1976-03-18

Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, under the provisions of Standing Order 43 I ask leave to propose a motion on a matter of urgent and pressing necessity which is fully expressed in the motion and affects the foundations of public life in this country.
I would therefore move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the committee of the privy council, by order, instruct the Chief Justice of Canada to appoint three justices from among the justices of the provincial superior courts, the Federal Court of Canada, and the Supreme Court of Canada, who shall be constituted by the committee of the privy council to be commissioners under Part I of the Inquiries Act to inquire fully into any allegations, made or to be made, about any improper inducements having been offered to or improper pressures having been brought to bear in respect of a civil or criminal judicial or quasi-judicial proceeding, instituted or likely to be instituted, to the disturbance of the peace, order and good government of Canada, and in particular but without limiting the generality of the foregoing into the incidents resulting in the letter dated March 10, 1976, of the honourable the Chief Justice of the Superior Court of Quebec, tabled in this House and printed as Appendix "B" to the official report of the House of Commons Debates of March 12, 1976, and any matter bearing upon or related to those incidents, and if the said commissioners consider that there is prima facie evidence of an offence in relation to any matter inquired into, to consider such other matters as may appear to the commissioners to be relevant and to report fully thereon.


Mr. Speaker:: Order, please. Pursuant to the provisions of Standing Order 43 such motion would require unanimous consent of the House prior to presentation. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSED INQUIRY INTO ALLEGED ANGLO-SAXON JUDICIAL ESTABLISHMENT-MOTION UNDER S.O. 43
Mr. Rene Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I ask the unanimous consent of the House to introduce a motion dealing with an important matter of pressing necessity.
Considering that Mr. Justice Mackay made an unjustifiable indiscretion by giving his personal friend Special Attorney Richard Holden a copy of his correspondence
with the Minister of Justice; considering that Richard Holden submitted this letter to the press with the agreement of Mr. Justice Mackay, with the intention-and I apologize for the expression but it is accurate-of "giving shit to the government", to quote the words of Mr. Holden as reported in Maclean's; considering the fact that Mr. Justice Hugessen, Mr. Justice Mackay and Special Attorney Holden are all part of the "Anglo-Saxon judicial establishment of Montreal", I move, seconded by the hon. member for Rimouski (Mr. Allard):
That this House appoint a royal commission to determine whether the "Anglo-Saxon judicial establishment of Montreal" did not conspire indeed to harass a French-Canadian minister who did not hesitate to attack the well-to-do and the trusts.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


SUGGESTED CONSULTATION WITH INUIT AND INDIANS BEFORE AUTHORIZING DRILLING IN BEAUFORT SEA-MOTION UNDER S.O. 43
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under Standing Order No. 43. My motion is prompted by the reports today that the question of allowing Canmar Ltd. to commence an offshore drilling program in the Beaufort Sea is being considered by the cabinet today. If true, this suggests that the government is prepared to go ahead with a maximum of haste and a minimum of consultation. Therefore I move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That this House urges the cabinet to consult those Indian and Inuit Canadians who live in the vicinity of the Beaufort Sea before authorizing the proposed offshore drilling program in the Beaufort Sea planned for this summer.


Mr. Speaker:: Order, please. Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

March 18, 1976
Oral Questions


PROPOSED DELAY OF DECISION ON DRILLING IN BEAUFORT SEA PENDING PROPER ENVIRONMENTAL SAFEGUARDS- MOTION UNDER S.O. 43
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43 on a matter of extreme importance. It is somewhat similar to the motion just put. In view of the report today that cabinet is about to make its decision on drilling permits in the Beaufort Sea, and in view of the fact that United States authorities and officials in the Department of the Environment continue to express opposition, I move, seconded by the hon. member for New Westminster (Mr. Leggatt):
That this decision be delayed until proper environmental safeguards are established and adequate consultation with citizens of the north is accomplished.


Mr. Speaker:: Such a motion pursuant to the provisions of Standing Order 43 would require the unanimous consent of the House before presentation. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Minister of Public Works. On Tuesday, at page 11825 of Hansard, the Minister of Public Works denied that he felt the contempt of court proceeding might involve a ganging up of the English-speaking establishment against French speaking ministers and he appeared to say that he knew of no instance, either in the press or elsewhere, when that possibility was raised. Does the minister deny the allegation, and I would like a specific answer to this, of Mr. Justice Hugessen that, and I quote:
The view which Mr. Drury felt was being expressed in some quarters in Ottawa that the proceedings against Mr. Ouellet were in some way a ganging-up of the English-speaking Establishment against prominently placed French speaking persons.
If the minister does deny the judge's statement, will he tell this House specifically what he did say to the judge?
Hon. C. M. D^ury (Minister of Public Works): Mr. Speaker, I am not denying the allegation of the judge. I did say in the House the other day, and I am prepared to repeat it, that I am not aware of any press reports or other similar published reports of any such ganging up. I, myself, do not believe that there is or indeed, in any circumstances I can envisage, that there would be such a ganging up by the courts of Quebec against any particular section of the community. The reference which Mr. Justice Hugessen made in his letter to the Chief Justice was, I think, merely an expression, and what I was seeking was his confirma-

tion of my belief, in a sense, in his belief; I was persuaded that Judge Hugessen would pay no account to such a rumour, nor did he believe in it, nor did I; I was merely seeking his personal assurance that my belief in his belief was correct.
[DOT]	(1410)


Charles Joseph Clark: We shall want to take a careful look at the record of that.
I should like to ask the Minister of Public Works, bearing in mind that Mr. Justice Hugessen used the phrase, when he referred to the suggestion about the ganging up, that that impression seemed to be held in "some quarters in Ottawa", whether he accepts the paraphrasing of his conversation with the judge to the effect that there was a reference to "some quarters in Ottawa", and if he does accept that, will he tell us exactly what he did say and to what quarters in Ottawa and to what people he referred in his conversation with the judge?


Mr. Drury:: The phrase used by Mr. Justice Hugessen, "some quarters" was about as precise as I was. As I indicated to him, I was not aware of any newspaper stories to this effect; these were merely, as far as I was concerned, baseless rumours and when one is talking about baseless rumours it is difficult to be precise.


Charles Joseph Clark: The full reference in Mr. Justice Hugessen's words was not just "some quarters", but "some quarters in Ottawa" and presumably the minister would be more in touch with those quarters in Ottawa than the judge would. Could the minister tell us from which quarters in Ottawa the rumour to which he referred in his conversation came to his attention? Who were the people who were the source of the rumour in Ottawa he discussed with the judge?


Charles Mills (Bud) Drury: I did, I think, employ the term "baseless" in respect to my own concept of them and it is difficult to ascribe a precise source to baseless rumours.


Charles Joseph Clark: Was the minister referring to information or rumours or facts he had heard circulated by any minister of the Crown or by any senior official of the government? Will the minister tell the House, now, who those people
were?


Charles Mills (Bud) Drury: I have said I thought they were baseless rumours. I cannot ascribe their source to any particular individual, or, indeed, to any class of individual. Secondly, I cannot answer in the precise way the hon. gentleman is seeking or give him the kind of answer that I think he wants; and I think it would be slanderous of me to try to ascribe the source to any particular group of people.
[DOT]	(1420)


POSSIBILITY OF CONFRONTATION BETWEEN EXECUTIVE AND JUDICIARY-REQUEST OF MR. DRURY FOR CLARIFICATION
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my supplementary question is for the Minister of Public Works. As reported at page 11825 of Hansard for Tuesday last, the minister accepted Mr. Justice Hugessen's impression that the Minister was attempting to head off a possible confrontation with the executive. I assume that there must have been some concrete reasons for those fears. Who
March 18, 1976

within or outside the cabinet suggested that this case could lead to a confrontation between the executive and judicial branches of government?


Charles Mills (Bud) Drury: Mr. Speaker, I should tell the hon. gentleman that there was a current contempt of court proceeding that was initiated on behalf of the judiciary against a member of the administration, and this appeared to me to have the appearance at least of a confrontation between these two branches of government.


John Allen Fraser: A final supplementary question for the minister, Mr. Speaker. Is the minister telling the House that the suggestion made by him to Mr. Justice Hugessen that there might be a confrontation was completely his suggestion without any discussion with or suggestions from anybody else, either in the cabinet or outside the cabinet?


Charles Mills (Bud) Drury: No, Mr. Speaker, I am not suggesting that at all and it would be false to do so. I consulted a number of other people. As I said in the House, I accept full responsibility for this and I am not going to try to put the blame on the shoulders of somebody else.


ALLEGATION MR. OUELLET INTERFERED IN TRIAL OF SUGAR COMPANIES-REQUEST FOR TABLING OF LETTER
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is for the Minister of Justice and it pertains to an allegation that seems to have been missed so far, if you can believe that, in the questions raised in connection with this matter. I refer to an allegation made by Judge Mackay that the hon. member for Papineau was interfering with the course of justice in the first trial involving the sugar companies. I should like to read a section of the letter sent to the Minister of Justice in order to clarify the point, and I would then ask him for his response. In the original letter to the Minister of Justice dated February 9, Justice Mackay has this to say:
I might add that had your agent, Mr. Pateras, not been a friend and former partner of Mr. Ouellet, I would have appointed him and expected him to act in this matter and I have no doubt that his account would have been paid just as were his charges for writing Mr. Ouellet on my behalf during the course of the trial and warning him to refrain from interfering with the course of justice-
I should like to ask the minister whether he would take steps to table that letter from Justice Mackay to the hon. member for Papineau so we can see what allegation of interference is in the letter. Secondly, would the minister tell us what was his reply specifically to that point and what action he took?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I do not believe I have the letter. I have not seen it. I will determine whether Crown counsel in the case has the letter. Just to make it perfectly clear, I do not have a transcript of the trial in front of me so therefore I am paraphrasing the expressions used, but in the course of the trial the judge took exception to some words used in a speech by the then Minister of Consumer and Corporate Affairs. He asked Crown counsel in the case to write to the minister of Consumer and Corporate Affairs and bring this to his attention. That I understand was done, and that action satisfied the judge in the case at that time.
Oral Questions
It was raised in the letter to me as an argument that because Crown counsel had acted in the instance the hon. leader raises, that this Crown counsel should also have acted in the contempt proceedings which followed the trial. Of course, my position was very clear, that once the trial was over the proper procedure for the judge in a contempt proceeding was, as outlined in the United Fishermen and Allied Workers' case, to ask the Attorney General of the province to appoint counsel as a friend of the court in the contempt proceedings.


John Edward Broadbent: Mr. Speaker, my understanding from the minister is clearly that he said he had not seen the letter that Judge Mackay refers to written by Mr. Pateras, which contains allegations of interference by Mr. Ouellet, so the minister is simply assuming that the allegations refer to a speech made outside the court. The minister is nodding to that. So that we may be perfectly clear as to the allegations in mind here, will the minister take steps to speak to the hon. member for Papineau to obtain a copy of that letter and table it so we can see clearly what Mr. Pateras had in mind in terms of what he regarded as interference?


Some hon. Members:: No, no.


Stanley Ronald Basford: I do not want to accept the hypothesis upon which the question is based. The letter was written, as I understand it, and I was going on information and belief and not on conjecture, by Crown counsel in the case who was, of course, acting for me. I will ask him if he has a copy of that letter and see whether it is proper to table it.


ALLEGATIONS OF INTERFERENCE WITH JUDICIARY-SUGGESTION MR. DRURY RESUBMIT RESIGNATION
John Edward Broadbent: For my final supplementary question, Mr. Speaker, I should like to go back to the Minister of Public Works. I would ask him, since the former Minister of Consumer and Corporate Affairs submitted his resignation to the Prime Minister on totally specious grounds, yet it was accepted, will the minister reconsider his position, resubmit his resignation and urge the Prime Minister to accept it?


Some hon. Members:: Oh, oh!


An hon. Member:: Right on.


Mr. Speaker:: Order, please. With due respect, that is a question that has been dealt with previously.


ALLEGED INTERVENTION OF JUDGE MACKAY INTO GOVERNMENT-POSSIBLE HARASSMENT OF FRENCH CANADIAN MINISTER
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I would like to direct a question to the Prime Minister.
Since it becomes increasingly obvious in the deadlock brought on by the "judges affair" that Mr. Justice Mackay interfered with administrative authorities, does the Prime Minister intend to establish a royal commission of inquiry to determine whether the Anglo-Saxon judicial establish-

March 18, 1976
Oral Questions
merit of Montreal has not really conspired to harass a French-Canadian minister who did not hesitate to denounce trusts?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, if the premise of the question were founded, I assume the way to institute such an inquiry would be to refer the matter to the council of judges which is competent to look into the conduct of judges. I said "if the premise were founded," but the fact that this premise appears in a question asked here in this House seems to answer in part the question asked by the leader of the Progressive Conservatives in connection with the existence of rumours.


POSSIBILITY OF INQUIRY INTO JUDGE MACKAY'S ALLEGATIONS
René Matte: Mr. Speaker, I should like to put a supplementary question.
Could the Prime Minister tell us whether in his own view there would be grounds for an inquiry into the allegations of Judge Mackay?


Pierre Elliott Trudeau: Mr. Speaker, as I wanted to indicate, the answer to that question cannot be given by the government. If there is an allegation of illegal or improper conduct against a judge, it does not rest with the government to make an investigation in the matter, but rather with the council of the magistrate, primarily with the chief justice of the court involved. The only proper way to answer that question would be to initiate impeachment procedures, that is accuse a judge at the bar of the House, and the government does not intend to proceed in such a way.


PRESENCE IN GALLERY OF &quot;TIMMY&quot; FOR 1976
Mr. Speaker:: Order, please. Before carrying on with the question period I know hon. members would want to join with me in calling attention to the presence in our galleries at this moment of a very important visitor, a Canadian but an important visitor to the House of Commons just the same, in the person of Kevin Collins from Orillia. He is not probably known under that identity but he is the "Timmy" for the Easter Seal Campaign for 1976.


Some hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Prime Minister.

In refusing the resignation of the Minister of Public Works, the Prime Minister said he sympathized with his good intentions. In reaching that conclusion I assume the Prime Minister went into some detail about the question of intent, and that involved the conversation with the former Minister of Consumer and Corporate Affairs. Before his decision on Friday afternoon regarding the Minister of Public Works, did the Prime Minister not closely question both ministers on that conversation and if so would he give the details with particular reference to the intent of the former Minister of Consumer and Corporate Affairs?


Pierre Elliott Trudeau: Yes, Mr. Speaker; I did satisfy myself on that aspect of it. I think it is fair to say from Justice Hugessen's report to the Chief Justice that he also was satisfied that the intentions were good and honourable. On that basis I felt I was justified in accepting the intentions of the minister, as understood by me and by the Associate Chief Justice himself.


Lincoln MacCauley Alexander: Mr. Speaker, we have heard the Minister of Public Works on several occasions state that he accepts full responsibility. Of course, that begs the question because we do not know who had been told to approach the judge in the first instance. The Prime Minister indicated he had a conversation with both his ministers. Would he now advise the House whether he concluded it was the idea of the Minister of Public Works to approach the judge, the idea of the Minister of Consumer and Corporate Affairs to approach the judge, or was it a joint exercise in which the Minister of Public Works was to carry out the execution of the intent regarding approaching the judge?


Pierre Elliott Trudeau: Well, Mr. Speaker, apart from referring the hon. member to the record, the only thing I can add is that one minister said that he made a suggestion to the other. The other said he took the responsibility for phoning the judge-took it on his own. I do not know what the hon. member would want me to say beyond that, except perhaps I do not think the Minister of Public Works would have taken an order from any minister, particularly a junior minister, to do something he did not think was proper for hi a to do at that time.


Lincoln MacCauley Alexander: Mr. Speaker, I assume that this was a joint venture on the part of the Minister of Public Works and the former Minister of Consumer and Corporate Affairs in which the Minister of Public Works was to carry out the intent which was to approach the judge.


Pierre Elliott Trudeau: Well, Mr. Speaker, the member can describe it as a joint venture if he wishes.


FISHERIES
Mr. Albert Bechard (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, I would like to direct my question to the Minister of State (Fisheries), but in his absence I shall ask the Minister of the Environment and Minister of Fisheries or his parliamentary secretary.
March 18, 1976

Has the minister or his officials now any control over the members of the Greenpeace Foundation or other characters of the same kind who are at present engaged in illegal interference, this time on the ice of the Atlantic and the Gulf of St. Lawrence where the seal hunt is taking place?


Hon. Jean Marchand (Minister of the Environment and Minister of Fisheries):: Mr. Speaker, I cannot speak on behalf of the Minister of Fisheries since he is the one who has dealt with this matter, and in a most particular way. I think he will be here within a few days. When he arrives in the House early next week, I shall ask him to answer the hon. member.


ADMINISTRATION OF JUSTICE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker,
I was rather interested in the answer given by the Prime Minister to the hon. member for Hamilton West. Yesterday, as recorded at page 11866 of Hansard the Prime Minister, referring to the time before Justice Deschenes' letter, said that he had the version of both the Minister of Public Works and the former Minister of Consumer and Corporate Affairs and, according to both versions, there had not only been no illegality; there had been no impropriety. Maybe the Prime Minister would clarify this without equivocation. Had he been told by either minister that the call was on the request of the former Minister of Consumer and Corporate Affairs and that it was intended to explore how the matter could be settled and to report the possibility of a confrontation, and if so, when was he told that? Was it before the Monday he refers to when he had them in or was it after the Monday?


Pierre Elliott Trudeau: The first answer, Mr. Speaker, is no. The second answer is: not applicable.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: Mr. Speaker, we continue to be stonewalled in respect of information. Maybe I could put this question to the Prime Minister. Mr. Speaker, I would have thought some of those members would want the Prime Minister to hear so that he could answer. It is up to them. Since the Associate Chief Justice got the impression that the minister was trying to head off a confrontation with the court, does the Prime Minister recognize that not only was the call itself inappropriate but the substance of the conversation with regard to the executive and its perception of the proceedings could have been influential and intimidating?


Pierre Elliott Trudeau: Mr. Speaker, the question seems hypothetical. Could it have been such? The answer is, I suppose it could but in the opinion of the judge it was not.


Eldon Mattison Woolliams: Well, let me put it this way, Mr. Speaker. From the version of both ministers does the Prime
Oral Questions
Minister now take it that it was influential and intimidating?


Pierre Elliott Trudeau: Well, Mr. Speaker, I really must repeat a little of what I said on Tuesday on the nature of the proceedings. This is not an instance where the Crown, in a criminal proceeding, is indicting or committing another person to answer for an offence. This is a case where the court itself finds it is aggrieved and as the aggrieved party charges another person with a criminal offence. In such cases the time honoured way of purging that offence, alleged or real, is to get an apology through the courts. What was attempted by the Minister of Public Works was to see if that apology could be forthcoming in a way which would purge the offence. There is nothing illegal in this. It was found improper and for that reason I do not condone the actions, but I wish the hon. member would get back to the origin of this. It is one individual against another, one party which feels aggrieved and the other party which either directly or indirectly wished to say: "I want to apologize; what kind of apology do you want"? Do not forget the origin of this before trying to-


Some hon. Members:: Hear, hear!
3k *	*


HOUSING
Mr. Jacques Lavoie (Hochelaga):: Mr. Speaker, I would like to direct a question to the Minister of State for Urban Affairs, to whom I have given notice of my question.
Following a telephone call on Tuesday with the vicepresident of the Executive of the City of Montreal, I have learned that 50 per cent of the subsidies granted to nonprofit-making corporations are contributed by the federal government, and 25 per cent by municipalities. It seems that the 25 per cent share contributed by Quebec would not presently be granted to those groups, since the agreements between the province and the federal government are not yet settled. Could the Minister tell the House when he intends to sign this agreement in order that those groups may get 100 per cent of those subsidies rather than 75 per cent?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, I want to thank the hon. member for his notice because I can now clarify an answer to a question, I believe, posed last week or recently, which I misunderstood. In so far as the arrangement with Quebec and Montreal is concerned, this does not apply to non-profit housing. Non-profit housing rehabilitation subsidies are available regardless of locality as long as it is a non-profit operation, so that they need not be in those areas designated under the special arrangement that has been worked out for the city of Montreal.
While I am on my feet, I might mention also that the rehabilitation loan limits have been increased from $5,000

March 18, 1976
Oral Questions
to $10,000 per unit, and the forgiveness of grant portion has been increased from $2,500 to $3,750.


AUDITOR GENERAL
Mr. Alan Martin (Scarborough West):: Mr. Speaker, my question is for the President of the Treasury Board. Bearing in mind that roughly a year has passed since the issue of the report of the Independent Review Committee, will the minister indicate the extent of progress on a new act governing the functioning and responsibilities of the Auditor General, and when we may expect to see this new act brought before the House?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, we are through considering the report in Cabinet. We have made the decisions pursuant to this report, and the legislation is now being prepared by the Department of Justice; as soon as the legislation will be ready, we will be able to proceed, but I am afraid that it will take a few more months.


NATIONAL DEFENCE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Minister of National Defence and it arises out of the serious loss of some five ships and two men in the present herring fishing season on the Pacific coast, some 14 men last year, and the Soper report shows that the Atlantic losses are equally disturbing. In view of the fact that most of the rescue operation, particularly at night, has been carried on through the generosity and co-operation of our neighbour to the south, how soon will it be possible to have equipment so that rescue operations can be carried on at night so that we will not have these sad losses of men and ships?


Hon. James Richardson (Minister of National Defence):: Mr. Speaker, of course we do have the equipment; we have three helicopters and three Buffalo aircraft stationed at Comox. We also have a Ministry of Transport helicopter further north and we have the support of our operational aircraft in the area. We have a reciprocal arrangement with the United States on both coasts. We tend to assist the U.S. more on the east coast; they assist us more on the west coast. I should point out also that Maritime rescue is the responsibility of the Department of Transport. The Department of National Defence does not have a Maritime rescue capability but we have a very effective air-search capability.


Thomas Clement (Tommy) Douglas: While the minister says that we have some equipment, I am sure he is also aware of the fact that our equipment is not

operational at night, and unfortunately storms do not confine themselves to daylight hours. Does the Department of National Defence intend to equip helicopters with night lights and with equipment so that sea-rescue operations can be carried out during the night hours, because if the minister will not do that, the equipment is simply for daylight operations and at present there is a good deal of resentment about the fact that we have to depend on the generosity of the Americans to look after men wrecked at sea?


James Armstrong Richardson: It is not correct that we only have a day time capability. Our equipment is capable of night search, but I admit it is not as effective as the equipment that is being used at present on the west coast by the Americans.


REQUEST FOR TWENTY-FOUR HOUR OPERATION OF SEARCH AND RESCUE CO-ORDINATING CENTRE, HALIFAX
Mr. James A. McGrath (St. John's East):: I have a supplementary question for the Minister of National Defence. In view of the fact that his department has the co-ordinating responsibility for search and rescue and landings at sea and hence has a supervisory role over the Canadian coastguard, and in view of the seemingly ineffective capability of the co-ordinating centre in Halifax to respond promptly, may I ask the minister whether he is now considering, in light of the recent tragedies we have had in Newfoundland, deployment of search and rescue aircraft in Newfoundland and placing the search and rescue co-ordination centre in Halifax on a full 24 hour operational capability.


James Armstrong Richardson: I think that the answer to that was demonstrated in the last few days when the Cape Freels was lost due to a fire at one o'clock in the morning and all 27 personnel were saved by search and rescue carried out by the Canadian armed forces and Department of Transport personnel.


REQUEST FOR LIST OF BASES TO BE CLOSED-EFFECT OF BASE CLOSURES ON SEARCH AND RESCUE
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is directed to the Minister of National Defence and is premised on the understanding that we now have a final report with respect to base consolidation and base closure. Could he indicate to the House how many bases are on that list, either with respect to closure or consolidation?


James Armstrong Richardson: No, Mr. Speaker, I will be taking the report to cabinet shortly.


