1976-03-24

ROUTINE PROCEEDINGS


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, pursuant to Standing Order 43 I rise on a matter of urgent and pressing necessity regarding the air-sea rescue facilities in British Columbia. I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Standing Committee on Transport be empowered to investigate the air-sea rescue facilities in British Columbia and that it report to the House its recommendations as soon as reasonable after a thorough inquiry.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I, too, rise to propose a motion on a matter of urgent and pressing necessity affecting the security of Canada and its North American air defence partner and ally, the United States of America. At least half of the so-called diplomats accredited to the Soviet Embassy in Ottawa are agents of the KGB, the Soviet spy service, some of whom are known to have taken part in illegal and clandestine operations. The assistant air attache, for example, was expelled from Lebanon in 1969 for plotting to steal Mirage airplanes from the Lebanese airforce. I therefore move, seconded by the hon. member for Northumberland-Durham (Mr. Lawrence):
That the Minister of External Affairs be instructed to advise the Soviet Embassy immediately that KGB agents posing as part of their diplomatic staff can no longer be accredited to Canada as members of the diplomatic corps and that they be forthwith recalled.


Mr. Speaker:: Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I ask leave of the House to present a motion under Standing Order 43 on a very serious matter. I therefore move, seconded by the hon. member for Timiskaming (Mr. Peters):
That this House calls for a public inquiry into all of the activities of the firm of Reisman and Grandy Limited in relation to the negotiations between the government of Canada and Lockheed Aircraft Corporation over the proposed purchase of Orion aircraft.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 such a motion can only be presented to the House with its unanimous consent? 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 Prime Minister. Yesterday the Acting Prime Minister said he would look into the question as to whether Mr. J. F. Grandy personally has had a consulting contract with the Prime Minister's office or any other central agency of the government since his firm of Reisman and Grandy Limited went to work for Lookheed Limited and, if that is the case, when any such contract with that individual was completed or terminated. I wonder if the Prime Minister is now in a position to satisfy the House on this matter?


Right Hon. P. E. Trudeau (Prime Minister):: Yes, Mr. Speaker, I have received the question from the Acting Prime Minister and I have had it looked into. I can answer that no such contract has been entered into by the Prime Minister's office or by the Privy Council office. There have

Oral Questions
previously been several departments to which they were under very short-term contract essentially in order to wind up the transition period, that is a get files in order and so on. I think there is no difficulty with that. There was one contract with the Department of Industry, Trade and Commerce in an advisory capacity. I am looking at the nature of that contract. I am afraid I cannot reply to the House today on that. I see the minister is not in the House, but this is a matter we are considering very seriously with a view to finding out the facts.


PUBLIC SERVICE
Charles Joseph Clark: Thank you, sir. I appreciate the answer of the Prime Minister. I wonder whether the Prime Minister will review the question of the guidelines in respect of what I see now as virtually an untrammelled right of senior public servants to work for corporations in those areas where they have government experience.


Pierre Elliott Trudeau: Mr. Speaker, I cannot talk about reviewing guidelines because I do not think such guidelines have existed in the past. Indeed, I do not think the practice was prevalent and probably that is why there were no guidelines. I can say, however, unequivocally that it is a practice which leaves me somewhat uneasy. I am not sure of the extent of the facts. As I indicated in my first answer I am having them looked into, but certainly I am concerned about the possibility of former high level civil servants lobbying or approaching people, who until very recently were under their jurisdiction and authority, in order to make representations. I am concerned with the practice insofar as it may exist and I would want to see that guidelines are promulgated.
I cannot for the time being see how the practice could be made illegal. We do not want to attempt to direct the conduct of people who are no longer with the government, but it might be possible to have some contractual arrangement, perhaps under their pension arrangement or somewhere else, under which at least a period of time would elapse before any type of lobbying would be permitted. I take it this would apply to the senior level and not necessarily to all levels of employees who might have been in the public service. I think it would apply to the policymaking levels essentially. I confess I do not have a complete report on the facts. I am looking at them with a view to establishing policy.


Charles Joseph Clark: Once again, Mr. Speaker, I thank the Prime Minister and commend him for his willingness to look into this matter fully. I suggest that, in looking at the question of guidelines, he might look at the practice of the British government which has found a way to deal with this problem and also consider the precedents in our own public service dealing with employees at a very much lower level, namely, to the customs officers. Would the

Prime Minister give us an undertaking to move quite quickly in respect of the promulgation of guidelines and make those available to the House of Commons for review at a quite early date?


Pierre Elliott Trudeau: Mr. Speaker, I am aware of the British practice to which the hon. member has referred. But he is probably aware also that, in fact, it is rather customary for former civil servants in the British public service to go to the private sector. What their relations then are is something we will need to look into, but it is not an unknown practice any more than it is in other European countries. As to the urgency, I agree with the Leader of the Opposition that we must have some guidelines for practice in these areas very soon.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. Yesterday the minister told the House that to his knowledge no representations had been received from the consulting firm of Reisman and Grandy by himself, the Minister of Supply and Services or any member of those departments or departmental agencies. Would the minister now inform the House whether he has taken any steps to investigate the possibility of such representations and if so what has been the result of such investigations?


Hon. James Richardson (Minister of National Defence):: Yes, Mr. Speaker. I have made inquiries. I have discussed this matter with my deputy minister and others in the Department of National Defence. I did not discuss the matter with officials or ministers in other departments. To the best of my knowledge no representations have been made on behalf of the Lockheed company. I believe there have been some conversations concerning the contract, but there have not been representations made on behalf of the company to any official in my department.


Allan Bruce McKinnon: Then, Mr. Speaker, perhaps in answer to this question the minister could clarify his own position in respect of these conversations and whether he indeed had conversations with Mr. Reisman. Mr. Grandy said: "We have tried to help the company find financing for their shortfall." Last night the Minister of National Defence certainly indicated in committee that he was seeking financing aid for the same company to the extent that DND was willing to pay the interest. Are we now to assume that these two seekers of financial support for Lockheed did so without ever talking to each other about it?


James Armstrong Richardson: Mr. Speaker, I have not seen Mr. Reisman or Mr. Grandy even to say good morning or good afternoon to them for several months.


Some hon. Members:: Oh, oh!
March 24, 1976


James Armstrong Richardson: I have had no conversations of any kind with either of these gentlemen for many months. There have been conversations by telephone on the subject mentioned by the hon. member with my deputy minister. I do not believe there have been any other representations to any other personnel involved with the Lockheed company.


Allan Bruce McKinnon: I hope that the minister and Mr. Grandy are not both lucky on the same day and borrow twice as much money as we need.


FINANCE
Allan Bruce McKinnon: Mr. Speaker, my supplementary question is for the Minister of Finance. He stated yesterday that he would take notice and report to the House on either the contracts held by Mr. Reisman or his access to the Department of Finance files. Is the minister in a position to report to the House on the second part of that promise, that is Mr. Reisman's access to the Department of Finance files?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, may I say in answer to the second part of the question that I have made the inquiry and been advised that Mr. Reisman, as former deputy minister, would have no right of access to departmental files, either in relation to matters now on hand or in relation to his former responsibility.
With regard to contracts, I am advised that there was a contract outstanding with Mr. Reisman for the period from April 1 to April 30, 1975 for the purpose of winding up some of the items that he had under particular consideration in the department before he left, and that indeed Mr. Reisman occupied, on a part time basis, some space in the department until June 27 of last year.


Some hon. Members:: Oh, oh!


NATIONAL DEFENCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of National Defence. Since the minister indicated in the House on March 2 that the reason for the cost escalation of the Orion purchase by some $111 million over a two month period was due to the cost of interest on interim financing payments, I should like to ask the minister if he is telling the House that the government did not know in advance that it was obligated to pay this additional $111 million, in which case it is incompetent, or is he saying that the government was not obligated previously to pay this amount and, if so, why has it decided to do so?
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James Armstrong Richardson: Mr. Speaker, I have explained this point to the House before on earlier occasions. The cabinet decision which was reached in November included a decision to purchase the Lockheed Orion at a cost of $950 million, and also allowed for the interest charges for financing the payments over the production phase of the contract. This was in my statement which I made in the House in November. The exact dollar amounts for interest were not stated because we did now know them at that time, but the statement indicated very clearly that there would be additional financing charges over and above the $950 million.


John Edward Broadbent: Is the minister saying that that reference to interest charges pertains specifically to front-end financing of the project and, more specifically still, did it pertain to the $111 million for just a two or three month period? Was that clearly understood by the cabinet last November?


James Armstrong Richardson: It was not related to very short-term financing in the sense that we are talking about three years. Full payment is provided for by my department at the end of the life of the contract and on delivery of the aircraft. But the need for financing over the production phase, which is about three years, was always contemplated by the government. The interest payments were authorized and were so stated in my statement, and are in fact in the estimates which are now before the House.


LOCKHEED CONTRACT-POSSIBILITY OF OBTAINING INFORMATION ABOUT PAY-OFFS FROM UNITED STATES GOVERNMENT
John Edward Broadbent: On Monday of this week the minister indicated that the government was accepting Lockheed's response to the question about the possibility of bribes being offered by that company to anyone in Canada with regard to purchases of aircraft from that corporation. I should like now to ask the minister if the government thinks it appropriate to follow the examples of the governments of Holland and Japan, and specifically to request the United States government-not Lockheed-to provide the government of Canada with its confidential information concerning pay-off payments which have been made by the Lockheed Corporation to various government officials around the world.


James Armstrong Richardson: We have had conversations with senior officials in the United States government, and there has never been any indication whatsoever that there were any improper payments made to Canadians by Lockheed. In addition, in the Senate hearings which were held and in which the other revelations were made concerning Japan and other countries, there was no mention at any time of payments to Canada. There has been no evidence anywhere that there have been improper payments in this country, and a few months ago I read into the record a statement by the chairman of Lockheed confirming that in writing.

Oral Questions


LAW REFORM COMMISSION
Mr. Rene Matte (Champlain):: Mr. Speaker, I would like to put a question to the Minister of Justice.
I would like to ask him if he intends to appoint the new chairman of the Law Reform Commission in the near future. And, if so, who will be the appointee?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I appointed a new chairman some time ago, Mr. Justice Antonio Lamer of the Superior Court of Quebec, who is the present vice-chairman of the commission and will become chairman at the expiration of the present chairman's term of office.


ADMINISTRATION OF JUSTICE
René Matte: Mr. Speaker, I would like to put a supplementary question.
I would like to ask the minister-to protect the integrity of the Bench, whether he is aware that Justice Lamer has appeared in camera before Justice Real Brunet of the Commission of Inquiry on Organized Crime and whether he knows the contents of the evidence given by Justice Lamer?


Hon.   Ron. Basford@Minister of Justice: I am not
aware of the giving of the evidence, and obviously if it was in camera I would not be aware of it.


René Matte: Mr. Speaker, I would like to ask a final supplementary.
Can the minister explain how it is that he is not aware of such an important matter? If someone is appointed chairman and this person will be called upon to direct the new legislation relating to the law, can the minister tell the House whether he will investigate this matter to know the content of Justice Lamer's testimony to the commission of inquiry on organized crime?


Stanley Ronald Basford: The chairman designate was appointed vice-chairman some four years ago, and apparently the matter was examined at that time by my predecessor.


COMBINES
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question is for the Acting Minister of Consumer and

Corporate Affairs, whoever he may be today. Can the acting minister confirm for this House that, as a result of the diligent work of the hon. member for Central Nova and members of the caucus research staff, his department has seen fit to lay charges in the provincial court at Montreal relating to Combines Investigation Act violations committed by Thomcor Holdings Limited, the operator of duty free shops at both Dorval and Mirabel?


Hon. Bryce Mackasey (Acting Minister of Consumer and Corporate Affairs):: Mr. Speaker, the Acting Minister of Consumer and Corporate Affairs is the same person today as yesterday, will be the same gentleman tomorrow, and will be until someone is appointed on a permanent basis.


Some hon. Members:: Oh, oh!


An hon. Member:: Are you tired of the Post Office?


Bryce Stuart Mackasey: In the meantime, he has inherited a very capable parliamentary secretary who can answer these questions.


Mr. Art Lee (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, in answer to the hon. member's question, I think he well knows that it is not the policy of the department to comment on whether investigations are being undertaken by the director of the anti-combines branch.


Some hon. Members:: Charges.


An hon. Member:: What are you hiding?


Ramon John Hnatyshyn: Mr. Speaker, for the information of both the acting minister and the parliamentary secretary, there was in fact such a charge laid in the provincial court on March 17. I give that information to those gentlemen gratuitously.


ROYAL CANADIAN MOUNTED POLICE
Ramon John Hnatyshyn: Mr. Speaker, my supplementary question is for the Solicitor General. Now that the Department of Consumer and Corporate Affairs has led the way, so to speak, when it comes to investigating and then acting on information placed before it by the hon. member for Central Nova, I wonder if the minister can tell us when we are likely to see the results of the work of his department?


Hon. Warren Allmand (Solicitor General):: Mr. Speaker, as I have mentioned many times before, the RCMP were investigating this matter long before the hon. member for Central Nova raised it in this House.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


William Warren Allmand: Almost one year before, Mr. Speaker.


An hon. Member:: Come off it.


William Warren Allmand: The investigation is continuing, and when there is enough evidence we will present it to the attorney general of Quebec.


RESEARCH
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Public Works. Did the minister meet yesterday with members of the Canadian medical research community and if so, what was the nature of their representations and the minister's response to them?


Hon. C. M. Drury (Minister of Public Works):: Mr. Speaker, yesterday I was in Kingston at a funeral and did not meet with the members.


William Heward Grafftey: Mr. Speaker, maybe the Minister of National Health and Welfare-because of the noise from the other side I did not hear the reply of the hon. Minister for Public Works.


Mr. Speaker:: The reply of the hon. minister was that he was at a funeral in Kingston yesterday and did not attend any such meeting.


William Heward Grafftey: Mr. Speaker, my question is for the Minister of National Health and Welfare or the President of the Treasury Board. Did either minister meet yesterday or this week with members of the Canadian medical research community and, if so, what was the nature of the representations and the minister's response to them?


Hon. Jean Chretien (President of the Treasury Board):: Mr. Speaker, I met these persons yesterday. We discussed the situation and I informed them that I agree with the opposition party in trying to restrain government expenditures.


SUGGESTED RECONSIDERATION OF FUNDING OF MEDICAL RESEARCH
William Heward Grafftey: A final supplementary, Mr. Speaker. Maybe the government should change its priorities in this regard.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


William Heward Grafftey: Because the quality of medical research in Canada directly affects the costs and quality of medical and health care services, and because as a result of current government funding policies many research scientists are ready to leave this country and many projects have been cancelled, will the hon. Minister reconsider government
Oral Questions
funding policy and give the Canadian research community new and deserved hope?


Joseph Jacques Jean Chrétien: Mr. Speaker, we had granted a very substantial increase to the Medical Research Council the previous year. Unfortunately, in view of the government restraint policies, we have not been able to do the same this year. However, the doctors who made representations to me yesterday did not describe the situation as being as bad as the hon. member is doing today in the House.


ANTI-INFLATION BOARD BUDGET OF ADMINISTRATOR-EXCESS ALLOWED TO LAPSE
Mr. John Roberts (St. Paul's):: Mr. Speaker, my question is for the President of the Treasury Board. In view of the statement by the administrator of the Anti-Inflation Board that he requires no more than $100,000 to meet his budgetary commitment to the end of March and in view of the impossibility of procedurally amending the recommendations of the House of Commons for a sum much larger than that, will the minister assure the House that the sum in excess of $100,000 will be impounded, allowed to lapse and not spent?


Joseph Jacques Jean Chrétien: Mr. Speaker, I can assure the hon. member that the money which has been or will be voted will not be allowed to be spent and will be turned over to the government's Consolidated Revenue Fund, as is the case with every budget. In any given fiscal year, we tell the House that about 2 per cent of the credits have not been spent at the end of the year and are turned over to the Consolidated Revenue Fund; this principle will hold true for the administrator and for other departments.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General-if he still is Postmaster General. It arises from the 400 per cent increase in postal rates imposed on January 1 on Canadian periodicals mailed to points outside Canada, an increase which violates the guidelines of the government's antiinflation program and which was imposed without prior consultation with Canadian publishers. Will the Postmaster General comment briefly on criticism contained in the brief submitted to him by the Canadian Periodical Publishers Association and the Canadian Community Newspaper Association and give assurance that there will be consultation with the industry before the government imposes increases in domestic postal rates on Canadian publications?

March 24, 1976
Oral Questions


Bryce Stuart Mackasey: Mr. Speaker, the hon. gentleman is making statements which are not factually correct. As far back as in 1971, in order to protect the Canadian industry, we prevailed upon the United States government to raise their postal rates for publications coming from the United States to Canada. We did this to protect the Canadian industry and, in response, we had an obligation to raise the rates in this country. I have on file correspondence from both associations to which the hon. member alluded, dating as far back as 1974, plus the notification in October, 1975, that the rates were to go up. I suggest, when they go to the Anti-Inflation Board to check the new rates, they should also submit to that board their new advertising rates which went up on January 1 of this year.


SUGGESTED REDUCTION OF RATE INCREASES ON PUBLICATIONS GOING TO UNITED STATES
Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. Since the Postmaster General referred to 1971, a time known as the bad old days in the Post Office service-I recall the Prime Minister saying in those days that everybody knows the postal service is lousy-would he, in view of the decision of the associations I mentioned to refer the recent increases to the Anti-Inflation Board for adjudication, consider rolling back increases already imposed, so that they will meet the government's anti-inflation guidelines?


Bryce Stuart Mackasey: Mr. Speaker, I am surprised that the hon. gentleman questioned the service of 1971. I said that in 1971 we made representation in order to protect the Canadian publishing industry. Obviously, he feels we should not have done that. By asking the United States to raise postal rates, since for every 100 publications coming into Canada from the United States one Canadian publication only goes to the United States, we protected in a tangible way the Canadian publishing industry against the influx of United States periodicals. We did that, as I say, by raising domestic rates in the United States. I thought the hon. gentleman would be pleased about that. The associations are perfectly free to take the new postal rates to the Anti-Inflation Board, just as I am free to take to the Anti-Inflation Board their new advertising rates which went into effect on January 1 and which also exceed certain guidelines.


ROYAL CANADIAN MOUNTED POLICE
Otto John Jelinek: Mr. Speaker, my question is for the Solicitor General. Is the minister aware that a great number of personnel at the Soviet embassy in Ottawa, listed falsely as part of the Soviet Union's diplomatic corps, are actually Soviet spies and members of the KGB? If so, what steps, if any, is the minister taking to expel these individuals?


William Warren Allmand: Mr. Speaker, the RCMP are aware that certain members of the Soviet Union embassy staff, in Ottawa, are with the KGB. They have known it for some time. I cannot say more about what they are doing. That would be counter-productive.


Mr. Paproski:: But you are doing nothing.


EXTERNAL AFFAIRS
Otto John Jelinek: Mr. Speaker, my supplementary question is directed to the Secretary of State for External Affairs. Is it government policy to allow known KGB spies to be active under the noses of the government? Further, as it was the minister's position, in the answer to my leader's order paper question No. 3,336, that the government has no information that any accredited diplomat in Canada has been expelled from another country, and as Major Vladimir Vassiliev, presently serving-


Mr. Speaker:: Order, please. The hon. member put a clear question to the Secretary of State for External Affairs. Perhaps he ought to answer that clear question.


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, in reply to the clear question, if the activities of any members of the embassy staff are inconsistent with their diplomatic status, they would be asked to leave the country.


Mr. Woolliams:: Well, ask them to leave.


INDIAN AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. As salaries for 200 Saskatchewan Indian guidance counsellors, language teachers and associate teachers in Saskatchewan have been frozen for three years, in some cases at levels below the minimum wage, will the minister amend the guidelines controlling those salaries, to permit those workers to get cost of living increases retroactive to 1972-73?


