1976-11-08

Mr. Speaker:: Order, please. With the happening over the weekend of two rather blessed events-


Some hon. Members:: Hear, hear!


Mr. Speaker:: -both in the city of Ottawa-
[ Translation]
-one at least for the leader of the Progressive Conservative Party, and the other for the leader of the Social Credit Party of Canada.
[English)
I am sure that the House will forgive me if 1 see one or two members for a moment before beginning the question period. I promise faithfully under the circumstances to make up the time at the end. The right hon. Prime Minister.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I want to echo your own words and congratulate the two heroes of the events over the weekend, and as far as the Leader of the Opposition (Mr. Clark) is concerned to welcome him to the club of fathers. We will be expecting many more cigars in the years to come.
With regard to Le Parti Credit Social, I would preface my remarks by saying that for some weeks now we have regretted the absence of the hon. member for Temiscamingue (Mr. Caouette) who has spent some time in hospital. We all hope to see him back in the House very soon.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: On behalf of my party, I should also like to extend our congratulations to the hon. member for Lotbiniere by welcoming him once more to the House, after the Social Credit leadership convention which was a success for him.
His election seems to reflect youth. Indeed, even though he has been in the House of Commons for nine years, the hon. member for Lotbiniere will be only 33 next week. That is in the order of things, Mr. Speaker, for they say that from the demographic viewpoint his constituency is one of the youngest in the country. But in spite of his being young, the new Social Credit leader is one of the senior members in the House, and as the leader of his party in the House of Commons, he acted as a skilled parliamentarian.
He will now have the opportunity to show further evidence of his political talents and we express to him our good wishes. Once more, I congratulate him for his victory and, on behalf of my party, I offer him our best wishes.


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, in my own case 1 think it not appropriate to refer to a hero. If there were heroics 1 think it would be more appropriate to refer to two heroines. I should like simply on my own behalf, and on Maureen's and Catherine's, to express my appreciation to my colleagues in the House of Commons for their good wishes, many of them delivered personally. We appreciate them very much. Mother and child are doing very well and the father is recovering.


Some hon. Members:: Hear, hear!
[ Translation]


Charles Joseph Clark: On behalf of my colleagues and on my own behalf, I wish to congratulate the hon. member for Lotbiniere (Mr. Fortin) for having acceded to the leadership of the Social Credit Party of Canada. We know it is no easy task to succeed the hon. member for Temiscamingue (Mr. Caouette), but we feel quite confident that the hon. member will be able to maintain the impetus of his predecessor, and that he will fight with as much ardour for the principles of his party and the unity of our country. We extend to him our best wishes for success.

I should say, Mr. Speaker, that I am prepared, however reluctantly, to pass along the title of being the youngest party leader in the House of Commons to my colleague, the hon. member for Lotbiniere (Mr. Fortin). That, as the House knows, is a distinction that has passed from the NDP to the PC's to the Social Credit party. We are all naturally waiting to see what might happen next to the title.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: When the Prime Minister (Mr. Trudeau) welcomed me to my position as leader of this party, he did me a great honour by saying that I took my position in the tradition of my predecessor, the hon. member for Halifax (Mr. Stanfield). That is a commendation and a compliment that should also be paid to our colleague, the member for Lotbiniere. His conduct in the House of Commons has been in the spirit of his predecessor, the hon. member for Temiscamingue (Mr. Caouette) who, as the leader of that party and as one who had an impact upon Canadian affairs, while he might have been
80001 -S3

November 8, 1976
House of Commons
regional in base was always national in outlook and in thinking.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: That is a characteristic which is shared by the new leader of his party. Many of us have come to know him personally as a friend. We have come to respect him as a House leader and a parliamentarian. On behalf of my party and myself, I want to extend our congratulations and our welcome to the hon. member for Lotbiniere as the leader of his party in the House of Commons.


Some hon. Members:: Hear, hear!


Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, in commenting on the blessed events over the past weekend, I wish to first say on behalf of my colleagues that we are delighted to hear that the women in the Clark household are doing well and progressing in a healthy manner.


Some hon. Members:: Hear, hear!


John Edward Broadbent: We extend to both women our heartiest good wishes, and to the father as well. With reference to the latter, given the rather lofty state the Conservative party has maintained in recent months in the Gallup poll, as an old father, I would like to offer some unsolicited advice to the Leader of the Opposition (Mr. Clark) and suggest to him that he spend less time in politics and more time at home with his family.


Some hon. Members:: Hear, hear!


Mr. Guay (St. Boniface):: He is more successful there.


John Edward Broadbent: Switching immediately to the other blessed event, and on a more serious note, I join with the Prime Minister (Mr. Trudeau) and the Leader of the Opposition (Mr. Clark) in paying tribute to the former leader of the Social Credit party, the hon. member for Temiscamingue (Mr. Caouette). He was always proud to assert that he was both a Quebecker and a Canadian, an unequivocal federalist. Throughout his political life, he worked to establish harmony between the two principal linguistic groups in this country. Perhaps more than anything else when the history of Real Caouette's political career is written, that fact will stand out.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Also on a personal basis, on behalf of my colleagues and myself 1 wish to extend our sincere congratulations to the hon. member for Lotbiniere (Mr. Fortin). I wish him well. He has worked hard as a member of parliament. He deserves the new position. I can now say that he is making the Leader of the New Democratic Party look responsibly middle aged which is the right age to lead a government in Canada. 1 would say to him that we will even wish his party continued success and growth so long as it remains, if we are both in opposition, always just after the New Democratic Party in the order of questioning.
(Mr. Clark.)


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, on my own behalf and on that of my colleagues, I wish to thank the right hon. Prime Minister (Mr. Trudeau), the Leader of the Official Opposition (Mr. Clark), and the leader of the New Democratic Party (Mr. Broadbent) for their kind words, both for myself and for the man in whom all hon. members recognize an outstanding Canadian-the hon. member for Temiscamingue (Mr. Caouette).
I am very much aware of the tremendous challenge facing the Social Credit Party of Canada in replacing such a man, but I believe that, over the weekend, we gave the country the picture of a group of serious people, intent upon building this country and cooperating with the others in a spirit of good will. Of course, in politics we have to make electoral gains, and passages of arms are at times inevitable. But there is one thing I have always noticed in this House, that is the solidarity shown by hon. members when time comes to recognize historical facts, as Real Caouette does, in Canada.
I wish to assure all my colleagues, on both sides of the House, that we are eager to cooperate with all hon. members to get on with the business of the House, to continue doing efficient work and making positive proposals in an effort to improve the lot of our fellow citizens.
In closing, 1 wish to congratulate the Leader of the Official Opposition on his fatherhood; he pointed out that the honour of having the youngest leader went from the New Democratic Party to the Progressive Conservatives and now goes to the Social Credit Party of Canada; all this to remind him and all the other party leaders that the Social Credit Party of Canada often has the last word.



ORAL QUESTION PERIOD

[Stage Direction]
[ Translation]

Mr. Andr6 Fortin (Lotbiniere):: Mr. Speaker, I am so used to work as a member of a team that I was forgetting my own role.
I should like to direct my question to the Prime Minister. The government tabled in August 1976 a very serious white paper on the decennial review of the Bank Act which, as you know, will soon have to be done. On page 21 of that brief, the government suggests that from now on to become a chartered bank it will no longer be necessary to apply to the Canadian Parliament. It will solely be necessary to obtain letters patent from the Minister of Finance. I should like to ask the Prime Minister whether he is conscious of the fact that it is one of the last powers of Parliament with regard to the banking system and whether he is in a position to answer the House today or
November 8, 1976

seriously consider the matter to give back further powers to Parliament on the banking system instead of withdrawing them.


Pierre Elliott Trudeau: Mr. Speaker, this issue of course has to be debated in the House and in the other place, and I do hope it will be thoroughly considered by all parties in the House. However, 1 would just tell the leader of the Social Credit Party that the aim of this bill is not to give more power to the banks but on the contrary to increase competition, and we hope competition between more numerous banks will benefit savers and borrowers alike. As there will be more banks, we may expect that competition will enable them to make transaction at a lower profit rate.


André-Gilles Fortin: Mr. Speaker, could the right hon. Prime Minister tell the House how taking power from Parliament could possibly restore competition in the banking system?


Pierre Elliott Trudeau: Mr. Speaker, we know through experience that when the government is allowed to charter and create banks, there will be more of them than if, each time, we have to go through a very long debate before Parliament which, for inherent reasons, is generally slower in taking action than the government.


STATISTICS CANADA
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce whom I would like to thank for his co-operation in providing some answers, and the inquiries which apparently he has caused the Chief Statistician to make with respect to Statistics Canada's activities. I want to ask the minister whether he would not agree that we have passed the point where an internal inquiry by the Chief Statistician is the appropriate procedure in view of the way in which the Allan Jeffery affair was handled and in view of the unanswered questions on the activities of other employees and indeed on the efficiency of the department itself. Would the minister not now agree that in order to safeguard the reputation of the overwhelming majority of Statistics Canada employees, an inquiry under the Inquiries Act or by an appropriate committee of this House, even a special one, would be the best method to restore public confidence?


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, I do not agree at all. I think we have a very good institution there and I do not think it would serve any useful purpose to create doubt about this very good institution. I think the Chief Statistician is doing a very diligent job at this time in trying to restore confidence in that organization, and I do not think that casting doubt on it will
Oral Questions
serve any purpose. I think that all of us must help the institution to regain the high reputation which this organization had around Canada and abroad. I am satisfied that his predecessor had acted very diligently, and I do not think that the fact that his assistant has given his services to some university has in any way impaired the ability of this organization. 1 think that if the hon. member wants this organization to keep its reputation he should continue asking questions, if he has any more, or put them on the order paper and I will reply to them as quickly as I can. I do not think that a public inquiry will serve any good purpose in this case.


Some hon. Members:: Hear, hear!


ALLEGED CONFLICT OF INTEREST SITUATION OF EMPLOYEES- REASON FOR SECRET MEETING OF OFFICIALS
Elmer MacIntosh MacKay: Mr. Speaker, I appreciate the minister's answer. I want to tell him that I have taken his advise and I have put some more questions on the order paper. 1 want to thank him again for the questions he has answered.
I have another supplementary question for the minister. Further to press reports last Friday that there was an unprecedented conflict of interest check of 5,600 Statistic Canada's employees, can the minister confirm on a tentative basis why a secret meeting of 80 top ranking Statistic Canada officials was required last week and whether in fact these 80 top officials handed in a written conflict of interest declaration, as the press has reported. I think it is fair to conclude that all these developments are based on more than a minor indiscretion, which is the way the minister labelled it in the first instance.


Hon. Jean Chr6tien (Minister of Industry, Trade and Commerce):: I have asked the Chief Statistician to make sure that the institution is well protected, and it was on my advice that he asked everybody to declare to him any conflict of interest or any doubt they may have in their minds. I am satisfied the Chief Statistician is making sure that if there is any conflict of interest the employee will have to choose between his internal job and his external job. However, so far he has reported to me that there is not any serious problem. Of course, there are some experts who are teaching part time at universities in Ottawa, and I do not think the university community of Canada should be deprived of the talent we in the government have managed to get. Of course, if there is any conflict of interest, I have told Dr. Kirkham to tell the employees to make the choice of either staying in or getting out. He said they have made that choice and he is satisfied that, to his knowledge, there is no conflict of interest prevailing at this time within the institution.


Some hon. Members:: Hear, hear!
80001-531/2

November 8, 1976
Oral Questions


ROYAL CANADIAN MOUNTED POLICE
Elmer MacIntosh MacKay: Mr. Speaker, I have a very brief supplementary question for the Solicitor General, further to the question asked last week by the hon. member for Saskatoon-Biggar. Has the minister now ascertained from the officer in charge of the RCMP investigation into Statistics Canada in 1974 whether the conditions found when the force was called in, and the procedures used to notify the force were entirely satisfactory, in view of reports 1 have received that the police were quite disappointed with some aspects of the investigation?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, if that were the case, I am sure the commissioner of the RCMP would have brought the matter to my attention. That has not been done, and I can only presume that the matter was handled to the entire satisfaction of the force.


An hon. Member:: Look into it, please.


STATISTICS CANADA
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I too have a question to direct to the Minister of Industry, Trade and Commerce. Would the minister advise the House what action has been taken or what action is planned to correct the problem alluded to in an internal Statistics Canada memo which states that the accuracy of the gross national product estimate has been adversely affected by the deterioration of the component labour income and consumer expenditure which could affect the final GNP figure by an amount of S10 billion annually?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, this is an extremely complex problem. I discussed it with Dr. Kirkham. I am sure that in a few days I shall be in a better position to give a more satisfactory answer to the hon. member, because this is a serious problem. But, due to the very quick changes taking place in statistics, not only in Canada but in other countries as well, and due to new factors that statisticians must obtain, I believe it is normal to be unable to give an absolute answer at this time on that problem. However, I am sure that the high degree of competence of Statistics Canada staff will allow to solve the problem to which the hon. member has just referred.


Donald Frank Mazankowski: Having regard to the fact that this particular problem would pose very grave implications for the interpretations of GNP figures in Statistics Canada and the

fact that forecasting by Statistics Canada has been taken by trends rather than actual facts, and given the importance of accuracy in this particular area, I wonder if the minister would be prepared to table in the House the internal memorandum which was circulated, and also whether he would be prepared to make known the steps the government and Statistics Canada have taken to correct the errors contained in the memorandum.
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall see what I can do to satisfy the hon. member's request and report to the House as soon as possible.


INCOME TAX
John Edward Broadbent: Mr. Speaker, 1 have a question for the Prime Minister. Since the Minister of Finance has received a report presented by the National Council of Welfare which shows, for example, that in 1974 through various inequitable income tax deductions and exemptions the government of Canada lost $6.4 billion in revenue, with the bulk of it going disproportionately to higher income groups, I wonder if the Prime Minister will assure the House that the government will bring forward legislation which will change this for the next taxation year.


Pierre Elliott Trudeau: Mr. Speaker, I am not aware of the report to which the hon. member refers. 1 will draw it to the attention of the minister.


John Edward Broadbent: It is unfortunate that the Prime Minister is not aware of one of the most damaging reports of a private agency to come out in a long time. However, following this up, he ought to be aware that a majority of the provinces have made representations to the government urging it to change its present indexing system on taxation. For example, this system will cost the people of Canada, in the next fiscal year, over $1 billion in lost revenue. The system will provide tax benefits in the following order: a family of four earning $50,000 will save $580 and a similar family of four-I will come directly to the question, Mr. Speaker-a similar family, numerically, with a much lower income gets much less of a reduction. Since the majority of the provinces have already appealed to the federal government to abolish this unfair system, I should like to ask the Prime Minister if he will do so?
[DOT] (M30)


Pierre Elliott Trudeau: I repeat my first answer, Mr. Speaker: the hon. member is referring to a report of which I have no knowledge. I can only say I will look at it and have the Minister of Finance take knowledge of it.
November 8, 1976


SUGGESTED PUBLICATION OF AMOUNT OF REVENUE LOST THROUGH EXEMPTIONS
John Edward Broadbent: 1 correct the Prime Minister, Mr. Speaker. The second question referred to specific requests that came to his government from provincial governments, not from a report. As a final supplementary, 1 should like to ask the Prime Minister if he will consider adopting the system which is already in force in the United States which forecasts years in advance the losses to the taxpayers of that country from the various tax exemption provisions that are contained in the legislation of that country. Will he duplicate that public kind of report in Canada so that such information will be available to all Canadians?


Pierre Elliott Trudeau: Mr. Speaker, I find it hard to believe that the Leader of the New Democratic Party would be suggesting that we follow a tax system from the United States in part or in whole. As regards the position of the provinces, there is a meeting of the ministers of finance of the provinces with the federal Minister of Finance later this month. If they have representations they will be able to make them directly without the help of the hon. member.


NATIONAL CAPITAL COMMISSION
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is for the Minister of State for Urban Affairs but I notice he is not here so 1 should like to put it to the acting minister. On November 2 I asked a question to which the then minister replied that for the time being he would prefer not to table the correspondence between Mr. Gallant and Mr. Gordon Robertson in connection with the selling of data by Statistics Canada employees because, as he said, "It mentions individuals by name." Would the acting minister confirm that more than one employee of Statistics Canada was mentioned by name in that correspondence?


Mr. Jean-Robert Gauthier (Parliamentary Secretary to Minister of State for Urban Affairs):: Mr. Speaker, I am in no
position to confirm that there is more than one. All I can say is that the answer of the minister still stands, and we are looking into it.


Walter David Baker: Mr. Speaker, my supplementary question is for the acting minister or whoever is speaking for the government on this matter. In view of the fact that the minister is new, could the parliamentary secretary assure me and the House that he will bring my question of November 2 to his attention so that he, like his predecessor, can attempt to give an answer to it?


Jean-Robert Gauthier: Mr. Speaker, I think the minister is quite well aware of that but there is a question of confidentiality here. I think it has been the practice that
Oral Questions
correspondence between employees of the Canadian government at that level is considered confidential.


Walter David Baker: Mr. Speaker, I do not want the parliamentary secretary to be misled. He will note that I have not asked for names; all I have asked for is confirmation regarding the number of employees at Statistics Canada who were mentioned in the correspondence. I have not yet asked for names but I assume they will be forthcoming later.


Jean-Robert Gauthier: Mr. Speaker, I shall take note of the question.


INQUIRY OF THE MINISTRY
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister without Portfolio from the province of Manitoba for as Manitoba goes so goes the nation. The hon. gentleman seems to be very restless these days. As a fellow Manitoban, I should like to congratulate him on his elevation to this responsibility-


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: -for the province that is referred to as the keystone province-for as Manitoba goes, so goes the nation. In light of that statement and the protests reflected in the vote of that other important election that was held last Tuesday in Manitoba where the Conservative leader emerged a strong number one-


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: -the Liberal candidate, a charming lady-


Some hon. Members:: Hear, hear!


Some hon. Members:: Order, order!


Mr. Speaker:: Order, please. I am trying to be as lenient as I can under the circumstances.


Walter Gilbert Dinsdale: Mr. Speaker, this is preparing the way for the question. The Liberal candidate was a charming lady and we are all aware of the political power-


Mr. Speaker:: Order, please. We are in serious difficulty to start with in that it has never been the practice to put questions to a minister in terms of his geographic location rather than his area of responsibility.


An hon. Member:: That is his only responsibility.


Walter Gilbert Dinsdale: My question is: in light of the keystone province where the New Democratic Party came number three, can the minister-


Mr. Speaker:: Order, please. The hon. member for Prince F.dward-Hastings.

Oral Questions INDUSTRY


INCENTIVES FOR RESEARCH AND DEVELOPMENT-GOVERNMENT ACTION
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. As the Prime Minister quite rightly said in Tokyo, if we are going to get more export business we must pull up our socks and develop our technology, can the minister inform the House when we may expect him to introduce incentives to induce greater research and development in this country, thereby greatly increasing our technology which the Prime Minister said we need so badly and will these incentives be paid in direct proportion to the increase in effort?


Joseph Jacques Jean Chrétien: Mr. Speaker, Canadians will have to wake up and become competitive on the international market. Everybody must understand also that Canadian economic health depends a lot on our exports. As for tax rebates or other concessions made to help research and development in Canada, I am examining the whole question and I hope that we shall be able to help Canadian industry gain a better competitive position in the world.


INQUIRY OF THE MINISTRY
George Harris Hees: Mr. Speaker, as that was, of course, no answer at all I should like to direct a supplementary question to the Minister of Transport and hope for some better luck. Is the meaning of the minister's "user-pay" transport policy that he uses the equipment and the taxpayers pay for it?


AIR TRANSPORT
Mr. Maurice Harquaii (Restigouche):: Mr. Speaker, I have a serious question for the Minister of Transport. In view of the great need for a modern air passenger service in Atlantic Canada, a matter which I brought to the attention of the House in June of this year, would the minister advise the House of the status of the applications for class two licences now before the Canadian Transport Commission? Would the minister also inquire when we might expect a decision on these applications by the CTC in order to alleviate a most serious air passenger problem regarding air transportation facilities not only in New Brunswick but in Atlantic Canada?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I think we are all very conscious of the great importance attached to this question by people in the Atlantic region. I am

sure the CTC is aware of that as well. They have a total of three applications before them in relation to the area and they are working on them. They are, of course, working on them. I do not have an indication as to when those judgments are likely to come down, either singly, or the three together. I assure the hon. member that the matter is before the CTC; they are conscious of the interest in the area, and so am I.


GOVERNMENT ADMINISTRATION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Prime Minister. In view of press reports that the Minister of Transport took a government Jet to Saskatoon again this week end, to speak to a group of young Liberals among others in that city, and since the minister spent about $750,000 on trips in government aircraft during the last three years, I ask the Prime Minister, seriously, if he will undertake to set strict guidelines for the use of government aircraft by cabinet ministers?


Pierre Elliott Trudeau: Mr. Speaker, the guidelines do exist and they are quite strict. They are to the effect that if the minister is travelling on government business and that is by far the most efficient way of doing his business, he is entitled to use government aircraft. As the minister indicated, and this is so particularly for ministers who live in the more distant parts of Canada, it really is a question of making sure that the federal government is aware of the existence and feelings of various groups and in a position to meet and communicate with them as frequently as possible while ministers stay in Ottawa and carry out their departmental and House duties.


Lorne Edmund Nystrom: A supplementary question, Mr. Speaker. Does the Prime Minister consider a meeting of the young Liberals to be official government business?


Mr. Paproski:: There are not that many Liberals in western Canada.


Lorne Edmund Nystrom: If he does not, will he ask the Minister of Transport to exercise his user-pay policy and repay the treasury the money it costs to run government aircraft on such trips?


Some hon. Members:: Oh, oh!

November B, 1976


NATIONAL DEFENCE
Steve Eugene Paproski: Mr. Speaker, my question is for the Minister of National Defence. In view of disquieting rumours and reports to the effect that the Department of National Defence is determined to move the Canadian Airborne Regiment now in Edmonton to a new location in eastern Canada and change significantly the organizational structure, and since continued uncertainty about their future and the serious impact of such a material change would have adverse effects on the morale of officers and men in this corps d'elite, will the minister please advise the House if the Edmonton Airborne Regiment is one of those contemplated in the move?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, certainly, our armed forces are determined. 1 thank the hon. member for using that phrase in the opening part of his question. I have not made a decision so far. I realize the uncertainty. All options are open, and I want to remove that uncertainty as soon as possible. I do not want to shoot from the hip, because I know many people are concerned about the move.


Steve Eugene Paproski: A supplementary question, Mr. Speaker. The predecessor to the minister, the hon. member for Winnipeg South, resigned from the cabinet because, in part, western Canada was not receiving reasonable attention. Will the minister give assurance that he has a feeling for western Canada and its people and that he will stop this unsound military proposal to achieve obscure military objectives?


REQUEST FOR DELAY OF PERMISSION TO QUEBEC TO EXPORT ELECTRICITY UNTIL NEWFOUNDLAND'S DEMANDS SETTLED
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In light of the decision taken on Friday by the National Energy Board to grant a permit to Hydro-Quebec for the export of 800 megawatts of power to New York at a time when Newfoundland is being denied the right to recall some of this power under the Churchill Falls agreement and when this matter is being considered by the courts, I ask the minister if he intends to recommend to his cabinet colleagues the setting aside of this decision until the matter can be resolved to the satisfaction of Newfoundland and Quebec?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: No, Mr. Speaker.


James Aloysius McGrath: A supplementary question, Mr. Speaker. Since the Atlantic provinces are suffering from a severe energy shortage at a time when Labrador hydro power could be funnelled into the region to satisfy some of its needs, would the
Oral Questions
minister use the offices of the federal government to bring pressure to bear on the government of Quebec and so allow Newfoundland to recall some of this power? This would make it economically viable for the province to build transmission lines and open the way for including this power in the Atlantic grid.


Alastair William Gillespie: Mr. Speaker, the hon. member is trying to draw me into the discussion of a matter now before the courts. He should realize that it would be inappropriate for me to make any comment. I can say that I am most interested in the development of Gull Island and interested in assisting Newfoundland to develop this resource, for the use of the rest of Canada including the Maritimes. Toward that end the government has already made an offer of $343 million, for half the financing of a transmission line. We are looking at other opportunities as well.


EXTERNAL AFFAIRS
[Stage Direction]
DISCUSSIONS WITH FRANCE ON EXPORT OF NUCLEAR TECHNOLOGY AND ENRICHED URANIUM PLANT A^JAMES BAY
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, my question is for the Secretary of State for External Affairs. During his talks in Paris last week did the minister seek from the French authorities an agreement on a moratorium on exports of nuclear technology until such time as a more satisfactory system of international inspection is achieved over the possible use of nuclear spent fuel for other purposes than peaceful ones?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, there was quite a detailed and lengthy discussion of the whole question of non-proliferation. The French government advised me of the memorandum which they had issued just a few days before and indicated what changes had taken place in their position. I do not think it would be accurate to describe it as a total moratorium but, certainly, it moves a considerable distance toward the position which Canada and other countries have taken. The meeting of the suppliers group, which is under way in London this week 1 think, will be considering this question in more detail. Of course, we shall watch closely what happens in the United States in the next two or three months. I mention these points because they have a direct bearing on the Canada-French discussions on the non-proliferation question.


Claude Wagner: A supplementary question, Mr. Speaker. While in Paris did the minister discuss at any length the French proposal for an enriched uranium plant in the James Bay area?


Donald Campbell Jamieson: No, Mr. Speaker, this matter was not discussed in detail. To the best of my knowledge, I think it merely came up in casual conversation but nothing substantive was said about it by either side.

November 8, 1976
Oral Questions TRANSPORT


REQUEST FOR ACTION TO ENABLE SOME COMMUNITIES TO PARTICIPATE IN RAILWAY RELOCATION PROGRAM
Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, may I direct my question to the Minister of Transport? As the cost-sharing formula in the railway relocation legislation makes it impossible for many towns and communities to participate in the program, will the minister consider the introduction of amendments which will make it possible for less affluent communities to proceed with plans to remove serious inconveniences and eliminate safety hazards occasioned by the presence of railway lines in heavily populated areas?


Otto Emil Lang: Mr. Speaker, 1 am always pleased to consider improvements to legislation. I had not been aware of such impediments before and I know that small but vigorous communities, such as Regina in Saskatchewan, have been going ahead with plans.


Alexander Bell Patterson: A supplementary question, Mr. Speaker. Since in many small communities railway lines constitute a real hazard in connection with the provision of emergency services to parts of such communities, I wonder if the minister would consider an amendment along the lines I suggested.


CANADIAN NATIONAL RAILWAYS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, on October 27 I asked the minister a question about the reduction of CN staff in Newfoundland. He said he would investigate. Since there have been further announcements of cutbacks, can the minister say if he has received the report? If not, will he ask CN to desist from further staff reductions until that report is received?


Otto Emil Lang: Mr. Speaker, more accurately, I indicated to the hon. member that the question of staffing is largely a management one for Canadian National, but that 1 would investigate specifically his allegation that the cuts were being made contrary to statements by Canadian National that no cuts would be made. I investigated that and found, according to Canadian National, that in one particular location it was indicated that a post would not be closed, not that there would not be any cuts there and in other places. Of course, the whole question of Canadian National and its organization in Newfoundland is a complicated and long-range one. At this time I wanted to give the hon. member a brief report.


