1976-11-29

ROUTINE PROCEEDINGS


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, pursuant to the provisions of Standing Order 43 1 would like to move a motion on a matter of urgent and pressing necessity arising out of the tremendous spectacle enjoyed by all Canadians this weekend. 1 move, seconded by the hon. member for Ottawa-Carleton (Mrs. Pigott):
That this House commend both the Saskatchewan Roughriders and the Ottawa Rough Riders for the splendid way in which they participated in the Grey Cup game this past weekend and that we extend our warmest congratulations to the members of the Ottawa Rough Riders for their victory.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, on Friday past the Prime Minister (Mr. Trudeau) tabled a letter in which he said that a Crown corporation may have been involved in a breach of law and in any case was involved in activities in which there were, to use his own words, "obvious possibilities for embarrassment" for the Government of Canada. The Prime Minister also said that he had been unable to communicate with the former President of the Treasury Board prior to Friday's sitting concerning the letter in which he had raised this serious matter.
1 therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House requests the Prime Minister to make a statement on motions today in the House in which he will make a full report on the serious matter raised in the letter sent to him by the former auditor general on March 22, 1973, and concerning which he had written to the former President of the Treasury Board on March 27, 1973.


Mr. Speaker:: Pursuant to Standing Order 43 such a motion requires the unanimous consent of the House.


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR TRANSPORT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the tangled mess in the Manitoba aviation industry in which Midwest Airlines has applied to the Canadian Transport Commission to transfer a class 2 unit toll licence to Perimeter Aviation, and even though the Canadian Transport Commission has not granted a transfer to date, Perimeter Aviation has been operating an illegal unit toll service, and in view of the fact that both Midwest and Perimeter have received a cease and desist order from the Canadian Transport Commission which has been disregarded, with respect to the problems these events have caused to the Manitoba aviation industry I would like to move, seconded by the hon. member for Churchill (Mr. Smith):
That this House direct the Minister of Transport to intervene personally to untangle the mess that presently exists in the Manitoba aviation industry with regard to Midwest, Perimeter Airlines and St. Andrews Airways Ltd. and launch an immediate inquiry into why the Canadian Transport Commission has not satisfactorily resolved this problem.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

November 29, 1976
Lay-offs in Steel Plants LABOUR CONDITIONS


ALLEGED DISCRIMINATION OF CHARTERED BANKS AGAINST DIABETICS-MOTION UNDER S O. 43
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the continued reports of discrimination against diabetics in the hiring practices of some of Canada's federally chartered banks, and in view of the fact that nearly one million Canadians who suffer from this disease have a statistically proven better work record than many other groups, I move, seconded by the hon. member for Capilano (Mr. Huntington):
That the Minister of Labour immediately inquire into the hiring practices of the chartered banks.


Mr. Speaker:: Pursuant to Standing Order 43 such a motion can be presented to the House only with its unanimous consent.


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT ADMINISTRATION
Mr. Derek Blackburn (Brant):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43. In view of the reported statements of Mr. Allen Lambert, Chairman of the Royal Commission on Financial Organization, and I quote:
The royal commission would not be affronted nor its work hampered in any way if any and all of the Auditor General's recommendations, including that for a Comptroller General, were implemented immediately.
Mr. Lambert said that he had "already informed the government of my opinion". I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the government implement immediately the recommendation of the Auditor General that a Comptroller General be established, at a deputy minister level responsible to the President of the Treasury Board.


Mr. Speaker:: Such a motion, pursuant to Standing Order 43 cannot be presented to the House without its unanimous consent. Is there unanimous consent?


Some hon. Members:: No.


LABOUR CONDITIONS
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43, concerning the economy of
[Mr. Speaker.!
the province of Nova Scotia. Keeping in mind that the Minister of Transport and Nova Scotia's cabinet representative have agreed to meet with a delegation from Pictou County respecting massive lay-offs of Hawker-Siddeley employees, and in the realization that many millions of dollars will be disbursed by federal, provincial and municipal governments in order to alleviate the loss of income suffered by these workers during the time when they will not be doing anything productive for the economy, 1 move, seconded by the hon. member for Halifax (Mr. Stanfield) who has made several previous representations:
That the Minister of Finance, the Minister of Transport and the Minister of Industry, Trade and Commerce, take all practical and immediate steps to provide orders for the railway rolling stock and steel rails for domestic and foreign markets at Hawker-Siddeley industries and the Sydney Steel Corporation in order that massive lay-offs extending over a period of many weeks do not permanently damage the work force, seriously crippling the local economies of Cape Breton and Pictou County.


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


Some hon. Members:: No.


Mr. Speaker:: Oral Questions.



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, my question to the Minister of Energy, Mines and Resources arises out of the statement made to the Standing Committee on National Resources and Public Works by Mr. J. S. Foster, president of AECL recently when he was told that the minister's predecessor, now the Minister of Finance, was informed in January, 1975 about massive commission paid by AECL to Shaul Eisenberg that the report of the Auditor General brought to light. I should like to ask the minister if he was informed by the former minister about this commission?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I would hope that the hon. member would take the full opportunity before the Public Accounts Committee to put such questions to Mr. Foster. The impression is left that the former minister had received a detailed report. Before hon. members jump to any conclusion, I think they should put some direct questions to Mr. Foster based on the information he has provided.


James McPhail Gillies: A supplementary question, Mr. Speaker. As the minister would know, Mr. Foster would have no information whatsoever about this and he could not possibly answer the
November 29, 1976

question. The question is: was the new minister informed by the former minister about the arrangements made with Mr. Eisenberg with respect to the atomic energy operations abroad?


Alastair William Gillespie: Mr. Speaker, 1 think the hon. member is suffering from a delusion. Mr. Foster was the president of AECL when the former minister was in office, so I think it would be perfectly appropriate for him to put those questions to Mr. Foster. 1 would also point out to him that conversations between ministers are, of course, privileged.


INVESTIGATION BY MINISTER OF COMMISSIONS PAID PRIOR TO AUDITOR GENERAL S REPORT
James McPhail Gillies: A final supplementary, Mr. Speaker, and I must say that I really object bitterly to the evasion of the question in that particular way. May 1 ask the minister whether he made any inquiries or any investigation of the apparent operations of AECL during the previous year before this operation was brought to light in the Auditor General's report?


Alastair William Gillespie: Yes indeed, Mr. Speaker. If the hon. member reads the report of the Standing Committee of National Resources and Public Works he will see that as soon as 1 was made aware of the situation I took certain action.


INQUIRY IF MERUBENI IS AGENT IN JAPAN AND ACTED FOR LOCKHEED-SCALE OF FEES
Mr. David MacDonald (Egmont):: Mr. Speaker, mine is a supplementary question to the Minister of Energy, Mines and Resources and relates to questions I put to the minister last Tuesday relating to AECL sales agents in other countries, in particular Japan where Merubeni has been the AECL agent since 1969. Can the minister indicate whether in fact Merubeni is the same company that was acting for Lockheed in the matter of the corporate bribes allegedly paid to Japanese officials? Can he also indicate what scale of fees he negotiated with this agent?


Alastair William Gillespie: Mr. Speaker, again, if the hon. member will read the record of the committee on natural resources he will see that that question was fully answered by Mr. Ross Campbell. The short answer is, yes, Merubeni is the same corporation; the agent of AECL in Japan is the same corporation which was acting for Lockheed.


POSSIBILITY OF CHANGING JAPANESE AGENT
David Samuel Horne MacDonald: Mr. Speaker, may 1 ask a further supplementary question. In view of the disturbing facts which will undoubtedly have implications not only on the public perception of AECL in Canada but also on the efficiency with which Merubeni is able to pursue AECL objectives in
Oral Questions
Japan, will the minister indicate to the House whether he intends to direct AECL to acquire some other representative in that country. Will he also answer the question about the scale of fees which I asked in my first supplementary question?


Alastair William Gillespie: Mr. Speaker, I cannot give a precise answer on the scale of fees. I am not sure if any fees have been paid to Merubeni. That, again, can be determined. The other point I think is most important. At the moment I have no reason to suggest to AECL that they should change their agents. After all, Merubeni changed its chief executive officer after these particular disclosures were made known.


GOVERNMENT ADMINISTRATION
John Edward Broadbent: Mr. Speaker, in the absence of the Prime Minister I have a question for the Minister of Energy, Mines and Resources. Given that the committee of ministers to which the Prime Minister referred in his letter of March 27, 1973, never met to discuss activities which the Prime Minister described in his letter as being at best embarrassing for the government and at worst illegal, and since as we have learned during the week end those activities so described by the Prime Minister still persist, I ask the minister if it is the government's view that these activities should continue?


Alastair William Gillespie: Mr. Speaker, I suggest that the hon. member is directing that question to the wrong minister. I have no responsibility for Polysar, nor did 1 ever have responsibility for its predecessor.


John Edward Broadbent: Mr. Speaker, then may I direct my question either to the Acting Prime Minister or to the minister responsible, the Minister of Finance?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, I have been advised by the Canada Development Corporation that Polysar sought the advice of its auditors, the firm of Peat, Marwick, also legal advice at the time the question was raised to the management by the hon. member for Westmount, the former President of the Treasury Board, and that the advice received from those professional advisers was that there was no illegality involved in those particular transactions.


Mr. Fairweather:: No illegality in Canada.


Donald Stovel Macdonald: Of course, the professional advisers were dealing both with the situation in Canada and, for purposes of the balance sheets of the corporation, I assume with the other jurisdictions in which it operated.

November 29, 1976
Oral Questions


Walter David Baker: Do not assume too much, Don.


Donald Stovel Macdonald: The president of Canada Development Corporation has publicly indicated his disagreement with the analysis put on events by the Toronto Globe and Mail and has indicated that he would be prepared to appear before a parliamentary committee on this particular question. He has further drawn attention to the fact that the Canada Development Corporation is not a Crown corporation under the Financial Administration Act, that about 30 per cent of its shares are held by members of the public throughout Canada and that, in that sense, this corporation is now in a different position from the position occupied by Polymer Corporation at the time of the transaction.


Walter David Baker: Who is the biggest shareholder?


Donald Stovel Macdonald: And the objection would be that private shareholders might feel that the affairs of this corporation were being introduced into the political arena. Subject to that particular observation, Mr. Hampson has indicated his willingness to appear before the committee, to talk very fully about the matter.


John Edward Broadbent: A supplementary question, Mr. Speaker. Given the obvious importance of the government showing moral leadership in matters of this kind, 1 ask the minister if he agrees, from the point of view of the government, that this kind of activity coincides with its views on good corporate behaviour, or whether it violates Canadian law? Second, has the government contacted the other countries involved to find out whether the activities of corporations which were then full Crown corporations were in accordance with the law in those countries?


Donald Stovel Macdonald: As far as I know, the Government of Canada has not sought the opinion of other governments as to the legality or otherwise of these particular practices.


John Edward Broadbent: Do you intend to?


Donald Stovel Macdonald: With regard to the first part of the question, I understand these are rebates for volumes of goods purchased and it is on this basis that legal advice has been given that they would not be illegal.


REQUEST FOR TABLING OF CONTRACTS SHOWING REBATES
John Edward Broadbent: In light of the statement that these discounts were made on the basis of volume purchases, contracts are presumably available which indicate that if the purchaser bought X plus Y amount of goods instead of merely X, he would be entitled to a rebate. If this is what was involved, will the minister undertake to ensure that such contracts are produced for public scrutiny to validate
(Mr. Macdonald (Rosedale).]
the contention that all that was involved here was a highly moral and appropriate kind of discounting system?


Donald Stovel Macdonald: 1 would remind the hon. member that the Canada Development Corporation, of which Polysar is a subsidiary, is a mixed corporation in the sense that there is a 30 per cent private interest outstanding. With regard to producing information from that corporation for public scrutiny, one would have to be concerned about the competitive position of that corporation as it might affect not only the Government of Canada but all the private citizens who have subscribed for shares in the Canada Development Corporation.


John Edward Broadbent: How is it different from Lockheed?


Donald Stovel Macdonald: If the hon. gentleman and his colleagues are interested in pursuing this matter with the President of Canada Development Corporation they might co-operate in developing the subject before the Public Accounts Committee when these items are being discussed.

[ Translation]


UNEMPLOYMENT INSURANCE
Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration.
I should like to know if the minister will soon consider the possibility of introducing an amendment to the Unemployment Insurance Act for the purpose of repealing article 33, paragraph 3, section d, because I feel this provision is a clear incentive to the unemployed not to accept employment for a period from four to seven weeks, during the extension of the initial period. This provision therefore penalizes the unemployed who would work during this period of four to seven weeks, which is certainly not the intent of the Unemployment Insurance Act.


Hon. Jack Cullen (Minister of Manpower and Immigration):: I have heard the hon. member's representation and the section as quoted. 1 shall have to take a careful look at it.


Mr. Gauthier (Roberval):: Mr. Speaker, 1 should like to ask the minister how many complaints he has received in respect of this section. This is the most difficult period for the unemployed, namely, the end of the initial period, for he may have been receiving benefits for 10, 15 or 20 weeks. I should like to know if the minister is really aware of all the problems working people are faced with.


Jack Sydney George (Bud) Cullen: As far as numbers are concerned, 1 do not have specific figures, but having heard the hon. member's representation 1 will take a look at the matter.
November 29, 1976


GOVERNMENT ADMINISTRATION
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, 1 have a question for the Acting Prime Minister supplementary to those asked by the hon. member for Oshawa-Whitby. Is it the view of the government that a practice, by a corporation in which it has a considerable interest, of sending falsified invoices to customers which enables such customers to avoid the provisions of the tax laws of their respective countries and evade currency regulations is not one which the government should condone and accept?


Donald Stovel Macdonald: If I may
just respond to that, Mr. Speaker, it seems to me that that particular question is hypothetical at this point. Certainly, the information indicated by the chairman of Polysar and the president of the Canada Development Corporation would not, in their opinion, support the facts asserted by the hon. gentleman. May I suggest that before that kind of allegation is made it would be more advisable for a committee of the House to look at the actual facts, under the circumstances.


Gerald William Baldwin: A supplementary question, Mr. Speaker. May I ask the Acting Prime Minister whether the government would accept this kind of practice, if adopted by Lockheed toward this country, in connection with the purchase of Lockheed aircraft?


Mr. Speaker:: Order, if the question was not hypothetical before it certainly has become so.


PUBLIC ACCOUNTS COMMITTEE
Walter David Baker: Mr. Speaker, I have a question for the government House leader arising out of the series of questions and the answer just given by the Minister of Finance in terms of the desirability of the public accounts committee examining this whole matter. Pursuant to the discussion in this House on Friday, has the government House leader examined the terms of reference of the public accounts committee, which is commencing its sittings tomorrow, to see whether they are wide enough to involve transactions in other years of Polysar or its predecessor corporation, or anything in respect thereto, so that the Committee might call the appropriate witnesses before it? If the minister has not done so, would he do so; and can he advise the House whether the government, of which he is House leader, is now prepared to agree to that kind of extension?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, it is my opinion that the present terms of reference are probably wide enough to permit that kind of investigation, but in order to ensure that the investigation can
Oral Questions
go ahead I am quite prepared to put a further term of reference to the committee so that all the allegations can be considered and all the witnesses heard and questioned by members of the committee.


EXTERNAL AFFAIRS
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the Acting Prime Minister. It is really addressed to him in his capacity as the ex-minister of external affairs. Did the minister in his office of external affairs minister sign-


Mr. Speaker:: Order, please.


Francis Alvin George Hamilton: Then I will ask the question of the Acting Prime Minister. Did any minister of the government on behalf of Canada sign the United Nations convention on guidelines for ethical behaviour of multinationals this last year?


Allan Joseph MacEachen: Mr. Speaker, I believe, through discussions held in the OECD, we did adhere to a statement with respect to the behaviour of multinationals, but I should like to check into it further.


Francis Alvin George Hamilton: A supplementary question, Mr. Speaker. Would the Acting Prime Minister then examine these guidelines to see whether we as a nation have in any way infringed them in the events made known during the last two or three weeks?


Allan Joseph MacEachen: I would be glad to do that, Mr. Speaker. I think I should add that, as I recollect it, the guidelines, or practices, or the statement of ideal practices to which we adhered, were general in nature and I do not recall they referred to anything specific.


ROYAL CANADIAN MOUNTED POLICE
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a supplementary question for the Solicitor General. In view of the revelations in the Auditor General's report and subsequently concerning the sale of CANDU reactors to Argentina and South Korea, and in view of the fact that the government of Argentina has indicated that it is going to launch its own inquiry into the circumstances surrounding that sale, is the RCMP launching an inquiry into the sale of CANDU reactors to Argentina and South Korea and, if not, is it the intention of the Solicitor General to order such an inquiry?

November 29, 1976
Oral Questions


Hon. Francis Fox (Solicitor General):: Mr. Speaker, this matter was raised last week by the hon. member for Brant. The response I gave at that time was that I would bring his representations to the attention of the RCMP. I have spoken to the commissioner of the RCMP in this regard so that the force can take whatever action is appropriate.


GOVERNMENT ADMINISTRATION
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, 1 wish to direct my question to the Minister of Finance. Since the Auditor General's letter of March 22 came to light with the tabling of the Prime Minister's letter of March 26, has the present Minister of Finance, in light of the involvement, or possible involvement, of his predecessor, Mr. Turner, in the matter, taken any action to ascertain the extent of Canada's liability which the Auditor General called a
. . . serious contingent liability of indeterminable proportions arising out of certain transactions of Polymer's Swiss subsidiary.
If so, did he find out the annual amounts of Canada's liability during the past three years, the names of the representatives who received the payment in cash in Switzerland, the manner in which cash is delivered by the Canadian government, or the names of the owners of the Swiss bank accounts?


Donald Stovel Macdonald: As I
already indicated, upon the inquiry of Polysar, we received the opinion, certified by the auditors of Polysar-an accounting firm of national status-supported by their international and domestic legal authorities, that indeed there was no contingent liability arising out of these particular circumstances. In that respect, the allegations made by the former auditor general seem to have been mistaken.


CANADIAN COMMERCIAL CORPORATION
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question is directed to the Minister of Supply and Services, but in his absence I shall direct it to the acting minister or to the Acting Prime Minister. Given the revelations of recent days regarding questionable practices by Crown corporations, can the minister advise the House what action the Department of Supply and Services has taken in regard to a full accounting provided to the office of the Auditor General of the $500,000 which was described as a marketing service incurred by the Canadian Commercial Corporation involving the sale of some 20 CF 5 aircraft to Venezuela in 1972, and would the acting minister or parliamentary secretary-who 1 see is prepared to

answer the question-be prepared to table such documentation in the House of Commons?


Mr. Rod Blaker (Parliamentary Secretary to Minister of Supply and Services):: The information which the hon. member seeks is available, but in view of the fact that the Minister of Supply and Services will be returning to the House before the end of the question period, 1 wonder if we might delay the question until his return.


POLYSAR
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct my question to the Minister of Finance. Arising out of the statement made by Mr. Ian Rush, president of Polysar, in which he says the payment of 7 million Swiss francs, or approximately $2 million of Canadian funds, into numbered accounts in Swiss banks represented rebates for volume purchases, and since the practice in the trade is to grant credits on future purchases in such instances or to pay the rebates directly to the head of the company, has the Minister of Finance, as the minister responsible for the company 70 per cent of whose shares are owned by the government, made any inquiries, or will he make inquiries if he has not already done so, as to why these rebates, instead of being paid through the usual channels were paid through numbered Swiss bank accounts, which has all the appearance of compounding a felony to defraud the government of the customer country?


Donald Stovel Macdonald: 1 would have to refer again to the advice which I received through CDC from the president of Polysar that in the judgment of the firm's auditors, and of their international tax and legal counsel, there is no impropriety involved in these payments. In that regard I would suggest that if there is a question to be pursued-if 1 can refer again to the response I gave to the hon. member's leader-indeed further details in that respect might be better pursued in the Standing Committee on Public Accounts.


SUGGESTION PAYMENT OF REBATES INTO SWISS BANK ACCOUNTS BE STOPPED
Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that the minister is responsible to the House and cannot foist this off on questioning in the committee, may 1 ask him, with reference to the statement of Mr. Anthony Hampson, president of the Canada Development Corporation, who, when asked whether or not he was suspicious about these rebates being paid into numbered accounts, is quoted as having said:
I would certainly suspect they're minimizing taxes but we're not a taxing authority.
November 29, 1976

Do the minister and the government condone a corporation, in which they are the major shareholders, participating in minimizing taxes, is this practice still going on, and can he assure the House that the government will use its majority control on the board of directors to ensure that this practice is stopped?


Donald Stovel Macdonald: If there have been any illegalities involved in this regard, then I certainly think they should not be carried out.


John Edward Broadbent: Improprieties!


Donald Stovel Macdonald: 1 would point out, however, that while I transmit reports to parliament in respect of the government's interests in the Canada Development Corporation, it is under the management of the board of directors and the executive of that corporation and, very properly, they have taken the position of obtaining the opinion of their auditors and their legal counsel.


LABOUR CONDITIONS
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, in the absence of the Minister of Labour I should like to direct my question to the Minister of Finance. In questioning the Minister of Labour on Wednesday I referred to a speech in which he proposed a national forum of representatives of government, labour, the farm community, and possibly others. The minister said that he
has not formally concluded who the others will be.
But he said:
there will be discussions with other groups which might be interested in participating in this body
-that is, the national forum. In view of the fact that the Minister of Finance met with business representatives on Friday, can he tell us what are the other groups referred to in the speech of the Minister of Labour and what other groups will be contacted for discussion?


Donald Stovel Macdonald: course, I will be discussing with the provincial finance ministers further developments in the anti-inflation program, and particularly measures which may be taken for the purpose of removing the mandatory controls. That will be done at the meeting next week. One of the aspects of that discussion will be to discuss the possibility of on-going arrangements which would include the provincial governments as well as business, labour, and other interested groups for the purpose of consulting on the major questions of economic and social policy which may occur in Canada from time to time. My colleagues responsible for different sectoral parts of the Canadian economy will be discussing at the same time with their interlocutors the kind of arrangements which should occur in a post-control
Oral Questions
period of this kind so that we may have the widest possible consultation and consensus with the Canadian community.


John Allen Fraser: Could I ask the minister if he can tell the House whether, in his discussions with business representatives on Friday, he mentioned to them what "other parties" the government had in mind in this national forum, what other parties he mentioned to these business people, if he mentioned them at all, and what was their response? I ask that because this has gone on for weeks and we cannot get any information out of the government.


Donald Stovel Macdonald: I have already indicated that there would be the widest consultation. Indeed, we did discuss further consultations on Friday and in particular referred to the role of the representatives of organized labour, not just the CLC but a widely representative group of organized labour, as well as representatives of the provincial government. There was, I think, a general rejection of the CLC view that there should be a narrow tripartite group which would have executive responsibilities, but they were positive about participation in a multipartite group which would make it possible to have discussions and perhaps agreement on some of the major economic questions that the government and the community will face in Canada at that time.


John Allen Fraser: The minister's response is helpful up to a point. I wish to ask him whether, in addition to speaking with provincial governments-and he alludes to groups outside the CLC within the labour area-there was any discussion of what other groups might be consulted. Was there any discussion about consumer groups, environmental groups, citizens' groups, or groups that would go beyond the tripartite concept of government, industry and labour?


Donald Stovel Macdonald: 1 might say the tripartite concept was not agreed to. It should be a multipartite group. There was no extensive discussion of an exclusive list of those who would be involved.


EXTERNAL AFFAIRS
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I wanted to pose a question to the Secretary of State for External Affairs or his parliamentary secretary, but perhaps I could ask the Acting Prime Minister, and if he might like, to take notice of it. When were copies of the Prime Minister's notes for his national television address made available to embassies in Ottawa, and at what time did the Department of External Affairs begin transmitting the message to Canadian missions abroad?

November 29, 1976
Oral Questions


Allan Joseph MacEachen: Mr. Speaker, I will be happy to make inquiries and to provide the hon. member with that information.


Robert Gordon Lee Fairweather: Were officials of the Department of External Affairs assisting in the collating and despatching of copies of these notes at about 3 p.m. on November 24, and were the Leader of the Opposition, the Leader of the New Democratic Party and the Leader of the Social Credit Party included in the distribution at three o'clock that afternoon?


Allan Joseph MacEachen: 1 will make inquiries about that also.


INQUIRY OF THE MINISTRY
Benno Friesen: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Recently the Canadian mother of two children born in Rhodesia wanted to come to Canada to visit, and naturally she was granted permission, but her two children, aged two and four, could not come. I would like to ask the minister what kind of national threat children of that age are to Canada?


Mr. Speaker:: Order, please. That information should be sought in some other way.


INTERNATIONAL TENDERING-INCLUSION OF PERCENTAGE TO COVER MARKETING AND PUBLIC RELATIONS COSTS
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Is it the policy of his department to request that companies pursuing international tendered opportunities involving EDC and/or CIDA financing support should ensure between 5 per cent to 8 per cent in their bid price to cover marketing and public relations costs?


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, I am not aware of any guidelines concerning this. I think that every corporation dealing with a foreign country decides what its sales and marketing methods will be.


Arthur Ronald Huntington: I have in front of me "The Nigerian Marketing Current Opportunities" and it recommends to companies seeking tendering opportunities that they include 5 per cent to 8 per cent in their bid price to cover necessary marketing and public relations costs associated with doing business in Nigeria, as it states that often more than one agent or representative is needed to win an agreement.


Mr. Speaker:: Order, please. The hon. member for Brandon-Souris.


