1976-06-10

[Stage Direction]
The House resumed, from Tuesday, June 8, consideration of the motion of Mr. Allmand that Bill C-84, to amend the Criminal Code in relation to the punishment for murder and certain other serious offences, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, Bill C-84 proposes the abolition of capital punishment. I shall vote against the bill. By so doing, of course I shall vote to retain the death penalty for those who commit premeditated, first degree, coldblooded capital murder, call it what you will. I say to you, Mr. Speaker, and to my colleagues in this House that no single issue, certainly since my election over two and one-half years ago, has caused me more personal concern and torment than the issue of capital punishment.
Some complex issues have been discussed during this period. I think of the efforts to deal with the economy, inflation and of course the frustrating issues of unemployment as well as the energy crisis. There have been more heated issues. We have only to recall to the judges' affair to establish this fact. However, in over-all terms the death penalty or its abolition contains such a tremendous mixture of values and considerations that the subject defies, at least for me, a logical or rational approach, and frankly, in my judgment, presents a problem that is incapable of a solution that will continue to be acceptable to all segments of our Canadian society and all regions of our country.
Likely by now most of us have had for some time a definite opinion on this issue. But the considerations that prompted us to formulate this opinion are not nearly so definite. A great deal of opinion has been based on religious considerations, and I think quite validly so. Much of my mail and the personal representations I have received have this basis. What is difficult for me, and I am sure some of my colleagues share this difficulty, is that we find different church groups taking diametrically opposite views on the retention or abolition of the death penalty. Similarly, I have many constituents, and I am sure I am not unique, who are members of a certain church who will disagree firmly and openly with the official view that the Church has taken. I suppose, therefore, I should not be too confused or even too surprised when I see two individuals
in support of completely opposite positions quoting me the same Holy Scripture. That is the nature of capital punishment.
Another consideration involves the general concern regarding law and order, and in many cases it goes certainly far beyond concern. I detect a very real fear. People see an increase of some 25 per cent in the number of murders committed in roughly a five-year period, and they want a solution. Generally, people who are in fear look for a quick, simplistic and understandable solution. So the government has seen fit to bring in the peace and security package to this House for debate. It has tried to convince the people of Canada that this is one entire package, but really it is two different bills, Bill C-83 which deals at great length with gun control, wiretapping and other housekeeping amendments, and this bill. Bill C-83, the main thrust of which is gun control, has been debated in the House and it is now under discussion in the committee. Bill C-84 of course is the one we are debating now, and that deals with capital punishment. It also contains other provisions.
I wish to make another point regarding the conduct of the government in bringing in legislation such as Bill C-84. This bill has been highly touted as providing for a minimum 25 year prison term in place of execution. The Solicitor General (Mr. Allmand) said this 25-year provision is harsh, that it may be counterproductive with respect to rehabilitation, that it may increase the problems in our prisons and for our prison guards. He does not know whether the 25-year rule in capital murder cases will act as a deterrent. In view of all this I, and others, must ask why we have the 25-year minimum rule? The only answer I can find is that the government, by instituting the 25-year sentence provision, may garner enough votes in this House to abolish capital punishment. It is the price it will pay to eliminate the death penalty which is unacceptable to it.
What happens then if this bill is passed? There are two classes of murder. A person convicted of either class may receive a sentence of life imprisonment. In spite of the sentence, is the murderer eligible for parole? Sure. In the case of first degree murder, the minimum 25-year rule applies. Does this mean that a murderer convicted of a cold-blooded murder has to wait 25 years to become eligible for parole? No, that is not what the bill provides. It provides that after 15 years a man convicted of first degree murder may have his case reviewed.
[DOT] (mo)
What does all this mean? It means that life imprisonment is not life imprisonment but 25 years, and it means that 25 years is not really 25 years, it is 15 years. Yet, the government wonders why the public is confused and angry. The government saw fit, in bringing in this legislation, to support it with a great deal of publicity and a high cost advertising program to try to convince the people of Canada that the peace and security legislation could
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replace capital punishment in this country. We saw the Solicitor General (Mr. Allmand) and the Minister of Justice (Mr. Basford) on television and we heard them on radio. We received a great deal of literature, which must have cost the government a fair amount, and which was distributed to the people of Canada. Nevertheless I do not think that the government has been able to convince many Canadians to change their minds. I do not know what they have been able to accomplish so far as MPs are concerned. In their advertising they said that members of parliament should vote according to their conscience and not according to what their constituents want. They said this because they knew that a high percentage of the Canadian population is in favour of retaining capital punishment, according to the latest polls. In my riding the percentage in favour of retention is 84 per cent, and I believe it is 80 per cent across Canada. So, in their advertising the government is appealing to members of parliament not to vote in accordance with what the people of Canada want.
I do not believe they have been successful in convincing Canadians through this advertising program, and it is certainly not convincing many members of parliament to change their minds. In fact it seems that there is a hardening of attitudes among people in Canada with regard to this bill. We know, and much has been said and written on this, that there is to be a free vote on this issue. We also know that this is a government bill and that the peace package was brought in as government legislation. Bill C-84 deals not only with capital punishment, but with other matters as well. It is certainly the feeling of many of us that there will not really be a free vote on the government side, especially since we have been told that the cabinet will vote solidly for the bill.
Since I have been here we have had two votes on capital punishment in nearly two years, and since 1966 we have had four votes in the House on this issue. It appears to me that the vote will be quite close one way or the other, with the government making every effort that it can to ensure that the legislation is passed and that capital punishment is abolished in Canada, in spite of what Canadians want.
It is because of this conflict, and because I am not positive that this issue will be finally solved with the vote on this bill, that I am in favour of having a referendum on this issue. I do not favour government by referendum, but on an emotional issue of such importance it appears to me that if we are to solve this problem for any length of time we should let the people of Canada decide, not just the 264 members who are sent here to represent them. I would not want this practice to be extended to other issues, but I would certainly favour it in this case. If we have to bring forward bill after bill on capital punishment, eventually the government will be forced to carry out a referendum on this issue.
I made a speech on capital punishment in October of 1973 and at that time I outlined my reasons for being a reten-tionist. One is the fact that not much emphasis is placed on the relatives of victims of murder and all the attention is focused on the murderer after he has committed the deed. We hear a lot about the deterrent aspect of capital punishment. Many abolitionists say that the deterrent aspect of capital punishment must be proved beyond a shadow of a doubt. I really believe that capital punishment is a deter-

rent and I think I can use as many arguments as the abolitionists put forward to convince others that capital punishment is a deterrent. More emphasis should be placed on the fact that retentionists also have a conscience, certainly, this is true of a greater number than the abolitionists are prepared to admit.
Then there is the subject of parole. Here again, if the government really wanted to demonstrate that it is going to tighten up the law and order legislation by doing what Canadians really want, then murderers would certainly not be let out of prison on parole after only a short period of incarceration. I think that Canadians have come to the conclusion that capital punishment is necessary because of the large number of murders that have been committed by people out on parole.
[DOT] <U20)
The matter of second offenders is a matter which should be considered in detail because many murderers have committed the offence of murder a second time. These people, under the rules of law and order we have in Canada, are not doing very much to convince the people of Canada that we should not have capital punishment. Second offenders most certainly should not receive anything less than the death penalty.
Those are the reasons I feel that capital punishment should be retained in Canada. I think the courts should decide, when somebody is found guilty of the type of murder for which capital punishment could be the penalty, what the penalty should be. That penalty should be carried out, and the Cabinet should not be permitted to decide that capital punishment should not be carried out.
I will close by saying that I do not believe retentionists are cold-blooded, hard-hearted, cruel or have no regard for human life. I believe it is easier to be an abolitionist than a retentionist. If capital punishment is retained, each of us voting for retention will have to bear some measure of responsibility each time capital punishment is carried out.


Mr. Hugh A. Anderson (Comox-Alberni):: Mr. Speaker, I have followed with considerable interest the debate on Bill C-84 to this date, and in particular, I paid very close attention to the statements made by the Solicitor General of Canada (Mr. Allmand) when he presented a brief on May 3, 1976 on the abolition of capital punishment. The Solicitor General (Mr. Allmand) stated that the government of Canada, the ministry of the Solicitor General and he, personally, sees it as our first task in the field of criminal justice to protect the Canadian public against violent crime. I applaud the Solicitor General, as I am sure all hon. members of the House applaud this minister, since all of us in this House believe that the protection of the law-abiding citizen should be the first principle in the administration of criminal justice.
The minister further stated that capital punishment does nothing to protect the public, and those who argue that capital punishment does protect the public are using emotional, illogical and rhetorical remarks. Let me just pause at this point and quote from an interview with Ernest van den Haag, a psychoanalyst and adjunct professor at New York University. Professor van den Haag recently stated that he was in favour of the use of the death penalty for
June 10, 1976

certain types of crimes. He said that it is indispensable. He said that the federal prisons-and he was referring to the federal prisons in the United States-now have in custody a man sentenced to life imprisonment who, since he has been in prison, has committed three more murders on three separate occasions, and these murders included both inmates and prison guards. The professor said that there is no further punishment that man can receive and that in effect, he has a licence to murder.
Professor van den Haag dealt with another case and said that when a man is threatened with life imprisonment for a crime he has already committed, what reason has he not to kill the arresting officer in an attempt to escape? His punishment would be the same. In short, the professor said there are many cases where the death penalty is the only penalty available which could possibly deter.
In deference to the Solicitor General, that was not an emotional, illogical or rhetorical statement made by the professor. The professor disagrees with the Solicitor General. Therefore, I have come to the conclusion that the statement made by the Solicitor General regarding deference is open to question and interpretation, and that his statement that capital punishment does nothing to protect the public can be taken as a personal opinion rather than as a statement of fact.
In the statement on the abolition of capital punishment made by the Solicitor General there is a further reference to violent crime. Statistics have been brought in to show that the murder rate, as reported by the police in Canada, climbed since the last executions were carried out in 1962 from 1.2 murders per hundred thousand population to 2.4 murders per hundred thousand population by 1974. This is an interesting statistic because in the 12 years during which capital punishment was not carried out the murder rate has doubled. However, I must be careful because the Solicitor General states that those citing the increase in murder rates and concluding from those statistics that the lack of executions in Canada since 1962 is the reason, run the risk of deluding themselves and those who listen to them. I certainly do not wish to delude the House, because the minister went further and stated that the real problem is the growth in the rate of all violent crimes, and indeed, the growth of crime of all types both here in Canada and throughout the world in recent years.
I find little consolation in being told that I should not be incensed or distressed by the growth of the murder rate in Canada because violent crime has also been increasing. Could it be that the growth in the rate of violent crime in Canada and the doubling of the murder rate in a 12-year period just might be the result of a breakdown of deterrence in our criminal system, and that those who cause violent crime are very well aware of this breakdown?
Recently when touring the B.C. penitentiary, I and several of my colleagues were informed by the prison staff that approximately 80 per cent of the inmates were repeaters. In other words, they had not committed only one crime, but a succession of crimes. In all seriousness, is this an argument for making deterrence lighter or heavier? Are Canadians less law-abiding than they were 50 years ago, or are the same people perpetrating crimes, receiving minor sentences and being turned loose on society again?
Capital Punishment
It would be interesting to learn from statistics whether there are more people committing crime or whether the same people are being convicted on more than one occasion. Unfortunately, statistics tend to be rather dry in the reading, but to put the trend of murder in Canada in a better perspective, let me state that in 1955 there were 118 murders, while in 1974 this figure had risen to 539. I am afraid the trend of attempted murder is even worse than murder, according to Statistics Canada. In 1961 there were 74 attempted murders in Canada. In 1974 there were 524 attempted murders, so that in that 13-year period attempted murders increased seven to eight times, which I think is rather frightening.
It is not my intention to criticize the Solicitor General, but he stated that if those who suggest that capital punishment is an effective method of fighting crime were serious, they must argue that we should reinstate capital punishment for many more crimes and many more murders. I would only point out that in my humble opinion if the deterrents to all crimes were harsher, then those who prey upon the law-abiding citizen would have two choices. First, to be deterred by more stringent enforcement of the Criminal Code with longer sentences or, second, to be incarcerated for a period of time that would in effect protect the public at large. In those cases wherein the crime was so heinous and repugnant to our society that the ultimate deterrent should be provided, then the ultimate protection would be provided.
[DOT] (U30)
Mr. Speaker, I am pleased to agree with the Solicitor General that the concentration on the issue of capital punishment does not serve Canada well and that ultimately the peace and security legislation embodied in Bill C-83 is of much greater importance. I realize that by stating this I will be in conflict with some of my colleagues and the general public in Canada, since they perceive the capital punishment issue much as a mariner would view an iceberg. The tip of the iceberg is an awesome sight and which can be clearly perceived; however, the main bulk and danger remains below the surface where it cannot be readily identified. Bill C-84 is a high profile bill. I would recommend that all hon. members of this House proceed with the speedy dispatch of Bill C-83 through the Standing Committee on Justice and Legal Affairs and third reading through this House, since the matters dealt with in this bill will ultimately have a greater impact on the protection of our Canadian citizens than will Bill C-84.
The hon. Solicitor General has quoted Professor Wilson who said: "It is a matter of dispute whether any penalty will have a deterrent effect on murderers, but surely the prospect of a long prison term will have as much as others." As a layman, I cannot dispute Professor Wilson but can only quote in rebuttal Isaac Ehrlich's recent article in the American Economic Review, where he stated: "Over the period 1933 to 1969 one additional execution per year may have resulted on the average in seven or eight fewer murders." My dilemma, Mr. Speaker, is that I do not know whether Professor Wilson or Isaac Ehrlich is correct in their statements and I doubt whether any of us in the House can make empirical judgments since experts disagree on whether capital punishment is a deterrent. Professor Wilson's thesis is that surely the prospect of a long
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prison term will have as much deterrent effect as capital punishment. The hon. Solicitor General has apparently heeded the words of Professor Wilson, since C-84 establishes the punishment for premeditated murder as life imprisonment with a minimum of 25 years incarceration as the answer to the protection of society from those who would commit premeditated murder.
If I may, Mr. Speaker, I should like to quote Mr. William F. Phipps, Chairman of the Penal Reform Task Force of the United Church of Canada who states:
We submit that the very extensive prison sentences will put even greater pressure on the penal system. The legislation seems to eliminate most of the current incentives, and when the incentives are lost, the pressure inside the institutions will be considerable.
These terms will also create a different class of prisoner, who will be living in a different "head space" from other inmates. Therefore, we would predict a negative impact on other inmates as they see their colleagues having no chance for parole. Some well informed people are predicting that these kinds of sentences will increase violence within the penitentiary system. A more isolated and dangerous "subculture" will surely develop.
Many of the programs within our prison institutions will be irrelevant because they are geared to inmates who are getting out of the institution. There seems to be no accompanying legislation regarding rehabilitation for such long term prisoners.
There will be an increase in prison population and therefore increased human pressures as well as increased cost.
He made a very interesting comment which struck me as something that I should certainly look into when he stated:
What happens to the inmate when he gets out of prison after serving 25 years? Most sociological data in this regard would say that the person would be more dangerous coming out than going in.
These are not my comments but those of William F. Phipps, Chairman of the Penal Reform Task Force of the United Church of Canada. I must say it is a rather chilling prospect to find that, according to his group, we are creating a dangerous situation within our penitentiaries and throughout our penal system if we adopt the provisions of Bill C-84 as they have been brought before the House. I think hon. members would agree that whichever way we vote on this, the object of the legislation is to not create more problems than we already have.
Mr. Speaker, I was going to quote further remarks made by Mr. Phipps but I think that is really the sum and substance of his remarks. I think the dilemma that we as members face in voting on C-84 is that we are told on the one hand by experts that life imprisonment should deter murders that are not crimes of passion. We are told again that by incarcerating a premeditated murderer we have removed him from our society therefore he is no longer a danger. On the other hand, Professor Van den Haag states that you run into an additional risk if you fail to execute the convicted murderer. In that case, since executions have had an additional deterrent effect, you have failed to spare the lives of a number of future victims. Mr. Van den Haag also states that between the two risks, first, of failing to impose the death penalty because it does not have an additional deterrent effect and thus by failing to execute the convicted murderer failing to spare the lives of future victims, he would much rather execute the convicted murderer than risk the lives of innocent people who could have been saved.
Mr. William F. Phipps, the Chairman of the Penal Reform Task Force of the United Church of Canada,
although not in favour of capital punishment, has clearly stated there is a disadvantage to long prison terms and that the pressure inside the institutions will be considerable. He predicts there will be additional violence. It would be fair to say that not only is there no concurrence regarding the deterrence of murder by the establishment of capital punishment, but that there are also varied views regarding whether life imprisonment or the 25 year sentence will protect our society or merely lead to acts of further violence by the establishment of long prison sentences. This, Mr. Speaker, is the quandary in which I find myself; the dilemma the government has to face and the decision that we, the members of the House of Commons must make and there is no clear evidence on either side.
Mr. Speaker, our system of criminal justice is based not only on deterrence but also on fairness. A person who has committed a crime, I believe, must be punished in proportion to the seriousness of the crime. When you kill a man or a woman with premeditation you do something which is irrevocable to the victim; his or her life is lost forever. The society which does not deal swiftly and justly with premeditated murder detracts from human dignity and in fact argues against the sacredness of life.
One paradox, Mr. Speaker, that I do not believe has been raised during this debate is why, in one of the most affluent countries in the world, during a time of almost undreamed of prosperity-undreamed of by our forefathers-are we experiencing a rapid rise in crimes of all types, including crimes of violence? In a society in which there is no class distinction, where anyone can rise to the potential of his or her own abilities, why should crime be increasing? Throughout the ages, the oppressed, the landless, poorly educated, those who have no material goods have traditionally taken to a life of crime because they could not obtain by honest pursuits what they could obtain by crime. Is this the case in Canada today? Are our children deprived of education? Are there oppressed people in our land? Is our society so stratified the people cannot succeed by ability? Surely, the answer is no.
[DOT] (U40)
Why has crime in Canada increased? I am sure there are many components to the answer. Could one component be that our society has turned the penal system and Criminal Code into an inconvenience rather than a deterrent. Should we not consider this? It is not our object, surely, to make the punishment for crime a mere inconvenience, which will leave the criminal free to pursue his course when he returns to society because we have not put road blocks in his way. I am no authority in this field. I merely bring to the attention of the House one of the causes for the breakdown of law and order in society.
In my opening remarks I agreed with the Solicitor General (Mr. Allmand), that the first priority of any member of parliament when dealing with criminal law is the protection of the public. Since experts have expressed grave doubts about life sentences, I must vote against Bill C-84. As an idealist I regret that our society is in many ways barbaric and cruel, as evidenced by the murders taking place in society. As a pragmatic legislator I abhor the taking of life. Nevertheless, the penalty must fit the crime. The Canadian people must feel that the legal system does not condone premeditated murder.

June 10, 1976


Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, a philosopher rightly showed that the more education gives a man liberty in his judgment, the more complex and shaded every issue appears to him. He sees the valid reasons both for and against, and becomes all the more incapable of taking sides. Obviously, this is a position that many members of parliament find themselves in on the question of capital punishment. Unfortunately for the politician, while he may philosophize with the philosopher, he must take matters one step forward, to decision and action. For many months and years now I have maintained the philosopher's position without coming to a full and real decision. However, having been forced to make a decision, it is my intention today not to outline both sides of the issue, both of which I have sympathy for, but rather to rationalize the side of the decision I have taken.
First, most of us have our own visions of what Utopia our society should hopefully evolve toward; then we rationalize and legislate toward such a better lifestyle for mankind. In the Utopia, there is obviously no requirement for capital punishment, because man becomes a self-actuated, self-responsible individual, maximizing his individual capacities in a creative and productive way born of respect for himself and for the individual rights of others around him. Such a society would require fewer externally imposed laws by government, because enlightened reason would have replaced force and irrational violence. In view of the affluence of our society, virtually total literacy, a population which has, on average, more than 12 years of formal education, securely and firmly based churches and our democratic government, one might expect our society to draw close to the reality of such Utopian objectives. But the reality of the situation finds us straying far, perhaps even regressing, thereby necessitating an agonizing and pragmatic reassessment.
The question of retention or abolition needs to be considered in a common sense way fitting the time in which we find ourselves, a time, hopefully, leading to man's upward ascent. As we move through time and space there will be stages in social evolution when punitive factors need to be imposed; at other times of greater order and enlightenment punitive factors can be moderated or even eliminated. While I prefer to support an upward or progressive evolutionary movement, in order to uphold the fuller, long-term interest and approach Utopia sooner I must accept that at times it will be necessary to recommend backward, punitive, even regressive measures.
When a democratic society attempts to move beyond the commonality of its moral ethics at a pace too fast for the overwhelming majority, such a democracy or government deserves its own inevitable self-destruction. Therefore it is necessary, in my opinion, to take into account the contemporary moral ethics of our society. It does not take an oracle for politicians, who are moulding our laws, to recognize that the basic moral ethic of today's society is that the most precious value is human life and the safeguarding of the free continuation of such life. If one person takes the life of another without a just cause, and the just cause is commonly defined as approval by the state, as in war; and if these two lives are weighed equally before the court, the death sentence is inevitable for the murderer.
Capital Punishment
A regulation against capital punishment would necessarily value the life of the murderer more than the life of the victim, since the life of the murderer would become untouchable. This, in my view, does not conform with the aspirations of justice maintained by Canadian society. Hence, capital punishment should remain as a possibility, no matter how rarely used, in order to further safeguard our lives and preserve the ethical equality before the law of all human beings. The victims of brutal murders had a right to life. The crime of murder is equally on the hands of the state as it is on the hands of the murderer himself. An individual living in a non-state or a state of anarchy carries his own responsibility for his personal protection and security. In an organized state he subjugates and passes his right of self-determined security by any means, including murder, to the state. In transferring this authority the individual expects to gain from that society the guarantee of his right to life, personal safety and security.
The state by allowing, for whatever reason, the murder of the individual has become itself a party to the murder and thereby has an obligation, not only to the victim of murder but to those other individuals who remain in society, to demonstrate the equity of the value of life to the state by providing that the value of the life of the victum is no less than the value of the life of the murderer. Society owes not only the victim but other members of society who have abrogated their rights of self-determined security to the state a demonstrated expression of equity in the form of capital punishment. That the state has the right to take life is necessarily obvious in that, in order to defend the sovereignty of its law, a state must maintain the right to defend its territory and laws from an aggressor. If a state does not maintain the right to kill in a defensive war, the law and thereby the state itself has no force, authority, or security. If a state maintains, as it must, the right to take life, particularly in face of an external threat to its sovereignty, then it too has an obligation and a right to take life internally when the right to life has been violated within the state.
When the state or its individual components, basic security or right to life or law are violated, the murder of an individual component of the state is in fact murder of the state itself. The killing of a murderer by the state is not revenge, it is rather self-preservation and the ultimate statement of intent to guarantee, as far as possible, the security of both the individual component parts, the people of the state and the state itself. The strongest instinct that man is born with is the instinct of self-preservation which, in turn, formulates his understanding of his most basic right and that is his right to life.
If the state refuses to uphold his most basic right with the ultimate penalty for the ultimate crime, why should the individual within the state continue to abrogate his right of self-determined protection to the state? If the state will not protect his right to life, does the individual regain by default the right of self-determined protection? Will the policeman or the prison guard or the individual not take this law then back into his own hands?
Killing is a natural part of the balance of the environment. Murder, on the other hand, is offensive to the environment. Murder is wanton, wasteful killing that upsets

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the social balance of the environment. One of the most basic reasons for man collectivizing to form a state is to ensure his own personal security in a balanced, lawful, and orderly society. Murder upsets the social environmental balance. The killing of a murderer stabilizes and re-establishes social balance and order within the environment of the society.
The acceptance and adherence to law is a matter of a broad and general public perception. Some enlightened people obey the law because they perceive the law to be right and just and because they know that because they live in a democracy, they have the opportunity for direct participation in the formation and changing of these same laws. However, the majority seem rather to obey the laws that they perceive; that should they break the law, justice will be certain and swift. I am more certain to be caught, more quickly caught and convicted for over-parking at the airport than caught and convicted for premeditated murder.
Unfortunately, the broad perception of law and order in today's society is that justice is unsure, uncertain and even improbable. This negative perception is enhanced when governments are either unwilling or unable to uphold and enforce their own self-made laws, or when the law makers themselves, even in a minority, are perceived to be dishonest and corrupt. Unfortunately, this negative perception is the perception that abounds in Canada today.
Through the focus of this debate, the problem is further compounded in that the broad perception in the minds of Canadians is that this vote on capital punishment is a symbol of the intent of the government to re-establish the upholding of law and order. If the retentionists win the battle by defeating this abolitionist bill, the abolitionists still win the war because the limitations of the existing act then remain in force, and while the government of the day remains temporarily in power it will, in all likelihood, continue its abolitionist stance through the commutation provisions still available to the Prime Minister (Mr. Trudeau) and his cabinet. The retentionists will, however, have some solace knowing that they have raised the level of perception of the intent of the government to uphold the existing laws and order in Canadian society.
Not only must the question of the state moral ethic of the nation attempt to be determined, but also the church moral ethic requires examination. This is a considerably more difficult position to ascertain because of contradictions between and within the various Christian denominations.
The Pentecostal assemblies of Canada quote, amongst other things, the Bible, Numbers 35, verse 33, and verse 31 which read:
Moreover ye shall take no satisfaction for the life of a murderer, which is guilty of death: but he shall be surely put to death.
They also quote Genesis 9, verse 6 and Romans 13. Ephesians 4, verses 31 and 32 and Matthew 5, verses 38 and 39 might well be cited by those on the other side of the question, the United Church of Canada which comes out clearly for abolition. They cite Matthew 5, verses 38 and 39 which read:
Ye have heard that it hath been said, An eye for an eye, and a tooth for a tooth: But I say unto you, That ye resist not evil: but whosoever shall smite thee on thy right cheek, turn to him the other also.

They may also quote Exodus 20, verse 13:
Thou shalt not kill.
I could list other examples.
In the face of such contradictions by the various church establishments, the individual member of parliament is, even on the moral question presented with both positions, left personally to make his judgment as to the broad consensus of the Christian Church.
In the research and consultation that I was able to undertake, it seemed clear to me that while the establishments and hierarchy of some church organizations speak strongly and clearly in favour of abolition, an interdenominational broad poll from coast to coast would show that Christians in general are in favour of retention of capital punishment and, taken as a group, would exceed the percentage reported by the various polls in the nation's news media. While I cannot fully substantiate this claim, I doubt that there are many neighbourhood church leaders who would refute this probability.
Abolitionists tend to centre their case around the question of deterrents and varying forms of empirical statistical analysis. Between the years of 1970 to 1974, during which time Canada was in a situation of de facto abolition, Statistics Canada provides the murder statistics as printed in the text I speak from today. While from these statistics I could claim that the murder rate had increased 25.9 per cent across Canada and claim that the reason for the increase was because the death penalty was in fact not invoked during this period, I reject that claim in the same way that I reject the claim of the abolitionists who will produce alternative sets of figures and interpretations to make their case. In my opinion, all these statistics indicate is that the murder rate is clearly up but the reason for the increase in the murder rate is not solely due to the effectual abolition of capital punishment, as currently practiced, but is rather only one factor in the increase in murder rate; the actual causes being the sum total of the many variants relating to the lifestyle, economics, morality and values prevalent in our society during any given period.
Similarly, comparing murder statistics in abolition countries and non-abolition countries of wide cultural and value differentials lacks considerable credibility or validity. Comparisons of different regions to ascertain the deterrent value of capital punishment must reckon with such factors as the homogeneity of the society and its traditions, and whether these have been lawless or law-abiding. Even regions within a country indicate variations. It is not surprising, therefore, to see that in the Northwest Territories the increase between 1970 to 1974 was 14 per cent, while in British Columbia the increase was 47 per cent. New England also, as another example, as might be expected, has had a low murder rate over the centuries. Rising racial animosity in Boston and its suburbs seems likely to change this tradition as it has drastically altered the social climate of Philadelphia and San Francisco.
I make these points, not to make a case for the retentionists but, rather, to question the cornerstones of the abolitionist argument. I suggest that the bric-a-brac of the statistical by-play game has little real value and is invalid, or at the least misleading and inconclusive.
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Abolitionists often attempt to discredit retentionists by claiming that they are emotional and non-objective. I suggest that more often the opposite is true. If we were to shun emotional response and look for objectivity and reason, the argument might well follow in this manner: living on a small and delicately balanced life support system, mankind, through his unbridled consumption and over-population has embarked on the irreversible selfdestruction of his environment; the obvious end to this process is a lawless and chaotic struggle for depleting life support systems. Murder statistics show that where the population is extremely high, with extreme affluence at one end and extreme poverty at the other, the incidence of lawlessness, including murder, is also extremely high and increases rapidly. In order to restore a balance within the life support structure, society requires discipline, law and order and balance. If we could be totally objective and emotional, logic would accept the elimination of murderers from that society.
Those who argue against deterrence as being a factor in the prevention of murder seem, somehow, to categorize murderers as some sort of non-persons. We have become so preoccupied with distorted sensationalism in our thinking about criminals that we have almost succeeded in persuading ourselves that all criminals are radically different from other people; that they are utterly indifferent to rewards and incentives, and that they are capable only of response to fleeting impulses or passionately uncontrollable forces from within. As police superintendent Tom Flanagan said in an interview:
Don't believe for a moment that they do not prize their lives as much as you and I. They have families like you. They have jobs, albeit illegal ones. They enjoy living and put a high value on their lives .. . Anyone who thinks criminals do not weigh the possibilities of getting caught and do not understand that they could be executed is talking absolute balderdash. Every sane person thinks about the consequences of his actions. Some of these people are brilliant strategists and there isn't any way you can be that if you don't consider consequences and accept the risks involved.
Some abolitionists claim that no one in his right mind would purposely plan to kill another human being. There is an implication that all murderers must be depraved or insane. I maintain that in many cases not only is a murderer perfectly sane and rational, but also that he may well be highly intelligent. In such cases it is not a matter of sanity but, rather, a matter of moral values. If a murderer is sane and rational, he is also capable of considering consequences and of accepting the risks involved. In the case of murders of this type, capital punishment could well be one deterrent factor which would convince such a person not to commit murder.
Assuming the rationality of the criminal and his adherence to a set of values different from that held by "normal" persons in our society, the alternative to capital punishment is limited to some form of brainwashing or life imprisonment. Are the abolitionists suggesting total life imprisonment, or some form of mind alteration along the lines of the "Clockwork Orange" solution? Or, if the deterrent of capital punishment is removed, do abolitionists support the alternative of maintaining prisoners who pass their lives in drug-induced docility in root-cellar prisons?
Another favourite and typical statement made by abolitionists is this, "We must be very clear in our thinking and
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our motives must be objective and unemotional." Then, in almost the same breath, they quote the line about Madame La Farge taking her knitting to the guillotine. Or else they hurry to this description of a hanging and its aftermath:
Two wardens would then cut the corpse down, lay it out on the table in the pit for the coroner to tuck the tongue back into the mouth, plug all orifices with cotton batten and then, while we stood around the body, proceed with the inquest.
It is interesting to note how on one hand an abolitionist will condemn emotionalism, while on the other using it for his own purposes. Mr. Speaker, murder is emotional and it is impossible to consider the subject without emotion. As a consequence, it is not my intention to discredit abolitionists who use this emotional approach. At the same time, I would not expect them to put down retentionists who use similar emotionalism to express the retentionist point of view. The question remains: What about the victim found in a bush area off the parkway who had been bludgeoned and stabbed several times with a screwdriver, or the two little girls who were raped and then strangled with their own blue jeans?
Those who hope that alternatives to capital punishment might have been found and presented to the House must be dismally disappointed in Bill C-84. There is nothing in this legislation to indicate that prisons will be changed so as to ensure that they are more than merely warehouses for convicts. There is no indication that the social and economic costs of locking people up for long periods have been considered. There is no indication that the government has a clear conception of the objectives it wishes to achieve in administering punishment by incarceration.
How can an abolitionist, who condemns capital punishment on the grounds that it is nothing more than revenge and an expression of the retributive urge support, proposed sentences of 25 years mandatory for first-degree murder, and ten years for second-degree murder? These proposals guarantee a prison system populated by men and women without hope. There is no evidence to support the notion that spending ten years in prison guarantees that a woman who shot her husband will emerge a better and happier person for that decadent experience.
If the abolitionists were truly humanitarian, they would call for indefinite sentences, recognizing that one man's rehabilitation might well take place in one year and that another's might never occur in a hundred years. They would call for punishment to fit the crime and the criminal, rather than a process of fitting the crime and the criminal to the punishment. They would recognize that one man's punishment might well be another man's pleasure, and vice versa. They would urge that those with maximum potential for rehabilitation should be identified and the full rehabilitative capacity of our society brought into effect; that justice be tempered with reason, emotion, mercy and love. The 25-year provision is arbitrary, illogical and self-defeating and I oppose it firmly in favour of the rehabilitative principles I have just enunciated.
In a complicated and diversified society such as ours, the 25-year provision will have little more effect than to restrict the parameters of justice by limiting the flexibility now given to judges to make allowance for the multiplicity of variants in the nature and individuality of the crime and the criminal. Our system requires a broad and full

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range of options for punishment and rehabilitation-from pardon to parole, to prison, to solitary confinement, to capital punishment.
Like many other MPs, I questioned constituents regarding their views on the retention or abolition of capital punishment. While earlier questionnaires to the constituency elicited a return of approximately 8 per cent, the results of my last questionnaire showed that of 48,300 sent out, 7,885 were returned, for a percentage of 16.3. The tabulation indicated that 95.1 per cent of those who returned the questionnaire wanted capital punishment retained. Certainly, the value of such polls is not absolute. But whether the result showed 85 per cent or 98 per cent, the fact remains that it is a clear indicator of the broad, general feeling of my constituents and, in my opinion, of Canadians in general.
Like other members of parliament, I believe polls are only one of the factors which lead members to a decision on this subject. While I certainly did not agree with all the statements made in the hundreds of letters, telephone calls, conversations, interviews and public meetings, I might put on record a number of typical responses from constituents. Some thought there should be a national referendum and that the government should be bound by its results. Others pointed out that it cost between $10,000 and $15,000 a year to keep a prisoner in jail-money which might well be used to rehabilitate prisoners with a greater potential for return to the community.
Others say that we should strike a bold new step and bring back the noose; that until some better deterrent comes along we must retain the death penalty; that punishment must be swift and certain; that capital punishment is a deterrent. It is said there is a fundamentalist revival that recognizes revenge and retribution as valid motives for capital punishment; that we should vote secretly to avoid party pressure; that 25 years is a slow death; that capital punishment is justifiable homicide; that murder is an act of free will and the perpetrator must and should be held accountable with his life.
Others liken capital punishment to animal management and say that an animal that must be destroyed is destroyed without animosity or emotion but, rather, with cold, rational management. It is said that protection of the public is the most important consideration. Some ask, would the subject of capital punishment even have been raised if existing laws were enforced? Others say that responsible government is outmoded due to massive government intervention, that therefore there is confusion, and that consequently members of parliament should vote on a representative basis. Some feel the abolitionists should tell us how they will protect us. Still others claim that abolition has proved unsuccessful and they are tired of permissiveness, that now is the time to try severity. Some say that to propose the abolition of capital punishment for treason is treasonable; that we should not let the minority point of view of abolitionist members of parliament repress the will of the majority of Canadians. And so on and so forth, Mr. Speaker.
I could go on listing this typical kind of response that comes directly to all of us from our constituents. While I

certainly do not endorse all of the sentiments expressed by my constituents in letters to me, the mood of the country is frightening, yet clearly expressed. In the final analysis, the government must reflect, at least to some degree, the tenor of the times, however much this distorts the priorities of reason. After all, Mr. Speaker, democracy can prevail only if the law reflects the will and tolerance of the people. It does seem clear from any broadly based assessment of public opinion that the tolerance of the people for a humane and, in the short run, somewhat riskier penal system is being strained to the point of breaking.
In casting my vote for retention I do so with considerable regret. The responsibility of a judge is heavy when he finds a criminal guilty of premeditated murder. But how much heavier is the weight and pressure of responsibility on a member of parliament whose vote is cast for legislation that will put a man to death?
As I cast such a vote for retention, I feel regret and sorrow both for the criminal and his family. I feel anger at the failure of the institutions of our society and the inadequacy of my own efforts within these institutions. I feel anger that the schools, after 14 years of education, have been unable to teach the young people of our community self-respect for themselves, let alone self-respect for others in the community. I feel concerned that the church that has preached loud through the centuries has been unable to achieve its objective. I feel concerned and disappointed that the home that is supposed to provide the base of security and acceptance for the individual has, instead, in too many cases, rejected the individual; and with the community rejecting the individual, resulting in criminality, that we then allow that condition to continue.
It is with great regret and responsibility, Mr. Speaker, that I shall cast my vote thus; and it is with a pledge to work hard to improve our society, to move it forward so that perhaps another day another time will come when I, along with others in the House of Commons, will find that the time has come to vote for abolition.