Hon. Judd Buchanan (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I am not sure if this group was included in the recent negotiations we conducted with teachers and allied groups. I understand an increase was negotiated which is acceptable and going before the Anti-Inflation Board.


Lorne Edmund Nystrom: A supplementary question, Mr. Speaker. According to what members of the group said yesterday, when I met them, what the minister suggested does not appear to be the case. Will the minister look into the
March 24, 1976

matter? How can he justify guidelines which allow salaries in programs administered by his department, both provincially and federally, to be below the minimum wage? How can he justify such guidelines?


J. Judd Buchanan: Mr. Speaker, I do not understand that that is the case. I do not think the hon. member is correct. The settlement negotiated was in excess of the guidelines. That is why it has been referred to the Anti-Inflation Board.


HOUSING
Mr. Jacques Olivier (Longueuil):: Mr. Speaker, may I direct a question to the Minister of State for Urban Affairs about the Housing Action Program?
Considering that under the provisions of Quebec chapter 15, municipalities are not allowed to negotiate directly with the government of Canada or its organizations, considering that this delay of the Quebec government in finalizing an agreement with the government of Canada deprives Quebec municipalities of important amounts in capital and interest and in view of the fact that by February 29 the city of Longueuil had already qualified for $814,000, could the minister report progress of the negotiations with the provincial government and tell us whether he thinks an agreement will be reached very soon with the Quebec government?


Hon. Barney Danson (Minister of State for Urban Affairs):: Mr. Speaker, there is to be an exchange of letters. It is not covered in a formal agreement. There is an understanding between Dr. Goldbloom in Quebec and our regional director in Montreal, Mr. Guilbault, that all building permits which fall within the criteria passed by this House since November 1, 1975, I believe, will be honoured. The applications will pass through the Quebec Housing Corporation. The funds will be paid directly to the municipality by CMHC, retroactive to November 1, 1975.


AIR TRANSPORT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of Transport. In a release of February 25 to do with bilingual air traffic services the minister stated that allegations of problems concerning bilingual air communications were without foundation and that not one alleged incident had been validated. We now find that The Canadian Air Line Pilots Association has submitted evidence of 20 incidents of close calls in Quebec to the director general of Civil Aeronautics. Were those incidents reported to the minister?
Oral Questions


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I have not yet received a report on them. The officials would, in the ordinary course, determine whether there was any foundation to them, as in the past such reports have proved to be without foundation.


A. Daniel McKenzie: A supplementary question, Mr. Speaker. May I ask the minister this: Why was not the report of these close calls from CALPA acknowledged? Will the minister make the details of these incidents public and meet personally with CALPA officials, to clear up the matter?


Otto Emil Lang: Mr. Speaker, there is not much point in acknowledging something like this until one has checked, to see whether there is substance to the allegations.


AGRICULTURE
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is the first ever to a Minister of Agriculture. I hope he will be kind to this city fellow. Since the Minister of Transport has told me that the subsidies on flour and grain movements through east coast ports will go shortly, and since the Minister of Agriculture replied very kindly to the hon. member for Vegreville that studies are underway into this sensitive matter, may I ask which represents government policy, ruination by Transport or rumination by Agriculture?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, that all depends on what my studies show.


TRANSPORT
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, two more fishermen were lost at sea the night before last in Queen-Charlotte Sound. I wish to ask the Minister of Transport whether he was able to ensure that the recommendations of last year's report on life and fishing boat losses on the west coast were implemented before the herring fleet set out to sea this season.


Otto Emil Lang: Mr. Speaker, a number of steps were taken to try to minimize the danger. Some further regulations have been put forward for discussion. It was our intention to implement them, requiring fairly major changes in the nature of construction and other safety matters relating to vessels. There was general concern that any very abrupt implementation of those regulations would cost fishermen the use of their vessels completely for a period of time. Therefore, those

March 24, 1976
Oral Questions
discussions as to how we can best bring about those standards are still going on.


Donald W. Munro: Mr. Speaker, since the failure to implement the regulations has cost lives and not just ships, will the Minister of Justice inform the House about the correspondence he has had with the British Columbia authorities in relations to this report and, in particular, to the conflict between federal and provincial jurisdication over the fishing fleet as those conflicting jurisdictions affect provincial regulations relating to workmen's compensation.


Otto Emil Lang: Mr. Speaker, that, of course, is another question which concerns the fishermen. They are concerned if they are faced with two sets of regulations and each one imposing different standards upon them. As a result, discussions have commenced with the appropriate provincial minister. It will be our endeavour to seek to coordinate the regulations so there is no duplication, quite apart from the jurisdictional issue.


FISHERIES
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is to the Minister of State (Fisheries). As a result of the loss of the Cape Friels patrol vessel, which was so important with regard to patrolling the fisheries zones and air-sea rescue surveillance, has the minister been in touch with his colleagues in the Department of Transport to ensure that the Cape Friels will be replaced as soon as possible? What action is being taken in this regard?


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, there is a vessel replacing the Cape Friels at the moment. We are looking into a permanent replacement for the vessel which was lost. While I am on my feet, I should like to pay homage to the men of the armed forces. It was their plane which found the survivors and which, at their own risk, stayed very close to the lifeboat until the survivors were safe.


Some hon. Members:: Hear, hear!


PROPOSED EXPANSION OF LIFEBOAT STATIONS- GOVERNMENT POSITION
Jack Marshall: Mr. Speaker, I acknowledge the fact that the air-sea rescue tracker plane in St. John's was the first to assist in the incident. Will the minister indicate what plans there are with regard to expanding air-sea rescue surveillance, particularly with regard to lifeboat vessels and stations which apparently do not have the capability to apprehend or intercede?


Roméo LeBlanc: Mr. Speaker, the different departments involved-Transport, Defence, Environment in terms of atmospheric ser-
(Mr. Lang.]
vice, Fisheries and others-are working together. We are pulling together the coordination that is required. It is really a question of getting people in the regional offices to pull together and we are working on this question now.


TRANSPORT
Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, I have a question for the Minister of Transport. In the Vancouver Province of March 18 an article stated the Vancouver registry office for ships was to remain open but the Prince Rupert and other customs offices were expected to be closed for ship registration. Can the minister advise the House whether there has been any change of policy under Bill C-61 as was discussed in committee where custom offices such as Port Alberni and Prince Rupert would continue registering ships?


Otto Emil Lang: No, Mr. Speaker, there has been no such change in policy. There may have been a misunderstanding because certain offices will be designated as deputy-registry offices along with the registry office at the central registry. It will still be the intention to receive documents and offer such services at a variety of customs offices.


HARBOURS
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the Minister of Public Works.
As an agency has been delegated to negotiate with the Quebec government the abandonment by the federal government of wharves located along the St. Lawrence River, can the minister tell the House whether those negotiations are progressing or whether they are at a standstill? If there is no progress, can he tell the House when he will finally decide to spend the required public moneys on the maintenance of those wharves which, all in all, are still useful to the public?


Charles Mills (Bud) Drury: Mr. Speaker, I must tell the hon. member that his question should be addressed to my colleague the Minister of Transport. The wharves in question are used for passenger ferries, and they fall under the jurisdiction of the Minister of Transport.


Joseph Adrien Henri Lambert: Mr. Speaker, on a
supplementary.
As the Minister of Transport is a colleague of his, may I ask him to get in touch with the Minister of Transport so that an agreement can be signed as soon as possible with the province of Quebec, so that those wharves can be kept
March 24, 1976

in good shape and that the Quebec government, if it takes over the wharves, can accept that responsibility at the earliest possible date, and to avoid their becoming useless within the next few months?


Charles Mills (Bud) Drury: Mr. Speaker, I am in favour of an agreement and I shall take up the matter with my colleague at the first opportunity.


NATIONAL DEFENCE
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is for the Minister of National Defence and has to do with the reported cancellation of the Computing Devices contract for the Samson communications project. Can the minister confirm whether or not that cancellation has taken place?


James Armstrong Richardson: Mr. Speaker, I can confirm that Computing Devices were not able to complete their work under the contract. The contract is handled by the Department of Supply and Services and I do not know if in fact it has been cancelled.


Walter David Baker: A supplementary question, Mr. Speaker. In view of the interest of the minister in obtaining Canadian input into this kind of defence project, and in view of the statement made yesterday by the president of the company to the effect that Computing Devices had offered to start delivering the terminals in May, 1976 and that Supply and Services had refused to accept that offer, before any action is taken by the government or before the government permits any action to be taken can I have an undertaking from the Minister of National Defence that he will intercede with his colleague the Minister of Supply and Services to see whether there is any way in which the contract can be restored? Because it is important, Mr. Speaker, not only to the people employed at Computing Devices, but also to the whole commitment of the Canadian electronics industry to supply our own Canadian forces.


James Armstrong Richardson: Mr. Speaker, we have, of course, wanted to see the maximum amount of Canadian content in the Samson project. I think it is true to say that the government has been very long suffering with this particular contractor. We have been delayed many months but we have made every possible attempt to have the contract completed by them. However, at some point we are going to have to go to another contractor to supply the essential parts for the Samson project.
Oral Questions EXTERNAL AFFAIRS


CAMBODIA-INQUIRY AS TO CANADIAN PROTEST AGAINST VIOLATIONS OF HUMAN RIGHTS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is for the Secretary of State for External Affairs. In regard to the previous questions put to the minister concerning the cruel tragedies and tortures that are taking place in Cambodia, documented in the Toronto Star of March 10 in an on-the-spot report by Jack Cahal, can the minister add to what he said before and tell the House in what way Canada is protesting this massive violation of human rights, and specifically whether Canada has yet launched a protest with the United Nations commission on human rights?


Allan Joseph MacEachen: Mr. Speaker, the hon. member may be aware, as I am, that it is very difficult to get information out of Cambodia at the present time. There is an almost total lack of information on the situation in Cambodia at the present time, but we are following up the question of violations with the UN commission on human rights.


FEDERAL-PROVINCIAL RELATIONS REQUEST FOR REPORT ON NEGOTIATIONS CONCERNING FOREIGN OWNERSHIP OF LAND
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, may I direct my question to the Prime Minister. It has to do with foreign ownership of land in Canada. Can the Prime Minister advise the House what progress is being made with the provinces with respect to the establishment of measures to deal with the ownership of land by foreigners in Canada? I realize the government has introduced an enabling amendment to the Canadian Citizenship Act which will assist in this regard, but I understand that there are other matters that require resolution, such as the application of the Foreign Investment Review Act, particularly as it applies to agricultural land. Can the Prime Minister bring the House up to date on negotiations in this regard with the provinces?


Pierre Elliott Trudeau: Mr. Speaker, I would have to check whether there has been any new development since I last reported to the House on this. There was a study by the federal and provincial governments on this very subject and certain conclusions were reached which I believe were tabled in the House. I believe I tabled at the time the letter that I wrote to the various premiers getting their reaction to the report.
The amendment to the Citizenship Act is one of the recommendations that is within federal jurisdiction and on which we can act. There have been objections to the federal authority acting in that area under the Foreign Investment Review Agency. The position that I have taken is that this agency was set up by federal law and that it will continue to operate.
I will see whether there is some occasion on which to table further correspondence. I believe I have brought the House up to date on the matter as it stands. The provinces

March 24, 1976
Oral Questions
have taken the view, which we understand, that much of this is within their jurisdiction. The Citizenship Act amendment was an exception and we are prepared to amend that act in co-operation. I think the matter rests where it is now, and the provinces and the federal government will each have to act within their own jurisdiction to make sure that ownership and zoning of land in Canada is properly dealt with.


NORTHERN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I have a question for the Minister of Indian Affairs and Northern Development in connection with his promise of jobs for northerners on the proposed Mackenzie valley pipeline. In view of the fact that a master labour contract now exists between almost all pipeline contractors and four trade unions giving the unions control of hiring for pipeline construction, and in view of the fact that these unions will allocate jobs on the basis of seniority to unemployed members, including 2,000 members fresh from the Syncrude project, what steps will the minister take to ensure that northerners get the jobs he and the industry have promised us?


J. Judd Buchanan: First of all, Mr. Speaker, a conclusion has not been reached vis-a-vis the pipeline. Secondly, in the granting of the right of way application which will come to me this will be one of the conditions upon which I intend to insist, that it guarantees employment for native people.


Walter (Wally) Firth: A supplementary question, Mr. Speaker. Is the minister aware that similar government promises were changed by union action on the Alyeska pipeline in Alaska?


J. Judd Buchanan: Mr. Speaker, I was not aware of that but I will happy to do my best to see that the same does not happen here.


EXTERNAL AFFAIRS
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Secretary of State for External Affairs and relates to the call yesterday by Ambassador Thomas Enders with respect to new forms of co-operation between Canada and the United States. In view of the considerable disquiet raised by his predecessor Ambassador Porter in December and the comments in January of the Senate committee studying Canada-U.S. relations regarding the need for the re-establishment of the Canada-U.S. interministerial committee, what action is being taken by our

government to head off being in a reactive position with respect to new U.S. initiatives?


Allan Joseph MacEachen: Mr. Speaker, I read with interest the speech made yesterday by the United States ambassador to the Canadian Club, and I must say that his approach to the management of Canadian-U.S. affairs is commendable and obviously will be constructive in the months and years ahead.
With respect to the suggestion of the hon. member that the interministerial committee be revived, it is not one of the forms of co-operation that we presently find useful in view of the very frequent bilateral conversations that take place between United States and Canadian ministers and the difficulty of bringing together all the players who are required for a successful interministerial meeting.


ADMINISTRATION OF JUSTICE
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is directed to the Minister of Public Works. On March 18 the minister admitted that he "consulted a number of other people" on the question of confrontation which he raised with Mr. Justice Hugessen. Would the minister tell the House whether any of the "number of other people", with the exception, of course, of the former minister of consumer and corporate affairs, are members of the cabinet?


Charles Mills (Bud) Drury: Mr. Speaker, I have no very clear recollection but I thought I probably did mention this to some of my other colleagues in cabinet.


John Allen Fraser: A supplementary question, Mr. Speaker. In view of that I would ask the minister to examine his memory carefully and to tell the House with how many and which members of the cabinet this matter was discussed. I do not have to remind the hon. minister that without an answer in this regard he leaves a very grave suspicion of conspiracy to commit an impropriety, namely, to touch a judge.


Charles Mills (Bud) Drury: Mr. Speaker, I do not think the hon. member wants to be threatening. I have replied that I have no particular recollection of discussion concerning an event which I myself felt to be a baseless rumour. I will try to see if I can get some precise recollection.


John Allen Fraser: Mr. Speaker, I would remind the hon. minister that the baseless rumour was the ganging up, and not the confrontation. I would invite the hon. minister to clarify his memory and advise this House just what went on.


Douglas Roche: I have had occasion before, Sir, to draw to the attention of the Chair the lack of clarity about who can ask supplementary questions and who cannot. I wish

respectfully to draw to the attention of the Chair today the continuing lack of clarity, for again today I was denied the opportunity of asking a very important supplementary question of the Secretary of State for External Affairs. I raised in my first question the matter of what Canada would do to protest the terrible tragedies that have taken place in Cambodia with regard to the violation of human rights. That, Sir, was the preparation for the question I then intended to ask the Secretary of State for External Affairs concerning what Canada would do about the long awaited ratification on the part of Canada of the UN declaration on human rights.
Some of us will be representing our country at the forthcoming meeting of the Inter-Parliamentary Union where the question of human rights is going to be foremost on the agenda. We are going to be asked at that time what Canada is doing in respect of ratifying the UN declaration on human rights which was approved in principle between Ottawa and the provinces last December 11. I believe I should have been given the opportunity of following up my question to the minister in this regard, especially since some of my colleagues did have the opportunity of asking supplementaries following my denial. I only want to respectfully-


Mr. Speaker:: Order, please. Surely the hon. member does not seriously contend that, in order to prepare himself for participation in an international conference on behalf of our country, the only avenue of information for a proper preparation for that event is the question period.
There are members I can name here who for two days now have been attempting to get the floor. The Chair has always found this difficulty. Indeed, there are seven or eight members who tried to get the floor yesterday and still could not get the floor again today. Surely there must be a judgment left to the Chair when a question relates to a very general subject, such as the one put by the hon. member for Edmonton-Strathcona, and in turn by the hon. member for Egmont, anticipating his point of order, in which the Chair must exercise some discretion, not related necessarily to the importance of the question put by the hon. member, but really to the importance of the questions that fail to get put each time a question of that sort is followed by one or two supplementaries. This is a balancing act that the Chair has to do every day, and it is such that really gives me no pleasure.


David Samuel Horne MacDonald: Mr. Speaker, I will not repeat some of the arguments that were put by the hon. member for Edmonton-Strathcona in respect of the same question, but I do think you put members in a somewhat difficult position, Sir, in terms of the question period. I am one of the members you referred to who stood all day yesterday and today in order to catch Your Honour's eye. It is somewhat difficult for this hon. member, who has been in the House for a few years, to determine the basis on which the decision is taken.
If indeed there is to be a rule in respect of the asking of second and third supplementaries I think it should be clear to all hon. members in this House in order to avoid the very situation which has arisen, on this and on previous days, of a number of members not being recognized and getting a suitable opportunity to do so. Otherwise it may
Petitions
fall to some members to consider that Your Honour is making decisions which are really not based on anything other than a very subjective judgment.


Mr. Speaker:: I welcome that intervention because that, indeed, is in fact the case. If there is a way the hon. member or other hon. members could suggest that would cause it to be otherwise, the Chair would welcome such comments.



ROUTINE PROCEEDINGS


Mr. Speaker:: Order, please. It is my duty to inform the House that an objection signed by the hon. members for Bellechasse (Mr. Lambert), Roberval (Mr. Gauthier), Rimouski (Mr. Allard), Champlain (Mr. Matte), Kamou-raska (Mr. Dionne), Shefford (Mr. Rondeau), Manicouagan (Mr. Blouin), Mercier (Mr. Boulanger), Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) and Joliette (Mr. LaSalle), has been filed with me pursuant to Section 20 of the Electoral Boundaries Readjustment Act, Chapter E-2, R.S.C. 1970, to the report of the Electoral Boundaries Commission for the province of Quebec.
It is also my duty to inform the House that an objection signed by the hon. members for Matane (Mr. De Bane), Papineau (Mr. Ouellet), Argenteuil-Deux-Montagnes (Mr. Fox), Charlevoix (Mr. Lapointe), Lafontaine (Mr. Lachance), Drummond (Mr. Pinard), Maisonneuve-Rosemont (Mr. Joyal), Compton (Mr. Tessier), Saint-Jean (Mr. Smith) and Richelieu (Mr. Cote), has been filed with me pursuant to Section 20 of the Electoral Boundaries Readjustment Act, Chapter E-2, r.S.C., 1970, to the report of the Electoral Boundaries Commission for the province of Quebec.