AIRPORTS
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of Transport in the absence of the Minister of National Revenue and the absence of the Minister of Manpower and Immigration, both of whom are involved in the matter. Will the minister advise the House what plans the Ministry of Transport has for the alteration of the airport facilities at Gander, in the light of reports that for the past ten years in-transit passengers on international aircraft have been able to wander about the airport, even into the town of Gander, without complying with the formalities of either customs or immigration? What steps have been taken to remedy this situation from the custodial point of view since the incident complained of by Iron Curtain countries?


Otto Emil Lang: The problem arose when concern was expressed as to whether rules with regard to immigration and customs were being ignored under the procedures being followed. When this concern surfaced, it became apparent that modifications were required to the holding facilities at Gander Airport, because if the rules were strictly applied it would cause great inconvenience and make.it almost impossible for aircraft to land there and use Gander to the full. Since we wished to ensure that Gander was available, and that it was used as much as possible we made immediate short-run plans to deal with the situation and long-run plans to provide adequate facilities for holding passengers who were not clearing at Gander.


Marcel Joseph Aimé Lambert: May I ask whether the short-run plans are merely to hold passengers in the plane? Second, how soon does the hon. gentleman expect the longer-term expansion of the facilities to take; and, third, will those facilities include the possibility of customs pre-clearance in the case of passengers flying on to either Malton or Mirabel?


Otto Emil Lang: Since the question was raised only a short time ago the plans are still being developed and I cannot give the hon. member an exact timetable as to when the longer run plans will be implemented. The short-run plans are designed to allow passengers off the aircraft and into the terminal building. The difficulty is that this allows them access to some facilities while restricting access to others. We hope eventually to clear up this situation.


INCOME TAX ACT
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, I have a question for the Acting Minister of Finance. Will the Minister of Finance give consideration to having an independ-
November 8, 1976

ent study conducted of the apparent anomalies in the Income Tax Act which appear to favour wealthy Canadians as opposed to those in the lower and middle income groups? 1 refer to such things as allowing interest and depreciation on rental property to be classed as income deductions in the case of landlords but not in the case of home-owners, travel deductions for wealthy businessmen-


Mr. Speaker:: Order, please. That information may be sought in another way.


EXTERNAL AFFAIRS
Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, I wish to direct my question to the Secretary of State for External Affairs.
In view of the tabling before the UN special political commission of paper A31-218 on October 1, 1976, entitled: Report of the Special Committee to Investigate Israel Practices Affecting the Human Rights of the Population of Occupied Territories and in view of the conclusions of this report drawn by an independent firm of consultant engineers under the responsibility of Swiss engineer Edward Gruner, according to which the destruction of 4,088 homes in the city of Quneitra was caused by systematic and deliberate action, does the minister envisage to recommend that Canada ratify the conclusions of the report by casting a positive ballot when the resolution is presented before the special political committee?


Donald Campbell Jamieson: In large measure the question is hypothetical inasmuch as the resolution related to this report has not yet been received. I am, therefore, in no position to indicate what Canada's reaction will be.


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, before addressing my question to the Secretary of State for External Affairs I should like to call attention to the presence in the gallery to your right of the Speaker of-


SOUTH AFRICA AND RHODESIA-INQUIRY AS TO POSSIBILITY OF CANADIAN INTERVENTION IN CONFLICTS
Mr. Speaker:: Order, please. If the hon. member for Shefford has a question, I suggest he should ask it immediately.


Gilbert F. Rondeau: Mr. Speaker, I should like to direct my question to the Secretary of State for External Affairs.
In view of current events in South Africa and Rhodesia, can the Secretary of State for External Affairs assure the House
Oral Questions
that the Canadian government will not intervene, adopting a neutral position in this conflict? What does the Canadian government intend to do with regard to the requests it is receiving from all over the world urging it to intervene?


Donald Campbell Jamieson: There have been no such requests for any intervention, participation or involvement by Canada in any other way in matters relating to Rhodesia. A number of speculative stories have appeared and a number of proposals are being discussed in one form or another but to this moment, at least, nothing specific has been asked of the government of Canada.


RHODESIA-POSSIBILITY OF CANADA TAKING REFUGEES
Mr. Jake Epp (Provencher):: Has a direct request been made to Canadian officials by United States officials in connection with Rhodesia settlement question that Canada take a certain number of refugees from Rhodesia?


Donald Campbell Jamieson: No, Mr. Speaker. I want to take advantage of this opportunity to re-emphasize that under no circumstances and at no time has any request been made to us by any country, including the United States, for consideration to be given to that matter.


CRIMINAL CODE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I should like to direct a question to the Minister of Justice. It relates to a motion I put forward on Friday. In the light of a statement made by the minister thereafter that he knows of no law in Canada to prevent the publication of advertisements across the country soliciting abortions, and in light of the fact that section 251 of the Criminal Code makes it illegal to aid and abet, will the minister investigate this matter within the purview of his responsibility as Minister of Justice and principal law officer of the Crown, and will he likewise consult with his counterparts at the provincial level, the attorneys general of the provinces, to determine whether the section of the Code I mentioned has, indeed, been breached?


Hon. Ron Basford (Minister of Justice):: As I have stated both inside and outside the House, a committee under the chairmanship of Dr. Robin Badgley is examining the operation of the whole of the law relating to abortion. In the course of its work, the committee has examined the operation of referral agencies outside Canada. As to the specific question asked by the hon. member, I shall be pleased to take that up with my provincial counterparts to ensure that any advertisements
8000 I-54

November 8, 1976
Oral Questions
which appear do not offend the provisions of the Criminal Code.


Eldon Mattison Woolliams: To follow up that answer, may I ask whether the hon. gentleman has received the Badgley Report? If he has, will he file it and if not, will he give an undertaking that it will be tabled in the House of Commons so that the public and members of the House may know what it contains?


Stanley Ronald Basford: Yes, Mr. Speaker. I have not yet received the report but I understand the work of the committee has been completed and that its members are preparing their report and having it translated into both official languages. As soon as it is available it will be tabled as the hon. member asks. Such an undertaking was given at the time the committee was appointed.


COMMUNICATIONS
Mr. J. Patrick Nowlan (Annapolis Valley):: Mr. Speaker, my question is directed to the Minister of Communications. Has the government approved of an in-part de facto merger or contractual arrangement between Telsat and Trans-Canada Telephone Systems whereby in exchange for a cash flow from Telesat it will be guaranteed the use of transponders in the building of three new satellites?


Hon. Jeanne Sauve (Minister of Communications):: Yes, Mr. Speaker, we have agreed to this request by those two corporations to make an arrangement whereby the renting of space on the satellite would be done by the grouping of telephone companies and Telesat so that we might ensure for the future more profitable operations to Telesat.


John Patrick (Pat) Nowlan: I thank the minister for that answer as far as it goes. But in the course of these arrangements was due consideration given to the fact that Telesat will be playing a very active role in TCTS, as part of the trans-continental telephone system and thus would be well placed to take unfair advantage vis-a-vis the other communication system in this country, CNCP quite apart from the governmental regulatory body which also controls and directs TCTS? Is there not a potential conflict of interest?


Jeanne Sauvé: The role which will be played by Telesat is not different from that of the other members of this proposed arrangement between TCTS and Telesat. Telesat will maintain its corporate identity but it will have full membership in TCTS and will have the same veto power and the same role as other members of TCTS. As for CNCP, which the hon. member feels is at a disadvantage in this new arrangement between Telesat and TCTS, Telesat has obtained a full guar-

antee in light of this new arrangement that CNCP will have access at the same price, without discrimination, to space on the satellite, so it will not be in a disadvantageous position vis-a-vis the other carriers.


U500) ENVIRONMENTAL AFFAIRS REASON FOR FAILURE TO APPOINT NEW ENVIRONMENTAL PANEL TO STUDY PROPOSED THIRD RUNWAY AT VANCOUVER AIRPORT
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is to the Minister of Fisheries and the Environment and concerns the proposed third runway at Vancouver airport. In view of the fact that an environmental panel was established in July of this year and has since been disbanded, would the minister advise the House why the panel has been disbanded and why, at least until last Tuesday night, no new panel had been established?


Hon. Rom6o LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, I would have to check with my colleague who sits in front of me. I understand the decision was to examine the possibility of doing the construction within the existing dykes, in which case, of course, the problem would be very different from extending out into the estuary. However, I will look at the facts and try to answer the hon. member's question tomorrow.


John Allen Fraser: A supplementary question, Mr. Speaker. I wonder whether the minister would be kind enough to undertake to give the House and the public a release of the terms of reference of the proposed environmental study?


Mr. LeBlanc (Westmorland-Kent):: Mr. Speaker, I will certainly look into this. I see no reason why the terms of reference could not be indicated.


SUPPLY AND SERVICES
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of Supply and Services. Has the minister had an opportunity to examine the question I put to him on October 29 with respect to tabling the letter that the minister wrote on March 1, 1976 on the subject of his knowledge and recommendations respecting the LRPA contract that he sent to the then president of the Treasury Board? Will the minister table the letter at the earliest opportunity?
[ Translation]


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I have considered the hon. member's request,
November 8, 1976

and since there is reference in the letter to cabinet decisions or documents, I think that in those circumstances it would not be advisable to make this letter public.


REQUEST FOR TABLING OF ATTACHMENTS TO CONTRACT FOR PURCHASE OF -'AURORA&quot;
Allan Bruce McKinnon: A supplementary question, Mr. Speaker. With reference to the contract between the Lockheed Corporation and the government for the purchase of the Aurora which the minister tabled four weeks ago, would the minister now table the annexes, schedules, attachments and other documents referred to in article 2.1 of the contract which, according to that article, form part of the contract and therefore should have been tabled at that time?
[ Translation]


Jean-Pierre Goyer: Mr. Speaker, those documents could be eight to ten inches thick. I do not know whether the hon. member realizes the amount of work that the translation would represent. In any event, there is nothing to hide. If the hon. member wants to consult the documents, I invite him to do so and 1 offer him my services.


ANTI-INFLATION PROGRAM INCREASE IN PENSIONS OF EMPLOYEES AT EXECUTIVE LEVEL EXCEEDING GUIDELINES-POSSIBILITY OF INCREASE FOR OTHER CATEGORIES
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question could have been put to the Minister of Finance or to the Minister of National Revenue, or perhaps to both of them, but in their absence may I put it to the right hon. the Prime Minister. In view of the restraint that the government is practising with respect to pensions, as demonstrated by its opposition to a review of widows' pensions two weeks ago tomorrow, would the government reconsider two rules that were announced at the end of last week, one by the Department of National Revenue, the other by the Anti-Inflation Board, that permit the pensions of top executives to rise from a maximum of $40,000 a year to $60,000 a year, contrary to the whole spirit of the anti-inflation program?


Mr. Bob Kaplan (Parliamentary Secretary to Minister of Finance):: Mr. Speaker, that is a representation that I will be glad to bring to the attention of the minister.


Stanley Howard Knowles: Mr. Speaker, my supplementary question is obviously on a matter of policy. So may I direct it again to the right hon. Prime Minister. Since the government is agreeing to a 50 per cent increase in the pensions of top executives, will it bring in proposals for a 50 per cent increase in old age pensions, widows' pensions and war veterans' pensions?
Oral Questions


Robert Phillip Kaplan: Mr. Speaker, again I will bring that question to the attention of the minister.


ADMINISTRATION OF JUSTICE
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I should like to direct my question to the Minister of Justice. Mr. Leonard Peltier, a Sioux from the Pine Ridge reservation in South Dakota, is accused in the United States of murdering two FBI agents and of two attempted murders and a burglary. I understand that the gentleman in question has asked for political asylum in Canada on the basis that he is innocent of these charges and feels that he will not be safe if he returns to the United States. Since the Minister of Justice is in charge of extradition proceedings or at least has designated a lawyer to prosecute, I wonder whether the minister can tell the House if he has received this representation and if it is his intention in fact to comply with the request for political asylum on the part of Mr. Peltier?


Stanley Ronald Basford: Mr. Speaker, I think "political asylum" would be a wrong use of words. The facts in Leonard Peltier's case are that there was an application for extradition which has been heard at trial in British Columbia, with an appeal to the Federal Court which was dismissed. I have indicated to Mr. Peltier's counsel that I was prepared, subject to further legal proceedings being taken, to receive written submissions from him on behalf of Mr. Peltier and, if he wishes, to have oral submissions made to me in support of the written submissions.


Mr. John Reynolds (Burnaby-Richmond-Delta):: Mr. Speaker, I have a supplementary question for the Minister. Would he advise the House why he would interfere with a court decision that we should take this man out of the country?


Stanley Ronald Basford: Mr. Speaker, that is a very pejorative question and the hon. member, not being a lawyer, may be excused his use of the word "interfere". As my hon. friend from Calgary knows, there are several sections under the Extradition Act. Some apply to court proceedings, and others refer to the minister-the question as to whether a warrant for extradition will in fact be signed. The latter is a decision, not for the court but for the minister.


EXTERNAL AFFAIRS
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Secretary of State for
80001 -541/2

November 8, 1976
Privilege-Mr. Lang
External Affairs and relates to his discussions with Soviet foreign minister Gromyko about the question of reunification of families. When the Secretary of State for External Affairs was talking with Mr. Gromyko, did he specifically raise the case of Nailya Bibershtein with the foreign minister? If not, has the Bibershtein case been raised with the Russians since that time and, if so, by whom?


Donald Campbell Jamieson: Mr. Speaker, I hope that the hon. member will permit me some slight qualification of the second part of his question. I instructed our embassy in Moscow to submit the names of all outstanding cases. I assume that the case to which the hon. member refers was included in those names, but I would have to make a specific inquiry. So I make that qualification. I did not raise it or any other individual case with the foreign minister.


SOVIET UNION-DISCUSSION WITH MR. GROMYKO CONCERNING HELSINKI AGREEMENT
Henry Perrin Beatty: A supplementary question, Mr. Speaker. I thank the minister for his answer but may I ask him whether, during the discussions which the Secretary of State for External Affairs conducted with the Russians, he stressed to the Russians that this country expects the Soviet government to live up to the terms of the Helsinki agreement as they refer to the reunification of families; and, if so, did he indicate any steps that might be taken by Canada, such as being hesitant to sign one-sided agreements, if the Soviet government continues to refuse to abide by agreements to which they are a signatory?


Donald Campbell Jamieson: Mr. Speaker, there was no-if the word is appropriate-threat on my part or anything of that nature. I consider that the best way to advance this cause is to keep making the kind of statement that I did make, and which the hon. member paraphrased. But 1 did not couple it to any comments about what future action might be taken in the event of non-compliance.



ROUTINE PROCEEDINGS


Mr. Speaker:: Order, please. The Minister of Transport, on a question of privilege.


Otto Emil Lang: Mr. Speaker, I rise on a question of privilege, first of all to clarify the kind of comment that was made by the hon. member for Yorkton-Melville (Mr. Nystrom). I claim that I would not ordinarily
[Mr. Beatty.)
have to tell the House what government business I am doing across the country except, perhaps, to assure the House that I am usually very busy at it. However, I do want to comment on the very erroneous reference to my using a Jetstar for a meeting of Young Liberals, which ignores this fact. I must say Young Liberals from all over western Canada are very vigorous and are doing a great job.


Some hon. Members:: Hear, hear!


Otto Emil Lang: In addition to that meeting with several hundred Young Liberals from all over the west, during the course of the weekend I met with a group of beef producers from Alberta who obviously are not being very well represented by their members, so they came to Saskatoon to see me.


Some hon. Members:: Oh, oh!


Otto Emil Lang: I spoke to university students on matters of government interest. I met representatives of Serena Canada, and I met the aviation committee of the Chamber of Commerce and spoke to the Chamber of Commerce at Melfort, Saskatchewan, in the constituency of the right hon. member for Prince Albert (Mr. Diefenbaker). I want to make quite clear that the record shows that. I appreciate that the question was first raised by the hon. member for Prince Edward-Hast-ings (Mr. Hees), who in his wisdom as minister of transport put in the first order for a Jetstar, as I understand it.


George Harris Hees: This is a straight political speech.


Otto Emil Lang: I want to make it clear that the record of cost, as shown, includes the total cost-


Mr. Speaker:: Order, please. The extent to which a member is entitled to go, on a question of privilege, in clarifying a reference made on the opposite side is always a very difficult matter for the Chair. The reference was made by way of a question today which I ruled out of order, whether it was considered that a meeting of Young Liberals was, in fact, government business.
The minister has risen on a question of privilege. I was prepared to let him go at least to the extent of indicating that the trip did involve other government business, which he has now done. This is an area that can only lead to a very partisan debate. It is not the proper subject of a question of privilege. I do not propose to let the matter go any further unless the minister is prepared forthwith to put some motion of privilege calling for a decision of the Chair. If not, I think the matter ought to close.


MR DINSDALE-ANSWER TO QUESTION PUT LAST THURSDAY BY MR. LAWRENCE
Walter Gilbert Dinsdale: Mr. Speaker, 1 rise on a question of privilege concerning a question I asked today. I trust I can remain within the rules. This arises from a question asked last Thursday by the hon. member for North-
November 8, 1976

umberland-Durham (Mr. Lawrence) to which the following reply was given:
-one of my responsibilities will be to represent the people of Manitoba to the best of my ability.
What we are trying to do is to get the terms of reference of the responsibilities of the Minister without Portfolio (Mr. Guay). In light of that reply, I seek your judgment, sir, as to whether it is possible for the Minister without Portfolio to deal specifically with questions relating to the province he represents, because there are many long-outstanding problems there, or whether he has a wider area of responsibility. That is the question I was trying to pose today.


Mr. Speaker:: The hon. member for Brandon-Souris (Mr. Dinsdale) raises an interesting point of order. I did, finally, refuse to let his question be answered. In fact, he never got to the point of putting the question. In any event, I tried a couple of times to draw him gently to the point of the question. His continued reference to a political result and situation in Manitoba was in an effort to put a question to the minister with respect to his presumed geographic representation of the province of Manitoba. That is a question which has consistently been rejected in the past.
Several questions in the past have been sought by members to be put to ministers in their direction of the political party in a region. That has consistently been turned down. The strict scope of the question period is clearly understood to be that which falls within the administrative competence of the government. Certainly, that is a political responsibility and not an administrative one.
Last week, as a first question of the hon. member for Northumberland-Durham (Mr. Lawrence), a question was put as to exactly what the responsibilities of the new minister were. Of course, until I hear the answer I cannot tell what they will be. The minister's first answer was, if I recall correctly, to represent the people of Manitoba. That is a nice answer on his part, but does not alter the basic rules. He will have to adopt more responsibilities if questions are to be put within an administrative sphere. I cannot permit questions to go on a geographic responsibility, inviting as they may be.


Mrs. Holt:: Mr. Speaker, I rise on a point of order. It arises out of a statement made by the hon. member for Brandon-Souris (Mr. Dinsdale) during question period. As you know, Mr. Speaker, I do not have to answer for the responsibility of the Minister without Portfolio or chief government whip. However, I am concerned about the form of the question of the hon. member for Brandon-Souris.


Mr. Speaker:: Order, please. With due respect, concern about the form of a question is for the Chair. I took action by not permitting the question to be put.


Simma Holt: May I explain the point of order? You ruled, Mr. Speaker, that you do not have to rule on geographic questions. I suggest, with the greatest respect, that do you have to rule, either, on a lady's charm.
Order Paper Questions


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: You've got charm, Simma.


CANADA ELECTIONS ACT
Mr. Bill Clarke (Vancouver Quadra) moved: for leave to introduce Bill C-379, to amend the Canada Elections Act.


Some hon. Members:: Explain.


William Hillary (Bill) Clarke: Mr. Speaker, at present, proxy voting is available only to voters who are unable to cast their ballots at the advance polls or on election day because of illness or physical incapacity, because of absence in the course of employment as a fisherman, mariner or prospector, or because of absence while a full-time student at a Canadian educational institution.
This bill proposes to allow proxy voting for voters absent for any purpose, including business, vacation or compassionate travel, and will also eliminate the need for medical certificates for illness or incapacity and the need for a registrar's statement for students. The bill further proposes to allow the urban voter a right presently allowed only to the rural voter; that is, the right of a qualified voter whose name has been omitted from the list of electors to cast his ballot upon being vouched for by an elector whose name appears on the official list of electors.


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

Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, I was going to move a motion seconded by the charming lady from Vancouver-Kingsway (Mrs. Holt), but perhaps it can be seconded by the hon. member for Fraser Valley East (Mr. Patterson). The motion is as follows:
That the first report of the Standing Joint Committee on Regulations and other Statutory Instruments, presented to the House on Thursday, November 4, 1976, be concurred in.


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following ques-

November 8, 1976
Order Paper Questions
tions will be answered today: 10, 34, 82, 363, 367, 498, 641 and 697.


Mr. Cossitt: 1.	Since April 20, 1968, how many foreign diplomats or embassy personnel stationed in Canada left the country as a result of (a) the request (b) the suggestion (c) direct or indirect action on the part of the Canadian government and, in each case (i) what were their names (ii) what countries were they from (iii) on what date did they leave Canada (iv) for what reason did they leave?
2.	Were all such incidents made public at the time and, if not, for what reason?


Mr. Fernand E. Leblanc (Parliamentary Secretary to Secretary of State for External Affairs):: 1. Three, (a) (i) Lieut. Col. V. S. Didenko; (ii) USSR; (iii) May 24, 1968; (iv) Retaliation for expulsion from the USSR of the Canadian Assistant Military Attache, (b) (i) Janos Hegedus; (ii) Hungarian People's Republic; (iii) January 10, 1970; (iv) Activities incompatible with diplomatic status, (c) (i) Kuo Ching-an; (ii) People's Republic of China; (iii) May 2, 1975; (iv) Activities incompatible with diplomatic status.
2. Yes.
PUBLIC WORKS-TENDERS FOR NEW CARPET IN LA CITfi PROJECT-MONTREAL, QUEBEC


Mr. Cossitt: 1.	With reference to the answer to Question No. 4,109 of the First Session of the 30th Parliament, which stated in part that new carpet valued at $77,443 is being used by the Secretary of State in the premises rented in La Cite project in Montreal, were tenders called and (a) if so (i) on what date (ii) were they publicly advertised and, if so, in what publications; (b) if not, for what reasons; (c) were they invited tenders and, if so, what are the names and addresses of all those invited to tender and where were such names obtained?
2.	What are the names, addresses and amounts of all tenders received?


Hon. Judd Buchanan (Minister of Public Works):: 1. (a)
Tenders were not called by the Department of Public Works, (i) Not applicable; (ii) Not applicable, (b) Not applicable, (c) The onwer of the La Cite building invited the following contractors to tender for our project by invited tenders: Savoie et Sauve, 5060 Charleroi, Montreal N.-Date of request for quotations: March 8/76 $77,443. Roy & Fils, 3399 Metropolitan Blvd., St. Michele-Date of request for quotations: March 19/76 $79,423. Provincial Flooring, 4228 Decarie Blvd., Montreal-Date of request for quotations: March 15/76 $84,793. Jerome Myers, Place Bonaventure, Montreal-Date of request for quotations: Feb. 26/76 $86,013. Lemnor Interiors, 4020 Cote Vertu, Montreal-Date of request for quotations: March 9/76 $86,026. In the case of this project, the Department of Public Works was authorized to award directly to the owner, a contract for fitting up the space to be occupied by the Government of Canada. In such circumstances the owner is free to select the number of tenders he wishes to invite and to decide which one he wants as contractor. The

Department in such cases, asks owners for estimates and requires prices to be competitive and to meet the estimates of our appraisers. In the case of La Cite, these two criteria were met.
2. See 1 (c) above.


EXTERNAL AFFAIRS-FRANCOPHONE INSTITUTIONS DIVISION
Mr. Cossitt: 1.	Does the Annual Report of the Department of External Affairs for 1975 contain a Departmental Headquarters Organization Chart on pages 86-87?
2.	Does the chart show a Francophone Institutions Division and, if so (a) what is a full description of the purpose of the Division (b) how many persons are employed there (c) what is its total annual budget for all expenses?
3.	Does the Department have an Anglophone Institutions Division and, if not, for what reason?


Fernand-E. Leblanc: 1. Yes.
2. Yes. The annual report also gives a general indication of the functions and activities of the Francophone Institutions Division, which, along with the Commonwealth Institutions Division and the Federal-Provincial Co-ordination Division, is attached to the Bureau of Co-ordination, (a) More specifically, the Francophone Institutions Division is responsible for all aspects of Canada's participation in multilateral intergovernmental and non-governmental organizations forming part of what is commonly referred to as la Francophonie internationale (the international French-speaking community). In this way, the Division, under the authority of the Secretary of State for External Affairs, co-operates in the development and implementation of Canadian government policy with regard to the international French-speaking community and, in this regard, with the countries and organizations forming part of it. Additionally, the Division is responsible for co-ordination and liaison, on the one hand with the many departments and agencies of the Canadian government which participate in the programs and activities of the international French-speaking community, and on the other hand with the provinces of Quebec, Ontario, New Brunswick and Manitoba, which also have some involvement in the Community. At the intergovernmental level, the principal international French-speaking institutions of which Canada is a member and to whose activities Canada contributes are: (i) The agency for Cultural and Technical Co-operation, created in 1970. (ii) The Conference of Ministers of Education of French-speaking Countries, and a related organization, le Conseil Africain et Malgache pour l'Enseignement superieur (African and Madagascan Higher Education Council), which Canada joined in 1969. (iii) The Conference of Ministers of Youth and Sports of French-speaking Countries, which Canada took part in creating in 1969. About thirty European, American, African and Asian countries having French as their official or working language are members of these institutions. At the private international level, Canada, through the Francophone Institutions Division, maintains constant ties with the numerous international associations and organizations in the French-speaking world, with which it co-operates to promote and ensure effective and truly
November 8, 1976

representative participation by Canada. Among the more important of these associations, many of them of Canadian origin or inspiration, we may name by way of example: l'Association des Universites partiellement ou entierement de Langue frangaise (AUPELF); le Fonds international de Cooperation universitaire (FICU), an offshoot of AUPELF; le Conseil international de la Langue frangaise (CILF); l'Association mondiale des Medecins de Langue frangaise (AMMF);le Conseil de la Vie frangaise en Amerique; ['Association internationale des Parlementaires de Langue franchise (AIPLF); l'lnstitut international de Droit d'expression frangaise (1DEF); etc. (b) Present staff consists of three officers, one trainee and three secretaries, (c) The Francophone Institutions Division, in co-operation with the Finance Division of External Affairs, administers the contributions which Canada makes as a member of Francophone multilateral organizations (Agency for Cultural and Technical Co-operation, Conference of Ministers of Education, Conference of Ministers of Youth and Sports of French-speaking Countries). These contributions amounted to about $2,900,000 for the fiscal year 1976-77. The Division is also responsible for disbursement of the subsidies granted by the Canadian government in 1976-77 to AUPELF ($95,000) and CILF ($30,000). Lastly, the Department of External Affairs has a budget for 1976-77 of $200,000, managed by the Francophone Institutions Division in close co-operation with the Finance Division and Treasury Board, for the purpose of promoting and giving substance to Canada's necessary and constructive presence in the many activities of the international French-speaking community, both those of an intergovernmental nature and those in the private sector. Within the Bureau of Co-ordination, the Francophone Institutions Division's share of the travel budget for 1966-77 is about $15,000.
3. Yes, to the extent that the international French-speaking community can be considered as the counterpart of the Commonwealth. The appropriate units are grouped together under the Commonwealth Institutions Division, which assumes identical functions with regard to multilateral intergovernmental and non-governmental organizations making up the Commonwealth. The activities of this division are described in the annual report of the Department of External Affairs.