TRANSPORT
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Transport. Has the minister arrived at a solution for the transportation of grain isolated in elevators at Lyleton and Tilston, Manitoba as a result of the flooding last spring in the southwest Manitoba area? In particular, are rail subsidy funds going to be used for moving the grain from the elevators by truck as an emergency operation, as the minister suggested in a letter last September?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, we did follow up on that suggestion by raising the issue with some of the interest directly involved, and particularly the elevator companies which would have been involved. Those discussions have not borne fruit up to this point, although if the response changes, we are certainly prepared to look again at the issue.


Walter Gilbert Dinsdale: As a partial solution to the total problem, and in view of the information now available that repairs to the railbed in the amount of some $3,000 would restore rail service to Lyleton, would the minister also take the necessary action to effect this solution?


Otto Emil Lang: I will certainly be glad to look at that and to determine whether it can be done that simply for an interim period.


FARM CREDIT CORPORATION
Mr. S. J. Korchinski (Mackenzie):: Mr. Speaker, I would like to ask a question of the carnivorous Minister of Agriculture. Is it government policy that the Farm Credit Corporation should deny young farmers, who are temporarily employed and not necessarily getting 50 per cent of their income from farming, loans as a result of their extracurricular work in an effort to try to make ends meet?
At the same time, would he also indicate whether a father who is retiring would be denied a grant from the Small Loans Assistance Program under that kind of condition?


Mr. Speaker:: Order, please. The hon. member surely is asking for a general opinion on the interpretation of the statute.
The hon. member for Red Deer.
November 29, 1976


ROYAL COMMISSIONS
Mr. Gordon Towers (Red Deer):: Mr. Speaker, in the absence of the President of the Treasury Board, perhaps 1 could direct my question to the Government House Leader. It relates to the Royal commission on financial control announced by the President of the Treasury Board. In view of the fact that his position as Deputy Minister of Industry, Trade and Commerce has placed Mr. Gerald Stoner in the middle of a controversy concerning an alleged illegal $2 million loan to Rhodesia by the Canadian Imperial Bank of Commerce, has consideration been given to the undue pressure he could be placed under as a member of the royal commission, under the chairmanship of Mr. Allen Lambert, who is not only chairman of the board but also president and director of another bank?


Allan Joseph MacEachen: Mr. Speaker, I would have to consider the alleged facts in the hon. member's question and give him an answer later.


Thomas Gordon Towers: Mr. Speaker, as a federal government employee did Mr. Stoner have the choice of accepting or refusing that appointment without retaliation?


Allan Joseph MacEachen: Mr. Stoner, like other Canadians, is free to choose whatever employment he wishes.


Some hon. Members:: Hear, hear!


INDUSTRY
Elmer MacIntosh MacKay: Mr. Speaker, I have a question for the Minister of Transport. In view of mounting concerns about the critical economic situation in Nova Scotia, with particular reference to heavy lay-offs from the Hawker Siddeley industries in Trenton, and the continuing erosion of the position of the Sydney Steel plant, as pointed out recently by the hon. member for Cape Breton-The Sydneys, has the minister anything encouraging to report about the possibility of obtaining foreign or domestic orders to alleviate the situation in these areas? Also, I want to thank him for his readiness to meet with a delegation from Pictou County.


Otto Emil Lang: Mr. Speaker, I cannot report a definitive proposal at this point in time. The government is looking at the situation and the possibilities which may exist to take steps to alleviate that situation, and 1 hope we can reach a decision in that regard quite soon.
Ora! Questions ENERGY


HIGH COST OF ELECTRICITY IN ATLANTIC PROVINCES- GOVERNMENT ACTION TO ALLEVIATE
Elmer MacIntosh MacKay: Mr. Speaker, to be honest my supplementary question is a question related to the Nova Scotia economy, and I would like to put it briefly to the Minister of Energy, Mines and Resources. In view of the alarming problems facing the people of Nova Scotia and Prince Edward Island because of escalated power costs, would the minister indicate when a decision can be expected as to the amount of subsidies to be paid to these provincial governments to alleviate their situations until a more permanent solution can be found to their rising energy costs?


Alastair William Gillespie: Mr. Speaker, we have previously indicated that this decision will be taken before the end of the year. I hope we will be able to announce some decision on this very important matter in a matter of a few weeks.


ROYAL COMMISSIONS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is directed to the Acting Prime Minister. It is related to the question which was just put by the hon. member for Red Deer. In a statement to the House on November 23 relating to the formation of the royal commission, the Prime Minister made quite a thing of the need for knowledge of the parliamentary process to go into the royal commission. Now that there is a gap in that royal commission and since there can be no parliamentary input from the four members-a banker, an accountant, an academic and a public servant-I am wondering whether there will be an appointment of someone with parliamentary experience to that commission.


Allan Joseph MacEachen: Mr. Speaker, we would be ready to receive any suggestions from the hon. member as to who might be the appropriate appointee.


An hon. Member:: Jean Marchand.


ENVIRONMENTAL AFFAIRS
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Minister of Fisheries and the Environment and relates to the flurocarbon issue and aerosol sprays. In light of United States action of an eventual ban and publishing warnings on certain spray cans containing specified flurocarbons, will the

November 29, 1976
Oral Questions
minister tell us whether he will be in a position to make a statement on motions this week regarding the Canadian action to be taken in concert with our U.S. neighbours?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, 1 received a preliminary report from the group working on this question when I returned from the Atlantic provinces at the weekend. Hopefully, I will meet with representatives of the industry this week or early next week. Then, 1 will be in a position to indicate Canada's position.


AIR CANADA
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I will direct my question to the Minister of Transport. In view of the fact the Minister of Agriculture does not have the responsibility to report to the House on matters pertaining to Air Canada, would the Minister of Transport take up with Air Canada officials the advisability of allowing all Canadian meat processors to compete when tenders are called for meat requirements for Air Canada?


Otto Emil Lang: Mr. Speaker, I will be glad to bring that representation to the attention of Air Canada.


Kenneth Earl Hurlburt: Now that the minister is flying Air Canada, would he consider letting his fellow passengers know they are not allowed to have access to choice quality Canadian beef because of Air Canada's tendering policy, which calls for only Australian or New Zealand beef?
Some bon. Members: Shame.


Mr. Speaker:: Order, please. The hon. member for Edmonton Centre.
V * V


SEARCH AND RESCUE
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is for the Minister of National Defence. On Thursday November 18 a twin Otter plane crash landed between Rankin Inlet and Repulse Bay. On Friday, November 19, the downed plane was located by an armed forces Hercules from Edmonton but due to the lack of helicopters anywhere near the site, the victims were not rescued until Tuesday, November 23, a delay of 4'h days. Is the minister satisfied that he has sufficient resources in position for Arctic search and rescue and if not, what is he doing to rectify the situation?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I think the hon. member would be interested in knowing that a Para-rescue team was landed at the crash site the following day, as soon as they were located by Hercules aircraft. The owners of the crashed plane indicated they could effect the search and rescue themselves but thereafter found that they could not. We immediately dispatched the helicopter from Ottawa because it had the fuel capacity to carry out the flight with a minimum of delay. It became unserviceable in North Bay and another one was dispatched from the great city of Edmonton. It reached the site and evacuated the personnel satisfactorily.
Of course, Mr. Speaker, I am never satisfied; but it is a great big Arctic and 1 think our people are doing an excellent job with the resources they have. The people were safe at all times because of the exceptional work of the paramedic team which landed, kept them warm, fed and happy until our helicopter came to pick them up and take them away.


Steve Eugene Paproski: Mr. Speaker, I really appreciate what the minister has just said. It is good reason why he should see that the Canadian airborne division is not moved from western Canada to eastern Canada.


GOVERNMENT ADMINISTRATION
Derek Nigel Ernest Blackburn: Mr. Speaker, my question was for the right hon. Prime Minister but in his absence I will direct it to the Acting Prime Minister. Since the Prime Minister has stated that he could not implement the Auditor General's proposal for a Comptroller General because of the ramification of this new position which "would have to be studied in detail, and it is this problem which led us to appoint a royal commission", may I ask the Acting Prime Minister, since the chairman of his royal commission, Mr. Allan Lambert, has recommended implementation of the Comptroller General's position, will he now accept Mr. Macdonell's and Mr. Lambert's advice and implement this position?


Allan Joseph MacEachen: Mr. Speaker, the suggestion made by the hon. member would require a policy decision by the government and 1 am not prepared to announce this at the present time.


Derek Nigel Ernest Blackburn: Mr. Speaker, 1 should like to ask the Acting Prime Minister if he would convey my supplementary question to the Prime Minister at his earliest possible convenience and if the Prime Minister would make a major statement in the House with regard to the establishment of a Comptroller General in view of what Mr. Lambert just said?
November 29, 1976


INDUSTRY
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. In view of the precarious state of our shipbuilding industry in Canada and in particular the Great Lakes region where mass unemployment is imminent unless conditions change for the better within the very near future, what actions are the minister and his department contemplating to bolster this very important and essential industry so that its viability may be maintained and its 1,300 employees have some assurance of maintaining their jobs?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, I am really quite concerned about the situation in the shipbuilding industry. I hope to announce a measure this week that should improve the situation to some extent. Naturally, I have very little influence on the international shipbuilding situation which is rather on the downgrade; still, temporary measures could be taken, and I hope to be able to announce some this week.


Constantine George (Gus) Mitges: A supplementary question, Mr. Speaker. As one avenue of help and assistance to this industry, would the minister give consideration to bolstering and increasing the percentage of government subsidy and also make loans available to prospective customers at an interest rate comparable to what the Export Development Corporation is asking of its offshore clients; that is a rate less than half that demanded of our own ship customers?


Joseph Jacques Jean Chrétien: Mr. Speaker, naturally the question of helping that industry financially could be considered, but it is not at the present time. That could be extremely costly. We are now considering other solutions.


TRANSPORT
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is for the Minister of Transport. Is the minister aware that his officials have removed the radar equipment from the facility at Placentia Bay, so the traffic monitoring system there is not operating as it has in the past and is causing danger to ship traffic and fishing vessels in Placentia Bay? Can the minister tell the House where that equipment is being shipped and can he advise who authorized an official in his department to send out a memo on October 16 advising everybody in the department not to speak to me, the candidate
Oral Questions
for St. John's West, because I had demanded a public inquiry into the matter?


Otto Emil Lang: Mr. Speaker, I will be glad to inquire into the situation in relation to the radar equipment. I will also inquire to determine, as I suspect, that no such communication about the hon. member was made.


John Carnell Crosbie: Mr. Speaker, does the minister realize that I saw the communication in question?



MANPOWER


Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Will the S100 million extension to the LIP program announced last week be implemented as an entirely new program or will it be used to fund applications made by various groups this past fall and not funded at that time? Will the minister also ensure that a significant portion of the Federal Labour Intensive Funds, $50 million, will be directed toward Indian reservations, many of which have the highest unemployment levels in the country?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the projects will be selected from those already submitted. With respect to the second part of the question, that is under the administration of the Treasury Board. I would expect that each individual department will be making its recommendations and in the final analysis the Treasury Board will make the determination as to where the funds should go.


Mr. Speaker:: The hon. member for Peace River (Mr. Baldwin) on a point of order.


Gerald William Baldwin: Mr. Speaker, my point of order arises out of an exchange between the Minister of Finance and myself, and also Your Honour's ruling. I am not, of course-and would not, if I could-disagreeing with Your Honour's ruling, although I would ask the Chair to take notice of the fact that the rather notorious practice of the Lockheed Aircraft Corporation is not too different from that carried on by Polymer in this instance.
The Minister of Finance indicated that he should not answer the question I asked because it was based on a hypothesis. I would point out to Your Honour that the only evidence in this regard consists of the letter tabled by the Prime Minister. This is the only fact before the House at the present time, and the government must to some extent be bound by it. The letter reads in part as follows:
Briefly, this arises from the subsidiary's practice of invoicing certain European customers, by agreement, at inflated prices, with the difference being remitted to the customers or their representatives in cash in Switzerland or placed in numbered Swiss bank accounts as directed. As a result of this practice, the

November 29, 1976
Oral Questions
customer is in a position to reduce his tax liabilities in his own country and avoid his country's foreign exchange control regulations, where these exist.
1 point out that while the Minister of Finance cannot be compelled to answer questions, or cannot be compelled to answer correctly, he should not be able to avoid his responsibility for answering on the ground that the question is hypothetical, when the facts suggest that it is not.


Donald Stovel Macdonald: Mr. Speaker, the hon. gentleman has read from a letter which came originally from the former auditor general. The president of Polysar has indicated in the statement made public today that in the opinion of the auditors of Polysar and its legal counsel, the opinions advanced by the former auditor general are mistaken. In those circumstances, where you have differences of opinion of that kind, allegations of fraud, falsification or otherwise should not be made until the House has received the full facts and circumstances. I have suggested repeatedly in the question period that the Standing Committee on Public Accounts would be a proper forum for that. May 1 suggest, further, on the point of order that since a matter of this kind is to be considered in the public accounts committee, which has an opposition party chairman, allegations should not be made with regard to what is, after all, one of the disputed matters to be considered before the committee.


Walter David Baker: Mr. Speaker, I rise on the same point of order. I cannot see how, in the face of a document tabled by the Prime Minister on Friday, the argument advanced by the Minister of Finance can be sustained and that that which has been tabled in this House ought to stand against an opinion expressed in a press released by one of those who might be subject to examination in the House of Commons. Surely this House is not barred from examining the matter, for that was the thrust of the minister's statement. In any event, although the matter may be examined by the public accounts committee, surely those members of the House who are not members of that committee still have the right to ask questions about the matter. With respect, at issue here is not a hypothesis: at issue here is the moral conduct of a government which condoned that which would be illegal in the practice of this country, since it was practiced in another country. Under the guise of some market practice, this government seeks to hide behind a legal opinion. That is immoral.


Mr. Speaker:: Order, please. I remind hon. members involved in this interesting discussion that the Chair did not make a ruling or express an opinion on whether the first question asked by the hon. member for Peace River, which is the substance of the point of order, was hypothetical. The Chair permitted the question to be asked. There was contained in the response of the Minister of Finance the suggestion that the question might be hypothetical. That was part of his response, not part of the ruling of the Chair.
The second question asked by the hon. member for Peace River, with respect to which I gather there is no disagreement,

related to the possibility of certain similar practices being engaged in by companies in other circumstances. It was hypothetical. If we had been discussing a ruling of the Chair, I might have let the discussion go on. But we are discussing the response of the minister, and that does not constitute a point of order.


Stanley James Korchinski: Mr. Speaker, I rise on a point of order to seek clarification of a policy position the government has adopted. Earlier, when Farm Credit Corporation amendments were introduced, the minister indicated that the legislation was necessary in order to provide start-up funds for farmers who wish to establish themselves in farming. I am told that someone in the department has ruled that applicants can no longer qualify unless they get 50 per cent of their income from farming.
I should like some clarification from the minister, for the sake of a young advocate who wants to know if he can continue working at his occupation and still apply for funds, and want to know if a farmer, in the particular case in mind, who sells his farm to the young son can also qualify for a small farm assistance loan. Will the minister clarify the position with respect to these matters? At the same time, I am told that if land is sold to the land bank of Saskatchewan, one may qualify for assistance. Either the government favours state ownership of land, or it does not. What is the position of the government?


Mr. Speaker:: Order, please. I am sure the hon. member is more than anxious to know that position. The question is whether he should determine it in the question period. Surely he realizes that he is seeking general information from the minister on the application of a statute for which the minister is responsible. The circumstances described were, in my opinion, too general to cover in the question period. If the hon. member wishes to use other means, not necessarily for finalizing the question but at least for narrowing its scope so that it may be focused in the question period, that might be possible. But the general question as to whether the act operates in a certain way in respect of certain general cases really cannot be dealt with in the question period.


John Edward Broadbent: Mr. Speaker, I gave Your Honour notice earlier of my intention to raise a question of privilege concerning the Prime Minister's role in certain financial transactions drawn to his attention by the former auditor general. The Prime Minister not being in the House today, I have decided to wait until tomorrow when, presumably, he will be here.
November 29, 1976



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, 1 should like to table in the House the report of the Anti-Inflation Board to the administrator on the question of the Trillium Villa Nursing Home in Sarnia.


Mr. Speaker:: The President of the Treasury Board has the floor-


Joseph Jacques Jean Chrétien: No, Mr. Speaker, the Minister of Industry, Trade and Commerce, who is now Acting President of the Treasury Board.


SUPPLEMENTARY ESTIMATES
[Stage Direction]
Hon. Jean Chretien for President of the Treasury Board
tabled a message which was read by Mr. Speaker whereby His Excellency the Governor General transmitted Supplementary Estimates (C) concerning the sums required for the service of Canada for the Financial year ending on March 31, 1977.

Allan Joseph MacEachen: Mr. Speaker, 1 should like to table, in both official languages, copies of a telex sent to the ten provincial premiers concerning the proposed first ministers' conference meeting next month, as well as correspondence between Premier Schreyer and Premier Campbell and the Prime Minister concerning the patriation of the constitution.


CANADIAN HUMAN RIGHTS ACT
Hon. Ron Basford (Minister of Justice) moved: for leave to introduce Bill C-25, to extend the present laws in Canada that proscribe discrimination and that protect the privacy of individuals.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Order Paper Questions SUPPLEMENTARY ESTIMATES

Allan Joseph MacEachen: Mr. Speaker, I move:
That the supplementary estimates tabled this day be referred to the following standing committees:
To the Standing Committee on Labour, Manpower and Immigration, Manpower and Immigration votes 5 and 10;
To the Standing Committee on Miscellaneous Estimates, Treasury Board vote
17C.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 433, 654, 660, 669, 671, 674, 718,791,893,906 and 957.


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


Mr. Art Lee (Parliamentary Secretary to Solicitor General):: 1970 and 1971: The psychologists working at the Ontario Regional Headquarters visited this Institution as cases were referred to them. 1972: (a) Two full-time psychologists, (b) None, (i) MA psychology; (ii) Transferred from Regional Headquarters Ontario Graduate from Queen's University into CPS; (iii) Salary range $11,949-515,723. (i) MA psychology; (ii) Graduate from Queen's University; (iii) Salary range $9,561-512,579. 1973: (a) Two full-time psychologists, (b) None, (i) BA psychology; (ii) Student intern, University of Toronto; (iii) Salary range 59,669-513,428. (i) MA; (ii) Transferred from Regional Reception Centre, Ontario. Psychologist, Kingston Hospital Clinic; (iii) Salary range 512,756-516,784. 1974: (a) Three full-time psychologists, (b) None, (i) MA psychology; (ii) Department Health and Welfare, Province of Nova Scotia; (iii) Salary range $ 14,085-518,364. (i) MA psychology, (ii) Federal Department of Transport, Psychology Department; (iii) Salary range 514,085-518,364. (i) MA, PhD; (ii) Student at Loyola University, Chicago, USA; (iii) Salary range 514,085-518,364. 1975: (a) Three full-time psychologists, (b) None, (i) MA psychology; (ii) Department Health and Welfare, Province of Nova Scotia; (iii) Salary range 518,771-523,316. (i) MA psychology; (ii) Federal Department of Transport, Psychology Depart-

November 29, 1976
Order Paper Questions
ment; (iii) Salary range $15,634-520,384. (i) MA, PhD; (ii) Student at Loyola University, Chicago, USA; (iii) Salary range $15,634-520,384.


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of National Revenue (Customs and Excise) and the Department of National Revenue (Taxation) hire, dismiss or transfer employees to other departments and, if so, how many?


Hon. Monique Begin (Minister of National Revenue):: Yes.
Customs and Excise Taxation
H i red	464	1,231Dismissed	7	17Transferred	61	85


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of Justice, Law Reform Commission and Tax Review Board hire, dismiss or transfer employees to other departments and, if so, how many?


Stanley Ronald Basford: Yes.
	Hired	Dismissed	Transferred
Department of			
Justice Law Reform	103	0	1 1Commission Tax Review	6	0	0Board	4	0	0


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of Communications, Canadian RadioTelevision Commission and Teleglobe hire, dismiss or transfer employees to other departments and, if so, how many?


Mr. Ross Milne (Parliamentary Secretary to Minister of Communications):: In so far as the Department of Communications is concerned: Hired, 144; Dismissed, none; Transferred, 58.
In so far as the Canadian Radio-Television and Telecommunications Commission is concerned: Hired, 64; Dismissed, none; Transferred, 8.
In so far as Teleglobe Canada is concerned: No.
[Mr. Lee.J


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of Agriculture, Canadian Dairy Commission, Canadian Livestock Feed Board, National Farm Products Marketing Council and Farm Credit Corporation hire, dismiss or transfer employees to other departments and, if so, how many?


Hon. E. F. Whelan (Minister of Agriculture):: In so far as
the Department of Agriculture is concerned, the answer is: 220 employees hired; 12 employees dismissed; 36 employees transferred.
In so far as the Canadian Dairy Commission is concerned, the answer is: 1 employee hired; No employees dismissed; No employees transferred.
In so far as the Canadian Livestock Feed Board is concerned, the answer is: No employees hired; No employees dismissed; No employees transferred.
In so far as the National Farm Products Marketing Council is concerned, the answer is: 1 employee hired; No employees dismissed; No employees transferred.
In so far as the Farm Credit Corporation is concerned, the answer is: 12 employees hired; no employees dismissed; No employees transferred.


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of Indian Affairs and Northern Development, Northern Canada Power Commission, National Battlefields Commission, Council of the Northwest Territories (including the territorial Public Service) and Government of the Yukon Territory (including the territorial Public Service) hire, dismiss or transfer employees to other departments and, if so, how many?


Mr. B. Keith Penner (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: In so far as the
Department of Indian Affairs and Northern Development is concerned, the answer is: Yes. Hired, 1030; Dismissed, 308; Transferred, 132.
In so far as the Northern Canada Power Commission is concerned, the answer is: Yes. Hired, 48; Dismissed, 3; Transferred, 1.
In so far as the National Battlefields Commission is concerned, the answer is nil.
In so far as the Government of the Northwest Territories is concerned the answer is: Yes. Hired, 699; Dismissed, 539; Transferred, -.
In so far as the Government of the Yukon Territory is concerned, the answer is: Yes. Hired, 670; Dismissed, 800; Transferred, -.
The figures for the two Territorial Governments include the entire territorial Public Service.
November 29, 1976

Order Paper Questions


Mr. Coates: 1.	How many Armed Forces bases are in operation in the Atlantic Provinces?
2.	In each case (a) what are the specific sites (b) what is the main objective of the base (c) what is the period of time the base has been in operation?
3.	In each case (a) what is the present complement of Armed Forces personnel (b) how many employees are not members of the Armed Forces?
4.	In each case (a) what was the total payroll (b) what is the breakdown between Armed Forces personnel and those not members of the Forces?


Barnett Jerome Danson: 1. Eight.

Armed Forces and Civilian Personnel and Payrolls
Number of	Number of	Payroll of	Name of	Armed	Civilian	Armed	Payroll ofBase	Forces Pers.	Personnel	Forces	Civilians($000,000)	($000,000)Summerside, PEI	1,020	264	$ 15.7	$ 3.8Halifax, N.S.	6,249	4,654	97.9	69.5Greenwood, N.S.	1,539	364	22.8	5.7Cornwallis, N.S.	1,623	413	13.4	5.6Shearwater, N.S.	1,724	467	26.3	6.6Gagetown, N.B.	2,830	743	38.5	9.9Chatham, N.B.	1,119	448	16.2	7.1Moncton, N.B.	142	365	2.2	4.5Totals	16,246	7,718	$233.0	$1 12.72.	(a), (b) and (c) see following statement marked "A".3.	(a) and (b) 4. (a) and (b) see following statement marked "B".
Site, Objective of Base, Length of Time in Operation
Site
Main Objective of Base
Length of Time in Operation
Summer- Operational Air Base for side, P.E.I. long range patrol and search and rescue
Halifax,	Maritime Command HQ
N.S.	and home port for Atlantic
Fleet. Shipyards. Operational Control Centre
Greenwood, Operational Air Base for N.S.	long range patrol and
operations training for long range patrol aircraft Cornwallis, Canadian Forces Recruit N.S. School
Shearwater, Operational Air Base for N.S.	Tracker aircraft and
helicopters for surveillance activities; and operational training for Tracker and helicopter crews
Gagetown,

Chatham.

Combat Arms Training Centre and home to a battalion group Operational Air Base for all weather fighters. Also radar and satellite tracking
Moncton, Supply Depot N.B.
Opened in 1940
Original shipyards date back to 1755. Build ups have occurred in 1812 and in World Wars I and II
Opened in 1942
Opened in 1943 Opened in 1918
Opened in 1958
Opened in 1941
Opened in 1940


Mr. Beatty: 1.	Has CBC management listened to CBO Ottawa in the past few years and, if so, are they aware that there is an annoying interference with the signal of the Station?
2.	For what reason does the Station suffer from such interference?
3.	For how long has interference with the Station's signal been a problem in downtown Ottawa?
4.	Does CBC intend to improve the reception of the Station and, if so (a) in what manner (b) on what date (c) for what reason has so little been done about the problem to date?


Hon. John Roberts (Secretary of State):: I am informed by the Canadian Broadcasting Corporation as follows: 1. Yes. There is a whistle occurring in the reception of CBO on some receivers due to receiver design.
2.	The intermediate frequency of some receivers is half that of CBO's frequency, and a harmonic oscillation is set up.
3.	CBO has had its present frequency since 1941. Changes in receiver design in subsequent years have emphasized the problem.
4.	Yes. (a) A new frequency and increased power are planned for new facilities now under construction, (b) In the near future, (c) Financial limitations.


Mr. Epp: 1.	What was the total amount Mr. Jack Brossard received from the Canada Council with regard to his research and publication of the book L'Accession a la souverainete et le cas du Quebec?
2.	How much did Mr. Brossard receive each year of his five-year study?