SOCIAL SECURITY
Mr. Speaker:: I have the honour to inform the House that the Clerk of the House has laid upon the table the twenty-sixth report of the Clerk of Petitions, stating that he has examined the petition presented by the hon. member for Winnipeg North Centre (Mr. Knowles) and finds that it meets the requirements of the Standing Orders as to form.
Supply



March 24, 1976


[Stage Direction]
On the Order: Government notice of motion:
March 22, 1976-The President of the Privy Council:
That, notwithstanding any Standing Order, on the penultimate allotted day in the present supply period, at fifteen minutes before the ordinary time of adjournment, proceedings then in progress shall be interrupted and every question as may be required by section (9) of Standing Order 58 shall be put forthwith successively, without amendment or debate:
That, immediately thereafter, any other question or questions as may be necessary to dispose of any item of supplementary estimates, the restoration or reinstatement of any item in the supplementary estimates, or any opposed item in the supplementary estimates, and for the passage of any bill based thereon shall be put forthwith successively, without amendment or debate;
That, immediately thereafter, the questions on a motion to grant interim supply and for first reading of a bill based thereon shall be put forthwith successively, without amendment or debate; and
That, on the final allotted day in the present supply period, the business taken up shall be the second reading, consideration in committee of the whole, report stage and third reading of the bill based upon the motion for interim supply and that, at fifteen minutes before the ordinary hour of adjournment on the said day, proceedings then in progress shall be interrupted and every question necessary for the disposal of the said bill shall be put forthwith successively, without amendment or debate;
Provided that, on both the aforementioned days, the House shall not adjourn until all business referred to in this Order is disposed of.
Hon. Mitchell Sharp (President of the Privy Council):: Mr. Speaker, since this motion for a special order is couched in rather arcane language, perhaps the House would appreciate a brief explanation in what might be called lay terms. This special order has, of course, been discussed among the House leaders of the various parties, who I understand have recommended its support by the members of their various groups.
The purpose of this motion is to facilitate debate on the bill authorising interim supply for the first quarter of fiscal 1976-77. Interim supply is the last item of the business of supply taken up during the winter portion of allotted days and, consequently, it has not in recent years been reached in time for debate. Under this proposed special order a full day's debate would be provided.
Under this proposed special order the business for the next two days will be as follows. Today we will debate the opposition motion in the name of the hon. member for York-Simcoe (Mr. Stevens). At the conclusion of that debate we will take up the motion relating to Supplementary Estimates (B) and will then proceed to pass at all stages the required bill. The motion for concurrence in interim supply will then be reached and the required bill will be introduced. The proceedings relating to estimates and interim supply must be taken up not later than 5.45 this afternoon. When orders of the day are reached tomorrow, the interim supply bill will be taken up at second reading. After receiving second reading the bill will be considered in committee of the whole. The bill must be disposed of not later than 9.45 tomorrow evening.
In our continuing efforts to iron out procedure relating to supply there have been suggestions from several quarters that it would be helpful if provision were made for

debate on supply bills. Our experience tomorrow will help us assess this proposal.


Walter David Baker: Mr. Speaker, I want to say that I welcome this proposal as a niche in the heretofore closed door. I hope the door will be flung open much wider to let the rays of the sun shine on a proper and real examination of government expenditure by the representatives of the people. I am very pleased to have participated in the discussions with the House leader and to say that the measure has our support as a beginning.


Stanley Howard Knowles: Mr. Speaker, it is correct, as the government House leader pointed out, that the terms of this motion have been discussed among the House leaders and that we have recommended to the members of our parties that it be supported.
Under normal conditions if members of the opposition were to put down motions for debate for both today and tomorrow we would end up at 9.45 tomorrow night having to put through two bills, the supplementary estimates and interim supply, without debate, in an atmosphere that sometimes is not exactly pleasant. Under the terms of this motion, as we understand it, we will pass the supplementary estimates bill tonight without any debate, and that may not be exactly pleasant, but we will have all day tomorrow for second reading, consideration in committee of the whole and third reading of the interim supply bill. We hope, as some members have said, that tomorrows' debate on the interim supply bill may result in a desire for more such days.


Mr. Speaker:: Order, please. The motion is in the name of the President of the Privy Council (Mr. Sharp) seconded by the Minister of Finance (Mr. Macdonald).


Mitchell William Sharp: That, notwithstanding any Standing Order, on the penultimate allotted day in the present supply period, at fifteen minutes before the ordinary time of adjournment, proceedings then in progress shall be interrupted and every question as may be required by section (9) of Standing Order 58 shall be put forthwith successively, without amendment or debate;
That, immediately thereafter, any other question or questions as may be necessary to dispose of any item of supplementary estimates, the restoration or reinstatement of any item in the supplementary estimates, or any opposed item in the supplementary estimates, and for the passage of any bill based thereon shall be put forthwith successively, without amendment or debate;
That, immediately thereafter, the questions on a motion to grant interim supply and for first reading of a bill based thereon shall be put forthwith successively, without amendment or debate; and
That, on the final allotted day in the present supply period, the business taken up shall be the second reading, consideration in committee of the whole, report stage and third reading of the bill based upon the motion for interim supply and that, at fifteen minutes before the ordinary hour of adjournment on the said day, proceedings then in progress shall be interrupted and every question necessary for the disposal of the said bill shall be put forthwith successively, without amendment or debate;
Provided that, on both the aforementioned days, the House shall not adjourn until all business referred to in this Order is disposed of.


Mr. Speaker:: Is it the pleasure of the House to adopt the motion?
March 24, 1976


Some hon. Members:: Agreed. Motion agreed to.


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 followimg questions will be answered today: 3,946, 4,017 to 4,019 inclusive, 4,023 to 4,029 inclusive, 4,108, 4,587, 4,602, 4,604, 4,609 and 4,916.


Mr. Mazankowski: 1.	How many (a) Rural Development Officers, (b) Farm Management Consultants are employed by the Department of Agriculture to administer the Small Farm Development Programme and, in each case (i) where are they located (ii) how many are in each location?
2.	What are the specific duties of the (a) Rural Development Officers, (b) Farm Management Consultants and, in each case, to whom are they directly responsible?
3.	Are their activities monitored to ensure their duties are properly being conducted and fulfilled and, if so, in what manner?
4.	What is the aggregate amount spent on an annual basis to cover the costs of the (a) Rural Development Officers, (b) Farm Management Consultants?


Eugene Whelan: i.
(a) and (b)(i)	(a) (ii)	(b)(ii)
British Columbia			5
Alberta	6	10New Brunswick	-	1Prince Edward Island	-	52.	(a) Under the direction of the Provincial Regional Director, Alberta Department of Agriculture, participates in the planning of and guides and supports the implementation of Rural Development Service activities in the region by: participating in the preparation and co-ordination of overall plans for rural economic development at the regional level; guiding and supporting the activities of the Rural Development Counsellors within the region; providing counselling services to rural people directly and on referral or request from Rural Development Counsellors; conducting liaison activities with regional officials of government agencies and other organizations involved in the solution of rural development problems; performs other related duties, (b) Under the general supervision of the Regional Farm Management Specialist* studies, analyzes, and advises individual farmers requiring farm management consulting services on how to develop viable farms and thereby increase income opportunities and equity; provides a continuing follow-up consulting service for the progressive review and adjustment of the farm operation; provides management assistance to farmers on a wide
Order Paper Questions
range of business activities; and performs other related duties.
3.	Yes. In accordance with the Federal-Provincial agreements covering the Small Farm Development Program, functional supervision is provided by the Provincial Supervisor on the day to day activities of the employees. Monthly reports are submitted to the Department outlining activities and the number of farmers served.
4.	(a) $128,925. (b) $388,935.
*Farm Management Consultants are responsible in the respective Provinces, as follows:
British Columbia, Director of Extension, British Columbia Department of Agriculture.
Alberta, Regional Director, Extension Branch, Alberta Department of Agriculture.
New Brunswick, to the District Agriculturalist in the office in which they work.
Prince Edward Island, to the Agricultural Representative in the office in which they work.


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council which lists a grant in the amount of $6,600 to Georges Letourneau of Montreal "to investigate uses of the translation of human bio-electrical signals into musical sound" (a) what are human bio-electrical signals, (b) what were the conclusions of the investigation, (c) what are the names and addresses of all those (i) appearing on the application for the grant (ii) who recommended the grant to the Canada Council, (d) what are the reasons that the application for the grant was approved?


Miss Coline Campbell (Parliamentary Secretary to Secretary of State):: I am informed by the Canada Council as follows: (a) Human bio-electrical signals are electrical impulses of the brain which can be recorded by an enceph-alograph. (b) Conclusions are not yet available as the investigation is still under way. (c) (i) The only name appearing on the application form is that of Georges Letourneau. (ii) See Appendix I of the Council's 18th Annual Report for the names of members of the Regional Selection Committees for the Explorations Program. To protect the privacy of candidates and Committee members, the Council does not release their addresses, (d) The Selection Committee judged the application worthy of a grant after assessing the merit of the proposed project and the applicant's ability to carry it out, and taking into account all other applications entered in the competition.


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council which lists a grant in the amount of $2,760 to Jo-Anne Fraser, Kathleen Murch and Erna Van Daele of London "for a multi-media review on the theme of sexual stereotyping" (a) was the review made and, if so, on what date, (b) what are the reasons that the application for the grant was approved, (c) what are the names and addresses of all those who recommended the grant to the Canada Council?

March 24, 1976
Order Paper Questions


Coline M. Campbell: I am informed by the Canada Council as follows: (a) The review, entitled Straightjackets, was presented in the Talbot Theatre, London, Ontario, from April 15 to 19, 1975. (b) See 4,017 (d). (c) See 4,017 (c)(ii).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council which lists a grant in the amount of $5,000 to Kevin Gillis of Chester-ville "to study the role of the harmonica in the social culture of each region in Canada" (a) was the study made and, if so, on what date was it completed, (b) what are the names and addresses of all those who recommended the grant to the Canada Council, (c) what are the reasons that the application for the grant was approved?


Coline M. Campbell: I am informed by the Canada Council as follows: (a) This study has not yet been completed, (b) See 4,017 (c)(ii). (c) See 4,017 (d).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council which lists a grant in the amount of $48,160 to Jacques Henripin of the University of Montreal to study "fertility of families in Quebec" (a) was the study made and, if so, on what date did it report, (b) what was the purpose of the study, (c) for what reason was the grant awarded, (d) what are the names and addresses of all those who recommended such a grant to the Canada Council?


Coline M. Campbell: I am informed by the Canada Council as follows: (a) The study is still under way and will be completed in March 1977. (b) Purpose of the study is to analyse certain factors related to the drop in Quebec's birthrate, (c) and (d) The Council bases its decisions on the recommendations of assessors chosen for their expertise in the particular subject or research area and on the advice of the Advisory Academic Panel, whose role is to review the applications, taking into consideration the opinions of the assessors and the policies of the Council. The names of Panel members are listed on page 5 of the Council's 18th Annual Report. The addresses of members of the Advisory Panel and the names and private addresses of assessors are regarded as confidential.


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council showing a grant of $3,500 to Linda Diane Rubin of Vancouver to hold workshops "for the general public on expression through body movement" (a) were such workshops held, (b) what type of body movement was involved, (c) what are the names and addresses of all those who recommended the grant to the Canada Council, (d) what are the reasons that the application for the grant was approved?


Coline M. Campbell: I am informed by the Canada Council as follows: (a) The workshops were held on weekends between September and December, 1975. (b) Dance movements. (c) See 4,017 (c)(ii). (d) See 4,017 (d).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council which lists a grant in the amount of $10,233 to Stephen L. Endicott for a "biography of China missionary and political activist James G. Endicott" (a) is the Canada Council aware as to whether this is the same James G. Endicott that was at one time associated with the Labour Progressive Party (communist) and other left-wing causes, (b) is the Canada Council aware as to whether Stephen L. Endicott was at any time a member of the Labour Progressive Party (communist), (c) what are the reasons that the application for the grant was approved, (d) what are the names and addresses of all those who recommended the grant to the Canada Council?


Coline M. Campbell: I am informed by the Canada Council as follows: (a) Yes. (b) No. (c) and (d) See 4,023 (c) and (d).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council showing two grants totalling $10,000 to O Handmade Paper of Beaverton for "experimental work in the production of hand-made paper as a visual art form" (a) what are the names and addresses of all those (i) appearing on the application (ii) recommending the grant to the Canada Council, (b) what are the reasons that the application for the grant was approved?


Coline M. Campbell: I am informed by the Canada Council as follows: (a)(i) Andrew James Smith. To protect the privacy of grant recipients, the Council does not release their addresses, (ii) See 4,017 (c) (ii). (b) See 4,017 (d).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council showing a grant in the amount of $6,000 to John Musgrave of Edmonton "to collect, organize and interpret data on reported sightings of UFO's across Canada" (a) has this data been collected and has it appeared in printed form, (b) what are the reasons that the application for the grant was approved, (c) what are the names and addresses of all those who recommended the grant to the Canada Council?


Coline M. Campbell: I am informed by the Canada Council as follows: (a) The research is still under way. (b) See 4,017 (d). (c) See 4,017 (c)(ii).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council showing a grant in the amount of $5,000 to Ocean Life Systems Society of Victoria "for a film based on research and attempts of communication with whales" (a) has this film been made and, if so, on what date, (b) what are the names and addresses of all those (i) who recommended the grant to the Canada Council (ii) appearing on the application for the grant, (c) what are the reasons that the application for the grant was approved?


Coline M. Campbell: I am informed by the Canada Council
March 24, 1976

as follows: (a) Research is still under way. Because the initial submission was modified, the results will be set forth in a book instead of a film. (b)(i) See 4,017 (c)(ii). (ii) Bruce J. Bott, James A. O'Donnell, Christine Swierbut, Paul Mockler, Nick Orton, Peter Vatcher, Patricia Sower-by. To protect the privacy of the grant recipients, the Council does not release their addresses, (c) See 4,017 (d).
Order Paper Questions
as follows: (a) Writing of the book has not yet been completed, (b) See (a), (c) The author refers to her involvement with the Canadian Campaign for Nuclear Disarmament, the program for U.S. draft resisters arriving in Canada, the Committee Against the War in Vietnam, and Amnesty International, (d) See 4,017 (c)(ii). (e) See 4,017 (d).


Mr. Cossitt: With reference to the 1974-75 Annual Report of the Canada Council showing a grant of $5,300 to Goldie Josephy of Ottawa "to write a book on her experiences with the Canadian Peace Movement during the last fifteen years" (a) has the book been written, (b) has it been published and, if so, on what date, (c) what is a description of the Canadian Peace Movement as it was represented to the Canada Council, (d) what are the names and addresses of all those who recommended the grant to the Canada Council, (e) what are the reasons that the application for the grant was approved?


Coline M. Campbell: I am informed by the Canada Council
Name	Title
J. M. Shoemaker	Executive Director of
the Commission
G. R. Lefebvre	Secretary General to
the Commission
J. Baby	Director General
E. E. Boyd	Director General of
Administration
P. McDonald	Director General,
Broadcasting Programmes
D. Loftus	Director General,
Broadcasting Operations
C. C. Johnston	General Counsel to the
Commission


Mr. Matte: 1.	What are the (a) names, (b) jobs, (c) duties, (d) salaries of the Canadian Radio-Television Commission staff members?
2.	How many are (a) French speaking, (b) English speaking, (c) bilingual?


Mr. Jim Fleming (Parliamentary Secretary to Minister of Communications):: The Canadian Radio-Television Commission (CRTC) submits the following information:	1.
Duties
Within Salary Range of
Responsibility for the supervision	SX-3
of the operations, policy development and staff of the Commission Responsibility for the supervision	SX-2
of the licensing, the public hearing function of the Commission, the Chairman's Office and for the Administration of the proceedings of the Executive Committee and of the Commission.
Responsibility for developing,	SX-2
establishing and supervising a telecommunications bureau to assist the Commission in carrying out its new responsibilities for regulating telecommunications carriers under federal jurisdiction.
Responsibility for administrative	SX-1
matters in the Commission including corporate and resource planning, personnel, finance and program planning, management services, operational review and audit, administrative services and information services.
Responsibility for advising the	SX-1
Commission on station and network programming matters in television, cable television and AM and FM radio.
Responsibility for providing infor-	SX-1
mation, recommendations and advice to the Commission on policy, regulations and decisions which lead to strengthening and extending of the Canadian broadcasting system.
Responsibility for the provision of LA-3 legal advice to the Commission, for the development and enforcement of Commission regulations and for representing the Commission in all judicial proceedings.

March 24, 1976
Order Paper Questions


Mr. MacDonald (Egmont): 1.	For films designated as Canadian, is it permissible for production companies to employ workers and, in particular, actors without furnishing prior proof that there are no Canadians suitable for and capable of filling such positions?
2.	Have any negotiations been held with the responsible authorities in the United States with a view to permitting reciprocity of employment between the two countries for workers in the film industry and, if so (a) between whom, (b) on what dates, (c) what were the specific points raised by Canadian representatives, (d) with what results?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: 1. Such an arrangement would normally only apply to actors, except in the case of coproduction agreements.
2. No.


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


Mr. Marcel Roy (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: See reply to question No. 3,954 answered on March 2, 1976.


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


Marcel-Claude Roy: See reply to question No. 3,954 answered on March 2, 1976.


Mr. Herbert: Has an offer been received from Jamaica to sell sugar to Canada and, if so (a) from whom was it received, (b) what was the response?


Marcel-Claude Roy: Industry, Trade and Commerce has not received any communication from Jamaica offering to sell sugar to Canada. Of course, Canadian sugar refiners consider Jamaica as a source from which raw sugar can be purchased for refining in Canada. In 1974, imports of raw sugar from Jamaica were valued at $4.5 million. There were no imports of raw sugar from Jamaica in 1975.
March 24, 1976


Mr. Mazankowski: How much has the government spent for the production of a LRC train system?


Marcel-Claude Roy: In so far as Industry, Trade and Commerce is concerned: The Government has contributed approximately $2.75 million toward the design, construction and testing of the LRC train system.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if question No. 3,685 could be made an order for return, this return would be tabled immediately.


Mr. Jones: 1.	How much has been loaned by CIDA to (a) francophone countries, (b) colonies of France in each year 1971 to 1975 (i) for what purpose (ii) at what interest rate (iii) to which countries?
2.	How much has been granted by CIDA to (a) francophone countries, (b) colonies of France in each year 1971 to 1975 (i) for what purpose (ii) to which countries?
3.	What was the basis and criterion followed for each loan and grant in Parts 1 and 2?
4.	How much money has been loaned by CIDA to (a) anglophone countries, (b) countries which are not anglophone or francophone in each year 1971 to 1975 (i) for what purpose (ii) at what interest rate (iii) to which countries?
5.	How much money has been granted by CIDA to (a) anglophone countries, (b) countries which are not anglophone or francophone in each year 1971 to 1975 (i) for what purpose (ii) to which countries?
6.	(a) Is the President of CIDA anglophone or francophone, (b) what is his (i) ethnic background (ii) mother tongue?
7.	What is the (a) ethnic background, (b) mother tongue, (c) salary for each person in the executive and management positions of CIDA?
Return tabled.


Mr. Blais:: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the notice of motion for the production of papers No. 96 is acceptable to the government.
Economic Policy


Mr. Speaker:: Is it the pleasure of the House that notice of motion No. 96 be deemed to have been adopted?


Some hon. Members:: Agreed.


[Stage Direction]
Motion No. 96-Mr. Knowles (Winnipeg North Centre):
That an Order of the House do issue for a copy of the resignation from the Cabinet tendered on or about March 12, 1976, by the Minister of Public Works, and a copy of the reply of the Prime Minister thereto.
Motion agreed to.
Jean-Jacques Blais: Mr. Speaker, would you be so kind as to call notice of motion for the production of papers No. 79?


[Stage Direction]
Motion No. 79-Mr. Marshall:
That an humble Address be presented to His Excellency praying that he will cause to be laid before this House copies of all minutes of meetings, letters, telegrams between the government and the Province of Newfoundland as it relates to federal cost sharing on the current construction programme for marine service centres.
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, almost every activity the Department of the Environment and the Department of Regional Economic Expansion are involved in includes some sort of discussion with one or more of the provinces during the course of development or implementation of policies and programs. The release of documents exchanged during the preliminary discussion phase related to policies and programs would very probably be detrimental to the future conduct of federal-provincial relations. I would therefore request that the hon. member withdraw his motion.


Jack Marshall: Transfer for debate.


Mr. Speaker:: Transferred for debate.



