1977-05-17

ROUTINE PROCEEDINGS


Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. 1 move, seconded by the hon. member for Red Deer (Mr. Towers):
That this House commend the Hon. Emmett Hall for the work he has done and the recommendations he has made for retention of the Crowsnest Pass rates and direct the Minister of Transport, in charge of the Canadian Wheat Board, to make a statement on motions as to his intentions with respect to the implementation of the recommendations of the Hall Commission and, further, to scrap the confidential report that recommends the ending of the Crowsnest Pass rates, in light of this repudiation of the inflexible, blanket user-pay concept in transportation.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 such motion can be presented for debate in the House only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Paproski:: Ralph Goodale said no.


SUGGESTED IMPLEMENTATION OF HALL COMMISSION RECOMMENDATIONS ON STATUTORY RATES-MOTION UNDER S.O. 43
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I wish to move a motion under Standing Order 43 similar in nature to the motion just moved. It, as well, is urgent and pressing and is in regard to the report of the Hall Commission tabled in this House yesterday which contains a recommendation that the statutory grain rates be retained and that the difference between the statutory rate and the cost of transporting grain be paid directly to the railways. If I may have the unanimous consent of the House, I would move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House calls upon the government to immediately implement the recommendation of the Hall Commission on statutory rates.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43, such motion can be presented to the House for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Steve Eugene Paproski: Ralph Goodale again said no.


PROPOSED FEASIBILITY STUDIES FOR NEW COAL MINES IN NOVA SCOTIA-MOTION UNDER S.O. 43
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise under Standing Order 43 on a matter of urgent and pressing necessity. Since a privately financed international study group which included Canada's National Energy Board Chairman, Marshall Crowe, and Maurice Strong, Chairman of Petro-Canada, Canada's national oil company, who both were involved in this study, that study predicting that demand for oil in the non-communist world will probably overtake available supplies some time between 1985 and 1995, and possibly by 1981; since electricity costs in Nova Scotia, a province which is a large importer of oil, have increased about 100 per cent over a two year period; and since in April there were 14,476 active claimants on the unemployment insurance rolls in Cape Breton, and some 3,500 applications for jobs in the Cape Breton coal mines, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
Thai the Department of Regional Economic Expansion, along with Devco, immediately start feasibility studies for new mines in Donkin and New Victoria in Cape Breton county.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is to the Prime Minister. In view of the

May 17, 1977
Oral Questions
tabling of the long-awaited Hall report yesterday, which will go down in history as the economic Magna Carta of western Canada, does the government intend to implement its recommendations before the calling of a general election?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I do not believe the hon. member seriously expects me to report today on the government's position on a very, very lengthy piece of work. At this stage I would associate myself with at least part of the feelings of the hon. member opposite who said that Judge Hall should be commended for his very, very dedicated work to Canadians and his concerns for the west.


An hon. Member:: Why didn't you support the motion?


Pierre Elliott Trudeau: Obviously, the motion was leaning toward the support of all the recommendations before we even read the report. Only members of the Tory party would want to support something before they read it.


Some hon. Members:: Hear, hear!


Francis Alvin George Hamilton: Mr. Speaker, in view of the fact that these matters have been before Canadians and this parliament for over 40 years and the material and facts are so well known, will the government at least indicate to the country that on certain sections of this report they will move immediately? I refer specifically to the question of railway line abandonment, the government elevator policy, rationalization of our use of the grain handling system and the railway operation.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, 1 certainly want to join the expressions of commendation to Mr. Justice Hall and the other commissioners who did a tremendous job in hearing public views from all across the west in connection with the grain handling system. 1 do, of course, intend to put forward recommendations with regard to the various proposals of the commission at a very early date. They will be put before the House as quickly as we possibly can. Obviously there will be a different timeframe for different recommendations because of the complexity of some of them, but it will be our intention to move very rapidly on this important report.


Francis Alvin George Hamilton: To be specific, Mr. Speaker, 1 will direct this question to the Minister of Transport. Will the recommendations and solutions offered in the report be implemented in this session or in the fall session?


Otto Emil Lang: Mr. Speaker, my timeframe would see action on some of the recommendations and some of the issues involved almost certainly before the end of June.


STATUTORY FREIGHT RATES-GOVERNMENT POSITION ON HALL RECOMMENDATIONS
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I wish to direct a supplementary question to the Minister of Transport having to do with the very important question of statutory

freight rates. In view of the recommendation which re-affirms the continuation of the statutory freight rates for the movement of grain, will the minister seize the opportunity to ensure the producers of western Canada that this very important recommendation will be accepted as government policy? It would serve to allay the fears of many producers on this very, very important historic instrument.


Otto Emil Lang: Mr. Speaker, I think 1 have been as emphatic as anyone in maintaining the western interest in the maintenance and benefits of the Crows-nest rate. 1 have noted in the Hall report the very clear-cut analysis of the impact of rail freight rates on development and processing and natural advantage. The only solution that 1 perhaps read in this would involve a tremendous additional expenditure of taxpayers dollars which the commission itself does not quantify. Obviously, I would not associate myself with members opposite in agreeing to spending money like that without knowing how much it would be.
In addition, of course, I am impressed by the fact that according to the very argument of Mr. Justice Hall freight rates have their impact on processing. If this does appear to be a fact ignoring the real cost of transportation will tend to increase the volume of expenditure on transportation, in this particular case it means specifically that lower freight rates on materials like wheat and grain tend to encourage the shipment of the grain rather than the processing of that grain into meat, and that is what my colleague, the parliamentary secretary to the government House leader, meant when he said he was in favour of the west on this issue. We are in favour of developing real means for further processing in the west and not appearing to simply seize short-term political advantage out of any situation.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: Is the minister saying, then, that he does not agree in total with the recommendation of Mr. Justice Hall and his colleagues with respect to the statutory freight rates? Is he saying he does not agree that the difference between the statutory rate and the cost of transporting grain should be paid directly to the railways by the treasury? Am I to assume that the Minister of Transport is discarding that particular possibility out of hand?


Otto Emil Lang: No, Mr. Speaker. The hon. member is completely wrong in making that assumption. He should reread my answer. What I am saying is that any embracing of a proposal which would involve the expenditure of perhaps hundreds of millions of dollars, without even knowing whether it is $300 million or $800 million, is irresponsible and only to be seen in the hands of Conservative politicians who don't care about the west.


Some hon. Members:: Oh!


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: You can tell an election is coming up.
May 17, 1977


ADOPTION OF HALL RECOMMENDATIONS ON FREIGHT RATES TO ENCOURAGE PROCESSING IN WESTERN CANADA
Leslie Gordon Benjamin: Since the minister is concerned about a timeframe I should like to put a question to him about matters over which he presently has authority to act; 1 suggest we could implement some of Mr. Justice Hall's recommendations within a timeframe, and that legislation is already available to him. The Hall Commission report notes that the production and processing of agricultural products should take place in the regions which have natural geographic advantages for such activities; freight rates and other related transportation policies should not destroy or hinder these natural advantages-which, by the way, is the opposite to what the minister has been doing. The commission goes on to say that in a number of areas this has not been the case up to the present. Flour milling, rapeseed pressing, livestock processing and the malting industry and a number of changes in freight rates and related policies would have the effect-


Some hon. Members:: Order!


An hon. Member:: You've reached your 40-minute limit!


Mr. Speaker:: Does the hon. member have a question to ask? If so, will he put it now?


Leslie Gordon Benjamin: Yes, Mr. Speaker, and it will not be as long as the minister's answer to the hon. member for Vegreville. In the light of that statement by the Hall Commission, I should like to ask the minister whether it is the intention of himself and the government to adopt the Hall Commission recommendations with respect to these rates and the encouragement of processing industries in western Canada?


Otto Emil Lang: The hon. member is quite wrong in thinking that this would not require legislation. Moreover, he has overlooked the fact that in connection with rapeseed we have introduced a program of financial assistance to the rapeseed crushing industry to avoid some of the dilemmas which arise out of the differentiation in rates between the low rate on rapeseed and the more ordinary but still low rate on oil. This involves the expenditure of money but on a temporary basis until better long-term solutions are found.
We have also acted to meet the problem of the stop-off charge in eastern Canada being lower than the stop-off charge in western Canada by supporting the difference in those stop-off charges by charging it against the treasury and paying the money annually to the flour millers. These are examples of the ways in which we have been very conscious of the need to avoid the impact of adverse freight rates and costs upon the west.
Of course, we do want also to come to grips with the overall problem. It is our objective to implement, as we have said in connection with the feed grain policy time and time again, the development of the processing of agricultural products in accordance with natural advantage. That means with equity in
Oral Questions
freight rates between various products. What hon. gentlemen opposite have been reluctant to do is to say anywhere outside of the west what they mean by equity.


Some hon. Members:: Oh!


An hon. Member:: Loser pay!


Some hon. Members:: Sit down!


Mr. Speaker:: Order!


SUGGESTED AMENDMENT OF BILL C-33 TO PROVIDE FOR EQUITY IN TRANSPORTATION COST BETWEEN RAW AND PROCESSED MATERIAL
Leslie Gordon Benjamin: Mr. Speaker, may I pursue this subject with the minister. The moneys given the rapeseed crushing industry are designed to take them that much longer to go broke under his present policies. The Hall report notes that one of the first principles to be acted on with respect to transportation policy is a freight rate structure in which the processed product in its concentrated form should cost no more to transport on a per-ton-mile basis than the same product in its raw state. Since the Hall report notes that the absence of this principle has had a damaging effect on the economy of the western provinces, and since the current transportation policy bill before this House, Bill C-33, does not ensure this principle, will the minister assure the House that he will either amend the bill to enshrine this principle within it, or withdraw the bill?


Otto Emil Lang: Mr. Speaker, the very point I was making is repeated by the hon. member. Obviously equity relationship between cost of rates on the product and on rapeseed is fundamental to fair development of these products and the processing of them according to natural advantage in Canada. The dilemma, of course, is^that that would lead to putting everything that is shipped on the Crows-nest pass rates. Hon. members opposite might pretend that that would be a great thing in terms of low freight rates, but in fact it would cost the taxpayer a tremendous amount of money and 1 do not know what the hon. member's colleagues from other parts of the country might say about that.
In addition, it would lead to waste in the form of lowered productivity by having a transportation system which ignores costs, and therefore goods would be shipped far further before being processed than is to the advantage of this country. That is something which I will oppose in our transportation policy.


POSSIBILITY OF CONSIDERING HALL REPORT AS A PACKAGE-REQUEST FOR TABLING OF REPORT
Leslie Gordon Benjamin: Mr. Speaker, may I put a final supplementary question which incorporates two questions. The minister was quoted on the CBC national news last night as saying that he did not intend to concern himself with anything in the report except recommendations about which lines were to be abandoned and which were to be

May 17, 1977
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retained. Can the minister assure the House that the Hall Commission report will be taken as a package, as Mr. Justice Hall clearly intends, and that his recommendations regarding general transportation policy and its place in economic development will be considered in that package? Finally, in light of what is the obvious problem which the minister is having with the Hall report, can the minister say whether he will request the House leader to refer the report to the Standing Committee on Transport and Communications?


Otto Emil Lang: Mr. Speaker, the hon. member, I presume innocently, completely distorted and misstated what I said about the recommendations in the Hall Commission report. 1 did make the point that a certain number of comments on the Hall report were based on matters which may have come as a surprise to people appearing before the commission. The central theme of the commission's report, on the other hand, which was completely within its terms of reference, was extremely well researched, worked, debated and heard about throughout the sessions across the prairies and this section obviously has a lot more weight attached to it. 1 also in fact said that 1 did not want any of my comments about peripheral matters in the report to detract in any way from the report, which 1 thought was very commendable indeed.

[ Translation]


REGIONAL ECONOMIC EXPANSION
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Regional Economic Expansion.
In an interview given to the newspaper Le Devoir, Mr. Jacques Leonard, minister of state for Quebec development, formally accused the Minister of Regional Economic Expansion of wilfully delaying the signing of agreements said to have been finalized between Quebec and Ottawa. Can the minister tell the House whether that is true and also, if the agreements have not yet been finalized, when those very important documents, according to this morning's newspaper, will be signed?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, what I would like to say about the headline 1 see in Le Devoir's morning edition is that 1 am not responsible for any delay in signing amendments which, to be more specific, would alter to quite an extent existing agreements in discussions now being held. As recently as yesterday, Mr. Speaker, I received information we had requested further to Mr. Leonard's filing certain proposals with me at the end of April. We got the information requested yesterday, and my officials and myself are now in the process of studying both the proposals and related information. 1 was in touch with Mr. Leonard again this morning and hope to be able to get back to him and advise him of my position with regard to his proposals some time before the end of the week.


INQUIRY AS TO DISTRIBUTION OF MONEY ALLOTTED TO QUEBEC FOR DEVELOPMENT
Joseph Adrien Henri Lambert: Mr. Speaker, I should like to put a supplementary to the minister.
As the amendments to the agreements which have already been finalized involve a fairly large sum of money-the figure of $409 million has even been mentioned-would the minister tell the House whether this $409 million estimate is correct and if so whether this amount will be equitably shared by the different areas concerned by these agreements or if the province of Quebec will be allowed to concentrate all this money in the same place as was done in the past?


Marcel Lessard: Mr. Speaker, since the figures mentioned by the hon. member are the figures which apparently have been given to the press by the minister, obviously I cannot question them. In fact, according to the proposal brought in by the provincial authorities, the total amount of the contributions which would be granted during the next five years, through amendments to the present agreements or possibly through a new agreement, could reach $409 or $410 million. That is the possible amount of our contribution to those programs which have been submitted to my department and it is this matter we are now considering, Mr. Speaker.


POWERS TO MODIFY AGREEMENTS WITH PROVINCES
Joseph Adrien Henri Lambert: Mr. Speaker, I would like to ask another supplementary question of the minister.
Since there are negotiations between Quebec and Ottawa, which is normal, does the federal government reserve to itself the power to amend any proposed agreement which relates to projects introduced by the provinces, particularly by Quebec, when difficulties have been encountered in the course of those negotiations because one of the two parties involved rejected any part of that project?


Marcel Lessard: Mr. Speaker, it is obvious that if there are negotiations it is because both parties are willing to negotiate. In the course of those negotiations, consideration is being given to representations made to the federal government of course, and to myself in particular. Those representations originate from any place in the province, in your own region and in others, and we must try to reconcile those proposals with priorities of the provincial government and with what it is prepared to incorporate into its own program. Therefore, it is obvious that during negotiations we must discuss and try to come to a compromise between reasonable people so as to take into account distributions of undertakings and expenses in a way which will best satisfy the interests and the needs of more disadvantaged regions.

May 17, 1977


TRANSPORT
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is for the Minister of Transport. The Hall Commission in its report recommended the elimination of the railway stop-off charge for grain in transit and also the utilization of interior terminals to supplement the storage and cleaning facilities at Thunder Bay, Churchill, Prince Rupert and Vancouver. I wonder whether the minister agrees with this recommendation, and will a decision be announced as to its acceptance before the fall?


Otto Emil Lang: 
Douglas Charles Neil: Mr. Speaker, is the minister prepared to refer these recommendations to the Canadian Grain Commission and the Canadian Wheat Board for study?


Otto Emil Lang: Mr. Speaker, only after I have had a chance to examine further what the proper disposition should be.


POSSIBLE WITHDRAWAL OF BILL C-33 IN VIEW OF HALL REPORT
Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, my question is to the Minister of Transport. In view of the recommendations of the Hall Commission regarding railways, will the government now consider withdrawing Bill C-33 from its agenda for this session?


Otto Emil Lang: Mr. Speaker, there is no rational or logical connection between the Hall Commission report and that bill.


Some hon. Members:: Oh, oh!


Frank Fletcher Hamilton: The Hall Commission recommends dealing with the national railways as instruments of national policy. Bill C-33 proposes to turn over rail transportation to a bunch of bureaucrats. I take it from the minister's answer that he favours the latter course.


Otto Emil Lang: Mr. Speaker, the hon. member can take it from the minister's answer that he thinks the hon. member's observation is nonsense.


RAIL LINE ABANDONMENT-GOVERNMENT POSITION ON HALL RECOMMENDATIONS
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the Minister of Transport. Since there are recommendations in the Hall Commission report that certain railway lines should be abandoned by June 30, 1977 and that others should
Oral Questions
be abandoned by December 31 of this year, would the minister inform the House whether this is a fait accompli, or will the Prairie Rail Authority be permitted to take a look at these proposals?


Otto Emil Lang: Mr. Speaker, this is the kind of decision I expect we will make before the end of June.


LABOUR CONDITIONS
Mrs. Ursula Appolloni (York South):: Mr. Speaker, my question is directed to the Minister of Labour, and it relates to the minister's recent announcement of the first phase of an affirmative action program designed to improve and enhance the employability of women in Canada. While I wholeheartedly welcome this excellent initiative, I wonder if the minister, together with his colleague the Minister of Manpower and Immigration, is contemplating a similar program designed to improve the employability of Canadian youth?


Hon. John C. Munro (Minister of Labour):: No, Mr. Speaker, but we believe the application of our labour policies in the long run will have that impact.


TRANSPORT
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is to the Minister of Transport. Given that the Hall Commission report endorsed earlier recommendations by Canalog Logistics and the Institute of Guided Ground Transport at Queens University that the transport of Arctic oil and gas by rail is feasible both from an engineering and a financial perspective, is the government now giving serious consideration to this kind of facility as a means of transportation and development in the north? I ask that particularly since the Minister of Energy, Mines and Resources last week summarily dismissed this option in replying to the right hon. member for Prince Albert, and that was before Mr. Justice Hall's report was available and before the report of the National Energy Board. Is this- strong endorsation by Mr. Justice Hall of an Arctic railway now being given very serious consideration by the government? [DOT]


Otto Emil Lang: Mr. Speaker, with regard to a matter such as this I say I would not consider the Hall report to be the definitive work because certainly all the arguments on the question and all the evidence and the facts were not before the commission in the course of its
5710

May 17, 1977
Oral Questions
deliberations. 1 am somewhat surprised that the hon. lady should suggest that we should go ahead and decide on a rail line along the Mackenzie without having regard to environmental considerations, which have been seen by her to have a great impact on the pipeline question.


Flora Isabel MacDonald: I said consider it.


Otto Emil Lang: The studies to which the hon. member referred which indicated the possible feasibility of a railway did not deny that it might require between 10 and 12 years to complete it, which might make it rather an academic exercise in terms of the very oil and gas which that study saw as being required to make it economically feasible. The fact of the matter is that that study was based on the theory that not only gas from Prudhoe Bay but, in addition, oil would be available for that railway and its economic justification. As the hon. lady may know, that oil is now going another way from Prudhoe Bay.


Flora Isabel MacDonald: Mr. Speaker, in referring to the study done by Canalog Logistics Mr. Justice Hall said: "We have intensively reviewed the 13 volume study of this proposed railway and are most favourably impressed by the breadth of its investigation and the superior quality of its analysis". In order to enable hon. members of this House to participate more effectively in the debate on the motion in the name of the President of the Privy Council, will the Minister of Transport now undertake to table the complete 13 volume report prepared by Canalog Logistics rather than just the 28-page executive summary which was tabled in October of 1974?


Otto Emil Lang: Well, Mr. Speaker, this may be the type of work which might be more suited for deposit and access to the public in the Transport Canada library, if it can be placed there. I will certainly see if that can be done.


Flora Isabel MacDonald: Table it.


Otto Emil Lang: Indeed, it may already have been done. The hon. member may have checked. I can agree that the work in those 13 volumes was very fine indeed, but as I pointed out to the hon. lady, it was based on certain theories and facts which are no longer applicable in terms of the availability of oil and gas for that movement.


Flora Isabel MacDonald: Let us decide that. Give somebody else a chance to decide.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. In light of the unanimous report of the Standing Committee on Regulations and Other Statutory Instruments, tabled last week, which stated

that the Post Office has improperly increased first class postal rates, thereby collecting and profiting from approximately $100 million over the past 8'/2 months, will the Postmaster General immediately suspend the collection of the illegal 4 cents until enabling legislation is passed?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, as I indicated in the committee, 1 do not agree with the premise of the hon. gentleman's question. As I indicated in committee, there is no finding by the Standing Committee on Regulations and Other Statutory Instruments that the collection is illegal, and there is no intention at all of discontinuing the practice.


Walter Gilbert Dinsdale: Mr. Speaker, would the hon. gentleman be willing to table the legal opinion upon which the decision to raise the postal rates by regulation rather than by parliament was based, and would he also be willing to submit it to the Supreme Court of Canada for decision?


Mr. Blais:: Mr. Speaker, I refer the hon. gentleman to section 13 of the Financial Administration Act.


SUGGESTED EXTENSION OF HOME INSULATION PROGRAM AS CONSERVATION MEASURE
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is for the Prime Minister. An international study group published its findings yesterday, which state that the non-Communist world will probably run out of available supplies of oil and gas between 1985 and 1995, that it is possible that this could occur in 1981, depending on the policies of Saudi Arabia, and that the world must drastically curtail growth in the use of energy and move massively out of oil into other fuels with wartime urgency. Mr. Marshall Crowe of the National Energy Board participated in that study, and he says that the report adds immensely to one's sense of urgency. Does the Prime Minister have a sense of urgency about this situation and about the need for energy conservation, and would he direct his minister to implement an effective conservation program by extending the home insulation grants program beyond Nova Scotia and Prince Edward Island to the rest of the country, keeping in mind the fact that the director of the office of energy conservation has just resigned-


Mr. Speaker:: Order.


Pierre Elliott Trudeau: Mr. Speaker, the hon. member is obviously making a representation that the government extend a program which has been applied in two provinces. We applied that to two provinces for a reason which is well known to the opposition, the great dependency of those two provinces on petroleum for the production of electricity. Extending the program to other provinces is being considered. The financial implications of it, of course, are very great.
May 17, 1977


POLYSAR
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, before the Minister of Finance went on his trip to London and because of certain media revelations from Amsterdam, in the Netherlands, he undertook to inquire into-and has, I understand, received-a report from CDC regarding the Polysar controversy and the identification of some of its customers. Because the Public Accounts Committee was frustrated in its attempt to receive that information on the basis that a certain Swiss law grants an exception where shareholders are making the same inquiries and because the minister in the right of Canada is the major shareholder of CDC, which in turn owns Polysar, I wonder if the minister can now tell us what is in that report. Could he also tell us when that report, if there is anything worthwhile in it, is going to be transmitted to the Public Accounts Committee?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, as I indicated, I asked the representatives of the Government of Canada on the board of Canada Development Corporation, the parent company of Polysar, to inquire, through the management of CDC, of Polysar with respect to these particular media allegations. I have been advised, as I advised the House, that an investigation is being carried out by Polysar management with regard to improprieties but no report has yet come from that examination. I gather that the corporation would probably have some contest with the hon. member as to the legal question involved. They have taken the viewpoint that in the light of Swiss law, representatives of the company would be subject to legal sanction in Switzerland if they revealed details about individual customers. 1 understand the hon. gentleman was offered this information and it was offered to the steering committee on a confidential basis but the position taken by the company is that they could not put it on the public record. When the response to the investigation is received I will of course want to examine it. I will then be glad to discuss with the hon. gentleman its possible use in the Public Accounts Committee.


ALLEGATIONS OF ILLEGAL PAYMENTS TO CUSTOMERS- POSSIBILITY OF REQUEST FOR INFORMATION FROM NETHERLANDS GOVERNMENT
Allan Frederick Lawrence: A supplementary question, Mr. Speaker. Obviously if any Canadians are implicated they are going to be those same officials from both Polysar and the CDC who are conducting the investigation. It seems rather strange that we cannot have more information, which I am sure the minister must have, than he has given to the House. In any event because those same media stories indicated that the Netherlands government was already conducting an investigation into the same matter and expected to have some of its information presented to them by the Canadian government, could the minister indicate if that
Oral Questions
information has been given to the Netherlands government or has there been any request for any such information?