ALLOCATION OF FUNDS IN BRITISH COLUMBIA-OFY PROGRAM
Mr. Munro (Esquimalt-Saanich): 1.	For each constituency in British Columbia, what was the allotment of OFY grants in (a) 1972-73 (b) 1973-74 (c) 1974-75 (d) 1975-76 (e) 1976-77?
2.	For the same years, what were the unemployment figures, in percentage terms, in each constituency?
3.	What other criteria were used in deciding on allocations?


Hon. Jack Cullen (Minister of Manpower and Immigration):: 1. (a), (b), (c) and (d) Funds under the OFY Program were not allocated by federal constituency, (e) The Program was not administered in 1976.
2. As funds were not allocated on a constituency basis, unemployment rates were not calculated by constituency for the full year.
Order Paper Questions
3. The OFY Program came under the jurisdiction of the Department of Manpower and Immigration in 1974, and since that time funds were allocated to departmental Management Areas on the basis of student unemployment, youth population between the ages of 14 and 25 and youth job availability index.


ALLOCATION OF FEDERAL FUNDS FOR EDUCATION OF INDIAN PEOPLE AND INUITS IN YUKON TERRITORY
Mr. Nielsen: For each year 1970 to 1976, what was the total amount of federal monies allocated to education of the Indian people in the Yukon and to the Indian people and Inuit respectively in the Northwest Territories?


Mr. B. Keith Penner (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: The following is a list of monies expended for the education of Indian people in the Yukon Territory:
Fiscal Year	O&M	Capital1970/71	$ 632,000	$ 2,0001971/72	617,000	11,0001972/73	1,145,000	194,0001973/74	1,249,000	137,0001974/75	1,254,000	317,0001975/76	1,442,680	248,200
No federal monies were allocated for education in the N.W.T. as this is a Territorial Government responsibility.


REPLACEMENT OF &quot;CROWN COPYRIGHT RESERVED&quot;
Mr. Schumacher: 1.	Were the words "Crown copyright reserved" replaced in the April 1976 edition of the Economic Review by "Copyright Minister of Supply and Services" and, if so (a) by whose authority (b) for what reason (c) on what date was the change authorized (d) is it intended that the new wording will continue in future?
2.	Is it intended to credit copyright of the Crown to individual Ministers and/or Ministries in all future publications and, if so, on what date was such decision taken and by whom?
3.	Which publications since 1974 has "Crown copyright reserved" been replaced and, in each case (a) what credit was used as a replacement (b) who authorized the change (c) is the change now permanent policy?


Jean-Pierre Goyer: 1. Yes. (a) By the authority of P.C. 1976-104 dated January 20, 1976. (b) The Minister of Supply and Services was designated by P.C. 1976-104 as the Member of the Queen's Privy Council for Canada under whom the Director, Information Canada shall administer a consolidated information service which includes the supervision and control of the rights and obligations in respect of the Crown copyright in any document or other work of any kind in which it subsists. The use of the title of the Minister of the Crown who supervises and controls the rights and obligations in respect of Crown copyright clearly identifies the individual who, by assignation, controls the copyright of Her Majesty and to whom all requests for permission must be addressed, (c) January 20, 1976. (d) Yes.


HABITAT CONFERENCE
Mr. Beatty: Did the government provide aid of any kind to the Palestine Liberation Organization for the preparation of audio-visual material for the Habitat conference and, if so, what was the nature and amount of such aid?


Fernand-E. Leblanc: The Canadian Government did not provide aid, either financial or technical, to the Palestine Liberation Organization for the preparation of audio-visual material for the Habitat conference.


POST OFFICE DEPARTMENT
Mr. Fortin: What is the classification of the post office in each municipality in the Constituency of Lotbiniere?


Hon.   J.-J. Blais@Postmaster General: Group or
Name	Classification	Grade
Victoriaville	Sub 3		
Norbertville	Revenue	3St. Valere	Revenue	3St. Pierre les Becquets	Revenue	5Val Alain	Revenue	5St. Sylvere	Revenue	6Victoriaville	Sub 1	-Victoriaville	Sub 2	-Victoriaville	Sub 7	-Ste. Marie de Blandford	Revenue	3Ste. Sophie de Levrard	Revenue	6Victoriaville	Sub 5	-
Group or
Name Ste. Fran?oise de	Classification	GradLotbiniere	Revenue	3St. Samuel de Horton	Revenue	2Victoriaville	Staff	8Villeroy	Revenue	3Leclercville	Revenue	3Ste. Eulalie	Revenue	6Lemieux	Revenue	2Daveluyville Ste. Emmelie de	Semi Staff	5Lotbiniere	Revenue	2Deschaillons	Semi Staff	3Lotbiniere	Semi Staff	1Dosquet	Revenue	5Blandford	Revenue	3St. Antoine de Tilly	Revenue	6Riviere Bois Clair	Semi Staff	2Ste. Cecile de Levrard	Revenue	4Laurier	Semi Staff	4Ste. Croix *	Semi Staff	5Aston Junction	Revenue	6Parisville	Revenue	3St. Flavien	Semi Staff	1Victoriaville	Sub 6	-Manseau	Semi Staff	3Fortierville	Revenue	6Joly	Revenue	4Princeville	Semi Staff	6


QUESTION PASSED AS ORDER FOR RETURN
Ralph Goodale: Mr. Speaker, if question No. 369 could be made an order for return, this return would be tabled immediately.


MEAT INSPECTORS
Mr. Patterson: 1.	How many meat inspectors are in the employ of the government in (a) Canada (b) British Columbia at the present time?
2.	Which department or departments employ them?
3.	What is the salary range for the job classification?
4.	What are the qualifications for the position of meat inspector with the government?
Return tabled.


Ralph Goodale: I ask, Mr. Speaker, that the remaining questions be allowed to stand.
I Mr. Goyer.)
November 8, 1976


Mr. Speaker:: Shall the remaining questions stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration, from Friday, November 5, of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
William Hillary (Bill) Clarke: Mr. Speaker, on Friday before four o'clock I was saying that the government's effort at restraint in the area of CYC, Information Canada and the freezing of family allowances was weak. I suggested there was an enormous potential for restraint in Crown corporations such as Air Canada and the CBC. I was just starting on the Canadian National Railways. I thought it was significant that in an operation like the CNR, where the total revenue was close to $2 billion and the losses on operations in 1975 were $91 million, that the corporation does not even consider that a bill of total interest charges of $111 million could not be cut somewhat as a matter of restraint.
So we have a total deficit for that corporation in the 1975 fiscal year of $168 million, which is an increase of $130 million over the deficit from the preceding year. I hardly think we can consider there is any measure of restraint in that kind of report. There is not only the loss of that income, but also the amount of money that they invest in order to incur that loss. For example, on page 21 of the report of the corporation we see that the government of Canada has an investment of $1.4 billion in the operations of the CNR. Furthermore, there is an investment in shareholders' equity-and the government of Canada is the only one listed in the shareholding section-in the amount of $2.2 billion. The total assets of the CNR now are just less than $5 billion. There is a further example where I think we might see the lack of restraint on the part of this particular Crown corporation. On page 22 of the corporation's report we have this statement in the notes to the financial statement:
-based on the latest actuarial reviews, the unfunded liabilities to be funded over various periods to 2027 amounted to $809,020,329.
They already show a lack of restraint in their statements, but one would wonder why these unfunded liabilities are not shown in the statement instead of only in the notes. This corporation, in addition to its railway operations, has a hotel operation. If we look at page 14 of the annual report, we see that in fact they make a profit on operating their hotels of
Restraint of Government Expenditures $900,000, and also on those they lease to the Hilton hotel organization of $2.7 million, for a total net income for hotel operations of $3.6 million in the year. However, in order to earn that there is a capital expenditure of $4.2 million, so the net cash requirement in that period is something over half a million dollars. If we accept $3.6 million as profit on the hotel operation, we cannot tell what the return on investment is, because the investment of that corporation is not detailed as it relates to particular operations such as hotels. So we have the taxpayers of Canada being asked to contribute to the investment in an operation in which the CNR does not need to be, and this operation is in competition with other enterprises in this country. If the government wishes to be serious about restraint, there is plenty of room in the CNR.
In the remaining time I have, I should like to comment about the Canada Post Office. This should be a place in which we could exercise a little restraint. The gross revenue of the Post Office is $618 million, and the deficit for the fiscal year ending March 31, 1975, was some $321 million. In the preceding year the loss of the Post Office was only $177 million, so these people who are trying to practice restraint have increased the deficit of the department by $144 million. That department spends $1.50 for every dollar it takes in in revenue. The interesting thing about the Post Office is that the statements do not reflect all the costs that are incurred by the Post Office and charged to the Department of Public Works for the occupancy cost of the various buildings the Post Office occupies. It does include an amount for accommodation of $59 million, but on the balance-sheet we see a note at page 8 of the 1975 annual report of the Post Office which says:
Land and buildings are provided and paid for by the Department of Public Works and consequently are not included among the assets. Certain international accounts receivable and payable are not in the balance-sheet since they cannot be established with sufficient accuracy.
Mr. Speaker, I submit there is plenty of room in an operation such as this to exercise some kind of restraint. While I am commenting on the cost of the Post Office that is charged to the Department of Public Works budget, I think it might be well to have a look at that department. In the public accounts for 1976 which were received about a month ago, on page 20.4 we find that in the accommodation program the budget of the Department of Public Works has an expenditure of $252 million for operating expenses for the provision of accommodation of various departments in the government. That may seem like a reasonable figure, but in the previous year that amount was only $220 million. The increase is $32 million, or something like 15 per cent.
Furthermore, the expenditures of the Department of Public Works on capital expenditures including expenditures on works other than federal property amounted to $270 million in that fiscal year-for capital expenditures on buildings they do not even own! That is an increase from $208 million in the preceding fiscal period, which would be an increase of $62 million or something in the order of 30 per cent. In the limited time I have, I want to emphasize that when we are asked to consider a measure of restraint as weak as that we are dealing with, I think it is well for us to insist that more detailed

November 8, 1976
Restraint of Government Expenditures
examination be made of the very many areas available to this government in order to achieve some real kind of restraint.


Mr. Marke Raines (Burnaby-Seymour):: Mr. Speaker, I want to say at the outset that I always welcome a bill which restrains and cuts back on unnecessary government spending, so I welcome the treasury board's Bill C-19. My only complaint is that it does not go far enough. Included in Bill C-19 is the demise of the Company of Young Canadians. I shed no tears for the CYC. They had their day, but times change and we must now address ourselves to new priorities.
As I said, 1 do not think Bill C-19 goes far enough. There are other areas of government spending that could be examined. I have in mind one which could be called mind-boggling and which, again, deals with CNR, a subject which the speaker before me, the hon. member for Vancouver Quadra (Mr. Clarke), dealt with. That is another facet of the operations of the CNR. I refer to a picture, with cut-lines, in an Ottawa newspaper.

In an article of the Ottawa Le Droit, November 3, 1976, titled "Publicity Campaign", we read the following:
CN public relations vice-president Jean Cormier administers a publicity budget of $1 million to restore the image of the Crown corporation which, he said, has a reputation of "inefficiency, bureaucracy and waste" because of its association with the government.

That is a rather ludicrous situation when the vice-president of public relations of CNR says he is going to spend, or at least he has, a $1 million budget to restore the image of the CNR; an image which, he says, was created as a result of government policy. So we are giving them money and they are spending the money we give them to restore their image. I suggest that that $1 million could be put to better use. The vice-president of public relations of CNR says he has $1 million to counteract an image. I suggest that if the $1 million is indeed available, it might be better spent in further lowering rail fares so that more people, especially students and young Canadians, could travel across Canada and get to know this country.
Another strange expense that PR people favour is the logo or call it what you will, a trademark, an emblem, a symbol, a design, an insignia, or a squiggly line which reads "CN". These people fall into the trap and they hold the fond belief, apparently, that if you get the right, new logo, everything else will fall magically into place. This morning I made several inquiries through my office about the cost of the CN logo. I found that officials in Crown corporations and bureaucrats are rather reluctant to disclose such costs. I suppose that, like most logos, its cost must have been a source of embarrassment because it seems to be hidden with as much secrecy as the CBC logo was, that new device which was incorporated by the CBC and about which I inquired earlier in the House. So I have not yet been able to confirm the cost of the CNR logo.
(Mr. Clarke (Vancouver Quadra).]
This leads me to the secrecy regarding the expenses of government agencies. In my view, this secrecy is unacceptable. I am repeatedly told, and I cannot accept it, that government agencies and Crown corporations are not required to disclose certain details of expenses relating to internal management and administration. The reason given is that the information might be used by competitors seeking a commercial advantage. I cannot accept that reasoning. When these agencies are subsidized by the taxpayer, I believe the taxpayer has a right to know how his or her money is being spent.
Personally, I think the CNR could improve its image by getting back to the main reason for its being, which is the efficient movement of people and freight as cheaply and as effectively as possible. All the rest is frills-and the expense of frills should not be tolerated by the taxpayer. If, by its own admission, the CNR suffers from an image of inefficiency, bureaucracy and waste, then let it address itself to these problems and the image will take care of itself.
The CNR could be used effectively in the movement of young people from east to west and from west to east. We have had a good beginning in this type of program with the Young Voyageurs, for example, student exchanges, and summer language schools which combine both travel and learning. But these programs have been too limited. Most people do not even know about these programs or their value. However, the programs are very good and should be expanded and enlarged. Lower train fares would enable students and young people to see the country as they travel, and more and better summer language training programs would give students a working vacation that would be stimulating and rewarding.
The cost of the bilingual programs in Canada has also come up for discussion. I think it is important that this money be spent wisely. I point out that I do not criticize the amount of money spent on bilingualism. The time has come, and gone, when we can afford the luxury of debating and toying with the idea of bilingualism, niggling over the cost of it, wondering if we are not moving too quickly, suspicious and fearful of exposing ourselves and our youth to a language and culture that have for too long been alien to us. The time for this has passed, because if we do not accelerate the bilingualism program in our schools, in our communications systems and even in our government services, we are going to face the possibility of losing Quebec and, regardless of whether or not we are ready to admit it, if we lose Quebec we will lose Canada and everything that has made this country worth while.
So what can we do to hasten the day when our two languages and cultures meet and when we talk to one another, instead of remaining in our respective corners brooding and scowling? I submit that we need more in the way of education. I know that the educational system in Canada has always been claimed as the creature of provincial governments. The provinces have guarded their jurisdiction over education jealously over the years, affirming their rights under the BNA Act. But their rights, unquestioned so far, entail enormous responsibilities and duties to give young Canadians the very best education available.
November 8, 1976

In my view, a major part of this education should consist of instruction in the other official language. It should also consist of an introduction to our own cultures and peoples, if only to help our children gain a better understanding of their nation and of its role in the world. In this respect, our educational system and the responsible provincial governments have been negligent. In some cases they have been spitefully negligent. Their attitudes toward bilingualism and biculturalism must change, and they must open their eyes not only to their provincial responsibilities but also to their national responsibilities. If they cannot do this, then perhaps it will be necessary to consider a federal role in education.
Also extremely important to the survival of Canada is the communications field. We are told that we must all be sensitive to the power of the media to shape the public mind and spirit. We are, especially in this House, sensitive to the media. The power-and in it, the wonderful potential-has not been wisely used so far. Instead of a lively system linking disparate parts of the country with information and entertainment from all other parts of the land, we have a loose, unbalanced conglomeration of broadcast centres which look blankly at the rest of the country, hardly aware, hardly seeing. Broadcasting in Canada is ghettoized and balkanized. The media in Canada have not fulfilled what I consider to be their primary role, namely, to introduce Canadians to each other. How can one plead for community understanding, tolerance and compassion, when the members of the national community have never met? The media have the power to take on the role of national communicators. I say they also have the duty to take on this role and that it is long overdue.
Finally, I should like to speak about the development of bilingualism in the federal government and civil service. There is no question in anyone's mind that this is money well spent, that every Canadian has the right to approach his or her federal government in either of the two official languages and to be served in that language. That is little to ask, yet that small but crucial principle has been so widely misunderstood. From this principle let us expand the notion of bilingualism to include more, and much better, language instruction in our shools, and a positive, constructive role for the communications industry in bringing our cultural and linguistic communities closer together.
For too long we have been on the defensive about the policy of bilingualism-almost apologetic-in trying to explain a program which is giving French-speaking Canadians but a smattering of the rights we English-speaking Canadians have enjoyed and taken for granted for years. I suggest that this attitude must be replaced soon with one of justifiable pride in having at least begun the construction of a bridge between what we have been calling the two solitudes.


Robert Jardine McCleave: Mr. Speaker, I think I am the first maritimer to take part in this debate on the son of Bill C-87 from the last session, for want of being able to use somewhat stronger language with reference to its
Restraint of Government Expenditures name. But I will not be the last, because there is an important principle here which very much affects the ports of Halifax and Saint John. Indeed, that principle affects the port of Montreal and other ports on the St. Lawrence river, and it has a substantial effect upon the milling industry in Canada. The policy set forth in this bill is so bad that it has been labelled by one member of the present administration with one classic word. I will indicate later who said it, but I can say now what he said. He said, "It is nuts." When a minister of the Crown, no doubt committed to defence of the bill, has that to say about a measure, it is about time his party and the government he adorns takes another look at the measure.
I intend to devote my speech to the subject of the "at and east rate" and to the matter of the removal of section 272 of the Railway Act; in short, to what clause 15 of Bill C-19 attempts to do. I do so because when the matter originally came up in the spring, the hon. member for Vegreville and myself alternated in bringing the issue, by way of questions, to the ministry. I think at one time we had four or five ministers involved. Then we went to the "late show" to try to make as much noise as we could and to raise the cry of "rape" as much as we could. At least, the bill did not get beyond first reading last session. However, now it has been resurrected. The Frankenstein whose components have not been improved by age, comes before us again.
On Friday the hon. member for Crowfoot (Mr. Horner), the transport critic for my party, and the Parliamentary Secretary to the President of the Privy Council (Mr. Goodale), the apologist for his party, dealt with the matter of the effect of this measure on grain movement and, more particularly, on the flour industry. I thought the hon. member for Crowfoot, in his usual succint style, put the case pretty well. I thought the Parliamentary Secretary to the President of the Privy Council was being somewhat pessimistic. After all, if the flour industry in Canada is facing some difficulties, we should not forget that wheat is perhaps the one product for which we are known in the rest of the world, and flour is a good commodity with which to help the starving of the world keep body and soul together on this planet.
There is one flour mill near the area I serve. It serves the whole of central Nova Scotia, and it is threatened with closure if clause 15 is passed. As I develop my argument, I think the House will also find that while there was some talk by the Minister of Transport (Mr. Lang) about an alternative program which might restore to the ports what is now so rudely being taken away-at least an attempt is being made-the fact is that he said nothing, and there has been no indication so far that any substantial and workable policy will be substituted.
At one time when the hon. member for Vegreville and myself were using the "late show" to some good effect in getting this subject at least raised as an issue in certain parts of the country, I went to the Halifax waterfront and walked through the mass of sheds there. The floor area of those sheds is about the size of three football fields. I walked between stacks and stacks of flour, stacked almost to the ceiling and

Restraint of Government Expenditures covering, as I have said, an area of almost three football fields. It appeared that alongside there was a Russian freighter loading that flour which I believe was destined for Cuba.
That business is a very important part of the livelihood of the people of the Halifax longshore who have to scratch for a living, and if clause 15 passes, all that would be removed in peremptory fashion by the President of the Treasury Board (Mr. Andras) and the Minister of Transport. The minister should not duck his responsibilities on that one. This measure to repeal section 272 of the Railway Act has all the smell of an action of the Minister of Transport. I will resist it as best I can. My colleagues, the hon. member for Halifax (Mr. Stanfield), the hon. member for Dartmouth-Halifax East (Mr. Forrestall), and the hon. member for Annapolis Valley (Mr. Nowlan) will be among the hon. members who will be taking part in this debate, but you can bet your bottom dollar that there will also be hon. members from flour-milling communities in other parts of Canada who will join in the effort. We might even get somebody from the other side in on this effort, because I am going to read some of the quotes which some hon. gentlemen opposite have proffered. This matter is obviously of some concern to them, and perhaps they will participate in the debate along with, I am sure, the hon. member for Saint John-Lancaster (Mr. Landers). He will want to have his say, because this question affects many jobs on the Saint John waterfront, and anyone who represents a waterfront community knows that people do not give up jobs very lightly.
First let us start with somebody who is well known on the government side. He is a long-time friend of mine, and a well known and valuable member of the Liberal party of Canada. He is Mr. J. W. E. Mingo, and he happens to be the chairman of the Halifax-Dartmouth Port Commission. He is a lawyer of standing in the province of Nova Scotia. He is either a past president of the Nova Scotia barristers' society or will be its president in another year or so. He is important in the business life of Nova Scotia; and because money is needed to run an election campaign, he is very important in that he raises money for the Liberal party. In an act of supreme statesmanship, Mr. Mingo sent a telegram to the Minister of Transport in which he said:
Termination of the subsidy and the statutory rates will cost Halifax its export flour trade, estimated at 200,000 tons in 1976, and will greatly reduce the throughput of grain at its elevator, thereby increasing the operating deficit of the elevator to the point where its closure will be inevitable.
Then he makes this point:
Prairie grain moves at statutory rates to Vancouver and Thunder Bay, at an annual loss to the railroads which is now estimated at $150 million or more (and which has to be subsidized by other traffic, including export-import traffic moving to and from the port of Halifax), and from Thunder Bay via the St. Lawrence Seaway at highly subsidized tolls to Montreal, Bay Comeau, and the other river and gulf ports. How is it that this $11 million subsidy on the movement of grain to eastern ports is singled out for termination?
He talked about amounts 14 times as much that are untouched, as far as I can see, by this statute in which the Minister of Transport would say to all of us in Atlantic Canada, "You are only second-class citizens so let's see how I
[Mr. McCleave.)
can turn you into third-class citizens". I have a telegram from Mr. Mingo followed by one from Mr. J. Peill, chairman of the Inter-Cereal Producers Association of Nova Scotia. This telegram was sent to me, and I adopt his reasoning as my own. It reads as follows:
Grain producers of Nova Scotia are concerned with the effect Bill C-87-
As I said earlier, Mr. Speaker, Bill C-87 was the father of the present Bill C-19. The telegram continues:
-may have on continued operation of NHB and Dover Mills both of which we consider vital to ascertain continuation and expansion of our young and promising grain production industry in this province.
Modern production methods have made grain production in the past years an economically viable crop in Nova Scotia resulting in doubling of winter wheat acreage for milling purposes every year over the last three.
All signs point to possible continuation of this trend providing handling facilities continue to exist.
Since full implications of Bill C-87 and other contemplated transportation policies are not known we urge that all steps be taken to keep elevator and Dover Mills in operation.
The NHB is the National Harbours Board, Mr. Speaker. I refer to the policy set forth in Bill C-15 as insane. Now I should like to turn to that statesman-like gentleman who used a choicer word-he called it "nuts". In the proceedings of the Standing Committee on Agriculture, reported in issue No. 84, an exchange took place as follows:


Mr. Douglas (Bruce-Grey):: Mr. Chairman through you to the minister and the members from the Feed Board, just going on a little bit with the subject raised by Mr. Corbin and that, of course, is the repeal of section 272. It is certainly going to affect the eastern ports but it is almost going to wipe out the flour milling industry in at least my section of Ontario and possibly other sections of Ontario as well, but I think we have to leave that part of it to another time.
Then we come to the statesman who said the policy was "nuts":


Mr. Whelan:: I do not think so, Mr. Chairman. I want to ask the member what he has done about it.
This is the minister asking for help from a government backbencher to ward off the government's own evil policy. The hon. member for Bruce-Grey replied:
I have written a number of letters to a number of people, Mr. Minister, and I intend to continue doing so because I think it is wrong.
I hope the hon. member for Bruce-Grey (Mr. Douglas) will enter the present debate and tell us whether those letters succeeded or failed. This would give us some appreciation of his fight for his constituents. Later in the same debate the Minister of Agriculture (Mr. Whelan) said:
I think what Mr. Douglas is saying and it is a fear that we all have that it is going to affect the feed industry because of the fact that you will not be using those bay port elevators in Georgian Bay and Lake Huron and possibly the one on the St. Clair River as much as you did before because of the fact that the boats will try and haul the grain through to the St. Lawrence ports at the end of the season and then it can cause congestion that way. It can cause less use of the bay port elevators; they will be of no use whatsoever.
Mr. Speaker, the ripples are spreading from Halifax practically to the other end of Ottawa. The exchange continues:
The ships will not stay loaded in the ports because it is their last run they can make in the fall and if they are down through the St. Lawrence they will not have time to get back up the Lakehead to load and come into the bay port elevator, so you can rail that grain out in the winter because you will lose the
November 8, 1976

subsidy on that movement of grain by rail. That amounts to about $11 million, if I remember correctly.
MR. Towers: You are in agreement with that bill, then?


Eugene Whelan: No, I am not. I think it is nuts. I want to clarify that; on that part of it 1 voiced my opinion and I think it is very wrong.


The Chairman:: I think, gentlemen, that-


Eugene Whelan: I withdraw the word "nuts".


Gérald Laniel: I think, gentlemen, that that probably clarifies the concern that the committee members had with respect to Bill C-87. Perhaps we could now restrict ourselves to the estimates.


Mr. Wise:: On a point of order, if that is the way the minister feels about the bill, then I would suspect that he would support our motion that we have in mind to request that that section be withdrawn.
As the debate goes on, Mr. Speaker, possibly the Minister of Agriculture will have that opportunity. The hon. member continued:
1 hope to see support from the Minister of Agriculture coming at that time.


Eugene Whelan: I think you must have had your private detectives in my mail, because you know what I am doing.


John Wise: We have just been representing our constituents.
That, indeed, is exactly what is going on. It would not be very difficult for a person of even one-quarter of the normal intelligence to recognize that from the standpoint of the Department of Agriculture this is a very bad bill. Those who want to look back to the contributions of the hon. member for Vegreville and myself to the debate will find that we hauled in the then minister of industry, trade and commerce as well as the Minister of Agriculture and the Minister of Transport- when he was on the ground and not at the 30,000 foot level in an expensive plane! We also hauled in the then president of the treasury board. In the Minister of Agriculture we knew we had a friend and ally since he had commissioned studies in his department on the effect of this legislation on the flour and grain trade in Canada.


Mr. Towers:: Don't depend on the Minister of Agriculture.