GOVERNMENT ORDERS


Mr. Sinclair Stevens (York-Simcoe) moved:: That this House deplores the contradictory economic policies of the present administration, which have failed to enhance the growth and stability of Canadian employment and industrial production, which have not encouraged investment in industry and which have permitted a serious decline in our competitive position in international markets.
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Economic Policy
He said: Mr. Speaker, there is a growing lack of confidence in the country. Under the present administration confrontation rather than co-operation has become the custom. Labour is uncertain; it is bewildered. Why else would some 15,000 union people come to Ottawa in protest, the largest demonstration in history? Businessmen have tried to maintain hope, but they hesitate to make the necessary capital commitments needed to ensure prosperity in the country.
Consumers have learned to spend today, and even to borrow in order to spend today as they have little confidence in what tomorrow may bring. Can such consumers, such businessmen and such labour be blamed for this attitude when in a very basic sense the administration has done little to defend our currency?
During the last eight years the value of the dollar as measured by the Consumer Price Index has fallen by 40 per cent in Canada, a direct result of the most prolonged period of inflation in our peacetime history. To maintain a strong dollar we must assure a vibrant inflation-free economy. The value of our dollar at any particular time is based on the condition of our domestic economy. Yet in the past eight years the administration has followed fiscal and monetary policies which have built strong inflationary forces into the structure of the economy itself. They have discouraged savings and capital investment in the private sector. Consequently, capital investment in Canada during this period has been one of the lowest of any major industrialized nation.
Rationalizations for administration failures have become more and more commonplace. It is only appearance which seems to count, not reality. Gestures are the order of the day rather than effective action. Policy in respect of the making of decisions is preferred to decision.
We are now told that as a result of the administration's approach to the economy, including controls, inflation may drop to 8 per cent this year. Why only 8 per cent? Certainly the Americans are doing better. Why can our target not be 5 per cent or, certainly, 6 per cent? With responsible economic planning at the federal level we could have significantly less than 8 per cent inflation in Canada this year. In fact until recently it was widely forecast that we would do much better than the administration now predicts.
In the summer of 1975, prior to the Minister of Finance (Mr. Macdonald) taking office, prior to the Prime Minister's (Mr. Trudeau) control program, prior to the Liberal leader's musings at Christmastime, concerning a new society, and certainly prior to the so-called tight money policy, independent forecasts by eight of our most reputable financial institutions, including the Bank of Montreal, the Bank of Nova Scotia, and Woods, Gordon and Company, predicted that inflation would be down to the 6 per cent range this year. And now the government is saying that 8 per cent is the target.
On that point I think it is interesting to review what the winter forecasts are of the institutions which were optimistic about a 6 per cent range of inflation for the current year. The Conference Board is now predicting that for 1976 our inflation might be as high as 10.5 per cent. The Bank of Montreal, instead of its summer prediction of 6 per cent

inflation in 1976, is now stating it may be 9 per cent to 9.5 per cent. The Bank of Nova Scotia is now predicting an 8.8 per cent inflation, Woods Gundy are predicting 9.3 per cent inflation, Woods, Gordon and Company are predicting 8.1 per cent.
What went wrong? Why should we be faced, after so-called government action with an 8 per cent inflation when nine months ago such reputable institutions anticipated a 6 per cent level? Why should we be tolerating the administration's vague hope of less inflation when William Simon, the counterpart to our Minister of Finance, who is Secretary of the Treasury in the U.S. is confidently predicting a 2 per cent inflation in that country within the relatively near future?
The administration has consistently fallen short of its real growth projections. In November of 1974 we were told there would be a real growth of 4 per cent in the economy in 1975. It turned out to be barely zero. That 4 per cent loss represents $5.3 billion of a loss for the Canadian public, or $220 for every man, woman and child in this country. Last summer the Conference Board in Canada and the Bank of Montreal, for example, were confidently predicting that our growth this year would be 6.3 per cent. Already the government is conditioning us to less, stating it hopes we will reach 5 per cent this year. In this context our motion today deals with five deficiencies in the administration's approach to the economy.
First, its economic policies have been contradictory. I cite three examples. While we have been subjected to the wage and price control program designed to contain inflation, the administration has followed a counter productive fiscal and monetary approach.
The present administration preaches restraint, yet its own spending will increase this year by 20 per cent when main estimates are compared with main estimates annually. The money supply increased by 16.5 per cent in the 12 months ended January 1976, and the Minister of Finance now tells us it will be difficult to hold this year's increase to 13 per cent. The minister's approach seems to be to anticipate inflation and thus adjust the money supply to accommodate it rather then to contain inflation. With such an approach how could any control program work effectively?
Again, while the Foreign Investment Review Agency attempts to regulate foreign investment, we have found out that more than $4 billion in foreign capital was encouraged to enter the country in 1975 to finance our trade deficit. This capital was attracted by Canadian high interest rates and as a result of a change in the government's attitude to such borrowing. While debt is preferable to equity, the extent of Canada's obligations to foreign lenders is alarming. On this point governor Bouey of the Bank of Canada stated in the bank's annual report that such borrowing "could at some point prejudice a healthy expansion of the Canadian economy".
Not only do these borrowings run contrary to the spirit of the foreign investment review legislation, but we find that these heavy borrowings abroad have driven the Canadian dollar above parity with the U.S. dollar. If the exchange rate remains at this level serious damage could be done to our economy through the overpricing of our exports and the underpricing of our imports. With a trade
March 24, 1976

deficit of $5 billion it is time the administration stopped aggravating the situation.
Second, in our motion today we deal with the administration's failure to ensure meaningful employment growth. This is especially so in the manufacturing field. On average there were 65,000 less jobs in goods-producing industries in 1975 than in 1974. This decline came about because of a massive 73,000 jobs lost in manufacturing industries over the same period. On a 1974 to December 1975 basis there were 99,000 fewer jobs in manufacturing. The 1,905,000 employed in manufacturing industries in December, 1975, means there has been lower employment than in any month since March, 1973, and the year average employment has not been lower than this level since 1972.
Industrial production in Canada is the third disappointment. Canada's performance in industrial production is significantly worse than in most other industrialized nations. In a comparitive table found at page 67 in the March 19 issue of the Economist, Canada is listed with a sad 6 per cent decline in production last year, the worst record of the ten industrialized nations shown. More than that, our record was even worse than the record of the beleaguered United Kingdom which had a 2.5 per cent decline, and much worse than the United States increase of 4 per cent and Germany's jump of 5 per cent in the same period.
Our fourth point is that investment has been weak over the past several years, reducing Canada's employment generation capabilities and productivity. Investment capital has been difficult to raise, in part because of federal government actions in the area of the capital gains tax and the federal cash requirement of over $11 billion between 1975 and 1976, but it is mainly due to the government's inaction in not giving direction and leadership to the country.
As a result of such indecision, investment as a per cent of the gross national expenditure is now lower than in 1966. This confusion in government was highlighted last night when officials from Dome Petroleum told us of their nine year delay in receiving approval to start drilling for oil in the Beaufort sea, an area they were encouraged to develop almost a decade ago. This case is unfortunately typical of government frustration of business. Can we be surprised if many businessmen choose to go elsewhere than remain in Canada? The government should streamline its decision-making process.
In the case of Dome Petroleum, in spite of the fact that over $150 million of invested funds is at stake, that company has been required to deal with three ministers of the environment, each one requiring himself an education as to what the project is all about.
I would suggest that the administration should also review the effectiveness of the capital gains tax which the government is not even willing to estimate so far as its revenue production is concerned. Dealing with that I think it is important to note that an unofficial estimate of the total revenue in the last full year with respect to the total capital gains tax was only $70 million. Think of the red tape and the frustration to which the business community is being subjected for that type of revenue, for $70 million.
I believe the government should also consider measures to encourage the private sector to raise capital domestical-
Economic Policy
ly. Employee stock ownership plans may be part of the answer. The administration should review this approach, which is really a democratization of our capital ownership system. It could well be that our income tax system should be changed to facilitate the development of such plans.
The government must take steps to reduce its impact on our capital markets. Speaking on this subject, Andrew G. Kniewasser, president of the Investment Dealers' Association of Canada, said this month in Guelph, and I quote:
Last year, savings were channelled through our capital market in the following ways-debt financing for governments $13.8 billion, debt financing for corporations $4.3 billion, preferred equity with call features $300 million, new permanent capital (equity) $700 million.
In other words, of the $19.1 billion of savings flowing into the Canadian capital market last year, governments absorbed 72 per cent, leaving 28 per cent for the private sector. The pattern of financing is remarkably unbalanced in that debt financing accounted for 96 per cent leaving only 4 per cent available for permanent capital to launch new businesses or to strengthen the financial base of existing firms.
Obviously governments should take less, and less should be channelled off in the form of bonds and debentures. New incentives should be offered to equity financing and existing disincentives removed.
The impact of the federal invasion of our capital markets is reflected by the staggering interest cost now carried by all Canadians. In 1977 it is estimated that this cost will be $4.7 billion, or $202 for every man, woman and child. The cost has jumped in the past two years more than the entire interest cost on federal debt when the Prime Minister first assumed his post. At that time the cost was $1.3 billion, a $63 load for every Canadian. As we just stand still, the cost of debt for previous spending sprees at the federal level is now 50 per cent of the total federal budget 10 years ago.
But what is $4.7 billion? None of us really can comprehend such a sum. I am reminded of a story which I believe appeared in Reader's Digest in which a man with $1 million gave his wife the money and told her to spend $1,000 per day. He found her back on his doorstep in less than three years. It was then pointed out that, if he gave her $1 billion, she would not be back for almost 3,000 years.


Robert Jardine McCleave: That's what he had in mind.


Sinclair McKnight Stevens: The fifth point in our motion deals with the serious decline in our position in international markets. We are fundamentally lacking in price competition in the manufacturing sector. In 1968 our merchandise trade had a surplus of $1.2 billion. Last year we were $1.7 billion in deficit. Most alarmingly, our manufactured goods were $6.5 billion in deficit compared with $900 million in 1968. In 1975 it was mainly our primary products which helped minimize our manufacturing deficit.
Wage inflation has undoubtedly played a key role in the deterioration of our manufacturing export trade. Canadian earnings as a percentage of the United States were 79 per cent in 1968 when the present administration took power. The percentage rose to 95 per cent in 1973, and last year it went over the American level and now stands at 105 per cent, based on last year's figures.
With this background, as I have outlined, it is discouraging that the response of the government is one of justifica-

March 24, 1976
Economic Policy
tion, not one of rectifying the problems. Worse still, judging from the utterances of the leader of the Liberal Party, it is we who should conform to a lagging economy, not that the economy should be made more vibrant and prosperous to serve the people better. We Canadians are being conditioned to accept a standard of living less than our capability. It is a subtle conditioning, but it is there.
With no real growth in the economy, a per capita income now eighth in the world compared with second six years ago, and with the highest combined inflation and unemployment levels since Confederation, those in power would like to talk of other things. The new approach is: if you cannot reach your goals, then change your goals.
We are now told there is a limit to growth in Canada. The Prime Minister's control program is designed to whip us into line. Our Minister of National Health and Welfare (Mr. Lalonde) advises that we should use more powdered milk, for example, to offset the rising price of the fresh stuff. Our Minister of Agriculture (Mr. Whelan) adds that we are eating too much meat and should shift to cheaper spaghetti and macaroni. Our expectations are said to be too high, and our natural resources are now found to be finite.
But to live is to grow, and as we lower our expectations so will we lower our achievements. Certain resources may be finite, but man's ingenuity is infinite. Canada, with its relatively small population and vast area, is unique in the world. We have the potential to be the wealthiest people on earth if we allow our resources to be harnessed through individual initiative.
To prosper, a nation needs fresh water, food, resources, energy and an educated population. We have them all. Canada has more lakes than the rest of the world combined, and about one third of the world's fresh water supply. In relation to our population we have more arable farm land, natural resources, and energy reserves than any other country. We certainly have a highly talented people. So why have we slipped? In my opinion we have slipped as we have subjected ourselves to undue bureaucratic control. Our growth in employment has been more in the unproductive sectors of the economy than the productive.
Most bureaucrats are quick to regulate, but slow to innovate. Left to government, our oilfields, our gas reserves and our potash industry would never have been developed to their present levels. Yet governments, in the name of progress, now stifle further advances through heavy taxation and regulation, and there are even plans to nationalize certain of our industries.
The greatest thing government could do is to stop expanding and to be explicit as to the future for those who wish to innovate and create. The people of Canada can create a vibrant economy once again, but government cannot do it for them. Such an economy would create jobs for Canadians in productive sectors. What a relief that approach would be compared with the present drift. But the worst may be yet to come.
Recently I was shown a paper which is now being reviewed by the Liberal caucus. It contemplates the substitution of a new, and I quote, "gross social product" index for the present gross national product figures. In future it is suggested that we calculate the contribution of the unemployed in our society, not just the employed. When

we visit our neighbour it is suggested that that should be recorded in the new scale as a contribution to Canada. And of course, when we take a holiday, that in turn should be duly recorded as a plus for the nation. It is strange what some academic, bureaucratic and so-called liberal minds will turn to. It is even stranger that they are paid for their efforts out of our taxes. Canada was not built with such thinking, nor will such thinking help in the building of our future.
The nation has now reached a crossroads where we must decide between a more competitive, more open society or accept, perhaps irrevocably, a society in which the large decisions about our economic and personal welfare are made by a central government.
The past demonstrates that a system of free enterprise, despite its many flaws, is the most compatible with the protection of rights and liberties, as well as the most productive of material goods. Equally so, recent history shows that government, despite its splendid intentions, is incapable of matching the vitality, the wisdom, and the ingenuity of free men. Let us hope the present administration learns this simple truth soon. If it does confidence will return and we will have significantly less inflation and unemployment, with a higher real growth for all to share.


Some hon. Members:: Hear, hear!


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I am glad we are not having a vote on this particular motion. While I agree with the content of the motion to the effect that the government does not know what it is doing, etc., the remarks I have just heard do not persuade me that the alternative is any better.
I think I have heard that speech before. It seems to me it was given in the late sixties or early seventies when the Liberal rump sat on this side of the House. This is the sort of criticism the Conservatives were making of the then government whose dollar had gone away up, a government that was in the grip of a high interest rate policy from the Bank of Canada, and was following a contradictory policy in that the monetary expansion was coupled with an easy fiscal policy. "Everything changes and yet nothing changes."
The subject matter of the motion is a very important and serious one, however, and should command our attention. This party has been formally committed to the idea of planning. I wish I had the same kind of faith that the hon. member for York-Simcoe (Mr. Stevens) has in the free enterprise system and its ability to do all the right things to get our economy going.
We do not very often get examples of the problems with the free enterprise system because newspapers and critics generally, certainly the financial writers, love to point out that the waste that takes place in our society is almost entirely government waste. Their annual horror story is the Auditor General's report. More copy comes out of that when writers point out with glee all the errors committed by the government.
It is not very often that we read about the things that happen in the private sector and learn how costly they can
March 24, 1976

be. Recently, however, there has been quite a spate of stories about the kind of waste that takes place in the private sector, and about what happens when you have the kind of economy where people are allowed to pursue their own ends. If, as Adam Smith thought, the pursuit of those ends leads to some kind of intelligence and while the methods might not be desirable the objectives might be worth while, one would have some sympathy. But you find that people who are engaged in building shopping centres, for instance, are sighing with relief because money has dried up. They have had to build and yet have so many empty spaces in their shopping centres that it is hard for them to stay alive.
A headline in the Globe and Mail of March 19 reads: "Industrial leasing vacancies greatly exceed demand". All kinds of facilities have been built that are not being used, and all kinds of capital has been put into these things and it has now gone down the drain. Of course we will use them in the future. As the country grows I am sure these facilities will be required. In the meantime, and while the hon. member for York-Simcoe is complaining about the great inrush of capital and the resultant high interest rates that need to be maintained in order to get this capital, it is being wasted.
Another horror story appeared in the Toronto Star of March 23 relating to empty hotels. Under the heading "Empty hotels: a look at the biggest losers", the article says that in the city of Toronto in recent years three major hotels have been completed-Plaza II, The Prince, and Harbour Castle. The Harbour Castle is described thus, "Is the site a plus or a minus?", The Prince "The trial balloon didn't soar", and the Plaza II as "The hotel that hardly anyone knows about".
I do not have the exact figures on the other hotels but apparently The Prince cost $23 million. The city of Toronto does not need the hotels. The occupancy rate is something like 20 per cent or 30 per cent in these new hotels. Those are just a few reports that have appeared in the newspapers. Here we are talking about $50 million or $60 million when we cannot get enough money for housing, enough money for the manufacturing industries if we require to expand them, yet we are putting up these kinds of hotels.
I should like someone to explain how the private sector with all that comes to it through investors, is increasing the productivity of this country, or how putting up hotels that stand with empty rooms is increasing productivity. You might call it private waste and say it is their money and they can spend it as they will, but today it is everybody's money, Mr. Speaker, to the extent that when one group of people in our society use capital they are taking it away from some other use; to the extent it is important to the country when it has an effect on the exchange rate. These people are not islands, and what they do affects others.
If waste takes place it is not just the individuals involved who suffer or lose on their investments. Governments are deprived of revenue, and very often a loss of one commercial enterprise is written off against the profits of another. In fact the taxpayer becomes a partner to these losses and waste just as surely as he is to some of the things the Auditor General discusses in his reports. Waste is waste, Mr. Speaker, and it is one of the problems we run
Economic Policy
into today. I do not see how any modern society can proceed on the basis that the individual entrepreneur can handle the situation if he is left alone.
In the case of the Beaufort Sea the hon. member for York-Simcoe deplores the fact that environmentalists are entering the picture. But, Mr. Speaker, we have to take the environmentalists into account; they have to be heard. People are entitled to make representations. I should like to see these things expedited, but there was a time when we used to do things the way they were done in regard to the pipeline-a minister made up his mind, rammed legislation through parliament, and did not care about the consequences for the economy or the people affected by it. We know a little better today; it takes a little more time to get things done.
When it comes to the question of planning in the field of energy, private enterprise has demonstrated how totally bankrupt it is to meet the needs of the country. Then we talk about over investment. One of the reasons that interest rates are so high and ruinous to small businessmen is that we are talking about billions of dollars needed to provide energy in the future. This is a fine argument-we are running out of energy, and therefore the industry needs more profit in order to provide energy in the future.
A few years ago we were being told that we would never have to worry about energy supplies in our lifetime; we had so much that it was a sin to keep it in Canada. The total effort of people in the energy industry was directed toward persuading the government to allow them to increase their exports of gas and oil. They said we had so much energy to spare that it was an embarrassment to us. The government bought the idea. We exported fuel we ought not to have exported. We permitted overdevelopment in the industry. That should not have happened.
Let me remind the House of what happened in the early days of oil development and why we exported vast quantities of our oil. It was not enough that oil had been discovered in western Canada. We were not satisfied with letting one or two companies rationally service the Canadian economy. No, that was not good enough. People thought money could be made, and they rushed into the industry. The result was tremendous over capitalization in the oil industry, particularly in Alberta. The government of Alberta was forced to prorate production; at one time it prorated production at 35 per cent of well capacity, to restrict the amount of oil an individual operator could take out. You can see what caused the tremendous pressure for exports.
People had invested huge sums in our oil and gas industries. They had over invested. The capital was sitting there, not bringing the return people thought it should bring. They wanted to sell our oil and gas as quickly as possible, just to recover the excessive capital which should never have been invested in the industry in the first place. It was over developed.
To hear people talk, you would think this country suffers from a shortage of capital. This country does not suffer from a shortage of capital. In this country there is not enough rational use of capital. From that we suffer. The people of this country are known to save more money than

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the citizens of any other country, except Japan. We have a reputation as savers of money. Surely we cannot carry on in future as we carried on in the past. If, in future, our people are allowed to invest huge sums of money in any industry haphazardly, without heeding the needs of other sectors of society, our goals will not be reached. There just is not enough money in the world for doing what we want if we take that kind of haphazard approach to energy development.
Energy is being developed in this country. At the moment Quebec is embarked on a multi-billion dollar hydroelectric project in northern Quebec. Manitoba has embarked on a somewhat smaller hydroelectric development. One hears talk of pipelines being built for oil and gas. Every time you turn round pipeline costs increase by millions of dollars. If we are spending all this money in these areas, how then can we expect to find enough capital to meet all our other requirements? We need to plan for the future. At present there is no such planning.
Let me show hon. members how capital is wasted in this country. This country is not short of capital. It misuses capital most criminally. If we are to meet future needs we shall require the government to plan the use of capital. Why do I say that? Some years ago we began a government enterprise known as Trans-Canada Air Lines. The government went into the air transport business because private entrepreneurs felt it was too risky, or would bring small returns. That government airline grew until it became Air Canada, one of the finest airlines in the world.


