1976-12-09

ROUTINE PROCEEDINGS


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, I rise on a matter of urgent and pressing necessity. On Tuesday, December 7, the CBC presented the regularly scheduled program "The Fifth Estate". Whereas this particular program, hosted by Adrianne Clarkson, entitled "Citizen McCain" gives unfavourable publicity to the major processing part of the agricultural industry of New Brunswick, it may have a detrimental effect on the marketing of agricultural products from the area and a resulting decrease in employment and in the general prosperity in the area; whereas the program by innuendo reflected upon the effectiveness of government programs of assistance to underdeveloped areas, and whereas the program was biased, inaccurate and totally improper, it will inevitably reflect upon the credibility of all CBC documentaries. Therefore, I move, under Standing Order 43, seconded by the hon. member for Annapolis Valley (Mr. Nowlan):
That the minister responsible for the CBC should, first, severely reprimand all those who were responsible for the preparation and presentation of this program; second, take the necessary steps to ensure that the CBC will never again present programs of such inaccuracy and bias; third, insist upon an apology to all those insulted by the demeaning program; and, fourth, have the officials responsible called before the Standing Committee on Broadcasting, Films and Assistance to the Arts for their consideration.


Mr. Speaker:: Order, please. The provisions of Standing Order 43 require the unanimous consent of the House for the presentation of such a motion. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT ADMINISTRATION
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. It concerns the testimony given
this morning by Mr. Ross Campbell, chairman of Atomic Energy of Canada Limited. Considering that Mr. Campbell testified that the agreement between AECL and Mr. Shaul Eisenberg for services connected with the sale of a CANDU reactor to South Korea contained "no specifics whatsoever" in terms of guidelines, and in view of the fact that the Prime Minister stated in the House on December 2 that there were existing guidelines for the behaviour of Crown corporations in the form of instructions from ministers to the heads of Crown corporations, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the failure of the former minister of energy, mines and resources, now Minister of Finance, to issue such instructions and guidelines to the officers of AECL before they entered into an agreement with Mr. Eisenberg be referred to the Standing Committee on Public Accounts for investigation.


Mr. Speaker:: The presentation of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FEDERAL-PROVINCIAL RELATIONS   FAILURE OF GOVERNMENT TO INSIST THAT CONFERENCE OF FIRST MINISTERS BE HELD IN PUBLIC-MOTION UNDER S.O. 43
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a motion under Standing Order 43 the reasons for which are demonstrated in the motion itself. I move, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn):
That this House rise to observe two minutes of silence out of respect for the destruction of the principle of open government demonstrated by the refusal of the government to insist that the federal-provincial first ministers' conference, or part of it, be held in public.


Mr. Speaker:: Order, please.


FINANCE
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House to present a motion of extreme importance. I trust all hon. members in this House will agree.
As the federal Minister of Finance said, during the last federal-provincial finance conference, that Canada must

December 9, 1976
Resources
expect the cost of food products to increase in the coming months, and as he also maintains that it is unlikely that the Canadian people can continue to benefit from the low rate of increase in the cost of those products, which low rate has been the main factor in the slowing down of inflation in the last few months, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House request the government to take the necessary steps, as soon as possible, to set up a system of compensatory discount on consumer prices to lower the cost of Canadian consumer goods and bring them in line with the present purchasing power.


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


Some hon. Members:: Yes.


Some hon. Members:: No.


Mr. Speaker:: As there is not unanimous consent, the motion cannot be put.


RESOURCES
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I wish to move a motion under Standing Order 43 on a matter of urgent and pressing necessity. The matter deals with an agreement to be entered into between the Government of Canada and Nova Scotia, New Brunswick and Prince Edward Island with regard to offshore mineral resources whereby the Government of Canada will have the final control and whereby revenues are to be shared 75-25, but the provinces are not to be permitted to impose any income taxes on permit holders. I therefore move, seconded by the hon. member for Egmont (Mr. MacDonald):
That this House direct the Government of Canada not to proceed with such an unfair and inequitable agreement nor to introduce any legislation in connection therewith until such time as there has been a general election in Canada so that the people of Canada may decide what policy should be adopted by the Government of Canada with respect to offshore mineral resources, whether the policy of centralism proposed by the Trudeau administration or the policy of recognition of provincial control of such resources to assist regionally disadvantaged provinces...


Mr. Speaker:: Order, please. The motion is clearly argumentative.


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. The United States Ambassador has been giving public advice to Canada and urging the expansion of Canadian arms expenditures. In the light of the recent acquisition of long range patrol aircraft, new tanks and the prospective purchase of fighter planes, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the government advise the ambassador that the scale of Canadian defence expenditures is a matter of exclusive Canadian concern and that we are in a phase of restraint on expenditures which precludes vast and possibly wasteful increases of expenditure on defence.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
[Stage Direction]
Mr. Mike Landers (Parliamentary Secretary to Minister of
Justice): Mr. Speaker, I rise on a matter of urgent and pressing necessity under the terms of Standing Order 43. In view of the fact that the report of the Auditor General describes loans to the Saint John Harbour Bridge Authority as being uncollectable, and in view of the fact that a write-off of these loans would be in accordance with standard accounting practices, I move, seconded by the hon. member for North-umberland-Miramichi (Mr. Dionne):
That the government of Canada commence negotiations with the province of New Brunswick in the near future, with the ultimate goal in mind of the write off of the $24.8 million in loans to the Saint John Harbour Bridge Authority and toll free passage for all vehicular traffic, with operating costs to be assumed by the province of New Brunswick.
Mr. Speaker:: Such a motion, pursuant to Standing Order 43, can be presented to the House only with its unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
December 9, 1976



ORAL QUESTION PERIOD


Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is to the Prime Minister, and I would like to raise with him again the answers which he gave earlier this week regarding the first ministers' conference of next week being held in public, at which time he stated that he felt there were a majority of provinces which favoured a closed conference. In view of the fact that according to the Prime Minister's officials only four provinces expressed any preference for a closed conference and that I am now led to believe that that number has been reduced to one, will the Prime Minister now go along with the majority opinion and make it possible for Canadians to view and, in fact, participate in this very important meeting about the future of their country?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I am not in a position to verify or deny the facts that the hon. member alleges in her question. I shall look into the matter and see if the facts are as she alleges. Certainly, we stand to our view that we can go for either an open or closed conference. If there is no consensus for a closed one we will have it open. I suggest the best way to do it might be to have that as the first item on our agenda on Monday morning. I will consult the premiers and if they want to have it open it will be, then and there.


Flora Isabel MacDonald: A supplementary question, Mr. Speaker. In view of the importance of this matter, I would propose to the Prime Minister that he consult the provinces prior to the convening of the conference, if that has not already been done, and find out whether they will agree, as I have already suggested, to hold this conference in public?


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady is a politician and she realizes how these decisions are taken-or maybe she does not. I can state quite unequivocally that at past conferences, and indeed for this one, I have talked to first ministers personally and they have taken the view that we do much better and efficient business for the people of Canada in a private conference. Naturally, they cannot say so, however, because of the kind of questions that the hon. lady asks.


REQUEST FOR EXPLANATION OF STATEMENT OF MINISTER OF FINANCE THAT UNITED FRONT BY PROVINCES MAKES SEPARATIST CAMPAIGN EASIER
Flora Isabel MacDonald: Mr. Speaker, I have a final supplementary question for the Minister of Finance. This concerns the statement the minister made on Tuesday night which has aroused considerable consternation at a time when Canadians are seeking reassurance about the future of their country. Would the minister explain why, when a degree of unity is attained among all ten provinces, this
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should be construed by him as making the separatist campaign easier?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, in the particular situation that we met earlier this week, the ten provinces acted together and set together the highest common denominator of provincial demands. They agreed also that that highest common denominator would be the absolute minimum required of the federal government. Under these circumstances, it seems to me that for financial reasons the federal government inevitably had to say no. That kind of tactic would inevitably bring on the kind of accusation that was made, that we were refusing to co-operate.
There are two comments I would make: it seems to me that the comment I made on Wednesday afternoon was confirmed by the comments of the minister of finance of the province of Quebec.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: In the company of his nine partners he said that he and they were "fathers of deconfederation". He also said the fact that we could not accept the highest common demand was proof that confederation no longer works. What I said in my remarks was that I would think provincial governments would want to think further about participating in that kind of situation where they could be portrayed as fathers of deconfederation.


Some hon. Members:: Hear, hear!


ALLEGED OFFER TO PROVINCES FOR TERMINATION OF REVENUE GUARANTEE-FLEXIBILITY OF NEGOTIATING POSITION
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is also for the Minister of Finance. As the minister has referred to the provincial negotiating position and it has been reported that during the revenue guarantee negotiations, officials of the Department of Finance offered one tax point to the provinces on the strict understanding that there be no recriminations in that they accept the federal position in its entirety and make no further claim and no further criticism of the federal position as a result of the termination of the guarantee, would the minister indicate whether this offer was indeed made and if it represents the present position of the federal government?


Donald Stovel Macdonald: Mr. Speaker, officials in the government of Canada in the course of their discussions with the provincial governments, as well as talking about the established programs proposal upon which there was substantial agreement at the conference and about equalization, also talked about the revenue guarantee and raised the question whether in the transfer of one income tax point the question of the revenue guarantee could be put to rest once and for all. I think it is evident from the position taken by the provinces that they would not accept that; therefore, it was clearly rejected.

December 9, 1976
Oral Questions


Sinclair McKnight Stevens: A supplementary question, Mr. Speaker. Considering that the provinces have arrived at a unified position respecting the revenue guarantee and that this unified position demanded both flexibility and conciliation among the individual provinces, can the minister tell the House whether his position respecting the revenue guarantee is a flexible negotiating position, or is it a non-negotiable final offer?


Donald Stovel Macdonald: Mr. Speaker, the first ministers will be meeting next week and this will certainly be one of the questions on the agenda. We will be prepared to continue the discussions which occurred at that particular meeting on this particular question of the revenue guarantee and a number of the minor remaining outstanding elements involved in the other two proposals.


FINANCE
Sinclair McKnight Stevens: Mr. Speaker, may I direct a final supplementary question to the Minister of Finance? As it was a contention of the minister's two predecessors, Mr. Benson and Mr. Turner, that the revision of the tax system would not result in increased federal revenues over and above the amount they would have increased in the absence of the revision, and now that there has been a sensational increase in such revenues, would the minister inform the House of the government's intention regarding the $1.1 billion windfall which will accrue to the federal government if the revenue guarantee is cancelled?


Donald Stovel Macdonald: Mr. Speaker, the hon. gentleman does not state the record correctly. The initial undertaking with regard to the revenue guarantee was with respect to the tax change, and a part of the amounts which have since become payable is, indeed, the consequence of the tax change. The substantial payments or liabilities which have accrued over the last four years have been payments made as a result of changes to the federal income tax law since tax reform and approved by this House. The provincial governments were advised, and that was one of the conditions in the agreement to which the parties came in 1971-72, that it was to be a five-year guarantee only, that it was to end in that period of time and that the provinces were to adjust to that change.
With regard to the so-called $900 million or $1 billion windfall, I remind hon. members that we have at the moment a federal deficit of $5 billion on a national accounts basis and it would be my wish to reduce that deficit. It would be my intention, as well.


Sinclair McKnight Stevens: Is that a commitment?


Donald Stovel Macdonald: It would be my wish to reduce that deficit and I hope the hon. member opposite shares my concern for a reduced deficit. I should like to preserve for the federal government the freedom of action to engage perhaps in a tax reduction or other fiscal changes in the budget next time, and we can only preserve that by adhering to the revenue guarantee as originally contemplated.


ATOMIC ENERGY OF CANADA LIMITED
John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister. A week ago today the Prime Minister said in the House, with reference to guidelines covering the behaviour of Crown corporations and practices in the hiring of overseas agents, as reported at page 1591 of Hansard:
Such guidelines do exist.. . they are contained in instructions and in draft model agreements which are circulated by certain ministers, those who have Crown corporations under their command.
This morning in the public accounts committee the chairman of AECL said with reference to those guidelines, in the case of the sale of a CANDU reactor to South Korea, that there were "no specifics whatsoever."


Mr. Hnatyshyn:: In other words, there was carte blanche.


John Edward Broadbent: There were no specifics whatsoever in the appointment of Mr. Eisenberg, and that the practice of AECL was to hire a reputable agent and to "let him go to it." Can the Prime Minister explain the apparent contradiction between those two statements?


Pierre Elliott Trudeau: Mr. Speaker, I am not sure if it would be appropriate for me to comment on the proceedings of the committee as the hon. member has done in his question, but with your permission I will try to deal with the substance of the question. In my answer last week I indicated that guidelines existed and that they were applied by certain ministers to the corporations and agencies dependent on them. I did not say they existed in a uniform way for all areas, but I did say that it was the intention of the government to make a statement in the near future in which we will make an effort to have uniform guidelines applying across the whole board. The government would bring under one statement a series of practices which undoubtedly have been different over the years and not applied from time to time over the years and which have been somewhat different from department to department or Crown corporation to Crown corporation.


Ramon John Hnatyshyn: You are shameless.


Mr. Clark:: Those are flexible, elastic guidelines.
December 9, 1976


Mr. Fairweather:: Guidelines if necessary, but not necessarily guidelines.


John Edward Broadbent: Will the Prime Minister tell the House with what frequency the departments applied these guidelines? Was it normal for most departments that had Crown agencies within them to apply as a matter of course such guidelines, was it done infrequently or entirely at the discretion of the minister concerned? Related to that, will the Prime Minister ensure that all documents pertaining to such guidelines are tabled in the House as soon as possible.


Pierre Elliott Trudeau: Mr. Speaker, I think the answer will be found in the substance of what will be put before the House very shortly. However, I find it important to remind the hon. member, and perhaps to tell him in advance, that there were practices within departments and indeed corporations which were spelled out in some detail. For the greater part, commercial practices which had been going on for many years in Canada and in other countries under this government and previous governments were just the normal rule of obeying the law and making sure you did not indulge in any fraudulent or corrupt practices.
Therefore, to the extent that this was the case there were no written guidelines covering every detail. It is assumed that Crown corporations and officials of the Canadian government operating in Canada or abroad know that they have to obey the law. There was no guideline required for that. However, in the intricate question of how-


Charles Joseph Clark: Do they tell about judges?


Pierre Elliott Trudeau: The Leader of the Opposition has questions, but he never stands up to ask them.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: As trading practices expanded in geography, size and intricacy, some departments found it useful to come up with models of contracts which should be adhered to. Others did not. It is in order to bring all this together that we will make a statement.


John Edward Broadbent: Presumably the Ministry of Energy, Mines and Resources is one of the departments where we would have expected to have had in operation such guidelines. Therefore, will the Prime Minister inquire of the present Minister of Finance to find out from him why, when he was the minister responsible, he did not ensure that there were embedded into the agreement with Mr. Eisenberg certain specific guidelines as to how public money provided by the people of Canada was to be spent?


Pierre Elliott Trudeau: Mr. Speaker, I think I answered that question at least in part today and in previous days. We expect that the officials of Canada and the officials of Crown corporations will behave and conduct themselves according to law. This is a general position. Because of the fact that Crown corporations are at arms length, ministers do not run them on a day-to-day basis and the surveillance of government generally most fre-
Oral Questions
quently consists of looking at annual budgets and approving in a general way large expenditures. In many cases there was not a detailed examination of overseas arrangements. I repeat, the assumption was made by this government and by previous governments, including Tory governments and I am sure NDP governments in provincial areas, that officials would behave according to law. That was the practice and it is still the assumption.
I repeat, in very intricate dealings through agents in foreign countries, particularly in countries where the law of that country demands that a local agent be chosen, there were no detailed guidelines in existence for all departments and all Crown corporations. It is exactly that that we are proceeding to establish now.


FINANCE
Eudore Allard: Mr. Speaker, I wish to ask a question of the Minister of Finance.
Since the minister admits that consumer prices will probably increase during the coming months, would he be willing to urge the government to introduce legislation to grant a compensatory discount on all Canadian consumer goods so that all Canadians may face this aspect of inflation?


Donald Stovel Macdonald: Mr. Speaker, I take the hon. member's question as a suggestion which I will consider later.


FEDERAL-PROVINCIAL RELATIONS   REASON MEETING OF FIRST MINISTERS CANNOT BE OPEN TO PUBLIC
Gerald William Baldwin: I have a supplementary question to the question directed to the Prime Minister by my hon. friend from Kingston and the Islands. It relates to the nature of the proceedings at the first ministers conference. Can the right hon. gentleman give the House any valid reason why the course of conduct at that meeting should not follow the pattern usually followed by other public bodies, unless it arrogates extraordinary power to itself? Why should not these meetings be conducted in public, leaving it up to the participants, if they so wish, to demonstrate a need for part of those proceedings to be conducted in private?


An hon. Member:: Answered yesterday.

December 9, 1976
Oral Questions


GOVERNMENT ADMINISTRATION
Mr. Allan Lawrence (Northumberland-Durham):: My question, too, is addressed to the Prime Minister, Mr. Speaker. It relates to guidelines and I will begin by quoting the words of the Prime Minister as recorded at page 1591 of Hansard of December 2, a week ago today. He is referring to the guidelines and he says:
I do know that they are contained in instructions and in draft model agreements which are circulated by certain ministers, those who have Crown corporations under their command.
My question is simple. Why cannot we see them? Why cannot these instructions circulated by cabinet ministers be tabled?


Pierre Elliott Trudeau: I will certainly consider that suggestion. It would mean, perhaps, in certain cases, putting before parliament model contracts which are to be adhered to by certain Crown corporations. But I think the House would be much more instructed if we were to do what I suggest, that is, have a general statement covering all the parties for the present and the future rather than looking over the past. But I am prepared to consider tabling the material we already have.


FEDERAL-PROVINCIAL RELATIONS CONSTITUTIONAL AUTHORITY FOR DECISIONS MADE AT CONFERENCE OF FIRST MINISTERS
Hon. Marcel Lambert (Edmonton West):: A question to the Prime Minister, Mr. Speaker. On what constitutional basis does the right hon. gentleman believe that he, on behalf of the Government of Canada, and ten other gentlemen on behalf of the provinces, have the right to carve up Canada as they see fit without any consultation with or authority from the legislatures or parliament they seem to represent?


Pierre Elliott Trudeau: I do not know what straw man the hon. member is setting up but obviously it is of his own invention, not mine.


Marcel Joseph Aimé Lambert: The Prime Minister is fully aware that the consultations that he proposes to hold next week with the first ministers will be on a confidential basis. There will be no prior consultation. It will be on the basis of a deal either reached or imposed, and then imposed upon the legislatures. Will he advise us on what constitutional authority he understands that the destiny of Canada is to be carved out on that basis?


Pierre Elliott Trudeau: The conference will be in no way convened to do what the hon. member suggests. We are dealing with fiscal arrangements. The opposition knows what our position is. It

has been stated quite clearly. We know what their position is. It is to hand a billion dollars over to the provinces, simply because the provinces ask for it. So, I do not see what further consultation we need with this House. Insofar as consultation with the first ministers is concerned, as the Minister of Finance has stated, that is what the meeting next week is about.


FINANCE
John Carnell Crosbie: My question is for the
Minister of Finance, Mr. Speaker, and it relates to the revenue guarantee. If no compensation is advanced by the Government of Canada in connection with the termination of the revenue guarantee, the provinces themselves will have to raise their taxes to make up for the loss of revenue-in the case of Newfoundland it will be a case of an extra four or five points on the income tax. This being so, what good would be a tax deduction by the Minister of Finance for Canada if the provinces have to raise their taxes by an equivalent amount? What good would that do the general economy?


Donald Stovel Macdonald: The hon. gentleman knows well that the provinces have for a long time been in contemplation of the end of the present revenue guarantee. They have chosen not to act in that regard. I have told them, and repeated to them, that the revenue guarantee was for a five-year period, and that was all.


John Carnell Crosbie: Does the hon. gentleman have any estimate of the amount of revenue the provinces will have to raise on their own narrower tax base if he unilaterally and arbitrarily terminates the revenue guarantee? What is his estimate?


Donald Stovel Macdonald: The hon. member uses the word "unilaterally". I repeat, it was agreed between the provinces and the federal government that the revenue guarantee would end after five years.


REASON FOR FAILURE OF PROVINCES TO RAISE TAXES DURING PERIOD OF REVENUE GUARANTEE
Mr. James Gillies (Don Valley):: Can the Minister of Finance not confirm that during the first year of the revenue guarantee the provinces were not permitted to raise their taxes-if they did, they would lose the benefit of the guarantee-and that during the next two years the federal government asked the provinces not to raise taxes in the interest of stimulating the economy? So, the allegation in the minister's statement that the provinces had been derelict in their response to this situation is unfounded, or, if they have been derelict, it was at the request of the federal government.
December 9, 1976


Donald Stovel Macdonald: That is not my understanding of what happened, but I would be glad to confirm whether there is any accuracy in that suggestion.


INDUSTRY
Mr. Roch La Salle (Joliette):: Mr. Speaker, I would like to direct my question to the Prime Minister.
About ten days ago, the Minister of Industry, Trade and Commerce announced quotas for the import of foreign made clothes, for which I was very happy, and last week, a Hong Kong businessman stated in Montreal that in view of the GATT agreements now in force, this statement made by the minister did not worry him in the least. To reassure the textile industry, I would like to ask the Prime Minister if he can assure the House and the textile industry that the statement of the Minister of Industry, Trade and Commerce will be strictly implemented in the interest of the Canadian textile industry?


Pierre Elliott Trudeau: Mr. Speaker, obviously the statement of the Minister of Industry, Trade and Commerce reflected the policy of the federal government. I believe that, as concerns its implementation, particular problems were raised in certain sectors and that the minister accepted to see Canadian businessmen who will make some suggestions to him. I believe that the Minister of Industry, Trade and Commerce is now prepared to listen to those who may have been disadvantaged by his statement. However, no change has been announced and none is foreseen to my knowledge.


EXTERNAL AFFAIRS
Francis Andrew Brewin: Mr. Speaker, my question is directed either to the Prime Minister or to the Acting Minister of National Defence in the minister's absence. The Ambassador of the United States is reported to have said in a public speech in Halifax that Canada should spend more on defence. Will the minister inform Mr. Enders that the scale of Canadian defence expenditures is strictly a matter for determination by Canadians and that the Ambassador might direct his attention to advising his own government on the question of military expenditures at a time when restraint is so obviously necessary.


Mr. Maurice A. Dionne (Parliamentary Secretary to Minister of National Defence):: If, indeed, Ambassador Enders did make that statement I would simply say that the policy on
Oral Questions
national defence is a "made in Canada" policy and will continue to be so. The Armed Forces of Canada have carried out all the tasks assigned to them over the past few years; that statement has been made before the Standing Committee on National Defence and External Affairs by no less an individual than the Chief of Defence Staff. They will continue to be financed adequately.


Some hon. Members:: Hear, hear!


Francis Andrew Brewin: A supplementary question, Mr. Speaker. Would the parliamentary secretary make sure that the ambassador knows that Canada's policy is made in Canada, and that it is superfluous to give advice to the Canadian public?


ATOMIC ENERGY OF CANADA LIMITED
Ramon John Hnatyshyn: Mr. Speaker, my question is supplementary to earlier questions respecting the guidelines relating to sales through foreign agents. The Prime Minister stated that the position of the government was that it would appoint resident agents in foreign countries if it were the requirement of the foreign government that was making a purchase. I wonder whether the Prime Minister can say if Mr. Eisenberg is a resident agent in either Korea or Argentina.


Pierre Elliott Trudeau: 
INDUSTRY
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is for the minister of state responsible for small business, who I understand is by now well entrenched in his new portfolio. In view of the fact that this government's attitude, and indeed its lack of action, in respect to the small business community of this country appears to be some 20 years behind other western industrialized nations, as witnessed at the recent international symposium on small business held in Washington, can the minister indicate when, if ever, he expects to outline to this House, not by way of a few speeches outside the House but in the House, specific government proposals in this regard, and would the proposals be backed by appropriate legislation? The small businessman can no longer-


Mr. Speaker:: Order, please.

December 9, 1976
Oral Questions


Hon. Len Marchand (Minister of State (Small Businesses)):: Mr. Speaker, as soon as possible. We have a number of important initiatives under way on behalf of the small business community. I have been on the job now for a little over two months and the hon. member will find, when the announcements are made, that there has been consultation with the small business community. I think the small business community will find them very acceptable.


Otto John Jelinek: Mr. Speaker, the minister did not say when he will make these recommendations. I should like to ask him a supplementary question. Because of the fact that in many areas of Canada the bankruptcy rate within the small business community has more than doubled in the last year alone, mainly as a result of the bureaucratic stranglehold that governments in general tend to have on small business, would the minister consider some recommendations that we have been making for some time and take steps to reverse the government's philosophy of intervention and centralization-


Mr. Speaker:: Order, please.


AGRICULTURE
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of Agriculture. Would the minister explain why, more than a year after the United States has banned the use of the organic pesticide leptophos, this dangerous chemical is still registered for use in Canada against insects on a variety of vegetable crops?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I think I should explain how this product is used. It is used in the soil, not on crops, and we are satisfied that it cannot contaminate any harvested crops. It is also of interest to note that the chemical endrin has been banned for some time in Canada but the United States still uses it. We do know that there is a danger if this is used on fruits, vegetables, etc. We will not be using this product until next spring. It is used for cutworms etc., in the soil.
We are reviewing the situation with the other departments concerned, and perhaps if some of them will feel that it is the type of product that should be banned, it will be. The Minister of National Health and Welfare has already indicated that he will recommend that it be banned. 1 would point that if we have to go to some other kind of chemical to control pests in the soil, it will be much more costly to produce crops on that land.


MONITORING OF LEPTOPHOS POISONING-GOVERNMENT ACTION
Paul Yewchuk: Mr. Speaker, may I direct a supplementary question to the Minister of National Health and Welfare. Will the minister tell the House what efforts he has made to monitor the leptophos poisoning situation in the United States, what efforts he has made to monitor the use of this chemical in Canada; and in view of events south of the border, namely that it has been banned there, has the minister any plans to recommend discontinuation of this chemical in this country?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, there have indeed been regular and continuous contacts in this regard with the American agencies concerned, especially the American agency in charge of environment. We have been in contact with this agency regularly, especially these last few months.
As concerns the second part of the question asked by the hon. member, I would reply that I have already consulted my colleague, the Minister of Agriculture, as he stated, to recommend that we implement the same policy as the United States, but we shall have to continue our discussions on this subject to see if we should definitely decide to take such action. We still have a few months before us since none of these elements will be used before next spring.