Mr. William Skoreyko (Edmonton East):: Mr. Speaker, I feel it is regrettable that members of parliament should be put in the position where this very serious matter is being debated once again. I feel this way because I think the responsibility for this must fall on the shoulders of the government. If the existing law had been upheld, as everyone in Canada expected it to be, we would not be discussing this bill in parliament today. When this bill comes to a vote, although I should not be prejudging the outcome, if it is defeated, then having spent many weeks debating this very serious issue we will again find ourselves in the position of having to live with the existing law and wondering whether the government is in fact going to obey it.
The second reason I am on my feet this afternoon is that I want to restate some of the views I hold about this legislation and to put forward a view that I think is held by the majority of my constituents. We are discussing Bill C-84 which seeks to amend the existing legislation, which provides that a murderer can be sentenced to death for the killing of a policeman or a jail guard and that all other cases of murder are regarded as second-degree murder. I say again that if the government had fulfilled its responsibility to the people of Canada, we would not be discussing this bill today.
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The points I wish particularly to discuss this afternoon have to do with the arguments that have been presented on both sides of this issue; the arguments presented by the abolitionists from various articles available to us and to the public, and the arguments presented by the retention-ists. The abolitionists advance the argument that the death penalty is not an effective deterrent to prevent murder. The second point they make is that the imposition of such a penalty is contrary to all concepts of Christianity. Their third argument is that the hanging of a murderer is nothing more than an instrument of revenge. Their fourth argument is that all forms of capital punishment are objectionable and repulsive, and that the alternative to capital punishment is life imprisonment and a rehabilitative program.
To take the first argument of the abolitionists, that the death penalty is not an effective deterrent in the prevention of murder, I suggest that the deterrent effect of a certain punishment has two aspects: deterrence as it applies to the convicted prisoner, and deterrence as it applies to others who read about or otherwise learn of the imposition of such a punishment on a prisoner convicted by the courts. I suggest that such a penalty is the only deterrent that will guarantee that a murderer will not commit a murder a second time. Life imprisonment is certainly an assurance that for a given period a second murder will not be committed, but with the government doing some of the strange things it has done in the past, that is not much of an assurance.
Life imprisonment does not mean that a convicted murderer will spend the remainder of his life in custody. On the contrary, Mr. Speaker, all it means is a lengthy term in a penitentiary. But let us suppose that life imprisonment really does mean life imprisonment and that it would be enforced as presently proposed in Bill C-84. There is still a danger, and no guarantee, that a lifer will not again commit murder in attempting to escape from prison. Surely there is ample precedent for this view, and the possibility of prison murder increases as the number of lifers in prison increases.
The second argument that the abolitionists put forward is that the imposition of such a penalty is contrary to all concepts of Christianity. It seems to me that there is a conflict here. It appears to me that those who would make such a statement have not read three particular passages in the Bible to which I might refer. The first is Exodus, chapter 21, verse 12 which states:
He that smiteth a man, so that he die, shall be surely put to death.
The second passage, Leviticus, chapter 24, verse 17, states:
And he that killeth any man shall surely be put to death.
The third passage, Deuteronomy, chapter 19, verses 11 and 12, states:
But if any man hate his neighbour, and lie in wait for him, and rise up against him, and smite him mortally that he die, and fleeth into one of these cities; then the elders, of his city shall send and fetch him thence, and deliver him into the hand of the avenger of blood, that he may die.
Surely the aforementioned passages are the wish of God, who is the divine ruler of the world, and anyone who does not want to abide by his ruling should not say that he
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believes in God, because if he does not want to abide by God's ruling how can he believe that God will save him from eternal suffering? Furthermore, as the Fifth Commandment says, "Thou shalt not kill". That tells you what not to do. The aforementioned Bible passages are warnings concerning what shall happen to anyone who kills a fellow citizen. It does not mean that they should get royal accommodation and royal service. Surely they should not receive the kind of treatment this government has been dispensing since the middle 1960s.
The third argument that is raised is that hanging a murderer is nothing more nor less than an instrument of revenge. I think the simple answer to that argument is that if the murderer has so little respect for the life of the victim, then it certainly does not appear to me that if society has no more respect for his life, that is revenge.
The fourth argument the abolitionists put forward in respect of capital punishment is that it is objectionable and repulsive. I must say that that statement is true. But, Mr. Speaker, so, also, are wars repulsive. Surely wars in the defence of one's country are not nearly as repulsive as wars fought to save political face, as has been the case in recent times where hundreds of thousands of "cream of the crop" young men have died to save the political image of politicians.
Yes, killing in any form is repulsive. It is as repulsive to take the life of a murderer as it is for a murderer to take the life of an innocent victim. But if that is the law of the land, then each one of us as an individual has the responsibility to abide by that law. So that is a valid point. Killing is repulsive. Killings by murderers are even more repulsive. In wartime, a Christian may kill an enemy in battle to prevent the enemy from killing other persons. Under the guise of self-defence, a Christian may kill an assailant who intends to kill another human being. Therefore, why may not a Christian government provide a law for the killing of a convicted murderer in order to protect its innocent citizens? I submit that killing of all kinds is repulsive, but capital punishment is not in the nature of revenge; it is, rather, a punishment justifiably prescribed by law, a punishment aimed to have effective deterrent results which I am thoroughly convinced it has.
As a retentionist, I believe that the repeal of capital punishment could unleash on society a greater number of criminals to murder innocent people, to rape, to maim, or to betray their country. I firmly believe that many the capital murder offenders are beyond the rehabilitative process. Surely not all, but many are beyond the rehabilitative process, and therefore the risk is too great. I believe that without the deterrence of capital punishment, the lifer would be much more violent toward policemen and authority, and there is a possibility that the people responsible in institutions would have to have their authority extended for the purpose of greater retaliation and this, reasonably, could lead to a greater upswing in violence and murder.
I suggest that 25 years in jail, as proposed by this bill, is less humane than the death sentence. Life imprisonment, particularly where there is little or no hope of parole, itself creates tension and anxiety. Custodial officers are forces to segregate or watch lifers most carefully. This places upon those officials an onerous and difficult responsibility, with a constant awareness of the danger to themselves.

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I have on my file letters from people who have suffered through having lost loved ones who are prepared at this point in time to take the law into their own hands unless the government takes very serious action in this regard. To the extent that this government has not obeyed its own law, there has been, to a degree, a breakdown in our moral values. How does a government expect the populous of a nation to respect the laws this parliament passes, when the government fails to obey them?
It is true that in many instances the death penalty is not a deterrent. A person who is mentally deficient cannot conceive of his own death. Capital offences are usually of an emotional, spur of the moment nature. They are acts which are not planned. That, again, suggests temporary insanity, and in most cases that kind of murderer will not hang. It has been suggested that juries, in the knowledge that a man may die, are less likely to convict. Therefore, the culprit often is acquitted, which makes a travesty of justice. I have more faith in the jury system of this country than I have in a minister of justice or a solicitor general who will commute a death sentence when there is not a recommendation of mercy from the jury.
In conclusion, I wish only to say that my concern is not mainly in respect of murders of passion, murders that are not planned-because they cannot be controlled. They will not be controlled by Bill C-84. They will not be banned unless we ban the association of human beings one with another. What I am concerned about is the premeditated murder, organized crime, the hitman, so-called, and the destitute who deliberately plans to commit a robbery or a felony, and does so. I think to them it is a deterrent, because they are indeed very astute people in the pursuit of their trade. If weaponry is part of that pursuit, then the penalty for the crime should be the ultimate penalty.
I think the proposals in Bill C-84 are inhumane. Recent surveys have indicated that lifers who have been interviewed would prefer the death penalty to a 25 year sentence without hope of parole. The rehabilitation process is expensive, slow, tedious and uncertain. There is an everlasting risk of recidivism. Some way that capital punishment is archaic. Well, so is murder. The only thing modern about murder is the modern weaponry used to mow down a policeman or a bank teller. On the basis of that brief statement, I intend to vote against Bill C-84.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I listened with great interest to the hon. member for Edmonton East (Mr. Skoreyko) and the members who spoke before him. They conveyed many of the sentiments that I wish to convey to this chamber. I am deeply concerned as I take the opportunity to participate in the debate this afternoon on Bill C-84. I do not propose to speak at great length on this legislation because, as I have said previously, many of my colleagues have already put forward many excellent arguments and any detailed remarks on my part would only prove repetitious on points that have already been made by these members.
However, I do wish to voice some of the sentiments and views of the constituents of Wetaskiwin on the extremely controversial issue of capital punishment. Nearly 90 per cent of the individuals who answered the recent question-
naire I sent out voted in favour of the reinstatement of the death penalty for all premeditated murders. Of the constituents who responded, 88.3 per cent said they wanted retention of capital punishment, 9 per cent favoured abolition of capital punishment, and 2.7 per cent agreed with the present law on the death penalty.
I found these results very interesting, particularly in light of a comparison between the current feeling and that of few years ago when we debated this issue. A poll of my constituency conducted in 1973 revealed that 74.3 per cent of the individuals who responded favoured reinstatement of capital punishment. Yet a large percentage-some 47 per cent-were willing to consider life imprisonment as a satisfactory substitute for capital punishment. Today, only 17.7 per cent believe that long prison terms would be an acceptable alternative to the death penalty.
Emotions in Canada are running extremely high because of the steady increase in violent crimes, in particular crimes in which the victims have been innocent, law-abiding citizens or law enforcement agents. Naturally, in view of the number of horrible murders and violent crimes committed recently in this country, the current major concern of all Canadians is the prevention and reduction of crime in order to protect our society. I believe that much of the strong feeling in my riding in favour of capital punishment stems from a concern over the lawlessness that individuals see everywhere today, and frustration over the fact that the law as it now stands has not been carried out by the present government.
I do not intend to involve myself in a discussion of the possible deterrent effects of the death penalty. Others have argued against the arguments of the abolitionists. The hon. member for Edmonton East recently put those arguments on the record. Rather, I would like to say a few words about the general scope of this bill. The government is presenting the citizens of Canada with an ill-formulated and, I believe, an unjust piece of legislation containing provisions on two aspects of conflicting principles which should more properly be dealt with in their own right.
The gist of the legislation is, first, to abolish capital punishment entirely in favour of lengthened imprisonment terms; second, to impose mandatory sentences of 25 years and 10 years to be served for first-degree and second-degree murder, respectively, without any consideration being given to the crime itself and the circumstances surrounding it. Little room is left for the exercise of judicial discretion. I think I am correct in saying that most retentionists would not advocate the death penalty for second-degree murder, say for a murder of passion resulting from a domestic dispute. The majority of these killings are unpremeditated, even accidental; the murderer would probably never again commit such a crime and therefore poses no threat to society or the safety of others.
While no one can condone the taking of life, for whatever reason, I believe that few people would maintain that a person who has no previous criminal record and who committed a crime of passion should be incarcerated for a minimum of 10 years. The punishment should be dependent upon both the individual's past behaviour and the circumstances surrounding the crime itself. To imprison a person who may contribute something of value to society and whose freedom constitutes no threat to the well-being
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of others seems both unfair to society in general and to the individual in particular.
I believe in the premise that if you put someone in prison, he can be rehabilitated. The same can be said of individuals who commit first-degree murder. Will a mandatory 25-year sentence really prove of concrete value? During the 25 years in prison, the prisoner constitutes a burden to the Canadian taxpayer. He is a potential escapee and poses a danger to other prisoners and prison officials. On the whole, I think that a blanket 25-year sentence is not the answer for all first-degree murders. Some individuals deserve harsher treatment, others could be treated more leniently. Again I reiterate that the punishment has to be suited to the crime.
It seems to me that there are, indeed, instances where the death penalty is warranted: for mass murders perpetrated by organized crime syndicates, for treason killings, political assassinations, ritual slayings, killings of policemen and law enforcement officers. Even for some cold, calculated murders planned for financial gain, the death penalty would not be unreasonable, dependent upon the circumstances involved in the crime. But there may well be mitigating circumstances in some first-degree murder cases, and these should be carefully examined before sentence is passed.
Let us consider, for example, a man who plans to slay his wife's lover, or who plots the murder of a drunken driver who has seriously injured or killed his child or spouse. This man would be extremely unlikely to ever kill again, and could doubtless contribute more to society outside the prison walls, after he has been punished, than by being incarcerated for 25 years. Certainly he must be punished, but the punishment must suit the crime.
The Canadian people are indeed concerned, with justification, about the recent rise in our crime rate. They want action, and this is something the present government has failed to give them thus far. Even though the law at present calls for the death penalty for murderers of policemen and prison officials, the cabinet has commuted every death sentence. Likewise, rehabilitation efforts on the government's part have proved minimal, at best. Once again, with the introduction of this legislation the government has failed the citizens of Canada and has failed to show leadership in this very important area.
We are faced with only one alternative: abolish capital punishment and enforce lengthened prison sentences, with no regard for the nature of the crime. Imposition of the death penalty and prison sentences should be discussed separately. They should not be part and parcel of the same piece of legislation. The circumstances surrounding each crime must be carefully examined before sentence is passed, be the sentence the death penalty or imprisonment.
However, the enforcement of harsher penalties after a crime has been committed cannot, alone, lead to a lower crime rate. More effective correctional and rehabilitation programs are essential for both juveniles and adults which will, as much as possible, ensure that a prisoner upon his release from prison will be fully rehabilitated and declared fit to join society again. The government must concentrate
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its efforts on providing valid, constructive rehabilitative programs in our prisons.
The entire peace and security package is supposedly designed to bring about a decrease in Canada's crime level. I fail to see how this legislation will prove effective in so doing, just as I fail to see how Bill C-83 will help in this area. Rather, I view this bill particularly as a thorn in the side of Canada's criminal law and jurisprudence system.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I am sure that capital punishment is a very difficult subject with which to deal. This has been amply demonstrated. There is the humanitarian standpoint and the standpoint of law and order in the state. A society without guidelines and ways and means of applying justice to those who would offend has nothing but anarchy and disorder. Justice must be meted out well and fairly to both the offender and the offended. Generally, in those cases the offender's peers sit as a jury and listen to all the evidence presented by both sides, and the judge sums up the case. The jury then carefully weighs the evidence to see that justice is done and that the judicial laws of this country are carried out. However, with this legislation I believe the government is trying to trade off capital punishment for long prison sentences to appease the people because of the long list of murders which have occurred since the government has failed to carry out any executions for the murder of prison guards or police officers since 1961. Let us look at the trend of murder from 1961 to the present time. We see that murders have doubled and that attempted murders have quadrupled. This is over a period of years when never have we given more to help social well-being in the community. Never have we spent more on housing, education and health. I am sure this is why the people of Canada have said they have had enough. They say that we have tried another plan and found it wanting. In my own constituency, people are overwhelmingly in favour of capital punishment. I feel that regardless of my own beliefs, I represent the thoughts of those people and in no way would I be responsible if I did not consider those wishes.
The carrying out of capital punishment should not be done by hanging. I think there are far more humane methods than hanging. A life can be taken in the quietness of a chamber with a minister or priest, prison officials and a judge present and giving the prisoner a period of time to make his peace. As an alternative, I could not be cruel enough, in any way, to sentence any man to 25 years in prison or a longer term if necessary-and that will be necessary because very few prisoners who receive a term of 25 years could be reformed or rehabilitated. All such a sentence can do is frighten or frustrate a man because of the long road ahead with nothing but hopelessness, walls and cells. Much better it would be to have the little white chamber and a quiet exit, than the Chinese water torture method of destroying a man's soul a little bit each day.
The minister states that cases would be reviewed in 15 years. At least all hope will not be taken away from prisoners. But 15 years is destructive in itself. A man going into prison at 35 years of age would be released at 50 years of age into a vastly different and rapidly moving world. Rehabilitation of this man would be beyond one's fondest dreams. Even if I was an abolitionist, there is no way I would have the heart or cruelty within myself to impose a

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prison sentence of this length with the hope of rehabilitation, knowing full-well that rehabilitation would be nearly impossible. If we take an active individual and sentence him to 25 years in prison, he will become a robot with no hope for the future.
I want to substantiate that statement with the statement of Dr. Boyd, who is the head of the institution for the criminally insane. Incidentally, Dr. Boyd was an abolitionist, but he now says that he is forced into taking the position that we must have capital punishment and he has retired entirely from his position of being an abolitionist. He states that it would be absolutely impossible to control or to help a fellow who is facing that long prison term, and that bit by bit we would not only destroy him, but we would also destroy any chances of rehabilitation. Further, it would frustrate the man and he could very well become an incorrigible prisoner who might lead prison riots or lead others into grabbing hostages. As I said before, never before in the history of prison reform have prisoners been treated as well as they have over the last ten years, and never before have there been so many guards taken hostage. We have seen that in the west, and we have seen it across Canada. So here we have, as reported, a man of Mr. Boyd's stature, someone intimately associated with the criminally insane, saying that this long sentence will completely destroy any chance of rehabilitation.
I remember well once seeing a fellow in prison clothes standing outside Kingston penitentiary. I went inside and told a guard that there was a man out there on the prison walk, and I was told that that fellow had been released three years ago but he did not want to go out; he was absolutely unable to face the world.
I ask, which is kindest, cruelly destroying a person day after day in a cell over a period of years, or quietly letting that person meet his maker after he has had a good opportunity to see his priest or preacher, to set himself right after the criminal acts he has perpetrated in this world and to ask forgiveness in eleventh hour repentance?
I have heard people quote the Scriptures. I think the Bible can be used to back any stand. I have here an article by John Palmer, published in the Orillia Journal. John Palmer is the son of a minister. He states that this humanitarian standpoint started in the nineteenth century. He says it is a good standpoint. He continues, and says that people are quoting the Bible to back their stand, and one quotation they are using is, "Thou shalt not kill." He goes on to say that it is now known to be correctly translated, "Thou shalt not murder." There is one quotation which covers murder and which I think is very relevant. When Christ was asked about taxes, he answered, "Render unto Caesar the things that are Caesar's and unto God the things that are God's." What Mr. Palmer was saying is that you have to run this world by law and order.
I wanted to point out that it is probably a failure of society and probably a failure of the church that there is not enough contact with families who need help. Perhaps a young man could be saved from a life of crime, or a young girl from a life of prostitution. On the whole, society has treated its citizens well, but over the past several years we have had many prison riots and anti-social behaviour in
(Mr. Rynard.]
the prisons although social workers and others try hard to improve the system. How many prisoners have been killed within prisons in the last few years? This government imposes long prison sentences and total confinement for psychopaths, which just means that more prisoners will be killed. It just means that we will have to employ more security guards and this should be a priority.
At the same time as we are doing this, however, we are closing hospitals and firing staff, which means that we do not properly provide for the sick and severely afflicted. Some of the sick and afflicted are really under a sentence of death because they are going to die of the disease from which they suffer. On the other hand, the bank robber who laid plans and carried a gun with him at the time of the act, and knew that he might either kill a policeman or be killed by one, has in effect accepted the possibility of death. If he killed one or two policemen, the possibility is, today, that he would be sentenced to 25 years behind prison walls. But, Mr. Speaker, this also destroys a man day after day.
Many years ago, when I was a medical student, we took clinics in the penitentiaries and observed that long prison sentences destroyed any chance of rehabilitation. Many prisoners told us that they would rather have been shot when robbing a bank than land in prison. To me, the ultimate cruelty is 25 years behind bars. With a short prison sentence there is a chance for reform. If a prisoner gets out within five years, I believe there is a good chance of keeping him away from crime-and particularly if he is crime-free in five years.
Psychiatrists, doctors and social workers have never been able to determine what goes on in a man's mind. I remember the famous "Red" Ryan who escaped from Kingston penitentiary in 1922. He had killed someone during a bank robbery and was sentenced to life imprisonment. After his escape he was recaptured and returned to the prison under guard. For some time he caused all kinds of trouble, and then was put in the "hole", on bread and water. He started a whole destructive process in the penitentiary, through chants. I remember being in the prison hospital one day treating some prisoners, and the chanting was so loud that we could not hear ourselves speak. All the prisoners, even the one we were treating, were chanting.
That is not an easy thing to handle. Eventually, Ryan began to reform and he became an orderly. He was good looking, bright and intelligent, with an IQ of, I believe, about 150. He worked in the library and then in the works department and became a model prisoner. He was a Roman Catholic and the priest declared that he was reformed and could be paroled. I remember that R. B. Bennett was prime minister at that time. After "Red" Ryan's parole he went out speaking to service clubs and to boys' clubs, telling them that crime did not pay. He was a real success story. In time, a series of murders were committed in the Toronto area where Ryan lived. He also had a cottage at Jackson's Point. At Stouffville, which is near Toronto, a man discovered that his garage was being robbed and tires taken. His dog had been shot, so he went out himself to stop the robbery, and he was shot. He left a wife and three children. Some months afterwards, "Red" Ryan was shot dead in the process of robbing a liquor store in Sarnia.
June 10, 1976

What I am trying to convey, Mr. Speaker, is that there is no way a psychiatrist or anybody else can look into the mind of man and say what he is going to do. Man has a computerized brain and we do not know what starts the computer or what stops it. That just has not been discovered, so there is no way that we can predict a man's future.
Then there was the O'Donnell case in Toronto. A young school teacher had been murdered, her skull crushed. She had also been raped. O'Donnell was picked up. He had already served a term in Kingston for the same thing.
May I call it one o'clock, Mr. Speaker?


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until two o'clock, at which time the House will resume routine proceedings.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43, relating to immigration appeal board procedures and departmental policy. Some months ago, an appeal board consisting of Rachel Tremblay, widow of former Liberal cabinet minister Rene Tremblay, Jean Rochon, a former Liberal MP, and Carmel Carriere, a former executive assistant to the then minister of transport, rejected the appeal of Czech ski champion Frantisek Charvat who had opposed the 1968 occupation of his country by the Soviet Union and consequently was harassed and jailed. In order to escape his country he used bribery and subterfuge and our appeal board used the astonishing rationale that because he had used deception to escape from Czechoslovakia any punishment he would incur there was deserved and he was, as was his countryman Jan Morcinek in another instance, ordered deported. I move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That this House instruct the Minister of Manpower and Immigration to restructure application and immigration appeal board procedures in order that refugees from oppressive regimes will in future be treated with more understanding and compassion.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions HOUSE OF COMMONS


PRESENCE IN GALLERY OF DR. JOSE CASAL, MINISTER OF DEVELOPMENT FOR VENEZUELA
Hon. Donald C. Jamieson (Minister of Industry, Trade and Commerce):: Mr. Speaker, I know that hon. members will wish to join me in extending a warm welcome to Canada of a very distinguished visitor, Dr. Jose Ignacio Casal, the Minister of Development for Venezuela.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Finance. In view of the sad news for Canadian consumers contained in today's announcement relating to the Consumer Price Index and noting that the minister stated on three or four occasions in his budget speech that the anti-inflation program had begun to take effect, I now ask the minister how he can reconcile this point of view in view of today's figures showing an alarming rise in consumer prices?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, the hon. member will have noticed as well in the budget statement that I referred to the fact that the reduction of beef prices in particular had been one of the bases for the reduction in the Consumer Price Index. Of course, one of the principal factors in the change in the month of May was an increase in that item. The two major elements of increases are two items not covered by the control program, namely farm prices and the budgetary policies of provincial governments. Unless the hon. member is suggesting that we should attempt to exercise control in those areas, I would have to express my regret that there has been the increase in the past month, but it seems to indicate more than ever that we will want the program to be effective in that part of the economy which is under controls.


Some hon. Members:: Hear, hear!


William Heward Grafftey: This is more than just an ordinary increase, Mr. Speaker. The minister's very credibility is on the line.


Some hon. Members:: Oh, oh!


William Heward Grafftey: The government has statutory authority to protect the Canadian consumer. Considering that today's news as published by the Consumer Price Index indicates that the government had been relatively successful in controlling wages and low income salaries, but not successful in controlling prices, something very serious especially for low income Canadian consumers, what immediate

June 10, 1976
Oral Questions
action can we expect on behalf of the beleaguered Canadian consumer from this government today or before the budget debate is over?


Donald Stovel Macdonald: Mr. Speaker, may I first draw to the attention of the hon. member the analysis of the figures as follows: Higher beef prices, up 12.4 per cent on average over the previous month, were the largest single contributing factor to the 1.5 per cent rise in the food index. As to the non-food price increase, increased prices for tobacco and alcoholic products which were mainly brought about by various provincial budgetary measures accounted for most of the 0.6 per cent rise in the index for all items excluding food. Unless the hon. member is advocating control of farm prices, which this government has chosen not to do, and unless he is advocating that provincial budgetary decisions should be subject to the control of the federal government, regrettably I feel there is nothing can be done about that kind of increase. It does indicate that greater support should be given to the controlled part of the economy.


William Heward Grafftey: The minister will not get off the hook with that kind of sophistry. Can he assure the House that the price increase is related to food before it left the farm gate? Is he completely unaware of the policy our party has proposed in connection with food prices?


Donald Stovel Macdonald: The price increases are, of course, related to the price of beef generally. With regard to salary and wage costs involved in the food processing and distribution industry, may I point out that a moment ago the hon. gentleman objected to the notion we should exercise control over wages and salaries; the fact of the matter is that at least with regard to the major packers these are subject to control under the anti-inflation program. With regard to the basic cost of livestock, it is not the policy of the government to control this as it affects the farm community. In that respect I think I would have the support, if not of the hon. gentleman, then at least of some of his colleagues.


ANTI-INFLATION BOARD NUMBER OF CASES AWAITING DECISION-GOVERNMENT ACTION TO REDUCE BACKLOG
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is addressed to the Minister of Finance with respect to the effectiveness of the Anti-Inflation Board. On April 30 he told the House that the majority of the 3,900 wage settlements awaiting ruling by the Board should be, and I quote, "cleared in the relatively near future". Since the AIB has reported that a ruling is still awaited on 3,000 wage settlements, can the hon. gentleman tell us what he meant by the phrase "relatively near future" and can he provide the House with a revised estimate of the date by which the backlog will be reduced to more manageable proportions?


Donald Stovel Macdonald: Many of the cases under consideration at that time have

been disposed of but naturally, in an ongoing program, cases are added from time to time. The necessity of scrutinizing individual cases with great care and of re-examining some of them-I have in mind, for example, the reexamination which was pressed upon us by the hon. member's colleague with regard to the situation in Thompson, Manitoba-naturally means that the Board must spend more time on individual cases and is therefore not able to get on as rapidly with the others.


REQUEST FOR ESTIMATE OF SIZE OF STAFF REQUIRED THIS YEAR
Lincoln MacCauley Alexander: My supplementary is based on the fact that the staff of the AIB now exceeds 850, which is more than double the figure of 398 for which provision was requested in the main estimates. Can the minister provide a revised estimate of the Board's staff requirements for the current fiscal year-an estimate which will bear a closer relationship to the actual number of personnel required to administer the program?


Donald Stovel Macdonald: It
seems to me the hon. gentleman is contradicting himself. The Board has a heavy volume of business before it. A few moments ago he was complaining because it has not dealt with all the cases on which decisions are pending. Now he is critical because the staff has grown, even though a large volume of work remains to be done.


Lincoln MacCauley Alexander: I asked a simple question. Can the minister give us some indication of the staff required to deal with these matters? Has he a new figure to give to the House?


Donald Stovel Macdonald: I do not think one can provide such a figure in precise terms, because I cannot tell which agreements will fall within the arithmetical guideline. The Board will have to respond to the pressures placed upon it as a result of collective bargaining settlements throughout the country.


FINANCE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is directed to the Minister of Finance. In view of the fact that the most recent consumer price index shows that the cost of home ownership rose by 14.5 per cent over last year and by .9 over the past month, and since home ownership is one of the few areas left completely uncontrolled by the anti-inflation program, can the minister inform the House what measures he intends to take to assure Canadians they will not continue to see land speculation and mortgage rates drive home ownership further and further beyond their reach?


Donald Stovel Macdonald: While it is true that some parts of the real estate sector of the economy are not subject to the control of the AntiInflation Board, insurance prices are now subject to con-
June 10, 1976

trol. Municipal taxation is not, nor indeed are rents. However, rents are subject to provincial rental control. In general terms, the government has proposed to deal with actual ownership charges as opposed to rental charges, of the kind such as the program that my colleague has set forth, so as to bring down interest rates for those in the lower range of income levels.


John R. Rodriguez: A supplementary question, Mr. Speaker. In view of the fact that not just lower income Canadians are finding that home ownership is beyond them but so are the middle income Canadians, in view of the fact that mortgage interest rates charged by the banks are completely uncontrolled, and since we were hoping that the minister would have included a measure in the budget respecting mortgage interest rates, is the minister contemplating, now or in the very near future, to establish some kind of controls or rollbacks of mortgage interest rates so that middle income Canadians can also afford a home?


Donald Stovel Macdonald: Mr. Speaker, a formal ceiling on interest rates would only make certain that less funds were put into mortgages for real estate purposes than is the case at present. My colleague the Minister of State for Urban Affairs has put forward, under the assisted home ownership plan, specific measures designed to bring down interest rates for those at the lower end of the income scale, the group within the community that has very high priority with us.


John R. Rodriguez: A final supplementary question, Mr. Speaker. While I am in some agreement with the minister in that the fixing of interest rates might result in less money being put into housing, would the minister consider what this party has always suggested, that legislation be implemented which would force the banks to set aside mortgage funds for those who would like to build their homes at reasonable rates of interest?


Donald Stovel Macdonald: Mr. Speaker, the rate of interest is the price of the money borrowed. Of course, if one starts setting interest levels which are below the rate of inflation in Canada, one can be certain that funds will not be coming forward from the many millions of Canadians who are depositors and investors. So in that sense an over-all ceiling would be counter productive in terms of having additional mortgage funds made available.


CONSUMER AFFAIRS
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I would like to put a question to the Minister of Consumer and Corporate Affairs. However, I think he is not in his seat. Perhaps the minister who replaces him or his parliamentary secretary could then answer my question.
As a matter of fact, this question relates to another question I asked him on May 11, concerning the increase in the price of sugar. Considering that companies also take advantage of the conversion to the metric system to reduce containers while retaining the price of old containers,
Oral Questions
thereby raising the price of sugar, can the minister tell the House what steps have been taken or what investigations have been made concerning the rise in the price of sugar?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I will take note of the hon. member's question and as soon as he returns, the minister will give an answer. However, if it is possible, I will answer the hon. member's question myself before the return of the minister.