Some hon. Members:: Hear, hear!


Max Saltsman: That was too much for the government. Here was a government enterprise operating successfully. It was more than the federal government of the day could stand. It looked for some way to correct the situation, for some way of killing the airline. Well, a previous Conservative government found a way of killing it. It allowed a competitor to compete with Air Canada, the government-owned airline which was doing a fine job, returning money on investment and providing suitable service across this country. A competitor was allowed. What was the result? Air Canada did not make as much money. Aircraft were used inefficiently. Now, both Air Canada and CP Air have an overcapacity of seats.
The situation has degenerated; now CP Air magnanimously says, "We do not mind embarking on joint efforts with Air Canada so that we can rationalize our purchasing, flights, and use of capital." But capital was used rationally when only Air Canada was the large operator in Canada. Introducing a competitor in the air served no useful purpose. Probably in the end we shall need to take over both airlines and operate them as one airline.
We did much the same with our railroads. One railroad was not good enough. We needed two, one to compete with the other, in order to preserve the myth that one is privately, the other publicly owned. The publicly owned railroad has to bear the costs of passenger service, whereas the CPR is not under that obligation to the same extent. It is free to carry more profitable cargoes. The CNR, being saddled with higher costs, is forced to apply for government loans. The CPR, which does not carry as many passengers, is said to be more profitable. People should remember that.

The point is that Canada is a large country, and transportation is important in holding it together. That has always been true. Therefore why do we need competition in our modes of transport? Or why should one mode be forced to compete with another? Why do we need two airlines, one competing with the other? When we disembarked from one mode, say at a station, why must we travel to another part of town to embark on another mode? Arrangements of this kind destroy confidence in the utility of transportation.
People talk of our great capital requirements in the future. We do not want to import large quantities of capital. Surely, therefore, we ought to co-ordinate our transport systems, to make sure that one system does not duplicate the efforts of another. We do not need two modes of transport doing the same thing, carrying the same goods. These things ought to be done by co-ordination and cooperation, not by competition. Really, competition in transportation brings few benefits.
I know that businessmen like to think that competition in transport is good. Some of them think that any government-run operation is not worth a damn; therefore when they travel by private carrier they please their ego, their own philosophy. Such attitudes are not based on fact. Some businessmen insist on travelling by private carrier. But the majority of our people are quite satisfied with Air Canada service. The vast majority must pay the shot so that a few in this country can choose to satisfy their vanity or ideology. That is madness.
The United States has concluded that competition between similar modes of transport is not beneficial. It was harder for the people of that country to reach that conclusion. Now they know that, no matter if people travel by train or air, the transport system must be planned rationally. They are moving in the direction of the planned transport system and away from the private enterprise pattern advocated by the hon. member for York-Simcoe.
I do not disagree with much that the hon. member said. In many areas of society private enterprise can perform a most valuable service. In many areas of society private enterprise is useful and should be encouraged. My argument does not constitute a blanket condemnation of the private sector. I say to the hon. member for York-Simcoe that we shall not meet the challenge of the future if we permit the anarchy of the market place. Many things benefit from competition, but many things are destroyed by competition. That is the kind of choice we have to make. I was hoping that in his well prepared and sincerely delivered address he would have shown a recognition of that fact, that what we need today is planning.
Planning does not mean that you do every little thing in the economy, that you plan everything to the last detail. The mind of man and the computers at his disposal are not of such accuracy that all these things can, should or need to be done. One of the jobs of planning is to know which things are important and of such magnitude to the economy that they should be part of government and public responsibility, and which things can be safely and more efficiently left to competition in the market place. That is the first job of planning, to say which things are which,
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and not to undertake everything. You can then get the benefits of both systems. You can have competition where competition has some merit and provides some benefits, but you also get the benefit of planning public ownership and coordination, where that is obviously the way in which we have to go.
I guess I should have not been surprised. I should have anticipated that my colleagues on my right feel that our tax system has been too onerous for businessmen, that we should get rid of the capital gains tax and that the whole Carter report was a mistake, even as little of it as the government implemented. In fact it was most unkind of the hon. member for York-Simcoe to degrade the government over its lack of response to businessmen. I cannot think of any government that has been more generous to businessmen or has given more away than this government in the last number of years.
Because it said we had to make our business in Canada more competitive, the government brought in two main tax measures. It reduced the corporation tax to one of the lowest in the western world. It gave valuable concessions in the way of depletion and depreciation allowances. Those were very, very generous concessions. When successive ministers of finance answered why they were giving these great benefits to business in Canada, they said it was in order to be competitive, to provide jobs, to provide the investment and capital that are needed to create employment.
We have now gone through two or three years of this corporate bum era. Where is the great prosperity that was promised this country as a result of these tax concessions to business? Where is the employment the government said would be created if we would only let business hang on to its profits, and be generous with depreciation allowances? Where is it? We do not have the employment and we do not have the investment. It is not that they have not made the money, it is that they have not uSed the money.
We argued that if you want to stimulate the economy you should give the money to the people who want to buy things and let business respond to that, instead of giving the money or concessions to business. There are times when in fact concessions to business may be valuable, but not in the period of time we have gone through when most businesses have idle plant capacity. The idle plant capacity in Canada is something around 20 per cent. There is hardly a factory in this country that could not increase its production by 20 per cent if there were the demand or market for its products. That demand or market only comes from people making the purchases they want to make.
The government promised there would be a survey of the consequences of those tax concessions. It did a survey. It asked something like, "Would you like to have these concessions continued?" One would have expected unanimous agreement from the people involved saying "Of course, we want these continued", giving a story about how great the benefits have been from these tax concessions. Instead, the results of the survey that came back were unfavourable. Of 1,014 companies surveyed, only 67 bothered to respond. A follow-up survey indicated the companies which failed to respond had a zero impact on their operations as a result of these tax measures.
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Mr. Deputy Speaker:: Order, please. I regret I have to interrupt the hon. member, but the time allotted to him has expired. He may only continue with consent. Does the House agree that the hon. member may continue his remarks?


Some hon. Members:: Agreed.


Max Saltsman: Mr. Speaker, I will not take up too much time of the House. I know there are other members who wish to speak. I will conclude my remarks by summing up the point I was trying to make.
I agree with what the hon. member for York-Simcoe said about the chaotic state of our economy, the absence of planning, and how everything is going off in different directions. However, I also disagree with the hon. member. I call upon this House to recognize that we cannot go back to the kind of situation that got us into the present mess.
The fault of the government is that it has in fact listened to the kind of advice that the hon. member for York-Simcoe has been giving, namely, "keep your cotton picking hands off the economy and leave it to those of us who know more about running it than you". That has been happening, and it has made a mess of things.
The government has interfered in the economy to some extent. I do not think its efforts have been all that great. Ministers really do not have that much confidence in government interference. That is probably the reason why none of these things have worked. It is as though the government had a death wish about its own creature, not wanting it to work.
I do not think we can go back to the simple model of an eighteenth or nineteenth century economy. Our resources are much too scarce for that. The challenges facing the country are much too great. Therefore if the government is to be condemned, and I think it should be condemned, it is because it has been derelict in its duty, not using its brains to anticipate the problems, and not doing intelligent planning to make the best use of our resources.


René Matte: Mr. Speaker, again I have the great pleasure to intervene in this debate and congratulate the sponsor of this motion who denounces anew a reality that is unfortunately very obvious. In fact there are so obvious inconsistencies in government policies that we really wonder how such policies can be seriously established.
But, Mr. Speaker, when we study the matter in depth to find out for what actual motives or reasons this government formulates such policies we realize that those inconsistencies are created by the obstination of the government to maintain a totally inadequate system as a basis for those policies. So is it not surprising that we wish to fight inflation and that we accept higher unemployment as a consequence of this fight against inflation.
Of course, we do so without mentioning it as it would not be politically profitable. But facts are facts. We also accepted escalating prices developing into real inflation because a few years ago the problem had nothing to do with our production capacity or the quantity of products
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we could have at our disposal. The problem was rather the disposal of our products but, systematically, through inconsistent economic policies we artificially created inflation and it became a fact.
Recently the Bank of Canada anounced a rise in interest rates which, of course, will be reflected in all chartered banks in the country. Mr. Speaker, as I said earlier, production should be increased but we design a policy that will systematically prevent industry from producing; we notice the same inconsistencies in all areas because the government's economic experts never even dreamed of getting off the beaten track to find out why the system did not work. How is it that we have to face inflation every two or three decades? How did this come about? Is it because the country has less potential? Is it because Canada has run out of natural resources? No, I do not think that there is a single hon. member in the House who would question Canada's potential, its productive capability, the availability of its natural and human ressources which are plentiful.
In fact we have 800,000 unemployed persons. Are not those 800,000 jobless workers prepared to participate in the production which we require? No, they are not, because, once again, governmental measures are conflicting with one another. We import goods that we could manufacture here. My hon. friends opposite ought to check on their shirt collars if their garments were made in Japan, Korea or China. Mr. Speaker, is not Canada capable of producing clothes for Canadians?


An hon. Member:: Where does your necktie come from?


René Matte: Clearly this is contradictory. Instead of enquiring about the origin of my necktie, the hon. member opposite should address himself to my objection. How in this country larger than the United States with their 250 million people, how in a country larger than the whole of Europe but with only 24 million people, how can we have 800,000 unemployed? This is a scandal. A government that accepts such a situation dwells in contradiction.
Let us reform the system, let us produce neckties when we need them. It is as simple as that. And let us simply ask the questions that are pertinent: First, do we have what is needed to produce food? This evidently is the first question. The second question is: What do we need for clothing? The third question is: What do we need for housing. If we have the materials, the manpower, the know-how to compute, plan and coordinate the whole thing, it is stupid to say we have no money. No engineer will ever say that bridges are built with money. They are built with steel, with concrete, with cement, with stone. You build a bridge with all that and with labour, but not with money.
We therefore say that a system must face bankruptcy if it gives money some other value than the one it has or should have. Because we hold on to the same system, we are regularly confronted with the ups and downs of the vicious circle of inflation, unemployment, high interest rates.
Obviously the more you prevent industry from developing, the more unemployment there is. And the government go on floundering in this, simply because they will not consider changing the system.

Obviously when it is realized this does not work, why not try another way? I therefore feel the motion is up to the point, except maybe for the last suggestion "which have permitted a serious decline in our competitive position in international markets." I have some reservations about that, because we should stop explaining everything through world trends. Everytime there is a problem like inflation, for instance, the government say, it is is a world problem.
At this point, they say: why not do this or that? Oh, the international market, that must be closely watched. In other words, instead of saying: let us produce what we can produce, when that is impossible because we do not have what is necessary to produce, let us call in the international market, but only then. We should not believe those who say that everything must be based on the balance of trade, on international trade, and that we should be willing to sacrifice ourselves for others. To those who think that we should always watch that trade balance I would ask what that thing is made of.
Mr. Speaker, I would like them to answer the following question: why do Communist China and the USSR buy wheat from Canada? Because of the trade balance? It is because they need it; because they have not produced enough cereals in their own countries to feed their people. They do not buy our wheat just to please us. That is certainly not the reason. And why do Americans buy our pulp wood? Because they have newspapers with circulations in the millions, and they need paper to do that. That is all. They do not buy our paper to please us. And when one argues about inflation seen as a world phenomenon, we must protect our international balance of payments. That, we must protect. Let us buy butter from New Zealand while penalizing our own producers in Canada. What a lot of contradictions!
The member for York-Simcoe (Mr. Stevens) denounces these contradictions and he is right. But to find a remedy to these problems, which I understand, the government will have to change the system otherwise we will be facing the same problems. We know we can change it and our party leader (Mr. Caouette) has been saying so for 40 years. This reminds me that when I was a teacher-I was a teacher for 13 years-I learned that one had to repeat the same thing over and over but when a pupil still did not understand, we knew we were dealing with a "dummy". It seems that some people are so stupid they cannot understand such elementary things.
I suggest that the economic policy must be developed in such a way as to enable us to ask ourselves: What are the requirements of Canada? What is our physical capacity to meet these requirements? And the third point is self-evident: The problem only lies in financing. Well, we only have to vote the necessary supplementary estimates to meet this financing. It is as simple as that. But the Prime Minister of Canada (Mr. Trudeau) answers me that if we grant interest-free loans to foreign countries, there is no such thing as interest-free loans, and in order to make such loans to India, Ceylon, Bangladesh, we must make borrowings that bear interest.
Well, when a prime minister speaks in such a way without being ashamed of himself, I say he is "stuck" in his own contradictions, his own system. This is why he is
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being blamed today. It is true, I know, that there is nothing the government can do. Even my friends on my right could not do anything about it if they had the power, unless they recognized it is necessary to start right now reforming and restructing the economic system. Only then shall we logically fight against inflation, otherwise we will continue to flounder in contradictions, like those mentioned in the motion before us today.


Donald Stovel Macdonald: Mr. Speaker, in responding to the motion this afternoon I should like to address myself to a number of points; first to a view of recent Canadian economic performance and government policies which have been involved in that; second, to talk about Canada's competitive position; third, to pass under review some of the statements of the official opposition in the same time period that we have set out these various policies; and then, as a fourth element, to talk about the post-controls period and address some remarks in particular to the decision made by leaders of the Canadian Labour Congress yesterday not to participate in the very necessary role of planning that we would have to do for future policy change in the post-controls period.
First, with regard to the Canadian economic performance and government policy I would call, in response to the hon. member for York-Simcoe (Mr. Stevens), on a number of economic authorities, private and public, Canadian and foreign, who have commented favourably on a comparative basis on the course of economic events in Canada in comparison with the situation in a world which has generally been in economic turmoil.
It has been demonstrated, beyond any shadow of doubt, by countless numbers of independent economic bodies, both at home and abroad-for example the OECD, the Howe Research Institute, the University of Toronto's Institute for Quantative Analysis, the Economic Council of Canada, and most recently in the annual report of the Governor of the Bank of Canada-that in recent years this country has out-performed virtually every other industrial nation in terms of employment, output, and capital investment.
Indeed the most outstanding fact that emerges from developments of the past few years is the extent to which Canada, despite its vulnerability as a major trading nation, has succeeded in maintaining relative economic stability at a time when the rest of the world was plunged into the worst recession of the post-war period.
As the Governor of the Bank of Canada has noted in his annual report for 1975, real gross national product in Canada during this period declined by only l'/2 per cent during the course of the recession, a decline which compared to a fall of 514 per cent in West Germany and more than 6I/2 per cent in the United States.
The Governor also noted that:
Canada and Japan were the only major industrial countries in which the over-all output of goods and services at the end of 1975 appeared to be as high as it was before the recession began.
I would refer the hon. member for York-Simcoe to the charts on pages 24 and 25 of the bank's annual report
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where he will find a graphic illustration of the extent to which Canada has out performed the United States in terms of maintaining output, employment, and business investment in recent years.
In its 12th annual report the Economic Council pointed out that few countries have escaped the adverse impact of inflation and unemployment in recent years. But as the council pointed out:
The Canadian economy managed quite well under the circumstances, with better price and growth performance than most other industrial countries.
In its economic outlook last December the OECD forecast that the "path of recovery in Canada is likely to follow that of the United States, but by end-1976 the level of activity, in relation to the previous peak, may be higher for Canada than for other major OECD countries".
As I have had occasion to emphasize on other occasions, the fact that output, employment, and business investment held up better in Canada than in practically any other country, notwithstanding the seriously adverse effect on our economy of a sharp decline in critically important export sales as a result of deep and prolonged recession, is not something that just happened. To a very considerable extent it has been the result of a whole range of government policies and programs aimed at preventing the real personal income of Canadians from being seriously eroded by the impact of rising prices and unemployment. May I just say here I refer to the indexing and cuts in personal income taxes, sales tax cuts and tariff reductions, indexing and increases in old age security and guaranteed income supplements, family allowances, veterans pensions, subsidies on some basic foodstuffs and imported oil, and the automatic stabilizer provided through generous benefits provided under the Unemployment Insurance Act.
These measures were reinforced by changes in corporate taxation policies, and other measures which have been aimed at sustaining business investment and housing construction at a high level.
While I would concede there was virtually no growth in Canada's real GNP in 1975, that was the result almost entirely of the slump in export sales because of recession abroad, a development naturally over which we had little or no control. The impact of the policies initiated by the government to sustain the economy are apparent in the figures relating to final domestic demand here in Canada for goods and services which rose last year by 3.5 per cent.
As the central bank's annual report noted in comparing the Canadian and U.S. performance during 1975:
The major difference between the two economies was the extent to which final domestic demand was sustained in Canada. Here, the volume of domestic spending on final goods and services continued to advance, whereas in the United States it fell by over 4 per cent.
Despite the slowdown in the economy brought on by recession abroad, the rise in unemployment in this country by comparison with most other nations has been relatively small even though in absolute terms, in the view of the government, it is still at an unacceptably high level.
I think it is important to emphasize at this point that, for reasons of the age and structure of our population, Canada has the fastest growing work force of all industrial nations. There are more young people coming to working
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age in this country than in any other industrialized country. Our relatively better performance on this front is due to the fact that employment has continued to grow relatively strongly despite the adverse circumstances confronting the economy. In February, for example, the number of Canadians with jobs was up by nearly 300,000 over the level a year ago, which is an increase of 3.2 per cent, somewhat above the long-term trend of growth we have experienced over the past decade.
Now, I should like to address just a few remarks to the question of Canada's international competitiveness. What about the allegation that our so-called contradictory policies have contributed to a decline in Canada's competitive position? I do not for a moment deny that our international competitive position was in danger of becoming seriously jeopardized. That, of course, is why the government moved last October to launch a major national anti-inflation program with the co-operation of the provinces, to bring under control the domestically generated cost-price spiral that threatened to undermine our competitive position at home and abroad.
The developing problem of a domestically generated cost-price spiral, which by last year was rapidly becoming the primary source of inflationary pressure in Canada, was in no small measure the result of the success of government policies and programs aimed at minimizing the impact on the Canadian economy and the Canadian people of inflation and recession abroad.
Had Canada followed the course of a number of other countries and allowed inflation and recession abroad to erode the real income of Canadians and their real power to purchase goods and services, we in this country would also have suffered a massive recession and a massive increase in unemployment. In those circumstances we undoubtedly would have experienced substantially less upward pressure on costs and prices. But we, for our part, were determined to search for a means which would enable us to bring prices and incomes in this country under control without the imposition of severe hardship on the Canadian people in terms of output, employment, and real incomes.
I hope that during the course of this debate the official opposition will let us know whether the Conservative party believes we should have resorted to severe recession as a means of preventing the build-up of domestic cost-push pressures. As the House is aware, we sought over a period of many months to develop a consensus among the major groups in our economy in support of voluntary restraint of prices and incomes. When that effort proved to no avail, we finally found ourselves with no choice but to impose mandatory restraints on the major groups in the economy in order to bring inflation under control without at the same time jeopardizing our prospects for the revival of healthy economic growth.
I should like to address myself now to one of the phrases in the motion of the hon. member in which he refers to "contradictory economic policies of the present administration." I should like to cite some of the policies he and his colleagues have advocated over the same period of time which I passed under review with regard to the economy to see where the contradiction lies.