POST OFFICE
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question is for the Postmaster General and it follows on questions asked of his predecessor in the past. In light of the fact that certain Canadian philatelic material, namely Olympic souvenir stamp cases, was being sold at the recent American Stamp Dealers Association meeting in New York for $3.25, or $2.75 less than the present $6 retail price in Canada, does the Postmaster General still maintain, as did his predecessor, that the post office's sales practices do not offer any opportunities for the sale of Canadian stamps at less than face value? If he does not, what corrective measures will the Postmaster General be taking to ensure this does not continue, so that the worth of Canadian stamps in the eyes of stamp collectors all over the world will be maintained and collectors will not be turned away from collecting Canadian stamps?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, first I would like to say that I agree with the hon. member in that we must protect Canadian and international collectors. However,
(Mr. Speaker.]
December 9, 1976

we must reconsider both points he brought to the attention of the House, that is my predecessors' statements which 1 have not considered yet as well as the sale at the price indicated by the hon. member. I do intend to give the hon. member the information he requests as well as some explanations which may be suggested by those questions.


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Agriculture.
In a press release published on December 8, 1976, the Minister of Agriculture announced a change in the payment of subsidies to industrial milk producers, a change which I welcome and which will be retroactive to October 1976. My question is the following: Since the decrease in milk production prompted the minister to bring forth that change, can he tell the House, in the event that this decrease would continue at the same rate until March 31, 1977, whether he will recommend giving retroactive subsidies as of April 1, 1976, to producers who have been penalized at the beginning of the year, because of the monthly quotas policy?


Eugene Whelan: Mr. Speaker, the hon. member is asking me a question that would require a very detailed answer, but in essence may I say we are continually reviewing this situation. Dairy farmers of Canada have brought their production into line with domestic and market demands for their product. We are reviewing the possibility of refunding penalties, etc., but farmers who produced without consideration for any quota at all should be told that any refunds of penalties on their production will only be within the national quota.


DAIRYING-INQUIRY IF INCREASE IN BUTTER PRICES WILL BENEFIT PROCESSORS
Joseph Adrien Henri Lambert: Mr. Speaker, 1 wish to put a supplementary to the minister.
I realize the minister has seen the importance of the issue and that is why you allow me a supplementary. As it was reported in last weekend newspapers that the price of butter was likely to increase by two or three cents a pound, can the minister tell the House whether that increase will benefit industrial milk producers or whether that increase, paid by consumers but not approved by the Canadian Dairy Commission, will mostly benefit processing plants?
Oral Questions


Eugene Whelan: Mr. Speaker, the increase the hon. member is talking about relates, I believe, to a request by the processing plants for more money to process butter, maintaining that their costs of operation are that much higher. This is true of other industries and we are reviewing the request. I do not think it is all manufacturers or processors that are doing this. It appears to me at the present time from my information to be only those in Quebec.


INQUIRY OF THE MINISTRY
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I have a brief question for the Minister without Portfolio. May 1 ask the minister just what is it that the Minister without Portfolio does about which we can ask him questions?


AGRICULTURE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, I have a question for the Minister of Agriculture. To enable beef producers to efficiently estimate now the number of feedlot cattle required to ensure a continual and sufficient supply of beef in the early months of next year, and what market climate to expect at that time, is the minister in a position to state what 1977 import quotas will be for offshore beef?


Eugene Whelan: Mr. Speaker, I am glad to see that the hon. member is concerned about some form of marketing system, which we do not have at the present time. We will be making that announcement I would hope before the first of the new year.


Thomas Gordon Towers: Mr. Speaker, I presume that will be the year 1977, not 1978. Could the minister now tell us what the amount of the stabilization payment will be in order that the same producers will know just what to expect in the coming year?


Eugene Whelan: Mr. Speaker, we will be making that announcement soon. I took it for granted that the hon. member knew that next year was 1977.

December 9, 1976
Oral Questions ENERGY


PROPOSED POWER AUTHORITY FOR ATLANTIC PROVINCES- REQUEST FOR PROGRESS REPORT
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources and 1 think I have just given him notice. In light of the minister's announcement in Cape Cod, and consultations with the Atlantic premiers this summer concerning a power pool, will the hon. gentleman tell the House what moves are being made in this area by the federal government to provide support for this idea?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, there has been a good deal of consultation at the official level recently, and between the three maritime provincial premiers, as 1 have noted from the press. I was very happy to see that they endorsed the principle that they would include both generation and transmission, and that they could see such a corporation being useful perhaps even from the point of view of purchasing power, including power from a Gull Islands project. These are the sorts of things I was anxious to see get underway, and I am so far encouraged by the progress made.


J. Robert Howie: Mr. Speaker, in view of the fact that a maritime power authority could well require federal regulation to govern the interprovincial transmission of electricity, would the minister say what action he has taken to follow-up his statement made in Labrador earlier this year to the effect that federal legislation to provide for interprovincial hydro transmission could well be in the cards.


Alastair William Gillespie: Mr. Speaker, I think there has been a good deal of discussion and consultation, as I have indicated, between myself and the premiers of the various provinces, and between myself and the hon. gentleman who sits behind him, formerly representing the government of Newfoundland. I have not yet had an opportunity of speaking to the new minister of energy for Newfoundland. I have had discussions with the premier there, and I am hoping that as soon as the new minister of energy for the province of Quebec has had an opportunity to fully brief himself on his portfolio I will have an opportunity of discussing it with him, too.


EXTERNAL AFFAIRS
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, my question is for the President of the Privy Council in what I believe is still his capacity as Canada's representative at the so-called North-South Conference in Paris and co-chairman of very important aspects of that conference. Would the minister indicate whether that conference has been adjourned, whether

a date has been set for its resumption and when that date might be?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker, in answer to that question I can confirm that the conference on International Economic Co-operation which was to commence in Paris on December 15 has been postponed to a date in the new year. That decision to undertake a postponement was the result of a consensus by the 27 participating governments. The two co-chairmen will consult with the participating governments at an appropriate time in the new year as to when the ministerial conference will take place. It would be my expectation that it will certainly take place in the early part of next year.


Robert Lorne Stanfield: Mr. Speaker, would the minister consider it in the public interest to seize a reasonably early opportunity in the House to make some kind of a statement about the stage at which things are and what the outlook is for the conference? I am sure it is still in the public interest, and it would be of great interest to members in this House and the country generally if he would do so at an appropriate time.


Allan Joseph MacEachen: Mr. Speaker, I will consider that possibility, but I think I should tell the hon. member for Halifax that the basic reason for the postponement had two aspects; one was that the work of the four commissions in preparation had not advanced to the point where material would be available for the ministers to consider, and the second was that it was not likely new policy decisions could take place before December 15. It was because of those two factors that the conference was postponed, but I will consider whether I can add anything further to this later on.


CANADIAN DAIRY COMMISSION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of Agriculture. In view of the charge by Statistics Canada that the Canadian Dairy Commission has lost some $90 million, or will by the end of the fiscal year, and in view of the meeting that took place yesterday between the dairy farmers, the CDC and Statistics Canada, I should like to ask the minister whether he can tell us how much money has been lost, if indeed there has been any, and what he is going to do about it?


Eugene Whelan: First of all, Mr. Speaker, I think it has been reported that one of the officials of the Canadian Dairy Commission said there were some grey areas of the Canadian Dairy Commission system. He did not say that and he categorically denies it. He says there are some grey areas of the Statistics Canada data collection system. The Canadian Dairy Commission is satisfied that its facts and figures are accurate. They are meeting and have met with Statistics Canada. Statistics Canada has a
December 9, 1976

different way of collecting its data, and it is alleged there are some discrepancies there. They are not questioning the statistics in respect of all dairy products, in total, but so far the evidence presented to me is that the dairy commission is doing a fairly accurate job.


Lorne Edmund Nystrom: Mr. Speaker, my information is that the CDC is already adjusting its calculations for determining quotas next year. It has said also that the only way of accurately doing this would be to conduct an audit of all the products in all the plants in this country. 1 should like to ask the minister whether he is considering the possibility of an audit of all milk plants?


Eugene Whelan: Yes, Mr. Speaker.


ABORTION
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, my question is for the Minister of National Health and Welfare and has to do with this package of information entitled "A Teacher's Guide for Sex Education", and in particular booklet number four entitled "Birth Control and Abortion". My question to the minister is whether he has been advised by his legal advisers as to whether or not statements establishing that abortion is an acceptable form of birth control, as mentioned on pages 23, 24 and 25 of the pamphlet, are within the purview of the Criminal Code?


Marc Lalonde: I suggest that the hon. member should read pages 23, 24 and 25 and he will find that there is no reference to abortion being an acceptable method of birth control. It is said there that it is one of the oldest methods of birth control. The government position has always been and remains that it is not an acceptable method of birth control.


Some hon. Members:: Hear, hear!


LEGALITY OF ALLEGED STATEMENT IN PAMPHLET THAT ABORTION ACCEPTABLE METHOD OF BIRTH CONTROL
Dean Waldon Whiteway: I have a supplementary question for the Minister of Justice who was preoccupied at the time I put my original question to the Minister of National Health and Welfare, so perhaps I should repeat it. It has to do with pamphlet No. 4 put out by the Minister of National Health and Welfare entitled "Birth Control and Abortion" from a series on a teacher's guide for sex education. Has the Minister of Justice been advised by his legal advisers as to whether statements which I have read from the pamphlet which establish that abortion is an acceptable form of birth
Oral Questions
control in Canada fall within the purview of the Criminal Code?


An hon. Member:: And if not, why not?


Hon. Ron Basford (Minister of Justice):: I have not been so advised because I have not asked my officers that question. Obviously, under the provisions of the Criminal Code abortion is legal if practised under circumstances prescribed in the Criminal Code.


Fred Alward McCain: Mr. Speaker, I have a question of privilege. With respect to my earlier reference to the program "The Fifth Estate", entitled "Citizen McCain", I wish to make it clear to all concerned that I am in no way politically or economically associated with the subject matter of that program-


Some hon. Members:: Oh, oh!


Fred Alward McCain: -but I am proud to be able to support any productive aspects of my constituency, because that is the responsibility and duty of any member of the House.


Some hon. Members:: Hear, hear!


Mr. Martin:: Mr. Speaker, I rise on a point of order arising from certain comments made by the hon. member for Sas-katoon-Biggar during the course of the debate on December 7, as recorded at page 1745 of Hansard, and I do so relying on citation 140 of Beauchesne. Incidentally, I want to thank the hon. member for having drawn these comments to my attention, which he did at the earliest opportunity yesterday. I think it is unfortunate-and no doubt completely unintentional on his part-that the hon. member, who is a colleague in this House for whom I have had the greatest respect since both of us came here at the same time in 1974, should have cast a slur on my performance as an elected member of the House of Commons and, I suggest in fairness, on the attitude and performance of the distinguished hon. member for Port Arthur, the President of the Treasury Board, during this particular debate. The extract from Hansard is very short and I should like to quote it for the purpose of making my point of order. It reads:
I was interested in the prepared question posed today by the hon. member for Scarborough West (Mr. Martin) when he suggested to the President of the Treasury Board (Mr. Andras) that it might be a good idea to put in place in each department some form of puisne chief financial officer. It seems to me that when the President of the Treasury Board goes to the trouble to write out a question to be asked by a member of this House, he and his colleagues must really be in a flap about the reaction in the country to their refusal to accept a reasonable proposition on the part of the Auditor General.


An hon. Member:: Shame.


Alan Gray Martin: I want to make it abundantly clear that I did not present myself to the electorate of Scarborough West in order to come to Ottawa to act as a puppet-on-a-string, as it were, for members of my party who might be cabinet members from time to time; nor, I suggest, did other colleagues on this side of the House. I think that any suggestion by members of the cabinet that backbenchers should be treated in this way

December 9, 1976
Oral Questions
would be the last thing they would have in mind. I want to make it quite clear that when I rise to pose a question, it is my question, and mine alone, and it is raised because I sincerely believe the subject matter to be in the public interest.


Some hon. Members:: Hear, hear!


Alan Gray Martin: To suggest that such a question would be otherwise presented, and in particular that it might be a "plant" by the minister to accommodate some need on his part is, I suggest, at best an unintended slur on the character of both of us.
If any further proof is needed of the originality of that question, I might draw to your attention, sir, that the question was taken up by the deputy House leader opposite the following day-"borrowed", to use the word of the President of the Treasury Board-and posed in the House. I have no objection at any time to giving assistance to hon. members opposite in writing their questions regarding matters on which they need help, but I suggest that when a question is put in that manner and then used by the deputy House leader opposite as an indication that we are putting questions that are written out for us, this is going a little far. As I said at the outset, it may have been unintentional on the part of the hon. member, but I invite him at this time, probably working on a false assumption as he was, to withdraw that unintentional assertion, if that is what it was, and the matter could end there.


Ramon John Hnatyshyn: Mr. Speaker, I am glad the hon. member for Scarborough West has raised this matter so that I have an opportunity to comment on it. I was under the impression that the question he asked was made up by the President of the Treasury Board primarily because Your Honour declared it to be out of order. But short of the fact that I know Your Honour to be perceptive on the form of questions, I did not want to attribute to the question an original thought on the part of the hon. member for Scarborough West, and actually I was not sure whether the President of the Treasury Board typed out the question or simply dictated it.


Some hon. Members:: Oh, oh!


Mr. Andras:: Mr. Speaker, I rise on the same point of order. I want to state categorically that I did not submit, write to nor communicate with the hon. member for Scarborough West to deliver that question to him. The hon. member for Saskatoon-Biggar did not equivocate in his statement yesterday that I did, in fact, deliver a written question to the hon. member for Scarborough West to be asked of me. I suggest, in all fairness and decency, and having this on the record now, that the hon. member should unequivocally withdraw his statement.


Charles Joseph Clark: Such outrage!


Mr. Speaker:: Order, please. The hon. member for Scarborough West has referred to citation 140 of Beauchesne which has to do with personal reflections on members. This is a matter of a suggestion as to the level of quality or performance of an hon. member in respect of comments made in the House.

There have been suggestions that the House has always followed the long-standing practice of taking all hon. members at their word in respect of matters of this sort. The hon. member for Scarborough West, supported by the President of the Treasury Board, has indicated that a description put upon those events by the hon. member for Saskatoon-Biggar was not factual, and his word is accepted.
So far as any further procedural questions are concerned, the fact is that the kind of comment just made by the hon. member for Saskatoon-Biggar does not come within the confines of a personal reflection to the hon. member for Scarborough West and, therefore, so far as the Chair is concerned the matter is finalized.


BUSINESS OF THE HOUSE
Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, in the absence of my friend, the hon. member for Grenville-Carleton, and this being Thursday, may I ask the government House leader about the business for the next several days? I might have a supplementary question to ask him, depending on his answer to my first question.


Allan Joseph MacEachen: As the hon. member knows, today is an allotted day. Tomorrow I suggest that we deal with the small craft harbours' bill and the historic sites bill. On Monday it is my intention to call Bill C-26, the scientific activities bill, and probably on Tuesday we will return to Bill C-9, the James Bay bill. But I reserve the right to change that order after consultations later this week or on Monday.


Stanley Howard Knowles: Mr. Speaker, as the government House leader knows, there are two measures about which I have been questioning him from time to time. I wonder if he has anything further to say about them. The Secretary of State has been promising us a bill which would include Heritage Day as a holiday. That would be in February, which is getting very close. When are we going to see that bill? We have also been told by the Minister of Veterans Affairs that a study is being made of a bill regarding the pensions of widows of veterans where the veteran's pension was below 48 per cent. What progress is being made on that bill? Indeed, can we look for the introduction of these two bills before Christmas?


Allan Joseph MacEachen: Mr. Speaker, the bill relating to the additional holiday which the hon. member has mentioned could be brought forward very quickly, and it probably will be brought forward. But I would bring it forward with greater enthusiasm if I thought it would pass quickly.


An hon. Member:: Don't hold your breath.
December 9, 1976


Stanley Howard Knowles: Why not file it today?


Allan Joseph MacEachen: 1 will take my chances on the possibility of its passing quickly. If the hon. member could tell me that it would pass quickly, 1 would bring it in at once.


Stanley Howard Knowles: As far as we are
concerned, yes.


Allan Joseph MacEachen: I cannot tell the hon. member when the other bill will be brought forward. It is not in the same stage of preparedness as the holiday bill.


Ramon John Hnatyshyn: Mr. Speaker, I wonder if the government House leader is able to indicate in which order the bills will be taken up tomorrow. Will the national historic sites bill be first, or will it be the other bill respecting recreational harbours?


Allan Joseph MacEachen: The recreational harbours bill will be called first.


Mr. Murta:: Mr. Speaker, I understand that this morning the government made the decision to appoint Hon. Jean Marchand to the Senate, and I am wondering whether the government is going to make a statement to that effect or, if the story is not true, there will be a statement to the contrary. I believe it is true; but will a statement be made in the House?


Ramon John Hnatyshyn: Is he going to get back into the cabinet?


Mr. Speaker:: With respect, that is not a matter of general administrative responsibility of the government so as to concern the House.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, I wish to table copies of orders of reference respecting the Anti-Inflation Board and the administrator, under the act.


EMPLOYMENT AND IMMIGRATION REORGANIZATION ACT
Hon. Jack Cullen (Minister of Manpower and Immigration) moved: for leave to introduce Bill C-27, to establish the Department of Employment and Immigration, the Canada
Order Paper Questions
Employment and Immigration Commission and the Canada Employment and Immigration Advisory Council, to amend the Unemployment Insurance Act, 1971, and to amend certain other statutes in consequence thereof.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: When shall the bill be read a second time? At the next sitting of the House?


Some hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ross Milne (Parliamentary Secretary to Minister of Communications):: Mr. Speaker, the following questions will be answered today: 59, 66, 92, 97, 105, 142, 297, 508, 602, 664, 726, 790, 799, 817, 837, 888, 894, 916, 928, 1,042 and 1,133.


Mr. Cossitt: 1.	Was Mr. Chris Patterson Regional Manager of Operations in Metro Toronto for the Unemployment Insurance Commission and, if so (a) on what date was he appointed (b) until what date did he serve in the position (c) what is his present position with the Unemployment Insurance Commission?
2.	Prior to his appointment in Toronto, did he serve with U1C in Belleville and, if so, in what capacity?
3.	(a) During the period of time he was in Toronto, what was the total of all expenses paid on his behalf, including any hotel expenses prepaid (b) was he on full expenses and (i) if so, for what reason (ii) if not, what expenses, if any, was he on (c) did he take up permanent residence in Toronto during his term there and, if not (i) for what reason (ii) for what reason were his expenses paid?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: 1. Yes; (a) 29 September, 1974 (performing duties on an acting basis 1 April, 1974). (b) 15 July, 1975. (c) Senior Operations Officer.
2.	Yes, Regional Manager Pay Centre.
3.	(a) 1974, $5,062.43; 1975, $4,380.95; total, $9,443.38. (b) Yes, (i) Working in Toronto and living in Belleville, (ii) not applicable, (c) No-(i) and ii) Four regional managers of operations were nominated for the following locations: London (West), Toronto (Toronto Metro), Ottawa (East), and Belleville (Central). London and Ottawa incumbents were posted to permanent positions immediately. Operation exigencies were such that a very experienced person was required in Toronto during the winter of 1974. The Toronto Metro appointee, although an employee of high potential, was assuming his first senior management post in U.I.C. and it was f?lt that the commission's best interest would be served by temporarily assigning him to the smaller central area with an office in the Belleville regional office for a period of 6 to 10 months prior to
1818

December 9, 1976
Order Paper Questions
assuming duties in Toronto. During this period Mr. Patterson, the central appointee, was assigned to Toronto. In July, 1975 Mr. Patterson returned to Belleville and the Toronto Metro appointee assumed his position in Toronto.


Mr. Cossitt: How many persons classified within the Unemployment Insurance Commission as (a) Agents 1 (b) Agents 2, have resigned or left their jobs within the past two years and what arc all reasons for this exodus?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: (a) 1975: 82 Agents I resigned or left their positions for the following reasons: deaths: 3; retirements: 15; appointments to other Government Departments: 16; resignations from the Public Service: 48; January 1 to October 31, 1976: 53 Agents I resigned or left their positions for the following reasons: deaths: 2; retirements: 5; appointments to other Government Departments: 10; resignations from the Public Service: 36; (b) 1975: 70 Agents II resigned or left their positions for the following reasons: deaths: 3; retirements: 21; appointments to other Government Departments: 24; resignations from the Public Service: 22. January 1 to October 31, 1976: 58 Agents II resigned or left their positions for the following reasons: deaths: 2; retirements: 8; appointment to other Government Departments: 16; resignations from the Public Service: 32.
uic- w. e. McBride


Mr. Cossitt: 1.	Is Mr. W. E. McBride a Commissioner of the Unemployment Insurance Commission and, if so (a) on what date was he appointed (b) what is his salary (c) is his office located at the head office at 222 Nepean Street?
2.	(a) What is the total amount of expenses incurred by Mr. McBride since he became a Commissioner (b) on what dates did he take his vacations (c) were any expenses paid to him during his vacations or shortly prior to, or shortly thereafter and, if so, what were the expenses and what were they for?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: 1. Yes, he is the employers' representative on the commission, (a) July 29, 1971. (b) SX-1 Range $27,500-$36,-500. (c) Yes.
2.	(a) $23,310.30. (i) To attend management meetings with C.M.A., C.C.A. Chambers of Commerce and various other employer organizations from coast to coast, (ii) To visit regional and district offices of the commission throughout the country for discussions of problems with U.I.C. management and staff, (iii) To meet with individual employers to assist them with U.I.C. related problems, (b) Three weeks in February, 1973. Three weeks in October, 1974. Three weeks in July, 1976. (c) No.
[Mr. Cullen.J


Mr. Cossitt: Has the Central Index of the Unemployment Insurance Commission any agreement with the provinces whereby it is advised of death registrations and, if not (a) what method is there to prevent persons inside or outside UIC making use of the Social Insurance Numbers of deceased persons for fraudulent purposes (b) what steps have been taken to date to examine or deal with this matter
(c)	on what date will the UIC take steps to plug this loop-hole (d) what steps will the UIC take?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: Central index has such an arrangement with Prince Edward Island only, (a) Use of social insurance number of another person for fraudulent purposes is a criminal offence; safe-guards against such practices are the same, whether the person whose number is misused is living or dead. Generally speaking, the fraud is detected by the organization (government or private) using the SIN as an account number through its normal identification procedures: i.e. the organization insists on other documents and an in-person appearance to prove identity. The social insurance number is simply a convenient account number, (b) Organizations, using social insurance numbers as an administrative tool, must guard against their fraudulent usage either internally or externally, (c) and
(d)	Not applicable.


Mr. Cossitt: During each of the past four years, how many duplicate Social Insurance Cards bearing duplicate Social Insurance Numbers have been issued by the Unemployment Insurance Commission (a) of these, how many (i) were (ii) were not issued on completion of the usual S-l form (b) have incidents of such cards being issued for deceased persons been discovered and (i) if so, how many by Region (ii) if not, for what reason?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned. It is understood that the question refers to the issuance by the Unemployment Insurance Commission, of replacement SIN cards, i.e. plastic card issued to persons already holding a SIN to replace a card lost or stolen. Such cards bear the same number as the card issued on initial registration, (a) The number of such cards issued in the last four years are as follows: 1972, 230,893; 1973, 280,121; 1974, 376,932; 1975, 366,034. (i) Each replacement must be supported by an S-l application, except in cases where the applicant supplies a paper card in the old form (CAN-1) and requests that it be replaced by a plastic card, (ii) CAN-1 paper card replacements were as follows: 1972, 17,070; 1973, 7,905; 1974, 12,594; 1975, 6,482. (These figures are included in those given in (a)), (b) No. (i) Not applicable, (ii) No evidence has come to light of the existence of such cases.
December 9, 1976


Mr. Orlikow: 1.	For the fiscal year 1975-1976, what contracts for professional services were let (a) for studies, surveys and analyses into present or future policies, programs or information analysis, and their efficiency and effectiveness (b) into the examination of the administration or internal operation of the Department of Justice?
2.	How much was committed on each contract and to whom?
3.	What were the comparable figures for the fiscal year 1973-1974?


Stanley Ronald Basford: In so far as the
Department of Justice is concerned: 1 and 2. See following statement.
3.	1973-1974: Amount of contracts as referred to in 1(a) and in 1(b) of question: Nil.
1 [DOT] (a)	2.	
Provide advice on labour law problems.	$16,251.	B. AdellLegal research for a study of the responsiveness of the law and legal institutions to social change.	3,786.	D. AnselAssist in Study of the Operation of the Bail Reform Act.	1,500.	F. G. BobiazLegal research for a study of the responsiveness of the law and legal institutions to social change.	9.900.	S. BurwellProvide legal services in connection with the administration and development of the Legal Aid and Community Legal Service programmes of the Department of Justice.	29,531.	I. B. CowieServices in connection with the Study of the Operation of Bail Reform Act wherein he shall conduct a pilot study in the Ottawa area.	2,000.	G. FergusonProvide advice on such statistical and related problems as the Department of Justice refers to her in particular to assist in the development of statistical programs designed to meet current and future needs of the Department and Canadian legal researchers.	25,500.	E. GibsonProvide services in connection with studies on child abuse and family law.	25,613.	M. E. HughesProvide services in connection with a study of the responsiveness of the law and legal institutions to social change.	1 1,385.	D. HunterLegal Advisory services to the Policy Planning Section in relation to legislation to establish a Human Rights Commission.	300.	I. A. Hunter
Order Paper Questions
1-(a)	2.	
Special Advisor-provide services in connection with a study of the responsiveness of the law and legal institutions to social change.	19,678.	J. MacKenzieConduct an investigation to determine the needs of native people in Manitoba for information about the law and the legal system.	3,150.	M. MeadmoreResearch and submit a full report with respect to the training and utilization of laymen as legal para professionals in Canada.	1.200.	V. SavinoProvide advice on medical-legal subjects, including abortion.	31,750.	B. StarkmanProvide advice on labour law problems.	5,530.	K. SwanTo provide legal advisory services to the Policy Planning section of the Department in relation to legislation to establish Human Rights Commission.	175.	W. S. Tarnopolsky(b)	Internal Audit	15,000.	Audit Service Bureau


Mr. Fleming: 1.	How much money has been spent to date on the Pickering Airport and related work on (a) airport plans (b) engineering plans (c) land acquisition?
2.	What was the total cost of the Gibson Inquiry?


Mr. Marcel Roy (Parliamentary Secretary to Minister of Transport):: 1. (a) and (b): Planning costs including engineering, $16,803,000; (c) Land acquisition, including administration and property management costs, $88,561,000; Loan interest on funding requirements, $17,749,000.
2.	Cost of the Gibson Inquiry, $770,000.


Mr. Hnatyshyn: Is the government giving consideration to allowing a self-employed person who assists a spouse in a business to be able to file a separate income tax return and declare earnings and include such earnings for eligibility to contribute to the Canada Pension Plan?