J. Michael Forrestall: I wonder if the minister could indicate, relative to the questions asked by two previous speakers this afternoon, whether or not the consolidation of closure of bases will affect in any way, in the sense of deteriorating or running down further, our capability for good search and rescue on both coasts?
March 18, 1976


James Armstrong Richardson: No, Mr. Speaker, we will be maintaining and in fact improving our search and rescue capability.


ADMINISTRATION OF JUSTICE
Mr. Jack Horner (Crowfoot):: Mr. Speaker-


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: -I should like to direct a question to the Minister of Justice. In light of what may well be a difficult year for peace and security in some parts of Canada, would it be correct to assume that after the peace and security legislation passes this House the Minister of Justice will be putting before the House legislation dealing with the Emergency Powers Act or something along that line?


Stanley Ronald Basford: I think this is probably one of those rare occasions when I can speak on behalf of the Leader of the Opposition and welcome the hon. member back.


An hon. Member:: Cheap shot!


An hon. Member:: Where have you been?


Stanley Ronald Basford: Mr. Speaker, I am delighted with the premise of the hon. member's question that the peace and security measures will be passed by the House and, I hope, get into committee as quickly as possible so that they could be dealt with in detail there.
With regard to the latter part of the hon. member's question, I think that the answers we have given in the past stand and that is that the matter is being considered.


John (Jack) Henry Horner: Mr. Speaker, the answer of the minister that the answers in the past stand is not a very clarifying answer. Would it be logical to assume that, in anticipation of events to take place later this year, there will be an act with regard to foreign police services being allowed to operate in this country? Would that be logical or could the minister answer that?


Stanley Ronald Basford: Mr. Speaker, I would not want to speculate on that. As we have said in the past we are working on measures and have been for some time. I would not want to speculate on when they would be introduced nor would I want the hon. member to speculate.


POST OFFICE
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question for the Postmaster General concerns the termination procedures in effect for post office employees. It stems
Oral Questions
from a termination in Vancouver which took place on December 19, 1975. I should like to quote from a letter I received from the personnel manager of the B.C. and Yukon Postal District in Vancouver which says-


Mr. Speaker:: Order, please. In all fairness I think the hon. member ought to try to make, as usual, the preamble as short as possible and put the question directly.


William Hillary (Bill) Clarke: Mr. Speaker, the sentence I think I must quote in order make the question relevant is this:
Regretfully, service from our central pay office in Ottawa has deteriorated to such an extent that we can only guess his final pay will reach us about mid-March.
Does the Postmaster General think it just that his department should be allowed to force terminated employees to exist for three months without their final pay?


Hon. Bryce Mackasey (Postmaster General):: Mr. Speaker, the answer is, of course not. I should like, however, to analyse the whole letter, if the hon. member would be kind enough to send me a copy. The whole question of pay does not come under the Post Office but under the Department of Supply and Services.


EFFECT OF STRIKES ON PAY OF RURAL COURIERS- GOVERNMENT POSITION
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, a supplementary question for the Postmaster General. Does the minister think it fair or just that the people in charge of rural delivery receive only 50 per cent of their pay when they have been dislocated by a strike over which they have no control?


Bryce Stuart Mackasey: Mr. Speaker, this has been the normal practice. In all strikes, legal or otherwise, there is a certain amount of unfairness but people know when they sign the contracts, specifically, the remuneration they will receive when strikes occur in the Post Office, so the method of determining remuneration in this case was precisely the same as in the last dozen or so strikes over the last four or five years.


NUCLEAR LIABILITY ACT
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources and is based on the fact that documents tabled in this House on February 19 indicate that there are 109 known or suspected radioactive sites in Canada which could result in radiation damage to people or property. Given the clear federal responsibility to protect Canadians from the consequences of nuclear accidents and to provide compensation for any damage related to nuclear facility operations, could the minister tell the House when the government intends to proclaim the Nuclear Liability Act which was passed by this parliament some six years ago?

March 18, 1976
Oral Questions


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, the short answer is as soon as possible.


Some hon. Members:: Oh, oh!


An hon. Member:: About six years or so.


Alastair William Gillespie: I should like to add that I very much share the concern of the hon. member opposite. I am not at all satisfied with the pace of events with respect to negotiating the details with the private insurers. I am told it is a very technical question. I would invite the hon. member to attend the meeting of the standing committee this evening where there will be officials who can go into this matter in considerable detail.


Flora Isabel MacDonald: A supplementary question, Mr. Speaker. Regarding the minister's comments with respect to insurance companies, am I to take it that it is now the policy of this government to wait until certain interest groups concerned with specific legislation have come to an arrangement with the government before any specific piece of legislation relating to that has been proclaimed by the government?


Alastair William Gillespie: Mr. Speaker, there are certain things that have to be done before the act can be proclaimed. One of them is to ensure that insurance policies will cover the insurable risk and that is being negotiated.


ADMINISTRATION OF JUSTICE
Walter David Baker: Mr. Speaker, my question is for the Minister of Public Works. It arises out of the quite reasonable expression of his respect for the integrity and depth in the Associate Chief Justice Hugess-en of the Superior Court of Quebec. Would the minister please tell the House why he would bother a judge of the integrity which he has described, and which we accept, with what the minister has termed as baseless rumours? Why would he bother bringing that to a judge of this man's character?


Charles Mills (Bud) Drury: Mr. Speaker, I think it is probably useful, and perhaps lends some colour, to denial of a rumour and a statement of lack of belief in a rumour for a person to have it directly from him if that is the case.


Walter David Baker: A supplementary question, Mr. Speaker. In view of the answer which the minister has just given and certain answers given just a few moments ago in the course of the question period, do I take it from the minister that he is denying categorically that there was any discussion of this question of the ganging up on certain ministers in the cabinet and among the cabinet in a formal or informal way? Is he denying that?


Mr. Speaker:: Order, please. My recollection is that that precise question was put earlier this day. I would hear the

argument at three o'clock, but the question was put in specific terms by an hon. member earlier in this question period as to whether or not that matter was discussed. My recollection is that the minister answered, in fact. In any case, I could take an argument in a minute or two about that point.
The hon. member for Vancouver-Kingsway.


BUSINESS OF THE HOUSE
Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, my question is for the President of the Privy Council. In view of the fact that dangerous offenders are loose in Vancouver and also in the riding of Calgary North, and the murder and the hostage taking that has become endemic in the cities of Canada, the violence that is everywhere in this nation, the movement of criminals and guns across this country as speedily and freely as airline pilots, when can we expect to get down to completing legislation to control dangerous offenders and guns in order to achieve peace and security for the people of Canada?


Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, this has been one of the concerns of the government.


Some hon. Members:: Oh, oh!


Mitchell William Sharp: We have tried to bring important legislation before the House from time to time recently with moderate success only. I hope we do better in the future.


ENVIRONMENTAL AFFAIRS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I have a question for the Minister of the Environment. It arises from the report today that the cabinet is about to make a decision on drilling permits for offshore drilling in the Beaufort Sea. On February 23, the minister indicated to the House that he was concerned that the technology was not sufficiently advanced for a permit. He indicated:
... if there should be a blow-out of some kind whether we have the facilities to really make a decent clean-up so that all the ecology is not destroyed.
Would the minister inform the House today whether he still has reservations on those very important matters that he raised in the House on February 23 or is he now satisfied that we can go ahead?


An hon. Member:: Clean up the cabinet first.


Jean Marchand: Mr. Speaker, I think I have expressed my concern about this situation. I still am concerned and as far as what is decided, it is up to cabinet to
March 18, 1976

make the decision, not me. If the hon. member wants to know if the permit has been granted, this comes under the jurisdiction of the Minister of Indian Affairs and Northern Development.


Stuart Malcolm Leggatt: Mr. Speaker, a supplementary question. The same report indicated that the United States authorities on the Alaskan slope were very concerned about the potential for pollution of their own shores in the Prudhoe Bay area. Would the minister advise if he has had representation or the government has had representation from the United States authorities expressing concern about the granting of these permits?


Jean Marchand: Mr. Speaker, I think that is the kind of question that should be put to the Secretary of State for External Affairs because that is the channel for such discussion.


NORTHERN AFFAIRS
Douglas Charles Neil: Mr. Speaker, a question for the Minister of Indian Affairs and Northern Development. Can the minister confirm whether he and his cabinet colleagues have come to a decision on the proposed offshore drilling by Canmar Ltd. for this summer in the Beaufort Sea?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: Mr. Speaker, the matter is still before cabinet for decision, so the decision has not yet been taken.


Douglas Charles Neil: Mr. Speaker, a supplementary question. In view of the fact that Mr. Justice Berger recently has taken some evidence pertaining to offshore drilling in the Beaufort Sea, would the minister recommend to cabinet a request for an interim report on the subject from Mr. Justice Berger before cabinet makes its decision?


J. Judd Buchanan: Mr. Speaker, I shall be happy to examine Mr. Justice Berger's records and take his information into account.


EXTERNAL AFFAIRS
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is for the Secretary of State for External Affairs. Perhaps the acting minister will answer. In the light of extremely disturbing reports coming out of Thailand regarding conditions in Cambodia and involving, apparently, a considerable slaughter of the populace, has
Oral Questions
the Canadian government made any attempt to acquaint itself with the situation there?


Mitchell William Sharp: Mr. Speaker, personally, I have not kept in close touch, but I am sure my department has. I shall try to ascertain the facts and get in touch with the hon. member.



ROUTINE PROCEEDINGS

['1.\tOf the total amount of money approved by the Newfoundland and Labrador Development Corporation, for each year (a) 1971-72 (b) 197273 (c) 1973-74 (d) 1974-75 (e) 1975-76, what was the (i) breakdown by industry classification (ii) percentage breakdown by industry (iii) number of individual projects (iv) distribution by electoral districts?\n2.\tFor the same years, by electoral district, how many (a) inquiries were received (b) applications were (i) approved (ii) rejected?\n\n3.\tWhat is the breakdown of operating costs of the Corporation for each year since its inception?\nReturn tabled.']
Walter David Baker: Mr. Speaker, I rise on a point of order. A few moments ago, at the end of the question period, I directed a question to the Minister of Public Works but Your Honour decided that the question has been asked before, and answered. The hon. member for Vancouver South asked a question about discussions. As I recall, his question concerned an apprehended confrontation between the judiciary and the executive branch of government. My question related specifically to the gang-ing-up previously referred to.
Paraphrasing my question, I asked the minister if he could deny categorically that the ganging up had been discussed formally or informally by members of the cabinet. The question related to the subsequent visit which the minister made to the court. I suggest, first, that that is not repetitious. Second, even if the question is repetitive, the Chair has ruled in the last ten days that the point to be considered is not so much on whether the question is repetitive but, rather, on the quality of the answer. It is important either to dispose of the question now or to obtain an answer, as the government insists upon not providing a proper vehicle for the kind of examination we deem necessary and which was the subject matter of my earlier motion today under Standing Order 43.


Charles Mills (Bud) Drury: Mr. Speaker, I rise on the same point of order. I think the hon. gentleman is trying to discover who has been inspiring me. It may be unfair to suggest this, but I witnessed the fact that that was not his question. He was put up to it by somebody else. Perhaps that should not affect the quality of the question, and I do not think it does.


Some hon. Members:: Oh, oh!


An hon. Member:: The same old arrogance.


Charles Mills (Bud) Drury: Although the idea is somebody else's, he still gets credit for it.


Mr. Stanfield:: Utter nonsense. Rubbish.


Charles Mills (Bud) Drury: I am utterly appalled-


Robert Lorne Stanfield: You should be.


Charles Mills (Bud) Drury: -that the distinguished House leader of the Conservative party should expect to get information from a member of cabinet on the details of proceedings in cabinet.

March 18, 1976
Business of the House


Mr. Speaker:: Order, please. Once more, it is difficult to determine, not so much whether questions are repetitious of previous questions but whether they have been answered previously. The rule is difficult to enforce. For several days, we have heard questioning on the same subject. Perhaps the Chair might be forgiven on this occasion for thinking that the question has been answered.
In any event, in replying to the point of order the minister made a response. If the hon. member feels aggrieved, and if an examination of the record shows that his question was not dealt with by the minister on previous occasions, perhaps the hon. member for Grenville-Carleton will put the question again.


Mr. Harquail:: Mr. Speaker, although we have listened for a couple of weeks to repetitive questions, I was not able to catch the attention of the Chair. For the last two days I attempted to ask a question of great concern to my constituency and I repeatedly failed to gain Your Honour's attention. Since I was not able to ask my question, I shall put it on the record now-


Some hon. Members:: Oh, oh!


Mr. Fairweather:: You have caucus every other day.


Mr. Speaker:: Order, please. If the hon. member wants commiseration he might discuss the matter with three or four of his colleagues who are senior to him and tried to get the floor today, and with the entire caucus of the Creditiste party the members of which have been seeking to ask questions on other matters. The Chair has been through a difficult time these last few days in trying to focus on what is obviously an important subject, sometimes at the expense of hon. members who want to ask questions about other subjects.


Maurice James Harquail: Mr. Speaker-


Mr. Fortin:: Mr. Speaker, I heard with considerable interest what you have just told the Liberal member. It is bad enough that we should have been allowed only one question today without your using us to make the Liberals sit down.



Walter David Baker: Mr. Speaker, I rise on a point of order. Today is Thursday.


An hon. Member:: How do you know?


Walter David Baker: Mr. Speaker, an hon. member asks how I know it is Thursday. Perhaps that is because it is the one question the government is prepared to answer. I want to raise the usual question concerning the business of the House. It is directed to the government House leader.


Mitchell William Sharp: Mr. Speaker, I am glad for the confirmation that it is Thursday. I am a little confused, with all the argument that has been taking place in the House: it seems to me that today has been much the same as Monday, Tuesday and Wednesday. If I may announce the business, this afternoon I hope we will complete consideration on second reading of Bill C-68. We will then continue, as I indicated, to begin debate on the anti-inflation bill. When that is disposed of, we will revert to Bill C-83. Tomorrow is an allotted day, and Tuesday, Wednesday and Thursday of next week are allotted days. The business announced should cover today and Monday.


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, may I direct a supplementary question to the government House leader? Since it is now three full weeks since the welcome announcement of the Minister of Veterans Affairs concerning legislation respecting Canadian veterans who were prisoners of war-


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: -is it not now
possible for the minister to indicate on what day that bill will be on the order paper?


Mitchell William Sharp: Mr. Speaker, I cannot be precise. I am happy to note the restored interest of the hon. member in the business of the House. I expect that the bill probably will be before the cabinet committee on legislation and House planning at the beginning of the week.


Stanley Howard Knowles: You are as slow as ever.


COMMITTEES OF THE HOUSE
[Stage Direction]
Ninth report of Standing Committee on Veterans Affairs-Mr. Boulanger.

[Stage Direction]
Second report of Special Joint Committee of the Senate and of the House of Commons on the National Capital Region-Mr. Gauthier (Ottawa-Vanier) (for co-Chairman).

[Stage Direction]
Sixth report of Standing Committee on Regional Development-Mr. Lumley.
[Editor's Note: For text of above reports, see today's Votes and Proceedings.]
March 18, 1976

Hon. Marc Lalonde (Minister of National Health and Welfare) moved: for leave to introduce Bill S-31, to amend the Quarantine Act.


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

Mr. Speaker:: It is my duty to inform the House that an objection signed by the hon. members for Lincoln (Mr. Andres), York South (Mrs. Appolloni), London East (Mr. Turner), Middlesex-London-Lambton (Mr. Condon), Kent-Essex (Mr. Daudlin), Bruce-Grey (Mr. Douglas), Wellington (Mr. Maine), London West (Mr. Buchanan), Hamilton East (Mr. Munro), and Niagara Falls (Mr. Young), has been filed with me pursuant to section 20 of the Electoral Boundaries Readjustment Act, chapter E-2, RSC 1970, to the report of the Electoral Boundaries Commission for the province of Ontario.
If the House agrees, I would suggest we follow past practice and print the text of the objection as an appendix to this day's Votes and Proceedings. Is that agreed?


Some hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 3,674, 3,845, 3,848 and 4,942.


Mr. McKenzie: 1.	What is the total cost of construction of the new Place du Portage complex in Hull over the original estimates?
2.	What is the estimated cost of (a) site acquisition (b) architectural design (c) mechanical and electrical engineering services (d) foundation structure (e) landscaping and interior design and, in each case, what is the name of the firm who has been awarded the contract?
3.	(a) What was the purchase price of the site (b) from whom was it purchased (c) how was the decision reached as to the cost of the property?
4.	What is the estimated (a) annual operating cost of the building (b) total amount of useable floor space?


Mitchell William Sharp: am informed by the Department of Public Works and
Order Paper Questions
National Capital Commission as follows: 1. Place du Portage-Phase I, $7,223,774; Place du Portage-Phase II, $4,668,615; Parking Garage-Former City Hall Site, $166,412.
2.	(a) Approximately $412,000, exclusive of purchase price reported under Part 3(a), covered legal, appraisal and other incidental expenses, (b) Phase I-$361,981, Daniel E. Lazosky; Phase II-$705,267, Daniel E. Lazosky; Parking Garage-Former City Hall Site, $95,500, Labrecque, Vezina and Associates, (c) Costs associated with this service are included in estimated cost shown for architectural design. The Standard Consultant Agreement provides for mechanical and electrical services which is part of the basic fee for prime consultants, therefore no detailed cost is available, (d) Phase I-$1,299,640-Thomas Fuller Construction (1958) Limited; Phase II-$1,871,006-Pitts Quebec Limited ($618,540) and V.K. Mason Construction Limited ($1,252,466). Parking Garage-Former City Hall Site-$3,266,838, V.K. Mason Construction Limited ($689,935), J.R.B. Construction ($65,779) and Thomas Fuller Construction Co. (1958) Limited ($2,511,124). (e) Landscaping: Insofar as landscaping costs are concerned, design and construction costs identified to date amount to about $2,575,000. Hough, Stansbury Associates, Toronto, has been awarded contracts for landscape design. Cramer Nursery, Ltd., Montreal, and Thomas Fuller Construction Co. (1958), Ltd., Ottawa, have been awarded contracts for landscape construction. Interior Design: Phase I-$219,-559-Daniel E. Lazosky; Phase II-$142,946-Forrest Bodrug; Parking Garage-Former City Hall Site-Nil.
3.	(a) $2,748,878.65. (b) The land assembly involved 20 individual owners, the City of Hull and a larger holding from Portage Inc. (c) Each individual property was appraised by independent appraisers establishing the current market value at the time, in accordance with the normal standards and procedures of the appraisal profession.
4. (a) Phase I-$375,333.; Phase II-$325,613.; Parking Garage-Former City Hall Site-$42,158. (b) Phase I- 328,438 square feet; Phase II-351,681 square feet; Parking Garage-Former City Hall Site-120,000 square feet.


Mr. MacDonald (Egmont): With reference to the fishing sector of the Prince Edward Island Comprehensive Development Plan, did members of DREE or the Joint Advisory Board hold discussions of any sort as part of the drafting process for the Phase 2 Agreement, with persons engaged in fishing, fish processing or their representatives and, if so (a) on what date (b) with whom (c) on what topic (d) for what purpose?


Mr. Cliff Mclsaac (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Department of Regional Economic Expansion is as follows: In the process of developing the Phase II Agreement, members of DREE met with a cross section of people engaged in fishing and fish processing and as well received the views of fishermen's organizations from the province. Records of dates, participants' names, or topics of discussion were not kept.

March 18, 1976
Order Paper Questions PEI-FISHING SECTOR


Mr. MacDonald (Egmont): With reference to the fishing sector of the Prince Edward Island Comprehensive Development Plan, have changes been made in the (a) sectoral strategy (b) objectives (c) programmes for Phase 2 as a result of the Phase 1 evaluation report by Professor Copes and, if so, what are they?


Joseph Clifford McIsaac: The reply for the Department of Regional Economic Expansion is as follows: (a), (b) and (c): The study by Professor Copes was one factor that was considered when changed objectives, strategies and programs were being developed for Phase II. No changes have been made purely as a result of this study.
"OH! CANADA" ALBUM


Mr. Reynolds: In relation to the Commissioner of Official Languages' Oh! Canada album, how many (a) were made and at what cost (b) have been distributed and to whom (c) are planned for distribution in the future?


Mitchell William Sharp: The Commissioner of Official Languages reports directly to Parliament and not through a minister. Questions can be made directly to him privately.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if questions Nos. 3,977 and 4,061 could be made orders for return, these returns would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Matte: 1.	Has the Department of National Health and Welfare ever granted funds for the development and the efficiency of welfare services in Canada and, if so, what was the total amount?
2.	For each such grant, what vras (a) the name of the recipient (b) its purpose (c) the amount (d) the year it was made?
Return tabled.


Mr. Marshall: 1.	Of the total amount of money approved by the Newfoundland and Labrador Development Corporation, for each year (a) 1971-72 (b) 197273 (c) 1973-74 (d) 1974-75 (e) 1975-76, what was the (i) breakdown by industry classification (ii) percentage breakdown by industry (iii) number of individual projects (iv) distribution by electoral districts?
2.	For the same years, by electoral district, how many (a) inquiries were received (b) applications were (i) approved (ii) rejected?

3.	What is the breakdown of operating costs of the Corporation for each year since its inception?
Return tabled.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, March 17, consideration of the motion of Mr. Lalonde that Bill C-68, to amend the Medical Care Act, be read the second time and referred to the Standing Committee on Health, Welfare and Social Affairs.
Mr. Speaker:: Order, please. Before permitting the hon. member for Yukon (Mr. Nielsen) to resume speaking, may I indicate that in accordance with our records there remain exactly 20 minutes pursuant to the order previously made under Standing Order 75C. Therefore, at 3.35 this afternoon I will interrupt proceedings and put the questions necessary to dispose of the motion now before the House.


