1977-11-21

ROUTINE PROCEEDINGS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion which I hope would have the unanimous support of all hon. members of the House. 1 move, seconded by the hon. member for Hillsborough (Mr. Macquarrie):
That this House commend the President of Egypt and the Prime Minister of Israel for their courageous and positive initiative in beginning a direct dialogue toward the establishment of a peaceful relationship between their two countries and express its sincere hope that this initiative will be extended to achieve a just and lasting peace throughout the Middle East.


Mr. Speaker:: The presentation of such a motion pursuant to Standing Order 43 can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Is it agreed?


[Stage Direction]
Motion agreed to.

Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I rise under the provisions of Standing Order 43. My motion relates to the statement made by the Minister of Energy, Mines and Resources (Mr. Gillespie) to the press on October 14, 1977 which purported to set the record straight on the sorry tale behind the government's uranium cartel. In view of the fact that the minister's press release made several highly contentious and completely unsupported statements, including an assertion that the operations of the cartel were not conducted in secret, and with the background now of Chief Justice Evans'
recent decision with respect to this matter, I move, seconded by the hon. member for Okanagan-Kootenay (Mr. Johnston):
That this press statement, which was given outside this House, be referred to the Standing Committee on National Resources and Public Works and that the said committee be given a full mandate, adequate staff and resources to inquire fully and publicly into all matters concerning the uranium cartel.


Mr. Speaker:: The presentation of such a motion can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



FINANCE


Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity.
Since prices are increasing much faster than wages, thus reducing the small wage earners' purchasing power, and since the maintenance of anti-inflation controls only creates more imbalance among various classes of the Canadian society, 1 move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That this House consider as early as possible the opportunity to set up a compensated discount system of consumer prices mainly to lower consumer goods prices to the purchasing power level now available to consumers and, by the same token, stimulate the economy of the country as a whole.


Mr. Speaker:: Presentation of such a motion for discussion at this time pursuant to Standing Order 43 requires unanimous consent of the House. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ROYAL CANADIAN MOUNTED POLICE


Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a matter of pressing necessity pertaining to the RCMP Featherbed operation and matters related thereto. My motion is as follows:
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November 21, 1977
Ship Subsidy
That the Solicitor General advise the House of circumstances surrounding the RCMP career of Leslie James Bennett, formerly head of "E" Branch, "I" Directorate, Security and Intelligence, specifically why this man was pensioned early on condition he forthwith leave the country, whether or not he threatened to reveal contents of the Featherbed and Tachereau files in order to escape, and finally whether the Prime Minister gave an order that the Tachereau files remain indefinitely in the custody of Major Lemieux of the Privy Council office when they were about to become public information and were seized by the PCO-PMO instead.


Mr. Speaker:: Such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



BILINGUALISM


Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the resolution of the Quebec Liberal party this weekend stating that access to English schools in Quebec should be restricted to Anglophones and in view of the fact that Mr. Michel Robert, chairman of the policy committee is reported to have said that it would not be realistic for Liberals to go back to free choice and that the motion reconciles the division between those in the party who want freedom of choice and those who want to limit enrolment in English schools, I move, seconded by the hon. member for Grey-Simcoe (Mr. Mitges):
That this House calls on the Minister of State for Federal-Provincial Relations to make a statement on motions at his earliest convenience guaranteeing to all new Canadians and immigrants that their rights under the constitution and the Bill of Rights will be upheld in all cases by the federal government.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



FISHERIES


Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact the government of Newfoundland was encouraged by assurances from the Secretary of State for External Affairs (Mr. Jamieson) that federal subsidies totalling 35 per cent of the cost of the vessel Cape Sambro would be paid if that stern trawler was built at Marystown shipyard in the minister's district on spec

in order to ensure continued employment at the yard and in view of the fact that the trawler was built at a cost of $414 million, but the Minister of Fisheries (Mr. LeBlanc) refuses to pay the normal 22 per cent subsidy on the fishing vessels amounting to $935,000, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the House direct the Minister of Fisheries to pay the 22 per cent subsidy, approximately $935,000, to the Newfoundland government with reference to the building of the stem trawler Cape Sambro in accordance with the statement by the Secretary of State for External Affairs that there is a moral obligation to take such action.


Mr. Speaker:: The presentation of such a motion for debate at this time requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



PRESENCE IN GALLERY OF MEXICAN SECRETARY OF FOREIGN RELATIONS, MR. SANTIAGO ROEL GARCIA

Mr. Speaker:: Before beginning the question period, I know hon. members will want to join with me in welcoming into our galleries a most distinguished visitor in the person of the Secretary of Foreign Relations of the United States of Mexico, Mr. Santiago Roel Garcia.



ORAL QUESTION PERIOD


Sinclair McKnight Stevens: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. In promoting the uranium cartel, the government has represented that cartel activities would not apply to the consumer markets of Canada, yet we now have clear evidence that this was not true. For example, the Gulf Minerals contract of 1974 with Ontario Hydro was described by Gulf to be in line with other cartel arrangements, and as such would yield a 50 per cent profit to Gulf on a $98 million contract. Will the minister indicate why his government acquiesced in this activity bearing in mind Gulf represents that their Ontario Hydro contract not only met cartel requirements but had "protection from government action".


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, the real question in my mind is whether the hon. member is serving Canadian interests or
November 21, 1977

whether he is acting as an agent of a foreign corporation that is contending with Canadian regulations. We are all aware that the issues which he has been promoting are the issues which Westinghouse of the United States have been promoting because they are looking for a defence for their own mistakes. The Canadian government adopted a system which was aimed at trying to prevent the extinction of the uranium industry in this country. The hon. member and some of his associates have made it very plain that they are not interested in that. We are, Mr. Speaker.


URANIUM-POSSIBILITY MINISTER REVIEWED GULF-ONTARIO HYDRO CONTRACT AS IT RELATED TO CARTEL ARRANGEMENT
Sinclair McKnight Stevens: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources who seems to be stoutly defending Gulf U.S. for reasons I am not sure of. My supplementary to the Minister is very simple. Has the hon. gentleman reviewed the Gulf-Ontario Hydro contract and has he determined whether it was not only meeting the cartel requirements but was, in fact, more highly priced than the cartel minimums?


Alastair William Gillespie: I have noted carefully the comments of Ontario Hydro with respect to the contracts they have entered into for the supply of uranium. 1 have not seen any complaint by Ontario Hydro, the consumer and buyer, that it was forced to purchase uranium at a higher price as a result of the so-called cartel arrangements, which exclude the Canadian market.


URANIUM-PROPOSED REFERENCE TO COMMITTEE OF CARTEL ARRANGEMENT
Sinclair McKnight Stevens: My final supplementary to the minister is twofold, Mr. Speaker. The minister has just indicated that the cartel arrangements excluded the Canadian market. Would he go further and indicate whether he received any commitment from any Canadian producer that they would, in fact, exclude the Canadian market from cartel pricing? Second, if the minister is interested in hearing Ontario Hydro's position on this important matter, will he follow our request and make a reference to the appropriate standing committee of this House, at which time we can hear Ontario Hydro, Gulf Minerals and the minister concerning this entire sorry mess?


Some hon. Members:: Oh!


Alastair William Gillespie: If the hon. member would care to read the directives which were issued by the Minister of Energy, Mines and Resources to the Atomic Energy Control Board he would see it was made very clear in every directive which was issued that the United States was excluded and that the domestic market was excluded.
Oral Questions


ALLEGED ADVANCE KNOWLEDGE OF CARTEL ARRANGEMENT WHICH GAVE RISE TO INSIDER TRADING-REQUEST FOR INVESTIGATION
Mr. James Gillies (Don Valley):: My question is also directed to the Minister of Energy, Mines and Resources and refers to reports that certain members of the investment community in Toronto were aware at least three months before the orders-in-council came down that the cartel was being formed. It is reported that there was a degree of insider trading taking place of shares of certain firms who were associated with the cartel. May I ask the Minister of Energy, Mines and Resources to investigate these reports of insider trading?


Alastair William Gillespie: Mr. Speaker, I have no reason to believe that these allegations are true, but if they are true I am sure the responsible agency, the Securities Exchange Commission, or other Ontario government or stock exchange institutions would be well placed to examine the kind of allegation the hon. member has made. I put it to him that if he feels as strongly as he appears to indicate by his question, he has a responsibility to draw these allegations to the attention of responsible exchange commission officials.


James McPhail Gillies: On August 23, 1973, when the minister of the day stated:
I have today issued a directive to the Atomic Energy Control Board covering such aspects as minimum selling prices and volumes of sales to export markets. Because of the nature of uranium export contracts it would not be in the public interest to disclose further contract details at this time.
Would the hon. gentleman tell the House how it was possible that details of these contracts got into the hands of investment analysts in the securities business in Toronto almost immediately? What was the leak in his organization which allowed such a thing to happen?


Alastair William Gillespie: The hon. member is asking me to speculate on the sources of information of some analysts. I do not have the source of that information, but perhaps the hon. member does have some information. If he has any information which he would like to give to me I would like him to do so.


James McPhail Gillies: I might say to the Minister of Energy, Mines and Resources that people on this side of the House are sick and tired, every time an issue is raised which affects very seriously and deeply the integrity of the operations of the government of Canada-and we have heard about this for weeks now-to be told by the government: "Why don't you look into it?" I asked the Minister of Energy, Mines and Resources whether he had asked the Attorney General of Canada to make inquiries whether or not there were leaks from his office of information that allowed insider trading which apparently took place. It is very much his responsibility to make that inquiry, Mr. Speaker.


Alastair William Gillespie: Mr. Speaker, members of the House have been all too aware recently of allegations coming from the other side of the House, allegations which have been unsub-

November 21, 1977
Oral Questions
stantiated. I think the time has come for members of the Conservative party, if they have allegations to make, to make them to the responsible institutions which can deal with them, and to back them up.


CANADA-UNITED STATES AUTO PACT-REQUEST FOR REPORT ON NEGOTIATIONS TO OBTAIN MORE BENEFITS
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, 1 have a question for the very positive Minister of Industry, Trade and Commerce.


Some hon. Members:: Hear, hear!


John Edward Broadbent: You fellows opposite are right on cue. The minister said on television last night that Canadians are tired of watching news reports every night informing them of the bad consequences of his government's misgoverning, and in that regard I agree with the minister. Does the minister have some specific good news about the automotive industry for next year, in light of the fact that we have had a net loss of some 15,000 jobs in that industry as a result of the mismanagement of the Canada-United States automotive agreement? Can the minister tell us about new commitments for new jobs next year?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, I am particularly glad that question has been asked, because as I look at the facts I find that the automotive industry has enjoyed its fourth consecutive year of growth of profits and success in Canada. We are holding talks with the industry regarding development of additional capability in manufacturing parts in Canada. I can assure you, Mr. Speaker, and hon. members of the House that those talks look to me as if they will be very productive.


John Edward Broadbent: That is precisely my point, Mr. Speaker. The minister referred to profits, and as he probably knows, the profit margins of the "big three" in Canada are such that two are more than twice as high as their profits in the United States, and the third is not quite twice as high in Canada as in the United States, although in the United States much more proportionately is being put into new investment.


Mr. Speaker:: Order, please.


John (Jack) Henry Horner: Mr. Speaker, I want to assure the hon. member and all hon. members of the House that the government takes no evil view at all of profits; we believe they are necessary. I want to assure the hon. member that my department is aware-


Mr. Andre:: You don't expect us to believe that.


John (Jack) Henry Horner: I do not believe the hon. member for Calgary Centre, either. I believe in profits, and I believe the argument that the automotive industry has had four good consecutive

years in Canada, profitwise and otherwise, as 1 have said. We are using this to encourage them to expand their parts industry in this country and we believe that our talks will be successful. That is all I can say.


John Edward Broadbent: Mr. Speaker, in light of the fact that four ministers of industry, trade and commerce in a row have said that, and considering that we have had a net loss, I repeat, of 15,000 jobs in the last half dozen years under the pact and that the president of the Ford Motor Company about 10 days ago denied what the minister has said, namely that the Ford Motor Company had committed itself to expanding next year, is the minister in any position to give us a specific commitment, short of the general verbiage which he has just repeated this afternoon?


John (Jack) Henry Horner: Mr. Speaker, I want to make it abundantly clear to the hon. member that I do not accept, for one minute, his figure that we have lost 15,000 jobs.


John Edward Broadbent: I did not expect you to.


John (Jack) Henry Horner: Thank you. 1 am glad we can agree on something-not to accept your figures. We are agreeing on that. At least we are agreeing on one thing, that we do not accept your figures.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: The other point is: jobs will be created, and we will expand parts manufacturing within this country.


An hon. Member:: How?


John (Jack) Henry Horner: I am quite hopeful with regard to our talks.


ANTI-INFLATION PROGRAM INQUIRY WHETHER GOVERNMENT HAD DISCUSSIONS WITH QUEBEC ON APPLICATION OF PROGRAM TO SCHOOL TAX INCREASES
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, in the absence of the Minister of Finance, I will direct my question to the right hon. Prime Minister. Given the fact that several regions in the province of Quebec have been advised lately that school taxes will be increased by more than 75 per cent, would the Prime Minister tell the House whether or not discussions have been held about that with the province of Quebec in relation with the Anti-Inflation Act?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I do not know if any discussions have been held lately on that but the hon. member should know that the province of Quebec, that is its present government, has decided to abolish the Anti-Inflation Act as it applies to the private sector which is under its control. So, as far as salaries in the public sector are
November 21, 1977

concerned, including municipal employees, Mr. Speaker, one has to look to the present government which has lifted the controls and allowed that result.


FINANCE
Gilles Caouette: 1 have a supplementary, Mr. Speaker. In view of the fact that school boards and municipal authorities have to go on the money markets to borrow money at prohibitive interest rates in order to administer their budget, as it is also the case for provincial governments, is the Prime Minister prepared to advise his Minister of Finance to allow interest free loans to public bodies to ensure adequate management and to save the money of Canadian taxpayers, as it is done through the Islamic Bank to all the countries which are under the jurisdiction of this bank. Would the Prime Minister be prepared to do the same here in Canada?


Pierre Elliott Trudeau: Mr. Speaker, we would be prepared to consider this kind of interest-free loan to school boards as soon as the leader of the Social Credit can find enough citizens willing to provide loans without interest to the government, for example through saving bonds, without claiming the interest. This would give us a good fund and we would be quite prepared to re-lend without interest. So we are waiting for the leader of the Social Credit to take action.


Gilles Caouette: Mr. Speaker, since the Prime Minister is telling us how to proceed, I am ready to give a lecture if he is willing to attend. When would he be free to attend a lecture on Social Credit to understand at last that Canadians need interest-free loans as is done in other countries.


Pierre Elliott Trudeau: Mr. Speaker, I did not ask for a lecture. I said that when the government is issuing saving bonds, as it has just done, it is borrowing from the citizens at a rate of about 8'/2 per cent. If the hon. member could find us a number of purchasers who would be prepared to make interest-free loans, we would lend those funds to municipalities. I am not asking for a lecture but merely a list of individuals ready to make interest-free loans.


URANIUM-REASON FOR FAILURE TO ADOPT TWO-PRICE SYSTEM OR MARKETING BOARD
Mr. Ron Huntington (Capilano):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. In view of repeated statements that the government was concerned with Canadian consumers and with keeping down the
Oral Questions
domestic cost of uranium, will the minister tell the House why the government did not go to the legal two price system for uranium, as was done with Canadian wheat? Will he tell the House why the government did not bring in an uranium marketing board with specific provisions to safeguard Canadian consumers and industries?


Alastair William Gillespie: Mr. Speaker, if the hon. member will take a look at the record, he will realize that Canada took a number of actions. The first action was to make very strong representations to the United States when they imposed an embargo on Canadian uranium sold to that market which represented 70 per cent of world markets at that time. There is a whole series of Canadian positions which are on the record with respect to U.S. action.
The second action we took in Canada was to try to persuade the consuming countries of the world that it would be in their interest to join with the producers, and it was the producer-consumer arrangement which would attempt to stabilize the supply and demand price of this country, in much the same way perhaps as the international tin council is an association agreement of producer and consumer countries. We were not successful although we tried right up to the very last moment with a major initiative by the Secretary of State for External Affairs at the United Nations in New York.
As a result, we formed an agreement with the other producing nations, Australia, France, South Africa and ourselves, aimed at stabilizing the market. I believe that this arrangement was successful for the first year perhaps, or even the first year and a half of its existence, but with the OPEC price increase of 1973 and energy values generally escalating out of all proportion to previous experience, the real need for that arrangement ceased to exist. That is the record, Mr. Speaker, and those are the reasons Canada moved into this particular arrangement because the major market on which the Canadian industry has relied, the U.S. market, was closed as a result of an arbitrary decision by the United States.


James McPhail Gillies: Not true.


URANIUM-REASON FOR FAILURE TO SUPPLY ONTARIO HYDRO WITH CHEAPER STOCKPILED MATERIAL
Arthur Ronald Huntington: Mr. Speaker, I thank the minister for his answer, although it hardly answers the two questions he was asked on the legal approach that the government might have taken. I will ask him this: As shipments will be made from the Canadian government's stockpile of uranium concentrates to Spanish electric utilities in 1978, will the minister tell the House why the Government of Canada has not offered to sell Ontario provincial utilities, uranium concentrates purchased at $4.75 to $6 a pound with Canadian taxpayers' dollars, I might add, rather than leaving them exposed to world prices? To be more precise, why should Ontario Hydro pay world cartel prices for uranium mined in

November 21, 1977
Oral Questions
Ontario when foreign utilities are provided from a government stockpile program undertaken with Canadian taxpayers' dollars?


Alastair William Gillespie: I have always made it very clear that the so-called cartel arrangement excluded in every way the relationships between the producers and consumers of Canada. The Canadian government's position from the very start was that the consumer utilities of this country should make their own arrangements with Canadian producers, and that was the basic policy.
As to the second aspect of the policy, that is to say the stockpile to which the hon. member alluded, that stockpile, I believe, was a very important safety measure for Canada to ensure that at all times there will be adequate back-up supplies for Canadian consumer utilities, given the interest in our export markets. As the hon. member knows, we have a policy which secures Canadian consumers on the basis of 30 years, but additionally we have the back-up of the stockpile.


ADMINISTRATION OF JUSTICE
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have a question for the Minister of Justice with respect to that matter. It arises out of the decision of Mr. Justice Evans which effectively precludes people in the industry, people with knowledge and others, from disclosing to any investigation carried out under the Combines Investigation Act facts rather than allegations of what the facts may be. Has the Minister of Justice considered the effect of this provision and will he tell the House what he intends to do to rectify the situation?


Hon. Ron Basford (Minister of Justice):: We are considering the matter, but 1 am not in a position today to reach a conclusion on that. Obviously, it would be very difficult if impediments were put in the way of the director of investigation and research.


Walter David Baker: Would the Minister of Justice consider very quickly changing once again the gag order that has been placed on this matter as the time for an appeal with respect to the action in which the Minister of Justice must have a great interest, particularly because of the attitude of full disclosure, brought by six people in the Supreme Court of Ontario is running out this week, would the minister let this House know whether or not it is his intention, as chief law officer of the Crown, to use as one primary vehicle an appeal of the judgment which clearly renders toothless and useless the combines investigation which the minister is setting up with respect to this matter?


Stanley Ronald Basford: I think that the remark of the House leader of the opposition carries the judgment far beyond its intent and I would not want to adopt that language at all.


Walter David Baker: Let us look at the judgment to refresh the minister's mind.


Mr. Speaker:: Order, please. There may be an argument at other times. I will permit the hon. member a supplementary question now.


Walter David Baker: I have a simple supplementary question, Mr. Speaker. Does the Minister of Justice intend to appeal the ruling of Mr. Justice Evans with respect to the right of the people inside and outside the industry and people with direct knowledge of what happened within the cartel to give evidence and come clean before the combines investigation which the government has set up? Will he appeal that order?