Mr. Bob Kaplan (Parliamentary Secretary to Minister of Finance):: Under our Canadian income tax system, the rates of income tax are progressive. That is, rates of tax increase on higher levels of income received by a taxpayer. Because of this progressivity, if a taxpayer were able to split his income with his spouse, he would avoid the increased rates of tax he would otherwise incur on higher levels of total income received by
80005-47y2

December 9, 1976
Order Paper Questions
him. Therefore, our income tax law does not recognize as income earned, amounts of remuneration paid by a taxpayer to his spouse for services performed in his unincorporated business. This long-standing feature of the tax law was debated in parliament at some length when the tax reform proposals were under consideration. It was not found possible to devise equitable rules to allow a payment of such wages as income to the spouse, without opening the way for many taxpayers to substantially reduce their tax by dividing their income for tax purposes with their spouses. This would be unfair to other taxpayers whose rates of tax increase as their incomes increase to higher levels. But where a corporation controlled by the taxpayer pays wages to his spouse, such wages are recognized as earnings of the spouse which she must declare as her own income (where the amount warrants it) and which entitles her to Canadian pension plan coverage. The use of a corporation for the business has two major effects. First, it establishes a third party which employs the wife. Secondly, corporations are required to meet many legislative standards which make it feasible to administer a test based upon whether the payments are reasonable remuneration for services performed. Moreover, where a taxpayer's spouse invests her own property to acquire a financial interest in his business or is actively engaged as a partner in the business, her share of the profits therefrom is also recognized for tax purposes, as her income which, similarly, qualifies her as eligible to make C.P.P. contributions. There is no immediate intention to change these well-established tax policies.


Mr. Munro (Esquimalt-Saanich): 1.	(a) How many regional offices are maintained by the Department of Justice (b) where is each located (c) for what area is each responsible?
2.	On what date was each established and with how many personnel?
3.	What is the present personnel strength of each office?
4.	In addition to regional offices, are district or other sub-offices maintained and, if so (a) in what locations (b) how many?
5.	Are the duties performed by those manning the regional and/or district offices line functions, in the chain of command from Ottawa to the operator in the field, or do they have other functions to perform and, if so, what are such functions?


Stanley Ronald Basford: 1. (a) Eight, (b) See below, (c) City in which office located and broadly speaking the following geographical areas: Montreal, Quebec; Toronto, Ontario, Vancouver, British Columbia; Winnipeg, Manitoba; Halifax, Nova Scotia, New Brunswick, Prince Edward Island, Newfoundland; Edmonton, Alberta; Saskatoon, Saskatchewan; Yellowknife, Northwest Territories.
Mb)	2.	3. No. ofDate	With	Presentestimated	Personnel of	PersonnelMontreal	July 1, 1965	2	54Toronto	January 1, 1966	2	86Vancouver	March 1, 1967	4	81Winnipeg	April 1, 1969	2	20Halifax	July 1, 1970	11 (1)	15(2)Edmonton	January 1, 1972	2	31Saskatoon	September 1, 1974	1	12(3)Yellowknife	April 28, 1976	7	64.	Yes. (a) Whitehorse, Yukon (crown attorney's office); Regina, Saskatchewan; Belleville, Ontario; Moncton, New Brunswick; St. John, New Brunswick; Sydney, Nova Scotia; (b) Six.5.	Line functions, in the chain of command from Ottawa to the operator in the field.
Note: (1) Regional office establishment includes following sub-office personnel: St. John, New Brunswick, 3; Moncton, New Brunswick, 1; Sydney, Nova Scotia, 1. (2) Regional office establishment includes following sub-office personnel: St. John, New Brunswick, 2; Moncton, New Brunswick, 1; Sydney, Nova Scotia, 1. (3) Regional office establishment includes following sub-office personnel: Regina, Saskatchewan, 1.


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of the Environment, Canadian Saltfish Corporation and Freshwater Fish Marketing Corporation hire, dismiss or transfer employees to other departments and, if so, how many?


Mr. John Fleming (Parliamentary Secretary to Minister of Fisheries and the Environment):: In so far as the Department of the Environment is concerned: Employees hired, 225; Employees dismissed, none; Employees transferred, 105. In so far as the Canadian Saltfish and Freshwater Fish Marketing Corporations are concerned: none.


Mr. Coates: 1.	What is the present deficit of the St. Lawrence Seaway Authority in principal and interest?
2.	What was the deficit in principal and interest for each fiscal year from 1970-71 to date?
3.	What is the estimated revenue for the fiscal year 1976-77 and will such revenue cover the interest charges against the present deficit of the Corporation?


Marcel-Claude Roy: The St. Lawrence Seaway Authority has provided the following information:
l.	Accumulated deficit	Accumulated debtAt March 31, 1976 Principal (Loans) Interest Deferred	$150,919,349	$624,950,000 192,205,744 $817,155,7442.	Annual deficit	Accumulated debtCalendar Year 1970 Principal (Loans) Interest Deferred	$ 7,369,379	$509,950,000 84,240,789 $594,190,789
(Mr. Kaplan.)
December 9, 1976

Annual	Accumulated
deficit	debt
Calendar Year 1971 Principal (Loans) Interest Deferred
Calendar Year 1972 Principal (Loans) Interest Deferred
Calendar Year 1973 Principal (Loans) Interest Deferred
Calendar Year 1974 Principal (Loans) Interest Deferred
15 Month Period 1975/76 Principal (Loans) Interest Deferred


[Stage Direction]
3.	The estimated revenue for the fiscal year 1976-77 is $27,600,000 which will not cover the interest charges against the present deficit of the Corporation.
Mr. Friesen: What amount was spent on advertising for immigrants in (a) 1973 (b) 1974 (c) 1975 in newspapers in (i) England (ii) France (iii) Germany (iv) Portugal (v) Spain (vi) Italy (vii) India (viii) Hong Kong (ix) Taiwan (x) Japan (xi) the Caribbean (xii) the United States (xiii) Mexico (xiv) Latin American Countries?
Hon. Jack Immigration):	Cullen	(Minister	of Manpower
(a)1973/1974		(b) 1974/1975 (c) 1975/1976	
(i)	Nil	Nil	Nil(ii)	$20,000	$32,844	$123,260(iii)	Nil	Nil	Nil(iv)	Nil	Nil	Nil(v)	Nil	Nil	Nil(vi)	Nil	Nil	Nil(vii)	Nil	Nil	Nil(viii)	Nil	Nil	Nil(ix)	Nil	Nil	Nil(x)	Nil	Nil	Nil(xi)	Nil	Nil	Nil(xii)	Nil	Nil	Nil(xiii)	Nil	Nil	Nil(xiv)	Nil	Nil	Nil
Order Paper Questions SALE OF AIRCRAFT BY AIR CANADA 
Question No. 799-Mr. McKenzie:
Were the seven Air Canada Viscounts being advertised for sale by Beaver Enterprises Ltd. sold outright to Beaver Enterprises by Air Canada and (a) if so, for what amount in each case (b) if not, what is the agreement between Air Canada and Beaver Enterprises Ltd.?


Marcel-Claude Roy: The management of Air Canada advises as follows: Yes. (a) The amount is considered confidential for competitive, commercial and other reasons, (b) Not applicable.


Mr. Epp: What number of refugees in (a) Argentina (b) Chile (c) Uruguay, having declared a desire to immigrate to Canada are known to be communists, terrorists, political dissenters or militants?


Jack Sydney George (Bud) Cullen: We do not maintain statistics on persons refused admission to Canada on the grounds that they are communists, terrorists, political dissenters or militants. Our statistics indicate that the following number of persons who applied under our special refugee program were refused in Argentina and Chile because of adverse background information. No separate statistics are maintained for Uruguay.
1974	1975	1976Argentina	6	74	57Chile	92	378	62


Mr. Horner: 1.	Was an announcement made on May 20 that the government proposed to begin a programme of improvement of the rail passenger services in the Quebec-Windsor Corridor?
2.	(a) Has a contract been signed between CPR and the government and, if so, on what date (b) has CPR received the monies from the government to upgrade the Quebec-Montreal section of the Quebec-Windsor Corridor (c) what is the exact amount that will be spent on the Quebec-Montreal section?
3.	(a) What is the specific type of work, construction or upgrading that will be applied to the improvement in work between Montreal and Quebec (b) has work begun, and if not, what is the anticipated date of construction?

December 9, 1976
Order Paper Questions
4.	Has the government signed an agreement with CPR with regard to the purchase of new equipment, and, if so (a) on what date (b) what are the specific details of the agreement?


Marcel-Claude Roy: 1. Yes.
2.	(a) No. Contracts have been signed with Canadian Pacific Consulting Services, the consulting branch of CP and Canalog Logistics, the consulting branch of CN, to identify the improvements necessary to upgrade the Montreal to Quebec service, (b) As of Nov. 1, 1976 no money has been spent upgrading the Montreal-Quebec line, (c) The exact amount has not been determined. $24 million has been allocated for infrastructure improvements.
3.	(a) Details of work for stations, tracks, signals, and grade crossings have not been finalized, (b) It is anticipated that construction will begin in Spring 1977.
4.	No agreement has been signed as yet. Both CN and CP are involved in the tendering process for new equipment.


Mr. Brisco: 1.	During the fruit season of 1976, how many farm workers were required to pick tree fruits in the Creston, British Columbia area (i.e. cherries, peaches, pears and apples)?
2.	For each weekly period, how many requests for fruit pickers were (a) met (b) not met by the Department of Manpower and Immigration?
3.	Does the Creston farm labour office or the farm labour co-ordinator at the Penticton Manpower Office have any indication as to the number of fruit pickers that can be accommodated on the farm location?
4.	How many tree fruit farms have (a) sufficient (b) partial (c) no accommodation for fruit pickers?
5.	How much accommodation is still required for the Creston area to meet the demand for fruit pickers from out of the area?
6.	How much effort has been made to co-ordinate and organize the residents of the Creston area to serve the tree fruit industry as pickers?


Jack Sydney George (Bud) Cullen: 1. In 1976, during peak demand periods, approximately 400 tree fruit workers in total were required in the Creston,
B.C. area. By crop they were:	cherries 70; pears 50; prunes 30;		
apples 250. All peaches themselves.	were picked	by	the growers2.	Workers requested	(a) Met	(b) Not MetMay 10-14	8	8	0May 17-21	3	3	0May 24-28	0	0	0May 31-June 4	0	0	0June 7-11	8	8	0June 14-18	15	15	0June 21-25	3	3	0June 28-July 2	17	17	0July 5-9	22	22	0July 12-16	27	25	2July 19-23	33	33	0July 26-31	22	22	0August 2-6	12	12	02.	Workers requested	(a) Met	(b) Not MetAugust 9-13	4	4	0August 16-20	4	4	0August 23-27	0	0	0August 30-September 3	10	10	0September 6-10	10	10	0September 13-17	9	9	0September 20-24	38	38	0September 27-October 1	68	68	0October 4-8	74	74	0October 12-15	32	32	0October 18-22	41	41	0October 25-29	7	7	0Totals	467	465	23.	Fifty workers.4.	Of a total of 190 tree fruit growers in the Creston area: (a) 18; (b) 4; (c) 168.5.	Additional accommodation is required for approximately 100 workers.6.	Extensive efforts were made by the Creston Farm Labour Office to recruit Creston area residents as fruit workers. Communication was maintained with local secondary schools; posters advising of jobs available were placed in local restaurants, public notice boards, bus depot, etc.; a farm labour bulletin was distributed to all news media on a weekly basis; local radio advertising was used when required; full co-operation existed between Canada Manpower Centres and Unemployment Insurance Commission and British Columbia Department of Human Resources during the harvest season.


Mr. Howie: Has the Department of Public Works any plans for the construction of a government building to house a post office at Postal Station "B'\ Fredericton, New Brunswick and, if so, what arc they?


Hon. Judd Buchanan (Minister of Public Works):: Yes. The Department of Public Works on behalf of Canada Post Office plans to construct a new Postal Station "B" in Fredericton, New Brunswick on a site located on Hughes Street. It is anticipated that a contract will be awarded by the end of January, 1977. Completion is anticipated in early 1978.


Mr. Howie: From January 1, 1975 to date, what lawyers in the Province of New Brunswick were employed by the Department of Justice and how much was paid to each?
(Mr. Horner ]
December 9, 1976


Stanley Ronald Basford: In so far as agents of the Minister of Justice are concerned:
Name	Amount
Allman, A.
Anderson, William Appleby, Olmstead & Quinn Barry, John P.
Bingham, W. Ross Boisvert, Guy Brien, Alfred Brison, Charles Emery Bryden, John G.
Burchill, William J. Chiasson, Paul Emile Cochrane, Richard B.
Cyr, Leonide H.
Daigle, Joseph Depous, Herve Drapeau, J. E.
Dube, J. A. Raymond Duffie, Theodore E.
Dumont, Guy F.
Godin, Gerard Gorman, Patrick G.
Hayes, Paul Hogan, John J.
Hoyt, W. L.
Hughes, David C.
Hughes & Malone Jackson, Leslie Keating, Lloyd E.
Kelly, John Kenny, Bob Lampert, Irwin Lawson, William L.
Leblanc, Bernard Leblanc, Yvon J. G. Lebouthillier, Alie Leger, Franklyn O.
Lordon, Paul Lordon, T. Denis Losier, A. J.
McCaffrey, Pat

220.00
3,409.26
6,008.74
3,951.00
3,660.23
342.50
6,482.51
2.970.20 4,976.25
11,175.10
7,409.60
1.506.20 41,521.05
1.050.00
6.922.39 6,216.10
953.50
1,577.90
3.439.00 14,773.38
2,672.50
37,708.60
9,955.47
546.00
477.00
12,111.70
*
*
8,179.75
2,854.10
7,775.15
*
6.651.40 420.65
6,965.93
*
455.00 6,908.70
Ontario
Order Paper Questions
MacCallunt, John D.	5,498.80
McGloan, Thomas L.	*
McGrath, Edward	321.55
McKenna, Frank	*
McKenna, Hubert P.	1,349.55
McNair, John C.	867.17
Maddox, Paul B.	7,333.71
Malone, Brian	61,329.89
Maxwell, Wendell J.	90.00
Meldrum, W. W.	2,426.10
Michaud, Jean Marc	610.55
Michaud, Leblanc & Robichaud	25,840.50
Mitton, Myron	9,052.95
Olmstead, David	2,066.66
Pappas, Deno P.	4,543.95
Purnell & Brien	36,236.79
Raymond, J. A.	*
Richard, Clovis	3,719.90
Richard, John J.	6,067.65
Roy & Losier	180.00
Sargeant, Charles A.	2,243.83
Scullin, J. E.	11,146.15
Seheult, Peter	3,376.77
Shaw, Richard G.	1,519.93
Smith, David	*
Smith, Gerald	*
Somers, E. J.	4,407.19
Tingley, Richard J.	12,158.68
Whalen, Norman J.	275.00
Whelly, Charles F.	3,087.75
Young, Gladys	*
*In these instances work was assigned during the period in question but accounts have not yet been submitted.


Mr. Horner: How much has been spent on bilingualism in the field of education in the Province of Ontario and in which cities?


Hon. John Roberts (Secretary of State):: The following is a table showing the amounts paid by the Secretary of State Department to the Province of Ontario for bilingualism in education during the 1970-1976 period. There are no statistics available on the distribution of these moneys by city.
Programme	1970-1971	1971-1972	1972-1973	1973-1974	1974-1975	1975-19765 per cent	$2,797,812	$4,388,251	$3,876,272	$4,278,612	$3,879,384	$5,497,6589 per cent	7,298,640	11,464,399	9,764,281	10,663,072	10,372,096	14,649,7631.5 per cent	2,067,948	3,143,925	2,715,026	2,672,505	2,458,582	3,548,133Annex A	-	2,441,659	1,728,283	1,900,000	2,191,671	2,617,092Annex B	-	-	284	394	2,694	13,803Annex C	-	-	-	37,500	200,000	100,000Annex D	-	-	79,990	402,200	592,662	510,929Annex E	-	-	66,705	185,172	254,000	859,409Annex F	-	-	-	2,101,000	3,191,004	1,562,282Total	$12,164,400	$21,438,234	$18,230,841	$22,240,455	$23,142,093	$29,359,069
December 9, 1976
Order Paper Questions
DEFINITIONS: 5 per cent-contributions for teaching the second language; 9 per cent-contributions for education in the minority official language; 1.5 per cent-contributions for administration costs. Annex A: Assistance to minority-language institutions at post-secondary level and for teachertraining; Annex B: Travel Bursaries; Annex C: Language Training Centres; Annex D: Bursaries to second-language and minority-language teachers; Annex E: Fellowships for second language study; Annex F: Special projects.


Mr. Howie: What financial assistance, if any, has been given to (a) cattle farmers (b) poultry farmers in New Brunswick since January I, 1975?


Eugene Whelan: (a) Subsidies were paid to producers for slaughtered 'D' cows and beef cattle, $76,659.48. (b) Nil.


Mr. McKinnon: As of November 15, 1976, by constituency, what amount of the Local Initiatives Programme funds allocated in British Columbia have been returned by Constituency Advisory Groups as surplus to their requirements?


Jack Sydney George (Bud) Cullen: As of November 15, 1976, the assessment-approval phase of the Program had not been completed, and until its completion the amount of unutilized funds in any constituency cannot be ascertained.
[ Translation]


Mr. Speaker:: The questions listed by the hon. parliamentary secretary have been answered. Are the other questions allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Charles Joseph Clark: That this House vigorously protests the manner in which it has been deprived of a genuine role in the discussion of estimates and fiscal and monetary policy, objects to the secrecy of economic studies and projections, deplores the fact that key recommendations of the Auditor General will not be implemented in the foreseeable future, and condemns the government for its inept handling of the public finances of Canada.


Mr. Speaker:: Order, please. Today being the last allotted day in the supply period ending this month, the House will go through the usual procedure tonight at 9.45 p.m. and put the question on the opposition motion set down for debate today. This will be followed by the adoption of a motion to concur in Supplementary Estimates (B) and (C) and the introduction and passage through all stages of a supply bill based on the estimates. Hon. members will remember that on the last two occasions when this has occurred, the House gave unanimous consent to an early distribution of the supply bill, which I think has been satisfactory to all hon. members. Perhaps again, with unanimous consent, the House would like to follow the same practice and arrange for early distribution of the supply bill at five o'clock this afternoon. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Hon. members should note that pursuant to Standing Order 58 (10), not later than 9.45 p.m. every question necessary to dispose of proceedings shall be put forthwith.


Charles Joseph Clark: Mr. Speaker, I think that I and other hon. members of the House noted with particular interest your remarks immediately prior to our coming to this item of business when you indicated that later tonight we would be following the usual procedure and the House would be concurring in supplementary estimates and other expenditures of the government of Canada. I think that one of the major reasons we have chosen today to introduce this motion in the form we have is precisely that the usual procedure of the House of Commons, being simply to concur in, and not being able to call the government to account for its expenditures, has created a situation which has raised very severe questions about the competence of parliament to carry out its traditional role as a guardian of the public interest and as a controller of the public purse, which has been, in concert with other actions by this government-highlighted most recently by the report of the Auditor General-a further source of a decline in public confidence in the public institutions of Canada, a decline which should not affect us merely in our capacity as members of those particular institutions but also should concern us as it is an indication of a weakening of the ability of national institutions to earn the respect which alone can draw the country together.
December 9, 1976

I should say, in passing, that the respect for public institutions, particularly for parliament and for the conduct of governments, was not helped at all by suggestions which were made a couple of nights ago, and which have been repeated here by the Minister of Finance (Mr. Macdonald), that somehow in this country it is unpatriotic for the provinces of Canada to adopt a common position which is a compromise position on all their parts in the face of a consistent tactic of the government opposite of attempting to divide the opinion of the provinces of Canada in federal-provincial relations and trying to triumph by a tactic of divide and conquer.


Robert Lorne Stanfield: Blackmail; that's what it is.

For some time now, Mr. Speaker, Canadians have been more and more concerned and asking questions about the value and merits of their national institutions. Unfortunately we must admit that they are right to ask those questions. Their very existence depends on respect from the people. It is the duty of the government and of Parliament to earn for them the respect of Canadians. Flowever the attitude of the present government is about to jeopardize the credibility of our national institutions.
I think, sir, that we have all been concerned with the practice that has become evident again today in questions relating to the public nature of the federal-provincial discussions which will occur next week and those which occurred earlier this week. We in Canada now face a situation where to an increasing degree decisions of fundamental importance to the future of the country are taken by small groups of people who theoretically are responsible, but who in practice are meeting in secret to make decisions in secret which are relayed back to the respective legislatures, whether the parliament of Canada or the legislatures of particular provinces, for ratification.
That has rather seriously changed the system of government we have had in this country. It raises serious questions about how the parliamentary system functions and the way the system was established, namely, to allow members elected from the various constituencies of the land to control in a real sense the actions of the executive of the day. Parliament must begin with information, and it must involve influence. If the parliament of Canada continues to be denied information and influence on the activities of the government of Canada, we have strayed a serious distance from the original purposes of the parliamentary system.
Today the hon. member for Edmonton West (Mr. Lambert) raised a very legitimate question when he asked the Prime Minister (Mr. Trudeau) by what authority, in terms of the long history of parliament, the decisions of import to the country-those that were under discussion earlier this week and will be again next week-should be made, in effect, in secret by a group of people who, while theoretically respon-
Economic Policy
sible, have the capacity to impose their private decisions on the various legislatures of the land. The Prime Minister, who is probably the expert in the House of Commons on strawmen, dismissed this very valid request by the hon. member for Edmonton West as setting up a strawman. It is not that at all; it is a question of real concern to all of us who want to see the parliamentary system in Canada function and represent the people of Canada.
Unfortunately, the practice of secrecy which the Prime Minister, at least, is not prepared to initiate breaking down in relation to the federal-provincial conference next week has become a practice very close to the heart of this government. As my colleague, the hon. member for Peace River (Mr. Baldwin) has pointed out on numerous occasions, this is a government almost obsessive in its secrecy. We have seen it refuse, not simply to make information available to people who should be informed both by formal right and informal right, but we have also seen it frequently make decisions which suffer because they are based on the narrow range of information.
We have seen this most recently in the Speech from the Throne which began this session of parliament. The government proposed to begin consultations on the anti-inflation process-some 13 months after the process was brought into being-not to try to draw upon the advice of Canadians and the advice of interested sectors of the country but, instead, to try to get some help in bailing the government out of a situation it got into by acting too much in contempt of the advice that could and should have been offered by various interested parties in the country.
The federal government apparatus has quite aptly been called by the Auditor General-and, I believe, by the Prime Minister-"the largest business in Canada." In terms of its spending impact, it is equivalent to the 20 largest corporations in Canada. Yet we have here, in this massive instrument of impact upon the conduct of Canadian affairs, a complete absence of direction, an absence of leadership, an absence of purpose. In the face of that situation, this largest business in the country has become, in effect, an uncontrolled political conglomerate which, unfortunately, in its lack of purpose and lack of direction is setting a trend for other levels of government and a trend of carelessness for the public purse.
We believe that it is fundamental to restore fiscal control to the House of Commons and the government of Canada. We think that unless there is a demonstration on the part of the government that it is concerned about fiscal control, unless there is a demonstration that the parliament of Canada has a capacity to control the spending practices of the government of Canada, we are going to continue to invite the cynicism which is unfortunately undermining the respect for institutions in this country.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I repeat, Mr. Speaker, that if that cynicism persists it is going to have serious effects, not simply on the Financial capacities and on the economic policy of the govern-

December 9, 1976
Economic Policy
ment of Canada, but it is going to have a serious and deteriorating effect upon the capacity of this institution of parliament and the institution of the government of Canada to command respect and draw together Canadians in achieving our other goals, whether they be in terms of social policy, national unity or anything else.
When the Auditor General introduced his report, the attention of many of us was initially drawn to what one of the newspapers called the "horror" stories. We are aware of many of these horror stories and the failure to make optimum use or anything near optimum use of office space, transfer expenses not accounted for, inadequate control of cash received in many departments, expenditures seriously in excess of appropriations that are approved-we know about the individual horror stories. We have to recognize that the reports of Auditors General, particularly the most recent one but also those which preceded it, have to be seen not as a mere catalogue of mistakes but, instead, as a thorough indictment of the system of control that has been in place in the government of Canada for the last eight years.
The recommendation of the Auditor General that a chief financial officer be appointed in each department seems to be under way, if we can judge from the responses given in this House by the President of the Treasury Board (Mr. Andras) yesterday to questions the origin of which might be a matter of dispute.


Robert Lorne Stanfield: They change their minds from day to day.


Charles Joseph Clark: As my colleague, the hon. member for Halifax (Mr. Stanfield) points out, they change their minds from day to day; but the problem with the House of Commons is that we still do not know exactly what kind of system the President of the Treasury Board intends to bring in.


An hon. Member:: He does not, either.


Charles Joseph Clark: We do not know if he intends to bring in any system at all. If a chief financial officer is to be brought into each department of government, the House of Commons would like to know from the minister-and if he participates in the debate later, perhaps he will tell us-at what level these officers will be appointed in the departments. There is a very real danger, if they are named at a level too subordinate to the deputy minister, that they are going to be unable to exercise the kind of control that is important. If they are not able to do that, then their appointments will be phantom and their authority will be nil. We would like to know from the minister at precisely what level these officers will be appointed, and precisely what their functions and powers will be.


Ramon John Hnatyshyn: And whose idea it was.