Mr. Erik Nielsen (Yukon):: Mr. Speaker, in keeping with the traditional courtesies of the House, it will be my intention to share some of the time remaining with the minister so that he might be permitted to answer some of the points that have been made on this side. However, I want to impose upon the minister three conditions to that sharing of time. First, and I am sure he will agree with this, that he direct himself to the question of the Yukon and Northwest Territories participating in federal-provincial conferences, not on an observer basis but on the basis of being heard; second, that he deal with the status of the transference of the administration over health services in the Yukon territory to the territorial government; third, and I am sure he will agree with this, that he will not be heavy-handedly partisan in his use of the time which I intend to leave him.
Before proceeding, I want to say with respect to yesterday's Hansard, page 11894, at the foot of the page in the left-hand column, there appears a statement attributed to me. It reads:
The minister belonged to one scheme for 19 years.
The reference is to the then minister of justice. However, that was not the reference I made. I said that I had belonged to the Ontario scheme for 19 years. The point I was making was that that was my choice, as indeed it was the minister's.
I exposed last night, primarily for the consideration of the Minister of Justice (Mr. Basford) rather than the Minister of National Health and Welfare (Mr. Lalonde), circumstances which prevailed in the Yukon concerning certain charges made by an employee of the minister. The circumstances appeared to indicate some pressure being brought to bear upon the minister's employee to withdraw those charges. I hope that the Minister of National Health
March 18, 1976

and Welfare will consult his colleague with regard to my suggestion that an investigation be held. I want to say that it was being made only for the purpose of conveying, at least to the public, the assurance that indeed there are no double standards in the administration of justice. Should the investigation disclose-and I certainly hope it does not-that there has been a transgression of the provisions of this section of the Criminal Code, the government will lose no time in dealing with the evidence on that basis.
There are two important matters that I want to raise before resuming my seat. One has to do with questions that would have been raised by the member of the Yukon legislative council and the executive committee member- concerning herself with health matters in the Yukon had she been given the opportunity to speak. That is the question of urging the minister to give priority to expediting the transference of responsibility for the administration of health services in the Yukon-here I do not speak for the Northwest Territories-from the federal government to the territorial government. This matter is high on the priority of the Yukon legislative assembly. Had she been able to urge upon the minister that view, as part of the discussions taking place with respect to federal-provincial arrangements, she would have done so. I am sure she has done so in private, but that is not sufficient.
I understand that the minister has appointed a consultant, Jack Flemming, an employee of the department, to set up a timetable for the transfer. May I get this through to the minister: there is nothing complicated about this transfer, no more so than there were any complications attendant upon the transference of the Alaska highway system to the territorial government from the federal government. With respect to the employees, they are given a choice. They go with the transference, as they did in Public Works, or they are in other positions. I do not think there is any real complexity about effecting that transfer without delay. That is one point I would like the minister to deal with in exchange for the courtesy I am going to afford him to wind up this debate.
I do not think there will be any financial problems as far as employees at the federal level are concerned. Once they transfer to the territorial level, they will be at least as well off, and in some cases a little better off. Some positions eventually, of course, will go by attrition. However, the most important factor in effecting the transference without delay is to enable the territorial legislature to apply its own priorities rather than federal government factors taking priority. I might add, for the minister's information, that the full support of the Yukon Medical Association is behind the acceleration of this transference.
With respect to the cost-sharing arrangements, this is one matter that disturbs me. I well recall the debate in this House which set up the medicare scheme. I well recall opposing it simply because we were not accorded the opportunity of participating. The present government is known for adopting stances one minute which are the direct opposite of those taken the minute before. I well recall the formulas which were developed for the purpose of constructing cost-sharing arrangements. The formulas put forward at that time were those upon which we acted; they were the basis for measures which were taken in the two northern territories. Now we find the federal govern-
Medical Care Act
ment backing away from those proposals, unilaterally as far as the northern territories are concerned, and we have no recourse, no say one way or the other as to how it will affect us.
The fact is that in the first year we shall probably be all right in the Yukon because of the assurances given last October by the minister to the health ministers who attended the conference at that time. The Yukon and Northwest Territories have no input whatsoever, so there is complete inability to plan as far as both territorial governments are concerned. In my view, this is a compelling argument for the minister to set up a structure which would allow a meaningful input by territorial representatives at federal-provincial conferences on health matters. I do not mean at the deputy minister or official level, but at the political level. If we are to be expected to pay our share of the cost, if we are to be burdened with added cost in the Yukon, we should have a part to play in the decision-making process.
One example of the manner in which federal decisions made unilaterally can affect us is to be found in the closing of one wing of the Charles Camsell Hospital in Edmonton. This has thrown a burden on the Yukon and Northwest Territories of looking after patients who are no longer acceptable at Camsell; they must be cared for in territorial hospitals unless, of course, they are seriously ill, in which case they are taken outside in any event. I understand this matter is now being discussed with the Yukon Medical Association and that they are not at all happy about this added burden which is being placed upon hospital facilities in the north.
There are other representations I could make with respect to the application of this legislation as it affects the north, but the chief complaint we have is the fact that we are not heard when conferences are held; we have no part in the decision-making process. It would not detract at all-indeed, I think it would be helpful to the functioning of these conferences-if the minister were to back down and permit territorial representatives from the elected councils to be heard as part and parcel of the design and operation of health schemes which the federal government expects to operate in the two territories, with costs being shared by the central administration. I shall now allow the minister to close the debate.


Marc Lalonde: Mr. Speaker, I should like, first of all, to thank the hon. member for Yukon (Mr. Neilsen) for his kindness in giving me some time to conclude this particular stage of the study of Bill C-68.
I would call the attention of hon. members to the fact that we have been debating this bill for a very long time. No fewer than 90 speeches have been made on it, most of them by members opposite, and I note particularly an attempted filibuster by members of the New Democratic Party. I submit there is a time for discussion and a time for decision, and that we have reached the time for decision on this matter. I thank the government House leader for having brought in an order requiring the House to make up its mind at last on the principle of this bill on second reading.
11910

March 18, 1976
Medical Care Act
I shall be happy to discuss at length the content and objectives of the bill in committee as soon as the Standing Committee on Health, Welfare and Social Affairs can be called. I hope the opposition will realize from these detailed studies that the bill is one which is required in current circumstances.


Mr. Orlikow:: Tell that to the provinces.


Marc Lalonde: The hon. member for Winnipeg North (Mr. Orlikow) has been heard plenty of times, and I suggest he should also listen a little. The hon. member for Yukon talked about the representation of the Yukon and the Northwest Territories at federal-provincial conferences. He raised this matter in relation to conferences of ministers of health, but I submit to him that the question is obviously much broader than that: it relates to all federal-provincial conferences and to the status which should be given to the two territories in relation to the provinces and the federal government.
I have already indicated that the elected representatives or the appointed officials of the territories are welcome at these conferences. They are regularly invited. They can participate as observers or as part of the federal delegation. My door has always been open to them and I have frequent contacts with them. One might say that in fact they are in a privileged situation which enables them to talk, if they wish to do so, with federal ministers and officials at a very early stage in the development of policy. It is up to them to use the opportunities available to them as part of the federal delegation. I can, of course, understand their interest in participating at these conferences as full-fledged members, but that is a question which goes well beyond the field of health and welfare.
As for the transfer of health services to the Yukon, I submit the hon. member is a little late in raising this issue. I agreed to the transfer of health services in the course of the last 12 months. The hon. member drew an analogy with the transfer of the Alaska highway. I do not think it is a well chosen analogy, because a health care system is not very much like a highway; it is a more complex operation and it has to be treated with extreme care. The timetable I have proposed has been agreed upon by the northern representatives and there is no problem, as far as the elected representatives are concerned with respect to the timetable I have in mind. I understand the transfer is progressing normally, and I certainly look forward to the day when the Yukon will have full responsibility for the administration of health services for its own citizens. Obviously, this will have to be done co-operatively and will take some time.
With regard to the particular point about Dr. Connolly, I have investigated the matter with my officials and I have been unable to find any evidence of the threat of dismissal which the hon. member indicated. Nevertheless, the hon. member has raised a legal question which I am sure the Minister of Justice (Mr. Basford) will want to examine with his officials.
May I take the three minutes remaining to thank, first of all, all hon. members on this side of the House for their contributions to the debate. Eighteen members on this side of the House have participated, and having listened to

their speeches, and read their speeches when I was unable to be in the House, I have no hesitation in saying those 18 speeches were overwhelmingly better than the 62 others made by members of the opposition. The most preposterous statements have been made during the course of this debate by the opposition, the worst coming from the NDP.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The minister has the floor.


Marc Lalonde: Mr. Speaker, I am sorry to hurt the feelings of opposition members, but I think they are beginning to realize what a mistake they made in opposing this bill. Hon. members opposite have said that this bill will be the end of hospital insurance. The bill has nothing to do with hospital insurance. I can understand members of the official opposition, particularly those from Ontario, raising this issue, but I submit they were completely out of order in doing so. They should be members of the Ontario legislature, not members of this House.
Another amazing complaint which has been made regularly is that there has been a lack of federal-provincial consultation. If ever there has been an area where there has been consultation over the last three or four years, it is this area. We have had regular meetings between ministers and officials and the discussions have been extremely productive. The speeches of some opposition members in this debate have really been like voices from the past. They are living in another age and are quite unacquainted with what has been going on in this field during the last few years. I shall have more to say about this subject at a later stage, Mr. Speaker. In the short time at my disposal, I shall merely say that extensive consultations have taken place, not only on this bill but on the whole question of health services. Yesterday and the day before there was a federal-provincial meeting of deputy ministers that went very well indeed. I will be meeting with the provincial ministers at the end of April, and I am sure this, too, will go well.


The Acting Speaker (Mr. Turner):: Order, please. It being 3.35 o'clock p.m., pursuant to the provisions of Standing Order 75C it is my duty to interrupt the proceedings and to put forthwith every question necessary to dispose of the second reading stage of the bill now before the House. The question is on the amendment. All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


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


The Acting Speaker (Mr. Turner):: Call in the members. The bells will ring for 15 minutes.
Following the ringing of the bells:
March 18, 1976


Mr. Speaker:: Order. Hon. members will realize that there is a possibility that two questions will have to be put. May I assume that in the event two questions have to be put we may proceed with both without the necessity of ringing the bells again.


Some hon. Members:: Agreed.


ANTI-INFLATION ACT MEASURE TO ADD NEW DEFINITIONS
Hon. Donald S. Macdonald (Minister of Finance) moved: that Bill C-89 to amend the Anti-Inflation Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, as the House will recall, last week I announced that on the recommendation of the Anti-Inflation Board all firms and employees in five industries which engage extensively in association bargaining, construction, trucking, grain handling, longshoring and shipping are being brought under the control program because of their strategic importance in containing and reducing inflation. I advised the House, in addition, that the government has decided to ask the Anti-Inflation Board to consider whether the property and casualty insurance industry should also be brought into the program, for the same reason. I should now like to take the opportunity to outline the amendments to the anti-inflation legislation proposed in Bill C-89, to indicate the nature of some of the further changes the government intends to make in the guidelines and to review the operation of the anti-inflation program to date.
Members will recall that at the time the program was first announced last October, I readily acknowledged the fact that we were entering a difficult and complex area, one in which few people in Canada had much experience. I

emphasized that we fully appreciated the importance of maintaining close consultation with all groups in the economy affected by the guidelines and the importance of being prepared to make changes in the system as the need for them became apparent. The amendments to the legislation put forward in this bill, together with the alterations that are being made in the regulations, further testify to the government's readiness to bring forward changes in response to constructive representations from every quarter in an effort to increase both the fairness and effectiveness of the anti-inflation program.
First, let me indicate two significant changes that are being made in the regulations. At present, an exemption from the general guidelines is provided for compensation of workers up to $3.50 an hour or to permit a minimum rise in compensation of $600 a year. As the regulations now stand, these limits include not only wages and salaries but also any additional fringe benefits. The government believes the exemption from restraint for those in the lower income brackets should be made more generous and less complicated by applying the limit only to wages and salaries rather than to total compensation: or, to state it another way, the $3.50 will be calculated on the take-home pay and the fringe benefits will be in addition to that.
A relieving change of a parallel nature will also be made in the case of the guidelines relating to compensation received in the form of indirect incentive benefits such as bonuses and profit-sharing arrangements, ones which in many firms are very much related to the productivity of employees. At present, the permissible increase in such benefits is computed on the basis of the average indirect incentive payments received over the previous five years. In a number of cases, this rule has the effect of reducing the compensation available to an employee below that received in the previous 12-month period, which is contrary to the general intent of the guidelines. To remedy this shortcoming, we intend to allow an employer to use either the average of the previous five years or the incentive provided in the immediately preceding 12-month period as a basis for determining permissible increases in indirect incentive benefits under the guidelines. The $2,400 limit on the average increase in total compensation would, of course, continue to apply. Some additional changes of a more detailed nature will also be made in the guidelines, the nature of which will be indicated shortly.
Now, Mr. Speaker, I would like to outline the more important amendments being proposed in the legislation now before the House. Undoubtedly, the most significant change involves a series of amendments related to the difficult and contentious issue of the appeal system which has been the subject of what the government believes to be a considerable degree of misunderstanding. Let me explain how the proposed new system would work. As is the case at present, the Anti-Inflation Board would have the initial responsibility for considering whether any actual or proposed increase in prices, profits, compensation or dividends coming under the mandatory control program was permissible under the guidelines.
In the event the board provides notification of its opinion that an increase exceeded the guidelines, any person or group directly affected by that decision which chose to dispute it would have the right to so notify the board,
March 18, 1976

which in turn would be required to refer the issue in question to the administrator. Subsequently any order issued by the administrator could be appealed to the AntiInflation Appeal Tribunal.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: Under this amended procedure it would be possible for a disputed opinion of the Anti-Inflation Board to be ?ferred to the administrator for his consideration without ihe necessity of actually increasing prices or incomes contrary to a board opinion. In that way, the party or parties involved could avoid the risk of being found by the administrator to have contravened the guidelines and subject to the possible consequences of such a decision.
A second important change in the system involves a significant broadening of the right of appeal. At present, only the party or parties specifically named in an order of the administrator have the right to launch an appeal. A similiar right does not extend to those who may be directly affected by the order but not named in it. Under the revised system, those directly affected would be granted similar rights of appeal. This change has application, of course, in cases involving compensation where there are two parties to the issue. The legislation provides that an employee organization, for example a trade union or, in the case of unorganized workers, what is referred to as a "designated employee" chosen to represent workers who are not organized, may dispute opinions of the Anti-Inflation Board on compensation directly affecting their interests, requiring such issues to be referred to the administrator for his consideration. An employee organization or designated employee would also have the right to appeal an order of the administrator to the Anti-Inflation Appeal Tribunal and beyond, as now provided in the law. A similar right would be extended to employer organizations directly affected by guideline decisions.
Members will be familiar with many of the questions relating to the appeal process which I have been discussing which arose out of the case referred to the administrator involving an increase in compensation to employees of the Irving Pulp and Paper Co. Under this legislation, the way would be opened for an appeal to be launched against an order of the administrator by an employee group or a designated employee chosen to represent fellow workers who were formally associated in a group, and specifically to the collective bargaining unit in that particular company affected by the decision.
A third issue that arises relates to the question of increases in compensation in excess of the guidelines. Under present regulations, special factors may be taken into consideration; first, in the case of a group that operated under a compensation plan agreed to before January 1, 1974, which expired before October 14, 1975; second, in the case of a group which had not jointed in a new compensation plan before that time in October; and third, where one group had a historical relationship with another group. The regulations provide that in such circumstances an increase in compensation in excess of the guidelines may be granted for-
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-such further amount that in the opinion of the Anti-Inflation Board is consistent with the objectives of the act.
It was always our intention that in the first instance the parties, and ultimately the administrator and the appeal tribunal, should be entitled to formulate their own judgment as to whether any increase in compensation beyond the guidelines was justifiable in such cases, and we propose to modify the regulations shortly to provide more certainty in that respect. An amending clause in this bill makes clear the power of the tribunal to consider whether increases in compensation in excess of the guidelines are consistent with the purposes of the act in the case of an appeal against any outstanding orders of the administrator.
In keeping with the intention which I indicated to the House previously, the legislation would also permit members of the Tax Review Board who, according to the terms of the act governing the board are allowed to discharge no other duties, to serve as members of the Anti-Inflation Appeal Tribunal, notwithstanding the restrictions contained in the act governing that board.
A further amendment exempts compensation in the Quebec construction industry from the federal guidelines, to give effect to the agreement under the anti-inflation program with the provincial government which was signed a week or so ago. That agreement provides for the Quebec government to exercise responsibility for the application of the compensation guidelines in that industry because of the unique system in force in that province, but no other, under which wage standards in construction are established by provincial decree following government discussions with employers and employees.
The bill proposes, in addition, to broaden the scope of the authority available to the administrator in issuing orders involving compensation and dividend cases. This would make it possible, for example, for the administrator to issue an order affecting both employers and employees in compensation cases, in contrast to the current situation in which he is limited to issuing an order involving only one or the other party.
As I indicated at the outset of my remarks, Mr. Speaker, I believe these amendments, together with the changes being made in the regulations, will significantly increase both the fairness and effectiveness of the anti-inflation program. If, as and when other modifications become necessary to deal with emerging difficulties or changing circumstances, we will be quite prepared to make these changes. As it is, considerable progress had been made in the implementation of this national effort to bring inflation under control. The administrative machinery at the national level is now in full operation. We have entered into agreements with seven provincial governments covering the application of the guidelines to the public sector in those provinces, and I would hope that agreements with the remaining provinces can be reached in the not too distant future. All of the provinces have established, or are in the process of establishing, restraints on rent increases.
Perhaps the most important development is the emergence of early signs that some significant progress is being made in slowing the cost-price spiral and, consequently, the rate of inflation. Over the past few months the rate of increase in wholesale and industrial selling prices has been

March 18, 1976
Anti-Inflation Act
moderating. In February, the rise in the consumer price index was only .3 per cent. During the latest three-month period to February the average annual rate of increase in consumer prices was 4.5 per cent, an encouraging decline from the three-month average in January of 7.2 per cent and the three-month rate last August of nearly 14 per cent. The broad yardstick of inflation as measured by the national accounts showed the rate of price increase for 1975 as a whole down to 9.7 per cent from 13.8 per cent the previous year.
The base rate increase in wages and salaries under major, new collective bargaining settlements has also continued to moderate, declining from an average annual increase over life of contracts in the second quarter of last year of 18.6 per cent to 14.3 per cent in the fourth quarter- a figure that could conceivably be further revised downward as a result of the impact of the anti-inflation guidelines.
Undoubtedly, the most marked change has taken place in the case of major agreements covering those in the noncommercial sector, where the average annual increase over life of contract has declined from 23.2 per cent for settlements in the second quarter of 1975 to 13.6 per cent in the fourth quarter of last year. In the commercial sector, the rate of increase declined from 15.1 per cent in the second quarter to 14.9 per cent in the fourth quarter.
As hon. members are well aware, a number of observers have contended that sizeable public sector settlements have been a major factor contributing to an increase of Canadian wages and salaries generally at twice the rate prevailing in the United States. That view should be tempered by the fact that a substantially greater proportion of major settlements reached in the commercial sector have contained cost of living adjustment provisions than those in the public sector, which does much to narrow the apparent disparity between the two sectors. To be specific, a total of 60 per cent of workers covered by major, new collective bargaining agreements in the commercial sector last year enjoyed the protection of cost of living clauses, as opposed to only 12 per cent in the non-commercial sector. Nevertheless, there can be little doubt that large settlements in the public sector have played a part in influencing the sharp increase in wages and salaries generally in Canada. For that reason, the scaling-down of public sector settlements over the course of the year is particularly important.
In that connection, I would like to point out that federal public service bargaining agents generally have been responsive and responsible in collective bargaining with the government. New agreements negotiated during the course of 1975 provided for an average annual increase in wages and salaries over the life of the contracts of 14.4 per cent. This compares with an average annual increase of 14.7 per cent in the commercial sector, including Crown corporations but excluding construction, 17.7 per cent in the municipal sector, and 20.7 per cent in the provincial sector, including other public bodies such as schools and hospitals. During 1976, agreements and tentative settlements reached with a number of groups in the federal public service have provided for an average annual increase over life of contract of 11.8 per cent, down signifi-

cantly from the average 14.4 per cent increase in settlements arrived at during 1975.
I would be the first to acknowledge that the contribution of the anti-inflation program to this moderation of costs and prices up to now has probably been quite modest. We have emphasized repeatedly that the impact of that program could only be gradual. Nevertheless, such developments are mutually reinforcing, with a trend of declining inflation helping to bolster the confidence of Canadians in the outlook for the future, which in turn can only help to contribute to a continued slowing of the inflation rate itself.
Now, Mr. Speaker, I want to deal with the persistent allegation that the anti-inflation guidelines are solely effective in restraining wages and salaries and have virtually no effect whatever in restraining prices and profits. This allegation is based on a serious misconception, not to say misrepresentation, of the entire program. It seems to stem in large part from the fact that most of the initial decisions of the board have been concerned with compensation cases and, more particularly, with cases involving wage and salary increases in excess of the guidelines. There is a simple explanation for that, Mr. Speaker. It is the very fact that we wrote into the guidelines provisions to allow for wage and salary increases over and above the limits provided in the guidelines so as to be able to provide an element of fair and equitable treatment for those who had fallen behind in the inflation scramble, and to reduce the sharp distortions created in the process.
We could have followed the approach adopted in many other countries of establishing a flat limit on permissible increases and provided few, if any, exceptions. In the United States they provided only for a limited percentage increase in wages and salaries. In the United Kingdom, unions voluntarily agreed to accept a maximum pay increase of $12 a week for those in the moderate income category. For a 40-hour week, that is an increase of 30 cents an hour. For those in higher pay brackets, no increase was provided at all, despite the fact that inflation until recently has been running at an annual rate of nearly 30 per cent.
In Canada, on the other hand, we provided a number of exceptions to the general rule. We established a complete exemption from the guidelines for those in the lower pay scales. We made an exemption for women to provide room for an increase in their compensation to that paid to men in equivalent positions. Also, as I indicated earlier, we provided for an increase in compensation in excess of the guidelines to permit some catching up for those whose pay had fallen seriously behind the pace of inflation and for those whose relative pay position, compared to other groups with which they had an historical relationship, had deteriorated significantly.
Had we not provided this degree of flexibility, of equity and of fairness, and instead followed the course adopted by a number of other countries, there would be far fewer cases involving compensation coming before the anti-inflation administrative bodies for their consideration, and there would be far less room for public dispute. But is any member of this House-indeed, is any spokesmen for organized labour prepared to argue that we should not
March 18, 1976

have followed this approach, that we should not have sought to build in these elements of fairness and equity? Unless they are prepared to advocate that course, they have no grounds on which to argue that the cases going before the anti-inflation agencies for consideration of compensation increases in excess of the guideline can be said to provide one shred of evidence that the program is biased against Canadian workers. If anything, the very opposite is true.
What about the position of prices and profits? Let me give the House some plain facts. The first and most important fact is that the program is working now to restrain prices and profits and, if anything, is working to restrain them more severely and more effectively and it is working at present to restrain wages and salaries.
It is perfectly true that there has not been a series of rulings pouring out of the Anti-Inflation Board up to now ordering firms to hold price levels, to roll back price increases or shave profit margins. There should be no expectation that a price and profit control system in this or any other country would work in that way. It did not work that way in the United States. It does not work that way in Britain where, incidentally, there is no similar chorus about the ineffectiveness of price and profit controls, even from organized labour, despite the fact that the systems are very similar-and it cannot work that way here in Canada.
Unlike the case of wages and salaries, the guidelines do not provide broad latitude for exemptions or exceptions from the general rules restraining prices, profits and dividends. As members know, the general rule is that prices must not increase by more than permissible cost increases, and profit margins must be limited to 95 per cent of the average of the past five years.


David Orlikow: Except for exports.


Donald Stovel Macdonald: The hon. member for Winnipeg North (Mr. Orlikow) says "Except for exports." I draw to his attention the fact that when we took off the export levy, the Canadian Labour Congress approved of our position in that regard. Contrast that stringent regime with the provisions for real increases provided in the case of wage and salary earnings generally, and even greater increases provided for those who have fallen particularly far behind in the pay race.
The Anti-Inflation Board, of course, has some flexibility in how it administers the general rules applying to prices and profits and some power to deal with exceptional cases. No doubt there is also room for some dispute between companies and the board over the interpretation of particular provisions of the guidelines relating to prices and profits which could give rise to appeals from board judgments. Generally speaking, however, it is a fact that the price and profit guidelines are understood and are being applied by companies to the best of their ability in the daily operation of their business. While there may well be a few firms busily intent on circumventing or evading the guidelines, I think the overwhelming evidence is that the vast majority of companies are anxious to do everything possible to remain strictly within the guidelines, mostly because they know it is essential to make the program work-and they desperately want it to work-and some
Anti-Inflation Act
because they are fearful of the heavy public censure that would result if they were seen to be stepping out of line.
To ensure continuing compliance by companies subject to mandatory controls, some 150 key firms have been required to give the Anti-Inflation Board 30 days advance notice of any proposed price increases involving a wide range of strategically important consumer and industrial goods and services. A clear indication that the program is working effectively now is provided by the fact that such notification of proposed price increases has up to now been received only for a limited range of goods and services, although of course more can be expected as rising costs work their way through the system. Some 6,500 firms are already in the process of filing extensive information as a basis for actively monitoring their prices and profits in future.
In some cases, the argument about price and profit controls follows a rather different tack. The line goes something like this: Yes, no doubt the government and the Anti-Inflation Board are sincere and well-intentioned in their determination to restrain prices and profits effectively, but everyone knows they are doomed to failure because the companies can easily circumvent controls simply by cooking their books.


David Orlikow: That's right.