John (Moody) Roberts: 1 am informed by the Canada Council as follows: 1. Mr. Jacques Brossard did not receive any grant from the Canada Council to do research for "L'Accession a la souverainete et le cas du Quebec". A S6,000 grant however was awarded for the publication of this book to Les Presses de l'Universite de Montreal by the Social

November 29, 1976
Restraint of Government Expenditures
Science Research Council of Canada. The SSRCC is funded by the Canada Council.
2. Not applicable.


Mr. Howie: What was the total (a) military (b) civilian strength at Canadian Forces Base Gagetown on March 31 (i) 1974 (ii) 1975 (iii) 1976 and on November 1, 1976?


Barnett Jerome Danson: (a)
and (b) (i), (ii) and (iii).
Insert Table 906-fol. 13
March 31,
Military	3,009
Civilian	1,037
Total	4,046
March, 21 1975
2,624
3,453
March 31, 1976
2,818
3,730
November 1, 1976
2,883
3,687


Mr. Howie: As of November 1, 1976, how many persons were employed by the Department of National Defence Mapping and Charting Service?


Barnett Jerome Danson: Military, 133; Civilian, 58; Total, 191.


Mr. Speaker:: Questions enumerated by the parliamentary secretary have been answered. Shall the other questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, November 26, consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates; and the amendment thereto of Mr. Holmes (p. 1393).
Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I have already spoken on Bill C-19 but since the official opposition has
[Mr. Roberts.)
introduced an amendment to postpone the study of this bill for six months, I cannot help but add a few remarks.
It has certainly been noted, Mr. Speaker, that we have been discussing this bill for almost three weeks now and we cannot foresee when we will see the end of it. Many of those among the general public who follow the debates in the House of Commons ask themselves what is going wrong, why such lengthy discussions over so small a bill. It is surely not just for the sake of having an argument, and much less to prolong debates in the House. The endless discussions rest only on the opposition refusal to accept the bill in its present wording.
We are once again facing an omnibus bill which covers all kinds of subjects that have absolutely no common grounds whatsoever. Once and for all, why does the government not decide to introduce a separate bill for each subject? What members of parliament want is to be able to vote on one subject at a time and not have to vote at the same time about matters as different as food, transportation, publicity or even associations. Since the government does not want to understand, we therefore ask technocrats and senior officials, since they are the ones who draft and prepare the legislation, to make an effort to meet the wishes of Parliament by introducing one bill on each subject so that we may discuss them separately.
This does not seem to be too much to ask for, unless someone has decided to heap even more ridicule upon the government by perpetuating this game of omnibus bills. I think the government should be more serious and more responsible and stop shifting onto the shoulders of these officials all the responsibilities and all the authority it was given by the people through the popular vote. The government wants to reduce its expenditures. Very well! We agree in principle and we are even very proud to do so, but who will suffer from it? That is the question, Mr. Speaker.
In the second place, we say that not only must the government reduce its expenditures, but that it must first of all control them. What is expensive for a country, just as for an industry and even a family, is not what is well spent, but what is spent foolishy. When we glance at the present administration, we are not at all surprised to hear the Auditor General of Canada say: The present government has lost all control over public expenditures and the many Crown corporations spend money wastefully.
The following statement was published in the Journal de Montreal of November 24, 1976, and was signed Richard Johnson. I quote:
What a piece of news! According to J. J. Macdonell, the Auditor General of Canada, the federal government lost or is about to lose any efficient control over public expenditures.
How glad Rene Levesque will be, he who has already been accused of being a dangerous saboteur, even before taking office.
Why, imagine that those fine dollars taken away from our pockets are wasted without any efficient control. Just like that, according to the whim and moods of civil servants.
Mr. J. J. Macdonell does not speak through his hat. An army of fifty accountants combed through the financial statements of the federal government for the last two years and their conclusion is the following: we are going out into
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the wilds. In the opinion of those private enterprise accountants, the public accounts are held by third-rate people.
In the middle of the whole mess, Macdonell criticizes the government for not implementing the recommendations of the Glassco report in 1962! Furthermore, he blames civil servants for behaving as if the government had unlimited resources and for having lost their sense of responsibilities. Private corporations have a far more stringent accounting system than do government corporations.
To demonstrate to what extent bureaucracy is expending in Canada, just consider the fact that the finance ministers most hostile to the increase in the number of civil servants never did succeed in stopping that tendency, We are plagued by mismanagement.
This government would have certainly saved billions of dollars since 1962 had it followed the recommendations of the Glassco report. But the government did not even accept the conclusions of that report. Another Auditor General of Canada, Mr. Henderson, made many efforts to stir up the government but without any results. The government forced Mr. Henderson to resign under the pretence that he wanted to get involved in politics.
Today, a third auditor sends an SOS to the government for the second time, realizing that his 74-75 report was not heard. Mr. Macdonell says clearly to the government that the only means to stop that drain of money is to create a position of general comptroller of finance. 1 am convinced that if it accepted this solution immediately, the government would save billions of dollars that dissolve into thin air when they do not serve to pay bribes and kick backs to political friends or just friends. But the minister decided otherwise and I wonder what has influenced him that much.
I have always been very confident in the President of the Treasury Board and I am most surprised by his decision to create a royal commission instead of following the wise advice of the Auditor General. Has the minister been influenced by senior bureaucrats who again want to protect themselves? Governments are always asking for more taxes from the taxpayers who must make every sacrifice to meet their excessive demands.
The Prime Minister is asking the Canadian people to cut down expenses, and at the same time the staff or departments, Crown corporations and all kinds of agencies doubles. The billions paid to treasury are not enough to meet the people requirements because an important part of this money is lost due to the complete lack of control over expenditures. And the government is told by its first responsible authority, the Auditor General, that it has completely lost control over the purse strings. But where has that control gone, Mr. Speaker? The government knows very well that in every department the big chief is the deputy minister. And the presidents of the bid Crown corporations are the real financial heads of these corporations, because, according to the Prime Minister himself, these corporations have to remain independent. I keep saying that we are living under the worst bureaucratic dictatorship Canada has ever experienced. The ones who should have the real responsibility, because they are elected by the Canadian citizens, have nothing to say regarding finance. And
Restraint of Government Expenditures when I talk of finance, I mean high finance. It is a little like in a household, Mr. Speaker.
No matter how much the husband claims to be the family head, the wife knows very well that she dominates and controls her husband.
Nowadays bureaucrats are running the government, which is either too proud to admit it or too cowardly to inform the electorate. As soon as things get though, high ranking civil servants try to hide any way they can. They will even blame their mistakes or incompetence on the minister. The Treasury is their game preserve. They use it at will, and abuse it more often than not. Woe onto the member, minister of even senator who dares pry into their actions. They will use a whole team of federal policemen for private investigations, in an attempt to drag him before the courts and have him convicted, for an improperly drawn up receipt or an inadequately detailed invoice. We have all experienced those witch hunts, and our party has also felt the backlash.
Why? Because the government ignores misappropriations, kickbacks, secret commissions, money transferred into Swiss bank accounts without even a supporting invoice. We are talking here of billions of dollars, probably embezzled from the money paid in taxes by workers.
Some might object that not all bureaucrats and high ranking officials are gangsters. Thank heaven for that, because under the present system if they were all gangsters, they would not have any difficulty in taking over Canada. The great majority are honest, but they have no means of getting rid of the bad ones, or of tracking them down. This reminds us of the rotten apple in the barrel. Finally, everything is contaminated.
For this reason, we are saying to the minister again that he should appoint immediately a comptroller general, if he is to restrain expenditures, because now a significant part of the billions of dollars collected from Canadian tax payers is spent with such carelessness that it shows a total lack of responsibility.
There are, therefore, enough honest men among technocrats to prevent that danger. It is now up to the minister. I would like also to emphasize that, in my view, the control problem, whether at short or long range, will not be settled by a Royal Commission of inquiry. The minister, must not let himself be fooled once more by a new inquiry that will amount to nothing except fill the shelves of the Parliamentary Library. Previous governments were probably too gullible and easily fooled by high government officials who had been in office for many years and knew, in fact, much more than the new minister. Those are the dangers inherent in the minister's new posting, and I do not envy him in the least. But 1 would ask him to keep in mind those who have proven their honesty before allowing himself to be taken in by fast talking opportunists. And I would like also to draw the minister's attention to an article published in the Journal de Montreal on November 25, 1976 which reads as follows:

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SENIOR CIVIL SERVANTS WANT TO PROTECT THEMSELVES
[Stage Direction]
Federal government senior civil servants have launched an important campaign to protect themselves against the revelations of Auditor General J. J. Macdonell who is alleged to have said that they left public spending go adrift.
Highly reliable sources in Ottawa indicate that the senior civil servants, led by Mr. Michael Pitfield, Clerk of the Privy Council, persuaded Prime Minister Trudeau to create a commission of inquiry so as to delay the possible consequences of the report Mr. Macdonell tabled on Monday.
Some members of the Cabinet are alleged by opposed to the creation of a commission of inquiry and claim that such a step would be interpreted as a dilatory measure to prevent the creation of a new post with wide-ranging powers: that of a comptroller general.
Supported by Mr. G. F. Osbaldeston, Clerk of the Treasury Board, Mr. Pitfield won acceptance of his opinion. Consequently, hardly a few minutes after the Macdonell report had been tabled in the House of Commons, the creation of a commission of inquiry at a cost of $1,000 a day was announced. This commission will be presided over by Mr. Allen T. Lambert, who is very close to the senior civil servants.
The Auditor General himself confirmed privately that Mr. Pitfield was leading the group of people opposed to the creation of the post of a comptroller general of the accounts.
In the meantime, some higher functions in the government were reorganized.
Mr. O. G. Stoner, Deputy Minister of Industry, Trade and Commerce and former Deputy Minister to Mr. Jean Marchand when Mr. Marchand was Minister of Transport-he used to say that the Department of Transport was in "mess"-is one of the first to have been appointed to the commission of inquiry.
I could go on and on but I do not have enough time. Mr. Speaker, I simply want to say to the minister that he was not really lucky as far as the appointments he made to the commission are concerned. First, Mr. Caron had to hand over his resignation because of a conflict of interest-he was linked to the atomic energy matter-and Mr. Stoner, deputy minister and former deputy minister to Mr. Jean Marchand has also been appointed. Finally, the president of the commission is none other than the President of the Toronto-Dominion Bank. I do not want to raise any doubt about his integrity but I seriously wonder whether he does not have any conflict of interest.
The Toronto-Dominion Bank is certainly called upon to do business with some Crown corporations mentioned in the Auditor General's report. Unless he is a superman or an imbecile, I cannot see how he can be impartial in his position. The Toronto-Dominion Bank is continually negotiating with officials of government agencies mentioned in the report. Surely the accused should not be judged by their best friends.
Once the commission is set up, will a solution be found? Not at all, Mr. Speaker, since private members will be deprived of the opportunity to ask relevant questions on government financial controls.
It is a very well known fact that once a commission is sitting, one must wait for its final report to be permitted to ask questions in the House. If the government really wants to reduce its expenditures and control Crown corporations finances as well as that of others, there is only one way in which it can be done, that is to appoint a general comptroller. I am convinced that we should hoist Bill C-19 for six months to give the government time to sort out every main concept of the bill and consider the restraint of really useless spendings and the recovery of millions-not to say billions-of dollars which have flown away every year because of a lack of financial

control. We might thus substantially increase family allowances, for instance; make a larger contribution to adult vocational training, assist in scientific research and continue to subsidize the western grain movement.
The present bill emphasizes vital areas in which the government wants to make reductions even though they already show a deficit, and we are simply trying to emphasize the protection of the companies of those very directors who must be denounced in this House. Instead of making reductions in these areas as proposed in Bill C-19, we must provide for an escalation clause to give the same opportunity to those people who are living below the poverty line. If we do not want to compare them with large companies, we must at least guarantee them a minimum vital income.
John Carnell Crosbie: Mr. Speaker, I spoke earlier in the debate, and I want to carry on with the theme that I enunciated then. I pointed out on November 15, two weeks ago, that I could not support this restraint of expenditures bill because the government of Canada is not proposing to implement it properly across the country, keeping in mind the differences in the regions of this country, the fact that certain regions have a far worse economy and more problems than others, and that to apply a blanket policy of restraint across the country is wrong. In addition, I spoke on the theme that not only is the federal government restraining its own expenditures in what I consider to be a poor manner, but it is also improperly restraining expenditures in its govern-ment-to-government dealings: it is acting to squeeze the provinces least able to look after themselves in government-to-gov-ernment transactions.
Now I want to speak on how to avoid having to restrain expenditures. One of the reasons expenditures are needed by the government is our poor economic situation, particularly in the Atlantic provinces. If ministers of the Canadian government were diligent in carrying out their duties, we would need fewer expenditures to create economic activity. It could be created in other ways.
Let me use as an illustration the Argentia naval base in Placentia, Newfoundland. In the early 1940s the Americans were able to get a 99-year lease from the government which then administered Newfoundland in three areas, including Argentia. Several years ago, the American naval authorities decided they no longer had any use for the facilities on the north side of the Argentia naval station, and they abandoned them. Among those facilities are some very valuable buildings, good harbour facilites and other facilities offering possibilities for industrial and economic development if only the people in the area could have access to them. However, they had not had access to them because the American authorities imposed a restriction. Although they had abandoned these facilities, they said they wanted to be in position to take them back upon 30 days' notice without further ado, so that if anyone invested any money in these facilities, established an industry there, or
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invested hundreds of thousands of dollars to create some activity and create jobs utilizing those facilities, they would be subject to losing that investment on 30 days' notice if the United States decided within the next 50 or 60 years, or whatever the time of the lease might be, to again take over that area.
The area of Placentia, Jersey Side, Freshwater and Argentia has a population of 8,000 to 10,000. Newfoundland has an unemployment rate of 13.9 per cent, but that area has an unemployment rate far in excess of that figure. There are two things at issue here. First, the Canadian government has had a dog-in-the-manger attitude. It wants to claim that it has a legal right to take over these facilities in the event of an American withdrawal. They will not concede that the government of Newfoundland should have the right to these facilities. That is one problem. The second problem is that it is within the power of the Department of External Affairs to negotiate a better arrangement with the U.S. authorities so that this area could be used for job creation, thereby saving the government unemployment insurance and welfare payments and enabling it to better control its expenditures.
It would not cost the government of Canada a cent to pursue this matter with the U.S. authorities. Yet since last May we have been waiting in Newfoundland for the Department of External Affairs to get some answer from the United States authorities so that these facilities could be properly employed. The minister of that department is the Secretary of State for External Affairs (Mr. Jamieson), and his attitude exemplifies why the expenditures of the government are so great in the areas of unemployment insurance, welfare and the rest, because he and his officials have been lax in getting from the Americans concessions to enable these facilities to be used properly for job creation and industrial development. When asked in this House on November 16 whether he had had discussions with the Americans, whether they were successful, whether he had heard from them as to any new conditions to apply to this situation to create jobs-


Mr. Deputy Speaker:: Order, please. The hon. member for Scarborough East (Mr. O'Connell).


Mr. O'Connell:: Mr. Speaker, I apologize for interrupting the hon. member, but we are discussing government restraint and not additional government expenditures, even though those expenditures may be very beneficial to certain regions, and I think we ought to stay within the confines of the principle we are discussing.


Mr. Deputy Speaker:: I must say that the point of order is well taken. As the hon. member may have noticed, I was just about to rise to bring to the attention of the hon. member for St. John's West (Mr. Crosbie) that this is not a budget debate, although the bill has wide scope and touches on the administration of the government. This bill would eliminate expenditures, and the Chair has allowed hon. members to discuss matters concerning the administration and control of expendi-
Restraint of Government Expenditures tures. However, I think the hon. member is discussing policy in the sense of bringing about more expenditures, instead of restraint, so I must say that until now his remarks have been completely outside the scope of this bill and I hope he will direct his remarks to the bill. That gives him enough latitude to make a 40-minute speech.


John Carnell Crosbie: Mr. Speaker, I must not be speaking as clearly as I thought I was. I am speaking about restraint of expenditures, and if the government was doing its administrative job it would be able to control its expenditures much more easily. I will give examples. For example, if the Secretary of State for External Affairs was doing his job, there would be job creation activities in Argentia which would be saving government expenditures for unemployment insurance and welfare and would help the objective of restraining expenditures. On November 16 I questioned the minister on this, and he gave an incorrect answer. He said he had not yet heard from the American authorities as to any new conditions on that subject, but he said that when he did he said he would report to the House. Seven days later I found out that the American authorities had replied to his department on October 21, yet he had not communicated that to the House on November 16.
When it was brought up in the House, I was attacked savagely by the minister; but he misled the House. In his defence, he offered the fact that he had been to Russia two or three weeks earlier and had not known, when he answered in this House, what the situation was. If he did not know what the situation was, he should have said so and should not have tried to answer the question and pretend he did know. The point is that if the minister was attending to his duties, there would be far less need for government expenditures in the Argentia area because we would have facilities in Argentia for industrial purposes. The arrogance of the minister is exceeded only by his self-esteem, and he is not going to frighten this member and prevent me from asking questions in the House.


Some hon. Members:: Order.


John Carnell Crosbie: I am right on the point, Mr. Speaker.


Mr. Breau:: Mr. Speaker, I rise on a point of order. With all due respect to the hon. member, I suggest that the subject he is wandering to has nothing to do with Bill C-19, and I suggest that he be brought to order.


Donald Frank Mazankowski: You are casting a reflection on the Chair.


Mr. Deputy Speaker:: If the hon. member had been listening to me, he would know that I did bring the hon. member to order just a few minutes ago. I was listening attentively to his remarks, and I will intervene in due time. I am trying to follow him. His latest remarks convince me more and more that he is completely outside the scope of the bill, and I hope he will make a better effort to get closer to the bill; otherwise I will have to warn him again.
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John Carnell Crosbie: Mr. Speaker, I realize that hon. gentlemen opposite are awfully touchy about the sins of omission of this government.


Mr. Deputy Speaker:: Order, please. I bring to the attention of the hon. member that it is for the Chair to make a decision at this time, and I hope he does not involve the Chair in any debate he wants to have with hon. members. A decision has been rendered by the Chair on the relevance of his remarks, and it has nothing to do with the political opinions hon. members might have.


John Carnell Crosbie: Mr. Speaker, I have no doubt at all about that. I say that hon. members opposite, not the Chair, are very touchy. This bill also refers to Information Canada. It abolishes Information Canada, and what Canada needs is more information about the matters I am trying to refer to now. Therefore, I presume we are allowed to refer to Information Canada and to inform Canada. The bill also refers to transportation and many other matters.
The economy in Newfoundland is in very slack shape, mainly because of the failure of this government to administer the affairs of this country properly and to give any consideration to the regional disparity that it was elected to correct. The two things hon. gentlemen opposite were going to correct were regional disparity and the bilingualism problem. They have not corrected regional disparity one bit, and they have not done one tittle about their bilingualism policy. They have failed completely in both, and the economy in Newfoundland is dormant.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Hon. gentlemen can bray away. They can bray like donkeys, but I will speak.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: The chief donkey is the Secretary of State for External Affairs. He is not here, but his deputies are left behind. The MUN Extension Services Business Outlook 1977 Conference was held in St. John's last Friday and Saturday, and there were general expressions of despair. There is no laughter, if you live in Newfoundland or in the maritimes. Mr. Campbell Eaton, who is an adviser to the Minister of Regional Economic Expansion, said that the true unemployment rate in Newfoundland is closer to 28 per cent than the actual figure of 13.9 per cent because only 49 per cent of the people of working age in Newfoundland are in the job market. The participation rate in Newfoundland is 49 per cent, compared with something like 60 per cent or 59 per cent in the rest of Canada.
The difference is that in Newfoundland, with jobs just not available, fewer people report as seeking work. There is a truly horrendous unemployment situation in Newfoundland, and a government bill which just promises restraint of expenditures across this country should not be passed by this House until that situation is corrected. Last year the real growth in the Newfoundland gross provincial product was something like 0.7 per cent, and the figure for next year is expected to be only 2

per cent or 3 per cent. Our construction industry is in a major slump, with only 15,000 of our 21,000 workers employed near the seasonal peak of the building period in Newfoundland last June. There is truly high unemployment. There are many hundred thousand people running out of unemployment benefits before they are re-employed.
In the fishery we are suffering from the effects of years of neglect by the government of Canada. The interests of Canada's fishermen are depressed. Because quotas of fish are already fished out for the year, there are five or six fish plants, principally on the south coast of Newfoundland, operating one or two days a week because they cannot catch red fish and the rest. It is not restraint of expenditure that is needed in situations like this, Mr. Speaker: It is a government with some will to do the things that enable Canadians to be productive, a government which does not just blindly cut out opportunities for youth programs, or cut back on LIP programs and the construction of marine facilities and other public works in provinces like Newfoundland.
The Secretary of State for External Affairs is the cabinet minister who represents Newfoundland in the government. The transportation system has been twisted out of all recognition to favour Port aux Basques and his district over St. John's, Argentia and other districts of the province. I have heard it said time after time by the minister that it is very expensive for the government of Canada to meet the subsidies on the ferry service in Newfoundland. Lo and behold, the CNR and the government of Canada have been meeting these subsidies, they have been growing every year and the minister has been telling Newfoundlanders how bad this is and how much the government is doing for Newfoundland and how much it costs.
When I saw the report of the Auditor General for the past year, I noted that it says there are inadequate guidelines for determining ferry deficits. The Secretary of State for External Affairs has been telling Newfoundlanders how lucky they are that the great Canadian government meets these deficits on the North Sydney-Port aux Basques ferry service and the Newfoundland coastal service. According to the Auditor General's report, in 1975 the deficit was $60.3 million on the ferry service and $22 million on the coastal service. At page 170 of his report the Auditor General pointed out:
Under the terms of union with Newfoundland, Canada in 1949 took over operation of the Newfoundland railway which includes certain marine services such as the Newfoundland coastal service and the North Sidney-Port aux Basques ferry service. That same year Canada assigned the management and operation of the services to the Canadian National Railways under an entrust-ment order "upon such terms and subject to such regulations and conditions as the governor in council may from time to time decide". No regulations or conditions have been issued by the governor in council and the CNR has operated the services without any formal agreement or guidelines. The Department of Transport has underwritten operating deficits calculated annually by the CNR.
No wonder the subsidies continue to go up and up. The CNR calculates what the operating deficits are, and the government and the Department of Transport have never
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entered into any formal agreement or set any guideline. At page 171, the Auditor General said:
Absence of a formal agreement covering the terms and conditions for the operation of these services results in the Department of Transport being unable to verify the ferry deficits charged to its appropriation each year.
Mr. Speaker, this is the administration that asks us to agree to their controlling expenditures. I say, bunkum! I would not agree to this government administering anything. Look at their sorry record. Since 1949 this government has been paying deficits on the ferry service from North Sydney to Port aux Basques and on the coastal service around Newfoundland without having entered into an agreement with the CNR or having any means of checking whether the deficits for which the CNR puts in are actually earned, or not. Is that stewardship of the public money?
The Secretary of State for External Affairs rolls around Newfoundland; he jounces around the province telling us how grateful we should be for the $82 million spent on these services last year. That hon. gentleman was minister of transport for a year or two. He is like a whirling dervish, he has been in so many departments. Now that he is Secretary of State for External Affairs he will be a whirling dervish around the world; you can bet your bottom dollar on that. He was the minister of transport for something like two years, and during that time there was no agreement with the CNR. The government just blindly accepted whatever the CNR put in as their operating deficit.
The present Minister of Transport (Mr. Lang) accepts the same kind of arrangement, but the department has now advised us that to correct the situation after some 26 or 27 years a new subsidiary company of the CNR will operate to subsidize the ferry service. That does not say whether agreement will be entered into in order to give them guidelines. They are going just blindly to carry on giving the CNR what it says the deficits are, and telling us Newfoundlanders how lucky we are that they are doing it. Mr. Speaker, that is a great illustration of how this government administers the affairs of this nation.
Next time the Secretary of State for External Affairs wants to mention the generosity of the government of Canada in that regard, we will show him the Auditor General's report and give him the laugh he is entitled to when he speaks about this matter. We will ask him to explain why he did not change it when he was minister of transport. He has been minister of defence production, minister of supply and services, minister of transport, minister of regional economic expansion, minister of industry, trade and commerce, and secretary of state for external affairs-all since 1968. The hon. whirling dervish! Now we are told in the House that if the hon. gentleman has been on a trip somewhere, we have to be careful whether we accept his answers as factual because his excuse will be that he was in Russia-"From Russia with love"-or Afghanistan, or Pakistan, or Turkistan or one of the "stans" around the world.


Mr. Deputy Speaker:: Order, please. The hon. Parliamentary Secretary to the Minister of National Defence (Mr. Dionne) on a point of order.
Restraint of Government Expenditures


Mr. Dionne:: Mr. Speaker, since the hon. member for St. John's West (Mr. Crosbie) has so many opinions, I wonder if he would mind sharing any that might be relevant to Bill C-19.