Stanley Ronald Basford: I want to ensure that the director is not under any impediment.


URANIUM CARTEL-AVAILABILITY OF FILES TO COMBINES INVESTIGATORS
Mr. James A. McGrath (St. John's East):: My question is directed to the Minister of Energy, Mines and Resources. In view of the necessity of ensuring that there will be absolutely no impediments put on the director of combines in his investigation, may I ask the minister what steps he has taken to ensure that there are no impediments. Is he, has he, or will he make it possible for the director of combines to produce documents which he has in his possession, and will he also ensure and direct that all pertinent and relevant files within his department are opened to the Combines Investigation Branch?


Alastair William Gillespie: We made it very clear that all the files and all the information we have are fully available to the director of investigation and research.


COMBINES
James Aloysius McGrath: My question is for the Minister of Consumer and Corporate Affairs. In view of the potential conflict of interest that seems to be arising here, since one of the parties under investigation by the Combines Investigation Branch is in fact the government itself, and since the director of the Combines Investigation Branch answers to the government, what steps is the minister taking to ensure that the Combines Investigation Branch will
November 21, 1977

have a full, complete and unimpeded investigation of this whole affair? In that regard, can the minister assure the House that all documents and all files relating to the unfortunate affair, with its potential for a consumer rip-off with the government being party to that unfortunate situation, will be made available and that there will be a complete and unimpeded investigation of this whole sorry affair?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: If the hon. member had read the Combines Investigation Act he would know that the director of investigation and research has a full and independent status given to him by statute and can be in no way impeded by the government or by the minister. He has all the tools necessary to do a complete job.


INDUSTRY
Hon. George Hees (Prince Edward-Hastings):: I have a question for the Prime Minister. As manufactured products are the ones that produce jobs and as the Canadian Manufacturers' Association has just forecast that this year Canada will have an adverse trade balance, a deficit of $11.5 billion in manufactured goods, up 15 per cent from the record $10 billion deficit of a year ago, will the Prime Minister take the first opportunity on motions to outline to the House what specific new initiatives the government intends to introduce in the very near future to change this very serious and steadily deteriorating situation which is so adversely affecting Canadian employment?
[DOT] (M42)


Pierre Elliott Trudeau: Mr. Speaker, those figures contradict information I have. I wonder if the hon. member has garbled them a bit.


George Harris Hees: The answer is no, Mr. Speaker. I received those figures from the President of the Canadian Manufacturer's Association at a luncheon here last Thursday.


Pierre Elliott Trudeau: That proves my point.


George Harris Hees: I should like to ask a supplementary question. In view of the very vague and completely unsatisfactory nonanswer of the Prime Minister, I wonder if he would consider this: When he is answering these very serious questions about matters important to this country would he use facts instead of so much of the commodity of which he is amply supplied on the cattle ranch of his Minister of Industry, Trade and Commerce.
Oral Questions ENERGY


OPPORTUNITY FOR SMALL BUSINESSES TO PARTICIPATE IN PROGRAMS ON RENEWABLE FORMS OF ENERGY
Mr. F. A. Philbrook (Halton):: Mr. Speaker, may I put a question to the Minister of Energy, Mines and Resources regarding solar and other renewable forms of energy. It is my understanding that the programs accepted by government are those from large institutions and those that have been assigned. I wonder if the minister has any intention of opening up the program for those forms of energy to small businesses, small organizations and individuals who might have a superior proposal?


Alastair William Gillespie: Mr. Speaker, the thrust of the program, is to make available to industry and the Department of Industry, Trade and Commerce-and my colleague I am sure would be pleased to provide additional information on this-information on the opportunity posed by the challenge of solar energy to bring into being very much more activity in the private sector and small business in particular. Some consumers have complained that we have left the tariff on solar equipment and components, and have argued that if we were to take it off we would be able to get lower costs on solar energy for Canadians. That may be true, but it would also of course have the effect of discouraging the kind of indigenous enterprise we are trying to provide around this new kind of technology.


INDUSTRY
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Industry, Trade and Commerce regarding the Canadian electronics industry which is in dire straits. Since 1965 the electronics industry in this country has grown by some $2.8 billion. Of this amount only $1.1 billion has gone to domestic producers, or only 38 per cent, while 1.7 billion or 62 per cent has gone to foreign importers, the result being that in the last three years the number of persons employed-


Mr. Speaker:: Order, please. I wonder if the hon. member would put his question without further preamble.


Thomas Clement (Tommy) Douglas: -the
number of persons employed has dropped by 17,000. I should like to ask the minister if he has looked into this situation and if he can tell the House what the causes are, what steps the government is taking to see that Canadian manufacturers of electronic products get their fair share of the Canadian market?


John (Jack) Henry Horner: Mr. Speaker, my officials and I have met with representatives of the electronic industry. We are very much
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Oral Questions
aware of their concern for future growth within their ability to meet the Canadian market and world markets. We will bear that in mind in the MTN agreement negotiations and do everything we can to facilitate growth of this industry in Canada. We recognize it is a high technology employer and therefore very important to the high technology within our country.


Thomas Clement (Tommy) Douglas: A supplementary question. I notice that Mr. Terry Matthews, executive vice-president of Mitel Corporation has pointed out that this year according to Statistics Canada, of a domestic market of some $3 billion, imports are taking $2.2 billion, whereas Canadian exports are only about $600 million. This represents a very serious threat to the jobs of many thousands of Canadians. Surely the minister can give us some more satisfactory answer than that. The government has taken steps with other industries to effect some type of quota system or method of protecting Canadian producers and Canadian jobs. What steps does he intend to take to protect the Canadian market for Canadians?


John (Jack) Henry Horner: Mr. Speaker, first of all we recognize the industry of which we are speaking is a highly technical industry and vastly changing. The technological advances made in the electronics industry in recent years make it very, very difficult to apply any degree of set permits or import permits to our country because of the continual change taking place within the electronics industry. For that reason we have been reluctant to consider that approach. As I said earlier, however, we will do everything we can to allow the industry within Canada to meet export capabilities and to serve the Canadian market to a greater degree.


PULP AND PAPER-EFFECT ON CANADIAN INDUSTRY OF LOANS TO FOREIGN COUNTRIES TO ESTABLISH PLANTS
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the fact that the pulp and paper industry is suffering from lack of markets, I wonder if the minister would advise the House why the Export Development Corporation, which falls within his responsibility, is making loans to European countries which are taking away the markets of Canadians and causing serious loss of jobs?


John (Jack) Henry Horner: Mr. Speaker, we are well aware of the difficulties in the world market of the pulp and paper industry. I should like to say that the Export Development Corporation has made a loan for development of a pulp and paper industry in Poland. In making that loan they do not believe the Polish industry would serve any of the markets our industry is now serving. We also believe that a loan made to them for procurement of pulp and paper machinery in this country would create jobs which are needed in our manufacturing sector.


LINERBOARD MILL IN NEWFOUNDLAND-REQUEST FOR ACTION TO AVOID LOSS OF JOBS
Jack Marshall: supplementary question, Mr. Speaker. Dealing with the province of Newfoundland in particular where the pulp and paper industry and the linerboard industry are basic to the province and which are being seriously hurt, has the minister consulted with the provincial government of Newfoundland with respect to the difficulties of the Labrador linerboard mill where 2,100 jobs were lost. Would the minister follow that up?


John (Jack) Henry Horner: Mr. Speaker, with regard to the linerboard mill in Newfoundland I would not like to reflect on any dereliction of duty on behalf of the government of Newfoundland but I believe they did discuss this with my predecessor and members from Newfoundland. It was only after lengthy Cabinet discussions in Ottawa that they believed no additional help could be made to keep that linerboard mill open.


NORTHERN GAS PIPELINE-USE OF CANADIAN PIPE IN CONSTRUCTION
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is for the Prime Minister regarding what I call that great sellout by this government in terms of the northern pipeline and the evasive answers given by the Minister of Industry, Trade and Commerce and others. Given the fact that Dr. Stuart Smith, Leader of the Opposition in the province of Ontario, has indicated by way of a letter to the Prime Minister that he is very, very concerned about this matter and that there should be guarantees in the agreement, and given the fact that there are no guarantees, could the Prime Minister advise Dr. Stuart Smith, this House and the people of Canada, what his reply will be to Dr. Stuart Smith who has registered the same kind of concern that we have in face of the apathy of the Prime Minister and the Minister of Industry, Trade and Commerce?


Pierre Elliott Trudeau: Mr. Speaker, I regret, I have not seen Dr. Stuart Smith's letter yet but I can assure him I believe the matter is a very important one and I shall pay every attention to his representations. I must say it is typical of the Conservative party to describe as a sellout a negotiation between Canada and the United States, very ably conducted by ministers on this side which has meant some 100,000 man-years of work for Canada and some $4 billion to be spent in Canada. If that is a sellout we would like to see what the hon. member for Hamilton West would do.
November 21, 1977


INDUSTRY
Lincoln MacCauley Alexander: A supplementary question, Mr. Speaker, and I want to thank the Prime Minister for that unwanted lecture. I know all about the $4 billion, I know all about the 400,000 man-years of work and all about the one million tons of steel. Let me go to the other minister who knows something about this matter, the Minister of Industry, Trade and Commerce. I resent the evasive answers that this minister has given and the one the Prime Minister just gave.
Is the minister aware of the fact that there is a substantial lobby now in place not only by steel producers but also by unions, enhanced by Senators Jackson, Stevens and Durkin, who do not want any preferential treatment going toward Canada? If he is not aware of it, would he kindly get on the ball and go to his counterparts in the United States and advise them of the concern which has been registered around here and ascertain from them just how he is going to assure and guarantee Canadian content? Is the minister aware of that concern, and before he brings in legislation, which is almost on the books, will he see his American counterparts and follow the suggestions I just made?


John (Jack) Henry Horner: Mr. Speaker, I am aware of the concern of Senators Jackson and Stevens and others in the United States with regard to having as much work done in the United States as possible and to receiving gas as cheaply as possible.
However, let me explain just briefly the basic criteria which is now to be decided. First, there is the matter of pressure. The Americans want to build a pipeline with a pressure of something over 1,600 pounds. We say there is no pipeline yet built in the world with that amount of pressure. We want to build the pipeline with a pressure of less than 1,200 pounds. That pressure determines the thickness of the wall of the pipe. That decision is for Canadians to make, not Americans, so hon. members can readily see that we are in the driver's seat with regard to the size of the pipe, whether it be 48 inches, 52 inches or 54 inches, and with regard to the thickness of the wall. If we make the right decision in that regard-and I have no hesitation in saying that I am fully confident that we will- then we will make available to Canadian suppliers the opportunity to produce the total length of the pipe.
When we make that opportunity of producing something in the neighbourhood of 3,000 miles of pipe available to Canadian suppliers, we ask them to be competitive because we do not believe we entered into an agreement with the United States so that we could force them to pay for a pipeline built in a non-competitive environment and because in the end American consumers are going to have to pay for the building of the pipeline. It would be foolish of us to think that their government would enter into an agreement with us which would
Oral Questions
allow us to build a pipeline in an environment which is not competitive.
So I assure the hon. member that Canadians will get every possible opportunity to supply the components for that pipeline. Of course, we are asking Canadian suppliers to remain as competitive as possible to meet the challenge.


Lincoln MacCauley Alexander: That answer means absolutely nothing to me.


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: All the minister has said is that he is going to give an opportunity,-


Mr. Speaker:: Order, please.


Lincoln MacCauley Alexander: I was just going to get to the question.


Mr. Speaker:: Rather than express an opinion I wonder if the hon. member would put his supplementary question.


Lincoln MacCauley Alexander: In that I have expressed my opinion, regardless of the possibility of bidding, all I want to know is what the minister is going to do to guarantee Canadian content. That is the basis of that agreement, and I want to know whether the minister is going to go to the United States and advise his American counterparts and all those involved that he expects preferential treatment for Canadians. Does he intend to guarantee that? Is the minister going to do that, or is he going to sell out to the American consumer at the expense of Canadian steelworkers and jobs for Canadians? That is what I want to know from the minister.


Mr. Speaker:: The question in its form is a repetition of the one asked earlier.


Lincoln MacCauley Alexander: He has not answered it.


Mr. Speaker:: Further, it is a repetition of questions answered on two occasions by other ministers.


Lincoln MacCauley Alexander: With all due respect-


Some hon. Members:: Sit down.


ROYAL CANADIAN MOUNTED POLICE
Thomas Charles Cossitt: Mr. Speaker, in the absence of the Solicitor General I would like to direct my question to the Prime Minister. Would the Prime Minister tell the House whether the government is prepared to reveal the mysterious circumstances surrounding the departure from Canada of Leslie James Bennett of the RCMP, and was one of the conditions that he not reveal the contents of the Featherbed file?
80025-68%

November 21, 1977
Oral Questions


Pierre Elliott Trudeau: Would the hon. member ask the question again.
IVlr. Cossitt: Would the Prime Minister reveal the circumstances surrounding the mysterious leaving of Canada of Leslie James Bennett of the RCMP on condition, apparently, that he not reveal the contents of the Featherbed file?


Mr, Trudeau:: Mr. Speaker, I have never heard the name before. I will refer the question to the Solicitor General.


POSSIBILITY PRIME MINISTER INTERFERED WITH FORCE IN SECURITY WORK
Thomas Charles Cossitt: Mr. Speaker, I would like to ask the Prime Minister how he was able to tell the House last Tuesday in reply to a question of mine that he had never heard of the Featherbed file and yet the next day the Solicitor General told the House that the file existed and was known to the security committee of the cabinet of which I believe the Prime Minister is a member. Therefore, I would like to ask the Prime Minister pointblank-a yes or no answer-has he in any way directly or indirectly interfered with the RCMP in pursuing the matter of national security in this country?


Pierre Elliott Trudeau: Mr. Speaker, 1 would be prepared to answer the question if the hon. member would say he would take my word for the answer.


Thomas Charles Cossitt: The Prime Minister says he will answer my question if 1 am prepared to accept his answer. That is a hypothetical situation. I am certainly prepared to consider whether his answer is true, but he cannot ask me in advance to accept his answer when he will not even tell the House what he has to say. I can see too-


Mr. Speaker:: Order, please. The hon. member for St. John's West.


NEWFOUNDLAND'S OFFSHORE OIL AND GAS REGULATION- POSSIBILITY OF AGREEMENT ON QUESTION TO BE PUT TO SUPREME COURT
John Carnell Crosbie: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. As the minister no doubt knows, on October 24 the province of Newfoundland proclaimed its own oil and gas regulations for the offshore area off the east coast and set out its case with regard to offshore mineral rights. The minister of mines and energy of Newfoundland said that the province of Newfoundland is prepared to go to the Supreme Court of Canada on this question if two matters can be settled first. The first is whether the province can have access to certain documents in the hands of the government of Canada relating to the so-called thirty year rule which applies to confederation, and second, whether the government of Canada will agree that both sides have to

agree on the terms of the question to be asked the court. Can the minister advise the House whether those two points will be met by the government of Canada, whether disclosure of these documents will take place and whether both sides will have to agree to the question?


Alastair William Gillespie: Mr. Speaker, as far as I know there was a favourable decision taken in principle on these matters some months ago, and I do not understand why the Newfoundland government has not been able to move more expeditiously.


NEWFOUNDLAND'S OFFSHORE OIL AND GAS REGULATIONS- POSSIBILITY OF ESTABLISHING INTERIM JOINT MANAGEMENT COMMITTEE
John Carnell Crosbie: The minister is poorly briefed, but I cannot brief him here now. The minister of mines and energy of Newfoundland, realizing that there are now two sets of oil and gas regulations in force in that area, has said he is suggesting to the Minister of Energy, Mines and Resources that the two governments set up an interim offshore management committee so that there will be a forum for discussion and co-ordination and so that the industry will know where to go to get answers in this matter of disputed jurisdiction. Has the minister received that submission, and what will be the reply of the government of Canada to this suggestion?


Alastair William Gillespie: Mr. Speaker, 1 think that is an interesting and constructive suggestion. I would be very pleased to consider it.
I have to point out, however, that at no time has the Newfoundland government taken us into its confidence. It published these new regulations without showing them to us. Nor did I within a week or some days of their publication receive a copy. 1 hope that the Newfoundland government and the minister in particular will see that it is in their interest to collaborate. I can assure him of our wish to co-operate.


FISHERIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Minister of Fisheries. It concerns the salmon enhancement program in British Columbia. The study done by his department in September of this year indicated that the major cost of the salmon enhancement program would be borne by a fishermen's licensing arrangement. Would the minister advise the House why fishermen should begin to bear any of the cost of that program before the returns come to them? There is about a four-year lead time after the hatch gets out to sea. Why is the minister now suggesting that commercial fishermen immediately have to bear the cost when they do not have any other returns?
November 21, 1977


Hon. Romeo LeBlanc (Minister of Fisheries):: Mr. Speaker, first, the hon. member seems to forget that the fishermen are already getting a considerable return from some S30 million worth of investments which have created the technology required for the salmon enhancement program. The other point which the hon. member did not make in his question- and I thank him for giving me notice-is that not just fishermen but all sectors of the industry-commercial, sports fishermen and processors-are expected to carry part of the cost of what is a program not open to citizens generally but to a specific group.
It has been the policy all along that users in cases such as these-for example, airport licence fees, airport landing fees, the post office and other users of government services-should be requested to pay some of the cost.


Stuart Malcolm Leggatt: Mr. Speaker, there is one group that the minister did not refer to in his answer who are apparently bearing no costs. These are the people who have polluted the rivers and dammed them. It is the CPR which has blocked the Fraser River. They apparently are not going to bear any of the cost of what is not essentially a salmon enhancement program but a salmon rehabilitation program. We are trying to bring those runs back to the condition that they were. Why is there not a program whereby those who have been responsible for degrading the fishing capacities of British Columbia are required to pay some of the cost of reinstating it?


Roméo LeBlanc: Mr. Speaker, one of the features we tried to design in this program is simplicity. I suspect if we were to try to do what the hon. member is suggesting, it would turn out not to be a simple matter at all. For example, how would he charge the cost of the landslide of 1913 which almost wiped out the Fraser River salmon runs?


PRIVILEGE
Mr. Speaker:: On Friday last, several requests were put to the Chair to seek or to explore the existence of unanimous consent for the purpose of extending some of the provisions of our Standing Orders and precedents of the House in order to permit either a statement by a minister, subject to questioning, provision of an opportunity for a minister to raise a question of privilege, or simply for clarification of the right to put questions to ministers.
Over the last couple of days I have ruled as clearly as possible on the reinforcement of our practices with respect to the limitation on questions which can be put to ministers, that is to say, respecting their own administrative responsibility at the present time. However, I did indicate I had some concern about the opportunity for the House to try to explore by one member that which would take unanimous consent by way of
Ministerial Responsibility
an action on the part of another member, in this case particularly, a minister.
I indicated then that I thought it would be unwise to attempt to extend our practices in that way. Having examined the matter over the weekend, as I undertook to do, I have no reason to change that opinion. I am concerned that we really are not able to take, by way by point of order, in any regularized way an application for unanimous consent, but we do it in circumstances in which it seems that a member who wishes to do something for the benefit of the House feels constrained by the rules and seeks to ask the House to set those rules aside in order to permit him to do that.
If we were to extend that proposition to permit regular applications under points of order for unanimous consent by one member for another member to take such action, we would be inviting regular applications at three o'clock every day for an application for unanimous consent; for example, that the question period be extended indefinitely. We would be opening up the practice to tremendous flexibility. I say that particularly in view of the fact that in the way we have been using Standing Order 43, the Chair has tried to stay out of discussions or disputes as much as possible about the content of applications pursuant to Standing Order 43. In some cases they have been flagrant and I have not put the question to the House.
However, bearing in mind in the procedures we have arranged, because we take such applications at the beginning of the day and because they are, therefore, self-policing in terms of abuse of the rule, since they must stop in order to permit the start of the question period, it has given the Chair an opportunity to take a somewhat passive stance with regard to such applications. That adds a kind of flexibility to applications for unanimous consent pursuant to that Standing Order.
In view of the fact that members do enjoy the opportunity to put these kinds of propositions for perhaps setting aside the Standing Orders for a particular purpose or a particular day, I feel we ought to take a rather tight rein in respect of applications of other sorts for unanimous consent for the setting aside of our procedures, and that I ought to continue to confine the kinds of cases we have discussed to those where the initiative comes from the minister involved.
I want to remind the House that there is one outstanding question of privilege; that is the one related to the decision before the Supreme Court of Ontario. I have given a preliminary indication of the position that I felt the House was in with regard to any outside definition or circumscription of our privileges here. However, the Minister of Justice indicated it was his intention to make an intervention with regard to that matter. I am, therefore, holding that question of privilege open until such time as the Minister of Justice comes forward with that intervention, which I hope will be as soon as possible.