Donald Stovel Macdonald: Mr. Speaker, I know of no such request from the government of the Netherlands-certainly none that has come to the government of Canada-but it may well be that the subsidiary of the Canadian corporation has been the subject of such a request. I would remind the hon. gentleman that, contrary to his allegations about the management of Polysar, they did appoint an independent inquiry made up of a retired Court of Appeal judge and a member of the Toronto business community and that they did make an independent investigation of these particular allegations.


TRANSPORT
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, my question is for the Minister of Transport. In recommending the abandonment of some railway branch lines, Mr. Justice Hall proposes that the agency making the decisions as to which lines should be abandoned, should be dedicated exclusively to the public service and relieved of the commercial standards of the corporations it is to suspersede. I should like to ask the minister if the government agrees that the future of the transportation system in western Canada should be decided on social and economic grounds as well as on the basis of commercial viability or user-pay, as it has been up to now?


Otto Emil Lang: Mr. Speaker, obviously it was the desire to take social and other factors totally into consideration which led us to set up the Hall Commission and receive from it this very commendable job of work. Those are the factors we took into consideration. The Prairie rail authority to which the hon. member has made oblique reference is a very interesting idea in terms of dealing with these questions in the future in relation to several thousand miles of line. I will certainly want to consider that very seriously and to hear representations from farmers and representatives of farm organizations before drawing conclusions on the recommendations to put before my colleagues.


RAIL LINE ABANDONMENT-SUGGESTED SUBSIDIZATION OF UNECONOMIC BRANCH LINES
David Orlikow: A supplementary question, Mr. Speaker. Since the Hall Commission recommended that in the interest of promoting economic development in western Canada there should be continuing subsidies for some uneconomic branch lines, will the government now agree that it should carry the cost of such regional development of transportation, rather than shifting much of the cost to the provinces as the minister proposed just last week?
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May 17, 1977
Oral Questions


Otto Emil Lang: Mr. Speaker, 1 do not agree with the hon. member's comments.



SOCIAL SECURITY


Mr. F. A. Philbrook (Halton):: Mr. Speaker, my question is for the Minister of National Health and Welfare. I should like to know if any special measures have been taken to ensure that all senior citizens receive their old age security benefits when they reach age 65?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, usually all senior citizens make application well before they reach age 65. For those who apply late, there is provision in the Act for retroactivity. Unfortunately, some senior citizens do not apply in time. For instance, I am sure all members of the House will join me in wishing a happy birthday to the hon. member for Westmount who is celebrating his 65th birthday today.


Some hon. Members:: Hear, hear!


Marc Lalonde: Unfortunately, the hon. member has not yet sent in his application so I am writing to him today, as I do to other senior citizens when a special case is brought to my attention, pointing out all the benefits available to senior citizens-the Canada Pension Plan, the basic old age security, the guaranteed income security, the Canada Assistance Plan, New Horizons and to make sure nothing is forgotten, I am sending him family planning information as well.



OLD AGE SECURITY ACT


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I want to extend my congratulations to the hon. member on reaching the age of 65. As we are involved with the old age security bill, can the minister advise whether it is still his intention that the bill will be in effect by July 1. I think this is the indication the minister had given to us earlier. After that Mr. Speaker, 1 have a slight supplementary.


Marc Lalonde: Yes, Mr. Speaker. The plans are to the effect that the bill which was approved by parliament will be proclaimed before July 1.


Mr. Speaker:: One slight supplementary.


Lincoln MacCauley Alexander: We are all entitled to make one mistake every now and again, sir, and I do not make too many. Given the fact that the minister has just returned from overseas

where I understand he had discussions with personnel in the United Kingdom, France and the United States, can the minister advise how the reciprocal agreements are coming along and whether any will be entered into by July 1? I am speaking in particular of the United Kingdom and the United States.


Marc Lalonde: Mr. Speaker, officials of my department were in Washington last week to have discussions on this subject. Meetings with British officials are scheduled for the week of July 11 and we are to have meetings with French officials in early fall. Unfortunately, I do not think we can have agreements ready for signature by the time the bill is proclaimed. With regard to the British situation, their minister has indicated interest in reaching an agreement but he pointed out that there might be some financial difficulty in Britain in meeting the commitment that could be made under such an agreement. We are going to explore the matter further.



FISHERIES


Mr. Lloyd R. Crouse (South Shore):: Mr Speaker, my question is for the Minister of Fisheries and the Environment. On May 2 the captain of a Soviet fishing trawler who had been detained since April 11 for catching river herring gaspereau some 130 miles at sea in greater quantities than allowed by law, pleaded guilty in a United States district court and was fined $10,000 and placed on nine-months' suspended probation. Since the normal run of river herring or gaspereau is practically extinct at the present time in Nova Scotia, I should like to ask the minister what steps he or his officials are taking to determine the quantities of these fish caught by foreign fleets off our coast, in the hope of preserving this species which is salted and exported to the West Indies, when it is available, thereby adding to the income of our inshore fishermen?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, if violations occur for quotas which are not available to the foreign fleet, obviously they will be dealt with first in the courts. If found guilty, then they will be informed that their licence will be suspended for a given period of time. So far we have suspended licences for one year and have indicated where there are repeated violations the licence will be suspended indefinitely.



SALE OF URANIUM AND NUCLEAR REACTORS-CANADIAN POSITION ON DISPUTE BETWEEN UNITED STATES AND GERMANY

Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Prime Minister. Can he shed any further light than
May 17, 1977

came forth in the communiques issued from London and the press reports, on the development of the dispute between Germany and the United States with respect to the handling of the sale of uranium and reactors? Is Canada taking an active position in support of one side or the other, given the fact that the Canadian position has not been that far removed from that put forth by the President of the United States?


Pierre Elliott Trudeau: Mr. Speaker, I must admire the euphemism that the hon. member uses in saying our position is not that far from that of the United States. He will know, of course, that Canada has taken the lead in this matter. We put on safeguards a considerable period of time before the Americans caught up to us. Of course, our position has been one of great doubt about the utility and necessity of reactors and indeed much of our safeguards position centres around the undesirability of having reprocessing plants. Naturally, President Carter was stating the view we had already stated many times.
In the debate between President Carter, the German Chancellor and the French president, naturally, the Americans are on the same side as Canada. We all attempted honestly at that summit to find a way out of this difficulty. The hon. member is aware, of course, that we set up a group to establish within 60 days terms of reference for the study which would look at the problem of fuel cycling, to see if there is any way of reaching a compromise on the types of safeguards which are needed and would meet the arguments of both sides.



EXTERNAL AFFAIRS


James McPhail Gillies: Mr. Speaker, may I direct my supplementary question to the Secretary of State for External Affairs? I have never been particularly impressed with arguments as to who was first in this area. Given that Canada started the atomic race in the Far East, I do not see why we should argue who was first, whether it was the United States or somebody else. The Secretary of State for External Affairs told the House before he went abroad that he would make quite a detailed report to the House on the whole range of safeguards, bilateral agreements, multinational agreements and agreements with non-proliferation signatory countries, in which Canada is involved. 1 think even the minister will agree, this is a highly confusing situation. Can the minister tell the House when he proposes to make that report, so that hon. members who are keenly interested in this important matter can be certain of being present.


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I will be glad to reaffirm my intention of doing so, and as thoroughly as possible. I cannot be specific about time. I think the hon. member knows that a Japanese
Oral Questions
delegation is in Ottawa, with whom our officials are speaking, and there are also talks going on with the European countries concerned. I think it would be inappropriate for me to make a full declaration of the type I have been speaking about during the period of those negotiations. As soon as there is some clarity as to where we are going with those countries in those negotiations, I will be glad to do it. In case the hon. lady is worried that this will not take place until the millennium, let me say that this will be done within the next two weeks. If the negotiations have not been completed in two weeks, I will make the statement in any event.



IMMIGRATION


Mr. Lionel Beaudoin (Richmond):: Mr. Speaker, I would like to put a question to the minister responsible for immigration, but since he is not in the House I shall direct my question to the right hon. Prime Minister.
Since in recent days or last month Quebec Labour and Immigration Minister Jacques Couture has apparently sent to the federal Minister of Manpower and Immigration a paper containing a new approach to change the immigration criteria which already exist in Quebec, can the Prime Minister tell the House whether he has read that paper sent by Mr. Couture and whether the Department of Manpower and Immigration or the federal government intends to do something in that regard?


Pierre Elliott Trudeau: Mr. Speaker, I have not read that document myself, but I am told there will certainly be a meeting between officials of the federal government and Mr. Couture, the Quebec minister, next week.



LABOUR CONDITIONS


Mr. Serge Joyal (Maisonneuve-Rosemont):: Mr. Speaker, my question is for the Minister-of Labour.
Since the union representing the 2,000 employees of the flying personnel of Air Canada cannot continue the negotiations with that Crown corporation because the parties are unable to agree on a place to do so, and since the personnel union will have the right to strike within 14 days should the minister fail to appoint a conciliator, can the Minister of Labour tell hon. members whether he has read the union's request and, if so, can he say whether he proposes to appoint a conciliator?

May 17, 1977
Oral Questions


Hon. John C. IVfunro (Minister of Labour):: Yes, we do, Mr. Speaker, next week.



CANADIAN BROADCASTING CORPORATION


Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is directed to the Prime Minister. Recently the Montreal Gazette announced that the Prime Minister's former press secretary has been appointed as head of public affairs programming for the Radio-Canada television network. I ask if, in making the personal appointment, the Prime Minister instructed the CBC to make a balanced presentation of public affairs and news programs in order to avoid those situations of which government members were so critical?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member may recall that the gentleman in question, Mr. O'Neil, was also president of the parliamentary press gallery.


Ramon John Hnatyshyn: Nobody's perfect.


Pierre Elliott Trudeau: That is possible. The hon. member for Sas-katoon-Biggar says nobody is perfect. Every time we hear him talk we realize that is a fact.


Some hon. Members:: Oh, oh!


Ramon John Hnatyshyn: Thank you, Pierre. That remark will be worth a couple of thousand votes in the next election.



ENVIRONMENTAL AFFAIRS


Mr. Dan McKenzie (Winnipeg South Centre):: 
A. Daniel McKenzie: A supplementary question, Mr. Speaker. As the study stated that the building of a methanol plant would create 40,000 new job openings, I ask the minister if he is planning meetings with the private sector, with the forestry industry, in order to get a methanol production plant going?


Roméo LeBlanc: Mr. Speaker, we have not yet reached that stage. Obviously, if we were with the other departments involved to recommend federal involvement in this area, it would be perfectly logical to involve the industry.



POST OFFICE


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, my question is for the Postmaster General. Will the Postmaster General please explain why the Post Office continues to sell such non-postal materials as stamp album kits, souvenir stamp cases and first day covers, when the Auditor General has questioned since 1972 whether the sale of these items falls within the powers of the Postmaster General under the Post Office Act?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, I am not aware of the Auditor General's representation relating to that point. We are selling philatelic items and have sold such items for some time. There was some question at one time if the prices solicited were sufficient, considering that we were selling stamps with those items. Besides that I see no difficulty, Mr. Speaker.


Mr. Baker (Grenville-Carleton):: Stick to the mail.


Stan Darling: A supplementary question, Mr. Speaker. When will the Postmaster General introduce legislation, promised since 1973, which will give the Post Office the necessary authority to sell this material and junk?


Jean-Jacques Blais: Soon, Mr. Speaker.
May 17, 1977



FINANCE


Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Minister of Finance. Since the Arctic Gas Company has repeatedly said before the National Energy Board that it will require financial guarantees before it can proceed with the construction of the pipeline, and has gone so far as to say, no guarantees, no pipeline; and since the minister, in answer to questions, previously said Arctic Gas has not made any formal application, I ask if that is still true, namely, that there has been no formal application? Also, has he received from Arctic Gas officials correspondence outlining the terms and conditions of the kind of guarantee they would require. If so, what has been the minister's reply to such correspondence?


Donald Stovel Macdonald: Mr. Speaker, I think it is fair to say that I have not received any official request for financial assistance of that kind. Representatives of the Canadian Arctic Gas Pipeline group have indeed discussed the evidence that they gave to the National Energy Board with my officials indicating the financial concerns in relation to which they would be seeking support. The general position we have taken is that in view of the fact the board has not reported, and indeed the board may not find in favour of their particular application, it would be premature for the government to seek to make any decision with regard to financial applications, either from this particular group or any other pipeline group.


Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that Arctic Gas has asked for a conditional permit, the only applicant which has, and the condition is that they get financial guarantees, may I ask the minister if it is the government's intention, assuming Arctic Gas gets a conditional permit, to deal post de facto with the matter of giving a guarantee and to introduce legislation in the House, asking parliament to approve financial guarantees after the company has the permit to proceed with the construction of a pipeline?


Donald Stovel Macdonald: Mr. Speaker, as the hon. member points out, the situation is entirely hypothetical at this point. He probably states the situation correctly, that if the government of Canada wants to give guarantees of any kind to any pipeline applicant, it would either through the estimates or some other legislation have to seek the support of parliament. As I said in response to the previous question, we have not addressed ourselves to that at this point because there is no indication at this point that this particular group is going to be successful as an applicant.
[ Translation]


Mr. Lavoie:: Mr. Speaker, I am raising a question of privilege because yesterday, seconded by the hon. member for
Oral Questions
Esquimalt-Saanich (Mr. Munro), I put to the House a motion under Standing Order 43 to congratulate the hockey team the Canadiens. In answer the Chair referred to the ruling on the previous motion put by my colleague from St. John's West (Mr. Crosbie). So the reason for the refusal of the motion by the hon. member for St. John's West was that it was not a matter of urgent and pressing necessity. I should like to say that my speech to commend the hockey team the Canadiens was not a motion of pressing and urgent necessity, but I simply wanted to point out an event of national and international interest.
Mr. Speaker, I remember that last year I had presented that same motion. The Chair had agreed to present the motion and hon. members were unanimous in accepting it. Therefore, this is the principle I am dealing with, not because this is a precedent. I recognize that your task is rather difficult, Mr. Speaker, and you deserve all our admiration for what you do. Consequently, following your decision whether you will give me the authority to put the same motion before the House again next Thursday, since I shall be here on Thursday, I shall be pleased to do so or if you decide in favour of the point I am raising, Parliament could perhaps simply send our sincere congratulations to all the players of the hockey team the Canadiens as well as to the coach and management on behalf of our institution. I thank you, Mr. Speaker.


Mr. Speaker:: The hon. member can certainly understand the difficulty imposed on the Chair having to decide whether such a motion under Standing Order 43 is in order because when dealing with a motion to congratulate someone, as a winning sports team or, as it occurred before, to mark the anniversary of the funding of a very important town in Ontario, or another success, as proposed by the hon. member for St. John's West (Mr. Crosbie) there is always a difficulty on the urgency of or the need for such a motion. We always have to determine whether we can accept the motion of an hon. member which underlines the importance of an event which occurred in his riding or a motion concerning the success of an organization. Every day we face the difficulty of having to decide whether a motion which should be very precise as far as its national scope is concerned is in order under Standing Order 43. Of course, it is easier and fairer simply to let an hon. member speak for two minutes to enable him to put forward a motion under Standing Order 43 and to justify its importance before the House, without having to take a vote. The Chair must also consider the importance and the urgency of the matter, under Standing Order 43.

May 17, 1977
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ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, I would like to table copies, in both official languages, of the economic review by the Department of Finance, dated May, 1977.


Mr. Speaker:: I understand there has been some discussion or consultation about the statement to be made by the Minister of Public Works. It is related to the position not only of some responsibilities of the Department of Public Works but also of the Department of National Revenue in so far as it affects the position of employees resident in Ottawa and working in Quebec, or vice-versa. There might be some disposition to listen to the statements by both the Minister of Public Works and the Minister of National Revenue, comment on them in rotation and then ask questions of both ministers. Is that acceptable?


Some hon. Members:: Agreed.


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Hon. Judd Buchanan (Minister of Public Works):: Mr. Speaker, since 1969 the government has been implementing a plan for the national capital region with two major objectives: the achievement of a more balanced and equitable distribution of public service jobs between Ottawa and Hull, and an increase in the level of Crown-owned facilities as opposed to leased space. Today 1 would like to announce recent decisions by the government in both these areas and to take the opportunity to recapitulate and clarify the government's position and expectations with regard to development and space utilization in the national capital region.
Particularly since the government's announced policy of slow growth in the public service as part of its over-all restraint program, there has been some concern shown and fears expressed about the effects of government policies on growth and development in the capital. I hope that I can provide a clear picture of our over-all planning for this area and in so doing allay some of the fears and provide a groundwork for planning by all concerned.
At present, the printing and publishing section of the Department of Supply and Services, as well as the Departments of Consumer and Corporate Affairs, Labour and Environment, are located in Hull. As previously announced, we hope that by the end of the current fiscal year most of the Department of Supply and Services, Canadian International Development Agency, the Department of the Secretary of

State, Canadian Radio Telecommunications Commission, and the Department of Indian and Northern Affairs will have moved, or commenced to move, as well. In addition to these relocations, the government has recently decided also to relocate the Solicitor General's department, the Canadian Transport Commission and the Department of Regional Economic Expansion from Ottawa to Hull during this same fiscal year. The Canada Labour Relations Board, Unemployment Insurance Commission, and the Department of Manpower and Immigration are scheduled to move in the 1978-79 period.
The total number of public service jobs involved in these moves is approximately 15,000. With these relocations, the main thrust of the government's relocation policy within the national capital region will have been completed. Except for a number of small units which will be moved to fill up smaller blocks of space in the new buildings, there are no further plans for permanent relocation of government units to office space in Hull for the foreseeable future.
As to the second major objective of the government's national capital region plan, that of increasing the level of Crown-owned facilities as opposed to leased space, there has been considerable revision of our projects for development and construction in light of the government's program of over-all restraint and the related plan for slow growth in the public service over the next few years. I should emphasize that "slow growth" means just that-in the current fiscal year, authorized man-years will be increased by only 0.6 per cent over the 1976-77 level. The continuation of our move toward Crown-owned space and the projected slow growth rate will mean that the government will be returning, on a phased basis, some 4 million square feet of commercially-leased office space to the market over the period to the end of the 1980-81 fiscal year.
Fortunately, the office vacancy rate in the national capital traditionally has been, and is now, substantially lower than in almost any other major Canadian city. Therefore, it appears likely that the building owners, through aggressive application of their entrepreneurial skills, will be able successfully to cope with the admittedly substantial volume of space being released by the federal government.
My departmental officials have been co-operating with the Building Owners and Managers Association-BOMA-to ensure that they have the full, timely information necessary for them to react. Further, we have been informed that the Commercial and Industrial Development Corporation is preparing to mount a vigorous campaign to increase private sector demand for commercial and office accommodation. In addition, the chairman of the National Capital Commission has announced that the NCC intends carefully to study the question of commercial and industrial development with a view to providing whatever assistance it can to encourage greater private sector activity in the national capital. The efforts of these agencies are beginning to show tangible results; recently we were approached by two owners to release space in advance
May 17, 1977

of our original plan, to permit them to accommodate private sector demands.
One of our main concerns in attempting to alleviate the impact of these necessary inventory adjustments has been for the smaller shop and restaurant owners, which both support the occupants of the buildings we lease and, to some extent, rely upon their trade to stay in business. Accordingly, we are negotiating with the building owners, through BOMA, and with the downtown merchants, in an attempt to arrive at an arrangement which will permit us evenly to spread the effects across our rental inventory. If we are successful in securing the full co-operation of building owners, it should be possible to ensure that no specific area is critically damaged or required to absorb an inequitable share of the burden.
In order further to ease the transition, the government is taking advantage of this period of consolidation to demolish over 2 million square feet of old, inefficient space in temporary or obsolescent buildings throughout the city of Ottawa over the next two years. I should point out that even after these inventory adjustments the government will continue lease or lease-purchase arrangements for 7.7 million square feet of office space in the national capital region: 2.3 million square feet on the Quebec side, and 5.4 million square feet on the Ontario side. Incidentally, some concern has been expressed recently about the impact of income tax deductions on residents of Ontario working in Quebec. This is a concern, of course, not only for federal civil servants residing in Ontario whose departments are relocated in Hull, but also for some employees in the private sector. I am happy to report that my colleague, the Minister of National Revenue, will describe a solution to this problem in a separate announcement.
I am pleased to confirm, also, that the agreement signed in 1975 by representatives of the Outaouais Regional Community Transit Commission, the Ottawa-Carleton Regional Transit Commission and the NCC is currently being reviewed. Negotiations between the parties are expected to lead to a similar agreement providing passengers with a choice of interchangeable services to and from both sides of the Ottawa River, augmented as necessary to meet the demand.
Although the restraint program has restricted Crown construction in the Ottawa area, the government is concerned that the core of the city of Ottawa continue to be vital and thriving. In particular, the government has long favoured the development of the Rideau Centre, a proposed major complex on an 8 1 /2-acre tract of federal land on the east side of the Rideau Canal. The development of this area has had wide support and it is felt would make a substantial contribution to the revitalization of the whole Rideau core area. The government will shortly be publicly inviting proposals for development of the centre. The first stage will enable potential developers to express their interest and demonstrate their capacity to undertake such a venture. As originally planned, this centre would feature a major hotel, a major department store and other retail outlets and some 700,000 square feet of office space, much of which would be occupied by the federal government.
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In view of the present situation, it has been decided not to include office space in the Rideau Centre development proposal call on federal land. Nevertheless, the government has decided to move ahead with the other aspects of the centre in the belief that this will have a beneficial over-all effect on the Rideau core and will be welcomed by the Ottawa business community.
I hope the?" comments will help to clarify the government's plans for development in the national capital region in the medium-term future. There is no question that insofar as the federal government is concerned we shall be going through a period of consolidation rather than the fairly rapid growth we have experienced over the past few years. However, over-all there will continue to be some growth in the NCR as a whole and, of course, the municipalities in the area will continue vigorously to pursue alternative courses leading to a more diversified industrial and commercial life for the region.
I am sure hon. members are also interested in the government's plans to move government units from the national capital region to other parts of the country. This is a complex issue, involving a number of difficult assessments and choices. The government has already made some announcements on its plans in this regard but is not in a position to make a comprehensive statement at the present time. It hopes to do so in the next few weeks. I wish to emphasize, however, that there will be no overlap between these moves to Hull and decentralization outside of the national capital, with the minor exception of a few smaller units already announced, involving approximately 450 jobs in all.


Hon. Monique Begin (Minister of National Revenue):: Mr. Speaker, I am pleased to announce that the negotiations undertaken by the Minister of Finance and myself with the province of Quebec have resulted in an agreement which enables us to reduce tax deductions from federal employees residing in Ontario but working in Quebec.
Under the agreement, the Quebec government will reduce income tax for federal employees. For others, including those working for the private sector, government agencies and Crown corporations, the federal government will reduce the federal tax deductions to obtain the same result. I am also pleased to extend that solution to private sector workers in other provinces so as to reduce the additional tax deductions when they reside in a province and work in another.
Under the regulations in effect, Quebec residents working in Ontario may ask their employer to make additional tax deductions. To do so, they must file a tax deduction application. In conclusion I might add that we are now discussing with the Minister of Supply and Services (Mr. Goyer) the application of tax deductions. I hope this regulation will come into effect on or about July 1.

I should like to conclude by thanking all my colleagues from Ottawa who constantly made representations to me in caucus, and I should like, also, to mention particularly hon. members
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May 17, 1977
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on the other side of the Elouse, especially the hon. member for Esquimalt-Saanich (Mr. Munro).