Charles Joseph Clark: The hon. member for Saskatoon-Biggar (Mr. Hnatyshyn), of course-a naturally modest man-is interested in having on the record precisely whose idea it was. Even if there is an introduction of this kind of representation, it is clear that it is only part of the step that must be taken by the
(Mr. Clark ]
government to repair a situation where its expenditures are, in the words of the Auditor General, "virtually out of control".
In addition, even if we are able to make the kinds of reforms proposed by the Auditor General of Canada, it is clear that there is going to be one part of, or one half of, a necessary two-pronged effort to restore fiscal control to the federal government of Canada. It will help only to give direction and control in a bureaucratic sense; it will not, by itself, serve to restore public confidence.
The present runaway situation in public finance is associated with two developments. The first development has been the partial-I emphasize "partial"-implementation of the recommendations of the Glassco royal commission for decentralization of fiscal control. There has been a decentralization of authority without the mechanisms for control and responsibility. The other matter which is of critical importance is that there has also been, in the period since 1965, a gradual and striking removal from the House of Commons of any effective capacity to control the spending or planning of the government of Canada.
In passing, it is important to dwell for a moment on the degree to which the reforms proposed by the Glassco commission have only been partially introduced. I will accept, as I am sure the House will, the authority of the Auditor General of Canada himself when he says:
However, it seems clear that the present unsatisfactory and vulnerable situation came about because certain key recommendations on financial management and control made by the Royal Commission on Government Organization (Glassco commission) in 1962 were not implemented. Perhaps they were not understood, although the recommendations relating to the decentralization of financial authorities were evidently understood and were fully implemented.
The Auditor General goes on to say:
Unfortunately, the concurrent and equally important Glassco recommendation that new counterbalancing controls be instituted and that existing ones be strengthened was not implemented.
Sir, I now want to turn the attention of the House to the problems faced by this parliament in dealing with the public spending of the government and the problems faced by parliament in exercising the traditional parliamentary role of controlling, in the final analysis, government expenditure and government plans. I will not dwell long on what we can call the former situation. It is clear to all who have studied parliament and know of its force that there was a time, not long ago, when the House of Commons had a real capacity to call the government of Canada to account. It was not simply a matter of giving, as we shall be called upon tonight to give, automatic passage to expenditure requirements-not at all. There was, with the capacity for unrestricted questioning of estimates, the real ability to force the government to respond to the will of the public of Canada.
One authority upon whom I shall call is Professor Norman Ward, author of the book entitled "The Public Purse." He referred to that historic event in Canadian parliamentary history which has become known as the pipeline debate, when the opposition of that day was able to use its capacity to delay
December 9, 1976

passage of the estimates to force the government of Canada into a difficult situation. I quote Professor Ward, who said:
No one who witnessed that sitting of the House could have any doubts of the power of the weapon which the members held until spokesmen for the various opposition parties made clear that they had chosen to lay it down.
No observer of any of the processes which will occur later this evening in this House can have any doubt that the parliament of Canada has lost completely that capacity to control expenditures and approve the plans of a majority government in Canada today. There was, with that former system, an obvious shortcoming: it took too long. As government has become more complex, it is no longer possible to have the unrestrained capacity on the part of the opposition to hold up public business. Everyone recognizes that we could not contemplate, with the modern agenda of business, the kinds of delays which were possible perhaps in easier times. The difficulty is, sir, that the reforms which were introduced, particularly the way they have been interpreted by the government opposite, have substituted for delay a much more serious problem in that they have left the parliament of Canada virtually without control of the public spending of Canada, and virtually without control of the government of Canada, it is significant to note that when there were changes in methods of financial control, there were, by coincidence, at the same time changes in the rules of the House of Commons.
To be consistent on the matter of questioning the estimates, it would be helpful to the House of Commons to review some of the changes which have occurred in the last few years in the handling of estimates by this government and the presentation of estimates by this government to the House of Commons. One change was that detailed information was dropped from estimates and millions of dollars were put under headings which gave little information. For example, the preface to one set of estimates says that they are to assist members of parliament in their deliberations and to assist those seeking an understanding of the purposes for which the government proposes funds to be appropriated.
In 1970-71, the form of the estimates was changed with that particular goal in mind. In fact what has happened, as all know who have served on committees trying to scrutinize estimates, is that a sentence or two is placed in front of items allocating funds-a sentence or two which can be highly uninformative. For example, some in this House have recently been preoccupied with the discontinuance of the ferry service in British Columbia. I happen to have obtained a copy of the 1976-77 estimates for the Department of Transport, and I note that ferry services are defined in the following detail:
Development, implementation and monitoring of programs, including participation in policy formulation, for the operation of certain coastal, ferry and related terminal services, particularly those for which Canada has accepted responsibility under terms of union and confederation.
That explanation gave next to no detail, but that item cost in excess of $116 million. On the basis of a handful of words, the parliament of Canada is now supposed to pass intelligent judgment and to raise questions upon expenditure in excess of $116 million. I have cited an example which was simply drawn at random, because it is of some concern now; but it indicates
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the kinds of changes which have taken place in the period since 1971-72. It indicates a moving away by the government, in its presentation of estimates to parliament, from the giving of detailed information with regard to estimates, and this moving away generally makes it very difficult for the parliament of Canada to do its job.
The other highly serious problem which we face as a parliament now, and which the people of Canada face as a consequence, is that the committees of parliament, and parliament itself, have been deprived of any leverage upon the government by the automatic guillotine which comes into force to conclude debate. The government has the capacity in the committees, through its control of committee chairmen-a control which exists in reality, as any realist in this House must admit-to decide who is going to testify and for how long. That is done through the steering committees. They have also the capacity to formally limit debate.
Last year, as an experiment, some estimates were brought before the House, presumably for debate along the old lines. The problem was that debate was under the guillotine; it was to end that very night. Consequently, any minister under questioning knew that he had simply to turn up his collar against the storm; he knew he had only to live through that day. Indeed, he encouraged-and I say this with respect to the sensitivity of the hon. member for Scarborough West (Mr. Martin)-supporters of the government party to consume as much time as they could by asking patsy questions. That was allowable perhaps within the rules, but it was a shameful use of those rules and shameful contempt of the right of parliament to control expenditure.


An hon. Member:: Do you people live in glass houses?


Charles Joseph Clark: Theoretically, this House of Commons retains the ability to vote down estimates, although this very rarely happened in the past even before the rules changed. It has not happened at all since 1970-71, not even in a minority parliament. It was not possible for the House of Commons to ratify, in the whole House, changes which had been made in the various standing committees.
In June, 1973, I remember a number of committees reporting back to the House of Commons recommending specific expenditure cuts. I particularly remember being involved in one which recommended the reduction by $1 million of consultants' expenditures for the Department of Indian Affairs and Northern Development. That expenditure was struck out in committee. However, the government brought it back in in a form, not where it would be considered as a $1 million expenditure struck out for the reasons decided by the majority of the Standing Committee of the House of Commons, but part of an over-all estimate of $45 million. It was included with a number of other quite legitimate expenditures, expenditures which the committee was quite prepared to accept.
With that kind of juggling and varying of an expenditure to which exception was taken in a body of expenditures that we
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were prepared to accept, the government was in a position of, in effect, blackmailing the House of Commons into supporting an expenditure which it did not want to support. That kind of trickery and deceit has an opportunity to occur only with a minority government. The point I am making is that there is a determination on the part of this government to use the changes that have occurred in the method of bringing forward the estimates to frustrate the will of parliament even though that will is expressed by standing committees of the House.
I want to review very quickly a couple of other problems which exist in the present system of consideration of estimates in committee. One obvious problem is that there is very little public attention paid to the activities of standing committees, particularly when considering estimates. Second, there is a clear inability for members of parliament of any party who are interested in getting at the facts about a particular expenditure effectively to cross-examine a chairman or minister who is determined to stop that kind of cross-examination. By controlling the agenda, or having limited time, the government can effectively forestall any kind of investigation. There is, by the nature of reference, a simple inability on the part of the House of Commons to deal with a specific matter in any prolonged or coherent fashion.
I see that the hon. member for Westmount (Mr. Drury) is in the chamber. In the last session, that distinguished member was a member of the government of Canada. We had an admission by that gentleman, as a minister, that the government of Canada was indulging in the practice of hiding certain expenditures, particularly those that related to intelligence activities by the government of Canada. That raises the very serious problem about the ability of parliament to control the expenditures of government. We have no capacity to know what amounts of money are being spent on intelligence operations, or for any other purpose, by the government of Canada.
I should say that there was an undertaking, although I do not believe it has been acted on, to give private briefings to members of parliament who were interested in that question.
The far more serious problem was that the then minister admitted there had been an inflation of other estimates by smuggling in the intelligence estimates. We do not know in how many other cases this occurred. However, it is clear that the parliament of Canada was being deliberately misled as to the amount of money the government of Canada intended to spend on particular projects. The government intended to deflect part of that sum to intelligence activities which it did not trust parliament to know about. That is another indication of the abuse of the system in which the present government has indulged.
This is not an academic matter. Today we face another very real concern about the capacity of parliament and parliamentary committees to investigate. I am told by my colleagues who serve on the public accounts committee that many of the documents necessary for that fundamentally important committee of parliament to examine the records of AECL may be withheld for a variety of spurious reasons.


Some hon. Members:: Shame!
(Mr. Clark.]


Charles Joseph Clark: It certainly is shameful. "Wait and see," the parliamentary secretary tells me. We will do that. The best way to answer our doubt would be to have, today, an unequivocal undertaking by the minister when he stands in his place that each and every document requested by a member of parliament in the consideration of that and other questions in that and other committees will be available and that each and every witness will be made available. I doubt that that kind of undertaking will be given. It would depart fundamentally from the practice of this government to use the committee system to frustrate, rather than assist, in any examination.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There are a number of other reforms that we think the House of Commons ought to deal with in a non-partisan manner. We are concerned, not in our capacity as members of parties but in our capacity as members of parliament for the effectiveness of this institution. There are a number of changes which should be considered very soon. First, we must improve the capacity of parliament to control public expenditures. One way to do that would be to vest in opposition parties the capacity to select a certain limited number of departments each year whose estimates could be debated in committee of the whole without an automatic guillotine. If a minister or the government wants to introduce the guillotine, perhaps they should be left with that right. However, if there is going to be a guillotine, they should at least have to face the music by standing up in this House of Commons and making it clear that they intend to limit debate. With an automatic guillotine there is a safeguard for the ministers. No one knows they are limiting debate. They get away with murder. We think there is very real merit in giving some consideration to vesting in committees-


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the Leader of the Opposition (Mr. Clark) that his allotted time has expired. He can continue only with unanimous consent. Does the House give its consent?


Some hon. Members:: Agreed.


Charles Joseph Clark: I appreciate that courtesy, Mr. Speaker, and I will attempt to be brief. Consideration should be given to vest in the committees of the House of Commons some capacity to initiate investigations into matters of public interest. Right now, the capacity of committees is limited. Their capacity to investigate is limited in two ways. First, we know from experience that estimates before a committee is an inadequate means of examining the government. The second would be to receive a reference from the House, in theory, but from the government in fact. The practice is that when the subject is hot, the reference does not come. Time and time again, this parliament has sought to have the committees of the parliament of Canada empowered to look into questions of obvious public importance. Time after time the government has refused to make that kind of reference.
We think it very much worth considering having some capacity vested in the committees of the House of Commons to
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initiate their own inquiries. They would be both extensive and educational. If we are looking for parliamentary reform, we might consider looking, not to another country but simply to the other place. It is one of the ironies of political life in this country that private members of the other place have far more capacity to look into public problems than private members of the House of Commons.
1 want, in passing, to pay tribute to the members of the other place in recognition of some of the very important investigations they have carried out, performing the kind of function which the elected parliament of Canada should perform. I think it is unacceptable that the appointed members of a national institution should have more power and capacity to investigate than do the elected members.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There are number of other matters to which I wished to refer, Mr. Speaker, but I will abbreviate those references. 1 do wish to say, however, that one of the other constraints upon the capacity of parliament to secure information has been the change in attitude of the government toward the question period. We all recognize that there is no requirement upon the government to answer questions put to it in the House of Commons. But there is a requirement on the part of the government of Canada to treat seriously questions which are posed seriously in the House. Unfortunately, we have seen the development of what I think can fairly be characterized as a personal style of flippant answers, being cute with questions, of seeking not to answer, not to provide information but, rather, to evade questions and create false controversies and to send people off on tangents. We get responses, rather than answers, from ministers opposite, and I think if there were a serious desire on the part of ministers to inform the House of Commons they could start by answering seriously questions seriously posed.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: This motion, among other things, condemns the government for its inept handling of the public finances of Canada. Its record in the handling of public finances is well known. When the present administration took office, federal expenditures were in the neighbourhood of $9 billion a year. Today they exceed $42 billion. When the government took office, governments in Canada claimed 30 per cent of the gross national product. Today they claim almost 43 per cent.


Robert Phillip Kaplan: That's all government in Canada.


Charles Joseph Clark: That is right. The parliamentary secretary makes an interjection which is correct. But he would not want to pretend that the initiative for that increase came exclusively or even primarily from other levels of government. In the last decade in particular-and this is documentable-that initiative came from the federal government. It has been the central
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cause of the increase in the growth of public sector consumption of the gross national product in this country.
Despite all the increase in expenditures, we have so little to show in terms of public response. Rather than an increased faith in the government's ability to help Canadians meet their difficulties, there is now an increasing growth of cynicism and a diminution of trust about the role and relevance of government policies to the economic well-being of Canada. Rather than a major increase in our well-being as a nation, we see our country has slipped in one decade from second place to seventh place in the world in terms of per capita living standards. It threatens to fall even farther down the list. Instead of there being greater sense of economic equality in Canada, we see instead a greater sense of division among the regions and among the different income groups.
I do not wish to take the time of the House to elaborate on economic details about which my colleagues will be speaking later on in the debate. But there are a least two aspects of the present situation which are fundamental. The first is something I have enunciated on many occasions when speaking across the country. It is the need for us to halt, and gradually reverse, the growing claims of all governments upon our national output. I am convinced that what is often referred to as "the British disease" is a very real economic malady. I have no reason to believe that if we continue to hurtle down the course set by the government we will avoid our own particular Canadian strain of that disease. Indeed, we will invite it. I want to make it clear that my colleagues in the Conservative party and I are advocating a far different approach to spending restraint than that which is practised by the government. The government opposite bows in the direction of restraint, although the minister admitted the other day that in fiscal year 1977 federal government expenditures will increase by 14 per cent.


Robert Knight Andras: Fourteen per cent this year, and only 11 per cent next year.


Charles Joseph Clark: The minister tells me 14 per cent this year, and 11 per cent next year.


An hon. Member:: Dreadful.


Charles Joseph Clark: We find it interesting that the saving will be in the neighbourhood of $1.2 billion. It is both interesting and illustrative that that is exactly the figure the government of Canada, in the negotiations between finance ministers which failed this week in Ottawa, is seeking to take from the provinces of Canada. So the government practises restraint, not by restraining its own expenditures but by passing its burdens on to other levels of government. That is not restraint; that is sleight-of-hand.


Some hon. Members:: Hear, Hear!


Charles Joseph Clark: Clearly, what we need to do is not to pass the buck on to the provinces but, instead, exercise national leadership to try to bring together the efforts at restraint to all levels of government.

December 9, 1976
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There is another major difference between our approach and theirs, that is, the relation between the federal spending policy and that of the other levels of government. One of the favorite tackles of this government in limiting its expenditures is quite senselessly to shift its commitments on the provinces, and to hell with the taxpayers: they have no choice but to support all governments.
In our approach, we endeavour to generate a coordinated and joint effort on the part of all levels of government with a view to moderating the overall demand on the economy. I underestimate neither the difficulty nor the complexity of that endeavour, but it is necessary: otherwise, we will witness no less than the abdication of the leadership.
This brings me to the second point I want to stress in this context. It is obvious for everybody, except the government, that we cannot continue making decisions which affect more than two fifths of our national economy on the basis of the arbitrary and unilateral action of eleven different governments. And yet that is what we do in Canada. The federal and provincial governments make their budgetary decisions separately, without real co-ordination, which often puts them in competition, if not in opposition.

Of course, the ministers of finance meet, as they did earlier this week. But I do not think any of us would pretend, in the present atmosphere, that they even seek to achieve any meaningful co-ordination of the economic direction of what amounts to two fifths of our national output. This, clearly, is not a one-sided affair. The fault-if that is the term I should use-does not rest solely with the federal government. The government has contributed-significantly to the whole problem of governments acting unilaterally in a country requiring co-operation, but it is not the exclusive agent of that kind of action.
It is fair to assert, however, that only the federal government can show the kind of national leadership we need if we are to achieve worth-while economic co-ordination within the public sector. Along with maintaining security, the management of the national economy is probably the most fundamental responsibility of the federal government. It controls the monetary system, and while it does not by any means exercise all the fiscal power, it controls the national fiscal lever and thus, in a very real way, sets the framework for everyone else. Only the national government can exercise the primary responsibility for economic management in Canada.
In the name of that responsibility there must be a much greater effort, a much more concerted active national leadership in seeking to co-ordinate, through consensus and through compromise, the impact of public sector policies and demands upon our economy as a whole. That will mean, not a giving up of ultimate responsibility by the government of Canada but a greater willingness on the part of all governments to act as partners and to share information and planning before each exercises the responsibility which ultimately rests with each.
| Mr. Clark.)
I began, Mr. Speaker, by speaking about the problems that face our national institutions, such as the erosion of respect which can have consequences of very real danger to a country like ours. This parliament is the only institution in Canada which legitimately speaks for all the people of Canada. It is our only national institution. But it can have effect only if it has power. It can be respected by the people of Canada only if it is respected by the government of Canada. The tragic situation today is that the government of Canada has demonstrated, through its use of changed rules, through its failure to bring forward estimates which can be understood, through its refusal to accept the control or the point of view of the House of Commons, what amounts to contempt for parliament which, unfortunately, is capable of being shared by the people of Canada. We believe that that kind of attitude by the government must be changed. We would hope that in the acceptance of the motion introduced today we will be beginning down the road toward a change in that fundamental attitude.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: With a little prompting from my friends, in that spirit, Mr. Speaker, 1 want to move, seconded by my colleague for Edmonton Centre (Mr. Paproski):
That this House vigorously protests the manner in which it has been deprived of a genuine role in the discussion of estimates and fiscal and monetary policy, objects to the secrecy of economic studies and projections, deplores the fact that key recommendations of the Auditor General will not be implemented in the foreseeable future, and condemns the government for its inept handling of the public finances of Canada.


Robert Knight Andras: Mr. Speaker, I listened with considerable interest to the Leader of the Opposition (Mr. Clark) who read the motion that has triggered this debate. I must say I find it rather interesting, and passing strange, that the motion comes barely one week after the Prime Minister of Australia, the Right Hon. Malcolm Fraser, announced the decision of his government to proceed with a fundamental reorganization of the central management functions of the government of Australia along the lines of what the Australians call "the Ottawa model".


Some hon. Members:: Oh, oh!


Robert Knight Andras: This reorganization was announced after careful consideration by Mr, Fraser's cabinet of the recommendations of the royal commission on Australian government administration; and of all the management systems examined by this commission-and indeed there were several and many-the system that we have gradually been implanting in the federal government of Canada was found to be the most effective. Allow me to quote from the statement issued on November 30, by the treasurer of Australia, the Hon. Phillip Winch:
The division of existing Treasury functions is along the lines of the "Ottawa model" that has produced excellent results in Canada . . .
The new arrangements reflect the Commonwealth's desire to generally upgrade and improve the working efficiency of the public service . . . They are
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evidence of the government's determination to strengthen its sources of economic advice and to exercise more effective control over expenditures.
A bit of a coincidence, Mr. Speaker! Barely a week after the government of Australia, a fellow member of the Commonwealth and one of the world's major liberal democracies, decided to adopt "the Ottawa model" of financial administration, the leader of our Conservative opposition has seen fit to make a blanket condemnation of the government for its handling of the public funds of Canada. He and his colleagues have been doing so throughout the course of the last few days by misquoting and misrepresenting with almost total abandon a considerable and substantial report by the Auditor General of Canada.
This government welcomes the special audits, the publication of special studies and the inquiries undertaken in the last fiscal year by the distinguished gentleman who holds the office of auditor general. Not only in the exercise of our responsibilities do we welcome those studies and the recommendations accompanying them, but it is the fact that it is the government that has made this possible, co-operating fully with the Auditor General and increasing considerably in recent years the financial and human resources allocated to his office.
At the end of my remarks, Mr. Speaker, 1 should like, with the permission of the House, to take the opportunity of tabling a summary of the Auditor General's estimates during the past five years. Since the appointment of the present incumbent, the financial resources allocated to that office have gone from $4.4 million annually to $13.9 million, an increase of about 215 per cent over a four-year period. The man-years authorized for that office have risen from 298 persons to 428 over the same period, an increase of more than 43 per cent. In other words, the Auditor General's office has been one of the fastest growing, most strongly supported functions of parliament, supported by the federal government.
In effect, the Auditor General has requested of us that his office be exempted from the expenditure restraint program introduced by the government a year ago, and Treasury Board had approved this request. We have done so because Treasury Board ministers were very conscious of the crucial role that the Auditor General plays in the intricate system of checks and balances through which Canadians seek to ensure that public funds are used and handled efficiently and effectively and, most importantly, in accordance with the statutory provisions set by parliament.
We are also fully aware of the very important contribution that the Auditor General, through an expansion of his activities into what could be called system audits, can make toward the improvement of financial management and control systems in the public service of Canada. As a result, the estimates for his office have been increased by about 58 per cent in the current fiscal year, from $8.8 million to almost $14 million, inclusive of the $2 million tabled a few days ago in Supplementary Estimates (B). That is more than four times as much as the increase of about 14 per cent this year in the over-all expenditures of the government.
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Similarly, the authorized man-years of the Auditor General's office have been increased by 7 per cent this year, more than 41/2 times the percentage increase effected through the whole of the public service of Canada. I want to inform the House once again that we willingly acquiesce in the request of the Auditor General that his office be exempted from expenditure restraints for the year 1977-78.
I am also pleased to remind this House that the proposed legislation which I tabled on November I has been drafted after very close consultation with the Auditor General. I refer to the Auditor General's Act. We have done this out of the glare of attention and political controversy, and 1 think it has been extremely successful. 1 think, too, that hon. members will find that, with the exception of minor points which he has informed me about and may wish to raise at the committee stage, the provisions of Bill C-20, which is the Auditor General's Act, have received the unqualified endorsement of the Auditor General.
On August 26 he reported to the deputy secretary for financial administration of the Treasury Board that his advisers, Mr. Belanger, Mr. Campbell, Mr. Skinner and Mr. Dunnet, were unanimous in the opinion that the draft legislation meets the spirit of the independent review committee's report and implements most of its recommendations, and that he agreed fully with their views. He said that he saw no need, in the face of this, for further discussion of the provisions of the draft act, because he expresses the view that it captures well the essence of the Wilson committee reports, and in his opinion it was ready for submission to parliament. He thanked the deputy secretary for his very active participation in bringing that extremely important legislation to fruition, or to its present stage.
I think that is a reasonable rebuttal to the misinformed, misleading and often partisan view expressed in this House and in the press in the past weeks of the government's record concerning financial administration, and in complete disregard of the many initiatives detailed in the progress report I tabled in the House on November 19, about which 1 am sure the hon. member for Vegreville (Mr. Mazankowski) is going to have something to say. In light of these facts it was, therefore, in a somewhat different perspective that I saw the report of the Auditor General for the fiscal year 1975-76. 1 did not stop at the first five sections of the report. I read through the special audits and inquiries reported in the other eight sections and focused on the audit operations and specific observations contained in the subsequent six sections. I want to make it absolutely clear that each of these special audits, inquiries and specific observations contained therein is being carefully reviewed by the Treasury Board and each department or agency concerned or involved, and I also assure the House that remedial action will be taken and, as in previous years, will be reported thoroughly to the public accounts committee.
I also want to make the point that most of the observations made by the Auditor General, following the special audits and

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inquiries which he conducted in this past fiscal year, confirm the Treasury Board's own views, its own findings, as well as the timeliness of initiatives we have taken to correct these deficiencies. I am referring, for example, to the Auditor General's comments about management and control systems for office accommodation, for travel and relocation expenses, and payrolls, to which the hon. Leader of the Opposition made reference in his comments at the opening of this debate.
I want to emphasize that our initiatives have not been limited to those undertaken by the financial administration branch of the secretariat, about which I also reported to the House on November 19. Members should be aware that on March 25, eight months ago, my predecessor announced the appointment of a senior committee on administration improvements to make recommendations to Treasury Board and to cabinet on required changes in the public service management system and on the most effective ways of implementing and monitoring those changes.
Among the key areas examined by that committee-which, incidentally, is chaired by the secretary of the Treasury Board and composed of the clerk of the Privy Council and the deputy ministers of nine departments-were office accommodation and travel regulations, and I will soon be reporting to the House on the work done by that committee on changes to regulations, procedures and practices which it has recommended to the Treasury Board and which we will be implementing forthwith.
Similarly, Mr. Speaker, a personnel policy branch of the secretariat has been developing a new and improved government-wide pay system, a subject of some concern, in close co-operation with the Department of Supply and Services, as well as with the financial administration branch which is concurrently developing financial control standards for payroll systems.
Referring to the more specific audit observations made by the Auditor General, I should like to point out that those made in sections 14, 15 and 16 of his annual report deal with the presentation of government accounts and that most of the discrepancies, with generally accepted accounting practices noted by the Auditor General, had already been recognized in the study of the accounts of Canada initiated by the government in 1974 and sponsored by the Treasury Board secretariat and, indeed, referred to the public accounts committee last year.
Members are, or should be, aware that amendments to the Financial Administration Act are required to correct these discrepancies, and I assure hon. members that these amendments will be introduced by the government early in the new year. Among those is the amendment that will clearly establish the Treasury Board as the single central agency, which the Treasury Board thinks it should be and which the Auditor General also has recommended as necessary action.
Of the 22 specific audit observations made in sections 17 and 18 of the report, 11 were accounting improprieties which did not actually involve any loss to Canadian taxpayers. For example, a quite legitimate payment to the province of

Manitoba was improperly charged to the appropriations for 1975-76 instead of those for 1976-77. Several other accounting improprieties are of this nature. They do reflect the inadequacy of present fiscal year-end procedures. In fact, as I announced in the progress report I tabled on November 19, these procedures will be changed shortly through appropriate amendments to the Financial Administration Act, following completion of the required studies by the financial administration branch of the Treasury Board secretariat.
Other specific audit observations did involve the probable loss of public moneys. The Auditor General reported, for example, that we failed to recover costs of trans-border highway services between Canada and the United States; that we were paying rent on property not occupied; that we were getting too low a return on long-term mortgage credits to farmers; that the guidelines for determining ferry deficits were inadequate; that we had purchased and modified a vessel unfit for navigation, and so on. Those are the so-called horror stories which have been so prominently displayed in the press out of the millions of transactions completed by federal departments and agencies last year. Out of all of them there were 11 such horror stories reported by the Auditor General.
It is difficult, admittedly, to estimate what the actual losses to taxpayers have been, because in most cases some recovery of the funds is possible and will, indeed, be attempted. I have asked my officials to try to put a valuation on the total maximum possible loss arising from these improprieties, and again, I emphasize, in the absence of any recovery. The total amount computed is about $6.6 million, of which only $85,000 consists of losses incurred through fraud, default or mistakes of any persons-in effect, what are technically called defalcations.
The $6.5 million is a considerable amount of money, and the deficiencies noted by the Auditor General which have caused these potential losses will be promptly reviewed and remedied by the Treasury Board, as they have been in past years. It must be remembered that the total dollar value of transactions conducted by the government of Canada in the fiscal year 1975-76 was over $129 billion. We expended about $34 billion under budgetary appropriation. Non-budgetary receipts amounted to another $32 billion. Our non-budgetary outlays amounted to $33 billion, yet the maximum value of losses discovered by the Auditor General, provided we do not recover any of it, represent .00005 per cent, or one-twenty thousandths of all the moneys transacted during the fiscal year by all federal departments and by all federal agencies.
Let us keep this in perspective, although I am extremely concerned that we improve our fiscal management and our financial control mechanisms. There is no doubt that, as the Auditor General has pointed out, some federal practices in financial administration are unacceptable-and we are determined to eliminate these practices. But setting aside any extravagant statements that may appear in the House or in the press, it is my contention that parliament and the government
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are very much in control of the public purse and that they exercise this control through time-tested and effective institutions, systems and procedures.
What do we mean when we speak of the public purse? First, we are speaking of the close to $38 billion in revenues which will be collected during the current fiscal year by Revenue Canada and other federal agencies. Can anyone seriously argue that we have lost control of our taxation system? Deductions at source are regularly remitted to the Receiver General of Canada. Taxation Canada is better equipped than ever before to handle the millions of income tax returns which will be filed in the first few months of 1977, and we expect assessment notices and reimbursements, where justified, to be swiftly dispatched to taxpayers. Indeed, Canadian taxpayers can testify, sometimes rather ruefully, that government control over tax revenues is only too thorough.
Can anyone seriously claim that the government, or indeed parliament, has lost or is close to losing control over social security payments? Each months millions of cheques are being issued to and received by Canadians: old age pensions, family allowances, unemployment insurance payments, veterans pensions, Manpower training allowances-more than $9 billion worth in the current fiscal year and about 22 per cent of total federal expenditures. I emphasize that all these payments are made by government departments and agencies in accordance with the statutory provisions set by parliament.
Can anyone seriously claim that parliament or the cabinet has lost control of payments to other governments? In the current fiscal year, over $8 billion-close to one-fifth of our total expenditures-will be remitted to provincial governments and municipal or territorial administrations. All of these payments are being made under formulas stipulated in statutes of this parliament which were adopted, in the main, after lengthy discussions in the democratic parliamentary process. I am referring to fiscal transfer payments, hospitalization payments, medicare payments, contracting-out payments, post-secondary education payments, and so on. Some of the acts governing these payments will shortly be up for renewal. Ministers have stated in the House and in other places the views and intentions of the government with regard to the methods of their reintroduction, and opposition members will have ample opportunity to state their views and counterviews on this matter in the House and in its committees.
I could go on and on, Mr. Speaker. Holders of government bonds can testify that the public debt is efficiently managed and they get the interest due to them when it is due. These interest charges will amount this year to about $5 billion, another 10 per cent of our total expenditures. Recipients of oil compensation payments or subsidies for transportation, agriculture and fishing can similarly testify to the efficiency of our expenditure management systems. Opposition members of the House can themselves vouch for the effectiveness of parliamentary control over this category of expenditure since just the other day they succeeded in persuading the government to accept their amendment to the government expenditure restraint bill.
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Mr. Paproski:: It was a lot of hard work, but we did it.