Donald Stovel Macdonald: The hon. member says "That's right." That is a point that has been made before by the hon. member for Oshawa-Whitby (Mr. Broadbent) and his followers. The most effective way I can deal with this argument of members of the NDP is to point out to them, and others who make a similar argument, that they were also in the forefront of those who long called for imposition of controls on the prices and profits of a number of companies. May I suggest, Mr. Speaker, that these hon. members cannot have it both ways.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: If they believed, at the time of advocating such controls in the corporate sector, that the program could be made effective, then it still must be true, and they are caught in their own contradictions. Before concluding, I would like to comment briefly on one further aspect of the anti-inflation program, the restraint of government expenditures. My colleague, the President of the Treasury Board (Mr. Chretien), recently tabled the estimates for the coming fiscal year and advised the House that the increase in total federal outlays in 1976-77 would be around 16 per cent. Notwithstanding the substantial cuts that were made in prospective government spending to hold the increase to that limit, a number of members of the official opposition in this House and a number of observers outside the House have condemned an increase of that magnitude as excessive.
It is not unfair to recall in this connection that we have just taken a vote on the second reading of a bill which had as its specific purpose the limiting of federal government expenditure in the area of medical care. If one is effectively to control the cost of expenditures by government in that sector and others in Canada, this kind of approach is necessary and we have to accept that there will be this tighter discipline. Speaking as an Ontario member, it

March 18, 1976
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seems that the last people in this House who should be opposing that bill are Conservatives from Ontario.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: As the Minister of Finance, I would of course have been very pleased if it had turned our to be reasonably possible to provide for a considerably lower increase in our expenditures in the coming year. As Minister of Finance, however, I must also have a balanced concern for the welfare of our economy as a whole and for the welfare of the Canadian people, particularly those of lower income who have been most adversely affected by inflation. Imposition of sudden and severe restraints on the rise of government spending would have a shock effect on our economy, jeopardizing the fragile recovery now under way and seriously hurting many Canadians. To illustrate, let me point out that the estimates for next year include expenditures of $1.5 billion, to provide subsidies of direct benefit to Canadian consumers, for oil, flour and skimmed milk powder. If those subsidies were eliminated, the growth of government expenditures would not be 16 per cent but only 11 per cent. While the government would save a substantial sum of money, the cost of living of Canadians would also be substantially increased. The cost of gasoline and fuel oil to the consumer would go up by around 15 per cent to 18 per cent.
If we eliminated the subsidy on wheat consumed in CAnada, the price of bread could be expected to increase by anywhere from seven to nine cents a loaf. To shift that burden to Canadian consumers would undoubtedly be cosmetically attractive in terms of government spending, but I question whether it would contribute to the well-being of the Canadian people or the Canadian economy at the present time.
If we have learned anything from our experience of the past several years, it is surely that we should attempt to do everything possible to avoid sudden and drastic changes in policy which tend to have the effect of intensifying economic instability rather than reducing it. During the recent period of severe international turbulence we have succeeded fairly well in keeping the Canadian economy on an even keel. Today we are challenged by difficult problems, foremost among which is inflation. It was, and is, our conviction that we should deal with this and other related problems in a gradual way, over time, avoiding wrenching changes that would intensify stresses and strains in our country and jeopardize our prospects for the renewal of healthy economic growth.
The program we launched last October to restrain increases in prices and incomes is one of the important elements in the approach we have adopted to achieve that objective. I believe the changes proposed in the bill before the House today will contribute to strengthening that program by increasing both its fairness and its effectiveness, and I commend them to hon. members.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, as the first speaker from the opposition to reply to the Minister of Finance (Mr. Macdonald), I must take him up on his comments concerning inflation. As I understood him, he was trying to hint or infer that there had been a decline in

inflation and that somehow this showed that the government's wage and price control program is working effectively. I would point out to him and to hon. members that the Conference Board of Canada recently reviewed the situation and had this to say:
The moderation in the rate of advance of the consumer price index in December and January was due almost entirely to the decline in the food component of the index reflecting a softening in the prices of agricultural commodities. Since the latter are exempt from controls of the federal government's anti-inflationary program, it would be erroneous to attribute the better over-all performance of consumer prices to the control measures.
A similar view is expressed in the March issue of the Wood Gundy economic report which spends several pages reviewing the wage and price program. The report says that in spite of any figures which might look as though there is a moderation in the rate of inflation at the present time, unfortunately-it uses the word "unfortunately"- the link between the improvement and the controls is almost non-existent.
The Canadians are living through an economic experiment. We are the guinea pigs while the present administration follows a "touch and feel" system in running the economy. It was just three months ago that Bill C-73, the Anti-Inflation Act, was passed after extensive amendments by the Minister of Finance. Now the same minister is further amending his legislation in the bill before us today, Bill C-89. Granted, our present Minister of Finance inherited a dreadful mess from his predecessor. The year before Mr. Turner became minister of finance, in 1971, real growth in the economy was 6.9 per cent, inflation was 2.9 per cent, unemployment was 6.4 per cent, and the budget roughly balanced, as did our exports with imports.
In the year Mr. Turner left office-last year-real growth had declined to .2 per cent, inflation was running at 10.8 per cent, unemployment stood at 7.1 per cent, the budget was more than $5 billion in deficit, and so was our trade balance. Under Mr. Turner, the federal budget grew from $14.8 billion to $30.8 billion, an increase of 108 per cent in four years, or 27 per cent a year. In spite of these staggering increases, here we find Mr. Turner's successor, the present Minister of Finance, trying to justify before the House unreasonable increases in budgets and expenditures.
Now Mr. Turner is gone. How strange it is to hear his statement in Toronto only six months after his resignation from cabinet that a tighter fiscal policy is needed to overcome inflation. "An effort has been made to tighten fiscal policy", he stated, "but federal expenditures are still growing too fast." Though Mr. Turner has gone, I fear the real culprit responsible for our current problem is still with us, namely, the leader of the Liberal party, the Prime Minister (Mr. Trudeau). The Minister of Finance appears to be merely his water boy.
The main estimates for 1977 are up by 20 per cent compared with those for 1976. And this is called restraint! I would emphasize that the 16 per cent figure to which the minister has referred is not the figure derived from final estimates, but a figure comparing main estimates for 1977 with the last budgetary estimates for 1976. A much fairer comparison would be to compare main estimates with main estimates. But let us look at the history of this matter since Mr. Turner resigned last September. First, we got a new

Minister of Finance. On October 14 last, the present minister rose in the House and tabled a policy statement entitled "Attack on inflation: A program of national action". One might wonder why that program was so long in coming and why it took the form it did. Was Mr. Turner the obstacle? In any event, it is here, it is reality and we are being asked today to amend its pivot piece of legislation, Bill C-73.
Just what is this program so lately discovered by the leader of the Liberal party? The document begins by stating: "Canada is in the grip of serious inflation." There is no argument there. What is the substance of the dramatic proposal presented to us? It consists, we are told, of four major elements. It might be helpful to remind the House what those four major elements are, as set out here: first, fiscal and monetary policies aimed at increasing total demand and production at a rate consistent with declining inflation; second, government expenditure policies aimed at limiting the growth of public expenditure and the rate of increase in public service employment; third, structural policies to deal with the special problems of energy, food and housing, to ensure a more efficient and competitive economy and to improve labour-management relations; fourth, a price and incomes policy which establishes guidelines for responsible social behaviour in determining prices and incomes of groups, together with machinery for administering these guidelines and ensuring compliance where necessary.
What has happened? In December, the cold turkey, as it has been described, arrived in the form of regulations dealing with the fourth element in the so-called attack. Later, the leader of the Liberal party told us of his "new society" concept for Canadians. But what of the first three elements in the program? Let us look at the money supply. It increased between December, 1973, and December, 1974, by 16.7 per cent. This morning we were told in the finance committee that the money supply increased 23 per cent between December, 1974, and December, 1975. Some restraint! As any economist knows, expansion of the money supply at a rate faster than real economic growth is one of the prime causes of inflation. In short, the more money you print, the less it buys. On average last year our money system grew by 13.8 per cent, with real growth at .2 per cent. So is it any wonder we had 10.8 per cent average inflation for the year?
What I am saying is that not only is the money supply continuing to expand faster than real economic growth, but the rate of increase is escalating in relation to that real growth. Let us look at the government's own figures. Last February 23 the Parliamentary Secretary to the Minister of Finance (Mr. Trudel) replied to a written question at page 11152 of Hansard. In that answer he stated that the annual percentage increases between 1968 and 1975 in currency and demand deposits was as follows: 1968, 4.4 per cent; 1969, 7.4 per cent; 1970, 2.3 per cent; 1971, 12.8 per cent; 1972, 14 per cent; 1973, 14.4 per cent; 1974, 9.7 per cent; 1975, 13.8 per cent. Real growth in the economy for the same years was as follows: 1968, 4.9 per cent; 1969, 5 per cent; 1970, 3.4 per cent; 1971, 6.9 per cent; 1972, 5.8 per cent; 1973, 6.7 per cent; 1974, 2.8 per cent; 1975, 0.2 per cent. As the increases
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in our money system have grown, our real growth has fallen. Inflation has been the result.
In the past four years the average increase in our money supply has been 13 per cent per year, while our real growth has been 3.8 per cent. How forgetful Mr. Turner has become. He was the minister during this 13 per cent per year growth in money period, yet only last Monday, after asking what we must do to overcome inflation, he stated: "First, control the money supply. I believe the current stance of the Bank of Canada is sensible". But what is that stance? The governor of the Bank of Canada, backed up by the Minister of Finance, has said it intends to restrain the increase in our money system this year to a range of 10 per cent to 15 per cent; but in the last four years we have had an average increase of 13 per cent. So the bank is really saying we are to get more of the same, which is exactly the principal reason we have been having such high inflation.
In the United States in recent months they have been able to keep their monetary increase to between 5 per cent and 7.5 per cent, exactly half the projected program announced by Mr. Bouey. The United States appears to be beating inflation, while we are treading water. This morning the Minister of Finance said, to use his exact words, that it will be very difficult this year to get our money supply increase below 12 per cent.
In an article appearing in the January-February, 1976, Canadian Tax Journal, Mr. Lawrence B. Smith, professor of economics, department of political economy, University of Toronto, reviewed Canada's incomes policy. At page 73 he said: "If the rate of growth of the money supply remains high, say in excess of 12 per cent per annum, there is little likelihood that the program can succeed". In other words, according to Professor Smith the anti-inflation program will not succeed if the government allows a monetary increase in excess of 12 per cent this year. Yet the Minister of Finance says it will be difficult even to get down to a 12 per cent increase.
The real question before this House is: Will the present administration's program succeed without proper monetary and fiscal restraint? Speaking of fiscal restraint, Mr. Speaker, I should like to turn to the second element in the government's attack on inflation. The minister has made reference to the estimates that were recently tabled in this House and to the fact that the President of the Treasury Board (Mr. Chretien) has talked about cutbacks in spending. Are these real cutbacks, Mr. Speaker? I think most members in their hearts realize that the cutbacks are nothing but a sham. It is like a man with two Cadillacs in the garage, and a $10,000 overdraft, who is being pressed by his banker to cut back. He says to the branch manager, "Okay, I won't buy the third Cadillac; I'll lease it and run it on regular gas".
As I have said, Mr. Speaker, the main estimates for 1977 are up another 20 per cent over the previous year. This increase can hardly be called restraint. As for the view of the leader of the Liberal party, he stated in that famous interview on December 28 that in the case of the government you will never bankrupt it, because it has only to print more money or borrow more money. What a frightening philosophy concerning the economy of this country! The way this government is going, there is no doubt they
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March 18, 1976
Adjournment Motion
will have us bankrupt, but they may not know where to file.
The third element in the attack does not appear to be generating much support. To take but one example, Mr. Speaker, how much do you think labour-management relations have been improved by the Anti-Inflation Board's "Yes, no; maybe so" approach? I could go on at length concerning the failings of the so-called attack on inflation, but I want to discuss in some detail the climate that the government has created which surrounds this program.


Simma Holt: The public like it.


Sinclair McKnight Stevens: I suggest that rather than the public liking it, the public are confused. It is generally agreed that something has to be done about inflation. It is also agreed, however, that at few other times in history have the people been so aware of the presence of government in their lives. "Surely a government that is everywhere at once must be able to do something", is the sentiment one hears so much. Certainly the people wonder why the government is not doing something about inflation.
Government-and I mean all government-will be responsible for the expenditure of over 40 per cent of the gross national product in 1976. This is a staggering figure. Who cannot be aware of the omnipresence of the government, and who might not be led to believe that that omnipresence should be "omnicompetent"?



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: It is my duty, pursuant to Standing Order 40, to interrupt the hon. member to inform the House that the questions to be raised tonight at the time of adjournment are as follows; the hon. member for New Westminster (Mr. Leggatt)-Supply and Services-Contract with Lockheed-Reason for failure to provide for short-term financing-Possibility of buying Canadian aircraft; the hon. member for Esquimalt-Saanich (Mr. Munro)-Administration of Justice-Reason Prime Minister can ignore request for public inquiry; the hon. member for Dartmouth-Halifax East (Mr. Forres'tall)-National Defence-Request for list of bases to be closed-Effect of base closures on search and rescue.

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, private bills, notices of motions (documents) and public bills.


Stanley Howard Knowles: Mr. Speaker, I rise on a point of order. I recognize that our interest in the bill that is slated for this hour is a negative one. But even so, in order that the House might continue to consider Bill

C-89 I would make the suggestion that private members' hour for today be surrendered and that we stay on the item we have been discussing.


Mr. Blais:: On the same point of order, Mr. Speaker, in view of the importance and urgency of this particular legislation and in view of the optimism the minister feels relating to its passage this day, we would consent to giving up private members' hour in order to continue this debate.


Mr. Paproski:: Mr. Speaker, it is my understanding that there has been no previous arrangement in this regard.


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Mr. Speaker, we certainly will not consent.


Mr. Deputy Speaker:: Order, please. There does not seem to be consent, so we will proceed with private members' hour as listed on today's order paper, namely, private bills, notices of motions (papers), and public bills.


PRIVATE BILLS
[Stage Direction]
The House resumed, from Thursday, March 11, consideration of Bill S-30, to incorporate Continental Bank of Canada, as reported (with amendments) from the Standing Committee on Finance, Trade and Economic Affairs.
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, last Thursday I had just begun making some comments on the bill we have before us, namely, Bill S-30, which attempts to convert IAC-Industrial Acceptance Corporation-into a bank called Continental Bank of Canada. We in the New Democratic Party are opposed to IAC making this transition because of the kind of bill we have before us in which the company is seeking a number of exemptions from the Bank Act. We consider this to be highly irregular in the circumstances, especially from the point of view of why the Bank Act was set up and the fact that it is due to be amended in a year or so. We find it quite extraordinary that this finance company should try this route to incorporate into a bank.
The bill was first introduced in the Senate and had, I thought, rather rapid consideration there. It is now before us, and we want to give it very thorough airing before it moves from this chamber. We have proposed a number of amendments, and I should like now to give some of the background. I will deal with the specific one before us at this time. It should be remembered that IAC is the largest finance and consumer loan company in Canada. Its 1974 assets were some $2.04 billion. It owns Niagara Finance and a number of realty and insurance companies. It is a profitable company. Its 1974 profit was over $23 million, and in 1975 that profit increased to over $30 million, or a 30 per cent increase in one year.
March 18, 1976

IAC is seeking to move from what we might classify as the minor league to the big league in its attempt to become a bank. The reason is that IAC has pretty well expanded as much as it can under the present limitations that apply to companies of this sort. It is now restricted in the number of times it can turn over its money in the form of loans and mortgages, so it wants now to become a bank in order to get into the big league, a very profitable league indeed, I may say.
When we look at banks in Canada over the past few years, we see that because of higher interest and mortgage rates they have been doing very well. I do not blame IAC for wanting to join this league. What I do take issue with is the way they want to do it and the fact that they are attempting to gain exemptions from the Bank Act with which all other banks must conform.
When we look at the profitability of banks-and I am now looking at the first quarter increase in 1976 over 1975-we see that the Royal Bank had an increase of 31.6 per cent, the Commerce 54.1 per cent, the Bank of Montreal 50.7 per cent, the Bank of Nova Scotia 26.4 per cent, and the Toronto Dominion 26.7 per cent. That is just in the first quarter of 1976 over 1975. If we wanted to go back to the year previous to that we would find similar, but not as great, profit increases. We are concerned that if IAC is to get into that very profitable league we should make sure it abides by the rules. The point that also bothers me is that if Bill S-30 passes we are, in effect, going to create a tax shelter for IAC that may amount to anywhere from $40 million to $60 million over the ten-year transition period.
We have proposed a series of amendments, the first of which we are dealing with at this time. It is an attempt to make IAC conform to the Bank Act as it relates to directorships. Bill S-30 seeks to subvert that intent of the Bank Act. I should like to read the appropriate clause to illustrate that point. I will read clause 2(2) of Bill S-30. This concerns directors, and it reads:
A director of IAC Limited is not eligible to be a provisional director of the bank unless he holds, as the absolute and sole owner thereof in his individual right and not as trustee or in the right of another, not less than 500 common shares of the capital stock of IAC Limited, and the requirement in subsection 10(2) of the Bank Act that a provisional director of a bank be a subscriber for stock of that bank does not apply to a provisional director of the bank.
We have moved to delete clause 2(2) in order to make IAC conform to the Bank Act. What the clause says in the bill is that in order to be a Continental Bank director one must have IAC stock rather than bank stock. The IAC directors automatically are provisional Continental Bank directors, but they do not have to conform to the Bank Act which says they be subscribers for stock of the bank. If this bill is passed as it stands, and our amendment is defeated, we will then find that IAC gets around the very important provision in the Bank Act concerning interlocking directorships. We see a number of dangers in this. It was set out in the Bank Act that there could not be these interlocking directors, for a very good and proper reason. If you had interlocking directors they could quite possibly have access to privileged information about the company's policies or financial status that could be manipulated in the marketplace to the advantage of the bank. This relates to one bank or another, and it is this that we are very much concerned about.
Continental Bank of Canada
When we look at the list of directors of IAC we find some very interesting names in the "Who's who" of the economic world. We have the following directors: Mr. F. M. Covert, director, Royal Bank of Canada; Mr. J. S. Dewar, director, Toronto Dominion Bank; Mr. C. F. Harrington, chairman and director, Royal Trust; Mr. D. Kinnear, director, Bank of Montreal; Mr. L. A. Lapointe, director, Toronto Dominion Bank; Mr. Charles Rathgeb, director, Royal Bank of Canada; Mr. Renault St. Laurent, director, Banque Canadienne Nationale; Mr. Thackray, director, Bank of Montreal; Mr. Yorath, director, Montreal Trust Company; and Mr. Courtois, director and vice-president, Bank of Nova Scotia. Those are some of the directors. There are many other directors of IAC who are involved with other companies. I would draw the attention of the House to two famous directors and raise an interesting point in relation thereto. One is Peter F. Bronfman, of Bronfman fame. We have heard of the Minister of National Health and Welfare (Mr. Lalonde) taking trips on his plane in the past. We have Mr. Bronfman among the list.


Mr. Abbott:: I rise on a point of order, Mr. Speaker. I am sure the hon. member would not wish to be inaccurate in his statement. The Mr. Peter Bronfman to whom he is referring is in no way connected with the ownership of the corporate jet to which he referred in his remarks. I think it is wise to correct this. Just because someone has the same name and is related does not mean that he should share the association-


Mr. Roberts:: Guilt.


Reginald Cyril Symes: Thank you. I welcome the correction. We find that Mr. Peter F. Bronfman is the president of Edpar Investments. He is also chairman of Canadian Arena Company and director of Trizec. Also, we have among the list a Mr. E. J. Courtois who is a director of a number of companies, most notably Trizec. He is also president of Canadian Arena Company. I find it very interesting, as have a number of other people, including senators on the banking and finance committee in that House, as well as many members in our own House, that Canadian Arena Company is now known as Carena-Bancorp. Carena-Bancorp is a holding company for certain Bronfman family trusts.
It is very interesting that Carena-Bancorp, prior to its becoming public knowledge that IAC wanted to become a bank bought a significant number of shares in IAC. The Senate Committee looked at that in some detail. One of the senators thought it was rather coincidental and asked if there was any prior knowledge on the part of Carena-Bancorp, because there were interlocking directorships here, of IAC's intention to convert to a bank. This was denied. I raise the example to illustrate that the reason we have a Bank Act is to ensure that we do not have these interlocking directorships and to allay public suspicion that directors can take advantage of inside knowledge of the affairs of financial institutions. The bill before us will permit those kind of interlocking directorships for a period of up to ten years. We think this is a very dangerous precedent and one which could raise many suspicions in the minds of the public, let alone the financial world, that these kind of dealings go on, the kind of dealings that are prohibited by the Bank Act in respect of other banks.
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March 18, 1976
Continental Bank of Canada
There is the suggestion that this might be going on in respect of this company which is receiving special exemptions under this bill in respect of the Bank Act. It is our contention that if IAC wants to convert to the continental bank, it must follow the same rules that must be followed by any other finance company that wants to become a bank, or at least wait for the revision of the Bank Act so that we can conduct a full public hearing in this chamber to make sure that the public interest is upheld.
So I strongly urge the members of this chamber to support our amendment so that this kind of special, cozy relationship will not be allowed to continue in respect of a company that is seeking to become a very powerful bank in this country. I think it is in the public interest that we have a very close scrutiny of this bill. This is why my colleague, the hon. member for Waterloo-Cambridge (Mr. Saltsman), proposed the amendment we have before us, so that the provisions of the Bank Act may be upheld and the public interest maintained. For these reasons, I cannot support the bill and urge my colleagues to accept our amendment concerning directorships.


Sinclair McKnight Stevens: Mr. Speaker, this is the first time I have spoken on this matter. I believe somebody in this House should register a very strong protest against the NDP for delaying the incorporation of this bank. Surely, in this country, which has only ten banks, and of that number five are extremely large, there is room for another bank. I think the House of Commons should be the last place in which to start delaying the incorporation of a bank. When I say we have ten banks, we should bear in mind that the United States has 14,000 banks, and here we have the NDP-which likes to tout itself as the great defender of the small people, the working people and whatever they get some mileage in-standing up here defending the ten incorporated banks in this country. I think they should declare their interest. What bank are they protecting? Which banking operation today is the NDP trying to ensure will not be in competition with this new bank?
You will recall, Mr. Speaker, that the former minister of finance proposed to introduce a bill to provide for the incorporation of banks by letters patent. Personally, I am sorry the government did not have the courage to go ahead with that legislation and end this farce which periodically occurs in this House, namely, the incorporation of banks by special acts then the NDP rump group such as we have here today would not delay the incorporation of a bank which I suggest is needed in this country. Certainly, the idea that we cannot have another new bank in this nation is ridiculous.
Let us face it. If you analyse the arguments that are being raised by the NDP members, you find it is all fluff, it does not mean anything. Surely it is preferable, if a finance company in this country, be it IAC, Traders or a trust company, wish to incorporate in the form of a bank, that they should be encouraged, not discouraged.


Anthony Chisholm Abbott: Mr. Speaker, I want to say very briefly that I think this is one of the first times since I have been here that I have had reason to agree with

the hon. member for York-Simcoe (Mr. Stevens). I believe that we should stop to consider that IAC is seeking certain transitional provisions which at the committee stage were not regarded as unacceptable. Those that were, were amended. Having arrived at this stage, with the prospect of the transition from a finance company to a bank frustrated arbitrarily by the NDP, it does lend a great deal of credence to the comments of the hon. member for York-Simcoe.
We are not talking about a fly-by-night outfit. This is a company which was established 50 years ago. It has become the largest independent sales financing company in Canada. It has 200 branches; it has consolidated assets of almost $2.3 million; it has a respected management and a respectable board of directors. As the hon. member said, this company comes to the House to become incorporated through a rather antique procedure. Normally, other corporations do not receive any scrutiny because they go through in a businesslike fashion. If they fail to meet the regulatory standards set out by law, they suffer the consequences.
I do not wish to take up the time of the House. I am not really prepared, because I am standing in today for the hon. member for Kenora-Rainy River (Mr. Reid). I only want to say that I think it is deplorable to see a bill of this sort, which has gone through second reading and the committee stage, being treated in this fashion. If the NDP had honestly felt strongly about these motions, surely we would have heard some of them at the committee stage. The hon. member who introduced them appeared on the last day of the committee hearings and registered one or two points at that time. Now he is using this stage to obstruct the bill in this frivolous and vexatious fashion, simply to frustrate this respectable company's attempts to become a strong member of the Canadian financial community. I think it is disgraceful and it does a disservice to parliament and to the financial community of this country.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker-


Mr. Peters:: Tell us about the little people.