Walter David Baker: Mr. Speaker, this is an interesting day in the life of the national capital area. We are now seeing the government attempting to justify, on the backs of the Public Service of Canada, a proposal which was made to develop what I call Fort Fullerton on the other side of the Ottawa river, a decision that was reached without any forethought or consultation whatsoever.
If I may deal with the statement of the Minister of Public Works (Mr. Buchanan), using his language, this is an attempt to justify a decision which was made without any planning or consultation with anyone. I refer to the development of those buildings on the other side of the Ottawa river. The buildings are there; anyone can see them if they look across the river. They stand there at great public expense, and I think it is important that the people of Canada know just how little planning, discussion and consultation went into the decision to put them there.
I am not speaking from lack of knowledge. 1 am speaking from information that was given to me by the government in an answer to a question which I put on the order paper on November 19, 1976. It is of interest to note that there was so little planning, so little digging and so little to look for that the government was uncharacteristically quick in answering that question on November 22, 1976. The question asked whether a task force on relocation of departments and agencies to Hull has been formed and, if so who are the members, what are the terms of reference, has it begun to function, on what date is a report expected, and will it be tabled in the House or published as a white paper? To that question the answer was no. So some time between November of last year and today's announcement somebody scurried around and found some departments which they could move to Hull. If making an announcement in this way within that short period of time is not an example of lack of co-ordination, then 1 do not know what is, Mr. Speaker.
As for development of the area itself, I put certain questions on the order paper on November 19. For example, No. 1,141 has never been answered, though it is being partly answered today. I asked in the fourth part of the question:
What consultation has been undertaken with Hull to determine the best means of maximizing benefits and minimizing harmful effects on the city (b) what consultation has taken place with the city of Ottawa to minimize possible harmful effects on the city?
The minister's statement did not deal with this, which means that there has been no consultation whatever. If the statement of the Minister of Public Works marks a failure in anything- and I say this with regret and without any reprobation of the hon. member himself-it marks a failure in the efforts of the hon. member for Ottawa West (Mr. Francis), the hon. member for Ottawa Centre (Mr. Poulin) and the hon. member for Ottawa-Vanier (Mr. Gauthier), who within their caucus, as it is described by the Minister of National Revenue (Miss

Begin), have tried to persuade the government to use its head and to think about what it is doing.
The justification for a ministry of the public service to look after the interest of the public servants of Canada has been put forward time and time again by the hon. member for Ottawa West. In terms of consultation with the corporation of the city of Ottawa, the regional municipality of Ottawa-Carleton and all the municipalities around, on a matter that affects them gravely, the government has admitted today that there has been none whatsoever. This step has been taken to fill buildings on the other side of the river which were constructed without any study at all being made. They are a figment of some bureaucratic mind; they are standing there today and they must be filled. That is the situation we are in in the national capital today. In other words, it is a Ruby Goldberg day in the national capital.
Another matter which concerns me, regarding which members of the House have tried to deal, is the matter of getting co-ordination between the government's plan to decentralize the public service, on the one hand, and relocation of the public service to Hull, on the other hand. This statement, on its face, is an indication that this step has been taken separate and apart from decentralization. Relocation is not considered as part and parcel of decentralization in terms of areas affected. That is an admission of failure. It is dereliction of duty on the part of the government, not simply on the part of the Minister of Public Works who is only the fellow who has to carry the can today. This lack of co-ordination between decentralization and relocation reminds me, quite frankly, of an octopus in heat, and I think it is about time somebody said so.
Have any studies been made of this proposal for the growth and development of the national capital? None whatsoever. How can we believe the well-intentioned Minister of Public Works when he says that only 15,000 public servants will be transferred to Hull? Do you remember, Mr. Speaker, the bilingualism program in this city? It started out first as a policy involving 25,000 people. Then there was a little leak out of the government to the effect that it would be double that and, by golly, the government admitted that 53,000 would be affected. Now we are up to 65,000 positions and there is no indication that that figure is going to be lessened. If the Minister of National Revenue, who is interjecting, will be patient, what I am saying is that the disease of this government is that its figures mean nothing since there are no studies upon which those statistics are based.
Who is going to carry the freight for a policy which has been made without consultation with the city of Ottawa, the regional municipality and the municipalities around? Who but the old entrepreneurial skills of the private sector? The entrepreneurial skills of the private sector in the national capital area in a time of slow growth are going to be tested like they have never been tested before. If there is any meaning to the statement by the chairman of the National Capital Commission with respect to providing some help to develop the private sector and increase employment, then it had better become apparent quickly. There had better be some flesh put on the
May 17, 1977

skeleton, instead of the pious statement which the minister made to the House today.
I laughed out loud when the minister expressed concern for the small shop and restaurant owners and stated how the government was going to rationalize the position of small shop and restaurant owners in the city of Ottawa who had developed on the basis of one particular scheme of development and who now find the rug pulled out from under them by a government which has about as much co-ordination as the octopus that I have mentioned. I am sure the hon. member for Ottawa Centre and the hon. member for Ottawa West-and I bet that if he were here, the hon. member for Ottawa-Vanier would nod his head, too-have received letter after letter, as I have, from members of the business community in Ottawa asking why they are not being consulted and being told what the government is doing. I suggest it would be uncharacteristic of the government ever to consult. If they will not consult with their own public service unions, and if they will not give advance notice to them of decentralization, how could we ever expect them to consult with such forms of life, in their consideration, as smaller shop and restaurant owners in the national capital area? They even admit in the statement that damage is going to occur. They say on page 3 of the statement that there is going to be something less than critical damage. Well, that is a comfort. They are going to do their best to deal with that. In the statement there is no rationalization of transportation problems.
1 am delighted to see the government has announced, for the fifth time-twice in the 1972 election, twice in the 1974 election, and today-that we are going to proceed with the Rideau Centre. That is a wonderful thing. But I want to warn the proponents of the Rideau Centre that, like bilingualism and the designation of bilingual jobs which has escalated, the promise with respect to the Rideau Centre is de-escalating. We were going to start with a big project, and now it is going down and down. I wager there will be a sixth announcement in the future concerning the development of the Rideau Centre in Ottawa.
Referring to the whole business of relocation, I remind the government the only place within the national capital area is in the city of Hull, and the official plans for the townships of Nepean, Goulbourn, Osgoode and Rideau, and the whole aspect of the regional government plan in this area asks for government installations in those areas as part of relocation projects. Why the government continues to place more and more square footage of office space in one area of the national capital, and denies that kind of development to the other areas, 1 leave that to hon. members to speculate about. That demand is there. That is a demand that ought to be remembered, and not forgotten, as it has been forgotten by this government.
The statement of the Minister of Public Works is a dreadful one for the national capital area. We have come to this point without consultation with the public service unions, the municipalities involved, and without any meaningful plans to assist
Public Service
the private sectors. Lip service is given to that in this statement. This point has been reached without any meaningful plans with respect to transportation, and without settling the matter of sewage treatment on one side of the Ottawa River. Making these announcements is further indication of lack of co-ordination which has afflicted this ministry since 1969.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I would like to make my comments more as a representative from Canada looking at this problem, rather than someone speaking for the municipal council of Ottawa.


An hon. Member:: Hear, hear!


Max Saltsman: We are dealing with something a little bigger than just what happens in the city of Ottawa. There are a number of things in this statement that I approve of, but there is one thing of which I very much disapprove. It is not so much contained in the statement, as the way the minister has been treating parliament and the committee which was set up to deal with this matter.
I appreciate there is an urgency to deal with these matters. We have a committee set up to study the National Capital Commission. We have some very able people on that committee, and the committee did a great deal of work. It is contemptuous of the minister and the people involved to make this announcement without having convened that committee and discussed the matter with them and made them aware of the situation. There were many different points of view expressed by the people on that committee. I did not agree with every one of them. It is typical of the way parliament and its committees are being treated by the ministry. This behaviour serves very badly a relatively good cause. I am referring to the manner in which the minister has brought this information into the House.
Let me say something about consultation. My hon. friend who preceded me said that the business community of Ottawa should have been consulted. I am sure the business community of Ottawa made known their points of view. If they had been consulted and listened to, there would be nothing in Hull. It is parliament which makes the decisions, not the business community of Ottawa. I should like to talk about the business community of Ottawa and the kind of decisions they have made for this city in the past.
I am delighted the National Capital Commission owns the land which will be the future site of the Rideau Centre. Those 8% acres will not be built on, if the National Capital Commission has anything to say about it, in a way that will overshadow the parliament buildings. Those acres will not be built on in a way which will allow for the maximum amount of assessment regardless of the consequences to Parliament Hill. Unfortunately, the policy of the city of Ottawa in the past has been virtually to laugh at the attitude of the National Capital Commission in regard to height restriction: the greater the height, the greater the assessment, so let them go as high as they like, not matter what it does to Parliament Hill! That is
80016-22%

May 17, 1977
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what is important about having public lands to prevent this type of thing taking place.
To build in Hull and to move some 15,000 public servants there will create a number of problems. The Minister of National Revenue (Miss Begin) has taken steps to correct some of those problems. While it deals with some long-standing grievances, it does create new problems. What happens when 15,000 people pour out of Ottawa to work in Hull and return to Ottawa in the evening? Just because they are working in Hull, I do not think they will make their residence in Hull. Perhaps Hull does not want them. Over the years Ottawa has been getting the industrial and commercial assessments in many cases, and Hull has been the bedroom town with all that is involved in terms of a tax base. Some of that is going to be redressed by this move. It is long overdue that we should redress this imbalance.
My hon. friend who spoke on behalf of the Conservative party worries about the fact there has been no planning. He is right. There was probably no planning involved here. It was only Mackenzie King type of planning-if you have a tradeoff, you make a deal. If you look at the history of the conflict between the regional municipalities of Ottawa and Hull and the National Capital Commission, you realize that a rare choice has been made here. At some point I would like to question the minister to find out what Mr. Coolican's attitude has been to this kind of trade-off. It is quite apparent that the city of Ottawa was given something they wanted in return for lessening their objections about development in Hull. They have been given the Rideau Centre. It is a typical Canadian compromise, "Here is something for you, so do not get too noisy about what we are doing over there because you stand to gain something as well". There should be a better way of doing it than that, but that is apparently what has been done.
There is a real problem which the minister has not dealt with. I appreciate at this particular time that we are very much concerned about the relationship between the other provinces of Canada and the province of Quebec. It is almost to the point where it is dominating everything we are attempting to do these days. I am sure this real concern will be voiced by those who come from the less developed and less prosperous areas of Canada. Our preoccupation with this problem will lead to neglect in solving the other problems.
In his statement, the minister touched very briefly on the fact that he is going to make some announcement in the future about the decentralization of government agencies into other parts of Canada, but it is not very reassuring for him to come in with this kind of statement, to leave the other matter hanging in the air and to be so vague about what he intends to do about decentralization generally. This can only increase the concern other parts of Canada have as to whether the minister is going to deal as expeditiously with their problems as he is in trying to deal with the more central problem here in Ottawa-Hull. I think it terribly important that perhaps even today the minister should state in unequivocal language that this is not
[Mr. Saltsman.l
going to be the case, and should reassure other parts of Canada that the much needed assessment of employment in those parts will not be overlooked in view of the concern about the central capital area.
[ Translation]


Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, while agreeing with my colleague, the hon. member for Gren-ville-Carleton (Mr. Baker), about the lack of foresight and co-ordination in the transfers announced today, I wish to thank the Minister of National Revenue (Miss Begin) for her cooperation because she sent me the text of her statement prior to its delivery this afternoon. I thank the minister for her courtesy.

Speaking now of those public servants who today are working in Hull but who are living in Ottawa, I feel it is worth mentioning that it has taken a long time to get the message across the floor-


Mr. Speaker:: Order, please. I do not know if there has been some impression created that there would be several rounds of speeches, but the procedure under which we are operating calls for a statement by a minister-in this case statements by two ministers-which I respected. In terms of the time allocation to those who wished to respond, I attempted to guard for those who were responding to those statements the same time which was occupied by the two ministers who spoke. Our Standing Orders then allow a period for questions, but not a period for other statements, responses or speeches to be made. I have recognized the hon. member for Esquimalt-Saanich (Mr. Munro) as the first questioner, if he has any questions to put to the minister.


Donald W. Munro: Mr. Speaker, it was my understanding that my colleague, the hon. member for Gren-ville-Carleton (Mr. Baker), was addressing himself to the transfer and the public works aspects of the move, but that I would be addressing myself to the other aspect mentioned by the Minister of National Revenue (Miss Begin). It was to that end that I was making my remarks, and I was certainly keeping myself within the timeframe the minister used in making her remarks, as did my colleague in respect of the timeframe used by the Minister of Public Works (Mr. Buchanan).


Mr. Speaker:: If that were the case, it would have been much easier. In fact, hon. members who have spoken until now have used equivalent time to that occupied by both ministers. However, in case there is any confusion-it is a rather extraordinary occurrence-I should reflect in favour of the hon. member and allow him a brief comment, as certainly the statement by the Minister of National Revenue (Miss Begin) was brief. That may, of course, have a restrictive effect on questioning. But in any case, the hon. member for Esquimalt-Saanich may continue.


Donald W. Munro: As I was saying, it has taken some time for the message to get across the floor,
May 17, 1977

because this situation has existed for some time. Here, again, I echo the comments of my colleague about the matter of failure to consult. However, I am really delighted that the minister and her colleague, the Minister of Finance (Mr. Macdonald), have at long last managed to persuade the taxing authorities in the province of Quebec that some sort of accommodation on this tax problem could be made in order to relieve the burden suffered by public servants who, without being consulted and being in danger of losing their jobs if they refused to move, found that their place of work was transferred into a higher tax area.
The formula is a complicated one, at least as it was laid out in the minister's statement, but if I understand it correctly, the formula consists of an undertaking by the provincial authorities in Quebec to reduce the amount of their provincial tax so that the burden of taxation would be no heavier than it was before the move. Nothing, however, is mentioned about retroactivity or the immediate refund, on application, of over deductions which have been made.
What puzzles me is that the provincial authority has undertaken to act in the case of employees in federal departments, whereas the federal government will have to act to reduce the tax deductions on others. I quite understand in the case of the private sector, but not in the case of Crown corporations, government boards and agencies. Does this mean that public servants alone were the target of the Quebec provincial tax collectors, whether those tax collectors were of the former Liberal government or of the current separatist government? This unusual situation requires careful analysis and I reserve the right to come back to the relevant ministers for clarification.


Mr. Speaker:: Order, please. I think hon. members ought to be provided a short period of time in which to direct questions to either of the hon. ministers.


Mr. Francis:: Mr. Speaker, I have a question for the Minister of Public Works. In his statement he said there will be no overlap between these moves to Hull and decentralization outside the national capital, with the minor exception of a few smaller units already announced involving approximately 450 jobs in all. So that I may understand, does this mean that, in effect, there will be no further moves of positions outside the national capital region-and that includes both sides of the river-until such time as the relocation of government offices to Hull has been completed?


J. Judd Buchanan: That is correct, Mr. Speaker. If my memory is correct, I believe the cheque redemption centre of the Department of Supply and Services in Matane, plus the three taxation data centres in Surrey, Shawinigan and St. John's, are the ones which employ the 450 employees to whom I made reference, and that will occur during the same period. Other than that there will be no decentralization prior to the completion of the relocation to Hull. Any further decentralization will be subsequent to that.
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Mr. Poulin:: Mr. Speaker, I have a question for the Minister of Public Works. Just as a preliminary comment, I must say that I am disappointed that this announcement has been made with respect to further relocations to Hull, in view of the fact that last October it was estimated that there was 2.5 million square feet of vacant office space and now we find that 4 million square feet are being returned to the private sector. Will there be additional square feet of presently occupied private sector office space vacated by the federal government when those plans which the minister hopes to be announcing in there weeks with respect to decentralization have taken effect? Will decentralization result in further vacancies of private sector office space in the city of Ottawa?


J. Judd Buchanan: Mr. Speaker, I am not quite clear in this regard. The question is similar to the one previously posed. Is the hon. member asking if in the years 1981, 1982, 1983, 1984 and 1985 there will be additional decentralization?


Fabian Hugh Poulin: In his statement the minister indicated that some 4 million square feet will be returned to the private sector, and he indicated certain branches, government boards, bureaux and departments which will be relocated in Hull. My question is, will decentralization result in the vacating of additional space to those 4 million square feet referred to?


J. Judd Buchanan: No, Mr. Speaker. The vacancies for the small decentralization to which I made reference are included in that figure.


Max Saltsman: Mr. Speaker, I would like to ask the minister why he did not reconstitute the joint committee on the national capital and put this proposal to that committee, since it spent so much time examining this very problem.


J. Judd Buchanan: Mr. Speaker, part of the problem is that we are simply carrying out this previously announced program, as I mentioned at the beginning. The increase in Crown-owned facilities was announced by one of my predecessors. I believe it was the late Arthur Laing who, back in 1969, indicated that this was the intent of the federal government. In the intervening years difficulties have been created, in particular, excess space which was created by the slowdown in the rate of growth of the public service.


An hon. Member:: What?


Donald W. Munro: What did you say?


J. Judd Buchanan: Otherwise, this is something which would have been absorbed without the creation of the significant vacancy to which my hon. colleagues on this side of the House just made reference. Really, it is simply the logical continuation. The buildings have been very evident: there for all to see. They have been building for many years across the river and this is simply carrying through to completion the undertakings given by the late Arthur Laing in 1969 and 1970 when he made statements about adjusting the balance between the amount of leased space and the amount of Crown-owned space in the national capital region.

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Max Saltsman: Mr. Speaker, has the minister been in touch with the Ottawa regional group, has he explained what he is going to do, and has he had any comment from them on this proposal? In other words, does it meet with the approval of the municipalities in Ottawa and the Ottawa regional group?


J. Judd Buchanan: Mr. Speaker, there has been consultation on this at the official level. I have had meetings which involved the mayor of the city of Ottawa, and I was chatting with him concerning this announcement earlier today. We have had several meetings prior to today to lay to rest the incorrect allegations of the hon. member for Grenville-Carleton. There have been ongoing discussions. There obviously has not been great happiness on their part at seeing the quantum of space that we are letting go back to the private sector, but it involves the expiry of our leases on these spaces. There has been some concern about that and about the impact on the city of Ottawa.
We hope that over the timespan involved, a significant portion of this will be absorbed by the private sector. In addition, I understand that certain buildings amongst those we are vacating are comparable to some of our own buildings which are on the list for demolition. We anticipate that these buildings in the private sector will be demolished as well. 1 would not suggest they are jumping up and down for joy at the results, but on the other hand I think there is acceptance of this as a program that has been in train for several years and that this is the outcome. The intensity or the extent of the vacancy will be severely increased by the diminution of 4, 5 or 6 per cent in the rate of growth in the public service in this area back to something like 0.6 per cent.
During his preliminary remarks the hon. member made reference to the question of decentralization. This deals also with a question from the hon. member for Ottawa Centre. The government's commitment in the medium and longer term to the importance of decentralization remains, but it is our intention that in the short term there will be none while the community goes through-any "additional", I should say- this process of absorbing the fairly significant amounts of space which will be going back to the private sector.


Mr. Speaker:: Order, please. Bearing in mind the length of the statements, it would appear to me from those members who have been seeking the floor for some time that the questioning would be equitably distributed by recognizing these other hon. members: the hon. member for Richmond, the hon. member for Esquimalt-Saanich, and the hon. member for Hull. If the hon. member for Winnipeg North Centre, in addition to his colleague the hon. member for Waterloo-Cam-bridge, seeks to round that out, 1 would have no objection.


Léonel Beaudoin: Mr. Speaker, the minister said a moment ago that he would continue to decentralize government services in the capital or in Hull. I agree with the principle of decentralization, but I am concerned about one

thing: the minister said it was very difficult to decide where some government services should be sent. It is very difficult to know where they will be sent. Are these criteria determined in advance and are they available to members of Parliament and the public?


J. Judd Buchanan: Mr. Speaker, basically I think one of the policies is to try to decentralize generally to the smaller and slower growth regions of our country, but 1 am trespassing to a degree on the preserve of two of my colleagues. It is the responsibility of the Minister of Industry, Trade and Commerce to deal with decentralization in the first phase, and then it will revert to the President of the Treasury Board. This question would be more appropriately addressed to either of those ministers.


Léonel Beaudoin: Mr. Speaker, could the minister tell us whether he will inform hon. members on which basic criteria he bases himself to diversify or move one portion of the services provided by a department in a given sector, so that they can be better informed?


J. Judd Buchanan: I will be happy to draw the comments and representations of the hon. member to the attention of my colleagues.


Donald W. Munro: Mr. Speaker, I am tempted to ask the minister about the annual rate of growth of the public service, from 186,000 in 1961, to 320,000 now. It has almost doubled in 15 years. However, since I was commenting on the remarks of the Minister of National Revenue-

I wonder if she could explain the second paragraph of the statement, particularly the distinction between civil servants of federal departments and other employees, and between the provincial responsibility regarding tax reductions on one hand and, on the other the federal responsibility regarding deductions at source?


Monique Bégin: Mr. Speaker, I understood the allusion of my colleague from the opposition when he welcomed in a much more positive way this agreement with Quebec.
This agreement is the result of negotiations. I think that the whole House will welcome the result for all the employees living in one province and working in another, particularly for Ontarians working in Quebec, whether they work in the private sector, the public sector or else for Crown agencies or for the public service. The net result is the same for everyone and those persons will not be taxed according to the present legislation, that is depending on the province where they work, but according to the amount of taxes they should be paying after one year.
I feel that one should not expect more from negotiations than what is universally hoped for. In an agreement concerning civil servants, we have obtained that the minimum cost of
May 17, 1977

energy and administrative changes be assumed by Quebec. We have decided to assume the other part of responsibilities, namely, those concerning Crown corporations.
Moreover, the hon. member mentioned retroactive pay and reimbursement. 1 feel that there is no question of that. We are now in the second half of May. We have just signed this agreement which hopefully will become operative on July 1. Unfortunately, there will be no retroactive pay for the past six months. This is the lesser of two evils, a price we had to pay to reach a settlement which will benefit everyone in future years.


Donald W. Munro: What about the previous
years?


Monique Bégin: They already are entitled to a reimbursement for the previous years.


Mr. Gaston Isabelle (Hull):: Mr. Speaker, I have two questions I would like to ask the Minister of Public Works whom I thank for his announcement since, as you know, we have waited since 1917 for some of the manna that was pouring over Ottawa, the official capital of Canada. I think that Hull has been recognized since 1922 as part of the national capital area. Even the Tory government, which preceded the Liberal government, did recognize that legislation in 1958.
As for the other hon. members from the area who are getting impatient, I would ask them to be as patient as we have been on the Hull side. My first question, since reference was made to consultation, Mr. Speaker, is the following: Is it not true that the major consultations took place at the Confederation of Tomorrow conference in Toronto in 1969? I am wondering if the wishes expressed at that conference were not that the national capital area should be officially recognized as the capital of Canada. So, has there been some consultation in that regard?
Following the answer to that question, I would like to direct another question to the minister, Mr. Speaker. Does the minister intend to make his cabinet colleagues aware of the need to amend section 16 of the Constitution so that the capital of Canada be at last the national capital area, and that we do away with those useless, pointless, fanatical and sectarian complications we are always running into when something is going on in Hull while basically it should be in Ottawa, since we all live in the national capital area. So I wonder if the minister will make his colleagues aware of that.


J. Judd Buchanan: Mr. Speaker, as I said earlier, I understand there has been considerable consultation over a period of years relating to this matter with which I am not as familiar as the hon. member, his length of service in this House being longer than mine. He is familiar with the source of the plan and when it was decided to put it into effect. I am certain that his suggestion that the plan flowed from the Conference of Tomorrow is correct. As for his representation concerning
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article 16, I will be happy to draw it to the attention of my colleagues.