Robert Jardine McCleave: The hon. member for Red Deer (Mr. Towers) says we should not rely on the Minister of Agriculture, but we can at least put him to the test later and ask whether he intends to stick by the opinion that this clause of the bill is "nuts". We also got rather sympathetic statements in the House from the present Secretary of State for External Affairs (Mr. Jamieson), then minister of industry, trade and commerce. Mr. Speaker, I shall be taking part in this debate whenever I can, and helping others with the information 1 have. The file is still quite thick because I have not used much of it, although 1 have touched on the salient points.
It would be a sad day for this House if clause 15 were adopted as law by this parliament. It would be a blow to the people of Halifax and Saint John who work at longshoring and ask why an attempt at government economy should start with them. Why should they be singled out as a working part of the Canadian economy, when they do not have year-round employment for the most part and rely on the flour and grain trade, amongst other things, for their living? For the sake of saving about $12 million we are going to jeopardize the longshoring of Halifax and Saint John: we are going to make a
Restraint of Government Expenditures dent in the business of Montreal and other St. Lawrence River ports from which flour and grain are shipped, and we are probably going to put three-quarters of the flour milling industry out of business.
The millers' association has tried to present its case, again getting a sympathetic ear from the Minister of Industry, Trade and Commerce (Mr. Chretien) and the Minister of Agriculture, but getting the deaf ear of the Minister of Transport.
Sir, it is always good to have economy in government, if you know what you are doing and what the result will be. But I suggest that the present measure will occasion much mischief to the shipping, longshoring and flour sectors of the economy, to say nothing of the farmer who is at the beginning of the line, as it were. I suggest that this attempted economy will do mischief so great that a word the Minister of Agriculture used-"nuts"-will be applied to members of the cabinet if they persist in continuing with this monumental piece of stupidity they are asking us to consider.


Stanley Howard Knowles: Mr. Speaker, we think this is a bad bill, and we oppose it. If we are in economic difficulty, in our view the best solution is to increase production, provide employment and get our economy rolling in high gear. But if the government does not realize all this and feels that it must fall back on a program of restraint, we say that such restraint should at least be practised with some degree of equity and fairness. In our view, this government does not know the meaning of those words when it comes to practising restraint.
I shall illustrate what I mean with some examples. Before I mention them, may I say that I am not at all satisfied with the decision to ditch the Company of Young Canadians and the Local Initiatives Program. I know that the CYC was the brunt of a good deal of criticism. I also know that the young persons who worked under the auspices of the CYC did much useful work coping with social difficulties in this country. It is unfortunate that that project has been ended. Likewise, I was pleased with the number of things done under the Local Initiatives Program to help persons who needed help and could not get it otherwise. I was pleased by the initiative and innovation which that program brought out. The government is to keep the program alive for a while, but plans something else to take its place. That just shows how this government can change its mind in the few months between the time when it introduces a bill and when it gets around to dealing with it.
Information Canada for a long time was a whipping-boy around this House, and it is to go: no longer will it be a whipping-boy. 1 do not think we shall save much money by doing away with Information Canada, and I suspect that many Canadians already miss the services which were available through that agency. I think the main mistake made about Information Canada was that when it was set up the notion was created that it was to take the place of the public relations staffs of the various departments. The idea was that instead of

November 8, 1976
Restraint of Government Expenditures having every department put out its own press releases, this would all be done by Information Canada.
We discovered that it did not happen that way. The departments increased their public relations activities, and one of the supposed aims of Information Canada was not achieved, instead, Information Canada began publishing material not otherwise available, and opening book stores-all of which I think was good. Because of criticisms levelled at Information Canada from the floor of the House, I suppose the government felt it had no option but to yield to those criticisms and, in the name of restraint, to do away with Information Canada. Now it has gone. Let mine be a voice that is not happy about it.
I move on, sir, to what I think is the main example in Bill C-19 of practising restraint in the wrong place. I refer to the cancellation, for the year 1976, of the escalation of family allowances. The government has been able to say, in effect, "We have saved over $200 million by this means." But it will have been saved mainly at the expense of families and largely at the expense of families in lower income brackets. To me, sir, this is practising restraint in the wrong place. It is making those who can least afford to pay for the government's economy measures pay the larger portion of them.
Let me mention other examples of restraint for which the poor must pay. One such example was brought out particularly in the report of the National Council of Welfare which reached us last week. I confess I was surprised today, after my leader, the hon. member for Oshawa-Whitby (Mr. Broadbent) asked the Prime Minister (Mr. Trudeau) some questions about this report, to hear the Prime Minister reply that he had not seen or heard of this document. After all, the National Council of Welfare is an important body, set up and funded by the federal government. It is not some outside agency. It was set up and funded by the federal government for the purpose of making recommendations to the Minister of National Health and Welfare on matters of welfare policy.
In the past two or three years it has produced a number of excellent reports which turned the searchlight on inequities and unfairness in our welfare system and society as a whole. The current report, which I hold in my hand, is entitled "The Hidden Welfare System." It is a timely report, coming, as it does, when the government is talking about the need for restraint. The theme of the report, "The Hidden Welfare System," is that the people of Canada are having to pay to certain individuals at least $6.4 million a year because of the unfairness of the exemptions built into our income tax system. This unfairness is documented in this report which is some 40 pages long. The inequity is highlighted extremely well on pages 16 and 17 which tell us how the hidden welfare system works. I do not wish to quote all the material on these two pages, but I will say that these two pages refer to 60 subsidies under the Income Tax Act, with respect to 17 of which the Department of National Revenue provides useful and comprehensive statistics. It is by studying the costs of these 17 subsidies that the National Council of Welfare finds that the treasury is losing, under these exemptions in the Income Tax

Act, about $6.4 billion a year. I should like to read two paragraphs of the report:
An examination of the $6.4 billion cost of the 17 subsidies tells us a great deal about the hidden welfare system. To put this $6.4 billion into perspective, it is equal to well over one-fifth of the entire federal budget in 1974. It was 4'h times the cost of the Olympic Games and 19 times the total new costs of the support and supplementation programs. It was enough money to have provided every family in Canada with an extra $100 per month for food and clothing.
But this $6.4 billion was not distributed equally among Canada's families. The poorest of the poor, those with incomes below the tax-paying threshold, received none of it. For all others the rule was, the higher their income the higher their benefit.
Then follows a table which sets out various income brackets and average benefits received. There are those in the very low brackets who get no benefit at all from the 17 subsidies under the Income Tax Act. For those whose taxable income was under $5,000, the average benefit was $243.75. That sounds good, if you are a low income person. But if you are in the group from $20,000 to $25,000, the average benefit is $1,786.93; and for the group whose income is over $50,000, the average benefit is $3,989.78. Listen to this paragraph, and I am quoting again from the report.
ll would be difficult to imagine any direct and visible government expenditure program which gave $244 to those with income of less than $5,000 but $2,427 ten times as much-to those with incomes of between $25,000 and $50,000, and $3,990 to those who make over $50,000 a year. No government would dare propose such a program. And yet the hidden welfare system does just that, and there is hardly a protest to be heard.
I might add that when there was a protest today from my leader during the question period, the Prime Minister did not even know what he was talking about. I quote again:
The reason the hidden welfare system can get away with it is precisely because it is hidden. The low income taxpayer saving $200 cheers his saving and remains oblivious of the $2,000 saving granted to the person with five times his income.
I might say that in this report it is suggested that if details of all the 60 subsidies or exemptions under the Income Tax Act were obtainable, instead of just 17, it would probably turn out that the total figure would be not $6.4 billion but several billion dollars higher than that. What I am saying is this: if there needs to be restraint, why not practice it here, why not practice it on those who are getting these hidden forms of welfare in the guise of income tax exemptions instead of imposing it on persons who receive family allowances and on the poor generally? It is our contention that the place to practice restraint, the place to practice economy, is where it can be done without hurt to those concerned, instead of where it really hurts our people.
Another question which was asked today raises the whole subject of restraint. My hon. friend from Yorkton-Melville (Mr. Nystrom) did not get very far, nor did one of the hon. members in the Conservative party.


An hon. Member:: The member for Prince Edward-Hastings (Mr. Hees).


Stanley Howard Knowles: He did not get very far with it, either. I am referring to the ministerial use of
November 8, 1976

private aircraft. Even if a minister feels there must be some sort of privacy in which he can work when he is on his way to attend some function, government or otherwise, how can one justify spending $7,000 to transport one minister from Saskatoon to Edmonton? That journey would take all of an hour and a half. By the time the steward had served food and drink, his ministerial passenger would be ready to land; there would be no time left for him to work. We are not complaining that a minister has travelled by air from Saskatoon to Edmonton: we all have transport privileges; but we suggest he should travel by Air Canada. For the minister to have piled up, in the last several years, a bill amounting to three-quarters of a million dollars for the use of private aircraft is scandalous and it does not wash well with the legislation which is now before us calling for the practice of restraint.
That is a large amount of money to have been spent on air travel. Perhaps the item I have in mind to deal with next would not mean the saving of as many dollars. But if we intend to practice restraint, let us do it. I do not know why, every time a minister makes a speech in the House, we should all get copies of it immediately before, or immediately after he does so. It gets printed in Hansard, in the same way that this speech of mine will be printed. Why go to the expense of printing speeches in addition to what is already available? Then again, when one looks at the hand-outs which come from the ministers and their departments, and I fill a waste basket a day with them; it isn't all from the government, I know-


An hon. Member:: Why don't you read some of them?


Stanley Howard Knowles: That is one of the
things I had to learn when I first came here: to decide what one should read and digest, what one should keep in case it might be needed, and what one should throw away without wasting time on it. That is what all new members have to learn. I think the hon. member has been here long enough to learn it. Anyway, room for economy is obviously there, and there are scads of areas like this which could be the basis for economy, instead of what the government is proposing. Maybe economies brought about by reducing the volume of printing, and so on, will not yield a great deal of money, but if savings in this direction are coupled with cuts in other expenses in which the government is indulging, huge sums will be saved.
I have one other suggestion to make. It is about this time that I expect my popularity in the House of Commons to rise to new heights; but I am used to that. Almost a year ago, when the government was first talking about restraint, one of the things it said it would do was to bring in legislation to ensure that the pay of members of parliament would not escalate in 1976 as provided in the legislation which was passed in 1975. Hon. members are aware of this. First, it was just the pay which was not to be allowed to escalate. Then, because of protests which some of us made, the bill applied to both pay and the tax-free allowances received by members of this House and the other place. Mr. Speaker, the restraint period is not over. Inflation has not been licked. Why not do the same for
Restraint of Government Expenditures
1977? If nothing happens, then the increases that did not take place in January, 1976, will take place in 1977.


Some hon. Members:: Oh, oh!


Stanley Howard Knowles: I knew I would reach new heights of popularity by suggesting that, Mr. Speaker. It means that in January there will be an increase from our present $24,000 salary to $25,600, and our expense allowance will go up from $10,600 to $11,300. Their Honours in the other place will have their indemnity increased the same as ours, and their expense allowance will go up from $5,300 to $5,600. I know all the arguments about what the money for expenses, and so on, is used for, but we are talking about restraint. We are talking about economy, because the country is in trouble; so why not practice restraint by doing for 1977 what we said was good for 1976?


Mr. Clermont:: What about sending back your old age pension?


Stanley Howard Knowles: I said I knew I would be popular, Mr. Speaker, and get all sorts of support in all sorts of places.


Jean-Pierre Goyer: Let us get back to the two-party system; then we will save money.


The Acting Speaker (Mr. Turner):: Order. The hon. member for Winnipeg North Centre (Mr. Knowles) has the floor.


Stanley Howard Knowles: If hon. members want to put this on a personal basis, I can tell them that by staying here in the House of Commons I am saving the treasury a good many thousands of dollars of parliamentary pension that I would have to be paid if I were not an MP. If I stay on in this place long enough, I may not get any of it.
I have the uneasy feeling that the reason family allowances will be allowed to escalate in 1977 is that it would be just about impossible to freeze family allowances for another year and let our pay and allowances go up. I have seen this sort of thing happen too often for it to be mere coincidence. It happened with respect to the escalation of the pay of retired civil servants, and so on. We did not get that for a long time, but we did finally because it was time to do something for the pay of MPs. I do not think that this is the time or place to argue what the amount should be, but it is a time to discuss the government's policy of restraint. If we are to have a policy of restraint, I suggest that we in this House should give leadership. For these reasons, Mr. Speaker, I suggest that the whole program that the government has set before us in Bill C-19 is awry, and that it should be taken back and drawn all over again, along lines of equity and fairness.


Jean-Pierre Goyer: Mr. Speaker, at a time when we ask the Canadian people to cut their expenses and refrain as much as possible from

November 8, 1976
Restraint of Government Expenditures making expenses which are not urgent, and to abolish useless expenses, I think it is appropriate for the government to bring forward a bill cutting some expenditures which, at a certain time, could appear essential for the good operation of government and for the services offered to Canadians but which after a number of years appear useless and even futile in a few cases because of changing circumstances.
Any good government must endeavour from time to time to direct its efforts to cut wasteful spending which finally becomes a habit in an administration like the federal government and produces expenses which become substantial in the course of the years. Therefore, the object of the present legislation is to ensure that we show the Canadian people a certain will to adjust to the present circumstances.
On December 19, 1975, the President of the Treasury Board announced that certain programs would be abandoned. Certain expenditures which were now useless would be cut, and the federal administration, including the representatives of the people, must show a certain restraint as concerned public spending.
My department was asked, among other things, to see to the disbanding of Information Canada. Originally, the creation of Information Canada was certainly a good idea. This agency rendered many services, especially in the areas most isolated from large centres in Canada. For those who live in large centres like Vancouver, Toronto or Montreal, Information Canada did not bring as many advantages as for the people in isolated centres where government information cannot reach Canadians as effectively. It was in this spirit that Informatinon Canada had been established, but because Information Canada was perhaps not managed as efficiently as possible, and mostly because Information Canada had to face a barrage of repeated and, in a sense, generally negative objections on the part of the opposition, the government had to face the fact that Information Canada could no longer provide Canadians with the same services without provoking increasing criticism. This does not mean that all services previously offered by Information Canada have disappeared. Some of them of course have disappeared, but others have been amalgamated in various departments and continue to meet the needs of Canadians but under other forms.
I would like to report now on what we have done to publish and distribute government publications. As everyone knows, through Information Canada, the government had six bookstores across the country, which operated necessarily in the larger centres and offered their services to a great number of Canadians, but still not to the majority of them.
Moreover, government publications were not, far from it, distributed solely through our bookstores since 65 per cent of the needs were met through the postal service. Therefore, many Canadians are not affected by a change in the distribution of government publications. On the contrary. In addition, because of our labour contracts, it was difficult for our bookstores to adjust to the working conditions in the private sector, that is longer working hours, the opening of our stores at night and on Saturday, when there are necessarily more customers.
[Mr. Goyer.l
After due consideration, we decided to give another orientation to our distribution service through the Department of Supply and Services.
First, we have decided to close our six bookstores which were in operation in six different Canadian cities. In so doing, we will save over $1 million a year and substantially reduce the number of man-years in the government. How will those six stores he replaced? We shall replace them by appointing agents, that is to say by designating private sector libraries that will offer the same services as government libraries, within their commercial activities. In doing so, we shall multiply the number of libraries throughout the country and even in smaller communities where we can find libraries ready to do business with us. We shall multiply the number of service centres throughout the country so that the distribution of government publications be more adequate and reach more Canadians from coast to coast. Furthermore, we shall appoint as government agents all libraries in Canadian universities. It means that every student, every university teacher who use the services of the libraries in our six largest centres will find now similar services in their own university libraries. In doing so, we eliminate annual deficits as well as positions that are becoming redundant.
As concerns the distribution of publication by postal services, we improved that service a lot, as earlier we had to wait from three weeks to one month to receive an order. Our objective is to get it in nine days; it now takes about twelve days, but we hope to reach the nine-day objective within a few months. In doing so, we improve very much what represented 65 per cent of our business volume.
We will also publish very soon a list by subjects of all publications and we shall send this list to special interest groups to avoid sending throughout the country information of no use to the people who get it and so that the people interested can get information on subjects relating to their expertise or their interest field.
In doing so we are going to increase our marketing. We are also going to expand information on government publications and make them available to a greater number of Canadians. Having said that, Mr. Speaker, it may be that some publications will be considered somewhat too expensive by some Canadians. To meet that shortcoming we are sending our publications to all libraries in this country, all those that are registered with the federal government. So there is a legal depository in every library and Canadians can obtain government publications through those libraries without having to spend a penny. For those who insist on doing business with us and buying those publications, once again they will be able to do so from the lists that will be published based on their fields of interest or the expertise sought.
There is a last way which may seem somewhat more attractive for it is surely innovative. We negotiated with CARA which offers various services in several airports in Canada, notably sales services for publications, books on various subjects. So we negotiated with CARA the possibility of having a stand in their bookstores at airports in Canada. So those
November 8, 1976

Canadians using planes in the various airports in this country will now be able to see in those bookstores the latest publications of the federal government and, if they are interested, buy them. So that is an innovation that will surely increase the marketing and profitability of the publications of the government of Canada.
Finally, with respect to decisions we are looking forward to being a lot more active in our efforts to negotiate once again with the private sector the co-edition of some of our publications, notably, of course, in a general way those that are not official publications of the government but that are rather published in the general or particular interest of Canadians. We want to combine with the collections of the private sector.
Why should government publish books in, say, specialized fields such as mining or botany, regardless of collections already in existence in Canada which could very well take in the different subject matters so that, in its publications, the Canadian government be considered on the same level as the private sector? This would further help create jobs in the private sector, one of the government priorities set out in the Speech from the Throne. We would like to enable the private sector to undertake certain tasks for which government has no technical expertise or cannot carry out competitively.


Donald Frank Mazankowski: What are you going to do about the redundant Crown corporations?
[ Translation]


Jean-Pierre Goyer: Mr. Speaker, we could take up this question again when the announced bill is considered in the House. Therefore, with regards to our publishing needs, we intend to rely more on the private sector to offer to the Canadian public not only these services but additional ones as well. Mr. Speaker, I would also like to touch on the subject of exhibitions without going into too much detail and taking too much of the House's time since we have not yet defined our policies in detail.
Everybody knows, as do the members of the committee which reviewed the credits of my ministry, that in the field of exhibitions our deficit ran fairly high. My aim is to eliminate such deficits and to run the exhibition service on a cost efficient basis so that we can reach a point when our spendings can be paid from our revenues so that both items be balanced.
There is no reason why we could not reach that aim if, first, there is no more overlapping in the various departments and, second, if the resources are not scattered away. Also, if my department can get clear terms of reference to offer common services to the various departments. Thus, we think that before one or two years at most, we will be able to completely eliminate the deficit. This is only one particular condition, there are many others, of course, for example we should be able to rely more on the private sector. Here again I could say that there is no reason we should do things in the government that can be done more economically in the private sector, and
Restraint of Government Expenditures it is on that subject that we are now initiating careful studies to know exactly what would be the necessary corrections to make so that the deficit could be eventually eliminated.
Mr. Speaker, I could give other examples of the measures that we have taken to eliminate certain useless spendings or to restrain government expenditures such as those in the field of computers, when we created pools for buying computers and when we urged the departments to share their use so that the renting of these computers be as cost efficient as possible. Now we are planning to buy certain computers, instead of renting them, and then to rent the computers to the various departments so that we can make the best possible use of our spendings and so that we can use ourselves the renting services.
In the field of photocopying machines, not only in the public sector but also in the private sector, everybody wants to have a photocopying machine very close at hand, something which contributes to increase expenses, henceforth my department will be responsible for making expert services available to all departments so as to make better use of duplicating machines, maximize their output and lower the leasing or purchasing cost of those machines which resulted in heavy expenses for the government and whose costs were not in line with the services they performed.
I could also add that we have completed a study of all storage facilities across the country. While each department wanted that all its storage facilities be located across the land, we have calculated the number of square feet in each area, even in each city, across Canada and we realized that we could use those facilities collectively and could provide the same services to the departments but at a much lower cost.
Those instances have already been mentioned and this will result in many millions of dollars in annual savings because we have put forward a clear and precise policy whereby government services must be provided adequately to all Canadians to meet rapidly their needs. And that is possible by realizing savings and performing more effectively.
Mr. Speaker, Canadians are currently asked to use restraint in their wage settlements, to reduce their expenses. Workers and industries are being asked to increase productivity, to work harder to put our economy back on the right course. Various levels of government, whether municipal, provincial or federal, are called upon to take their responsibilities, to reduce unwarranted government expenses, to eliminate waste, to ensure we give Canadians good but efficient and economical services. In this vein, 1 am amazed that in a province where there are now suggestions that the people should eventually separate from the rest of Confederation, that Quebecers are invited to get into absolutely unwarranted expenses in the current economic context.
For instance, urging Quebecers to separate is asking them to grossly overtax themselves to pay for unwarranted expenses. Efforts, talents, time and money are spent and civil servants are at work to undo what the governments are trying to build. In my view that is negative thinking, and Quebecers will have an opportunity to realize this is no time for adventure, this is no time to hire economists or other human resources to do

November 8, 1976
Restraint of Government Expenditures
demolition work, while we are trying to improve the well-being of Canadians, and thereby building a better Canada and government structures that can serve the people better.


Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, on December 18, 1975, the president of the treasury board announced the elimination of the subsidy on the movement of flour and grain through the east coast ports. This is a very serious move and one which will have devastating and far-reaching consequences. This is in clause 15 of Bill C-19, formerly Bill C-82. If this subsidy should be removed, many aspects of the economy such as the eastern ports, the farmers, inland grain terminals and the flour industry, stand to lose. The scope of this problem is very large indeed. During the last session the hon. member for Halifax-East Hants (Mr. McCleave) and the hon. member for Vegreville (Mr. Mazan-kowski) mentioned the effect the removal of this subsidy would have on the flour industry in Canada. However, Mr. Speaker, let me refresh the memory of members of the House.
First, the removal of this transport subsidy could cause freight rates in some cases to jump by as much as 212 per cent. This is an unrealistic figure, no matter what one happens to be talking about. Second, because of these increased costs, Canada will stand to lose any competitive edge it currently holds in prices, and as a result our flour buyers will be forced to look for alternative suppliers. The alternative suppliers in this case would be the Americans and the European Economic Market. It is interesting to note that both these alternative suppliers already enjoy a competitive advantage with their various export subsidy programs.
Third, the elimination of this subsidy could mean a loss of $28 million, in what economists call the "added value processing activities", with most of this occurring in depressed areas of our country. Fourth, many plants in the milling industry will be forced to close, with lay-offs approaching 3,000 personnel. This figure is for workers directly engaged in the flour industry. Who knows how many workers will be indirectly involved. I ask the government this question: How can you adopt a plan that will increase unemployment when we are already living in an economy where unemployment is over 7 per cent?
Fifth, it is felt that our domestic price of flour will go up because of the number of mills operating at less than full capacity. As one can well see, the removal of this subsidy will have negative results in the flour industry, so much so that the flour industry might be forced into further declines and lose even more of its share of the export flour trade. Of course, there is also the significant effect the reduction in the movement of grain, as a result of the subsidy cut, will have on the eastern ports. This has been discussed in greater detail by the hon. member for Halifax-East Hants, but let me touch on it briefly. First the removal of financial support for shipments through eastern ports will require increased freight rates. That, in turn, will have the effect of pricing the facilities of
[Mr. Goyer.l
Saint John and Halifax out of business. Naturally, accompanying this will be loss of jobs, loss of markets and reduced rail movements: the list goes on.
However, the biggest injustice here is that at the same time the government announced the plan to eliminate the subsidy to the eastern ports, it also announced that the tolls on the St. Lawrence Seaway will not be raised this year, even though this is needed to meet operating costs. The government will subsidize the Seaway and the Great Lake ports, but will let the Atlantic ports fend for themselves.
The third point of discussion, and one which the government has met with weak solutions, is the question of what will be done with this extra 35 million bushels of wheat that is currently handled by the rail movement from these inland terminals to the eastern ports. One solution, as suggested by the government, is the adoption of a new system for moving grains. One that has been discussed is the concept of unit grain trains running from the prairies to Halifax or Saint John. This proposal, however unique-sounding it may be, cannot be considered as a serious alternative. It has never been heralded by the Wheat Board as an alternative mode of grain transportation to the eastern ports. It has never had practical application from the prairies to Halifax or Saint John. It has even been said that the roadbed on which these trains are supposed to be able to travel is not strong enough to support these proposed unit trains full of grain. They will not be able to support any unless a great deal of money is spent improving the roadbed.
The general feeling among the people affected by this proposal is that this extra grain will never see the eastern ports under any other type of grain movement. It is felt that this extra grain is likely to be moved out of the Vancouver port. This is ironic in that the facilities are already overloaded, especially with wheat, and it will not be encouraging to our export buyers if they have heard of the labour unrest there, or are from the other side of the Atlantic. The conclusion that must be drawn from this information is as follows: there may be more efficient and cheaper systems for this movement of grain, but let us carry out our experiments now before we change the present system. Let us find out all there is to know about these alternatives before any present system is replaced or subsidies cut.
Another question to ask in this discussion is: How is it that this particular subsidy is being chosen as the one to be cut? This subsidy, which is in the neighbourhood of about $11 million annually, is quite small and not all that staggering, especially when you compare it to others. For example, $150 million is being spent annually on the subsidy for the movement of grain from the prairies to Vancouver and Thunder Bay. If the government wants to make some savings, simple arithmetic tells you that $150 million is much more than $11 million. This is only one of many examples of grain being moved at statutory rates. There has been no government action to cut any of these rates.
November 8, 1976

Another question, and one that is of particular relevance, is: Why is the public outcry so loud? The reason for this is that the public was never given any indication of the government's intentions before the actual decision was announced on December 18, 1975. After the announcement was made and the people were given a chance to study the consequences, they had every reason for public alarm. It was most evident that very little time or effort on the part of the government had gone into this decision. It seemed that the government had some obscure motive for making this subsidy cut. They certainly had not made a responsible decision, taking into account the government's restraint on transportation programs. It was evident that the subsidy underlying this particular rate was easy to identify, and thus became an easy target for the cut.
It can be said that with the removal of the subsidy and a strict enforcement of the user-pay concept, with no clear alternative policy proposed, the government is abandoning the basic principles of transportation policy, that it should be a tool of regional development and an instrument for national policy. It has also been said that the decision to cut the subsidy was taken before a study of the effect was ever considered. Clear proof of this lack of study is the failure of the government to offer an alternative policy. If a study had been carried out, I am sure it would have shown how disruptive to the Canadian economy will be the action that the government proposes. It would at least have recommended that the subsidy be phased out of existence, not dropped so suddenly. It would have found, also, that despite the restraint objective of this subsidy cut, the end result, with unemployment and disrupted industry, would be increased costs to governments. It would have found that the proposed loss of this subsidy cut to the Canadian economy was estimated to be in the neighbourhood of $100 million. The final comment is that these people and industries must be given a chance to adjust; they do not need this form of shock treatment.
The last point of discussion in respect of the removal of this subsidy, and one that is of great concern to me, is the effect it will have on the inland terminals and on the people who are dependent on the services these terminals provide. The specific terminals in question are those located along Georgian Bay, Lake Huron, Collingwood, Midland, Port McNicoll, Goderich, Owen Sound, Sarnia, Toronto and Kingston. The terminals are presently being used for the movement of grain on the Great Lakes and to the eastern ports. The program in which they take part and which is of interest here is the annual movement of about 35 million bushels of grain by rail to the eastern ports. This movement takes place mainly in the winter months and is subsidized annually to the sum of approximately $10 million to $12 million.
This program is very important to these terminals and makes up most of their winter activity. If it were lost, these terminals would definitely be forced to close in the winter months. With this closure would come the characteristic problems associated with a seasonal industry, everything from the usual labour problems to the more serious problems encountered with the loss of the services these terminals provide. The
Adjournment Motion
whole problem here is that removal of this subsidy and the subsequent closure in the winter months would not be the end result. The end result would be in the indefinite forced closure of these terminals.
Why would the removal of this subsidy cause the terminals to close indefinitely? This is an important question, but one that can be easily answered. The removal of the subsidy will cause decreased activity in the winter months and an over-all reduction of grain movements through these terminals. As a consequence, the operating deficits of these plants will rise until it is no longer profitable for them to stay open. When they reach this point, their doors will close.
Another reason these terminals should not be allowed to close is that these facilities provide a valuable alternative to the St. Lawrence Seaway. If, for some reason, the Seaway was ever forced to be closed or shut down for any period of time, the inland grain terminals could be used to their maximum. Even now they are extremely important during times of strikes or the slowing down of grain movements to Thunder Bay. Another segment of the economy which will be affected by the removal of the subsidy, with its subsequent effect on terminals, is the Canadian grain plan. The farmers of Ontario would suffer a cut in the supply of feed grains.
At present, farmers depend on these terminals for the distribution of the majority of their feed grains. When the terminals close, farmers will be faced with having to find alternative sources of feed grains. These alternative sources will most probably supply the grains at a higher rate. The Quebec farmer who is dependent on feed grain storage at Seaway terminals will also suffer. Terminals further down the Seaway near Montreal and Quebec will not waste any storage capacity on feed grains, instead, they will concentrate only on export grain. The higher price of rail movement of grain will dictate that these terminals accumulate as much export grain moved by water as possible. There will be no room for feed grains. The western farmer will lose the markets which are supplied by grains from eastern ports. This will be the result because of the possible price differential which grain buyers will have to pay in winter months when grain arrives at these ports by train.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: Order, please. It is my duty, pursuant to Standing Order 43, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for St. John's West (Mr. Crosbie)-Energy-Possibility of re-activation of refinery at Come-by-Chance-Government position; the hon. member for

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Humber-St. George's-St. Barbe (Mr. Marshall)-Canadian National Railways-Reduction of staff and service in Newfoundland-Request for investigation; the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn)-Energy-Request for tabling of documents relating to establishment of uranium refinery in Saskatchewan.