Lorne Edmund Nystrom: I have decided on the contents of my speech, having listened to the hon. member for York-Simcoe (Mr. Stevens). He referred to the little people in the IAC company. I want to speak for 20 minutes this afternoon about the little people, because I think it is very pertinent to put on the record the directors of IAC and of other companies in which they are involved and because we are discussing an amendment which deals with directors. Therefore, it is very important that we talk about interlocking directorships. What are the interests of people who direct and control IAC? I want to take a few minutes to put on the record the companies of which they are directors, so that when people read the annals of this debate they will see who owns the company. When the hon. member for Sault Ste. Marie (Mr. Symes) spoke, he mentioned some of this, but I submit he just touched the tip of the gigantic iceberg.
I will start with a fellow named Lyndon E. Nichol. He is chairman of IAC, director of Merit Insurance Co., director of Niagara Finance Co. Ltd., and director of Sovereign Life
March 18, 1976

Assurance Co. of Canada. He lives at 5 Bachelor Place, Willowdale, Ontario.
Second, we have the vice-chairman of IAC, Mr. Keith H. MacDonald. He is director of the following companies. He is the little man to whom the hon. member for York-Simcoe referred-a poor, poverty-stricken Canadian. I will give you the directorships which this little man, Keith MacDonald, holds. He is vice-chairman of the board. He is director of the American Sterilizer Co., the Boiler Inspection and Insurance Co. of Canada, Canada Permanent Mortgage Corp., Canada Permanent Trust Co., Merit Insurance Co., Niagara Finance Co. Ltd., the Sovereign Life Assurance Co. of Canada, Uniroyal Ltd., Zeller's Ltd., Roads and Transportation Association of Canada, Toronto Symphony, and International Road Federation, Washington and Geneva. This is one of the little men referred to by the hon. member for York-Simcoe. I would not have spoken if he had not angered me, so I must continue. The vice-chairman, Keith MacDonald, is also a member of the advisory board of the Better Business Bureau of Canada. His home address is 32 Suncrest Avenue, Don Mills, Ontario. There is much interlocking of directorships there.
I should now like to go to the next fellow, who is Joseph Stephen Land. He is director of Niagara Finance Co. Ltd.


Mr. Deputy Speaker:: Order, please. The hon. member for Lachine-Lakeshore (Mr. Blaker) wishes to rise on a point of order.


Mr. Blaker:: I have a great deal of respect for the comments that were made by the hon. member for Yorkton-Melville (Mr. Nystrom). I appreciate his comments with respect to the expansion of the banking industry, although my opinions differ from his and those of his party in that regard. But I wonder whether the hon. member is making a point with respect to the banking bill when he reads out the names of the board of directors of the proposed bank, and whether that is relevant to the bill before us.


An hon. Member:: We are glad you asked that.


Mr. Deputy Speaker:: Although I must say that some of the*comments by participants in the debate did not relate to the motion before us, the hon. member speaking about the directorships is right on the subject matter of the amendment before the House at this time, which concerns the directorship of IAC.


Lorne Edmund Nystrom: Mr. Speaker, I am speaking directly to the amendment. I will not waver from my amendment for the rest of the 20 minutes allotted me.


An hon. Member:: Where is Sine Stevens?


Lorne Edmund Nystrom: I guess we scared him off. The next man I want to talk about is Joseph Stephen Land, president of IAC. As I said, he is director of Niagara Finance Co. Ltd., the Sovereign Life Assurance Co. of Canada, Merit Insurance Co., Sovereign Mortgage Insurance Co., the Canbor-ough Corp., International Capital Corp., Merit Plan Finance and Discount Corp. Ltd., Capital Funds (IAC) Ltd., IAC Business Development Fund Ltd., Premier Property Ltd., and Royal Trust Co. I thought we were incorporating a new bank. Here is a very interesting interlocking. These are the people who want special privileges. I
Continental Bank of Canada
wonder why? I shall have to look into their background to see why they want special privileges. I am only just beginning, Mr. Speaker. Mr. Land lives at 9 Darlingbrook Crescent, Islington, Ontario.
Next is a poor man referred to by the hon. member for York-Simcoe, Douglas W. Maloney. He is the executive vice president of IAC.


An hon. Member:: A small shareholder.


Lorne Edmund Nystrom: He is a small shareholder. He is also a director of four other corporations: Merit Insurance Co., Niagara Finance Co. Ltd., Sovereign General Insurance Co., and Sovereign Life Assurance Co. of Canada, and he lives in Toronto. Mr. Speaker, John Turner already has more directorships than this poor fellow. I feel sorry for this poor capitalist if he is one of the last we have.
Next is Ronald Laird Cliff, director of IAC.
An. hon. Member: Which riding?


Lorne Edmund Nystrom: I do not know. He lives on Avenue Road, Toronto. He is chairman of Inland Natural Gas Co., Ltd., chairman of Tenco Distributors Ltd., and chairman of Canadian Aircraft Products Ltd. Mr. Speaker, this man is a little bit bigger than the last. He is president of Western Finance Co., Ltd., and president of British Columbia Transformer Co., Ltd. He is a director of Balco Industries Ltd.; director, Bramalea Wescorp Developments Ltd., director, Burrard Dry Dock Co. Ltd.; director, Canada Wire and Cable Co. Ltd.; director, Cornat Industries, Ltd.; director, Coronation Credit Corp.; director, Wescorp Industries; director, Riftow Staits Ltd.; director, Morrison Steel and Wire Co. Ltd.; director, Noranda Metal Industries, Ltd.; director, Sun Publishing Co. Ltd.


An hon. Member:: Why is he not president?


Lorne Edmund Nystrom: Because he is president of two other companies. He is also a director, Pacific Press Ltd.; director, Johnston Terminals Ltd., and director, Okanagan Helicopters Ltd. He is also a member of the Advisory Board National Trust Co. He lives in Vancouver, British Columbia. I do not know how many directorships he holds. I do not know if anyone can count that high.
Now I am coming to some really poorer people referred by the hon. member for York-Simcoe. Frank Manning Covert, Q.C., director. He is a partner in Stewart MacKeen & Covert. He is chairman and president of Ben's Holdings Ltd., and president of three other companies, the Great Eastern Corp., Ltd., Maritime Paper Products, Ltd., and Ben's Ltd. He is assistant secretary and director of Maritime Steel and Foundries Ltd., director, Petrofina Ltd.- that sounds suspicious-director, Phoenix Assurance Co. of Canada; director, Royal Bank of Canada; director, National Sea Products; director, Minos Basin Pulp and Power Co. Ltd., director, Canadian Keyes Fibre Co., Ltd., director, Sydney Engineering Dry Docks Co., Ltd., director, Home Care Properties Ltd., director, Eastern Telephone and Telegraph Co.; director, Acadian Lines Ltd.; director, The Molson Companies Ltd.; director, Standard Brands Ltd.; director, Trizec Corp. Ltd.; director, Canning Investment

March 18, 1976
Continental Bank of Canada
Corp. Ltd.; director, Sun Life Assurance Co. of Canada, and governor of Dalhousie University. He lives in Halifax, Nova Scotia.
The next director of IAC and one of the people asking us to do something special for his company, to make it into the Continental Bank, is John S. Dewar. This man is quite powerful. He is president of Union Carbide Canada Ltd.; president, Union Carbide Canada Mining Ltd., and president of Dominion Viscoe Products Ltd. He is a director of Manufacturer's Life Assurance Co.; director, Toronto Dominion Bank, another interesting directorship; and director of Ralston Purina of Canada Ltd. He is governor of the Ontario Research Foundation. Mr. Speaker, I do not wish him any personal ill will; I wish him well, but not more financial wealth and no special privileges.
The eighth director is Conrad Harrington. He is chairman of the Royal Trust Co.; chairman, the Royal Trust Co. Mortgage Corp.; chairman, Redpath Industries Ltd., and chairman of Glaxco Canada Ltd. He is a director of R. L. Crain Ltd.; director, Gerling Global Life Insurance Co.; director, M. P. G. Investment Corp. Ltd.; director, Consumers Glass Co. Ltd., and director, Stone and Webster Canada Ltd.
This is a beautiful corporate society, a free enterprise society of Liberal and Conservative bodies. There are so many of them and they are so interlocked in that big corporate family.
To return to Mr. Harrington, he is a trustee of BM-RT Realty Investment Ltd., chairman of the Salvation Army, governor of McGill University, and life governor of Trinity College School. He lives in Montreal.
Peter Kilburn is chairman of Greenshield Inc. He is a director of Imasco Ltd.; director, Ritz Carleton Hotel; director, Sicard Inc.; director, Merit Insurance Co.; director, the Mortgage Insurance co. of Canada; director, Niagara Finance Co. Ltd.; director, Stanton Pipes Ltd.; director, Weyerhauser Canada Ltd., and director of Zeller's Ltd. He lifes in Montreal's west end-not the east end where the ordinary working people live.


Stanley Howard Knowles: He is a neighbour of the Prime Minister (Mr. Trudeau).


Lorne Edmund Nystrom: I think from the address he lives in the riding of the Minister of Public Works (Mr. Drury). That may be of interest to Liberal backbenchers.
Next is David Kinnear, vice chairman of the Bank of Montreal, that poor little people's corporation. He is a director of Canadian Pacific Ltd.; director, The T. Eaton Co., Ltd.-I wonder what he did about the closing of the sales catalogue company. He is a director of the T. Eaton Acceptance Co., Ltd.; director, Eaton Financial Services Ltd.-I cannot believe this, Mr. Speaker-he is also a director of Eaton's of Canada, Ltd., and a director of Eaton Viking Fund. I had better tell the hon. member for Moncton (Mr. Jones) about this man. He is also director of T.R.I. Holdings S.A.-whatever that means.


An hon. Member:: South Africa.


Lorne Edmund Nystrom: He is a trustee of Heitman Canadian Realty Investors.


Mr. Deputy Speaker:: Order, please.


Lorne Edmund Nystrom: I have scared one out of the woods.


Mr. Deputy Speaker:: The hon. member for Mississauga (Mr. Abbott) on a point of order.


Anthony Chisholm Abbott: Mr. Speaker, I regret to have to interrupt the infantile and ignorant remarks of the hon. member. Presumably the reason for the recitation of the directors is that he is going to come out with some message concerning interlocking directorates. Because he did not show any interest in this bill, nor did his colleagues, at the committee stage, he is unaware that the committee amended the bill to provide that the interlocks that might exist in contravention of the act will be removed prior to the Inspector of Banks giving the licence for the commencement of business.


Lorne Edmund Nystrom: We are talking about the interim period. If I have time after reading this list I will get into my precise recommendations.


Mr. Trudel:: You have not read the bill. That is what you should have started with.


Lorne Edmund Nystrom: I think I said the last man came from Toronto.


William Arnold Peters: Naturally. Why the intervention?


Lorne Edmund Nystrom: The eleventh director is to be Louis A. Lapointe.


An hon. Member:: From Gravelbourg, Saskatchewan?


Lorne Edmund Nystrom: He is not from Gravelbourg, Saskatchewan. He is from Montreal. As I said, the eleventh director is to be Louis A. Lapointe, Q.C. He is chairman of Miron Co. Ltd.; a member of the Canadian advisory board, Commercial Union Assurance Group, and director of Alliance Compagnie Mutuelle d'Assurance Vie; Brascan Ltd.; Cinevideo Inc., which sounds Spanish; Genstar Ltd.; Goodyear Tire & Rubber Co. of Canada Ltd.; Hilton of Canada Ltd.; Inter City Papers Ltd.; International Paints (Canada) Ltd.; Rio Algom Mines Ltd.; Ronald Federated, the Toronto Dominion Bank and Trizec Corp., Ltd. It is important to note that he is a director of the C.D. Howe Research Institute, and lives on St. Catherine Street, Montreal.


Mr. Benjamin:: Another welfare case.


Lorne Edmund Nystrom: Number twelve is Paul Pare, chairman of Imperial Tobacco Products Ltd., president of Imasco Ltd., and director of Canadian Pacific Investments Ltd.; Canadian Pacific Ltd.; Canron Ltd., and Royal Bank of Canada. He is a governor of the Montreal General Hospital, and of the Olympic Trust Fund. Perhaps we ought to look into the last appointment mentioned on another occasion. He is also a director of St. Mary's Hospital. He too lives in Montreal.
The thirteenth director is to be Mr. Charles J. Rathgeb, chairman of Comstock International Ltd., and director of Algoma Steel Corp. Ltd.; T. G. Bright & Co. Ltd.; Canadair Ltd.; Liquid Carbonic Canada Ltd.; Newconex Holdings
March 18, 1976

Ltd.; Royal Bank of Canada; Olympic Trust of Canada; the Canada Committee, and Rathgeb Foundation. He lives in Toronto.
How is it that most directors live either in Toronto or Montreal? And they do not live in the poorer parts of Montreal or Toronto.
The fourteenth director is Renaut St. Laurent.


An hon. Member:: What's the point of this?


Lorne Edmund Nystrom: Apparently some Liberals and Tories are upset because we are talking about people who want special privileges.


Simma Holt: That's typical of a socialist.


Lorne Edmund Nystrom: Yes, I am a socialist, and proud of it. Mr. St. Laurent, among other things, is a director of Merit Insurance Co. Ltd.; Anglo Canadian Pulp & Papers Mills Ltd.-


Mr. Deputy Speaker:: Order, please. I regret interrupting the hon. member, but his time has expired. He may continue if he has unanimous consent of the House. Does the House give unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: Apparently there is not unanimous consent. The hon. member for Timiskaming (Mr. Peters) is recognized.


William Arnold Peters: Mr. Speaker, I find this list of directors extremely interesting. The fourteenth director is to be Renault St. Laurent, who comes from the family of Louis St. Laurent, the former Prime Minister of Canada.


Mr. Dionne (Northumberland-Miramichi):: Mr. Speaker, I rise on a point of order. I may not have heard Your Honour, and I wonder whether the hon. member for Timiskaming (Mr. Peters) was recognized by the Chair before he started speaking.


Stanley Howard Knowles: Yes, he was
recognized.


Mr. Deputy Speaker:: He was recognized. I do not know if he heard the Chair recognizing him, but he has the floor now.


Maurice Adrian Dionne: Mr. Speaker, I rise on a second point of order. The hon. member for Yorkton-Melville (Mr. Nystrom) handed his list to the hon. member for Timiskaming. Are serial speeches allowed in this House?


Lorne Edmund Nystrom: Hon. members refused to extend my time.


Mr. Deputy Speaker:: Order, please. The hon. member knows the Standing Orders. An hon. member may not be repetitious and should not read his speech, but may say what he wishes so long as it relates to the subject matter before the House.
Continental Bank of Canada


William Arnold Peters: Mr. Speaker, if the hon. member wishes to speak, I shall cede him the floor. As that is not likely I shall continue referring to my list. Mr. Renault St. Laurent is director of Merit Insurance Co. Ltd., Anglo Canadian Pulp & Paper Mills Ltd., Banque Canadienne Nationale, and Sicard Inc. It seems to me that many of the corporations in which we are interested are good friends of certain members of this House. I will stop reading the list if I find that these corporations are among my friends. As they are not friends of mine, I shall continue. Mr. St. Laurent is also director of Imperial Life Assurance Co. of Canada; Scott Paper Ltd.; Home Oil Co. Ltd.; Gaz du Quebec Inc.; Villa Medica Inc.; Rothmans of Pall Mall Canada Ltd., and Carling O'Keefe Ltd.


Leslie Gordon Benjamin: How about putting a bank in a brewery?


An hon. Member:: Now you're talking.


William Arnold Peters: He lives in Quebec.
The fifteenth director is James C. Thackray, executive vice-president of Bell Canada. Why is he mixed up with a bank? He should devote all his time to Bell Canada. He is a director of the Bank of Montreal; Bell Northern Research Ltd.; Maritime Telegraph & Telephone Co. Ltd.; Northern Telecom Co. Ltd., which used to be Northern Electric, I think; Tele Direct Ltd., and Union Carbide of Canada Ltd.


An hon. Member:: Is he Canadian?


William Arnold Peters: Mr. Speaker, I apologize for not being able to answer the hon. member. I do not have his pedigree in front of me. He lives in Westmount, Quebec.
The sixteenth director is Denis K. Yorath, vice chairman of IU International Corp., chairman of Mis.Mat Corp. Ltd., and director of Alberta Power Ltd.; International Utilities Petroleum Corp.; Montreal Trust Co.; The Commercial Life Assurance Co. of Canada; Canadian Utilities Ltd.; Canadian Western Natural Gas Co. Ltd.; Northwestern Utilities Ltd.; The Halifax Insurance Co. Ltd., and Echo Bay Mines Ltd. He lives on 131 Street in Edmonton, Alberta.
The seventeenth director is Stanley F. Melloy, executive vice-president, finance; president, Capital Funds (IAC) Limited and of Capital Funds (IAC) Ontario Limited; director, International Capital Corporation Limited; Niagara Finance Company Limited; Niagara Realty of Canada Limited; Premier Property Limited; The Sovereign Life Assurance Company of Canada. This poor little man lives in Islington, Ontario. I see he has covered them all. He gets them in insurance, finance, when they buy a house, and when they die. If he is a small person, I will be surprised.
No. 18 is R. E. Campbell, senior vice-president, who is president of Premier Properties Limited; vice-president and director, Capital Funds (IAC) Limited; Capital Funds (IAC) Ontario Limited; IAC Business Development Funds (Canada) Limited; IAC Business Development Fund Limited; Merit Plan Finance and Discount Corporation Limited; Western Acceptance Corporation Limited; director, Commercial Contracts Limited; Merit Insurance Company; Niagara Finance Company Limited; SDI Associates Limited. He lives at 61 Ballial Street, Toronto.

March 18, 1976
Continental Bank of Canada
When I hear all this, I wonder how these people ever write off their income tax. They must travel extensively. I feel sorry for them. They become small, not in the sense that the hon. member for York-Simcoe (Mr. Stevens) mentioned, but in another sense, the little people.
No. 19 is, Frangois P. Paradis, senior vice-president, who is vice-president and director Premier Properties Limited; vice-president, Niagara Realty of Canada Limited; director, Capital Funds (IAC) Limited; IAC. Business Development Funds (Canada) Limited; IAC. Business Development Funds Limited; Merit Insurance Company; The Sovereign Life Assurance Company of Canada; Trustee, BM-RT Realty Investment. His home is at 85 Thorncliffe Park Drive, Toronto.
No. 20 is, Allan P. Bolin, senior Vice-President. His home is at 96 Ravebsbourne Crescent, Islington, Ontario.
No. 21 is, L. Guy Gravel, vice-president, Ontario Division. His home is at 26 Skyview Crescent, Willowdale, Ontario.
No. 22 is, W. E. Hoddinott. I apologize, Mr. Speaker. I do not know how to pronounce it. I have never seen the word before. It is rather difficult speaking only one language. He is a vice-president and lives at 126 Edenbridge Drive, Islington, Ontario.
No. 23 is, N. Vincent Keyes, a vice-president. He lives at 1494 West, 40th Avenue, Vancouver. I wonder if he is related to the Keyes who used to be a member of parliament.


Mr. Muir:: No; he and I loaded coal together in Cape Breton.


William Arnold Peters: No. 24 is, W. McCraken (Elwood), vice-president, administration. He lives at 7 Tullamore Drive, Willowdale, Ontario. You will note, Mr. Speaker, that all these poor people live on either drives or crescents. I do not even live on a street. In fact I am on a rural route.
No. 25 is, Raymond K. Jackson, vice-president; vicepresident and general manager, IAC Capital Fund Division; Capital Funds (IAC) Limited; Capital Funds (IAC) Ontario Limited. He lives at 1250 Cloverdale Crescent, Mississauga, Ontario.
No. 26 is, J. Y. Buchanan, vice-president. He lives at 105 Davisville Avenue, Toronto.
No. 27 is, W. P. Davidson, vice-president; vice-president and director, Capital Funds (IAC) Limited; IAC Business Development Funds, Limited; IAC Business Development Funds Canada Limited; vice-president, Capital Funds (IAC) Ontario Limited; IAC Business Development Funds (Ontario) Limited. He lives at 40 Proudbank Millway, Willowdale, Ontario.
No. 28 is, Brian Fraser London, vice-president; president, Niagara Finance Company Limited; Niagara Realty Limited; Niagara Realty Canada Limited; director, Maritime Publishing Limited; Premier Property; governor, Ontario Research Foundation.


Anthony Chisholm Abbott: Mr. Speaker, I wonder whether the hon. member will permit a question. It is in the nature of a request. Would he be good enough to table his remarks and

those of his predecessors because these important facts may be lost to us.


William Arnold Peters: Yes, Mr. Speaker, because the translation of my pronunciation of some of the names would make it difficult if done otherwise. I would be prepared to table the remainder without reading them, if this is the wish of the hon. member.


Some hon. Members:: Carry on.


William Arnold Peters: No. 29 is, W. J. Van Wyck, vice-president, credit. He lives at 505, 355 St. Clair Avenue West, Toronto.
Then there is Claude R. Stewart, secretary; secretary; Niagara Finance Company Limited; Niagara Realty Limited; Niagara Realty Canada Limited. His home is at 1622, 400 Walmer, Toronto. I thought we were talking about IAC. This is Niagara Realty.
Next we have S. S. Ilaqua, treasurer; director, Bruck Mills Limited. His home is at 10 Blaine Drive, Don Mills, Ontario. Janos J. Tors, comptroller. He is "unknowed". R. Hemond, vice-president. He is also "unknowed". The source for all this is the "Directory of Directors, 1975, Financial Post." You Honour can see why the interest of all members is so high in the directors of this corporation. It is because of their widespread interests. May I call it six o'clock, Mr. Speaker.