Walter David Baker: Mr. Speaker, answering the hon. member for Waterloo-Cambridge, the minister said that the buildings were erected with this philosophy: If the buildings are built, we will fill them. In other words, it was suggested that the public service would grow. At some stage the government must have changed this plan. In order that members may assess better studies and consultations carried on with respect to changes in plans, the curtailment of growth of the public service and its requirements for buildings, would the minister table those documents which preceded the decision which the minister says was made in 1969 by the late Hon. Arthur Laing? Also, would he table the studies which could help us to follow the course the government intends to follow during and after 1977? That is my first question.
Second, is the minister in a position to indicate what the situation is with respect to the holidays of public servants who live in Ontario but work in Hull? Are public servants who live in Ontario and work in Hull to celebrate the holidays of the province of Quebec, or those of the province of Ontario?


Mr. Knowles (Winnipeg North Centre):: Or both?


Walter David Baker: Or both? Are they to be given the option of expressing a preference?


J. Judd Buchanan: Mr. Speaker, if I may answer the hon. member's questions in reverse order, I will check with my colleague, the President of the Treasury Board, as to what the treatment will be with respect to holidays of those who work in Quebec but live in Ontario. The hon. member for Esquimalt-Saanich raised the question of growth in the public service. Significant diminution of the rate of growth in the public service has only taken place since the 1975-76 fiscal year. That diminution in growth continued in the 1976-77 and the 197778 fiscal years.
Frankly, if we had continued with rates of growth in effect as late as 1974-75, the buildings we erected would in large measure have been occupied by the increasing numbers of public servants.
I can remember, as a new cabinet member, expressing my horror at seeing some figures regarding the rate of growth and the amount of space which would be required. 1 saw these figures late in 1974 and stated, "I guess you are saying that every three years we are going to require the equivalent of two Place Bell Canada's simply to accommodate growth." The response to that question was "Yes." A major factor which has altered the situation is the dramatic cut which has occurred in the rate of growth of the public service. As soon as I became Minister of Public Works and was made aware of the results which would flow from curtailing this growth, I raised the possibility of stopping, or mothballing projects already started, such as Terrace de la Chaudiere, phase 4 across the river in Hull, and 240 Sparks Street.

May 17, 1977
Order Paper Questions


Steve Eugene Paproski: You will take these projects out of mothballs next year, just in time for the election.


J. Judd Buchanan: However, each and everyone of these structures was at the point where it was neither reasonable nor practicable to stop construction.


Stanley Howard Knowles: Mr. Speaker, may 1 direct a short question to the Minister of Public Works. I am sure he knows that some of us feel it is a crying shame that the view of the Peace Tower has been blocked in so many directions. Since I can still see it from my room in Parkwood Hills, six miles away, I say woe betide the developer who puts a high-rise building between my window and the Peace Tower. Is the Minister of Public Works prepared to do all he can to preserve the view of the parliament buildings and of the Peace Tower and to prevent the obliteration of that view from other directions?


J. Judd Buchanan: Yes, Mr. Speaker, 1 am happy to give that assurance to the hon. member. I, too, stand on my balcony and admire the view of the Peace Tower from three or four miles away. We both share that pleasure. I want the hon. member to continue to enjoy it.


Benno Friesen: The minister has only to stand on tiptoe and he can see the tower from anywhere in Ottawa.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Fabian Hugh Poulin: Mr. Speaker, the following
questions will be answered today: 514, 1476, 1847, 1850, 1913, 1933, 2017, 2034, 2184, 2236, 2266, 2269, 2281, 2318 and 2360.
1 ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.
[ Text]


Mr. Reynolds: 1.	How many (a) dangerous sexual offenders (b) habitual criminals have been out on temporary absences in the past eighteen months?
2.	How many guns have been found inside penitentiaries in the (a) past eighteen months (b) previous ten years?


Hon. Francis Fox (Solicitor General):: 1. For the period January 1, 1975 to October 31, 1976: (a) 21; (b) 49.
2.	(a) For the period April 14, 1975 to October 14, 1976, seven; (b) For the period October 14, 1966 to October 14, 1976, 21.


Mr. Howie: 1.	For the year 1976, how many riots or similar disturbances took place in Dorchester Penitentiary in New Brunswick and on what date did they occur?
2.	What was the (a) property damage incurred (b) extent of bodily injury among (i) inmates (ii) prison personnel?


Francis Fox: 
Mr. Yewchuk: By category and brand, to which prepared foods on sale in Canada is it permitted for a manufacturer to add Amaranth (Red Dye No. 2)?


Marc Lalonde: Amaranth may be added to the following categories of foods: (1) Apple, or rhubarb, and (naming the fruit) jam; bread; butter; cheese; chocolate drink; concentrated fruit juice; (naming the flavour) dairy drink; fig marmalade with pectin;

May 17, 1977

ice cream mix; ice milk mix; icing sugar; (naming the fruit) jam with pectin; (naming the fruit) jelly with pectin; liqueurs and alcoholic cordials; (naming the flavour) milk; pickles and relishes; pineapple marmalade with pectin; sherbet; smoked fish, lobster paste and fish roe (caviar); tomato catsup. (2) Unstandardized foods such as gelatin desserts, gravy mixes; cake mixes. The Food and Drug Regulations do not require manufacturers of food products to inform the Health Protection Branch of the presence of this colour in their products.


Mr. Yewchuk: By category and brand, to which prepared foods on sale in Canada is it permitted for a manufacturer to add Tartrazine (Yellow No. 5)?


Marc Lalonde: Tartrazine is permitted to be added to the following categories of foods: (1) Apple, or rhubarb, and (naming the fruit) jam; bread; butter; cheese; chocolate drink; concentrated fruit juice: (naming the flavour) dairy drink; fig marmalade with pectin; ice cream mix; ice milk mix; icing sugar; (naming the fruit) jam with pectin; (naming the fruit) jelly with pectin; liqueurs and alcoholic cordials; (naming the flavour) milk; pickles and relishes; pineapple marmalade with pectin, sherbet; smoked fish, lobster paste and fish roe (caviar); tomato catsup. (2) Unstandardized foods such as gelatin desserts, gravy mixes, cake mixes. The Food and Drug Regulations do not require manufacturers of food products to inform the Health Protection Branch of the presence of this colour in their products.


Mr. Laprise: For the fiscal year (a) 1974-75 (b) 1975-76, has the Department of Indian Affairs and Northern Development made any grants under the Indian and Eskimo Affairs Programme to natives who have (i) signed (ii) not signed the James Bay Agreement and, if so, in each case, in what amount?


Hon. Warren Allmand (Minister of Indian Affairs and Northern Development):: (a)(i) Nil; (ii) Nil. (b)(i) Nil; (ii) Nil.


Mr. Epp: 1.	What was the number of immigrants coming into Canada with Hansen's disease (Leprosy) in (a) 1970 (b) 1971 (c) 1972 (d) 1973 (e) 1974 (0 1975 (g) 1976 and, in each case (i) what number were illegal immigrants (ii) what was the respective country of origin?
2.	What number of Canadians, in the past five years, have returned to Canada with confirmed cases of Hansen's disease?
3.	Is the "Scratch Test" given to all members of a family of immigrants after it is determined that a member of that family has Hansen's disease?
4.	How soon after their arrival in Canada do immigrants have access to "compulsory medical benefits" if they have an illness such as Hansen's disease?


Marc Lalonde: 1. No immigrants have been admitted advertently
Order Paper Questions
into Canada with a documented diagnosis of Leprosy, between 1970 and 1976. Applicants are examined and entry is refused if Leprosy is diagnosed. There is no record available of the health status of illegal immigrants.
2.	The federal government has no readily available information on the number of Canadians who have returned to Canada with a documented diagnosis of Hansen's Disease. Requests for such information should be directed to provincial health authorities.
3.	Lepromin intradermal test (MITSUDA) has no diagnostic value and is only useful in classifying the disease between the two distinct major clinical types: lepromatous and tuberculoid.
4.	In general, new residents to a province can obtain medical care benefits on the first day of the third month from the date on which residence is assumed in that province. However, all provinces provide first day coverage on arrival to bona fide residents who have no immediate opportunity to acquire coverage, whether they are affected by Hansen's or any other disease. This applies to the following groups in all provinces except British Columbia, where it applies to new residents in group (a) only: (a) newborns, non-Canadian spouses (of Canadian residents) assuming residence in Canada for the first time, members of the Canadian Armed Forces and the R.C.M.P., and prisoners, (b) Landed immigrants, repatriated and returning Canadians.


Mr. Knowles (Winnipeg North Centre): 1.	How many retired Royal Canadian Mounted Police personnel are receiving pensions, including their basic pensions and any supplement or supplements added thereto, of amounts within each of the following brackets (a) less than $20.00 per month (b) $20.00 to $29.99 per month (c) $30.00 to $39.99 per month (d) $40.00 to $49.99 per month (e) $50.00 to $59.99 per month (f) $60.00 to $69.99 per month (g) $70.00 to $79.99 per month (h) $80.00 to $89.99 per month (i) $90.00 to $99.99 per month G) $100.00 to $149.99 per month (k) $150.00 to $199.99 per month (I) $200.00 to $249.99 per month (m) $250.00 to $299.99 per month (n) $300.00 to $399.99 per month (o) $400.00 per month and over?
2.	How many widows of RCMP personnel or of retired RCMP personnel are receiving pensions, including their basic pensions and any supplement or supplements added thereto, of amounts within each of the brackets indicated in the above question?
3.	What is the number of retired RCMP personnel and also the number of widows of RCMP personnel or of retired RCMP personnel presently residing in each province?
4.	In respect of how many orphans of RCMP personnel are pensions being paid and what is the average amount thereof?


Francis Fox: 1 and 2.
(a)	Amount Less than $	20.00 per month	Retired Members 5	Widows 1(b)	$ 20.00 to $	29.99 per month	8	5(O	$ 30.00 to $	39.99 per month	59	6(d)	$ 40.00 to $	49.99 per month	18	7(e)	$ 50.00 to $	59.99 per month	25	7(0	$ 60.00 to $	69.99 per month	46	7(g)	$ 70.00 to $	79.99 per month	21	6(h)	$ 80.00 to $	89.99 per month	34	17
May 17, 1977
Order Paper Questions
Amount	Retired Members	Widows(i)	$ 90.00 to $ 99.99 per month	12	6a)	SI00.00 to $149.99 per month	132	57(k)	$ 150.00 to $ 199.99 per month	183	53(1)	$200.00 to $249.99 per month	251	44(m)	$250.00 to $299.99 per month	292	42(n)	$300.00 to $399.99 per month	560	61(o)	$400 or over per month	1.792	633.	Province	Retired Members	WidowsNewfoundland	59	7Prince Edward Island	19	3Nova Scotia	259	22New Brunswick	139	9Quebec	232	23Ontario	741	88Manitoba	163	20Saskatchewan	180	20Alberta	516	49British Columbia	1,031	130Yukon	13	1 3Northwest Territories	29	Outside Canada	57	7Total	3,438	382
4. One hundred and eighty-three; $58.39.


Mr. Ellis;: Is the beef consumed in penitentiaries (a) Canadian (b) imported?


Francis Fox: The purchases of beef for the Canadian Penitentiary Service are made by Supply and Services Canada to Canadian Government Specification 32-GP-44c, Type 1, Grade B, which permits only Canadian beef.


Mr. Fairweather: 1.	Has CBC considered adding captions to the news, public affairs and other programmes in order that Canadians with hearing deficiencies might enjoy such programmes?
2.	(a) What would be the cost of adding such captions to the National News (b) would the cost be comparable for public affairs and entertainment programmes?


Hon. John Roberts (Secretary of State):: 1 am informed by the Canadian Broadcasting Corporation as follows: 1. Yes, but the suggestion has not been implemented because of potential distraction and annoyance to the majority of viewers and the consequent loss of audience, and the time required to make captions for news programs that are often changed as they are broadcast in different time zones, as well as the costs involved.
2. (a) No firm costs are available, but the capital cost would be approximately $50,000 for a character generator, and operating costs would be approximately $150,000 a year, (b) There would be no extra capital cost but the operating costs would be increased.


Mr. Laprise: With reference to the documentary series Carcajou et le peril blanc prepared by and shown on Radio-Canada (a) who paid for the study (b) how many programmes does the series comprise (c) have any programmes been censured and, if so (i) how many (ii) by whom (iii) for what reason?


John (Moody) Roberts: I am informed by the Canadian Broadcasting Corporation as follows: (a) The CBC did not pay for the study for the series "Carcajou et le peril blanc", shown on its French TV network. This project was submitted to the Corporation by les Ateliers Audiovisuels of Montreal, and the study was made by Remi Savard, ethnologist, and Arthur Lamothe, film-maker, (b) Seven one hour episodes, (c) The CBC had an option on an eighth episode, which it did not take up, because it did not conform to CBC program policies. This last documentary dealt with a complex issue that is controversial and did not offer the diversity of points of view or the further opinions and evidence which such a subject calls for.


Mr. McKinnon: Is the Department of National Defence buying $198,242 worth of personal armour and, if so (a) in what quantity (b) under which of the four roles of the forces is it expected that the armour will be used?


Hon. Barney Danson (Minister of National Defence):: Yes. (a) 22 personal armour Explosive Ordnance Disposal Suits are being purchased, (b) The equipment is required to provide protection to Canadian Forces personnel involved in neutralization of homemade bombs and explosives devices. The armour will be used under the role of surveillance and protection of Canada's sovereign territory and specifically to provide aid to civil law enforcement agencies on request.


Mr. Patterson: Which Five constituencies contain the greatest number of federal penal institutions and, how many are in each constituency?


Francis Fox: Kingston and the Islands, Ontario, 6 institutions; Duvernay, Quebec, 5 institutions; Fraser Valley-East, British Columbia, 4 institutions; Hastings-Frontenac, Ontario, 4 institutions; Terrebonne, Quebec, 3 institutions.


Mr. McKinnon: Has the Department of National Defence ordered handcuffs from William Scully Limited and, if so (a) is the value of the order $12,499 (b) how many pairs are being purchased (c) what stocks of handcuffs are currently held by the Department of National Defence (d) for what reason is it necessary to add to the stocks currently held?
May 17, 1977


Barnett Jerome Danson: Yes, through the Department of Supply and Services, (a) Yes. (b) 915 pairs, (c) 1,585 pairs in use, seven in stock, (d) To bring stocks to the approved level and to meet maintenance needs for a 27 month period.


Mr. O'Sullivan: L What have been the total amounts spent by CBC on fees for services rendered by (a) part-time employees (b) free-lance personnel in the years (i) 1974-75 (ii) 1975-76 (iii) 1976-77?
2.	What is the estimated total cost of such services for the fiscal year ending March 31, 1978?
3.	What amount, each year, was paid to persons not resident in Canada?


John (Moody) Roberts: I am informed by the Canadian Broadcasting Corporation as follows: 1.
1974-75	($000's) 1975-76	1976-77(a) (b)	4,823 30,366	6,828 37,164	7,646 39.0252.	Part-time Free-lance	$ 8,300,000 $42,500,000	3.	1974-75	($000's) 1975-76	1976-77530	711	796
Note: 1976-77 amounts are estimated on the basis of known results for 11 months to February 28, 1977.


Mr. McKenzie: 1.	Was a statement of claim filed on Monday, July 21, 1975 in the Ontario Supreme Court, Toronto, Ontario by Mr. John Turner against the Canadian Broadcasting Corporation seeking $100,000 in damages plus legal costs and, if so, has a settlement been reached?
2.	If a settlement has been reached (a) was it in or out of the Supreme Court of Ontario (b) what were its terms (c) on what date did it take place?


John (Moody) Roberts: I am informed by the Canadian Broadcasting Corporation as follows: 1. A Statement of Claim and Writ were served on July 14, 1975. A settlement has been reached.
2. (a) Out of court, (b) A broadcast apology on three radio broadcasts on July 2, 1976; payment of costs by CBC; Mr. Turner discontinued the Ontario legal action as well as two other actions commenced in the Federal Court of Canada and the Supreme Court of Nova Scotia, (c) The terms of settlement were agreed to on June 30, 1976.
Customs Tariff



GOVERNMENT ORDERS


Donald Stovel Macdonald: that Bill C-55, to amend the Customs Tariff (No. 2), be read the second time and referred to committee of the whole.
He said: Mr. Speaker, the purpose of this bill is to give effect to the amendments to the Customs Tariff which were proposed in the budget of March 31, 1977. The amendments fall into three broad categories: first, those required to continue in force for another year the temporary tariff reductions which would otherwise have expired on June 30, 1977; second, those designed to implement certain concessions for products of interest to the developing countries which we have agreed to make in the context of the discussions in Geneva on multilateral trade negotiations; and third, a number of miscellaneous amendments, including the withdrawal of the British preferential tariff rate on certain machinery imported from Britain and Ireland.
First let me deal with the question of temporary reductions. The principal provisions of the bill, in clause 3 and schedule II, provide for the extension until June 30, 1978, of a large number of temporary tariff reductions on consumer goods which were originally introduced as an anti-inflation measure in the budget of February 19, 1973. The value of imports affected is about $1.4 billion in terms of 1976 trade. About $400 million of this is in the food sector. Other products covered by the package include drugs and pharmaceuticals, kitchen and dinnerware, hand tools, photographic equipment and sporting goods.
The coverage of the package as of July 1, 1977, will differ in three respects from that now in effect. First, the reduced rates of duty on lighting fixtures are being allowed to expire on June 30 because of the difficulties domestic manufacturers have had in competing against imports. Second, the duty on refined sugar is being increased by one-fifth of a cent per pound to provide refiners with the net amount of protection recommended by the Tariff Board when it reviewed the tariffs on sugar several years ago. I should point out, however, that the new rates of duty on refined sugar are still below those which were in effect prior to the 1973 budget. All we are doing is restoring them to the levels which were in effect between February, 1973, and November, 1974. Third, tariff reductions on several tropical products which were previously part of the temporary measure are being continued in force on a permanent basis pursuant to the provisions in the bill relating to concessions for developing countries.
With respect to concessions to developing countries, the second category, the proposed tariff reductions on products of special interest to developing countries have been discussed with these countries in the "tropical products group" which

May 17, 1977
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was set up in the framework of the multilateral trade negotiations. This group was established to see if something could be done on a priority basis, before the end of the negotiations as a whole, to improve the export earnings and balance of trade of the developing countries.
The Canadian concessions are of two kinds. First, we have added a number of products to the list of goods that are eligible for the general preferential tariff, which applies only to imports from developing countries. Second, we have also reduced or removed the permanent most favoured nation tariff on a number of "tropical products" which are produced mainly in developing countries. The concessions which are being implemented through changes in the general preferential tariff are provided for in clause 2 and schedule I of the bill, while those being implemented on a most favoured nation basis are provided for in clause 4 and schedule III. These proposed changes will affect about $100 million of imports from developing countries.
The third category, as I indicated, is with regard to some miscellaneous tariff charges. As I have indicated, the most important amendment in the miscellaneous group-clauses 5 and 6 and schedules IV and V-is the proposal to make certain machinery and related equipment from Britain and Ireland subject to the 15 per cent most favoured nation rate rather than the 2'h per cent British preferential rate. This amendment flows from the study of the tariffs on machinery from Britain and Ireland which I announced in the budget of 1976.
This study was initiated as a result of representations from Canadian manufacturers that imports of British machinery at the preferential rate were adversely affecting production in Canada. Canada, of course, is no longer required to accord preferential tariff treatment to imports from Britain and Ireland since they withdrew preferences on our exports when they joined the European Economic Community.
On the basis of our review to date, we concluded that the Canadian manufacturers of the nine categories of machinery which are being added to the provisions of tariff item 42701-1 had made a case for withdrawal of the preferential rate at this time. When machinery in these categories is not available from Canadian sources, the duty can be remitted under the machinery program. The Department of Finance will continue to monitor the situation with respect to imports of other kinds of machinery from Britain and Ireland. The bill also provides authority for an increase of 2'h percentage points in the duties on polypropylene resin and on certain products made from this resin. Canadian production of the resin will come onstream in the near future.
The schedule of miscellaneous amendments also provides for continuation of duty-free entry on a temporary basis for various petroleum products and for aircraft. Other amendments are designed to resolve certain problems which have come to light. A number of these are of a relieving nature; for example, the provisions which will accord free entry to cameras and other equipment for the production of films. On the other hand, the $7,500 value limit on individual articles which

may be brought back by Canadians duty and tax free after a period of residence abroad is designed to prevent abuse of existing duty and tax free provisions.
That, Mr. Speaker, is a general review of the items involved. In committee of the whole I will, of course, be glad to deal with any specific questions.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, this is one of the non-items arising out of a very bland budget. We received some amendments to Customs Tariffs in the past which were really much more noticeable or had a much higher profile from a policy point of view. For example, in schedule II there is an extension of two years of a three-year program of tropical fruits and certain things. I was very struck by the first item in 705-2, the admission of frogs legs free into Canada.
It may be that some people consider that a Customs Tariff is a very dry-bones subject and has no humour in it. I do not want to take too much time on this particular bill. I have already mentioned frogs legs in schedule I on page 5. The same schedule, on page 6, refers to fruits, dried, desiccated, evaporated or dehydrated; namely, breadfruit, guavas, litchis, mangoes, mangosteens, pineapples and soursop. What is sour-sop? I am sure even the minister does not know that one. Item 10525-5 takes you through mangosteens, soursop and mangoes, including mango chutney, which is a particular delicacy for my colleague, the hon. member for South Shore (Mr. Crouse). He really loves mango chutney and will be quite happy with that.
On these particular points I would like to know from the minister if, as a result of the three years special tariff on these tropical fruits and part of the extension of freedom of the Canadian market to developing countries outside of the general preferential tariff, there has been any movement of goods into the country. Do items such as these, where we now have free entry, mean anything? Is there a meaningful movement into the country-of a particularly sophisticated kind, I will admit-of such items as 13300-2, caviar being prepared from sturgeon roe, being admitted free? There are others.
One I find most intriguing is item 52306-1, page 8, schedule I. I wonder why this particular item is now being admitted free. This has to with industrial shop towels, hemmed but not bleached or dyed except for identification markings. It lists the various sizes. Are there not, within the Canadian textile industry, ample facilities to produce these industrial shop towels at a price where foreign imports could not be used to drive down prices, that is, costs in the industrial field; or is it in response to representations from any particular country or countries that this is something they would like to sell us in reasonable quantities in exchange for their purchase of other Canadian goods? I think we should have an explanation.
I do not want to belabour this bill. A good deal was said about the principles of it as we debated the tax changes and tariff changes during the budget debate. Several of my colleagues are going to question certain parts as their particular areas may be most severely affected by some of these proposals. I was a little surprised that the minister did not speak
May 17, 1977

about what he felt was the progress on the present GATT talks at Geneva out of the Tokyo round. I was disappointed he did not tell us what progress the government had made in responding to the serious representations made by members on this side of the House as well as by some of the provincial premiers whose full intention it is to insist upon consultation with the provinces with respect to tariff changes. It seems to me that not only do they have a point, but that they have an indisputable case. There is no question but that the premiers have full jurisdiction with regard to development within their own provinces, and unilateral action on the part of the government of Canada in the course of these negotiations, without disclosing what is being acquired and what is being given away, is simply not good enough. A province might very well find that its industrial policy had been thoroughly undermined.
I have mentioned before the implementation of certain features of the Kennedy round having to do with the heavy chemical producing industry across the country. That industry was hard pressed, to start with, as a result of the Kennedy round negotiations. Indeed, it seemed to me that in many instances the concessions made in the field of industrial chemicals were regarded as among the throw-away items. The changes which were to be implemented were to be placed on a five-year basis. But less than two years after the conclusion of the Kennedy round the then minister of finance, Mr. Benson, suddenly telescoped all the remaining reductions into one year. The result was, of course, disastrous for the chemical industry.
I, for one, and my colleagues from Alberta as well, will be very reluctant to accept any concessions made at the GATT negotiations which will further seriously affect the developing industrial chemical industry in Alberta. I suppose that in toto it is the biggest such complex in the country. The problems it faces are already tough enough, in the face of world competition. There is the distance from markets, for example. A considerable element of transportation cost is involved before getting to offshore.
The situation is tough. These firms are finding it hard to meet competition in the domestic market on the basis that a world-scale plant produces 8 per cent to 10 per cent, so perhaps a little more of that plant's capacity will satisfy the Canadian market. So I want to know, as do my colleagues, to what degree is there consultation? By this I mean active consultation, not a telephone call the night before a decision is taken. I mean actual participation on the negotiating teams of representatives of industry and the provincial governments.
In this respect I think we should seek to emulate our United States counterparts who, incidentally, are very successful in these tariff negotiations. They take their people into their confidence and are quite open about what they want to do. Somehow or other, we seem to believe in playing our cards very close to the vest; we think everything ought to be kept under the shell, obliging our own people to guess where the pea is hidden.
Customs Tariff
I see the minister making notes in readiness to reply. Several of my hon. friends have brief comments to make. We do not believe there should be a very extensive debate over this bill, and if the minister is forthcoming in his answers I do not doubt we shall make good progress with this measure. Subject to my commitments on the estimates committee which is dealing with the Department of National Revenue this evening, I hope we can progress rapidly in dealing with Bill C-54.