AGRICULTURE
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a question that is supplementary for the Minister of Agriculture. In view of the fact that the president of Canada's largest retail chain has predicted that food prices in Canada this year could go as high as 10 per cent, and further went on to recommend the development of a national food policy to co-ordinate the interests of consumers, producers, processors and distributors, may I point out to the Minister of Agriculture that a similar recommendation was made by the special committee on food prices in 1972. May I ask the minister what steps the government is taking to bring in a co-ordinated food policy for Canada that would serve the best interests of Canadian producers and consumers?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, first of all I want to remind the hon. member that the country that has the cheapest food in the whole world is the United States of America. Call it what you want, food policy or not, with the distribution system and climatic conditions, food in Canada costs only one per cent more. I have not seen any great move in the United States to change over to a food policy in that country. So we are not doing all that bad in Canada, but if there is room for improvement we will do it. The food index after declining for four consecutive months rose one and one half per cent between April and May to account for nearly half of the over-all consumer price index. This index is 6.2 per cent higher than one year ago as compared to 10 per cent for all items, excluding food index. So, we must get the facts straight concerning what really has increased the market.


James Aloysius McGrath: Mr. Speaker, may I ask the minister a supplementary question and remind him of a statement made to the Retail Council of Canada by the vice-chairman of the Anti-Inflation Board in which she predicted that there would be a serious increase in the price of food in Canada in the months ahead. Can the minister tell us, in view of the prediction by Mrs. Plumptre and in view of the projection of the President of Dominion stores of Canada what policies he is proposing to his colleagues in cabinet to coordinate the food policies in Canada or are we to continue to suffer from the ad hoc policies of the minister which hurt both the consumer and the producer.

June 10, 1976
Oral Questions


Eugene Whelan: Mr. Speaker, the food producers in Canada are the envy of the world, not only the small countries but many of the large countries also. Food prices are virtually the same as they were in October. The all-items excluding food index rose some 5.2 per cent. What I am saying is that we must be realistic about this whole thing. The income of farmers actually went down last year. The hon. member quotes the head of a supermarket as a source of information. They share over 60 per cent of the money that the food consumers of this nation pay. Maybe this is a place where expenses should be curtailed. Perhaps he should be asking them more questions because we made the same prediction in our department that the vice-chairman of the Anti-Inflation Board made, that food prices would go up because the farmers are still getting less return than they were last October.


GOVERNMENT ADMINISTRATION
James Aloysius McGrath: Mr. Speaker, may I ask the Prime Minister a final supplementary in view of the fact that we cannot get an objective, rational response from the Minister of Agriculture.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


James Aloysius McGrath: May I ask the Prime Minister, who has the over-all responsibility for coordinating government activities, if he will undertake to determine what became of the Interdepartmental Committee which was supposed to have been set up by the Minister of Agriculture quite some time ago to make recommendations regarding a coordinated food policy for Canada.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I cannot agree with the premise of the question. On the contrary I think the Minister of Agriculture is giving very rational answers on these points. I am surprised that the hon. member seems to be disappointed with the position the minister adopts in'defence of the farmers.


INDUSTRY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the minister's exhortations on Monday to the Canadian Manufacturers Association that they should sell considerably more products to try to revive Canada's sagging trade balance and put it on the plus side of the ledger, and as the main reason our sales have fallen so badly in recent years has been a steady decline in the last four years of industrial productivity, I would ask the minister does he intend now at long last to

introduce productivity incentives to be paid in direct proportion to increases in industrial productivity so that we can lower costs and prices and thereby make our products more competitive to sell in the kind of increased volume the minister has requested.


Donald Campbell Jamieson: Mr. Speaker, as I said in my comments on the budget debate a couple of days ago, we are directing a great deal of our attention to the question of productivity. The summary the hon. member has mentioned might work for some sectors, specifically manufacturing and processing, but would not be effective in others. But, as I think the Minister of Finance also indicated earlier on, we are prepared to listen to and receive representations from business concerning how in fact such incentives can be applied. In other words, the principle is a very sound one but I am sure the hon. member will agree it is not just a simple matter that can be stated in a couple of moments, which is what he suggested it is.


George Harris Hees: As I listened very carefully to the minister's speech in the House and found nothing positive regarding the introduction of productivity incentives, and as I have been asking for the past two or three years about the introduction of just this kind of incentive, does the minister mean to tell the House that he and his predecessors have waited until now to ask businessmen for some suggestions as to how the kind of productivity incentives that I have been suggesting, and which businessmen all agree would make very good sense, could be put into operation?


Donald Campbell Jamieson: No, Mr. Speaker, we certainly have not waited until now. Futhermore, the hon. member is using the word "businessmen" as if it incorporated everybody in the country. I can assure him that there is a wide variation of opinion among businessmen as to the form which the incentives should take. If you adopt it purely for manufacturing and processing on the one hand, what do you do for those industries which are extremely valuable and important to the country but in which it is not as easy, indeed it may be almost impossible, to assess what the productivity gains are. It is that kind of issue which we are trying to resolve.


George Harris Hees: Let us see you start with industry and I will give you the other answers later.


ALLEGATION PLUTONIUM IN HANDS OF NON-GOVERNMENTAL AGENCIES-REQUEST FOR REFERENCE TO COMMITTEE OF NUCLEAR POLICY
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is for the Prime Minister.


An hon. Member:: Back to your seat, Pierre.


James Aloysius McGrath: Behave yourself because she is a lady.


Flora Isabel MacDonald: My question relates to the affidavits signed by the president of the Greenpeace Foundation that
June 10, 1976

he was offered an ounce of plutonium, indicating that the most lethal substance is in the hands of non-governmental agencies. Given that the Minister of Justice has called for an immediate check into the possible existence of a black-market operation dealing in plutonium, would the Prime Minister say what action the government will initiate to get to the root of this vital matter?


Pierre Elliott Trudeau: Well, the hon. lady is informing me that the Minister of Justice said he would inquire into this. I think this was a very speedy response from the Minister of Justice, and I support him wholeheartedly.


Flora Isabel MacDonald: I would think that on an issue of this magnitude the Prime Minister would be better informed.


Some hon. Members:: Oh, oh!


Flora Isabel MacDonald: Given the serious implications of this incident and the fact that the Minister of Justice did not spell out any pattern by which he would follow up such an inquiry, would the Prime Minister undertake to ask the government House leader to put down a motion to refer this matter to committee where it would be possible to call witnesses and to have a meaningful public hearing on the safety aspects of Canada's commitment to nuclear energy, both at home and abroad?


Pierre Elliott Trudeau: On the first part of the question, I must tell the hon. lady that I am not informed about all the things my ministers do. I can assure her that they do not jump to the telephone every time they have an important decision to make. This indicates that they are strong men and woman able to take their own initiatives.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I do not know how the hon. lady could really expect that I would be informed that some person somewhere is taking an affidavit that he has been offered an ounce of plutonium.


Flora Isabel MacDonald: It has been on the news for a day.


Pierre Elliott Trudeau: I am sorry; I do not listen to the news.


An hon. Member:: You don't listen to the people, either.


Pierre Elliott Trudeau: As I have explained to my backbenchers, that is why I do not have ulcers or insomnia.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: That is a free bit of medical advice which I address to the hon. lady.


Flora Isabel MacDonald: I don't have them either.


Pierre Elliott Trudeau: It is of course an extremely important topic and I hope that the opposition, on one of its days, will want to discuss this question.


Some hon. Members:: Oh, oh!


An hon. Member:: We have already done so.
Oral Questions


Mr. Clark:: Perhaps you missed that, too.


Flora Isabel MacDonald: Given the fact that the Prime Minister indicates that he has knowledge of ulcers, headaches or whatever else it might be, I wonder if he has any understanding of the implications of plutonium on the health of the people of this country.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I know that you cannot do much with plutonium unless you have a great deal of expertise and devices at your disposal. If the hon. lady has some plutonium or knows where to get some, I would ask her to inform the police.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: By its very nature this must be stolen property, and I suggest that the Greenpeace person report this to the police.


EXTERNAL AFFAIRS
Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, I want to put a question to the Secretary of State for External Affairs.
In view of the disastrous sanitary conditions prevailing now in the Comoro Islands and the visit to Canada of a delegation from that country, and the refusal by CIDA to respond to their request for immediate financial or at least medical assistance, can the minister tell the House whether other means are considered in cooperation with CUSO to help the Comoro Islands, especially considering the intention expressed by the Secretary of State for External Affairs to be more active in those countries of the Third World that are French-speaking?


Hon. Allan J. MacEachen (Secretary of State for External Affairs):: Mr. Speaker, the question of assistance has been drawn to my attention by a number of hon. members, including my parliamentary secretary and the hon. member for Saint-Denis, and I know the interest of the hon. member is added to theirs. I want to tell the hon. member and the House that at present I have these representations under consideration and will ascertain whether it is possible within the over-all strategy for international development, which has already been laid before the House by the government, to make any form of assistance available to this particular country.


REQUEST OF UNITED STATES BROADCASTERS AND GOVERNMENT FOR DELAY IN FOREIGN ADVERTISING TAX LEGISLATION-GOVERNMENT POSITION
Mr. Claude Wagner (Saint-Hyacinthe):: Mr. Speaker, my question is to the Secretary of State for External

June 10, 1976
Oral Questions
Affairs. Would the minister tell the House if he shares the opinion expressed by Senator Keith Davey, who described as a regrettable intrusion on the business before the Canadian parliament the move by U.S. Ambassador Thomas Enders and New York and Washington State broadcasters calling for a delay in the implementation of part of the government's foreign advertising tax legislation?


Allan Joseph MacEachen: Mr. Speaker, I should explain that I did pass on what Ambassador Enders regarded as a correct version of the opinion of the United States government on a particular matter which was before the Senate Standing Committee on Banking and Commerce. I believe that it was within normal practice for my department to act in this way, but at no time did we take the view that the proceedings on this bill, either through the House of Commons or through the Senate, should be either facilitated or held up because of representations made by the United States, as a look at the record of the proceedings of the bill would indicate.


Claude Wagner: In the light of the minister's remarks in Quebec City a few days ago calling for a permanent dialogue with the United States, is it the government's intention in this particular matter to have a dialogue and to listen to what the United States have to say on this subject?


Allan Joseph MacEachen: Yes, Mr. Speaker. We had discussion earlier in the year-in January, I believe-and it was at this particular early discussion between Canadian and American officials that the suggestion that possibly the passage of this particular bill might be delayed was raised. Further dialogue will be held on this subject, as on all other subjects in play between Canada and the United States, and I assure the hon. member that the degree and intensity of the dialogue between the two countries is very great and increasing very rapidly.


POSITION OF PRIME MINISTER ON ACTION OF UNITED STATES GOVERNMENT IN INFORMING SENATE OF POSITION ON FOREIGN ADVERTISING TAX LEGISLATION
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a supplementary question for the Prime Minister on the same issue. Yesterday morning at the request of the United States American ambassador, the United States government's summary of its position on Bill C-58 was tabled before the Senate banking committee in which that government expressed the view that the legislation should not proceed at this time and that the United States could achieve some other, more positive arrangement with the Canadian government. Does the Prime Minister accept this unwarranted intrusion of the American government on this Canadian legislative process?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker I have the impression that this was already dealt with by the Secretary of State for External Affairs, but beyond that I say to the hon. member, and perhaps to some of those behind me who have been applauding, that I wonder what

we would do if some Canadian interests were being jeop-pardized in the United States. I think we would probably make representations to them, and that is what they are doing to us. We do not have to follow their advice, but we certainly can hear what they have to say.


Some hon. Members:: Hear, hear!


Reginald Cyril Symes: I think that there is a difference between affected individuals making representations at the request of the Senate committee and a foreign government taking the initiative to table its position. Will the Prime Minister make it known to the United States ambassador that it is considered, if not unacceptable, at least irregular, for this kind of procedure to take place and that the government has every intention of passing Bill C-58 unamended in the Senate?


Pierre Elliott Trudeau: I do not think it would be proper to comment on the proceedings in the other House and to say what we would do in some hypothetical situation. However, as to the representations, I am assured they were made in a very proper fashion through the Department of External Affairs and the minister, and this is the way we proceed in Washington when we want the administration there to be informed of something which is of interest to Canada. We act through the State Department.


REQUEST FOR TABLING OF AGREEMENT WITH EUROPEAN ECONOMIC COMMUNITY-DISCUSSION OF ACCESS TO RESOURCES WITH PROVINCES
Mr. Jim Balfour (Regina East):: Mr. Speaker, my question is for the Secretary of State for External Affairs. In view of the announcement that Canada and EEC officials have reached agreement with respect to the terms of the so-called contractual link between the EEC and Canada, does the minister intend to table the terms of the agreement in parliament? If so, when, and if not, why not?


Allan Joseph MacEachen: Mr. Speaker, the agreement was initialled ad referendum on June 2 by officials of Canada and the community. The agreement is now before the community and the Canadian government, and when and if the agreement is concluded, I will obviously consider tabling it. I hope that the signature can take place at an early date, hopefully in Ottawa.


An hon. Member:: Unamended?


James Balfour: To what extent do the terms of the understanding arrived at provide access to Canadian resources by member countries of the EEC, and has the question of access to Canadian resources been discussed with the provincial governments?


Allan Joseph MacEachen: The question of access obviously has been the subject of discussion and interest in the course of these negotiations, but the framework agreement itself does not create any new rights or obligations with respect to access to supplies of raw materials or access to markets. That has been a position taken quite strongly and successfully by the Canadian government, that the agreement should not create any such undertakings.
June 10, 1976

However, in the future it might be that in specific projects questions of this kind can be discussed between Canada and the community, but the agreement itself does not do any such thing.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, I would like to direct my question to the Minister of Manpower and Immigration. Immigration figures released by his department today show an immigrant flow of some 187,000 for last year. The minister went to some lengths to explain that refugees were included in the sponsored, nominated or independent categories. Could he tell the House whether the 21,000 plus landings under ministerial order were dealt with in the same manner by his department?


Hon. Robert K. Andras (Minister of Manpower and Immigration):: I am sorry, Mr. Speaker. I did not follow the gist of the question. The order in council landings are always included in the totals. Apart from that, I am not sure what the hon. member is asking.


SUGGESTED INCREASE IN NUMBER OF IMMIGRANTS- GOVERNMENT POSITION
Arthur Jacob (Jake) Epp: The minister answered my question by saying that they are included in the 187,000. I take it that that is affirmative. I would like to ask a question of the Prime Minister. With reference to immigration, in his press conference on June 1 the Prime Minister indicated that we have a moral responsibility and that it is politically right for Canada and for the world to increase immigration. In view of the decline in Canada's immigration in the last year by some 14 per cent does the Prime Minister feel that flow is in keeping with Canada's present labour needs or in view of the statement he made at Habitat, does he feel that flow should be increased?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member refers to the rest of my statement he will see that I indicated that naturally any immigration- of which we always wanted more-would be acceptable in varying degrees depending on the economic conditions in Canada and depending on the rate at which we could absorb it. The hon. member knows that at this particular time we are making a particular effort to assist immigrants of Lebanese origin. At other periods in history we have made efforts to assist people from Chile, Hungary, Tibet, Uganda and so on. When there are special circumstances we make a special effort. Year in, year out Canada has been accepting immigrants and will continue to do so. We will do it at a rate which is compatible with the economic welfare of the immigrants themselves and, of course, Canadians.
Oral Questions POST OFFICE


REQUEST FOR ISSUANCE OF COMMEMORATIVE STAMP FOR MICHAEL LUCHKOVICH, FIRST UKRAINIAN MEMBER OF PARLIAMENT
William Skoreyko: Mr. Speaker, in the absence of the Postmaster General I should like to direct my question to the Prime Minister. In view of the fact that Ukrainian Canadians from across Canada will be assembling in Edmonton next Sunday, June 13 to dedicate a memorial to the first Ukrainian member of parliament, who represented the riding of Vegreville, Michael Luch-kovich-


Some hon. Members:: Hear, hear!


William Skoreyko: -who was elected in 1926 and served with distinction until 1935. Would the Prime Minister feel disposed to issuing a stamp in memory of this notable Canadian?


Pierre Elliott Trudeau: Mr. Speaker, the Postmaster General is always open to suggestions of this kind and I hope the hon. member will address himself to the Postmaster General. His parliamentary secretary is present and he is almost as able as the Postmaster General himself.


Some hon. Members:: Hear, hear!


Mr. Baker (Grenville-Carleton):: Don't insult him.


Pierre Elliott Trudeau: Able as he is, however, I am sure even he would not make that kind of commitment outright. He knows, as I do, that we receive hundreds of representations every year from people who would like to see a stamp in memory of a particular event. They all have to be put in perspective. Is that not right, Paul?


An hon. Member:: What did he say? No?


ANTI-INFLATION PROGRAM ALLEGATION GOVERNMENT CREATING EMERGENCY AS BASIS FOR ESTABLISHING PROGRAM
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I am sorry that I have to get into this multicultural discussion but I should like to ask the Prime Minister a question supplementary to the first one asked today. In light of the statistics issued today, is the Prime Minister considering requesting the Supreme Court to reconvene to hear additional argument as to the constitutionality of the antiinflation program-the argument being, of course, directed to the way in which the government, in collaboration with the Anti-Inflation Board, is engaged in creating the emergency which would justify its original formation?


Pierre Elliott Trudeau: Mr. Speaker, I take this occasion to inform the House of a very important piece of news. I will be making a speech this afternoon on the anti-inflation program and the budget-


Some hon. Members:: Hear, hear!

June 10, 1976
Oral Questions


Some hon. Members:: Where?


Pierre Elliott Trudeau: -In the House of Commons at around 3.45. I am not sure if we will have a quorum but if we do, I shall continue-


An hon. Member:: You mean you are going to do it in the House?


Pierre Elliott Trudeau: Therefore, I shall not be able to avail myself of the invitation of the hon. member to invite the Supreme Court to reopen the case. I will convey his request to the right hon. member for Prince Albert; perhaps he would want to contact the court.


An hon. Member:: Cheap.


ANTI-INFLATION BOARD ALLEGED BORROWING OF PERSONNEL FROM BANKS AND TRUST COMPANIES-REQUEST FOR REPORT
Elmer MacIntosh MacKay: Mr. Speaker, my question to the Minister of Finance is related to those asked by the hon. member for Hamilton West. On May 31, at page 13968 of Hansard the minister undertook to make inquiries into the practice of the Anti-Inflation Board approaching major banking and trust institutions to lend personnel to the AIB on the basis that the employers would be reimbursed for salaries paid to their personnel in their absence while working for the board. Can the minister now report to the House on this matter, can he outline the extent of this practice, the actual cost to the government and can he say whether the figure of 853 AIB employees as reported in today's Globe and Mail includes personnel who have been obtained on this basis?


Donald Stovel Macdonald: Mr. Speaker, I had an answer in my book for several days after the hon. gentleman asked the question. Perhaps I could dig it out from my office and send it to him. With respect to the number of AIB employees in this category I shall be glad to make that inquiry.


ALLEGED REFUSAL OF UNIONS TO LEND PERSONNEL TO BOARD-REQUEST FOR REPORT
Elmer MacIntosh MacKay: A supplementary question. Can the minister confirm that the AIB has also attempted to second personnel from the trade union movement and that this effort has been singularly unsuccessful? Can he tell the House why, if this is the case, the unions do not wish to participate? What is being done to change their attitude?


Donald Stovel Macdonald: Mr. Speaker, I think the views of the Canadian Labour Congress at least with respect to the program are well known. While we will be meeting with the Congress for the purpose of discussing broader economic questions, I am not sanguine at this stage that we will be able to persuade them to take a more positive approach to the fight against inflation in Canada.


FISHERIES
Mr. Albert Bechard (Bonaventure-Iles-de-la-Madeleine):: Mr. Speaker, my question is directed to the Minister of State (Fisheries).
In view of the critical state of fisheries in eastern Canada, especially around the Iles-de-la-Madeleine and Gaspe, owing to the scarcity of redfish,, a fact which could last three years leaving the population in very uncertain economic conditions, could the minister, as a result of his meetings and those of his officials with fishermen and producers, tell the House and distressed Canadians what he intends to do to relieve the hardships of those who really are in desperate straits?


Hon. Romeo LeBlanc (Minister of State (Fisheries)):: Mr. Speaker, without accepting entirely the pessimistic description of the hon. member, I recognize that there is a real problem caused by the scarcity of redfish in the Gulf of St. Lawrence and this is why we have asked that large trawlers withdraw from that area. To solve the problem we are also trying within the framework of the North Atlantic Council to reach an agreement which could allow an exchange of redfish for a certain quantity of capelin caught by Russia. I hope that this agreement which seems to be effective will be concluded and accepted by the international community. If so, it would help relieve the problem to which the hon. member referred. I must say however, that this year and next year there will be no magic solution to the problem under consideration.
[English}


DISCUSSIONS WITH UNITED STATES TO SETTLE BOUNDARIES
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, in the absence of the Secretary of State for External Affairs I should like to put my question to the right hon. Prime Minister. On the anniversary of a great political event which occurred 19 years ago today and which is soon to happen again-


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: -and in light of the announcement by this government that a 200 mile limit will be declared on January 1, 1977 while the United States government has stated it will declare a 200 mile limit effective March 1, 1977, can the Prime Minister tell the House what steps will be taken by this government to resolve the controversy between the United States and Canada over ownership of Georges Bank which is one of the most prolific fishing grounds off the east coast of Canada and which falls within the 200 mile limit of both Canada and the United States?


Roméo LeBlanc: Mr. Speaker, this matter is the subject of considerable discussions between the United States and Canada at the present time. In fact, I had occasion to discuss the question with the head of the United States delegation to ICNAF

June 10, 1976

last night and talks will be continuing. The problems are being identified. The fisheries aspect of it might be more subject to reciprocal arrangements. The boundary problem will be difficult for some time to come and may require intervention at a very high level.


CUSTOMS
Mr. Ray Hnatyshyrt (Saskatoon-Biggar):: Mr. Speaker, my question to the Minister of National Revenue follows on a question raised some time ago by my colleague from Regina East. In view of considerable interest in Saskatchewan in the continuance of customs services, with respect to which representations have been received by the Minister of Transport, among others, and since all members from Saskatchewan are interested in seeing this kind of service continued, can the minister now confirm that service will be provided for international flights to airports in Saskatchewan, particularly Regina and Saskatoon?


Hon. Jack Cullen (Minister of National Revenue):: Mr. Speaker, I understand that no scheduled international flights use, as their first port of arrival, Regina or Saskatoon. Probably between ten and 15 such flights a year occur in this particular area. Because of the inconvenience being caused to a comparatively small number of people, a team of officials, both from the Department of Transport and the customs branch, are looking at the matter to see if facilities can be fixed in such a way as to accommodate people who travel by charter.


SUPPLY AND SERVICES
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is for the Minister of Supply and Services. Since Mr. Stopforth has firmly denied reversing his position on the subject of financing the Orion project and made the statement that he reports directly to senior officials who, in turn, report to the minister, will the minister say if Mr. Stopforth in fact did report on this or other matters directly to him, the minister, or whether the statement the minister made about Mr. Stopforth was based on information received from other officials in his department?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I believe the statement I made in the House is quite clear. I personally checked some facts with this senior official of my department.
Oral Questions


GOVERNMENT ADMINISTRATION
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Prime Minister. I gave him notice of it. Can the Prime Minister tell the House exactly when he became aware that the financing agreement between Lockheed and the Department of National Defence was purely verbal; can he also tell the House when he was informed that the interest payment on the financial arrangement would be about $100 million?


Pierre Elliott Trudeau: Mr. Speaker, I had the file checked on this and am speaking from the knowledge conveyed to me by the file. I cannot claim to have a precise memory of what particular phrase was said at what particular time in the long sequence of events concerning the choice of an LRPA by the Canadian government. But, having checked the dates and, particularly, the statements made in the House by the Minister of National Defence, that he had become aware of this after his return from NATO in mid-December, I can only conclude that some time between December 15 and December 22 I became aware that the assurance that Lockheed could provide the bridge financing had been given verbally. It would be in that period when I became aware of that.
As for the second question, Mr. Speaker, as all the ministers involved have said repeatedly, they were aware some time in the fall and even before that, in the summer of 1975, of the difficulties of the Department of National Defence with financing the purchase of the long-range patrol aircraft. Indeed, we took a decision in the early fall, I believe, to increase the capital expenditures of DND in real terms by 12 per cent a year, in order to facilitate such purchases. So, we were aware of the cash flow difficulties with some precision toward the end of November, on November 27, when we realized we would have to do some borrowing-in other words, that there would have to be some bridge financing and that we would have to pay interest on it. At that time an approximate amount was established, but it was only'decided by Treasury Board in mid-December, on December 15, that $100 million-odd would be authorized for interest payments.


Allan Bruce McKinnon: Mr. Speaker, may I direct a supplementary question to the Prime Minister. I take it from his answer that he was aware that the verbal financing agreement had broken down on December 15. My question was, when did he first become aware that there was in existence only a verbal agreement between Lockheed and DND? I call the right hon. gentleman's attention to page 14107 of Hansard where he is reported to have said, when discussing the decision made on November 27:
.. . we were hoping that the LRPA bridge financing would be provided by Lockheed ...
Further, in the next column, quoting and approving what the Minister of National Defence had said, the Prime Minister is reported to have said:
... perhaps we acted imprudently, but we did so in good faith based on this verbal agreement.

June 10, 1976
Oral Questions
That answer left the impression that he knew then that there was a verbal agreement. Today I should like the Prime Minister to clarify if he knew on December 2 that the arrangement with Lockheed was purely verbal.


Pierre Elliott Trudeau: Mr. Speaker, I have just given the answer to that. The closest dates I have been able to ascertain would be between December 15 and December 22. I would have known then that the agreement we had from Lockheed was purely verbal. Before that, of course, the people who had received that agreement, presumably one or more people in the Department of National Defence, knew the nature of that agreement. But, from reading the answers of the Minister of National Defence himself, it is apparent that he indicated that he, himself, only knew the agreement was verbal when he returned from NATO in mid-December. I repeat, until then we knew there would have to be bridge financing. We had been assured that Lockheed could supply it. It is only when it came to saying, "O.K., to whom do we pay the $100 million-odd in interest" was it realized that Lockheed had only made a verbal agreement, had given some verbal commitment, and that there had been some misunderstanding. Those are the dates.


LOCKHEED CONTRACT-INQUIRY IF DEFENCE MINISTER GAVE CABINET ALL INFORMATION RELATIVE TO NEGOTIATIONS
Charles Joseph Clark: Mr. Speaker, may I direct a supplementary question to the Prime Minister. Is it the position of the Prime Minister that the cabinet received from the Minister of National Defence all of the information relative to any aspect of negotiations with Lockheed that was in the possession of the Minister of National Defence and that was germane to a decision to be taken by cabinet?


Pierre Elliott Trudeau: Mr. Speaker, the answer to that would be, yes, if the import of the question is to know whether the Department of National Defence had held back any information. I am certain that they held no information back from the cabinet. As I have just indicated in my answers and as has been repeated many times in the House, the assurances we had from Lockheed turned out not to be forthcoming. When we asked "why?", we then found that there was a misunderstanding and we could not refer to an item in writing because it was said that this understanding was purely oral, purely verbal. I just said, Mr. Speaker, that that, as far as I am concerned, was after mid-December. That is also what I understand the Minister of National Defence told the House.


INDUSTRY
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, I would like to put a question to the Minister of Industry, Trade and Commerce.

When the Canadian Shoe Manufacturers Association submitted its last brief, it requested the establishment of quotas for foreign countries exporting shoes as well as a guarantee that no new tariff concession be made. Could the minister tell us where the negotiations of his officials with exporting countries representatives stand in terms of obtaining export quotas and could he also give us some information about the tariff issue?


Donald Campbell Jamieson: Mr. Speaker, there were two elements in the suggestions made during my meeting with the Shoe Manufacturers Association. The first was that I would make representation to the Minister of National Revenue, with a view to speeding up unquiries and actions coming under the Anti-Dumping Act. I have already made those representations and am sure my colleague will deal with them expeditiously. The second point was a proposal or query as to whether shoes and footwear might be embraced in the responsibilities of the textile and clothing board and be monitored in the same way. That question is now being examined. In addition, meetings are continuing between officials and the industry as to other steps which may be taken.


PRESENCE IN GALLERY OF EXECUTIVE DIRECTOR OF UNITED NATIONS ENVIRONMENT PROGRAM, DR. M. K. TOLBA
Hon. Jean Marchand (Minister of the Environment):: Mr. Speaker, may I call to Your Honour's attention the presence in our gallery of a very distinguished guest, Dr. M.K. Tolba, executive director of the United Nations environment program, successor to Mr. Maurice Strong.


Mr. Murta:: Mr. Speaker, I rise on a point of order. On two separate occasions in the House, on April 29 and May 11, I directed questions to the Minister of Agriculture and to the Prime Minister with regard to the special beef inquiry that was ordered by the Prime Minister and which the minister had in his hands. As I understand it, the minister received the report in both official languages on or about April 27. On April 29 the Minister of Agriculture indicated that he would have the report made public as soon as possible. On May 11, approximately a month ago, the minister said:
Mr. Speaker, the hon. member will have to be patient. I hope next week to study the report and discuss it with my assistant deputy minister who is in charge of it. He is now attending a preliminary meeting in Rome-
It has been over a month since the minister gave that undertaking. The report is very important and certainly very urgent as far as the general farming community is concerned. I urge the minister to table the report. If he does not do that, we can only assume that he is trying to hide something and is not prepared to table this very important document.
June 10, 1976



ROUTINE PROCEEDINGS


Jean Marchand: Mr. Speaker, under the provisions of Standing Order 41(2), I wish to table two copies of the report, "Characterization of Wastewaters from the Great Canadian Oil Sands Bitumen Extraction and Upgranding Plant", as I promised yesterday.


TABLING OF REPORT &quot;ATMOSPHERIC ASBESTOS FIBRE CONCENTRATIONS IN THE BAIE VERTE AREA, NEWFOUNDLAND&quot;
Jean Marchand: Mr. Speaker, under the provisions of Standing Order 41(2), I wish to table two copies of the surveillance report, "Atmospheric Asbestos Fibre Concentrations in the Baie Verte area, Newfoundland".