Mr. Deputy Speaker:: 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.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-89, to amend the AntiInflation Act, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Sinclair McKnight Stevens: Mr. Speaker, before the dinner recess I was saying that in considering the bill before us we must take a look at the over-all program which the government announced under the description of an anti-inflation program; I was pointing out that at the time of the announcement on October 14 last the government stated there were four parts to this program. I was commenting on certain of these parts and indicating that in many ways the government had not been acting with proper restraint.
March 18, 1976

I have already referred to an article by Lawrence B. Smith, professor of economics at the University of Toronto. In the article entitled "Canada's Incomes Policy: An Economic Assessment" appearing in the "Canadian Tax Journal" for January-February 1976 he reviews the program in some detail. On page 72, he asks:
Will the incomes policy succeed?
He goes on to say:
As mentioned above, the success of the incomes policy ultimately hinges on the implementation of the correct demand restraining monetary and fiscal policies. If the government is serious about combatting inflation then it must reduce its rate of monetary expansion and it should significantly restrain its expenditures. Consequently we should expect the incomes policies to be accompanied by considerable monetary and fiscal stringency.
Professor Smith goes on to state:
However, it is not clear that this will occur. First, in its policy statement "Attack on Inflation", the government quotes from its June 23, 1975 budget that "in its present cost-push form, inflation threatens" to create serious problems. But our inflation is not a cost-push inflation; rather it is a demand-pull inflation in its second stage created by excessive monetary and fiscal ease. If the government persists in incorrectly diagnosing the problem there is little likelihood it will introduce the necessary demand-restraining policies. Second, the government claims in its policy paper that it is setting in motion "monetary policies aimed at increasing total demand and production at a rate consistent with declining inflation", yet for the three months ending November 30, 1975 the money supply broadly defined rose 21.9 per cent, up from 8.8 per cent in the second quarter and approximately double the rate consistent with its own target rate of inflation for 1976.
I mentioned earlier that in our standing committee, this morning, Mr. Hood, the Deputy Minister of Finance, stated that from December, 1974, to December last the increase in the money supply in this country was 23 per cent.
Professor Smith goes on to say:
If this is the result when the government perceives itself to be acting, the outlook is bleak. Third, the government states in its policy paper that government expenditure policies will be "aimed at limiting the growth of public expenditures and the rate of increase in public service employment". The policy paper then adds that a "very large proportion of the federal government's expenditures are made under statutory programs, and other arrangements where there is little flexibility". Thus, it appears the government is only paying lip service to the issue and is more concerned with justifying inaction than in taking action on the expenditure side. Fourth, the government in its policy paper refers to structural policies to combat inflation. But structural problems, while important because of their effect on relative prices, do not significantly affect the rate of inflation and hence concern with them deflects from the main problem. Fifth, there is a very great danger that the government will deceive itself into believing it has taken action to curb inflation by introducing an incomes policy and thus feel it less urgent to implement the appropriate monetary and fiscal restraint. For all these reasons there is a very great danger that the incomes policy will fail and worsen our economic problems.
I refer to what Professor Smith said, Mr. Speaker, because sometimes we politicians, when we enunciate what economists have been saying, are thought to be suspect. In my case I am a member of the opposition. But believe me, one issue that most economists are agreed upon is that, if we cannot have more monetary and fiscal restraint in this country, there is absolutely no way that a wage and price control program is going to work. We must be candid with ourselves and the Canadian public, and quit pretending otherwise.
Anti-Inflation Act
Faced with Bill C-89, I ask myself whether the government is persisting in some kind of window dressing. Is it consistently trying to create the impression that it is doing something about inflation, while indirectly, through its own spending and excessive increases in the money supply it is seeding further inflation in the country beyond all expectations at this time?
Before private members' hour I was referring to the size of government and its great power to tax and spend. In view of the great number of government employees it is obvious that the government is the biggest of the big businesses. It writes the rules, it prints the money. What I am leading up to, as if hon. members could not imagine, is that in accepting guidelines we must ask ourselves where the government truly stands on the matter of inflation. We all know what John Turner had to say last June. He said we did not need controls. He felt the nation did not need controls. He said this week that controls should not be retained one day longer than is absolutely necessary to achieve their limited purpose. Obviously Mr. Turner is out of step with the philosopher king, who had another plan in mind.
What is the position of the Minister of Finance (Mr. Macdonald), who reluctantly accepted that portfolio at a time when he was considering leaving politics? Before the controls were announced he described them as "frightening", and believe me, Mr. Speaker, he was right. In January the minister said that perhaps the controls will have to end between their second and third anniversaries. Is this still his view? Perhaps when this matter is being debated in committee we will find out more definitively from the minister when he sees these controls ending.
More important though than when the Minister of Finance sees the controls ending is the question: when does the philosopher king believe the controls will end? We all know what the philosopher king said on December 28 and on January 19. If we really knew what he meant we would all know where this country is headed. However, the whole success and credibility of controls depend upon what the people of Canada think. How does the average Canadian, who will never read the AIB regulations, view the program? Does the government's approach to fighting inflation have credibility with the people of Canada?
My quick response, Mr. Speaker, is that it does not, but it could. I base this on my discussions with Canadians from coast to coast. When you were growing up, Mr. Speaker, your father might have told you not to smoke, that it was not good for you, while at the same time he sat there puffing on his pipe. Or your boss may have said that you had to work hard to get ahead in this world, while he took off early for a round of golf. As a result we quickly learned the hypocrisy of "Do as I say, not as I do". I am sure each of us has encountrered this contradiction which makes growing up very difficult. It raises simple questions about moral values. Behaviour is something that is learned by emulation, not paternal edict.
That is my indictment of the present administration's approach to fighting inflation. While big business and small business, big unions and lowly office workers, trained professionals and struggling entrepreneurs are instructed to expect less and to settle for less, government exempts itself from the same controls. Indeed, we live in a

March 18, 1976
Anti-Inflation Act
new society where there is one set of rules for us and another set of rules for the present administration. I think this is morally wrong. I think this more than anything undermines the credibility of the anti-inflation program.
"Do as I say, not as I do" appears to be the creed of the present administration. Surely, Mr. Speaker, this type of thinking is shown up so clearly in the judge's affair that is now before us. What administration at a senior level of government in Canada other than this administration would be allowing cabinet ministers who have acted illegally to carry on in their posts?


Marc Lalonde: Mr. Speaker, I rise on a question of privilege.


Steve Eugene Paproski: Now take it easy, Marc.


Marc Lalonde: The hon. member made reference to cabinet ministers who have acted illegally. I think that raises a very fundamental question of privilege. I invite the hon. member to specify which ministers he has in mind, or completely withdraw the charge. I am not raising this question of privilege on a facetious basis, Mr. Speaker; I certainly want a ruling on this.


Mr. Guay (St. Boniface):: Withdraw.


Sinclair McKnight Stevens: Mr. Speaker, I am very pleased that the Minister of National Health and Welfare (Mr. Lalonde) has-


The Acting Speaker (Mr. Turner):: Order, please. I do not believe the hon. member made any specific charge. He did not name a specific minister.


Joseph-Phillippe Guay: It was a broad statement.


Marc Lalonde: On the question of privilege, Mr. Speaker, by referring to ministers generally the privileges of all ministers of the government are affected. I think the hon. member has made a very serious charge and he should be challenged either to withdraw it or be specific. Certainly I intend to pursue it if the hon. member does not withdraw it.


Sinclair McKnight Stevens: Mr. Speaker, I am very pleased that the hon. minister has raised this point. This is why we want a public inquiry into this affair.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Let us find out who is right. It is often contended that government spending cannot be cut.


The Acting Speaker (Mr. Turner):: Order. The Parliamentary Secretary to the President of the Privy Council (Mr. Blais).


Jean-Jacques Blais: Mr. Speaker, I heard the representation made by the Minister of National Health and Welfare (Mr. Lalonde). Evidently the hon. member for York-Simcoe (Mr. Stevens) is not ready to withdraw. If your Honour is not ready to make a ruling-


Steve Eugene Paproski: He already has.


Jean-Jacques Blais: -I hope you will reserve further comment so as to protect the obligation that the minister has to raise his question of privilege at the first opportunity. If the minister wishes to raise the matter further, then at the time he raises it I hope the Chair will take into consideration that the question of privilege has been raised now seriously, that Your Honour has heard him, and would wish to hear further representations.


The Acting Speaker (Mr. Turner):: Order, please. I would suggest that the hon. member should not impute motives in that way, and that we get back to Bill C-89.


Sinclair McKnight Stevens: Mr. Speaker, I was saying it is often contended that government spending cannot be cut. What will be cut-pension payments, welfare assistance, family allowances, or funding of bilingualism? No, these are sacred cows. Surely if you are forced to make hard decisions in your life or in your business to live within the tightness of the guidelines, then why cannot the government face up to the same hard decisions?
You will recall that when Bill C-73 was being passed in this House we moved an amendment that would have required the government to stay within the 8 per cent ceiling as far as its expenditures were concerned in the fiscal year 1977. We were voted down on that measure. I suggest that when we were voted down on that 8 per cent ceiling, the same ceiling the government expects every wage earner in this country to accept, the government showed its true style as far as its intention in respect of restraint is concerned.
The federal government alone now spends more than $30 billion a year. It is budgeting a 15 per cent increase, or another $4.5 billion during the next fiscal year. I find it incredible that somewhere in that $30 billion, somewhere in that $4.5 billion increase, there is not ample opportunity to make some hard pruning of government spending.
In this connection the insincerity of the federal government's commitment to restraint was made apparent on Tuesday when the administration authorized $198,000 in spending over what was originally needed or requested for the office of the administrator of the anti-inflation program. During consideration of the Supplementary Estimates (B), Mr. Tansley, the administrator of the program, told opposition questioners that his office required $100,000 in funds for the remainder of the current 1976 fiscal year. However, the Supplementary Estimates (B) finally requested $298,000 for his office, making apparent that very little preparation or consultation was given to an excess of $198,000 over what was originally requested and needed. Mr. Tansley, a $50,000 a year executive, is indisputably qualified by his training and experience to make such an estimate. In addition, with only 15 days remaining in the fiscal year the possibility of error becomes negligible.
Members of the official opposition attempted to reduce the $298,000 estimate to the level of what was required. Government members voted the motion down, eight to seven. In doing so the government mocks its own restraint program and is contemptuous of the Canadian people who are trying to make the anti-inflation program work.
March 18, 1976

This is a perfect example of the kind of fat in federal government spending that we are trying to cut. By actually encouraging this kind of spending, which was neither needed nor requested, the so-called spending restraint program has permanently damaged its credibility.
Rough justice, as the Prime Minister put it, should fall equitably on all segments of society, including the present administration. What has to be addressed frontally is the problem of growth in the economy. Severe restraints should not be imposed for any great length of time on a faltering economy. We should not be arguing about sharing a shrinking pie; we should be suggesting that the pie could be enlarged.
Immediate action must be taken to increase the export of our goods. We may not be able to blast our way into the world markets, but surely imaginative leadership can improve our position. Naturally, improvements must be seen in our productivity at the same time. This can best be accomplished by incentives. Most people will improve their output when the certainty of greater reward is there. This is the exact antithesis of being told that your reward will be limited to an increase of 2 per cent for productivity.
So there will be no confusion let me restate what I have been saying. Yes, restraint and regulations are fact; they are necessary. We said that in 1974. But there are two very important differences between what we proposed and what the present administration belatedly enacted.
First, we would have imposed a 60 to 90-day total freeze. By this we would have gained two very important advantages: we would have avoided all the confusion that is rampant today where one group is allowed more, and another less, and we would have had the time to examine the economy in its frozen state with much more clarity than is possible today.
Secondly, and more important, our program would have been limited to 18 months at the most. It was not the open-ended strait-jacket envisioned or at least threatened by the leader of the Liberal party. Our goal would have been to resolve basic inequities within 18 months in order to stabilize the economy. We would have gone on from there to offer incentives and positive government support to make the economy grow.
In Bill C-89 there are certain important clauses we should consider and question at the committee sessions, if this bill reaches committee. As the Minister of Finance indicated when he was dealing with the bill, clause 2 covers indirectly the extension of the control program to cover such industries as construction, trucking, and shipping. In clause 2 there is a specific exemption in respect of construction companies in the province of Quebec.
Dealing with this, I would suggest we should first ask ourselves: is the control program getting out of hand? You will recall initially on October 14, when the minister first outlined his program, he stated there would be about 1,500 firms that would actually be involved or controlled under the program. It was also stated at that time that the total complement for Anti-Inflation Board would be about 200 civil servants. We now find that the control program is to be extended to cover some 20,000 firms. When checking today with an Anti-Inflation Board employee we were unable to identify the total complement they have on staff,
Anti-Inflation Act
but the chap I spoke with said it is at least 400, and possibly 500 employees.
When we are dealing with clause 2 I think it is important that we question why it was felt desirable to extend these controls to cover all construction firms in the nation with the exception of those in Quebec, and why it was considered desirable to make that extension, covering even those construction firms including two-man companies. Think of all the red tape to which this will subject those companies.
When I read the letter addressed by Mrs. Beryl Plumptre to the Minister of Finance setting out the reasoning for this extension I found it most unsatisfactory, because the general impression I was left with is that the cabinet turned to the board, which it had the right to do under Bill C-73, and asked the board to consider whether these five industries shoud be included under its control program or its administration. For no apparent reason, and certainly no strong one, the board came back, and I guess it is not surprising, saying yes, all five should be in its net. What a typical example of growth of bureaucracy. The tentacles go out to cover thousands more never intended to be covered the last time this measure was debated in the House.
Not only do I point that out, by coincidence, we received a press release in our offices not too long ago from the Anti-Inflation Board which makes reference to the source of the complaints the board is receiving. I would recommend that members take a look at it because they will find that the number of complaints that can be related to the construction industry are comparatively low. The number of complaints related to the transportation industry in total is 1.8 per cent, which includes rail and ships. Yet for no apparent reason the government says that virtually the whole industry should be in the net at the present time. This is the type of question I believe we must raise before we pass this bill.
I think the Minister of Finance must give us much more concrete reason for feeling some of the approaches that have been taken to date are justified. The Minister of Finance referred to the appeal provisions which have been included and the fact that the administrator will be given changed powers and in some manner more orderly powers than he had under Bill C-73. But again I think a great deal more explanation should be coming forward before we are expected to pass the final reading and the legislation.
In clause 8 there is a provision not to allow members of the Tax Review Board to sit on the appeal tribunal hearing the anti-inflation cases. I think there should be some explanation why this has been found necessary. Is there a possible conflict here? Is it right to have this anti-inflationary aspect of this program so interrelated with the actual taxation side of our administration? As you probably know, Mr. Speaker, the estimates in respect of the administrator himself, for no apparent reason-certainly an explanation could not be given at the hearings of the Finance committee-have been placed under the Minister of National Revenue (Mr. Cullen). Why? What is the link between the administrator in respect of the anti-inflationary program and our Income Tax Act? Perhaps at the

March 18, 1976
Anti-Inflation Act
committee hearings we will hear some answers to this type of question.
Again when we take a look at clause 11 we see it is proposed to amend the provisions that now exist which allow Bill C-73 to be terminated by resolution of this House. This was one of the most contentious questions when Bill C-73 was being debated. We felt that the 39-month period the government asked for in that bill was too long. We wanted the legislation to terminate in 18 months. The reply was that they would give the opportunity for 50 members in this House to request a debate and that within 15 days the matter would have to be disposed of and if the House so saw fit the legislation could expire whenever the resolution required. That is being amended, and we are now being asked to consider not that this House have the sole prerogative but that the Senate now concur in the termination of the programs in the legislation.
It may be acceptable to have the Senate at least pass on the matter, but surely if it is to be dealt with within 15 days of being raised in this House there should be some time limitation on the Senate rather than having the provision, as it now appears to be, that the Senate be asked to concur in the motion to terminate the legislation, with absolutely no time limitation concerning when that honourable House would decide on the suggestion. I know there may be other members in this House who have something to say concerning the right of the Senate to concur or otherwise in any termination motion we might see fit to pass in this House.
So far as I am concerned the end result of a restraint program should be growth and not a regimented and controlled economy. That is what we fear. We believe the 39-month period is too long. We are apprehensive that it will not be terminated at that time and could continue considerably longer.
In conclusion let me re-state our position. I believe some program of restraint is necessary at this time. However, I also believe that the present program will not easily be fulfilled. It will not be easily fulfilled for the simple reason that there is too much confusion. The people do not perceive that the government is leading the way or giving an example by paying serious attention to its profligate ways. The present administration should not count on speedy passage of this bill. There are too many questions to be answered. The present administration should not count on our support at all stages of this bill, which is an amending bill. It should not count on our support at all stages without further explanation and amendments. This country is too young, too vibrant, to need prolonged restrictions. Canada has immense promise, and I would like nothing better than to see it realize that promise.


David Orlikow: Mr. Speaker, the members of the New Democratic Party will support this bill for the simple reason that we insisted from the beginning that this law, like many other laws of Canada, should have in it provisions so that those who feel they are being mistreated by the application of the law would have the right to appeal to an impartial body against decisions of the Anti-Inflation Board.

It was both amusing and interesting to hear the minister espouse that view when he introduced this bill because I can remember, if the minister has forgotten-and I would not fault him if he tried to forget-the cavalier sneering way in which he and the Prime Minister (Mr. Trudeau) refused the suggestion of members of the opposition parties. The former leader of the official opposition and the Leader of the New Democratic Party (Mr. Broadbent) stated that this kind of appeal section was required in the law. Let me remind the minister of a couple of illustrations of what I mean.
On February 16 the then leader of the official opposition asked the Minister of Finance (Mr. Macdonald) a question, as recorded at page 10955 of Hansard, which in part was as follows:
... is the government by amendment, administrative order or some other way prepared to assure the right of a direct appeal of board rulings without the necessity of a party defying the board before such an appeal can be launched?
Later on, after some further questions are asked, the Minister of Finance (Mr. Macdonald) replied:
... if a party does not agree with a decision of the board, then the board will refer the matter for the decision of the administrator. This does not necessarily indicate non-compliance on the part of the parties. Just to put it in the context of the normal judicial procedure, parties who are satisfied with the outcome of litigation normally do not appeal.
Of course the minister should have known then-and I think he did know but was trying to avoid admitting-that they would have to change the act because one party in the case of the paperworkers, the union members, could not appeal.
On February 18 the Leader of the New Democratic Party put some questions to the Prime Minister, as recorded at page 11048 of Hansard. He asked the Prime Minister:
... will the government consider changing the legislation so that the right of appeal is open to both the employers and the employees?
The Prime Minister replied in part as follows:
... if the employer is paying wages that are higher than permitted by the guidelines, it seems proper for the other to issue against the employer, not the employee. Therefore, it is the employer who should have the right of appeal if he does not agree with it.
In other words, even less than a month ago the Prime Minister did not accept the idea that any party adversely affected should have the right to appeal. Today of course the minister comes in with his bill, amending the procedure as was suggested by members of the opposition, as if there never was a problem, the government never had any doubts about this, the government was always willing to be fair. Of course nothing could be further from the truth. But as usual today the Liberal government was right when it opposed this kind of appeal procedure, and it is right today when it brings in this appeal procedure.
We will support the bill. I will talk a little later about the effects that this appeal procedure will have on the administration of the whole program, but I want to deal for a little while with the confident way in which the minister was arguing this afternoon when he introduced the bill. Although the government knew it would take considerable time before the effects of the program would be felt and before inflation would moderate substantially, lo and behold, already it is working, and the minister had figures
March 18, 1976

to demonstrate that that was true. I think the minister should have been much more cautious than he was.
We opposed the government's anti-inflation program from the day the Prime Minister announced it, on Thanksgiving Day, 1975. We opposed it because we said it would not work, we said it would not be applied equitably, and we said it would create further unemployment. Let us look at these claims which he made beginning on the day the Prime Minister announced his proposals. Is the program working? Are we in fact over the worst effects of inflation?
The minister boasted that the rate of inflation for the past three months is down considerably, and he gave some figures to prove his point. I want to suggest to the minister in all seriousness that what we have had is a very temporary lull in the high rate of inflation. Let me indicate some of the reasons why I say that. I am putting them on the record because I think the minister will be eating large portions of crow within a very few months. It will not be tasty and he will probably gag quite a bit on it, but I make that prediction confidently.
We know that the government is committed to permitting a sharp increase in the cost of fuel, particularly oil. It is being reported reliably, I believe, that the increase in June will probably be in the range of $2 a barrel for oil. It has been calculated by economists, including government economists, that a $2 increase in the price of oil will mean an increase in the cost of living of somewhere between 1 per cent and 1.5 per cent for the year.
I noticed that while the minister was speaking the hon. member for South Western Nova (Miss Campbell) applauded him vigorously. I saw the CBC national news a couple of nights ago and they were reporting that, as a result of the already sharp increase in the cost of oil which is used to produce electricity in the province of Nova Scotia, the cost of electric power there has virtually doubled. They reported that many people living in homes which are heated by electricity are getting bills for power for two months in the neighbourhood of $200 to $500. Those are tremendous increases in cost, and I hope that the hon. member for South Western Nova will be able to report to her constituents and the people of Nova Scotia why the cost of living has gone up when the Minister of Finance says that things are going so well.
The cost of money has just risen because the Bank of Canada has instructed the commercial banks to increase their interest rates on loans. The Bank of Canada will now charge 9.5 per cent, and of course the chartered banks will charge substantially more. My colleague, the hon. member for Waterloo-Cambridge (Mr. Saltsman), says that it is almost 4 per cent more than the rate which is charged in the U.S. This means that the interest on personal loans, which is also at an all time record high, will go up automatically. It means that the cost of purchases on credit will go up when more and more Canadians are buying merchandise on time. It means that the cost of doing business will go up because most businesses exist by borrowing money from the banks, and if they pay more to the banks for the money which they have to borrow they will have to pass that increase on to their customers in increased costs.
A very good economist estimated for me today that the most recent increase in the cost of money announced by
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the Bank of Canada will mean an increase in the cost of living in the coming year of .5 per cent to 1 per cent.
The major reason why the cost of living increases have moderated recently has been the stopping of the increase in the cost of food. Surely even the Minister of Finance knows that that is a very temporary affair. Surely he has talked to his colleague, the Minister of Agriculture (Mr. Whelan), who must have told him that livestock producers in western Canada are finding that they are losing money, that the cost of feed is so high that the price they get when they send their livestock to market means that they lose money on every head that they ship. So they are reducing their herds, the result of which is that although the price of beef has not gone up now, a year from now there will be shortage of beef and the price will be up by 10 per cent or more.
Surely the Minister of Finance must have seen the news from the U.S. that the midwestern U.S. is suffering from a drought the likes of which they have not seen since the dust bowl of the 1930's. This means that the price of feed will be up and the price of beef will be up in the U.S. These are facts which the minister has pushed aside in his desire to show some results from his anti-inflation program. I predict that three months or six months from now the minister will be trying to explain what happened to the anti-inflation program. My colleague says it will be the fault of the international situation, and he is right. That is what the Prime Minister was saying before and during the 1974 election. The Conservatives were saying that we needed a wage-price freeze or controls, and the Prime Minister was saying, no, we did not need them, and not only did we not need them, they would be bad. He was saying that inflation was not caused by internal Canadian problems but rather by international problems. That is true to a large extent.
I want to say to the minister, however, that if he had taken the time to look at today's Toronto Globe and Mail he would have seen that, rather than inflation declining in the western industrialized world in the last three months, in fact the rate is increasing.
Let me put on the record just a few illustrations. For the 12 months to January, 1976, prices increased in France by 9.6 per cent; that is about Vt of 1 per cent per month. In the last three months in France the increase per month was 0.6 per cent for November, 0.6 per cent for December, and 1.1 per cent for January. In West Germany the increase in 1975 was 6 per cent. For the last three months for which I have figures it was 0.3 per cent for November, 0.3 per cent for December, and 0.8 or almost 1 per cent for January, 1976. In Italy the rate was 17 per cent in 1975. It was 1.1 per cent in November, 0.8 per cent in December, and 1.0 per cent in January. In other words, Mr. Speaker, inflation has not abated in western Europe and it is not likely to abate in Canada. We are going to have about 9 per cent in 1976 despite all the claims of the minister.
We said that the guidelines not only would not stop inflation but that they were inequitable. We know what is happening. The Anti-Inflation Board is following the directive of the government and wages and salaries are being controlled at rates somewhere near the guidelines-