John Carnell Crosbie: Mr. Speaker, it is very difficult to get through to the hon. gentleman opposite. I thought I was sharing my opinion of this bill with him. My opinion is that the government would not need to restrain its expenditure if it administered its affairs properly. That is the opinion I just gave. I cannot help it if the hon. member opposite does not want to understand what has been said in the House.
The real issue is not control of expenditures, because this bill does not control expenditures. It has nothing to do with control of expenditures; it is simply subterfuge. The bill refers only to some small expenditures. While we are debating it, the government goes on spending $30 billion or $40 billion without accounting for it or adequately controlling what happens to it. The real issue is whether the government is capable of administering our affairs, whether in the tens of millions, in the hundreds of millions or the billions of billions. It is quite clear from everything we have seen and heard in the last few days that the government is not doing this. If the government had made an effort to assist the economic development of the provinces and help improve their prospects, there would be less need for restraint of expenditures or transfer of payments to the provinces.
An example is the development of hydro resources in Labrador. If the government were prepared to assist the provinces which cannot afford to develop their energy resources on their own, there would be a tremendous saving of money in Canada as a whole, as well as a particular province. If the government were prepared to administer DREE effectively and make its expenditures on the program worth while, we would be a lot further ahead. But DREE is receding into the background further and further; it is becoming the scapegoat of other departments who want to pass on to it their responsibilities for spending.
I will give an example, Mr. Speaker. There has been languishing in the hallowed halls of DREE and the department of energy, mines and resources of Newfoundland for seven or eight months a mineral development and exploration agreement which calls for the expenditure of $15 million over five years to develop basic information on minerals in Newfoundland so that private enterprise can take over and try to develop the possibilities. It is still languishing with DREE. The department of energy, mines and resources has not accepted its responsibility to spend the federal government's share of the money, so they have put it on DREE, which in turn is trying to put it on to the department of energy, mines and resources. While this kind of nightmarish infighting goes on in Ottawa, Newfoundland loses a year in the development of proper geological and mineral information to permit the discovery and exploration of new mines in the province. If that kind of thing were avoided, you would not need to control expenditures to the extent you are now doing.
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The administration of DREE concerning work on roads, and where they are to be placed, is becoming a scandal. There is political infighting going on as to where roads are to be built in the province. Roads are not built on the basis of any economic or social goal. Where they are to be built is decided on the basis of political infighting in Ottawa and among government members who decide where the money is to go. That is the history of the program in Newfoundland. This bill will not tackle such problems, Mr. Speaker. The leader of the opposition in Newfoundland called me up to exert influence behind the scenes, as it were, as to where money would be spent under DREE agreements in the great northern peninsula. We must correct the abuses presently going on if we want to control inflation and stop the horrendous waste of government funds.
We hear talk of money spent on the fishery. We would need to spend a lot less money on the fishery if the government of Canada had protected it during the last ten years. Many strange things are happening in the fishery. The great, 200-mile economic zone is to be implemented on January 1, 1977, but it will not matter one iota and will not be the least effective unless it is properly administered. Is it going to be administered properly? At present, in south Newfoundland, you can no longer catch red fish. The quota is used up and the fish plants are working one or two days a week, if they are working at all. The prognosis for next year is not much better, because red fish have been overfished by foreign fishing fleets. They were not stopped by Canada and were not stopped by ICNAF. Spanish and Portuguese fishermen every year have caught and thrown away tens of thousands of tons of flounder which they did not need. The fish they caught and needed were salted; all the rest were thrown away. We have done nothing to stop it, neither has ICNAF. Mr. Speaker, fish plants in my province work three-tenths of the year, or three-quarters of the year, or on slow time.


Mr. Roy (Laval):: Mr. Speaker, I rise on a point of order.


Mr. Deputy Speaker:: The Parliamentary Secretary to the Minister of Transport on a point of order.


Marcel-Claude Roy: Mr. Speaker, I am listening with great interest to what the hon. member is saying about the fisheries situation but when I look at Bill C-19, an Act to amend or repeal certain statues to enable restraint of government expenditures, I cannot explain why the hon. member is referring to the fisheries situation when the bill deals mainly with the Family Allowances Act. I could mention all the clauses relating to the bill now before us but I think the hon. member is completely outside the subject.


Mr. Deputy Speaker:: Order. I appreciate the point raised by the parliamentary secretary but I feel I must nevertheless recognize that the very title of the bill deals with government administration and even if in the opinion of the Chair the hon. member for St. John's West (Mr. Crosbie) is not making a lot of efforts he is making at least some effort to suggest, as I

understand, that if the government had done more in certain areas, in his opinion it would not be necessary to impose the measures that are now before us, and based on that I have to let him continue his remarks while at the same time inviting him from time to time to stick a bit closer to the subject matter of the bill.


John Carnell Crosbie: Mr. Speaker, the hon. member raised another point of order which I should like the opportunity to answer. I could refer to two tremendous decisions of Mr. Deputy Speaker and Mr. Speaker. Therefore, if the hon. member opposite wishes to raise another point of order, I wish he would do so and, if Mr. Speaker permits, I will reply.
The point I am making is this: these restraint of expenditures would not be needed if the government of Canada had had the good sense, intelligence and courage properly to administer during the last ten years our fishery resources. That is all I am trying to say. If the resource had been properly managed, our fish plants would not need to work short time and fishermen and fish workers would not need to go on unemployment insurance and welfare. Our fisheries workers could thereby remain productive all year long. But we did not do that. We permitted foreign nations to rape the high seas off the east coast of Canada, and we are now reaping the whirlwind which we sowed-and the prospects for next year are not much better.
What I and the fishermen of Newfoundland cannot understand is why, next year, the government of Canada will permit 48 per cent of the allowable catch off the east coast of Canada to be taken by foreign fishing fleets and 52 per cent of the allowable catch to be taken by Canadians. We were told in the fisheries committee the other day that 52 per cent of the allowable catch will go to Canadians and 48 per cent to foreigners. Allegedly, they will catch cod in the north and other species which it is claimed are not caught by Canadians. But this reasoning completely ignores the fact that this cod and other fish will come inshore, if it is not caught on the Hamilton Banks, by the hundreds of thousands of tons and will be caught by the Russians. This fish will come inshore and our inshore fishermen can catch some of it, unless they are prevented from catching it. What is the good of a 200-mile economic zone if it is to be implemented and is enforced in such a "pansified, sissified manner?" Who is going to stand up for the fisherman? Who will protect the resource for our fishermen so we can have a profitable fishery?
The other day the question was asked, has the Canadian government a program to assist in the construction of more Canadian trawlers so that Canadian vessels can catch the total allowable catch in the Canadian 200-mile economic zone? The answer was that no, the government does not have such a program and it is not contemplating one, because there are not enough fish for the present Canadian trawler fleet. The government of Canada does not plan to expand its fleet for another two or three years. If that is the case, what good will the 200-mile economic zone do us? Will these plans be in operation next year? How many more people will be put on
November 29, 1976

unemployment insurance? How much more must be paid out to meet the requirements of those who are not working? There you see the problem, Mr. Speaker, and it has little to do with this restraint of spending bill. The problem has to do with the lack of will to administer properly the resources of Canada for the good of Canadians so that Canadians can be made productive and work. That will is lacking, or appears to be lacking, in the plans for the fishery next year.
There is no need for restraint of manpower expenditure and training; there is need for an increase of expenditure in that area. Manpower training is badly needed in Newfoundland, considering our present economic straits. We need money spent on our transportation system; Newfoundland does not need restraint in this area. We need a program which will avoid overcrowding on CNR ferry runs. As a story in the St. John's Evening Telegram points out, no change is planned to avoid overcrowding. The reason given is that that change would cost too much money, but the Canadian government really does not know how much the service costs, because it blindly accepts what the CNR tells it.
The Atlantic Provinces Economic Council recently discussed the economic prospects of the Atlantic region for the next few months and said that those prospects are not good. There is little optimism. The members of APEC have accordingly urged our provincial and federal governments to begin easing their restraint of spending, since such restraint is a major factor in determining employment levels in the region. 1 suggest that a slight relaxation of restraint would have a positively stimulating effect on the economy of the region this coming winter. That, too, is what the Atlantic Provinces Economic Council has been saying. Therefore, we do not need restraint on expenditures in the Atlantic provinces; we need more expenditures on the part of provincial governments and the federal government. Unless there is more spending, we shall face such an economic situation next spring as will curl your hair. It will certainly be the worst since 1949. No one can be optimistic. Nobody can expect a member from Newfoundland to vote for a restraint of expenditure bill if such restraint affects his province. The government may properly restrain expenditures elsewhere. A great deal of money could be saved if the administration of this government were in order.
The same holds true for our oil refinery in Placentia Bay. Here we have a facility which has not operated since February, 1976. The Canadian government helped with the setting up of the facility; it spent $20 million on the wharf. They were supposed to be repaid by the operator who would pay for the use of the wharf and by this method, over a period of some 15 to 20 years, they would pay off the wharf. Mr. Speaker, this is right on the topic because the refinery is not operating and they are not paying their money to the government. The Canadian government is owed some hundreds of thousands of dollars and it would have less need to restrain expenditures if it were collecting this money.
Restraint of Government Expenditures
Before the hon. gentleman over there pops up on a point of order, I would like a chance to explain why this is relevant. This refinery in Placentia Bay is no longer paying the government what is owed on the wharf-$20 million. The Newfoundland government is owed some $47 million-that point is irrelevant to this House, I suppose. Anyway, this economic facility which employed 500 people became inactive last February. During the recent election campaign the Secretary of State for External Affairs was the campaign manager in St. John's West for the Liberal candidate there. He got the lowest vote of any Liberal candidate in the history of Newfoundland-16 per cent of the vote. That may explain the hon. gentleman's irritation with me the other day, the poor shy, new member he tried to crush! But the hon. gentleman was down on a visit to Come-By-Chance and spoke with members of the oil workers' union there. He happened to have in the back room the candidate, Mr. Innes, and he told those gentlemen-


Marcel-Claude Roy: Order!


John Carnell Crosbie: Economic activity is what I am talking about, Mr. Speaker. He told those gentlemen, Mr. Speaker, that during the winter work would be under way on the refinery and everything would be full steam ahead next spring. Yet when I reached this House and asked the government what steps were being taken to activate the oil refinery at Come-By-Chance, I was told that they were taking none, that this Crown Corporation, Petro-Canada-which should certainly be restrained; too bad it is not in the bill-had looked into this project to see whether they would be interested in it, and they had received a report from Petro-Canada saying no. The government of Canada has done nothing with respect to the refinery except to discourage the only people who approached them, the Japanese creditors who asked what assistance the government would give if the Japanese creditors attempted to reactivate it.
They might have got it going and taken those 500 people off unemployment insurance and helped restrain expenditures. But the Japanese creditors were told by the Minister of Finance (Mr. Macdonald) that they should write it off. The Minister of Finance did not think the government of Canada would help with a grant; he did not think it would help with a loan; he did not think it would guarantee a loan; he did not think they would agree to a duty-free zone; and he did not think it could assist in any way with this oil refinery. At the same time, the Secretary of State for External Affairs was telling the union officials in Come-By-Chance that everything was okay and that repairs construction would be under way during the winter, and the refinery operating by next spring.
Who speaks for the government, Mr. Speaker? There should be some restraint on irresponsible statements by cabinet ministers. The Secretary of State for External Affairs should be put under restraint so he doesn't raise false hopes in the people of Come-By-Chance when he visits the area. I would certainly vote to support a bill to that effect, Mr. Speaker. But I will not vote to support the measure before us. If the refinery cannot

November 29, 1976
Restraint of Government Expenditures
operate again, and that is a true opinion, then someone should come out and say so. If it does have prospects, then the government of Canada should assist, as will the government of Newfoundland, to try to get that facility an investment of some $300 million or $400 million to get back into operation.
Today, we only get indications indirectly. I suppose it is restraint of expenditures, really; but the navigation system they had in Placentia Bay to help regulate the tanker traffic and the traffic of vessels in Placentia Bay-it is a huge bay, and if hon. gentlemen would like to come down to visit, we would love to show it to them; one side of the bay is the district of the Secretary of State for External Affairs, and on the other side is St. John's West where Argentia is: if Argentia were on the other side of the bay, we would have a lot more action in Argentia, I can assure hon. members-


An hon. Member:: Order!


John Carnell Crosbie: Here is this bay, Mr. Speaker, which saw a lot of tanker traffic. There are still a few tankers. The Canadian government built a radar facility so that navigation in the bay would be safer. There are many dozen long liners, small fishing vessels, trawlers coming out from Burin and Marys-town, crossing the tanker routes, and not only are there tankers but there are phosphorous ships going up to Long Harbour to the phosphorous plant there. Nothing is more dangerous than phosphorous if there is an accident involving a phosphorous ship, as hon. gentlemen know, yet this system was deactivated-to save money, presumably-in March or April. Now they are moving the radar facility from Custlett, Placentia Bay, in St. John's West, cannibalizing it and removing the equipment to Port aux Basques, the district of the Secretary of State for External Affairs, to Burin-Burgeo. They are taking the radar facility from the east side of Placentia Bay and moving is to Port aux Basques to start a traffic control centre in Port aux Basques.
That is some restraint of expenditure, Mr. Speaker! They take it from one district, making Placentia Bay unsafe for traffic, and move it over to the district of the Secretary of State for External Affairs. This is something we are not taking lying down. It is the wrong kind of restraint of expenditure. To practice restraint in six districts in Newfoundland and increase it in one, Burin-Burgeo, is not a restraint program that members of parliament are going to accept, although some members on the other side have had to accept it for a good many years. It is not going to be accepted by the people of St. John's West, Mr. Speaker, and we want to know whether this is a true restraint of expenditures. Is Placentia Bay now safe for traffic, for tankers, phosphorous ships, fishing vessels, trawlers, long liners, or not? What would it cost to reactivate that navigation system again? What will it cost for the work they intend to do in Port aux Basques with the radar facilities they have taken from Custlett? Why has this been done? Why was a memo sent out-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but his time has now expired. He may continue his remarks only with the consent of the House.


Some hon. Members:: No.


Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, I will be confining my remarks to one clause of this bill. I am afraid hon. members opposite will be so distressed by the thought that my entire speech will be devoted to one clause that they might as well go for their coffee now.
This debate is quite unreal because various pieces of information we need in order to give the measure careful consideration are not yet available to us. One, which the Minister of Transport (Mr. Lang) has on his desk and has not made available to members of parliament, is the Snavely report on the movement of grains. The other on which a report is now being made, concerns the whole concept of the movement of unit trains and how unit trains would affect freight differentials. Both these reports, could affect Bill C-19 and could have particular application to clause 15, the one which I personally, as a member from southern New Brunswick, find offensive and unacceptable.
I wish to share with my colleagues in the House the benefit of the views of the Atlantic provinces transportation commission and the Atlantic provinces chambers of commerce on Bill C-19 and, in particular, on clause 15 which proposes to repeal section 272 of the Railway Act. I intend to be a little historical because I want this speech to be on record showing why I am opposed to this particular aspect of the bill. The section to which I have referred provides for the maintenance of export rates on grain and flour by eastern Canadian ports at a specified level and a payment of a subsidy to the railway companies in respect of such traffic.
The chambers of commerce and the transportation commission of the Atlantic area are closely affiliated organizations. The chambers, of course, like chambers everywhere, are voluntary associations. The transportation commission is financially supported by the governments of the Atlantic provinces. Its directors are business and professional citizens of the region, appointed half by the sponsoring governments and half by the Atlantic provinces chambers of commerce.
This transportation commission has been very actively involved. It might be called a quasi-government body because of the source of its funding. This is why it is well, on an afternoon like this, to listen to the views of this group which it has stated very calmly and in a quite apolitical or non-partisan way. Its directors are obviously made up of people of all political persuasions. The commission has been actively involved for many years in trying to see that the ports of Halifax and Saint John share in the movement of Canada's import and export trade to the maximum extent possible. The object of the commission is to get for persons and industries in Atlantic Canada the best transportation services possible at a cost which will permit these provinces to compete in the markets of Canada and throughout the world. This, after all, is an aspect of our federal system.
November 29, 1976

To this end, the commission is concerned with all those factors in transportation which affect the economic development and growth of the region. That is why those of us who have the privilege of representing the Atlantic provinces are very upset about a particular clause in the bill and intend to discuss it until closure is imposed upon us.
I should like to give the House the background of section 272 of the Railway act. This section was introduced into the act under the auspices of the then minister of transport, the Hon. J. W. Pickersgill. The section was one of the amendments to the Railway Act when the National Transportation Act was before parliament in 1967. The section requires the railways to maintain rates on export grain and flour from specified points on the Great Lakes-St. Lawrence waterway to St. Lawrence and Atlantic ports. In respect of grain, the rate level is to be maintained at the rates applying on November 30, 1960. In respect of flour, the rate level is fixed at the rates in effect on September 30, 1966. The bulk grain export rates are commonly known as the "at and east" rates. The origin of the term is unknown, but it is believed to be related to the grain being "at and east" of a specific point in our country's transportation system. Historically, these Canadian export rates have been closely related to rates from United States lake ports to United States seaboard positions.
Although not enshrined in Statute before 1967, as the Crowsnest Pass rates have been, by custom these rates have been part of the national policy of Canada for the export of Canadian grain for many years. This is the unreal part, Mr. Speaker. At the very time that we are discussing this bill, the Minister of Transport has available to him, but not available to the rest of us, the Snavely report which affects the very issue we are debating today.
During the hearings of the MacPherson royal commission hearings in 1959 and 1960, attention was focused on these rates as part of the export grain rate structure of our country, the other parts being the Crowsnest Pass rates and related rates in western Canada. While the railways sought a federal subsidy for Crowsnest Pass and related rates in western Canada, they chose to increase the "at and east" rates on January 1, 1961. This action was opposed by the western provinces, the Atlantic provinces transportation commission on behalf of the Atlantic provinces, and by grain interests throughout Canada. The opposing parties argued that the increase filed by the railways would divert grain to other routes, to U.S. ports, and would reduce the return to the western grain farmer.
The then board of transport commissioners, after public hearings, allowed some increase in the rates, although not as much as sought by the railways. The opposing provinces appealed the board's decision to the governor general in council, and the proposed increase was suspended.
When discussing Bill C-231, which became the National Transportation Act of 1967, before the Standing Committee on Transport and Communications on October 6, 1966 the then minister, the Hon. J. W. Pickersgill, said this:
We have decided to keep these rates-
Restraint of Government Expenditures
That is, the "at and east" rates.
-at their present level and to pay compensation for doing so. This is because we feel there is an equal obligation in the field to the obligation with regard to the Crowsnest. The purpose of this is to ensure that we will have some inducement and incentive to shippers to use the facilities of the Atlantic ports.
Hon. members who may be interested can find that quotation in the Minutes of Proceedings and Evidence No. 23 for Tuesday, October 6, 1966, page 1669. So members should understand why it is that we have dug in on this issue. How is it acceptable in this bill suddenly to remove from the Railway Act part of what was national policy in 1966, leaving all the other aspects of the transportation arrangements in this country untouched?
Representations by the milling industry sought the inclusion of export flour under this provision. The millers argued that to freeze the export rates on whole grain, while not freezing the rates on export flour, would result in the transfer of flour milling operations from Canada to foreign countries. The minister of transport acceded to the millers' representations and flour rates were frozen at the September 30, 1966, level. The subsidy paid by the federal government in respect of traffic carried at these rates has amounted to $34.4 million since the program began in 1967. Statistics of the tonnage and subsidy payments covering eligible movements of flour can be obtained, but I am not going to bore the House with them. However, in preparing my speech I had access to a table showing the export grain and flour movements under the very section of the Railway Act to which we are directing our attention, and it shows a substantial movement.
As Mr. Pickersgill recognized ten years ago, there is a very close relationship between the "at and east" rates and the Crowsnest pass rates. Both make up part of the export marketing costs of western grain. If the Crowsnest pass rates are increased, the western farmer will receive less for this product; likewise, the increase in the "at and east" rates will mean less return to the western grain farmer. So it is a happy coincidence, that as a representative of the Atlantic provinces, that I find it a perfectly comfortable position to take, as my little element in the unity of our country, to support very actively the interests of western Canada.


Some hon. Members:: Hear, hear!


Robert Gordon Lee Fairweather: Again, as the former minister recognized in his statement, the provisions of section 272 were established to fulfil an obligation that the Atlantic ports share in this export traffic. West coast ports and the port of Churchill have the benefit of the Crowsnest pass rates. The St. Lawrence ports have the benefit of non-compensatory Seaway tolls. Section 272 gives the Atlantic ports an opportunity to share in this particular traffic in competition with national policies maintained for the benefit of other routes. None of us in this House would go so far as to say that all the issues I have listed and all the various aspects of government support are carved in stone forever. We have been waiting for many years to get the transportation system of this country out of the mess that the former minister said it was in. If the government can give us evidence of their interest in a new, sensible and wise transpor-

November 29, 1976
Restraint of Government Expenditures tation policy, then we might not be as stubborn as we are about removing one element of the system. Why attack one element of what should be a general view of transportation in our country?
While the Atlantic provinces chambers of commerce and the Canadian Transport Commission recognize the need for the government to tighten its belt by reducing expenditures, in their view the consequences, both in short-term and long-term effects of this particular aspect of the bill, will be extremely detrimental to the region. With unemployment in excess of 10 per cent, as announced in October of this year, for all four of the Atlantic provinces such a measure as the removal of the subsidy will aggravate an already grave situation.
The major concerns that the chamber and the commission have about the repeal-and I must say I share it, and if I did not, it would be wrong for me to make use of the documentation they have provided-can be summarized in four or five points. First, it will mean that the Atlantic ports are no longer competitive for this export traffic. Second, it will mean a decrease in the returns to the western grain farmer. Third it is a discriminatory action against one trade route or, conversely, it creates preferential treatment for other trade routes. Fourth, it will result in direct loss of employment in the Atlantic region. Fifth, it will affect adversely economic activity beyond the activity directly associated with transportation functions for this traffic.
To illustrate the concern of our people in Atlantic Canada about the effect of the removal of the subsidy, in what might be called more concrete terms, I should like to point out that over the past five years there has been an average of 200,000 tons of flour and 15 million bushels of grain exported from the port of Saint John, the representation of which I have the privilege to share. The effect of this bill, should it be passed in its present form, would be the loss of valuable labour-intensive cargo to the port and the ultimate closing of the Saint John efficient and extensive grain handling facilities. I share the view of the hon. member for St. John's West (Mr. Crosbie). It is to be expected that a member of parliament representing this area and getting factual evidence of the harm which this bill will do to the area which he represents would speak up about it.
The loss of tonnage to the port will eliminate 75 jobs in grain handling, representing some $500,000 to the local economy. It would mean that two yard crews-one each from the two railways, CNR and CPR-would have to be laid off. That means many jobs, with a total annual income in excess of $100,000. If section 272 of the Railway Act is repealed, it would mean the loss of jobs to about 60 people who work as checkers, coopers, truckers, foremen, and others. This would mean the loss of $700,000. The loss to the stevedores and ILA checkers would amount to $850,000. The total initial loss in wages would be $2,150,000. This is obviously unacceptable to a member of parliament who shares the representation of this seaport. That is why we are concerned about the bill, and that

is why the government will have no alternative but to apply closure to this debate to get this bill passed in its present form.


Some hon. Members:: Oh, oh!


Robert Gordon Lee Fairweather: I have said it once, and I will say it again.


Some hon. Members:: Hear, hear!


An hon. Member:: Pretty arrogant!


Robert Gordon Lee Fairweather: I do not know what bothers the hon. member. I do not see why he should expect me to sit in my place in this House and allow wage loss in the port of Saint John amounting to $2,150,000 and take that calmly. If that is arrogance, it is the newest form of arrogance.


Mr. Lalonde:: Arrogance plus nonsense.


Robert Gordon Lee Fairweather: The Minister of National Health and Welfare (Mr. Lalonde), who is suffering very much these days from lack of sensitivity about certain events in this country, might come down to Saint John with me where we will discuss with the various union people who will be affected by their loss of wages just why the government is singling them out and the people in the port of Halifax for substantial losses because of the government's insensitivity to regional disparity in this country.


Marc Lalonde: You don't know the facts.


Robert Gordon Lee Fairweather: I will debate this issue with the minister in the ports of Saint John and Halifax any day he would like to come. I travel economy on Air Canada and Eastern Provincial Airways.


Marc Lalonde: Any day.