Stanley Howard Knowles: Mr. Speaker, I rise simply to say that we are quite prepared to have the bill go into committee of the whole forthwith.


Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker,
1 welcome the opportunity to debate this bill. We very seldom have an opportunity to talk in this House on the important subject of Customs Tariffs, but it is a very important subject to Canadian industry. This is an opportunity which usually comes to us after a budget. We get these changes in Customs Tariffs usually involving the lowering of tariffs or else keeping the status quo. Very seldom, if ever, are any of the tariffs raised in the rush by the government to get into a free trade situation as quickly as possible.
Today, many segments of industry in Canada are facing hard times. 1 think particularly of small manufacturing businesses and related enterprises. I think, for example, of firms manufacturing recreational vehicles, motor homes and mobile homes. Times are hard for the boat manufacturers, the electronics industry, the textile industry and the shoe manufacturing industry. Only recently we were hearing noises from the manufacturers of parts for automobiles. Then, as always, there is the case of farm products. These industries are finding it increasingly hard to compete with imports, and the tariff structure, or lack of it, is one factor which makes it difficult for them to do so.
The manufacture of recreational vehicles and mobile homes is quite extensive in my riding. It is important to large numbers of my constituents. Representations have been made to the minister over the past few months with regard to the tariff imposed on the component parts used in the manufacture of these vehicles. The tariff was lowered to 15 per cent a few years ago, but the charge on most of the parts which are not manufactured in Canada and would have to be imported is between 17'/2 per cent and 20 per cent. This means that if a recreational vehicle is manufactured in the United States, for instance, and shipped into Canada, the component parts in that vehicle are charged at only 15 per cent. However, if a manufacturer in Canada goes to the United States and buys the parts there, he is obliged to pay between M'A per cent and 20 per cent, which is really not fair trade. It makes it difficult for the Canadian manufacturer to compete. The whole tariff field is complex and difficult to understand.
Quite often when tariff changes are made there is a chain of reaction against manufacturers or industry in Canada. Unfortunately, manufacturers of recreational homes are considering

May 17, 1977
Customs Tariff
moving from Canada to the United States, as are other industries today. This is a situation we should not allow to happen. There is very high unemployment in Canada and we are looking for ways and means of employing people, yet the situation is such that industries are caused to move from Canada because it is more profitable for them to export their products back to Canada from some other country.
We cannot have it both ways, Mr. Speaker. If we are to do something to assist major industry and business in Canada, we must take a good, hard look at the situation and make sure that we do not inhibit manufacturers from producing their goods in Canada. We need employment. We cannot export people along with our manufacturers, yet we make it very easy for manufacturers simply to pick up and move out, make a profit in another country and send their products back here.
The electronics industry is in the same situation today as textiles and farm products. Although this is not the entire fault of tariffs, quite a lot of the blame is. Most of the problem has to do with trade and trading and bringing imports into Canada, and this is where the tariff structure comes in. People in the electronics industry talk about fair trade, just as do the people who produce farm products, and they see very many areas where we do not have fair trade. Our exports have to meet trade barriers, while we make it very easy to import into Canada.
Let me now come to my favourite topic, farm products. Bill C-55 deals with many farm products and continues temporary tariff reductions which were made previously. These reductions apply to products such as asparagus, beets, carrots and tomato juice-products that we should encourage Canadians to grow. Quite a few people in Canada argue that if we can get these products cheaper somewhere else, then let us import them and not worry about the Canadian farmer. But that is not the way to build this nation; we cannot build the nation with that kind of philosophy.
These same people are telling us to make sure that we do not pave any more farmland. I agree with them, because in time we are going to need all the farmland we can get. That is why we must ensure that our farmers get the chance to make a decent living. I have quite often heard Liberal governments say we should stabilize farming, that we should have stabilization programs, but in the long run I do not believe that stabilization programs are necessarily the best way to preserve agriculture. What we also need is proper protection in our tariff structure.
A couple of weeks ago the report of the Tariff Board respecting fresh and processed fruits and vegetables was laid on the table. I do not know when we will have a chance to discuss the report in the House, if ever. Seldom do we get the opportunity to discuss anything to do with tariffs in this House. We have the GATT round and the Kennedy round, and pretty well such decisions are made by the bureaucracy and approved by cabinet. Such matters are not really discussed in the House of Commons where the opposition has a chance to say something.
The Tariff Board report on fruits and vegetables is a very good one and certainly does not go along the lines of the action

taken by the Minister of Finance over the last few years of reducing tariffs on farm products. The fruits and vegetables industry has done a terrific job of informing the Tariff Board about what is going on, and I certainly hope the board's recommendations will quickly be acted upon. Llowever, we do not know what route is going to be taken to make these recommendations law and to incorporate them in the tariff provisions, if that is what is going to be done by cabinet. As I say, we do not get an opportunity to discuss the matter, which in my opinion is undesirable.
I will not take up any more time of the House except to say that, so far as the general over-all philosophy of free and fair trade is concerned, I think there should be a more complete review of the whole tariff structure so that we do not find certain tariffs penalizing producers or manufacturers in Canada. I have a few questions I should like to ask, but 1 will save them for when we get into committee of the whole.


Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I have a few comments to make on Bill C-55. At the outset I should like to echo the words of the hon. member for Edmonton West (Mr. Lambert) who underlined the importance of tariff negotiations so far as Alberta is concerned, particularly with regard to agricultural and petrochemical products. These are very important to the industrial capacity of the province of Alberta, a fact which I should like to impress upon the minister. I would like to deal today with three industries which are of grave importance to the prairies and western Canada. They are the pork industry, the beef industry and the rapeseed industry. I would like to deal with them in that order as far as tariffs are concerned.
On February 20, 1973, the tariff on canned pork was substantially reduced. This bill calls for a continuation of that reduction. This is despite the fact that the hog industry in western Canada is on the verge of collapse. The industry is in trouble, and low tariff rates have only served to aggravate the problem. In 1971, Alberta produced 2,015,000 hogs. By 1975, this figure had been slashed almost in half to a total production of only 1,242,000 hogs. Many pork packing plants across Alberta have been shut down and the remaining operations are running at 35 per cent to 50 per cent of their capacity.
Tariff rates have not been the sole, nor even the major reason, for the decline of the hog industry in western Canada. Most of these problems relate to the problem of freight rates whereby it is cheaper to ship 800 pounds of barley to eastern Canada to raise one hog than it is to raise a hog in western Canada and ship the meat out to eastern markets. It would be a favour to western markets if the tariff was increased to an adequate proportion in order to eliminate some of the import-export anomalies we see.
In 1975, $77 million worth of pork was imported into Canada. By 1976, this had increased to $144 million worth of pork shipped into this country. At the same time, we are only exporting some $93 million. You can see the effect this is having. We have doubled our imports of pork products into
May 17, 1977

Canada within one year, and our exports have remained virtually the same or have dropped slightly.
1 would like to deal for a moment with the continuation of low tariffs on vegetable oils. The highlights of this plight of the industry in the west is that the oilseed crushing industry is not going ahead at the pace it should be. 1 know of one or two plants in western Canada which are ready to start building if they could get the proper concessions as far as tariffs and freight rates are concerned. Without getting into the problem of freight rates, because I know that does not come under the jurisdiction of this bill, I would like to put before the House the supposition that if we cannot get the proper freight rate structure for the oilseed crushing plants in western Canada, maybe the answer is in a proper tariff structure.
At present it is cheaper for eastern Canada to import their vegetable oils for use in the kitchens than it is to bring in western crushed oilseed. This, of course, is because of the freight rate structure. If we could get a proper tariff structure on the importation of vegetable oils, this would provide the distinct advantage which is needed until the minister stops procrastinating on the freight rate structure and allows us to bring rapeseed oil and rapeseed meal into eastern Canada at the rate at which we are now shipping uncrushed rapeseed.
My last representation has to do with western Canada's beef industry. The item I want to refer to is the ad valorem duty which is being charged by the United States. It ranges from 7.5 per cent to 10 per cent on all boxed beef which is going into the United States. As a producer of beef in western Canada, I have to take that steer or heifer to a packing plant, have it slaughtered and put into a boxed condition ready to be shipped to the United States market directly into a store or a restaurant. I am being charged 7.5 per cent to 10 per cent ad valorem duty by the American government to send that boxed beef to the United States.
At the same time, a producer in the United States doing the same thing is allowed to bring his beef into Canada at a mere three cents per pound, which is a standard rate Canadians and Americans pay at the border for any carcass beef that crosses. This is a direct discrimination against the western beef farmer in processing his product in the packing plant. This is something we should look at very closely.
I am not advocating we should put on a 7.5 per cent to 10 per cent ad valorem duty here in Canada to offset what they are doing to the beef industry in the United States. I am advocating we should be entering into negotiations with the United States government to eliminate that discriminatory factor and allow it to cross the border at the three-cent tariff which is applied to American beef coming into Canada. All we are asking for is the same treatment. This has been going on for at least ten years, if not longer. In order to create more jobs in the packing industry in western Canada, it is absolutely essential, as we move more and more to the boxed beef trade for the restaurant market, to get the same treatment. Over a third of our meals are now eaten in restaurants, which is increasing rapidly to the point where in the next three or four years half of our meals will be eaten outside the home.
Customs Tariff
1 would like to ask the minister one question in the area of small business. I cannot understand why a tariff is charged on machinery coming into this country which we are not capable of producing. To give an example of this, an industry in my riding is setting up a plant to produce plastic boxes for stores. They required a printing press to print on those plastic boxes. They were unable to find a printing press in Canada and found out that such a printing press could not be produced. Thus, they had to go outside Canada to buy the press. It cost some $300,000, and they were charged a 15 per cent tariff. That is a substantial amount of money to a small business which is scratching to get started and is faced with a sum of money like that which has to be paid to the federal government. That is unfair and is something we should look at. If we are not capable of producing that machinery in Canada, then there should be no tariff on its crossing the border.
In conclusion, it is a good practice to have no tariff on tropical produce. It is more sensible to allow that produce in free, than shipping hundreds of thousands of dollars of Canadian taxpayers' money to those countries in order to help them out with their balance of trade payments.


Benno Friesen: Mr. Speaker, to begin with, I would like to compliment the minister on one inclusion in the tariff. I am referring to item No. 46218-1 which is a tariff item that relates to the film animation industry. This is a relatively new industry in Canada. It is encouraging to see they will be able to bring related machinery into the country duty-free in at least two areas, except for the third item which is the most favoured nation column. I want to thank the minister for that. It is necessary this new industry be supported in that way and I compliment the government for recognizing this need.
Having said that, I want to associate myself with the remarks of the hon. member for Okanagan Boundary (Mr. Whittaker). The policy of the government is contradictory in this area because, on the one hand, the government has created a tariff classification in order to help new industry, but on the other hand industry which is already established in Canada is having a hard time making a go of it.
I refer specifically to the leisure craft industry which produces campers and trailers. In my riding of Surrey-White Rock there is a large leisure vehicle industry, and because of rising taxes at all levels of government, rising labour costs and rising material costs, the industry cannot make it any longer in Canada. It is moving to the state of Washington. It is going to continue manufacturing leisure vehicles there. Canada can be serviced from the state of Washington better than if the industry is operating within Canada. Something must be rotten in the state of Denmark when a wholly-owned Canadian industry which was born in Canada and which has been operating in Canada for a couple of decades has to move to the United States to service Canada. It is time we took a new look at our taxation structure in order to help industries which are trying to make a go of it.

May 17, 1977
Customs Tariff
1 would like to bring to the attention of the minister just one item. I raised this the last time there was a budget debate. It relates to marksmen, whether they are target shooters, skeet shooters, or whatever. The Canadian industry has stopped making components for ammunition; that is, shells, cartridges and shot. All those items are no longer manufactured in Canada. All you can get is the completely assembled bullet, shell, or whatever it is called, which is manufactured in Quebec. There are many people in British Columbia who are members of gun clubs and who do not want to pay the high, assembled price of those components.
Over and over again in schedule IV of the tariff we find the phrase "those items not made in Canada". I would like to ask the minister why it is not possible for this item to be declared duty-free so that people who see assembling these bullets as part of their hobby can be accommodated. Why can they not bring the component parts from the United States or from other countries and assemble them themselves? Why should they have to pay up to 12 times as much for the assembled item, when they could get it in its component parts and have the pleasure of assembling the bullets themselves, as well'as saving all that money?
I know the minister will argue that this is a revenue-producing item, but if that is the case, why not for all these items? Why pick on this one item? I would like to have a clear answer from the minister as to why the tariff is on this one simple item which is important to target shooters and skeet shooters. These people purchase in large volume, and this tariff makes it very difficult for them to practice their hobby as much as they would wish. Why has the minister not included that in the tariff arrangements for this year? That is one item about which I would like to have a clear and concise answer from the minister.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I want to make a few comments to show that governments sometimes admit they make mistakes, and sometimes they even take action to correct them. On December 13, 1976, during a debate on scientific research relating to a bill on government organization with regard to scientific activities, I made reference to tariff item 69605-1 which is a tariff item dealing with scientific apparatus including scientific preparations used in teaching, in research and in medical diagnoses, these items being equipment and chemicals of various types.
Over the past five years there has been a severe erosion in Canada in the area of scientific research and medical research-all kinds of research, as a matter of fact-because of a policy of this government which suggests that very much research is not really necessary in this country because we can simply import it and thereby get it at a lower cost. The tariff item to which 1 am referring was changed a couple of years ago. These items were free of tariff originally, but for some strange reason somebody in the government got the idea that a tariff should be applied. The result of that was to increase the hardship for research people in Canada because the cost of research went up by 6 per cent to 10 per cent. Following many vigorous representations by researchers from across the coun-
[Mr. Friesen.1
try and by hon. members from this side of the House I am pleased to note that the government has now seen the folly of its ways and has again proposed in this bill to abolish the tariff on these items.
I wanted to make these few comments in order to show the House of Commons, the country and the world that members of the opposition are not afraid to say something complimentary about the government when it is deserved. I must emphasize, however, that I am speaking strictly about one specific tariff item. There are many others on which action could have been taken which has not been taken. The government should be severely castigated for this. However, on this particular item I think the correct action has been taken.


Mr. Deputy Speaker:: Order, please. Before 1 recognize the hon. minister, 1 wish to inform hon. members that if the minister speaks, he will close the debate.


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, I would like to advise the hon. member for Edmonton West (Mr. Lambert) that a soursop is a sour-tasting fruit found in the Caribbean. The substantial question which the hon. member for Edmonton West raised was with regard to provincial consultation on the current so-called Tokyo round of negotiations. I point out to him that there has been extensive consultation among the Canadian tariffs and trade committee and industry across Canada, and that provincial governments in particular have been invited to submit their considerations which should be brought forward in the forthcoming tariff negotiations. Only some provincial governments have responded to that invitation.
Mr. Speaker, I see that you are looking restlessly at the clock, and perhaps I will be able to continue my remarks at eight o'clock.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of the adjournment are as follows: the hon. member for Simcoe North (Mr. Rynard)- Agriculture-Brucellosis-Possibility of returning to vaccination program; the hon. member for New Westminster (Mr. Leggatt)-Environmental Affairs-Drilling in Beaufort Sea- Possibility of complaints from other countries about risk of oil spill and co-operation on clean-up.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's
May 17, 1977

order paper, namely, public bills, private bills and notices of motions.


PRIVATE MEMBERS' PUBLIC BILLS
Mr. Alan Martin (Scarborough West) moved: that Bill C-207, to amend the Railway Act, as reported (with an amendment) from the Standing Committee on Transport and Communications, be concurred in.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: When shall the bill be read the third time? By leave, now?


Some hon. Members:: Now.


Alan Gray Martin: that the bill be read the third time and do pass.
He said: Mr. Speaker, I have very few words to say at this time, but I should like to take the opportunity of expressing my thanks to members on all sides of the House-the opposition, of course, included-and to the Minister of Transport (Mr. Lang) for his support of a bill that I think through debate on second reading and in committee has been determined as being in the public interest. I might say that although the bill arose from problems in my own riding in connection with the expansion of the marshalling yard facility, I think it has been obvious from discussion of the bill that this kind of situation can probably affect all other ridings in the country.
The effect of the bill is to require that a public announcement will be made, when such expansion is contemplated, four weeks in advance of when it is proposed, and it will be made at no time when there are residences, commercial or public buildings within 1,000 feet of the proposed site of construction. This will give those affected an opportunity to present any objections they may have of the proposed plans to the Canadian Transport Commission, which may in turn require that the railway submit detailed plans, and it may choose to hold public hearings if that seems to be in the public interest.
The only other comment 1 should like to make at this time is that as a backbencher in this parliament it is encouraging to me, and I hope to other backbenchers, to see that members of parliament can indeed from time to time, with the co-operation of other members of the House, bring forward legislation that hopefully can have some useful effect across the country.


A. Daniel McKenzie: Mr. Speaker, I will be brief. This bill has been discussed in great detail both in committee and in the House and there has been all-party support for the proposal. My only objection-and I raised this
Railway Act
when it was raised in the House on November 23, 1976-is that the bill does not go far enough. We felt then that the bill should also cover the selection of piggyback terminals and other large railway projects. There have been complaints in the Winnipeg area about Canadian National Railways' complete disregard for citizens and residential areas when they locate, without any proper consultation and complete disregard for objections from the city or area residents. However, as this bill progresses we hope it can cover other areas such as locating piggyback terminals. I should like to congratulate the hon. member on his bill and trust it will receive speedy passage.


Mr. Marcel Roy (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I am again pleased to be able to participate in this discussion on Bill C-207 to amend section 119 of the Railway Act. As I indicated in my comments during second reading on November 23, 1976, and again on April 25, 1977, when this bill was carefully examined by the Standing Committee on Transport and Communications, this is a bill which addresses itself to increasing public information and awareness by requiring railroad companies to provide four weeks' public notice of plans to change or expand railway tracks in residential areas. This is an important step in making the railways more responsible and considerate of the public they serve. In this respect, I am sure that all hon. members recognize the need for adoption of this legislation.
During detailed study of this bill in committee 1 moved an amendment which was unanimously adopted by the committee. The amendment in no sense changed the major thrust of this private member's bill. Rather, it broadened the scope of the bill to include not only residences but also commercial and public buildings located within a distance of 1,000 feet of the planned railway facilities. The amendment also provided for the Canadian Transport Commission to exercise practical discretion in administering the act.
The railways are not required to advise local citizens when existing facilities are to be deviated, changed, expanded or otherwise, when those fall within the scope of section 119. The value of Bill C-207 to the Railway Act is reflected by the unanimous and positive reception which the bill received on second reading and in committee. I urge that this bill again receive the unanimous support of all hon. members. I should like to thank all hon. members who participated in the debate on this legislation.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


[Stage Direction]
Motion agreed to, bill read the third time and passed.
Mr. Deputy Speaker:: Order, please. I just overheard that it was agreed to call it six o'clock. Is it agreed that I see the clock as reading 6 p.m.?


Some hon. Members:: Agreed.

May 17, 1977
Customs Tariff


Mr. Deputy Speaker:: It being six o'clock p.m. and the hour appointed for the consideration of private members' business having expired, 1 do now leave the chair until 8 p.m.
At 5.10 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-55, to amend the Customs Tariff (No. 2), be read the second time and referred to committee of the whole.
Donald Stovel Macdonald: Mr. Speaker, may 1 say a few words, in reply to comments made this afternoon. I began to say this afternoon, subsequent to the comment made by the hon. member for Edmonton West (Mr. Lambert) with respect to consultation, that my predecessor over two years ago invited the provinces to make submissions with regard to Canada's position at the Tokyo Round of tariff negotiations, and a few provinces have responded to that by indicating their positions. Many more have not. I would have to say that 1 would welcome provincial participation on this question. Indeed, I would welcome the participation of the provinces at a meeting of finance ministers, at which we could collectively address ourselves to some of the issues involved. Last, but not least, I would welcome the provinces giving some priority to considering what they would be prepared to pay in terms of trade-offs in order to get tariff reductions abroad, and to considering their objectives for developing Canadian industry.
In this particular round of tariff negotiations the provincial position is going to be relevant, because this time it will not simply be a matter of changing the Canadian tariff. Some provincial policies themselves will be the subject matter of criticism. Non-tariff barriers of various kinds to trade are up for negotiation at this time.
Since I have been Minister of Finance, I have noted one of the areas of difficulty has been not so much the policies of the federal government as the policies of various provincial governments which have been active in excluding foreign imports from Canada. I think, of course, of the policies of some liquor control boards, policies of other provincial entities with regard to government procurement, the policies of marketing boards, and so on. I think that kind of national discussion would be extremely valuable, not only for the purposes of obtaining

some indication of provincial priorities, but also for the purpose of learning what they are prepared to give up in terms of provincial protection in order to secure better markets for Canadian goods abroad.
Consultation with the private sector has been actively under way for over two years in the Canadian Tariffs and Trade Committee. That process of consultation will continue in the next six months as the Tokyo round of negotiations again gains momentum.
The hon. member for Okanagan Boundary (Mr. Whittaker) spoke of the difficulties some Canadian manufacturers are experiencing in competing in the Canadian market, and said that one or more of them-this point was echoed by the hon. member for Surrey-White Rock (Mr. Friesen)-had moved their operation to the United States and were selling back to the Canadian market. That, really, is the crux of one of the major economic problems we face in Canada. Unless we can keep our costs down in this country, unless we can remain competitive on the world market, not just in the business of recreational homes to which the two hon. members referred, but in many other Canadian secondary manufacturing enterprises, our businessmen will want the future expansion of their businesses to take place outside this country. For that reason the government has put particular stress on the importance of restraining the increase of costs in this country and, particularly, restraining the increase in the rate of inflation.
The hon. member for Okanagan Boundary also referred to fresh fruits and vegetables, and referred positively to the report on fresh fruit and vegetables made by the Tariff Board and tabled recently by myself. The second part of that report on processed vegetables will be available in the early summer, and the two parts of that report will have an important role to play in forming the Canadian position with respect to negotiations at the Tokyo round, particularly negotiations with the United States.
Both the hon. member for Okanagan Boundary and the hon. member for Wetaskiwin (Mr. Schellenberger) demonstrated the problems that the negotiators face, in the sense that at one time they were talking about better protection for Canadians and the next moment about better access to the American market. This is the basic problem that this country, indeed any country, faces in tariff negotiations.
What are you prepared to give up in the way of protection in Canadian industry for the purpose of getting better access to foreign markets? What are you prepared to trade off? That is the really critical question.
The hon. member for Wetaskiwin referred to the better market access he would seek for Alberta petrochemicals. That is a laudable objective if it can be achieved. He also talked about the importance of protecting certain Canadian agricultural markets in this country from penetration, particularly by United States exports. In this sense you have the contradiction that is involved in these negotiations for any country, of wanting better access for those products in which you think
May 17, 1977

you have a comparative advantage as opposed to having to give up protection of a certain Canadian industry.
On the question of vegetable oils, and indeed the question of further processing on the Great Plains, I would make a reference to the discussion which occurred in the question period with respect to the freight rate system and the impact of this on manufacturing in western Canada. It is a fair comment to make that indeed the crushers of rapeseed are faced with a difficult market in western Canada.
The problem is compounded by the fact that the freight rate system favours the shipment of either rapeseed, in the case of rapeseed crushers, or barley or other feed grains out of the Great Plains to be used not only in eastern Canada, but indeed for rapesseed to be processed in the Japanese market rather than having the processing occur in western Canada. There again is another trade-off you have to face between a lower freight rate for the raw product as opposed to the freight rate you have to pay for the more refined goods.
On the ad valorem beef tariff in the United States, the imbalance between the United States and the Canadian tariff, 1 recognize the imbalance. That is the kind of objective we should have in mind in going to the American negotiators, pointing out in this particular case we would be seeking reciprocal treatment in this regard, which I understand is the position the hon. member took. That is a very fair position. That is the kind of proposal we would have in a specific negotiation with the United States.
Finally, with regard to the machinery being imported by a small business, the present structure of the tariff system does make provision for the kind of situation to which the hon. member refers. There is a special provision with respect to machinery imports. If indeed it can be established that the piece of machinery being imported into Canada is not of a class or kind made in Canada and is not available from Canadian producers, that particular firm is able, under the machinery program, to make an application to get a remission of the duty. The hon. member did not mention any particular time frame within which the import had been made. If he would like to pursue with me a particular case of particular import, it may well be that under the machinery program they would be entitled to have back the duty which they have paid.
The hon. member for Surrey-White Rock made reference to the problem which he raised during the customs tariff bill debate last year, that is, with regard to the import of the elements by people who, as a matter of hobby, fill their own ammunition. As a result of the kind of representation he and others have made about importing things for hobbies in Canada, we have decided to make a reference to the Tariff Board to get their recommendation as to the appropriate treatment of imports of that kind for hobbies, and their being competitive with some of the products produced in Canada. That particular question is going to be given full consideration by the Tariff Board.
That covers some of the major items raised by hon. members. As we go through from clause to clause and look at the schedules, I will be glad to elaborate further.
Customs Tariff


The Acting Speaker (Mr. Ethier):: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Ethier in the chair.
On clause 1.
George H. Whittaker: Mr. Chairman, I thank the minister for his limited reference to my remarks on the Tariff Board report. However, he failed to tell us what input parliament will have in dealing with this report. What discussion will opposition members be able to have? Will this be dealt with through cabinet? Does it have to go to the GATT round in Geneva? There is quite a large area there on which I would certainly like an answer.