PRIVATE MEMBERS' MOTIONS
Hon. Stanley Haidasz (Parkdale) moved:: That, in the opinion of this House, the government should give consideration to the feasibility of allowing residential taxes on owner-occupied homes and rental payments of accommodation by tenants to be deductible from federal personal income tax up to a maximum allowable of $300 each year.
He said: Mr. Speaker, I welcome this opportunity to propose in this session of parliament a motion seeking tax relief for the already overburdened municipal taxpayer. In reintroducing this motion, I hope to bring to the attention of the federal government, and especially to the attention of the Minister of Finance (Mr. Macdonald), the urgent need to alleviate the heavy and intolerable burden of the Canadian taxpayer who is not only heavily taxed today but in most cases is also a victim of double-taxation.
My motion calls for an amount of up to $300 as a deductible expense from federal personal taxable income for municipal taxpayers of owner-occupied homes and tenants renting accommodation in rooming houses or in apartments. We all know that the provision of shelter is a basic one for decent living, and we are also aware of the difficulties today of obtaining adequate and affordable housing with the many services expected and demanded by people in our affluent society, especially in urban and industrialized regions. No level of government acting alone can hope to meet successfully all these demands and needs. That is why all levels of government should be involved in the matter of providing affordable housing and tax relief for the municipal taxpayer.
To be really successful in this task, the three levels of government must co-operate. As the involvement of the federal government in municipal affairs is very limited, due to the provisions of the BNA Act, provincial governments are mostly responsible for education, municipal land use, local economic planning and the provision of many other services to people living in homes in our cities and towns. Unfortunately, not all provincial governments have as yet developed satisfactory policies and programs to ease the financial burden of municipalities. As a result, municipal governments have to tax property owners to raise the money to provide more and more of
I I Ik- \tliim Spcakei I Mi. I mnci I ]
those services which the people demand and which are becoming costlier every year.
Property taxes have become the major source of money for local governments, making up to 80 per cent of the total municipal revenue, exclusive of transfer payments. In turn, residential property is the main source of property tax revenue for municipalities. However, the many services provided by municipalities, especially education, bear little relationship to the value of one's property holdings, and yet educational costs today comprise from 50 per cent to 60 per cent of our municipal tax bill.
Furthermore, a property tax in isolation cannot meet the ability to pay principle in the matter of taxation, and there is no precise relationship between property ownership and ability to pay. For example, an elderly couple has no great capacity to pay taxes by virtue of owning property. Therefore, property taxes today are considered by many tax experts to be regressive, inflexible, inequitable and bearing heavily upon those who can least afford them. Furthermore, the person paying municipal property taxes is a victim of double-taxation. That is why many countries-for example, the United States-avoid this kind of injustice by allowing property taxes, mortgage interest payments and other expenses as items deductible from personal income tax. On the other hand, Canadian taxation laws allow businessmen to deduct real estate taxes and many operating expenses as items deductible from their income tax.
In the present economic crisis which our country is undergoing, I think it is urgent that the federal government take special measures to reduce unemployment, to control cost of living expenses, and in particular to cut taxes to stimulate the economy. Measures encouraging the construction and purchase of homes would increase the number of jobs and provide a much needed stimulus to our economy. Almost daily we read announcements and predictions in the newspapers that mill rates, hydroelectric rates, water rates and heating costs will be rising again this year almost to intolerable levels in spite of controls and the anti-inflation program. These developments are tragic to people on low incomes, and especially to our senior citizens on fixed retirement incomes. Renters of accommodation in rooming houses and apartment buildings will also face increased rents, as all these services will push up rents in spite of rent controls.
These problems have frequently been brought to the attention of the Minister of Finance, and recently by the Federation of Mayors and Municipalities of Canada. The members of this federation expressed great dissatisfaction with the senior levels of government for not giving municipalities sufficient financial assistance to keep down municipal taxes. I am particularly happy that recently the Canadian School Trustees' Association, in a letter to me, expressed their interest in this motion and I would like to read a policy article which that association published at one of its conventions. It reads as follows:
The Canadian School Trustees' Association believes that financial measures should be undertaken by the government of Canada that will permit school-taxes on local property-owners and tenants to be deductible from taxable income.
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I hope hon. members support such a policy statement. The rumblings of discontent are growing louder each year in all sectors of Canadian society faced with rising costs and heavy taxation, and that is why it is imperative that the Minister of Finance give this matter serious attention. The federal government has already recognized basic tax relief for marital status, dependants, charitable donations, special medical costs, moving expenses, and job-related expenses. Since 1 first introduced this motion in November of 1967, the federal government has increased its total expenditures from $11 billion annually to over $35 billion last year. That amounts to an increase of $24 billion. Therefore, the cost of the program I am proposing should not be entertained by the government or by hon. members speaking in this debate as an excuse for turning it down. I think it is high time the federal government recognized the need to grant Canadians basic tax deduction for shelter. 1 believe that the support and acceptance of my motion this afternoon will help ease the heavy taxation burden carried by our citizens.
I make this motion as a matter of urgent importance and with the serious intention of trying to solve some of the problems of property taxation which have been recognized before now to be inequitable and regressive. Therefore, I hope that this afternoon I will receive support for my motion from all sides of the House.


Marcel Joseph Aimé Lambert: Mr. Speaker, 1 rather suspect that the time for the discussion this afternoon will be much too short, because over the past many years I have attended political conventions and policy meetings at the local, provincial and national levels and I know that this subject has come up for considerable discussion. On the face of it, this proposal does sound very attractive, but one has to consider the context in which such proposals have always been presented. Some 10 to 15 years ago when I first dealt with a proposal like this, it was put up, particularly by municipal authorities as an incentive for home ownership.
Civic administrations felt that if they had a higher mix of owner-occupied homes rather than tenant-occupied accommodation in their communities, they would have a more stable population and if the individual was the owner of the premises he occupied there was a greater incentive for him to maintain and improve the property. This was the chief purpose of the proposals 10 or 15 years ago, but it seems to have gone by the board today. The proposals we see are like that made by the hon. member for Parkdale (Mr. Haidasz), designed to alleviate the burden of taxes in this high inflation period. In other words, it is an income-relieving proposition. It is not an incentive program for the owner of property but, rather, is relief against inflationary pressure and ever-increasing taxes at all levels.
The Ontario tax credit provides for a variant of the formula proposed by the hon. member. On the Ontario tax credit return one stipulates the amount of taxes paid during the last taxation year on property owned or rented, and a credit is
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available. It must be remembered that the hon. member, although his resolution does not say so exclusively, is going for tax credit, not merely a deduction of $300 on taxable income. That would be almost meaningless for all tax credits, whether they be for interest paid on mortgages or on owner-occupied properties. We have seen this proposal many times in this House and outside, and there are various difficulties with it. With all these proposals one has to make up one's mind about the negative consequences.
I think the hon. member said he would grant a credit on owner-occupied residences or to tenants. If he understands income tax law, he will realize that theoretically the tenant has already received the benefit of a tax credit toward that rent, because if there have been expenses with regard to the rent, the owner of the property has been allowed to deduct them and therefore there is, theoretically, already an advantage to the tenant.
But how can each taxpayer be treated equitably? In 1974 my party put forward a proposal that interest rates above 8 per cent, to a maximum of a certain amount, would be deductible from income in order to arrive at a taxable income. But that suggestion had some difficulties with it. It really encouraged the taxpayer to take on a mortgage regardless of the interest rate because he would get credit under the Income Tax Act for anything above 8 per cent. It is the same with the proposals that mortgage interest beyond $5,000 per year, say, would receive some form of subsidy. This is not to encourage ownership but is merely a sort of one-shot affair to alleviate high interest rates. Personally, I do not think that would work; it would be counter-productive.
In this particular instance I wonder whether the benefits that will accrue to the taxpayer will be worth the complexities of the income tax return. With some 18 years' experience on both the government and opposition sides, I know that every exception to income tax leads to greater complexity in the return. It costs a great deal more to administer and it means more trouble and expense for the taxpayer whether the return is completed by himself or someone else. As a matter of fact, a very simple income tax system would be one that taxed revenues at all levels at a flat percentage. It would certainly be an incentive to get out and make more income and develop initiative. On the other hand, for those who are believers of a steeply progressive income tax-and I am not-we start getting exceptions. We have exceptions under the Family Allowances Act. If there were to be the elimination of the child allowance from income tax, it would mean a substantial reduction; at one time estimated almost as high as five points across the board.
There are workers' allowances, moving allowances, allowances for this and for that. As far as corporate income tax is concerned, every exception gives rise to all sorts of difficulties and to greater expense in computation of tax return. I do not think that system necessarily does greater justice in this particular instance, bearing in mind that it is used with some degree of success. I think the hon. member would have added more to his motion if he had included an allowance for

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expenditure of sales tax to see what the total tax burden is on the individual. If the purpose of the motion is to equate the weight of the total tax burden, it is very poor thinking to say that under the Income Tax Act persons earning $5,000 a year shall not pay income tax.
Let us assume that the figure is $5,000. That person may be relieved of the obligation to pay federal income tax; but is he relieved of the obligation to pay municipal tax if he owns a home? Such people may own homes which they bought many years ago when conditions were somewhat different. The owner may have built the home himself and it may be fully paid up. But the point is that the person must still pay his municipal taxes and must also bear as high a load, if not a proportionately higher one, of the retail sales tax burden in certain provinces. Such person must also pay the federal manufacturers' tax-the indirect sales tax which enters into the commodities people buy. Therefore, this proposal will do little to lighten his load.
One hears people speak of low income earners. It is hard to say just who is a low income earner these days, because today people in middle and upper income brackets are living just beyond a bare subsistence level. Only 20 years ago we thought such people were well off.
I suggest, Mr. Speaker, that we ought to consider the total tax package. If the hon. member were to bring forward a proposal covering the total tax package, I think we should be prepared to look hard at it. The hon. member's proposal contains an element of rough justice. Unfortunately, it does not go far enough. I suggest that it would be better to consider the total tax burden borne by the group the hon. member wishes to favour.
In addition, we ought to consider the value of a $300 tax credit to a man paying a marginal tax rate of 50 per cent. One immediately sees the difficulties of applying the tax credit to the varying tax scale brackets. The $300 tax credit is more valuable to a person paying tax at the rate of 50 per cent at the margin than it is to the person lower in the income scale or even, shall we say, to the poor chap who is not paying any income tax. After all, what is the $300 credit worth to the man not paying tax? Absolutely nothing. The cake disappears from the plate before he can eat it. Therefore, we must examine all the factors of this proposal. It is not as easy to resolve as it would first appear to be, and I invite hon. members to give further consideration to the various aspects of this proposal. We are considering a subject which some find it popular to advocate without examining closely its many ramifications. Certainly, a proposal like this could cost the treasury tremendous amounts of money. That is why we must examine its facets in detail to see whether it provides a greater degree of justice than injustice.


Mr. John Gilbert (Broadview):: Mr. Speaker, I congratulate the hon. member for Parkdale (Mr. Haidasz) for bringing forward his perennial motion calling on the government to give consideration to allowing residential taxes on owner-occupied

homes and rental payments of accommodation by tenants to be deductible from federal personal income tax up to a maximum of $300 each year. This proposal will probably be talked out by the hon. member's Liberal colleagues since it has not been received well by the cabinet, especially the Minister of Finance (Mr. Macdonald) and the Minister of State for Urban Affairs (Mr. Ouellet).
I must say the hon. member for Edmonton West (Mr. Lambert) treated the meaning of "deductible" somewhat charitably. There is a difference between a deduction and tax credit, and I think the hon. member sponsoring the motion spoke of deductions rather than of tax credits. I suggest that a deduction in this regard would be of little or no use to many people and a tax credit as proposed would be practically useless to those not paying taxes, including pensioners, people on fixed incomes and those earning low and moderate incomes. Perhaps when the hon. member brings forward his motion again next year he will clarify its language and speak of tax credits rather than tax deductions.
Arguments for deductibility are popular and persuasive; yet on close examination one sees that the idea behind them is expensive, regressive and a gimmick which offers little advantage to the average and low income owner-occupier or tenant. Therefore, the hon. member's proposal would be of real benefit only to those high in the income scale, to high income earners and to renters. One could best describe his proposal as prescribing an aspirin for a migraine headache, for he is considering the symptom rather than the cause.
Let us examine more closely the deductibility proposal as put forward by the hon. member. Studies show that such deductibility would be most expensive. I imagine that is why the Minister of Finance and the Minister of State for Urban Affairs do not support the idea. Allow me to quote the views of William Teron, chairman of Central Mortgage and Housing Corporation, on this subject as expressed in a recent edition of Executive. He is reported as saying:
As far as deduction of interest charges or taxes, municipal taxes off peoples' incomes, etc., this is an extremely costly program, or would be a costly program. The loss of revenue by government would be something in the order of $1 billion per annum. It would be terribly regressive in that those with larger homes would benefit more than the poorer ones; which is almost in reverse to what society accepts. And we spend something like $200 million-$280 million or thereabouts right now to pay for the subsidies of all the public housing and all the sewerage treatment, etc., that we have done in Canada. And here with one item you would spend four times as much in one year to help all those Canadians who are extremely well-housed, beautifully-housed.
Those Canadians well-housed don't need help. And I believe it is terribly important that we be very selective to help those who don't have good housing.
The attitude of the chairman of CMHC is supported by the government. We contend, as well, that deductibility as proposed is regressive from the point of view of the moderate and low income earner. I suppose I could best illustrate my point by mentioning the Registered Home Ownership Savings Plan introduced by the former minister of finance, Hon. John Turner, in the 1974 budget, and passed. That program allows a taxpayer to deduct $1,000 from his income every year up to a maximum of $10,000, provided the money is set aside in a special account and used ultimately to buy either a home or
November 8, 1976

home furnishings. Persons who already own a home are not eligible. As long as the money is to be applied to the purchase or furnishing of a home, it is deductible from income tax and the interest such money earns is not taxed. On the other hand, if the taxpayer decides not to buy a home or furnishings he or she can transfer it to a Registered Retirement Savings Plan and, likewise, avoid taxation. So much for the RRSP program.
Returning to the Registered Home Ownership Savings Plan, in 1974 a subsidy of $65 million was provided. Who gained from that subsidy? Of people earning between $5,000 and $10,000, one in 49 participated in the program. Of those earning between $10,000 and $15,000, one in 32 participated. Of those earning $50,000 or more, one in 16 participated.
The average income earner in the $5,000 to $10,000 bracket received a grant of $264.93. A person earning between $15,000 and $20,000 would be eligible for a grant of $365, a person in receipt of between $20,000 and $50,000 would be eligible for $462, and a person with more than $50,000 could receive $571. Contrast this with the amount available to people with less than $2,000. They got a grant of $105. People getting between $2,000 and $5,000 received $203. That is what happens under a program of this type. To him that hath it shall be given, and from him that hath not, it shall be taken away.
The problems of housing cannot be solved by gimmicks. We have to build homes at reasonable cost. When 1 talk about homes, I am talking about homes for families, rental homes, public housing, non-profit housing. The former minister of state said there were 800,000 people in Canada who paid more than 25 per cent of their income in rent. These are the people we have to help. How is this to be done? By bringing down interest rates.
Last week I made a speech in the course of which I drew attention to what a person pays on a mortgage of $50,000 at the current interest level of 11.5 per cent for a 25-year period. He pays $498 a month, principal and interest. Over the 25-year period total payments amount to $143,000. This is what we have to attack. Surely there is a social responsibility on the part of governments and of all financial institutions to bring down interest rates so that people can buy homes at reasonable costs.
We have to assist tenants by bringing in meaningful measures of rent control and shelter allowances in the case of those on low incomes. We must bear in mind that most people do not pay personal income tax, which is why we must think in terms of shelter allowances rather than tax deductibility. The hon. member for Parkdale was talking about tax credit. But a person who does not pay taxes gets no tax credit whatsoever. It is important that the hon. member distinguish between a tax deduction and a tax credit.
It is time the government attacked the high cost of land. In the year between 1975 and 1976 the price rose from $6,542 to $8,520-that is the average cost of an NHA lot; it increased by 30 per cent in one year. The hon. member comes from
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Toronto and he knows it is impossible to buy a lot there for less than $30,000, so something has to be done. Mr. Teron, the head of the CMHC, says land costs have behaved very badly and that counter measures will be taken through a land mapping process.
What the government has to do is increase public land banking and release the land at the proper time so that the cost of land is brought down. The hon. member for Parkdale knows as well as I do that the land around the perimeter of Toronto-and this applies to land around the perimeters of almost every major city in Canada-is in the hands of land developers who release it only when it is to their financial advantage. The government should step in, acquire land, and release it at the proper time in such a way as to bring prices down.
The hon. member for Edmonton West (Mr. Lambert) outlined some of the ways in which the provinces are giving help to municipalities. It is true that in Ontario tax credits are available. The system should have wider application. At the moment the limit is $90 but the scheme might well be extended to cover taxpayers with moderate incomes. I believe more tax credits are needed.
I appreciate the fact that municipal taxes are posing an increasing burden. In my view we ought to shift the portion covering education to the provinces and to the federal government-they do pay a certain amount at the moment. But they would have to pay an increased share, more especially on behalf of taxpayers with moderate and fixed incomes.
I cannot accept the proposition of the hon. member for Parkdale that a deduction with respect to owner-occupied homes and rental homes be allowed under the Income Tax Act. But if the hon. member is not successful in persuading the Minister of Finance to put forward his ideas in this respect I hope he will be successful in persuading him to adopt the proposals I have just put forward for a national house building program, a plan to tackle high interest rates, the need to impose greater responsibility on financial institutions, to provide for meaningful rent controls and shelter allowances, and so on. If he does this I shall be very proud of him, but at the moment I am not persuaded of the validity of the proposition he has set forth today.


Mr. F. A. Philbrook (Halton):: Mr. Speaker, first I should like to thank and congratulate by hon. friend from Parkdale. His proposal was well presented and it was obvious, even without benefit of a chest X-ray that his heart is in the right place.
As a regular member of the Standing Committee on Health, Welfare and Social Affairs, and as one who has received a number of public inquiries on the subject, I greatly appreciate an opportunity to address myself to this subject.
This debate has to do with the need for shelter, one which is considered by many to be a basic human right for the sake of security and privacy. This is the case even in countries with the mildest climates, countries where people can live outdoors the year round if they so choose. How much more vital is it, then,

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to make sure that people are properly housed in a country such as Canada where one can actually perish in the cold seasons, even within shelter, in the absence of related needs such as adequate heating and clothing. This question of survival is acutely aggravated at the present time by such modern tensions as the rapidly rising cost of living, increasing expectations, changing values, social instability, and the energy crisis.
What is the hon. member proposing? He is proposing that property taxes and rental payments be deductible from income tax up to a maximum of $300. I am not sure whether he intended to include mortgage interest payments.
What are some of the main points of the government's position on this subject? First, proposals to allow property tax deductions or credits against personal income tax are usually advocated on one of two grounds. It is sometimes held that such a measure would aid the housing sector. Secondly, it is often held that government should reduce the high cost of housing by enacting such a measure.
The current level of housing starts is over 260,000, seasonally adjusted at annual rates. While this is slightly less than the peak reached earlier in the year, the reduction is not a result of any fundamental weakness in this market but rather a return to sustainable levels of activity. Provision of a measure of this sort is likely to have negligible impact on starts as only a small fraction of the tax savings would be in respect of new units. Any measure of this nature that stimulates the demand side of the market will have the undesirable effect of putting upward pressure on prices and rents and would thus frustrate, to some extent, the efficiency of the measures in reducing housing costs.
As it is highly unlikely that a measure of this sort would have significant positive effects on the housing sector, such a measure becomes essentially a transfer payment. Considerations of equity are thus of primary importance. Judged on this basis, even including the proposed $300 maximum, the proposal of the hon. member for Parkdale (Mr. Haidasz) does not appear too desirable.
As background to any consideration of the equity of the measure, it should be noted that in recent years the property tax component of the consumer price index has risen no faster than other prices and costs. Against this background it seems fair to say that singling out this component of the recent inflation and subsidizing these particular costs via the tax system is not generally equitable. The government has, via indexing and increases in the federal tax cut, used the tax system in a much broader fashion to compensate those who are hardest hit by inflation.
In addition, if the hon. member for Parkdale is proposing that all rent be deductible up to the $300 maximum, the proposal will be discriminatory in favour of tenants as opposed to homeowners. Equity would require that a percentage of rent, roughly equal to the property tax content of rents, be deductible. Furthermore, a simple deduction or credit approach, as recommended by the hon. member for Parkdale,

would not adequately recognize the income of the recipient. Some reduction in the deduction or credit available, based on the individual's income, would appear essential to ensure that the benefits are directed to those who are hardest hit by increases in housing costs.
While modifications along these lines could be accomplished, any proposal of this nature, regardless of its structure, will involve further inequities. The ultimate beneficiaries of such a general measure will not be those who receive the initial tax deduction. For example, if house prices and rents rise as a result of the deduction, a substantial portion of the benefits would accrue to developers. A measure of this sort makes little allowance for the housing needs of different persons. It could well be argued that larger families require relatively larger dwelling units and thus should be allowed a credit or deduction for a relatively larger fraction of their property tax or rent.
In addition, the inequities between persons residing in different provinces would probably be severe. This would occur because provincial-municipal financing arrangements vary significantly from province to province. In particular, that share of services provided by provinces, and the share of municipal revenues made up by provincial grants, as opposed to property taxes, varies dramatically by province. While this is not a concern to an individual province in structuring its scheme, a federal measure related to property taxes that, of necessity, had a uniform structure across provinces would result in different benefits in different provinces, and would cover a different percentage of the total costs of municipal services in each province. In addition, property tax assessment systems in different provinces differ in their treatment of various types of property. This fact would result in inter-provincial differences in the benefits flowing to various types of housing. The interprovincial inequities resulting from these facts would be substantial.
Several other points are in order in judging the desirability of this proposal. First, as a result of the measure, municipalities could feel less pressure to hold property tax increases down. As a result these taxes could rise, and/or provincial grants fall, from the levels that otherwise would have occurred. This effect would pervert the aims of the proposal and substantially increase the revenue cost. Such a scenario is also not the most efficient way for the federal government to transfer resources to municipalities.
Second, while property taxes are undoubtedly a cost of home ownership, they are levied by municipalities and provinces in order to pay for goods and services. Responsibility for these taxes is a uniquely provincial-municipal affair. Provision of a deduction along the lines suggested by the hon. member for Parkdale might be regarded by provinces and municipalities as an unwarranted federal intrusion into their affairs.
The precise structure that the hon. member for Parkdale has in mind is not clear. In particular it is not clear if he is proposing a deduction from income or a credit against tax paid. While most of the effects noted above would be independent of the precise form of the measure, the revenue
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cost, and the relative size of tax savings at various income levels would, of course, depend crucially on the structure.
It is estimated that a deduction from tax payable of up to $300 would cost something in excess of $2.5 billion. If the measure were structured as a deduction from taxable income, the cost would be some $500 million. Even with the $300 maximum, a substantial portion of the benefits of such a measure would flow to higher income persons.
The federal government allocates substantial resources to the housing sector. The CMHC budget for new loan commitments is some $1.2 billion. The main portion of these loans will benefit lower income persons. In addition, the expenditures of CMHC for programs such as grants and public housing subsidies is some $300 million. Again a substantial portion of these expenditures, under programs such as AHOP and RRAP, the assisted home ownership plan and residential rehabilitation assistance plan, go to lower income persons. In addition, in 1973 the federal government included municipal school-purpose taxes in the federal-provincial equalization formula. As a result equalization payments are currently some $200 million higher than otherwise. These payments, of course, go predominantly to lower income provinces. It is obvious that all of these existing federal measures provide benefits to those most in need. The proposal of the hon. member for Parkdale, on the other hand, would provide to some extent benefits without regard to need.
What then is the government's conclusion? A measure of this nature does not appear to be desirable. It would not provide significant impetus to the housing sector and would have the perverse and undesirable effect of putting upward pressure on house prices and rents. While the lack of clarity in this proposal makes precise determination of the equity effects difficult, it is the case that the proposal would not impinge equally on persons living in different provinces and it would not adequately account for the different housing needs of families of different sizes. As property taxes have not risen faster than the CPI, subsidizing this particular cost does not appear equitable. The measure would involve a substantial reduction in federal revenues and would not direct benefits to those most in need. Lastly, it would be construed as an invitation to municipalities to raise property tax rates.
In addition, there are a couple of other counter-arguments which have been raised. First, let me compare United States and Canadian tax systems. In response to the argument for a deduction of the expenses on the basis that the U.S. allows it, the following points should be made. It is practically impossible to make meaningful comparisons of personal income tax practices in Canada and the U.S. because of differences in the basic income tax systems. For example, although municipal taxes and mortgage interest on homes are deductible in the U.S., capital gains from the disposal of a home are taxable and the basic personal exemptions are lower in the U.S. than in Canada. While Canada allows a deduction for pension contributions, the U.S. does not. Also, the method of recognizing state and provincial income taxes for federal purposes is different in the two countries. All tax comparisons will have to
Residential Taxes
be made in the context of the total tax structure and the social welfare programs in each country in order to be meaningful.
Secondly, with regard to municipal taxes and mortage interest expense of home owners from a tax policy point of view, one basic principle in Canadian income tax law is that no deduction is allowed in respect of personal expenses. Because the purchase of a home is for personal reasons, such as private living accommodation, no expenses incurred in respect thereof could ordinarily qualify for a deduction under this principle. Although the purchase of a home is a large expenditure, it is no different from a taxpayer's purchase of furniture, clothes or a car. Personally I take issue with that viewpoint but it is one that has been expressed.
These are the main points of the government's position on this subject. However, given the crucial need for shelter in a harsh climate such as Canada's, in a world where shelter should be a minimum basic human right for security and privacy even in areas of the world with an easy climate, the high costs of housing due to speculation and other reasons, and the social importance of stable family life, it behooves any government, and especially one like ours, to recognize persistent public concern for the cost of housing and to give thorough consideration to all suggestions to modify it.
Surely the wit of man, especially the political man, can do that much. This certainly includes the high costs of land, due perhaps to an increasing oligopoly of developers and builders, particularly in dominant urban areas, which are mounting even faster than the costs of buildings themselves.
Whether or not this motion comes to a vote, I urge governments at all levels to give it serious thought. I again commend my colleague, the hon. member for Parkdale, for championing this cause.
[ Translation]


Mr.   C.-A. Gauthier@Roberval: Mr. Speaker, I want to comment briefly on the motion introduced by the hon. member for Parkdale (Mr. Haidasz). The House may be assured that I shall not try to kill his motion, because I should like it not to be disallowed. I feel that the issue raised is of paramount importance, although the motion is very moderate, not to say nearly insignificant for the small wage earner,
I have never been able to understand why successive governments have never studied the discrimination which exists between the owner of a single-family dwelling and that of an apartment building. Even now, the owner of a single-family dwelling is unable to deduct a cent of his municipal and school taxes from his income. He must pay 100 per cent of it and, if he borrows to build or repair his house, he must reimburse 100 per cent of this loan, because it is a single-family dwelling. He must pay these taxes twice, while the owner of an apartment building will be exempted to pay two-thirds of his municipal and school taxes, as well as two-thirds of his income tax and of the interests on the money he had to borrow to build this apartment building.
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He is continually favoured whereas the person who would need it does not have this opportunity. If this corporation or this individual has enough funds to build up low or high rent apartment buildings, he is favoured, Mr. Speaker, because he is entitled to all those tax deductions. He is entitled to all those deductions whereas the low wage earner wishing to build a house for his family is entitled to none of them. This is the discrimination 1 want to expose to the House tonight.
But they fear depriving treasury of a mere $300. If that makes the tax collector nervous, Mr. Speaker, let us tax a little more those who can afford to pay. It is said that big monopolies, big corporations do not pay more than 25 per cent of the whole taxes in Canada, whereas workers pay 75 per cent. This is asking workers to pay to enrich big monopolies, period.
The motion, although very moderate, should be accepted. As I do not want kill it, I will take my seat immediately.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I wish to make a very brief comment with respect to this motion as I too do not want to kill it.
1 want to assure the hon. member for Parkdale (Mr. Hai-dasz) that a Progressive Conservative government will carefully consider the principle that a proportion of municipal property taxes and interest on mortgages should be deductible from the federal taxable income of homeowners or should form the basis of a federal tax "credit" scheme. One condition is that a comparable tax benefit should be extended to tenants.