Stanley Ronald Basford: Mr. Speaker, I have had an opportunity of meeting, since then, with the President of the Privy Council who is studying the matter. He will want to respond to the question of privilege as quickly as

November 21, 1977
Ministerial Responsibility
he can. I hesitate to speak for the President of the Privy Council-


Charles Joseph Clark: Jack Horner does.


Stanley Ronald Basford: -but I hope the President of the Privy Council will make his intervention quickly on it.


Walter David Baker: Mr. Speaker, this is the first day the President of the Privy Council has been back in the House. He has been very ill. All of us welcome him back.


Some hon. Members:: Hear, hear!


Walter David Baker: I am sure his colleagues welcome him back even more fervently than we do. Because of the issues involved and the question of time, I wonder whether the President of the Privy Council might tell us now when he plans to reply. There is a question of considerable urgency involved in this matter. It affects the basic privileges of the House. I think the minister realizes the urgency. Does he have a time he can tell us as to when he will be replying?


Hon. Allan J. MacEachen (President of the Privy Council):: Mr. Speaker-


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: -may I thank the hon. member for his expression of welcome on my return to the House of Commons. I must say I had an opportunity to observe my colleagues from a distance. I want to assure them that they all appeared to me as statesmen, but of course they know better. I also want to ease my way into the atmosphere of the House by expressing appreciation to the opposition for ensuring that not very much happened in the House of Commons during my absence.


Lincoln MacCauley Alexander: It didn't take you long to get back into form.


Allan Joseph MacEachen: In reply to the question by the hon. member for Grenville-Carleton, I will attempt to reply to this question of privilege just as soon as I have had an opportunity to examine the various aspects of it. I undertake to do it certainly before the end of this week.


Charles Joseph Clark: Mr. Speaker, I rise on a point of order. It relates to the ruling Your Honour just made which, naturally, all of us on this side of the House are quite happy to accept. 1 simply want to rise at this point to say that if the Minister of Consumer and Corporate Affairs would like to seek unanimous consent of the House to make, in this House, the charges which he made against the Royal Canadian Mounted Police outside this House. In the interests of having something happen in this House of Commons which the government House leader just referred to, we on this side would be quite prepared to grant unanimous consent to allow

the minister to make the accusations against the Mounties in parliament that he made outside parliament.


Some hon. Members:: Hear, hear!


MR. STEVENS-URANIUM CARTEL-REPLY BY MINISTER
Sinclair McKnight Stevens: Mr. Speaker, I wish to give notice of what I believe is a question of privilege. In reply to a question put by myself to the Minister of Energy, Mines and Resources today touching on the consumer consequences in Canada of the uranium cartel activities, the minister replied, as far as my notes and recollection are concerned, as follows; "The real question in my mind is whether the hon. member is serving Canadian interests or whether he is acting as an agent of a foreign corporation that is contending with Canadian regulations. We are all aware that the issues which he has been promoting are the issues which Westinghouse of the United States have been promoting."
I would like to give notice that I believe this involves a clear question of privilege. I would like to be able to check Hansard, the official record. However, at this point I want to assure all members that I am here to serve primarily the York-Simcoe constituents, and the people of Canada generally.


Mr. Speaker:: If the hon. member feels he has some basis on which that statement constitutes privilege, I will be interested to hear it. I must say I do not see anything in it initially. However, the hon. member has given notice.


Mr. MacDonald (Egmont):: Mr. Speaker, I rise on a point of order. It has some aspects of a question of privilege. Under the rules of the House, I think this deals with the rights and responsibilities of all members. I would refer to two citations in our rules. Standing Order 65(2), which relates to the practice of establishing standing committees provides:
Each of the said committees shall elect a chairman and a vice-chairman at the commencement of every session and, if necessary, during the course of a session.
It is well known that when each session commences, the listing of members on committees takes place within a very short period of time. Then, when references are made, the committees are supposed to be constituted immediately. Standing Order 58(15) makes this clear when it says:
Supplementary estimates shall be referred to a standing committee or committees immediately they are presented in the House. Each such committee shall consider and shall report, or shall be deemed to have reported, the same back to the House not later than three sitting days before the final sitting or the last allotted day in the current period.
I raise this matter because we find ourselves in a very difficult situation. A number of miscellaneous estimates were referred to committees on November 9 last. As I understand it, all the standing committees have been established by now, with the exception of one, the Standing Committee on Broadcasting, Films and Assistance to the Arts. Two announcements were made in the course of the past two weeks that this
November 21, 1977

committee was to be organized; on two occasions it was announced it would meet for organizational purposes. Yet on each occasion, shortly before the time announced for such meetings, and in one case only half an hour before, they were cancelled, as I understand it, on the instructions of the government whip's office.
These estimates-I refer particularly to those under the umbrella of the Department of the Secretary of State and the Department of Communications-involve some $140 million in public expenditures. Expenditures for which the Secretary of State is responsible represent the fifth largest supplementary estimate. Mr. Speaker, I have no knowledge that this committee will ever be established prior to the expiration of the time available, which is due on some date in December.
I am told informally that the committee might be organized on Thursday of this week, which would, in practice, mean there would be no meetings to discuss matters of a substantive nature until next week. This would leave the committee with little more than a week with which to deal with budgetary items having to do, for instance, with bilingualism, new initiatives in the area of national unity, the activities of a number of Crown Corporations, including the Canada Council, the CBC and the National Film Board. Then, turning to the responsibilities of the Department of Communications, we find the CRTC which was the subject of considerable debate this session.
Mr. Speaker, as the presiding officer of this House you are the protector of the rights and privileges of members. The Standings Orders make it very clear, in Standing Order 58(15), that supplementary estimates shall be referred to a standing committee or committees immediately. We now have a ridiculous situation in which, although the reference was made on November 9, meetings of the committee, after they have been scheduled, have been cancelled unilaterally by the government whip. In effect, this means the committees are unable to meet and do their work.
To my mind, this situation calls for a clear directive, perhaps pursuant to an agreement among the House leaders, which would set dates for these meetings in a binding way. As things are at present, the government whip can cancel meetings for reasons which are unknown to us, and this makes our job even more difficult.


Mr. Cafik:: Mr. Speaker, 1 think the question raised by the hon. member for Egmont is one of legitimate concern, and I hope it will be resolved through discussion among the House leaders. Having regard to the timeframe he mentioned, there is no doubt all hon. members would like to see this matter dealt with at the earliest possible opportunity, and 1 can assure the hon. member that as deputy House leader I shall look into the matter to make sure it is dealt with as quickly as possible.
Post Office


POST OFFICE
Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, at the stage of statements by ministers, 1 am pleased today to deal with a subject which I feel is fundamental and essential to the administration of my department.

Mr. Speaker, as I conceive my responsibilities as Postmaster General, they are twofold. First, 1 must provide a communications service to all Canadians and, second, I must manage postal operations on a business-like basis. This is a mandate which has been and continues to be difficult to discharge. Because 23 million Canadians are able to communicate daily on an instantaneous basis, they expect, and are entitled to, the most reliable delivery service we can provide in the case of packages and written communications.

Mr. Speaker, for reasons beyond the control of the Post Office, its management and work force, expenditures have continued to outstrip revenues. Inflation, rising material and labour costs, competition, and labour-management relations are some of the factors that add up to some very somber reading along the bottom line of our balance sheet. Rapidly rising costs have outstripped the growth in revenue. Our deficit is growing larger by the year. It reached $90.9 million in the fiscal year 1972-73; in fiscal year 1976-77 it had risen to $568.8 million.

This deficit is heavily financed by you, by me and by every other taxpayer because it comes out of general government revenue.
Hon. members will recall that the blue book defines the object of the Post Office as "to provide postal service to the people of Canada at reasonable rates and at a standard of service adequate to meet their needs without incurring subsidization from general taxation." But now, Mr. Speaker, the taxpayer is paying a higher percentage of postal costs, and the postal user is paying less. It is time we began to restore the balance by reducing the cost to the taxpayer, while increasing it to those who are actively using the service.
I should like to take a few moments to give the House a quick rundown of some of the reasons which have led to the present situation and then indicate what we are doing about them.

First the costs. A substantial portion of these does not vary with volume. While the mail volume might drop, the number of points of call we must serve will continue to grow. This gives rise to further requests for Post Office services. And as the number of new addresses grows, our costs grow in a way unrelated to income. Indeed, Mr. Speaker, successful federal policies have created the growing number of homes which makes our task that much more difficult.

November 21, 1977
Post Office
A further cost factor is transportation, due largely to the rising cost of fuel. It takes a great deal of transport to move six billion pieces of mail a year. That transportation network runs on diesel fuel, aviation kerosene, diesel-electric locomotive fuel and gasoline. We now spend about 20 per cent more on transportation than we did five years ago.

Then there are wages. The Post Office employs about 63,000 people, second only to the Department of National Defence in its total of employees, and salaries account for more than 70 per cent of the operating costs of the department. Since 1968, wages of postal employees have risen by 120 per cent. Over the same period, postal revenues have risen by only 107 per cent. Thus, personnel costs outstrip revenues.
I should now like to turn, Mr. Speaker, to revenues. They are determined by two factors, mail volumes and postal rates. Volumes are continuing to grow but, disappointingly to us, at a slower rate than we once thought they would. Indeed, current volumes at just under six billion pieces a year are historically high, but are approximately one billion pieces short of our prognostications. In terms of parcel delivery, we find that volume is down as well. We are presently at the level we were 20 years ago, having suffered a 22 per cent decrease in our parcel volumes. Service disruptions, coupled with aggressive competition from other forms of communication, are the principal causes of this shortfall.

In the area of first class mail, our volumes are continuing to grow, but the mix in the mailstream has changed greatly over the past few years. Today we are heavily dependent on the movement of things like bills, cheques, statements, and so on, especially with the advent of those plastic credit cards, Mr. Speaker. This material now makes up about 40 per cent of all our mail, making us highly vulnerable to any changes in this market.
Also, electronic funds transfer is already undergoing embryonic growth, as members can see for themselves when they do business at their local banks.

With consequent adverse effects on revenues, mail volumes are threatened on several fronts. A further depressing effect on revenues exists with respect to the postal rates themselves. If the Post Office is to survive as a public service and to grow with the rest of Canada, it must solve the problems I have outlined and reverse the trends which are making increasing demands on scarce government resources. I want to emphasize, however, that we are fully committed to fighting inflation and we are already moving in the directions open to us. But we must seek new initiatives now and in the future if we are to improve control over our costs and increase our revenues. I have confidence in the Post Office management, which 1 consider is doing an excellent job in most trying circumstances.


Mechanization is an important ingredient for success, as is public acceptance of the postal code. I am happy to report that business and the general public are now using the postal code on more and more of their mail. At the end of September more than 70 per cent of the national mail stream carried the postal code.
Of course, the most important elements in this equation are postal people. To make mechanization work and to maintain consistently high levels of service, we need full cooperation from all postal employees and their unions who in return, and I want to stress this, Mr. Speaker, must share in any gains achieved by mechanization.

Last month, Mr. Speaker, we signed a new contract with the Letter Carriers Union of Canada. In many ways this was a landmark settlement, because both parties approached the negotiations with a positive problem-solving attitude. Mr. William Dickie, one of the most professional conciliators in Ontario-and indeed Canada-said that he had never seen such a group of people on both sides who were so well prepared, who so fully understood the issues, and whose working relationship was so positive. We will continue our efforts to persuade all postal workers that their own interests lie in co-operative efforts to give the public the best and most economical postal service.

Better cost-control measures, increased productivity, and greater mail volumes will help to improve our financial position. By themselves, however, they will not arrest the growth of the deficit. To make any real impression they must be coupled with rate action that will bring in more revenue.
Mr. Speaker, the Post Office is sensitive to the effect of pricing on business-planning, as well as on the private pocket-book. One of the commitments we have undertaken in the past is that we try to give adequate time between pricing announcements and the implementation date, to allow business and the public to adjust to the new rates. Although I would have liked to have given a longer period of notice, I would hope that the more than four months we are providing in this case will prove to be sufficient.

We intend to implement a broad range of price increases to virtually all domestic and international rates, to become effective-and I stress, "to become effective"-on April 1, 1978. The basic first-class letter rate will rise to 14 cents, and there will be appropriate increases in other postal classes and services. Details of the new rates will be spelled out in a news release from my department to be issued today. Postmasters will be given details of the rate revisions immediately.
We estimate that for the fiscal year 1978-79 the increases will bring in about $126.5 million in additional revenue. Along with cost control measures and other revenue-generating initiatives which I outlined earlier, they should make a sub-
November 21, 1977

stantial impact on the current deficit without imposing undue hardship on either business or the general public.
[Translation\
Both the federal and provincial governments have agreed as general policy that possible price increases for their goods and services only reflect the pass-through cost increases since the anti-inflation regulations came into effect in 1975 and that absolute subsidy levels remain constant. Our prices are lower than what they might have been.
Even with these price increases, Canadian postal rates will still be among the lowest in major western countries. Expressed in Canadian dollar equivalents, Australians pay 21 cents for a first class letter and so do the French. It costs the British 16 cents, and Americans 14 cents.

Of course, the price increases still will not cover the total cost of sending a letter. Unlike private companies that can restrict their operations to areas and routes where cost and volume levels guarantee that they can operate at a profit, we as a public service must provide a national service at a uniform, reasonable price.
In conclusion, Mr. Speaker, I am sure that members will recognize that no one, least of all yours truly, will shoot to the top of any popularity poll by announcing postal increases. But at least I hope 1 have been able to demonstrate today, in the short period which has been available to me-although I will be able to give further elucidation following questions hon. members will put to me-that if the Post Office is to maintain its present level of contribution to Canadian society, it must establish a better correlation between postal rates and the cost of providing postal services.

Mr. Speaker, I am anxious to hear the questions of hon. members from both sides of the House since they are all interested in the Post Office Department, regardless of party.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, if hon. members were to ask all the questions which were close to their heart with respect to the Post Office Department, I am afraid they would be here not only today but tomorrow and for many days ahead, because this is one of the most controversial of government departments. The Postmaster General has indicated that his mandate is to provide postal service to the people of Canada at reasonable rates and at a standard of service adequate to meet their needs without incurring subsidization from general taxation. The immediate response from the official opposition is that the standard of service is not adequate, nor are the rates reasonable for the quality of service rendered.


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: I am sure the Postmaster General is aware that there are complaints that come rolling in, not only from
Post Office
the Canadian public but from his own workers and from management. There have been public complaints in Toronto, where a good percentage of the mail is handled, from high levels of management, and one of the more moderate leaders in the Canadian Union of Postal Workers resigned there recently.
I feel this constitutes a rather severe setback in the continuing attempt to establish more cordial labour-management relations.
Also, of course, the complaints of the postal users are proverbial. As the opposition spokesman, I spend a great deal of my time dealing with those complaints which come from all parts of Canada. Even the Prime Minister joined the chorus when he uttered that classic criticism which everybody knows "The postal service is lousy".


An hon. Member:: I say the same thing.


Walter Gilbert Dinsdale: Some of the criticisms have turned to good-natured humour-and humour can be the most effective criticism. I suppose the general public, as they face another postal increase, will come up with the old observation that obviously the increased rates are the result of the increased storage costs.
The Postmaster General said that for reasons beyond the control of the Post Office, its management and work force expenditures have continued to outstrip revenues. I hope to demonstrate how we can bring about improvements in the Post Office Department which will restore the efficiency and high morale which once made it one of the best government departments. Primarily, I wish to point out to the Postmaster General that what he is doing is illegal. He knows it is illegal because the Standing Committee on Statutory Instruments, in a unanimous report issued last May, stated that the Post Office Department had illegally increased first-class postal rates. Notwithstanding that admonition from a very important parliamentary committee of the House of Commons, and also from repeated comments of the Auditor General, the minister persists in this illegality.


Some hon. Members:: Shame on him.


Walter Gilbert Dinsdale: In his statement, Mr. Speaker, the Postmaster General said, "I must manage the postal operations on a businesslike basis." This, unfortunately for the people of Canada, is precisely what the hon. gentleman has failed to do. The postal operation is an industry, and as an industry it is not operating efficiently. As a result, it is not providing an efficient, reliable communications service to all Canadians, which is another point in the mandate the minister outlined this afternoon.
Malaise in the Post Office-and the word "malaise" is one of the favourite words of the former postmaster general, the hon. Bryce Mackasey, for describing the growing problems within the Post Office Department-has been pointed out many times in this House and in other forums across the nation. The Post Office Department itself went so far as to publish a book at public expense in June, 1976, which was a compilation of the speeches of the former postmaster general, under the pessimistic title "What's Behind the Lemming

November 21, 1977
Post Office
Urge". Unhappily, nothing has happened since that time to change the Lemming-like rush of the Post Office to selfdestruction that Bryce Mackasey describes so vividly in that book.


An hon. Member:: "Lemon" or "lemming"?


Walter Gilbert Dinsdale: Lemming. Little creatures all proceeding rank upon rank toward the precipice of destruction. I am going to quote from the minister's comments today to demonstrate that what I am saying is confirmed by some of the points he made. The Postmaster General said that there is a growing deficit in the Post Office Department, with decreasing revenues, and decreasing volume.
The decline of one million pieces in the forecast volume of mail, and the drop in parcel volumes to the level of twenty years ago, are symptoms of major problems in the Post Office. Surely they are indices that something is drastically wrong, when parcel post service is down to the level of twenty years ago, notwithstanding merchandising gimmicks such as postpak and mechanization at the Gateway plant at Mississauga that was supposed to increase volume and thereby improve the financial position of the Post Office Department.
I suggest to the Postmaster General that infusions of additional cash by frequent increases in postal rates is dealing with the symptoms rather than the disease.
Along with internal malaise, the postal service is faced with serious external threats. The Postmaster General refers to electronic communication as already undergoing embryonic growth. That is the phrase which I abstracted from his statement today. Surely he must be aware that this technology is now in place and Canada is poised for the great leap forward. If permission were given to allow electronic fund transfers, such as bills, cheques, bank statements and transactions of that kind, both in the private and the public sector, 70 per cent of mail volume would be lost-and already the forecast volume is down by one million pieces. Surely this is a state of affairs in the Post Office Department that requires more than periodic rate increases, as has been the action taken under the mandate of the present incumbent.


An hon. Member:: Go back to the pony express.