Donald Stovel Macdonald: Yes, Mr. Chairman. What we have said in making the Tariff Board report public is that we would like to have reaction from the public. In particular, we would like reaction from those provincial governments such as Ontario and British Columbia which have made specific representation with regard to the tariff and other arrangements concerning fresh fruits and vegetables.
It would be very valuable within the context of this House to follow the practice that was followed about 1967 at the time the Kennedy round was under discussion and to have a discussion on the issues involved in the Kennedy round, in particular some of the trade-offs I was talking about, some of the things we have to pay in terms of tariff concessions in order to get concessions from others. Therefore, as the position becomes formulated with regard to the Canadian position abroad on the Kennedy round, I would be quite happy if we could find an appropriate order of reference to have this matter discussed in committee. Essentially, they are questions of detail, and discussion would be more appropriate there than in the House as a whole.
On the other hand, if the hon. member would like to make his views known, either personally or in writing, to me with regard to the fresh fruits and vegetables report, I would be delighted to have it in that form as well.


Mr. Clarke:: Mr. Chairman, I would like to ask the minister about the function of the Tariff Board and the input that it might have in connection with the proposals in the bill before us. It became evident in committee that there is a great delay in the preparation of a report and the presentation or consideration of that report by the ministry. To begin with, perhaps the minister can tell us what the problem is with the delay that seems to be experienced, and also what kind of input there is from the Tariff Board itself to the ministry.


Donald Stovel Macdonald: Mr. Chairman, I would have to concede that one of the first questions I raised when I became the minister was a question as to the relative lapse of time involved in some of these Tariff Board hearings. I think it can be said that a greater sense of urgency has been communicated to the new chairman of the board. Miss McDougall has set

May 17, 1977
Customs Tariff
some very much tighter time schedules for the production of the Board reports. A good example has been the production of the fresh fruits and vegetables report on which she has now delivered the first part, and we will be expecting the second part in the early summer. I have to correct myself, Mr. Chairman. We are not anticipating it, now, until the early fall. That is a good example, however, of the manner in which the Board's recommendation will become a basis for a policy decision by the department.
The Board has made recommendations with regard to fresh fruits and vegetables and described the way in which the tariff system is operating. We have sought public response to the Board's observations. Based on both the Board's observations and the public response, we shall go on to formulate the position to be taken in the Kennedy Round.
I give another example. The report of the Board on leisure craft has been available to the government for some time and specific items related to it are already in the government's portfolio for negotiation in the Tokyo Round. I have to say that to a great extent we have obviously been holding off in terms of making changes since many of our objectives in the negotiating round are objectives with regard to which we would prefer to withhold action until we find out the kind of return we can get. In other words, we do not want to give anything away at this point if by conceding it in the course of negotiations we can get better access for Canadian goods abroad.


George H. Whittaker: Mr. Chairman, 1 have a news clipping from one of the Ottawa papers quoting the minister as saying that the next round of tariff negotiations will be "all too real". The gist of the article is that we are likely to find ourselves having to give a good deal away.
Bearing in mind the fact that many industries and producers in Canada believe that this country is a saint in a world of sinners as far as tariffs and trade are concerned, I should like to ask the minister this: do we intend to take a hard stand so that we are not the first to give things away as in the past? Will we be conceding tariff levels which are of importance to the electronics industry, for example, or mobile home manufacturers, or producers of farm products, to improve the position, say, of natural resources or CANDU reactors? Or will the minister go in with a hard line, such as I understand the United States intends to adopt, so that we may be able to put our unemployed to work in the manufacturing industry or in small business?


Donald Stovel Macdonald: Mr. Chairman, I really should not be commenting in detail on the United States position, but I would have to say, on the basis of discussions with President Carter at the London summit meeting, that he was not going into the Tokyo Round with a hard line.


An hon. Member:: What about the U.S. Senate?


Donald Stovel Macdonald: Well, the President has the authority under the existing legislation, and he does not intend to seek greater protectionism. 1 believe this is evident from his action with regard to the request made to him by the American shoe industry. An important reality, and one which we have to bear in mind, is this: at that London summit meeting, for example, we were the only country with access to a market of less than 100 million. The Americans, with a market of 220 million, are obviously in a position of much more "heft" when it comes to what they can press for and hope to get.
Having said that, I must add that on the basis of our experience in the last Kennedy Round we can expect to get better access to foreign markets. Our negotiators have proved to be very skillful. For example, we have proposed in certain of the sectors in which we have a comparative advantage, for instance, base metals and forest products, that current high tariff levels on more highly processed products in these areas where there are quota restrictions should be lifted so as to allow better access for Canadian exports. Indeed, we are looking to get better access for Canadian manufactured goods as well. But let us not be under any illusions that we shall not, in the next decade, be operating in a very tough competitive world.
We can expect no easy free rides in the negotiations. Nor can we expect to prevent others from penetrating our markets. The fact of the matter is that even with the relatively high levels of tariff in Canada in some areas, certain products from abroad have been able to sail right in over the top of the tariff wall. One example is textiles. We could, of course, say to our people, "We are going to pay more for everything around here; we are going to put the tariff walls very much higher and exclude foreign goods." The result would be restricted access for Canadian exports and a lower standard of living for everyone. It is a tough choice.
I understand the concern expressed by the hon. member but I do not think we can turn the clock back and go for higher tariff protection. In the first place, I am not sure Canadians are prepared to pay for it, and in the second place I am quite certain other countries will not permit us to get away with that kind of claim while expecting concessions from them in the negotiations.


Some hon. Members:: Hear, hear!


William Hillary (Bill) Clarke: Mr. Chairman, I thank the minister for his earlier answers. I would like to ask him about the Tariff Board again. I have a question concerning report No. 152 of the committee. It was conceded that the report was signed by the Tariff Board on March 2, 1977, although no attention appears to have been paid to it in the budget. It then came out that it was not until April 26 or thereabouts that the report was received from the printer and therefore the minister could not have had it in his possession until after the budget was presented on March 31.1 would like to ask the hon. gentleman what is the purpose of these reports which the minister receives from the Board, and when might some use be expected to be made of some of them.
May 17, 1977


Donald Stovel Macdonald: I have answered that question by pointing out that the principal use of these reports will be in formulating the Canadian position in the Tokyo Round of negotiations. It would obviously be foolish to take up such a report, particularly if we are going to concede some points, before we get into the actual negotiation. For instance, in the case of the luxury craft we now have a good indication as to the structure of the industry and the kind of tariff treatment the Board thinks desirable. This is a report which we have in our portfolio for negotiation. That is why we have invited the views of the industry in Canada with regard to the Tariff Board's recommendations, and on the basis of this advice we shall formulate the Canadian position at the Tokyo Round.


William Hillary (Bill) Clarke: Perhaps I could refer to report No. 149 on the pleasure craft, commissioned, I believe, in 1971. It took a long time to prepare. I cannot see the date. Anyway, it was received by the minister in April, 1976, some 11 months before his March 31 budget. That document was five years in production and it was in the hands of the department 11 months before the budget brought down in March of this year. According to the Chairman of the Tariff Board the minister has not included any of the pleasure craft recommendations in the current budget.


Donald Stovel Macdonald: That is right, Mr. Chairman. As I said, that is again a matter for negotiation in the Tokyo round.


William Hillary (Bill) Clarke: I know the minister gets a lot of representations from different groups with special interests, and in the debate on a similar bill last year I raised the matter of other interests which had been brought to the attention of the minister by myself and others. In this case it was the collection of vintage cars. I know there have been many representations made to the minister on this matter. It is argued that vintage cars are really no different from original works of art which are allowed into the country free of tariff, as are other things like antiques of a certain age. The minister has not seen fit to relieve vintage car hobbyists in Canada, even though they are trying to preserve in Canada some of Canada's history.
It has been a tradition in tariff setting in Canada that when there was a goods not of like kind produced in Canada, tariffs would not be prohibitive. It is a fact that many vintage car parts, particularly tires, are of a class or kind not made in Canada; at least they are not available in Canada. I would ask the minister what further consideration is going to be given this group of Canadians.


Donald Stovel Macdonald: Mr. Chairman, the hon. member said that we have done nothing about this. I would bring to his attention tariff item 69315-1 in which we have reduced the age of antiques, not just vintage cars, of all kinds, from 100 years to 50 years. As I indicated in my budget speech, we have also referred the various representations, which the hon. member has mentioned, in connection with antiques to the Tariff Board for their recommendation.
Customs Tariff


William Hillary (Bill) Clarke: I was not aware, Mr. Chairman, that there were any automobiles approaching 100 years of age and I confess that bringing the limit down to 50 will certainly be a step in the right direction. Has the minister any thought of reducing it to something more realistic, such as 30 years of age for cars?


Donald Stovel Macdonald: That is the kind of question which the Tariff Board will be considering.


Mr. McCain:: Mr. Chairman, the questions that I should like to direct to the minister are primarily in the field of agriculture. He may feel that I am directing them to the wrong minister, but in view of the fact that in an earlier debate on the same subject not too many years ago I asked the Minister of Agriculture whether he had been consulted about changes in duties and reduction of protection for agricultural products and he said no, and I asked the Minister of Consumer and Corporate Affairs whether he had estimated or in any way calculated the benefits to Canada, or the disadvantages to Canada, resulting from reduction in tariffs on agricultural items and had it been part of his input into the duty structure as it related to change in that budget, and he said no, I therefore assumed that the government must have made some calculation as to the impact upon the total Canadian economy of a reduction of protection for Canadian products.
I should like to ask the minister whether reductions in duty on agricultural items have been related to their effectiveness on imports into Canada, and has there been any tabulation of the comparable effect of duty in markets to which we might ship, or the comparable effect of duty in places where similar items are produced and imports are regulated by protection? Has there been any calculation to determine whether or not Canada is being fair to itself in this change in duty structure?


Donald Stovel Macdonald: Mr. Chairman, I find the question a little obscure in the sense of asking have we calculated the impact in other markets to which we ship. I would have to say with regard to our own tariff that probably the best evidence of the fact that Canadian producers have not suffered unduly is that, on the whole, there have not been extensive representations against these particular temporary tariff reductions which, as I have said, have now been in place for close to four years. There have been a number of cases where there were representations in the past and we had taken action for the purpose of restoring the duty. A good example of that is the action that we took earlier this year with regard to pork.
In general terms it is difficult to make a precise calculation of the kind of saving to the consumer resulting from the reduction of the tariff. On the other hand, one can say at the same time very clearly that if the customer does not have passed on to him the additional cost of a number of points of duty, then it is going to cost him less.


Fred Alward McCain: So in other words, Mr. Chairman, the answer is no, there has been no study of the relative effect of duty on agricultural products brought into Canada versus the effect of duty levied on agricultural products which might go to other

May 17, 1977
Customs Tariff
markets, such as the European Economic community or to the United States, which is a recipient of some of our exports. 1 guess the answer is no, there has been no study to determine the effectiveness of our duty versus the effectiveness of duties in other jurisdictions, and this is what I had suspected from the beginning.
I should like to ask the minister why he feels there should be restrictions on the importation of textiles, for instance, which will have exactly the impact, so far as food is concerned, which the minister has denounced. A relative impact on clothing will be felt, as there would be a relative impact on food if agricultural products had had greater protection. Why does the minister feel that textiles and some other items in Canada deserve increased protection, either by an increment in the effective duty or by the restriction of imports by quota, as is the case in the textile industry? Why should these industries be isolated and agriculture left out?


Donald Stovel Macdonald: Mr. Chairman, the principal reason is that there had been a dramatic increase in textile imports into Canada, to the point where imported textiles had come to assume about 55 per cent of the Canadian market. We are talking of an industry that employs 200,000 people. We recognize that there will have to be a substantial adjustment for both firms and work force in adjusting to the current terms of trade whereby particularly more advanced developing countries can now sell effectively into our market even over the existing tariff structure. However, the feeling was that the situation had reached crisis point in that particular industry and that we should give them temporary protection until the adjustments can be made.
The Canadian textile industry has already been through one adjustment when it reduced non-competitive capacity in the 1960's and early 1970's. It is now faced with very much the same thing again. It is important for the employees involved, on a temporary basis, to protect their present jobs as far as possible, and then make the effort to give them adjustment assistance to move into other areas of the economy, a task upon which the Minister of Industry, Trade and Commerce is now engaged.


Fred Alward McCain: I think the minister is improving the case for agriculture as he goes along. There is a distinct parallel between the textile industry and certain facts of the agricultural industry. I would ask him to take a sincere and deep look as Minister of Finance at some of the alarming alterations in trade patterns as a result of some of our negotiations in the international world of trade. Take, for instance, the apple industry. Does the minister have any idea of the change in the pattern of the apple trade over the last 25 years, part of which results from international negotiations or the establishment of unnatural barriers in markets to which we had at one time exported substantial quantities of apples and which are now closed to us?


Donald Stovel Macdonald: Mr. Chairman, indeed that is recognized. One of the substantial markets was certainly that of the United Kingdom. We have lost our advantage with regard to many agricultural products in that market because of the United Kingdom's accession to the European Economic Community. That is not a matter of negotiation we could have prevented by withholding in some way. The United Kingdom was in a position to make its own decision to join the EEC. It was entitled to do so under GATT, and it did do so. That is a kind of change in international events for which one cannot provide protection. One has to seek to provide adjustment assistance. It is fair to say in many of the agricultural programs a parallel type of adjustment assistance has been provided.


Fred Alward McCain: Mr. Chairman, I agree the items I will refer to have been the extreme reflectors of the pattern, but they have at the same time reflected upon important segments of the field of agriculture. Is the minister aware, for instance, that in the ten year period from 1966 to 1975 apple imports increased from 54 million pounds in 1966 to 148 million pounds, or almost threefold? Is the minister aware of the source of the pressure upon Canadian apple production?
I submit the aid which has been given to the textile industry is not drawn from the public treasury, nor does agriculture appreciate the fact that as a result of some of the positions in which it finds itself it must draw from the public treasury if it is to remain viable at all in certain products which are native to this country. In past years there were fair and equitable trade agreements, and we have been major exporters and able to supply all of our own requirements. The apple is the extreme case as a result of these things. When you go from 54 million pounds to 148 million pounds of imports in a ten year period, you find it very serious to accept. If you look at the export picture in that same commodity for a comparable period of time, you will find our exports declined by something like 31 million pounds. This puts us in a very unfavourable net position. If I were to take this back 25 years, the figures would be even more alarming.
Is it not reasonable for the Canadian apple producer to ask for treatment comparable to that of the cheese producer or the textile producer of Canada, so that he might have a chance to flourish within an area of his own country?


Donald Stovel Macdonald: Mr. Chairman, the Tariff Board report we have been discussing this evening recommends apples should continue to come in duty free.


Fred Alward McCain: That has been the very generous position which has been adopted over the years by the apple industry; but it was also assuming, when it made this recommendation, that it would not lose equal trading opportunities in jurisdictions to which it had exported over the years, and these have been lost. Therefore there is demand upon the public treasury for support in the apple industry.

May 17, 1977

Let us go to a crop which is not as major in significance. Is the minister aware that in the same ten year period there has been almost a threefold increase in the import of cherries as far as Canada is concerned?


Donald Stovel Macdonald: Mr. Chairman, I would have to check to see if the hon. member's figures are correct.


Fred Alward McCain: Is the minister aware that the increase in importing pears has been in the region of 45 per cent in the same ten year period?


Donald Stovel Macdonald: Mr. Chairman, with regard to cherries and with regard to pears, the Tariff Board has made precise recommendations, on which the hon. gentleman might like to comment.


Fred Alward McCain: You have them in front of you.


Donald Stovel Macdonald: You have the Tariff Board report.


Fred Alward McCain: When you look at onions, in that same ten year period the importation changed from 63 million to 96 million which was an increase of over 50 per cent and a physical increase of 33 million in round figures. Mr. Chairman, I should point out I am referring to pounds throughout.
Is the minister aware that in the tomato industry imports have gone up 48 million pounds in the same ten year period? Is the minister aware that, as a result of the position considered as a crop which Canadian farmers should drop because the effective tariff structure is such that it can neither be grown nor processed effectively in Canada at this point in time and may be wiped from the scene?


Donald Stovel Macdonald: Mr. Chairman these are commodities which have been dealt with by the Tariff Board report. One of the purposes of having that report is to get a judicial balance, and we have got it. This is one of the questions now being discussed with the agricultural industry. A most helpful thing at this particular point would be, if the hon. gentleman disagrees with the Tariff Board report in this regard, for him to indicate the ways in which we could do so. If he feels these particular interests need help, then I think the most useful thing he can do is to express the kind of help needed and comment on the statement which has been made respecting fresh fruit and vegetables.


Fred Alward McCain: Mr. Chairman, I should point out for the minister's information that I have been a regular attendant at the Canadian Horticultural Council for approximately 30 years. I am familiar with the demands they have made and the treatment they have received. Notwithstanding what the tariff report may say, I would like to draw another crop to the minister's attention. Before doing so, 1 should say the Minister of Finance, the Minister of Consumer and Corporate Affairs, the Minister of Agriculture, and the government itself should not seek the crutches of various boards as the government tries to justify its position in an intolerable situation created by trade policies which are not related to the needs of Canadian
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industry in any way, shape or form. Certain aspects have absolutely been demoralized in our trade structure and our agricultural production. If you take a look at the figure for tomatoes 25 years back compared to today, they would starkly point out to the minister that fresh and processed tomatoes, both in relation to our capacity to produce and in relation to our nation consuming that product, are an industry which is no longer significant as an agricultural crop. We are relying on foreign sources to produce what we can produce in our own gardens at home. This is not good government policy, whether you want to use the Tariff Boards as a crutch or an excuse for the things which have been visited upon agriculture. The minister has not studied the matter, as he revealed in his first answer to me.
In the ten year period imports of broccoli went up from nine million pounds to 34 million pounds. That is an increase of more than 350 per cent in the importation of broccoli in a ten year period. If one were to take a look at strawberries, as I mentioned earlier, that item has disappeared as a Canadian agricultural product relative to Canadian consumption. I believe these figures are somewhat rounded. I did not bring one piece of paper which I should have brought with me. The importation of fresh and frozen strawberries has risen from five million pounds in 1952 to approximately 55 million in 1976. That is an elevenfold increase in imports of one product.
I support the minister as he protects the textile industry. 1 supported him when he took belated action with respect to pork. It was belated, but it was a step in the right direction. But 1 cannot support a policy under which producers in Canada should suffer because of a lack of protection, where we find the doors closed in traditional markets and we open our doors to rather non-traditional sources of meat. These things have been said in the Standing Committee on Agriculture as strongly as possible. If the minister would read the resolutions and recommendations as they have been presented by the Horticultural Council over the last 30 years, he would find that that council predicted exactly what has happened.
I would like to ask one other question of the minister. How many agricultural jobs have been lost and how many jobs in the processing industry have been lost as a result of these changes which have taken place, and in relation to the percentage of crops we now produce along with the percentage of crop which we ourselves can consume and which other countries can consume? How many jobs have been lost in Canada? We protected the textile industry. We should have protected agriculture on a broader base. Has the minister made any study whatsoever as to the impact on employment of reduced agricultural products in the broad scope of things agricultural over the last 25 years when we have had a cheap food policy and an open door policy for trade?


Donald Stovel Macdonald: Mr. Chairman, there is no doubt about the fact that there has been a substantial drop in employment in agriculture, just as there has been a substantial

May 17, 1977
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drop in employment in the textile industry. The hon. gentleman says we have protected the textile industry.


Fred Alward McCain: As you should have.


Donald Stovel Macdonald: He forgets the fact that by a series of steps taken in the late sixties and early seventies we made a very substantial restructuring of that industry as a result of which a significant number of plants were closed and people were moved into other areas of employment in the economy. It seems to me that was the sensible way to manage things, and that is the way it was managed at the time.
Going back to the hon. member's comment when he said we should not have a Tariff Board-


Fred Alward McCain: I did not say you should not have; I said you should not use it as a crutch.


Donald Stovel Macdonald: Accepting the recommendations of the Tariff Board, considering them, asking for public consultation on them, and on the basis of all that deciding on our negotiating position-is that using the Board as a crutch? It seems to me that if the Board has, as it has, devoted many hours to taking testimony from many interests in this regard, it is entitled to be listened to by the government. The Board is listened to by the government. It makes sense to have the Board part of the process, and this has been recognized by governments for many years.


Fred Alward McCain: Mr. Chairman, I agree basically with what the minister said, but he did not go far enough. As far as he went he was correct. It is the function of the Tariff Board to make recommendations to the government, but it is the responsibility of the government to make decisions after having faced the economic realities of this nation as a whole.
The minister has expressed concern in various dissertations which he has given both inside the House and outside with respect to the impact of an unfavourable balance of trade. Has the minister taken a serious look at what an element of protection for agriculture could do to change the imbalance of trade which we are presently experiencing? With the exception of grains for the moment, because we must agree that grains are at an unusual peak in value, has the minister taken a look at the balance of trade as it relates to food, and particularly food which we can produce in this country, and its impact upon the total economy of the nation? Has there been any precise study in that field?