Robert Gordon Lee Fairweather: The port of Halifax will lose considerably if this clause of Bill C-19 is passed. If it is, the port stands to lose 210,000 man-hours of work in the handling of flour alone. This figure is based on the 1975 figures prorated to 1977.1 am accused of inaccuracy. The figures are the government's own figures. That is the source of the information I am relaying to the House. This, plus the loss of 45 elevator jobs and five others in the grain handling will bring a loss to the employees affected of over $2 million annually. The Halifax figures do not take into account the jobs that would be lost at the port in such areas as the administration of the dock employees, port agency staff, pilots, clerks and others.
Another identifiable loss is employment and wages for train crews handling the movement of grain to Halifax and Saint John. Based on the number of train crews per train attributable to the Atlantic area, the railways' methods of handling the export grain traffic and the approximately 800,000 tons of grain exported via the Atlantic ports in 1975, 415 train crew trips consisting of five men per crew, will be lost, with direct wages in excess of $100,000. What the figures indicate is that there will be a loss of wages in the two ports of over $414 million. This is in direct wages to employees. The indirect
November 29, 1976

losses that would be incurred to the regional economy through secondary industries and services would be an additional $1.5 million to $2 million. These losses to the economy and employment do not include any losses occurring outside the region, such as train crews, elevator employees at the bay ports and marine transport workers on the Great Lakes. If these losses were identified, they would add greatly to the losses which I have itemized.
I have a little more to say, Mr. Speaker. I feel very deeply about this. I feel deeply that we should not be in a position to discuss clause 15 when there is evidence about the whole movement of freight to be found in the Snavely report on the minister's desk, and yet those of us who have responsibilities as members of parliament do not have access to that report. The flour mill at Halifax will likely have to close if this bill is proclaimed. Located at seaboard, it can, and does, participate in export flour sales. The nature of much of the export flour business is that more than one mill makes up the consignment. With the rate structure as it is under section 272 of the Railway Act, many of the export consignments of flour are made up at the Atlantic ports. The Halifax mill can afford to participate in these consignments. It cannot afford to backhaul its traffic to a non-maritime port. With the loss of the export flour trade, the Halifax flour mill will find it difficult, if not impossible, to exist on its share of the local Atlantic provinces market. Should the Halifax mill close, the effects will be felt by the maritime livestock and feed industry. At present, some 24,470 tons of mill feeds are moved in the province of Nova Scotia under the federal feed grain freight assistance program.
The concern of our two organizations about the competitive position of the Atlantic ports is emphasized by the widening differentials in rail rates which result from the repeal of section 272. Under the "at and east" rate structure as maintained by section 272 of the Railway Act, the export rail rates on grain to the Atlantic ports is thirty-three one-hundredths to 1.04 cents per 100 pounds higher than to the St. Lawrence ports. In the case of flour, the spread is one cent per 100 pounds.
When the government's plan to repeal section 272 was incorporated in Bill C-87 in the last parliament, the railways filed tariffs with the Canadian Transport Commission which would increase this differential to 34 cents to 35 cents per 100 pounds on flour, and to 20 cents per 100 pounds on grain when the former bill was to be proclaimed. On November 3 of this year the railways further revised their tariffs to increase this differential between the Atlantic ports and St. Lawrence ports to 37 cents to 38 cents per 100 pounds on flour and to 22 cents on grain. The Atlantic ports will no longer be competitive with a differential of the magnitude of 37 cents to 38 cents per 100 pounds on flour and 22 cents on grain, a differential which will widen with every future rate increase of the railways. The return to the western farmer will decrease. The traffic now moving via our Atlantic ports will seek the lowest alternative route. Whatever that route is, it will be more expensive than
Restraint of Government Expenditures the present route. It is not possible to measure the extent of the
cost.
By the repeal of section 272 of the Railway Act, the export route for grain and flour via the Atlantic ports is being placed on a user-pay basis. Of all the ministers of this cabinet to talk about user-pay, the Minister of Transport takes the prize. It is being placed on a user-pay basis while the major export routes in competition with the Atlantic ports are not on a user-pay basis. This is discrimination against the Atlantic ports, and preferential treatment for other trade routes.
Other implications of the bill include the long-term loss of foreign markets and foreign currency generated by the export flour trade, loss of traffic to Canadian ports and Canadian transportation agencies and carriers, higher railway costs- since there will be fewer units of traffic to share in railway overhead costs-and a transfer of costs from one department to another; for example, from the Department of Transport to the Department of Industry, Trade and Commerce or the Department of External Affairs, the department responsible for CIDA.
We have no quarrel with the concept that governments should strive to utilize public funds carefully. There may be ways in which this objective can be met, but any representative person in a democracy must share these difficulties. Primarily, in the case of this bill, it could allow the Atlantic ports to remain competitive for export grain and flour traffic, and the continued operation of the Halifax flour mill could be allowed without the continuation of the present method of subsidy payments to the railways, and if the government has another plan-and the plan we were given the other day is quite inadequate-let the government bring it forward and we can get on with other legislation.
The absence of the Snavely report-commissioned some time ago-into whether the unit train concept of moving bulk grain directly from the prairies to the Atlantic ports should be used creates a serious gap in a sensible debate of this issue, and if the government would be more forthcoming with the information it has, many of us would be able to get on with the matters which are before us. How the Snavely report could ever be considered classified or secret astounds me even to contemplate. Apparently that is the case. The minister has it, but we do not have it.


Ralph Goodale: It is being printed.


Robert Gordon Lee Fairweather: Then we should rise, report progress, wait for the Snavely report and then get back to this, because that report will be relevant to this discussion. If the concept is practical, then the repeal of section 272 should be deferred until that concept is operational and proved to be effective. What I am now speaking about is the proposal the minister made for some funds on November 10, 1976, when he undertook to provide a subsidy of $9 million in the first year, decreasing progressively over a five-year period. Based on a decrease in subsidy of 20 per cent per year, this would equal a total subsidy of $27 million over the phase-out period. I suggest the proposed subsidy does not assure the continued
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Restraint of Government Expenditures viability of the flour export trade. This appears to be only a short-term expedient to soften the impact of this legislation. What bothers me most is that we are only dealing with one aspect of the entire transportation system and it really belies our understanding as to why the Atlantic ports should be singled out by the government when there are many aspects of transportation which demand our attention.
The main concern of the Atlantic provinces chambers of commerce and, I remind the House, the transport commission which-as I said earlier-has government funding and is a quasi-government operation although it maintains its independence, is the need to maintain a competitive relationship in transportation costs via the maritime provinces ports with other trade routes. I say to the parliamentary secretary, or to anybody else who cares enough to listen, that if this can be achieved through the use of unit trains for grain and other methods for flour, then our concern may well be met. But we do not have evidence and it is unreal to be debating an issue like this until we have it.
The position of the two organizations that I have the privilege of underlining in this speech to parliament is that the rate relationship between the ports of Halifax and Saint John and other ports must be maintained to ensure that our maritime provinces ports remain competitive for the movement of this traffic. To allow the removal of section 272 of the Railway Act without some guarantee that alternative methods will safequard the position they now occupy is unacceptable to this member of parliament.


Mr. Cecil Smith (Churchill):: Mr. Speaker, it is a great privilege to rise to speak on Bill C-19. Coming from the north, and representing the north, I am sure that is one part of Canada where a great deal of government money is wasted and nothing is accomplished. That is more so in the north than in any part of the country of which I know. The reason for that is poor administration.
The north has been studied to death and developed less than any other part of Canada. There have been cases where consultants have arrived at a given remote community by chartered aircraft, held the aircraft all day and then left for home before evening fell. These consultants felt they had gathered sufficient information to write a lengthy report for the minister of some government department. I call these consultants 24-hour wonders. They wander into a community and spend the day, 24 hours later they have a report drafted, and they wonder why they were ever there. Of course, the report, written automatically, becomes government policy.
That is where this government has fallen down badly. It depends so much on consultants to get the message about what the country needs and what the people of an area require. This government is notorious for not consulting the people who live in specific areas and for depending on what consultants firms say. On top of that, if a minister does not happen to like the report of the consultants-and some of these reports cost hundreds of thousands of dollars-he commissions another

consulting firm to do another study, and then another one, until he gets one that he likes. That is why people who live in remote communities should have a part in making decisions that affect the northern part of the country. I think we are dealing with a government that has no consideration whatsoever for the trappers, the fishermen, the forest workers, miners and businessmen.
I should like to cite what happened at the port of Churchill as an example, Mr. Speaker. The port, which is about 44 years old, was designed with foresight and developed to ship about 40 million bushels of grain annually. The shipping season at Churchill is only 88 days, so the facility has to be utilized fully every hour of the day to capacity. This year, the record was set of 27 million bushels, but not without a lot of problems. The port of Churchill has had many managers in its history, and the manager who was fired last spring was one of the best; but he was a little aggressive for this government. He decided that he would try to make arrangements with some countries, such as Russia, to come to the port two weeks earlier and leave two weeks later. This would enable them to haul out some 35 million bushels. When he got a little too aggressive, the Minister of Transport (Mr. Lang) took it upon himself to see that he was let go, and as he worked for the National Harbours Board he had no one to fight on his behalf. A replacement was sent in, and the 37 million bushels of grain went out.
My point is that with a facility such as the port of Churchill that is expected to handle 37 million bushels of grain going to the European market in an 88-day shipping season, the government is not using the port to its full capacity. It is, therefore, costing taxpayers $250,000 per year in subsidies. The manager who was let go last spring pointed out that this could be overcome and the port could be put on a paying basis. He maintained that the port could ship enough grain and other commodities to balance the budget.
Another example of government waste of funds is the dredging operation. I hate to "dredge" up this, because it has been spoken about in this House many times-not at Churchill but in Toronto and the Hamilton harbour. The port of Churchill has a dredge that belongs to the Department of Public Works. It was completely refitted last year at substantial cost. Last year alone the amount of material removed cost $11.37 per yard. Mr. Speaker, this is totally unacceptable. The crew had tried its best, but it was working with obsolete equipment. After the dredge was refitted, the crew felt obligated to try and get some worth out of it. This year a contract was called for the removal of two million yards of material and the bids came in at $4.35 per yard. Compare that with the $11.37 the Department of Public Works charged the National Harbours Board. It shows that bringing in a private contractor could have saved the cost of refitting this antiquated dredge which I do not think will ever turn a wheel again. The contract could have been given to a private contractor in the first place.
The National Harbours Board is another example. It is to be reorganized and the people in the department do not know what their future is. A report was commissioned which was
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being implemented before it was finished, so 1 do not know how significant it was. Another area of concern is housing in the north, and I am sure anyone who has travelled there knows that. There is a lack of know-how about the way houses should be built in the north. I have spoken to engineers in the Department of Indian Affairs and Northern Development about log housing for the north and was told that housing designs for the north could not be improved upon. I can tell you, Mr. Speaker, that the materials being shipped into the north are of the lowest quality. The insulation factor in the construction of many homes is below the level acceptable for areas with temperatures as low as 55 degrees Fahrenheit during the winter and much of the late spring. I think we need log houses in the north. In an Ottawa paper last week there was an article about a log house being built in this area which sold for $120,000.
May I call it five o'clock, Mr. Speaker?



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 adjournment are as follows: The hon. member for Surrey-White Rock (Mr. Friesen)-Transport-Shipping service to Northern British Columbia-Nature of reservations of residents of area about new system; the hon. member for Capilano (Mr. Huntington)-Transport-British Columbia ferries-Government position on aid for operational costs.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely public bills and notices of motions.



PRIVATE MEMBERS' MOTIONS


Ralph Goodale: Mr. Speaker, I think there is general disposition to deal with notice of motion No. 11 today.


Mr. Deputy Speaker:: Is this agreed?


Mr. Ellis:: Agreed.
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Mr. Deputy Speaker:: If this is so, I would ask if the House is agreeable to stand motions Nos. 3, 4, 5, 7, 8 and 10 at the request of the government.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: The House will proceed to the consideration of motion No. 11.


Donald Frank Mazankowski: That, in the opinion of this House, the government should consider the advisability of amending the Excise Tax Act in order to exempt all purchases made by municipal governments from the levy of federal sales tax and so doing relieve municipal governments of the necessity of imposing additional local taxes to cover such federal sales tax.
He said: Mr. Speaker, the motion I have proposed is clear and straightforward. Its purpose is to draw attention to one of many inequities in our tax system, to a provision I consider unfair and unjust. The purpose of the motion, as well, is to draw attention to the obvious squeeze the federal government places on local governments in this country. Under current excise and sales tax legislation the federal government exempts only a few selected items which are required by municipalities or local governments for their own use and not for resale. These exemptions can be found, for example, in schedule 12 of part 3 of the Excise Tax Act. Anyone who takes time to review that section will see how ridiculous is the application of that particular law which applies to the purchase of materials and equipment required by municipalities in this country.
To show the ridiculous manner in which this law is applied, let me give the House some examples, Mr. Speaker. Let me refer to fire-fighting equipment. One finds that fire engines are exempt from sales tax, but rescue units are not. One is led to ask whether, by virtue of this provision, the federal government is more concerned with making sure municipalities have equipment to save buildings than it is with making sure they have equipment to save lives. In all fairness, I do not think that is the intent of that provision-but what other conclusion can one draw from it?
Perhaps even more ridiculous is the application of the law as outlined in memorandum ET 403 of Revenue Canada, Customs and Excise. That particular memorandum deals with the application of sales tax to goods manufactured and produced by municipalities for their own use or for sale. Section 12 of that memorandum points out in part as follows:
The exemption for fire-fighting equipment applies to equipment at a price in excess of $500 per unit specially designed for use directly to extinguish fires. It covers units commonly known as fire engines and pumpers at a price in excess of $500 but does not include salvage and rescue units equipped at time of purchase or importation with items such as stretchers, axes, resuscitators, life nets, etc ... This exemption is not extended to fire alarm systems, emergency power generators and items to prolong or save life such as resuscitators, inhalators, life nets, life jackets, blankets, tarpaulins, rope, boats, breathing apparatus, and stretchers.
I think the application of the law as outlined in the memorandum is strange. We are concerned about exemptions for fire engines. On the other hand the government levies sales tax on other items required for preserving or prolonging life. I
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think amendments to the law, or to the way it is applied, could correct some of these glaring anomalies.
A more fundamental reason for the introduction of the motion has to do with the blatant double-taxation occurring in this area. The basic principle of common law that the Crown should not tax itself is a proposition backed by many legal precedents. However, section 43 of the Excise Tax Act overrules that basic principle of common law. The Canadian School Trustees Association has argued for years against double-taxation and attempted to convince the federal government that school supplies used for education should be exempt from tax. I think that proposal has validity and is sound.
The Alberta Urban Municipalities Association, in September, 1976, at its annual meeting passed the following resolution which was endorsed unanimously:
Whereas all municipalities in the Dominion of Canada are required to pay federal sales tax on most goods purchased, and
Whereas this federal sales tax is in effect a tax imposed by a senior level of government onto local levels of government, which does appear most unfair,
Be it resolved that the AUMA through the medium of the Federation of Canadian Municipalities petition the federal government to the effect that all municipalities be exempt from federal sales tax on all required goods purchased by municipalities.
The arguments are clear. The support for the proposition contained in the resolution is widespread, and I would think that mine is a legitimate and common sense request. Another argument for an amendment to the particular piece of legislation being discussed concerns the ability of local municipalities to raise revenue. That question is crucial. We know that the federal government has at its disposal various ways of generating revenue. On the other hand, the ability of municipalities to raise revenue is confined essentially to the levying of property tax and certain licence fees within their domain. Therefore, the funding base of local governments is limited, to say the least. They know that during the past 10 or 15 years the proportion of revenues by local governments has declined, while revenues at the provincial and federal government levels have increased. Since 1963-incidentally, since the time the present Liberal administration took office-we have seen that all levels of government in this country have extracted, in taxes, an evergrowing proportion of the gross national product. At present, about 42 per cent of our gross national product is so extracted by the three levels of government. The bulk of the money is extracted at the provincial and federal level; the proportion extracted at the local level has declined.
On the basis of 1974 statistics contained in the pamphlet on national finances published by the Canadian Tax Foundation for 1975-76, we see that the federal government's share of the gross national product has increased from 15.9 per cent to 20 per cent. It was 15.9 per cent in 1963, and 20.8 per cent in 1974. During the same period of time the percentage going to local government had fallen from 5 per cent to 4.2 per cent.
We must also bear in mind that during this period the gross national product increased by 206 per cent, from $46 billion in 1963 to $141 billion in 1974. Despite these revealing statistics,

the federal government continues to force municipal governments to use part of their falling share of revenue to fill the federal coffers. I do not believe this is fair. Indeed, I find it incomprehensible. The injustice is particularly acute as it concerns the smaller centres of our nation. The large cities can float a bond issue to raise money when they urgently need it. The smaller towns do not have this option, though I might say in passing that this might be a blessing when we consider some of the financial difficulties experienced in such cities as New York and Montreal. To a smaller town, the requirement to pay sales tax on major items often prevents the community purchasing other needed items because there is nothing left in the budget.
One example can be found in my own constituency of Vegreville, the town of St. Paul, Alberta. This municipality purchased a backhoe for a variety of purposes. It was used for the installation of culverts, for work on sewers, sidewalks, roads, and so on. We find that the federal sales tax was applied to this piece of equipment in the amount of $4,171. Had the machinery been certified only for use in the area of road-making alone, it would have been exempt from sales tax. Surely this is an anomaly which ought to be corrected. Surely any town purchasing a piece of equipment to be used for a variety of purposes ought not to be discriminated against, as was the case in this instance.
I made representations to the Minister of National Revenue on this issue, and the letter he sent me made it clear that a tax is not imposed in respect of equipment costing more than $500 if it is designed to be used directly for road-making purposes. I suppose that this particular piece of equipment was not classified as being used specifically for road-making; it was used for the installation of culverts, sidewalks-everything in that field. But because of a technicality, the tax was applied.
The other factor which I suppose we should consider in connection with this motion is how much revenue is derived as a result of the application of sales tax in this area. I confess that I am not in a position to answer that question because, although we have gone to great pains to ascertain just how much money is involved, we have not been able to find any evidence either from Statistics Canada or Revenue Canada as to the amount of money we are taking from this source. I consider it not to be substantial. A number of other factors are relevant.
Consider the administrative costs which are incurred by municipalities and governments in this area. These are bound to add up to a good deal of money. If there were a blanket exception, the administrative work which the law presently creates would certainly be substantially diminished. Another consideration is this: we devote a good deal of consideration to the health and viability of municipalities and local government generally, acknowledging the fact that they are great generators of employment. Surely the money which could be saved by the municipalities should be plowed back into the community, providing jobs in much the same way as does the Local Initiatives Program.
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At the moment we are taxing local governments to generate funds for the federal government which, in turn, spends huge amounts on programs of various kinds designed to promote employment. We would certainly be wise to consider leaving this money in the hands of the municipal authorities in the first place. Local government is closest to the people. It knows the needs of the people. In recent years its advantages have been ignored in favour of ever-increasing centralization. In order to get our economy back on the road, we must use all the means at our disposal. Municipal governments are too important a tool to ignore, and acceptance of this motion would be a positive step toward reestablishing the strength of municipal government.
The government has accepted the desirability of being closer to the people. It has stressed a middle of the road philosophy. It is turning toward a lower degree of centralization. I believe it could do something very significant in restoring and strengthening the role of local government which in my view continues to be the most efficient form of government within our system.
I hope the Minister of Finance (Mr. Macdonald) will look upon my motion with sympathy. I hope he will consider in a genuine way the many positive aspects of bringing forward an amendment which would satisfy the request my motion contains because, as I have pointed out, it would certainly help maintain the viability of local governments. I believe it would encourage greater economic activity and constitute a significant step forward in enhancing the strength of a very important level of government within our system.


Mr. D. M. Collenette (York East):: Mr. Speaker, I should like to begin by congratulating the hon. member for Vegreville (Mr. Mazankowski) for having put forward what I believe to be a very sensible motion. I accept many of his arguments, especially the one about double-taxation. It does seem silly that one level of government should take away revenues raised from the people by another. We should certainly take a look at that aspect.
However, such a motion has far-reaching implications in respect of federal, provincial and municipal relations and should really be discussed within the framework of the reallocation of fiscal responsibility. The hon. member did touch on this aspect when he talked about the general health of municipalities. I do not think we can take a narrow viewpoint by considering solely the elimination of the federal sales tax. The subject of increased financial assistance to municipalities has been fully discussed. I believe it was discussed a couple of years ago at the second national trilevel conference of elected representatives from all levels of government. The date was October 21, 1973. An agreement was reached at that time to undertake a joint study of the present state of public finance in this country. All provinces participated in the task force, with the exception of Quebec.
The Canadian Federation of Mayors and Municipalities has publicly stated its case on federal-provincial plans to assist the
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municipalities. This organization contends that although the public finance system as a whole in this country is in balance, the local government sector is in a state of imbalance. This is demonstrated by the fact that over the period 1950 to 1974 the federal government, on a national accounts basis, accumulated a surplus of almost $3 billion, the provinces a deficit of almost $2 billion, and the local sector a deficit of $7 billion. The municipalities further believe that local government revenues from their own sources have not grown as quickly as federal and provincial revenues from their own sources. This is due to the fact that local governments must rely on allegedly inelastic property taxes as their major source of revenue, while the other two levels have access to such growth taxes as income and sales taxes.
This is a tremendous issue right now, Mr. Speaker, in the province of Ontario, and more particularly in my constituency of York East. In my riding, almost 20 per cent of my constituents are living on fixed incomes-retired persons, generally. The exorbitant increase in property taxes has put many people in my area under severe stress. I speak not only of private residences, Mr. Speaker, since over one-half of the population of my area live in apartments. Many retired persons live in these high-rises as well as family homes, and increased property taxes have to be passed on through rents, of course. So, as you can appreciate, Mr. Speaker, I am more than sympathetic to any measure which will ease municipalities of some of their financial burdens, whether it be through elimination of the federal sales tax on various items, as the hon. member suggested, or through some other means.
One argument that municipalities have made over the years in the case for review of fiscal matters is that local governments have had to rely increasingly on conditional transfers from provincial governments to help them meet expenditure needs. Such transfers destroy local government autonomy. Often I hear from my colleagues in government at the municipal level in Toronto that the province of Ontario has a virtual stranglehold on major municipal decisions in our area.
I think we should turn to the federal response for a moment, Mr. Speaker. The former minister of urban affairs, the hon. member for York North (Mr. Danson), has stated the federal government position on fiscal aid to municipalities on a number of occasions. In fact, he spoke to the Canadian Federation of Mayors and Municipalities at their conference on June 17 of this year. He noted that the federal government welcomed the task force report to which I referred earlier, and that it was willing to participate in a discussion of the contents of that report.
The minister stressed that there was a need for very real dialogue in terms of municipal interpretations of the task force data that were submitted. In general, the federal position on the broad issues of municipal finance in Canada has been that the provinces are responsible for the municipalities, under the constitution. The main federal concern has been to see that the provinces have the necessary taxing powers, supplemented by federal equalization transfers where necessary, to exercise their responsibilities. The fiscal arrangements with the prov-

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inces have been designed with this in mind. The facts concerning the rapid growth of provincial revenues suggest that the system has worked.
Deficits and surpluses as measured on a national accounts basis are not meaningful indicators of the financial requirements of the three levels of government, for two major reasons. First of all, the federal government alone has responsibility for stabilizing economic fluctuations. This requires the federal government, as a matter of discretionary policy judgment, to run deficits in some years and surpluses in others. Since the local sector does not have this responsibility to discharge, the numbers being compared reflect the outcome of very different activities.
Secondly, the national accounts framework is designed to measure the impact of the government sector on the economy. It does not, however, provide a complete statement of the government's financial transactions. Most importantly, it excludes government lending. This is particularly important at the federal level where the government advances funds on behalf of, for example, CMHC, the Farm Credit Corporation and the Federal Business Development Bank. In 1974, on a pure national accounts basis the federal government recorded a surplus of almost $600 million. However, when the federal government's lending activities are taken into account, this led to a total financial requirement, or a deficit, of almost $2 billion. In the local case, since very little lending is done by municipalities, the national accounts position and the financial requirements of that level are almost identical.
On the issue of conditional grants, I believe that the slow growth in local, own-source revenues might reflect the sizable increase in transfers provided to local governments. Over the 1960s and 1970s, provincial governments have moved to assume greater responsibility for services that bring benefits throughout a province. In this regard, provinces have provided increased funds for health, education and social welfare. These greater responsibilities have been assumed primarily as the result of recommendations of the royal commissions held in each of the provinces on local administration and finance.
Speaking more specifically to the motion, Mr. Speaker, I wish to remind the hon. member for Vegreville that in the budget of May, 1974 the government did put into effect the removal of federal sales tax from articles and materials purchased by local government for use in construction of water distribution systems, and buses and other public transportation equipment purchased by local government. This was particularly welcome in metropolitan Toronto since the government has had to underwrite an excessive capital expenditure program in building the new subway, which of course demands new subway cars, expansion of bus routes and new streetcars.
Although some concessions have been made by the federal government, perhaps it should be looking at all the grievances listed by the hon. member for Vegreville. However, again I come back to my original point, that this whole matter should really be discussed within the constitutional framework, in terms of financial responsibility of both the federal and provincial governments, for our municipalities.


Charles-Arthur Gauthier: Mr. Speaker, I would like to make a few comments on the motion which reads as follows:
That, in the opinion of this House, the government should consider the advisability of amending the Excise Tax Act in order to exempt all purchases made by municipal governments from the levy of federal sales tax and in so doing relieve municipal governments of the necessity of imposing additional local taxes to cover such federal sales tax.
First of all, I would like to congratulate the mover of this motion, because I find it simply unfair and discriminatory towards municipalities to exempt them from the excise tax on purchases above $500 and slap the levy on anything under $500.
I believe, Mr. Speaker, that if it wants to introduce national legislation, if it wants to pass a law applicable at the municipal level, the government should then introduce national legislation with general provisions. If it wants to make exemptions, then let it exempt municipalities for any purchase of equipment or anything to be used by them. I suggest that the restraint imposed through this act will increase the difficulties as well as the number of discussions, and make the accounting systems more complex. I feel it would be more just and equitable to the municipalities and, therefore, to the ratepayers, for we must realize that anything bought by the municipalities is paid in the end by the ratepayers. Accordingly, the ratepayer will pay a tax on a tax. Mr. Speaker, it is certainly not very funny for a municipality to ask, because of a tax increase, for this excise tax levied by a higher level of government, repeat, a higher level of government.
A while ago, a previous speaker stated that municipalities are a provincial responsibility. I think so too, unless the federal government continues taking over provincial powers. I think that it is the Quebec government which should keep on asking for this exemption, that all the provincial governments have submitted requests for the elimination of this tax, and that the federal government should cancel this tax. A moment ago, someone said: Since municipalities come under the jurisdiction of the provincial governments, and since provincial governments are receiving equalization payments from the federal government to readjust their financial situations. Then, in its mind the provincial government should probably remit that tax to municipalities. In my opinion, it would simply make the administration more complicated. Imagine the federal government first levying the tax on municipalities, then municipalities turning to the provincial government to ask for the reimbursement of the tax levied by the federal government; it would be nonsensical. Instead of all these complications, it would by very simple to eliminate directly and absolutely the excise tax on all purchases by municipalities. I am not only talking about equipment, but also about all other purchases by municipalities, so that they do not have to go around to the provinces to ask for help.
I would like to mention here the municipalities that invest in low-rental housing, and do not even benefit from a preferential interest rate. The Crown corporation grants them loans at the same interest rate as to individuals, and they cannot even save the excice tax on those purchases, which are nevertheless
November 29, 1976

municipal goods; I do not think this should be included in the legislation. Thus when a municipality builds low-rental housing, with the interest rate of 4 per cent, how can we call that low-rental housing? In my opinion, it is not low income housing because we pay five times the price of the building to the finance company and, in this case, they pay to the Central Mortgage and Housing Corporation, a Crown company. On top of it all they have to pay the excise tax.
I only urge the government to seriously consider this motion. I think the House is unanimous in saying that it is somewhat unfair and even discriminatory that municipalities be forced to pay this excise tax.
I then ask the government to introduce an amendment exempting all municipalities from paying the excise tax on their purchases. We know that today the municipalities must double their rates. As I understood, an hon. member said a while ago that municipal taxes in the province of Ontario between 1970 and 1974 went down 35 or 40 per cent. I think that such is the case in one province only, because in the province of Quebec-and I own property there-the municipal tax doubled since 1970. I think the story is the same all over Canada, if we think of the requirements municipalities must meet nowadays. In my opinion, it would be fair and logical to remove once for all this excise tax on all municipal purchases.