Walter Gilbert Dinsdale: 1 further point out, Mr. Speaker, that this technology is in operation in West Germany, as 1 discovered during a fact-finding visit to Germany in September, along with the hon. member for Parry Sound-Muskoka. We also discovered another significant piece of information with respect to Canada's problem. Because of the boom in electronic communication which the hon. gentleman says is in its embryonic state in Canada-I am sure he does not mean that-West Germany has frozen further mechanization and automation in their service. They have only five or six plants automated, because they have stopped the whole process of automation and mechanization.
An even more disturbing piece of information we gleaned was that they have sold to Canada some of their surplus

Telefunken equipment which was intended for domestic use in Germany. Canada has been moving post-haste-if I can use that word with respect to the Post Office-in recent years to totally and completely mechanize their postal operation. I am sure it occurs to the hon. gentleman that Canada can be locked into an expensive program of mechanization and automation just at a time when electronic communication has rendered that program obsolete. It is going to require a lot of sober second thought with respect to the solutions which management must decide upon in order to solve the growing problems of Post Office service.
It should be noted that one of the major reasons for confrontation in labour-management relations is the automation program which was foisted upon the inside workers without prior consultation or knowledge. The information was passed on in the form of Comteam bulletins, but that was after the fact. In the United Kingdom they were unable to proceed with mechanization until labour and management were brought together, along with the postal users, thus proving that these tremendous challenges being felt in all democratic countries can be solved constructively and positively.
Our attitude has been positive throughout this long, continuing debate. In face of the forces which are threatening to destroy Canada's postal service, the Postmaster General was scheduled to make a speech to the postal users' conference last year. It was the best of his speeches I have read, and I wish he would accept its authorship. He recognized that the current trends will be insurmountable unless we come to grips with them very quickly.
We in the official opposition believe it is possible to restore the Post Office to its former efficiency. From time to time we have put forward specific recommendations. From what has been said here today, it is obvious that an independent investigation of the Post Office must be undertaken immediately. Surely that is elementary. The Canadian Union of Postal Workers called for a royal commission last spring. Almost simultaneously the official opposition recommended a parliamentary committee investigation which would achieve more immediate results.
The problem is so urgent that immediate decisions must be made. The investigation should consider the issue of transforming the Post Office into a Crown corporation. This change would make it easier to introduce modern industrial relations into the Post Office, thereby helping to avoid the confrontation which exists between CUPW and management. This is one of the main causes of the deterioration of the postal service. This fundamental and essential service cannot face repeated strikes without destroying the reputation, efficiency and reliability of the Post Office.
The Postmaster General pointed out that co-operation has been achieved between management and the Letter Carriers Union of Canada. They are not in the front line of the impact of mechanization because they do not work directly in the plants affected. The same spirit of co-operation which is now
November 21, 1977

being achieved under very responsible leadership by the LCUC can be achieved, also, with respect to the Canadian Union of Postal Workers provided there is a deliberate and concerted attempt to indicate that management will deal with some of the fundamental problems and criticisms. The Postmaster General has an opportunity to accomplish that, because negotiations are currently going forward. This is a golden opportunity.
Because of the mixed-up state of affairs in the Post Office Department by reason of the failure of the government to recognize it as an important industry, the Postmaster General has been unable to come to grips with the continuing labour problems. The mixed-up state of affairs in that department brings together the following: the Treasury Board to handle wage negotiations, Public Works to handle decommodation, and Labour to handle labour problems. Even Supply and Services gets into the act on mechanization. Post offices in other democratic countries have had to face the same problems confronting Canada today. While they have raised postal rates because inflationary circumstances demanded that post offices have some increase in revenue, they have also made fundamental changes in administration. This has taken place in the United Kingdom, the United States and West Germany where management, labour and the postal users are working together for an efficient, modern postal service.
These groups must sit down together. The process of Corn-team communications is not enough. There must be co-determination, and they must sit around a table face to face. There must be personal confidence established between the individuals taking part in the dialogue. The process of co-determination must be used to make decisions for resolving postal problems. They must sit down together in order to resolve some of the problems referred to by the Postmaster General. This is industrial democracy that will be required to overcome the problems of Canada's postal service.
Finally, I should like to strongly emphasize that the Postmaster General is making a fundamental mistake-which 1 am sure he realizes-by arbitrarily announcing substantial increases in postal rates. He has indicated that we have been given ample warning and by April 1 the users will have overcome the shock. By this time he should realize that there will be the usual protests from small businessmen, book publishers, senior citizens and other Canadians who are totally dependent upon a postal service at reasonable rates.
The Postmaster General has failed to go through the basic consultative process that is necessary to prepare for a development of this kind. I will be kept busy in the next weeks dealing with publishers and independent businessmen in an attempt to explain what makes the Postmaster General tick, which is a difficult job for a member of the official opposition. What the government is doing is illegal, as was indicated by the Standing Committee on Regulations and Other Statutory Instruments last May 11.


The Acting Speaker (Mr. Turner):: I would inform the hon. member for Brandon-Souris that the hon. Postmaster General
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took 14 minutes, and the hon. member has exceeded that time. When will the hon. member close his remarks?


Walter Gilbert Dinsdale: Mr. Speaker, I am in my final paragraph. Your Honour has a very good sense of timing in realizing that I was coming to the climax.
It is illegal, as was pointed out by a standing committee of the House of Commons. Last May 18 we asked the Postmaster General to refer the issue to the Supreme Court for a definite opinion. Today I ask him, once again, to defer the proposed increases until the Supreme Court has expressed itself on the matter and the necessary amendments to the Post Office Act can be brought in. On this issue, surely the government can operate within the law.


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, first I want to express my dissatisfaction with the fact that although, apparently, the Postmaster General mailed the text of his remarks this afternoon to my leader and to my House leader, as of now we have not yet received a copy. I think that to use the mail service to deliver copies of documents to members is doing a disservice to members. This has been the case so far as our party is concerned.
There is certainly no doubt in the minds of Canadians that something is wrong in the postal service of Canada, and 1 am glad to see that the minister has at least put his finger on the problem in the following statement as it appears on page 4 of this borrowed text of the minister's speech: "Of course, the most important elements in this equation are the postal people. To make mechanization work and to maintain consistently high levels of service, we need full co-operation from all postal employees and their unions who must share in any gains achieved by mechanization."
There is no Canadian who is not fully aware of the fact that something is wrong in the state of Denmark. Surely the minister has heard it stated often enough in this country that the whole question of mechanization within the Post Office has created a great many problems for those workers who are directly affected by it, namely, members of the Canadian Union of Postal Employees. This dissatisfaction with technological change in the Post Office has led to wildcat strikes and to lengthy strikes.
When the previous postmaster general, Bryce Mackasey, brought in the same goals as are in the Canada Labour Code into the contract with the postal employees, he said the government had the answer. Obviously, we do not have the answer because we are still bogged down with the same problems in honouring that clause in the contract, namely, clause 127. The Post Office management is still trying to run around the ends of the very clause they put in to eliminate problems with respect to technological change.
So the people of this country are fully aware of the fact that there are management-employee problems. Even though the Postmaster General said, on taking office, that he does not know much about industrial relations and negotiations, very

November 21, 1977
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soon afterwards he became an expert on the subject, and now suddenly he is carrying the can for management. There is another problem as well which the Postmaster General has identified. It seems to me that it amounts to a miscalculation on the part of the Post Office Department. For example, they have admitted that the electronic funds transfer is undergoing an embryonic growth, as hon. members can see for themselves when they do business at their local branches, they have all the high-priced help in the Post Office Department, all the economists and planners needed, yet they do not look down the road to see that electronic funds transfers will be introduced and will affect the department.
The Postmaster General admits that there has been a miscalculation in the volume of mail in the Post Office. What are we paying our bureaucrats $40,000, $50,000 and $60,000 a year for? It is a waste of the taxpayers' money if they cannot do better forecasting than that. The minister admits all this. He says, "We have miscalculated" and, "We have a human problem in the Post Office". But what do we get? He announces an increase in the first-class mail rate from 12 cents to 14 cents. I suspect that one cent out of the two cents is for sending mail to the RCMP headquarters so they do not have to go to the Post Office Department to open it.
The minister increased the first-class mail rates by 17 per cent: I worked it out. It seems to me that by doing this he has exceeded the guidelines that we have set for the workers. We have a 17 per cent increase on first-class mail, but what is the increase on junk mail? The minister says: " . . . there will be appropriate increases in other postal classes and services. Details of the new rates will be spelled out in a news release from my department to be issued today. Postmasters will be given details of the rate revisions."
That is also one of the problems. We are carrying a lot of these newspapers, junk mail, catalogues and the rest of it. The taxpayers are subsidizing all this. Again, the little people are being asked to pick up the 2 cents increase on first-class mail. The Post Office Department officials have miscalculated their revenues, and it is very convenient now for the minister to run to the House and announce an increase in the first-class mail rate. This increase is totally unacceptable to the NDP because, in effect, we are bailing out the Post Office Department.
The people are aware of the fact that there is a problem. The postal workers have called for the establishment of a royal commission to look into the department. Every commission that has studied the Post Office in the past, and every previous postmaster general, has recommended the transformation of the Post Office Department into a Crown corporation. An indication of the state of affairs in the department is that there have been five postmasters general in the last seven years. That is certainly an indictment of the department and an indication that it is topsy-turvy.
If ever there was a need to streamline the Post Office Department by making it into a Crown corporation which would be accountable to parliament, it is now. Now, is the time to do it. Every time the Postmaster General comes here and grabs two cents more on first-class mail, or makes any other

increase in mail rates, we avoid making the tough decision and taking a close look at the way in which the Post Office is run, making recommendations and following them through to ensure that the Canadian people get the best possible service for the price they pay.
[ Translation]


Gilles Caouette: Mr. Speaker, I was somewhat surprised to hear the speech of the Postmaster General (Mr. Blais). I did receive a copy of his speech in both official languages delivered by hand, not by mail, before coming to the House, and I thank him for it; that is probably why I received it and the representatives of the New Democratic Party did not. But, on the other hand, as usual the Post Office is mixed up and consequently the paper was sent to the office of my colleague, the hon. member for Villeneuve, rather than mine although it was addressed to me.
We see once again-and the minister explains it clearly in his mini-speech-that the Post Office is not administered on a businesslike basis. The minister can say that it should be administered that way but he then goes on to prove that it is not being actually administered on a businesslike basis. We knew, and the minister said, that in 1972-73 the deficit stood at $90.9 million. Logically speaking, a businesslike attitude would have meant trying to reduce the deficit, not passing on the cost of the lack of administrative capability of the minister and his predecessor. And in 1976-77 we have a deficit of $568.8 million-and that is the minister's figure. He thinks the department is being well administered, administered intelligently, and so it will not look too bad this year because the anticipated deficit is $717 million. They say they are going to reduce this 1978-79 deficit by increasing first class rates once again from 12 cents to 14 cents hoping to go and get an additional $126 million.
On the other hand, the same paper says that an increase in mail volume had actually been anticipated which did not materialize. That is quite understandable. This cannot happen with the service offered by the Post Office when it takes a week to send a letter from Ottawa to Rouyn in the riding of Temiscamingue; in many cases, it takes a week and a half to send a letter from a parish in Temiscamingue to Ottawa. They can complain that prices went up, that gas went up, that it costs more to send mail by train than by plane. Now we realize that generally speaking the department is not trying to solve the problem. We do not get the kind of service we were used to in the fifties when we could expect a letter mailed in Montreal for Ottawa to arrive at destination the next day or the day after that. But today we can hardly rely on the postal service. It is so bad that, as some members have indicated, for urgent matters it is better to forget about the postal service and turn to private enterprise instead.
The minister says that the department is trying to reduce the deficit and is still investing money and he talks about sound management; I can give him an example of sound management on the part of his department. Last year the government decided to increase-as it plans to do this year- the postage cost for a letter sent first class mail. This became
November 21, 1977

effective in April, and not so long ago, at the beginning of the year, on March 16, 1977, a communique from the Post Office Department to its employees, the postmasters of the entire country, clearly said: Prices are being increased and you should not expect-I would like to read the second item of information sheet SF-7717 dated March 16, 1977. For the minister's information, this communique said: Rolls and booklets of the new 12 cent stamps will not be available for at least one year.
Prices had just been changed. This year, the rates will be increased from 12 cents to 14 cents, but the post offices in northwest Quebec have not yet received the 12 cent stamps. And this is called a good service and a healthy administration.
It is easy to see how the Post Office is administered. Enormous deficits are accumulated. What is the minister proposing to solve this problem? I do not want to know what the minister is asking of Canadian taxpayers to pay for the deficits accumulated because of his bad management; I would like to know what he intends to do to reduce the excessive cost of the Post Office Department and to improve the service provided to the entire country. Then, people might be interested in paying a bit more for the stamps that they will stick on their envelopes.
The minister says that his experts are shocked at the decrease in the number of mail items. This is understandable since they are asked to pay twice as much for four times less service. This will continue of course, but it is always the small municipalities which suffer. In the release attached to his speech the minister says that it will be possible to save 50 cents on postage for a ten-pound airmail parcel or $2 on a 50-pound airmail parcel sent from Montreal to Toronto. It is all very well for those cities. But it is the peripheral areas which make a massive use of the mail service that finally have to pay the cost of bad management in the Post Office Department. In major centres, as the minister says in his speech, there is electronic communication for banking transactions; of course, in large cities, there is a mail service between businesses and industries. Why? Because the Post Office Department does not provide adequate service. But it is the people in peripheral and far away areas who must shoulder the heavy losses resulting from this administrative chaos. As I was saying a while ago, a letter needs from a week to a week and a half to get to the next parish, because automation forces it to pass first through a distribution centre, then through a sorting centre, then to return to the distribution centre and finally from there to the next village. That is what automation has meant in addition to a $568 million deficit.
We are not satisfied with the minister's decision generally, and I am anxious to see the minister rise and hear him tell us of the way he intends to solve the administrative problems afflicting his department, instead of always burdening the taxpayers who are the users of the postal service with the effects of wrong decisions.
To conclude, Mr. Speaker, I suggest to the minister that all hon. members are interested indeed in the Post Office, as he said as he was about to conclude his own speech, and so are
Post Office
those who are using the Post Office as a means of communication within our constituencies, namely, the people who are entitled to adequate services throughout this country and who are not getting them.
As the minister said, we still find some places where they have to open new offices, while in some remote areas, with 10-year lease contracts, they have to renew those contracts, and pay increases to people who rent those premises. That is still under discussion. Those things cannot be paid. There are some delays and they said: We have to increase prices to cover expenses, but in many cases, they do not pay for expenses and they delay payments.
Then, generally speaking, Mr. Speaker, that is simply acceptance. The minister stated indirectly today that he knows his department is badly administered but that all he is prepared to do is to overtax postal service users as much as the others who will have to pay taxes. All this party did since they are in government is to let things get rotten and they continue to charge and to blame Canadian people.


Mr. Speaker:: Order, please. This is the kind of statement which is an announcement of a change that is going to take place at some time. Therefore, I realize there should be questions asked today, but they ought to be of a general nature. Opportunities ought to arise to pursue the matter in detail on other occasions, but I think it appropriate to recognize two or three questioners today.


Thomas Clement (Tommy) Douglas: Mr. Speaker, the minister has announced an increase in the first-class mail rate and has said, if I follow him correctly, that a press release will be issued by his department announcing what the increases will be in other categories. It has been my experience that successive postmasters general have been very quick to point out the deficits in first-class mail and increases in the rates, but have been somewhat reluctant to give the House information about the deficits incurred in carrying other classes of mail. I think particularly of-


Mr. Knowles (Winnipeg North Centre):: Junk mail.


Thomas Clement (Tommy) Douglas: -junk mail and advertising on the basis of household deliveries, some newspapers and other advertising material. It does not seem to be satisfactory merely to tell us that the cost of first-class mail will go from 12 cents to 14 cents, and leave it to a press release from his department to give us the other information.
Can the minister now tell us what the deficit has been in the other classes of mail and, by comparison, what the increase in the costs of these other categories of mail will be and what that increased cost will do to reduce the deficits in those various classes of mail? If he does not have the information with him now, will he undertake to present it by way of a statement on

November 21, 1977
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motions or by asking permission of the House tomorrow or the day after to have it included in Hansard?


Mr. Blais:: Mr. Speaker, the information the hon. gentleman requests is very detailed. I can tell him that this is the first time in the history of new rate proposals that the total rate structure for all classes of mail is being changed upward. As I indicated, the increase for first-class mail is 2 cents, likewise for third-class, addressed mail; and for second-class mail the increase ranges between 24 per cent and 25 per cent. That is for publishers' mail, publications, newspapers, etc., which come within the second-class classification. The hon. gentleman will recognize that there is a very wide range of rate changes in each one of the classifications, and it is very difficult for me to start analysing each and every increase for the benefit of hon. members. I thought it would be more informative for me to make available to hon. members and to the public generally the exact nature of those rate increases by way of a press release.
In terms of the question of deficits in the various classes, here again the deficits vary in accordance with the individual rate which is being sought. As the hon. gentleman knows, in terms of second-class postage it is a highly subsidized rate. The Post Office has been carrying the can as part of government policy in terms of printed material and the distribution of published material, including daily newspapers and weeklies. We are incurring deficits which we can properly identify, but with some difficulty, as the hon. gentleman might well imagine. We are trying to minimize the deficit in terms of first-class mail, but as 1 indicated in my address, a deficit is still going to be experienced.
The hon. member for Winnipeg North Centre referred very impolitely to commercial mail. I call it advertising mail. It is revenue-producing and it is generally on a cost recovery basis save and except in those areas where we are still competing and trying to increase our market. We are doing that as a business initiative to attempt to enter to a greater extent into that particular market in order to increase our revenue in the long term.
I do not want to elaborate too much. I am sure the hon. gentleman will have on his desk tomorrow the press release giving the specific increases in rates for all the various classes of mail.


Thomas Clement (Tommy) Douglas: One of the
features which disturbs people, in addition to the cost of mail, is the whole question of the confidentiality of mail. I wonder why the minister has not made a statement on motions similar to the statement he made to the press last week in which he said the Post Office had lost control of the issue because no one in the Ottawa headquarters knew of the collaboration with the RCMP. He went on to make a great many other statements, which I will not bother to quote at this time. But it seems to me this whole question is something on which the minister ought to have made a statement at some time.


Mr. Speaker:: That is a valiant effort to raise another subject. However, I think it falls outside the ambit of this particular statement by the minister. The hon. member for Nickel Belt.


John R. Rodriguez: Mr. Speaker, in view of the fact that the Postmaster General admitted that his department miscalculated in terms of electronic funds transfers, and in view of the fact that electronic communication is certainly changing the whole aspect of mail service, can the minister tell the House what studies have been undertaken, or if there have been any, by his highly paid bureaucrats with respect to the future of communications in this country? Because we have already invested $1 billion in machinery to move mail quickly, can the minister tell the House whether there are any studies, and is he prepared to table the studies so that members of parliament can see the great forecasting of his department?


Jean-Jacques Blais: Mr. Speaker, I thought the hon. member for Nickel Belt was interested in the Post Office. If he were, he would surely have seen a number of public statements I have made. I flatter myself in believing that the hon. member for Brandon-Souris reads every speech that I make. He quotes from them widely. I would have hoped the hon. member for Nickel Belt would have been doing the same. Evidently he has not. I have said on a number of occasions that we are, indeed, concerned about EFTS, and we are monitoring activities not only to ascertain how EFTS is proceeding but also to ascertain the vulnerability of the Post Office.
If I might be permitted, I would like to use the hon. member as a channel to some of his friends-who are not in this House but with whom I have dealings, although not as cordial as the dealings I have with my hon. friend-to advise them that EFTS is a serious threat. The hon. member recognizes that it is a serious threat and that we can lose, not 70 per cent of our volume, which would indeed be fatal, but up to 40 per cent of our volume unless we can obtain the co-operation of the CUPW membership. I have said that quite often. I have recognized that mechanization is a process which is irreversible. I have recognized that any increase in productivity has to be shared with the workers. The hon. member has agreed with me on that.
Having said that, and having recognized the intentions of the Post Office, I ask the hon. member to solicit the co-operation of CUPW so that we can improve our services, increase our efficiency and identify those areas where we can accelerate our service in order to compete effectively and efficiently with the electronics media. This media includes digital computer transfer of messages, EFTS and other electronic means of communications which are now taking great amounts of the potential earnings of the Post Office. That interference with our revenue has been aided in the past not by just one union but by the general labour relations atmosphere in the Post Office, which I have been trying with every effort to correct since my appointment. I have been successful with reference to all but one of the major unions within the Post Office.
November 21, 1977

The hon. member for Brandon-Souris was speaking of industrial democracy a while ago. I fully agree with him. I am attempting to get our feet under a table together with CUPW, not necessarily for negotiations but for finding solutions to some of the problems which are making us more vulnerable to electronic means of communication.