Robert Knight Andras: Yes, that is the process of parliament. You yourself, Mr. Speaker, can testify that it is by no means a rare occurrence in this House to see amendments proposed by the opposition accepted by the government, even to money bills.


John Edward Broadbent: Especially in 1972-73.


Robert Knight Andras: You are also aware, Mr. Speaker, that the standing committees of the House-and I want to refer to the comments of the Leader of the Opposition on how the House cannot deal with estimates-devote more than 500 hours each year to detailed examination of the estimates submitted by the government under the processes approved by this parliament. Our Standing Orders provide for 25 allotted days during which opposition parties can initiate debate on any aspects of the government's record including, of course, expenditures. Questions placed on the order paper, as well those put in the oral question period, allow members of the House to query ministers each day on every aspect of their activities, including the expenditure of funds.
Month after month the remainder of our sitting days are devoted to the detailed examination in the House or in standing committees or ad hoc committees of every piece of legislation introduced by the government. Practically every one of them involves expenditures in one way or another. So if hon. members are not exercising effective control of the public purse through that manner, I am very puzzled at what the devil we are doing here every day.
I can only conclude that the real problem we are facing- one which is serious and which concerns us very much-is not really that parliament or the government have lost control of the public purse, but that some of our processes and procedures, bookkeeping systems and practices are inadequate and that this has understandably given rise to uncertainty about the efficiency and, indeed, the propriety of government operations.
There are about 1,800 financial officers in the public service of Canada, and indeed the Treasury Board is very much in agreement with the Auditor General that it is not enough. Too many financial management and control operations are entrusted to clerical people and people whose qualifications are often insufficient. Many departments and agencies have not yet elevated their chief financial officer to the position that he or she must occupy in the management structure in order to maintain or upgrade standards of financial adrrtinistration. This is a specific answer to the question of the Leader of the Opposition. It is my opinion, and our endeavour in almost every case-on some very small boards it might be slightly different-that this person should report not through anybody else but directly, at least, to the deputy minister of the department, the chairman of a board of the president of a Crown corporation.

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Economic Policy


Charles Joseph Clark: That speaks of reporting. What public service level will that person have?


Robert Knight Andras: It will vary in particular circumstances, but generally I think that in the main with respect to departments, where appropriate, it would be at the assistant deputy minister level. Other departments have not yet allocated to financial management and control the resources they need, and certainly this is a situation which I, as the newly appointed President of the Treasury Board, intend to see rectified as quickly as possible.
In finishing, I would like to emphasize-and re-emphasize perhaps for the hundredth time-that the appointment by the government of the Royal Commission of Inquiry on Financial Organization and Accountability was not intended to pre-empt the report of the Auditor General. It was not intended to keep his recommendations in the deep freeze for two years or to justify in action or a "wait and see" attitude on the fundamental issues and the very real problems raised by this officer of parliament.


Sinclair McKnight Stevens: Why the timing?


Robert Knight Andras: It is very obvious that those who have made these charges have not read the statement 1 made in the House of Commons on November 22, nor do 1 think they could have read the order in council-at least they could not have read it objectively-establishing the royal commission which I tabled that same day.


James McPhail Gillies: It recommends the members.


Robert Knight Andras: I am, therefore, compelled to state once more the reasons which led the government to establish this commission of inquiry and to comment on its terms of reference. The Leader of the Opposition raised the question of the Glassco commission, and in some ways I agree with some of the implications of his comments as I interpreted them. I think we all recall that the Glassco commission emphasized in its report the importance of what it called "the essential safeguards" operating independently of the framework of management placed under the authority of ministers-the Public Service Commission and the Auditor General. The commissioners described the function of the Auditor General in the following terms:
The other external safeguard rests with the Auditor General, in his responsibility forjudging the efficacy of government accounting systems, internal control and audit procedures and other techniques of financial management, and ensuring that public funds are adequately protected against misuse and are legally spent. This function and his duty of disclosing to parliament and the public any evidence of illegality, irresponsibility and dishonesty in the handling of money, serve as powerful deterrents.
However, a crucial element of the Glassco commission's approach to public administration has been generally overlooked in the debate which followed the appointment of the royal commission the other day, because the Glassco commission stressed in the strongest terms that the first and primary guarantee of administrative integrity was the new concept of

management it proposed, with its emphasis on a much sharper definition of responsibility, authority and accountability.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the minister that his allotted time has expired. He may, however, continue with unanimous consent. Does the hon. minister have unanimous consent?


Some hon. Members:: Agreed.


Sinclair McKnight Stevens: Sure. He is doing no harm.


Robert Knight Andras: I express my appreciation of the courtesy of the House. To continue my comments on the Glassco commission, I think hon. members are aware that over the past ten years managerial responsibility and authority certainly have been effectively decentralized in the public service and entrusted to deputy ministers and heads of other government agencies. The fact is-and this is the fundamental point which we as parliamentarians have to examine very carefully, and I accept the suggestion of the Leader of the Opposition that it might be done in a non-partisan way-that in that decentralization it is quite possible, certainly in terms of financial control, and I am talking about financial control after allocation of budgets and after the spending authority has been placed in the hands of a department or agency, that the pendulum may have swung too far in the direction of decentralization-


Some hon. Members:: Hear, hear!


Robert Knight Andras: -to the extent that the central control and leadership which I am told in the Glassco perspective were to come from the privy Council Office and the Treasury Board has not always proved as effective as the government might have wished or, indeed, as parliamentarians in this House might have wished.
A major stumbling-block has been the difficulty the government has encountered in really building that third leg of the managerial concept proposed by the Glassco commission, which was administrative accountability. In other words, the delegation of responsibility and authority to managers could only work if those managers could be held accountable for their actions and decisions, and the Glassco commission, unfortunately-as I see it, with hindsight-considered as being beyond its terms of reference the identification of any system which a parliamentary government might adopt to fulfill this further requirement of administrative integrity.
I noted in the November 22 statement I made that the views of the Glassco commission on the political character of public administration were idealistic and, I think, overoptimistic and perhaps even somewhat simplistic. The commission concluded by saying this:
In the last analysis there cannot be any precise formal division of authority between ministers and their officials. Their partnership must depend on the existence of suitable working arrangements for which no legislative blueprint can be drawn.
The fact of the matter is-and I can at least say this to hon. members in this House-that in the view of the government these working arrangements do not always work that well and
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that some explicit administrative or legislative framework might have to be established to implement effectively this principle of accountability. That is one of the major factors which led us to establish the royal commission of inquiry, and the examination by the government of these issues was, of course, significantly influenced by the views expressed on several occasions in the past years by the auditor general. But most certainly, whether hon. members want to accept it or not, our intention was certainly not to launch an inquiry on the inquiries of the auditor general. Rather, we felt that that principle of accountability-and it is just related to the placement in the structure of a potential comptroller-general; there are other issues here which are important to examine-as well as some of the recommendations made by the Auditor General pertaining to accountability, had to be more comprehensively reviewed, and that examination of their constitutional, political and broader administrative aspects was well beyond the mandate of the Auditor General-and he himself was one of the first to say so in his report and in subsequent comments he has made publicly in the past weeks.
We also thought that the considered views of royal commissioners are required at this stage to reconcile best the principle of ministerial responsibility with that of accountability and so to protect the duties and prerogatives of parliament against the possibility of bureaucratic encroachment. Some of the suggestions I have heard made in this House in recent days-and I know they are made in the heat of political exchange-come close to challenging the responsibility of ministers of this House for what happens in their departments, or asking whether we should switch this responsibility to identified public servants. Both options should be examined, but we should fully understand the implications of what happens. 1 know that the hon. member for York-Simcoe (Mr. Stevens) is very eager to get the AECL and all the rest aboard, but it is time, particularly in light of those kinds of incidents, that we had a better financial link, better financial control and a better financial system to make sure that we have these things under control.


Sinclair McKnight Stevens: We need the right morality.


Robert Knight Andras: There is no argument about that, without accepting the allegations or implications. It must worry some of us in this House if in the process of following what is the totally understandable, desirable and legitimate objective of getting much better financial and other kinds of control over Crown corporations, we do not remember the purpose for which they were set up in the first place, which was to be apolitical, which was to detach in some case policy-kind of institutions like the CBC and in other cases Crown corporations, away from the direct policy control of the government of the day in order to fly by themselves in the private sector.
I believe we have to be very careful, and this is one of the things the royal commission has to examine before we in our frustration over some events leap to take control financially and see the opportunity for them to take control politically or
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policy-wise. Those were the views of the government some months ago leading us to the appointment of the royal commission. As far as 1 am concerned, those reviews remain current.
1 have been in this portfolio for a couple of months and I have had some recent and very, very constructive discussions with the Auditor General. There has never been, and certainly there is not now, in light of those discussions, any real differences of opinion between the government and the Auditor General about what has to be done.


Some hon. Members:: Hear, hear!


Robert Knight Andras: Obviously, we would not have used some of the strong words he used on occasion; but aside from that, we agree, and I have consistently said so in this House, that we want to tighten up the financial management and controls of this government. Relative to other countries, we stand in a pretty good position, but that is not good enough. I am still convinced, having talked to the Auditor General and to other people, that there has been a genuine, intellectual disagreement on one fundamental issue. We are in total agreement about what must be done: the question remains-and I am quite sure we will resolve it-about the exact method by which it should be done. Taking into consideration my genuine concerns, which surely are shared by other members, we must be quite clear that in the process of doing it we do not create other problems.


Some hon. Members:: Hear, hear!


Robert Knight Andras: Mr. Speaker, I mentioned that I wanted to table a document, if I could have the permission of the House.


Gerald William Baldwin: Mr. Speaker, before the minister tables the document, could I ask a question or two about it before giving assent? Is it the document in connection with the amounts paid to the Auditor General's staff and the moneys paid to the Auditor General?


Robert Knight Andras: It is tabling the 1972, 1973 and 1974 figures.


The Acting Speaker (Mr. Ethier):: Order, please. Is there consent that the minister be allowed to table the document?


Some hon. Members:: Agreed.


Gerald William Baldwin: 1 just want to know what it is.


Robert Knight Andras: It shows the expenditure budgets and man-years of the Auditor General's office over the last five or six man-years, and the increase as evidence of the fact that his facilities are being bolstered.


Gerald William Baldwin: Does that include the very large, exceptional sums paid to the special members who are engaged from private industry in order to try to bring some order out of the chaos?

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Economic Policy


Robert Knight Andras: I will check on that. I think it would certainly include their expenses, but I believe some of them offered their services on an exchange basis.


The Acting Speaker (Mr. Ethier):: Is it agreed that the document be tabled?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Agreed and so ordered. The hon. member for Oshawa-Whitby (Mr. Broadbent).


John Edward Broadbent: Mr. Speaker, although the smothering words of the minister are not instructive and on point, the fact that we have this motion before us today in itself constitutes evidence of the strong, serious and always urgent concern felt by Canadians about the financial mismanagement of this government.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Although the motion presented by the Leader of the Official Opposition (Mr. Clark) is broken down into three or four specifics, in its essentials it deals with an over-all criticism of the financial operations of this government. As such, it is remarkably similar to a motion I put forward a week ago on behalf of the New Democratic Party, which was supported by the official opposition. During the interim this government has not moved at all to show it is concerned with the questions related to financial mismanagement that have been posed virtually every day since that debate. Today, our party will give its unequivocal support to the motion before the House.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Last week I drew attention to the need for this government to appoint a comptroller immediately, as recommended in the most recent Auditor General's report. The minister who spoke on behalf of the government at that time did not deal with that proposal. He used up all his time speaking on totally erroneous and, I would say, at times immoral matters entirely unrelated to the motion. The minister who spoke for the government today did not deal with the central recommendation of the Auditor General, namely, that we have a comptroller-general. I want to say to the minister that even the news he has given today about the appointment of senior financial control officers in each department, as important and necessary as they are, is not an adequate substitute for appointing a comptroller-general as was recommended by the Auditor General. The government's arguments were so weak and so superficial in the first two days after the recommendations that the minister himself did not even have enough nerve to trot them out again today.
The second point we made in the debate last week, and referred to in the comments of the Leader of the Opposition today, was on the inadequacy of our committee system to deal with the financial supervision of the operations of this government. The mythology that surrounds parliamentary commit-
[Mr. Baldwin.)
tees is remarkable. Every member and all parties in this House know that they are a farce.


Some hon. Members:: Hear, hear!


John Edward Broadbent: They serve as rubber-stamps for the government of the day; that is all. They are time-consuming for members of all parties and produce virtually nothing by way of an effective contribution to legislation or supervision of government activities in the House of Commons. We might as well get rid of them entirely as maintain them in their present form.
Specifically, in terms of the motion today as with the one we proposed last week, what is required of the government, if we are to take them seriously, is to give adequate staff and a real research capacity to the committees so that members of the opposition or the government, when they deal with important matters, have the intellectual and factual resources necessary to do an adequate job. The kind of operations that the public accounts committee of this House is expected to conduct cannot be done with the scandalous resources put at its disposal. I repeat the point made a week ago: if our committees are to perform an essential and important function in the parliament of Canada, namely, the supervision of the financial operations of this government, they need to be re-equipped and to be given adequate staff to do the job.
While reiterating our strong belief in the need for immediate corrective action in those two areas, in the comptroller-general area and the staffing of committees, and giving our general support to the motion, I want this afternoon to talk specifically about the serious need for tightening the supervisory financial control over our Crown corporations in general and over AECL in particular. The House will recall that the Auditor General could not have made a more scathing condemnation of our Crown corporations if he had deliberately set out to do so in his selection of facts. In his report, the Auditor General made several recommendations and came to certain conclusions. He found that Crown corporations which, from the perspective of members of parliament, ought to act as models in a Canadian community in setting standards of efficiency and moral propriety which the private sector should imitate, have unfortunately acted in a contrary manner. That is what the Auditor General discovered.


Ramon John Hnatyshyn: It is enough to make you choke.


John Edward Broadbent: As the hon. member says, it is enough to make you choke.


Mr. Trudel:: Because he read the motion.


John Edward Broadbent: The Auditor General reached several conclusions about our Crown corporations; and we did not hear the minister either last week or this week in replying deal with the specifics of the criticism-and that, too, is disgraceful. What are the criticisms of the Auditor General? First, there is no central agency in the government whose exclusive purpose
December 9, 1976

it is to identify all corporations owned and controlled by the government of Canada. Such agency does not exist. Second, he concluded that the private sector in Canada is subject to a greater degree of control with respect to its operations than this country's Crown corporations. Third, the annual deficits of our Crown corporations are regularly and systematically understated. The fourth, and most important, point given the nature of today's debate is that parliament itself is given incomplete information on the financial position and practices of Crown corporations over which we ought to exercise supervisory authority. To repeat, that description of this government's behaviour, of its attitude to its major obligations and our Crown corporations, is a disgrace.
Instead of ignoring such criticism, ministers of the Crown should be on their feet answering. If they disagree in detail, they ought to say, "We disagree with the details of the criticism, but we shall get on with the job of correcting errors." There has been no indication in statements made today, in those made in the last two weeks or in answers made during the question period that the cabinet cares one whit about the criticism the Auditor General made of government mismanagement of the Crown corporations of Canada.
Recent horror stories-I use those words with care-about a number of Crown corporations fully document and substantiate the Auditor General's description of the operations of our Crown corporations. Let me list some of the items which recently came to light. I shall mention four examples to show the behaviour of Crown corporations, behaviour which ought to concern Canadians greatly. The first example concerns Polysar. Serious allegations were made by the former auditor general, Mr. Maxwell Henderson, that Polysar Limited, a Crown corporation, had paid rebates to some European companies in the form of special deposits to special kinds of bank accounts. From the available evidence, those so-called rebates involved either bribes or facilitated the violation of the tax laws of other countries whose governments would expect the government of Canada to set a much higher standard of conduct.
The second example concerns the operations of AECL in South Korea. Payments totalling more than $15 million were made to one Saul Eisenberg, the owner of United Developments Limited and other companies associated with Mr. Eisenberg, in connection with the attempt to sell a CAN DU reactor to South Korea. The Auditor General reported that in his opinion the documentation for these kinds of payments was inadequate-that is some euphemism! Subsequent testimony given before the public accounts committee indicates that the payments for so-called consultants of various kinds, for which Mr. Eisenberg submitted inadequately detailed invoices, were in fact payments to Mr. Eisenberg's own companies in various countries operating under a variety of names. One wonders why he would want to operate a number of companies under a variety of names, and why would he get a variety of payments for the same work? To ask the question is to suggest the answer, as members on both sides of the House recognize.
Economic Policy
The third case involves the AECL attempt to sell a CAN DU reactor in Argentina. Payment was made by AECL to a numbered Swiss bank account of $2.4 million as its portion of a commission payable to an agent for "services rendered over an extended period." Investigations concerning the possibility of bribery involving those funds provided by the people of Canada through the government of Canada are now under way in Argentina. That is a serious matter; yet when the minister responsible was asked just a week ago in the House if he had been in touch with the man in charge of the bribery investigation involving Canadian funds in Argentina, the minister said no, he had not personally been in touch with him but understood that the head of AECL had been in communication with him in some way, perhaps by telephone or letter.
As I say, he understood that AECL had been in touch with the man in Argentina now investigating possible bribery involving Canadian funds. Mr. Speaker, that response was totally inadequate. The minister involved should not simply have "understood" that the head of AECL had been in touch with the man conducting that investigation. The minister himself ought to have been in touch, and pursuing as thoroughly as he could, investigations being conducted in Argentina.
The fourth example concerns Canadian Commercial Corporation. Mr. G. R. Long, deputy auditor general under Maxwell Henderson, reported in a recent interview that he found an entry of $500,000 on the books of the Canadian Commercial Corporation in 1972 listed as "Marketing services." He states that the money went to Canadair and that it was his belief, and I quote, "that the money was used partly to pay off some Venezuelan official" in connection with the sale of 20 fighter bombers. Mr. Long commented further that "Certain payments were made, but you'll never be able to prove it." The auditors at the time were unsuccessful in their attempts to inspect the books of Canadair, a company which has subsequently come under the full public ownership of the people of Canada.
What have been some of the specific responses by ministers of the Crown directly involved in terms of their responsibility and, indeed, by the Prime Minister (Mr. Trudeau)? A week ago in the House, the Minister of Industry, Trade and Commerce (Mr. Chretien) said:
Commercial practices in other countries. .. sometimes are different to ours.... I am not about to condemn the morals of anybody. It would be very presumptuous for Canadians to tell other people how to conduct their morals.
That is what he said. About the same time his colleague, the Minister of Energy, Mines and Resources (Mr. Gillespie), with reference to the same general set of moral misdemeanours, as I would describe them as best, said the following:
We are not in a position to impose our morality or moral values on other countries.
Then there is the Prime Minister. What did he say? In reply to a question put by myself on November 30, he said:

December 9, 1976
Economic Policy
The House might want to address itself to the question whether we want the Crown corporations to continue to be involved in business or whether they should all be privatized ...
If we want to depart from what are acceptable business, accounting and legal practices in the name of some ethical standard which we may well want to apply,
I suggest that we should get out of the bussiness of having Crown corporations.
That is what the Prime Minister of this country had to say. The minister directly responsible, the Minister of Energy, Mines and Resources, the Minister of Industry, Trade and Commerce, and the Prime Minister all indicated an attitude of moral indifference. A renowned scholar of this century, Hannah Arendt, a woman who died not long ago, used the illuminating phrase "The banality of evil". I suggest that the response to the recent revelations of the international behaviour of Crown corporations by the Prime Minister and senior ministers of the Crown is certainly banal and comes dangerously close to being evil.
The Prime Minister and his ministers are, at best, remaining benignly indifferent to such practices that deeply disturbed the former auditor general. In my view, such a response offers implicit moral support of their continuance. I ask, in all seriousness, whether there is any possible interpretation to be drawn from the statements they made other than they are prepared to accept in other countries moral behaviour for Canadian corporations, private or publicly owned, which they would not accept at home. Therefore, they are implicity saying-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue if he has unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


John Edward Broadbent: Mr. Speaker, I thank the members of the House for their consideration. In taking this attitude, the Prime Minister and ministers of the Crown are implicitly accepting a double standard of morality. They are implicitly telling Canadian corporations to continue with these operations. In 1968, Gunnar Myrdal, the Swedish economist, devoted a great deal of space in his book "Asian Drama" to the problem of the behaviour of businessmen in the third world. He concluded with the following observation:
A western firm operating in a South Asian country often finds it convenient. .. to give a negotiated lump sum to a more or less professional briber, an "agent" who then undertakes to pay off all those whose co-operation is necessary for the smooth conduct of production and business.
This describes perfectly the practice that appears to have gone on with AECL in both South Korea and Argentina, Earn sorry to say. Since the practice is common and has gone on for so long, any protestations from the government that they were unaware of what their agents were doing to earn their money severely tests the credulity of all members of parliament and the public of Canada. This is especially so since the advice to Canadian businessmen which the Department of Industry, Trade and Commerce was giving in 1973 clearly documents that they were aware of these dubious practices. In 1973, that department published a booklet entitled "The Nigerian

Market: A Survey of Current Opportunities". Part of the advice to Canadian businessmen contained in this little gem of a booklet was the following:
Canadian companies pursuing international tendered opportunities involving either EDC (Export Development Corporation) or Cl DA (Canadian International Development Agency) financing support should ensure that they have between 5 per cent and 8 per cent in their bid price to cover the necessary marketing and public relations costs associated with doing business in Nigeria (i.e., often more than one agent and/or "representative" is needed to win an international tender).
It is time for an unequivocal declaration, not from one of the appropriate ministers but the Prime Minister that the government of Canada expects Canadian corporations, private or public, to comply with the highest moral and legal standards, not only at home but abroad.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Leadership is precisely what is required now in this matter, and it is leadership that is precisely what is lacking. In my view, Canadians will not accept the spurious and-I will say it-immoral answers already implied by the Prime Minister when answering in the House on this matter. His answer amounts to saying, "Others do it; therefore, we must join in". That is the logic of his position. The first thing to be said about this is that a wrong is a wrong is a wrong. It does not acquire virtue by being repeated by others. The second point I would make, and this is important given the kinds of general observations that have been made about business practice both in Canada and abroad, is as follows: there are many, many companies-I would like to think, a majority of them-both Canadian and foreign which will not have anything to do with the kind of practices we have heard so much about in recent days.
We are aware that competitors of Polysar from West Germany and the United States refused to indulge in the kind of practices with which Polysar has been so preoccupied and which were so thoroughly and, unfortunately in terms of their implications, documented by the Auditor General. The point is, it is not necessary to be corrupt-and that is what you have to be if you are offering bribes. It is not necessary to practice that kind of behaviour in order to get business abroad. What you must do is compete. You must market a product which merits purchase by other countries, and produce salesmen who are honest and technically competent to sell those products abroad. The contracts will follow. That is what General Electric says it is doing in the United States. It is time the Crown corporations began practising the same kind of high ethical standards. It is time they got the leadership where it counts, and that is from the Prime Minister.
In the view of the New Democratic Party, the Prime Minister has an obligation to put guidelines before the House soon outlining the minimum legal and moral standards he expects Crown corporations to abide by both at home and abroad. Second, he should ensure, through the House leader and other appropriate steps, that the committees of the House
December 9, 1976

of Commons will be given, as a matter of right, the task of investigating the annual reports of all Crown corporations as they are submitted to the government. That would be one effective way of ensuring that members of this House would have a continuing supervisory role, at least, to play in ensuring that Crown corporations do the kind of job for Canadians that Canadians expect of them.
All 1 can say on behalf of my party, in response to the indifference, at best, on the part of the government toward the serious state of moral morass which has been outlined is: enough is enough; it is time to clean house. I, therefore, move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the motion be amended by adding thereto immediately after the words "in the handling of the public finances of Canada", the following words:
"particularly its failure to establish mechanisms to achieve effective supervisory financial control over Atomic Energy of Canada Limited and other Crown
corporations."


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Ethier):: The hon. member for Ontario (Mr. Cafik).