Where, for example, does the Conservative party stand on the broad thrust of fiscal and monetary policy? Does it believe it should be more expansionary, or more restrictive? Let us take a few random declarations by various Conservative spokesmen to see if we can how they approach this question.
First, almost exactly a year ago, on March 26, 1975, the hon. member for York-Simcoe, who moved the present motion, was quoted in the Toronto Star as complaining that the November, 1974, budget produced by my predecessor did not provide "sufficient stimulus to the economy and a new budget is needed-It's needed now more than ever". Then we find that the same member, speaking in the debate following the budget of June, 1975, a budget incidentally which did add to the net stimulus being injected into the economy, had completely reversed his position. He contended that major cuts should be made in government spending to reduce both the government's budget deficit and its cash deficit, the effect, of course, being to reduce rather than add to the stimulus of the government's economic policy.
On October 25, 1975, the Conservative financial critic was again quoted by the Toronto Star on the occasion of his entry into his party's leadership race, and at that time he warned that his fellow Conservatives would vote against the government's price and income restraint program unless it was accompanied by more monetary and fiscal restraint.
What is the position of the Conservative Party? Well, a new note of confusion was injected by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), one of the intellectual leaders of the group on the other side and a privy councillor on the front benches, on December 19, 1975, when he warned that the economy was heading into recession and urged the government to adopt more expansionary policies. But on January 6, 1976, another front bencher, the hon. member for Don Valley (Mr. Gillies), the former financial critic, appeared to reverse the field when he indicated that he was in favour of more restrictive economic policies, particularly in his advocacy of a balanced federal budget.
On March 1, 1976, the hon. member for Rocky Mountain (Mr. Clark), now the leader of that party, was quoted in the Financial Times as demanding during the course of his own leadership campaign that the government must set a dramatic example of restraint by sharply reducing the rate of growth of the money supply and the growth of government spending.
On the basis of those remarks a reasonable man might reasonably conclude that the Conservative Party now believes, in contrast to the position-and the hon. member for York-Simcoe supports this-of the hon. member for York-Simcoe of a year ago, that the government should have adopted highly restrictive fiscal and monetary policies, reflected in a balanced budget and money supply growth trimmed to the long term growth potential of the economy of around 5 per cent. Were we today following such a policy prescription, the Canadian economy today would still be in the grips of a critically severe recession. Output would have fallen to catastrophic levels, unemployment would likely have risen to the double-digit level, the real incomes of Canadians would be very much lower than
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they are today, many more companies would now be in bankruptcy than has been the experience, and the profits of other Canadian firms generally would be very much lower, and business capital investment would be very much lower indeed.
Those are the certain and inevitable consequences of the fiscal and monetary policies-


The Acting Speaker (Mr. Boulanger):: Order, please. Is the hon. member rising on a point of order?


Sinclair McKnight Stevens: Mr. Speaker, I wonder whether the minister would permit a question.


Donald Stovel Macdonald: I would be delighted to do so, but since I have only 30 minutes I think I should be entitled to finish my speech and then entertain a question.
I would just remind the House that this policy prescription, which I consider a prescription for disaster, is directly contrary to the course that almost every other industrial nation has adopted over the course of the past several months, namely, that of expanding their fiscal and monetary policies in an effort to pull their economies out of the deep recession into which they plunged.
What of the Conservative position on the question of price and income restraint? I am sure it is not necessary to recount that story of conflict and contradiction at any length. But I might briefly recall the official opposition's advocacy of comprehensive wage and price controls early in 1973 at a time when they clearly would have been totally ineffective in holding back the tidal wave of inflation sweeping around the globe.
Indeed the election campaign waged by the Conservative party in favour of controls in 1974-and incidentally the restrictive monetary, fiscal and consumer credit policies also advocated by the Conservative leader-was at a time when the world was heading into a recession. Then we have the incredible admission in a speech to the Toronto Kiwanis Club on September 3, 1975, by the Conservative architect of controls, the hon. member for Don Valley, that the proposal had lost any validity it might have had when world oil prices were quadrupled, but the party refused to alter its position despite its obvious absurdity.
Finally, we had the spectacle of the official opposition having voted in this House for the bill on second reading and then voting against the third reading of the Anti-Inflation bill because it would have been in effect some months longer than originally proposed by the Conservative party during the 1974 election campaign.
I suggest that this motion condemning the government for failing to follow policies which enhance growth and stability, coming from a party which has urged the adoption of measures that would have had the certain consequence of plunging the economy into severe recession, and coming as it does from a party which has opposed the present national undertaking to restore Canada's competitive position, cannot have been made seriously by the hon. member.
They cannot have it both ways. They cannot stand in this House and on platforms across the country and advocate drastically restrictive fiscal and economic policies which would cripple output, employment, and real incomes
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in Canada, and at the same time argue with any credibility that the expansionary policies we have pursued have hampered the growth and stability of the Canadian economy. They cannot at one moment stand in this House and demand that the growth of the money supply be sharply curtailed, as is so often heard in this House, and at the next rise to deplore rising interest rates which are the inevitable consequence in the short term of efforts by the central bank to moderate the growth of the money supply. They cannot deplore the current level of unemployment and at the same time advocate restrictive economic policies that would drive it infinitely higher.
The final point I should like to make is with regard to the withdrawal of the Canadian Labour Congress from federal consultative bodies such as the Economic Council and the Canada Labour Relations Council. What this will mean is that the formal leadership of the Canadian labour movement will not participate in the discussion on policy making at the critical point when we are considering what policy changes are appropriate for the post-controls period.
The chairman of the CLC at the meeting 72 hours ago suggested that the labour movement looks forward to further consultations on the question of the post-controls period, and we would welcome further consultations. We suggest to him that he and his colleagues should reconsider the decision to withdraw from the federal consultative bodies, which would facilitate that kind of consultation on the changes to take place. Indeed we found it rather contradictory that just 24 hours after the chairman of the CLC had complained that labour was not being consulted sufficiently, or had complained that the consultations which were taking place were not occurring with the business community there, after those two expressed complaints made 300 feet away in the Railway Committee Room of this House, we found the council as a whole retiring from two important groups, the Economic Council of Canada and the Canada Labour Relations Council.
The French have a very wise maxim that "les absents ont toujours tort", those who are absent are always wrong. In discussions in the coming months leaders of organized labour risk putting themselves in a position of not being able to participate in these discussions and not being able to add their experience to these discussions. That is not to say that organized labour will be without representation in these discussions.
I myself and my colleagues who represent members of organized unions will have a full opportunity to participate, in our weekly contacts with our constituents, with the thousands of members of the labour movement with whom we meet on a regular basis. Indeed it is clear that the leadership of individual unions will be continuing to seek contact with the Government of Canada on these important questions. But I say-and I say it not in anger- that the country and the over-all membership of organized labour stand to benefit from the participation of their leaders, talented leaders in this field, in the kind of decisions that we as a country have to agree upon, and therefore it is important that we should have the opportunity again of being able to consult effectively with them. I hope they will reverse their decision.

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Economic Policy
I should like to say a final word with regard to the efforts of my colleague, the Minister of Labour (Mr. Munro), with regard to the Canada Labour Relations Council. He embarked on this endeavour of trying to bring together the two sides of the collective bargaining equation to attempt to reverse the trend which has existed in Canada of a great number of work days being lost in the last several years. There were close to 10 million work days lost in 1975 and a very serious record of work days lost in 1974. I think that anybody involved in these particular discussions would have to acknowledge that neither the working man himself, nor his family, nor those who live in his community and provide him with services, nor the industries for which he works, nor the economy of the country generally will benefit from a continuation in Canada of that kind of collective bargaining environment in which 10 million work days a year are lost. That is not only lost income to the individuals in question, it is a loss to the economy of the productive services of these many Canadians.
We are a well endowed country both in resources and in the talent of our people, but we cannot afford continuing to lose 10 million work days a year. This is too much for any economy to bear. Therefore measures have been taken by the minister of Labour to try to change the environment in which these discussions take place and try to change the structure of these discussions. This can only be for the benefit not just in the broader interest of Canada but of the working man himself, and it is for that reason, I hope, that we may again resume these discussions within the Canada Labour Relations Council.


Some hon. Members:: Hear, hear!


Mr. J. H. Horner (Crowfoot):: Mr. Speaker, in rising to take part in this debate I must, first of all, comment on the remarks of the Minister of Finance (Mr. Macdonald). Basically I was disappointed by the hodge-podge of new and old statistics which he called to his use in defense of the mismanagement of the Canadian economy which we have witnessed in the past year and a half or two years.
I was surprised by his remarks, toward the end of his speech, regarding the collective bargaining process. Perhaps one could gather from these remarks that some time in the future we will be seeing substantial changes in the collective bargaining process in Canada. Were I a union leader or one deeply involved in the trade union movement, I would be very concerned and I would want to know a great deal more about the government's intentions in that regard because the action which the government takes can either lead to further disharmony within our labour force or, perhaps, bring about greater harmony. But certainly if this misunderstanding continues for very long it is apt to lead to a worsening situation rather than an improvement. If we lost 10 million labour days last year, we may well have more days lost in the months ahead, particularly if the impasse continues much longer.
The motion before the House deals with the contradictory economic policies of the government. The minister dealt lightly with that in attempting to embarrass the Conservative party. He asked how one could have low interest rates if there was a tight money policy. That has been the complaint on this side of the House. We have had high

interest rates and a high rate of growth of the money supply, and we have not benefited. If we are going to have a high rate of growth of the money supply, then the country should benefit from low interest rates. But the government has chosen the deliberate policy of having high interest rates, not because of any curtailment of the money supply, and that is the error in the minister's remarks and in the contradictory figures which he used.


Max Saltsman: It is not an easy thing to do.


John (Jack) Henry Horner: It is the deliberate policy of the Bank of Canada to have high interest rates. The hon. member from the NDP made a speech and you would think his party was the mother of planning. If you took the word "planning" out of his speech, not much would be left in it. I am not much of a capitalist but I believe that anyone who has tried hard to earn capital does a little planning about how to spend it.
I look at some of the failures in the government's planning-and here one does not have to look only at Canada, one can take a look at Great Britain where the master planner of all master planners threw his hands up in the air and said "I am quitting". He has left the scene of action completely. We could take a look at some of the socialist provinces in Canada to see how their planning has got them out of trouble, but I do not think that we in this House have to go that far.
We have a master planner in the Department of Transport. Formerly he was in charge of the Wheat Board and he brought in a planning program called operation LIFT, which cost the prairie farmers around $600 million. That was his master planning. We have also seen master planning in CEMA to cut back production in Ontario to 62 per cent of capacity. I suppose that overproduction would be wasteful in the eyes of the minister. We have seen master planning in the dairy industry, and we have seen excessive build ups of wrong products. No, planning alone is not the answer.
In order to control inflation we must recognize the fact that we must increase productivity, manage our money supply with a great deal of care, and cut back on wasteful government expenditures. The Minister of Finance talked about people in the Conservative Party wanting the government to cut back on government expenditures. We want the government to cut back on wasteful, unnecessary and excessive government expenditures.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: That will not in any way greatly harm economic conditions within Canada, but it will lower the debt load, lower the demand upon the capital market by government, and allow private enterprise to use more of the money which should be available to it to do the things which will provide more and more jobs for Canadians. Last year our country had to bring in something like $4 billion. This year it is estimated that government borrowings will cause an input of foreign capital into Canada at the rate of $5 billion, and this has the tendency to keep our dollar above par with the United States. Many may think that is a good thing, but it is very detrimental to the
March 24, 1976

possibility of our trading in manufactured goods, and this is what this motion deals with today.
The Financial Post of March 13 clearly spelled out big deficits, calling for retooling of trade policies. It pointed out that Canada's slump on the manufacturing trade front is getting worse. Canada ran up an $8.2 billion deficit last year, $1 billion worse than the year before. The article goes on to describe the difficult position in which Canada finds itself. How will we get out of that difficult position? Rather than the dollar increasing in value in relation to the American dollar, it should be decreasing. That might increase the cost of foreign goods, but it would allow our Canadian manufactured goods to search out and find markets which are available.
The Minister of Finance blamed the slump in our trade picture on world economic conditions. World economic conditions are not as bad as he suggested they might be. In fact the economies of Europe and the United States are improving at a much more rapid rate than that of Canada right now, and yet our trade picture, particularly with regard to manufactured goods, is not at all encouraging.
On the question of contradictory economic policies, the government has come out with high interest rates, a high growth money supply, and a high growth in government spending. On his famous telecast the Prime Minister (Mr. Trudeau) suggested that the government is going to cut back on the growth of government spending. It will be limited this next year to 15.2 per cent. Government spending contradicts other policies and encourages inflation.
The government has come along with a poor application of what I call wage and price controls. It is a poor application because these controls do not freeze food prices, the cost of housing, the cost of energy, the cost of transportation, the cost of money, or the cost of imported goods. These are the six major commodities which fall within what we might call the desires of the average consumer in purchasing and carrying on a business or livelihood within this country. The cost of living for the average person may well continue to rise because of the things the government is doing and the things the government is not doing.
We certainly will have a freeze on wages, and it does not take a financial genius to realize that somewhere down the road, perhaps in the middle of 1976, the ordinary, average worker, whether unionized or not, will find that he cannot keep pace with the cost of living, and he will find himself financially worse off than he was the year before.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: There are steps the government could be taking. There could be a cutting down on federal and provincial government borrowings outside Canada. I think borrowing outside Canada is only being done because to some extent interest rates are too high in Canada, and it is less expensive to borrow outside Canada. Foreign countries are prepared to invest in Canada because of our high interest rates, which are artificially held so high because of the action of the Governor of the Bank of Canada.
I think we must also concern ourselves with our energy picture and our energy needs. What has the government done to encourage further development of our energy resources? We are now a net importer of oil. We are still
Economic Policy
exporting something in the neighbourhood of 500,000 barrels per day, but we import about 700,000 barrels per day. We are a net importer, but the sale of that oil still does help our balance of payments and our trade picture.
The minister stated how well Canada's trade picture compares with other countries. Our trade picture did as well as it did in the last year purely because we were able to export our raw materials, our agricultural products, oil, gas, minerals and lumber. If we had not had a market for raw materials we would have been in a severe economic recession. We were able to export those raw materials through no good policies of the government. In fact many of the policies of the government made it even more difficult for those products to be exported.
What we need is for the government to create a climate where business can operate with some degree of confidence that conditions will remain the same for the next year, the next six months, or even the next three months. There has not been that degree of confidence in the government in the past couple of years. Business has become edgy, hesitant, and worried about investments.
The minister brought in an anti-inflation program under which he was going to freeze dividends, and then the next week he took that freeze off dividends. He brought in a tax on export profits, and then somehow or another that was negotiated away. Business does not know where it stands. Canadians are taking their savings out of Canada and investing them in the United States. That is not a healthy thing to see. They are forced to do that because they have no confidence in what the government is planning economically for the country.
It is the duty of the government to create a healthy economic climate. This climate cannot be created if economic policies are contradictory. A climate of growth and stability cannot be created when governments are changing their minds every other day.
The Minister of Finance quoted out of context some of the suggestions made by the hon. member for York-Simcoe (Mr. Stevens). He only has to look at his own cabinet ranks to see the difficulties in which the Canadian business world finds itself. There have been changing and contradictory policies over the past two years with regard to the whole question of energy and energy development. There have been contradictory policies with regard to investment within Canada, and the situation became so bad that the former minister of finance had to resign and leave the government completely. That must have shaken the business community-to have the minister of finance leave the government without saying why, without fully disclosing the differences of opinion he was having with the cabinet.
Since that time another minister has resigned, and there is one who should have resigned. These conditions do not create a climate of confidence or contribute to the growth and stability of the Canadian economy.
Yesterday a great confrontation took place between organized labour and the government. This does not create confidence and stability within the union movement, nor even on the management side. Management sees greater unrest in that confrontation. In the summer of 1976 labour

March 24, 1976
Economic Policy
will try to exert itself to break down the impasse government has placed upon the old well worn collective bargaining system.
This motion is timely because the government must make a clear and sharp appraisal of its actions and do something about them. We as a parliament must encourage Canadians to produce more and perhaps to consume less- to save more and invest more in Canada. The attitude of the government in not saying when the wage and price controls or economic controls will be removed, although we are now led to believe they will be removed sooner than the three years first mentioned and we hope this will be the case-this attitude must be improved upon. Controls have never been envisioned as an economic instrument; they are a psychological tool-in fact they are inflationary in themselves. They encourage Canadians not to reinvest in their own industrial plants, and they discourage Canadians from producing more. All they have done is increase the size of the government as we have seen in regard to the Anti-Inflation Board.
Another subject I should like to touch upon is our trade with our major trading partner, the United States. Something like two thirds of our exports go there, and something like one job out of every two in our industry is concerned with the export of goods to that country. In order to improve our economic climate and our competitive position in international markets the government would do well to improve its relations with the major trading nation to the south. It worries me greatly to see the erosion and breakdown of what was once considered a good neighbour policy-to see it becoming what might be considered a poor neighbour policy.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: If that were improved I am certain it would help us reach a competitive position with other trading nations.


Mr. Alan Martin (Scarborough West):: Mr. Speaker, I am pleased to have the opportunity this afternoon to speak on the motion put forward by the hon. member for York-Simcoe (Mr. Stevens) in which he deplores what he refers to as the "contradictory economic policies" practised by the government; in which he further complains of the so-called failure to "enhance the growth and stability of Canadian employment and industrial production" and, presumably in order to complete his all encompassing and one shot sweep of the horizon, he talks of a failure to encourage investment in industry. He wraps the entire effort in a backward sweep in which he condemns the government for permitting "a serious decline in our competitive position in international markets".
The very nature of the motion is, I would suggest, somewhat indicative of the practice of the hon. member for York-Simcoe-if you throw enough stones in the general direction of the barn door, sooner or later you are likely to hit something. So far we have seen the stones flying through the air, but the barn door remains unscratched. Sometimes one must wonder whether he becomes confused about barn doors and aims his stones in more than one direction. Certainly I find it confusing to be aware of the 180 degree switch in his attitude from time to time on

major factors relating to the economy. The Minister of Finance (Mr. Macdonald) referred to some of these in his address earlier.
The hon. member speaks of contradictions. May I bring to his attention, and that of the House, his recent vote against the government's inflation policy through which the government was attempting to come to grips with the serious inflationary trends prevailing in the country last summer and last fall?
Over and over again I have heard the hon. member express concern about the seriousness of our economic problems-of a too large increase in the monetary expansion-in essence, showing his concern over the serious effects of high rates of inflation. Mr. Speaker, he cannot have it both ways; either he is in favour of containing the operation of the Canadian economy within reasonable bounds under which we can all survive, or he is not.


Mr. Epp:: That is not logical.


Alan Gray Martin: I should like to quote the Governor of the Bank of Canada who in his statement, at the time of the recent rise in interest rates, was firmly committed to an increase in monetary expansion within moderate limits. It seems to me the hon. member for York-Simcoe was rather keen on this at one time. Frankly I do not know where he stands now, and I doubt if other hon. members are much wiser.
My point, Mr. Speaker, is simply this: an hon. member with the business and financial background of the hon. member for York-Simcoe should, in my view, be in a position where he can put forward positive and constructive views relating to the operation of the Canadian economy and the government's role in it-


An hon. Member:: He did.


Alan Gray Martin: -rather than continuing on a negative and, to use his own terminology, contradictory course. Surely as chief financial critic of the official opposition this House and the Canadian public can expect more from him.