John R. Rodriguez: Mr. Speaker, I am always very interested in the speeches of the Postmaster General, but he is cancelling out the speeches he made in Sault Ste. Marie and Nickel Belt. I want to assure the minister that I have spoken with my friends in CUPW, and I say to the minister quite honestly and frankly that if he is prepared to honour the agreement he signed with CUPW, CUPW is prepared to sit down at the table and negotiate a new contract.
In view of the fact that he has correctly identified the major problem in the Post Office as being one of management-worker relationships, is he prepared to have management stop harassment of this one group of workers, CUPW, in terms of posting on their bulletin boards material which is already public knowledge? Why does he persist in having management interfere with the rights of workers on the job, creating friction which is not necessary, at the time they are attempting to negotiate a new contract? That is the first question. Will he assure the House that management has been instructed not to interfere with the communication rights of the leadership of CUPW with its members?
Second, now that first-class and other postal rates are being increased, will he assure the House and the people of Canada that the Post Office management will honour the contractual agreement signed by his predecessor with regard to technological change and the required notice when changes come into effect, and stop trying to run around the end of the agreement?


Jean-Jacques Blais: Mr. Speaker, with regard to the question of the first undertaking, I wrote to the president of the Canadian Union of Postal Workers. I agreed that it had always been Post Office policy to permit communication between union representatives and the members. I think the hon. member is a bit exercised about one instance in Winnipeg-one instance in 8,600 postal establishments. I suggest that the exception proves the rule. If all that hon. member can call to my attention is one instance in the more than two months since 1 made that declaration, 1 think we are doing very well indeed.
In terms of the second undertaking, the collective agreement that is now in force and which, in effect, was supposed to have come to an end on June 30, as the hon. member knows, we have honoured that collective agreement, although there has been some difficulty in interpretation. Now, when parties are negotiating a new collective agreement, is the time, to try to iron out any disagreements that arise as a result of difficulties in interpretation. That is exactly our intention. Indeed, I point out to the hon. member that, in the negotiations with the letter carriers we not only negotiated the contract, but in order to
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avoid any misunderstanding we also negotiated interpretative guidelines for that particular contract. Indeed, there is no danger, with the letter carriers, that we can have any sort of difference in terms of how to interpret the various clauses.
What we are attempting to do during these negotiations is to improve the labour-management climate with CUPW in the hope of smoothing out any differences there may be in interpretation. We are having some success. It is slow, but, as I indicated to the hon. member, we are eminently patient. The union seems to be patient as well. Our own postal negotiators, not Treasury Board negotiators-because the Post Office is delegated to negotiate all its collective agreements-are meeting with the union as often as possible in order to sign as many articles as possible. To date, save for a few exceptions, the attitude and the atmosphere of the negotiations have markedly improved. We are going through this Christmas period without any threat of strikes. 1 am hopeful that by very early in the new year we will have a collective agreement signed with the Canadian Union of Postal Workers.


Mr. Speaker:: Order, please. 1 think we ought to conclude questioning with the hon. member for Villeneuve, the hon. member for Brandon-Souris and the hon. member for Gatineau.


Mr. Armand Caouette (Villeneuve):: Mr. Speaker, 1 have one or two questions for the Postmaster General.
First, given the fact that he has asked for an increase in postal rates, can he tell us if once and for all he is going to satisfy the claims of citizens of remote areas such as northwestern Quebec where the post offices have become inadequate or obsolete due to the demographic increase or the rising volume of mail produced there.
My second question is as follows: Is the Postmaster General going to yield to the demands of some postmasters who, for eight, nine or ten years now have signed long term leases, and have asked for an adjustment of the lease prices since they are doing all they can to give better service to the public?


Jean-Jacques Blais: I am very pleased to be able to give an answer to the hon. member for he has mentioned areas of Canada which, as he identifies them, truly demonstrate the national character of the postal service. As you know, Mr. Speaker, what happens is that our competitors are looking for revenue in each of the big urban centres and in so doing compete with the Post Office while our national postal service is trying its best to provide services for the whole of the Canadian population.
Last Friday, I participated in the first issue of a new stamp and I had meetings with Inuit people in the northeastern Arctic region, which is an area administered by the postal region of the province of Quebec. The hon. member is certainly well aware of how difficult it is to provide a service to the northern regions such as those located north of the 60th parallel. However, the same principles as elsewhere apply regarding the postal service that we provide in areas such as Temiscamingue, Abitibi and the whole northwestern part of

November 21, 1977
Post Office
Quebec as well as the northeastern part of Ontario. I am quite aware of that.
Now, as for the problem of postal stations, I cannot make a general statement dealing with each one of the postal stations within the member's riding, or generally speaking within the Abitibi region, but I am prepared to listen to the representations he would like to make to me in order to see what kind of flexibility could be reached within the framework of our existing contracts and regulations in order to provide for the needs of the postal contractors of that region. I can assure the member that profit is indeed not our prime motivation in the Canadian north but rather the concern to provide a public service. All Canadians must be aware that we are trying to carry out our responsibilities as best we can and that in providing services in those regions, we cannot expect a sizeable revenue given the volume of mail and the distances to be covered.


Walter Gilbert Dinsdale: Mr. Speaker, 1 have already asked my question. 1 had hoped the Postmaster General would have responded. It was asked in the form of a suggestion that the minister should refer the whole question of increases in postal rates by order in council to the Supreme Court, in light of the strong, unanimous condemnation in the report of the Standing Committee on Statutory Instruments that was issued earlier this year. I know that he has misgivings with regard to the legality of what he is doing. I know he contemplates amendments to the Post Office Act so that any possible suggestion of illegality will be removed.
I suggest that referring this question to the Supreme Court is one way of getting a decision, or he should bring in the necessary amendments to the act. That would make it possible to assure the public of Canada and this House that increasing rates in this way is within the law. Perhaps even more important, why does he not proceed to the fundamental changes that are becoming increasingly obvious with regard to Post Office operations? Other countries faced with the vexing problem of inflation have been able to get around it without too much protest by setting up commissions on postal rates and commissions on postal rates set comprising representatives of labour, management and postal users. They sit around the table and decide, in light of all the factors, whether an increase is necessary. The postal users conference has not really become an official organization, but the Postmaster General meets with it at least once a year-


Mr. Speaker:: Order. I do not want to permit the hon. member to make a further response to the statement. 1 understood he was asking the minister a question.


Jean-Jacques Blais: Mr. Speaker, I am constantly amazed at the selective analysis the hon. gentleman derives from his own experience. He would, surely, be the first to admit that the commission concept with respect to the establishment of postal rates is a lousy concept and that it is not working. The
[Mr. Blais.)
commission is having more difficulty in making up its mind to increase postal rates than the hon. member had when he was postmaster general.


Walter Gilbert Dinsdale: I was never postmaster general.


Jean-Jacques Blais: I thought you had been. When the opposition was governing the country, it did not dare to increase postal rates. It was not taking its responsibilities sufficiently seriously. I might point out that there is a monstrous deficit today in the United States, where the government has created a public corporation and established a commission. They are finding great difficulty in getting a decision from their commission with respect to increases in postal rates. The post office there is facing huge, ongoing deficits, yet they cannot get the commissioners to move. As a result, there is increasing pressure from the elected representatives who say: Restore the old control system, because we have to pay for the post office yet we have no control over it.
In terms of the legality of my proposal, here again the hon. gentleman is making a very selective analysis. The statutory instruments committee never said the use of section 13 was illegal. I am satisfied that the use of section 13 of the Financial Administration Act is legal. I am acting under that legislation. If the hon. gentleman is serious in suggesting that the statutory instruments committee has indicated there was illegality, may I say this to him: I recall that the report was tabled in the House and that it was not subject to futher debate. It died on the order paper. If there was an issue which ought to have been raised at that time, why was that not done by the hon. gentleman, who seems to have a great deal of interest in what I am doing today?


Walter Gilbert Dinsdale: The Postmaster General paid me the compliment of suggesting that I am an avid reader of his speeches. There was one of his speeches a copy of which he did not send me, but I have seen it reported in the press. It was a speech made in his constituency, and obviously he was discussing some of the ongoing problems in the Post Office with some of his constituents who were rather unhappy about the situation. They asked him when he was going to introduce into the management of the department the fundamental changes which are necessary. The minister replied that they would be forthcoming, but not until after the election. Why not proceed before the election?


Jean-Jacques Blais: That must have been a meeting in camera. [Translation]


Mr. Clermont:: Mr. Speaker, the Postmaster General mentioned in his statement as the main reason for the increase in postal rates the deficit his department has been facing for many years and particularly from 71-72 to 76-77.
Could the minister also announce other revenue opportunities and particularly some developments as regards parcel delivery to compete with the private sector? We know very well that seven or eight years ago parcel delivery by the private
November 21, 1977

sector was almost unknown. Now it is a business competing with the Post Office department.
Could the minister also tell us what steps have been taken to compete with that business. Could he also tell us what will be the effect of the postal rates on small business and the economy in general as it has been mentioned that it could also represent an additional cost for individuals and senior citizens?


Jean-Jacques Blais: Mr. Speaker, of course there will be an impact on the small businessman, but on the other hand we want to eliminate the subsidies we are granting directly to every Canadian taxpayer. With the deficit we have to face, it means that every Canadian must pay $25 a year in taxes to maintain the postal service. There are very few businesses, small businesses or individuals that are spending as much money on the Canadian postal service as on private enterprise service.
As concerns small businesses, we are trying at the same time that we raise our rates to improve our communications with them, to encourage our postmasters in various communities to discuss the improvements that should be made in services and to inform small businesses on the best way to use the postal service and to provide them with a more efficient means of communication. Mr. Speaker, 1 might say that among all post office users, small entreprises are the ones most adversely affected by service interruptions caused by strikes or other work stoppages.
Therefore, 1 have always considered as my duty since my appointment to suppress those interruptions and, up to now, there has definitely been success and I hope that in the future we will eliminate the word "strike" from our postal vocabulary. I sincerely hope the hon. member will support us in this respect. Concerning the second part of his question, we are competing as effectively as possible with private enterprise which is providing services in parcel delivery. We are opposing an application made by the American UPS which wants to extend its parcel delivery service in Canada. We are now in court. We were successful in opposing them before and we hope that eventually they will decide to go back home and stay in Germany because, as the hon. member for Brandon-Souris (Mr. Dinsdale) just suggested, what happened in Germany is that close to 50 per cent of parcel revenues were lost to the organization called UPS. From there the postal service went into, not a study, but the establishment of an express delivery system between major centres where there was a need for it.
We have recognized that the service must meet the increased demand in the marketplace for additional services never before offered by the department. Heretofore this had been covered by the intrusion of and swarming by private courier services in that market, but we are now doing a very aggressive penetration to take away from them as much business as we can. We have established the service referred to by the hon. member, that is between major centres like Montreal and Toronto, Calgary and Edmonton. We are now joining in the competition for the so-called Premium Mail Service, and we hope we can eventually increase our revenues by competing more efficiently with private enterprise in the marketplace.
Order Paper Questions


Gaston Clermont: Mr. Speaker, the minister spoke of strikes. What progress has been made in the way of reducing differences in the postal sector, because each work stoppage or strike, entails increased expenditures for the department?


Jean-Jacques Blais: Mr. Speaker, as I indicated earlier to the hon. member for Brandon-Souris (Mr. Dinsdale), we have established an inter-group system very much in the spirit of true industrial democracy, under which there must be two channels of communications with employees, that is delivery men and postal officers. The negotiations channel we obviously enter into each year is also a channel of consultations at every level, national, regional, district and local. Employees, that is delivery men and their supervisors, meet with management to discuss their problems and eliminate-


Mr. Speaker:: Order. 1 do not want to interrupt the minister, but 1 have turned down other members who have tried to get into areas other than the Post Office. We are now branching off into labour relations, which I think is a new subject.



ROUTINE PROCEEDINGS


Norman Augustine Cafik: Mr. Speaker, in accordance with Standing Order 75C, I wish to inform the House that it has not been possible for the representatives of the parties to reach an agreement pursuant to Standing Order 75A or 75B with regard to the allocation of time for the second reading stage of Bill C-l 1, an act to amend the statute law relating to income tax and to provide other authority for the raising of funds. Therefore, I wish to give notice that I shall move, at the next sitting of the House, that five additional hours be allocated to the second reading stage of the said bill.


Mr. Paproski:: Closure.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the following questions will be answered today: Nos. 182, 271, 288, 381, 404 and 410.
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November 21, 1977
Order Paper Questions


Mr. McKenzie: 1.	what is the total number of persons under contract to the Canada Institute for Scientific and Technical Information and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Mr. Frank Maine (Parliamentary Secretary to Minister of Public Works and Minister of State for Science and Technology):: In so far as the National Research Council is concerned, the answer is as follows: 1. Three (3), of which one (1) is a retired public servant.
2. (a) None, (b) $4,100 of which $1,300 was to a retired public servant.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Canadian Overseas Telecommunications Corporation and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Mr. C. Douglas (Parliamentary Secretary to Minister of Communications):: See answer to question No. 410 answered this day. Would you please note that the Canadian Overseas Telecommunications Corporation (COTC) has changed its name on January 1, 1975. The Corporation is now called Teleglobe Canada.


Mr. McKenzie: 1.	Has the Bureau of Pension Advocates obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Bureau of Pension Advocates in (i) 1975 (ii) 1976?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: 1.	(a)(v) 1975-76, 6; 1976-77, 6. (b) None.
2.	No, from Main Estimates.
3.	(a)(v) 1975-76, $6.65; 1976-77, $8.00. (b) Not known. (c)(i) $7,390; (ii) $2,277.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Science Council of Canada and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Francis William (Frank) Maine: In so far as the Science Council of Canada is concerned: 1. Thirty four, Nil retired public servants.
2. (a) 1975-76, $83,600, Nil retired public servants, (b) 1976-77, $123,969, Nil retired public servants.


Mr. McKenzie: 1.	Has the Canadian Pension Commission obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Canadian Pension Commission in (i) 1975 (ii) 1976?


Daniel Joseph MacDonald: 1. (a) (v) 1975-76, 13; 1976-77, 17. (b) None.
2.	No, from Main Estimates.
3.	(a) (v) 1975-76, $5.91; 1976-77, $5.92. (b) Not known. (c)(i) $9,422.20; (ii) $8,646.10.
[Mr. Young.)


Mr. McKenzie: 1.	What is the total number of persons under contract to Teleglobe Canada and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Crawford Douglas: In so far as Teleglobe Canada is concerned: 1. None.
2. Not applicable.
[English ]


Roger Carl Young: Mr. Speaker, I ask that all remaining questions be allowed to stand.

November 21, 1977



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Before resuming the debate on government orders, perhaps 1 could intervene briefly to inform the House that at six o'clock this evening, pursuant to Standing Order 40, the subjects to be raised are as follows: the hon. member for Medicine Hat (Mr. Hargrave)-Agriculture-Possibility of import quota for beef in 1978; the hon. member for Victoria (Mr. McKinnon)-Social Security-Negotiations for reciprocal agreement on pensions with United Kingdom-Request for report.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Friday, November 18, consideration of the motion of Mr. Chretien that Bill C-l 1, to amend the statute law relating to income tax and to provide other authority for the raising of funds, be read the second time and referred to committee of the whole.
Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, that was a long wait! Let me try to carry on from where 1 left off on Friday. I want to cite specific cases where the Tariff Board made recommendations, and compare those with the recommendations of Canadian agricultural organizations. Let me start with mushrooms. The industry asked for a 20 per cent duty on mushrooms, and the Tariff Board recommended 20 per cent. However, the Tariff Board excluded dry mushrooms from its recommendation, recommending 10 per cent for that item. A 10 per cent duty on dry mushrooms gives a great opportunity for substitution of this product and brings about tremendous competition from fresh mushrooms or other types of mushroom products. They can be substituted one for the other, and therefore one undermines the other to the detriment of the mushroom industry in Canada.
Let me go to canned vegetables. The recommendation which the Tariff Board brought in is lower than that requested by the industry. This might have been acceptable if it had not been for the fact that, as 1 understand the report of the Tariff Board-and I have not had time to study it in great detail- they included canned peas, beans, beets and carrots in the category known as the n.o.p group, and that particular rate is too low. Therefore, with too low a rate on canned products, the first item in their recommendation, fresh products, is sabotaged.
Income Tax
Let me return to potatoes, the processed product. The industry recommended a 20 per cent duty on frozen and n.o.p items. The Tariff Board recommended 10 per cent and 12'/2 per cent duty, respectively. This represents a 2'k per cent reduction in duty on these items, which in many cases have come under extreme pressure recently.
The rates on n.o.p. frozen vegetables are also too low. This category includes virtually all vegetables frozen in Canada. This, again, is detrimental to the industry which grows the product and processes the frozen product. It is useless to protect a product in part only; there must be consistency in the various duties recommended by the board throughout the entire line of products which come from a particular vegetable or vegetables. There has not been this consistency. Therefore, as a result of unsatisfactory recommendations regarding frozen peas, corn, carrots and mixed vegetables, vegetables as a whole are given very serious competition. Some of these products can actually arrive on our market duty free, or nearly so. Again, they can be substituted for the fresh product. Our competition for the fresh product at any time when the product is in demand is stiff, and thus the Canadian price is depressed.
I want to leave individual items, because one can go through an almost endless list of products regarding which the industry has recommended to the Tariff Board one level of duty and the board has come up with something that is almost satisfactory, but by virtue of the introduction of new classes, or by changing the duty on certain processed products, the board have really negated all the favour they initiated by their recommendation with regard to fresh products. However, 1 shall not dwell longer on that matter.
I mentioned, perhaps at some length, on Friday that we must be in a position in Canada to impose a surtax at the time damage is done to a Canadian product. The least our negotiators should ask for is a codicil to the agreement. This codicil should trigger automatically when import prices become detrimental to a particular Canadian industry producing fresh, frozen or dried products. If action is not taken immediately, the flow of products can destroy the industry for the entire season.
Let me give the House one example. In 1957 I recall that the inventory of frozen peas in the United States was well in excess of any possible market that they could see. Therefore, they decided to get rid of 10 per cent of all frozen peas in the United States within a period of one or two weeks. The flow of frozen peas into Canada would have totally destroyed the market for the next 12 months had it not been that the government of the day imposed an immediate surtax on imported peas from the United States, thus protecting the small amount of production we had in this country at the time but which has grown since then.
Therefore, an immediate surtax capability, not on any particular or specific basis but on a sliding scale which is applicable at that moment in time when it is needed, must be put at the disposal of the Canadian government in order to protect our agricultural industries. This is the very least that we must
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November 21, 1977
Income Tax
have. It will be ruinous for processors, farmers and all those who work for combined industries if we do not get it.
As Canadians, Mr. Speaker, we recognize that there must be an element of liberalization of trade which will remove it from the straitjacket in which we once found ourselves, where nothing moved across an international border without a duty being applied. That, sir, is part of our life in the world today. We must also realize that we can only participate in the liberalization of trade up to the point where our industries, and we as a nation, can survive. Agriculture has never asked for 100 per cent of the total market; but it has asked that it have a fair share of the market on a viable basis. The only way this can be obtained is to recognize the needs of the industry when our negotiators conduct their negotiations.
In dealing with the United States, we are dealing with industries which in many instances have farms adjacent to Canadian farms producing the same items. We are dealing with a country which has economy of scale in production and processing. We are dealing with a country which has lower capital costs. If we are to protect our industries, we must have protection at least as great as that which the United States affords its industries. Or, in many instances, we should have an additional 5 per cent to make up for some of the additional costs which our producers experience. It is on this basis that we should negotiate with them.
But as I look at the potato products we seem to be on a unilateral binge to reduce the duty as they come from the United States, without any return in reduction of duty from them. Our negotiators should obtain from our principal trading partners, such as the United States, the European community and Japan, an opportunity which would increase our marketing capability in those countries. I have neither seen nor heard anything from the Minister of Industry, Trade and Commerce (Mr. Horner), the Minister of Consumer and Corporate Affairs (Mr. Allmand), the Prime Minister (Mr. Trudeau) or anybody else which would indicate we are seeking additional markets in other sectors of the world for our products, that we are seeking the removal of duty barriers or their reduction, or that we are seeking removal of the artificial trade barriers which keep us out of many markets.
We are going down a one-way street. We must get value in return for the things we have given away. In view of the fact that we have had unilateral reductions in duties in several budgets in my short period in this House, 1 am afraid, sir, that we are going for unilateral reductions again and our industry will once more be stripped of part of the protection which is absolutely necessary for a healthy consumer market, for a healthy agricultural industry and for employment in our processing industry. These are subjects of real importance to this nation.