Donald Stovel Macdonald: Mr. Chairman, very obviously the Tariff Board has focused on that, and that is quite a precise study. I think it is fair to observe that for very many months of the year in Canada the Canadian producer is not in a position to supply the Canadian market with fresh fruits and vegetables. Very obviously these are the commodities which, given almost any circumstances, we will be importing into this country.


Fred Alward McCain: I did not mention bananas, lemons or grapefruit. 1 mentioned crops.


The Assistant Deputy Chairman:: Order, please. 1 think the hon. member for Carleton-Charlotte has taken his allotted time, and I see other people seeking the floor.


Fred Alward McCain: I just have one more question, Mr. Chairman.


Charles Robert Turner: The hon. member will be allowed one more question.


Fred Alward McCain: You have been very generous, Mr. Chairman, and I appreciate it.
Does the minister know that the importation of agricultural products from 1960-64, on a five year average, to 1975, went from roughly $780 million to roughly $2.8 billion, a $2 billion increase in imports of food into this country?


Donald Stovel Macdonald: Mr. Chairman, I do know that there has been a substantial improvement in our standard of living generally, and the hon. member will find a similar escalation in that regard through the same period. I suppose the question is whether Canadians should be entitled to import lettuce or fresh tomatoes in the winter time, and we think they are.


Fred Alward McCain: Take a look at these things.


George H. Whittaker: Mr. Chairman, I would like to comment briefly on the apple situation which is a good example of what happens when we negotiate with other countries such as the United States to take tariffs off over a period of years. It was agreed to take it off over a period of years, but the then minister of finance decided that he was going to take it off completely in Canada, so within one year he took the tariff off. He asked the United States to take theirs off as well, but because of the agreement they refused to do so. So there we were in Canada trading with no tariff on the commodity coming into Canada, and we had to pay one. However, over those years there was a constant increase of imports of apples into Canada, and as the hon. member for Carleton-Charlotte said, starting out on an equal basis of probably one million boxes going out of Canada and one million boxes coming in, now, ten years later, it costs us three times as much. We have free trade in apples. The farmer in his orchard is not protected, but many industries on which he depends are protected.
For instance, the Minister of Agriculture put a complete barrier in front of farmers going down into the United States to bring back sprays. Farmers are trying to compete when the industries on which they depend are working in a climate of protection, and it is getting more and more difficult. I am quite aware that the industry did not ask for a tariff and that therefore the Tariff Board did not say that there should be a tariff put on our apples; however, I am also aware of the stabilization that is needed today in the apple industry because of this situation. I am also aware that it is difficult to market this commodity because of imports coming into Canada. Three times the previous amount of this commodity is now being imported into Canada.
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I would like to comment on the cherry situation. The minister asked the hon. member for Carleton-Charlotte if he would like to comment on it. I am very aware of what is in the Tariff Board report with regard to cherries. On Sunday I was down in the fruit markets of Ottawa. 1 saw a sign in a window which said "Cherries, 89 cents". 1 thought that we really are going to get cheap cherries this year. I took a closer look and found that the price was 89 cents per half pound. Cherries from the United States are selling in Ottawa at SI.68 to $1.79 per pound. We would sure like to get that kind of market for our Canadian cherries. Those prices will not change very much until just about the time Canadian cherries come on the market. By that time 85 per cent of the cherry production of the United States will have been sold. The remaining 15 per cent is then sold at a much lower price. It is the tail end that they are getting rid of, and it is with that that the Canadian producer has to compete. It is a very short market season for cherries. We grow a good product and we are using the type of farm land that people are saying today should be frozen, should not be paved over or have houses built on it.
In this tariff report there is also a report on the surcharge concept that the farmers producing commodities such as cherries and peaches need and are requesting. One of the disappointing features of the report is that the Tariff Board only recommended that it be triggered at 85 per cent of the three-year average. It is doubtful that on a monthly basis 85 per cent of the three-year average will be enough to give the necessary protection for that short period when United States producers will ship into Canada at a lesser price than they are getting today.
We will be into the Canadian peach season within 40 or 50 days and growers are going to need help of this kind this year. If the report is going to gather dust for a while it is not going to be of any use to producers this year. I should like to request that the minister look at the surcharge provisions that have been used before by the government and that are recommended for use now, and put them into effect for this year's crop.


Mr. Ritchie:: Mr. Chairman, in a previous customs tariff debate 1 made reference to western crops of flax and the 50 cents per bushel duty on flax going into the United States while there is no duty on flax coming into Canada. Flax is a cash crop for western Canadian producers and it is a useful crop. Last fall about 2 million bushels were exported to the United States. 1 am not sure why, because the price tends to be the same in both countries. It is a small volume crop compared to wheat, and this sort of thing happens. The flax growing area of the United States is the Dakotas so perhaps that is why it moved back and forth across the border. There is no particular reason, however, why the United States should impose a 50 cents per bushel duty when we do not impose any. It would be desirable to have the United States remove the duty so that there could be a free flow back and forth. If this cannot be done it would seem logical that we should have the same duty.
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Reports from the negotiations in Tokyo seem quite pessimistic and little progress seems to have been made. It is disconcerting that according to a report in the Globe and Mail, little progress has been made in agriculture which includes such sub-groups as dairy, meat, grain and other products. Some agricultural producers feel that they have been used as a trade-off and that their interests have been subordinated to manufacturing or resource industries. Does the minister feel this is happening at Tokyo now, or has there been a change in emphasis?


Donald Stovel Macdonald: Mr. Speaker, in general terms I would have to say that the Tokyo Round discussions on agriculture have not made very much progress up to this point. This is principally because of the stalemate between the United States and the EEC on agricultural products and the manner in which they would be negotiated in the Tokyo Round. There was some indication at the London summit meetings that this impasse might now be broken and there was some prospect of having early negotiations in substance in the Tokyo Round. It is quite true there has been less progress on agriculture, than, for example, on manufactured products or the preparatory work done concerning some of the other questions which will be negotiated in this round.
On the matter of flax, I think the hon. member makes a good case, just as a good case was made by the hon. member for Wetaskiwin with regard to boxed beef as to an imbalance between the Canadian and United States tariffs. If one looks at that particular sector there could be powerful argument with the Americans about reciprocity. The difficulty with picking one element out of a complicated structure like tariffs is that you cannot be sure where else in the schedule of tariffs they may seek reciprocity which may have a very substantial impact on Canadian producers.
This is the kind of trade-off that will occur. I cannot say whether flax or boxed beef is on the list for negotiation, but very obviously the MTN, the Tokyo Round, is the basis for trying to get reciprocity on these items.


William Gordon Ritchie: In our negotiations in Tokyo, on the agricultural products do we tend to be on the side of the Americans in dealing with the EEC, or do we have our own stance?


Donald Stovel Macdonald: Mr. Chairman, it depends on what the product is. If it is one in which we are seeking substantial access to the American market, obviously we will be looking at it on a bilateral basis. Equally obviously, if there is a product that the Americans are interested in and where they can use their much greater weight because of the size of their market to penetrate the EEC, it makes sense for us to let the American lineman run interference for the Canadian back fielder. On the MFN quality, the generalization for other contracting parties of a negotiated rate or quota arrangement between the United States and the EEC, we can get the benefit of the lower rate without having to pay anything for it. It really depends on the commodity and what the prospects are for selling it. Obviously we are going to have important bilateral trade with the Americans, and equally we are going
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to be looking forward to the possibility of their making some penetration of the European market, of which we will get the benefit through the MFN clause. There will be some third commodities for which, obviously we will have to carry the ball ourselves.


William Gordon Ritchie: On the question of countervailing duties there is a suggestion that Canada continue to press for injury to domestic industry as a key criterion, contrary to the practice of the United States. I should like to ask the minister what the difference is in our approach to these countervailing duties and how is this working out?


Donald Stovel Macdonald: Mr. Chairman, 1 am reminded that fresh regulations have just been issued with regard to countervailing duties. The hon. gentleman is correct in saying that the Canadian practice required the identification of injury, whereas the American practice had been mandatory. The new regulations we have put forward make provision for interim duties, pending the ultimate finding of injury. In other words, in a practical sense we are moving closer to the American position, but there is still this difference between the two positions.


William Gordon Ritchie: Mr. Chairman, may I ask one more question concerning the United States treasury and the court case involving Zenith Radio Corporation? According to what I read in newspapers, the consequences of that case, which is still before the courts, could be serious. Do the minister and his officials regard that as a serious case, with wide-ranging tariff and trade implications?


Donald Stovel Macdonald: Mr. Chairman, I would have to say yes, but cannot give a detailed explanation why.


Benno Friesen: Mr. Chairman, 1 hope I am not out of order; I was attending a committee meeting when the Minister of Finance made his summary comments winding up the second reading debate. I wonder if he dealt with the question of the component parts of shells used for target practice. What are his plans in this regard and, if he does not plan to allow this item in tariff free, will he explain his reasons for his decision?


Donald Stovel Macdonald: Mr. Chairman, I dealt with the question and indicated that this is one item with respect to which we have sought the advice of the Board. We want to know how to treat hobby items of this kind. The question is now under consideration by the Tariff Board which is looking at how the matter is to be treated.


Benno Friesen: Mr. Chairman, can the minister indicate when he will have an answer or decision from the Tariff Board and announce it in the House?


Donald Stovel Macdonald: Mr. Chairman, I cannot give an indication of an early response. The Board will be considering the question, but I am afraid I do not know what the timetable is.


Mr. Halliday:: Mr. Speaker, may I address a question to the minister? I hope my question will be in order. It concerns the importation from the United States of fabrics which, if made in Canada, would naturally be subject to tariff. I am talking about a double knit fabric which is normally made in Canada. If there is a backing on it, it is used for upholstery purposes. I understand such a material with backing is not made in Canada, and that a tariff is imposed on such imported double knit fabric which, with a special backing, is used only for upholstery. Have I correctly described the effect of our present regulations?


Donald Stovel Macdonald: Mr. Chairman, I am afraid I cannot give a specific answer this evening with regard to the application of that tariff item. Certainly I could inquire and enlighten the hon. gentleman. Collectively, the trio in the committee of which I am a member cannot respond to that specific question.


Mr. Kempling:: Mr. Chairman, I return to the Tokyo Round, which the minister discussed a few moments ago and about which the hon. member for Dauphin questioned him. I, and 1 am sure my comments apply to others, have received letters from manufacturers in my constituency and the surrounding area concerning the Tokyo Round. The tenor of such letters makes it clear that manufacturers do not know what is happening. They have made submissions to the minister but there has been no feedback. They are operating in the dark, not knowing if they can expand operations and put in another production line, or if the negotiations will lead to a drop in tariffs, with possibly unfortunate consequences for certain products. I understand that Mr. Gray is shortly to return from Geneva. What is the government doing to let industry- know what is happening in tariffs? Is the minister planning to hold meetings, or to hold further discussions, or to issue press releases concerning the progress of negotiations? We need to know what is happening in this area.


Donald Stovel Macdonald: Mr. Chairman, the Canadian Trade and Tariffs Committee was specifically set up for this purpose. It has received submissions from Canadian industry and, indeed, has met with representatives of Canadian firms who have sought such meetings, as, indeed, Rod Gray has on his fairly frequent return visits to Canada. The hon. member suggested that there is an element of uncertainty with regard to certain products as a result of negotiations. I think, inevitably, there will be a certain amount of uncertainty until the negotiations are finalized. For reasons of which I am sure the hon. gentleman is aware, the discussions have stood still for a time. There is now some prospect, after the meeting of two weeks-ago, that they will be moving forward somewhat more quickly. However, until the final deal is made there will be that element of uncertainty. The Tariffs and Trade Committee intends to try to resolve such difficulties as best it can in addition to being an effective communications medium.


Mr. Stevens:: Mr. Chairman, may I refer the minister to the report by the Tariff Board, known as Reference No. 150, which deals with computers and related telecommunications
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equipment? Let me give the minister some background. I hope the minister can bring the committee up to date on the government's current position with respect to the tariff structure affecting computers and related telecommunications equipment.
It is interesting to note that Hon. E. J. Benson on December 10, 1971, requested the Tariff Board to prepare this report, which was finally signed on March 3, 1977, by a board the composition of which was somewhat different from that to which Mr. Benson had originally addressed his request some five years and three months earlier. I raise this matter because some in the computer field have told me that their industry has changed. Some of the people previously active in it and who were witnesses have died, retired or resigned. The Board's delay in reporting is most strange. A minister of finance requested this report several years ago; now, two ministers of finance later, so to speak, the Board has finally handed down its report.
This report says substantially this "Guess what? What you said back in 1971 concerning the computer industry was quite right." My question is this: since we will have waited five years and five months by the time the report will be tabled in the House, let me now ask the minister what does the government intend to do to relieve the computer industry from the senseless customs duty which, as the Tariff Board seems to agree, that industry has been forced to pay over the years?
Let me refer to the letter Mr. Benson sent on December 10, 1971, to the then chairman of the Tariff Board, Mr. L. C. Audette, Q.C. He said that he received representations concerning the effect of the customs tariff on the production and use of computers and related equipment, and went on to say:
It has also been alleged that the duty on such equipment, especially that which is not available in Canada, is having an adverse effect on the ability of the Canadian business community to take advantage of computer services and techniques and discourages the processing of data in Canada.
Five years and some months later, the Tariff Board handed down its report. At page 325 of its report the Board begins to make that part of its recommendation which says that the tariff on the items alluded to should be changed or reduced. The Board stated on page 325 of the report:
Given the pattern that characterizes the Canadian computing equipment industry, the Board has carefully weighed the available evidence and concludes that the tariff has had very little effect in restricting imports, supporting a viable Canadian-owned indusry, or in influencing production location decisions ...
The report goes on to say:
The Board has found no evidence to support the need for a general level of tariff protection on all finished computer products.
When we questioned the Chairman of the Tariff Board as to what recommendations made in the past the Minister of Finance has implemented, we were left with the strong impression that there has been little interplay between the activities of the Minister of Finance and those of the Tariff Board. In short, although it takes years to prepare these reports, they are conveniently filed away and little reference is made to them. This is most unfortunate.
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If we look, we find that 34 different people or companies actually made submissions to the Tariff Board as to why the tariffs on computer and related equipment should be changed. It is most unfortunate that the Minister of Finance seems to be so casual toward Tariff Board reports after they have been prepared.
I notice tonight the minister stated that the government is entitled, and I think I have his words correctly, to listen when the Tariff Board speaks. That is the point, Mr. Chairman. I understand that technically the minister can amend what we have before us tonight and can give effect to the Tariff Board recommendations here tonight as far as the computer industry is concerned. My first question is, is he willing to do that, bearing in mind it took the Tariff Board five years and three months to sign a report that was transmitted to him a month later?


Donald Stovel Macdonald: Mr. Chairman, I think one of the important points to make in this regard and one of the reasons for tabling it in parliament is so that industry will have an opportunity to comment. As the hon. member knows, the document was tabled several weeks ago. We will be looking forward to comment.
Will 1 be prepared to take the tariffs off this evening? For the very reasons I indicated before the hon. member came into the House, I would have some hesitation in doing that. We are going into an international negotiation in which we will have to give up some things in order to get other things. If we are going to reduce the Canadian tariff for somebody else's benefit, we should try to get something for it.
Far from being casual about it, we have, for example with regard to pleasure craft and other representations, kept any possible changes as one of the matters on which we would be prepared to negotiate in the multilateral trade negotiations rather than giving them away unilaterally before the negotiations are completed.


Sinclair McKnight Stevens: Following on the minister's reply, will he now indicate what steps he will actually take? We now have in hand a Tariff Board report which recommends a reduction in tariffs on computers. What is the next step? It was tabled not a few weeks ago as the minister indicated, but within the last ten days. What happens now? Is there any formal exchange between here and Geneva where the report is drawn to the attention of those people, with or without a recommendation of the minister?
Second, what process is the minister going to follow to ensure that those who are affected by the report and know of it have an opportunity to make their feelings known? I ask this because I have checked with some of these companies. To date, most of them do not even know that the report has been tabled in the House.


Donald Stovel Macdonald: Mr. Chairman, I have to say that the Tariff Board gave publicity to the fact that it produced the report. If companies which took the trouble to make
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submissions in this regard have not been following the issue that closely, then I suppose I should ask the Tariff Board to go back to those who made a submission and bring this to their attention. The Board has, however, publicized the fact that it has reported. As I indicated, we are seeking public response to it at this time. Obviously the government will have to make a judgment on what to do in this regard, in particular on how to treat it in the MTN negotiations.
The next step, in answer to the specific question, is to get the public response to the Board's findings and evaluate this response to see to what extent the government should either, in its conclusion, change those findings, or be prepared to accept as the Board has recommended.


Sinclair McKnight Stevens: Following on the minister's comments, Mr. Chairman, will he indicate specifically how he is going to seek the public response? Is it going to be to all individual companies that are listed here, something over 100 of them? Is the onus on them to come to the minister? Is so, how long does he plan to wait until he feels they have had a fair opportunity to respond before we can hear what his views are on the Tariff Board's recommendation?


Donald Stovel Macdonald: Mr. Chairman, I think it is not unreasonable, having given it some publicity, that we should be able to assume that within this industry there will be some knowledge of the report and that the people who want to respond will be coming forward. Any interested person can come forward and make representations in this regard. Publicity is obviously the sensible way to bring this to their attention.
It is fair enough to give those interested a matter of weeks, perhaps a matter of several months, to formulate their response. We in turn are going to be hardening our own position on the negotiations as the year goes on. It would obviously be advisable if they responded as quickly as they could.


Sinclair McKnight Stevens: The minister refers to publicity having been given to the tabling of this report by the Tariff Board. 1 ask this advisedly. Will the minister now advise precisely what was the nature of the publicity the Tariff Board gave to the report?


Donald Stovel Macdonald: Mr. Chairman, there was a press release and a notice of where copies of the report could be acquired.


Sinclair McKnight Stevens: Is the minister aware that the total number of copies available was 40, in spite of the fact that at one time almost 200 concerns were interested in what the Tariff Board might have to say?


Donald Stovel Macdonald: Mr. Chairman, I think I will have to check on the accuracy of that. I would certainly be prepared to question it.


Sinclair McKnight Stevens: If I understand it correctly, the minister intends to wait a few months until, as he says, he hardens his attitude.


Donald Stovel Macdonald: Position.


Sinclair McKnight Stevens: What exactly then is the process? I take it this may or may not be dealt with at Geneva, depending on how his process hardens. Is that correct?


Donald Stovel Macdonald: Yes.


Sinclair McKnight Stevens: May I get to the more general question of what is being changed in Bill C-55. Will the minister give us an indication as to how he decides, notwithstanding the Geneva negotiations, to change certain items but not to change other items? For example, I notice that peanut butter in this bill is now going to be free of any tariff whatsoever.
In Bill C-15, which was given first reading October 22, 1976, peanut butter was subject to a tariff of two cents in so far as the British preferential tariff was concerned, two cents in so far as the most favoured nation was concerned, and seven cents on the general tariff. That is all per pound.
What caused the minister in the case of peanut butter to say we will change the tariff as of now, whereas in so far as the computer industry, the small boats industry and what not are concerned, this is something to be dealt with only in Geneva?


Donald Stovel Macdonald: Mr. Chairman, I dealt with this earlier today. This was an item dealt with at Geneva. As I indicated in my statement earlier today, as part of the multilateral trade negotiations it was agreed that a range of products of specific interest to the developing countries would be dealt with on an early basis and would not be held up until the end of the negotiations under the MTN. This peanut butter item happens to be one of them, as indeed are quite a number of products, many of them related to products agricultural or other products of a tropical origin.


Sinclair McKnight Stevens: The minister clarified the situation with regard to peanut butter. Is the list available of what has been left open for tariff reductions with no particular reference to the Geneva negotiations?


Donald Stovel Macdonald: Mr. Chairman, if I can just correct the hon. member, I said it was decided at the Geneva negotiations and the list is in the bill.


Sinclair McKnight Stevens: May I assume from the minister's response that the entire list is in the bill and the bill includes nothing that is not in the document he is referring to as being exempted by the Geneva negotiations?


Donald Stovel Macdonald: Again I dealt with this on second reading, pointing out the different categories of items being dealt with in the bill. There are three. The hon. member might like to examine the record in this regard. This is the list of items agreed on at the multilateral trade negotiations between the contracting parties and has been included in the bill. There will be further negotiations. It may indeed be that further negotiations might provide a further list of items for the benefit of the developing countries. At the moment this is what has been agreed upon and is included in our law.

May 17, 1977


Sinclair McKnight Stevens: That is just the point. What has been agreed upon? The minister's official is nodding his head in the negative. The minister is saying that what is in the bill has been agreed upon. What I am trying to relate is not what the minister said on second reading, but what is in the bill now before us. What specifically has been included in the exemption that the minister referred to with regard to the Geneva negotiations? Is it the entire bill, every item in there or is it certain items and not other items?
When the last tariff bill was before us I directed the minister's attention to item No. 8717-1 dealing with onions. 1 pointed out that there seemed to be an unfair tariff arrangement between the United States and ourselves in that the duty on Canadian onions going into the United States was one and three-quarter cents per pound while the duty on onions coming into this country, as we can see in the bill before us tonight, was 1 Vi cents. As that time the minister stated he was unaware of the U.S. duty position. Can he now give us this information? Has he checked it out? If there is this relatively unfair duty arrangement as far as the two countries are concerned can he tell us why we have been going along with a relatively favourable duty position as far as onions are concerned?


Donald Stovel Macdonald: Mr. Chairman, fresh fruits and vegetables are the subject of the Tariff Board reference. As 1 indicated in response to earlier questions it is a matter which is now open for comment by interested parties in Canada. It is obviously a question which will be included in the negotiations. Whether we shall be able to get reciprocity of treatment is something which will have to await the outcome of the negotiations.
I think it should be said, in general terms, that there is a longer period of the year in which it is to our advantage to import onions in comparison to the period of time in which we would be in a position to export from Canadian production. This is one of the factors to be taken into account in the temporary tariff reductions.


Sinclair McKnight Stevens: More specifically, though, could the minister tell us whether his research has disclosed that the American duty is in fact higher than ours on produce going into the United States?


Donald Stovel Macdonald: Mr. Chairman, that answer will take just a moment. Yes.


George H. Whittaker: Mr. Chairman, there is an interesting item on page 29, Schedule III, at the bottom of the page. It has to do with ivory carvings. I refer to the schedule which appears to apply to the developing countries. Would the minister explain what is happening in this connection? Is the tariff going down on this item?


Donald Stovel Macdonald: The tariff is being reduced. Ivory carvings are included in a group of handicrafts which are among the exports of certain developing countries. When
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imported into Canada they will be given the same treatment as other items under the MFN rate.


George H. Whittaker: I find it very strange that at this time Canada should be reducing tariffs on ivory carvings. We all know that the United States has placed a ban on imports of ivory and bone carvings done by our Eskimos. It applies to all artifacts made from bone, even though in most instances they are made from fossil and are very old. It makes it difficult for our Eskimo people to trade or sell their products; their market is pretty well confined to Canada. This seems to me to be another example of people who practice a fine art finding other countries banning their products while at the same time Canada is reducing tariffs on similar items coming into Canada.


Donald Stovel Macdonald: Perhaps I might remind the hon. member that this applies to just a specific group of countries, that is, the developing countries. It is part of a policy followed by Canada and other OECD nations under which we have agreed that in order to further the economic development of the developing world we should open our markets to their products. Ivory carvings reflect in a real way the cultural differences which exist in African countries and it does not follow we should in some way exclude them because a third party is excluding a product made by Canadian sculptors.
I must say I regret the exclusion of Canadian handicrafts and believe it to be a rather foolish practice. However, it does not seem to me we should take revenge on developing countries just because certain Canadian exports happen to be handled in this way. If this involved perfectly standard goods where there was no difference in utility, quality or style from one to the other, there might be some validity to the argument. But ivory carvings are obviously a reflection of a culture, and in that sense one who is interested in Eskimo carvings might not necessarily be interested in these ivory carvings. When you get right down to it, I suppose it is really a case of whether you wish to help the developing countries or not.