EXTERNAL AFFAIRS
Allan Joseph MacEachen: In reporting to the House on the results of the UN Conference on Trade and Development, I should like to say at the outset that its immediate results represent a major achievement in the dialogue between developed and developing countries on a new international economic order, and that the longer-term impact of Nairobi will be substantial. Obviously, UNCTAD IV-like all conferences where countries are required to make compromises in order to ensure agreement-did not achieve all that Canada or other developed and developing countries might have wished. But it was, without question, a most important step in the efforts to reduce disparities between developed and developing countries which were initiated at the seventh special session of the United Nations.
At that session I stated that Canada was determined to play a positive role, to use our resources and our influence to help bring about constructive change in the international economic system and thereby to reduce the gap between rich and poor nations. Governments committed themselves at that time to work together to make changes in the international trade and payments system in order to enable it to contribute to more rapid economic development in the developing countries and to permit them to obtain a larger and sustained share in world trade.
UNCTAD IV was the first major UN conference following the seventh special session, and in its disagreements as well as in its accords it reflected these new dimensions. There were efforts to address these questions at a practical level; there were some important new commitments; there was agreement to create a program, timetable and frame-


UNCTAD IV
[Stage Direction]
work for the central issues in which the many essential decisions can be taken.
In my statement to the conference on May 7, I touched on the four areas Canada considered would be the main issues to be dealt with: the problems of stabilization of commodity trade, the alleviation of the debt servicing difficulties of many developing countries, liberalization of trade to benefit developing countries, and the transfer of technology to developing countries. Of these, the commodities issue proved to be the central focus of the conference. Indeed, the adoption, by consensus, of a resolution which established an integrated program proposes a list of 18 commodities of particular interest to the developing countries for consideration, describes the international measures to be taken in the context of the program, and establishes procedures and a timetable for pursuing it.
On the important question of a common fund, the resolution provides for a negotiating conference to be held next year and for a series of preparatory meetings. As a major importer and exporter of commodities, we shall be actively involved in these international discussions and shall work with the other participants to resolve the problems of commodity trade which concern developing countries. These discussions and negotiations will provide the appropriate basis for examining the parameters of a common fund and for a decision regarding its establishment. As I stated in the House earlier this week, and as stated before that by the President of the Privy Council (Mr. Sharp), if we are satisfied in the course of these commodity meetings and negotiations that the common fund will be effective and useful, Canada will make a contribution to it.
The conference also took an important decision on the subject of the financial problems of developing countries by adopting, again by consensus, a resolution on the debt problems of developing countries. The resolution calls for appropriate international bodies to identify features relating to debt servicing problems which could provide guidance in the future for dealing with them. In addition, a ministerial session of the UNCTAD board will be held in 1977 to review this work and a group of experts will be established to assist in this review.
We had hoped that some further steps would be taken on the broader subject of financial transfers, which is of fundamental importance to many developing countries, but this was not possible. We had hoped, for example, that the conference would agree to improve the international standard for official development assistance so that developing countries would receive such assistance on softer terms than they do now. Although this was not agreed, we shall continue to pursue this objective.
Apart from these two issues of particular importance, the conference also adopted resolutions on trade liberalization, the transfer of technology and a number of other subjects. One remarkable, and encouraging, aspect of the conference was the fact that 12 of the 13 resolutions approved were adopted by consensus. No previous UNCTAD conference has reached such a broad measure of agreement.
Canada supported all of these resolutions, offering explanatory statements on a number of them. We also, together with other industrialized countries, supported a proposal for further study of the concept put forward by
[Stage Direction]
June 10, 1976

[Stage Direction]
the United States. Dr. Kissinger had proposed to the conference that early consideration be given to the establishment of an international resources bank to facilitate resource development in the poorer countries. While we have not reached any final conclusion on this idea, we believe that it fully merited further consideration and we regret that it was narrowly defeated by two votes, the great majority of developing countries abstained on the resolution.
Despite the difficulties which arose at the conference and the problems which still need to be resolved, I believe that the outcome augurs well for the continuing dialogue between the developed and developing countries. Most especially, the positive results of the conference, particularly in the commodity area, should provide a useful and constructive basis for pursuing the work of the Conference on International Economic Co-operation in Paris.
At UNCTAD IV, Dr. Perez Guerrero stated, on behalf of the developing members of CIEC, the Paris conference, that failure in Nairobi could bring into question the continuation of that dialogue. The 19 developing countries which are members of CIEC have now assessed the situation. In light of the progress made on a number of important questions at Nairobi, they have indeed judged it useful to continue the dialogue in Paris.
I fully share the view that there is a satisfactory prospect for balanced progress in CIEC during the remainder of the year. In July, the CIEC will be reviewing the progress it has made and setting its course for the second half of the year. I am confident that the results of UNCTAD IV will help the conference in Paris to pursue its essential objective-the strengthening of international cooperation for the benefit of all.
So far as Canada is concerned, we shall pursue the work outstanding from UNCTAD IV in UNCTAD, CIEC and other bodies. We shall pursue our interest in improving the international standard for official development assistance. Together with other countries, we shall consider further the balance of payments and debt problems of developing countries and the appropriate measures for meeting them. We shall continue to support the principle of joint producer-consumer financial responsibility, on a mandatory basis, for buffer stock financing within commodity agreements containing such stocks. We shall be actively involved in consultations and negotiations on individual commodities and on the common fund. We shall devote efforts to see that the developing countries achieve additional benefits in the course of the multilateral trade negotiations in Geneva. We shall take an active part in the elaboration of a voluntary code of conduct for the transfer of technology which is universally applicable.
While the decisions taken by UNCTAD IV mark an important stage in our common efforts to reduce disparities between developed and developing countries, our progress toward that goal, to which the government is fully committed, will not be easy and will require hard decisions. As we proceed along that course, there will be costs for Canada and for individual Canadians. Their support will be essential, but with it, and the support of this

House, we may approach these decisions in a confident and positive manner.
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, first of all, why is UNCTAD IV so important as to merit this statement in the House?
UNCTAD'S purpose and principal aim is to transform a global economic environment that is most unfavorable for the poorest two-thirds of humanity. It seeks to do this through the process of negotiation, that is, hard bargaining as distinct from rhetorical expositions on the state of the world. It is, therefore, an essential forum to put into practice the trade reforms necessary to close the widening rich-poor gap in the world. But many nations are in great danger, and Canada is no exception, of becoming victims of procedural intricacies while losing sight of our real objectives.
The message of UNCTAD, the message of Habitat now in its closing hours in Vancouver, the message of the UN conferences in the past few years on the environment, population, food and the new economic order is that we must set in motion a process of restructuring the world economy. This will require more than an expansion of growth, more than better control over cyclical fluctuations. As the Secretary General of the United Nations, Kurt Waldheim, has said, this restructuring requires a well-defined time-table of economic cooperation to bring about-
-a more equitable share of developing countries in industrial activities beyond their present mere 7 per cent of the world's industrialization.
-self-sufficiency in food in developing areas.
-indigenous capacity in science and technology.
-serious progress in the eradication of mass poverty and unemployment.
All this is why the parliamentary subcommittee on international development issued an interim report, prior to UNCTAD IV, urging the Canadian government to exert leadership "in seeking creative solutions to the problems of commodities trade which will be acceptable to producers and consumers in both developed and developing countries." Canada's leadership is essential, not only because UNCTAD IV is itself a crucial element in international negotiations, but because Canada is a bridge between the developed and developing countries. This special role is reflected in the fact that Canada is co-chairman of the continuing Conference on International Economic Co-operation.
The subcommittee therefore suggested that Canada make a clear statement at the opening of UNCTAD IV committing this country to a phased, co-ordinated approach to increase and stabilize the prices of primary commodities exported by the developing nations. Such an approach would include the selection of an agreed list of commodities for action, the establishment of a timetable for negotiations, and emphasis on the possibilities for linkages among commodity agreements such as integrated or common buffer stock financing.
What the government did, however, at the opening of the conference was merely to repeat our worn-out position that "we are prepared to continue examination of the proposal for a common fund . .." In other words, continued
June 10, 1976

study but no action. Yet the Scandinavian countries and The Netherlands were able to go into UNCTAD and immediately pledge a commitment to the common fund principle around which the success of UNCTAD IV was clearly seen to turn. That was the kind of leadership that I expected from Canada. Why was that firm leadership, leadership we are capable of, not given?
Canada has a five-year strategy-between 1975 and 1980-on international economic co-operation, yet the government fails to implement it. In fact, most Canadians do not even know of the existence of this multidimensional strategy which recognizes that aid, as such, is insufficient in our relations with developing nations. The reason the strategy is not being implemented-and why we were so weak at UNCTAD IV-is that the government cannot get it all together. Some of the policy-makers want to participate in integrated commodity agreements, and others say that our domestic economy would be adversely affected and that we therefore cannot move on new agreements. But not to move is to perpetuate the economic discrimination which is at the heart of the problem. For this debate is not about charity, not about the $1 billion CIDA spends in a band-aid approach to poverty; it is about new, equitable economic relationships. This point is acknowledged by every serious student of the rich-poor gap. Last Monday, the Globe and Mail, expressing its disappointment at UNCTAD IV said:
The reality is that, setting aside the oil trade, the rich countries are taking out of the poor countries in excess profits from five to ten times as much as they are putting in foreign aid.
The Globe and Mail put its finger on the problem:
Thanks to grossly unequal access of capital, to the third world's lack of market leverage, the vulnerability of economies that depend on a single export, and to barriers set up by the rich against the manufactured products of the poor, it is the industrial world that takes most of the profit from what the third world has to sell.
So UNCTAD IV lumbered on as the pressure mounted. The Canadian NGO representatives kept sending back reports on the impending failure of UNCTAD IV. This group should be commended for its serious efforts to mount public opinion in Canada. Questions about Canada's commitment to a common fund were raised in the House. Finally, on May 27 the cabinet responded to the pressure and committed Canada to a common fund, if in fact there would be a common fund.
Why did this commitment have to be dragged out of the government? Why did the cabinet have to be pulled, kicking and screaming, to the reality of what UNCTAD IV was all about? Why does the Prime Minister (Mr. Trudeau) talk about a "conspiracy of love" to solve the problems of the developing world, when the government cannot back up sentiments of love with a commitment to action? Are we to assume that if the NGO community had not escalated the pressure on the government, there would have been no final commitment at Nairobi? Are we to assume that Canada finally acted because it wanted to save face at CIEC but without alienating the United States which was more committed to a new bank than new rules of trade? What a sad way that is for the government to lead!
Finally, UNCTAD IV ended with Canada giving its approval in principle, along with 15 other countries, to an integrated commodities program which calls for a negotiat-


UNCTADIV
[Stage Direction]
ing conference on a common fund to be held before the end of March, 1977.
We urge the government to play a more active role in these negotiations, and to do this by first of all building a climate of support within Canada for this action, which is clearly in the interests of our own country. We want to build better and more diverse trading partners, and this can be done by equalizing economic opportunities. This approach is a far more positive one than relying on the CIDA budget to do the job. When this policy is fully explained to the Canadian people, the government will find support for some brave, new action.
Francis Andrew Brewin: Mr. Speaker, we welcome the minister's statement and are glad that he has been able to make such an optimistic statement about the results of UNCTAD IV. We share the views that he has expressed, and action on the various aspects of the new economic order is urged. The well-known Swedish economist, Gunnar Myrdal, put it very well when he declared that we have been living during one of history's most abrupt reversals of political climate. UNCTAD has been an important step in that essential reversal of policy. The minister himself said at the UNCTAD conference that we need action with an unprecedented sense of urgency. He then went on to say:
I believe that we have passed that stage of analysis and assessment of issues. We must now get together to devise workable and dynamic solutions.
I must say I share, with the hon. member for Edmonton-Strathcona (Mr. Roche), the view that these bold words were not effectively followed up; there has been a degree of hesitation. I would give as an illustration the common fund, of which mention has already been made. The common fund is essentially a means of getting funds for a buffer stock to stabilize commodity prices, and this is one of the primary requests of the developing countries. Its purpose is to procure the exchange of commodities through which they can develop themselves so that they will not be dependent upon aid from the outside world.
Instead of our delegation taking a firm stand on principle, they put it off until the very last minute. Even in his statement the minister skated around any commitment by Canada, saying there were a lot of conditions and sort of backward steps. There is, in fact, no commitment at all. May I read what the minister said in this regard. He said that we shall be working with the other participants to resolve the problems of commodity trade which concern developing countries. He went on:
These discussions and negotiations will provide the appropriate basis for examining the parameters of a common fund and for a decision regarding its establishment. As I stated in the House earlier this week, if we are satisfied in the course of these commodity meetings and negotiations that a common fund will be effective and useful, Canada will make a contribution to it.
As has been pointed out already by the hon. member for Edmonton-Strathcona, many other countries were able to make a firm commitment. It is true that the details of the commitment still have to be worked out. Obviously, if a commitment was made which was impossible to carry out, or which Canada felt was a totally impractical way of
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June 10, 1976


UNCTAD IV
[Stage Direction]
solving the problem, we would not expect Canada to go ahead; but the making of a firm commitment is indeed perfectly possible. I wish the minister had used the same sort of language as was used by Mr. Hakkvard Bakke, the minister for commerce for Norway, who followed the Secretary of State for External Affairs (Mr. MacEachen). He said:
Only decisions which can be transplated into the realities of the daily life of the poor masses are real contributions. I am glad to say quite unequivocally that my government is in agreement with and supports the main elements of an integrated program for commodities... we have already declared ourselves ready to contribute to a common fund. In our view UNCTAD should have the central co-ordinating role in this important venture-
That language seems to me rather different from the language used by the minister in his statement. Perhaps the minister is just indulging in ministerial caution, which in many cases, I suppose, is befitting of his particular position. But as he described it, this is an urgent situation calling for action, not-to use his own words-analysis or assessment. I am disappointed that this caution, and perhaps the caution of some of his colleagues as well, seems to have so watered down his approach that I must agree with the hon. member for Edmonton-Strathcona that we have not had the real leadership we would have had. This common fund is not a backbreaking financial burden. It has been estimated that it would cost between $21 million and $29 million for Canada's share, which is about 3 per cent of Canada's aid budget.
Then there are other matters, Mr. Speaker. There is a vague reference in the statement to a resolution on liberalization of trade, but not a word more is said about that. Apparently the minister has overlooked the fact that the committee on development, which was approved by the whole external affairs committee, firmly recommended that if we are serious about liberalizing trade, we should get on with the business of planning adjustment assistance for those who might possibly be affected.
Has anything been done in this regard? I shall have to ask some questions of the minister about that later, but there is no mention of it in his statement. We are told that there was a resolution. Are we serious about this, or not? If we are serious, we should look once again at what the committee recommended, which was a tripartite body composed of government, employers and employees working together to work out adjustment assistance. This means that if, as a consequence of trade liberalization, we face competition from overseas which destroys job opportunities, something ought to be done about it. I am just wondering why so little is said on that particular question. UNCTAD IV is only a beginning, but an important beginning, leading to what may take months or years to hammer into shape so that practical action can be taken.
In closing, may I say there is needed a far greater and continuing effort on the part of the government, members of parliament and those who have the role of leadership in the community to make clear how vitally important is this whole new movement. If we are to build a stable world based on co-operation, greater justice and equality for men of all races, then we will have to start putting into practice some of the noble words we have been using for quite a while now.

I know that we are committed, but we need something to evidence that commitment a little more so as to arouse the Canadian people who must give it their support. If they do not do so, it will fail and fizzle. We have to do more to warn the people of Canada that we are in an era of drastic change; that justice as well as our own future stability and economic security depend upon a real change of opinions and upon action being taken in this field.
Gilbert F. Rondeau: Mr. Speaker, first I should thank the minister for having been kind enough to send us a French copy of his statement before the opening of the House and we wish that this practice will continue in every other similar circumstances.
UNCTAD IV that was held in Nairobi in Kenya from May 3 to 28, 1976 enabled more than 2,000 delegates from over 150 countries to meet and try to find answers for the establishment of a new international economic order, which means that the old economic order that we knew is no longer appropriate.
The Secretary of State for External Affairs (Mr. MacEachen) was very careful in his statements concerning our commitments to the developing countries and he was right because when we know the pressions between industrialized countries and poorer nations we realize how difficult it is to find an easy answer without offending one or the other of the countries that give or ask for help. Furthermore, an action program at the international level is highly impracticable because of important differences between the nations which can help and those which rely on that help. As the minister said, two particularly significant resolutions have resulted from this conference. One establishing an integrated program for basic products and the other concerning the debts of developing countries.
Mr. Speaker, it is unusual and it surprised me that even at the international level we discuss debts even before we talk about development. Even undeveloped countries have managed to get into debt. It is again an obvious sign of the illogicality of political economy principles which typify the financial management of those countries which have debts even before growing to maturity. Several external help programs have already been created by various international groups and by some countries, including Canada, the United States and others, and unfortunately the helping countries are too often criticized to the same extent as their generosity. But I am pleased by the minister's statement and I hope, as he said, that this conference will eventually give long term positive results.


Douglas Roche: Mr. Speaker, I should like to ask the Secretary of State for External Affairs a couple of questions. Why is it that Canada changed its position during the course of UNCTAD? In the minister's speech during the opening days of UNCTAD he merely said we would give our assent to a study of the common fund principle around which the success of UNCTAD IV was turning. Indeed, on May 11 when he reported to the external affairs committee he said he was not yet convinced of the need for a common fund. Yet on May 27 the cabinet met and gave its assent to the principle of the fund, which was subsequently
June 10, 1976

announced in the House and relayed to Nairobi, enabling us to sign the statement of the resolution with 15 other countries at the conclusion of UNCTAD.
I ask the minister, now, what evidence was put before the federal cabinet to enable it to change its mind and give its assent to the principle of the common fund, evidence that was not available at the opening of this conference and which would have enabled Canada to go into the conference at the beginning and give the commitment in the opening stages so that we would have been able to give the leadership that UNCTAD so desperately needed?


Allan Joseph MacEachen: Mr. Speaker, I do not regard the comments made in the House by the President of the Privy Council as any change in the Canadian position. It was merely an evolution of a position that had been taken by myself in my opening statement when I said we were quite prepared to examine further the concept of the common fund. We merely advanced that proposition to the point where we stated that as a result of discussions and negotiations, if the common fund justified itself in terms of usefulness in the solution of commodity problems, then we would be prepared to contribute to it.
I do not regard it as a change of position, because these contingencies obviously were in our minds as we prepared for the conference and as we considered the various attitudes we could take. I do not regard it as any change. Our delegation, headed by Mr. Bruce, had been advising us of the developments in the discussion and it was in response to our own convictions on this point and the developments of UNCTAD that caused us really to carry forward the policy which had been indicated in embryo in my opening statement.


Douglas Roche: Mr. Speaker, I am glad to see there was such a speedy evolution in the government's thinking during the course of UNCTAD IV, which only shows what can be gained by escalating pressure. That brings me to the question of public understanding of what this conference is all about and, indeed, the understanding and the commitment of the House itself.
I ask the minister why the report of the subcommittee on international development has not yet been tabled in the House, despite an expressed public desire by the minister that it be so debated in order to bring up the level of understanding by the Canadian people concerning the structural changes required in international relationships that are highlighted in the report. Those structural changes can be most significantly demonstrated by reference to two figures. Canada's aid to the ten leading recipient countries in bilateral assistance last year was $330 million, yet our trade surplus with those same ten countries was $368 million, which led CIDA to confirm today that there is a greater benefit to Canada in economic relations with these aid partners. In other words we gain more than we put into the developing countries, which is at the heart of the problem. The subcommittee reported on this, yet that report continues to be buried.


Allan Joseph MacEachen: Mr. Speaker, perhaps I should correct a false impression under which the hon. member seems to be labouring, namely, that the whole matter of the common fund was escalated as a result of public pressure. Obvious-



[Stage Direction]
ly, we had considered the view made known by the subcommittee. We had listened to views in the House of Commons. We were listening in Nairobi, and we acted in conformity with our own understanding of the realities and not as a result of any public pressure directed to us from Nairobi particularly.
I do not regard public pressure as distasteful or undesirable, but I think the hon. member would agree that there certainly was not an outcry among the Canadian public on the common fund that would cause the government to react to a groundswell in its favour. Unfortunately, the Canadian public up to the present time has exhibited only marginal interest in the subject we are discussing today. I had intended today, in my statement and in other ways, to draw to the attention of the House and the public these important questions that are so vital to the future of the world. I would be prepared to debate the subcommittee report at any time, but as my hon. friend knows, we are rushing pell-mell in this House to deal with all kinds of important matters and it is not easy to fit in every subject matter. That is the only reason.
Douglas Roche: I have a final supplementary, Mr. Speaker. The reason the Canadian public has a marginal interest in these questions is that the Canadian government has not laid before the public the full exposition of what this question is all about. I ask the minister specifically, with reference to the speech he made at the opening of UNCTAD, when he referred at page 5 of his speech to using aid funds to establish a trade facilitation office to assist developing countries seeking to export to the Canadian market, what did he mean by "trade facilitation office", and to what extent is the Canadian government prepared to move on that?


Allan Joseph MacEachen: I thought that was a particularly positive proposal that was made in my statement. We did make several other important proposals that were not accepted by the conference, including a proposal to increase the grant threshold, including a proposal to have a debt conference and a proposal for support of mandatory joint producer and consumer financing operations. All these were distinct Canadian proposals which were not accepted and were, in my view, somewhat ahead of some of the proposals which were accepted. The purpose of the trade facilitation office is to assist developing countries to penetrate the Canadian market. We are taking that proposal seriously and it is being studied at present. It is a new proposal, but it has not yet been implemented.


Mr. Munro (Esquimalt-Saanich):: Mr. Speaker, it is not easy, on the strength of 8V2 pages of generalities, to formulate questions: rather, this invites comment. There are two specific questions which I should like to ask, one relating to a comment that is made, and one relating to an omission. On page 5 the minister speaks in glowing terms of how happy he is that there was such a broad measure of agreement in that 12 of the 13 resolutions were adopted by consensus. I wonder if this is not a way, perhaps, of avoiding standing up and being counted. When you have reservations in a consensus procedure, you do not actually have to say you agree or disagree; you can virtually abstain.
9SS70-9y2

June 10, 1976



[Stage Direction]
This is unusual in UN procedure. I wonder whether the minister would care to comment on this point, because it seems that the whole thing is a means of befogging the issue and, as two or three of my colleagues have suggested, there are no clear, positive actions aside from the decision to study something further. This matter has been studied for years now. On the matter of consensus, I wonder if the minister could comment on why he considers this more desirable than a voting procedure, because on the next page he says that something was missed by a couple of votes.
Mr. Speaker:: Order, please. With all due respect, the hon. member has no difficulty in putting precise questions. He has put this question two or three times.


Allan Joseph MacEachen: I have not advocated consensus in preference to voting on the resolutions. What I have been saying is that consensus is much more positive than confrontation, which has been a real possibility in the course of the conference. It was only as a result of 48 hours of intensive negotiation that the developing and the developed countries agreed to go along with the negotiated resolutions by consensus.
In the case of the American proposal there was a vote. A vote was taken because the majority of those who voted were opposed to the American idea of a resources investment bank. We voted for that. I think it was a mistake to have turned that proposal down simply because it had not been fully explained or fully considered and it seemed to have been unwise for the conference to have turned down, without serious examination, a proposal made by the major industrial power whose co-operation is vital if we are to make any changes in the international economic order. I think that was a mistake.


Donald W. Munro: My second question refers to an apparent omission. I believe that one of the objects-I may be misunderstanding the purpose of these ministerial statements-would be to make the Canadian public aware of what went on, not just to justify the position of the government. For example, there is complete neglect of the matter of the transfer of technology in agriculture with a view to improving or helping those countries which seek self-sufficiency in the matter of food, water and fertilizer-those three things together. They are basic even to the generation of commodities for trade, particularly renewable commodities. No reference whatever is made to this question. Would the minister care to comment either on the purpose of the omission or on the matter itself?


Allan Joseph MacEachen: Three resolutions were adopted at the conference on the general question of the transfer of technology. I agree with the hon. member that agriculture is a very important item of development. My colleague, the Minister of Agriculture, through the world food council, through the world food conference, through the world food program, is addressing himself to the general question of agricultural production in the developing world. It did not receive special attention at this particular conference or in my statement because it was not a subject matter of special attention even though it is quite important. I did not omit it because I regard it as unimportant. As the hon.

member knows, it has been highlighted as one of the areas to which we attach priority in our international development strategy.


Francis Andrew Brewin: Mr. Speaker, I would like to ask the minister about the resolution on trade liberalization. I have not seen the resolutions yet. I think the members of the Standing Committee on External Affairs and National Defence, and perhaps all members of the House, would like to see them. However, I think trade liberalization is a very sensitive subject and I should like the minister to tell us the nature of the resolution passed on that subject.


Allan Joseph MacEachen: There were three resolutions passed by the conference on trade matters. One provides for measures to improve access to developed country markets for improvement of the generalized system of preferences and tariff reclassification. Another resolution calls for measures which will give added impetus to multilateral trade negotiations. The third resolution dealt with transnational corporations. I have received all of these resolutions. They require a good deal of study, and I believe it would be very useful for the standing committee to take a look at some of these resolutions which are cast in general terms. The three resolutions on trade liberalization were adopted, by consensus, at the conference.


Francis Andrew Brewin: I should like to ask the minister about another matter I mentioned in my remarks earlier today. What steps, if any, have been taken, in accordance with the recommendation of the committee, toward working out and developing adjustment assistance to help those who might suffer economically as a result of more liberal trade measures or, indeed, help those who are suffering because even now some industries are threatened by cheap imports?


Allan Joseph MacEachen: I realize that the subcommittee of the standing committee did make proposals on the matter of adjustment systems, and if at a certain point the Canadian government, supported by the Canadian parliament and the people, decided that we ought to admit tropical products at the expense of Canadian production and Canadian jobs, then of course adjustment measures would be essential. But up to the present time, while we have an adjustment program in the textile industry, as have most other countries, we have not yet developed new adjustment policies with respect to other industries. I say this with the full realization that the responsibility for such a program and policy is that of the Minister of Industry, Trade and Commerce. I suggest that it would be useful, in the interests of the dialogue, to raise the matter with him.


Mr. Ritchie:: Mr. Speaker, 1 have a question for the minister. In view of the record of commodity agreements and the great importance some of these commodities might have on our Canadian economy, how far did the Canadian commitment go in these commodity agreements?


Allan Joseph MacEachen: If I may attempt to abbreviate the Canadian position, we stated that we will support measures which have the effect of stabilizing commodity prices, and particularly of stabilizing the earnings of exporters. We accept, as one of the techniques, the negotiation of
June 10, 1976

commodity agreements, where they can be demonstrated as useful, on a case by case basis. For example, as a consumer we have joined the tin agreement. We made a voluntary contribution to the tin buffer stock because we believed that would be a useful approach. Some of the industrialized countries, including Canada, have supported the idea of a commodity by commodity approach and that each commodity should have its own agreement, with its own funding and with its own buffer financing formula. This has been our approach.
We then went on to say, like the French stated at the conference, that if a number of individual commodity agreements have been negotiated and are in operation, and if at that point there is a necessity for a common fund either drawing upon the individual funds or supplemented from other sources that would be useful, then we would consider it. In addition to that, we indicated at the conference our readiness to participate in the negotiations and the discussions on the common fund. But there seems to have been an idea abroad that we should create a huge common fund and that that would be an incentive, by the very creation of a large fund, for producers and consumers to enter into the commodity agreements regardless of whether the justification for these agreements had been carefully worked out. If a common fund is seen in that perspective, it certainly has dangers for the international economic system.


Gilbert F. Rondeau: Mr. Speaker, on page 20 of the French copy of the fifth report of the Standing Committee on External Affairs, dealing with developing countries, it says in the third paragraph:
Debt
A crisis of accumulated debt has been brewing for years in many of the developing countries and the severe balance of payments of recent years have now brought a number of them to the brink of bankruptcy. It has been pointed out that the repayment of the capital and interests on former debts use up to 50 per cent of the total amdunt of financial aid received by developing countries. Some proposals consider drastic measures in all respects to alleviate the burden of debts in developing countries. Now, I do not see these proposals in the report.
Would the minister advise the House which proposals the government is prepared to make to those developing countries, since 50 per cent of the financial aid they receive are used only to service their debt?


Allan Joseph MacEachen: The hon. member asked what proposals we had made with respect to the debt question. We supported the proposal in the Manila declaration that a debt conference would be convened to consider what action could be taken and what guidelines could be used in order to overcome the debt problem. We also made the proposal that it might be better to consider ways and means of preventing countries from getting into debt or from increasing their debt. It was for that reason we suggested an increase in the threshold of assistance to developing countries.
Now, of course, there have been various mechanisms established by UNCTAD-a review, the creation of guide-
Order Paper Questions
lines, a group of experts to consider debt questions-and we have gone along with that.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, the following questions will be answered today: 5,161, 5,233 and 5,431.


Mr. Cossitt: 1.	Is the government and, in particular, the Department of Public Works and the Dominion Fire Commissioner aware as to whether or not the Library of Parliament is the only part of the Centre Block of the Parliament Buildings with a fire alarm system connected to a central station and, if so (a) since what date has the Dominion Fire Commissioner been aware of the existence of this situation (b) have any recommendations been made on the matter by the Dominion Fire Commissioner or anyone else in the government and (i) if so, to whom and on what dates (ii) if not, for what reason?
2.	Does this same situation exist at the (a) Lester B. Pearson Building (b) l'Esplanade Laurier (c) Journal Towers and (i) if so, on what dates and to whom have any recommendations been made on the matter by the Dominion Fire Commissioner (ii) if no recommendations have been made, for what reason?
3.	Is the Department of Public Works and, in particular, the Dominion Fire Commissioner responsible for testing the fire alarm system in the Centre Block of the Parliament Buildings and, if so, on what dates during the past five years have such tests been made?


Hon. C. M. Drury (Minister of Public Works):: 1. Yes. (a) November 10, 1967; (b) (i) a recommendation to directly connect the fire alarm system to a central station was made by the Dominion Fire Commissioner to the Department of Public Works Capital Region Director in July 1973. However, due to the fact that a manually operated direct connection was provided to a central station, and to avoid unnecessary response by fire apparatus to the building in the event of false alarms, the recommendation was reconsidered and the present procedure whereby all alarms are monitored by a 24-hour guard service is considered adequate. (ii) Not applicable.
2. (a) Yes, in the case of the Lester B. Pearson Building where there are security personnel on duty at all times capable of taking appropriate action in the event of fire, the direct automatic connection from the fire alarm to the central station has been waived. Alarms are transmitted directly to the Ottawa Fire Department by operation of a direct line telephone, (b) The l'Esplanade Laurier is a leased building with qualified security personnel on duty at all times in the fire control room, which is equipped with an emergency telephone for use in reporting fire or other emergencies, (c) The Journal Towers are leased buildings with 24-hour security guard service. On receipt of a fire alarm the guard in the lobby immediately telephones the fire department. Any requirement for an automatic direct connection to a central station system from a

June 10,1976
Order Paper Questions
leased building (items b and c) would have to be made by the Municipal Fire Authorities having jurisdiction.
3.	The Dominion Fire Commissioner is responsible for testing fire alarm systems in the Centre Block. The most recent test of the complete system was conducted by the Dominion Fire Commissioner and Facilities Maintenance personnel on 21 to 23 January 1976. The fire alarm system in the Centre Block has been tested every three months over the past five years by contract.


Mr. Cossitt: 1.	What are the reasons that inquiries to the Old Age Security Office in Don Mills, Ontario, by the Member for Leeds, have taken in some cases up to fifty-one days to complete investigations and specifically in the case of File Number 415 164 821?
2.	Will the Department of National Health and Welfare conduct an investigation into operations of the Old Age Security Office in Don Mills to determine reasons for such slowness and will it take the necessary methods to drastically improve services in reply to inquiries from Members of Parliament?


Marc Lalonde: 1. Enquiries from the public and Members of Parliament, directed to the Old Age Security office in Don Mills, Ontario, are dealt with by an enquiries section set up specifically to ensure that a quick response is provided. Office records indicate that telephone enquiries from Mr. Cossitt concerning File Number 415 164 821 were answered promptly. Due to technical difficulties associated with the adaptation of the new Spouse's Allowance program to existing computer systems, there was a delay in producing a cheque in the correct amount for normal cheque delivery. To offset this problem, cheques for account 514 164 821 were produced manually and were delivered when due.
2. The technical difficulties mentioned above have been identified, and action is being taken to eliminate these problems. Enquiries from Members of Parliament always receive high priority.


Mr. Forrestall: 1.	What is the government's best estimate of the (a) total (b) individual amount spent in support of members of the Montreal Port Authority in respect of attendance at meetings, for travel and other purposes during 1975?
2.	What are the comparable figures for the Halifax Port Authority?


Mr. Ralph E. Goodale (Parliamentary Secretary to Minister of Transport):: The National Harbours Board advises as follows: 1. (a) $31,254; (b) Fees for Meetings, $4,700; Travel, $3,241.50; Honoraria, $23,312.50.
2. (a) $18,909; (b) Fees for Meetings, $7,300; Travel, $2,609; Honoraria, $9,000.


Mr.   J.-J. Blais@Parliamentary Secretary to President of the Privy Council: Mr. Speaker, if question No. 5,423 could be made an order for return, this return would be tabled immediately.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Matte: 1.	How many Manpower Centres are there in the Province of Quebec?
2.	What are their addresses and telephone numbers?
Return tabled.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, June 9, consideration of the motion of Mr. Macdonald (Rosedale) that this House approves in general the budgetary policy of the government.
Pierre Elliott Trudeau: Mr. Speaker, this budget comes at a crucial stage in Canada's fight against inflation. Because of tentative-and I am referring to the period between now and October as compared with the earlier period-early signs of success in reducing the rate of increase in the cost of living, there are some who would abandon the fight now, before the anti-inflation program has had a chance to exert a deep and permanent effect upon the inflationary expectations of the nation.
There are others who would divert our attention from the battle by proposing that the government should spend its way toward full employment. Such a proposal would not only fatally compromise the government's adoption of spending restraint as an essential weapon in the fight against inflation, but by stimulating inflation would also impede the private sector's long-term ability to create jobs for the jobless.
It is a mistake to consider inflation and unemployment as mutually exclusive problems. The unemployment problem cannot be solved by abandoning the anti-inflation effort. If economists and the governments of the industrialized nations have learned anything from our post-war experience, we have learned that the cyclical switching of our attention from inflation to unemployment and back again has not only not cured either problem but has worsened both.


Some hon. Members:: Hear, hear!
June 10, 1976


Pierre Elliott Trudeau: It is for just that reason that all our policies-spending policies, over-all fiscal and monetary policy, and the policies governing price and income restraint-are aimed at gradually bringing inflation under control without jeopardizing renewed growth of output and employment. The only way to bring down the rate of unemployment is to restore the economy to a state of health and vigour; and the only way to do that, in the present circumstances, is to remove inflation as a major obstacle to our economic progress.
And this is one of the reasons why we must strongly object to the diversion manoeuvres of our opponents.
When I announced the creation of the prices and incomes control board last October, I said clearly to the Canadian people that we were launching a three-year restraint program because it would take us that long to get back on our feet again, to return to steady prices and a balanced growth rate, and because we would need all that time to bring down inflation gradually and surely without putting the country in a situation of economic paralysis.
The government's viewpoint has not changed since then. We see no reason to give up our efforts today or in the near future, now that our hopes to bring down the inflation rate are just beginning to materialize. Despite the strong objections of some particularly restless unions and businesses, objections which their spokesmen in the opposition are echoing, we will not give up until we succeed in our attempt.

I am not surprised that some powerful interests are crying out for an early removal of restraints on the exercise of their free-wheeling power in the marketplace. But the plain, simple and hard fact of the matter is that there is no way in which inflation can be brought more quickly under control without resort to Draconian measures- measures which would seriously impede, if not abort, the present recovery of the economy and lead to substantially higher unemployment. Some may be prepared to pay that price. We are not. Nor do I believe the vast majority of Canadians are prepared to pay that price. I am surprised that the special interests of these powerful groups should be pleaded so blatantly by opposition members who have been elected to serve the powerless as well as the powerful.


Some hon. Members:: Hear, hear!


William Heward Grafftey: Pure bunkum.


Pierre Elliott Trudeau: Mr. Speaker, my speech is important and serious but not very funny, and if hon. members opposite want to contribute a bit of levity, it is on their shoulders.


Mr. Paproski:: You are laughing; we are not; we are serious.


Pierre Elliott Trudeau: I must say, Mr. Speaker, that I am especially shocked by the New Democratic Party. In trying to give the appearance that it is serving simultaneously the incompatible interests of powerful unions, which oppose the controls program, and powerless low income families,
The Budget-Mr. Trudeau
who need and support the program, the New Democratic Party presents the absurd spectacle of having both feet planted firmly on the ground on opposite sides of the fence.


Mr. Blais:: It is a pretty low fence.