Some hon. Members:: Hear, hear!


Fred Alward McCain: Mr. Speaker, it is absolutely unacceptable that we give anything more in respect of agricultural tariffs, if
[Mr. McCain.)
we do not in turn obtain better trading opportunities with our trading partners. This has been our history. Absolute tradeoffs and straight line reductions on imports coming to Canada cannot be tolerated and must not be given. Do not yield until you receive. If necessary, increase the protection on items which are particularly vulnerable to dumping-very low-cost items.
Mr. Speaker, I hope the Minister of Agriculture (Mr. Whelan) will exert all the pressure possible to get the committee in place which I proposed the other day. I think it is imperative that the farmer, the negotiator and the parliamentarian sit down around the table to exchange ideas on the needs of the potato industry, the vegetable industry, the fruit industry, the meat industry and the grain industry, so that when those people negotiate they will understand the consequences.


The Acting Speaker (Mr. Turner):: Order. 1 regret to inform the hon. member that his allotted time has expired. He may continue with unanimous consent. Is their unanimous consent?


Some hon. Members:: Yes.


The Acting Speaker (Mr. Turner):: The hon. member for Carleton-Charlotte (Mr. McCain).


Fred Alward McCain: Thank you very much, Mr. Speaker. I think our negotiators, who are not familiar with agriculture, should be impregnated as best they can be with full knowledge of the consequences of reductions in tariffs on any agricultural product. They should be aware of the consequences of no quota structures for the importation into Canada of meats and other items. They should be aware of the economic importance of agriculture, its employment opportunities and its basic industrial opportunities as an employer in Canada before they negotiate anything away.
The farmers will be able to convince a committee that it is in the best interests of all of Canada's economy, including the consumers, that we produce more, that we process more and consume more Canadian agricultural products under favourable trading conditions in order to create a viable agricultural industry.


Mr. William Knowles (Norfolk-Haldimand):: Mr. Speaker, it is very close to five o'clock, and if possible I would like to have my speech in one place in Hansard. I wonder if it would be permissible to call it five o'clock at this point and proceed with private members' hour?


The Acting Speaker (Mr. Turner):: It being five o'clock, the House will now proceed to consideration of private members' business as listed on today's order paper, namely, notices of motions.
Item No. 2, the hon. member for Levis (Mr. Guay): shall the item stand at the request of the government?


Some hon. Members:: Stand.
November 21, 1977


The Acting Speaker (Mr. Turner):: Stand at the request of the government.



PRIVATE MEMBERS' MOTIONS


Benno Friesen: That, in the opinion of this House, the government should consider the advisability of holding a national referendum for the purpose of making a survey of public opinion on the issue of capital punishment at the time of the next federal election.
He said: Mr. Speaker, I put this motion before the House approximately a year ago. As a matter of fact, we debated it on November 14 last year and, as members will recall, the following day was a very historic one in Canada because it was the day of the provincial election in Quebec. When we debated it a year ago, a number of government members spoke against the motion and it was marvellous to hear the casuistry with which they argued against it.
1 recall very clearly that the hon. member for Windsor-Walkerville (Mr. MacGuigan), chairman of justice and legal affairs committee, stated unequivocally that we could not have this kind of a referendum brought to the Canadian people because it would be a violation of parliamentary procedure. He said-and I think I quote him accurately-that we could not have a referendum unless we had in mind a plan to change the whole system. On the same day the member for Vancouver East (Mr. Lee) spoke against my motion for a national referendum on the issue of capital punishment. In speaking against it last year, he said:-the hon. member for Surrey-White Rock is using colourful means to fight the issue of capital punishment-
1 would like to underscore this. He said:
-because the hon. member is attempting to alter our whole parliamentary system of government merely because we retentionists lost.
Since that time, as I have already said, we have had a very important, landmark election in the province of Quebec. Just this year the Prime Minister (Mr. Trudeau), in this House, during the throne speech debate-and all members will recall the one hour and fifty minutes' torture chamber we were in during that time-suggested that one of the things we could do would be to have a national referendum on the issue of national unity.
It seems to me, Mr. Speaker, that the Prime Minister has put his imprimatur and his blessing on the concept of a referendum, so I thought it would be advisable, good and maybe a wholesome experience of purgation if government members were given the opportunity to debate the subject again, now that a referendum has been sanctioned, as a matter
Capital Punishment
of policy, by the Prime Minister-and who could be a greater authority than the Prime Minister? I know that all his backbenchers would like to stand behind the Prime Minister on all the key issues in the country, and since he has said we can have a referendum on an issue of great national importance, such as national unity, surely the government backbenchers would like to support the Prime Minister on such an important issue. It would be a good experience for me and for government members to have another opportunity to debate this issue.
It need not even be the issue of capital punishment, but as I said last year-and I repeat now-probably 80 per cent to 84 per cent of the Canadian people have expressed themselves very clearly on this issue. As I said then, this is one issue on which all of us knew where Canadians stood, yet because of government pressure the bill carried and the issue of capital punishment lost.
Now that the Prime Minister has given his sanction to a policy of holding a referendum, we should be able to bring the question back to the country and give the people a personal and individual opportunity to express their wishes to parliament. As the hon. member for Windsor-Walkerville pointed out and as the hon. member for Vancouver East pointed out, if there is a referendum, the decision after that vote is binding upon parliament and legislation would have to be brought forward. I agree with that.
1 am attempting to open the door for all government members to stand behind the Prime Minister on this issue. They should agree with me that we have a national referendum on this important issue. Since Canadians have indicated that they want capital punishment in our statutes, government members should come forward and support me in this motion, allowing the government to bring forward a referendum on the question of capital punishment.


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, not only was this motion debated a year ago in the name of the hon. member for Surrey-White Rock (Mr. Friesen); it was debated, also, in this House on May 2, 1977, in the name of the hon. member for Winnipeg South Centre (Mr. McKenzie). The debate is reported in Hansard commencing at page 5193. At that time 1 spoke in the debate, and I have in no way changed my opinion. I was one of the hon. members on this side of the House who voted against the government, which was a difficult thing for me to do. It was difficult because it involved a basic question of principle which I had a great deal of difficulty resolving in my own conscience.
After consulting my constituents in a poll of 16 per cent or 17 per cent of householder responses received by my office, I came to the conclusion that something over two-thirds of the voters in my constituency were solidly in favour of capital punishment. This raised the basic problem which any elected body has to face from time to time. I am referring to what extent we follow that famous maxim of Burke which was cited ad nauseum, or do we follow another quotation from someone

November 21, 1977
Capital Punishment
like Tom Payne who said that you have to represent the people who voted for you?
Eventually I came to the conclusion that in a democratic society where there is a basic concept of moral conscience on issues which are firmly held and not lightly held-and there is no question of majority opinion-the elected representatives had to take some note of that opinion or else they would bring the whole process of law-making into disrepute.
A law which is not accepted by the majority of the people to whom it applies can never be a good law. I have not changed that opinion, although 1 hope the trend of our times would be toward less and less severity of the sentence, more and more emphasis on rehabilitation and the possibility of rehabilitation, and a reduction of the number of circumstances in which punishment of this order would even be considered.
I would hope the ultimate penalty would be reserved for those who were totally unmanageable in the present context of our prisons, the repeat murderers, those whose guilt is established beyond any question of a doubt, and those about whom it can be said that the circumstances were just about as brutal as the human mind could conceive. There are not many such cases-perhaps 1 per cent of the murders that take place.
Presently in the United States there is one man who has committed four murders of other inmates and prison guards since being incarcerated under a life sentence. I do not think our prisons are capable of coping with a substantial number of such persons incarcerated within them. The concentration of 15 or 20 of such persons within a single institution strains the situation. The lives of other prisoners are in jeopardy, as well as the administration of the institution itself, which brings disrepute upon our society.
I should like to refer to an article which appeared in Weekend magazine dated November 19, 1977. It cites the result of a poll which was taken in 32 urban centres. A total of 1,078 people were questioned. They were asked: "Do you think there is ever an occasion when it is all right for society to execute a criminal?" The article indicates that 73 per cent said yes, 14 per cent said no, and 13 per cent said they had no opinion.
Those who said yes, that the death penalty should apply, were asked what kind of crimes it should apply to. Here is the table: for child murder, 72 per cent said yes; mass multiple murder, 71 per cent said yes; premeditated murder, 67 per cent said yes; killing prison guard, 62 per cent; murder during a crime, 53 per cent; child rape, 42 per cent; terrorism, 34 per cent; treason, 28 per cent; hijacking, 28 per cent; kidnapping, 26 per cent; drug trafficking, 25 per cent; child abuse, 21 per cent; child molesting, 21 per cent; rape, 19 per cent; and manslaughter, 19 per cent.
This is an issue which cuts across traditional allegiances. The people who took the poll noted that the lowest and highest income groups were most favourable to capital punishment: 86 per cent of those earning less than $3,000 a year and 84 per cent of those making more than $25,000 a year favoured the death penalty. Men were more likely to favour it than women.

The figures were: 79 per cent of the males favoured the death penalty, and 68 per cent of the females. Understandably, females in our society were more in favour of the death penalty for crimes against children.
There were regional differences across the country. British Columbia was the province that most strongly favoured the retention of capital punishment. Perhaps some recent happenings in the prisons of that province had something to do with that. The Atlantic provinces and the province of Quebec were the areas least in favour of capital punishment. Only 70 per cent of Quebec residents favoured it. In terms of age groups, those who were examined between the ages of 30 to 34 were most strongly in favour.
I have no reason to reject the results of such a survey, nor do any other members of this House. The resolution before us requests the government to consider the advisability of a referendum on the subject. There is no question what popular opinion on a referendum would disclose. I suggest to Your Honour, and to the members of this House that this poll is substantially correct. As far as my constituency is concerned, all I know of the subject is consistent with the results that are revealed.
We have to ask ourselves, as law-makers, what our responsibility is. The thing which bothers me most is to what extent we are free, or should we reflect upon decisions which have been taken by this House? A decision has been taken as a result of a long, free debate. The suggestion on previous occasions that there was not a free exercise of conscience for members on this side of the House is one I firmly repudiate.
I was not alone on this side in voting against the abolition; many of us stood and were counted. It was a free vote of members of the House of Commons, freely expressed, and 1 believe that any decision on a matter as fundamental as this should stand for an adequate period of time to test the validity of the decision. I do not believe that we serve our own purposes or those of the nation well if we take a decision one day and reflect on it by some action the next.
I have not changed, in any respect, the views I held at the time I rose in my place to cast my vote in the House, but I do not believe that the process of consultation, referendum or plebiscite can be used ad infinitum or for a large number of purposes without reflecting on us. We have, it is true, a proposal before the House which was made in the debate on the Speech from the Throne by the Prime Minister (Mr. Trudeau) for a referendum on the subject of national unity. 1 believe that the term sophistry, casuistry or some other fancy term was used by the mover of the motion to suggest that because the Prime Minister had agreed to a referendum on national unity, it was perfectly in order to have this additional one, and that if we were opposing it we were doing something which is somehow less than straightforward or honest.


An hon. Member:: Inconsistent.
November 21, 1977


Cyril Lloyd Francis: The hon. member has modified his adjectives somewhat. Let me recap what has happened. The prime minister of Quebec has proposed a plebiscite in that province on the question of secession. The wording is not yet established. The details of such a referendum are by no means clear. In reponse to the initiative on his part, the Prime Minister said, and I think correctly, that this is not just a matter for the Parti Quebecois, through the government of Quebec, to resolve in the language they choose in a plebiscite of their timing.
The Prime Minister said that he reserved the right to a federal initiative in this matter, and it is a initiative which I, for one, am pleased to support. The referendum held under federal auspices would, I am sure, be worded much more fairly and in terms which will be more generally accepted as being objective. What the results of such a referendum would be, time alone will tell, but the Prime Minister has not closed the door on the possibility of other parts of Canada being invited to express their opinion on events which possibly might take place in that province.
1 find it hard to believe that the mover of this motion could be serious and could suggest in good faith that an issue involving national unity, an issue as fundamental as this and a federal initiative to respond to what might come from the province of Quebec, should be cluttered, obscured or denigrated by the holding of other initiatives at the same time. Surely the question of national unity is a more important issue before us and before the House at this time than any other issue, with the possible exception of matters relating to the performance of the economy.
We all have to establish our priorities. 1 think we have a very serious responsibility to the people of Canada in regard to national unity, to the state of our economy, to the control of inflation, the creation of jobs and employment and the distribution of incomes. According to my scale of values, the issue of capital punishment is below these other issues. 1 hope that an expression of national purpose and national will could be achieved, if it is considered appropriate, without having too many side issues on the ballot at the same time. I consider this to be a side issue in relation to other matters. I am sure the hon. member would not want to have a clear response in regard to national unity, for example, obscured by a debate, which would be very partisan and very bitter and which would reflect very strong feelings in many parts of Canada, on the issue of capital punishment.
I am one of those who believe that this issue may well be reviewed by parliament, but I would hope not before something like five years, when we would have had the opportunity to judge what the effects would have been of a measure which was adopted by parliament, namely, the abolition of capital punishment, a measure which I voted against at the time and would do so again if I had to vote now. I believe our responsibility is still to allow a reasonable period of time to elapse before we reflect on a vote which was taken in this place, and that we do not at the time of the next federal election bring in other issues which could obscure the results which are most
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important on the basic issue of national unity should a referendum be held on that subject at the time.


Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, 1 rise to support the motion put forward in private members' hour by the hon. member for Surrey-White Rock (Mr. Fries-en) which calls for a referendum on the subject of capital punishment for the purpose of making a survey of public opinion on the issue. 1 would go even further than the motion and would propose a referendum on the subject of capital punishment, not just a survey of public opinion. I would do this because of the feeling of the people in my riding and other people throughout Canada to whom I have spoken.
The hon. member for Ottawa West (Mr. Francis) read into the record the results of a very good survey that has been taken. It reflects the opinion of Canadians both before we held the last vote on capital punishment and afterwards. The people of Canada do not agree with the results of the last vote on capital punishment. It has been said that it was a free vote, but people realized fully that it was not free when they saw the solidarity of the cabinet members who all voted with the Prime Minister (Mr. Trudeau). He made sure there was a sufficient number of members voting for abolition. However, the vote was against the wishes of the people of Canada.
This summer I had a very good opportunity of meeting many of my constituents when I was trying to canvass their support for my nomination for the next election. They were mostly disappointed with the way in which the government had handled the issue of capital punishment. They want capital punishment. They do not agree with the way it has been settled. The hon. member for Ottawa West says we should have some time, a moratorium if you wish, because we have already had a vote, and that we should hold off for the next five years. But that is not the wish of the people of Canada. It is not the way they want capital punishment handled. They are in favour of capital punishment and have not changed their opinion since the last vote.
The question of national unity is certainly very important, probably one of the most important for the country. But before it came along there was the question of capital punishment, which is so important to the people of Canada that they should have an opportunity to be heard. They have not had that opportunity so far, Mr. Speaker. They were in favour of capital punishment, but parliamentarians felt they knew better and voted against it. This is a very important issue to the people, and they want to be heard.
I do not hold that we should have all kinds of referendums. The issue of capital punishment has been debated four times in this House in the last ten years, and the vote has always gone against what the people want. It is time now to hold a referendum and let them decide the question. It is not necessary to have precedents for important issues. If a referendum were held on capital punishment, it would not mean that one should be held on every other subject. Each issue would be decided on its merits and, according to the people of Canada,

November 21, 1977
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the government should allow a referendum on the issue of capital punishment.
I know that my friend and colleague, the hon. member for Surrey-White Rock, has good reason to move that a survey only be made at this time. I support that motion very strongly, and 1 know that the people in my constituency support it as well.


Some hon. Members:: Hear, hear!


Mr. John M. Reid (Kenora-Rainy River):: Mr. Speaker, it is often said that one of the functions of the House of Commons is to consent to proposals respecting the law. I entered this House in 1965, and before that was here in an executive assistant capacity. During that time one of the topics most frequently debated on the floor of the House of Commons has been capital punishment. There have been three major debates, and I recall innumerable discussions within party caucuses. The record shows that the subject has been well canvassed over 14 years and that there have been opportunities for members to express opinions and, more important, to cast votes.
What is so important about the exercise is that all these votes have tended to be non-partisan. By that, I mean votes cast irrespective of party policies. Members had an oportunity to vote as they saw fit according to their conscience or the conscience of their constituents. This brings up an interesting point about votes on capital punishment. It is an interesting dilemma to be faced with the kind of pressure that many of us felt from our constituents, where it was clear from the beginning that the majority of the people who elected us to this House wanted some form of capital punishment left on the statute books.
I recall quite vividly that in the 1972 election in my constituency the question of capital punishment and the way I voted was one of the main issues. I defended the position I had taken and, rightly or wrongly, was re-elected. I cannot claim, however, that the argument I made at that time was particularly the one espoused by constituents, but I was re-elected whether they agreed with my position or not. Although my constituents did not agree with my position on capital punishment, apparently they agreed with the position I took, or that my party took on a whole host of other matters. It seems to me that had they wanted to switch to someone who thought as they did on the issue of capital punishment, they would have chosen one of the other two candidates.
We had a choice in this House, and those of us whose thinking led us to one set of conclusions voted as we saw fit, while those who believed they should vote the way their constituents demanded, whatever their conscience, did so. There were, of course, those who faced no such conflict-those who believed in capital punishment and had no difficulty in accommodating themselves to the wishes of their constituents who also believed in it, and then those who believed in abolition and whose constituents felt that way as well. The latter two groups were, indeed, happy people. They had no

difficulty with their conscience or with the opinion of their constituents. They had no difficulty in deciding how to vote.
The first two groups had a real problem, however. In our constituencies we had pressure from people who felt there ought to be capital punishment, and here we ran into a very difficult problem. While there is much agreement that there ought to be capital punishment, there is no agreement on whom that capital punishment ought to fall.
I recall, when drugs became a problem in Canadian society about 1967, constituents were telling me that we must do everything possible to get rid of them. When it happened that it was their son or daughter or a friend who became involved, however, they felt the law was perhaps too rigid and that the courts and the police were not taking all the circumstances into account. It was clear that while people generally felt the law was correct as it applied to drugs and other things, apparently its application was not correct.
There are other circumstances where people have got into difficulties with the law and, of course, have felt that full implementation of the law was not called for in their circumstances. It is not always justice we seek; most of the time we seek mercy. Perhaps that is at the heart of my difficulty in interpreting the views of my constituents as to the appropriate response to demands for capital punishment. From a series of circumstances I know it is not capital punishment just for the sake of bloodthirsty revenge that is demanded.
I also know, from speaking to people who have served on juries at murder trials, to Crown attorneys and police, that the situation is not as simple as it seems. Any honest Crown attorney will tell you that he has presented cases where he has been absolutely certain that the accused was guilty. However, the jury was not certain, and therefore the person was released. That is because if a jury makes a slight mistake, there is no way to bring a person back from the grave.
If there is no capital punishment for first degree murder, there is a greater chance of getting a guilty verdict because people are then not so concerned about the absolute taking of a life, from which there is no coming back. There are aspects which have to be considered in that way.
I want to go back to the question of the nature of the votes we have had in this House on the question of capital punishment. I go back to that because it seems to me that they were unique votes. Parties were split, with the sole exception, 1 think, of the Social Credit Party, which voted en bloc. I believe there was a small split in the New Democratic Party, and there were significant splits in the Conservative party and in the Liberal party. That indicated that the vote was a genuine free vote and that members had an opportunity to make decisions.