Walter David Baker: You would not listen.


Alan Gray Martin: The hon. member complains of the failure- as he sees it-of the government to enhance the growth and stability of Canadian employment. But let us look at some of the facts. I wonder if the hon. member is aware of them.
In Canada the statistics for 1973 indicate that 7.2 million people were employed; in 1975 the figure stood at 8.6 million. It is true that unemployment is at a higher than desirable rate, but this is the case in the United States, and in a number of other industrialized countries as well. It is well known that the big swing came at the end of 1974 and the beginning of 1975. The increase since then, however, has generally tempered and it is anticipated that 1976 should show little or no increase-yet it will remain high. This is a problem with which the government is faced, as well as the governments of other industrialized nations.
Again, by comparison with our giant neighbour to the south, it is still expected-I am referring to the rate of unemployment-to continue at a somewhat lower rate in
March 24, 1976

Canada than in the United States. Whereas at the end of February the unemployment rate in that country stood at 8.3 per cent, Canada's rate of unemployment is not anticipated to exceed 7.5 per cent in the current year. So much for stability of employment in this country vis-a-vis other industrial areas at the present time.
As for industrial production to which the hon. member also made reference, I wonder if he is aware of the predictions by experts in the private sector that the real increase in the Gross National Product will be in the range of 5'/2 per cent. This compares with some 6 per cent being predicted in the United States; and experts for a long time had said that the recession in that country bottomed out long before it bottomed out in Canada.
While I am on this topic I suggest that it must be acknowledged that productivity in this country is still a real problem. Yet here again there is a clear indication that a low point has probably been reached, and improvement may be anticipated in this area in 1976.
The hon. member in his motion speaks of what he calls the failure of the government to encourage investment in industry. Is he aware-
Mr. White way: The hon. member for York-Simcoe (Mr. Stevens) knows what he talks about.


Alan Gray Martin: Are hon. members opposite aware of the various tax incentives provided both federally and provincially to stimulate investment in new plants? Is the hon. member familiar with federal and provincial incentives to support and stimulate various industries establishing in the less well developed areas of the country? Is he familiar with the direct investment the government has made to prop up the teetering project known as Syncrude, in order that this vital undertaking may proceed? That it shall proceed is in the interest of the many industries associated with the project, and of the Canadian public in general.
Is the hon. member familiar with the incorporation of Petro-Canada, a corporation which alone will stimulate much new, essential investment by the private sector in various industries associated with the exploration for and development of new oil and gas resources? Does this constitute a failure to encourage investment?
As the hon. member well knows, stimulation of new industrial investment has been one of the cornerstones of the government's policies in the last 30 years and, undoubtedly, will so continue in the years ahead. Obviously one must do one's best to ensure that stimulation, when provided, is effective, both as to method and area of the economy selected for stimulation. The real problem in the immediate years ahead will be to find the tremendous sums of capital which industry will require. It will not be difficult, as the hon. member suggests, to stimulate investment. It will be difficult to find the capital which will be needed for investing. How right is the hon. member's thinking. Is he aware of just how much capital business in this nation needs? Does he know what the businessmen of this nation are saying? One wonders.
The hon. member wraps his argument in what I called a backward sweep. He condemned the government for per-
Economic Policy
mitting a serious decline in our competitive position in international markets. Let us consider some aspects of this comment.
First, as the hon. member well knows, governments neither allow nor do not allow serious declines in competitive positions on international markets. The hon. member knows well the factors affecting the ups and downs of international trade. I am surprised that one with his business acumen should suggest, that the swings, up and down, occur mainly in response to specific acts of a national government. Perhaps he is referring to current difficulties having to do with the auto pact agreement which was entered into by Canada and the United States.
Let us look at this situation. Yes, we experienced a $700 million trade deficit in our merchandise trade in 1975. The auto pact and trade in auto parts have had a great deal to do with this deficit. At present we are seeing, I suggest, a rationalization process in the United States designed to counteract, in part, substantial U.S. deficits which occurred under this agreement a few years ago. Yes, the swings are there. The point remains that the swings will remain, no matter what governments do. They are independent of specific government involvement.
Hon. members, including the hon. member for York-Simcoe, are familiar with the general decline in the rate of growth of industrial activity in most countries of the western world. Without doubt, high wage and salary settlements in Canada in the last few years have hurt us. The point to bear in mind is that all these are factors involved in the over-all operation of the economy. Certainly they do not arise from any specific government action. Actually, Mr. Speaker, because of the leadership shown by the government in introducing its anti-inflation policy, a policy which the hon. member for York-Simcoe does not support, Canada, generally, has come through this economic period in somewhat better shape than a number of other countries.
It is also predicted that our exports of raw materials and semi-processed goods will rise as the economies of other countries improve. In this regard we must consider both the value and the volume of exports. In my view we ought to be more concerned about the value of our exports, because a relatively small rise in volume in the export of certain valuable raw materials and semi-processed goods could significantly affect over-all values of exports.
The hon. member spoke of interest rates. As the Minister of Finance said, it is clear that the Bank of Canada acted as it did in recent days in order to keep the rate of monetary expansion within moderate limits. Surely this moderate increase in the money supply indicates an increase in economic activity in this country. There have been substantial increases in bank borrowings in the last several months. Borrowings are up about 15 per cent. Does the hon. member for York-Simcoe not agree that this clearly shows that our economy is fast being stimulated? The rise in rates is consistent with the professional opinion of the Governor of the Bank of Canada with regard to future trends. He, unlike the hon. member, is obviously able to see encouraging developments as they take place.
Allow me to make passing reference to housing. There was a big upswing in house building in the last half of

March 24, 1976
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1975.	Some professionals in the private sector now predict a further increase in the rate of starts for 1976.
Let me also say a word about inventory investment. There was some evidence of disinvestment in 1975. It is anticipated that there will be a major upswing in this area in 1976. Growth in inventory investment may reach the figure of $350 million.
To conclude: generally, Mr. Speaker, the outlook for the coming year should be one of optimism. That is the thinking which I am pleased to see reflected on my side of the House. We do not support the pessimistic, confused, contradictory and aimless views on the Canadian economy held by hon. members opposite and epitomized in the motion moved today by the hon. member for York-Simcoe.


Mr. Jim Balfour (Regina East):: Mr. Speaker, I want to address my remarks today to the manner in which economic policies of the present administration have failed to encourage and sustain investment in Canadian industry. I think, in dealing with a matter such as this, that it is essential to reflect on the present situation and ask ourselves why it is the way it is.
It was obvious in 1974 that Canada and its economy were in a major economic and financial crisis which was likely to worsen before it improved. Inflation during 1974 ran between 11 per cent and 14 per cent depending upon how it was measured, and for the first half of 1975 it was still running around 10 per cent. Increases in wage settlements, which in 1973 were under 10 per cent, were 17.4 per cent at the end of 1974, and 18.5 per cent in mid 1975.
Meanwhile unemployment rose from 5.4 per cent in 1974 to 7.2 per cent in mid 1975, strikes were causing major disruptions in the economy and exceeded one day per year for every member of the labour force, real GNP and industrial production had been falling for almost a year, and the value of the Canadian dollar had declined by over 6l/2 per cent during the preceding year. All in all it was a pretty grim picture, and inflation was correctly identified as the villain.
Unfortunately the government refused to recognize that this situation existed until late 1975, and then in complete contradiction to its stated policies of only a few months previous, it imposed upon Canada, as a solution, an ill-defined, hastily organized, and so far ineffectual program of wage and price controls.
Economists offer a variety of explanations for inflation, ranging from cost or price push explanations to sociological explanations. According to Lawrence B. Smith, writing in the January-February, 1976 "Tax Journal", and I quote:
There is really only one explanation for our present inflation, namely that there has been too fast an increase in the rate of growth of the money supply. In fact the money supply, regardless of how it is measured, has been increasing at an astronomical rate for the last five years, and in 1974 alone it rose 20 per cent. In the first three-quarters of 1975 it rose at an annual rate of 17.5 per cent, and during the three months ending November 30, 1975, it rose at an annual rate of 21.9 per cent.
Since real output in Canada has been increasing at an annual rate of under 3 per cent during this period, there has been annually an extra 15 per cent to 17 per cent more money available to purchase every unit of output.

Thus, either people must increase their savings very considerably or else prices must rise rapidly to absorb this extra purchasing power.
Rather than display restraint, however, the government allowed its own rate of growth and spending to sky-rocket. Between 1965 and 1974 government expenditures as a percentage of GNP rose from 29.9 per cent to 39.1 per cent or, stated differently, government expenditures rose approximately 65 per cent faster than expenditures in the rest of the economy. This type of uncontrolled spending is especially harmful because to a very large extent the financial resources for this expansion were raised internally.
By borrowing from the Bank of Canada, that is to say, by increasing the money supply, or by borrowing abroad under a fixed or managed exchange rate, the government generates inflationary pressure.
Since the Bank of Canada's holdings of government securities rose at an annual rate of 13.5 per cent over the last five years while holdings in the private sector rose at an annual rate of under 1.0 per cent, excluding Canada Savings Bonds, and since increases in the Bank of Canada's holdings of Canadian government securities were the primary way of meeting federal government dollar financing requirements, it is clear that a massive increase in the money supply financed the increase in government expenditures.
As Lawrence Smith says, and I quote:
Consequently, in the sense that the need to finance the growth of government expenditures was a major reason for the excessive expansion of the money supply, the growth in government expenditures directly contributed to the accelerating inflation.
There are few members here who do not realize that there is one essential ingredient in all plants to start up a new business, to expand an existing one, or take on new lines, and that is capital. If we cannot find the capital for investment in productive Canadian business enterprises in sufficient quantities, in the right form and at a reasonable price, then we will simply not grow as a nation, and the miseries of unemployment, inflation, and human disappointment will certainly jeopardize our society.
There are four basic forms or sources of capital: first, savings from individuals; second, savings by business, normally in the form of retained earnings; third, savings by government; fourth, foreign investment in our country, either in the form of debt or equity.
Since we must concern ourselves with government and its effect on business investment, we must direct repeated attention to the inability of the government to save. All levels of government, as we have learned, tend to be dis-savers. All governments, and especially this government, tend to develop extravagant habits. To finance their extravangance they draw on the savings of business and individuals, with the result that these savings do not reappear in the economy in the form of capital for investment. Governments in Canada at all levels last year dissaved over 4.5 billion to finance their budgetary deficits.
Andrew G. Kniewasser, President of the Investment Dealers Association of Canada, in a recent speech said:
Indeed, Canadians are going to have to save enough or import enough of other people's savings to finance unprecedented levels of capital expansion all over this country. The agreed figure in constant dollars is $500 billion between now and 1985, and in current dollars, close to $900 billion.
March 24, 1976

Mr. Kniewasser adds:
I am using GNP deflators of 6 per cent over the next five years and 5 per cent over the following five years in making these estimates. Gross capital formation will have to rise from 22 per cent to 26 per cent of GNP, an enormous shift in financial management. We will have to produce more, consume less, save more and invest more in our country than ever before in our history. We will also probably have to persuade foreigners to divert their savings from their own countries to Canada as never before in our history.
Canada has become one of the most highly capital-intensive countries in the world. Some sources say that more than $130,000 in new business investment is needed to create the average new job in Canada. High taxes and continued inflation prevent the public from saving and investing as much as is desirable, and the situation for business savings is also difficult.
Governments and perhaps the public, including labour unions, which have a direct stake in the prosperity of business, appear to have little interest in the capital-formation problems of corporations. Two decades ago Canada was among the leaders in the industrialized world in terms of fixed capital investment as a proportion of total output. By 1973 it was estimated by at least one source that Canada had fallen to sixteenth position on this scale among 23 industrially advanced countries.
One very graphic example of how government has shown little interest in this problem appears in the undervaluation of inventories problem. In 1974 Canadian industry earned $4.3 billion in inventory profits and paid an extra $1.5 billion in taxes that would not have been payable under stable price conditions. Total taxes paid in that year were $6.4 billion, so the taxes on inventory profits added 20 per cent to the corporate tax bill. This was a welcome windfall for government, but it was a serious drain on corporate cash flow. The result is that inventories account for an increasing proportion of current assets and firms need a lot more cash in order to finance these inventories. Inflation also has the obvious effect of making new development more expensive and therefore less attractive to business.
The results of inflation on business decision-making in Canada can be summarized in four basic points. First, the risks involved in investment in new productive capacity are increased because of the wide disparity between the prices at which existing plants can be operated profitably and the prices needed to make new plants profitable. This diminishes the incentive to invest.
Second, the illusion of prosperity created by understated costs may have encouraged firms to accept higher wage settlements and to take greater risks with inventory accumulations than they otherwise would have done.
Third, the concern about the inadequacy of cash flow, in contrast, has encouraged firms to raise their prices by more than they otherwise would as a way of replacing the savings that are not being generated by depreciation and that are being drained away by taxes on inventory profits.
Fourth, the over-all liquidity of the corporate sector has been reduced, with the result that corporations have less resilience in confronting new challenges. The situation,
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simply stated, is not healthy and it is obvious something must be done.
It is not my purpose, Mr. Speaker, to conduct for the benefit of the members present a one man inquiry into Canada's economic situation and I shall simply conclude my remarks at this point with some thoughts on what I believe must be done to improve the situation.
First of all, individual savings must be encouraged by winning the attack on inflation and by reducing taxes. In order to do this all Canadians must help by reducing their demands on all levels of government. Too many people still believe that when the government does something it is free.
Secondly, corporations must be encouraged to save more. This means a better environment for the development of retained earnings within the firm, lower levels of corporate taxation, greater opportunities for true profits, and the acceptance by the tax authorities of more realistic accounting techniques for the replacement of assets.
Third, government must save, not dis-save, for if it continues to skim off the cream of the savings of individuals and business it only drives up the cost of money for business and seriously impedes new business investment.
Fourth and finally, foreign investors must be encouraged to divert a portion of their savings to Canada rather than to use them at home.
In conclusion, Mr. Speaker, I quote from Judith Maxwell's excellent study recently published by the C. D. Howe Research Institute entitled "Challenges to Complacency in our Society":
1976 will be a time of transition and of adjustment. The really wrenching adjustments will have to be made by institutions-government, business and labour-adapting to the tougher environment of the late 1970's. Now is the time to stop the confrontations and get on with the job.


Mr. D. M. Collenette (York East):: Mr. Speaker, I was not sure whether I would get the opportunity to speak this afternoon, but I am sure I can fill up the next five or ten minutes with some comments about this very interesting motion.
The motion before us is a prime example of how the official opposition seeks to mislead the Canadian public. The hon. member for York-Simcoe (Mr. Stevens) really amazes me by his criticisms in view of the obviously difficult world economic climate in which Canada has been forced to operate for the past two years.


Mr. Gillies:: Same old trash.


David Michael Collenette: It may be the same old trash but it got us elected two years ago. I should now like to show in the next few minutes, if hon. members opposite will permit me, how despite the general inflationary and recessionary climate experienced by all industrialized countries Canada has maintained a relatively healthy economic environment. This relative stability is due to the policies of the federal government.
The hon. member for York-Simcoe appears in many ways to profess-I do not want to be too harsh-a profound ignorance of an essential economic fact today, and that is that it is not possible to isolate the performance and work-

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ings of one country without regard to economic conditions in other countries, especially without regard to the United States with whom we do some 60 per cent of our total trade.
Not only must we in this country concern ourselves with the inter-relationship between personal incomes, consumer expenditures, output, employment, capital investment, prices, profits, savings and interest in an analysis of our own economic health, but we must also look at each of these items as they relate to our major trading partners. There is also the additional variable, when we take this more global view into account, of analysing the impact of exchange rates.
This world-wide inter-dependence of economic conditions was the principal reason why the Liberal party fought extremely hard, and as we know very successfully, against the policy of a wage and price freeze as proposed by the official opposition in 1974. Because Canada is one of the world's major trading nations we were very vulnerable to the inflationary pressures that swirled around us in 1973 and 1974. In effect we were inporting inflation, and no degree of price and wage freeze would have isolated us from the effects of the most serious bout of inflation since the second world war, 30 years ago.
However, I do not want to flagellate the opposition too much, Mr. Speaker, because they paid their price with interest two years ago for the errors of judgment they made. A freeze at that time would have been iniquitous in its effect upon the Canadian people. Perhaps the official opposition would have preferred this iniquitous solution. Perhaps they would have preferred a solution which was really put into effect by our American neighbours to the south, but maybe I can come to that in a moment. I do not believe that the Canadian people would have appreciated that kind of policy.
Repeatedly over the past year we have read reports from august economic bodies such as the Economic Council of Canada, the Organization for Economic Co-operation and Development, and others, which laud the policies pursued by the Government of Canada during this period. In order to refute the implications of the motion before us, let us look at some of these policies, since this is the essence of the criticism that is made in the motion.
The hon. member for Crowfoot (Mr. Horner) dealt extensively with the subject of energy, but the one price oil system has for two years provided a balance in this country. It has meant that all Canadians have been forced to shoulder the burden of the increased world price of oil. In addition to the one price policy we have kept the domestic price below the world price. This has not only benefited consumers who have had a chance to adjust themselves to higher fuel prices and scarcity of supply, but more important, certainly in terms of the motion before us, Canadian industry has benefited from a lower than world price for oil and natural gas. There is no doubt, Mr. Speaker, that the results of this policy have been to keep more Canadians in work than would have been otherwise possible. It has kept industries operating at a healthy capacity.
The subsidization of one price oil has resulted in a net deficit to the treasury. With the decline in export tax revenues from the sale of crude oil to the United States, the deficit in the oil account had to be met from general

revenues. This, of course, placed additional cash demands upon the government and has contributed to inflation.
But, Mr. Speaker, think of the alternative. Think of the industrial havoc that would have been wreaked in Canada, especially in Ontario. It is interesting that the hon. member for York-Simcoe is one of my neighbours in Ontario, and I ask him to think what could have happened in Ontario had the government not pursued this policy. Perhaps he does not appreciate the number of jobs saved as a result. Certainly the industrial workers in my constituency and in other industrial areas of this country appreciate the effect of this policy.
We have been attacked for our expansionary fiscal and monetary policy over the past two years, but we had little choice. A government that is Liberal, that is responsible but compassionate, had no option but to expand the monetary supply, to pay for existing government programs hit by inflation. Is the hon. member for York-Simcoe telling this House and the Canadian people that he was against cushioning the effect of inflation for the elderly, the poor with children, the unemployed, and the veterans? That is what the government did. It indexed old age pensions, family allowances, unemployment insurance benefits. Is the hon. member for York-Simcoe against this, and are the members of his party?
The government also indexed personal income tax and reduced personal taxes as well as corporate and commodity taxes so that incomes could keep pace with inflation, consumer demand could be sustained, and capital investment encouraged. As a result we were able to keep Canada's productive capacity in manufacturing and other areas stimulated at a time when the rest of the world crumbled into recession.


Mr. Elzinga:: Mr. Speaker, I rise on a point of order. I wonder whether the hon. member would entertain a question?