Pierre Elliott Trudeau: I had expected a little more courage and a little more honesty from the party which so often and so self-righteously has proclaimed itself to be the social conscience of the nation.
I am less surprised by the contradictory performance of the Progressive Conservative party, which in its predictable effort to identify itself with every competing special interest group in the country is not representing any interest very well, least of all the public interest. It is perhaps too much to ask the Tories where they really stand on the issue of controls and spending restraint. I would be satisfied if they would just tell us which fence they are currently sitting on.
For an example of the Tories' attempts to be all things to all men, we need look no further than the remarkable speech given in this House on May 27 by the hon. member for York-Simcoe (Mr. Stevens). I am sorry he is not here. If he had known I was going to speak, I am sure he would have been here to understand the remarks I am going to make on the subject of his speech. After criticizing the government for the level of its spending and the size of its deficits, he proceeded, without so much as an embarrassed blush, to plead for more government financial assistance for farmers, small businessmen, energy consumers, exporting companies, job creation, industrial research, medical research, big business and the taxpayers in general.


Some hon. Members:: Hear, hear!


An hon. Member:: Heward wrote that for him.


Pierre Elliott Trudeau: The next time I hear the Leader of the Opposition (Mr. Clark) complain about the damaged credibility of parliament, I will know exactly what he means.
It was to be expected that some business and labour leaders would object very strenuously to controls on their freedom of action. In fairness, however, it must be said that hundreds of thousands of union members have voluntarily agreed to settlements within the guidelines, and that the bulk of business criticism has not been directed against controls in principle but against the details of their application. That kind of criticism has usually been both constructive and welcomed by the government. It is more in sorrow than in anger-


Mr. Knowles (Winnipeg North Centre):: Oh, yes!


Pierre Elliott Trudeau: -that I listen to otherwise responsible people demanding restraint in government spending but objecting to restraint in programs in which they have a special interest. That kind of myopia has made the government's job more difficult than it need be. I have no quarrel with those who plead the special worth of one or other of the very many worth-while programs for people in which the government is engaged, whether it be regional development, housing, the Local Initiatives Program, museums, dairy subsidies, or many others. This afternoon we heard

June 10, 1976
The Budget-Mr. Trudeau
special pleading for UNCTAD. We have no objection to these; they are all worth-while programs and that is why this government is pursuing them.
But the harsh fact is that we do not have the billions of dollars which would be needed in order to give immediate and adequate support to all those and other priorities. We will have to learn to choose more carefully and pay for some things over a longer time period than we have been used to in the past.
I ask for public understanding and support of the hard spending decisions which are being forced upon us by economic circumstances. It seems to me that there comes a time in the affairs of the nation when a particular public policy is so much in the public interest, so crucial to the stability of the country, that it requires members of parliament and citizens generally to lay aside narrow private interests and stand up for Canada.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Now is such a time, and the anti-inflation program is such a policy.

For in this fight against inflation, we have only one alternative: success or chaos. A failure would be a gross injustice towards our most disadvantaged citizens and would jeopardize the hold we must have on our future. I urge opposition members to think about it when they are tempted to use the House of Commons as a forum for powerful economic interests. I said it many times, an effective control of prices and incomes is possible only with the support and cooperation of all of us. That is why I am pleased not only because Canadians have supported this program from the outset but because they have not changed their minds since, despite the well financed and well organized hostility of our opponents.
What is to be feared is not that willing Canadians will finally take a negative stand as a result of the continued propaganda of groups which serve particular interests, but that public support weakens because some people would be led to conclude, on the strength of favourable statistics on the cost of living, that the fight is already won, or because others, reassured by the same figures-I will quote them in a moment-would feel that this problem is not as serious and consequently that restraints are no longer necessary. Both attitudes, if they were to become widespread, might be fatal to the success of our program. This is why those who are in a position to influence public opinion have such a responsibility. Those who, among influent and academic people, contribute to make people believe that it is less important today than last October to strongly restrain prices, salaries and public expenditures are doing the nation a very bad service.
Of course I am gratified that the increase since last year in the consumer price index declined to 8.9 per cent in April and May from 10.6 per cent in October. I am pleased that the seasonally adjusted CPI, which had increased at an annual rate of 11.7 per cent in the six months prior to last October, declined to 6.4 per cent between October and
[Mr. Trudeau.)
May. While this sharp rate of decline is very welcome, I am the first to admit that it is not due solely to the anti-inflation program, and that it is not sustainable over the longterm in the absence of some basic structural reforms in the economy.
I have said many times before that success in the fight against inflation is not to be looked for in short-term movements of the CPI, but in the progress we make in effecting necessary changes in our attitudes, expectations and economic institutions. That takes time. If we do not give ourselves the time by reaffirming our resolve to see this battle through to the end, we cannot succeed. I realize that in the context of the double-digit inflation which Canada has suffered for the past couple of years, the 8 per cent rate which we confidently expect to reach this year must seem to many people like the fulfilment of a dream, negating the need to continue the struggle.


Mr. Stanfield:: A bad dream.


Pierre Elliott Trudeau: A bad dream, as the hon. member opposite mumbled.


Robert Lorne Stanfield: I did not mumble. I said it quite distinctly.


Pierre Elliott Trudeau: Mr. Speaker, the hon. member dreams quite distinctly. I apologize.
It is because of the potentially dangerous consequences of such an attitude that I am appealing today to all who have an influence over public opinion to tell it like it is. I realize that in order to sustain public support for the anti-inflation program it is necessary for the people to understand not only that it must remain in force until it is successful, but it is also necessary for them to see that the program is fair.
In furtherance of that second objective, the government has consistently and seriously offered to make changes in the rules when we are convinced that such changes will contribute to greater equity. Our desire to be fair is the reason wage settlements above the arithmetic guidelines have been allowed in special cases. But it is important to note that even with those exceptions above the arithmetic guidelines, settlements subject to the Anti-Inflation Board's jurisdiction have shown an average increase of only 12.1 per cent. This compares with settlements which were running at average rates of about 18 per cent during the first three quarters of 1975.
I wish to stress that point. More and more we hear people-usually they are theorists-say that inflation was going to come down anyhow and the government only brought the program in to take the credit. Inflation was not going to come down anyhow. They say that now because it has been coming down. Settlements have been reduced from an average of 18 per cent in the first three quarters of 1975 to an average of 12.1 per cent since we brought the controls program in.
The desire to be fair is the reason behind changes in pricing regulations announced by the Minister of Finance (Mr. Macdonald) on budget night. We are confident that with the new rules all companies will be treated more equitably. No one in the government has ever claimed that restrictions on the way we do business in this country are
June 10, 1976

attractive to us or easy to apply. We have claimed only that such restrictions are necessary and can work. Mr. Speaker, they are working and they continue to be necessary. They are working because millions of Canadians have generously subordinated immediate self-interest to the longer-term common good of the nation. In that spirit of generosity lies the greatest hope that the program will continue to attract the support of Canadians and will be ultimately successful.


Robert Lorne Stanfield: Mr. Speaker, it never occurred to me, when I was slated to be the first speaker for the Conservative party this afternoon, that it would be my lot to follow-and I say this in a neutral sense-the Prime Minister (Mr. Trudeau). It is difficult to predict the course of events in this House. On this quiet, early summer afternoon I wish to make some comments on the budget and offer some suggestions.
The Prime Minister set a good example for the Minister of Finance (Mr. Macdonald) by delivering a short speech. I say this as I wish to comment on the length and dullness of the budget speech; and I assure you I will not indulge in carping criticism. Although the minister's speech did little for the Canadian economy, it did something for me. Speaking as one who may have bored audiences, as I suffered throughout that marathon of platitudes which the minister delivered I felt purged of all sense of guilt. I no longer felt guilty for what I may have inflicted on my audiences during the past 25 years or so.
I am puzzled why the government House leader, whom I regard as an honest and straightforward man, would wish to see the speech televised. Perhaps the hon. gentleman wishes to destroy not only the House of Commons but Canadian television as well. The truth is that the speech would never have been made on TV. Some generously describe the speech as realistic. A more accurate adjective is "soporific." I do not believe anyone could be that dull for so long without really trying. I know that I could not have been so dull for so long without working hard at it.


Pierre Elliott Trudeau: You must be trying now.


Robert Lorne Stanfield: I do not know if the minister was trying to put the House of Commons to sleep. I suppose the government's strategy is to tranquillize the Canadian people. Its strategy is also to leave it to the Americans to bring prosperity to Canadians after the next election: Do not raise any disturbing issues in Canada. Prepare your ground well with a few well chosen fights against the big, bad wolves, like certain big labour interests and certain special interests in the country. We saw the Prime Minister start to prepare that ground very nicely this afternoon.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It surely indicates something about this government, and in fact this country, that the Minister of Finance could have delivered that fatuous speech in the year 1976 in the world as it really exists. I am afraid it says something about the Canadian people. Some of them think that speech was not too bad because there was not anything in it to disturb them. I wondered that night, and I still wonder, whether the minister and I are living in the same world. Is he right to ignore the reality that I see, and
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content himself with a policy of inertia associated with some tricks, devices and sleight-of-hand such as monkeying with the estimates, unemployment insurance and controls?
I wish to say a few words about the tricks. The Prime Minister emphasized the importance of telling it as it is. There is no need for me to dwell on the basic dishonesty of the government on the issue of controls. The government and its supporters have shown a degree of cynicism that was previously not thought possible in this country. It is just as simple as that.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The Prime Minister spoke this afternoon about those members of parliament who are not prepared to help the little fellow whom they were elected to support. I ask the Prime Minister seriously, does he remember anything at all of what he said in 1974? Does he really expect anybody to take him seriously when he attacks any member of this House for failure to defend the little fellow or defend controls?
Consider what the government is doing in the area of unemployment insurance. Changes are being adopted that the government resisted, fought against and repudiated, hoping to convince the electorate that they were prepared to be tough toward unemployment insurance and hoping that the whole issue of the cost of unemployment insurance would quieten down and go away. That is the whole point. Consider the sleight-of-hand with the spending estimates. The Prime Minister made a big fuss, pleading for support for the efforts of the government to cut back on its expenditures. As far back as December last, the President of the Treasury Board (Mr. Chretien) was swearing by everything that is holy that spending for the year ending March 31 last would not be more than 16 per cent higher than in the previous year. He stuck to that story in a pamphlet issued to us in April, just a couple of months ago.
On budget night, however, we learned that spending during the last fiscal year was in fact 18 per cent higher than in the previous year; some $700 million higher than the President of the Treasury Board swore it would be. That may have made a monkey out of the President of the Treasury Board, but it was very convenient for the Minister of Finance and the government as a whole. Having spent that money last year, they not only do not have to spend it this year but it gives them a better basis for comparison in terms of this year's spending. It enables the Minister of Finance to say that expenditures this fiscal year will not grow faster than the gross national product, estimated by him to be about 14 per cent.
The government spent hundreds of millions of dollars during the fiscal year ending March last. It advanced hundreds of millions of dollars to Crown corporations toward the end of that fiscal year, hundreds of millions of dollars which did not need to be advanced or spent in that fiscal year. The government seems to have deliberately inflated last year's spending so that it will look better this year. Thsi is the sort of jigging around, tinkering and dishonesty which one has come to expect from this government.
Some may say I am making a big fuss about very little. What difference, they may ask, does it really make wheth-
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er the government spent money in the last fiscal year or the current fiscal year? Just this, Mr. Speaker. Quite apart from making a fool of the President of Treasury Board- and that is his business, with all his fine talk-it puts the Minister of Finance and the government in a position where they may well argue this time next year that expenditure growth did not exceed the growth of the gross national product during this fiscal year. It is just more manipulation.
The Prime Minister pleads for us to co-operate with them in their very earnest effort to control expenditures. He does this, of course, completely forgetting the totally irresponsible commitments made by the government during the election campaign. How can anybody take the Prime Minister seriously? Who can have any confidence, now, that this government will do what it says it will do, that its word is worth the paper on which it is written? Who can really believe that this government believes in anything?
This destruction of confidence is serious. Our challenge in Canada, as in other western democracies, goes far beyond working our way out of this recession. If we look around us, we see that western-style democracies and economies are under attack for lacking a sense of purpose, direction and cohesion. They are under attack for being too materialistic and lacking ideals, under attack for the range of their inequalities, inflation and unemployment.
In Canada, today, we lack a sense of common purpose. Distrust is prevalent. There is distrust of big business, big labour and big government. Citizens do not believe their national government is telling them the truth. Unfortunately, they are too often correct in that regard. The Minister of Finance is not to blame for all of this. However, this is the context in which he ought to have prepared his budget, although you would never recognize that from reading his speech.
The Leader of the Opposition (Mr. Clark) emphasized the need for a budget to set objectives for a period substantially longer than the year for which this budget has provided. We must improve our economic policies. We must re-establish trust between the citizen and his national government. We must ease, rather than aggravate, tension and confrontation that exists within our country.
I am not suggesting that we should abandon our institutions because those institutions are under attack. I am not suggesting that we should subject ourselves, as the Prime Minister said this afternoon, to deep-seated structural reform. The kind of talk indulged in by the Prime Minister around the end of the year is both incoherent and unsettling for many Canadians. He did not do much here this afternoon to throw any light on that question. Of course our institutions must evolve as conditions change. However, our system of a mixed economy, with heavy reliance on private enterprise, is better for us than anything we see abroad. That system may not be the best for certain developing countries, but it is best for us.
Government ownership has a role to play, providing certain national services as our history and our experience shows us. However, public ownership as a means of giving people control of their economy has been shown to be a gigantic illusion. I suspect the most difficult corporations for government to control are Crown corporations where

we see a paradoxical lack of control by the government, associated with great difficulty by those corporations in any hard decisions taken.
I say that our system is best for us. However, if we are to preserve it, we must see that it works satisfactorily. It is not working satisfactorily. This is partly due to external conditions, but it is dishonest to blame most of our troubles on the rest of the world, as the Prime Minister and the government have been doing for the past several years. What we need in the post-control period is not more government intervention but more restricted, intelligent, honest and better-defined intervention.
We should define the aims and priorities of government policy for the years ahead. The Leader of the Opposition has emphasized the importance of this. Not only have governments been expanding too rapidly, but they have been unable to solve or deal effectively with the problems they suggested they could solve. The national government in particular has been trying to do so many things that it has not done anything well. This has led to disillusionment and distress. Moreover, government has been taking an increasing proportion of the gross national product, and this in turn has generated inflationary pressures. Then, again, we see the federal government launch, with the provinces, costly programs which the national government now wishes to stick the provincial governments with, thus increasing distrust between the federal and provincial governments. I shall not elaborate on the con game involved in this; I have done so before.
Let me sum up in this way. The federal government has plenty to answer for. Instead of the Prime Minister coming to us and asking us to tell it as it is; instead of coming to us and seeking our support for some program of restraint, let the government tell it as it is, let the government try to be honest with the people. Certainly, the government must slow down the rate of growth of its expenditures if it does not wish to foster continuing inflation as taxpayers try to maintain their position after taxes.
It is clearly not good enough for the federal government to transfer costs to the provinces. That may ease the financial position of the federal government, but it solves nothing. Moreover, it places a heavy strain on confederation. We should recognize that the increasing share of the gross national product taken by the government presents a basic problem for our economy and our society. If that is what the Prime Minister was saying this afternoon, though he did not put it in those terms, I would agree with him. We must face that issue.
I think the hon. member for York-Simcoe did face it. He put before the House a number of proposals for large cuts in expenditures. It is true he did suggest using a small part of that money for certain specific purposes about which the Prime Minister made fun this afternoon. If the Prime Minister and members opposite are serious about the importance of controlling the rate of growth of government expenditures, the situation has gone far beyond hurling challenges at the opposition to say what we would cut. It has gone far beyond that. We must face this problem of the government taking more and more of the gross national product. But we should not regard government restraint as
June 10, 1976

being in itself a policy of economic management, though this is crucial if we are to preserve our mixed economy, with its heavy reliance on private enterprise, and if our citizens are to regain confidence in what the government says it can do and in what it does.
But I emphasize that government restraint, of itself, will not cause our economy to work satisfactorily. Government restraint is only a precondition. Flexible fiscal and economic policies, as opposed to rigid doctrinaire conceptions, will continue to be essential tools of economic management.
It may have been naive to believe that Keynesian techniques could achieve perfection, that they could produce a perfectly balanced economy with full employment and no inflation. But it would be even more naive to believe that our economy would regulate itself if only the government would control itself, important though that is. Surely we are not going to revert to a pre-Keynesian world. I remember what that world was like, and I do not wish to go back to it. Surely we are going to learn from our post-war experience and not simply throw it out of the window because we have made mistakes. Let us learn from our mistakes. We might even go back and reread Keynes, who never advocated bigger and bigger governments taking an ever-increasing share of a gross national product. In any event, we still need flexible fiscal and monetary tools for economic management, associated with a longer-term policy of economic restraint.
The question is: what additional tools will we need to provide the stability and growth required to enable our institutions to work? That is the question which is worth discussing, not some murky question about changing our institutions. Nearly everyone agrees that price and income controls are not a permanent solution, that they can only be used effectively to deflate inflationary expectations. I say, after long and considerable thought, that the length of the program of controls adopted by the government is both stupid and tragic.
I am sorry the Prime Minister is not in the chamber to hear me say this, but I hope my remarks will be brought to his attention, for what they may be worth. I say the duration of the control program contemplated by the government is both stupid and tragic. In the first place, controls will not work satisfactorily for that length of time. Then, the restriction on collective bargaining, for example, for so long a period will create fear and resentment among organized labour which will subject the economy to severe and unnecessary strain. I say to members of the government over there, "Please stop thinking of maintaining controls for three years or more." I say this is an irresponsible attitude, partly because the government probably has no intention of maintaining controls for that period of time any more than it had any intention of not imposing controls when it was arguing that controls should not be imposed.
The correct policy of the government would be to emphasize its firm intention to drop controls as soon as possible and seek the co-operation of labour, business and other economic groups. The correct policy at this time is for the government to give labour and business an incentive to prove that controls are not necessary. Maintaining the position that the controls are to be kept in place engenders
The Budget-Mr. Stanfield
confrontation and tension. The control operation carried out by the government is cynical and is certainly harmful as far as the aspect of its duration is concerned. Controls will not provide a solution to anything except in terms of deflating inflationary expectations on a short-term basis. Nor will controls take care of any competitive disadvantage which may exist in the manufacturing sector of our industry.
The Economic Council has already outlined the reasons for our competitive difficulties in this world of large trading blocs. One problem basically is that, with few exceptions, our manufacturing industries do not have free access to large markets and consequently are not competitive with manufacturing industries which do have free access to large markets. The Economic Council has documented this difficulty.
Why do we not face this problem? Why do we try to pretend that we can perhaps overcome these competitive disadvantages by the imposition of controls? The problem is real, it exists, it will not go away; controls will not drive it away. We will not get rid of it just by cutting or controlling government expenditures. We will not drive this problem away through any approach of Canadian ownership. Nor will we solve the problem by adopting miscellaneous programs to encourage research and development. We will only solve this problem by attacking it in the way the Economic Council indicated.
This, however, is not my main point this afternoon, Mr. Speaker. The main question is: what direction should the government be taking? What direction are we taking? There has been debate about where we should go in the post-controls period. With all due humility, I express the view this afternoon-it is a very simple approach basically, though certainly not easy to carry out-that we should make another effort to run our economy along what I would call orthodox post-war lines; that is to say, we should try to get back to where we were before the government became overcommitted. There is much more force to this than just trying to put the clock back.
I should like to see us adopt a firm determination to reduce somewhat the proportion of the gross national product going to governments in Canada. I say that without any delusions about its difficulties. Associated with this move, however, I wish to see neither the adoption of rigid concepts, such as the necessity of a balanced budget every year, on the one hand, nor, on the other hand, resort to Galbraithian concepts, analyses and solutions.
I should like to see us take another crack at the approaches that seemed to work reasonably well after the war and which we have moved away from substantially during the past ten years. That, I think, is a simple, realistic approach that is worth trying. I believe that if the government were to back off somewhat in terms of expenditures and what it is trying to do in this country-such as to stop taking, for example, more of the working man's pay in taxes, and if the government and the Bank of Canada were to abandon the sort of stop-go policies that we have had in recent years-and took a somewhat longer-term view of economic policy, realizing that policies take time to take effect and have the additional advantage of creating
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an atmosphere of more certainty for those involved in our economy, the workingman as well as the businessman-the Leader of the Opposition referred to this-we might achieve, not Utopia but something we could live with. I think it is worth trying and it is urgent that we try it. I believe that all Canadians generally would support this kind of effort.
I am not this afternoon attempting to write a blueprint. My time will soon expire. Certainly, anything I have said this afternoon would have to be supplemented by specific programs, such as attacks on structural unemployment. Nor am I suggesting conditions have not changed in the last ten years, that life in Canada 10, 15 or 20 years ago was the same and that our economy in that period was working perfectly, because I know it was not.
My basic point is that our post-war economic policies worked reasonably well until we got off the track; until, as I have put it, the government became overcommitted, not simply in terms of what it was spending but in terms of what it was trying to do, usually without success. I believe we should make a very determined effort to get back on the track, that the national government should outline a firm, believable set of objectives and policies for, say, the next five years, and try to convince the Canadian people that it is both serious and determined to carry out those policies. One of those policies, of course, would be a very firm attitude toward the rate of inflation, having clearly and firmly delineated its direction. We would then follow the course that had been charted.
I must say that I have not seen evidence that this government is capable of that, and if it is not capable of such an effort, or if it lacks the credibility to put forward such an effort, then the people of Canada will most certainly turn to the Leader of the Opposition for the kind of straightforward, challenging leadership which our country needs. I want to say to my hon. friends opposite, and through them to the Prime Minister, that I believe trickery has run its course in Canada.


Mr. Alan Martin (Scarborough West):: Mr. Speaker, I am pleased to be able to participate in this third budget debate since becoming a member of parliament. I should like to say at the outset that I have never been prouder to be associated with a finance minister and his budget presentation than in this particular case. I think we should all be aware that Canada is in the midst of some troubled times and that there is, indeed, the need for a steady hand on the rudder. I believe that our current finance minister has indicated very clearly that that steady hand is now being applied. I
I think it is worth remembering at this time, Mr. Speaker, as we enter a phase with a new finance minister, that he is joining a group of seven able and capable finance ministers which successive Liberal governments in this country, under four prime ministers, have placed in this onerous responsibility since the early days of World War II. I suggest each has acquitted their responsibility with a degree of ability and aplomb that I suggest has been the pride of Canadians and has had much to do with the continuing strength of successive Liberal governments over 30 years of this 36-year period.

I think it is significant, in the context of today's problems, Mr. Speaker, to bear in mind the importance that must be attached to the direction being given in the area of economic policies. The success of past finance ministers under Liberal governments has brought us through various periods, including a general period in which the population of the country has doubled. It has brought us through a wartime period, a crisis that has never before or since been equalled. It has brought us through a post-war boom, with all its ensuing difficulty as the economy moved ahead at a very rapid and unusual rate.
Liberal government finance ministers were then called upon to take over following a six-year period of Conservative rule during which our national and international reputation, which had been built up so successfully over past years in the area of the management of our economic affairs, was brought to a new low point and almost completely destroyed.
A more recent situation facing the country, of which we are all aware, has been the raging inflation that has beset Canada, and the need eventually to impose strong, central controls when it became evident that voluntary measures were not going to suffice. Finally, it was under a Liberal government that a finance minister has been responsible for implementing a most difficult and challenging set of amendments to our Income Tax Act, which has resulted in a greater degree of equity and fairness under our over-all taxation system.
These were some of the challenges faced by the government and by men of the stature of Ilsley and Abbott, both of whom held the finance minister portfolio for a period of some 14 years, and by people of the stature of Harris and of Gordon, the man who, in spite of problems besetting him and his government, was the single Canadian in high political office who was finally able successfully to pinpoint and bring into public focus one of our most continuing and besetting national problems, the degree of control over our Canadian economy exerted by people beyond our borders. The list goes on.
It is with this background, and in this context of 30 of the past 36 years, that our current Finance Minister, a man of proven ability and strength of character, as evidenced in his previous portfolios, particularly that of energy, mines and resources where I came to know him best, now takes over during an exceedingly difficult period. I suggest he has approached his first budget in his current mandate as Canada's Minister of Finance with a background that is second to none.
On the other side of the coin, what has parliament to offer? At the present time, the financial critic of the official opposition is spending a good deal of his time comparing fiscal expenditures with those of the past 100 years. It seems to me this is an exercise equally as futile as an endeavour to point out that General Motors is today an inefficient operation because its capital expenditures are so much greater than at the time that organization was built up. It is so ridiculous a comparison as to be discountable without any further thought on the part of any Canadian to attempt to follow the rationale of the finance critic of the official opposition.
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The position of that finance critic is one which I think we must assume, under the parliamentary system, does indeed involve responsibility to bring intelligent criticism to bear on government economic policies as brought forward in a statement so important as the budget. While I do not envy the task of the hon. member for York-Simcoe (Mr. Stevens)-it is an arduous task he has been given, to poke holes in an honest and straightforward finance policy brought forward by such an experienced and able minister as the hon. member for Rosedale-I must, however, take him to task for seeking sensationalism in his unfounded accusations, based as they are on the potential media value of the rhetoric contained in them rather than on their actual material content.
He mentioned the so-called 7 per cent growth factor which apparently has been lost over the past two years. Has he examined the picture in other western industrialized countries over the same time? Obviously not. Or if he has, for purposes of his own choosing he has refrained from including these comparisons in his speech. I must assume that he is both too intelligent a person and one who properly prides himself on the research capabilities of his office not to have appreciated that the real GNP for OECD countries dropped by 2 per cent in 1975, far from any gain at all, let alone a 7 per cent gain, and that as a result of, and contributing to this decline in economic activity, was a 6 per cent drop in over-all volume of world trade.
It is inconceivable for a responsible person to suggest that Canada, a country which lives by trading, could remain insulated from this worldwide trend and be expected to fly completely in the other direction, particularly to the extent suggested by the hon. member, the official opposition's financial critic. On one hand the hon. member for York-Simcoe complains of the extent of government control in the economy-and I presume he is referring to all levels of government, including the massive involvement of the government sponsored by his own party in Ontario in the affairs of that province-while on the other hand he moans about the lack of further government involvement in the federal economy in 1976 in his reference to what he chooses to call a "heal thyself" philosophy that he attributes to the federal government's position in relation to economic matters within the country at the present time.
He simply cannot have it both ways. The member indicates concern over what he regards as no real stimulus to employment. Yet he must be aware of the intent of the government to use any funds saved by the changes in the unemployment insurance legislation for job-creation programs. This will obviously operate as a form of stimulus. This may turn out to be something the opposition financial critic may find difficult to accept, being a seemingly confirmed anti-stimulant where the stimulus is to originate with the government.
Mr. Speaker, it is extremely difficult to really know where the hon. member stands or even to adequately define the side of the fence on which he appears to sit. The hon. member goes on to talk about lack of tax cuts and a probably horrendous deficit. Surely, tax cuts would result in an even higher deficit. Once again his economic arithmetic is difficult to fathom. The opposition financial critic indicates that we are counting too heavily on the U.S.
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economy to cure the Canadian economy of its ills. Again, as a businessman, surely he understands the position of the United States as Canada's largest customer. Is it not rational to assume that an improvement in the financial condition of your largest customer is bound to help your situation, when you are indeed its main provider of merchandise?
His reference to lotteries is nothing but a cheap shot. If, indeed, the lotteries of the day at both federal and provincial levels are, as he indicates, a poor remnant of what went on in the seventeenth century, one must assume that the lotteries of those days represented real bonanzas, based on the current success of the current Olympic series of lotteries. Here, again, the official opposition's financial critic is obviously seeking a point that lacks substance, in his attempt to make a publicity score on the government. This sort of meaningless criticism, once again, does him and his party little or no credit and the Canadian people, I suggest, simply will not buy it.
The arguments of the member for York-Simcoe on the anti-inflation program are similarly disturbing.
Mr. Speaker, he continues to argue for the implementation of the controls some 18 months earlier. Yet it seems to me that the government of the day, and the people of Canada, demonstrated quite clearly that they were not prepared to go for controls at that time without benefit of further attempts at consultation among government, labour and industry in a final effort to see if some voluntary means could be found to achieve the desired objective. As stated on many occasions, and surely as heard and noted by the hon. member for York-Simcoe, such efforts at voluntary resolution were not successful.
In the interim, the rates of inflation grew beyond all reasonable limits, reached double-digit rates and thus demanded more concerted and direct involvement by government than voluntary means could possibly have provided. Yet we have the spectacle of the hon. member for York-Simcoe, the official opposition's financial critic, leading his group in opposing that controls legislation when it was finally brought into the House. As to the post-controls period, the financial critic for the Conservative party decries the absence of meaningful discussion over this. Yet what has his own personal contribution been in this direction? When our distinguished Prime Minister (Mr. Trudeau) made even the slightest reference to changes that might be necessary in the future, the best that spokesman for the Conservative party could do was dash off in a form of blind hysteria. I ask whether this really can be considered a responsible position. In my view, it cannot.
I could go on and on analysing and answering criticisms levelled by the hon. member for York-Simcoe in his capacity as the official opposition's financial critic. However, I would like to move for a few minutes to comments made even more recently in this past week by the Leader of the Opposition (Mr. Clark).
In one area-that of proposed changes to the Unemployment Insurance Act-the distinguished Leader of the Opposition on the one hand indicates general concurrence with the position advocated by the Minister of Finance