Mr. S. Victor Railton (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, there have been some very eloquent speeches on this subject.


Walter David Baker: Mr. Speaker, I rise on a point of order. I hope that the hon. member who has just been recognized by the Chair will complete his remarks prior to the time of adjournment so that the motion may be put to a vote of the House. This is an extremely important principle.


The Acting Speaker (Mr. Turner):: Order please. The hon. member for Welland (Mr. Railton) has the floor.


Samuel Victor Railton: Mr. Speaker, the intervention by the opposition House leader is non-understandable, as are most of his remarks.
A proposal such as the one put forth in this motion by the hon. member for Parkdale (Mr. Haidasz) cannot be settled in a very short time. Of course it would not come to a vote anyway.


Some hon. Members:: Oh, oh!


Mr. Alexander:: Why not?


Samuel Victor Railton: It has to be discussed further than just during a mere private members' hour when people are filling in time, as they have been doing. This motion has not been discussed in everyone's speech pertinently or completely.
[Mr. Gauthier (Roberval).l
As far as I am concerned, this is a very good idea. The hon. member is trying to bring some benefit to the lower income group. However, that group will not be helped a great deal by this $300 difference because very few of them own houses. Their rents are usually looked after by rent policies and restrictions.


The Acting Speaker (Mr. Turner):: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Andras that Bill C-19, to amend or repeal certain statutes to enable restraint of government expenditures, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Robert Elgin McKinley: Mr. Speaker, if I may continue with the remarks I was making at five o'clock when private members' hour was called on Bill C-19, I was talking about the people who would be affected by clause 15 of the bill.
Another segment of the economy that will be affected by the removal of this subsidy, with its subsequent effect on these terminals, is Canadian farming. The farmers of Ontario would suffer a cut in their supply of feed grains. At the present time farmers are dependent on these terminals for the distribution of a majority of their feed grains. When the terminals close the farmers will have to find alternative sources of feed grains. These alternate sources will most probably be at a higher rate.
The Quebec farmer who is dependent of feed grain storage in Seaway terminals will also suffer. The terminals further on down the Seaway near Montreal and Quebec will not waste any of their storage capacity on feed grains. Instead they will concentrate only on export grain. The higher price on the rail movement of grain will dictate that these terminals accumulate as much export grain moved by water as possible. There will be no room for feed grains.
The western farmer will lose the markets that are supplied with grains from the eastern ports. This will result because of the possible price differential grain buyers will have to pay in
November 8, 1976

the winter months when the grain arrives at these ports by rail. Buyers will soon go to other suppliers who can guarantee the same price for grain all year round. The Great Lakes shipping fleet would also be affected when the terminals are forced to close. These ships are responsible for the movement of grain from Thunder Bay to the inland terminals and eastern ports. With the removal of the subsidy they would have to change their traffic patterns, with detrimental results to all concerned.
Presently, because the lower Seaway closes much sooner than the upper lakes in the fall, these grain ships are able to make additional trips to the inland terminals. After these additional trips are made, and in most cases the terminals are filled, the ships then make one final trip. On their return they tie up beside these inland terminals so they can be unloaded later on during the winter months. In the spring the ships docked at these terminals also get an earlier start and are able to make additional runs on the lakes while they are waiting for the lower Seaway to thaw.
With the removal of the subsidy there would be a marked change in the pattern. First of all there would be more movement of grain out of Thunder Bay directly to the eastern export points during the regular navigational season. Again the higher rail rates would dictate that as much grain as possible be moved by water. In the fall the ships will prefer to haul through to the St. Lawrence ports. If they are down through the St. Lawrence they most likely will not have enough time to get back up to the lakehead to load and then winter at the inland terminals.
There will no longer be the rail movement or the docking at these inland terminals, with the end result that there will be decreased activity in the winter. With this decreased activity will come the eventual forced closure of these terminals.
In conclusion, Mr. Speaker, I hold the same view as most of my fellow members. The repeal of section 272 should be held off at least one year until the minister can put together his new transportation policy, especially since his predecessor aptly described the existing policy as a mess. Dramatic changes in this one aspect of our national transportation system should not be made without any reference to how this will affect other parts of the economy.
Let me also say that if the government should decide it is desirable to remove the subsidy, it should be removed in such a way that the economy that is dependent upon it can adjust. Also before this political decision is made, we must be sure that all studies on the economic impact of this decision are completed and understood. Finally, should section 272 of the Railway Act be repealed as planned, and no compensating measures undertaken, the economies of the areas affected will be adversely and seriously affected. Mr. Speaker, in my opinion this bill should not pass this House until clause 15 of the bill has been removed.


Miss Coline Campbell (South Western Nova):: Mr. Speaker, I listened with interest to the hon. member for Huron-Middle-sex (Mr. McKinley) as he discussed the milling industry.
Restraint of Government Expenditures Coming from the east coast, I too am interested in this. However, I am waiting to hear what the Minister responsible for the Canadian Wheat Board (Mr. Lang), who will be taking part in this debate later, will be saying in the House on the discussions that have taken place in the milling industry, particularly as they relate to the east coast.
My task tonight is to speak on the clauses of Bill C-19 relating to the Department of National Health and Welfare. The government has made known its intention not to escalate in 1976 the rates payable under the Family Allowances Act of 1973. The provisions for this step are encompassed in Bill C-19, and it is in respect of those provisions that I wish to speak today. Before I say anything about the actual provisions, I should like to make a few introductory comments.
No government likes to announce that a program to which it is deeply committed, and in whose worth it strongly believes, will be subject to restraint. Thus these remarks are made with mixed feelings. However, we have recognized, virtually all of us, the need for restraint and for a reduction in the rate of growth of government expenditures. We have all recognized also that all sectors of government activity have to feel the impact of this restraint. Since social programs comprise the largest single portion of government expenditures, it follows that they must bear a share of expenditure reductions.
My investigation demonstrated that the Department of National Health and Welfare had a number of possibilities for restraining the growth of government spending. Measures to restrict the growth of federal government expenditures in respect of the Medical Care and Hospital Insurance and Diagnostic Services Acts had already been put in effect, and no further restrictions in those areas seemed to the government to be immediately desirable.
On the welfare side of the minister's department, and leaving aside the contributory Canada Pension Plan, the largest programs are family allowances, old age security, the guaranteed income supplement for OAS recipients, and social assistance and services expenditures under the Canada Assistance Plan. It was on these programs in particular that the government's attention was focused.
I am told that a reduction or the non-escalation of old age security or guaranteed income supplement programs was not an acceptable alternative. It has been a major part of the social program of this government over the last several years to ensure that benefits payable under income maintenance programs for the elderly reached fully sufficient levels as quickly as possible. To pull back now from the gains that have been made seems to the government to be unacceptable. Either reducing, or not escalating old age security and the guaranteed income supplement would reduce the impact of what has been achieved by the minister and the government. Even given a diminishing rate of inflation, this would doom some of our senior citizens to fall back into grave economic difficulty.
I am told that a somewhat similar argument prevailed with respect to major shared cost welfare expenditures under the Canada Assistance Plan. Under that legislation provincial expenditures on social assistance and services are shared,
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November 8, 1976
Restraint of Government Expenditures provided the expenditures are incurred on behalf of those in financial need or likely to become in need.
The exact definition of need varies from province to province, but in all cases the federal dollars under the Canada Assistance Program go almost entirely to those with very low incomes. To impose heavy federal restrictions upon these expenditures seemed most inappropriate to the government, and to do so would strike hardest at those least able to protect themselves in difficult economic times.
There were also other reasons for eschewing a major attempt to reduce costs under the CAP. As hon. members are well aware, we are currently nearing the conclusion of a major federal-provincial review of all our shared cost welfare expenditures, a review which it is hoped will result in a major reform and streamlining of the welfare system. Consequently the government thought that this was not the time for unilateral federal action in that field. Of course disbursements to the provinces under CAP are made pursuant to signed agreements between federal and provincial governments which cannot be changed unilaterally without one year's notice. In effect the federal government cannot act quickly without provincial consent.
I think the House will realize that among major welfare programs the federal government would have to consider cost reduction in respect of family allowances. Even here I am told the government moved with great reluctance. The 1975 family allowance level of $22.08 per child is not lavish, but it does provide a substantial measure of income support to Canadian families. Thus for most Canadians with children, the monthly family allowance cheque is an important supplement to family income. The government proposed the non-escalation of family allowances only on the grounds of the very urgent necessity to reduce the rate of increase in government expenditures and on the grounds that among the possibilities for restraint in our major welfare programs the non-escalation of family allowances would cause the least amount of difficulty to Canadians.
The minister has received representations from women's organizations about this decision and, quite correctly, they point out that the family allowance is for many women their only disposable income and the only income over which they can exercise control. The government does recognize this situation in the Speech from the Throne. But it must be reiterated that the decision was made on the basis of effecting a cost saving with the minimum possible detriment to the fewest people.
I should add that those who have been hardest hit by these changes are not left unprotected. Those who can demonstrate financial need will be in receipt of cost shared social assistance payments which do in general rise with the cost of living and which will fill the gap left by the family allowance non-escalation. Those working at minimum wages will, in most provinces, be receiving higher minima this year than last. Those who must utilize unemployment insurance to compensate for temporary loss of employment receive payments based on their wages while they were working. In general those wages are higher this year than last. Moreover, the escalation of exemp-

tions from income tax means that all wage and salary earners in the low and middle income ranges will pay less tax this year than last.
I should add that the reduction of inflation from approximately 11 per cent one year ago to 6.5 per cent in September should clearly have an ameliorating effect on family situations.
I am told that the savings which will be effected, should the House approve these amendments, will be considerable. The statutory payments under the Family Allowance Act in 1975 were almost exactly $2 billion. The non-escalation of payments in 1976 will result in savings of $221 million and will leave expenditures in 1976 at very close to the same levels as those in 1975. In addition, of course, the $221 million annual saving will accrue to the federal treasury in perpetuity since the base for any future adjustment of payments will be the 1975 base year.
The amendments to the Family Allowances Act of 1973 which are laid before hon. members in Bill C-19 are intended to give effect to this non-escalation. There is no need to discuss them in any detail on second reading here today, but I will call hon. members' attention to two features of the amendments. The first is that they are made retroactive to January 1, 1976. In this case the retroactivity provisions are intended to avoid causing additional hardship for Canadians because we have continued since the end of 1975 to pay the 1975 rate of $22.08 per child in order to avoid the problem of overpayments.
The second point to which I wish to draw the attention of the members is that the federal family allowance legislation permits provinces to adopt a different configuration of payments than the federal uniform rate should they desire to do so. Such variations, by age of child, size of family, or both, are permissible provided that the total payments in a province with such a configuration are not substantially more or less than what would have been paid if the federal rate were to apply.
Thus, in addition to giving effect to the Government of Canada's intention to maintain the 1975 family allowance rates through 1976, the amendments which are now placed before the House are intended to permit provincial governments, utilizing their own configurations of family allowance payments, to make the appropriate changes in their own provincial legislation and regulations. The provinces of Alberta and Quebec are the two directly involved. The government of Alberta has agreed to pay the same allowances in 1976 as in 1975 and will adjust its legislation accordingly. The province of Quebec is paying an escalated rate in 1976 but is doing so subject to the clear understanding that the federal government will compensate it only to the level which would have applied had the 1975 rates prevailed. Thus it will be up to that province to make up the difference out of its own treasury.
I would remind hon. members that family allowances were tripled by this government as recently as 1973, rising from approximately $7 previously to $21 by January, 1974, because the government recognized the additional cost to the family of raising children and recognized the important role of the
November 8, 1976

family in the fabric of our society. By means of supplementary legislation these increased benefits for 1974 and subsequent years were escalated to reflect the increase in the cost of living. I would point out that never before were these pensions indexed.
It was a difficult decision for the government to make but in the interests of fiscal restraint, in the social security field as in others, the government opted in 1976 to remove temporarily the escalation factor from family allowances since it was felt that those families in need would have recourse to other social assistance measures. I must underline the word "temporary", however. The legislation before us now refers only to 1976. The Speech from the Throne and the Minister of National Health and Welfare (Mr. Lalonde) have stated, and 1 reiterate today, family allowances will again be escalated by indexing starting in January, 1977.
In conclusion, Mr. Speaker, the government proposed these amendments to the Family Allowances Act of 1973 in recognition of the important necessity for restraint-restraint which all Canadians must share. The government believed that this was among the most appropriate and least disruptive means to introduce some restrictions on the growth of social programs.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: The hon. member for Vegreville (Mr. Mazankowski).


Jack Marshall: On a point of order, Mr. Speaker, I should like to ask the hon. member if she can assure the House that what is related-


Mr. Deputy Speaker:: Order, please. If the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) wishes to ask a question he can only do so with the consent of the hon. member for South Western Nova (Miss Campbell). Otherwise he will have to wait until he makes his own speech.


An hon. Member:: No.


Eldon Mattison Woolliams: You cannot say no; she can.


Mr. Deputy Speaker:: Order, please. It is the decision of the hon. member for South Western Nova whether she wishes to answer a question.


Coline M. Campbell: Certainly, Mr. Speaker. I am sure the hon. member will respect the fact that if I cannot find the answer right away I will get it for him if he places his question on the order paper.


Jack Marshall: Mr. Speaker, the Speech from the Throne indicated the freeze on family allowances would be lifted. 1 wonder if the hon. member can say that the freeze on the family allowance, which is presently at $22.08, will be removed and that in the New Year the government will bring in indexing of the family allowances again?


Coline M. Campbell: Mr. Speaker, I stated that in one of my last comments. 1 was quoting from the Speech from the Throne, that as of January, 1977, there would again be escalation based on the cost of living index that family allowances would be increased using 1975 as the base year.
Restraint of Government Expendit ures


Donald Frank Mazankowski: Mr. Speaker, you have listened to a lot of speeches on this bill and I suspect you will hear a lot more before the debate ends. It is a very complex bill, an omnibus piece of legislation involving a number of proposals. It deals with adult occupational training, family allowances, the Company of Young Canadians, Information Canada, the Industrial Research and Development Incentives Act, the Western Grain Stabilization Act, and the Railway Act-some good and some bad. This makes it very difficult for an opposition party to consider its decision in regard to voting on second reading. Indeed a second reading vote is a bit of a farce and our party is looking for ways and means by which to move a reasoned amendment to highlight these repugnant provisions. We feel the legislation is nothing more than gimmickry, a public relations job.
This is not a genuine government restraint bill, Mr. Speaker. In the areas where it proposes to exercise restraint the result will probably be much more costly in terms of the human and financial resources of the country.
I was amused by the comments of the President of the Treasury Board (Mr. Andras) when he introduced the bill last Friday saying it was very significant and important legislation, an important measure in the area of government restraint. The fact is that this bill was introduced last March. If it is so important and significant surely it could have been disposed of in one form or another before the House adjourned for the summer. Of course the government was occupied with the peace and security legislation and issues of that nature. It cannot be terribly important because the gun bill will never see the light of day, thanks to members on this side of the House and to a lot of sensible Canadians who made some very reasoned representations to an unreasonable minister.


Ralph Goodale: The public was distinct and different from the opposition.


Donald Frank Mazankowski: It was not the opposition who moved closure to curtail debate on the gun legislation so I do not know where the hon. member was when we were dealing with that legislation.


Eldon Mattison Woolliams: The mortality rate in Assiniboia is very high.


Donald Frank Mazankowski: This legislation represents deferrals of expenditures rather than cancellation of expenditures. Let us look at the grain stabilization fund.


Ralph Goodale: Hear, hear!


Donald Frank Mazankowski: The hon member is thumping his desk. I wonder if he will provide the same luxury of deferral to farmers who are being asked to pay into the fund.


Ralph Goodale: Read my speech of last Friday.

November 8, 1976
Restraint of Government Expenditures


Donald Frank Mazankowski: Is the young hon. member opposite, the understudy of the minister in charge of the Wheat Board, telling the House that farmers who are finding it difficult to meet commitments and obligations will be given the same privilege as is extended to the government?


Ralph Goodale: Read my speech of last Friday.


Eldon Mattison Woolliams: There speaks the $700,000 Lang boy.


Ralph Goodale: I have attended more than 50 meetings across the Prairies, talking to farmers about the grain stabilization plan.


Donald Frank Mazankowski: The hon. member will probably have to attend another 50 if he wants to get his point across.


Ralph Goodale: Does the hon. member not talk to farmers about the grain stabilization plan? How many meetings have you attended?


Donald Frank Mazankowski: 1 meet farmers practically every weekend, but it does not cost me $740,000 to go to my constituency.
How can the people of Canada place their trust and confidence in a minister who blows that kind of money and, at the same time, talks of restraint from the other side of his mouth? It is simply foolish.


Ralph Goodale: One cannot talk to farmers in Ottawa.


Donald Frank Mazankowski: It is well known that the young hon. member opposite spends more time talking to a handful of Liberals than he does talking to farmers.


Ralph Goodale: That is absolute nonsense. I'll wager I talk to more farmers than you do.


Donald Frank Mazankowski: I probably talked to more farmers on Friday night than the minister has talked to in all of the years he has been in Ottawa.


Ralph Goodale: Nonsense.


Eldon Mattison Woolliams: Apparently the only word the hon. member knows is nonsense.


Donald Frank Mazankowski: I suggest that the hon. member and the fellow he is trying to emulate must pull up their trousers if they are to sell their programs and instil confidence and trust in the minds of the Canadian people.


Mr. Andras:: Why not substitute the word "socks"?


Donald Frank Mazankowski: If the parliamentary secretary wants to defend the indefensible, that is his privilege. Obviously he and the person he wants to emulate are insensitive about the huge quantities of taxpayers' money being spent to spread Liberal propaganda among the people of Saskatchewan.


Ramon John Hnatyshyn: And it is not going over.


Donald Frank Mazankowski: And it is not going over. Really, this piece of legislation will merely shift spending from one area to another and can therefore be classified as cosmetic. Finally, it represents a withdrawal of government support from certain programs, which I find indefensible. We ought to reconsider those parts dealing with research and development, especially as we have run up a deficit of $8.2 billion in the field of high technology products. Mr. Speaker, research and development are important if we are to improve our technology and productivity, and cutbacks in this field are ludicrous. Improved technology can improve our trade balance, increased productivity can improve our competitive position in trade. Therefore cutback decisions should be reconsidered.
The special training programs fulfil an important need and are one means of providing jobs and filling vacancies in specialized fields. For example in Alberta there is a serious shortage of skilled tradespeople such as plumbers, electricians, and accountants. 1 suggest that overly generous U1C benefits and cutbacks in training will lead to vacancies in these fields not being filled. It is interesting to note that the last Statistics Canada report indicated that already $2.4 billion has been paid out in unemployment insurance benefits.


Elmer MacIntosh MacKay: But can you believe it?


Donald Frank Mazankowski: As I said, this legislation is unsatisfactory. Where the cutbacks are real, such as in the "at and east" rates, the impact will be so detrimental as to create consequential obligations for the government which will far exceed amounts saved. To me, the legislation is an exercise to disguise the government's own extravagant habits and refusal to come to grips with real issues.
I am appalled at the way in which the government can play games with figures when it wants to sell a particular philosophy or policy. The government's instincts for manipulating for political gain never cease to amaze me. You know, there is lots of room for the government to tidy and tighten its own operations. I refer specifically to the way in which the government, its agencies and departments control their internal financing. I do not suppose improvements in this area would attract too much attention in the press; nevertheless, restoring proper financial and parliamentary control is one of the gut issues we face.
The financial control and the management systems of the Government of Canada, its agencies and departments are significantly below acceptable standards of quality and effectiveness. Bear in mind that within the Government of Canada, its agencies and departments there is inadequate protection against fraud. Testifying before the Public Accounts Committee, the Auditor General said there is inadequate protection against fraud and we have inadequate mechanisms for determining the extent to which fraud occurs.
A reading of the testimony taken before the Public Accounts Committee reveals that in some departments one can obtain signed blank cheques. One member of the Auditor General s staff who worked on the investigation alluded to the fact that on the very first day of his investigation of the cheque-issuing
November 8, 1976

branch of one department he found signed but unfilled cheques. The department in question issues some two million cheques per month. Also, unless fundamental changes are made, the day may soon come when the Auditor General will not be able to vouch by certificate for the accounts of Canada. If this happened to a corporation whose shares are traded on the stock market, the value of its stock would soon sink to nothing. Or if a small businessman running his business that way were to go to his banker for credit, the banker would tell him to clean up his operation. Unless he could revise the operation, such a businessman could not even get inside the front door of a bank.
I do not know how long the government expects the Canadian people to swallow the blatant inadequacies and devious techniques brought forth before the Public Accounts Committee. In the first volume of the Public Accounts of Canada one sees evidence that the Government of Canada has over-stated its financial position by some $7 million. I see the President of the Treasury Board smiling. Perhaps he thinks it is a joke, a play on words. But the government does not follow consistent and standard accounting practices acceptable to the accounting profession across this country.
The minister knows of my respect for the Auditor General. I think he is bringing some of the inadequacies to light and warning the Canadian people that all is not well with the financial control and management exercised by the government. When can we expect the government to deal frankly with Canadians and adopt an accounting and book-keeping system consistent with generally accepted accounting practices?
When can we expect the government to report on the progress made in carrying out recommendations made by the Auditor General, some 34 in number? I understand the government has agreed to accept 32 of them, but to date there has been no indication of the progress made in this direction. What has happened to these recommendations, recommendations which were endorsed by the Public Accounts Committee? What has happened, for instance, to the recommendation requesting the appointment of a chief financial officer who would oversee the budgeting operations and financial management of all government agencies? I support this concept because under the present system internal management has clearly been lacking. The structure which exists within the Treasury Board and the policing departments of government militates against effective corrective action.
The Treasury Board has not given control measures sufficient emphasis. The estimates and the public accounts, which are the foundation of the control system, have failed to set up adequate standards of accountability. Moreover, under the current system members of parliament are given insufficient information upon which to establish accountability. One could describe this administration as one which is incompetent and which has failed to act as a capable and worthy trustee of
Restraint of Government Expenditures public funds. It has lost the will to govern and it has lost the confidence to manage.


Simma Holt: Those are all meaningless cliches.