Marcel Joseph Aimé Lambert: Mr. Chairman, it is not my intention to introduce a discordant note, but perhaps the minister could give us the timetable he has in mind as to the changeover in the customs tariff to the metric system. We are already dealing with kilograms while at the same time referring to ounces and pounds. It is my understanding that in September we are to adopt the linear metre in Canada. I think that somewhere here I could undoubtedly find some reference to the inch, the foot, and the yard. Perhaps the minister could tell us when it is planned to convert into the metric system.


Donald Stovel Macdonald: No specific date has yet been determined. I think we may be looking as far ahead as two years from now.


William Hillary (Bill) Clarke: Mr. Chairman, I have had a chance to look at item 69315-1 concerning articles produced more than 50 years prior to a certain date. I should like to ask whether the word "articles" does, in fact, include automobiles, and whether the

May 17, 1977
Customs Tariff
word "goods" used on page 36 of Schedule IV, the first word in tariff item 70320-1, also includes automobiles?


Donald Stovel Macdonald: The answer to both questions is yes.


William Hillary (Bill) Clarke: May I also inquire whether any provision has been made in connection with parts and tires for these automobiles? I asked earlier about the "class or kind" wording and I note that the wording used on page 34 in reference to aircraft engines is "when of types or sizes not made in Canada". Further down on the same page, referring to parts for metric conversion, I see the wording "parts when of types or sizes not made in Canada". I am not sure what the difference between "class or kind" and "types or sizes" is. What about parts for these old cars which are now able to come in free?


Donald Stovel Macdonald: Such parts if recently manufactured would not, of course, be antique and would have to be dealt with in the normal way under the tariff.


William Hillary (Bill) Clarke: 1 see that argument, but what about the idea of class or kind and types or sizes not made in Canada? Will that not apply to parts for these old automobiles?


Donald Stovel Macdonald: It will depend on the type of tariff item they come in under. It may or may not have that kind of qualification.


William Hillary (Bill) Clarke: Another item which has been brought to my attention is 70320-1, having to do with goods acquired by a former resident of Canada returning to Canada. I suppose my question hangs on the interpretation of the word "acquire" which appears in the phrase "was acquired after March 31, 1977". It may be strange, but I have two constituents who both find themselves in the position of taking a year's leave from Canada. Obviously this was planned for some months; you do not plan this kind of thing in no time at all. Both had gone on the basis of the existing tariff and had acquired boats or yachts, one from England and the other from Korea. In any event, these vessels were acquired, they think-at least, the money was paid and the contract signed-prior to March 31. They are now very concerned because they have not yet taken delivery but the acquisition has been made. Will these vessels be subject to duty on the excess value over $7,500, or will they be admitted under the old tariff?


Donald Stovel Macdonald: I am being asked to give a judgment in a particular case. I think it would be wiser to have the full facts, and if the hon. member would write me a letter I would be prepared to get an opinion from National Revenue in this regard. In general terms, Mr. Chairman, acquisition assumes the taking of possession, but there may be facts which could support another interpretation.


William Hillary (Bill) Clarke: 1 thank the minister for that answer. On my advice these individuals have written to the department for an

answer, but I thought this was the opportune time to ask about the meaning of the word "acquired".
One final item I wish to speak to is item 69605-1. I have an idea that this item was the subject of debate in the last go-around on the Customs Tariff. It deals with scientific apparatus. My question is this: is this item' the answer to the incredible paper work burden that was to have been placed on universities and other charitable organizations which found themselves needing to import scientific apparatus?


Donald Stovel Macdonald: Yes, Mr. Chairman, the hon. member is quite right. This was the subject matter of debate in the last budget and we think this now meets that concern.


Fred Alward McCain: Mr. Chairman, earlier I asked the minister whether he had made any studies of the effectiveness of duties on imported agricultural products relative to the effectiveness of duties in markets to which our agricultural products are shipped. Let me give the minister one example and then ask him a question. Unfortunately I have one sheet of figures missing but I think my Figures are roughly correct.
The tariff on peaches entering Canada was reduced from 18 per cent to 6.5 per cent over the last 25 years. Has the specific duty on a per pound basis remained constant? I believe the duty on canned peaches, for example, exported to the United States in dollars and cents terms has varied from 48 cents a case to $1.62 a case in the last 25 years. In view of the fact that the ad valorem duties applied by our major trading partner have become more effective in dollars and cents while ours have remained constant in dollars and cents but have declined in effectiveness, would the minister undertake a study to determine the impact upon agricultural production in Canada? We are using specific duties while markets to which we export are, in the main, using ad valorem or percentage rates on our products.


Donald Stovel Macdonald: Mr. Chairman, as to whether a specific study will be undertaken, I think I can only go as far as saying that I will consider it. I point out that the Board has sought to deal with this problem, so far as peaches are concerned, under item 9211-1, which states that the MFN rate is three cents but not less than 121/2 per cent. So we have, if you like, placed a floor of an ad valorem rate underneath a specific duty.


Fred Alward McCain: In view of the fact that in 1950 Canada imported roughly 17V2 million pounds of peaches, while in 1975 we imported more than 101 million pounds of peaches, an increment of almost sixfold, and in view of the impact that this has on agriculture, would the minister treat this and other agricultural items as, for instance, penknives, pencils, and dozens of other miscellaneous items which do not create a major employment opportunity but are protected by duty, and give them comparable treatment? The minister has referred to negotiations which are going to take place in the Geneva talks. Would he approach former customers, present customers, and customers who have actually closed the doors on us, and determine whether or not we can have an equal trading
May 17, 1977

opportunity? I do not believe that agriculture is asking for anything more than an equal trading opportunity.
I think we are justified in asking for this and should have to pay a price. When we discuss duties with the United States we should tell the United States we would like an equal trading opportunity for products which we can produce, since we buy from them tens of millions of dollars worth of oranges, grapefruit, lemons, grapes, seed potatoes, and so on down the list. These are items which we cannot ship to them. I suggest our balance of trade in food items with the United States would be no more than fair were we to ask that duties be identical in effectiveness. They are reasonable, fair minded people, and I think this is a reasonable approach.


Donald Stovel Macdonald: I would agree that it is, Mr. Chairman. We should, as I said earlier, seek to get reciprocity in these products, particularly where you have the example of the duty being higher than ours. With regard to the specific duty referred to, subject to confirmation I would say that would have been one which was bound under GATT as a result of the GATT negotiations in the late 1960's. In effect, we took the tariff system which existed then and at the same time bound those rates. We were not in a position to change them because they were international undertakings. As I said in my first response, the Tariff Board in its recommendation has sought to put agricultural products with ad valorem floors on the same basis as manufactured products.


Fred Alward McCain: We need the same basis as on those items we trade with the United States. We need comparable protection. Our farmers deserve it, as well as the manufacturers of pencils or the manufacturers of clothing.
Clauses 1 to 7 inclusive agreed to.
Schedules I to V inclusive agreed to.


[Stage Direction]
Title agreed to.
The Acting Speaker (Mr. Turner):: Shall the bill carry?


Some hon. Members:: Carried.
Bill reported.


Donald Stovel Macdonald: that the bill be concurred in.


[Stage Direction]
Motion agreed to.
Donald Stovel Macdonald: that the bill be read the third time and do pass.


The Acting Speaker (Mr. Turner):: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion agreed to and bill read the third time and passed.


Steve Eugene Paproski: How do you like that for co-operation from the opposition? You had better thank us.
Excise Tax


Donald Stovel Macdonald: Mr. Speaker, as the hon. member has said, I had better thank them. I would have said that without his urging, in any event. In light of the hour I wonder if we could call it ten o'clock rather than going on to the next item?


Marcel Joseph Aimé Lambert: Mr. Speaker, if the minister has a statement with regard to Bill C-54, perhaps he could put it on the record and then it would be available to the members of the House. I think it would take the minister approximately four minutes to put his statement on the record.


EXCISE TAX ACT (NO. 2)
Donald Stovel Macdonald: that Bill C-54, to amend the Excise Tax Act (No. 2), be read the second time and referred to the committee of the whole.
He said: Mr. Speaker, in the budget of May 25, 1976, I announced the government's intention to extend the air transportation tax to apply to an additional 2.3 million travellers who use Canadian airports annually. Although these air travellers make much the same use of Canadian facilities as taxable Canadian travellers, they do not currently pay the Canadian air transportation tax because they purchase their tickets outside Canada. Now, as a consequence of the amendments proposed in Bill C-54, they will be taxed in a manner which closely parallels that which applies to Canadians.
When first I announced the government's intention to extend this tax, I indicated that implementation would be preceded by consultation with interested parties to identify potential problems and difficulties. This process of consultation has now largely been completed, and it is proposed that the extension be made effective on November 1 of this year. This delay in coming into force will provide a necessary opportunity for the air carriers to make required alterations to their systems and procedures to implement the tax. As indicated in the ways and means motion, the tax will be extended to apply to any amount paid outside Canada for air transportation involving a departure from a Canadian airport for a destination outside Canada. This will ensure that all users of Canadian air facilities contribute in an equitable way to the upkeep of these facilities.
This bill also contains measures to change the current 12 per cent federal sales tax on gasoline and diesel fuel to an equivalent specific levy. The change is proposed in order to correct administrative and compliance difficulties which have existed for a number of years. The Excise Tax Act currently imposes a 12 per cent sales tax on the sale price of gasoline sold by manufacturers, and deems an importer of gasoline to be the manufacturer. Because of the nature of the petroleum industry, however, gasoline and diesel fuel are sold by manufacturers at a number of different levels of trade and at widely varying prices. The value for tax thus ranges from a very low level on inter-refinery sales to a relatively high level on sales to consumers through manufacturer's retail outlets.

May 17, 1977
Business of the House
In order to maintain a reasonable degree of equity and neutrality, Revenue Canada has allowed manufacturers to account for tax on all sales of gasoline and diesel fuel on the basis of weighted-average price determined periodically by Revenue Canada. The status of the resulting determined value is, however, uncertain under the law. I have therefore decided that, in recognition of the rather unique circumstances of this homogeneous product, and for greater certainty under the law, the statute should be amended to provide a series of specific levies to apply to the different grades of gasoline. The specific levies indicated in the motion and again in this bill are at the same rates which were put into effect by Revenue Canada on March 2, 1977.
The remainder of the bill deals with a series of relatively minor technical amendments designed to correct loopholes in existing provisions of the statute or to extend sales tax relief to certain users of products where a strong case for tax relief exists. In particular, the bill provides for the extension of the period within which a person may apply to recover tax by way of refund, deduction, or other payment, from two years to four years in the general refund provisions of the Excise Tax Act. This extension will apply to applications other than those which have expired on or before March 31, 1977.
In conclusion, Mr. Speaker, this bill seeks to implement the proposals contained in the ways and means motions of March 31 and April 18, 1977. With the exception of the extension of the air transportation tax, the proposed amendments are all relatively minor in nature, the emphasis being placed on correcting anomalies rather than making significant modifications in the scope or application of the federal sales tax. I would remind honourable members, however, that in conjunction with the budget, my colleague, the Minister of National Revenue (Miss Begin), announced that the small manufacturer's regulation would be altered in such a way as to raise the exemption from sales tax which it provides from $3,000 to $10,000 of sales and to provide an exemption from sales tax on the products of certain Canadian craftsmen.
Hon. members will want to discuss the provisions of the bill in detail, and I will be glad to do so at committee stage.


BUSINESS OF THE HOUSE
Steve Eugene Paproski: Mr. Speaker, I would like to direct a question to the Parliamentary Secretary to the President of the Privy Council (Mr. Goodale). Will Bill C-54 be the first item of business on Friday of this week, since Wednesday and Thursday are going to be opposition days?


Mr. Goodale:: Yes, Mr. Speaker, we will continue with Bill C-54. My understanding at the moment, if we are successful in completing that during the day on Friday, is that we will proceed with the item of business previously announced, which is the Bretton Woods legislation.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.

Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, on April 4, 1977, as reported in Hansard at page 4594, I asked the Minister of Agriculture (Mr. Whelan) about the situation regarding brucellosis and if he intended to return to vaccination. He said at that time that there has been a decrease in the number of affected cattle. Having looked up the statistics, I disagree with him, and I believe I can prove to him that some of the statistics he received were not up to date.
I am interested in the subject of vaccination for brucellosis. I ran a medical clinic, and we treated one of the early cases of undulant fever in a human being. That is a disease which can be contracted by human beings. They can be very sick or they can be chronically ill and still be working. It affects the bone. I remember one young veterinarian who contracted the disease. He had pain in his hip, and after we did a blood test the final diagnosis was that he had undulant fever with osteomyelitis. As I have said, in human beings it can cause very severe illness, and it can even be fatal. Of course some do not become so ill.
Back in 1953 brucellosis was running rampant, and many cows lost their calves through abortion. To overcome this, compulsory vaccination was adopted. That was commenced in 1956. This was carried out by the Health of Animals Branch of the Department of Agriculture without cost to the farmers. Reactors were shipped. Doubtfuls were re-tested. The stables were all disinfected and cleaned.
By 1964 the point was reached where some areas were able to be certified. This was in areas where only 5 per cent of the herds reacted and not more than one per cent of the animals were infected. With this very low incidence the disease appeared to be on the way out. Then the Brucellosis Act was introduced in 1965, and that terminated compulsory vaccination. Both the provincial governments and the federal government were involved in that act. From that date on fewer calves were vaccinated. In other words, vaccination of calves was discouraged because of the markets in some areas where calves were being shipped. Some calves were sold as cows and some of them would occasionally react, so some countries did not want to buy them. From that date on fewer calves were vaccinated.
From 1969 to 1973 it appeared that the disease was remaining under control, and there was a false sense of security. In 1969, for instance, 211 herds were affected. In 1972, 209 herds were affected. Both levels of government were in favour of the
May 17, 1977

eradication program which de-emphasized vaccination. During this period of time compensation paid for the animals which were destroyed was rightfully increased when they had to be shipped.
The federal government kept supplying the vaccine, and some of the good dairy farmers kept vaccinating, but of course they then had to pay for the vaccine. In 1953 when this plan was started, we were vaccinating 400,000 calves per year, and the Health of Animals Branch was paying the cost of this. However, all at once outbreaks started to recur, and here in eastern Ontario we probably had the first outbreak. Then there were other minor outbreaks. These were more insolated cases occurring in western Ontario. So at the end of 1973, 48 herds were removed. In 1973 there were 1,038 reactors. It is interesting to note that in 1974 there were 337 herds under quarantine, an increase of over eight times in the space of one year. The reactors, from January 1 to September 30 of that year, were 3,168, a ten times increase. Therefore the evidence shows that we have a return of a disaster that we thought we had conquered. Instead of that, from January to March of this year there have been 50 newly infected herds found. Multiply that by six and you get 300 new herds per year.
I would point out to the minister that this sort of thing has happened in the field of human medicine. We stopped vaccination and had to go back to it. I believe that we have to return to vaccination in Ontario and the rest of Canada. There has been a division of opinion between the Ontario government and the federal government. The Ontario government believes we should return to vaccination but the federal government does not.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member but his allotted time has expired.


Philip Bernard Rynard: Mr. Speaker, I have just stated that we have had this large increase and it must be met by different means than we have now.


Mr. Jim Fleming (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, as Parliamentary Secretary to Minister of Fisheries and the Environment (Mr. LeBlanc) it is a special pleasure tonight to reply to the hon. member on behalf of the Minister of Agriculture (Mr. Whelan).
I am pleased to have this opportunity to elaborate on the brucellosis eradication program which is being conducted in Canada by Agriculture Canada.
The hon. member for Simcoe North (Mr. Rynard) suggested in his question of April 4, 1977, that a renewed emphasis on the calfhood vaccination program might now be in order, given the increased number of herds under quarantine recently for brucellosis. The hon. member will be glad to know that a meeting has been scheduled for June 16 in Winnipeg at which this issue will be fully explored by government and industry representatives. Nevertheless, I would like to stress the fact that brucellosis will never be completely eliminated from the Canadian cattle population by the use of a vaccination pro-
Adjournment Debate
gram only. Not only may the presence of the vaccination mask the disease in the herd, but the vaccination itself is only effective in about 65 per cent of animals vaccinated. However, the department does recognize that a vaccination program may be justified in certain instances, and for this reason has continued to supply vaccine free of charge to veterinarians.
The national test and slaughter program was begun in 1957 at which time the infection rate of the Canadian herd was at 4.5 per cent. This has now been reduced to approximately two tenths of 1 per cent-an evident success. In addition, the brucellosis milk ring testing program and the market cattle testing program will play a part in the eradication of this disease in Canada. Furthermore, additional measures were implemented this year, such as the registration of livestock dealers' premises and mandatory testing of cattle sold at farm auctions. In 1976-77 a total of 2.2 million blood samples were drawn from farm animals. This is significantly greater than any year in the past.
It is correct that there has been an increase in the number of herds in quarantine in the hon. member's riding in recent months. This is a direct result of the general area test of every herd which was begun in November, 1976. Herds under quarantine often include only suspicious or one or two reactors or are awaiting 30-day or 90-day, or disinfection clearance. It is hoped that with the co-operation of all concerned this disease can be eradicated from all regions of Canada, including the hon. member's area, where a full thrust toward eradication is now in process.


ENVIRONMENTAL AFFAIRS-DRILLING IN BEAUFORT SEA-POSSIBILITY OF COMPLAINTS FROM OTHER COUNTRIES ABOUT RISK OF OIL SPILL AND CO-OPERATION ON CLEAN-UP
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, the reason I ask that this matter be dealt with this evening is because of the minister's answer to a question I asked on May 10. My question arose to a large extent from information contained in the Berger Report. At that time the minister said that he had not had a chance to read the report. I assume that he has now read the report and can provide complete answers on the issues raised.
In the time that I have been in this House, Mr. Speaker, I believe there have been two events that may or may not change the course of history in Canada. One was the air controllers' issue, and the second, the filing of the Berger Report which has made a valiant effort to tell us something about ourselves.
Basically I asked the minister to deal with four matters raised in the report. One was the possibility of a circumpolar conference. The other was the response to the proposal concerning a national wilderness park, to be located on the north slope in the Yukon, which would be the counterpart of the park on the Alaska side. The other question asked for a response with regard to the provision of a whale sanctuary, which seems to be necessary. Lastly, there was a question concerning the provision of a bird sanctuary in the Mackenzie Delta.
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May 17, 1977
Adjournment Debate
It is useful to examine some of the things the report says, and to consider some of the intensive studies which have resulted from some of the proposals in the report. I hope the parliamentary secretary can enlighten the Elouse as to what specifically the government is doing to move forward the implementation of those particular recommendations so vital and important to the north.
The Berger Report makes some interesting observations on Beaufort Sea drilling. The most interesting of those observations concern the problems of production which would arise after, presumably, the oil or gas is found; because at that point the risks become even greater than they are at present when drilling is under way. Examining this question, Mr. Justice Berger assessed the evidence concerning the risks confronting not only Canada, but adjacent countries as well. I will quote that part of the report couched in the form of the preliminary letter to the minister. Mr. Justice Berger wrote:
Therefore, I urge the Government of Canada to ensure that improvements in technology for prevention of spills and development of effective technology for containment and cleanup of spills precede further advance of industry in the Beaufort Sea. I further urge that advances in knowledge of the environmental consequences of oil spills should likewise keep ahead of offshore development. Here I am referring not only to impacts on mammals, birds and fish in the Beaufort Sea area but also to the possibility that accumulation of oil in the Arctic Ocean could affect climate. In this I am referring to the possibility that oil spills from offshore petroleum development by all the circumpolar powers could diminish the albedo (the reflective capacity of ice), causing a decrease in the sea ice cover and hence changes in climate. Canada should propose that research be undertaken jointly by the circumpolar powers into the risks and consequences of oil and gas exploration, development and transportation activities around the Arctic Ocean.
Surely all members of the House will support such a constructive proposal. Canada, the first nation to drill in the Beaufort Sea, should be the host nation for a conference of circumpolar powers. Through such a conference we could (a), obtain reliable evidence with respect to the potential of the albedo effect and (b), share our technology with others for the clean up of the oil spill which will inevitably occur in that environmentally sensitive area.
The minister indicated that so far as he could recall he had received representations only from the United States. I know the United States is most concerned about the risk of damage to its own environment, which is why that country is not drilling in the naval reserves off the coast of Alaska. They are concerned because they know they do not have the necessary technology, and they want Canada to guarantee that our drilling will not destroy their environment. Surely, at the very least, we should provide that guarantee to the United States. As well, we should provide the forum for an international conference which can assess the risks we are taking.
I am speaking not only of the risk of damage to the climate of the Arctic Ocean and the North American continent, but of the possible risk of damaging the climate of planet earth itself. I know that sounds a bit like science fiction. But let me say that reputable scientists are most concerned, because if we spill enough oil in the Arctic and if we change the reflective capacity of the ice, we could change the climate of the planet. That is too high a risk to take.
[Mr. Leggatt.J
I am hoping the minister will have some positive response at least in terms of the initial proposal of an international conference made by Mr. Justice Berger. Also, I hope the minister will give us some idea of how long it will be before we see legislation which sets up a national wilderness park, something Alaska has already done and is in the process of improving.
We have legislation which says once and for all that we are going to protect the whales in the Beaufort Sea. Fortunately, we are not now drilling in that area so we can do it. We have legislation for a bird sanctuary in the Mackenzie Delta. All of these things are absolutely vital if we are going to do what Mr. Justice Thomas Berger asked us to do, which is to look at ourselves, ask ourselves what kind of people we are, and then move in a civilized and constructive way in developing our north consistent with a civilized ethic.


James Sydney Clark Fleming: Mr. Speaker, I will try to respond as fully as I can in the very brief time available. As I am sure the hon. member is aware, the time allotted for my response is less than half that which he had to set down his concern on the question of the circumpolar conference. I know that the minister is well aware from the hon. member's question of several days ago of his representation. 1 am sure he will give it every consideration.
Because my time is brief, I want to deal directly with the American-Canadian situation.
As had been agreed with the United States in 1976, discussions took place with United States officials earlier this year in order to provide them with full information on Beaufort Sea drilling operations in 1976 and plans for 1977. The United States subsequently reiterated its concerns regarding possible effects on United States interests of such drilling operations. These concerns are being taken into account.
On the question of compensation in case of damages to the United States resulting from an oil spill, arrangements were established last year to provide remedies for potential United States claims resulting from Canadian operations in the Beaufort Sea should they proceed. As a part of ongoing discussions, consultations are taking place this year with a view to making available to potential United States claimants, on the basis of reciprocity, the legal remedies related to compensation for pollution damage available to Canadians under the Arctic Waters Pollution Prevention Act.
In addition, we are in the process of finalizing a joint Canada-United States oil spill contingency plan, which is now considered to be operational.
The Berger Report is a comprehensive and in depth study of the Canadian north. It took more than two years of intensive work to prepare. My minister obviously wants to give himself and his officials a reasonable chance to review it and also to consider related reports, some not yet available, on this general question, before making known his views.
I appreciate that the NDP has often been credited as being a party that is a little ahead. There is nothing wrong with taking an early and aggressive stand on a report as important
May 17, 1977

as the Berger Report, but surely the minister and his officials must have a reasonable amount of time to digest that report and other related items before reaching the important conclusions proposed by the hon. member opposite.
Adjournment Debate


The Acting Speaker (Mr. Turner):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.20 p.m.
80016-24H

Wednesday, May 18, 1977