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(Mr. Macdonald), but then later in his speech equivocates as to his position when he further examines the matter.
The hon. Leader of the Opposition indicates that the minister fails to provide leadership. Surely this is far from the case, Mr. Speaker. Any real understanding of the term leadership will appreciate that there is a time and a place for holding a firm hand on the rudder and charting a course that lies straight ahead. Stated in another form one might say that, when in a small boat on rough waters and surrounded by alligators, it is no time to stand up and move around. I suggest that the present Minister of Finance, the hon. member for Rosedale, has shown a most direct and meaningful act of leadership in bringing down a budget that might quite fairly be described in a general sense as neutral in its over-all impact on the Canadian economy, a most appropriate stance at this particular time, in my view.
I could continue to pick apart many of the specific criticisms made by the Leader of the Opposition in his speech earlier this week. However, I feel that in fairness I must respect the fact that this is his first opportunity to react to government leadership in the area of Canada's economy, in his new and responsible role as leader of his party. Although the Minister of Finance was also presenting his first budget in his new portfolio, I think his most creditable performance must at least in part be attributable to his extensive background in major positions of responsibility within the present government-in each of which he has acquitted himself with a high degree of ability and success. I do appreciate that the Leader of the Opposition has not had the opportunity for serving in anywhere near equivalent positions of responsibility or experience, and no doubt we can expect more from him in the years ahead as he entrenches himself in the role of leader of the party that I am sure Canadians will be pleased to leave in its current position of official opposition for many years in the future.
I have chosen to enunciate in my comments today the underlying strength which I think has been evident in the positions taken and the leadership shown by finance ministers in Liberal governments since World War II. I say again that into this picture enters our current Minister of Finance as he presents his initial budget before the House of Commons and the nation at large. I am sure the House recognizes the obvious ability of our new minister to follow in the illustrious steps of his predecessors. Nowhere is this more in evidence than in the seeming inability of the opposition to come forward with any real, meaningful criticism during this budget debate.
Turning for a moment to the immediate area of the economy that must continue to be of concern to Canadians I want to speak briefly on the matter of the balance of payments situation. In 1973 our current account with other countries was in balance. In 1975 the situation had deteriorated to a $5 billion deficit. In 1976 we are hoping that this deficit can be reduced to $4 billion. Mr. Speaker, we all understand the extenuating and world-wide circumstances that have led to this unfortunate state of affairs. The severe drop in the rate of increase of our 1975 exports to our two major trading partners; the international and national problems in the area of oil and gas-resulting in significant contraction of our exports in these commodi-

ties; our continuing deficit in the non-merchandize trade area; all of these contributed in a significant way to the $5 billion deficit which had then to be made up through the importation of substantial amounts of capital-both of short and long term nature. Unfortunately this capital has both to be serviced and repaid in future years, and it really provides an unsatisfactory solution to the problem over the long term.
It is important to point out that this current account deficit was occurring at a time when our Canadian economy continued to perform better than those of most other countries. In other words, Mr. Speaker, the $5 billion cash problem is there, but I believe there is every reason to be optimistic in view of our buoyant economy. Surely methods will be found to offset this substantial cash deficit problem. Certainly improvements in the area of merchandize exports to our major trading partners, as their economies improve, will help substantially. The point is that the cash deficit problem is there and must continue to receive the concerted attention of government and persons in the private sector.
I think it is significant to note that as we discuss this current budget the rate of unemployment has dropped- slightly it is true-but nevertheless the drop from 7.4 per cent to 7.1 per cent is most certainly in the right direction.
I would like to make a brief reference to the features of the budget relating to unemployment insurance, I might add, features that I heartily endorse. By uniting the Manpower and unemployment insurance programs, by increasing the work requirements from 8 to 12 weeks, by more directly tying benefits to the number of weeks worked and granting extended benefits according to regional economic conditions, the cost of the insurance program to taxpayers will be lowered at no risk to its equity. The Canadian unemployment insurance program has been hailed as one of the most advanced in the world. The changes which have been announced will help to reduce the opportunities to violate the intent of the program.
The integration of unemployment and Manpower services will result in improved enforcement of the provision that recipients be actively seeking work. I think that is important, and the length and eligibility requirement should discourage over-reliance on unemployment insurance as a principal source of income. Like other forms of justice, social justice must not only be fair but must be seen to be fair if it is to retain the support of society as a whole.
In conclusion, there are no claims that this budget would be a panacea for all our economic problems. However, the decision not to attempt extensive remedies should not be confused with indecisiveness. Rather, it represents a mature recognition of the limits of effective government intervention and of the importance of individual initiative. That problems will persist, there can be no doubt. Neither an unemployment level of 7.1 per cent nor an inflation rate which approaches 9 per cent is compatible with a healthy economy. Both undermine the foundations of an open society. The increased levels of investment which are essential if we are to avoid an early relapse are likely to await further improvements in business confidence.
The demand for housing continues to outstrip the supply. Credit conditions play a particularly important
June 10, 1976

role in the housing sector, and mortgage rates which are near the 12 per cent level make it all the more difficult to finance the construction or purchase of a home.
I might add that I do not share the views of those who suggest that the average Canadian should no longer be expected to own his own home. Whenever the opportunity has been available, people have unequivocally demonstrated their preference for their own piece of property and their own backyard. It is therefore essential that there be further improvements in the housing industry.
There are many positive signs on the economic horizon. A careful review of the minister's speech and accompanying documents most certainly gives legitimate cause for an optimistic if cautious attitude on the part of all Canadians. It is this kind of positive attitude that we on this side of the House feel is the appropriate and justifiable stance to hold. I am personally thankful that the prophets of doom and gloom, epitomized in the little thought out and almost desperate tone of the official critics of the opposition, do indeed occupy the benches opposite.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, it is great to get into this debate finally after waiting for so many days. The fact that so many cabinet ministers have spoken in this debate is an indication to me of its weakness. I do not believe the House has witnessed so many cabinet participants in a budget debate for many years.
The intervention of the Prime Minister (Mr. Trudeau) today can be classified as a painful exercise in generalized vagueness. In fact if the parade of cabinet ministers continues, we may have a new entry for the Guinness Book of Records for the most cabinet ministers to speak in support of a budget which was so lacking in content that it needed their contribution to prop it up.
Recently the Prime Minister was quoted as saying that it would take a miracle for the anti-inflation controls to be removed. Let us say that if the budget presented by the Minister of Finance (Mr. Macdonald) is any indication of the talents of the government, then we can be sure there are no miracle makers in its ranks.
This is really such a bare bones budget that one has difficulty separating the verbiage of the document from the measures which normally flow from budgets. Indeed, by 10.15 p.m. on budget night the media people in the lobby were putting their cameras and tape recorders to bed, and there has to be a message there. Watching some members of the front benches opposite, one could see them fighting off yawns.
One of the few good things in the budget was the removal of research and development from the Anti-Inflation Board regulations. This was hardly a stroke of genius because research and development should never have been placed under the AIB regulations in the first place. We will never know the full extent of the damage to the development of products in Canada. We could not calculate the number of projects which would have been undertaken but were either cancelled or moved out of the country. As it stands today, research and development projects will have to be approved by the Department of Industry, Trade and Commerce before they will be allowed as an expense item,
The Budget-Mr. Kempling
and I am not too confident that that is the best procedure to follow.
Let me deal with a few items in the budget. Under the heading of energy conservation the minister announced a tax of $100 on automobile air conditioners. Any competent automotive engineer will tell us that an air conditioner uses the same amount of horsepower as power steering. In fact when in use automobile air conditioners take less than one mile per gallon from performance. If you have the wrong tire pressure in your automobile tires that can rob you of more than one mile per gallon and create a tremendous safety hazard as well.
The weight tax on automobiles must be questioned. Surely the Department of Energy, Mines and Resources, which obviously put this tax in the budget, must realize the lead time required for the design of an automobile. Of course I am not surprised that the minister of that department did not think it out because he is part of the energy problem, not part of the solution.
Earlier this year the Minister of Energy, Mines and Resources (Mr. Gillespie) announced that government policy, in line with that of the United States, was to set a target of 24 miles per gallon fleet average for cars by 1980, and here again we have a conflict between the two ministers.
This budget increases the weight tax in stages to 1979. Bearing in mind the lead time required for design, and bearing in mind that the industry has accepted the 24 miles per gallon standard and adopted it as an industry standard, why have we chosen to complicate the problem further by adding a further tax?
We have a rationalized North American automobile industry, to some extent, and now we may be heading for a separate standard for Canada as distinct from the United States. While I appreciate the need for conserving energy I believe it could be accomplished in other ways without interference in the design and production of automobiles. We find the motor vehicle safety standards have added more than 1,000 pounds to an automobile.
In fact to look at the weight of a vehicle alone as the criterion for saving fuel shows the lack of in-depth study done by the Department of Energy, Mines and Resources and the Department of Transport. It is obvious to anyone dealing with motor vehicles that aerodynamics, tires, axle ratios, carburetion, engine displacement, and so on can have more effect on the efficiency of the engine performance than the weight of the vehicle. In many instances a small, light weight engine is less efficient than a larger, heavier engine.
When one considers the impact on our domestic industry and how our trade balance is affected when the industry is not at top production, one can only conclude that the provisions for additional taxation are inappropriate at this time.
The real disappointment in the budget is that the government missed a real opportunity to add a measure of confidence that would show our economy is really recovering, that inflation is being contained, and unemployment is being reduced.
Instead, we have another budget deficit of more than $5 billion, a trade deficit in high technology product of $9

June 10,1976
The Budget-Mr. Kempling
billion, and no meaningful reduction in unemployment. In fact it is forecast that we will have an increase in unemployment before the end of this year, and that is tragic. The tragedy in all the economic problems we face is that it could be so different. When we travel out of the country we are told how fortunate we are in Canada with all our resources. Yet within the country we are being told we are running out of resources.
Various members on the government front bench have stated that the recovery of our economy is directly related to the recovery of the American economy. While in Japan a few weeks ago, Japanese cabinet ministers with whom we discussed the question indicated that the recovery of their economy depended to a great extent on the recovery of the American economy. In Japan I picked up an Australian newspaper and read that the Prime Minister of Australia stated that their economic recovery depended upon the recovery of the American economy. If we read the comments in the OECD releases, we will find that they continually refer to the European economic recovery linked to the recovery of the American economy.
It would seem to me that we should be working closely with the Americans to see that our economy not only recovers in step with theirs but that we put in place complementary taxation and tariff measures to see that both our economies remain strong and buoyant. Rationalization of taxation is an urgent priority for the manufacturing sector.
We have no industrial strategy. In fact much of the profit earned by industry since 1971 is a pure paper profit. The combined effect of inventory inflation and a rate of depreciation on assets that is inadequate to recover the replacement of that asset has created levels of profitability that are fictitious. In many cases companies have to borrow to pay the tax bill. The net result is that most businesses face cash flow problems. Decisions to replace machinery are deferred because of lack of cash and increased replacement cost. Plant expansion has been held off because of increased cost, lack of cash, and the high cost of borrowed money.
When you spin off the combined effect of inflated inventory prices, unrealistic depreciation allowances, lack of adequate cash to operate, and high interest rates for borrowing, you realize the opportunity missed by the government to put in place some legislation that would build a sound foundation for an economic recovery. Once in place, that type of legislation can be adjusted to achieve the national objectives of a strong secondary industrial base.
Canada will for the forseeable future be a trader in rocks and logs in the international market place. The amount of processing of our mineral resources we are able to accomplish will depend upon the acceptance of those resources in the market place. There are those who like to comment on the economy and who would have us refuse to ship our mineral resources unless they are partially or completely processed. That is an unrealistic approach. We are not the only country in the world with mineral resources for sale. We have to compete for orders in a market that is flexible and moving. Our labour rates are amongst the highest in the world. To offset this we must be more productive and more efficient in our business process. Our transportation, because of the distances involved, must be the best and

most efficient to offset the distances to markets. It follows, then, that we have to operate in an atmosphere as free from government interference as possible.
The most urgent negotiation the federal government should undertake is with the provinces to work out a taxation formula to maximize the development of our mineral resources. But hand in hand with this is the development of a secondary industrial base, not only to complement the mineral industry but also to produce more of the products we import.
Each year we see the number of companies involved in manufacturing declining. Many companies find they can purchase the products they were manufacturing from a source outside the country, and merely act as a sales agent and marketing arm. There are more and more manufacturers becoming marketing organizations. It usually starts with a position that says, "We will round out our line of products with imports." From there they move to calculate the capital cost of new plant and machinery research and development against the cost of acquiring a product offshore. You can go through industry after industry and find this happening. In fact a large portion of products manufactured in Canada are aligned against similar products from countries that are classified as Third World countries that have labour rates only a fraction of our rates.
Looking at the decline in the manufacturing sector of our economy, one can only say that there is a death wish in the Department of Industry, Trade and Commerce that virtually all manufacturing cease in this country and that we become a net importer of products of other countries forever.
Certainly a look at the textile industry is a classic case in point. Our manufacturers' share of the Canadian market is dropping and has reached a level that they only enjoy 46 per cent of the domestic market. Only 6 per cent of the available domestic market is covered by quotas. In order to claim damage from imported textiles the manufacturers can appeal to the textile board, but the process is complicated and lengthy. By the time a case is heard it is too late for action to be taken.
By comparison the United States textile manufacturers have about 90 per cent of their domestic market reserved for them. The United States government has negotiated 19 separate agreements on textile quotas with various countries that produce fibres, woven and knitted products, flat goods, and apparel.
The net result of all this is that we find the Canadian textile industry in general will not invest in new plant facilities, and will only upgrade and maintain the better and newer production facilities. Plants that should be replaced will be closed down and more unemployment will result. Certainly the people responsible for including, in the first instance, research and development in the AntiInflation Board's regulations, and restricting the level of expenditures by a formula classifying research and development with donations to charity, promotion and advertising, displayed plain stupidity.
It is this type of bureaucratic stupidity that has frustrated manufacturing in Canada for years. We need, first, a complete overhaul and review of our taxation system. It
June 10, 1976

must be compared with that of our major trading partners to see that we are not placing our manufacturing industry in a non-competitive position because of inequities in our taxation system.
We must then examine the pricing of inventories and take a look at the method of calculating depreciation. Manufacturing profits should be stripped of inflation factors, and the profits should reflect true profits. To offset high interest rates a serious study of depreciation methods and an appropriate adjustment will do much to increase the cash flow in a business.
Profits that are earned and reinvested should not be subject to taxation. This would help the cash flow problem facing many businesses today.
Needless to say I am deeply disappointed that the budget did not reflect some of these points. We have so much potential in this country. I find it discouraging, and feel the sense of frustration that there is in this country with a government that has so little imagination that, at a time when other economies are advancing, we are still playing the short term game of finance. Is it any wonder that after the budget presentation when we asked people in business, "What did you think of the budget?", they replied, "What budget?"
There is a basic weakness in the departmental structure of the Department of Industry, Trade and Commerce. Perhaps the weakness is the fact that industry is included with trade in one department. Perhaps we would be better served in Canada if industry were separated from trade and we could then have them pursue their separate goals. Certainly a visit to the Department of Industry, Trade and Commerce confirms this. Talk to the people at Industry, Trade and Commerce about a product, and the first and most urgent question is whether or not it has export potential. If you say you want to serve a domestic market they lose interest.
In other words the heavy emphasis is on trade. Industry itself is only of secondary concern to the people in the Department of Industry, Trade and Commerce. Question the people at the Department of Industry, Trade and Commerce about product development in Canada and you are surrounded with classic bureaucratic buzz words such as world scale, economies of scale, export-export-export. You end up frustrated and discouraged.
There has never been any real co-ordination between the Department of Industry, Trade and Commerce, the Department of Regional Economic Expansion, and the Department of Consumer and Corporate Affairs. A case in point is that there is at present a backlog of 370 cases to be heard by the Opposition Board of the Registrar of Trade Marks. Under normal circumstances the Opposition Board would rule on about 60 cases a year. At the present time the trade marks office is dealing with cases presented for adjudication three years ago. Only the registrar can give a ruling on these cases, but the new registrar is on a year's immersion course to learn French. Consequently when he returns he will be looking at more than six years of backlog. What an intolerable situation! It requires an amendment to the Trade Marks Act to allow person other than the registrar to act on his behalf.
The Budget-Mr. Kempling
When you look at the combined effect of all the disincentives to the business community, it is any wonder there is dissatisfaction and frustration? Let us for a moment add up the problems they face. The Anti-Inflation Board has more than 3,000 wage settlements to rule on; inflation is creating false profits that are being taxed at too high a level; the combined effect of federal and provincial taxes and royalties is holding back expansion of our non-energy resource industries; inventory pricing under existing regulations does not allow for an inflation factor; depreciation allowances do not reflect the replacement cost of capital assets; there is a basic tax penalty for Canadian manufacturers as compared to our major trading partners; before phase one of the competition legislation has had a chance to work, we will be looking at phase two; interest rates are the highest of any country of the western world; our productivity is amongst the lowest of any of the O.E.C.D. countries; we have a six year backlog of trade mark cases to be considered by the Opposition Board under the Trade Marks Act; working capital is so short that some companies are borrowing money to pay their tax bills to the federal government; we lost 11 million man years due to strikes in 1975; we lost more than 11 million man years due to alcoholism and drug use in industry in 1975; research and development are at the lowest level they have ever been.
Only two countries on the O.E.C.D. list have lower research and development than Canada; we had, until this budget, research and development subjected to AIB regulations and formulae. This alone caused cancellation of many projects. It has taken four years after the realization that we had an energy supply problem for the government to act on expense deductions for exploration costs. While we welcome the announcement in the budget we must ask, along with other Canadians, "Why did it take so long for you to act?"
We face more and more intrusion in the private sector by the federal government. Add to all the foregoing, the year-end musings of the Prime Minister on the economy, and subsequent statements, and you will begin to see the depths of despair and frustration of the business community.
Many cabinet ministers who have spoken said that the official opposition has offered no solutions but pointed out legislative weaknesses. If you examine the points I have just mentioned you must agree that solutions to most, if not all of them, could have been included in the budget. Too much goes to the government. In fact these suggestions would have gone a long way toward stimulating employment and helping to reduce the level of unemployment in the country.
Inflation can be beaten, but the action that has been taken so far I do not believe has made the impact it could have made. Our trade deficit and balance of payments problem, in spite of the buoyant words of the Minister of Industry, Trade and Commerce (Mr. Jamieson), will be with us for some time. In fact his speech reminded me of a man whistling in a graveyard trying to keep his spirits up.
I have tried to set forth the real facts and problems as I see them. I have spent most of my life in business. I have had to look at the realities of economic life. If I had to choose a board of directors from the government benches I

June 10, 1976
The Budget-Mr. Maine
would be hard pressed to find one person to whom I would offer that position of trust. From the Prime Minister down, there is hardly anyone who would qualify based on their eight years of lack lustre performance. This budget reflects the lack of talent available.


Some hon. Members:: Hear, hear!


Mr. Frank Maine (Wellington):: Mr. Speaker, once again I should like to bring to the attention of the House and the Canadian people the importance to Canada's economy of science and technology, which in turn rest on a foundation of research and development.
I was pleased to learn that the new budget removes approved expenditures for research and development from the list of restricted expenses under the Anti-Inflation Act, expecially so since I made representations to the Minister of Finance (Mr. Macdonald) and emphasized this point strongly in my speech during the recent opposition day debate on science and technology. I am glad that the government showed a sensitive and sensible response to an important matter when it was brought to its attention.


Walter David Baker: It was a beginning.


Francis William (Frank) Maine: Two major aspects of science and technology in our economy are vital: harnessing it and controlling it. One without the other does nothing to improve either our standard of living or the health of our economy.
The harnessing of science and technology is done in the laboratory. To this end we spend millions of dollars annually to train scientists in our universities. We have expertise in many high-technology-content areas, but we rarely reap the benefits from this knowledge via its application because we do not control the use of that knowledge. If we are to derive benefit from scientific research work, the results must be commercialized and thereby translated into the Gross National Product. The "brain drain" about which we heard so much in the early sixties remains a serious problem. There are very few significant industrial research and development operations in Canada.
If by chance a multinational corporation does become interested in a product of Canadian technology, it is unlikely that much, if any, financial benefit will be realized by Canada. It is the practice of most multinationals based in the United States to carry out virtually all research and development in American labs and limit the Canadian operation strictly to manufacturing. The auto industry provides a very good example of that type of operation. All of the research and development work in the automotive industry is done in Detroit. All that is left for the Canadian operation is assembly line jobs, while jobs which should be going to our university graduates do not exist in this country.
Occasionally there has developed in Canada a research and development facility rivalling the best in the world. One of these is the RCA Limited Research Laboratories in Montreal, part of RCA Limited. There is no better example of the problem of Canadian control of science and technology than the announcement by RCA corporation that it is closing down these labs. RCA Limited is owned 100 per cent by RCA International Development Corporation in

New York. The Canadian company has 20 directors, ten of whom are U.S. nationals. The president of RCA Limited, Mr. G. Denton Clark, is a native of Montreal who has taken out United States citizenship. The company dates back to the turn of the century, became part of RCA during the 1920's, was for many years known as RCA Victor, and in 1968 became RCA Limited. In 1975 the sales volume of RCA Limited was approximately $175 million. At least 75 per cent was in consumer products or components for consumer products. Of the remaining 25 per cent a substantial amount was sales to the federal government or to Crown corporations.
For many years RCA corporation prospered under the direction of David Sarnoff, who built the organization into the giant multinational it is today. Following Sarnoff's retirement in 1970, his son, Robert Sarnoff, became president of RCA corporation. The young Sarnoff, for whatever reasons, was unable to provide the quality of leadership his father had shown. He was replaced as president in 1971 by Andrew L. Conrad, who now also serves as chairman of the board since Robert Sarnoff's resignation from RCA last fall.
Before Mr. Clark became president in 1973, the president of RCA Limited functioned largely as an administrative head. Effective line authority over the five divisional vice presidents was exercised by the corresponding executive vice presidents at the headquarters of RCA corporation in New York. With Mr. Clark as president, this situation appeared to change. The new president attempted to establish full functional line authority over the five operating divisions. In what was viewed by the government to be a significant move, the research and development laboratories were elevated to the status of an autonomous division reporting directly to the president.
In March, 1975, Mr. Denton Clark indicated to the government that the future direction of RCA Limited would emphasize Canadian autonomy, a world-wide product mandate, high technology and Canadian design capability, and the expansion of business. In an apparent reversal of Mr. Clark's earlier position, RCA announced on March 18, 1976, a restructuring of RCA Limited, "as part of an international program at RCA corporation to make its product divisions more efficient and profitable by giving them direct control of their world-wide operations."
RCA issued a further press release in April stating that, "Consistent with RCA's restructuring program, RCA Limited is undertaking a major realignment of its research and development activities." In other words, the research and development laboratories will be closed down at the end of this year, or by the end of the first quarter of 1977 at the latest. Some of the work done by the laboratories will be transferred to other divisions within the company, but only about 30 per cent of the scientists now engaged in research and development will be assigned positions in those divisions. However, those will not be research positions and will not be innovating the expertise developed at the research centre.
RCA Limited has made good use of the incentives programs which are available to industry through the Department of Industry, Trade and Commerce. The company has, during the past ten years, received at least $20 million in outright government assistance for research and develop-
June 10, 1976

ment. In addition it has benefited from $67 million of financing provided by CIDA and the Export Development Corporation toward sales to other countries through RCA Limited's government and commercial systems division, one of the five divisions in the company. Without this government assistance these foreign sales would not have been made.
What has been a successful and highly respected scientific research centre in Canada is now to be disbanded and abandoned because Ed Griffiths, an executive vice president of RCA corporation and president of RCA electronics and diversified businesses, decided that such a move would increase profits for the parent company and streamline its international operation. Mr. Griffiths was responsible for restructuring the Canadian Hertz rent-a-car company, an RCA subsidiary, so that control was centralized more completely at the American head office, leaving little autonomy for the Canadian operation. Apparently because that move was financially effective it was felt that similar actions should be taken with RCA Limited. I maintain that no matter what economic sense this realignment may make to the American parent company, such high-handed measures, disregarding Canada's needs and priorities, should not take place or be allowed to take place.


Some hon. Members:: Hear, hear!


Francis William (Frank) Maine: Most hon. members are aware that the government updated last year its guidelines for good corporate citizenship for foreign companies operating in Canada. Those guidelines state that foreign-controlled firms in Canada should pursue a high degree of autonomy in the exercise of decision-making and risk-taking functions, including innovative activity and the marketing of any resulting new products. RCA Limited was committed to function according to that principle. That commitment has, as I have shown, been rescinded by the parent corporation.
The guidelines also ask that companies develop as an integral part of the Canadian operation an autonomous capability for technological innovation, including research, development, engineering, industrial design and pre-production activities. Here again the actions of RCA corporation show no regard for that principle.
Furthermore the guidelines suggest that the companies foster a Canadian outlook within management, as well as enlarged career opportunities within Canada, by promoting Canadians to senior and middle management positions and by including a majority of Canadians on boards of directors of all Canadian companies, in accordance with the spirit of federal legislative initiatives. The board of directors of RCA Limited does not have a majority of Canadian members. Neither does the company offer expanded career opportunities within Canada when it closes down a successful operation that will almost certainly force brilliant Canadian scientists to take employment in the United States.
What is to be done? RCA Corporation should review its decision in the context not only of profitability but also in the wider context of Canada's national interest bearing in mind the large amount of Canadian taxpayers' dollars that have assisted the company in achieving its reputation and
The Budget-Mr. Mazankowski sales. RCA Limited has been successful in establishing an excellent technical capability in satellite subsystem design. The recent award of the Telesat contract to RCA Limited enabled its satellite group to remain in business in Canada, and its continued viability will depend on government support.
If the company is not prepared to reverse this retrograde decision, the government should not give any further subsidy to a company which has demonstrated that it will not abide by the "New Principles of International Business Conduct", as published by the Department of Industry, Trade and Commerce in July, 1975. Canadian consumers, too, should consider whether they should purchase products from a company that is not prepared to be a good Canadian corporate citizen.
As 75 per cent of the company's sales come from consumer products, primarily TV sales, if RCA does not change its policy, I would urge Canadians not to buy RCA. I repeat, do not buy RCA products-boycott RCA if RCA Corporation closes its research and development labs. Fight fire with fire. If RCA wants to attack Canada's future, let Canada attack RCA's future!


Some hon. Members:: Hear, hear!


Francis William (Frank) Maine: There is no point in the government taking measures to encourage industrial research and development if foreign multinationals such as RCA are not prepared to support Canadian research operations. But, since our standard of living is directly related to the harnessing of research and development and will be even more so in the future, it is absolutely essential that we have and maintain a viable industrial research and development community in Canada if we are to have any control of our own future.


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, as my colleague, the hon. member for Halton-Wentworth (Mr. Kempling), indicated, this is a rather record-breaking debate in terms of participation by cabinet ministers. They have indeed been brave souls, trying diligently to make the best of this budget, hopefully trying to make it a saleable product.
I was very impressed by the attempt of the hon. member for Scarborough West (Mr. Martin) to try to sell the sizzle in the budget, the sizzle that is not there. A number of members have participated in this debate, including the Minister of Industry, Trade and Commerce (Mr. Jamieson), the President of the Treasury Board (Mr. Chretien) and other brave souls.
I listened very closely yesterday to the speech by the President of Treasury Board. He ran out of steam about half way through, talking directly about the budget. He switched to debating the Official Languages Act and policy. His comments seemed to run counter to the report of the languages commissioner.
The President of the Treasury Board went on at great length suggesting that the critics of government expenditure controls were ill informed. I trust he was not including in that category the Auditor General, having regard to the rather stinging indictment the Auditor General made about government budgetary control, improper accounting methods, and a dearth of clear-cut understandable infor-

June 10, 1976
The Budget-Mr. Mazankowski
mation contained in the estimates and the public accounts. That is very clearly documented. It is something of which the government, and indeed all members of parliament, should take serious cognizance.
In my view parliament must have a better awareness of government's anticipated spending and government's intentions both in the short and long term. Further, adequate provisions and procedures must be established in order properly and effectively to examine and scrutinize all government expenditures.
The former Leader of the Opposition, the hon. member for Halifax (Mr. Stanfield), today dwelt at great length on the cynicism and lack of trust that pervade society with respect to our parliamentary and other democratic institutions. It is something we must all concern ourselves with if we are going to preserve the kind of credibility our institutions deserve and, with it, the kind of support we must have in order that our institutions will function in an orderly and proper manner.
The budget that we are debating has been described in many ways. Don McGillivary of Southam News described it as a drifting, dreaming budget in the midst of multiplying economic problems. Doug Fisher referred to it as 90 minutes of rhetorical drivel. He suggested the government did not have two ideas to rub together. He further suggested that the manner in which the budget was presented was tantamount to a non-relevant ritual. I think we all agree there were a lot of words in the budget, perhaps a lot of unnecessary words. I think we can further agree that the speech was honed in such a way as to preserve the government's own self interest.
I see my good friend, the Minister of Agriculture (Mr. Whelan), in the Chamber. Some people refer to him these days as the "Minister of sour milk and rotten eggs", but I would not do that. He is indeed a very unique Minister of Agriculture. The fact that we taunt each other in the House from time to time does not in any way affect our personal regard for one another.
The Minister of Agriculture has been under a fair amount of pressure, and under a lot of heat lately. He adopts the same profile as the others. When things are going well in agriculture, he is the first to take credit. If things go sour and we have a rotten egg or sour milk problem, who does he blame? He blames the provinces. It is not the fault of the Department of Agriculture or the government.


William James Kempling: Typical Grit trick.


Eugene Whelan: If they had done what I told them, there would be no problem.


Donald Frank Mazankowski: There he goes again. The Prime Minister (Mr. Trudeau) indicates that the farmers are getting enough and they should thank him.


Eugene Whelan: They are the highest paid in the world. Heward Grafftey said we should lower the pay.


Donald Frank Mazankowski: I am surprised that the Minister of Agriculture has not engaged in this debate. I can only presume it is because there is nothing positive in this budget to help agriculture in this country.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: Just ask the pork producers; they will tell you.


Eugene Whelan: They are the best off farmers in Canada.


Donald Frank Mazankowski: I would love to get involved in an agricultural debate, but unfortunately I have to speak on other things today. There is nothing I would love to talk about more than the "blue tongue Superbull."
We need only look at the attitude the government has taken when it expresses great satisfaction over the fact that we survived with a zero growth rate in this country last year. That has been described as a successful achievement. As the leader of my party pointed out in his remarks-


An hon. Member:: Which one?


Donald Frank Mazankowski: We have a number of leaders. Together we are building a team that will lead this country out of the doldrums, and back to prosperity.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: As our leader has pointed out, the difference between our party and the governing Liberal party is the absence of any clear determination of growth, the absence of any clear direction. I think it well worth while drawing attention to what our leader stated as was reported in Hansard at page 14284, "We see sound economic growth not as a contradiction to inflation control but as a prime requisite for the control of inflation in the long term." In that context I should like to quote a passage from the latest edition of The Economist, that of May 22, 1976. This is from an article entitled "Out of Slump."
In 1974 the world's six largest industrial economies marched roughly in step into slump. These big six are America, Japan, West Germany, France, Britain and Italy, which together account for 80 per cent of the output of the 24 rich countries in the Organization for Economic Corporation and Development. In 1975 two of the big six turned back up again early (America and Japan) while three others (France, Britain and Italy) turned back up again late. But by the end of 1975, industrial output in all six was rising again.
In January-March, 1976, recovery continued and each of the big six achieved faster industrial growth than its longer term trend. On this reckoning, the slump is over and the boom has begun. Everywhere idle plant and capacity are being brought back into use. Everywhere unemployment has stopped rising, and almost everywhere it should soon be steadily reduced.
In theory this should be the start of a long and strong boom. The world has a lot of lost ground to recover. Do the impossibly huge industrial growth rates necessary to get the world back on trend mean that there is no danger of overheating-of overstrain in capacity in any of the big six until 1981 at least? Not quite.
I think that sets out the international scene succinctly. It is obvious that recovery internationally is well under way. It seems to me that the budget we are discussing is not tuned in to the realities of the recovery on the international scene-that we have failed to take advantage of what might well be a long and sustained boom.
Look at the government's position with respect to spending. Here again we find the government patting itself on the back for the manner in which it says it is cutting back
June 10, 1976

or controlling federal expenditure. I should like to examine that aspect in some detail, but I will repeat once again that this budget is clearly not a good budget; it fails to include measures to encourage productivity or stimulate sales abroad despite the fact that our industrial plant is operating at less than 80 per cent of capacity.
It has been said over and over again in this debate, but it still bears repetition, that the government relies essentially on the recovery of the United States and its other trading partners. It intends to rely also upon the Anti-Inflation Board whose staff has now increased to 853 in an effort to deal with a backlog of 3,000 wage cases and to reduce delays which have made it an increasing target of criticism. The budget is completely lacking in vision of the full potential of this country. I find it amusing, having regard to the curt attitude the government has taken toward the United States that it should now be relying on that country as its saviour.
A word, now, about the importance of the private sector. The Prime Minister and some of his colleagues had all but written off the private sector last December, but it has suddenly become the key factor again. It is consoling that some ministers like the Minister of Industry, Trade and Commerce and the Postmaster General (Mr. Mackasey) should be coming out in defence of the private enterprise system, and I hope some of their colleagues will engage in the same crusade.
What about the reckless spending habits of the government and, in particular, the position of the President of the Treasury Board who is going about the country trying to convince Canadians that the government has become the epitome of restraint and good economic management? The fact that it is content to live with a further deficit of $4.5 billion shows us how phony and misleading it is. I think this reflects a blatant failure on the part of the government to control its own spending which, in my view, continues to be one of the main factors contributing to inflation.
The government has clearly demonstrated its inability to forecast accurately its expenditures and revenues. Review the record. On November 18, 1974, finance minister Turner told Canadians that he expected a deficit of $1 billion in the financial year ending March 31, 1976. Mr. Turner returned to the House with a new budget on June 23, 1975, and revealed that the $1 billion deficit he had planned earlier was in fact to be $3.2 billion. The estimate had gone awry, he said, because he had over-estimated revenues by nearly $2 billion, having taken an over-optimistic view of the economy. Despite the drastic revision of the expected deficit of the June 23 budget, evidence mounted during the fall of 1975 that the federal government had lost control of the deficit. Presented with evidence showing that the deficit would climb even higher than Mr. Turner's estimate of June 23, 1975, the present Minister of Finance (Mr. Macdonald) refused to comment. He said it would be of little value to comment on such projections.
May I call it six o'clock, Mr. Speaker?
At six o'clock the House took recess.
The Budget-Mr. Mazankowski


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Donald Frank Mazankowski: Mr. Speaker, at six o'clock I was pointing out the dismal record that the government has had in its ability to forecast. I was also leading up to the point that the Minister of Finance was not left with a very glamorous situation. While the former minister of finance may have been a glamour boy, he did not have the propensity for being able to put the nation's economic house in order. We are now faced over there with a new version, a version in the name of "Thumper". Whether he can put our economic house in order remains a leading question, but it is little wonder that he refuses to say what the predicted deficit will be.
In his budget speech of May 25 the Minister of Finance revealed that the deficit would be $4.1 billion in 1976, $900 million over the June 23, 1975, estimate. This time the fault lay not in inaccurate economic forecasting but in the fact that federal expenditures had overshot their target by close to $1 billion. The finance minister chose not to tell Canadians that the budgetary deficit had quadrupled in size since the first estimate of November 18, 1974. To make such a comment would have revealed both the wilful deceptions of previous federal economic forecasting as well as the incompetence of the present administration in controlling its own spending.
We have only to turn the clock back to the campaign of 1974, May and June, to ask how the government can stand up in a very sanctimonious fashion and preach restraint and responsibility? During the 1974 election campaign this was the government that so recklessly threw money around. Its members made election promises amounting to billions of dollars, Mr. Speaker, of your money and mine, simply to buy votes.
Today the Prime Minister stood up in this House and said, "We have to level with the Canadian people". He appealed to all members of parliament to be honest and to tell the story as it really is, and to tell it particularly to the little people. I can assure hon. members opposite and you, Sir, that many Canadians did not ask for the extravagances which were promised during the election campaign of 1974, but in the name of power, and only in the name of power, did this irresponsible, power hungry bunch scandalously pilfer the Canadian taxpayers' money.
The President of the Treasury Board failed to deal with this particular point in his remarks yesterday, and I am glad to see that he has now come into the House. He failed to justify the startling figures on the basis that they were political. It was a political game rather than an honest economic game. This particular view is shared by many Canadians, including a well known Liberal by the name of Douglas H. Fullerton who, in the Ottawa Citizen for March 8, in an article entitled "Dear Pierre: Who Said We Wanted All Those Goodies?" wrote as follows:
Come off it, Pierre, did we the people really ask for all those goodies your government showered on us these past eight years?
I'm awfully tired of hearing you say, as you did again recently in Vancouver, that the enormous rise in federal spending since you became prime minister has occurred because of the insistent and growing demands of an expectant public for more government handouts.