Donald Frank Mazankowski: You see, Mr. Speaker, that is the kind of flak we get from over there. They do not care about public money. But we care. We are all trustees of public funds-all hon. members. Government needs a watchdog but we have seen our role whittled down by the manipulations of this government.
The President of the Treasury Board is a businessman. I am sure that in his days in the business world he took care, as one of the prime requisites of his operation, to exercise careful internal management control. I am sure he would want to act in the same way in his present portfolio, but I should like to know what he has been doing since he assumed that elevated position. He is in charge of the cash register and I should like to know how much progress has been made in carrying out the recommendations of the Auditor General. What advice is he giving to his colleagues in this regard? The essence of parliamentary democracy is control of the purse strings. We all know that successive Liberal administrations have not had a good record in this field.
I want to quote from the proceedings of the Standing Committee on Public Accounts as reported at various dates. This is what Mr. Harris of the Auditor General's Office said, as recorded at page 66 of Issue 45.
Virtually all the observations and recommendations in our report were provided for, to a greater or lesser extent, by the Glassco Commission in 1962. Our recommendations are consistent with Glassco; they vary only in emphasis and degree of detail. The evidence indicates that those responsible chose not to emphasize or implement most of the control-oriented recommendations.
In Issue 47, page 10, we read:
In an environment where the government is not held accountable to parliament, it is less likely that subordinate managers will be held accountable to their seniors. If significant improvements are not made ... in our view little progress will be made in improving financial planning and control within departments and agencies.
In Issue 48 at page 17 the Auditor General is recorded as saying:
It would appear that the statutory provision which is available to Treasury Board is now too little used to guard against departments covering up operating inefficiencies by using funds for purposes different from those originally intended.
Here is another quotation from Issue 50, page 13. Mr. Lafferty is speaking.
It is also our view that until departments introduce effective systems of budgetary control there is no basis for determining whether or not funds are being spent for the purposes, in terms of activities, for which they were provided.
These are stinging indictments of government administration, a stinging indictment of the way in which taxpayers' money has been wasted and pilfered. In a speech during the debate on the address the minister spoke boldly of what he intended to do. He said he would be brutal in taking action with regard to wasteful spending practices. He would tighten up on the taxi slips. Well, that is a step in the right direction. It is about time someone took on this responsibility. But what

November 8, 1976
Restraint of Government Expenditures is required are basic changes and a fundamental shift in emphasis.
Most important of all is the restoration of parliamentary control. In this connection there must be changes in the form and content of the estimates-another of the recommendations which has been advanced by the Auditor General. What is the Treasury Board doing in this respect? I understand that a study group was established to look into ways and means of modifying the estimates so that they could be more readily understood. Have these changes been agreed upon? Will they be incorporated in the estimates for the next fiscal year? What input, if any, will members of parliament be making? Or will the review be undertaken solely by the bureaucrats?
The minister insists that growth of the public service will be limited to 1.5 per cent this year and one per cent in the next fiscal year. Again this is something of a distortion. It amounts to playing with figures. The use of authorized man hours ; an indication of public service growth is misleading because a large gap exists between the man hours authorized and the actual man hours used. For example in 1975-76 the authorized number of man years for public servants under Treasury Board control was set at 319,000, versus 308,000 for 1974. In the same year actual permanent staff reached about 276,000, versus 260,000 a year earlier. The gap was thus reduced from 15 per cent to 13 per cent. The government claimed, and truthfully, that the growth in authorized man years had been kept below 3.5 per cent, but the actual rate of growth of permanent public servants on staff was double that, about 6.1 per cent.
Projecting this previous 2 per cent drop in the gap between authorized man years and actual man years to 1976-77, the real rate of growth of the public service this year could be 3.6 per cent and not 1.5 per cent, as the government would have us believe. It is certainly fair to assume that this reduction in the gap will take place because the government is making full use of the two ways by which it can be brought about.
In addition, there will be more part time employees used and more consultant and contract workers. The other fact is that Treasury Board has been transferring authorized man years from the department to which they were assigned to a department that has developed a shortage because of over-hiring. I suggest that this playing with figures is very misleading and inaccurate and should not be allowed to take place.
On the administrative side we have a similar experience, and I suspect that it is not being changed as a result of the so-called restraint program. In the last four years some 33,000 new administrative positions have been created, an increase of some 31 per cent. For the 1976-77 fiscal year there are another 3,447 additional positions that have been created. These are the kinds of oddities that occur and which we find very difficult to swallow on closer examination.
Speaking of oddities and peculiarities, 1 want to discuss another matter, Mr. Speaker, which becomes somewhat bewildering as I study the current estimates. It has to do with some
(Mr. Mazankowski.J
departments which overspent rather dramatically, in the section dealing with purchase, repair and upkeep budgets in the 1975-76 estimates, by an amount anywhere from 300 per cent to 400 per cent greater than the amount in the original estimates. The 300 per cent increase over estimates and the 450 per cent increase over the previous year paled into insignificance beside some of the actual increases in departmental budgets.
For instance, the administration branch of the Department of Manpower and Immigration budgeted $36,000 for the item having to do with purchase, repair and upkeep budgets in
1975-	76. The actual expenditure was $4,236,000, an increase of some $4,200,000. This was covered in supplementary estimates A, but what is most noteworthy is that the 1976-77 main estimates forecast a drop to $50,000.
Similarly, Mr. Speaker, the forecast expenditure of $2,024,000 for the administration branch of the Department of National Health and Welfare in the 1975-76 main estimates called for an expenditure of only $23,000. The 1976-77 main estimates forecast a decline to $1,235,000. Each of these bears critical examination.
The taxation branch of the Department of National Revenue had forecast expenditures of $6,249,000, against a main estimate of $1,874,000. Again the overrun is covered in the supplementary estimates, but the forecast expenditure for
1976-	77 is down to $1,544,000. The administration branch of the Secretary of State Department had forecast expenditures of $4,719,000 against the main estimates figure of $19,000. That is a difference of $1,700,000 between the amount that was spent and the amount originally forecast. Again this deficiency was covered in the supplementary estimates, but the main estimates for 1976-77 forecast a decline to $331,000, lower but still significantly higher than the estimated figure of $19,000 in the 1975-76 estimates.
The administrative branch of the Department of Supply and Services will spend $1,425,000 against 1975-76 main estimates of $21,000. Again this is covered in supplementary estimates A, but the main estimates for 1976-77 show a reduction to $491,000. The same thing applies to the Department of Transport, which shows a forecast expenditure of $1,858,000 against the main estimates of $112,000 for 1975-76. Some $1,496,000 of this is covered by supplementary estimates, but the 1976-77 estimates show a decline to $1,184,000. The ministry account of urban affairs shows expenditures of $1,085,000, against the main estimate figure of $85,000. Again this is covered in supplementary estimates A, but the forecast for 1976-77 is $130,000.
All these figures indicate, Mr. Speaker, huge spending over-runs under the object, and reduced spending forecasts under the object for 1976-77. What creates special significance in regard to all these figures is the fact that visibly they represent one-time expenditures. Practically none of the departments involved plan to spend anything like the forecast expenditures for 1975-76 in the current fiscal year 1976-77. Indeed the total main estimates for 1976-77 at $14,242,000 for
November 8, 1976

these departments is less than half the expenditures for 1975-76.
I do not know whether we can suggest, Mr. Speaker, that great breakdowns occurred in all these departments, that there was an enormous amount of repairing and servicing required or that these departments tried to use funds through this particular area for use in some other category. We must ask these questions, Mr. Speaker. What buildings or what type of equipment were being repaired? What was the nature of the breakdown? Why was the repair and upkeep not foreseen in the previous year's expenditures? What steps have been taken to improve the departments' ability to forecast such huge expenditures, expenditures that bear no relationship whatever to the original estimate?
Quite frankly, Mr. Speaker, there are so many ramifications here and possibilities for incompetence that the whole question bears close scrutiny and requires some answers. I hope that the President of the Treasury Board will take a close look at the question and provide the House with those answers. Certainly I intend to follow it up in further questions on the order paper. It is surely an area that bears consideration and I would be prepared to provide the minister with more details if he is inclined to look into the background of these very peculiar figures as they relate to the differential between forecast expenditures and actual expenditures.
1 now turn, Mr. Speaker, to a section of the bill which perhaps is the most contentious, the repeal of section 272 of the Railway Act, more commonly known as the "at and east" rates. In 1961 there were four principal reasons for implementing the legislation on the "at and east" subsidy. Number one, to encourage the continued use of eastern ports. Number two, to help keep Canadian flour companies competitive in world markets. Number three, to promote and assist the development and expansion of Canada's grain industry. Number four, to benefit the Canadian economy by providing mill transportation and port employment as well as helping Canada's balance of trade position in manufactured goods.
Those four reasons were valid in 1961 and I submit to you, Mr. Speaker, that they are valid today. Certainly there can be no reason why this particular section of the Railway Act should be repealed at this particular time. I am interested to know that both the President of the Treasury Board and the Parliamentary Secretary to the President of the Privy Council (Mr. Goodale) alluded to the fact that we could be expecting the Minister of Transport to participate in this debate and to outline some new measures that may be implemented as a replacement for this particular provision. If that is so, that should be laid before this House at the earliest opportunity in order that we can not only debate clause 15 to repeal section 272, but also consider the proposed action which the minister is advancing.
I do not know why the minister has chosen not to participate in the debate at this time. I invite him to do so at the earliest possible date so that we can have a look at his proposal. If his
Restraint of Government Expenditures alternative approach is satisfactory, we might curtail or at least shorten the debate to some extent to allow the House to get on to other business.


Ralph Goodale: It never stopped you before.


Donald Frank Mazankowski: We caught the government a little shorthanded last Thursday night when we had to wait two hours for them to muster enough people for a vote.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: 
Ramon John Hnatyshyn: They always change things for the worse, never for the better.


Donald Frank Mazankowski: They always fly by the seat of their pants. It is interesting to look at the reactions and some of the answers we have been getting. A number of hon. members have pursued this particular issue, including the hon. member for Halifax-East Hants (Mr. McCleave), the hon. member for Carleton-Charlotte (Mr. McCain), the hon. member for Dart-mouth-Halifax East (Mr. Forrestall), and the hon. member for Middlesex-Huron (Mr. McKinley). We all raised this matter on different occasions and received some very weird and wonderful answers. For example, the then parliamentary secretary to the minister of national health and welfare stated at page 12040 of Hansard:
The minister had none the less carefully considered representations made to him by the Canadian National Millers' Association but does not feel that a case has been made for the continuation of the subsidy.
We know that in a letter the Minister of Transport stated that this particular provision is a waste of money. The Minister of Agriculture (Mr. Whelan) stated that studies were under way and that he had been in touch with the President of the Treasury Board to discuss the matter in detail. The Minister of Industry, Trade and Commerce said that he was studying the matter and having discussions with the other minister. On it goes.
If there have been studies and if the government has analyzed and properly reviewed the impact of removing the "at and east" freight subsidy, these studies should be tabled in
870

November 8, 1976
Restraint of Government Expenditures
order that we can have a look at them. After completing the studies, the government is determined that the withdrawal of the "at and east" rates will not cause any significant harm. A number of representations have been made to me and, I am sure, to other hon. members. The Goderich Elevator Company stated, and I quote:
Certain of our elevators will undoubtedly close their doors for good. There will be a resultant loss of employment, but additionally valuable storage space required at times of surplus grain stocks will no longer be available.
I see, Mr. Speaker, you are going to indicate that my time has expired.


Some hon. Members:: Carry on.


Donald Frank Mazankowski: I simply wanted to urge the President of the Treasury Board, who I know is a reasonable person, to reconsider clause 15. If there is sufficient evidence to indicate that the repeal of section 272 will not be detrimental to the industries affected, the flour and milling industry, the grain industry and the ports, I invite him to table that information. I assure the minister that if this provision is not deleted from this bill, there will be a long tough fight both in the House and in committee. Therefore I hope that the government will yield and come forward with its alternative quickly so that we can debate this measure with intelligence, having the full knowledge available to the government and knowing what the government proposes to do.
In conclusion, I thank hon. members for their attention. I am sorry the hon. member for Assiniboia got me off the track.


Ralph Goodale: I derailed your train of thought.


Donald Frank Mazankowski: Yes, Mr. Speaker, he derailed my train of thought and I was not able to complete my comments.


Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I join in this debate, which began earlier this year and has been continuing today. Other members have dealt with some aspects with regard to the removal of section 272 of the Railway Act which deals with "at and east" rates.
My comments will be brief and as pointed as I can make them. I have not had an opportunity to review this matter. The way in which the government House leader has treated this parliament with regard to the intentions of the government as far as legislation is concerned leaves an awful lot to be desired.
It is important that the people of Canada understand that this debate is just beginning. We have not heard anything since the government's retraction late last spring or early summer. At the time the government first brought in this legislation about a year ago, it made it clear this legislation would effect savings. On the other hand it is rather disconcerting for those who will be affected by the elimination of section 272 to have this treacherous piece of legislation thrust upon them without warning. The government is simply using it to fill in its legislative program.
The points I want to deal with, seven or eight in number, have in part been dealt with today, last Friday, and in questions asked in the last session of parliament. Since the first
(Mr. Mazankowski.]
announcement, nothing has happened in government planning to change the opinion of those most directly affected. That opinion simply stated is that there is no need to try to effect reductions of costs to the taxpayers of Canada in this particular area. The government has admitted it is not a question of there not being any studies. Rather it is a question of the government's failure to talk about the studies.
I am no longer bashful or shy about documents of the Government of Canada coming into my hands. I could not care less whether the government considers them to be top secret or only partially classified. I do not care what the government thinks about them. They are of interest to the people of Canada, and my six or seven points will deal with some of the matters contained in a public document which should have been released to the Canadian public in May last year.
I hear an interjection from the hon. member for Hamilton Mountain (Mr. MacFarlane). Does the hon. member for Hamilton Mountain want to talk about the welfare of the 400 or 500 men on the waterfront at Halifax or Saint John who are involved in the milling industry? Can he tell us how to find them jobs? Will the hon. member put the money in the millers' pockets? The hon. member never says anything. He just sits there, and makes little jibes across the floor without any background or any concern for anyone in western Canada. He has been so long away that the temperature of this place has cooled down. He has been so long away from the Atlantic provinces that he has lost concern for anyone outside of central Canada.


Mr. MacFarlane:: Mr. Speaker, I should like to remind the hon. member that I have always stood and spoken very strongly for the maritimes and have a great interest in the west. I can certainly speak for the big man and big is beautiful.


Mr. Deputy Speaker:: The hon. member can say that in his own speech.


J. Michael Forrestall: I do not know what in God's name that has to do with unemployment on the Halifax waterfront. What we are talking about is the restoration of a little confidence on the part of the Canadian people in the central federal government. Hon. members opposite would do away with meaningful programs which have been helpful and useful, and which were not implemented on casual hearsay.
Let me ask the hon. member for Hamilton Mountain what is the point in taking away something from one section of the country and giving it to another? What happens to the people? Is he not concerned about people? He is concerned about grandiose undertakings by a decaying government which has no ideas or concepts. He is concerned about giving legislative approval to casual comments made by the Minister of Finance (Mr. Macdonald) a year ago. The people are not satisfied. They are right. The Prime Minister (Mr. Trudeau) said that. Do you want to know, Mr. Speaker, why they are not satisfied? They are not satisfied because dollars and cents and jobs
November 8, 1976

are being taken away from one sector when they will have to be given to another sector, and no purpose will be served. Business will be lost. If hon. members opposite do not want the business they should stand up and say so.
Members opposite must know the alternatives if they read their own studies. 1 hope they are made available to the supporters of the government. We are not entitled to them, but 1 do admit that once in a while the alternatives are spelled out. The advisers to the government very strongly suggest that the industry is not in a fair competitive position because of the subsidies given by other governments to their industries.
The hon. member for Crowfoot (Mr. Horner) and the hon. member for Halifax-East Hants (Mr. McCleave) have said that the repeal of section 272 of the Railway Act will mean a cost to the economy of millions and millions of dollars. The subsidy on flour costs only $3 million or $4 million a year now. Why change it; why be divisive?


An hon. Member:: Question.


J. Michael Forrestall: What question? You people over there do not have any questions. Good God, you have no answers, and that is probably because you have no questions. Talk to the Canadian millers. Once you told them to go to hell. It is the people in the mills, in the grain stores and at the storage sites who are affected from central to eastern Canada. I am speaking of the Atlantic provinces, not necessarily Ontario and Quebec, although this does affect the river ports. As a matter of fact 1 wonder what Bourassa is saying tonight about that. I wonder how he is apologizing for this situation.
I have a study here which is called a memorandum to cabinet. Why could we not have had this before us last May? Does anyone want to get up and answer that question?
We hear talk about classified and secret documents. We hear the comments from the new minister from Manitoba whom I congratulate very warmly. As a matter of fact perhaps he should have gone to the Department of National Defence. At least he is a man of some character and has some concern for members of the Canadian Armed Forces. On the other hand I doubt very much whether he cares a damn for the workers at the port of Halifax, the port of Saint John or the port of Montreal.
It is rather interesting that this little document indicates to the cabinet that one of the effects of the removal of section 272 of the Railway Act which might be beneficial to the government would be the diversion of flour exports-the Cuban flour-from Saint John and Halifax to the port of Montreal. Like hell-they will get that over our dead bodies. That is not the way to do it. The government was concerned enough to ask for a study. I say to the hon. member for Vegreville (Mr. Mazankowski), who says there are no studies, that there are studies concerning schemes and devious ways of downgrading the port of Halifax. No one over there can tell me that the government did not intend to restore growth to the port of Montreal and to hell with Halifax, Saint John and Newfoundland.


An hon. Member:: Otto fly me!
Restraint of Government Expenditures


J. Michael Forrestall: I have friends in the Canadian merchant marine who would put it another way. Cuba is our largest customer for flour. The hon. member for Crowfoot and others have spoken about that. It also appears in briefs from the Canadian Millers Association. We have heard this from half a dozen sources. We heard it from the hon. member for Huron-Middlesex (Mr. McKinley) not only tonight but on a number of occasions away back in the earlier part of this year. The cabinet has three or four alternatives. They are clear. As a matter of openness and frankness it might be a good service to let the people of Canada know what is in these highly confidential documents so that they can judge what is so secret about them.


Jean-Pierre Goyer: What is secret about it? You have a blank paper.


J. Michael Forrestall: It is numbered at the bottom. I am not quite as intelligent as you people.


Some hon. Members:: Oh, oh!


J. Michael Forrestall: Half way up page five it spells out very clearly-


An hon. Member:: They are blank pages.


J. Michael Forrestall: -it spells out very clearly how this government can shaft the Maritimes, how it can shaft-in that vulgar term-grain growers in Canada and people employed at grain elevators and at milling operations. I suggest to some that they get this cabinet document. It would be improper for me to read from it, I would not do that.
The document is the property of the Government of Canada, as it says here. Who in the hell is the Government of Canada? They are so far removed from the people of Canada that even this is a confidential, secret document. They do everything they can to tell the people of Canada, "We represent you, we love you". But they are so far removed from the grass roots of this country that they will never be restored to government for another 20 years. This document is so unconfidential that it does not even have a document number. Perhaps it did, but it is cut off at the top. The number appears to be 267-75.


An hon. Member:: That is crap.


J. Michael Forrestall: I suppose that 75 refers to the year. It is a couple of years old. I have not heard anyone discussing these alternatives.


An hon. Member:: Accept the challenge.


J. Michael Forrestall: To read it?


Jean-Pierre Goyer: Yes.


J. Michael Forrestall: I will get you a copy. Perhaps everyone in the House would like a copy of it. A Minister of the Crown admits he has not even bothered to read the recommendations.
80001 -5 6>/2

November 8, 1976
Restraint of Government Expenditures


Jean-Pierre Goyer: It is pure invention on your part.


J. Michael Forrestall: Shame! I find it hard to believe from such a conscientious, concerned cabinet minister. I will tell you what I will say, and I will say it in one sentence.


Simma Holt: You said an awful lot of nothing in many sentences.


J. Michael Forrestall: I say in one sentence: Drop your stupidity.


Some hon. Members:: Hear, hear!


Jean-Pierre Goyer: A diversion.


Simma Holt: You have not said one line that is intelligent.


J. Michael Forrestall: What is the object of this bill?


Simma Holt: You see?


J. Michael Forrestall: It is not to lend legislative substance to wild, vague campaign promises of an inept government two years ago. They said, "We will do this; we will say that." Others have talked about the shallow hollowness of this as a proposal to restrain spending. I listened to my dear colleague from the Maritimes and I am sorry she is not in the House. I am referring to the hon. member for South Western Nova (Miss Campbell). She did not get into this subject. What she had to say will be on the front pages of the Halifax Herald. It will be there, let no one worry about that.


Jean-Pierre Goyer: Where is your document?


An hon. Member:: Liberal front page, page 52.


J. Michael Forrestall: There will be losses of $15 and $20 a ton in terms of man hours. If hon. members are concerned, let me tell them that it will cost us in the ports of Halifax and Saint John upward of 600 man years. I do not know what that means to a lot of other members, but in regions such as the Atlantic provinces where unemployment is higher than elsewhere in Canada, where it runs up to 20 per cent and 30 per cent, there is no alternative employment for men who have spent their lives on the waterfront. I can only conclude that hon. members opposite have no concern in this regard. If that is the case, then surely this entire Bill C-19-which used to be Bill C-87- is nothing but a farce, nothing but a hollow treatment of promises given and resurrected, long since ignored and forgotten by a country which no longer trusts the federal government. That is the great cost and the great sadness.
May I refer now to Bill C-61, the Maritime Code. I supported that bill very strongly-members on the government side of the House will recognize that. I continue to support it because I believe in it and I think it is in the best interests of this country. It has been rejected, and you know why? Because the people of Canada have lost faith in the federal government. They do not trust it, and that is the tragedy. Taking a subsidy away from the railways and giving it to the millers will not save the Canadians anything. If they do not want the flour business, let them stand up and say so, and let them listen to

what Canadians have to say in reply. Just maybe if they listen, Canadians might be willing to pay the price and to encourage the government to continue its efforts to get other governments to stop subsidizing milling operations. The fact of the matter is that other governments do it in a heavy way.
The flour we are sending to Cuba is paid for by the Russian government and subsidized by the people of Russia. Others have spoken in this Chamber about our declining share of the world milling market. Is that the direction in which we want to go? If it is the direction in which we are deliberately going, I suggest we have no reason to question why the people of Canada have lost faith, confidence, and trust in the federal institution. There is no trust, there are no savings, and yet this is being done under the guise of a bill that will effect spending restraint. That is not what this government is for. There is always a danger of getting so far in front of the people that you lose sight of them. The government is not doing anything in respect of this.
I have a telegram here which is too important not to read into the record. It is a telegram to the Minister of Transport (Mr. Lang) from the Halifax-Dartmouth Port Commission Chairman, J. W. E. Mingo, dated February 13, 1976. I think it makes a little bit of sense. At least it portrays the concern that we have in the ports of Halifax and Dartmouth. I am sure it echoes the concern of the port of Saint John, and I am sure it is supported in principle by concerned people in the ports of Montreal, Trois Rivieries and Quebec. It reads:
We have been informed that you propose (i) to introduce legislation repealing the rates prescribed by section 272 of the Railway Act for the carriage of grain and flour to eastern ports by rail, thereby freeing the railroads to set their own rates, and also, effective April 1st of this year-
Of course it goes a little further than that. It is effective on April 1, 1976, or the date on which the act comes into force, whichever is later. We were pleased to get from the government early last summer an undertaking not to proceed with it. So we can assume that the effective date will be the date on which the act comes into force. That will be one of the lengthiest battles which this Chamber has ever seen because this bill will not go through without the most bitter debate that we have seen in a long time. It is a classic unconcern. I continue quoting:
-(ii) To terminate the subsidy, estimated to have aggregated $11 million in 1975, now being paid to compensate the railroads for losses sustained in moving this traffic at statutory rates.
We appreciate that you are acting on the advice of public servants in your department who have given such action consideration. Yet we are at a loss to understand how it can be justified and accordingly we are requesting an opportunity to discuss it with you.
Termination of the subsidy and the statutory rates will cost Halifax its export flour trade estimated at 200,000 tons in 1976, and will greatly reduce the throughput of grain at its elevator, thereby increasing the operating deficit of the elevator to the point where its closure will be inevitable.
I depart from quoting here. I remind you, Mr. Speaker, that the port of Halifax was built on the principle that this country required a major year round ice-free port on the east coast. That is why it was built 70 or 80 years ago.
November 8, 1976

I again quote:
Closure of the elevator will curtail Halifax's port operation, close down the operations of Dover Mills, and undermine hog production in the province by permitting an increase in the rail rates for the importation from western Canada of domestic feed grains.
Nothing has happened about that yet, has it? To continue:
The justification for such damage to our economy eludes us for a number of reasons including the following:
(1)	Even when it is desirable to remove a subsidy, it is ordinarily undesirable to remove it so abruptly that the economy which relies upon it cannot adjust.
(2)	This is especially true where, as here, the economy is one which the federal government is seeking to strengthen in pursuit of its avowed policy to reduce regional disparity.
(3)	Prairie grain moves at statutory rates to Vancouver and Thunder Bay, at an annual loss to the railroads which is now estimated at $150 million or more and which has to be subsidized by other traffic including export-import traffic moving to and from the Port of Halifax, and from Thunder Bay via the St. Lawrence Seaway at highly subsidized tolls to Montreal, Bay Comeau, and the other river and gulf ports. How is it that this $11 million subsidy on the movement of grain to eastern ports is singled out for termination?
(4)	The explanation is even more difficult when it is appreciated that, in the broad sense, the enormous excess of expenditure over revenue of your department and of the Crown corporations in the transportation field which report to you constitutes a complex framework of transportation subsidies for the benefit of various constituencies of Canadians, and that the only subsidies which benefit the export-import traffic of the Port of Halifax appear to be its share of the one which you now propose to abolish and the operating loss of NHB on its Halifax facilities. This loss was $700,000 in 1975 and is forecast to disappear in 1976.
That is, Mr. Speaker, if we ever get around to some more important legislation than this piece of stupidity.
(5)	We have been informed that your department is reducing its expenditures by $31 million as its contribution to the federal government's program of budgetary restraint, and that, of this $31 million, $23 million, or 74 per cent, including the $11 million subsidy in question, will come from expenditures now being made in the Atlantic provinces. If this information is correct, how is it that the least prosperous region of the country, the one with the most precarious economy and the lowest standard of living, is being asked to bear three quarters of the burden?
Why is that, Mr. Speaker? I am asking hon. members opposite why is that?
(6)	The "at and east" rates were introduced years ago to encourage the use of Canadian ports. So far as we know, encouragement in this manner of the use of Canadian ports for Canadian trade is still the policy of the federal government-
Mr. Speaker, I know of no white paper or no statement to contradict that, yet the government acts differently.
-and, if this is the case, the "at and east'' rates should not be eliminated until a different policy is proposed, debated and adopted. Surely this policy, if it is to be changed, should be changed on its merits, and not for reasons of budgetary restraint.
(7)	To us, it seems that the "at and east" rates were selected for termination, not as part of any well conceived new national transportation policy, but because there was pressure on your department to cut expenditures somewhere and the subsidy underlying these rates was easy to identify and otherwise convenient.
(8)	We suggest that the proper course is to retain this subsidy until the whole question of the movement, east and west, of grain, coal and other bulk commodities is examined from the standpoint of projected traffic, available technology, and cost to the taxpayer . . . When all federal government and railroad subsidies are eliminated, and all technological options are optimized, we suspect the most economical way of moving grain from the prairies to
Restraint of Government Expenditures
Europe will be by rail from Saskatchewan to Halifax utilizing a unit train
composed of special purpose hopper cars.
At all events we would like the opportunity to discuss these matters with you before any irrevocable step is taken.
It would be interesting to know, Mr. Speaker, whether anybody has bothered to communicate with Mr. Mingo with respect to that program. He is a highly respected member of our community, a highly respected member of the Liberal Party of Canada, and a man for whom I have a great deal of personal respect. These are the views he expressed to a government which has frequently in the past sought his advice about political matters in the Atlantic area, particularly in Halifax and Nova Scotia generally.
If the Parliamentary Secretary to the Minister of Transport (Mr. Roy) is in the Chamber I should like him to find out whether a response was made to that telegram and, if so, would anyone table it or table a study which sets forth alternatives to dealing with this.