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somewhere near the 10 per cent or 12 per cent which was indicated by the government. But what about income which does not come from wages and salaries? What about professional people? I do not want to repeat in detail what I have said on other occasions but the minister knows-he would not want to admit it-that both he and the AntiInflation Board threw in the towel even before the fight began with the doctors.
The highest income earners in Canada have been told that the maximum increase of $2,400 in one year, which was supposed to apply to all incomes, does not apply to them as individuals. It will apply to the doctors as a group on the average. I suppose that includes interns, people on staff, and all sorts of people who have relatively low incomes, and it will permit doctors who get fees for services to get more than $2,400. That is the kind of equity the minister has provided and in which he believes. We say it is not equity.
The minister today asks us to look at what has been done to business and tells us that prices are not going up and profits have been restricted to 95 per cent of the average of the last five years. Let us look at the question of profits. I want to remind the minister that profits rose tremendously from 1972 to 1974. Corporation profits accounted for about 10 Vi per cent of the gross national product in 1972. By 1974 corporation profits as a share of the gross national product had risen to 14 per cent. If profits are to be restricted to 95 per cent of the average of the last five years that is just saying that they are going to be limited to something near the all-time high.
Corporations did not have a particularly good year in 1975, not because wages were too high but because of a world recession which cut sharply into the exports of a large number of the products that Canada sells in foreign markets. Minerals like copper, zinc, nickel, iron ore and coal, as well as pulp and paper, did not sell as well as they had from 1972 to 1974. The price for minerals fell very substantially. If rather than a continued world recession in 1976 there is an improvement in the economic conditions of the western world, Canadian exports like those I have mentioned will increase very substantially and prices may go up. What will happen then? The minister and the government already changed the rules of the game which they announced when they proclaimed this program with such great fanfare. They are proud of the fact that they have excluded profits on exports from the guidelines. Now we have what I consider to be a completely unfair situation.
The workers at INCO, STELCO, Hudson Bay Mining or Abitibi Paper, and I could go down the list, are having their wages controlled. The paper workers were on strike for almost seven months and had to return to work for substantially less than they were offered without a strike before the anti-inflation program was announced. But, Mr. Speaker, if the business for those corporations for which they work expands, then there is no limit, no restriction on the profits they can make.
I say to the minister that it is completely unfair and completely unjustified. But it is the kind of equity in which the Liberal government believes. The minister maintains that the government is monitoring corporations to see that they do not fleece the Canadian public. We have said repeatedly that the government does not have the will

and ability to do that. The minister contends that this is an anti-business stance, that it is just socialist rhetoric and does not mean anything, and that they will do what they say.
Let me put on the record the comments of a senior official of Revenue Canada. This was not reported in some wild-eyed radical journal of the left but in the Globe and Mail of October 31, 1975. I am reading it from page 9444 of Hansard for November 25, 1975, as follows:
... James Gourley, Director General of Audit for Revenue Canada said:
... some of the multinationals use their intricate corporate structures to minimize the taxes they pay.
The Globe and Mail reported that:
He said he had no idea how much Revenue Canada is losing through tax avoidance by multinational corporations. He guessed that missing revenue from all sources-including multinationals- might be 10 per cent of total revenue.
I note the former minister of national revenue sitting in the House. I continue quoting:
... it is difficult for Canadian tax officials to decide whether the costs being charged by subsidiary companies in Canada are fair or are being inflated to boost costs and lower taxes.
A subsidiary in Canada may be supplied with products or services by its parent in another country. The subsidiary would write off those costs against its profit.
But Mr. Basford said, when tax officials try to find out whether the parent is charging a fair price they may be told that the subsidiary has no access to pricing information concerning sales of their foreign sister corporation.
So there you have a senior official saying precisely what we claimed from the beginning, that the government does not have the facilities to monitor the corporations. Mr. Speaker, we have it from sources which we consider to be reliable that the situation is even worse than when Mr. Gourley spoke in October. I am told that today fewer people work for Revenue Canada than worked for the department in 1975. More and more the department will depend on corporations and individual taxpayers filing honest returns.
Lastly, we said that this program would cause unemployment to rise. We were right. Statistics Canada now uses a new method for computing unemployment. Supposedly the new method will indicate lower rates of unemployment. Yet Statistics Canada shows a seven percent unemployment rate, seasonally adjusted, even with its new method of statistical computation.
Let me say a word about profits. The minister patted himself on the back and promised that we should not witness a rise in profits. Well, today I read the annual report of my friendly bank, the Bank of Montreal. What did it show? For 1974 the balance of revenue, after income tax, was some $56,492,000. For 1975 the figure is $102,134,000. The same pattern applies to all banks.
In March, 1976, all banks reported that revenue after taxes had increased by 37.3 per cent over revenue in the same quarter last year. Royal Bank profits this year were up 31.6 per cent; Imperial Bank of Commerce profits were up 54.1 per cent; Toronto Dominion profits were up 26.7 per cent, and the profits for all banks rose by 37.3 per cent, as I mentioned previously.
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Apparently this 37 per cent increase is well within the guidelines issued by the Anti-Inflation Board. That frightens me, and is an interesting commentary on the guidelines. They allow between 10 per cent and 12 per cent more to wage and salary earners, and 37 per cent more to banks.
I think I have shown that this program will not stop inflation. It is not equitable, as it bears most heavily on wage and salary earners and least- heavily on the selfemployed or those whose income comes from company profits.
Despite its shortcomings we shall support the bill, as it will allow employers or employees who consider themselves adversely affected by a decision of the Anti-Inflation Board to appeal that decision. We say that every person in Canada should be allowed to appeal a decision if he, or she, feels that the decision went against them or was unfair.
A shortcoming of the program is that it will encourage the growth of bureaucracy. The hon. member for York-Simcoe (Mr. Stevens) said in so many words that the staff of the Anti-Inflation Board originally was supposed to be small, but has now grown to over 400 employees. Indeed the chairman of the board, Mr. Pepin, is reported by newspapers to have said that the board must deal with a backlog of wage and salary claims and can no longer guarantee a decision in 30 days. A decision may take up to three months. After a union and company have bargained and come to an agreement, they hope within the guidelines, they will need to wait up to three months before learning from the Anti-Inflation Board if the settlement will be permitted as coming within the guidelines. In the meantime I presume that the company will put the extra money it wants to pay employees in escrow or some kind of trust fund.
This bill will allow employees or employers to appeal to the administrator. So far, according to television reports, the administrator has worked with two assistants and some office staff, on a budget of close to $200,000 which he has not been able to spend. Obviously if employers or employees appeal to the administrator on grounds that they have not been dealt with fairly, the work load of the administrator will increase.
Why would employees or employers not appeal decisions of the board? The board is unlike any administrative tribunal I have ever known in this country. For instance, it is not like the Unemployment Insurance Commission which has established a host of precedents covering every conceivable circumstance which might confront it. For example, a person might be disentitled to benefits if his premiums were not paid long enough, if he did not try hard enough to look for work, and so on. If an employee feels he has been unfairly dealt with, he can examine the precedents to see if his claim is valid. Whether he has been fairly treated is another question. At least he knows how the commission works. The Anti-Inflation Board does not do that. It hands down a ukase from on high. It says, "You must reduce wages by 2 per cent or 3 per cent," or whatever the figure is. It takes little account of historical precedent average income in the area, and so on.
I predict that employees and employers in increasing numbers will appeal to the administrator. Not only are we allowing appeals to the administrator, as we should but the
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entire program will encourage appeals to the appeals tribunal. Its staff will need to be increased. Unless it supports in a routine way the findings of the Anti-Inflation Board it will need to examine all the evidence and arguments again. Therefore one new bureaucracy is being built up in the Anti-Inflation Board, another in the administrator's office and a third bureaucracy will be established to work with the appeals tribunal.
That will not be the only effect of the board. I have already said that the chairman of the Anti-Inflation Board will not guarantee decisions in one month. Decisions may take up to three months. As more and more appeals are entered we can expect delays of up to three months at the administrator stage of the proceedings. Similarly there will be a delay at the stage where appeals can be made to the appeals tribunal. I predict delays from three to six months after agreements are reached by the union and the employer in the negotiations now taking place or likely to take place in the next few months. Justice delayed is not justice. It is unfair to the employees. It is unfair that employees who negotiate in good faith will have to wait for months before they know what is happening. It is also unfair to employers. It will create tremendous problems for them.
Think of the problems of a construction company which sees an advertisement stating that the Government of Canada, a provincial government, municipality, school division or private corporation wants to construct a building. It is asked to submit bids on that. What contractor can, with any confidence, submit that he is prepared to take on the job without knowing the wages he will be paying to his carpenters, electricians, plasterers and labourers hired to work on the construction of that building? How can he put in a proper bid without that kind of information? How is he to know whether there will be the kind of delays I indicated are likely to take place as a result of this legislation?
I am sorry that the Minister of Labour (Mr. Munro) found it necessary to leave the Chamber. I am sure he would agree with what I am going to say. If you want industrial peace and a strike-free relationship between employers and employees, you try to settle differences as quickly as possible. If someone is penalized for breaking the rules, suspended for a week or month, or dismissed, and the employee and his union believe that the punishment was unfair or too severe, they file a grievance. Anyone who has looked at labour-management relations knows that it is necessary to settle problems as quickly as possible. If a grievance cannot be settled on the shop floor it has to go to the head office of the company, an impartial arbitrator, or to the courts, as many cases do. The post office is a good example of how stubbornness on either or both sides can delay the settling of complaints or problems. Hostility builds up on both sides. Instead of being deflated they become inflated, and further problems are created. That is what this program is doing.
This program is not leading to better co-operation and less difficulties. As we said from the beginning, it is leading to hard feelings between employers and employees, and to estrangement between unions and employers.

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The program may work temporarily to dampen the demands, requests, and desires of employees. However, when the controls are taken off, as inevitably they will be, the demands will be greater than ever. There will be a legitimate desire by those who have been adversely affected to catch up. They will want to make the gains which they justifiably feel they should have been able to make but were prevented from making by this anti-inflation program.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired. He can only continue with the unanimous consent of the House. Is it agreed that the hon. member be permitted to complete his remarks?


Some hon. Members:: Agreed.


David Orlikow: Mr. Speaker, I have no desire to take more than my share of time. I will conclude very quickly by saying to the minister that while we support the principle that every person should have the right to appeal, as the bill provides, what they consider to be an unfair decision by an administrative board, we are interfering more than ever with the free collective bargaining process. This program is not working. It will not work. I predict that in the not too distant future the government, which is announcing its conversion to this idea and this program so belatedly, will be coming to parliament to announce that it is ready to implement a program of decontrols, going back to the system where collective bargaining is as free as every other force in this society in the give and take of bargaining between employees and employers.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I would like to make some comments on this bill. When you really look at Bill C-89 you cannot help but wonder why it is being introduced and why the government has placed a priority on its passage, as we heard this afternoon. It was about four months ago that the House passed Bill C-73. We now have before us Bill C-89 to amend Bill C-73. Perhaps we can take a few minutes to review how Bill C-73 was handled. It may make it easier to understand why we now have Bill C-89.
In discussing the anti-inflation program the Prime Minister (Mr. Trudeau) stated that he wanted massive public input. He further stated we can make it work together. However, that did not happen. He did not have the massive public input.
When the Steering committee of the Standing Committee on Finance, Trade and Economic Affairs met and set about their task of getting that massive public input, they listed about 25 interested groups that would initially come before the committee and discuss the anti-inflation program. We asked the government members if any time limit had been suggested for the committee hearings. We were told that, as far as they knew, there was no time limit, we could just carry on. Of course we perceived the government would want the legislation passed, probably before the House rose for the Christmas recess. However, initially at the standing committee there was no emergency apparent as far as the government members were concerned.
We set about our meetings, and the standing committee first met on October 30. The steering committee had agreed

to meet a broad cross-section of representative groups representing consumers, school teachers, labour groups, business organizations, professional people, agricultural representatives, and so forth. When its report was presented, the Liberal member for Windsor West (Mr. Gray) moved that the report of the steering committee be set aside and that the bill be considered in committee and reported to the House by November 14. After a great deal of debate and haranguing, this date was amended to November 21. Nevertheless, as hon. members can see, there was only the space of a few hours between wanting massive public input and a position of virtual closure at the committee stage. This situation, I am sorry to say, was forced us by Liberal members of the committee.
From that point on, hearings were a charade. The manoeuvre I have described was a calculated move. The hon. member for Windsor West came to the standing committee, I am sure, with instructions to choke off discussion. The instructions he brought were to ram the legislation through at all costs-to hell with input from the public, to hell with parliament-ram it through.
The Minister of Finance (Mr. Macdonald) encouraged this attitude. Look at the record. In spite of the fact that we all had copies of the bill and of the white paper, the minister started off by reading the bill word for word. In other words, instead of making a short opening statement he decided he would take up the full time of the committee by reading Bill C-73, word for word and clause by clause, until we stopped him. He was a little annoyed when we stopped him saying we did not want to hear the bill read in such detail but that we wanted to ask him some questions about it. When we did put questions to him we did not get many answers. He said, for example, that the answers would depend on the judgment of the Anti-Inflation Board or upon the position taken by the Administrator. So members can understand why he wanted to read the bill. He wanted to get his performance over and move on to something else.
Even the tabling of amendments was frustrated. We agreed to table our amendments at a specified time, as did the government, in order to allow all members of the committee to consider the amendments and their relationship to the bill. However, when the time came to discuss these amendments the Liberal members submitted their own private amendments over and above those which had been submitted by the government and the opposition. Then they took up the time of the committee discussing their private amendments rather than those submitted by agreement. In any event, the Liberal members voted against the private amendments submitted by their own party colleagues. One does not have to be a party politician to know that this was a manoeuvre designed to waste the time of the committee, to prevent discussion if possible. The purpose was purely and simply to stonewall and head off serious comment.
If the anti-inflation legislation is not working-and this is the view widely held across the country-the blame can be placed squarely on the shoulders of the Liberal members on the standing committee, not all of them, but a large number of them, for contributing to the charade. The blame for the lack of public input lies squarely on the
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shoulders of the hon. member for Windsor West and of the Minister of Finance. They are the ones who stonewalled and wasted time and they must bear the blame for the mess the program is in. I believe it is in a mess.
Here we are, four months after the legislation has been put in place, considering amendments to the act. Only seven of the ten provinces have signed the anti-inflation program. The Minister of Justice (Mr. Basford) has asked the Supreme Court to give an opinion on the constitutional aspects of Bill C-73. I see by today's newspaper, in a Canadian Press report, that Nova Scotia has delayed signing the pact because the province wants to exclude teachers' wage settlements from the provisions of the legislation.
Why did the Minister of Justice decide to send the original bill, Bill C-73, to the Supreme Court for an opinion? The action was not prompted by his department or by the Minister of Finance. The constitutional aspect was raised during the committee hearings by my hon. friend from York-Simcoe and by my hon. friend from Edmonton West. Their efforts came to nothing at that time. What really prompted the Minister of Justice to take action was pressure from the provinces, and particularly from the province of Ontario in connection with the attitude of the teachers in Prescott. As the bill now stands we are dealing with more double standard legislation, and I think this is regrettable.
Teachers in Halton and other areas were denied historical wage adjustments or saw previous settlements rolled back, while Nova Scotia delayed signing the agreement because, in its view, the teachers should be exempt; they might have a good point, they might have some catch-up wage settlement, and apparently nothing could be done about that under the legislation. Had we been able to hear the views of all these people during the committee stage I am sure we would not find ourselves in this mess today. I hope this serves as a lesson to members on the government side not to take, in future, such action as they took to ram a piece of legislation down the throat of a standing committee.
Bill C-89 is really a sop. It cleans up a number of definitions and it allows appeals from decisions taken by the Anti-Inflation Board, a point members of this party made when the legislation was before the standing committee, only to be voted down by the Liberal majority. Most of the changes proposed in the measure before us could have been dealt with when Bill C-73 was before the committee if proper and adequate hearings had been held.
We note that the Anti-Inflation Board has a backlog of a thousand cases yet to be heard. Now we are told that the board, by order in council, will add 41,000 new companies to the list of those subject to the guidelines. We note that the trucking industry is to be brought under the guidelines, together with construction, shipping, longshoring, and grain handling. I question this move, particularly as it affects the trucking industry.
I do not think there is another industry in the country which is subject to as many controls as the trucking industry. When one thinks of the multiplicity of the federal, provincial, and municipal regulations in this field one wonders why anyone would wish to be in the business. Yet it is a vital part of our economy. At a time when rail lines
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in Western Canada are being abandoned and the trucking of grain to and from storage elevators is just beginning to evolve as an alternative system, it might well be unwise to place trucking within the ambit of the anti-inflation legislation. Perhaps when we get to the committee stage, unless ramrod tactics are again used by the minister and his people, we can be given some explanation.
It is particularly difficult for small and medium sized trucking firms to cope with further extensions of bureaucracy; they will have to add yet another layer of recordkeeping to those with which they are already burdened. I am sure this will cause many of the small and medium sized companies to sell out to larger competitors. The question we have to ask ourselves is whether this is in the national interest. The same argument applies to construction companies. As I read the regulations the guidelines will now extend to the one-man operation. To impose added record keeping on these people will, I am sure, cause them to question whether they can continue in business.
It is obvious to all concerned that the Ontario teachers' contracts should have been viewed in a different light. The provisions of this legislation caused disruption in the school year, put the teaching profession in conflict with students and the population in general, and cast the whole profession in a light unbecoming to the dedicated people who comprise that profession. By their actions the government and the board disregarded existing contracts and agreements, denied the historical background of those agreements, and chose the role of confrontation. By their actions they built up regional disparities, and indeed disparities within a region.
Just where is this legislation going, Mr. Speaker? We see important decisions, such as the one to drop the export levy and the recent order in council to bring under the anti-inflation regulations another 41 companies, being made by the governor in council. Parliament is left to debate housekeeping items and to clean up sloppy drafting, interpretation, or translation. I say this is really perverting the role of parliament and the committee system that we have attached to this institution.
There is a provision in the bill to terminate the legislation prior to December 31, 1978. This causes me to wonder whether the government, having launched a program which for years it said would not work, is preparing to abandon it in another pronouncement from the Prime Minister that inflation has been beaten or is under control. Certainly pressure is building to have the profit provisions of the legislation removed or modified. Businessmen are finding it hard sledding to expand their operations and thus reduce unemployment by employing more people. They find it extremely difficult to plan and project growth with an anti-inflation program that has so many strings attached.
The chairman of the Anti-Inflation Board keeps telling the business community that the board is going through a learning process. While this learning process is under way, decisions by the business community are being put off, stalled, pushed into the future, or in fact abandoned altogether. I have personal knowledge of several companies that have been planning extensions to their plants but

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which have said that, in view of the way things are going, the state of the economy, and the regulations they have to operate under, and in view of the fact that they cannot get any clear decisions from the Anti-Inflation Board, that they cannot understand the regulations, or that they have to hire an expert to interpret the regulations and even then they are not sure that the interpretation is correct, they are going to shelve their expansion programs or cancel them altogether.
Our serious balance of payments problem and our disastrous trade deficit are not going to be solved by the AntiInflation Board. These will only be solved by decisions made at the corporate level. You cannot expand any business over the long term with prime rates at the level they are in Canada today. We see our neighbours to the south pulling out of their recession and expanding their business sector. This recovery is being partially fuelled by prime rates that are one half of ours. In New York city today with a triple A rating you can get a rate of 5 per cent. Rates of 514 and 5lA per cent are average. Our rates are 10, 10'A or 11 per cent. You cannot expect a businessman to embark upon long-term expansion with rates at that level; therefore pressure is building either to drop or to modify extensively the profit regulations.
I think it is neither proper nor productive for a manufacturer or producer or any businessman to have to plead his case before the administrator. Many will not do it. They will simply hold back projects and expansion until either the anti-inflation program is altered or ended, one or the other. I think the Minister of Finance and those charged with the responsibility of administering this legislation will have to consider this factor very carefully.
Our unemployment level is rising and is now slightly above 7 per cent. One would have thought that once this program had got under way there would have been a real drop in the unemployment rate. The fact of the matter is that the rate is staying at 7 per cent, and the projections of many economists, as well as opinions expressed in letters from various financial institutions, predict that unemployment will stay at the 7 per cent level, that real growth is not going to be that significant.
The dilemma facing the government is that, having removed the surcharge on profits derived from exports as a result of charging a higher export price than in the domestic market, recognizing that the profit squeeze will hold back recovery, and realizing that funds for expansion cannot be borrowed at current bank rates, there is little that the government can do but drastically modify the profit regulations or be prepared to accept slow growth and the continued loss of markets in the future. This is a factor about which I think the minister is concerned. I understand from a recent report that the minister said he would look seriously at the profit side this October. I urge him to look at it long before October, because I think that by that time some very important decisions under consideration right now may have been cancelled.
The political reality is that only then, of course, will the legislation control wages and salaries. This is the accusation of labour and salaried people today. It would be very difficult for the government to keep the legislation in force if it controlled only wages and salaries. Labour leaders have charged that this was the real intent of this legisla-

tion in the first place. If this was in fact the case, the political consequences would be very difficult for any political party to handle. In order to remain at all credible, the government will have either to move to price controls much more rigidly than is the case now, or drop the program entirely. The elements of both these moves can be found in the actions of the Anti-Inflation Board and in Bill C-89, which provides for an earlier expiry date of Bill C-73 than December 31, 1978.
I should like to close my remarks by commenting on a matter referred to by the hon. member for York-Simcoe (Mr. Stevens). We saw a ridiculous act at the standing committee on Tuesday when Liberal members of the committee voted against reducing the estimates of the administrator of the Anti-Inflation Board in spite of the fact the administrator agreed he had $198,000 more than he really needed. Regardless of the technicalities or the perception that the government would not reduce spending, even when the administrator clearly stated he would not need it, this was a thoughtless and ridiculous act.
When this bill goes to the committee, if we have a repetition of the shenanigans that went on when we had Bill C-73 there, I can assure you we will do all in our power to oppose the passage of this bill. On the other hand, if we go to the committee meetings and the minister and his officials give us the information we ask for, in a proper form, I would suggest we will probably take a different attitude. The actions of the members on the government side at the committee examining Bill C-73 were absolutely deplorable. This was a mockery of the whole committee system.
If that sort of action continues in committee, then what we are going to see when bills are before the committees is that they will not be debated to any extent and everyone will withhold amendments and propose them at the report stage proceedings, so that the proceedings in the House will drag on and the whole process will slow down. I hope, when we consider this bill, we can reverse that process. Give us the hard information we ask for, in a realistic form, and we will do what we can to push these bills through.