June 10, 1976
The Budget-Mr. Mazankowski
This is a phony argument, a smokescreen designed to obscure the truth. Most of your new or expanded programs were concocted by a group of your colleagues, the "liberal" or spending wing, perhaps more appropriately designed as the "drunken sailors". With your support, their schemes were powered through cabinet and caucus, despite the doubts of more cautious ministers and members.
I am not challenging the motives of this spending lobby, which I suspect range from a humanitarian desire to benefit the weaker members of our society, down to instinctual political or personal urges for recognition, glory or re-election. What is at issue is that they are much less a response to a need felt by the public than the collective decisions of a small but powerful group at the top, who believed that they knew what was best for the country.
This is elaborated further by the former auditor general in an article appearing in the Globe and Mail for Wednesday, April 28.1 quote him as follows:
Spending public money "seems to have become almost the exclusive preoccupation of the government, with the politicians spending the people's tax money almost solely to buy votes to retain power, with little regard for parliament and no regard at all for the concept of balancing the budget or living within the country's means ...
Unlike businesses which have to meet payrolls and make profits or face disasters, governments can never face bankruptcy so long as they have an unlimited blank cheque on the pockets of the taxpayers of the country.
Yesterday we had a long dissertation from the President of the Treasury Board, who has been making a lot of sweeping statements recently. He generated a lot of publicity across the country. Maclean's referred to him as "Mr. No". He has also been referred to as the fastest gun in the east. Members on both sides of the House, I know, have a great amount of admiration for the minister's capacity and integrity, but we know very well that he is very political; he is a cagey individual, and he is very canny when it comes to manoeuvring and manipulating figures. I suppose his training in the Department of Indian Affairs and Northern Development has served him well in that regard. But we know very well that in justifying government expenditure the minister has used deferrals. He used the business of transferring or borrowing authority.
We see a new technique in the formation of Loto Canada by which the minister is using an estimate to enact legislation which in effect establishes a Crown corporation, outlining its purpose and its method of financing, so we know very well that the minister is very capable. However, as the Globe and Mail has suggested in an article on Monday, May 24, some of his practices are somewhat deceptive.
The President of the Treasury Board has talked a good line about restraint, but surely with the record of increase in government spending by this administration since it took office there is a lot of room for trimming government fat. I must say that, because of the juggling of figures and the manipulation, many Canadians are not convinced that the government has seriously cut back on federal government expenditures. It has not been able to live within its own forecasts and its own predictions. On February 18, 1976, the President of the Treasury Board, during the tabling of his estimates for 1976-77, stated in the House as follows:
Government expenditures in 1975-76 will be held to 16 per cent or less over 1974-75.

He stated further:
I am pleased to say that there is now every indication that this target will be achieved.
I must say that this is 1 per cent over his prediction in February, 1975, when he said he would keep expenditures down to a 15 per cent level. As late as April 27, 1976, less than one month before the budget was brought down, in an address to the Toronto Metropolitan Board of Trade he heaped praise upon himself for cutting the percentage increase of 16 per cent during the last fiscal year. That was less than a month before the budget was brought down.
As I said earlier, the minister reminds me of the Minister of Agriculture who heaps praise upon himself. I am sorry the Minister of Agriculture is not here. He is probably mourning over the fact that his good friend, Beryl Plump-tre, has resigned. I think she was a political asset to the Minister of Agriculture.
The minister said further, "I will not fudge or juggle statistics", but that is precisely what he is doing. While the minister purported in the same speech just one month before the budget, to have had effective control-he declared that he managed to hold spending to 16 per cent for 1975-76-what did we see on budget night? We saw that increase rise to 18 per cent, which amounts to more than peanuts, it amounts to some $725 million. We have not received a satisfactory explanation for that.
The President of the Treasury Board waffled around the subject yesterday but, in my opinion, the explanation is far from satisfactory. If this money was spent in 1975-76, why is it included in the estimates for 1976-77? Should not the figure of $42,150,000,000 be reduced by $725 million? This is tantamount to the Minister of Finance and the President of the Treasury Board hoodwinking the Canadian people into believing that they will restrain their spending in 1976-77 to 14 per cent over the previous fiscal year. This is another example of the government's manipulating and juggling figures. Its record of forecasting and the methods that it employs make it very difficult to place any credence in its forecasting ability. If this is what the Canadian people have from their new planning, programming and budgeting system, I am sorry to say that we are in for very dismal days ahead. Perhaps that is why the Auditor General took such a dim view of the government's accounting procedures.
If we look carefully at the 1976-77 estimates we find some rather revealing information that the government has not acted with restraint in areas where it could and should have. If we compare the 1976-77 estimates with the forecasted expenditures for 1975-76 we find that the government has stated that the major components of the roughly $4.7 billion increase, which amounts to 14 per cent for total standard objects, are transfer payments and other spending items which are beyond the government's control. The most cursory examination of total spending by standard objects indicates that this statement is ridiculous and nonsensical. Increased spending on grants, contributions, and transfer payments in fact accounts for $1,944,228,000, or 41.5 per cent of the increase. But there are a number of areas in which a more realistic approach would produce significant savings.
Let us look at a number of items. For example, in the area of salaries and wages there has been an increase in
June 10, 1976

1976-77 over the last fiscal year of $687,305,000. This is an increase of 13.6 per cent, or a 14.7 per cent increase of the total amount exceeding the expenditures of the last fiscal year. In personnel costs there has been an increase of $179,546,000, that is, 18.4 per cent over the previous year. In rentals there has been an increase of $50,759,000 or 18 per cent over the previous year. In public debt charges there has been an increase of $875,000,000, a 23.1 per cent increase over the previous year. In all other expenditures, a sort of umbrella group, there has been an increase of $392,444,000, amounting to 36.4 per cent over the last fiscal year.
It is interesting to look at these expenditures in terms of specific government activities. Most of these are highly controllable. Administration, for example, is controllable. We can go into that in quite some detail. The administrative operative expenses will cost at least $1,358,176,000 in the fiscal year 1976-77. This is an increase of $143,226,000 over actual expenditures in 1975-76, or 11.8 per cent. Some of the increases are astounding. There is much that can be done in this area and that is not being done.


The Acting Speaker (Mr. McCleave):: Order, please. I very much regret interrupting the hon. member but the time allotted to him has expired.


Mr. Louis Duclos (Montmorency):: Mr. Speaker, in his budget speech given on Tuesday, March 25, the Minister of Finance (Mr. Macdonald) stated the following:
No miracle drug exists to provide an instant cure to these economic ills. It will take time and patience to restore price stability and a high level of output and employment. This approach is evident in our monetary policy, our fiscal policy, our expenditure policy, our energy policy and our control policy. In all of these fields, drastic action to yield quick results would be highly disruptive, damaging to the interests of the groups most affected and unlikely to be sustainable.
Mr. Speaker, such is the philosophy underlying the budget now under consideration, a budget instilled with a healthy realism which truly shows the well-understood role of a government in the management of community affairs.
Mr. Speaker, and oft repeated French adage states that the knack of governing is to see ahead. It is also to try and determine where the true interests of the people lie, and above all to have the courage to go to the bottom of things in the search for solutions to society's problems. It seems to me the main quality of this government in these circumstances is they do not try to hide the facts from the Canadian people, they treat them as adults. The government also show they believe in Canadians, because they invite them to take part in the fight against our current economic troubles.
In the budget, the Minister of Finance stated and I quote:
Indeed, all Canadians have their roles to play in the achievement of our economic goals.
Mr. Speaker, clearly it is in the interest of workers themselves to join in the fight against inflation, because one way or another they are going to suffer most in an inflationary period. Let me say that while wages and salaries accounted for 74.9 per cent of national revenues in the first quarter of 1974, they had declined to 70.2 per cent only in the third quarter of the same year. That proportion seems to have maintained during 1975.
The Budget-Mr. Duclos
As for corporations, their profits rose from 11.2 to 17.6 per cent of national revenues between 1971 and 1974, an inflationary period. How can anyone blame the government for seeing to it that the rate of price increases be abated, while wishing for an upswing in the Canadian economy.
Mr. Speaker, it used to be that government had to remain entrapped in the vicious circle either of fighting unemployment at the cost of stimulated inflation, or fighting price increases at the expense of employment but those times are over. As the governor of the Bank of Canada suggested on May 29, 1975 to the members of the Canadian Association of Life Insurance Companies, and I quote:
The time has come for everybody to realize those two complementary aspects, to be united if we are to have stability and orderly progress in the economy, rather than contradictory objectives impossible to reach together.
Clearly, Mr. Speaker, a government concerned only with their popularity would have yielded to the temptation to introduce a very expansionary budget. But in so doing, they would have escaped their responsibilities. The danger must be perceived that considerably higher rates of unemployment and inflation as we are now facing might befall us if no measures were taken to fight inflation and maintain Canada's competitive position vis-a-vis the United States, which account for two thirds of our international trade.
In this connection, one must bear in mind that during the third quarter of 1975, just before the implementation of the anti-inflation program, the collective wage agreements signed in Canada provided an average salary increase of 16.8 per cent or about twice the increase awarded in the United States. If this trend had continued, we would have experienced at the same time disastrous unemployment and inflation rates, and that had to be avoided at all costs. Therefore, we must rejoice in the fact that the inflation rate has been brought back to 6.3 per cent during the first six months of the anti-inflation program while it reached 11.7 per cent during the six previous months. Salary increases have been reduced to an average of 11 per cent since the program is in force, and that can only improve our competitive position on foreign markets on which Canada relies for a number of jobs.
Mr. Speaker, whatever some people may say, it does not appear advisable in the overall economic situation to sacrifice the fight against inflation for the one on unemployment, because, and I quote once again the Governor of The Bank of Canada:
In due course, it appears that what we get for a slight reduction in the unemployment rate-here again only for some time-is not an additional amount of inflation but indeed a fast and accelerating inflationary upswing to which there is no end in sight.
Mr. Speaker, I do not intend to review all the measures contained in the last budget. However, I would at least like to bring to light the uplifting from $100,000 to $150,000 of the annual profit ceiling under which small businesses can take advantage of a reduced taxation rate, as well as the increase to $750,000 of the cumulative maximum under which businesses can be taxed at this rate. In my opinion, this is a measure which was needed if the incipient economic recovery is to appear still more vigorously in the coming months. I am more especially glad as the government is thus bringing a solution to a problem I had person-

June 10, 1976
The Budget-Mr. Duclos
ally brought to the attention of the Minister of Finance last April in the House. Indeed we must recall that as a result of the provisions of the Anti-inflation Act concerning the payment of dividends by corporations, many corporations might have lost their eligibility for that reduced rate of taxation because they would not be able to pay their shareholders all the dividends they had to pay in order not to reach the cumulative limit which was only $500,000. In taking these measures, the government shows its concern for our small business and its desire to use it as a decisive factor of the economic recovery which will create the employment and the prosperity all Canadians want.
I previously pointed out the sense of responsibility of the government, which does not hesitate to strike at the root of the problem and which prefers to risk being unpopular in the short run so as to ensure the well-being of the people in the long run. There is no better example of that sense of responsibility than the difficult decision made recently to raise the price of crude oil. Of course, it is a measure which strikes the consumer directly, and which may look inconsistent with the government's concern for the fight against inflation. Still, it had no other choice but to so encourage the people into moderating their consumption of a nonrenewable resource, while by the same token freeing additional amounts to speed up exploration in the field of traditional oil in western Canada and its tar sands. Because the fiscal treatment of oil companies should encourage them strongly to reinvest their profits instead of increasing the dividends paid their shareolders, I support that decision.
It is imperative that the people know that Canadian oil reserves are not limitless, that our country runs the risk of becoming dependent in less than ten years, on imports from the Middle East or Venezuela, if explorations in Canada are not stepped up. Then, we will have to pay the price exacted by the producing countries. If the past is any indication of the future, this cost could very well be prohibitive and lead us, for a few years at least, to yearning for 1976 price levels; let us not forget that oil products are still relatively low-priced in Canada, when one knows that in western Europe, a gallon of ordinary gas costs between $1.60 and $2.
In this respect, Mr. Speaker, I would like to point out that it is essentially because of the federal affiliation that Quebecers can obtain oil products at a substantially lesser price, a price which will reach $9.05 a barrel starting July 1 and which is less than the price prevailing on the international market, which is between $11 and $12 a barrel.
This single price policy is possible only because the federal government gives generous subsidies-the cost in 1975-76 is estimated at $1.6 billion-to refineries of eastern Canada in general and Quebec in particular, so that they can sell gasoline and heating oil for a significantly lesser price than what they would normally have to charge in relation to international costs of crude petroleum.


Steve Eugene Paproski: Because of Alberta.


Louis Duclos: You are going on record, Steve.


Steve Eugene Paproski: I know.


Louis Duclos: Mr. Speaker, shortly after the federal-provincial energy conference in April 1975, the director of the Montreal Newspaper Le Devoir, Mr. Claude Ryan, wrote this, and I quote:
Just as the fact of belonging to the Canadian federal community enabled provinces such as Quebec and Ontario to go through the crisis resulting from the spectacular rise in the international price of oil, without being too affected so can the ten Canadian provinces view their energy future with confidence if they stay together instead of separating.
And he added very appropriately, quote:
The most important thing is that a country has the wealth which enables it to be sure it will enjoy a great variety of energy resources and maximum security of supply. These are the guarantees offered by the Canadian challenge but they would not be available to a separate province.
Mr. Speaker, there are some ideas worth thinking over in these few lines, for those in Quebec who are tempted by the apparently captivating adventure of the establishment of an independent state, for which Quebecers generally and the workers particularly may be left to pick up the tab.
I do hope that while letting the crude oil price get nearer the international levels in the next few years, a substantial differential be maintained and that, as far as possible, the single price oil policy be maintained in Canada as a whole. Otherwise, one of the most forceful arguments in Quebec in favour of Canadian federalism would lose all its meaning.
Mr. Speaker, I think it would be timely to review briefly why, in spite of the considerable benefits the federal formula brings to Quebecers, too many of them remain skeptical about the possibility for them to assert themselves as a cultural group different from the majority of Canadians. Fortunately, Mr. Speaker, most Quebecers clearly see the advantages provided by the federal system or they are at least open to a frank and honest discussion. It is the latter group, Mr. Speaker, that we must convince once and for all in the years to come of the profitability of federalism and of the possibility for Quebecers to assert themselves culturally, socially and economically in such a political framework.
Mr. Speaker, during the debate on the Speech from the Throne in October 1974, the Prime Minister stated that he hoped an agreement would soon be reached with all the provinces towards the repatriation of the constitution. That was almost two years ago but unfortunately little progress has been achieved, chiefly on account of the Quebec government's opposition. However, it seems to me that the amendment formula which was adopted in Victoria in 1971, providing for regional veto powers, one of them for Quebec, was an improvement over the current constitutional practice which requires unanimity rule for any amendment concerning the delimitation of constitutional jurisdictions. One could not reasonably claim that the repatriation of the Canadian constitution would, under those conditions, seriously affect the basic rights of Quebec.
Besides, Mr. Speaker, it is regrettable that the Quebec government is somehow seeking to trade its agreement as to the repatriation of the constitution for a constitutional review, which would inevitably lead to an increase in its constitutional powers. Therefore I hope that Quebec will
June 10, 1976

renounce what sounds very much like blackmail and give its assent to the repatriation of the constitution. Thus it would help create a more serene and favourable climate in view of a future federal provincial conference which would consider the matter of sharing constitutional powers, which is obviously most important for the province of Quebec. However, it is imperative that the federal government show unequivocally in the next months its strong intention to pursue more vigorously than ever its objective by strengthening slightly the role of French-speaking officials in the management of the business of this country to promote the full development of French culture and the use of French in Canada, particularly in Quebec. If not, the people of Quebec will be right in turning to the government of their province and the latter will be justified in taking all available means to get a new sharing of the constitutional jurisdictions which will satisfy it.
We must say, Mr. Speaker, that if the present sharing of powers does not seem satisfactory, because of the extraordinary behaviour and the untiring devotion of Quebecers in the government who make sure that Quebec gets its share and that it is not affected in its vital interests, it is not impossible than an electoral accident could deeply change the Canadian political checkerboard and lessen the role of Quebecers on the federal scene. I think it is normal that such a possibility is the main concern of several Quebecers and that they are anxious to give to the Quebec government the necessary means enabling it to modify even more the destiny of Quebec in case the voice of French-speaking people would disappear from the federal scene.
However, Mr. Speaker, I think that all these negotiations to review the system of the sharing of powers must be undertaken in a real cooperative spirit and must at least take care that the quality of the services offered to all Canadians will be maintained. We must also see to it that they will not generate an irreversible process of gradual erosion of the powers of the federal government leading to some kind of disappearance of the presence of Quebec on the federal level. If French-speaking people could expect to be equitably represented in the senior positions of the federal public service, the possibility of a setback of Quebecers on the political level would not be so serious. Unfortunately, it is clear that, in spite of the important progress that has been made in almost ten years, the efforts made to promote French-speaking people to the senior positions of the public service have not been as fruitful as expected. If the number of French-speaking persons in the senior pos-iions of the Public Service Commission, the Privy Council, the Secretary of State and in some other departments is adequate, the situaton is far from satisfactory in some others, and I would like my friends of the opposition to listen carefully to some figures I would like to give. For example, in the Department of National Defence, only one senior officer out of 28 is French-speaking; in the Department of Energy, Mines and Resources, three French-speaking persons have been promoted to senior positions out of a total of 67; in the Department of Finance, 2 out of 32, in the Department of Agriculture, 5 out of 79, and in the Department of the Environment, 10 out of 127-
The Budget-Mr. Duclos


Steve Eugene Paproski: Whose fault is that?


Louis Duclos: I just want you to listen please. You take action.


Steve Eugene Paproski: Do not blame it on the Tories.


Louis Duclos: I did not say a word about you-

-does the hat fit you? And what is done to correct this situation? We could believe him as far as the hiring of university graduates is concerned. We could try to catch up by hiring a percentage of French-speaking persons slightly over the 28 per cent rate that must be reached as fast as possible. However, in 1974, French-speaking graduates who left the universities and who were hired by the Canadian public service made up hardly 29 per cent of the total. At least 35 per cent of French-speaking persons should be hired if we really want to make up for time lost.
Mr. Speaker, it is true that many French-speaking youths, especially in Quebec, are not very enthusiastic at the idea of moving to Ottawa, which they consider wrongly, to my mind, as an inhospitable city for French-speaking Canadians. I am sorry that they are prejudiced in this way, but this is an attitude that we must consider and which should in fact urge the federal government to be more enthusiastic when French-speaking people show an interest in a career in the federal government.
How can we ask French Canadians to play a role in federal administration if, in spite of their university degrees and their experience on the labour market, they are not sure that their offer of service will be well received. The government says that there are not enough French Canadians in the public service. It is supposed to be very difficult to find competent French Canadians, but if one shows some interest, he is treated with indifference.
I know that the government can count on the suppport of our Social Credit colleagues and on the open-mindedness of the NDP members on this matter, but I would like especially the official opposition to make a positive and determined stand on this matter instead of being satisfied with supporting the government half-heartedly.
I am sometimes surprised, Mr. Speaker, to hear certain members of the official opposition. From what they say, it seems that it is the French Canadians who have taken over everything in the federal public service. I hope that the few figures that I have submitted to the House will make them reflect on this and that they will take the trouble to read the last annual report of the Public Service Commission which contains very significant statistics in this matter.


Steve Eugene Paproski: Do not blame the opposition. It is your government.


Louis Duclos: I will provide the hon. member with a copy.
Mr. Speaker, when speaking on this same subject in the House in October 1974, the Prime Minister (Mr. Trudeau) very rightly said, and I quote:

June 10, 1976
The Budget-Mr. Duclos
Therein lies an obligation that we all have, a kind of political contract with French-speaking Canadians under which they would reject separatism and the federal parliament would guarantee the right to French Canadians to communicate with and work in the federal administration in the French language. I solemnly believe that if we do not or cannot make that right a reality during the life of this parliament with its commitment to bilingualism, with the very emphatic words of the Leader of the Opposition in his speech an hour ago, with the strong French-speaking representation in government, then it will never be done and separatism will have proved its point and Canadian unity will cease to have meaning for the majority of Quebecers,
Mr. Speaker, those are the words of a lucid man who, more than anyone else, wishes all Canadians to feel at home in Canada and to feel that they are making a useful contribution to the progress of their country without having to suffer cultural alienation.


The Acting Speaker (Mr. McCleave):: Perhaps before the Chair recognizes the next speaker it can have the indulgence of the House for a moment. It seems to me that the Chair can accommodate one member from each party in the time available between the present and 9.45 or 10 o'clock, if each speaker agrees to limit his time. I know that several members still wish to be heard.


Steve Eugene Paproski: Mr. Speaker, I rise on a point of order. I think, after the next speaker has spoken, we will be glad to limit the time.


The Acting Speaker (Mr. McCleave):: The Chair recognizes the hon. member for Greenwood (Mr. Brewin).


Steve Eugene Paproski: Mr. Speaker, I rise on a point of order. I understood that the hon. member for High Park-Humber Valley (Mr. Jelinek) was to be recognized after the hon. member who has just spoken, and that, after he spoke, there would be some agreement for allowing two or three members on the Liberal side to speak for the balance of the evening. That is my understanding. I could be wrong. However, I believe the Chair did say that the hon. member for High Park-Humber Valley would be recognized next.


The Acting Speaker (Mr. McCleave):: This always happens when the Chair tries to divide time, or suggests that it should be divided. The names I have before me include those of the hon. member for High Park-Humber Valley, the Parliamentary Secretary to the Secretary of State (Miss Campbell), the hon. member for Greenwood, and the hon. member for Kamouraska (Mr. Dionne). The Chair, trying to be fair, has obviously got itself up to its neck in trouble. I suggest that if hon. members speak for 20 minutes that would carry us through until 10 o'clock.


Steve Eugene Paproski: Mr. Speaker, the hon. member for High Park-Humber Valley will endeavour to fulfill that obligation.


The Acting Speaker (Mr. McCleave):: The Chair recognizes the hon. member for Greenwood. Is it agreed that each member will speak for 20 minutes?


Francis Andrew Brewin: Mr. Speaker, we will try to stick to that suggestion.

I feel that this debate is about to end and that probably nearly everything which needs to be said about the budget has been said. But I wish to make a few comments on what, after all, is an important central event in the life of parliament.
In my view the budget introduced few significant changes. It lacked any sense of social justice and failed to move in the direction of equity. The view which I and, I think, my party hold is that the budget should be the instrument for bringing about social justice and promoting equity. I share the view expressed by Lord Keynes, the famous British economist, who recommended redistribution of income in the direction of equality, partly on the ethical ground that extremes of wealth and poverty were disgraceful but also because the poor spent more of their income than the rich.
I was going to quote the words of other famous men, the words of Tawney and Matthew Arnold, but will not do so now. Both said that a system founded on inequality is against nature and breaks down. I think we are seeing the breakdown of our system which is based on inequality. My quarrel with the budget is that it fails to reverse this trend. For example, let us consider unemployment.
Over 700,000 Canadians are out of work. I strongly suspect that when students seek to enter the labour force, the figures will get worse. What has the Minister of Finance (Mr. Macdonald) done about this? He has done nothing, as far as I can make out. He rests his case on shallow optimism about the American economy. He anticipates it will continue to expand and that this will have the direct effect of promoting in the neighbourhood of 250,000 new jobs in Canada. One is assuming a great deal when one assumes the American economy will continue to expand. In any event, there is little link between American expansion and the Canadian economy. I remind the House that we will have 300,000 people entering the labour market next year; therefore, even on the basis of the Minister of Finance's assumptions, we will have a larger number of unemployed than before. What should be done about this question?
In my view the Minister of Finance should substantially cut the personal income tax for those whose incomes are below $15,000. This would have a dual effect. It would not only be a way of equalizing wealth between rich and poor but would stimulate the economy. People on lower incomes spend a greater proportion of their incomes than the rich do. As Lord Keynes pointed out, an excellent way to stimulate aggregate demand is to tax the rich to employ the poor. The budget does not touch on this.
It is suggested by some, including the Minister of Finance-I think the Prime Minister (Mr. Trudeau) said much the same this afternoon-that such a tax cut would be inflationary. This argument ignores that our economy is only working at 80 per cent of capacity, and if we were to use the now unused 20 per cent capacity the effect might well be a reduction of inflation. The minister ignored the fact that in an economy working at close to capacity there will be less unemployment, less money going out in unemployment insurance payments, an increased supply of goods and services, and a reduction in welfare costs.
The next thing on which I wish to comment in the budget is the proposal to increase the number of weeks of employment required to qualify for UIC and the decline in
June 10, 1976

the duration of benefits. Here again the so-called remedy of the Minister of Finance strikes at those who can least afford it. I refer to the people in the maritime provinces and Quebec where there is little opportunity to qualify for the present eight-week requirement. There will be even less opportunity to qualify if the period is extended to 12 weeks. The effects of these proposals will drive those people on to welfare rolls and increase the burdens of municipalities and provinces which can least afford them. Surely we in this House have learned that the welfare of all regions of Canada is of vital interest to all Canadians.
The question may be asked, if we are to seek full employment, for what types of employment must we plan? I maintain the view that where private industry cannot provide the necessary jobs it is up to public enterprise to step in. There are very great needs in our country; I will not list them all. We need public housing at rents and prices people can afford. There is an urgent need in metro areas, such as my own, for the extension of rapid transit. So far the government has completely failed to live up to its promises to assist the development of public transit, promises made in the last election campaign.
There are one or two things in the budget of which I approve. The first is the higher taxes on large cars. This measure is designed to conserve energy. I wonder if enough has been done. I am inclined to think that a reduction in the tax on small cars would have been a better incentive to conserve energy over the years.
I heartily agree with the increased tax exemption for small businessmen. The limit to which businessmen are eligible to pay the small business rate of 25 per cent tax is doubled. Small businessmen are a group in the community who have been particularly damaged by inflation and urgently need the assistance provided for them by the budget change.
I also approve of the increase in the child care deduction. I wish the government would proceed vigorously to carry out the recommendations of the Status of Women Committee which recommended a major federal investment in day care centres. On the other hand I do not agree that the government was wise in allowing tax exemptions for an increased range of registered personal pension plans. This is a change to assist the well-to-do and not the people who need it most.
I have tried to study the proposed changes in the prices and incomes policy. The objection which we have in this party to the government's anti-inflation measures is that the prices and incomes policy was effective to some extent in stabilizing wages and salaries but it left profits virtually intact. The Prime Minister this afternoon almost seemed to acknowledge this fact. I suspect that after the changes it will remain ineffective in respect to prices and profits. One obvious reason is that a large number of prices are exempt, such as energy, most food, and the price of imports. The price of housing has not been effectively controlled. These are major items.
I suppose that the object of the proposed changes is to give at least the impression of more effective control of prices and profits. I am afraid that the effort will be ineffective. One reason for this is the extraordinary com-
The Budget-Mr. Brewin
plications of the system. These invite evasion by those who can afford a skilled accountant and other expert advice. The mysteries of transfer payments give rise to serious doubts whether these technical changes will be an effective instrument of control. The Department of National Revenue has been unable to control large multinational corporations, and without an army of investigators far exceeding the present staff of 853 the Anti-Inflation Board has no way to assess the figures found in financial statements of these large corporations engaged in intra-corporate trade.
I now want to turn to the external aspects of the budget. The Minister of Finance in his budget speech did indeed make reference to the new economic order, but I think Canadians still have a long way to go before they appreciate the importance of the revolutionary changes affecting the world trade system. Canada depends upon trade; trade in the ultimate analysis depends on world stability and prosperity. There is an increasing recognition all over the world of the need for change in the way in which international trade is conducted. This has given rise to a series of international meetings. The main actors and promoters of the new economic order have been the victims of under development who have suffered on an immense scale from ever-worsening destitution and malnutrition. The Prime Minister himself observed in his famous address at the Mansion House, London, and I quote:
These nations seek no piecemeal adjustments but a comprehensive restructuring of all the components. The response of the industrialized countries can be no less well prepared or no less comprehensive in scope.
What is sought from us now is not aid, although in the least developed countries that remains a major factor. What is needed is to promote agriculture in the Third World, and to improve trade opportunities so that the Third World can earn for itself the means of developing itself. What we are talking about then are not fringe benefits but the basic necessities of life such as food, shelter, and clothing. What is required is to meet the basic needs of mankind in the foreseeable future on a global scale.
To this end a number of conferences under the auspices of the United Nations have met. The latest one we discussed today, the UNCTAD IV conference at Nairobi. It is notable that in all of these conferences the participants recognized the inter-dependence of nations in solving the basic problems of mankind, and the urgent need for the political will in both developed and developing countries to make the necessary changes.
Another thing which seemed to be common to all of these conferences was the conviction expressed by knowledgeable men and women from all over the world that the problems of the world could, in fact, be met by international co-operation and the necessary political will.
The Canadian government has clearly indicated its acceptance of the basic notions behind the new economic order. In his address to UNCTAD IV, the Secretary of State for External Affairs (Mr. MacEachen) spoke of the need for action "with an unprecedented sense of urgency". He went on to say:

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The Budget-Miss Campbell
I believe we have passed the stage of analysis and assessment of issue. We must now get together to devise workable and dynamic solutions, and solutions mean action.
Some observers at the conference felt that, at Nairobi, Canada did not take an effective lead and offered no solution but only more talk. I will not discuss UNCTAD further because it was discussed today. However, there is a long course ahead of us where important structural changes are required to be made. We must organize new machinery, such as the common fund to stabilize the price of commodities.
I am aware of course that programs in this field will be sought during the coming year, and no doubt for many years to come. It is of course wrong to assume that commodities are the only subject that is the concern of the new economic order. It is concerned with trade liberalization policies. It is concerned with the transfer of technology, and is still concerned with adequate aid transfers.
It is sometimes asked what is the real basis for Canada's concern about these matters. The real basis is a dual one. On one side is enlightened self interest. This requires that the strong, positive demands of two thirds of the world's people be heard and acted on. This is essential to stability. The other is the basic notion of human compassion and brotherhood. It is perhaps old fashioned to mention this, but it remains that some such moral imperative is an essential ingredient if we are to have effective action.
I had intended to mention the subject of justice to our native peoples, but I do not have enough time to do that. I will conclude by repeating that I have found the budget uninspiring and inadequate. It fails to move in the direction of social justice. It deals inadequately with the major problem of external trade whose urgency was expressed the other day by the Minister of Industry, Trade and Commerce (Mr. Jamieson). I can only hope that if the minister has another chance to bring in a budget, it will be a much better one.


Miss Coline Campbell (Parliamentary Secretary to Secretary of State):: Mr. Speaker, I welcome the opportunity to rise tonight to speak in the budget debate. I would first like to congratulate the Minister of Finance (Mr. Macdonald) on what I consider a very good budget for the times. One might have the great desire to get into all sorts of expansionary ideas and projects, and certainly as a member of parliament it would be very nice to have more federal money circulating in my constituency. However, it seems to me that it is very important to allow existing programs to take hold fully. I refer to the anti-inflation program established last October.
At that time all Canadians were asked to abide by the guidelines for prices and incomes, and we made provisions for mandatory controls over the larger economic units in our economy. The essential purpose was to change expectations, and to bring about a quicker response to the program as a whole so that the fiscal, monetary, and other general policies would in fact bring about real growth and declining inflation. We have seen the program become operational in the last few months and we have actually seen it taking effect. It would not do at this time to introduce programs which might disturb the full operation of the government's attack on inflation. The importance of all

Canadians co-operating in this program was reiterated in the Prime Minister's speech on the budget today.
Nevertheless there are some areas in the budget which I should like to discuss and with respect to which I may, hopefully, introduce some new thoughts. The one-parent family or the working mother will welcome the changes set forth under the day care provisions which allow a deduction for child care of $1,000 per child up to a total of $4,000 per family. Many people will not be directly affected by this concession, but for those concerned about the cost of child care this will be a welcome measure.
I also welcome the new tax provisions concerning oil and gas exploration. Such a means of equalizing power costs will be particularly attractive should oil be discovered and the Maritimes become an exporter of energy. I understand that a similar concession is given to the coal industry. Let me remind hon. members that we have a source of energy in coal. Not only could this provide energy but it would also provide work for people in Cape Breton and other areas in Nova Scotia. Let us take a look at it. The challenge is there. My sources tell me we still have a great amount to use up.
The budget provides that a taxpayer will henceforth be able to write off exploration costs at a rate of 100 per cent-up from 30 per cent as it presently stands. This concession became operative as of budget night and will remain in force until July 1, 1979. Until now, only the principal business taxpayers could claim a 100 per cent write-off of exploration costs. The new provision will also apply to funds received under provincial incentive programs in connection with drilling and exploration. As one who comes from a province where, at present, we are right in the difficult situation of relying on an oil-based power system due to the low cost of oil less than three years ago, I welcome these tax advantages and look forward to the use of coal and to the discovery of commercially viable oil resources off the Atlantic sea coast.
However, let us not think the discovery of oil will ease our problems over the long term. The Atlantic provinces and Quebec must make arrangements between themselves to provide a mutually beneficial and fully operational grid power system.
The federal government has offered financial support for the development of alternative power sources and it is up to the provinces to take advantage of this program. The provinces wish to continue jurisdiction over energy and thus they should come forward with new proposals. In this regard I am particularly anxious to see action taken to harness Fundy tidal power if this is possible.
Canada has always been a country which seemed to be able to get around its difficulties. In 1867 the areas came together and, as provinces, dedicated themselves to working together for the good of all. This has occurred over many years; it happened with respect to the rail and air transport industries; in connection with the oil and gas pipeline in the West; in equalization grants to the provinces; in support for the arts, humanities, and sciences; in education; with the CBC; with our social insurance programs, and in all principal areas of our national life.
June 10, 1976

The federal government provides services of unique importance to the unity of this country; this is what Confederation is largely about. Surely at this point it is not up to the federal government to say to one province, "Find your own solution." This is particularly the case should the solution lie in co-operation not only with the federal government but perhaps with four or five other provinces, all of which must get together if a particular difficulty is to be solved. Let me say, Mr. Speaker, that the sooner this is done the better it will be for Canada.
I should like to turn now to the subject of employment and the labour force. We often hear of the high unemployment rate in the Atlantic provinces. We also know that the figures mentioned are true and we look forward to the amendments which are to be introduced to the Unemployment Insurance Act. However, one does not solve this problem by increasing the number of weeks a person must work in order to qualify. Surely what we need to solve the problem are incentives which would help get all those people back to work.
We know that approximately 50 per cent of those presently receiving benefit can find those four extra weeks quite easily and will do so as soon as they are forced to take such action. But what of the others? As I say, I look forward to the amendments to the UIC Act in the fall. We welcome the assurances from the government that there will be programs of retraining and job creation-that the money which has circulated in the area will continue to be there. We are looking to see incentives which will enable existing operations to find new jobs for these people, along with the incentive already provided by the federal government.
Let us remember, Mr. Speaker, that there are abuses of the present system and that it is not only the working people who are responsible for them. There are employers who will not take a person who comes knocking at the door because they are scared that if they refused to say that the applicant is not suitable he will, when engaged, fail to provide efficient service. Employers therefore prefer to state that the applicant is not fit for the job rather than engage the services of a possibly unwilling worker. The system certainly has its faults and the one I have mentioned is probably the greatest-an employer is afraid to say openly to an applicant for a job that the job is available when he knows that the applicant is really not anxious to stop receiving UIC benefits.
On the other hand in some areas it is very hard for employers to compete in the employee market bearing in mind the amount of UIC benefits possible applicants for work are receiving. Usually it is persons from outside the community who receive these high amounts of unemployment insurance benefit.
I do not want to give the impression that we should jeopardize an unemployed person's UIC benefits if he has earned them at a particular level and would receive the same amount if he returned to the work force, when there is no job available for him. However, over an extended period of time perhaps it would encourage people to get back into the work force if the rates were reduced to the minimum wage thereby enabling an applicant to compete for jobs which are available in the area. I therefore welcome the indication of the Minister of Finance that the
The Budget-Miss Campbell
Minister of Manpower and Immigration (Mr. Andras) will introduce a further change relating to unemployment insurance benefits, that is to say, the number of weeks during which benefits may be drawn will be more directly related to the number of weeks worked and that, in addition, regional extended benefits will be related in a more sensitive manner to the level of regional unemployment. I look forward to taking part in the discussion of these proposals.
The budget has been criticized by the opposition as failing to bring forth new housing programs or incentives to business. I have been a member of parliament for not quite two years but I know the government has brought in a number of housing programs. Consider, for example, the Assisted Home Ownership Program. Under this program, a couple, regardless of income, who are buying or building a new house under the qualifying limit, which is $31,000 in my area, are eligible for loan assistance to reduce their mortgage interest rate to 8 per cent. Those with children and needing additional help to keep monthly payments below 25 per cent of their income may qualify for outright subsidies of up to $750 annually.
We have programs such as the Neighbourhood Improvement Program available to a great many municipalities. There are 16 municipalities in Nova Scotia which have taken part in this scheme. One of them is in Yarmouth, in my constituency. I should like to see more use being made by Nova Scotians of these programs, and I look forward to seeing residential rehabilitation assistance programs in full use.
[DOT] <2110)
I also realize that an agreement has been signed by the province of Nova Scotia with the federal government designating the rest of the province-that is, the rural areas including municipalities of less than 2,500 population-as eligible for residential rehabilitation assistance programs. It is up to the municipalities to take advantage of these programs. Included in this designation in Nova Scotia are a number of areas selected for priority assistance. I am under the impression that some problems still remain to be worked out before commitments can be made, particularly program delivery arrangements for provincial assistance. However, negotiations on these matters are proceeding and I hope it will not be too long before the full impact of these housing programs is felt.
These programs, Mr. Speaker, show progress in the housing industry, and I hope that anyone with housing problems will go after their municipality, their provincial and federal representatives, to ensure that the full benefit of these housing programs are taken advantage of, not only in Nova Scotia but in Canada in general.
In so far as business incentives are concerned, Mr. Speaker, opposition members claim we have not provided measures to stimulate capital investment. This government provided in the last budget manufacturing incentives, investment tax credits. Other programs provide financing directly, such as to small business. In the province of Nova Scotia in the first three months of 1975 there were eight loans to small businesses, whereas in the same period this year there were 30. The amount last year was $66,240, compared with the amount this year of $487,146.