Mr. Norman A. Cafik (Ontario):: Mr. Speaker, I am pleased to have this opportunity-


The Acting Speaker (Mr. Ethier):: Order, please. I am sorry. I did recognize the hon. member for Ontario, but it is the hon. member for York-Simcoe (Mr. Stevens) I was supposed to recognize.


An hon. Member:: You are next.


Norman Augustine Cafik: Come on; that's not true.


Sinclair McKnight Stevens: As the first to speak since the amendment was put forward by the hon. member for Oshawa-Whitby (Mr. Broadbent) I must say, Mr. Speaker, that many of my remarks will also concern what we on this side of the House regard as a most insensitive demonstration of lack of sense with regard to morality in the governing of this country.
I was pleased to hear the President of the Treasury Board (Mr. Andras) who, in the course of a rather dull speech, defended some of the steps he feels his department has taken or intends to take with respect to tightening up control over public spending. I was startled to find him refer to the fact that in Australia they had reviewed various systems of control and had come up with a suggestion that the "Ottawa model", as it was referred to, was the one which should be followed in Australia. Surely the President of the Treasury Board is missing the point. It is not a question of the system or the model. It is not a question of the vehicle being used. The question is, how is it being run; what internal controls are actually being observed by those who are running the system?


Robert Phillip Kaplan: There is no comptroller-general.
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Sinclair McKnight Stevens: The Parliamentary Secretary to the Minister of Finance (Mr. Kaplan) says there is no comptroller-general. Why are members opposite so upset about this suggestion? Why are they so emphatic about not wanting a comptroller-general? This is one of the areas 1 feel we ought to explore in the course of today's debate. But before I come to that I would draw attention to the fact that the motion before us, moved by the Leader of the Opposition (Mr. Clark), is composite in nature. He condemns the situation in which the House has no genuine role to play in the discussion of three things: first, it has no genuine goal in the review of departmental estimates; second, there is no such role with regard to fiscal policy; third, the House has no such role with regard to monetary policy.
May I touch upon those three items? All of us are aware of the frustration which presently exists with regard to our committee system, the fact that we are called upon to pass estimates and approve appropriation bills in the absence of any meaningful review of the figures we are asked to pass on. There was a good illustration of this in the current Supplementary Estimates (B) we had to review and which we shall be asked to approve by way of appropriation bill No. 5, 1976.
I am pleased to see the chairman of the Standing Committee on Finance, Trade and Economic Affairs in his place. To be specific, I think it is deplorable that in connection with the estimates of the Department of Industry, Trade and Commerce we should be asked tonight to pass on additional financing for Canadair and on a SI item which amounts virtually to a write-off of $40 million in relation to Consolidated Computer Corporation Limited. The Canadair items add up to some $80 million as far as government contributions are concerned, and there is a guarantee of a further $50 million. But in spite of the magnitude of those sums, we are being asked to vote on them in the absence of any monetary review. The artful dodging on the part of the government has been such that they have seen to it that the Standing Committee on Finance, Trade and Economic Affairs was not able to get the minister before it in order that questions might be directed to him. Second, in the minister's absence there was no review of these items.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, $40 million may not be much in the eyes of the Minister of Industry, Trade and Commerce (Mr. Chretien) but I can tell you that $40 million being spent in the Consolidated Computer situation is a lot of money to most Canadians. The more I watch the cavalier attifude of the present Minister of Industry, Trade and Commerce and his jolly predecessor, the more I am beginning to wonder how we can ever bring these people down to earth when they are dealing with public funds. How can we get through to them that it is a great consequence when they make decisions involving huge amounts of money which are needlessly lost, such as is the case with the Consolidated Computer Corporation?

December 9, 1976
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It may be, Mr. Speaker, we should seriously consider asking ministers, in effect, to give a bond, so that if plans do not work out as they expect they forfeit a percentage of their salary to the people of Canada. In this way there may be less foolhardiness than we have witnessed to date. For example, if we said to ministers, when they come before us, "Would you put one-tenth of one per cent of any loss that the people of Canada may be called upon to pay regarding your particular venture?", I bet we would get a lot fewer hair-brained schemes being rammed through this parliament than has been the case so far.
We are going to be asked this evening to pass on a $40 million write-off. One-tenth of one per cent of that would be $40,000, and maybe that would be just sweet justice for those ministers who are responsible for that unfortunate loss. Yet apparently, Mr. Speaker, they have absolutely no feeling when it comes to going before the Standing Committee on Finance, Trade and Economic Affairs to explain what went wrong.


Robert Phillip Kaplan: The minister did appear before the committee.


Sinclair McKnight Stevens: Well, let me deal with that. We tried to get an extra meeting. A meeting was arranged at which the minister appeared, but it was to deal with a specific reference of another matter, Statistics Canada.


Steve Eugene Paproski: It was a snow-job.


Sinclair McKnight Stevens: Yes, it was a clever snow-job. The artful dodgers are at their best when they want to cover up something. Let me deal with what is one of the most serious situations that has arisen in this session of parliament. I refer to the apparent lack of proper moral understanding on the part of the government as to what is right and what is wrong in its business dealings through Crown corporations. We have had references even today to the comments of the Minister of Industry, Trade and Commerce who somehow or other seems to feel that the standard of law or morality which exists in this country does not necessarily have to be met in another country if it does not suit their purpose. I say that is shocking.
I believe it important that we put on the record what editorially has been said about the minister's comments in some of the most reputable papers of this country. For example, in a lead editorial in the Gazette of December 3, entitled "The gall of the Grits" the following appears:
For sheer inconsequence and irrelevance the Commons speech of Industry, Trade and Commerce Minister Jean Chretien defending his government's financial management would be hard to beat. ..
And he says the state should no more limit ethical practices in Crown corporation foreign dealings than it should have some role in limiting conduct "in the bedrooms of the nation."
It is footling rubbish like this that the minister uses to counter opposition speeches, solidly based on the findings of Auditor General J. J. Macdoncll, criticizing financial mismanagement in the government, its agencies, and Crown corporations.
Luckily the heads of the Crown corporations, at least, are not so obtuse . .. Mr. Chretien's anything goes doctrine must be rejected in the strongest terms, lest we have a spate of mini-Lockheeds in the foreign dealings of Canadian
[Mr. Stevens.J
firms, either Crown corporations or private firms connected with government contracts.
The editorial concludes:
Now we have Mr. Chretien turning around-and Prime Minister Trudeau too- saying when in Rome do as the Romans do. Presumably they feel we should all wait for the golden day of the international code, meanwhile ripping off the bucks by whatever questionable means lie at hand. Some philosophy.
That is one editorial comment, Mr. Speaker.


An hon. Member:: Better table the Gazette.


Sinclair McKnight Stevens: If the hon. member likes, I will table it. The Globe and Mail of the same date was equally harsh. In a lead editorial entitled "Between right and wrong" the following appears:
Jean Chretien has been viewed by many Canadians-many who are not Liberals as well as many who are-as one of the real hopes in the Cabinet. Shucks, we were mistaken. Mr. Chretien does not know the difference between what is right and what is wrong.
The editorial says that this is the minister's view:
-if I cannot impose my morality on adults in the bedrooms of Canada, I do not see how I can go to another country and judge their morality.
The editorial condemns the minister's statement and concludes:
But Mr. Chretien seems to think it is acceptable to commit crimes, so long as they are committed beyond our jurisdiction. His statement will leave many Canadians with a terrible sense of disappointment.
I would go further than that, Mr. Speaker. In view of the reaction to the lack of any sense of morality on the part of that minister, supported to a certain extent by the Prime Minister (Mr. Trudeau), surely we have to ask ourselves whether this is the type of minister who should be heading up the portfolio of industry, trade and commerce. Is it right to have one of the most senior persons in this government in the portfolio of industry, trade and commerce in view of the questionable moral judgment that he has shown in this House? Would we not be right in asking for the resignation of this minister, bearing in mind that he should be setting the standard for industry? I would say that certain of the actions taken by Crown corporations are a reflection on Canada's good corporate image around the world. I say that because I believe that those two editorials echo the shock across the nation at the attitude displayed here.
I should also like to refer to an editorial that appeared in the Toronto Star headlined, "Would you lie to make a dollar?". The editorial commences:
Jean Chretien is right when he says the government has no business in setting out the business ethics of other nations. If they think bribes and hidden payments are all right, it's entirely their business.
But he is wrong, when he says Canada's Crown corporations should go along if shady ethics are requested by a foreign customer . . . The issue is not whether Canada should tell other countries "how to conduct their morals". The question is how are we to conduct our own ... A Crown corporation is an instrument of the nation, and its behaviour, legal or not, must be in accord with standards acceptable to all Canadians . . .
If we think such corruption at home is wrong, there is no justification for acceding to it abroad. To do so is to risk making influence peddling, skimming and bribery acceptable within our borders.
December 9, 1976

That, I suggest, is a fairly uniform condemnation of the minister's statements and is the general impression left by this government in regard to this very important issue. Unfortunately, I was disappointed today to hear the Prime Minister's still adamant reply when he was questioned on this general topic. In the House this afternoon he stated:
We expect that the officials of Canada and the officials of Crown corporations will behave and conduct themselves according to law. This is a general position.
Should there be any serious suggestion that any official of this government or of any Crown corporation will not conduct themselves according to law? What about the much broader question, Mr. Speaker? What are they expected to do when it comes to morality? Is it enough simply to say that because Polysar conveniently has a Crown corporation in Switzerland, and in turn another corporation has, I suggest, a Crown corporation in Netherlands Antilles, it is sufficient for us to say that this is all perfectly legal, that you can shift funds around and evade taxation, all perfectly legally? At the same time, if Polysar tried to do exactly the same thing here in Canada it would be illegal and wrong. That is exactly what we are talking about here.
This Polysar setup has been structured so that it has a subsidiary in Switzerland and in the Netherlands Antilles. That kind of a structure provides a relief not only in the Polysar situation, but in respect of any little corporation that wants to get into these rinky-dink deals. It is going to provide relief through the government's Bill C-12 which ratifies an agreement with Switzerland for the avoidance of double taxation, thereby facilitating the type of tax dodge we have been talking about in this House for several days.
This is an example of the inconsistency of this government. It acknowledged that it wants things tightened up and that we should have some new guidelines, and on the other hand it proposed that this House ratify a treaty with Switzerland. This will facilitate the use of numbered accounts in Switzerland, making Switzerland a tax haven beyond dreams.
There will be no need, for example, to use the Netherlands, Antilles anymore. One can go directly to Switzerland and maintain direct contact there with whichever corporation you wish to deal. It is for this reason we urge members to vote in favour of the motion before us. We believe the government should be roundly condemned for its actions on this matter to date.
There are many other areas upon which I should like to touch, Mr. Speaker. For example, I wish to deal with this question of fiscal and monetary policy in international dealings. We now have Bill C-5, which is the currency and exchange act, unfortunately bogged down for no apparent reason in the Standing Committee on Finance, Trade and Economic Affairs. There is absolutely nothing on the agenda of that committee at the present time except that bill, yet when we have asked that the bill be brought forward and the minister appear before the committee we have been told that that is not his will, that he would prefer to have the bill wait
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until the Bretton Woods bill comes down the pike. That is not good enough. We have questions to ask concerning dealings in Canada which this minister should be answering in a-


The Acting Speaker (Mr. Ethier):: Order, please. The allotted time of the hon. member has expired; however, he may continue with unanimous consent.


Robert Phillip Kaplan: Mr. Speaker, I rise on a point of order. I certainly would not want to withhold consent to allow the hon. member to continue, but I should like to point out that I am one of a number of members who has prepared a speech to deliver today, and it seems that every speaker so far has taken nearly double his allotted time.


Stanley Howard Knowles: No, that is not true-not double.


Robert Phillip Kaplan: That was my impression, Mr. Speaker, but, having made that observation, 1 certainly would not withhold consent from the hon. member.


The Acting Speaker (Mr. Ethier):: I gather there is not unanimous consent?


Some hon. Members:: Agreed.


Norman Augustine Cafik: Mr. Speaker, I am in the hands of the House. This is the second time I have been recognized, and it seems that at least on one of these occasions I ought to be allowed to speak. If the hon. member for York-Simcoe (Mr. Stevens) would like to take two or three minutes I would be agreeable. The fact of the matter is that we are entitled to 20 minutes. It is now 23 minutes to six so I will split the time, giving him a minute and a half and I will take a minute and a half.


The Acting Speaker (Mr. Ethier):: Is it agreed that the hon. member for York-Simcoe (Mr. Stevens) be allowed to continue his speech?


Some hon. Members:: Agreed.


Sinclair McKnight Stevens: Thank you, Mr. Speaker. I wish to thank hon. members, and particularly the hon. member for Ontario (Mr. Cafik) for his patience. Let me summarize very quickly. We believe the motion before us makes four very significant-


Mr. Roy (Timmins):: Mr. Speaker, I rise on a point of order. There was not unanimous consent. I said no.


An hon. Member:: Nobody could hear you.


Steve Eugene Paproski: Why don't you speak up?


The Acting Speaker (Mr. Ethier):: I had asked whether there was unanimous consent and I thought I heard a no. I will ask again. Is there unanimous consent?


Jean Robert Roy: No.

December 9, 1976
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Norman Augustine Cafik: Mr. Speaker, 1 cannot remember an occasion in this House when I have been recognized so often, and I appreciate it very much.


An hon. Member:: You are a four-time loser.


Norman Augustine Cafik: I am very pleased to have the opportunity of making a few brief comments today on the motion now before us. There is no question but that it is an important motion. It does in fact go to the heart of a question that is of a great deal of concern not only to members of parliament but to the public generally.
If I may, I should like just for a moment to indicate that as a Liberal member of parliament I think I have demonstrated over the years since 1968 that I have had a long-standing and genuine interest in public expenditures. In my experience on the Public Accounts Committee from 1968 to 1972 I spent a great deal of time in a very independent way, like many members did at that time, dealing with a lot of questions, not the least of which was the Bonaventure inquiry, in respect of which I played a very significant role. I think hon. members will acknowledge that.
The fact of the matter is that I am not one who is going to bring forward excuses for the government, allowing it to continue in a way that would not adequately protect the public purse. There is no question in my mind that we, as the government and as parliamentarians, have to turn our eyes inward occasionally, and begin to to look very carefully at levels of public expenditure, and the way in which those expenditures are controlled.
First of all in respect of levels of expenditures, in this area there is certainly a great deal of parliamentary control. Members may have complaints as to the amount of opportunity they have to debate the estimates and so on, but there is no question that all of us do have these opportunities and that parliament itself does control these global expenditures.
In respect of such global expenditures, aside from the fact that they are controlled in global ways, there are legitimate concerns in connection with the detailed application of budgets and estimates when it gets down to the individual department or Crown corporation. In the global context, the government has announced varying policies on a number of occasions intended to make significant cuts in the growth of public expenditure in Canada. Budgets have been curtailed and policies have been changed. I think this is all for the good. We all support such measures.
Let me make a suggestion which I think might assist us in terms of actually controlling the level of expenditure in a budgetary way. It is my belief that the government ought to conduct a very serious and high level profile cost-benefit analysis of all government programs, departments, and agencies so that we can assure ourselves that every dollar we spend is in fact returning the best possible result.
It goes without saying that parliaments spend a great deal of time bringing forward new laws and far too little time looking at them after they have been brought forward. I believe it is in
[Mr. Roy (Timmins).J
the public interest that we sit down and correctly analyze all the programs of the government to ensure they are performing the purposes for which they were originally intended, and that the need for these programs still remains, or whether we in fact believe that in a priority way the money could be better spent in another direction, in which case these programs should be reduced or scrapped altogether. If that kind of approach were taken in conjunction with the top executives, businessmen and other specialists in the country brought in to assist us in such an analysis, I think we would restore a great deal of confidence in the budgetary process of the Government of Canada. In addition to this, I think we have to do more.
We must address ourselves to many of the legitimate points brought to our attention by the Auditor General. The motion before us reads in part:
... deplores the fact that key recommendations of the Auditor General will not be implemented in the foreseeable future . . .
Surely that is one of the essential elements that we are talking about today. Yet, listening to speeches prior to that time, particularly from the other side, I heard very little reference to the key proposals of the Auditor General. What are the key proposals?


Sinclair McKnight Stevens: You cut me off.


Norman Augustine Cafik: I did not cut you off. I rather suspect, from my long standing experience with the hon. member in the House, that he would never have arrived at anything key in any event.


Some hon. Members:: Oh, oh!


Norman Augustine Cafik: What are the key proposals? They are not the Atomic Energy Commission and they are not the horror stories. They are simple, and for those hon. members who would care to read the report that they are talking so much about, let me say that they will find that the key proposals, in the words of the Auditor General himself, are simple and have a twofold aspect. One is to establish a chief financial officer in the Government of Canada whom he calls, for want of another name perhaps, the comptroller general of Canada. The first key proposal is the establishment of that position, and the second key proposal is the filling of the position, that is, to provide someone with in-depth experience and with the expertise to be able to perform that very central and important function in the government if that policy were to be enunciated and followed.
I have not heard much about that, but we do know one thing, that the President of the Treasury Board (Mr. Andras) took action many months ago to establish within the Treasury Board a financial administration branch.


Sinclair McKnight Stevens: How many people are to be in the branch?


Norman Augustine Cafik: If I recall correctly, it is 16, but I am not sure. It is no more than 30 and certainly no less than 16.


Sinclair McKnight Stevens: Pretty insignificant.
December 9, 1976


Norman Augustine Cafik: In any event, the numbers are inadequate. But that was one step before the report came out. Now that the report has come out, there has been a concentration on a certain element of disagreement, an intellectual disagreement, as to what a comptroller general would do. I do not think there is any disagreement in real substance. 1 understand from the remarks made by the President of the Treasury Board that in fact a chief financial officer will be put in place, that the position will be filled, so I wonder then why we have a motion in front of us condemning the government for failing to fulfil the key recommendations in the foreseeable future. 1 think the key recommendations in the Auditor General's report will clearly be met. I think that should be recognized in all fairness by all members of the House.
Let us get down-now that that has been laid to rest, I hope successfully for the moment-to some other detailed observations that hon. members have made on the Auditor General's report.
Much has been said about bottom line accounting, about the need to control government expenditures in an accounting way, as you would control General Motors. There is no question that the government has no excuse for not doing precisely that in specific terms. However, 1 would draw to the attention of hon. members that we do not operate, nor can any government operate, simply and exclusively on bottom line accounting. It is not always a question of saving money. We can save a lot of money. All we have to do is to cut out all the cost-sharing programs, and you have cut the budget by a phenomenal amount. Saving money is not really the question. The question is not to waste it, and not to spend it in areas where the public is not best served by having it spent in those areas. That requires a value judgment; it requires us to sit down and carefully sift the priorities of the people of this country and decide what programs will be scrapped and which ones will be retained.
I would like to draw to your attention, and use an illustration in respect of this, that it is not always simply a question of accounting. I will give you an example. Some of us have addressed ourselves to the question of space allocations to car rental agencies in airports across Canada. The government established a certain tendering process which brought forward certain winners and certain losers. The government had an option not to accept winning tenders on the basis that it felt that if it rejected a winner and accepted a loser, it would maximize government revenue. That sounds perfectly consistent with what everyone is talking about here today. But is it really consistent with good government policy? I say not, because the maximization of revenue is not everything. It is not the be all and end all of everything.
The fact of the matter is that the policy, as I view it, was designed to give a certain kind of guaranteed location to Canadian operators against international and multinational competition. That is good. If that were not part of the policy, then clearly we would have just allowed bids to come in and would take the top ones, which would maximize revenue to the extreme, but probably we would not have any Canadians doing
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business in Canadian airports. 1 do not think that is desirable, and I doubt if anybody thinks it is. Surely that point illustrates that it is not always exclusively a question of dollars and cents. If that had been done, we may well have ended up with another observation by the Auditor General.
The second point in respect of the horror stories which people have addressed themselves to is the question relating to the Atomic Energy Commission and all the veiled suggestions of bribery, corruption, and so on. I do not think there has been one member who spoke on the subject so far today who is a member of the Public Accounts Committee which addressed itself to the question. I rather doubt if any responsible member of parliament who sits on that committee would be making those kinds of statements and, if they did, they would be the first ones to realize those statements were not founded in fact. If they are in the future, fine, I am all for pulling that kind of information out and getting down to the root of it, but there is nothing at present that suggests that. The Auditor General does not suggest it, nor has anyone responsible suggested it. It happens, perhaps, to suit the political purpose of some people who are not nervous about being irresponsible.


Sinclair McKnight Stevens: You must be smiling when you say that.


Norman Augustine Cafik: Let us have a look at the question. The simple facts relating to the Atomic Energy Commission problem and the sale of a reactor to Korea are very simply put. That Crown agency entered into an agreement with an agent to sell a reactor in Korea. The agent sold the reactor. The commission was expressed in absolute dollar figures-$20 million, made up of two elements: $17 million, which they were to get for the sale, $3 million which they were to get in six equal payments of $500,000 each over six years. That is all very clear. If in fact that agreement had been honoured as it was entered into by the Crown corporation, Atomic Energy, and the agent, the Auditor General himself indicated that in all likelihood they would not even have been mentioned in his report.


Sinclair McKnight Stevens: Why did you need the agent?


Norman Augustine Cafik: The hon. member should address the Chair. I did not interrupt him, although I had many opportunities to do so.
The fact is that the matter would not have raised any difficulty at all had it been followed through in its original contractual form. What gave rise then to the difficulty? I suppose it was an enthusiasm, perhaps inaccurately expressed, but at least a desire on the part of Atomic Energy to pay less that the $20 million it was committed to pay, and it then went to its new chairman of the board, Mr. Campbell, and renegotiated rather successfully a deal which had already been consummated, a contract which had already been fulfilled.
I am amazed at AECL's ability to pay an agent $18.5 million instead of $20 million in the aggregate.


Sinclair McKnight Stevens: Why did they need the agent?

December 9, 1976
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Norman Augustine Cafik: That sounds to me not a bad bit of negotiating. The corporation saved SI.5 million, but it got into trouble because it happened to do it in such a way that the bookkeeping was not to the satisfaction of the Auditor General. The way that saving happened to be recorded was not satisfactory to the Auditor General.
I agree that the Auditor General had an obligation to bring it forward. 1 agree that under the terms of the renegotiated contract AECL had an obligation to see that it was properly recorded. I agree that if it is not properly recorded, AECL should be criticized, but the bottom line of the whole cotton picking thing is that AECL saved S1.5 million, and that should not be forgotten.


Sinclair McKnight Stevens: Why did they need the agent?


Ramon John Hnatyshyn: Do you think that is a good policy for the corporation?


Norman Augustine Cafik: Just a minute. If hon. members opposite would like me to appear as a witness before the committee, I would be delighted to appear and answer their questions.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: However, at the moment I am not a witness; I am a member of parliament trying to express my views, and I intend to do so.


Sinclair McKnight Stevens: Why did they need the agent?


Mr. Guay (St. Boniface):: You might learn something if you listen.


Steve Eugene Paproski: You would rather be an agent.


Norman Augustine Cafik: Hon. members ask, "why an agent?" That question was not brought before the Public Accounts Committee, although it may be a legitimate question. In fact I think it is a legitimate question, although in the Public Accounts Committee it would be an irrelevant question. However, that would not prevent hon. members opposite from pursuing it in any event.
It seems to me that to answer the question as to why there was an agent, one would have to have a great wealth of background information as to how such international contracts are made, how it is traditionally done, and if it is possible for a Crown corporation to do it directly without an agency arrangement. Some would say it is possible, but there is no doubt that it would require the setting up of a whole new department of a corporation to deal with it. Then of course we could end up with the charge that it cost perhaps $25 million because it was done in-house rather than through an agency. I am not one who looks into a crystal ball and who would know what the net benefits or disadvantages would be to do it alone. I only know that General Motors does not generally peddle its cars through its own dealerships. It does its business in a different way.
I was once in business. I employed salesmen from time to time, not only across Canada but also in other countries, and I

must say that my auditor never once asked me what the expenses of my commissioned salesmen were because we could not care less. We just paid them their commissions, and that was it. That is a very simple concept even for hon. members opposite to understand, and I am sure that in the business experience of those who have any-and it may be limited- surely they themselves have worked under that kind of arrangement.


Sinclair McKnight Stevens: Were you selling CANDU's?


Norman Augustine Cafik: An agency arrangement is nothing more than a commissioned salesman.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to inform the hon. gentleman that his allotted time has expired. However, he may continue if he has unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Norman Augustine Cafik: Hon. members opposite are very charitable to me. I wish they would express the same feelings toward one of our Crown corporations which negotiated a pretty good deal on behalf of the people of Canada.
I must admit that I have not covered all the points I had intended to cover, but I will conclude by saying that the Auditor General, Mr. Macdonell, is a man of superb qualifications, tremendous integrity, and honesty. It took a lot of courage on his part to submit the report which was tabled in the House. He was very tough with the government. The President of the Treasury Board has responded in a magnificent way, and with the probing and vigilance of members of parliament to ensure that we get a better handle on public expenditures, and with the pressure exerted by the press and the people of this country, I have no doubt at all that we will serve the people of this country well by making the needed adjustments and changes in our method of controlling expenditures. I hope and pray that we can do so in a way which will not damage any of the Crown corporations of this country, which I believe are important to our economic and social development. I hope we will all bear that in mind as we pursue our legitimate endeavours.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: Mr. Speaker, I am so shocked at the glowing acclaim given by the hon. member to Atomic Energy of Canada Limited that I think I will need at least an hour to recover. I wonder if we could call it six o'clock now.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.
December 9, 1976



COMMONS DEBATES AFTER RECESS

[Stage Direction]
The House resumed at 8 p.m.
["Order, please. It being after ten o'clock this House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order 2(1)."]
Gerald William Baldwin: Mr. Speaker, supported by the substantial segment of the Conservative party present in this Chamber, I intend to make a few truths known to government supporters.
Just before the House adjourned at six o'clock 1 was in deep shock. I had listened to the hon. member for Ontario (Mr. Cafik), a man for whom I have respect, and consider intelligent, say before he concluded his remarks that the actions of Atomic Energy of Canada Limited had been beyond challenge, and that what they had done ought to meet with the "Good Housekeeping" seal of government approval. He suggested that they deserve commendation from the public of Canada for what they had done. I was amazed.
Half way through his speech he asked why we, the opposition, had brought forward the present motion. Mr. Speaker, if the hon. member had followed me around the country these past ten days he would know why. I have been in many parts of Canada, in four or five cities and various areas, have travelled by aircraft, train and automobile, and talked to a great many people. Let me tell my hon. friends opposite, sitting smug in their complacency and proud of what they have done, that the people of this country are aroused about the issue, are aroused about the extent to which the government has permitted, condoned, I suspect even encouraged Crown corporations and probably others to engage in a series of practices which have put us in a difficult position. Government members can say that it was not of their doing. To that I say. "He who lies down with a dog gets up with fleas."