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, speaking briefly in support of this motion, I should like to underline the connection which I think exists between the common sense of the solution and the point made by the hon. member for York East (Mr. Collenette). My hon. friend across the way agrees with me that the motion is sensible and that it deserves support, but he made the point that it should be looked at in the context of federal-provincial finance and of constitutional discussions. I agree with him, and I think the hon. member for Vegreville (Mr. Mazankowski) would agree that the implementation of his idea should be looked at as part of the whole taxation picture.
The point I would like to make is that the resolution before us, if it were passed, would not change the law, would not bring anything into effect. It would simply be a case of this House expressing its opinion, and precisely because there need to be constitutional discussions as referred to by the hon. member for York East, I think it would be helpful and it would advance the cause if the House once in a while passed one of these motions which do not have legislative effect but which express an opinion. The motion before us in the name of the hon. member for Vegreville expresses an opinion which I imagine most of us in this chamber support. For that reason I should like to see this motion receive the approval of the House.


John Raymond Ellis: Mr. Speaker, I want to intervene briefly, because the hour is getting late, on this particular motion proposed by my friend, the hon. member for Vegreville
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(Mr. Mazankowski). I look on it as an idea whose time has come.
The principle of the motion-and I do not intend to get deeply involved in detailed sections because I know my friend has done a great deal of research on this and has adequately quoted the necessary sections-is an exceptionally good one. Having spent over twice as many years in municipal politics as I have in this House, I feel I have a little background with which to support the principle of this motion. I know the costs municipalities face in their public works departments, in their utilities commissions, in their parks departments, and in all the services municipalities are called upon to provide.
Municipalities receive their money from property taxes. The porperty tax varies from county to township, and from village to town to city, and it gets progressively harder to collect funds as the municipalities get smaller. I am familiar with this primarily in the province of Ontario, but as the hon. member for Vegreville said, the problem is equally difficult throughout all Canada, and it is becoming more difficult because of the inflationary tendencies that the government has failed to check. For this reason alone the government should accept this motion as an expression of the need to assist municipalites.
I would be the first to argue if the motion had in it any paragraph or clause which would take from the provinces the prime responsibility for municipalities. I have long been a supporter of the structure we have now in which municipalities are the creatures of the provinces. The structure should remain that way, but because the federal government in its fiscal policies has failed to take into consideration the extreme problems for municipalities which are created by inflation, it is time it implemented something of this nature.
My hon. friend's motion seems to meet the situation extremely well. A local improvement has just been installed on north Sidney Street in Belleville, and the taxes have more than doubled because of the implementation of local improvement charges. The implementation of my hon. friend's motion would perhaps not cut down as much as the citizens there would have liked, but in the over-all picture in the city of Belleville, if the requirement to pay federal sales taxes on materials and equipment which they have purchased were taken away, then the over-all tax picture would be better, and their share of these costs would be much smaller.
The bureaucracy which collects federal sales tax could be lessened slightly. I have seen the various forms which are necessary. This was mentioned by the hon. member for York East (Mr. Collenette). I have seen the forms which are required to exempt those portions which are now exempt. It seems to me we could cut down paper work if all the equipment and necessary supplies used by municipalities were exempted. I cannot help but think that there would be some small saving in this area.
I am not at all sure that the hon. member for Vegreville has investigated one aspect which I would like to suggest with regard to the completion of contracts within a municipality. I

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would particularly like to see free enterprise working in municipalities. I would like to see municipalities contracting out work which they can contract out to private enterprise. I think that would be the cheapest method. For example, the installation of water mains and sewer mains could be exempt from federal sales tax even though the work is being done by an outside contractor, and I cannot see why, if this motion were implemented, it would not be possible for that same kind of exemption to apply to contractors doing other types of work, whether it be tree cutting or a sidewalk replacement program, where there are taxable materials used. This exemption could apply with regard to the creation of a new park or whatever work municipalities wish to do, whether it is done by outside contractors or by the work forces of the municipalities themselves. I see no reason why those savings could not be achieved in exactly the same way.
I know, and I am sure my hon. colleagues know, that property taxes have risen quite drastically. As a percentage of disposable income they may not have risen as fast as other things, but the only reason for that is that inflation has shoved up that other portion, and municipalities, backed by provincial grants and subsidies, have made every effort to keep real estate taxes as low as possible. Up until a year or so ago I was in the same position as many others who were paying off mortgages which were 14 or 15 years old. My mortgage payments were less than my taxes, and of course in the beginning the taxes were small compared to my mortgage payments. This situation can only give us a great deal of grief. There have been some questions raised with regard to whether mortgage interest should be deductible. Frankly, the hon. member for Vegreville has raised a more basic suggestion.
The hon. member for Winnipeg North Centre (Mr. Knowles) has left the Chamber, but I am not at all sure that we need wait for any constitutional settlement of this matter. I think it is a straight Financial matter-whether tax could be exempted-and Canadians living in municipalities of any size in any province would benefit from it.
Just about a week ago I wound up debate on a proposal by, I think, the hon. member for Scarborough West (Mr. Martin), and I think we in the opposition set a precedent by sitting down before the hour of 6 p.m. and allowing it to go to a vote. Of course there may be no action on it. In its wisdom the government may decide it should never come back to this House for Final consideration, but as a responsible opposition we considered that proposed legislation. We felt that there was some merit in it and allowed it to go to a vote. I think hon. members opposite, and hon. members to my left, all agree that the expression of opinion we are now debating would certainly not in any way embarrass the government and, if carried out, would be a substantial boon to most Canadians. I am going to sit down now. I think this would be an excellent time for hon. members opposite to reciprocate, and to let this motion come to a vote as well.


Mr. Bob Kaplan (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, I feel constrained to say that if this matter did come to a vote I would be voting against it. I think

the reasons for opposing this measure are so compelling that when hon. members opposite hear the case I have to present they might be inclined to change their minds on this issue even though we all might agree that municipalities are in trouble. I can speak about my own province. They are suppported mainly by the property tax, which is an unjust tax that bears oppressively on the weak. But municipalities are creatures of the provinces, and the tax base they have is determined by the provinces. If, as hon. members on all sides have said, the municipalities are in trouble, the solution ought to come from the level of government that put them in trouble, and not from the federal government in the first instance. Even so, I want to assure you, Mr. Speaker, that there is quite a lot of support coming from the federal government for the municipalities in spite of the fact that they are the creatures of the provinces.
Maybe there should be no sales tax at all, Mr. Speaker. Arguments can be advanced that the federal sales tax is inflationary, that it adds to costs and so on. But we do have a federal sales tax. It is generally applicable to almost anything we buy; you pay a portion of federal sales tax and so do your fellow citizens. To the extent that exemptions are provided for certain classes of goods, or taxpayers, that in effect is a subsidy given by all taxpayers to the particular category of taxpayer who is exempted.
Taking my own municipality, if Toronto were to be given an exemption from federal sales tax, in effect taxpayers of Toronto purchasing goods for the benefit of the municipality of Toronto would receive a subsidy which came out of the pockets of all the taxpayers of Canada. That is the position being advocated. Some argue the federal sales tax is unjust to municipalities because in effect it is a tax upon a tax. In a sense a sales tax exemption would be nothing more than a subsidy from all taxpayers to the taxpayers of the municipalities. The bigger the municipality, the more it purchases, the greater the value of the subsidy from all the taxpayers in the country.
Hon. members opposite point out that there are a lot of exemptions already for municipalities, and that is true, but negotiations are under way between the federal government and several provinces to have financial affairs between different levels of government handled in a different way. It is being argued that the federal government should pay provincial sales tax when it purchases anything in a province, and that the provincial government should pay federal sales tax when otherwise applicable. The fundamental concept of tax exemption being a kind of subsidy is very relevant, and the question of why subsidies should be provided one way or another arises.
The general approach taken by the Carter Commission was that taxes should be regarded as an even burden-a buck is a buck. When a tax subsidy is proposed for municipalities, it is a subsidy being provided generally by all taxpayers in Canada. That is one argument against making municipalities exempt from federal sales tax, but the argument that attracts me most is that touched upon by the hon. member for Hastings (Mr. November 29, 1976

Ellis)-the issue of free enterprise versus a kind of socialistic approach to government activities. I say that, because if the motion is followed to its logical conclusion and the municipalities are made tax exempt, then by reason of the subsidy they would be receiving in this way they would be in a position to perform certain services more economically than free enterprise because they would have a special tax break that free enterprise would not enjoy.
This point was reflected very carefully by the hon. member opposite, who argued that the sales tax exemption should not only go to the municipalities but be extended further to contractors who work for municipalities. That would bring you to the kind of thing you see in the United States, Mr. Speaker, where bargains are arrived at between municipalities and businesses within the municipalities for certain forms of ownership to be taken and a certain kind of colouration to be put on activities, so that the activities of enterprises, not only the municipality, can be covered by the tax exemption extended by the federal government in the United States. This strikes me as wrong in principle.
Our attention is called to the case of snow removal, where municipalities can do the work cheaper than private contractors, not because they are more efficient but because they get enough of a tax break so that it is more economical than when done by private enterprise.
In Saskatchewan we will have an example of how a provincial government can run the potash industry more economically and profitably than the private sector. The provincial government can achieve this amazing result not because it is more efficient but because it does not have to pay taxes as the ordinary citizen does. The same applies with public utilities once they are expropriated by municipalities.
Hon. members opposite who have argued for greater exemptions for municipalities are undermining fundamental principles of free enterprise. They want to establish a framework which will make it possible for a government to do things more economically than business can-not because it is more efficient but because the rules are rigged against private enterprise. Now I know hon. members opposite really do not want to achieve that result, but they have not thought their arguments through carefully enough and do not appreciate the implications of giving municipalities the kind of tax exemptions they suggest.
I mentioned earlier that the federal government does a great deal in spite of the crippled tax base and the crippled structure which most provincial governments have awarded to their municipal creatures. In spite of all that, the federal government has taken a great many initiatives to assist municipalities, and to a large extent has provided a considerable amount of relief from the burden that would otherwise apply.


Mr. Deputy Speaker:: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock tonight.
At six o'clock the House took recess.
Restraint of Government Expenditures AFTER RECESS
The House resumed at 8 p.m.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates; and the amendment thereto of Mr. Holmes.
Cecil Morris Smith: Mr. Speaker, just before I called it five o'clock I had been discussing the poor quality of northern housing, and log houses. The first of our people who went to the north built log houses in which they were able to survive; yet today so-called housing experts think they can show us a style of house superior to the log houses which many in the north are still expert at building. In their wisdom various departments of government, including the department of northern affairs, sent consultants up north to show northerners how to build log houses. Those consultants cost us about $350 a day, so that every ten days we spend for their services enough to erect at least one log house.
As I said before five o'clock, I saw a log house for sale last week here, in the east, for $ 120,000. Clearly log houses are not new, although many consultants act as if they had invented the wheel when they try to show us how to build log houses. You may wonder why I am mentioning log houses, Mr. Speaker. Up north I have seen building materials such as plywood, beaverboard, buffaloboard, and insulating materials hauled to various communities by tractor train.


Martin Patrick O'Connell: Mr. Speaker, I regret rising for the second time today on a point of order. We are considering a bill which seeks to restrain government expenditures, or to reduce certain expenditures. Although I sympathize with the hon. member when he speaks of housing needs in the north-and I assure him I do sympathize-I believe such remarks are out of order. We shall not be able to reach a satisfactory conclusion if, in connection with a measure seeking authorization for restraint, we carry on discussion as though we were in a budget debate talking about general expenditures. The bill refers to specific measures to restrain specific programs. I think we should stay in order and try to bring the debate to a conclusion.


Mr. Deputy Speaker:: On the point of order raised by the hon. member for Scarborough East (Mr. O'Connell) I might say he is not the only one who has risen this afternoon to try to

November 29, 1976
Restraint of Government Expenditures bring hon. members closer to the bill which is before us. The Chair has done its utmost to get members to address themselves more closely to the bill. But this is not easy when one is dealing with an omnibus bill such as this, one whose title is "An Act to amend or repeal certain statutes to enable restraint of government expenditures" and which may be cited, according to the short title, as "The Government Expenditures Restraint Act". This tends to bring into debate the whole question of public administration. Members seem to be making the point that if the government had given the country better administration, restraint would not be necessary. I do not wish to set the Chair within the debate, but had the bill been presented in such a way as to have been cited, for instance, as an act to restrain family allowances, let us say, and to restrain expenditures on adult occupational training, or industrial research incentives, it would have been more restrictive and easier for the Chair to ask members to be more specific in their arguments.
However, in the light of the complaints I have been getting during the debate it might be worth while to read into the record from Beauchesne Citation 119(3) which is a warning to the Chair not to be too restrictive in the application of the rules of relevancy. I quote the paragraph to which I have referred:
Relevancy is not easy to define. A wrong comprehension of it may have a serious effect on the freedom of speech. Members are often deprived of their right to speak on the pretext that their remarks are irrelevant when they refer to matters perhaps remote and yet related, even indirectly, to the question under debate. In borderline cases the member should be given the benefit of the doubt. A great deal of latitude must be allowed in the House of Commons which is a forum where every phase of public affairs can be discussed and every member has the right to be heard, even if in doing so he sometimes disregards the rigidity of procedure.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Reading this and looking at the form of the bill, and in particular at the title of the bill, I find it difficult to prevent members from speaking about the administration of the government as long as they relate their remarks to the proposals put forward in this bill by the government to restrain expenditures. Actually, hon. members will agree with me that they are the ones who lose if they abuse the rule. No one in the Chair can pass judgment in the absence of the co-operation of members. I do not think any incumbent of the chair was given his functions for the sole purpose of preventing persons from speaking or limiting their right to speak. But we are here to try to apply the rule in such a way that our democratic system works at its best. I think the hon. member should be allowed to continue, though I invite him, as I have invited others, to make an effort, at least once in a while, to relate most of his remarks to the bill in front of us.


An hon. Member:: Just say "C-19", once in a while.


Cecil Morris Smith: Thank you, Mr. Speaker. As soon as I can find the bill-it is here somewhere in my folder-I will refer to it.


Mr. Guay (St. Boniface):: Now that's being arrogant.


Cecil Morris Smith: Why don't you get up and make a speech?


Joseph-Phillippe Guay: I can certainly do that. Why don't you stick to the rules?


Cecil Morris Smith: I had better not say too much more on log housing because I am getting away from the bill. However, since the Company of Young Canadians and Information Canada are referred to in Bill C-19 I have to get back to the subject of energy. We see stickers on every light switch around here telling us to save energy, but when I look at some government buildings in Ottawa which have their lights on for half the night there is not much energy being saved. In addition, it costs the government money to keep those facilities lit half the night.
Many areas in northern Canada heat their schools, hospitals, and senior citizens' homes by oil. In many communities oil has to be flown in, in some cases at a cost of 84 cents a gallon. In one community I know not five per cent of the people are employed.
I would make a plea to the government that it consider the use of wood fired boilers to heat public buildings in communities where fuel wood is available. I am not talking of communities that are served by rail or road but of remote areas where most of the people are unemployed. If the government wants to restrain spending it could save money by putting people to work cutting fuel wood, and this would give them some purpose in life. At the moment the government's attitude to people in a lot of these remote areas is to keep supplying welfare. You cannot make anything of a person who receives a monthly welfare cheque. A lot of these people are given no initiative at all. They do not want welfare, they want to develop their communities. But no, the government continues to pour in more welfare money, thinking that this will solve all the problems. That is the approach the CYC took, that the way to solve problems in a community was to pour in additional money. That is not the case; you merely take away the initiative of people in the north.
In talking about the north I must also refer to the CNR. I know the CNR is not referred to in Bill C-19 but it is part and parcel of government expenditure and restraint. It is a Crown corporation that builds up a huge deficit each year which is automatically paid by the government. In many parts of Canada the CNR is the only means of transportation. The CNR is protected by the government. In many areas competition is lacking. Early last week a group of commercial fishermen in northern Manitoba called me and told me that the CNR had refused to transport their fresh fish to market. The fishing industry in the north is just as important to people in the north as the fishing industry in Newfoundland is important to the fishermen in Newfoundland or the Atlantic provinces. Fishing is one of the main endeavours that enables them to make a living.
I just cannot accept that the CNR arbitrarily made the decision not to haul any more fresh fish. I talked to a CNR official who told me that he really could not see what all the kerfuffle was about when they had just failed to pick up a few fish. This simply shows that if that is the thinking of the CNR it must be the thinking of the government; and if the government will stand for something like this it will go to any lengths to disrupt private industry in Canada.
Restraint of Government Expenditures
The Company of Young Canadians went through the north like a blizzard, telling the people all the things they could and should do. Most of the people employed by the CYC were foreign to the north; they were up there on a bit of a holiday. They arrived wearing blue jeans with the rear end out of them, patches on the knees, as if they were God's gift to the north. They took the place by storm. Along with many others they arrived in communities and started to tell the people not to listen to what anybody had to say to them, that they had to think for themselves, that they had to do their own thing. They were told not to worry about what was going to happen, that the government would look after them; there was lots of money where they came from because they came from Ottawa, and money would be arriving any day. That is the kind of impression these people put out.
Let me say something about schools in the north. The Department of Indian Affairs and Northern Development is responsible for constructing schools in many northern areas. The Department of Public Works in many cases does the supervising of the construction of schools. Your Honour may wonder at my speaking about schools, but thousands and thousands of dollars are being wastefully spent on the construction of schools as a result of poor construction. Although the Department of Indian Affairs and Northern Development is responsible for paying the bill, and the Department of Public Works is responsible for seeing that the contractors construct the schools properly, in many cases the Department of Public Works has not even had a site inspector on the job. These are schools costing not $100,000 but in the neighbourhood of $2.5 million to $3 million. When I asked the Department of Public Works why a site inspector was not on the job, I was told it was too costly.
Today, Mr. Speaker, the taxpayers of Canada are paying the bill for these schools. Some of them are not even five years old and are collapsing. I have a report in my office on one school with 26 defects. One wall of the gymnasium has collapsed entirely, and the school is only five years old. As I say, the Department of Indian Affairs and Northern Development and the Department of Public Works got together to build these schools and have poured money into them. If the Department of Public Works needed another $200,000, the voucher was written out and they got it. What is all this doing for the people of the area? Absolutely nothing. They are being deprived of other developments in the community because money is being spent on repairing a school that was poorly constructed in the first place.
Many government departments feel that because money is being spent in the north it does not really matter, that no one will ever go up there anyway. They have no interest whatsoever in the area, and they do not do a good job of looking after construction in the north. I have to go back again to housing because this ties in with housing. It is all right so long as it holds up until the final inspection is made. "Our hands are clean'', say the officials of the Department of Public Works, and that is the way they look at it. It is very interesting that

November 29, 1976
Restraint of Government Expenditures
the Minister of Public Works (Mr. Buchanan) was formerly the minister of Indian Affairs and Northern Development. Formerly he was in a position of having to pay the bills; now he has to invoice the Department of Indian Affairs and Northern Development to see that these things are cleaned up. We hope the situation will clear up.
There is just one other matter to which I should like to refer, namely, schools and the water supply in the north. It is quite interesting that Habitat proposed the provision of a clean water supply for everyone in the world by the year 1980. We have several communities in the north which do not even have a clean water supply. Their water has to be treated, but they do not have facilities for treating their water supply.
As I said before, the north has been studied to death. I have to keep repeating it because very little development has taken place. There was the signing of the Canada Northland Agreement which took place in Norway House, at which the Minister of Regional Economic Expansion (Mr. Lessard) was present. On that occasion $138 million was cashiered by the federal and provincial governments, but low and behold, what is the first thing we see? We see $5 million going for consultants' fees for economic development. That is similar to what we see in Bill C-19 with regard to the Company of Young Canadians. That is exactly what the CYC was saying, "We will spend thousands of dollars, we will fix this and we will fix that." Everyone put their credit in them.
What are we doing now? The Company of Young Canadians is gone. This was another great government program that was established, that did its damage, and that is now abolished, leaving the people in the area to pick up the pieces. The same happened with Information Canada which was of some use in some of the areas in the north where there were no libraries. Information Canada provided some useful services there, such as providing material for students.
The government starts programs without giving real thought to what their end result will be. This is what is happening throughout the northern part of the country. Somebody dreams up a wonderful program, it is established, and then abolished. I think they must pay a bonus to any person who will come up with the newest program. We in the north always seem to be the ones to get it because, if it fails there, there are not too many people around to see it fail. We are a very quiet and modest group and we do not like to condemn any government too loudly.
There is another expenditure on which the government could put some restraints. In 1974 during the election campaign the Prime Minister (Mr. Trudeau) and five of his cabinet ministers came north, but that is the last time we saw them. They have not come up since. I hope that this is one government restraint that will be continued because we can certainly do without that sort of visitation.
The other form of government restraint that I would like to refer to is with regard to the Department of Transport. As hon. members know, many areas in northern Manitoba can only be reached by air. Airstrips were constructed in the days of the Company of Young Canadians primarily to serve the
[Mr. Smith (Churchill).J
northern communities to allow them access to schools and to supplies. As soon as the federal government found out that these airstrips were being used a fair amount, it imposed strict regulations on their use. Many people in the northern communities now can no longer utilize these airstrips on regular scheduled runs for the simple reason that the Department of Transport does not allow certain types of aircraft to land on them, for the safety of the people who live there, as officials say. Anyone who has ever flown in the north and who knows how unsafe it is to land on ice in the early fall and late spring would soon change those regulations because without those airstrips some of these northern areas cannot be reached.
In closing I should like to say that we in the north are completely fed up with the endless studies being done about the north, and the endless consultants coming north. Before one group of consultants leaves, another group arrives in the community. People in many communities are saying now that, before any new program is initiated, they would like the government to remember what happened to the CYC. The CYC arrived in a storm and took over, but now it is gone and, as I said, the people are left to pick up the pieces. They are the ones who will suffer. I say that the people of the north should be included in the planning and implementation of the programs, and then we will not be faced with the embarrassment of cutting down programs and putting it down to government restraint. I do not think the closing down of the Company of Young Canadians and of Information Canada is honest restraint; it is only window dressing.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I hesitated to rise because the whip on your right had suggested that he had a speech to make, and I thought it would be a lovely time for him to make his remarks. We will certainly be looking forward to him fulfilling his commitment, which was made here not long ago, to make a speech on this bill. I am sure we will all be interested in hearing it. His contribution will be worth while, and both the east and the west will be interested to hear what he has to say.


Joseph-Phillippe Guay: At least I will stick to the subject matter of this bill, which is more than you people can do.


Fred Alward McCain: If that is the hon. member's speech, Mr. Speaker, then let it go on the record as his speech on the subject.


Joseph-Phillippe Guay: Give me time.


Fred Alward McCain: If the hon. member had to stick to the bill, he would have to support all the clauses in the bill. He would then be supporting a bill which will have a detrimental effect on the movement and sale of grain and grain products. He would be speaking on a bill which is discriminatory inasmuch as it affects eastern and western Canada, but not entirely the rest of Canada. It is not totally discriminatory because in its transportation aspect it has some effect on mills located in Ontario grinding flour mainly from western wheat. The bill is dedicated to eliminating or, at best, reducing the use of elevators located throughout Ontario.
November 29, 1976

I am sure the hon. member's speech would be a great contribution to the cause of his party if the spoke at some length on a bill which has a debilitating influence on the economy of Canada from the Rocky Mountains to the Atlantic coast. So 1 would love to hear him speak on this bill. When you take the pay cheque from a Canadian you do not do him much good, and this measure takes pay cheques away from many Canadians.


Joseph-Phillippe Guay: You must have quite a time substantiating for yours.


Fred Alward McCain: The hon. minister is going to get a speech in yet, if I am not careful.
It is rather significant to note that this bill covers a wide range of departments, but I do not see the Minister of Transport (Mr. Lang), the Minister of National Health and Welfare (Mr. Lalonde), the Minister of Finance (Mr. Macdonald), or any other minister whose department may be touched directly or indirectly by this bill here this evening. 1 submit that it would probably be extremely inconvenient for all the ministers affected by this bill to be here, but I also submit that it is the duty of the government to have at least one of them here.


An hon. Member:: The minister without portfolio just left.