David Michael Collenette: Well, Mr. Speaker, I might have been disposed to answer a question had the hon. member sat in his seat for the last two hours awaiting his turn to speak, as I did. With only two minutes left I feel compelled to continue.
I am sure hon. members on the other side would argue that we have encouraged inflation in Canada, and I suppose to some degree we have. But look at the alternatives, Mr. Speaker. The hon. member for York-Simcoe talked about the United States. Is he saying that his party would have liked to inflict upon the Canadian people the heartless and, indeed, almost ruthless policies of the Ford administration in the United States? Has the hon. member paid many visits to the United States over the past couple of years? Has he seen the swarms of unemployed in the major cities; has he digested the tremendous increase in the welfare rolls, especially in the northern American states; has he been to Buffalo, Detroit or any other northern city and seen how an insensitive government has almost ground the economy to a halt?
Sure, the inflation rate in the United States last year was well below ours. The hon. member for York-Simcoe is
March 24, 1976

correct in saying this, but at what cost to the dignity, the self-esteem, and the economic health of American citizens?
A couple of percentage points more in the rate of inflation are fine with me if it means that the old will not go hungry, the young will not be poorly clothed, and the worker will not end up in a lineup at an unemployment insurance office.
If we had decided to limit government expenditures, if we had kept tax levels at previous levels so that we might have had a balanced budget, as is often advocated by hon. members on the other side, what would have been the result? I shall tell you, Mr. Speaker, and members on the other side. It would have meant lower personal income, lower personal spending, lower national output and lower profits, but substantially higher unemployment. Is this what members on the other side want?
I see that my time has almost expired. I do not really want to review the very excellent summary in the 1975 Bank of Canada Report which detailed the health of this country, but I do suggest that the hon. member for York-Simcoe might do well to read it.
Hon. members opposite would do well to generate their talents and energies into thinking about the type of society we want in the post-controls period rather upon government policies of the past. It is coincidental that the hon. Leader of the Opposition (Mr. Clark) said at a convention recently, "We want to tell Canadians what the Progressive Conservative party is for and not what they are against." I suggest that hon. members opposite might heed their own leader's advice.



ROUTINE PROCEEDINGS


Mr. Speaker:: It is my duty to inform the House that an objection signed by the hon. members for Essex-Windsor (Mr. Whelan), Hamilton Mountain (Mr. MacFarlane), Nip-issing (Mr. Blais), Thunder Bay (Mr. Penner), Welland (Mr. Railton), Stormont-Dundas (Mr. Lumley), St. Catharines (Mr. Parent), Kitchener (Mr. Flynn), Scarborough West (Mr. Martin), Peel-Dufferin-Simcoe (Mr. Milne) and Glengarry-Prescott-Russell (Mr. Ethier), has been filed with me pursuant to Section 20 of the Electoral Boundaries Readjustment Act, chapter E-2, R.S.C., 1970, to the report of the Electoral Boundaries Commission for the province of Ontario. Is it agreed that the said objection shall be appended to today's Votes and Proceedings'?


Some hon. Members:: Agreed.
Disposition of Supply Motions



GOVERNMENT ORDERS

[Stage Direction]
MOTION FOR CONCURRENCE IN VOTE 10b, DEPARTMENT OF NATIONAL REVENUE
["-this House stands adjourned until two o'clock tomorrow.\nAt 6:39 p.m. the House adjourned, without question put, pursuant to Standing Order.", 'Thursday, March 25, 1976']
Mr. Speaker:: It being 5.45 p.m., pursuant to order made earlier this day, it is my duty to interrupt the proceedings and put forthwith every question necessary to dispose of the business of supply relating to Supplementary Estimates (B), and all stages of the bill based thereon, together with interim supply and first reading of the bill based thereon.


Joseph Jacques Jean Chrétien: That Vote 10b, in the amount of $298,000 of the Department of National Revenue for Taxation-Office of the Administrator-Antiinflation-Programme expenditures in Supplementary Estimates (B) for the fiscal year ending March 31, 1976, be concurred in.


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


Mr. Lambert (Edmonton West):: Mr. Speaker, I rise on a point of order. This is a matter to which reference has been made in the past, and it is one to which I would take great exception, particularly in respect of the nature of its appearing on the order paper.
Standing Order 58(4) reads as follows:
Forty-eight hours' written notice shall be given of motions to concur in interim supply, main or supplementary estimates, to restore or reinstate any item in the estimates. Twenty-four hours' written notice shall be given of an opposition motion on an allotted day, or of a notice to oppose any item in the estimates, or for the purpose of setting down any item or items in the main or supplementary estimates for consideration in a committee of the whole.
The hon. member for Halton-Wentworth (Mr. Kempling) gave notice at precisely 6 p.m. yesterday, just at the limit of the 24 hours, of his intention to oppose an item in the estimates. That was written notice of intention to oppose or, in other words, to reduce the item. How is it now that there appears ahead of it a motion restoring the item? I see that Mr. Speaker is shaking his head, but the motion in respect of Vote 10b involves the restoring of the item.
There was a motion put down by the hon. member which complied with the rules requesting approval for a reduction of a particular item. Now the procedure, and I suggest it is quite erroneous procedure of this House, which has become the practice is that the motion is never put, but there is a prior motion which appears somehow out of thin air. How did it get there unless it was by an arrangement with the Clerks at the Table? There can be no other way.


An hon. Member:: Collusion.


Marcel Joseph Aimé Lambert: I do not suggest there is collusion because there is no time for that. On previous occasions, as on this occasion, it is 24 hours' notice. The rule says specifically that 48 hours' written notice shall be given.
What I am concerned about is an expression of the House with regard to the motion of the hon. member. Your Honour was a member of the procedure committee when

March 24, 1976
Disposition of Supply Motions
these rules were devised and you will know it was clearly indicated at that time, and this was followed for a period in this House, that an hon. member can oppose an item in order to allow for the expression of an opinion by the House either in respect of the reduction of the item to $1, or to a specific amount, or in opposition to it entirely.
Then there was a change, notwithstanding protests from this side of the House. Former Speaker Lamoureux decided that somehow a procedure could be followed whereby automatically out of thin air there appeared a motion under the name of the minister of the department with which the item is concerned to restore the total amount.
This caused a great deal of difficulty in the House because in many instances when there are main estimates the House is being asked to vote on an omnibus item when there is no procedure whereby the House can be asked to express its opinion on the item that is posted.
These rules were put in for a particular purpose, namely, to allow an individual member of the House to get an expression of the House on an item in the estimates. This is now totally impossible.
First of all, I say it is irregular for this motion appearing in the name of the President of the Treasury Board (Mr. Chretien) to appear on the order paper. I find no authority whatsoever for it in the rules. Secondly, I find no authority whatsoever, whether it is Standing Order 58(9), (10) or (11) which governs the procedure as to how the item shall be disposed of, and appropriation bills shall be considered, namely, the motion on behalf of the President of the Treasury Board to restore the item.


Mr. Speaker:: I hesitate to interrupt the hon. member, but I think we should be clear about the terms we are using. I will permit the hon. member to carry on in a moment. The motion to which he is referring in the name of the President of the Treasury Board is not a motion to restore an item. That would presuppose that the House had made a disposition to reduce it.
The motion in the name of the President of Treasury Board is a motion for concurrence in the item, and it is there because there is a blanket motion in the name of the President of Treasury Board for concurrence in all of the items in the supplementary estimates. They are not listed individually, because it is not felt necessary in the practice followed by the House over many years to list the items individually unless there is a notice of opposition. Therefore, in the face of a notice of opposition, in order to accommodate that vote, the motion is separated by practice-and by no other reason-in order to see to it that the notice of opposition by the hon. member is on the order paper together with a specific aspect of the general notice for concurrence. But it is not a motion to restore the item; it is a motion for concurrence.
If there were notices of opposition on every item contained in the supplementary estimates, presumably the House, for the purpose of recording that, would have to separate the general, blanket, omnibus motion for concurrence by the President of the Treasury Board into each item so that it would face opposite an item of objection. But it is not a motion to restore the item. A motion to restore the item could presumably only be made after the

House had addressed itself to a notice of objection and had accepted it in some way.


Marcel Joseph Aimé Lambert: By your own words, Mr. Speaker, you have drawn my attention to what is contained in 58(4). It provides that 48 hours' written notice shall be given to motions to concur in a supplementary estimate. Where was the compliance of the 48 hours' requirement with regard to this particular item? There was no 48 hours' notice. There was undoubtedly a general 48 hours' notice for the motion which appears on the order paper to concur in Supplementary Estimates B. That I am not disputing. That item I am not disputing.
But I do find it singular, and I do object, that any hon. member on either side of the House who wishes to post a single item within the 24 hours is confined to the 24-hour rule, comes to the deadline, and finds that there suddenly appears on the order paper a counter-motion and, particularly, that the counter-motion takes precedence in being put. The net result is that there is no vote, there is no opportunity for opinions to be expressed by the House on the particular motion of an hon. member who has complied with the rules. That is the frustration, and that is where I suggest that in the past the Chair has misdirected itself.
I am not suggesting that ultimately, if a vote on the motion of the hon. member for Halton-Wentworth is not carried by the House, the general motion therefore takes precedence. I am not questioning the general motion which I shall accept was filed within 48 hours to concur in Supplementary Estimates B, the same way that yesterday there was filed a notice to concur in interim supply. But nothing has been done with regard to this particular item appearing as 10(b) with regard to the Administrator of the Anti-Inflation Board.
How else is the House to proceed but to follow the procedure which I insist is the right one? It is my contention that the motion which should be put is that which stands in the name of the hon. member for Halton-Wentworth.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: The other motion, I suggest with respect, is both irregular and not according to the rules. What happened to the 48 hours' notice? It was not on the order paper; it has not complied with the 48-hour requirement, and on the side of the government there has to be compliance. There cannot just be a general motion put down which can then be translated somehow by the Chair into a particularized item on the order paper.


Mr. Speaker:: If the hon. member for Edmonton West will permit me, in accordance with the rules the hon. member for Halton-Wentworth has filed a notice of objection; it is not a motion. There is no question to which the House can address itself. There is, in fact, a notice of objection which, in accordance with the rules, notified the House that the hon. member insists on a separate vote on the particular item.
There must be a question to which the House can address itself, and the notice of objection by the hon. member is not a question. Therefore the House has nothing to which it can address itself. It is therefore necessary that
March 24, 1976

some question be put on the order paper which identifies the area of objection, and which permits the House to address itself by a vote to a question.
If one reads the notice of objection by the hon. member for Halton-Wentworth it is clear that the House could not address itself to such an item under the present rules unless the hon. member had put down a motion that the House direct that something be done in respect to that item. But that is not what has taken place. Therefore this seems to be the only feasible practice. If there is a better one, we certainly would welcome any suggestions which would clarify the position. At the moment, however, this is the only course which seems feasible.


Marcel Joseph Aimé Lambert: With respect, Mr. Speaker, I do not wish to appear argumentative, but what the hon. member for Halton-Wentworth did was in effect give notice to reduce item 10(b) from $298,000 to $100,000. Now, how this is expressed by the officers at the Table, I cannot say, but that is the intent of the motion. The intent is to reduce the item from $298,000 to $100,000. That is all.


Mr. Kempling:: May I just clarify a point, Mr. Speaker? I approached the Table and asked for guidance on the proper form to use in order that I could register my objection. It was my assumption, perhaps wrongly, Sir, that by following their advice this matter would result in a vote. I took the advice of the Table and I was given an example, as a matter of fact, of a similar motion which had been put down in 1972. I followed that example and altered it only as to the particular circumstances and filed it with the Table at six o'clock. I assumed that with that direction the matter would then be brought to a vote.


Mr. Speaker:: The hon. member for Halton-Wentworth was correct in his course. The advice he received was right. As a result of the action taken by the hon. member, the method he used may in fact result in a vote taking place in the House on that separate item. But instead of it being a vote on a motion in the name of the hon. member for Halton-Wentworth to effect the item, it will be a motion by the President of the Treasury Board to concur in the item. But that is as close as the House can come under present practices.
I say the point of order is well taken; it is well understood, and it is one to which we have addressed ourselves many times. If there is a better and more direct procedure for achieving this goal I am sure the House would be happy to hear it. However, with all due respect, I do not believe the time to solve the problem is in this particular instance. The procedure followed with respect to this instance is precisely the same as that followed the last time around on supply.


Donald W. Munro: On the same point of order, if I may, Mr. Speaker, I came to this House-


An hon. Member:: Too bad!


Donald W. Munro: -in the belief that there was some democratic procedure we could follow in this House.


Some hon. Members:: Oh, oh!
Disposition of Supply Motions


Donald W. Munro: Mr. Speaker, I have a point and I wish to be heard. There have been two supplementary estimates brought before us. I cannot understand why it is not possible, first of all, to have all the estimates required at one time. There have been As, now there are Bs. Next year there will be Cs. There will be three or four supplemental estimates.
The only alternative to the proposal put forward by my hon. friend from Halton-Wentworth is an amendment to the unopposed items in the estimates of March 22, which are here. We should be able to register our disagreement with certain items in the estimates, to have them withdrawn or removed. I will vote against them. But there must also be a method.


Some hon. Members:: Oh, oh!


Donald W. Munro: I have a right to stand on my feet!


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I am prepared in these circumstances to listen to the point of order, but I think something should be made clear. The Standing Orders of the House provide a procedure whereby estimates are studied in the committee, amendments moved, and so forth, and if effective the estimates would be reported back to the House with amendments and then would have to be reinstated. I do not challenge the interest of the hon. member in raising this point of order; however the process has gone on for some time now. Undoubtedly there can be suggestions to improve the procedure, but it is a procedure that has been used several times in the past as a result of points of order.
The supply bill will be introduced today instead of tomorrow at the hour at which it is expected to be voted on. Furthermore, the supply bill will be debated in all stages tomorrow. This is moving further and further in the direction of getting away from the procedure we followed in the past. However, I wanted to be clear that at this moment the Standing Order is specific, that the duty of the Chair is to intervene and to put without debate or amendment all questions necessary to decide on the supplementary estimates that are before us.
The hon. member seeks the floor on a point of order. I have given three hon. members the floor on a point or order. Let us be clear that we should not be debating what we are doing, but continuing to speak about order, and if we are talking about improvements in the procedure for supply, these are procedures that have been not only in use for some time but in effect, in respect of these supplementary estimates which have been before standing committees, hon. members from all parties have been present there, have discussed them, have moved amendments to them, and so on, and at this point the final step is being taken.
The hon. member's point is well noted and continues to form part of the study which is going on to try to improve these procedures, but again I say that we cannot solve the problem entirely at this moment.

March 24, 1976
Disposition of Supply Motions Mr. Munro (Esquimalt-Saanich): Mr. Speaker, my point of order is that the motion put forward in the name of the President of the Treasury Board has an order in advance, although posted later, than the order put in the name of the hon. member for Halton-Wentworth (Mr. Kempling). That is the order in which they should be. The motion put by the hon. member for Halton-Wentworth should be first and should be followed, if necessary, by the motion put by the President of the Treasury Board. This is not order, this is disorder. The government motion, although posted later, has taken precedence over the other motion.


Mr. Speaker:: Order, please. Let me say again that the points which have been raised are points to which the Chair has addressed itself in the past. The suggestion is a valid one. Unfortunately, the implementation or execution of the idea contained in the suggestion is not as simple as it appears. The alternatives have been examined, and this has been felt to be the only feasible way to proceed as a result of an objection by an hon. member to the singling out of an item which must be voted on separately. This is the best procedure up to this point. If hon. members who have intervened have a better suggestion, the Chair would be delighted to receive it.
The question is therefore on the motion in the name of the President of the Treasury Board relating to the particular item. The motion has been read. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Speaker:: Call in the members.


['Call in the members.']
Mr. Speaker:: I therefore declare the motion carried. The question is, therefore, on the motion of Mr. Chretien, seconded by Mr. Sharp:
That Supplementary Estimates (B) 1975-76 laid upon the Table, Tuesday, March 2, 1976, except the item previously disposed of, be concurred in.
Is it the pleasure of the House to adopt the said motion?
March 24, 1976


Some hon. Members:: On division.
Motion agreed to on division.
Mr. Chretien thereupon moved that Bill C-90, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1976, be read the first time and be printed.


[Stage Direction]
Motion agreed to.
['On division.\nMotion agreed to on division.\nMr. Chretien thereupon moved that Bill C-90, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1976, be read the first time and be printed.']
Joseph Jacques Jean Chrétien: that the bill be read the second time and referred to the committee of the whole.


[Stage Direction]
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Laniel in the chair.
['that the bill be read the second time and referred to the committee of the whole.']
Gérald Laniel: Shall Clause 2 carry?


Marcel Joseph Aimé Lambert: On division.
Clause 2 agreed to.


Gérald Laniel: Shall Clause 3 carry?


Some hon. Members:: On division.
Clause 3 agreed to.


Gérald Laniel: Shall Clause 4 carry?


An hon. Member:: On division.
Clause 4 agreed to.


Gérald Laniel: Shall Clause 5 carry?


An hon. Member:: No.
Clause 5 agreed to.


Gérald Laniel: Shall Clause 6 carry?


An hon. Member:: On division.
Clause 6 agreed to.


Gérald Laniel: Shall Clause 7 carry?


An hon. Member:: On division.
Clause 7 agreed to.


Gérald Laniel: Shall the Schedule carry?


Marcel Joseph Aimé Lambert: On division.


[Stage Direction]
Schedule agreed to.
['On division.']
Gérald Laniel: Shall Clause 1 carry?


An hon. Member:: On division.
Clause 1 agreed to.


Gérald Laniel: Shall the preamble carry?


An hon. Member:: On division.


[Stage Direction]
Preamble agreed to.
['On division.']
Gérald Laniel: Shall the title carry?


Some hon. Members:: On division.


[Stage Direction]
Title agreed to.
Bill reported.
['On division.']
Joseph Jacques Jean Chrétien: the third reading of the bill.
Motion agreed to and bill read the third time and passed.
Interim Supply


Mr. Speaker:: Order, please. Pursuant to order made earlier this day, the question therefore is on the motion of the President of the Treasury Board (Mr. Chretien) with respect to interim supply.



Joseph Jacques Jean Chrétien: That this House do concur in interim supply as follows:
That a sum not exceeding $4,970,732,370.57 being the aggregate of:
(a)	three-twelfths of the total of the amounts of the items set forth in the Estimates for the fiscal year ending March 31, 1977, laid before the House of Commons on February 18, 1976, $4,424,625,940.25;
(b)	an additional eight-twelfths of the total amount of Energy, Mines and Resources Items L50 and L55, Finance Item 20, Regional Economic Expansion Item 25, Transport Item 110, Urban Affairs Item 20(Schedule A) of the said Estimates, $8,407,333.33;
(c)	an additional six-twelfths of the total amount of Urban Affairs Item 10 (Schedule B) of the said Estimates, $3,315,906.00;
(d)	an additional four-twelfths of the total amount of Industry, Trade and Commerce Item 55 and Urban Affairs Item 15 (Schedule C) of the said Estimates, $150,479,333.33;
(e)	an additional three-twelfths of the total amount of Energy, Mines and Resources Item L45, Regional Economic Expansion Item L35, Secretary of State Item 90, Transport Items 40, 50 and 90, and Treasury Board Items 5 and 10 (Schedule D) of the said Estimates, $133,618,375.00;
(/) an additional two-twelfths of the total amount of Finance Item 5, Indian Affairs and Northern Development Item L65, Industry, Trade and Commerce Item 75, Transport Items 65 and L75 (Schedule E) of the said Estimates, $51,615,199.33;
(g) an additional one-twelfth of the total amount of Energy, Mines and Resources Items 1 and 70, Environment Item 15, Indian Affairs and Northern Development Items 5, L60 and L85, Manpower and Immigration Item 10, Post Office Item 5, Privy Council Item 25, Secretary of State Item 15, Solicitor General Item 1, and Supply and Services Items 1 and 15 (Schedule F) of the said Estimates, $198,670,283.33;
be granted to Her Majesty on account of the fiscal year ending March 31, 1977.


[Stage Direction]
Motion agreed to.
Mr. Chretien thereupon moved that Bill C-91, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1977, be read the first time and be printed.
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the bill be read the second time?


Stanley Howard Knowles: Tomorrow.


Mr. Speaker:: Pursuant to order made earlier this day, at the next sitting of the House. Agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It being six o'clock-


Some hon. Members:: Hear, hear!


Mr. Speaker:: -this House stands adjourned until two o'clock tomorrow.
At 6:39 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, March 25, 1976