Joseph-Phillippe Guay: Obviously that applies to many members of the opposition.


Gerald William Baldwin: The people are outraged about what has happened. It may well be that such conduct is prevalent among private corporations and individuals. 1 make no comment on that. 1 used to make a living defending people charged with criminal offences. If they were caught and found guilty, they were punished; that was the law. But, Mr. Speaker, we are speaking of Crown corporations under the control and domination of the government. The government is answerable for them through a minister to this House, and through this House to the people of Canada. Mr. Speaker, how can members on the government side, particularly ministers of the Crown, stand up in this House and say, "Yes, what was done was perfectly all right. We condoned it. When you go into another country, you adopt their morals and do the things they do." I challenge that as a theory of government. It is not acceptable to this House, nor to the people of this land.


Mr. O'Connell:: Mr. Speaker, will the hon. member accept a question?
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Gerald William Baldwin: Yes, Mr. Speaker, but only so long as the time is taken into account; only so long as the time the hon. member takes is not taken off my time.


The Acting Speaker (Mr. Turner):: I will keep track of the time. This is supposed to be a debating House and I am interested in what the hon. member has to say.


Martin Patrick O'Connell: Mr. Speaker, I thought I heard the hon. member for Peace River (Mr. Baldwin) say that the government controlled Crown corporations. I would ask him whether he is suggesting that the government does control or should in fact recapture control of Crown corporations.


Gerald William Baldwin: Mr. Speaker, that is not the issue; when it arises, I will deal with it.


Joseph-Phillippe Guay: The hon. member is speaking out of both sides of his mouth.


Gerald William Baldwin: One of the facts of life is that the government, with the acquiescence of the majority of its members, can control Crown corporations through this House, whenever it wants to do so. It can do that at any time.


Miss Campbell:: What about through the committees?


Gerald William Baldwin: The hon. member is being facetious about committees. Our committee system, by virtue of the way the government runs it, has become nothing but a farce. The government, through the incestuous relationship between heads of committees-


An hon. Member:: Rubbish!


Gerald William Baldwin: The hon. member can make his own speech later, if he so wishes. As I was saying, there is politically and intellectually an incestuous relationship between the heads of these committees and agencies. We have witnessed a steady procession of such people. They have been appointed as the heads of agencies, then entered the government service, then private industry, and back again. There is no doubt in my mind that, at least indirectly, the government controls many of these corporations, knows what they are doing, and condones their actions. If the hon. member does not believe that, he is not as smart as I think he is.


Martin Patrick O'Connell: Are you saying that we are breaking the law of this country?


The Acting Speaker (Mr. Turner):: Order, please. I suggest to hon. members that we are debating a specific motion, and I suggest that hon. members adhere to the terms of the motion.


Joseph-Phillippe Guay: Hon. members opposite are repeating the same old things.


Mr. Boulanger:: Mr. Speaker, will the hon. member permit a question? I ask what his great party did with regard to those corporations between 1958 and 1962? What kind of job did

December 9, 1976
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the hon. member's party do during that time with regard to this question?


Joseph-Phillippe Guay: The hon. member does not have to answer that question. Everybody knows the answer.


Gerald William Baldwin: Mr. Speaker, if the hon. member's only defence is to resort to conditions which existed 15 or 20 years ago, that is pitiful.


Steve Eugene Paproski: Shameful.


Gerald William Baldwin: Mr. Speaker, most of these Crown corporations were established by the government. The relationship between the heads of the Crown corporations and the government is well known, indeed notorious. There is no question about it. I suggest that not a thing passes within the head offices of these Crown corporations of which the government is unaware. Probably it encourages them to engage in these activities. I say to the government, it is your responsibility.


Prosper Boulanger: But I asked a question.


Gerald William Baldwin: Well, they are your children. There should have been an abortion a long time ago, before they became your children.
Having disposed of these silly interruptions, I shall continue with the debate. The hon. member for Ontario asked why we have brought forward the present motion. I say, ask the people of Canada what they think about this situation; what is on their minds as a result of what they have read, seen, and witnessed concerning the conduct of these Crown corporations. These corporations are the responsibility of the government. I say that the government was aware of what was happening. The Prime Minister (Mr. Trudeau) received a letter three and a half years ago in one case. 1 shall return to it later. So, do not pretend that the government was not aware of what was going on. It is a sickening situation, for public morality is the issue which may ultimately destroy the system under which we live. If we do not govern our conduct with a reasonable and sensible measure of morality, our system will no more survive than the lines children draw in the sand will survive when the tide comes in. Let hon. members opposite remember that when they support their government. In the view of the Prime Minister and ministers, what was done by AECL, Polymer and other Crown corporations was fine and good and, as the hon. member for Ontario suggested, deserved support. If that is the view of hon. members opposite, then it is high time this country was rid of this government. Let us return to decent morality.
Let me in a couple of sentences trace the ancestry of this particular motion now before the House. Year after year my party and the NDP to my left, as well as the Creditistes, either brought forward or supported similar motions. They were motions demanding that the government deal strongly and firmly with the question of parliamentary control of the expenditures of this government, and control the spending without restraint of taxpayers' money taken by the government. This has been going on year after year. I have here a list of the
[Mr. Boulanger.)
various motions, some of which I will deal with. Some of my colleagues will deal with others. In 1970 there was a motion in the name of the then leader of the opposition, the hon. member for Halifax, (Mr. Stanfield), almost in the same terms as this. In 1972 there was a motion in my name:
That this House, noting the continuing erosion of Parliament's control over government spending of public moneys . . . reaffirms the fundamental principle of the Canadian constitution
There was another motion in 1973, and one in 1974. We took this action and got no results. We took the only method within our capacity. No action was taken. The government did not pay any attention to the issues we brought before it. We documented the issues, chapter and verse. We called to its attention the problems that compelled us as responsible members of this House to deal with these issues. The government did not do anything.
We brought this action, reinforced in our right to do so by actions of the government in condoning and approving what has now been disclosed to the public as being the unconscionable action of these Crown corporations. It is all very well for my friends opposite to say fine, we have to sell the CAN DU reactors and therefore it is quite proper to be involved in irregularities, bribery, and corruption to do that. Some of us do not believe reactors should have been sold in the first place, and some of us do not believe they should have been sold to the countries they were. But let us forget that. This kind of mechanism was sold to these countries, and sold with the aid of inducements, bribery, and corruption. This has been reinforced by evidence given by the Auditor General before the Public Accounts Committee. It is time that this House and this country took notice.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: The present Auditor General said in his report that the government has lost control over spending. That is quite obvious. The previous auditor general said, year after year, in his annual reports that parliament had lost control. He said that in 1967, 1968, 1969 and 1970. In his last report before leaving his job because of age, at page 11 of the 1972 Auditor General's report, the previous Auditor General said, and I quote:
What I do question and deem it my duty to draw to the attention of the House are the increasing tendencies displayed by the Treasury Board and its staff to devote their energies and resources towards circumventing parliamentary control rather than towards improving the efficiency of departmental and agency operations by remedying situations which for years have demanded attention.
That statement by the previous Auditor General is as true today as it was then. Nothing that the President of the Treasury Board (Mr. Andras) said today gives me any feeling of relief that the situation will be changed.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: It so happens that there was a motion in 1973 on this issue. The hon. member responsible for the government was the hon. member for Westmount (Mr. Drury), then the
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President of the Treasury Board. As reported at page 4016 of Hansard, first session, volume 4, 1973, the hon. member made this comment:
I said that the new form
That is the new form of looking after, caring for and examining the public accounts.
-would include much more information about Crown corporations than had been included in the past.
That was a few weeks after the then President of the Treasury Board received from the Prime Minister a letter pointing out that Polymer Corporation was engaged in tactics which, in the words of the Prime Minister, were likely to prove very embarrassing. That is a clear hint they were known to the Prime Minister to be improper. He made that statement in his letter to the then President of the Treasury Board.
The President of the Treasury Board then got on the telephone and called Mr. Hampson, one of the great friends of the party, and said, "Look, Mr. Hampson, things are not going right. I have a letter from the Prime Minister. Can you tell me what is going on?". Mr. Hampson said that these practices were being carried on by private corporations, and why should we not do the same? In their desire to carry on selling, without regard to propriety, morals, or the feelings of the people of Canada, they forgot all about it.
Three of four weeks later the then President of the Treasury Board stood in this House and said; "We are taking steps to tighten up the financial procedures of Crown corporations." He did not do a damm thing from then until now, three and one half years later. That is a clear indication of the low degree of fiscal morality which has pervaded this government and, unfortunately, members opposite who support them.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: My time is nearly up, Mr. Speaker. It is a difficult situation, a problem we have to contend with. We have to develop a state of openness in our society. We have to persuade the public, the taxpayers, the consumers, and the voters of Canada, that it is possible to have decency and honesty in government and in the carrying out of the duties of this parliament.
There are many things that can be done. 1 suggest, within the terms of the motion that we are considering, a declaration by this government which will be supported unanimously from all parts of the House, that it will introduce a measure providing for openness and freedom of information so that the actions that are committed and the wrongs that are done will be made known. That would do a great deal to persuade the public that there is developing a much better degree of morality. It will not be the milfenium. 1 do not suggest that. However, after a great many years involved in the practice of law, sitting in this House, and in other political public endeavours, 1 believe that if people know that what they write and what they do will in due course be made public, it will have a very refreshing and wholesome effect on what they do.
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The kinds of things we have been dealing with in this House and the kinds of things the Auditor General mentioned in his reports will not vanish. From what I know of human nature, that is too much to hope. However, they will diminish to at least an acceptable state in this country. We will again be able to be proud. Canadians will be able to go abroad knowing that they have an open, decent society in Canada, a situation which does not exist in government circles today.


Some hon. Members:: Hear, hear!


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, as 1 read the confused motion which is before us tonight, I see that it combines many items. It talks about the House being deprived of its genuine role in the discussion of estimates, secrecy in studies, and deplores the fact that recommendations-


Joseph-Phillippe Guay: It is an opposition motion.


Cyril Lloyd Francis: Yes, and I am pointing out that it is a confused motion. I am trying to analyze its import. It condemns the government for inept handling of public finances.
The hon. member for Oshawa-Whitby (Mr. Broadbent) moved an amendment bringing in Atomic Energy of Canada Limited. If there is a common element in the various items brought here, it is an attack on the government's management of government business.


John Edward Broadbent: Very good.


Cyril Lloyd Francis: Mr. Speaker, I propose to deal with some fundamental things in a way I had expected members on the opposite side to deal with them. They talked about estimates. We heard the old story about the golden age of this House when we had estimates brought before it and you could do things. 1 sat in this House. I saw the estimates and not one line was changed. One side lined up against the other side in an interminable debate. There were many Speaker's rulings. It was a disgrace. There was no golden age existing at some time in the past.


Mr. Baker (Grenville-Carleton):: It is just as disgraceful now.


Cyril Lloyd Francis: If hon. members will bear with me I think they will find that what 1 have to say is interesting. If they wish to study the operations of the Government of Canada they have to go back, as the Auditor General has done, to the Glassco recommendations and the way in which they were implemented.
The Auditor General was very methodical and systematic. 1 want to pay my tribute to him and commend him as a man of great integrity and great ability, a man with infinite patience and a sense of humour. 1 am confident that his recommendations will be implemented. The difference between the President of the Treasury Board (Mr. Andras) and that senior official is simply one promotion for one man in the Treasury Board, and the reommendation of the Auditor General for a

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Comptroller General, or whatever it is, will be implemented. I am confident that this key recommendation will be accepted by the government because it is a very logical thing to do.
On the financial side, those of us who sat on the committee and listened to the testimony agree that one of the major responsibilities of the Royal commission which has been named is to look into the whole operation of Crown corporations. We recognize, following the revelations in the Auditor General's report, that there are weaknesses. Every member of the House does. One of the great things about serving on the Public Accounts Committee is that it has a tradition of being non-partisan in these matters. The members concerned have looked sincerely at the recommendations of the Auditor General, and members on this side of the House have been among the most active in criticizing the waste and maladministration which the Auditor General has disclosed.
I propose to develop some other items tonight, Mr. Speaker. Whoever wants to study the Glassco recommendations could profit a great deal. The recommendations made sense, but the way they were implemented did not make sense. Financial controls were virtually abolished when the office of the Comptroller of the Treasury was abolished in 1969. But something else happened at the same time which was equally important and which we must bear in mind when assessing the effectiveness of the government's operations. I am referring to what was done on the delegated authority side and with regard to hiring.
At that time the philosophy was: Let the deputy ministers manage; give them the authority; free them from all these bureaucratic restraints which are hampering their efficiency. Mr. Speaker, I think it is time we took a hard look at what happened when they got free of those restraints. The Auditor General has given us the story on the expenditure side, chapter and verse-there were no financial control officers, there were no financial control manuals in the departments; no one was concerned with the process of training and recruiting and developing competent personnel. All this has been outlined.
Hon. members talk about secrecy of information. I have listened to the hon. member for Peace River (Mr. Baldwin) many times and I have a great deal of sympathy for his point of view. But if he were to read a lot of the information which is already available to him it is surprising what he would find.


An hon. Member:: You bet!


Cyril Lloyd Francis: For example, 1 have here an extract from the Annual Report of the Public Service Commission of Canada for 1974. I am reading from pages 16 and 17.
Delegation of staffing authority to departments has meant that the PSC has had to develop methods to scrutinize departmental staffing and insure that the merit principle is upheld. Auditing is carried out at headquarters and in all regional offices.
Let us review what happened when an audit took place. The report states:
Auditors review departmental appointments on a random sample and on a selected and problem-oriented basis. In the first ten months of 1974, they audited 7,082 departmental appointments out of 74,980 made. These audits
(Mr. Francis.]
revealed 1,946 departmental infractions of the Public Service Employment Act and regulations. The audits also showed that departments made 2,754 errors in carrying out directives or administrative requirements of the PSC.
Then the PSC attempted to develop a system of evaluating the quality of staff. Another audit indicated that in the first ten months 25.2 per cent of appointments audited contained infractions. Twenty departments had an infraction rate higher than this national average, and 24 departments had a lower rate.
It does not take much imagination to prompt the question: what has happened in this field of delegated authority, the scope of delegated authority when it comes to departmental appointments? Members of this House do their work as they attend committees and avail themselves of the opportunity to ask questions. The Public Service Commission is a fascinating organization to examine at this point. 1 welcome every opportunity I have to ask the chairman questions, and the last opportunity I had was on Thursday, December 2, 1976, when he appeared before the Miscellaneous Estimates Committee. Actually I was just getting at the heart of it when my ten minutes were up. Here is an extract from the record of the committee proceedings.
1 asked Mr. Gallant, the Chairman of the Public Service Commission, this question:
When a vacancy exists in the Public Service, is there any statutory requirement that the vacancy be reported to the Public Service Commission?
To which the chairman replied:
There is no requirement that the vacancy itself be reported to the Commission. There can be no appointment, however, to the position unless it is under delegated authority, without the Commission being directly involved.
If the Public Service Commission does not know where these vacancies are, I do not understand how it can do its job and carry out its responsibility for staffing and making sure the merit principle is upheld. 1 put this question to Public Service Commission personnel and they said "Each spring we send out recruiting officers to interview bright, young graduates, and draw attention to the promising careers available to them in the public service." But, Mr. Speaker, those staffing officers do not know where the vacancies are, either at present or projected. All they could do was give general encouragement.
If hon. members are really interested in the operations of the Government in Canada and not in just repeating all the things we have heard about the government hiding documents, about the government being inept, repeating all those slogans adapted from the Auditor General's report, they would be more interested in the area 1 have just mentioned. As to the other aspect, corrective action is under way. But no corrective action is under way to deal with the problems which are arising under delegated authority in the Public Service.
In the period ahead we shall be dealing with amendments to the Public Service Staff Relations Act. Again a joint committee of this House and the other place laboured for over a year and brought in a report earlier this year. The government has indicated that legislation based on its recommendations will be laid before the House. At the same time there will have to be
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consequential amendments made to the Public Service Employment Act, because one statute affects the other.
What I am asking is that the government give serious consideration to reviewing what has happened under the system of delegated authority, that other arm of the Glassco report. One arm was concerned with financial control, and the other with delegated authority and the freedom to hire given to deputy ministers. I believe this has been a thorn in the side of many people who have tried hard, with a sense of professional integrity, to develop careers in the public service-the uneven way in which delegated authority has been applied and the lack of adequate auditing of the results of delegated authority and, I suggest, in some instances, bureaucratic patronage and nepotism. These matters will have to be corrected.
I know that in this city of Ottawa, for example, there are a number of instances where as many as ten members of a single family work for the Post Office Department. When you find a rude clerk at a wicket, you will often find that that clerk is very confident of his position because he has a brother-in-law or somebody else in the personnel department to protect him.
The situation calls for a review of hiring practices. The situation calls for a review of delegated authority. The situation calls for a meeting with the Public Service Commission to learn what measures the Chairman of the Public Service Commission would like to see enacted in order that he can do his job. I believe that in these circumstances the Chairman of the Public Service Commission is saying in the most polite way within the rules that he is hamstrung when he cannot know where vacancies are, when delegated authority has gone too far, when he has breaches of regulations on a scale admitted by the annual report of the Public Service Commission. The government must review the operation and undertake the kind of corrective measures that are now being implemented on the financial side.
I share, Mr. Speaker, with other members of the House concern about the "horror stories" in the annual report of the Auditor General. But we are missing the point if we pick out one example or another example and hold up our hands in horror. We must make an analysis of the causes of this mismanagement.


Some hon. Members:: Hear, hear!


Cyril Lloyd Francis: Hon. members opposite cheer and I am glad to hear it, but they did not contribute much in this debate by way of an analysis of the causes.


Ramon John Hnatyshyn: It was we who brought the debate on.


Cyril Lloyd Francis: 1 listened carefully to the debate and all we heard from members of the opposition were the old cliches about secrecy, all the shopworn talk about the government not allowing members to do their job, that the committees are not allowed to function, and all the rest of it. The job that has to be done, Mr. Speaker, is in the committees. The next time the Chairman of the Public Service Commission appears before
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the Miscellaneous Estimates Committee 1 will resume the questioning which was interrupted on December 2. I hope it will be possible, Mr. Speaker, when the government lays its legislation before the House this fall, to bring about a broader review not only of the Public Service Staff Relations Act but other associated legislation.
One last observation, Mr. Speaker. The President of the Treasury Board is out of the House at the moment, but the Auditor General said something with which 1 agree wholeheartedly. Treasury Board has become a large operation. It is not just a comptroller of the purse strings. It is now an employer and is involved in collective bargaining. It runs a major language training program. It has become a big spender itself. The department of government which is entrusted with the responsibility for overseeing the spending habits of others is also a big spender. I submit, Mr. Speaker, that this fact does something to impair its credibility. What should be done is clear.
Certain Treasury Board functions are not compatible with other Treasury Board functions. There should be a reorganization. A number of us on this side, as well as on the other side of the House, have argued that a ministry of the public service would make some sense. You could take, for example, responsibility for administration of the superannuation act, now under fire from many quarters, in my opinion unjustly, you could take the administration of the language program and the whole question of the authority of the Public Service Commission to hire staff, and bring them all within a department which would have over-all responsibility for personnel, administration, and management within the Public Service of Canada.
If hon. members opposite are really interested in the record of administration of the government, they must look at the way the Glassco report was implemented. They are not going to restrict their vision in tunnelvision fashion to certain limited financial recommendations; they are going to look at the whole philosophy of what happens when you try to let deputy ministers govern. You see how they governed, how they managed, and how they can be held accountable.


Walter David Baker: Mr. Speaker, will the hon. member accept a question?


The Acting Speaker (Mr. Turner):: Would the hon. member for Ottawa West (Mr. Francis) accept a question from the hon. member for Grenville-Carleton (Mr. Baker)?


Cyril Lloyd Francis: Yes.


Walter David Baker: Mr. Speaker, I listened with great care, as the hon. member knows, to the remarks which he made and I appreciate some of them, but I wonder whether the hon. gentleman can tell the House whether he intends to support the motion of the official opposition tonight?


Cyril Lloyd Francis: No, Mr. Speaker, I am not going to vote for the official opposition motion tonight, and I thought I had
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indicated why. It is a confused motion. It is a motion that does not go to the heart of the problem; it deals only with superficialities. The amendment that has been tacked on to it deals with matters which I believe have been answered very substantially by the President of the Treasury Board.


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, speaking of confusion, if there is any confusion in this debate it emanates from the other side of the House, particularly from the hon. member who has just resumed his seat. He tried to speak out of both sides of his mouth on this particular issue. He commended the Auditor General for bringing to light the very serious issues associated with financial management and control in the Government of Canada, the various horror stories and so on, and then he chastised the opposition for bringing the subject forward for debate. I find that rather inconsistent.
This afternoon the President of the Treasury Board (Mr. Andras) went to great lengths to describe the government's support for the Auditor General. He outlined to the House the increase in authorized man-years in support of the Auditor General. Quite frankly, we find no argument with that, but really it is not the substance of the motion. We have not chastised the government for failing to provide sufficient resources to the office of the Auditor General, both financial and in terms of manpower. We are in fact chastising the government for failing to act upon the recommendations of the Auditor General.
It is one thing to expose, Mr. Speaker, and in this regard we have really had no problem at all with this Auditor General or his predecessor. Both have consistently exposed the inadequacies, the extravagance and the waste emanating from this administration. What we are after, Mr. Speaker, is a correction of the situation, particularly at the source. That is the real issue, to establish mechanisms and ways and means of preventing these sorts of horrors from occurring.
This afternoon the minister tried to leave the impression that no money was lost, no fraud of parliament had been committed and that government was in control. He pointed out that so far as the matter of collection was concerned all we have to do is to ask the taxpayer whether or not the government has an effective collecting agency. Quite frankly, Mr. Speaker, it is the disbursement side of the coin with which we are really concerned. It is the control of public funds once they get into the hands of the government with which we are concerned. We must ensure that these funds are properly accounted for and properly controlled. It is that which is the issue.
The President of the Treasury Board also stated that in his view parliament does have control and the government is held accountable. Here again we see a major conflict between the President of the Treasury Board and the Auditor General. Certainly the Auditor General does not see it in that light. As a matter of fact, this is really the highlight of his latest report.
Despite all the flak that we have received from the other side of the House, it is with a considerable degree of regret that I find the House compelled once more to initiate a debate

on an issue that is so substantive, indeed so fundamental, as that which is contained in the motion which was presented by the Leader of the Official Opposition (Mr. Clark). I say it is with regret, because what could be more tragic than the developing mood across this country where Canadians are becoming increasingly disenchanted and disillusioned with government and with parliament, indeed with our very system of parliamentary democracy? Even worse, Mr. Speaker, anybody who thinks that the mess in our financial administration does not add to the problems of national unity, that it does not add to the cynicism, mistrust and suspicion of federal authority, is gravely mistaken.
I believe that all of us-each and every one who is associated with this House of Commons and associated with the governing of this country-no matter what political affiliations we may have, have a very major and solemn obligation to discharge. That obligation, quite frankly, involves the restoration of confidence in our system, and restoration of the people's belief that their taxes are being wisely and prudently administered. Surely that is the very core and foundation upon which responsible government can continue to exist.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: I believe it is fundamental that the taxpayers' dollars, the money given to the government by the people, must be treated by the government as funds held in trust. I am sure, in addition, that the people in all regions and provinces of Canada would display a greater degree of faith in the country, and a greater degree of patriotism, if they were assured that they were being governed by a federal administration which managed its affairs in an effective and efficient manner. They would be more patriotic if they could be assured that the federal government would address itself in a responsible fashion to the real issues of regional economic disparity, and deal with the issues of the economy inflation, high unemployment, and the basic fundamental need Canadians have for an adequate supply of jobs in order to live in dignity, and in harmony with one another.
Surely these are some of the issues that are driving a wedge into our confederation. Surely the commitment to stay unified as one nation does not begin and does not end with the province of Quebec. There are other regions in this country which, too, are having very serious difficulties. One only has to look around and examine the obvious frustrations and alienations which are growing in the outer regions of our country. These issues are continuing to fester because of the failure of the federal government to act.
Hopefully in bringing this debate to the House of Commons this afternoon and evening we will be able to contribute in some small way to meeting some of these problems, first by the reminder that the issues rising in this nation are indeed urgent and serious, and not to be sneezed at as the hon. member for Ottawa West (Mr. Francis) who just returned to his seat has done. Surely by directing parliament's attention to these very
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basic and fundamental issues we might be able collectively to come up with some answers to our pressing problems.
The hon. member for Ontario (Mr. Cafik) in a very constructive speech today, I believe, brought out a matter in which I concur with him, and one which I advanced in a speech in the House on October 21. I refer to the need for an ongoing independent review agency to evaluate government programs and government services, to conduct reliable cost-benefit analysis. I think this is a very valid suggestion and it should be considered. There have been other constructive recommendations advanced. We all have a part to play in this process. We can all offer some reasonable suggestions, and 1 have in mind what my leader said today regarding the restructuring of the committee system with the power of committees to initiate inquiries, or at least examine Crown corporations on a regular basis. It is very fundamental that their annual reports should automatically be referred to the respective committees so the committees can decide whether in fact they will direct a particular Crown corporation to come before them and be held accountable to parliament. Surely that is very basic and elementary.
Most important, the government must not continue to ignore blindly the recommendations of parliament. As my friend, the hon. member for Peace River (Mr. Baldwin), pointed out earlier, there have been many occasions in the past six years, I believe there were eight, on which motions emanating from this side of the House were brought forward to deal with the government's mishandling of funds and the loss of parliamentary control. We have raised this matter at various other times during the question period and in the committees, and we have had very little response from the government. The government must, indeed, heed the warnings of the opposition. It must take cognizance of the warning from the public and, indeed, the media, and it must act without delay in implementing the major recommendations of the Auditor General.
I am pleased that the President of the Treasury Board has at least gone part way in fulfilling some of these recommendations. I realize he has a mess to clean up, and he has my sympathy. Hopefully with some time and co-operation he may be able to put the business back on the rails. I am sure he will get support from this side of the House if he responds in a positive and direct fashion.
When we think in terms of financial management and control we must ask ourselves where are we and how did we get here. I think the Auditor General summed it up quite clearly and succinctly with very carefully selected and chosen words. It has been summed up not only in his words but in the words of the combined and collective opinion of a number of professional excutive accountants across the country. The Auditor General said very clearly that the government and, indeed, parliament have lost or are close to losing effective control of the public purse. In other words, he said government spending is out of control. He said the government financial management and control systems are weak, ineffective and, in some cases, grossly inadequate.
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The financial management and control study, which is the study that involved an examination of 28 federal government departments, brought forth very damning evidence contained in last year's report. Our Crown corporations were subject to the same kind of review in the last year, and out of the 27 that were examined there were only two identified as not having some significant weaknesses.
When we look at the Auditor General's report and note some of the alarming revelations there in connection with our Crown corporations, such as the CBC which sends out statements of accounts to its customers only on an annual basis, we can only conclude that if that is the kind of accounting and management practices our Crown corporations are engaged in, they need someone to step on their toes. There is no question about that. In short, the government, its departments, agencies, and now its Crown corporations have financial management and control standards which are significantly below the acceptable standard of quality and effectiveness. There is no question about that.
What brought about this deterioration? As has been pointed out, it did not happen during the term in office of this particular Auditor General. His precedessor did a pretty good job in bringing this matter to the forefront, but many of the former Auditor General's recommendations, as pointed out by the hon. member for Peace River, have yet to be implemented. What is the real reason and what did go wrong?
Quite frankly it is clear that this condition evolved over successive Liberal administrations, particularly since 1968. From that period to the present time we have witnessed a fourfold increase in federal government spending and a huge growth in the amount of money extracted by all levels of government, now approaching 43 per cent of our gross national product. Successive Liberal administrations have deliberately chipped and whittled away at the parliamentary process. They have usurped the job of parliament in the area of financial control, and have effectively destroyed parliament's ability to scrutinize and maintain a watchful eye over financial control. The control mechanisms in respect of the public finances of this country are defunct, to put it mildly. These administrations have done this by streamlining the rules and the estimates, relying upon an ineffective committee structure, and the ineffectiveness has become crystal clear, Mr. Speaker.
The government of the day is no longer held accountable to parliament for its conduct or for the way it spends public money. It seems that the bureaucrats, enough of them to make up a selected elite, have far more power than parliament today under this administration. Government expenditures can no longer be challenged in parliament, they can no longer be properly scrutinized and analysed. There is a built in guillotine rule which leaves the government in a position to simply run out the clock.
When the government is not held accountable to parliament, it is only logical and it follows that the subordinates, the bureaucracy, are not accountable either. This is summed up
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very clearly in a quotation which is to be found in proceedings No. 47, page 10 of the Public Accounts Committee, in the testimony of Mr. Lafferty of the staff of the Auditor General at a meeting of the committee earlier this year. He said:
In an environment where the government is not held accountable to parliament, it is less likely that subordinate managers will be held accountable to their seniors. If significant improvements are not made to the estimates and the public accounts, in our view little progress will be made in improving financial planning and control within departments and agencies.
That sums it up very succinctly. In this process the government has destroyed the basic role of parliament, that is the control, the approval and the management of public funds. Is it any wonder then that Canadians in increasing numbers are losing confidence in our system?
The President of the Treasury Board in response to questions by members of the opposition has referred to the infamous progress report to substantiate the speed of the implementation of the Auditor General's recommendations. I can assure you that it does not strike me as being a speedy document. It is full of bureaucratic jargon which is obviously written by the bureaucratic elite, the very group which, in my view, needs its wings clipped.
Government spokesmen argue that the appointment of a comptroller general is not consistent with the recommendations of the Glassco commission, and that if there is anything wrong with the present system it is that the government implemented the Glassco commission's recommendations. I think the minister really implied that today. I would like to answer that charge by again quoting from the proceedings of the Public Accounts Committee, issue No. 45, page 66, where Mr. Dale Harris of the Auditor General's office is reported as saying:
... virtually all of the observations and recommendations in our report were provided for, to a greater or lesser extent by the Glassco commission in 1962. Our recommendations are consistent with Glassco in that they vary only in emphasis and degree of detail. The evidence indicates that those responsible choose not to emphasize or implement most of the control oriented recommendations.
I think it is important here to note that the government has failed to implement the necessary budgetary control systems which were part and parcel of the Glassco commission recommendations. The Auditor General has not really criticized the resource allocation mechanism but he has been severely critical of the control system. The government has failed to implement this part of the recommendations and continues to refuse to do so.
Again I should like to quote from the proceedings of the Public Accounts Committee issue No. 50, page 14, where Mr. Lafferty of the Auditor General's office is reported to have said the following:
First, we have not made any serious criticism of the stated concepts of the resource allocation and budgetary control systems of the federal government. However, from a control perspective we are critical of almost every aspect of the way in which these concepts have been interpreted and applied in practice.
Certainly that spells out failure on the part of the government to implement a very important element of the Glassco commission, namely, the control oriented mechanism. The
[Mr. Mazankowski.)
progress report, in my view, is a very superficial document. While I acknowledge support-