Fred Alward McCain: As requested by the government whip, I will confine myself to Bill C-19 and the amendment. The first thing I want to do is compliment the hon. member for Fundy-Royal (Mr. Fairweather). He depicted in a very well documented address the consequences of this bill. He illustrated beyond any question of doubt that the bill will take more from the incomes of Canadians than it will save taxpayers.
This bill produces a net loss, as it reflects on transportation, and while the bill imposes hardships upon grain growers, millers, and all types of carriers, it will save peanuts. I wish to point out that this is but peanuts we are talking about in the transportation structure. For instance, the policy which has been outlined by the Minister of Transport suggests that user pay shall be the concept from here on.
What would that do to the St. Lawrence Seaway if all the subsidies were to be removed from commodities going through the Seaway and if the Seaway were to become a proper user pay instrument of transportation? Let us consider what would be assessed in tolls. If I am not mistaken, the interest rate on Canada Savings Bonds is something in the order of 9% per cent, give or take a point or two. The total bill that gets to the Seaway in capital costs, losses and interest charges, brings it to approximately $1 billion. It would therefore take perhaps a $95 million increase in revenue to carry the interest costs alone.
If it is fair to ask those concerned about grain and those concerned about employment in eastern ports to sacrifice their subsidy, then it is fair for the government, which has its seats along the St. Lawrence River in Quebec and in the province of Ontario, to say the Seaway shall pay its way. That is just as
Restraint of Government Expenditures fair as to say that we will deprive the eastern ports of their employment. Surely we can have fair play across Canada, or do we have to play politics with everything?
When we analyze the effects of Bill C-19-and it is a shame the government whip is not here because I am staying right on the subject and on related subjects-we find that it really has little effect upon the port of Montreal as a grain handling port, but we find that it will probably eliminate the ports of Saint John and Halifax as grain handling ports, as flour-handling ports, and as by-products ports for the grain industry. It is indicated-whether it is truthful or soft soap is pretty hard to say until the real results come out-that Montreal will be hurt least of all. This is a pretty poor deal. Why should the Atlantic area not look at it with a jaundiced eye?
It is significant that we are talking about the user pay concept and that we are talking in this debate about saving money. I just happened to pick up a few little notes here recently about a place called Mirabel. What does it do? It is reputed to have an estimated loss coming up of $46 million. That is the estimate for the forthcoming year. We know full well that if one had to pay for Mirabel as he used it, nobody would use it. It would become a ghost town.


An hon. Member:: It is almost that now.


Fred Alward McCain: To make Mirabel possible, land had to be bought. We bought 17,000 acres with $18 million. That is a pretty good price. Then we bought another 76,000 acres of peripheral land at a cost of $143 million. Then we got into trouble and ended up in court, and we spent $1,280,603 in court costs because the government had not really satisfied the people from whom the land was bought. Why did we not have a little austerity back then in transportation? Is it not a little late to ask the Atlantic area, the wheat grower, and the miller to pay the cost of austerity after spending money like a drunken sailor?


Some hon. Members:: Hear, hear!


Fred Alward McCain: It cost $25,637,500 for consultants fees to one firm alone to build Mirabel. How much are we going to save with this bill? Let us hear a minister answer that question. It will take three years to save that much. It took another $16 million in consultant fees to put Mirabel in place.
The Atlantic area comprises a group of people who like austerity. Like the hon. member for Cape Breton-The Sydneys (Mr. Muir), there is a little Scottish blood in us, and we have had to learn to get along without some of the things we like, and to be a little frugal. If we in the Atlantic area are going to be frugal, let us carry that across Canada, even if it pervades some of the seats opposite.


Some hon. Members:: Hear, hear!


Fred Alward McCain: Is it fair that the government is going to operate Mirabel at an ascending loss on an annual basis as it has been operated to date, at an estimated loss in the forthcoming year of $46 million, while it is going to ask the people

November 29, 1976
Restraint of Government Expenditures at the Atlantic ports to go without work and without revenue because of austerity? Let us turn some of it on Mirabel. Is that not in Bill C-19?


Some hon. Members:: Hear, hear!


Fred Alward McCain: I think we should go back a little further with Mirabel. I read in the Globe and Mail of November 3:
Federal government estimates indicate that Mirabel International Airport i Montreal will have a loss of $46.5 million in the current fiscal year, according to figures presented at the annual meeting of the Air Transport Association of Canada.
These are government figures.
This compares with an estimated loss of $26.9 million in the past fiscal year, according to a paper presented by J. J. Smith, who is conducting a study on airport user charges for the association.
Government estimates indicate that revenue at Mirabel in the past fiscal year ending April 1 would total $20.8 million, while expenses would be $47.7 million. In the current fiscal year revenue was estimated at $22.3 million while expenses climbed to $68.8 million for a deficit of $46.5 million.
This and other articles went on to explain that while one branch of the government, the Department of Transport, was recommending that Mirabel be built, another part of the same department was already redirecting flights to Toronto. So while Mirabel was under consideration it was a predictable loss leader and an inconvenient point of call for aircraft. A little austerity right there would be a good thing. Perhaps we could introduce a bill C-19-A to close Mirabel as an austerity measure and save $46 million, some five times what will be saved if this bill passes.
Bill C-19 is the laughing stock of Canada, at best. When one considers that we have a user-pay concept, when one considers that the interest charges alone would add $95 million or $100 million in additional fees on the St. Lawrence Seaway, and when one considers it is going to take $46.5 million to operate Mirabel, then one realizes why the Atlantic area wants to know why austerity only affects it.
Let us take this a little further, Mr. Speaker. Of all the money the Government of Canada spends on transportation, only IVi per cent is attributed to the Atlantic area. When one looks at what the austerity program is trying to save in the Atlantic area one must remember that they bear the burden of 22 per cent of the total savings in freight and other subsidies which might have been paid by the government. When in the neighbourhood of 8 per cent of the population of Canada bears 22 per cent of the austerity program, and when that 8 per cent of the population is in an area which DREE is trying to lift up-while the Department of Transport is trying to sink it- then the program does not make very much sense. When we of the Atlantic area argue, we are told that we have the Maritime Freight Rates Act. This is as if Croesus had stumbled and dumped his wealth in the Atlantic area, but when you begin to figure out what it actually means in terms of the total expenditure on transportation for Canada, then on a percentage or per capita basis the Atlantic area gets the short end of the stick.

I am concerned that not a single Liberal member from the Atlantic area has pointed out how detrimental C-19 will be as it changes the "at and east" rate. This is a total abandonment of responsibility. It reminds me that after the strike was settled in the city of Saint John there was a headline in the newspaper about the work the hon. member for Madawaska-Victoria (Mr. Corbin) had done-when people had been assured 48 hours earlier that it had been resolved. I think that is symptomatic of the interest that members of the Liberal party have in Atlantic Canada. Their sole duty is to bow and pay lip service to the Prime Minister (Mr. Trudeau) who has not seen the Atlantic area and its plight properly since he took office. He is not likely to see it in future either as he is so absorbed and interested in a fellow by the name of Levesque in Quebec. I say that he should get off that subject and on to the realities of Canada.


An hon. Member:: Bread and butter.


Fred Alward McCain: On Monday, November 15, an editorial in the Halifax Chronicle-Herald had this to say:
Bill C-19, the government's proposed restraint legislation, has received second reading in the House of Commons. Its passage will, among other things, remove the subsidy on grain and flour shipments through Halifax and Saint John and that can only have a seriously adverse effect on those ports.
The one encouraging factor at this time is that the bill is running into considerable opposition, as, indeed, it should.
The member from Halifax-East Hants, Robert McCleave, has pointed out in the House that removal of the subsidies would work a heavy handicap on the longshoremen of the east coast ports.
What it would mean in Halifax has been suggested by J. W. E. Mingo, chairman of the Halifax-Dartmouth Port Commission.
Mr. Mingo has been quoted as having said that termination of the subsidy will cost Halifax its export flour trade, estimated at 200,000 tons, in the current year.
How much wheat is in 200,000 tons of flour? How much does that affect the west? Even St. Boniface might be interested in knowing that. I wonder if this fact has been published in the west that the bill will affect the flow of 200,000 tons of flour through the Port of Halifax. We should consider the total national consequence of this.
The editorial continues:
As well, it will reduce the flow of grain through the port.
As Mr. McCleave has pointed out, it is not fair. Subsidies and statutory raises protect the movement of grain and flour to the west coast and through the St. Lawrence Seaway. Why pick on the east coast to exercise restraints?
To be sure, Ottawa has promised an alternative arrangement. Mr. Lang, the Minister of Transport, has said that legislation changing freight rates will be introduced in the Commons this winter.
However, on the basis of what little information is available, it appears, as one would expect, that Mr. Lang's legislation will most greatly benefit central Canada.
Perhaps the legislation will be something like the unit train, another concept which Mr. Lang offered as a palliative for depriving the Atlantic region of its freight subsidies. The unit trains are not running and, at the present rate of construction of them, they are not likely to be.
Meanwhile, the Commons is considering Bill C-19. If it is passed Halifax and Saint John can bid farewell to the subsidies which have enabled the ports to operate competitively.
The minister got himself into a bit of trouble with this part of the bill. It did not really concern him that there were people in Atlantic Canada who would be hurt, but what did seem to
November 29, 1976

concern him a little was the fact that flour mills might get hurt, all but one of which are located outside the Atlantic area. According to the press, the minister told the Canadian Flour Millers' Association that they can have $8 million this year, a diminishing figure each year for four years, and in the fifth year they will get nothing. This is to help them make export sales of flour. Any maritimer, whether he sits on your right or your left, Mr. Speaker, who will accept that as a reasonable alternative to a continuing movement of freight out of Canada through its Atlantic ports is not a loyal Atlantic individual.I would hope that in the Liberal caucus members from the Atlantic area will object to the clause in Bill C-19 which refers to the removal of the "at and east" rates.
If my understanding of what happened is correct from reading the press, the Minister of Transport told the flour mills that the $8 million is all they will get and they could take it or leave it, divide it up any way they like, but it was all there would be for the coming year, and then it would diminish each year until they get nothing. Let us hope they can use their $8 million to advantage. We need to sell wheat this year, and we need to move grain and flour through these ports. In the long run the subsidy offered to the flour millers will bring no relief whatsoever to the Atlantic area.
I suppose that after some people in the Atlantic area had discussed the bill with the minister and made their representations with respect of the importance of the deletion of the "at and east" rates, they were convinced that the government's proposed bill would not contain clause 15, and that the government had been persuaded, on the basis of information, coaxing, and even a little cajoling, that this was not an austerity measure but one detrimental to an area into which we shall need to pump more money in order to relieve its regional disparities. It was thought that the bill in its final form would not contain that discriminatory provision. I say this because the Minister of Transport had indicated in a press release that certain matters which caused dissension would not be proceeded with. Why did he not apply that thinking to Bill C-19?
The press release of November 26, 1976, put out on behalf of the Minister of Transport, said in part:
Transport minister Otto Lang announced today he has informed the provincial premiers of his intention to introduce a new Maritime Code bill in the House of Commons.
I shall not read most of the press release which deals in the main with the coasting trade. But I shall read the last two paragraphs, which are to the following effect:
Mr. Lang said: 'Removing the coasting trade provisions from the main bill should not be viewed as a lessening of this government's resolve to proceed with reasonable regulation of the coasting trade in Canada.
This method of dealing with the situation will ensure that the coasting trade provisions can be the subject of adequate debate both in the House and in committee without further delay to the Maritime Code legislation which is considered desirable by all parties, by the provinces and by industry.'
As far as it goes, the press release is fine, but what the minister did not say is just as important as what he said. At no time in that press release did he say that he intended to call
Restraint of Government Expenditures witnesses who would give their opinion on the matter of the coasting trade, even though the government was to introduce a separate bill. That was another example of the minister's discriminatory approach. It reminds me of the blind mule in the apple orchard, butting his head agains the trees. Similarly, the minister is oblivious to the pain he is causing himself and the inconvenience he is causing the rest of the country.
The Atlantic area is familiar with austerity; it knows all about austerity. The Minister of Fisheries (Mr. LeBlanc) has practised a brand of austerity which no doubt has placed him high on the totem pole of those who would praise the government for saving money. You may remember, Mr. Speaker, that not long ago there was a severe storm on the Atlantic coast; it raged in the Bay of Fundy and wrought great damage. The minister held that money would not be paid for insurable items which were damaged. Mr. Speaker, houses are insurable, but damage to houses was covered. Damaged fishing gear was paid for, although it is not insurable. But the minister said that boats which are insurable would not be paid for, if damaged.
I draw to your attention that boats, like automobiles, are insured on a depreciating basis. There comes a time, say after two or three years of depreciation, when the insurance premium on the boat is so high that it does not pay one to insure. This happens with vehicles of the sea used as fishing boats. Because their boats were not insured, some fishermen were unjustly made to suffer. The Minister of Fisheries will not say to Treasury Board, or Treasury Board will not accept, that the fishermen concerned were hurt by the storm. It was an emergency. If it had occurred in another field, the government would have acknowledged it as a calamity; but because it took place in the field of fishing, the government was able to save a lot of money. That is how it practised austerity-on the backs of the poor fishermen, some of whom could not fish this year.
Because of the government's austerity measures, some fishermen may not fish ever again; some will only fish next year with great difficulty. The government likes to practice that kind of austerity. And it is trying to do in the field of transportation what it did in the field of fishing. The Minister of Fisheries has been approached by people who have coaxed, pleaded with, and begged him to relieve the hardships which have been caused; but, no, he will not use his discretionary powers which would permit him to offer some adjustment to those poor fishermen who lost their boats, or whose boats, were so severely damaged as to put repairs beyond their means.
I hope the Minister of Transport will consider deleting clause 15 from Bill C-19. That is a fair request. Certainly the six-month hoist, if accepted, would allow the government to consider further measures for helping those who would be affected by clause 15. I support the position of the hon. member for Fundy-Royal. He is a mild mannered man, but I think he was speaking for all members from Atlantic Canada, in all parties, when he said that as far as he is concerned this bill would only pass on closure, and that it ought not to pass in its present form. Therefore I say that the amendment for giving it the six-month hoist would give the government time to consider these matters. Despite the objections which were

November 29, 1976
Restraint of Government Expenditures raised in the previous session, the minister has apparently not listened, because he included clause 15 in the bill.
I was disappointed to hear the Minister of National Health and Welfare say that the hon. member for Fundy-Royal spoke nonsense. I suppose that the minister, coming from Quebec and having some interest in the city of Montreal, might consider that hon. member's remarks as nonsense. Montreal would stand to lose little and gain a great deal if boats which ordinarily carry flour and grain could be coaxed to go up the St. Lawrence Seaway as far as Montreal. But the hon. member's remarks did not sound like nonsense to me. I suggest that ports east of Montreal will carry the burden of loss, and the port of Montreal will have little loss accruing to it.
It has been known in the Atlantic area for a long time that the government has chosen to do everything it can to broaden the navigable waters of the St. Lawrence Seaway, while at the same time doing what it can to discourage movement from eastern ports. Was this, another political move? Does the government not remember that the hon. member for Saint John-Lancaster (Mr. Landers) is a Liberal supporter? If the bill passes in its present form, will he be returned to this House, or will he be held responsible for not having spoken against the bill publicly in the House or elsewhere? Here is a chance for the hon. member for Saint John-Lancaster to speak on behalf of the city he represents. I challenge him to speak on its behalf.
The additional dredging, the additional ice breaking, the additional improvements to gates and locks on the Seaway are intended to create more competition for eastern ports, and Bill C-19 is a continuation of that pattern. What an innocent looking thing that clause is. It says that section 272 is to be deleted from the Railway Act. What an innocent looking clause to have such a major adverse effect upon an area.
While this bill is before the House we are hearing discussions about the infrastructure which is required for Mirabel. Does the Minister of Transport intend to introduce a companion bill to this, Bill C-19B, to bring to a halt all or any expenditures which might be made on Mirabel? The bringing in of such a bill would certainly be justifiable. The estimated cost of the infrastructure five or six years ago was $250 million. But the estimated cost of the Olympics was also a relatively low figure-it was a little more than $250 million, but it was still relatively low. On the basis of the inflationary trend which prevailed during the preparation for the Olympics, ought we to embark upon the expenditure of $250 million, which might well be $400 million, $500 million or $800 million in the final analysis, so that Mirabel can be used with the minimum of inconvenience?
Is it the intention to introduce fast transportation systems for both passengers and freight, or shall we once again opt for austerity and pass a Bill C-19B to halt expenditures on Mirabel Airport? That would be a very fair thing to do having regard to what is being done to the Atlantic area by this bill.
[Mr. McCain.)
Let hon. members bear in mind the story of the Olympics and how those cost estimates escalated into a horrendous figure.
Let me read again and ask the government again whether it intends to extend austerity to Mirabel. In his speech reported on September 24 the Prime Minister told a Bathurst, New Brunswick, audience that it is "now fashionable to say the economy will run better if government intervenes less." Then follows a sentence which members over there should not forget. "To blame fashion for coast-to-coast dissatisfaction among electors is to have misread the lesson or to have ignored the realities." We could go on in this article to find that it costs $20 to go by taxi to Mirabel. It only costs $2.25 to get to Dorval. It takes between an hour and two hours, depending on traffic, to get from Dorval to Mirabel.
There is not a single plane which can be repaired at Mirabel; planes have to be flown back to Dorval for repairs. Think of the expense the paying public is bearing to service a plane which lands at Mirabel, has to be lifted with its crew to Dorval, and then returned to Mirabel. Where is the austerity being practised there comparable to what is being proposed in Bill C-19? What about the Montreal members? Are they prepared to see that infrastructure go by the board? Are they prepared to be honest with the rest of Canada and to practise austerity as it is demanded we shall practise it in the Atlantic area?


An hon. Member:: Why don't you fly a kite?


Fred Alward McCain: That is about as responsible a remark as we have heard from over there all day. I commend the man.


An hon. Member:: He is one of the brighter ones.


Fred Alward McCain: The Atlantic area is prepared to accept austerity measures where necessary to improve the economy of Canada, but we are not prepared to accept austerity when 22 per cent of the savings in transportation occurs in our region. We are not prepared to accept austerity when the per capita payment for the total cost of transportation in Atlantic Canada is less than the per capita payment for the rest of Canada. However, we are prepared to accept reasonable austerity which leaves us in a position which could be considered fair in relation to the austerity practised by the rest of Canada.
Let us go without Pickering. Let us spend no more on Mirabel. Let us fix up Dorval if necessary. Let us save $46 million, not the pennies you are saving by this bill. Let us save $46 million next year and close Mirabel. Let us improve Malton so that we do not need to build Pickering. Let us get a profitable organization going, and let the government not profess to be practising austerity unless it is to be practised in connection with the Seaway, with dredging, with ice-breaking, with Pickering, with Mirabel and general transportation structures across the land. At that point I can assure you, Mr. Speaker, every part of the Atlantic provinces will bear its share of austerity. But we do not think we should carry the share of half the rest of Canada as well.


Some hon. Members:: Hear, hear!
November 29, 1976


A. Daniel McKenzie: Mr. Speaker,
I welcome the opportunity to speak for the second time on Bill C-19. It is most unfortunate that the government has not expanded its provisions so as to show its good intentions. All we have before us is this brief measure which raises a serious question as to the degree of the government's sincerity with regard to restraint. We see no evidence of any real intention in this area.
I certainly support the amendment which has been put forward by my hon. friend from Lambton-Kent asking that Bill C-19 be not now read the second time but that it be read the second time this day six months hence. If the government is sincere, I am sure it could bring forward a genuine bill containing real restraint measures. Let it show the Canadian people it means business. I am sure it would not need six months for that. Let us see it do it in one.
A large part of any government expenditure arises as a consequence of payments made on the public debt. Interest on the public debt is considered one of the "untouchables" of government expenditure; indeed, as long as Canada continues to honour its debts there is no choice but to pay the charges. But the willingness of the government to incur debt obligations by permitting a succession of large deficits, and the debt management practices of the government, have contributed to the growing burden of debt interest.
Between the total expected cost for 1976 and the preliminary cost of the 1977 main estimates alone, the costs of servicing the public debt have increased by S875 million, or 23 per cent. From the main estimates of 1976 to those of 1977, public debt charges have increased by more than $1 billion, or 30 per cent.
Whereas servicing costs formed 12.3 per cent of government expenditure in fiscal 1975 and 1976, based on 1977 main estimates-adjusted to exclude OAS/GIS-this proportion will rise to 13.7 per cent. Of the $3,654 million increase in government spending between 1976 and 1977 main estimates, 24 per cent is due to increased debt servicing costs. Servicing cost escalation stems from three main factors-increasing size of debt, higher interest rates, and changes in debt mix. From March 31, 1975, to February 18, 1976, $5.2 billion was added to the unmatured debt of Canada, or 15.8 per cent. This compares to $3.9 billion additional for the previous fiscal year, or 13.4 per cent, and smaller increases in years prior to that.
Sustained periods of high interest rates have the effect of raising interest costs on both the new debt created by deficits, and the old debt which is rolled over when attracted by higher rates of return. Since 1970 the average rate of interest on the unmatured debt has increased from slightly more than 6 per cent to more than 7.5 per cent in 1976. On current levels of unmatured debt a 1.5 per cent shift in interest charges involves an additional $575 million in interest charges.
Over the period 1970-1975, Canada Savings Bonds have increased in proportion to total unmatured debt from 29.9 per cent to 39 per cent. Since the average Canada Savings Bonds'
Restraint of Government Expenditures interest rates are generally higher than those of other debt instruments-often more than one per cent-such as marketable securities and treasury bills, the interest cost penalty of this shift is severe.
Among the general cost increases, despite the government's stated commitment to restraint, increases in certain categories of expenditures seem to betray the commitment. For example, a 365 man-year reduction was noted, achieved by the abolition of Information Canada. But was a reduction in information expenditures actually achieved? In all of 1975 and 1976, Information Canada is expected to cost $11,555,000. Expenditures on information by other departments will come to $89,342,000. Between total spending of 1976 and the main estimates of 1977 alone, information expenditure by departments will jump by $14,786,000 or 16.5 per cent. Further expenditures in 1977 supplementaries may be expected. The conclusion profferred by these figures is that no expenditure saving was achieved by the abolition of Information Canada. Information expenditures are merely better camouflaged within the budgets of individual departments. This is why this bill needs a hoist for six months, so that the government can come through with some genuine legislation showing that it is not going to continue this practice of camouflage.
Expenditures on professional and special services will rise by $105 million between the expenditures for 1976 and the main estimates for 1977. Although the June 23 budget announced that expenditures on consultants would be restricted, the whole classification of professional and special services has increased by $180 million since the 1976 main estimates. What on earth does the government need all these special and professional services for? Perhaps, Mr. Speaker, this is part of the problem. If the government would confine itself to obtaining special and professional service information from the civil service, it would be a lot better off than paying these large amounts for outside services.
Capital construction expenditures have grown by $85 million from the 1976 level to the 1977 main estimates. Between the 1976 and 1977 main estimates these expenditures have grown from $546 million to $800 million. Despite the commitments of both the November 18, 1974, and June 23, 1975, budgets to exercise restraint in this area, expenditures have far exceeded average rates of price change in capital construction projects.
The "all other expenditures" category, including deficits of and payments to Crown corporations, as well as sundries, has increased by $393 million between 1976 spending and the preliminary authority requested by main estimates for 1977. This increase stems in large part from high spending intentions by Crown corporations. To be just, however, in a rare display of moderation somewhat less than the legislative limit of 1976 will actually be spent during 1976 by Crown corporations and on sundries.
Still on the subject of uncontrolled expenditure, I should like to refer to a few of the federal government's spending increases. If the government's urge to splurge our tax resources remains unchecked, national bankruptcy will become a real