June 10, 1976
The Budget-Miss Campbell
With regard to farm improvement loans, in the same period last year, namely the first three months, there were 48 loans made in Nova Scotia, and 48 in the first three months of this year. However, the amount lent last year was $191,537 compared with $262,435 this year. As far as the fishing industry is concerned, there were 208 loans granted in Nova Scotia during the period April, 1974, to March,
1975,	totalling $1,505,251. Between April, 1975, and March,
1976,	there were 197 loans-this was a poor year for expansion, particularly in the groundfish industry-for a total of $1,300,773. However, loans in the first quarter of this year ending March, 1976, totalled 50, amounting to $282,021.
These measures have been provided to sustain high levels of business investment in Canada. We are looking at productivity as a government, Mr. Speaker. People, business, and Canada as a whole must get into these programs. We have reached a maturity; let us take it from there and make a success of what we have.
This budget also increases the amount of corporate profits allowed for the small business tax reductions. Canadian controlled private corporations are entitled to pay tax at a reduced rate, subject to an annual limit on their profits. For 1972-73 the limits were $50,000 to $400,000 per annum in total. In 1974 they were raised to $100,000 to $500,000; and effective for 1976 the Minister of Finance in his recent budget announced the limits will be further increased, ranging from $150,000 to a total of $750,000. This can only create incentives for small business in the Atlantic area and will help these small businesses to continue and expand.
Another welcome announcement has been the increase in the maximum annual deduction for registered pension retirement plans from $2,500 to $3,500. This measure will be welcomed by all those who are saving for their retirement.
A new step was taken by the government last Friday when it announced that it would be proclaiming jurisdiction over fishing rights extending out to 200 miles from our coast. This is to take effect as of January 1, 1977. We have had bilateral negotiations and have tied up some 88 per cent of the operations of foreign fleets within this 200 mile limit.
What will this do for the Atlantic provinces? It can only provide new industry and ideas. It is also time that the government regarded fish as a natural resource. We do not have to look elsewhere if we have a 200 mile limit. Businesses will grow and the fishery will develop. We have allowed foreigners to fish off our shore, but a lot of these fishermen have been fishing these grounds for some time alongside our own fishermen.
With regard to tariffs, we have a tariff on finished fish products that leave Canada but no tariff on unfinished products. When we are negotiating tariffs with other countries, perhaps we should consider imposing a tariff on unfinished products as an incentive to finish our products in Canada.
I realize we have agreed to take only 20 minutes and perhaps I have overstepped my time.


William Heward Grafftey: Keep going.


Coline M. Campbell: Thank you. This budget has been crit-ized by the opposition as not being expansionary. I suggest

that this is a time when we ought to examine the programs we already have in existence in an attempt to make our economy work. At a time when we are trying to make our anti-inflation program work we should not try new, expansionary ideas; the programs we have, I suggest, will probably work if given the opportunity.
I was very pleased to be given this opportunity this evening to speak in this debate, Mr. Speaker. Since my 20 minutes have expired I will say thank you, and resume my seat.


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I am pleased once again to take part in a budget debate, especially since I seem to have the distinction of closing this memorable debate on this memorable budget, which will be remembered forever for its nothingness. However, if I stick strictly to the contents of the budget itself, I will probably be finished before I have hardly begun. I say that because the budget is as shallow and as celluloid a budget as we have ever seen, and as a result it has very quickly become known as the "no budget budget".
This budget is what we get at a time when sweeping new proposals and policies are required, in fact are vital, if the downward economic trend that we are facing is to be reversed. But all this and more has been said by my colleagues who have spoken before me, none better than by the Leader of the Official Opposition (Mr. Clark) in his very forceful yet eloquent address just a couple of days ago.
Instead of expounding on the obvious deficiencies in the budget itself, I would like to take this opportunity to express my thoughts about a part of our economic process, a part that must surely form the backbone of our economic way of life. I am, of course, referring to small business, which many believe is slowly but surely disappearing under this government.
This small firm sector which generally seems to be ignored and bypassed by governments is responsible for employing over 50 per cent of our labour force. This high figure was substantiated several years ago by the minister of energy who was then the minister of industry, trade and commerce, when he stated in this House:
Almost 60 per cent of our entire labour force-two thirds of Canadians work for businesses employing 15 persons or less. Most of these businesses are owned and managed by Canadians and provide a means of developing greater Canadian participation in our country's growth.
Although it is admitted that by far the largest and possibly the most important sector of our economy is in fact the small firm sector, the government continues to expound on philosophies it established some 20 years ago by concentrating most if not all its efforts on bigness, bigger and costlier governments, bigger and stronger units, and larger and fewer multinational corporations as well as merger oriented enterprises, while small business as we know it is possibly heading toward extinction.
The government has gone so far in its centralization of power that it has nearly reached the stage of allowing a few to monopolize our over-all economy. The Canadian Labour Congress, for example, has been allowed to become so powerful that just recently it reached the height of impertinence when it threatened the government, and
June 10, 1976

therefore the public at large, by suggesting that unless it were given a key role to play in running the nation it would call a national strike. This is the way things operate in most communist countries, obviously not to the advantage of their people. In any event, they hold all this concentrated power, and yet the CLC controls only approximately 20 per cent of the labour force compared to over 50 per cent in the small firms sector.


John R. Rodriguez: Nonsense.


Otto John Jelinek: 1 notice that my socialist, if not communist, friends are getting upset because they would like nothing better than state ownership and control. If that is so, they can go back to Cuba or Russia.


John R. Rodriguez: Absolute tripe.


Otto John Jelinek: Yet the Minister of Industry, Trade and Commerce (Mr. Gillespie) did not even mention small business in his speech on the budget earlier this week. He does, however, from time to time outside the House indicate the seriousness of problems relating to the small businessman, as he did in a recent speech to the Canadian Manufacturers' Association. But I believe this is only a means of pacifying the hungry. If the minister were sincere in his casual concern for the small business community, then he would back his statements by appropriate legislation in order to show his sincerity. Promises alone mean nothing unless they are backed by action, and action is nowhere to be seen as far as the government is concerned.
As for the Minister of Finance (Mr. Macdonald) I do not think he even knows small business exists. The only mention in his budget which was in any way connected to even medium sized firms was an increase in the amount of net profits eligible for a lower tax rate. Not only will this affect less than 1 per cent of the business community but the truly small businessman whose net profits are below $100,000 a year remains on the list of the ignored so far as the government is concerned.
I would like to point out some of the problems or deficiencies that exist between governments and small business, but before doing so let me say that I hope I will not be labelled a pessimist or a cynic, as I was by the Postmaster General (Mr. Mackasey) a few weeks ago during my objective questioning on Olympic financing because I will now, as I did them then, base my points on facts and precedents, and therefore if I am to be labelled anything by anyone I suggest that the word realist would be far more appropriate.
First, however, let us clarify by means of a definition who we are talking about when we mention the small firms sector. The government's definition of small business, an active business income, has created considerable room for dispute which involves the usual cost of accountants and lawyers for the businessman and of civil servants for the government.
I believe that a far better working definition, perhaps oversimplified to some extent, would be that a small firm is one that is owner-managed. There are always exceptions, of course, for specific programs where arbitrary size limits would have to be decided upon. However, at this time for
The Budget-Mr. Jelinek
the sake of simplicity let us assume that the so called small business sector would fall into the owner-managed category. Even without the exceptions, by using this definition we can be sure that we are including 99 per cent of all small firms in that category.
Let me begin with high interest rates and the over-all banking system as it relates to this "owner-managed" segment of our business community. It is a well known fact that a small independent firm is at a great disadvantage against conglomerates and multi-national corporations when it comes to money supply. Although there are thousands of chartered bank branches across this country and the government has the Federal Business Development Bank, which is a carry over from the Industrial Development Bank, established supposedly for the purpose of assisting Canadian firms in their expansion programs; our banking system still remains one of the least competitive organizations in the world, afraid to take the least amount of risk when compared to the banking system in the United States, for example. A sort of a monopoly by the big "10" seems to be in existence within the money institutions, supported and protected by the government. The branches and their managers virtually have their hands tied when it comes to credit decisions, as their credit levels are limited by head office at uniform levels, thus eliminating any possible fluctuation for the sake of a healthy competitive atmosphere.
What is even worse is that American and other foreign subsidiaries can come into Canada and purchase Canadian firms and businesses which may have remained in the hands of Canadians, without ever using their own capital. The foreign company, by simply using its parent company in the United States or elsewhere as collateral, is able to generate a loan from a Canadian bank with no real problems. In many cases it is able to obtain the loan from the same Canadian bank that more often than not had refused the same Canadian plant further credit for necessary expansion. I know this as a fact as I have gone through this whole cycle myself.
In short, as it now stands, a U.S. or foreign enterprise can in fact buy out a Canadian firm without ever having to bring a red cent into Canada. From time to time we cry foul, or independence, and rightly so, but we as Canadians cry foul often without doing anything about it. The best comparison I can make is the way we cry and complain every four years when, as a nation, we do not bring back enough or any medals from the Olympic Games. Unfortunately this year will not be any different, so we complain, but during the subsequent four years we as Canadian citizens, as media, as governments, do next to nothing to assist, morally or otherwise, those few athletes who continue to give all their energies as well as their souls to specific goals for this country, and that is just one typical comparison with the small independent businessman in Canada and the government's attitude to him.
Yet still on the money end, while governments continue to turn their backs on small business and from time to time throw a bone in their direction just to keep them pacified, Canada has lent almost $1.5 billion to 57 foreign countries in the last ten years alone, for little or no interest. These are not figures I am making up, Mr. Speaker, they are figures that the government itself has confirmed. Some of

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these loans are even made to communist countries with no termination dates set, and they continue to be made while thousands of small businesses survive in this type of political atmosphere. How is it that Cuba, for example, can borrow millions of dollars at a rate of 3% while many small Canadian firms have to fight and beg, and collateral their gold fillings, in an attempt to obtain reasonable financing-say around 12%-many to no avail? No wonder the unemployment situation is a disaster, with three quarters of a million Canadians unemployed. Mr. Speaker, there is no better, no cheaper, and no quicker potential employment opportunity than by way of the small firm sector of our economy. The government must take appropriate steps to utilize this sector for economical make-work programs, by initiating and imposing comprehensive and realistic incentives for this very important industrial and economic community for the benefit of all Canadians.
Now let us move to a more specific problem, the problem dealing with the swamp of bureaucratic paperwork which governments continue to impose on all business establishments. There are the conventional tax papers, refund forms, application papers, questionnaires, licence forms, and on and on goes the list. There is general agreement that some of these forms have no justification for existing, and in fact many have become obsolete, sometimes tied to legislative bills which are no longer in effect. However, the forms continue to circulate, causing unnecessary demands at great expense to governments and business establishments. Meanwhile the filing cabinets of the nation bulge, often with incorrect and incomplete information. The only consolation is that most files gather dust, rarely to be used again.
The answer to this problem is simple: all we have to do is follow the example of the United States and initiate an immediate reduction of 10 per cent of government forms every few years or so. The result would be an unbelievable saving in dollars to the taxpayer and would certainly reduce considerably the nuisance, even harassment, that the small firm is expected to bear.
Surely if the government is prepared to wait for the United States economic upswing to bring us out of our doldrums, the least we could do would be to borrow some of their effective methods, which are obviously working for them, and could just as well work for Canada.
With regard to labels and packaging our labelling legislation is yet another horrendous bureaucratic and complicated mess. It is of little, if any advantage to anyone and unquestionably a big hindrance to the small manufacturer. To point out a very quick example, a manufacturer in northern British Columbia distributing goods from, say, the United States within the borders of the province of B.C. alone must go through the expense of relabelling and repackaging his product at a very great expense. The same can be said for manufacturing in central Quebec, or in any other area of this regionally complex nation. The act should and must be simplified.
One of the more intricate problems for some businesses-and I suppose every individual has this problem to a certain extent-is one which relates to the existing tax complexities. It is bad enough for individuals, but for small

businesses it is a nightmare and a real deterrent to expansion. The entire Income Tax Act should be rewritten so that it would be comprehendable to the taxpayer. This may seem like a large and burdensome order, but from the viewpoint of a small business the administration of the tax laws has become as critical as the laws themselves. It is a double cost to the taxpayer who must indirectly pay for bureaucratic administration and then pay again for advisers to deal with the problems directly affecting him.
If the small businessman had unlimited funds, as most multinational corporations do, there would be fewer tax problems for him to worry about. He could set days aside to confer with tax advisers, supervisors, and evaluators from Revenue Canada, but only to find that simple solutions are no longer available in this respect. Of course the small businessman has other things on his mind, for example, mere survival, let alone keeping up with product development, research, employment, cash flow, expansion and so on.
I could produce a long list of specific tax examples which apply to the small firms sector in a harmful way, but because of my time limitation I will just give one sample. It relates to the small businessman who in many cases must depend on his spouse to take part in his business endeavours. It so happens that because of the weird tax laws which are in existence it is cheaper for the business proprietor to live with a woman working for him rather than to marry her. I can vouch for the fact that wives can be just as expensive as girlfriends, but that is no reason for this specific tax law to continue. The point of the matter is that if they marry his business income is all taxable, and if they do not, he can deduct her salary. Then if they do decide to marry after all, they will need to incorporate so that she can be employed by the business. In other words, it is more economical to live with a mistress than it is to marry her. Strange as this example may seem, it is a true fact, and it affects tens of thousands of Canadians struggling to carry on their business ventures under existing tax complications.
The fact that the budget is a no budget naturally came as a surprise to many, but the fact that the budget in no way deals with Canada's current number one problem surely must have shocked all. I am of course referring to the housing situation as it now stands and the fact that the average young family can no longer purchase a home. This lack of positive action by the government in the field of housing does not only affect the small firms sector, but indeed all Canadians. Surely if the government was not prepared to reduce the tax on building materials, at least further concessions should have been introduced in respect to insulating materials, just to name one example.
We talk and preach about the serious need for energy conservation, and rightly so, yet modern homes are built without the least bit of thought about conserving energy. It is a known fact that properly designed and insulated homes will use less energy, as far as heating and air conditioning are concerned, than the types of homes which are now being constructed in various developments across Canada.
I had the privilege of attending a recent NATO conference at which it was established that those nations which impose stricter controls on building construction in respect
June 10, 1976

of energy conservation are the same nations which are ahead in the energy conservation field, and Canada unfortunately is not among them. It seems to me that the government has its priorities mixed up when it comes to controls.
Having just mentioned air conditioning, I am prompted to reflect on why the Minister of Finance saw fit to include in his budget a surtax on automobile air conditioners when the amount of energy consumed by air conditioning is less than one half of 1 per cent. The only answer must be that once again this is simply another example of pacification, this time for the benefit of energy conservationists who have a right to be concerned.
If I may, I would now like to take this opportunity to make some suggestions and recommendations which I hope will be considered in a serious manner.
It is no secret that government, whether in a restraint period or not, is by far the largest purchaser of goods and talent, but the bulk of the contracts go to a concentrated group of elite corporations and individuals, usually in the multinational range. In this regard it is time that the government followed the examples set by Japan and others by initiating set-aside programs in its purchasing for the purpose of contracting them to the competitive small firms sector. It is time the government took immediate steps to reduce the costly bureaucratic paperwork onslaught I mentioned earlier. It is time to simplify our legislation with regard to labelling and packaging, and it is time to rewrite the Income Tax Act for the sake of simplification and saving.
It is time the government took away the right to strike from those individuals and groups working in essential services. It is no secret that one of the major factors behind the low productivity figures in Canada is the fact that millions of working man-days are lost as a result of strikes, many of them illegal, and many of them within essential or government services.
Two recent polls indicate strong support for such a proposal. Of roughly 5,000 business establishments polled on a national basis 91 per cent favoured the idea of taking away the right to strike within essential services. On a more local level, of those constituents from my riding of High Park-Humber Valley who answered a recent questionnaire, 94 per cent supported such a move. Many of them work in essential services themselves.
It is also time the government followed its anti-inflation guidelines and reduced its spending in accordance with those guidelines. Our finance critic, the hon. member for York-Simcoe (Mr. Stevens), outlined in his budget remarks how we could realistically reduce government spending by at least $1 billion.
It is time for the government to encourage, by way of co-operation in research and development, the formation of a small firms consortium. This system of business co-ops in West Germany, Japan, and elsewhere is a tremendous advantage to the small firms taking part with respect to buying, selling, financing, sharing facilities, and so on.
It is also time for the government to initiate cautious but realistic and meaningful incentives for the primary purpose of increasing productivity. It' is time the government encouraged, through tax incentives, a far greater amount
The Budget-Mr. Jelinek
of secondary manufacturing within Canada rather than selling our national resources abroad for the sake of improving our international trade balance.
In short, the time has come for the government to change its attitude toward centralization of business, unions, and governments as well, and to take the necessary steps, some of which I have outlined, for the purpose of preserving a competitive business community which forms the basis of the free market system.
I have tried to outline some of the problems, along with some remedies, that relate to the small firms sector of our economy and, believe me, I have only scratched the surface. If we want this sector to survive within our society, as indeed we do, then immediate action by the federal government must be taken, for the small business community is what the free enterprise system is all about. It is what this country was built on and what this country can prosper by. Other countries which presently are more fortunate than Canada in regard to unemployment, inflation, productivity, and other areas by which the standard of success and happiness is judged, have all concentrated their economic energies toward their small firms sectors within their industrial way of life.
Japan, Belgium, West Germany, not to mention the United States and others, are all in far better shape economically speaking than Canada, and one of the primary reasons is because in those countries their governments are dedicated toward the betterment and continual growth of the small firms sector, thereby assuring the survival and success of the free market system in particular, and free enterprise as a whole. We cannot allow the Prime Minister to change the free market system in this country. If the Prime Minister believes that the free market system does not work, as he so clearly stated late last year, then may I remind him that if indeed free enterprise is having its problems in this country it certainly has nothing to do with the system itself but rather with the stranglehold that he and his government have had on that system for the past decade or so.
I see I still have about five minutes left, Mr. Speaker, so in order to close on a not too serious note I should like to read to you a very simple but significant story put out by the Canadian Federation of Independent Business. It simplifies the realities of our economic society to a children's fairy tale, but the reason I decided to end my address today by reading this story is because, more than anything that has been printed lately regarding the problems within our economy, this story signifies reality and comes right to the point in a way that even members and supporters of the New Democratic Party will understand-I hope.
Before I read it, however, let me set the stage by introducing the characters in the story and equating them to the real life segments of our society. First, there is the Little Red Rooster who should be equated to a typical small businessman in a free society. The cow will play the part of the union leaders, the duck will be the NDP oriented working man, and the goose is a socialist Liberal-is there any other? And lastly the farmer represents the cabinet. Allow me to read from this pamphlet put out by the Canadian Federation of Independent Business, which
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The Budget-Mr. Jelinek
is a non-profit organization of over 32,000 independent business owners dedicated to the preservation of free competitive enterprise.


Mr. Deputy Speaker:: May we clarify one point? It being 9.45 p.m. I should at this time put all questions necessary to dispose of the motion, but I believe there is some understanding so perhaps I could recognize the parliamentary secretary.


Mr. Trudel:: Mr. Speaker, I believe you will find there is general agreement among the parties that we do not see the clock until ten o'clock?


Walter David Baker: That is correct.


Mr. Deputy Speaker:: Is it agreed by unanimous consent that we do not see the clock until ten o'clock?


Some hon. Members:: Agreed.


Steve Eugene Paproski: Mr. Speaker, it was also agreed that the hon. member for High Park-Humber Valley (Mr. Jelinek) would finish his speech and then we will go to the hon. member for Kamouraska (Mr. Dionne), and finish up by ten o'clock.


John R. Rodriguez: Mr. Speaker, does that include listening to fairy stories about red roosters?


An hon. Member:: Sit down.


Mr. Lefebvre:: You guys deserve each other.


Mr. Deputy Speaker:: The hon. member is adding to the situation. I should ask consent not to see the clock until ten o'clock but the hon. member for Edmonton Centre (Mr. Paproski) suggests that the next speaker will be the hon. member for Kamouraska. I know that some other members might want to make representation and wish to speak, so it is difficult for the Chair to include that in the agreement. We could go beyond 9.45 p.m. and see what happens afterwards.


Some hon. Members:: Agreed.


Otto John Jelinek: As I was saying, Mr. Speaker, I will conclude my remarks by reading this story although it is simplified for the primary purpose that even those socialists on my left will be able to understand some of the problems of industry. It does lower itself somewhat to the level of a fairy tale. There is a very strong and important point in this. Allow me to read the story from the Canadian Federation of Independent Business.


Stanley Howard Knowles: You could have read it by now.


Otto John Jelinek: If you guys had been quiet over there I might have been finished. Here is the story. Once upon a time there was a Little Red Rooster who scratched about and uncovered some grains of wheat. He called his barnyard neighbours and said, "If we work together and plant this wheat, we will have some fine bread to eat. Who will help me plant the wheat?" "Not I," said the Cow. You remember who the cow was. "Not I," said the Duck. "Not

I," said the Goose. "Then I will," said the Little Red Rooster and he did.
After the wheat started growing, the ground turned dry and there was no rain in sight. "Who will help me water the wheat?", said the Little Red Rooster. "Not I," said the Goose. "I'd lose my workman's compensation," said the Cow. "Equal rights," said the Duck. "Then I will," said the Little Red Rooster and he did.
The wheat grew tall and ripened into golden grain. "Who will help me reap the wheat?" asked the Little Red Rooster. "I'm waiting for a guaranteed annual wage," said the goose. "Not I," said the Duck. "Out of my classification," said the Cow. "Then I will," said the Little Red Rooster and he did.
When it came time to grind the flour, "Not I," said the Cow. "I'd lose my unemployment insurance," said the Duck.
When it came time to bake the bread, "That's overtime for me," said the Cow. "I'm a dropout and never learned how," said the Duck. "If I'm the only one helping, that's discrimination," said the Goose.
"Then I will," said the Little Red Rooster and he did. He baked five loaves of fine bread and held them up for his neighbours to see.
"I want some," said the Cow. "I want some," said the Duck. "I demand my share," said the Goose. That is the NDP.
"No," said the Little Red Rooster. "I can rest for a while and eat five loaves myself."
"Excess profits," cried the Cow. "Capitalist leech," screamed the Duck. "Equal rights," screamed the Goose. And they hurriedly painted picket signs and marched around the Little Red Rooster, singing, "We shall overcome." And they did.
For when the Farmer-that is the cabinet-came to investigate the commotion, he said, "You must not be greedy, Little Red Rooster. Look at the oppressed Cow. Look at the disadvantaged Duck. Look at the underprivileged Goose. You are guilty of making second-class citizens of them."
"But I earned the bread," protested the Little Red Rooster.
"Exactly," the wise Farmer said. "That is the wonderful free enterprise system; anybody in the barnyard can earn as much as he wants. You should be happy to have all this freedom. In other barnyards, you would have to give all your loaves to the Farmer. Here you give four loaves to your suffering neighbours."
And they lived happily ever after. Including the Little Red Rooster, who smiled and crowed, "I am grateful. I am grateful."
But his neighbours wondered why he never baked any more bread.
The point of this story is that it is time to wake up to the fact that unemployment insurance has increased five times since 1971 and government spending has increased five times in the past ten years. The unemployment deficit has reached a staggering $4 billion, not to mention the unacceptably high unemployment figures and the highest infla-
June 10, 1976

tion rate in history. So wake up Canada-there is no free lunch.


Mr. Bernard Loiselle (Chambly):: Mr. Speaker, in taking part in this debate, I wish to emphasize some aspects of the budget proposed by the present government and that seem very logical, wise and adapted to the general situation of the Canadian economy a well as to the needs of the area that I represent, the south shore of Montreal.
Without coming back in detail on every point contained in the precise statement of the minister (Mr. Macdonald), I wish to comment briefly on the general context of that budget which is as follows: it is made up of a delicate web of contradictory situations. It represents the middle phase of an economic cycle. We are not entirely out of the depressive phase of the last economic cycle and we are not yet at the apex of the recovery which follows automatically any recession in each four or five year cycle. This is why the opposition can only make general criticisms which consequently are irresponsible. Those criticisms are general and out of context. As we all know the years 1974 and 1975 were the worst years of the recession in our economy since the 30's. In unprecedented and extremely concrete fashion, they reflected for every citizen what happened internationally, events which cannot possibly be underestimated in the restrictive context of a national electoral quarrel-a new planetary awareness both distressing and beneficial at the same time.
The last years have lit up new alarm signals on the controls panel of our planet. We realized as never before the limit of our resources. We noted, even us, the privileged citizens of a wealthy country, a large country new and rich, the fragility of the economic and environmental balance of the world.
We also understood the message of Carl Sagan, the American astronomer and physicist responsible for the message sent to the stars by Mariner 8. Our planet is small and limited and while we are broadening our conscience at the universal level we must look for new forms of organization on this earth and evaluate immediately its resources in the spirit of interdependency so favoured by the economists Galbraith and Myrdal. This is the meaning of the two years of recession which we have just experienced. They mean deep realignments on a world-wide basis between developed and underdeveloped countries, rich and poor ones, young and old ones, heavily populated and almost empty ones such as ours.
In spite of its privileged position in the world, Canada has known the consequences of an economic crisis which has affected every one of its partners. Due to some persistent behaviours of its citizens, especially the rapidly growing significance of wage increases as a deflation factor of the yearly inflation rate, Canada has been prompted to react, to strengthen some controls and to impose others enabling it to anticipate the future and maintain a real stability. By the way, while all or almost all industrialized countries reported a real reduction of their national production, Canada maintained during the past years an average growth of 1 per cent on a two-year basis.
The Budget-Mr. B. Loiselle
While the unemployment rates were reaching 10 per cent in the United States, including incredible rates of 16 per cent in Connecticut and 23 per cent in the States of New England, Canada for its part was always maintaining unemployment rates lower than 8 per cent. At the same time, the unemployed of our country enjoyed services and benefits whose realism and efficiency drew the admiration of all industrialized countries. For me, the general criticism expressed by the opposition in its motions of non-confidence are shabby and show an alarming chauvinism. They form, I think, an incredible condemnation of the policy carried out by the majority of our major commercial partners in the free world that were unable to match the stability of Canada in the recent crisis.
Indeed, if the opposition is not satisfied with an actual increase in the purchasing power of Canadian citizens, a real employment growth, a gradual increase in oil prices and a sustained national productivity, I wonder what strong criticisms they would make as regards the American government which enables the United States to undergo a real slowdown in productivity, the Japanese government which had to face inflation rates ranging from 10 to 20 per cent and the British government which must constantly appeal to the International Monetary Fund to keep afloat what is left of the strong pound sterling. I wonder what else the opposition want and to what model they were referring when they restlessly attacked the behaviour of the government of Canada during the recent events.
They were probably referring to a hypothetical country located in a solar system with which they are the only ones to maintain a constant relationship. I humbly suggest that Canada got out of the recent crisis with distinction and that the Canadian government was largely responsible for the relatively good performance of our economy through its strong and responsible approaches which were constantly adjusted to reality rather than to the requirements of a restrictive theory. And this year, it continues to act according to its principles.
We might have, between two alternatives, either applied brakes and more severely restricted our expenditures by relying on the economy recovery to ensure as best as we could a fair distribution of wealth. As the Minister of Finance (Mr. Macdonald) said, this would have amounted to clearly ignoring the most disadvantaged segments of society whose improving status necessarily depends on suppletive government action. Or we might have brought forward a largely expansionist budget, ignoring the fact that we can expect a better recovery than was forecast in Canada, under the pretence of stimulating our weakened economy.
But we had to respect the traditional balance of the economy. We decided not to feed inflation thanks to expansionist measures and important tax reductions, but at the same time not to demand further sacrifices from the citizens, under the pretence that consumption has remained at a high level and that it is impossible to cut expenditures that are attributed to it in our society.
This budget strikes a difficult balance between expansion and belt-tightening. It is an intermediate budget, with significant amounts still allocated to items that will require less funds starting from next year because the effort is done now. It also takes into account the real and
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significant results obtained mainly through the Anti-Inflation Board. It is now projected the inflation rate for 1976 will be below 8 per cent, certainly a more acceptable figure than the 11 or 9 per cent figures of preceeding years. This budget takes into account the key action by the Anti-Inflation Board since its inception. It also introduces a delicate transition before the termination and change of certain programs, and finally it undertakes major structural changes originating from important policy statements such as those made by the Economic Council of Canada.
I would like to stress at this point why this budget seems to me both acceptable and in line with certain major aspects of the situation in Quebec, namely economic development-more especially that of small and medium businesses-the improvement of manpower programs and progressive changes in the employment insurance, and finally the energy issue. On the matter of economic development, I note firstly that this budget does not affect the regional development incentives programs.
Despite the significant progress experienced during the 1970-74 economic cycle, and the bulk of favourable trends now experienced by the Quebec economy, that province is still faced with important structural problems that were keenly emphasized in the last DREE report in March 1976. Although Quebec has caught up in real terms on most aspects, its economy is still plagued by traditional industrial traits that must be rapidly changed to bring the province to the level of Ontario or the Canadian average.
We may therefore hope in that context that all this year and all along the 1976-1977 fiscal year the DREE programs take into account that basic requirement, by allocating significant funds to industrial reconstruction efforts that are complemented at the provincial level by a determined and specific action policy. However, I see in this budget a special emphasis on the growth of small and medium businesses, clearly the ones that denote the highest level of local and regional enterprise.
The provisions designed to increase deductible benefits for tax purposes to $150,000, and set their total amount at $750,000, are first of all a type of realist indexing to the cost of living. But by allowing a business to save up to $10,500 on its tax account for the previous year, the government exceeds indexing and ensures-


Mr. Speaker:: Order. It being ten o'clock, I must interrupt the hon. member and, as agreed earlier, it is my duty to put forthwith the question to dispose of the motion now before the House.

The question is on the motion standing in the name of the Minister of Finance (Mr. Macdonald). The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion? All those in favour will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.


Walter David Baker: On division.


Stanley Howard Knowles: On division.


Mr. Deputy Speaker:: I declare the motion carried on division.
Motion (Mr. Macdonald (Rosedale)) agreed to on division.


Mr. Deputy Speaker:: Order, please. It being ten o'clock p.m., this House stands adjourned until eleven o'clock tomorrow morning, pursuant to Standing Order 2.
At 10.01 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, June 11, 1976