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but the time allotted to him has expired. Is there unanimous agreement to allow the hon. member to continue?


Some hon. Members:: Agreed.


Donald Frank Mazankowski: Thank you, Mr. Speaker, I will be very brief, not more than two minutes. I should like to state for the record that the low profile and the low priority that the financial administration branch has been accorded is of major concern to us. It is quite central to achieving some of the recommendations which have been advanced by the Auditor General. Let me state quite frankly that only some 35 authorized man-years are allocated for that particular function, of which only 19 positions have been filled. In my view that is totally inadequate to provide any sort of central control. Let us just compare it with the administration of the Official Languages Act in this country, for which some 750 people are assigned.
Surely the central control agency, namely, the financial administration branch, warrants the employment of more than 35 people. Out of the 35 positions, 16 are not filled, and the Auditor General stated that in his view this work would require the employment of a minimum of 350 top professional people. When we see such lack of emphasis placed on the central control mechanism of the federal government, we are led to ask where the priorities lie. We implore the government to act quickly, to provide more resources to this branch, because I believe it is very central to the efficient operation of the control and financial management of our country. Thank you, Mr. Speaker. I appreciate the additional time which was granted to allow me to complete my remarks.


Robert Phillip Kaplan: Mr. Speaker, I want to deal with a portion only of this very fuzzy resolution because I think that perhaps by taking a part of it, a clear point can be made. The argument advanced by the opposition is that it has been deprived of a genuine role in the discussion of estimates and the fiscal and monetary policy. What I want to argue is that they could have had a role to play but they have blown it. Rather than having been deprived of it, they have not taken advantage of it. I do not think anything illuminates the failure of the opposition in this regard as much as the one or two small and big matters on which they have taken a solid position.
I listened to the hon. member for Peace River (Mr. Baldwin) who, in his case for more sunshine in the Government of Canada, more disclosure, has put forward a positive proposal which demands an answer from the government. It is an example of the way in which an opposition can operate effectively. In the last Speech from the Throne the government responded not only to the opposition but also to many other people making the same point, but the point has been made so clearly, so eloquently, and so loudly that it calls for a response, and like others in this House who are not members of the

government I am waiting to see the response from the government, and I am going to make a judgment on it.


An hon. Member:: Uh-huh!


Robert Phillip Kaplan: A couple of weeks ago the NDP put forward a positive employment strategy. It was an expensive public sector program, but again that is not a proposal the government can be silent about. That is the kind of role the opposition can play, and the government is called upon to act. That is a positive role, but the fact that I had to search my memory to think of a few examples of positive opposition illustrates how, in general, the opposition fails to do what it ought to be doing. It should be playing a genuine role in the discussion of matters of public business.
The hon. member for York-Simcoe (Mr. Stevens) did a remarkable thing in his performance this afternoon. It illustrated one of the reasons why the opposition has so much trouble-and makes so much trouble for itself-playing a genuine role. He began by saying that the Minister of Industry, Trade and Commerce (Mr. Chretien) had not appeared before the committee on the estimates of the Department of Industry, Trade and Commerce so that he could be questioned about a $40 million write off which appeared in his estimates. In fact, someone here pointed out to the hon. member across the floor that the minister had come not just to one meeting but to two meetings to deal with his estimates and with another matter which was referred to him at the same time. What one cannot fail to observe is that in those two meetings when the minister was there, when his estimates were in front of the committee and when the hon. member for York-Simcoe, I suppose, knew as much as he knew this afternoon, the minister was not asked one question about this $40 million item.
If the hon. member for York-Simcoe is going to argue that two meetings of the committee-let us say four hours or five hours-are inadequate to deal with $40 million, we have the observation of the President of the Treasury Board (Mr. Andras) that this government is involved in the receipt and transfer of $160 billion. If five hours is not enough to deal with a $40 million expenditure, we could go around the clock 24 hours a day for the whole year and not even get to any substantial items of estimates if we use the methods under which the opposition operates. I think they need a better strategy. They need to approach the opportunities which exist in a much more effective way. The fact that they do so rarely, shows that it can be done.
Look what happened with regard to Bill C-19. Members of the opposition say that they have no power to bring the government down on a substantive issue. Well, the opposition made the debate on Bill C-19 a supply debate. Day after day they thought they were hammering away at the government. Eventually some important agreements were obtained, and the legislation was changed. They achieved a victory, but how did they use all those hours, day after day?


John Edward Broadbent: What was the victory?
Economic Policy


Robert Phillip Kaplan: What points did they make? The victory is that legislation has been changed in the way the opposition demanded.


Stanley Howard Knowles: It was just postponed.


Mr. Douglas (Nanaimo-Cowichan-The Islands):: You had
better get acquainted with what is going on.


Robert Phillip Kaplan: What point did they make after all those hours of ineffective debate and wrangling? I think they could have used their time much more effectively.
I have a lot of boring material which I insist on putting before the House at this time because I want to deal in very specific terms with the charge that government secrecy deprives hon. members opposite of their role in dealing with fiscal and monetary policy. I want to outline all the opportunities there have been in this session for participation in economic policy making, in fiscal policy making, and in decisions on monetary policy.
No government will give or can give complete disclosure of pending fiscal, economic, and monetary policies. Hon. members cannot expect the government to give, for example, advance notice of the date of the removal of controls, and for the same reason they cannot expect the government to make public the advice it is getting about the appropriate time to remove the controls. That would have an effect on the market, on commercial activities, on jobs and so forth which would be entirely counter productive. They cannot expect to get advance notice of a change in the discount rate of the Bank of Canada, or advice about it. That is not the kind of information which can be made public in advance. They cannot expect to have budgetary changes or possible budgetary changes announced in advance. They cannot expect to have the government put forward its estimated cash requirements for some future period. All these things are the kinds of information which no reasonable person who knows anything about the way an economy operates could expect or consider it desirable to receive in advance. However, that does not deprive the opposition of a genuine role.
In May of this year the Minister of Finance (Mr. Macdonald) presented in his budget speech to the House a fully documented report on the development of fiscal and monetary policy and on the economic situation and outlook. To assist the debate he tabled in advance the "Economic Review", which provided a comprehensive and factual review of economic developments in Canada, and it was the subject of further discussion in the Standing Committee on Finance, Trade and Economic Affairs. When the May 25 budget was presented, it was fully debated in this House, and the co-ordinated thrust of fiscal and monetary policy and of the anti-inflation program was set forth and discussed at length. The hon. member for Vegreville (Mr. Mazankowski) talked about the fact that the government has been warned. We have been warned time and again. I think warnings are an important part of opposition participation in a debate, but I think in a debate on economic

December 9, 1976
Economic Policy
policy when all the facts are on the table, when the "Economic Review" is there, and when the economic outlook is there, more than warnings and threats is called for.
Following an extensive round of consultations during the summer recess the Minister of Finance announced on September 7 a number of modifications to the anti-inflation program. At that time he took the opportunity again to provide a very full accounting of the major progress made in the fight against inflation in the first year of the program, and he also presented a progress report on the operation of fiscal and monetary policy. He referred in particular to the policy of the Bank of Canada and the conduct of monetary operations in relation to monetary supply targets. He provided a further report on the fiscal position, the balance of payments and the developing economic prospects, including the elements of strength and weakness in the short term outlook. Later, in the debate on the Speech from the Throne, the Minister of Finance again reported to the House on the progress of the anti-inflation program, tabling at that time the government's working paper, "The Way Ahead", which provides a framework and an invitation for discussion among all Canadians of the government's longer term view about the evolution and the role of government.
What do we hear from the opposition about "The Way Ahead"? Perhaps some warnings, perhaps some criticism, but what are the proposals of the opposition on the important stress areas in our economy, the areas which require special attention after controls are removed? What would the opposition like us to do? The hon. member for Peace River talked about sunshine and its importance in the government process. If members of the opposition want to propose a new employment strategy in the public sector and in the private sector, that is the kind of proposal which calls for an answer from the government. It puts the government on the spot, but that is not something they have done very often; it is something they have done very rarely.
On October 22 I tabled in the House the first year report of the Anti-Inflation Board, once again detailing publicly and openly the role and operations of the Anti-Inflation Board and the major progress made in reducing inflation in Canada. More recently the Minister of Finance addressed this House during the debate at second reading stage of the income tax bill, Bill C-22. He responded openly to the request from the hon. member for Halifax (Mr. Stanfield) to provide a further updating on the economic situation and outlook, as well as the Fiscal position of the government.
It is also the case that since that time the minister has appeared before the Standing Committee on Finance, Trade and Economic Affairs concerning supplementary estimates (B) and presented himself for a broad range of questioning on economic affairs.
This is a long list and I could make it longer, Mr. Speaker, but as you can see, on all these occasions since last May, the government has provided a full and frank accounting of economic policy and the state of the economy. This approach by

the government can hardly be characterized as secrecy or non-disclosure. There was particular reference to the secrecy of economic studies and projections but it ought to be understood that the process of economic analysis and forecasting is a continually evolving one. New information becomes available, external developments occur, data is revised and updated. The process is fraught with uncertainty. In the last analysis the Minister of Finance must make his own judgments and report to the House as carefully and as confidently as he can on the situation and prospects. This he has done time and again.
There have been comments and, I believe, misunderstandings on the part of the opposition about the role of the Department of Finance in relation to the forecasts of the OECD. I should like to set the record straight again on that score for the benefit of hon. members, recognizing that this matter was looked at in the standing committee.
From time to time, both members of this House and economic commentators have raised the question as to the nature of communications between officials of the Department of Finance and OECD officials during the period of time leading up to the publication by the OECD of their semi-annual assessment of short term economic prospects. I would therefore like to outline briefly what in fact is the nature of the communications between the two organizations and, by so doing, underline the fact that the views expressed by the OECD in their report are their own. The published forecasts for member nations can easily be, and often are, at variance with the views held by officials of the member countries.
Each June and December, the OECD publishes a document titled "The Economic Outlook" which contains short run macro-economic projections for the economies of the OECD member countries. In addition, a brief commentary on recent economic conditions and policies is provided for the OECD countries as a group and for the larger countries on an individual basis. The forecasts appearing in this document are prepared by, and are therefore the responsibility of, the OECD. There are, however, both advantages and disadvantages faced by the OECD in the preparation of this material. Their geographic and physical remoteness from the country under study is an advantage because of taking an objective view; in a sense it is also a disadvantage because certain information can only be received second hand and the data may age rapidly.
It is in recognition of these shortcomings that the OECD secretariat convenes a series of meetings of officials of all of the member countries in the weeks prior to the publication of its Outlook document. At these meetings, officials of each country have the opportunity to comment on various aspects of the preliminary forecasts that have been prepared by the OECD secretariat for their country or any other country. The OECD benefits from this exchange in that they receive updates as to recent trends in economic data, as well as the professional analytic views of their colleagues in the member countries. Officials in the member countries benefit by being able to probe officials directly of both the OECD and other member countries as to economic conditions and prospects in
December 9, 1976

the OECD as a whole and in individual countries. Given the high degree of interdependence of the economies of the OECD countries, this type of exchange of course plays a vital role in the co-ordination of economic policy among countries.
Subsequent to these meetings, the OECD finalize the view that will be published in the Outlook. Of course, this final view will have had the benefit of the working level exchange between professional staff of the OECD secretariat and of the member nations. But it must be emphasized that the final decisions and responsibility for the forecasts rest solely with the OECD; the forecast may or may not be in accord with the views held by member countries.
It should also be noted-and this is something that is forgotten time and time again in the warnings offered to us by the opposition-that the OECD makes use of a methodological approach often employed in preparing short term economic forecasts. It is assumed that current policies in member countries are retained in an unchanged way over the forecast period. In addition, exchange rate changes are not forecast. Thus any policy or exchange rate changes that occur subsequent to the preparation of these forecasts means that the projections must be amended to reflect these changes.
I remember when an article appeared in the Wall Street Journal which was the subject of questions from the opposition, it was suggested that the OECD forecasts were not only prepared by the government or known to the government- which was not the case-but that they were absolutely valid. What was also not recognized in the question put to us was that just in the few days preceding, an important employment policy strategy had been announced by the Minister of Manpower and Immigration (Mr. Cullen), and there had been a reduction in the discount rate of the Bank of Canada. All these factors had to be taken into consideration.
I think I can conclude a little ahead of my time, Mr. Speaker, by noting that the opposition has great opportunities, it has all kinds of information but-it has blown it.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: Mr. Speaker, the member who has just taken his seat has read a good deal of meaningless trivia, the sole purpose of which seems to have been to take up time and prevent members of the opposition from taking part in this debate.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: I rise for the purpose of supporting the motion which condemns the government for its inept handling of public finances. I wish to address myself particularly to the amendment moved by the national leader of this party, which condemns the government for its failure to establish mechanisms to achieve effective supervisory financial control over Atomic Energy of Canada Limited and other Crown corporations.
It is rather significant that the President of the Treasury Board (Mr. Andras) who spoke this afternoon, and the other
Economic Policy
government speakers who have participated in this debate, carefully stayed away from the whole question of financial control over Crown corporations.
The Auditor General said that the government was in danger of losing control of its finances but, Mr. Speaker, in the case of Crown corporations it lost control of the finances of those organizations long ago. Anyone who has sat in this House for the last ten or 12 years knows that most of the Crown corporations have never been examined by a committee of the House and that there are no regular reports to the committees of the House, no assessment of policy, no examination of expenditures-there is virtually no control.
One of the things that ought to be done in this parliament is that the reports and financial statements of Crown corporations should be referred to the appropriate standing committee, or by statute form a special committee of this parliament with authority to sit whether the House is sitting or not, to examine the financial statements of all Crown corporations. These Crown corporations are spending billions of dollars of the people's money and there is no adequate control or accountability either with respect to expenditures or with respect to the policies they follow.
The hon. member for Scarborough East (Mr. O'Connell) asked the hon. member for Peace River (Mr. Baldwin) whether he thought Crown corporations should be controlled by the government. To ask the question is surely to answer it, Mr. Speaker. Nobody thinks that the government should have day to day control. After all, what is a Crown corporation? A Crown corporation is set up by the government under the authority of parliament to carry on certain business transactions on behalf of the people of Canada. It is responsible to parliament through a minister of the Crown and therefore, surely, both the government and this House have some right to hold it accountable with respect to the money it is spending, which belongs to the people of Canada, and with respect to whether it is serving the best interests of the people of Canada. Neither of these things is being done today by the Crown corporations, and no Liberal member who took part in the debate, including the President of the Treasury Board, even touched on this question. If you need an illustration of what I mean look at the three instances which have been brought to the attention of the people of Canada in the last few weeks by the present Auditor General and the previous one.
Let us consider the case of AECL. It has been referred to, but I want to document it. AECL negotiated a contract to sell a CANDU reactor to South Korea. On December 30, 1974, the president of AECL confirmed by letter that an agreement was being negotiated to pay an agent, Mr. Shaul Eisenberg of Tel Aviv, the sum of $17 million, plus $3 million at the rate of $500,000 a year. In the first place I do not know why you would need an agent. The Government of Canada was going to sell a reactor to the government of South Korea.


Robert Lorne Stanfield: That was in conformity with this government's humanitarian tendencies.

December 9, 1976
Economic Policy


Thomas Clement (Tommy) Douglas: In any
event, they thought they needed an agent and they were going to pay him $20 million. The contract was signed on January 27, 1975, and came into force on January 26, 1976. However, a new president of AECL had been appointed. He took the matter up with the minister and with the chairman of the board, so that the minister has known about this for many months. The agreement was renegotiated. And what did that renegotiation amount to? It amounted to the sum of $15,373,181. That was made up of $5,142,393, or 1 per cent of the commission, because the reactor cost $514 million; expenses of $8,098,500, to which I will come in a few moments; interest for delay of payment of invoices of $132,289, and advance payment for post-contract services of $2 million, with the commitment to pay $175,000 every quarter, or $700,000 a year during the period of the agreement. That was simply an advance payment of $2 million.
The interesting things to look at are the expenses, because there were expenses of more than $8 million for which no particulars were available. According to the details, payments were made to consultants. Whom did they turn out to be? They turned out to be Industrial Export of Frankfurt, Germany, and International Shipping and Building Establishment in Hong Kong, both of which were owned by Mr. Shaul Eisenberg, located in the same office and using the same telephone; so that by renegotiating the agreement Mr. Eisenberg made virtually the same amount of money.


Mr. Chretien:: The government was helping the Third World.


Thomas Clement (Tommy) Douglas: The $15
million which the corporation agreed to pay is in addition to a provision for the payment of $700,000 a year for the rest of the agreement. Since the previous agreement provided for the payment for six years, for the life of the contract, if you multiply six by $700,000 and add that sum to the other sum mentioned, you will see that approximately $18.5 million will be paid to Mr. Eisenberg. Mr. Speaker, $18.5 million is not a great deal less than $20 million.
The interesting thing is that not only was a good amount of these expenses paid to the other dummy companies set up by Mr. Eisenberg, but $5,400,000 was spent for which the only explanation on the invoice was the written notation that the expenditures were allocated in accordance with the agent's instructions. Now, no auditor would pass that under ordinary circumstances. No self-respecting company would expect to get away with a statement like that; yet here was a situation in which the taxpayers' money was frittered away, paid out-the ultimate sum will be close to $20 million-to an agent whose services have not yet been defined. Five point four million dollars was paid out without any explanation at all.
The other deal with which hon. members are familiar has to do with the CANDU reactor sale in Argentina. In that case on April 19, 1974, the president of AECL authorized the payment of $2,415 million to an unnamed commercial agent for services rendered during negotiations for the sale of a reactor
(Mr. Stanfield.]
to Argentina. In that case we did not even pay the money to an agent. The deal was negotiated by Italimpianti, which billed AECL $2,415 million. As the Auditor General said, these invoices were not supported by an agreement or invoice from the agent. Actually the money was paid, as hon. members know, into a bank in Liechtenstein, to the account of Intercontinental Trading Establishment. Significantly, we have been trying all week to discover to whom this money was paid. The minister admitted he did not know, but he is trying to find out. And how has he done that? He has been making inquiries of Italimpianti in Italy. Surely if you, Sir, were trying to find out why money was paid, you would at least get on the telephone. If you could not get results that way, you would put your ablest accountant on a flight, and send him over to Italy-


Miss B6gin:: What, with taxpayers' money?


Thomas Clement (Tommy) Douglas: -to ask
those people what they did.


Monique Bégin: The taxpayers' money would be paying for that trip.


Some hon. Members:: Oh, oh!


John Edward Broadbent: Is the minister concerned about taxpayers' money?


Thomas Clement (Tommy) Douglas: There you have it; it would be wasting the taxpayers' money if the government made an effort to find out what the government did with $2.4 million. Talk about being penny wise and pound foolish! That is exactly the kind of thinking which is prevalent in this government.


Stanley Howard Knowles: The hon. lady became a cabinet minister awfully fast.


Jack Burnett Murta: Talk to Otto Lang.


Robert Lorne Stanfield: That is typical of this government's humanitarianism to the Third World.


Thomas Clement (Tommy) Douglas: The other marvellous piece of business which was conducted had to do with the situation brought to the attention of the government by the former Auditor General, Mr. Maxwell Henderson, who wrote to the Prime Minister (Mr. Trudeau) calling his attention to two matters. First, he pointed out that a good deal of machination had been going on with regard to the Polymer Corporation. What has come out of it? The government has done nothing. The Prime Minister asked for an investigation. Nothing was done.
There was a telephone call by one of the ministers. Anthony Hampson, who was president of the CDC, said he would certainly suspect that they were minimizing taxes, but they were not a taxing authority.
December 9, 1976

Mr. Ian Rush, the President of Polysar, said his firm gave cash rebates to international customers for volume purchases. However, that does not explain why the rebates were placed in numbered accounts.
Surely that is not a satisfactory way in which to run the affairs of this country. The time has come when the government ought to be held responsible for the actions it has taken. 1 urge the government to come clean with the people of this country and tell them what has been going on.
It is perfectly apparent that in these transactions public funds have been squandered. They have been used very improperly, and we have had no satisfactory explanation from the government. The people of Canada want a much more satisfactory explanation than we have had to date with reference to this whole deal. They want an accounting, and they want it fast. We are going to get it eventually. It is not going to die. The members of this House and the people of this country will insist that the government give a much more satisfactory explanation. That explanation will not be found in the Public Accounts Committee, where it is being smothered. It will be found by a royal commission looking into this matter, getting the facts out into the daylight.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. It being 9.45 o'clock p.m., it is my duty, pursuant to Section 10 of Standing Order 58, to interrupt the proceedings and put forthwith every question necessary to dispose of the proceedings now before the House. The question is on the amendment of the hon. member for Oshawa-Whitby (Mr. Broadbent). Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the amendment 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 nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


['Call in the members.']
Mr. Speaker:: I therefore declare the amendment lost. The question is on the main motion.


['I therefore declare the amendment lost. The question is on the main motion.']
Mr. Speaker:: I therefore declare the motion lost.



Robert Knight Andras: That Supplementary Estimates (B) and (C), 1976-77, laid upon the Table November 10, 1976, and November 29, 1976, respectively, be concurred in.


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


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Andras thereupon moved that Bill C-28, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1977, be read the first time and be printed.
Motion agreed to, bill read the first time and ordered to be printed.
Robert Knight Andras: that Bill C-28, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1977, be read the second time and referred to the committee of the whole.


[Stage Direction]
Motion agreed to, bill read the second time, and the House went into committee thereon, Mr. Laniel in the chair.
Clauses 2 to 5 inclusive agreed to.
Gérald Laniel: Shall Schedule A carry?


Some hon. Members:: On division.
Schedule A agreed to on division.


Gérald Laniel: Shall Schedule B carry?


Some hon. Members:: On division.
Schedule B agreed to on division.
Clause 1 agreed to.


[Stage Direction]
Preamble agreed to.
Title agreed to.
Gérald Laniel: Shall the bill carry?


Some hon. Members:: On division.


Gérald Laniel: Carried on division.
Bill reported.


Mr. Speaker:: When shall the bill be read the third time?


Some hon. Members:: Now.
Supply


Robert Knight Andras: that the bill be read the third time and do pass.


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


Some hon. Members:: On division.
Motion agreed to on division, bill read the third time and passed.


Mr. Speaker:: Order, please. It being after ten o'clock this House stands adjourned until tomorrow at eleven o'clock a.m., pursuant to Standing Order 2(1).


[Stage Direction]
The House adjourned at 10.25 p.m., pursuant to Standing Order.
[Stage Direction]
80005-50y2
[Stage Direction]
Friday, December 10, 1976