November 29, 1976
Restraint of Government Expenditures possibility. The proposed government spending increases are up 19 per cent from last year. The following are a few examples, Mr. Speaker, of how our tax dollars are going toward uncontrolled government growth.
First I take the example of the Post Office. In the eight year interval covered by this study, its total numerical strength increased from 39,180 to 60,524, a 50 per cent increase in personnel. However, the executive, scientific and professional categories tripled, from 43 to 127. Total departmental salaries and wages almost quadrupled, from $263 million to $850 million, while over-all average salaries climbed from $6,031 to $13,643. Those in the top executive category in the Post Office went from $26,500 to $54,000.
From the general public's point of view, the nearly fourfold increase in postal service costs has been matched by a corresponding increase in public inconvenience and a further deterioration in the quality of the postal service system. Note that much of the increased volume of mail carried by the postmen represents government-sponsored advertising, dual-language communications, and questionnaires, much of the material being of doubtful value to the public. Isn't it time to ask the public what it expects of the postal service and what it is willing to pay for it? Should not the government explain its justification for this phenomenal increase in the size and cost of the postal service? This is the type of information it should be providing parliament in its bill, not the few generalities included in Bill C-19.
As for national defence, Mr. Speaker, the protection of our nation is entrusted to an establishment that includes 78,033 military and 37,288 civilian personnel within the department. Their average salaries during 1976-77 will be $16,001 and $13,651 respectively. Historical information was not conveniently available to compare growth rates. Of the proposed $4.15 billion estimate for national defence, salaries represent 40 per cent of the total budget. I doubt whether many countries could match that percentage.
The most significant observation about our armed forces is their relative numerical weakness in the lower ranks and their top heavy nature. The numbers include only 19,300 privates, or merely 25 per cent of the total military personnel, 43,723 non-commissioned officers, and 14,391 officers. There are nearly twice as many captains as lieutenants, and nearly 50 per cent more corporals than privates. Behind every two military personnel there is on civilian employee. The ability of this force to protect and defend the nation and to engage in international peace keeping missions is highly questionable. NATO has cause for concern, and so have the citizens of Canada. Whether we are getting top value for the $4.15 billion budgeted for national defence remains to be explained. Whether an adequate military establishment can be more cheaply and effectively obtained also remains to be explored.
There is no restraint either in the Department of National Revenue. The size of the staff increased by 40 per cent to 25,496 over the past eight years. The total salaries, however,

increased by 324 per cent to $376 million. Their average salary went from $6,191 to $14,783. In this department much of the numerical increase was in the top level high income groups and can be attributed to the increasingly complex tax laws fostered by the government. One might ask if a system of taxation that prescribed fewer types of taxes than the 30 or so which now burden the taxpayer might not be easier to manage and to collect.
Another example of lack of restraint is in the Department of Indian Affairs and Northern Development. This department looks after the interests of approximately 40,000 people in the Yukon and Northwest Territories and approximately 300,000 native people in the rest of the country. The departmental staff has grown by over 50 per cent over the past eight years to 12,897 authorized for the 1976-77 fiscal year. Their total salaries increased by 347 per cent to $184 million, while their average salaries went from $6,338 to $14,208. The most high priced staff in the department grew.
It is an interesting sidelight that the $80 million in salaries paid to the staff in the Indian Affairs section alone probably exceeded the total wages and salaries earned by all the native peoples in Canada. No wonder our native people are concerned and frustrated when they come down here. I have spoken to some of their leaders who tell me that to try to get anything done for their people or to cut through bureaucracy is practically impossible. One can agree with that when one sees how the Department of Indian Affairs and Northern Development has grown.
In the Unemployment Insurance Commission the staff has grown from 6,364 persons to 12,079 during the past eight years when the numbers of unemployed rose from 400,000 to a peak of 840,000 in early 1975 before easing off to around
750,000	today. It is regrettable that not enough information is provided about the operations to permit an objective analysis. Of course we in the Conservative party have been calling for a full scale investigation into the UIC operation in the last three federal elections. This is long overdue.
The staff of the Canadian Broadcasting Corporation has grown from 9,494 to 11,428 during the past eight years. As is the case with many other agencies and Crown corporations, not enough information is conveniently provided by the government about these operations. This is one of the highlights in the Auditor General's report when he states there is not enough accountability for the operations of Crown corporations, especially Crown corporations such as Air Canada which is accountable to no one. We do not know what their financial structure is-they can tell us anything they want.
Further evidence of government waste is to be found in the recent government cut back which included a $325,000 grant to the CNR-a grant which never existed according to the man who should know, namely the president of the CNR. Why was this issue dropped like a hot potato?
Last year the federal government spent $37 million just to write old age pension and baby bonus cheques. That amount of money would pay basic old age pensions to 23,000 people for a year. Last year the federal government gave its employees pay
November 29, 1976

increases which exceeded by $274 million the amount that would have been justified to keep pace with inflation.
I should like to get back to the public relations officers. How many public relations officers would you guess the federal government has? As of August 25, 1975, there were 880, and increasing. We wonder what they all do.
For every $5 of Canada's output, $2.13 passes through the hands of the government. Union increases last year amounted to 22 per cent in the public sector and 14 per cent in the private sector. The public sector also has many other advantages. We cannot just blame labour. The top mandarins in Ottawa earn up to $62,500, whereas the highest paid U.S. regular civil servants get no more than $43,000. So where is the restraint of this government?
I suggest to you, Mr. Speaker, that federal government spending today is out of control, and 1 would like to suggest some cut backs. We in this party have alway been constructive. We have suggested cut backs and we have made alternative proposals to cut back on spending, but unfortunately none of our recommendations has been heeded.
The highlight in the Auditor General's report is the statement that federal government spending is out of control. This is graphically revealed in the desperate attempts by cabinet ministers to juggle the figures and cook the books so that increases in federal spending appear to be made smaller. On February 18, 1976, the former president of the treasury board tabled his main estimates of expenditures for the fiscal year 1977. In his presentation, the House of Commons was told that federal spending, both budgetary and non-budgetary, would total $42,150 million in 1977. TThe final estimates of federal spending for the fiscal year 1976 came to $36,500 million. The $5,650 million increase in spending between 1976 and 1977 represented a rate of increase in spending slightly less than the 16 per cent increase that the former president of the treasury board had said was the maximum increase he would allow.
On May 25, 1976, the Minister of Finance (Mr. Macdonald) told the House that the final spending estimate for 1976 given by the former president of the treasury board was not final at all. Although the former president of the treasury board had indicated that the final estimate of 1976 federal spending was $36,500 million, the Minister of Finance told the House that spending in 1976 will total $37,225 million, $725 million more than the so-called final estimate. According to the Minister of Finance, the principal reason for the overrun was "a decision to permit" federal enterprises engaged in energy and export development to obtain financing from us somewhat earlier than had been anticipated.
In other words, non-budgetary borrowing originally scheduled to take place in 1976, was allowed to take place in 1977. This shift in the dates of borrowing of less than two months had the very convenient effect of making the increase in federal spending seem smaller than the former president of the treasury board's forecast of a 16 per cent increase. Since the borrowing was shifted forward by only two months, and since the shift forward in borrowing dates represented a change in
Restraint of Government Expenditures the plans of both the federal government and the federal enterprises involved, the manoeuvre with the accounts was clearly for the sole purpose of making the increase in spending seem smaller.
But the deceit does not stop there. The Minister of Finance admits that $725 million was shifted from 1977 spending to 1976. The 1976 spending was increased by $725 million over the final estimate. As this money was transferred from 1977 spending plans, one would expect that 1977 spending intentions would be reduced by the amount transferred to 1976 spending. How naive to expect straightforwardness and honesty from the present administration! The 1977 spending estimate remains the same as the original estimate of the President of the Treasury Board that is, $42,150 billion. Because $725 million of planned spending for 1977 in fact took place in 1976, the present administration has created a slush fund in the 1977 estimates of $725 million, an amount which makes a mockery of the administration's claims that spending cannot be cut any further.
These two examples of duplicity in the federal accounts are but two of many such cases. While these distortions in accounting may seem less important than the grave national problems of inflation and unemployment, one must remember that it is the Canadian taxpayer who pays for the slush funds and uncontrolled spending of the present administration.
In light of the ever-increasing amount of our tax dollars that the government is spending so freely, the Progressive Conservative opposition in parliament suggests cutbacks in spending. The government should slash $250 million from the consultant and related contracts this administration has grown accustomed to awarding to its friends. Based mainly on the Auditor General's recommendations, the government should tell Canadians why administrative savings cannot be realized and the civil service stabilized with a cost saving totalling at least $90 million.
In addition, a systematic amalgamation of departments, or the phasing out of departmental operations which overlap with other federal departments or provincial counterparts, can realize minimum savings of $50 million.
Do we really need 29 ministries in Canada, when the Americans can operate a country ten times our size with half that number? Does it really make sense to have ten departments operating in each of our provinces when in many cases their activities overlap directly with counterpart departments in Ottawa? It might be wise for the government to commission a Glassco-type commission to review the spending habits of the administration with a view to suggesting where savings may be made. When the Glassco Commission study was done in 1962, total federal spending was $6.5 billion. Today it is over $37.2 billion, a figure six times that of 1962.
The reason federal government spending has reached such awesome heights is because of questionable programs. Bilingualism, for example, is costing hundreds of millions of tax

November 29, 1976
Restraint of Government Expenditures
dollars, and many people are questioning this spending by the Liberals.
This all-time level in government spending includes the $123 million Montreal still owes federal taxpayers for Expo, and this is the same city that spent at least $1 billion on the Olympics yet pours 300 million gallons of raw sewage into the St. Lawrence daily because there is no money for sewage plants.
In total, the Progressive Conservative party has outlined $1,025 billion worth of savings. Here is how we would like to see these savings used: first, we would like to give a tax break of $250 million to the Canadians who have been paying the shot.
Of this amount, we would like to see a 10 per cent tax credit that would be about $100 million going to those earning $8,000 or less. The remaining $150 million should be given in credits scaled down appropriately for those earning between $8,000 and $16,000. I believe it is time to give the taxpayer such a break, for three very good reasons. The April Economic Review reveals that the real gross national product per employee in Canada has actually gone down by $200 since 1972. In 1975 the average employee, in real dollars, earned $11,645, compared with 11,848 in 1972. Surely it is wrong to deny a tax break to such employees who are being required to restrain their wage increases.
Second, we would point out to the Liberal government that it has been reaping a bonanza in personal income tax aggregate increases, which this year alone are jumping 26 per cent, or $3.3 billion. An 8 per cent reduction of this increase would not be out of line.
Third, and most important, as I have already indicated, the Liberal government just does not need the money. By being more restrained and by being more frugal there is no doubt it could save this amount and turn it back to the people we and they are supposed to be serving.
We in the Conservative party would like to earmark another $100 million of our spending cuts to give further incentives to the private sector to encourage it to increase its activities in the research and development field.
In the final analysis, I really believe that this uncontrolled spending is a serious threat to the economic survival of Canada. If the measures proposed by the Progressive Conservative party are not implemented, then we could very well see our country on the verge of bankruptcy. I am sure most people want something more positive than that.
In closing, I would also like to comment on probably one of the biggest extravagances in which the present government has become involved, that is, the Mirabel airport. Tonight my colleague from New Brunswick touched on this. It has been suggested by a number of people that Mirabel is one of the poorest financial performers in the country. The new Mirabel International Airport near Montreal, they say, is expected to have poorer operating financial results than other major Toronto and Montreal airports this year, partly because passenger traffic is said to be significantly lower at Mirabel.
(Mr. McKenzie.]
Mirabel is expected to lose $46.5 million in operations in the current fiscal year which ends next March 31. This compares with an estimated profit of $12.3 million at Toronto's Malton airport, and a $9.1 million surplus at Montreal's Dorval airport.
Hon. members can see we certainly have a white elephant in Mirabel. Very poor judgment was used in the building of that airport and it has been suggested by a number of people that it could be closed down for a number of years. This would probably be one of the best steps the government could take toward government restraint. I certainly hope that the Ministry of Transport is looking at this Mirabel fiasco to see just what can be done. We cannot continue with these $40 million and $50 million losses yearly at this airport. Most of our major airlines do not want to use the services there.
I have landed there once or twice myself. It is a huge mausoleum. You never saw such a magnificent extravaganza in your life! You can see one plane come in with just 50 or 60 passengers. Mirabel is a huge complex. A person is just like a little mouse in the middle of I don't know what. It is one of the biggest abuses of taxpayers' money I think we have ever seen in Canada.
I hope the government will take note of our comments and the excellent contribution my colleagues and myself have been making this evening. We are now going to hear a contribution from an hon. member from British Columbia. I certainly hope hon. members will take note of what this brilliant parliamentarian says.


Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, I rise to speak on Bill C-19, the restraint of government spending bill, to which an amendment has been moved. This is my first opportunity to speak on this bill. The amendment is to the effect that the bill should be read six months hence. That would give the government an opportunity to bring in a bill which would really bring about restraint of government expenditures. I certainly hope that hon. members will see fit to vote in favour of this amendment which is really necessary when one reads this bill and sees how little it is doing. If they do not vote for the amendment, however, I will still have an opportunity to speak on second reading.


Joseph-Phillippe Guay: We will look forward to that.


George H. Whittaker: Mr. Speaker, the government whip says he will look forward to that. We note how agitated he has been this evening, as well as during the last few days when the opposition has pointed out the many facts and fictions of the government. He is even more offended and agitated because the Auditor General has brought out a report that fits into the context of this bill very well.


Joseph-Phillippe Guay: On a point of order, Mr. Speaker,
I want to assure you and the hon. member that such is not the case. He is entirely wrong. I am concerned because the bill before the House outlines for the public that the government
November 29, 1976

wants to lower costs to the citizens of Canada through five different departments, but the opposition has been delaying this matter. In other words, they do not want to see us cut down expenses.


The Acting Speaker (Mr. Ethier):: Order, please. I can understand that all hon. members are anxious to get the legislation through the House, but we must also understand that members of the opposition want to discuss certain matters pertaining to the expenditures of government. The hon. member for Okanagan Boundary (Mr. Whittaker).


George H. Whittaker: Mr. Speaker, the government whip has been threatening to make a speech on this bill; I hope that was not it. He interjected, saying what the government is going to do. It wants to do away with the Company of Young Canadians and with Information Canada. As well, it has put some restrictions on the family allowance. It is reducing the money given under the Industrial Research and Development Incentives Act. Mr. Speaker, we need research so that industry can provide jobs at a time when we have the highest unemployment ever. It is also doing something with the "at and east" rates under the Railway Act. My colleague, the hon. member for Carleton-Charlotte (Mr. McCain), made an excellent speech on this subject this evening and some of my other colleagues who know all about the "at and east" rates have also made excellent speeches on the subject.
The government does not pay any attention, of course. The government whip tells us they are going to do something about saving money in Canada, but it is just window dressing, Mr. Speaker. On many occasions we have told them how to save $1 billion. Now the Auditor General's report has come out and it makes very good reading. It tells us all about the government and its inefficiency. I am not surprised that the government whip walked out after his interjection. The truth needs no study. It is the truth that hurts, and that is hurting. I hope the people of Canada know exactly what has been going on with this government.
A few days ago the Minister of Finance (Mr. Macdonald) gave us a great song and dance about how well the AIB is working and about how the government is going to save money; that things are not as good as they thought they would be, but that there will be a saving in money. Then the government brings in this kind of bill, Mr. Speaker, which does not reflect the savings about which the minister was talking. May I call it ten o'clock, Mr. Speaker?



PROCEEDINGS ON ADJOURNMENT MOTION

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

Benno Friesen: Mr. Speaker, if I could ask the Minister without Portfolio (Mr. Guay) to maintain his ministerial decorum perhaps we could go ahead with the adjournment debate. Perhaps he will be a minister without a riding the next time.
On November 5 I asked a question in the House, and in view of the fact that the Minister of Transport (Mr. Lang) was absent I directed it to the acting minister, the Minister of Justice (Mr. Basford). The question arose from a press release issued November 3 by the Minister of Transport entitled "Improved Shipping Service to Northern B.C.". Mr. Speaker, I wonder what the people of those coastal communities now think about the improvements that began on November 1.
Since 1958, and in variant forms through other companies since 1912, the people of that area have been served by Northland Navigation, by Union Steamships and other companies and have been provided with services upon which they could depend. Two things were prominent in that service- dependability, and security. When Northland was in charge of the operation the people on the coast could depend on the regularity of their passenger and freight service. They could also depend on security because the passengers were inside the vessels and the freight was in the hold. Since the Minister of Transport designed the new improved service, we find open barges and a tempermental schedule subject to tides and storms. The people of the Queen Charlottes now have a combined freight and passenger service. One can almost visualize the passengers sitting amongst the cargo as the ship plies its way through the Johnstone Strait.
I should like to quote from a bulletin issued by Coast Ferries Limited dated October 22 which apologizes to customers and suppliers for the interference in the service. May I read the following paragraph:
Our combination of tug barge and self-propelled experiment in September has proven unsatisfactory because of physical limitations of equipment to meet a schedule. For instance, where a tidal entry into an inlet held up the tug barge, the master chose to tie up the barge, transfer the cargo to his tug and run the tide to deliver your merchandise. It is increasingly difficult to find men for cargo work and we believe the handicap of tug men clambering aboard barges to offload traffic will prove unsaleable due to severe monetary penalties where towboat men handle cargo.
That is an example of the so-called improved service which the Minister of Transport is now providing in the coastal communities of British Columbia. What does all this mean to the minister? That minister, representing the constituency of Saskatoon-Humboldt, says in a press release that he will save the people of Canada $3.5 million.
Meanwhile on the east coast we see a somewhat different picture. I happened to look at the Auditor General's report, a copy of which came fortuitously across my desk. I noticed the following statement on page 27 of the Conspectus:

November 29, 1976
Adjournment Debate
The Canadian National Railways has responsibility for managing and operating ferry services between the mainland and Prince Edward Island, as well as marine services for Newfoundland and the North Sydney-Port aux Basques ferry service. There are at present no formal guidelines, regulations or conditions governing the operation of these services. Since 1973, the deficits associated with the ferry services have increased from $59.6 million to $95.3 million. In the absence of adequate guidelines, the Department of Transport is unable to verify the amount of the deficit charged to its appropriation each year.
There you have the picture. The deficit on the east coast in three years increased from $59.6 million to $95.3 million. There are no guidelines, and the Department of Transport is unable to verify the accuracy of the figure. It may be much larger. As you can see, when the deficit on the east coast rises $12 million a year, no questions are asked. But when you consider what happens on the west coast, a funny thing happens. Apparently $3.5 million is too much to spend on the people of Bella Coola, Ocean Falls, Stewart, Kincolith, Alice Arm, Port Simpson, Namu, Bella Bella, Kelmtu, Butedale, Masset, Queen Charlotte City, Sewell Inlet, Sandspit, Prince Rupert, and Thurston Harbour. The people of those communities are marooned in coastal inlets. For them, a $3.5 million in deficit is too much; they cannot have it. On the other hand an additional deficit of $12 million a year on the east coast is quite all right. You can see what this means to the minister.
And what will the cutback mean to the people? It means that workers working on steamship lines, in stevedoring, long-shoring, loading and ancillary occupations necessary for serving those coastal communities will lose revenue through unemployment of $300,000 a year. Add to that the UIC benefits which must be paid out by the federal government because of increased unemployment. Then you must consider the increased travel costs which will be paid by the people affected, and the consequent decrease in their standard of living. As well the minister has not considered what the cutback would mean to the 9,600 passengers who used the Northland service last year.
Obviously the minister does not know the coast. Coming from Saskatchewan, his idea of a rugged coast is a gravel pit on the Saskatchewan River. I have worked in the Charlottes and watched those people standing on the dock, waiting for the ship to come in. For many of them it is the only link with the outside world. They depend on it.
The minister says that he has given credit to the three coastal members of parliament-


The Acting Speaker (Mr. Ethier):: Order, please. [Translation]
Order, please. I regret to interrupt the hon. member but the time allotted to him has elapsed.


Marcel-Claude Roy: Mr. Speaker, I have to reply to the question raised by the hon. member for Surrey-White Rock (Mr. Friesen) with regard to the reservations felt by the residents in the coastal area of British Columbia with regard to the government's decision to withdraw the subsidy previously paid to Northland Navigation. It appears that some sort of conspiracy

was embarked on to spread alarm and despondency among the population and to suggest that the government was abandoning those communities insofar as water transportation services are concerned. Nothing could be farther from the truth.
Following consideration of the situation over a contracted period, being faced with ever-increasing subsidy demands, and having concluded that a more cost-effective alternative was available, the minister moved to put that alternative in place. The new system is based on separating the carriage of goods from the carriage of passengers in order that effect could be given to the most efficient way of handling both. As far as the carriage of goods is concerned, careful investigation showed there were a number of operators who were capable of providing, and anxious to provide, the necessary level of service on an unsubsidized basis. Following careful examination of their experience it was concluded that to continue to provide subsidies to one carrier would be indefensible, especially since those subsidies were distorting the economics of water transportation in the area and causing hardship to other carriers.
On the passenger side, we have reached agreement with the provincial government to improve the facilities available for transportation by water. Because of the need to address ourselves to a number of individual concerns as they arose during the transfer period, we were not able to fully implement our intended program in the time available. The arrangements now in place, while we believe them to be fully adequate, may be considered interim measures. Negotiations with the provincial government are continuing in a number of transportation areas and we expect to be in a position to make further announcements in the near future identifying further improvements. I might add that the province has indicated complete satisfaction with all the foregoing arrangements.
The end result of this exercise is the placing in position of a transportation service which will provide a proper level of service to the communities concerned for the carriage of goods and passengers at considerable saving to the public treasury.


TRANSPORT-BRITISH COLUMBIA FERRIES-GOVERNMENT POSITION ON AID FOR OPERATIONAL COSTS
Arthur Ronald Huntington: Mr. Speaker, the abrupt and discourteous withdrawal of the $3.7 million Northland subsidy is another example of failure to understand regional needs by the highly centralized decision-making process of the federal Department of Transport.
The political connection behind this decision is serious, for such behaviour only heightens the contempt the Canadian people have for the political system and for the federal function within Confederation.
I am the first to agree that change is needed within the transportation system of Canada, including the West Coast. I do not fight that proposition. However, I do protest the nature and behaviour of the Department of Transport in this matter because their timing shows no consideration for the problem and people on the West Coast. We mouth platitudes to the people who live in immature areas yet at the same time we
November 29, 1976

disrupt their historical transportation links, with no phasing in of alternative systems in such a manner as to cause minimum anxiety and frustration to the communities affected.
Why did the government not reply to the 1974 submission of Northland in which a plan was outlined to spend $20 million which would reduce the subsidy from $4.5 million to $250,000 over the next seven years? The $20 million was the company's own capital for two new ships and new shore facilities. The federal government never replied. Why?
Why did the government keep the Acres Report secret? Could it be that the Acres Report confirmed and agreed with the Northland study? Why is it that this knowledge was not made available so that the people affected could better understand the decisions made and be part of the decision-making process? Why would the Department of Transport not make available the studies justifying alternative modes of moving people and freight on the B.C. coast? Could it be there were not any, and that everyone is in an ad hoc scramble for answers and equipment? That equipment subsidy is being withdrawn.
If self-propelled equipment was not to be the method then why would not the Department of Transport phase the existing service out over a year or more after the new air strip at Bella Bella was in, after the air navigation beacons were in, and after the air service companies had their equipment for allweather flights in place with trained crews? Why would marine experts come to the conclusion that all needs on the B.C. coast could be best served by barge when at least two responsible studies said otherwise? Why was not consideration and some thought given to the plight of the 350 employees of Northland Navigation? Just pawns in a political game, Mr. Speaker!
Sure, there is a highly successful barge service to northern B.C. communities; but that service as it stands now is not equipped to absorb and perform the type of service in those waters offered by self-propelled ships handling the range of freight serviced by Northland, particularly on a scheduled run through the winter months. The tide, wind, and fog on that coast have to be seen to be understood.
Why is Rivtow being paid a $1,600 per day subsidy when that company was on record as saying it did not need one? Why was the Northland service disrupted in the fall as the very harsh winter season descended on the coast and its peoples? I ask this particularly since the minister said that the withdrawal was well considered and that it would save $3.5 million per year. Now we are told about a new air strip at Bella Bella, radio beacons and navigational aids-a $1,600 a day subsidy-and the Lumba Lumba, a $600 a day subsidy for the B.C. ferry diversion to Ocean Falls. But by the time all this is in place, Mr. Speaker, with operating personnel I will have trouble finding where the saving is.
We have now forced the B.C. ferry system into an involvement for one-half of the cost of subsidizing north coast communities. The federal government is spending $109 million on
Adjournment Debate
ferry subsidies on the east coast. The Canadian Transport Commission is spending another $16 million on private subsidies about which it will not answer questions which are on the order paper. With this involvement, Mr. Speaker, I do not think it washes any longer to say that the B.C. ferry system is intraprovincial. It is my submission that, if regional equity is to exist, the federal government should be picking up 50 per cent of the budgeted $25 million loss on the B.C. ferry system.
The CPR was denied the right to run a ferry service across the St. Lawrence river. They had the ferry, they had the docking terminals, for a cost of $10 million. The CNR took it over and will be in for over $100 million before they ferry the first car across the river. That is intraprovincial and is a federal subsidy. 1 do not care whether it is under a Crown corporation or otherwise, Mr. Speaker. If the east coast and river regions can have that kind of money from the federal treasury, in the name of regional equity I say that the west coast is entitled to a 50 per cent subsidy of its ferry system's losses.
The B.C. ferry system completes the trans-Canada highway to Vancouver Island. If Newfoundland is connected by subsidy, so should Vancouver Island and the immature regions of the north coast of British Columbia. The hon. member for Skeena (Mrs. Campagnolo) should keep her political curry and scorns in the kitchen.


Marcel-Claude Roy: Mr. Speaker, I should like to congratulate the hon. member for having raised this important question. As I am sure he will see from the answers I gave to a previous question, the minister is well aware of the situation.
I would like to say that we have reached agreement with the B.C. provincial government to improve the facilities available for their transportation by water. Due to the need to address ourselves to a number of specific concerns as they arose during the transfer period, we were not able to fully implement our intended program in the time available, and the arrangements now in place, while we believe them to be fully adequate, may be considered interim measures.
Negotiations are continuing with the B.C. provincial government in a number of transportation areas, and we expect to be in a position to make further announcements in the near future with respect to further improvements. I may add that the province has indicated complete satisfaction with all of the foregoing arrangements.
The end result of this exercise, Mr. Speaker, is the placing in position of a transportation system which will provide a proper level of service to the communities for the transport of goods and passengers at considerable saving to the public treasury.
The moves which have been made in relation to the ferries in British Columbia are part of an over-all policy in relation to ferries, one which reflects the view that the provinces are essentially responsible for the movement of passengers; where reasons for developing remote areas exist, the province and the federal government should work together in relation to the

Adjournment Debate
movement of freight to such areas. This is the policy which was applied in the case of the Northland service and, as the hon. member has noted, it may result in a total saving of approximately $3 million. I have not referred to all the figures mentioned by the hon. member but, as the minister has said before to the people in the area concerned, this is not because of a desire to save money, although that is a good motive, but rather because of our desire to use the money saved for better transportation in the area.
The broad policy which we are following is designed to apply to all areas of Canada, and we are in negotiation with the various provinces to this end. When the hon. member
refers to the subsidies affecting the east coast, he should remember that a very substantial proportion applies to the guaranteed ferry service to Newfoundland, which was a constitutional commitment made at the time that province entered into Confederation and, one might say, the sacred commitment referred to by the hon. member in the question he raised in the House at that time.


The Acting Speaker (Mr. Ethier):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until 2 p.m. tomorrow.
Motion agreed to and the House adjourned at 10.19 p.m.

Tuesday, November 30, 1976