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, when I spoke on the anti-inflation legislation, Bill C-73, last fall I expressed serious reservations about the hastily prepared piece of legislation. It was obvious that it was prepared in haste because the Prime Minister (Mr. Trudeau) did an about face and imposed controls when he realized that, once again, the government was failing to deal effectively with inflation. The Prime Minister, on the eve of two federal by-elections, suddenly decided that a new gimmick was needed to save face, and out of this was born the Anti-Inflation Board.
The Progressive Conservative party has been consistently showing leadership in drawing attention to the need to control inflation, even with controls. But in the government's case it was not so much a desire to bring about effective controls as it was to save face.
Those of us on this side of the House pointed out the flaws last fall, and Bill C-89 could have been avoided if the
March 18, 1976

government had been willing to listen. Now the government, caught in a bureaucratic nightmare, must pull the cookies out of the fire. Bill C-89 is a clear admission of the flaws in the government's anti-inflation program.
The Canadian people are rather apprehensive about the Anti-Inflation Board because it was established by a government that has continually put misleading positions on inflation to them. Government is supposed to show leadership in asking for restraint, and to practise what it preaches. I contend that it has failed miserably. We have continually called for a reduction in government spending and for the government to show restraint in its demands on the economy. Public opinion polls and commentary have made it clear that most Canadians were looking for guidance to help beat inflation. They wanted, of course, to be assured that their government was in the battle 100 per cent. All they got was a lot of whining about how much agony it causes to keep spending from rising more than 16 per cent. I ask the government to listen to the people who have been told their incomes cannot rise by more than 10 per cent. I ask the government to justify its lack of restraint.
It was amazing to hear the former minister of finance John Turner, offer his economic solutions the other day in a speech to the Ontario Economic Council, when his record proves without a doubt that he was the culprit in letting government spending run rampant. Mr. Turner can offer all the solutions he wishes, because he will be proven to be the most irresponsible Minister of Finance in Canadian history. Under the direction of this self-seeking political operator all government departments were handed a blank cheque to spend freely. It is little wonder then inflation remains uncontrolled. Any government that allows its spending to increase 198 per cent in a couple of years, obviously is not out to beat inflation.
For the record, I should like to point out some examples of the government's so-called restraint and fiscal responsibility. Rather than make a concerted effort to heed the criticisms of the Auditor-General to root out inefficiency, empire building, waste and feather bedding to save taxpayers' dollars, the Prime Minister puts on governmental showbiz. The Prime Minister wanted to put on a show for the public to win approval. His so-called restraints might have fooled some people, but in these times of economic peril the young, the poor, the unemployed, the elderly and so on, are not really affected, nor does it help them. They still face high inflation.
If one takes a careful look, only $466 million of the $1.5 billion cut back comes from present program budgets, and the rest from what departments had hoped to spend. One has to ask what kind of restraint that is. Who is the government trying to fool by flashing figures around?
The President of the Treasury Board (Mr. Chretien), better known as "Mr. No", has said he is the only one in the cabinet with the incentive to cut spending. On another occasion he said the federal government really has little scope for reducing expenditures in any significant way. It makes one curious as to what the minister's real intentions are.
If government is to play a key role in dealing effectively with inflation then the taxpayer should not have to read about such gross over-spending as the 42.9 per cent jump in foreign aid. This year the Department of External Affairs will have a $300 million increase in foreign aid, from $700
Anti-Inflation Act
million to $1 billion. Where is the 16 per cent guideline in this case? While the Canadian public are being asked to tighten their belts, a lot of their money is going to countries like Cuba, which has some 12,000 troops in Angola. Obviously the word credibility has been removed from the government's vocabulary.
The President of the Treasury Board will no doubt share honours with his colleague, the Minister of Public Works (Mr. Drury), in that he will be known as the most irresponsible President of the Teasury Board. People are no longer going to accept double standards such as those being practised in the Department of Public Works. In calling for restraint the Minister of Public Works has not done one thing to halt construction of the Guy Favreau complex in Montreal, which will cost millions of tax dollars. Are there not enough government offices without creating more, or is the government living true to its record of increased civil service growth?
The Department of Public Works has allowed the federal customs department to rent space in the Manufacturers' Life Centre in Toronto at $8 per square foot, despite the fact that over 39,400 square feet of space are available in its old headquarters.
In Winnipeg, federal government officials decided to renovate and old CAE Aircraft Ltd. building for use as a regional taxation data processing centre. When you take into consideration the interest to be paid on $1.7 million for renovations, the moving costs and so on, an entirely new building could be erected. The Minister of Public Works has proven he shows no discretion in other matters and no discretion in government spending. I would suggest that his department should be investigated to see how much money is really being wasted.
I could go on for days about the Liberal government's lack of direction in using government spending to control inflation. The Anti-Inflation Board does not appear to have any guidance over the government.
If we were to take seriously the message of the Auditor General, whose 1975 report indicated that the government is inefficient, wasteful, negligent of accountability, and out of control-


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for St. Boniface (Mr. Guay) rises on a point of order.


Joseph-Phillippe Guay: Mr. Speaker, may I interrupt the reading of the hon. member for Winnipeg South Centre (Mr. McKenzie) to bring to your attention that the tax data processing centre in Winnipeg, even though at a cost of $3 million, has brought to Winnipeg 900 jobs, of which I am very proud. I want to congratulate the government for the effectiveness of this move.


Mr. Deputy Speaker:: Order, please. The hon. member should make his own speech.


Joseph-Phillippe Guay: He can continue reading.


A. Daniel McKenzie: Mr. Speaker, as usual the hon. member for St. Boniface (Mr. Guay) is away off base. He should read the minutes of the Standing Committee on Public

March 18, 1976
Anti-Inflation Act
Works where I questioned the Minister regarding this multi-million dollar blunder. A new building could have been built for at least $4 million or $5 million less than this extravagance they have been involved in in renovating an old building which they will move out of in three or four years. I should like to ask the member for St. Boniface why they are paying $4.50 a square foot.


Joseph-Phillippe Guay: Sit down and I will tell you.


A. Daniel McKenzie: You sit down for a change. The going rate for this type of a building is $2.25 per square foot. Ask him to sit down, Mr. Speaker. He does not know what he is talking about. In business circles in Winnipeg I have been approached and asked by people if they could get in on any other such sweetheart deals.
This is one of the biggest blunders ever pulled off by the Department of Public Works, and other businessmen in Winnipeg would like to get in on this type of deal. The president of CAE, when he is out with his friends for a coffee, is laughing at how he took in the Department of Public Works on this deal. I suggest to the hon. member that he read my previous speeches with regard to this deal.


Joseph-Phillippe Guay: I do not have to read speeches as you do.


A. Daniel McKenzie: If you would do a little more reading and a little less of what you are doing you would be better off.
If we take a serious look at the message of the Auditor General it is startling to note that in 1975 it cost 18 per cent more just to pay civil servants than in 1974. There are now more than 300 federal regulatory agencies, and yet there is no cost benefit yardstick to apply to them. The time has come to stop this nonsense the Trudeau government has forced on the Canadian people.
Now that the Prime Minister has decided that the Antiinflation Board is here to stay, perhaps the government's record of restraint ought to be put under close scrutiny. Since the creation of the Anti-inflation Board its administrator, Donald Tansley, told the Finance Committee of this House that he had $198,000 more than he needs to run his office for its first three months. On February 27 the chairman of the Anti-Inflation Board, Mr. Pepin, said the board's staff had reached 410 and is still growing. When the program was annonced last fall the Minister of Finance (Mr. Macdonald) gave an estimate of fewer than 200 staff members.
The Anti-Inflation Board is well on its way to stepping in line with the government's attitude toward restraint. A Canadian Press report headlined "Fighting inflation at $240,000 a week" went on to report the Anti-Inflation Board will spend $12.5 million in the fiscal year commencing April 1. In another report it is pointed out that the. office of the anti-inflation administrator will cost taxpayers about $100,000 a month. It has indeed become clear that something is amiss. How can we fight inflation by contributing to it? It is sheer hypocrisy. Last fall I spoke of the issue of parliamentary accountability, and now more than ever I believe the Anti-Inflation Board should be completely accountable to parliament.
Three months ago we recognized that if Ottawa is to gain broad public support for its anti-inflation program it will

have to find a way to make public its actions and decisions on both prices and wages. Only through a build-up of case histories can a pattern be established that will enable Canadians to co-operate with the fight against inflation, and in the process build the credibility of the Anti-Inflation Board. The way things stand now, the public's faith in its effectiveness is not very high. As board chairman Jean-Luc Pepin said, "Mum's the word on most increases the board approves of". The taxpayers have a right to information about the board's activities. Naturally we recognize and respect the need for a certain amount of confidential items, but more information is needed.
The Anti-Inflation Board must make an effort to explain such things as why a group of teachers is deemed to merit a salary increase of 26 per cent, whereas some pulpworkers are limited to 14 per cent, both above the 10 per cent normal increase provided in the controls. To dispel this confusion the board must untangle the bureaucratic cobwebs and work to prove its competence. More important, by creating such confusion the board makes it difficult to know precisely what are the board's policies. There is neither rhyme nor reason to date, all in keeping with the government's attitude on inflation.
The Trudeau administration has made the whole scheme too complex to be understood by the ordinary citizen. The people in my riding, Mr. Speaker, do not have the time to read official documents on whether the prices they pay for food, clothing, fuel, and so on are within the distribution rules or the general net margin rules or the unit cost rules. All they want is real proof that the cost of living is in actual fact going down.
Even when interested individuals do wish to learn more about the program there seems to be a reluctance to help them. Take the case of the course at Niagara College of Applied Arts in Welland, Ontario, as reported in the Toronto Globe and Mail of March 17. It was, according to the report, the only non-union agency in the country to have a course on the anti-inflation guidelines and it attracted a good number of people. Mr. E. W. Robinson, chairman of the institute, reported he could not get a government man to come down. The board's media relations man, Mr. Roger Levett, was quoted as saying the problem is manpower.
Some months ago I stated that there should be consultation with the public at all levels. I believe the government has shirked its responsibility. There should be consultation with the provinces, municipalities, industry, labour, and indeed the public in general. In the case of municipalities the government has, by lack of consultation given them a free hand in spending, and this is not good.
I have received communications from small businessmen who are looking for relief from the rules. The board's guidelines make it possible for large companies in a field to reduce prices to stay within the guidelines. It will also force small companies to cut prices or lose business. Mr. J. L. Biddell, a member of the Anti-Inflation Board, in a speech to the Kitchener-Waterloo Chamber of Commerce on February 23 said:
If relief from the rules is not granted in some cases, some companies will not be allowed to earn sufficient profits to remain in existence.
In the same speech Mr. Biddell said the present guidelines could result in large companies getting larger and
March 18, 1976

smaller companies being taken over or going out of business. 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.

Stuart Malcolm Leggatt: Mr. Speaker, this matter arises from a series of questions that have been asked in the House concerning the strange contract for the purchase of the Lockheed Orion. I refer to the questions that have been asked from time to time by the hon. member for Victoria (Mr. McKinnon), and in more recent days by myself.
I hope the parliamentary secretary will address himself specifically to some questions which remain unanswered. I hope he will not think that this is simply an unwarranted attack on the government's position, because I appreciate that the matter is presently under negotiation and that the problem of financing is paramount. But I do think that this House deserves an answer as to why a company with the reputation of the Lockheed company in November of last year, after some six months of information from all over the world which has certainly scandalized the U.S. Senate, was not questioned very carefully as to the capacity of that company to develop its own cash flow or to generate sufficient funds within the company to meet its obligations on the final signing of a contract with the government for the purchase of the Orion.
It seems to me that the parliamentary secretary should try to answer the question as to why it was that further and more detailed inquiries were not carried out in this case by the Department of National Defence. I appreciate the fact that the parliamentary secretary does not speak for defence, but surely it is part of his general responsibility to answer why such a proper inquiry was not made into the financial capacity of the Lockheed company to satisfy its obligations under the contract in November when we announced in principle the purchase for $1 billion of LRPA aircraft. That was in November.
In January we found that suddenly there was not enough start-up money, and therefore formal contracts were not going to be entered into. We had the very strange interview with the Minister of National Defence (Mr. Richardson) in which he alleged, first of all, that Lockheed had misled us. He then suggested that they were given an assurance by Lockheed that the financial situation was all right. In the same interview he went on to say that because the Boeing contract was basically the same financially as
Adjournment Debate
the contract with Lockheed, they were relying on the assurances that since Lockheed was meeting the Boeing contract it would not be a financial problem. All three of these statements are in conflict, and I hope that the parliamentary secretary will cast some light on that.
We have invested about $11 million and eight years of study in the purchase of these aircraft. In Canada we have excellent aircraft. We have the Argus, and we have another new aircraft which we have developed called the Dash 7. The Dash 7 is manufactured by De Havilland, and the Argus by Canadair. We did not need to enter into this agreement with the Lockheed corporation because we had a perfectly satisfactory aircraft. The Dash 7 would have provided very adequate service in the north and in terms of the environment, and the Argus, with refitting, would have provided a satisfactory LRPA aircraft and substantiated our anti-submarine role about which some of us have some reservations. Nevertheless, we can appreciate, with the 200 mile zone becoming a reality in the near future, that satisfactory aircraft will be needed.
We could have had Canadian workers and all Canadian companies, and every dime of that tax investment could have been made in Canada. The government made a bad decision and now it has a golden opportunity to change that decision because if it was misled by the Lockheed company, as the Minister of National Defence stated, then legally-


An hon. Member:: He never said that.


Stuart Malcolm Leggatt: The hon. member suggests that the Minister of National Defence did not say that. I hope he will read the interview in the Hamilton Spectator by Mr. Clive Thomas, and reject the statements in that interview as being incorrect. Either the reporter is wrong or the minister is wrong. I welcome the opportunity for that discrepancy to be clarified. I am taking this as a direct quote from the Hamilton Spectator, and I am prepared to provide the hon. member with the date.


An hon. Member:: I have seen it.


Stuart Malcolm Leggatt: I would be happy to be corrected if the minister is misquoted. I do not want to put words in his mouth that are not correct.
The last point I want to make on the Lockheed contract, is that the United States government guarantees the company to the extent of $250 million of its contracts. Two thirds of the company's contracts are for the United States domestic market. We have had some indication by the Minister of Supply and Services (Mr. Goyer) in the House that that fact could give us sufficient assurance that we will receive delivery. I would submit that the present financial position of Lockheed gives us no assurance whatsoever.
In his response to these remarks I hope the hon. parliamentary secretary will tell us whether we have any United States government guarantee of delivery, or if we are going to take $200 million of Canadian taxpayers' money to buy a pig in a poke without any guarantee of a single aircraft. I should like that to be dealt with as well.


Mr. Walter Smith (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I am not too sure

Adjournment Debate
if I can reply to all questions that were asked this evening, but I wish to respond to the hon. member and to recent questions asked in this House concerning the financing of the LRPA, long range patrol aircraft program.
If my memory serves me right, the hon. minister has previously stated that the Department of National Defence has experienced difficulty in financing the initial development and production phases from its approved capital budget, and it has been necessary to examine a variety of alternatives in an effort to find an optimum solution. This has involved specialists in other departments, in financial institutions, and, of course, Lockheed itself. Lockheed's financial situation has made matters much more difficult. I can assure, you, Mr. Speaker, that this has turned out to be a most complex matter indeed.


Walter David Baker: Embarrassing too.


Walter Bernard Smith: There is no question of impropriety, no question of negligence, or of being misled by Lockheed.


J. Michael Forrestall: Says who? On whose part?


Walter Bernard Smith: The cash flow requirements are quite normal for this type of program.
Recent revelations in Washington have added to the difficulty of the Canadian government in reaching an over-all position on the long range patrol aircraft program; however, the department and the government are hoping to reach a final resolution on this matter by the end of this month.


ADMINISTRATION OF JUSTICE-REASON PRIME MINISTER CAN IGNORE REQUEST FOR PUBLIC INQUIRY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, for 12 days now this House has been frustrated in its functionings; it had been unable to carry out its business properly and in the normal manner. There has been almost complete expropriation of the question period by a single item. There have been motions for adjournment that have interrupted the normal business. The credibility of parliament is being questioned. On top of that we have had a ministerial resignation followed by a prime ministerial rejection. A few days later we had a second resignation accompanied by a prime ministerial acceptance.
Those involved in these cabinet manoeuvres were involved in the same matter occupying the question period-the problem of the relations between the executive and the judiciary on matters before the courts. This is a matter that should never have arisen. It is most improper that it should have become an issue because it is a fundamental doctrine underlying democratic government, as we know it, that the judiciary shall enjoy complete immunity from executive influence in matters before the courts. The fact that this doctrine has been set aside and improprieties committed-those are Chief Justice Deschenes words-is reason enough for an inquiry.
Confusion has been heaped on confusion, with the reasons given for the two ministerial resignations. One resig-

nation, not accepted, was tendered by the minister who admitted the impropriety and assumed full responsibility for it. The resignation which was accepted was tendered by the person on whose behalf the other minister acted. But the grounds for the second resignation were, according to the words of the minister concerned, in no way connected with the impropriety committed by the first minister at his behest or, at least, with his knowledge.
Then we learned of new rules and ethics, of the need to channel through the Minister of Justice (Mr. Basford) any representations which must be made on matters before the courts. One way or another, the credibility of parliament has been put in question. It is being eroded. I contend that the Prime Minister (Mr. Trudeau) is at fault.
Is it any wonder that the Canadian people are upset and confused about events I have just mentioned? I must indeed ask myself if the Canadian people are not being deliberately confused. I am supported in this approach to the question of why parliament is more or less immobilized at present by considering another couple of red herrings which have been dragged, for no apparent reason, across the picture. Patriation of the constitution is one; criticism of Bill 22 another; the third is the "ganging up" notion, which any in their senses reject out of hand. There is enough confusion in this picture, enough unexplained anomalies, enough inconsistencies between answers given by ministers and the Prime Minister himself, to provide evidence that the confusion is deliberate and could be made clear if the Prime Minister wanted to clarify.
I charge that, with his tactics, the Prime Minister is deliberately holding up the normal procedures of this House. He is doing this by refusing to establish a commission of inquiry. As proof of my charge I suggest that if the Prime Minister were to accede to the perfectly normal request of the opposition and country and establish an independent inquiry into relations between certain cabinet ministers and the judiciary, the House could return without further delay to its normal business.
Why does the Prime Minister hold out so stubbornly? That is the question I asked myself yesterday when I formulated my query. There are two possible explanations. I do not know which one is true, or if they are not interrelated. I suspect, first, that the Prime Minister interprets an election as a mandate to govern without further reference to the electorate.


Walter David Baker: Consecration by
election.


Donald W. Munro: The government has an absolute majority of seven members; at the moment it may be only six. I believe there is one vacancy on the other side of the House. Being possessed of that majority, the Prime Minister apparently feels he need not respond to popular demand. This is the presidential attitude I deplore and fear. It is an attitude many of my countrymen deplore and fear.
Alternatively, if I am not right, if it is not that, the Prime Minister's attitude stems from the arrogance of power. It is the arrogance of power which allows the Prime Minister to hold up the work of this House. We know about the arrogance of power. That power corrupts we know; we have seen instances of it. And absolute power corrupts

absolutely. We have seen instances of that, too. Has that happened to us, in Canada? Has power so gone to their heads that the members of the government no longer feel they need to be responsive to popular demand, popular request, and the popular will? Do they resist popular demand, even when it is made known to the government by its own members? We have heard of many on the government side who were kicking over the traces. When the vote came, they were obedient. There is nothing more docile than a maverick properly treated. Can this process be checked? Is there any way of stopping this "slippage"?
There are certain means at our disposal. We seek the truth during the question period. We want to seek the truth by means of an inquiry which could ascertain the facts more easily and objectively than we could, without disrupting the work of this House and country. After all, parliament cannot constitute itself a court of inquiry into matters of this sort. Parliamentarians are involved. Until the proper forum for the inquiry is established, we shall continue doing what we are doing. Why, therefore, can we not have a proper independent inquiry, in the form outlined by the hon. member for Grenville-Carleton (Mr. Baker) this afternoon, to determine the facts and to restore the credibility of this House?
I came to this House because it was a credible institution and I hoped to see it work. I now see it being eroded before me. Until such an inquiry is established we all suffer, our representative institutions and the individuals who try to make them work. The fault lies squarely with the Prime Minister.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, as the hon. member for Esquimalt-Saanich (Mr. Munro) has indicated, this matter has been before the House during the question period for the past 12 days. All the matters raised by the hon. member are by no means new. They were raised during the question period. I refer the hon. member to the replies made by the Prime Minister (Mr. Trudeau) and other members of the cabinet.
Parliament is working very well. I challenge quite explicitly any reference or suggestion that the credibility of parliament is at all impaired. I suggest that the credibility of the opposition has been substantially impaired by their attitude and rambling questions on this matter.
I might indicate that parliament has voted on the question of confidence in this government. Contrary to the seven-member majority the hon. member opposite speaks of, if I recall correctly the vote supporting the government in this issue was 128 to 102. Therefore the majority was 26 votes.
I suggest to the hon. member that the attempt by the opposition to try to excite public opinion has fallen flat on its face. I further suggest that he pay more attention to replies that are given, and open his mind as well as his ears, so as to be able to receive the responses made by the Prime Minister and his ministers in good faith in an attempt to reply to questions, although incompetently asked by members of the opposition.
Adjournment Debate


NATIONAL DEFENCE-REQUEST FOR LIST OF BASES TO BE CLOSED-EFFECT OF BASE CLOSURES ON SEARCH AND RESCUE
J. Michael Forrestall: Mr. Speaker, talking about credibility, when the parliamentary secretary can explain how it is that the Japanese military can buy 100 Lockheed Orions for $1.6 billion and we are paying $1.06 billion for 18, I will understand his lecture to us about credibility. This is the most incredible administration this parliament has seen in the ten or 12 years I have been here.
Just dealing with credibility, I am sorry that the minister has left. It is regrettable that the minister can sit here until ten o'clock and then not bother listening to questions with respect to his department. However, we have the parliamentary secretary.


Jean-Jacques Blais: The very able parliamentary secretary.


J. Michael Forrestall: He is very able. There is no question about that. I just hope he has permission to give us the right information. The information we are seeking is very simple. It has to do with base closures and consolidations.
I want the parliamentary secretary to respond to several questions. I premise my remarks on the clear understanding from the minister today that he does not in fact have the final report from his departmental people. It has not gone to Cabinet yet, so it is not the final report. If there are any bases to be closed, I will be damned if I want that to be the final report.
How many bases are involved? Where are they located? What are their military functions? How many civilians are involved? What is the extend of the civilian payroll? How many military payrolls will be shuffled around as a consequence of any base consolidation or base closure? What is the present impact of these same civilian and military payrolls on the immediate economic region? What will be the impact after this phase of base closure and consolidation is completed? And this is not the first phase.
It is an ongoing scenario we have witnessed for ten years under the Prime Minister (Mr. Trudeau) and the government across the way. I do not know why he does not stand up and say plainly, "We do not need a Canadian military force." That would end the sham he has perpetrated on the Canadian military and on the public to date. Because of the impact of these moves on Canadian workers and their families will the department, before cabinet has completed its consideration of this report, bring into a meaningful role in the decision-making process, UNDE, the union involved? Will it bring municipal officials and municipal authorities involved in this decision into a meaningful role, not merely a consultative role but a role which will reflect concern for the desperate situation which will result if the report results in further base closures?
I want to know, finally, because if the rumours are correct the economic impact on some of these regions will be desperate, what alternatives the government intends to make available to those who are affected. Will they involve the union, will they involve provincial and municipal officials, will they seek out provincial and departmental exp-

March 18, 1976
Adjournment Debate
ertise to see that the impact is not so great that the people in the area cannot possibly afford it?
Finally, when will the government stop trying to save pennies by wasting dollars with respect to military spending, and increase the military budget to a point at which it is adequate to avoid the disastrous economic impact which could conceivably occur if we go ahead with any full-scale base consolidation program at this time?


Maurice Adrian Dionne: Mr. Speaker, I think the hon. member who posed this question must be part owl. He seems to function best in the middle of the night. If he is a night owl, then I am a night hawk.


Walter David Baker: You are a hoot owl.


Maurice Adrian Dionne: The hoot owl is sitting over there. And he comes from Grenville-Carleton.
I thank the hon. gentleman for the kind words he directed toward me at the beginning of his remarks. I appreciate those remarks but I am not going to let them affect my mental capacity.


Walter David Baker: It would take dynamite to do that.


J. Michael Forrestall: Do get on with it.


Maurice Adrian Dionne: I will try to deal with the questions he has raised. However, he is asking for answers to questions with regard to which no decisions have been made. I thought I explained that in detail last week.
How many bases are being looked at? Well, I suppose the answer is that practically every base in Canada is being looked at with respect to this review. Where are they situated? They are located from coast to coast and their functions range all the way from supply and reconnaissance to training. The salaries of the employees involved
cannot be assessed until it is determined which, if any, of the bases will be closed. The same applies to the impact of closures upon the community. Until this is decided it is not possible to answer-


J. Michael Forrestall: You will find yourself here once a week until you get some answers, so get used to it. And let us have no slurs with regard to my night owl activities, young man.


Maurice Adrian Dionne: I beg your pardon?


Walter David Baker: You should withdraw that remark.


Maurice Adrian Dionne: If it has
caused any offence I would be happy to withdraw it. I did not intend it to be offensive in any way.


J. Michael Forrestall: We will be here once a week until we get some answers.


Maurice Adrian Dionne: I do not
mind that. Obviously it is not-


J. Michael Forrestall: It is not important to you, but it is to an awful lot of Canadians.


Maurice Adrian Dionne: Well, Mr. Speaker, if the hon. member wants an answer I will try to give it to him, but he will have to keep quiet for a minute or two. I did not interrupt him when he had seven tenths of the time to ask his question, and I have only three tenths to answer. He is making it impossible for anyone to give him an answer. If he does not want an answer, I will sit down.


J. Michael Forrestall: You would love to do that. You don't have any answers.


Mr. Deputy Speaker:: Order, please. Hon. members are aware that the procedure is very strict and that the time allotted for this question and answer has expired.
Motion agreed to and the House adjourned at 10.27 p.m.

Friday, March 19, 1976