Angus (Gus) MacFarlane: Why do you not table it?


J. Michael Forrestall: I am not allowed to. I am not the big boy around here like you.


Angus (Gus) MacFarlane: You read something from it.


J. Michael Forrestall: I have not read a thing from it. I have not quoted from it.


Angus (Gus) MacFarlane: Why not?


J. Michael Forrestall: It might offend your sensitivities. You might get uptight about it. There are three alternatives and I will paraphrase them. The first is that you do not do anything with respect to section 272. Second, you can be right about section 272 and provide some form of fixed subsidy, the effect of which would be to separate completely Montreal from Halifax and Saint John. The millers would just move to Montreal and eliminate the area of Saint John, Montreal and Halifax East Dartmouth. That would be the immediate implementation. Or you could drop this altogether, make no amendment and introduce a subsidy directly to the grain millers. That is taking the money out of one pocket and putting it in another, thus freeing Canadian National to get into their so-called compensatory thrust of recent years to the fullest extent. I suggest any of them rather than continue the debate this House will face with respect to clause 15 of Bill C-19.1 notice that this part of the bill is similar to the previous Bill C-167, introduced in the last session. Not even a comma appears to have been changed. We suggest that the government should delete this clause and thereby secure fairly quick passage of certain other clauses.
The bill seeks to amend the Occupational Training Act and the Family Allowances Act. The government may face difficulties with the latter provision. The bill will secure passage much more quickly if the government listens to the best advice of its experts, and does not implement the clause of which I am speaking. The government has done no studies; it possesses no

November 8, 1976
Restraint of Government Expenditures
comparative analysis on the effect of shifting the subsidy. I say, you will not save any Canadian taxpayer money; so why not leave the matter alone? So far as I am aware no member on the government side is prepared to see us abandon totally the export of flour and grain.
As I said at the beginning, the course open to the government is simple. Don't do it. Do not implement this part of the bill. It is stupid. No one will benefit and you will hurt many people, from the Lakehead to Halifax. Further, if implemented, the proposal would cost us thousands of man years of productive employment. Most of the people affected have worked in their field most of their lives. They are not easily retrainable. Once their unemployment insurance runs out, most of them will be in dire difficulties. Although the government has not studied the matter, I suspect that most of them are not re-employable or retrainable. After their unemployment insurance benefits run out they will become a direct burden on their families and on the government. Therefore the bill will achieve nothing.
I appeal to hon. members opposite to bring pressure to bear on the government with respect to this matter, as I am sure they have received briefs and letters from people most directly affected. I appeal to them to bring pressure to bear on the President of the Treasury Board (Mr. Andras) and the Minister of Transport with respect to this* clause. Last spring the government did not find it difficult to retreat after introducing a similar provision. I suggest, if the government is anxious to pass this bill, that it could probably make similar changes at this time. After all, it can do this better than we can. I tell the government that the more quickly it does this the more quickly this bill will pass and, unless it does this, we may be debating this bill next spring. The only other way the government will get it through is with closure and if it wants closure hanging over its head for such a stupid matter as this it must bear the consequences. The people of Canada will not put up with it and the people of Halifax will not tolerate what the government proposes.
Since the opening of the St. Lawrence Seaway we, in the port of Halifax, have seen 19 increases in freight rates. And how many have been imposed in the St. Lawrence Seaway? None. Not one darned extra cent has been imposed during the period when the ports of Halifax and Saint John have seen 19 increases. There has not been one increase with respect to ports above the city of Montreal-not one, and we talk about the user-pay concept! We in the Atlantic provinces have said, "All right, keep the Seaway open, but with our taxes we will pay for icebreaking purposes. Please leave us alone when we develop alternative uses for our ports." The government watched us do that for seven or eight years; what we did made it uncomfortable and it jumped on us again last spring, to the point where Halifax has lost 40 per cent of its business. God only knows if we will ever get it back. And we have been forced to sit here, to legislate men back to work because of the ineptitude of the government's management of relations between employees, employers, and those who use our ports.

Unless the government listens, this bill will not be given speedy passage. As the days go by others will be on their feet, speaking on the bill. Time and again hon. members will urge the government not to move in the wrong direction. I say that the government immediately ought to begin doing those things which will restore the confidence of the people of Canada in their federal government.


Mr. Arthur Portelance (Parliamentary Secretary to Minister of Manpower and Immigration):: Mr. Speaker, as hon. members know, Bill C-19 is a major symbol of the government's determination to do everything it possibly can to fight inflation. Inflation has no single cause. Some of our inflation is forced upon us in the prices of our imports from other countries. Some inflation results from the competitive scramble of the different parts of our society to enlarge their share of the national wealth. Some of it comes from increases in our money supply, and some of it is associated with the operations of the market place to which government programs must react.
We have taken steps to attack the root causes of inflation, including the very important element of expectations. As we now know, a great deal of inflation comes simply from the expectations of people that there will be more of it. Because people expect inflation, they are forced to bargain for higher wages. Because firms expect cost inflation, they feel forced to raise their prices. Because governments expect inflation, they feel that they too must make advance provision for it. The cumulation of all of those actions is self-defeating. It results in the inflation that we are all trying to protect ourselves from.
In view of the nature of inflation, Mr. Speaker, and in view of the major role that expectations play in it, the government has taken a number of broad steps. The one which has achieved the most prominence is the measures we have taken to prevent the undue escalation of wages and prices. That, although not universally popular, has been a key step. It imposes restraint where it has not been possible to get a voluntary consensus on restraint. It is crucial that we all should be able to see that the restraint is real, that inflation will come down and is coming down and that we need no longer expect fear and anticipate inflation. It is only when those expectations of continued rapid inflation have been laid to rest that we will be able to afford to do without positive controls.
The wage and price control program, though, does not directly deal with the government sector and it is evident that the Canadian people expect the government to exercise as much restraint as it is asking them to do. That is one of the main reasons for this bill. We are determined to show the country that we are not asking others to do anything that we are unwilling to impose upon ourselves. Restraint on the part of unions, on the part of business, and on the part of individuals must be accompanied by a restraint on the part of government.
I will not deal, Mr. Speaker, with all of the many important clauses in this bill. I want to focus for a moment on those
November 8, 1976

clauses which deal with the areas of particular and direct concern to the Department of Manpower and Immigration. They deal with the basis on which allowances are paid under the Adult Occupational Training Act.
The present legislation, established a decade ago, set a fixed bottom allowance rate and a fixed top rate. It provided that both the top and the bottom would be escalated each year on the first of July. The escalator it established was based on a national	statistic-the	average hourly earnings in
manufacturing.
The effect this had was that any upward pressure on hourly earnings in manufacturing had an automatic and equal impact on this important portion of government expenditures, but with a lag. If wages rose 16 per cent, allowances would go up 16 per cent in the next year, even if the rise in wages and in other income maintenance payments slackened off to 8 per cent.
The department is now spending some $200 million on training allowances. It is clear that an across-the-board increase of 16 or 10 or even 8 per cent would have a significant impact on government expenditures. The legislation made that impact virtually automatic.
The result has been that the department is faced with continually escalating costs of getting our badly-needed training done. At a time when government must restrain its expenditures rather than expand them, that does not make very good sense. It has meant that each year the department could do a little less training. It has been one of the factors which has prevented us from being able to train as many Canadians as need training or to provide as many skilled workers to industry as industry has frequently required.
At the same time as the escalator has bitten into our training budget, it has been one of the causes of the extreme difficulty that we have in controlling government expenditures.
The control of government expenditures is one of the most difficult problems that progressive governments in democratic countries face today. The real needs and the real demands are there. We must meet them. We must, though, meet them in ways which are as little inflationary as possible and in ways which do not give a further upward nudge to the inflationary spiral.
Those, Mr. Speaker, are some of the fundamental reasons why the government has decided to eliminate the automatic escalator for training allowances. It is a key part of our program to keep our day-to-day expenditures under control and let us do the most good we can with the money that we have.
I would not want to leave you with the feeling that this change is sensible only as an anti-inflationary measure. The fact of the matter is that, in training terms, this kind of change is desirable in and of itself. The old system whereby the law forced a rigid escalation of the upper and lower limits of the allowances with no regard to what was happening in respect of other forms of income support, with respect to what was happening in labour markets, or what the actual income needs
Adjournment Debate
of trainees really were, had begun to seriously distort our training programs. The department found, for instance, that it could not make all the adjustments that were needed from time to time. The law raised allowance levels automatically, departmental consultations with the provinces about what levels would best fit particular circumstances tended to become a bit of a sham. The fact was that the law gave us little choice in the matter.
The department wound up paying too much to some people and not enough to others. We could not provide suitable allowances to groups of people whose real need for them was modest. Too often the department had to pay a high allowance or nothing at all.
I would remind the House that these anomalies were what caused the department in 1972 to seek and obtain authority to pay allowances to people who were not the heads of households and to pay them at levels not earlier permitted by the legislation.
These amendments today are a further step in that direction. They will, I believe, permit the department to re-examine and use in a more flexible way, the scarce allowance funds. Our fundamental desire is to make sure that as many as possible have the replacement incomes they need to take training.
The amendments will permit us to pay training allowances on a human basis rather than a statistical basis. Allowances, from now on will be determined not on the basis of national statistics but on the basis of the family circumstances and living costs of the people who actually need to take training.
1 need hardly say that I feel that, both on the anti-inflationary grounds and in terms of the benefits it will bring to the training program, that change will be most helpful indeed. It will give the department the flexibility to make the allowances suit the circumstance. The new legislation would let us do exactly what we are now doing or it would permit us to alter the system to meet regional and local circumstances, to let allowances bear some sensible relationship to other means of income support, and particularly to have variation in relation to the cost of living as well as to family circumstances.


Some hon. Members:: Ten o'clock.


Mr. Deputy Speaker:: Order, please! I regret to have to interrupt the hon. member but, it being ten o'clock, we must proceed to the motion to adjourn.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
[ English]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
[Stage Direction]
November 8, 1976
Adjournment Debate

Mr. John C. Crosbie (St. John's West):: Mr. Speaker, the constituency of St. John's West had not been represented by a member for 14 months, and on November 2, the district being represented again, I asked a question of the Minister of Energy, Mines and Resources (Mr. Gillespie) in connection with the oil refinery at Come-by-Chance. There is an oil refinery there, as hon. members know, representing an investment of some $250 million to $300 million. Last February it went into bankruptcy, and the refinery has not operated since the end of February as a result of which around 600 people find themselves unemployed.
The Government of Canada has a connection with this refinery because the wharf at Come-by-Chance was financed by the taxpayers of Canada to the tune of some $20 million, a sum which is still owed to the government.
At the beginning of March the Minister of Energy, Mines and Resources said that at his request Petro-Canada was investigating whether it might be interested in acquiring the refining complex and that consultants were being engaged by Petro-Canada to examine the situation and advise thereon. That announcement was made early in March, some eight months ago. I asked the minister the other day whether the report had been received. He said that it had but that he was unable to give the results of the study. Is the minister concerned about this situation at Come-by-Chance or not? Is the government concerned about the situation at Come-by-Chance or not? Apparently not.
The Secretary of State for External Affairs (Mr. Jamieson) was in Come-by-Chance at the end of August-Come-by-Chance happens to be in the district of St. John's West-at a meeting with the union people, and he told them that it looked to him as though the refinery would be repaired, reconstituted this winter, and in operation again by spring. But what evidence have we of that, Mr. Speaker?
On November 2 I also asked the minister to advise the House what steps, if any, the Government of Canada was prepared to take to assist in reactivating this oil refinery. The minister did not answer that question. I ask again, what steps, if any, is the Government of Canada prepared to take? Is it prepared to make any grant to assist in the reopening of the refinery? Is it prepared to make any loans at a low interest rate to help reopen the refinery? Is it prepared to make any arrangements with reference to the wharf at Come-by-Chance to assist in the start-up of that refinery? Is the government prepared to consider making the area a duty free zone in order to assist the reopening of the refinery? Or what steps is the Government of Canada willing to take, Mr. Speaker?
Those are my questions. The people of Come-by-Chance and the 400 or 500 employees, many of whom are still waiting in the area and hoping the refinery will reopen so that they do not have to move to Alberta or somewhere else in Canada, are waiting for these questions to be answered.

In my opinion it is cruel and callous of the Minister of Energy, Mines and Resources to take such a blase attitude to a question asked of him about this situation. The other day the minister said that he had not been approached and that he did not know of any approach to the Government of Canada by any group to see whether the Government of Canada was prepared to do anything to help reopen this refinery. Let me tell the hon. gentleman now that the largest creditor in the bankruptcy, the Ataka company which is owed some $250 million to $300 million, had a representative approach ministers of the Government of Canada to ask whether the government were prepared to take any steps of the kind I have mentioned. They approached the Minister of Finance (Mr. Macdonald)-and I would suggest that the Minister of Energy, Mines and Resources consult with him-to find out whether a grant or loan might be made, or any steps taken. His advice was that this was very unlikely, that he felt that the refinery was finished and should be written off. That was the attitude of the Minister of Finance.
The Secretary of State for External Affairs, who represents the province of Newfoundland in the cabinet, took much the same position when he was approached. I would now ask the Minister of Energy, Mines and Resources or his representative to inform the House, the people of Newfoundland, the people of Come-by-Chance, and the people of St. John's West, what steps, if any, they are prepared to take to assist either the Japanese creditor or any other group in getting this refinery back in operation again, so that these assets do not just rust away. They are now being mothballed by the first mortgagee or receiver and the assets are wasting away. Some 500 people have been put out of work. What, if anything, is the Government of Canada prepared to do? Is the attitude of the Government of Canada that of the Minister of Finance, that the refinery should be written off and forgotten? Or is the attitude of the Government of Canada going to be one of helping to assist this project get under way again?
This is an industry that Newfoundland can ill afford to lose. This refinery may be of very little consequence to the province of Alberta, but to the province of Newfoundland it represents 500 jobs. It is an industry we cannot afford to have shut down. About $47 million of the people of Newfoundland's money is invested in the project as second mortgagees, and the people of Canada have invested about $20 million. Will the Government of Canada assist at all by grants or loans at low interest rates? What are the results of the Petro-Can study? Does Petro-Can have any interest in this project, or is this just a cynical attempt to make it appear that the Government of Canada is taking some action?


Mr. Maurice Dupras (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Mr. Speaker, it is true that Canada has great interest in the Come-by-Chance refinery. This has been shown many times, for example, in the contribution toward building a wharf and the weekly concern with regard to the situation now prevailing in Come-by-Chance.
To date the Canadian government has not received a request or been presented with any proposals relative to its participa-
November 8, 1976

tion in the reactivation of the Come-by-Chance refinery. The government, of course, would welcome reopening of this plant by an entity that could provide the needed technical and financial resources. It would be understood that any proposal by a foreign controlled agency would require the approval of the Foreign Investment Review Agency.
Concerning the activity of Petro-Canada with respect to this refinery, I can say that the corporation has had a consultant's report prepared in connection with its appraisal of the possible business opportunities presented by the Come-by-Chance situation. This was not a report to the Minister of Energy, Mines and Resources (Mr. Gillespie), but rather to the corporation. Members will realize that there are very large demands being made on Petro-Canada and, for the present, the corporation's priorities lie with oil and gas resources development rather than with refining and marketing.
The federal government will continue to keep the Come-by-Chance situation under study and will encourage consideration of any plan that would make provision for the rather large amounts of capital that would be required to reactivate the refinery and find adequate markets for its products.
I hope that within the next few days an acceptable solution will be found by the provincial authorities and the refinery.


CANADIAN NATIONAL RAILWAYS-REDUCTION OF STAFF AND SERVICE IN NEWFOUNDLAND-REQUEST FOR INVESTIGATION
Jack Marshall: Mr. Speaker, the grievance which I want to express tonight revolves around a question I asked the Minister of Transport (Mr. Lang) on October 22 in connection with the announced reduction of CNR staff in Newfoundland. Notwithstanding the fact that any changes in plans by CN, as they continually suggest, might be in the interest of the public they serve, the manner in which they make these announcements leaves much to be desired.
In this particular case which prompted my question the reduction in staff of four positions at Port-aux-Basques, five in central Newfoundland, and seven in Stephenville in western Newfoundland, reductions which were rumoured and came to my attention many weeks ago, was unconditionally denied by CN's senior officials. However, the very decisions that were denied, were made and confirmed in a letter to me from the Newfoundland area manager dated October 25. It keeps being confirmed as we reflect over CN action to downgrade rail service in my province. They keep following the same pattern of degrading Canadian National tactics to camouflage their real objectives while demoralizing human beings, the staff that has served them faithfully over the years.
The action, I repeat, follows the same pattern. First they start the rumours, then they deny them, and then an announcement is made of the introduction of changes in operations as part of plans to modernize and improve methods of doing business. Usually the method of modernizing is to lay off staff or remove a service.
Adjournment Debate
The most ridiculous point in their effort of camouflaging their real intentions is that they think they are believed. They are living in the world of fantasy that they are fulfilling their responsibility to Canadians. I say that they are living in the twilight zone. They try to camouflage completely their real intentions by the same old sorry method of confusion, relating that on the basis of the CN Express distribution system and the business environment in which CN operates that these are the conclusions reached which will be of benefit to the business community.
They go on to further confuse by relating that a study indicates that if CN Express is to maintain its competitive position in the package traffic market and improve productivity and service levels, alterations are essential. Then they try to impose more public relations utterances-that in order to make improvements there will be a number of changes in the traditional way of doing things.
They have been making the same noises for the past seven or eight years, in fact since the Pickersgillian sell-out of the province of Newfoundland when our citizens were used as an altar offering for the rest of Canada to start the persistent process of eliminating rail passenger service in various parts of the country.
I was pleased to note from the minister's answer to my question of Wednesday, October 27, that he would look into the question of statements that had been made by CN officials and then contradicted by action to deteriorate rail rate and express service in Newfoundland further and eventually to turn to rubber traffic which was the case \Vhen rail traffic was eliminated in favour of bus service. The minister further indicated he would be interested in having discussions with representatives of the province of Newfoundland and other interested people on the whole question of transportation in Newfoundland both by rail and road. I hope that in his reference to road transportation he was referring to the need for highway strengthening. The minister further stated that he is very much concerned about this issue which is a vital one in the province of Newfoundland. 1 am concerned particularly about the future transportation policy in western Newfoundland.
I suggested to the chairman of the standing committee that the committee visit southern and western Newfoundland to determine the needs of that area. I only hope that the parliamentary secretary will be able to disclose to me tonight that the minister has not only granted the authority to the standing committee to visit that part of the province but has taken the appropriate action to investigate the thrust by regional representatives of the Canadian National to eliminate rail service in Newfoundland by cloak and dagger tactics, and without any common sense effort to realize that the basis of any economy, particularly in isolated areas of Canada, is a fundamental, adequate transportation system which includes more than ever an expansion of the service rather than a deliberate attempt to phase out CN responsibility in the province of Newfoundland.

November 8, 1976
Adjournment Debate
Let me give one example. I might point out that one of the bases of the economy of Newfoundland is a pulp and paper firm named Bowaters. A letter from that company dated November 1, 1976, states in part:
Bowaters' concern on some aspects of the development plan that will affect our economic viability to remain in business here is as follows:
i) The urgent necessity of a standard rail car ferry service to Corner Brook from some mainland marine rail terminal, for the shipping of our newsprint. Newsprint cars would normally come to Corner Brook empty but could bring in general freight. Many mainland publishers are now preferring to buy newsprint in small lots, delivered frequently by special, large, cushioned rail cars rather than ship-loads that must be warehoused and rehandled. More rail shipments would not only help us to develop and keep more northeastern markets but also would have the added advantage of more evenly scheduling the work of our warehouse and shipping personnel.
This is one example of the situation in respect of a basic industry in Newfoundland. It is obvious that the government is not investigating the thrust of the CN with regard to building an economic base and provinding a responsible rail freight and express service in that province. I hope the parliamentary secretary will be able to give me an answer that indicates the intention of the minister relating to Newfoundland, and to its future which depends on transportation.


Ralph Goodale: Mr. Speaker, while I have moved over to assume new responsibilities as Parliamentary Secretary to the President of the Privy Council, I still maintain a very keen interest in Canadian transportation matters, and am glad to have the opportunity to pinch hit for the Minister of Transport (Mr. Lang) and his parliamentary secretary in replying once again to my hon. friend from Humber-St. George's-St. Barbe on a topic which I know is of great concern to him, and which the minister has indicated is of great concern to the government. To begin with I should like to quote from a portion of the minister's original answer to the hon. member on October 27. He said:
The question of Canadian National operations is, of course, largely for its management in a broad way, but I would be interested in having discussions with the province of Newfoundland and with other interested people on the whole question of transportation in Newfoundland both by rail and road. This is a vital issue in the province, one with which I am very much concerned.
Moments ago the hon. gentleman mentioned at least parts of the minister's original answer in the question which he addressed to the House this evening. As a result of the minister's concern about Newfoundland transportation generally and as a result of the hon. member's inquiries on this subject, a representative of the CTC has been in Newfoundland recently to examine closely the situation in question. I understand that his review has just now been completed, and 1 know the Minister of Transport will want to take a very close look at what this examination might reveal, and we hope that in that examination some of the answers to the inquiries which have been raised this evening and on other occasions will be found.
Furthermore, I think it is important to note that in a more general context and in co-operation with the provincial administration in Newfoundland, the Minister of Transport will continue efforts to examine a variety of different transpor-

tation issues including costs and shifting intermodal relationships which affect all modes operating in Newfoundland, as well as Atlantic transportation generally.


ENERGY-REQUEST FOR TABLING OF DOCUMENTS RELATING TO ESTABLISHMENT OF URANIUM REFINERY IN SASKATCHEWAN
Ramon John Hnatyshyn: Mr. Speaker, my question tonight arises from a response that I received from the Minister of Energy, Mines and Resources (Mr. Gillespie) on October 22, 1976, when I raised a question which is causing growing concern among people in my constituency and in the adjacent constituency of Saskatoon-Humboldt with respect to the establishment of a uranium refinery which appears to be destined for just outside the city of Saskatoon near Warman, Saskatchewan. I questioned the minister at that time as to whether or not he would be good enough to table the various documents and agreements that were entered into between the province of Saskatchewan and the Government of Canada regarding their respective agencies.
All of us who read the Speech from the Throne will remember clearly the following statement:
At a time of growing complexity in public affairs it is especially important to enhance citizens' rate of access to information necessary to make well informed judgments and take responsible action.
That particular declaration in the Speech from the Throne gave me some hope that finally the government might be inclined to make public its plans, particularly with respect to the kind of facility that it is apparently planning in Saskatchewan.
I raised this question in the last session of parliament when I asked about the plans of the government. The parliamentary secretary indicated to me that Warman is one of the sites being considered in Saskatchewan. He indicated in his response to me on June 17, 1976, that the decision would be made and then they would have something called a public educational program for the people. In other words, apparently the decision will be made on this project and then they are going to explain to the people of Saskatchewan, and particularly of Saskatoon, how safe it is and what a great facility this will be. I do not think that is at all satisfactory. I wrote to the minister on July 5 of this year and stated to him in the strongest terms my apprehension about the course the government was following. I pointed out to him that there are many people who were communicating with me in Saskatoon and in the adjacent area asking what the government had in mind.
Virtually no information was forthcoming. The federal government was in conspiracy with the provincial NDP government apparently, and acquiring property and land for the establishment of this particular refinery, and not letting the people in the area have any idea of what was going on. There was some suggestion by the parliamentary secretary that after the decision was made there would be a public information program. I do not think that is satisfactory enough.
November 8, 1976

1 asked the minister in my letter to him on July 5 if he would outline precisely what steps were anticipated by the government with respect to the establishment of this refinery. 1 am sorry to say that the response to my letter was in the most general terms. The minister indicated to me at that time that we could expect a decision about the site within a matter of weeks. A number of months have passed and there has been no indication of any selection process.
I think the government has a lot to answer for, and also the provincial NDP government whose representatives have been howling since I raised this matter in this House. They claim it is a matter of playing politics, but I can assure you, Mr. Speaker, 1 am not playing on this issue. People are concerned and they have a right to know. This is not wartime when we might be worried about the atomic bomb. People have the right to know about the kind of facility being put next to a large area of population. If the plant is going to be as safe as the spokesman for Eldorado says it is going to be, if it will be as safe as the minister has indicated, then why are they holding back and not tabling all the environmental impact studies? Why are they not telling us exactly what kind of studies are going on? Why do they not tell us what sites are being considered other than the one in Warman, which was only found out because a Conservative MLA stumbled across the information that they were picking up options through the Saskatchewan Economic Development Corporation in that particular area? We have no idea of what other sites are being considered.
No information has been given to us by either level of government about their intentions. In other words, it is another case of the government in its usual and continuing arrogant manner knowing what is best for the people in the various regions and areas of our country and not practising the participatory democracy that the Prime Minister (Mr. Trudeau) talked about in 1968-not allowing people to make well informed decisions on the basis of information provided by the government. I think this kind of example does more to show the necessity for a freedom of information act than many other examples that I could quote. It is lack of information in cases like this that shows how we need a freedom of information act which would provide an independent tribunal to decide whether information was properly withheld from the people of the country.
I take very strong exception to the kind of flim-flam, delay, and evasion practised by this government-and by the provincial government as well. I should not place all the blame on the federal government. It seems to me, however, that if these governments persist in this particular attitude they will suffer
Adjournment Debate
serious consequences in Saskatoon and the surrounding areas in future elections.


Some hon. Members:: Hear, hear!


Maurice Dupras: Mr. Speaker, in reference to the question of the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) of October 22, now I understand why a representative of the department of industry and commerce in the Saskatchewan provincial government said of him that he is either misleading his constituents or is misinformed. Of course he is uninformed if he does not know what the government is doing.
I will read it again for the hon. member because he does not seem to remember what was contained in that press release.
Gordon Burton, director of Corporate Affairs for the company, said the purpose of the the options is to allow Eldorado Nuclear to conduct detailed environmental and engineering studies of the site to determine whether it would be suitable for a refinery.
It is emphasized that the company has not yet made a decision to proceed, Mr. Burton said. This decision is dependant on many factors, not the least of which is the assurance of a supply of concentrates from proposed new mines in the northern part of the province.
He went on, Mr. Speaker:
The environmental studies as well as a large amount of other data will-if they support a decision to proceed-be made public before any construction begins.
I wonder if the hon. member is paying attention? Mr. Burton added:
Indeed, the environmental impact statement is subject, under government legislation, to public hearings.
If the hon. member had read page 3 of the same press release he would have noted that the Eldorado office in Saskatoon hopes to begin within the next several months a general information program on the nature of uraniam exploration, mining and refining.
The same press release also speaks of a new refinery in Ontario. For instance it says on page 2:
Plans have been announced for a new refinery in Ontario to begin production by 1980, and the company now is examining the feasibility of another refinery in Saskatchewan.
There is no wartime-like secrecy surrounding this press release and I think the provincial minister of industry and commerce, Mr. Messer, is correct. 1 think the hon. member is misleading his constituents.


Ramon John Hnatyshyn: That is not correct.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until two o'clock tomorrow afternoon.
Motion agreed to and the House adjourned at 10:28 p.m.

Tuesday, November 9, 1976