Benno Friesen: Come on, John.


John Mercer Reid: If we examine the breakdown of the vote, we find that there was a greater proportion of Liberals who voted
November 21, 1977

against the abolition of capital punishment than there was in the Conservative party, and if one wanted to draw an analogy, one could say that tire party leadership in the Conservative party put on greater pressure to follow one particular lead. I think it was significant, however, if we consider leadership as defined by the positions held by the party faithful, that three out of four party leaders voted for the abolition of capital punishment.
The leader of the Liberal party, the Prime Minister (Mr. Trudeau); the Leader of the Opposition (Mr. Clark), and the Leader of the New Democratic Party (Mr. Broadbent), all voted for the abolition of capital punishment. That indicated an interesting trend in Canadian society where obviously the leadership of the parties had some difficulty coming to grips with this problem and, by and large, the leadership of the three major political parties decided that it was worth taking a gamble to vote for the aboliton of capital punishment.
Whether we agree with the decision they took or not, I think Canadians can be proud of the leadership of their political parties for having had the courage, under very difficult circumstances, to take a stand. That stand was not widely supported throughout the country, as I believe most of us in this debate have admitted, but I believe it says a great deal for the leadership of the Conservative party, the NDP, and the Liberal party that they supported the motion. The motion carried in spite of the fact that all of them had to deal with splits in their parties, which indicated that there was not 100 per cent agreement in their parties that this piece of legislation ought to have been passed. I believe that is significant and very important.
I say that the last vote was very important because we can go back 14 years to when the debates on this matter in the House of Commons in the modern era began, and the result of those debates really culminated in the last vote when the motion carried by a very narrow margin. 1 believe that it carried by only a narrow margin because there were significant splits in the various parties.
We had an all-party consensus that abolition should take place, and that is what took place.
Mir. Friesen: Come on!


John Mercer Reid: I point out to the hon. member for Surrey-White Rock (Mr. Friesen) that if it had not been for the leadership of his party voting for abolition, it would not have carried. The margin was that close. All we have to do to prove that is go back and count the votes, and I think the hon. member does himself, his party, and the position he takes, a disservice by not admitting that the fundamental fact is that this is an issue which has split parties. That is why the leadership of the three major political parties were prepared to allow free votes.
Quite frankly, I cannot think of any other matter in the House of Commons in the 12 years I have been here on which the whips have been off. Only on the issue of capital punishment have the whips been off, and while members of parliament are quite free to vote against their parties at any given time, and to take the consequences which apply, this is the
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only issue upon which the leadership of the parties have seen fit to remove the discipline which normally applies.
I think the question of abolition of capital punishment has a unique legislative sanction which is not given to many other pieces of legislation which pass on a divided party vote. I put this in a position which I would rank second highest in terms of my concept of the kind of consent the House of Commons gives to legislation. The first, of course, would be legislation receiving a majority consent, which most legislation in this House receives. The fact that abolition took place in the face of party splits gives a profound voice to the abolition of capital punishment.
Members of parliament have obligations, and one of those is to give leadership to ensure that, even though there may be many things we are unable to agree upon, there are things that we can bring to a conclusion, and there are things upon which we can make a decision. It is not always easy for many of us to make the necessary compromises between our own opinions, our own interpretations of the facts, and what the folks back home, our constituents, feel. However I believe in this particular set of circumstances significant numbers of members were able to look into their consciences and say, "I am elected to the House of Commons for what I am, and I will cast my vote for what my understanding of the facts is". I think many members of parliament made their decision on that basis. At the same time, I do not in any way want to denigrate those who voted the other way, according to the dictates of their consciences, or those who voted the other way because their constituents wanted them to do so. I believe that either of the two positions is appropriate for a member of parliament to take. However, I want to let it be known that in any case I always vote the way I see things, and I am prepared to accept the consequences from my constituents.


Armand Caouette: Mr. Speaker, I am pleased to rise today on the motion introduced by my colleague and give my full support to his bill.
1 had the opportunity to hear the previous speakers say that the only party which was unanimously in favour of the death penalty was the Social Credit Party of Canada. It is true, Mr. Speaker, that members of the Social Credit Party of Canada were unanimously in favour of the maintenance of the death penalty in our country. Why? We have always felt that we were the representatives of the people in Parliament. All the members of this party made an inquiry in our constituencies to see whether our electors wanted or not the restoration of the death penalty. This is why it is easy for us today to take position in support of the bill, since we have been asked by our people to say to the government that they wanted the restoration of the death penalty.
We are referring today to a referendum. We also agree because I remember that the late Real Caouette said on many occasions that we should hold a referendum for the guidance of all members of Parliament on that serious issue of the death penalty. I also heard the hon. member for Ottawa West (Mr. Francis) say that we should try out the measure we adopted
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last year for a period of five years. I agree, Mr. Speaker, that we should put it to the test, but not for five years. In 1973, Bill C-2, an Act to amend the Criminal Code, was introduced in the Elouse of Commons. It attempted to add some provisions to the present act to provide that only murderers of policemen or prison guards would be charged with capital murder. Today, the hon. member is asking us to wait for five years, and this same government has not been able to wait for five years to find out the results of the law we adopted.
Mr. Speaker, I believe it is important to listen carefully to the demands of our people. Here, in Ottawa, I heard today in the news that policemen's wives from the city of Ottawa were circulating a petition precisely to force the government to hold a referendum or to restore capital punishment. How many policemen and prison guards have been killed since we abolished capital punishment? Unfortunately, I do not have the figures, but a great number of policeman and prison guards have been killed since we abolished capital punishment in Canada.
We also heard some hon. members tell us earlier that the first vote on capital punishment was a free vote. How strange it is; I discussed with hon. members on the government side whom I shall not name and who said that people asked them to restore capital punishment when we were examining this piece of legislation. How strange that these same hon. members voted once again for the removal of capital punishment.
Mr. Speaker, it is extremely important that the House, once again for the benefit of the Canadian people and for the security of honest citizens, support the hon. member's motion asking for a referendum, to follow a guideline which will be set up for us by the Canadian people. I am sure, Mr. Speaker that, after this referendum and several inquiries like those I made in my constituency, and where 89 per cent of the population said they are for the restoration of capital punishment, again 89 per cent of the population will want to be able to walk quietly and securely in the streets. Mr. Speaker, I would not like to be told this evening that I have been the one who talked out the hon. member's motion.
Mr. Speaker, I end my speech by urging all hon. members in the House to support the hon. member's motion, to give once and for all the Canadian people the right to vote on this serious problem of capital punishment.


Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, I support unequivocally the motion of my colleague, the hon. member for Surrey-White Rock (Mr. Friesen), with regard to the necessity of a referendum on capital punishment.
I do not think there is anything so dastardly to the thinking of Canadians everywhere than to have a murder committed that was either premeditated, planned, a hired murder or murder committed in the pursuit of a crime, than to have one who commits such a murder not pay the supreme penalty as the laws of Canada provided and insisted on prior to the

passing of the legislation which abolished capital punishment in 1976.
The hon. member for Kenora-Rainy River (Mr. Reid) stated that voting at that time was a free vote. I agree that it was certainly a free vote in every respect from this party's point of view, that it was indeed a free vote in our party. However, I must say that the hon. gentleman exaggerated beyond extreme when he stated, I think with tongue in cheek, that it was a free vote on the government side.
The hon. member for Vancouver-Kingsway (Mrs. Holt) asked the Prime Minister (Mr. Trudeau) prior to the taking of the vote whether he could confirm if the vote was to be a free vote. I remember being in the House at that time. The Prime Minister's answer was so inaudible that I do not think anyone got the right answer. I do not think he made any kind of answer. In any event, no audible reply was made by the Prime Minister.
The solid vote by the Liberal cabinet for the abolition of capital punishment was not an accident. You can take from that what you will. I feel sure that if some cabinet ministers had voted as they privately wished to do, the vote would have resulted in the retention of capital punishment.
The murder of our policemen in the carrying out of their duties in ever increasing numbers, six this year alone, is having a most unfavourable reaction among all our police forces from one end of Canada to the other. It has had serious effects on their morale and desire to carry out their duties, or even to continue in their careers.
I suggest, despite all the opposition to capital punishment, that it is a deterrent. Its re-establishment in our laws will be once again a step forward to a greater respect for our laws by all criminal elements. It will give our law enforcement agents the tool that they so desperately need to carry out their duties with zeal and determination. That zeal is now somewhat lacking because of the murders of their brothers in the pursuit of their duties by assailants who know that, if apprehended, they will only have to serve a few years for their crime and then be free to commit murder and other crimes again.
In conclusion, I support my colleague's motion for a referendum. The government should go along with the desires of our country as expressed in many polls. More than 80 per cent of Canadians want a return of capital punishment.


Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I rise in this debate with mixed feelings. During the prelude to the capital punishment debate, I wished for a referendum, yet I knew that many of us here were acting as representatives of our constituents. In order to represent our constituents and their wishes on issues that they have extremely strong feelings about, as they did in the capital punishment debate, a vote must be completely free.
I say to the hon. member who just spoke that there was not a free vote on either side. Those who subscribe to his leader's wishes on abolition followed him. I know there was pressure of various types on members, the worst kind of pressure-the feeling that you have to vote with your leader to get ahead.
November 21, 1977

I do not subscribe to what the hon. member for Kenora-Rai-ny River (Mr. Reid) said. He was supporting the theory of an arch-Tory, Edmund Burke, who said that we have to make our own decisions in the House. Edmund Burke did not represent many people, only a few hundred like himself. He could not hear the voices of the people because he was too far away. Two hundred years ago travel was very difficult.


Mr. Railton:: Mr. Speaker, I rise on a point of order. I would like to say there is no truth in the assertion by the present speaker that there was pressure on members to vote in a certain way. That was certainly not the case in my party.


Simma Holt: 1 did not refer to our party at all. I know that the cabinet voted party solidarity. Perhaps it was a coincidence.


Samuel Victor Railton: Mr. Speaker, 1 rise on a point of order. It is about time we straightened out the matter on which the hon. member is speaking. There was absolutely no pressure on anyone to vote in a certain way. It was a completely free vote.


Mr. Deputy Speaker:: I must say that the hon. member is speaking about something of which the Chair is not aware. The Chair is to rule on the operation and functioning of this House in accordance with our Standing Orders. It is not in order to criticize a vote that has been taken. I do not think the way the hon. member has been speaking about votes has reflected on this House. She is speaking in general terms. I think the point raised by the hon. member for Welland (Mr. Railton) is more a point of disagreement. Whatever influence the hon. member is referring to is very intangible and is really not perceptible to the Chair.


Simma Holt: Mr. Speaker, I want to make it very clear I am not reflecting on the way in which people voted in this House, but I do favour a totally free vote ultimately so that as members of parliament, we can represent our constituents fully as a whole House when they make their feelings clear on major issues.
1 would like to discuss the question of a referendum and answer the hon. member for Surrey-White Rock (Mr. Friesen) when he mentioned the statement of the hon. member for Windsor-Walkerville (Mr. MacGuigan), who is a very respected member of this House, who is the chairman of the Justice and legal affairs committee, an outstanding member and certainly well versed in his law. Several times he corrected the hon. member for Surrey-White Rock who implied that he, the member for Windsor-Walkerville, favoured a referendum. He made it quite clear, for the second or third time for that member opposite, on October 21, 1977, as reported at page 152 of Hansard. He was discussing the third point in his speech, and he said:
I am pleased, by the way, that the hon. member for Surrey-White Rock (Mr. Friesen) who I am sorry is no longer in the House, introduced my position on this with so much fanfare. I owe it to him that he read enough of my remarks from the previous occasion to indicate that I did say that there could be a referendum when our very system itself was at stake. I am not sure he appreciated the significance of those words, but what I was saying then is
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precisely what the Prime Minister is advocating now. When the country's government or the country's future itself is at stake, a referendum, of course, can be extremely appropriate. It was matters of ordinary policy which I was suggesting should not be taken from parliament and handled by way of referendum.
It may be of interest to the hon. member to know that his own leader, during the question period on October 20, 1977, seemed to be concerned that the Prime Minister (Mr. Trudeau) was proposing-and this is his statement-what he called a change to the tradition of the parliamentary system and to change it in a way that the government of Quebec is not proposing to change it-to have this referendum apply simply to one question relating to unity. Of course that is what the hon. member for Windsor-Walkerville stated, and whenever you see referendums in many countries of the world, it is always when major issues involve the whole state, its structure, its very existence. You can look at other countries, not just our own. A referendum is held when martial law is to be introduced. In Europe there was a referendums on whether a country should enter the European Common Market.


Benno Friesen: On a point of order, I find it necessary to correct the record that the hon. member for Vancouver-Kings-way (Mrs. Holt) is making. Or perhaps the hon. member for Windsor-Walkerville (Mr. MacGuigan) referred loosely to his memory of a year ago when he entered into the debate. But when I read from that record here on October 21, 1 quoted accurately what he had been saying a year ago. Perhaps on October 21 the hon. member for Windsor-Walkerville did not clearly remember what he had said a year ago, but I do want to read back into the record precisely what he said a year ago and state correctly, for the benefit of the hon. member for Vancouver-Kingsway, precisely what he said. I read, as to be found at page 143 of Hansard'.
I find it hard to understand that hon. members can rise in this House and urge us to change our whole parliamentary system merely because they are not satisfied with a particular vote.
That is exactly what he said, and it is definitely different from what the hon. lady has just read.


Simma Holt: I don't know, Mr. Speaker, because 1 have not gone back to that portion of the record. But he certainly cleared up the record on October 21, and he also said:
All we are talking about now is the power to have such a referendum; we are not making a decision to go ahead with it.
The Prime Minister himself said the referendum would be concerned with the issue of national unity, a constitutional problem, and he discussed it in the context of enabling legislation that would make it possible, in the case of an emergency, to hold a referendum on the question of unity.
While I do not often quote Macleans, because I really think it is a pile of garbage and is very seldom accurate-in fact they have a great problem with their own prejudices and hates, and therefore cannot get their record straight-but there is one writer for Macleans occasionally, whom 1 do respect very much, Peter Desbarats. On October 3, 1977, during this very discussion in the House, Mr. Desbarats wrote an article on Quebec's supposed legislation under the heading "What Will a
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Adjournment Debate
Referendum Mean?" I think his thoughts on this subject are very useful to the House. He wrote:
One of the most destructive aspects of the referendum, and the reason why many Canadians find it almost irresistible, is its counterfeit air of being conclusive. It pretends to be an honest and straightforward way of making a choice-Yes or No. It panders to the eternal Canadian yearning for an ultimate solution to our most vexing internal problem and it reinforces the illusion that there is an easy answer.
He points out also that in an era of public opinion polls the result is a foregone conclusion. He argues that far from revealing public opinion it prevents its orderly development-it becomes a political weapon, an interruption and distortion of our political process and, at worst, an entertainment.
I certainly would have found it much easier to have been in the House during the debate on capital punishment if there could have been a referendum. I would not have had to stand here and vote as I had to do. I would have been happier to serve my constituents and my party at the same time. But had I not been able to vote as my people wanted me to in Vancouver-Kingsway 1 would have voted their way, and resigned. That is how strongly 1 feel that I am a representative-


Mr. Deputy Speaker:: Order. The hour set aside for the consideration of private members' business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, the question which brings me into the adjournment debate tonight is one 1 had hoped would be replied to by the Minister of Agriculture (Mr. Whelan). That, in turn, relates to my question of November 16. But first I want to say that 1 appreciate the written response 1 have received from the parliamentary secretary to the minister who, 1 presume, will respond to me tonight. My question on that occasion dealt with my concern, and the concern of the Canadian cattle industry, over the possibility that there may not be control by quotas over beef imports in the coming year. I refer specifically to imports from Australia and New Zealand.
I remind the parliamentary secretary that the current quotas which have been in operation all this year, particularly so far as Australia and New Zealand are concerned, are now almost filled. As at the week ending November 5, combined totals of
[Mrs. Holt.)
imports of beef from Australia and New Zealand amounted to 109 million pounds as against an allowable quota of 120 million pounds. This means that about 11 million pounds still remain. These were the figures two weeks ago, so probably by now the quota is almost filled.
I should like to ask the parliamentary secretary whether he knows when this quota might be filled. Usually there is some indication when a quota will be filled once it reaches near completion. With rather plentiful supplies of beef from the major exporting countries of the world, particularly Australia and New Zealand, there have been only very slight downward adjustments in world supplies of beef available for export.
Canada's cattle industry needs to know now before the end of the year that somewhat similar quotas will be in effect for 1978. I think it is important that these quotas be announced before the end of the year. Can we expect somewhat lower quota levels for Australia and New Zealand in view of the currently plentiful domestic supply in Canada? The fact that current quotas are going to be nicely filled by the end of the year, or before the end of the year, is a clear indication that these quotas have worked very well this year and that they should be continued through 1978.
An early or interim announcement would be appropriate since the new beef import legislation will not be available until early next year. I refer to the speech of the minister during the throne speech debate as reported at page 298 of Hansard for October 26. He said:
If necessary, I have been authorized by the government to look at the possibility of the passing of a Meat Authority Act, provided I could be assured of very close collaboration of the opposition.
After three years of persistent support for this legislation, both personally and by almost every cattlemen's association across Canada, this is very welcome news. We in the Conservative party, cattlemen's associations, stock growers organizations and many other livestock groups across Canada, will certainly give our close collaboration on such legislation. Mr. Speaker, 1 can assure the parliamentary secretary on that, provided the new legislation is reasonable and does the job of serving as a long-range beef import policy for Canada. I urge the minister to act quickly so that we can take a look at this new legislation.
What does the word "authority" mean? He should tell us that very shortly. I find it somewhat ironic, after pressing for such legislation in a very personal way for three or four years and being most emphatically turned down by the Minister of Agriculture and previous ministers of industry, trade and commerce, that now we have the strange situation where both the Minister of Agriculture, and the present Minister of Industry, Trade and Commerce (Mr. Horner), are indicating support for this long overdue legislation. Could it be that the new Senate report on beef imports was responsible for this turn-around by the government? If there is competition between cabinet ministers to bring in this meat import legislation, all 1 can say is, it is about time. The only important issue
November 21, 1977

is that it be good and reasonable and long range so that our cattle industry can see an end to short-term, ad hoc, crisis-type legislation. We will support that kind of legislation.
On the other item which 1 raised in that question last week about the current cow-calf stabilization program for this year, that is, for 1977, when will those pay-out details be announced? Hopefully by now the parliamentary secretary may have some further information. Every calf producer, every calf seller in Canada, I am sure, is anxious to hear details about that program. Will it be announced especially before the end of the year? Last year, of course, the details of the federal fed cattle support policy were not announced until the end of January. We hope it will be a little earlier than that this year. Further, would he hazard a guess as to whether or not there will indeed be a pay-out, since there is the probability that because of higher calf prices there may not be a pay-out under the cow-calf stabilization program for this year.


Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am pleased to try and reply to the question the hon. member for Medicine Hat (Mr. Hargrave) asked concerning Canadian meat imports for 1978. As the hon. member indicated, the government has provided financial assistance to the beef industry and thus achieved stabilization of cow-calf imports for the past few years. I suggest therefore that the problems faced by the beef industry have been overcome.
As the minister indicated to the House through the throne speech, he will be authorized if necessary by the government to introduce legislation to limit meat imports, already assured of the opposition's co-operation. The government will soon come to a decision concerning beef and veal import quotas, following consultations with the other traditional exporting countries, a decision which the government will make public later.
We anticipate that quotas for 1978 will be approximately the same as in 1977. We have some reasons to maintain quotas as they were in 1977. Under their legislation governing meat imports, the United States will increase their quotas on a minimal quantity with no secondary effect on meat exports from Canada. In addition, meat consumption in Canada for 1978 will likely remain at the same level or even below that of 1977. Therefore it will be necessary to maintain Canadian beef exports to the United States in 1978. Aware of the situation which is confronting the beef industry in Canada, the government is prepared to take the necessary action to help that very important Canadian industry.
Mr. Speaker, as far as the cow-calf breeder program is concerned, regulation on subsidies granted for calf and cow meat will probably be announced next December.
1 was happy indeed, on behalf of the Minister of Agriculture (Mr. Whelan), to answer the very important question from the hon. member for Medicine Hat and I hope he is satisfied with that answer.
Adjournment Debate


SOCIAL SECURITY-NEGOTIATIONS FOR RECIPROCAL AGREEMENT ON PENSIONS WITH UNITED KINGDOM-REQUEST FOR REPORT
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, I asked a question on Friday concerning the reciprocal agreement on pensions with the United Kingdom. I directed my question to the Prime Minister (Mr. Trudeau), and it was answered by the former minister of national health and welfare (Mr. Lalonde) in his position as Acting Minister of National Health and Welfare that day.
I asked the question because I received a press release the day before. It was not one of the ones from the Prime Minister's office, it was merely a red headline; the really important ones come out with gold print on them. This one pointed out in the view of the Minister of Health and Welfare (Miss Begin) what she thought was going to happen due to the signing of the treaty on the reciprocal agreement with Italy. I should like to quote as follows:

The minister stressed that before the agreement can go into effect, Canada and Italy must agree on the detailed arrangements for administering it. Officials of the Department of National Health and Welfare will begin working on these arrangements shortly with their Italian counterparts ...
On November 18, 1977, 1 asked the Acting Minister of National Health and Welfare the following:
Has any progress been made with regard to signing a similar agreement with the United Kingdom ...
In part I received the following answer:
... that negotiations with England, the United States and France are still in progress, that the various officials have been holding meetings.
What is the difference between the situations in the United Kingdom and Italy? In both cases officials are holding meetings, and not much else is happening. The minister's answer in the House is similar to the press release-"We are not making a great deal of progress".
There is confusion in the minds of everyone interested in this subject as to exactly what procedure should be taken to make this agreement effective. It took one and a half years to pass the bill in the first instance, and we were assured it would be in effect quickly. There was no mention of a treaty at that time. Now we have a media happening. A media happening has no intrinsic value of its own, but is available because the media are there to cover it.
We have had a recent treaty signing between the President of Italy and the Prime Minister of Canada (Mr. Trudeau), the result of which is we are exactly where we are with the United Kingdom. This is a game which is being played by politicians to get publicity for an otherwise sterile visit. When the Italian agreement comes into effect, Canada will be faced with some difficulties.
I should like to refer to the press release from the Prime Minister's office, which reads as follows:

November 21, 1977
Adjournment Debate
11. Q. When will the Canada-Italy agreement go into effect?
A. The agreement must be ratified in both countries after it is signed. Also, administrative arrangements must be agreed upon by both countries before the agreement can be put into effect. Discussions for these administrative arrangements will begin once the agreement is signed.
The agreement has been signed, thus they are beginning their discussions. The agreement will be extremely difficult even when it is working. I should like to refer to the press release from the Prime Minister's office once again, which reads as follows:
9. Q. On what basis can totalizing and prorating under the agreement be applied to acquiring or receiving an OAS pension?
A. A person may add residence in Italy to residence in Canada in order to meet either the ten-year minimum requirement for payment of an OAS pension in Canada, or the 20-year minimum requirement for payment of the OAS pension abroad. The amount of the benefit would be one-fortieth of the OAS pension for each year of residence in Canada only. For example:
(i)	1 year of residence in Canada after age 18 plus 9 years of residence in Italy equals one-fortieth of an OAS pension payable in Canada;
(ii)	15 years of residence in Canada after age 18 plus 5 years of residence in Italy equals fifteen-fortieths of an OAS pension payable in Canada or abroad.
I caution old age pensioners to seek counsel. I hope the department will provide expert advice to these poor souls who are supposed to wander their way through this jargon in which these questions and answers are phrased.
In closing, may I say the bill was first introduced by the minister of health and welfare a long time ago. We were clearly informed that the United Kingdom was pressing us to sign such an agreement. In answer to a question put to him on June 21, 1977, as follows:
Have some countries indicated an interest in having reciprocal social security agreements with Canada?
The then minister answered:
Italy, the United States and the United Kingdom have been pressing for an agreement with us.
I put it to you, Mr. Speaker, that this bill was put through the House under false pretenses. I would like to know when and if the government intends to sign an agreement with the United Kingdom.


Yves Caron: Mr. Speaker, to answer the question of the hon. member for Victoria (Mr. McKinnon), as the Acting Minister of National Health and Welfare stated in the House last Friday, November 18, negotiations have been going on with the United Kingdom since July. We still did not get any formal answer to the agreement proposal which has been discussed by the officials in July and was subsequently the subject of discussions between the Minister of Welfare of Great Britain and the Minister of National Health and Welfare of Canada.
All I can say now is that the technical problems will likely be solved and that Canada has asked the United Kingdom to give British pensioners living in Canada the same pension increases as are regularly being paid to British pensioners living in the United Kingdom. Naturally, it is the prerogative

of the authorities of the United Kingdom to determine whether they will agree to give these raises to British pensioners who live in Canada as they have given them to British pensioners living in other countries with which the United Kingdom has signed social security bilateral agreements like, for instance, Turkey and Spain.
We believe that because of the strong links that exist and have always existed between the United Kingdom and Canada and because Canada automatically gives all people who are entitled to old age pension benefits and who live outside our frontiers all the increases in the pension benefits, which include the periodical readjustments linked to the cost of living index, the United Kingdom will want to treat on an equal basis all its retired nationals in Canada and in the United States, for instance, as well as those who live in countries which have signed social security bilateral agreements with the United Kingdom.
The hon. member for Victoria can rest assured that the government of Canada will do everything possible to convince the United Kingdom to sign as soon as possible an agreement which will be fair for British pensioners who have chosen to retire in Canada to live their old age near their children and grandchildren. As for us, we are ready to sign an agreement without delay. In reality, however, it takes two to negotiate. Even though the economic situation in the United Kingdom seems well on the way to recovery, our British counterparts tell us they have much difficulty finding the needed funds to meet Canadian requirements and give British pensioners in Canada equal treatment with British pensioners in the United Kingdom.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been withdrawn. I do now leave the chair until eight o'clock tonight.
Motion withdrawn.
At 6.21 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. Chretien that Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of
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[Stage Direction]
funds, be read the second time and referred to committee of the whole.
Mir. William Knowles (Norfolk-Haldimand): Mr. Speaker, in rising to participate in the debate on Bill C-11, amendments to the Income Tax Act, I feel it my duty to express the views of those whom I represent that have been expressed to me in personal conversations, by letter and by telephone. If I did not rise in my place and make representations to the Minister of Finance (Mr. Chretien) I believe I would be derelict in my duty. I know I rise to speak to the considerable impatience of the government side of the Elouse because just this afternoon they gave notice of a closure motion to limit debate. I believe it is completely wrong to muzzle debate in this House. Members should have every opportunity to put forward the views of those they represent.
The government would never have been in this bind if the Minister of Finance had been honest and had brought forth his amendment to the Income Tax Act in a proper budget address, with a time limit on debate according to the rules of procedure of this House. Had that been the case there would have been no need for the closure motion that now hangs over our heads. I make no apology to the government, therefore, if I take some time to express my views.
Canadian taxpayers view with alarm the continuous and oppressive increase in taxes. The percentage of tax Canadians pay in relation to the gross national product or total income is reaching the point where the economy is in grave danger. The government is like a giant octopus with tentacles, and hands at the end of the tentacles reaching into the pockets of taxpayers across the country. It severely cripples the right of citizens as individuals and of small companies to manage and determine their own economic destiny.
The government's attitude seems to be "Big Daddy knows best." He knows best how to spend our earnings! The federal government has the broadest tax base of any level of government in this country and therefore must bear the greatest responsibility for the increased tax burden on the citizens of Canada. So many government programs are those promised by politicians at election time and not programs sought by the citizens of this country, but rather are thrust upon them. It reminds me of the advertisements on television that try to sell things to people that they do not need. We have a government budget and government expenditures passing all reason.
I think the situation is set out very well as a fair warning to Canadian taxpayers in the July 7 edition of the Simcoe Reformer. An editorial refers to the opinions of Arthur Smith, a native of the town of Simcoe and former chairman of the Economic Council of Canada. The article began:
Canada is becoming an over-governed nation whose spending policies, if allowed to continue at their present rate of increase, could gobble up all income in a few short years.
Later, the article continued:
Discussing key Canadian policy issues last week, Smith said the danger signs were being recognized by both the public and government sectors which can see that neither individual freedoms nor collective interests were necessarily served well by bigger interventions by government. The question is: will government
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slacken off from its relentless pursuit of Canadians' incomes, resisting pressures prevalent within and without governments for more legislation and regulation?
Smith saw some hope for a pullback resulting from growing public opposition to tax increases brought on by increased government expenditure. He anticipated governments looking uncertainly inwards in questioning their capacities to assume rapidly expanding responsibilities.
Unless governments call a halt, a terrible price will be paid, Smith predicted. If governments maintain their rates of tax-grabbing and spending at the leve' of the past 10 to 15 years, simple mathematics demonstrates that all income will take the form of taxes and all spending will be by governments-federal, provincial and municipal-well before the end of this century. Taxpayers should take note and intensify their opposition to further intrusion on their pocket-books.
I think that is a pretty serious statement, and it was made by a man who commands some respect in economic circles in this land.
I want to turn to certain, specific interests in the government tax structure, and I want to discuss for a few moments the capital gains tax as it applies to family farms. First let us look at the history of the capital gains tax. It was introduced in 1971 following a presentation in a government white paper on tax reform.
The capital gain tax was explained in great detail. At the time the measure was debated here in the House of Commons the official opposition made a very urgent and eloquent plea to the government that the family farm should be exempt from capital gains tax. The government refused. It was adamant in its stand. It did make one minor concession, and that was a deferral of capital gains tax where a farm is sold by a father to a son and the farming enterprise is to be carried on. Then a few years later the government made another concession in the face of demands by Canadian taxpayers and of representations made on this side of the House, namely, that there should be a roll-over provision which would allow a farmer to sell his land and use the proceeds in one year to relocate in another farming enterprise. That was all well and good.
I think this makes one point very clear, and that is that the government does not have all the answers, nor does it understand fully and completely the plight the farmer finds himself in with respect to the capital gains tax. The government did make those two concessions, and we appreciate that. As I said, I think that simply tells all of us that government legislation is not always perfect.
The result of the capital gains tax program as first implemented was undue hardship and unwarranted debt loads for farms expropriated or under threat of expropriation. A sale had to be made, and made before the roll-over provision was enforced. The proceeds of sales were diminished by the capital gains tax so that in order to buy similar farms of equal economic viability it was necessary to go head over heels, as we sometimes say, into debt to get back into business again. I admit that has been partly remedied, but there are still hardships for the family farm owner. One of these is that instead of being owned by fathers or sons in partnership, many farm operations have been incorporated into closely held family farm limited companies. Because they are held by
[Stage Direction]
November 21, 1977
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members of immediate families I can see no reason why the government should not treat this in the same manner it treats a family farm held by the head of the family, usually the father. However, up until this date the government has refused to give closely held family farm corporations this privilege. This is one of the hardships about which I am talking.
Another thing which should be pointed out is that the government does not seem to recognize that, as they go through life, farmers invest their profits and incomes from their farms back into their farms to improve buildings, to buy equipment, to buy more land and so forth. We sometimes say they plow back their earnings into the farm business. The same applies to the small businessman. He just does not have money or cannot raise money for major capital expenditures. The only way he can do this is to put his profits back into the business year after year. At the end of his years of operation, a farmer or small businessman sells his farm or business and hopes that this will be his retirement income or his pension.
A farmer or small businessman cannot keep his farm or business in a form that is saleable unless he keeps it up to date and puts to work the expenditures of which I spoke. When he does sell and hopes to have a retirement pension, what happens? The government steps in and takes a big slice by way of capital gains tax. By the time he buys a home in a town or village where he intends to retire, he has nothing left with which to earn a decent pension or upon which to retire and live out a decent life in his twilight years.
I think the matter was put pretty well in a letter I received from Mrs. Don Petheram of R.R. 5, Waterford, Ontario, which reads in part as follows:
Most farmers and their wives work hard to pay off mortgages and to keep the farm going. A farmer doesn't have any retirement plan like other workers, whatever money he has left over after all expenses are met is put back into the farm to keep the business going.
When the farmer sells his farm and retires it takes a good portion of the farm sale money to relocate and either build or buy a ready built house. The remainder of the money has to be put aside to keep the farmer until his death. By the time the government takes the large portion in capital gains tax it is demanding, what has the farmer left to retire on?
1 have spoken about this in previous speeches here in the House of Commons and to various ministers of finance, and the answer I got from the ministers or their parliamentary secretaries was that the farmer has the same privilege as any other citizen of registering under a registered retirement savings plan. But he does not have that kind of money. As 1 pointed out before, he uses all his profits to re-invest and to keep his farm a viable operation. What I have said applies not only to farms but also to small businesses.
There is another unfair aspect of the capital gains tax, and that is the unfair and unjust way it is applied. Most of the argument is about the way auditors of the Department of National Revenue arrive at the valuation day value for a farm operation or for a small business. There is a continuous dispute. I receive numerous letters and phone calls from people who dispute the way government auditors arrive at fair market value on valuation day.

Many government auditors who come out to farms have no knowledge whatsoever of farm operations and what it takes to keep them viable. They learn their work from a textbook. They are instructed on how to value a farm and that they must not go beyond certain limits. In any event, they know nothing whatever of what value means to a farmer.
It seems to me that the government would be well advised to employ retired farmers or men who have had some experience and who know what a farm operation is. A man I know very well is well qualified in this regard. He is a retired farmer. He did valuation work for the Ontario government. He applied for a position with the Department of National Revenue and was refused. I simply could not understand why he was refused, because this man had some conception of what a farmer is up against.
Too much attention is paid to the speculative value of farmlands. The evaluator wants to value farms at the price which was in effect back on December 31, 1971. However, since that time inflation, and speculation by real estate people buying and selling land in the neighbourhood, or encroachment of metropolitan areas have put the price of the land out of all proportion to its value as farm land. This is a value that these auditors want to put on the value at the time of the sale. The discrepancy is far too great.
I want to again quote from the same gentleman. He has used some figures to illustrate what I am talking about. I will just quote that part of the letter which applies to this subject. I quote:
Land was selling at $1,000 per acre and up prior to 1971 in this area, now the government is only valuing land at $350 per acre. If land did sell at a low price of $350 per acre in 1971, it was for estate purposes or financial reasons and does not mean the rest of us would sell for such a low price.
Our houses we are told would be worth more if in town. A great many people prefer country living, and as for the cost of a house it costs just as much for materials and labour no matter where one builds. Why then is the assessment on our homes placed at such a low value? We trust you will reconsider this capital gains tax and at least put a fair value on our land and buildings.
The letter was written to the Minister to Finance and the Prime Minister (Mr. Trudeau). Apparently they did not pay too much attention to it.
I have a note that I made during an interview with a farmer who came to talk to me about this problem, Mr. William H. Rittenhouse, of R.R. 2, Dunnville, Ontario. He found the same situation. The person who came to put the V-Day value had no conception of farm values or what a farm could earn. As a result, the farmers had a very high capital gain and resulting gains tax.
This man had a very novel proposal. In order to remedy this situation, he suggested starting with the sale value when the farmer sold his land and deducting 10 per cent each year, which roughly represented inflation, back to 1971. This would give a reasonable capital gains tax. I believe this proposal is worthy of consideration. It should at least be looked at by income tax auditors when determining value for capital gains tax purposes. If that formula is not adequate, there should be some other formula which will take into account the effect of inflation on the value of farm land.
November 21, 1977
[Stage Direction]
I have made a major criticism about the capital gains tax and the way it is applied. There is a simple remedy to solve this. It would not cost the government all that much money. The Minister of Finance and the government should simply remove capital gains tax on family farms or small family businesses or a once in a lifetime sale. That is not unreasonable.
In addressing myself to this subject a year ago, I found that the amount of money the government realizes from capital gains tax on farmland is rather minimal compared to the administrative cost of calculating capital gains tax. I have made this proposal to successive ministers of finance, but it has always fallen on deaf ears. I hope the present minister will consider it. It has been suggested that a young man from Shawinigan Falls is out to make his mark in finance and economic affairs. Here is a novel proposal he might accept. He can then forget about the advice of the mandarins in his department. One simple step could solve all the hardships I have mentioned.
Another partial solution to this problem has been put forward by previous speakers on this side of the House. The hon. member for Medicine Hat (Mr. Hargrave) made an eloquent plea that closely held family farm corporations should have the same benefits in the roll-over privileges as are now enjoyed by the single farm owner. That makes a lot of sense. 1 will not expand on it because previous speakers from this side made a very formidable argument as to why this is entirely in keeping with fair taxation practices.
I now wish to turn to an entirely different topic, income tax on life insurance. 1 congratulate the government for giving up its intention to tax a portion of the death benefits. I am sure members from all sides of the House have written to and talked with the minister. He has at last seen the light. Because of that, I have great hope that he will pay some attention to what I said previously.
I am sure members of all parties have received letters from owners of insurance policies, and in particular from agents who sell insurance. I think I can take some credit for this. Modesty prevents me from taking full credit. However, there are two injustices that still remain.
A tax paying policy holder who takes out a loan on his insurance policy is taxed on that loan as though it were a portion of his income. That is nonsensical. If you make a loan from a bank, a trust company or a private individual, that is not counted as income. It has to be repaid. The same is true of an insurance loan. Most people who take out loans against their insurance policies repay them. If by chance they fail to pay them back, the amount is deducted from the proceeds when the policy matures.
There is no justification for that type of tax policy. If that is to be counted as income, it is reasonable to count as an expenditure the interest the borrower must pay on the loan. However, the government will not go along with that. It is beyond comprehension. After receiving representations from all sides of the House, I am sure the minister will listen to
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reason. The minister has gone part way. He must now be completely fair and just.
To point out some of the arguments in favour of that, I want to quote from a letter I received from the insurance industry. They wrote, and I quote:
Unfortunately, two serious problems remain. I refer to the budget proposals (a) to tax the policyowner at the time of taking out a policy loan, and (b) to disallow the deduction of policy loan interest as an expense in any circumstances.
They then list some of the reasons why this is patently unfair, and I quote:
A policy loan should be regarded as such because the loan is repayable out of the insurance proceeds if the policyowner does not repay the loan at an earlier date; the policy loan provisions are a long established and valuable feature of life insurance as a form of property and it is discriminatory to deny the normal tax treatment for such loans;
policy loans are normally taken in times of financial need or emergency which is a highly inappropriate time to levy an additional tax;... particularly hard hit would be small businesses which the government is committed to helping; life insurance policies are often the best or only source of ready cash for small business operators since the money can be obtained quickly at modest rates with no questions asked and no further collateral demanded;
the use rather than the source of funds governs the deductibility of loan interest for income tax purposes; this proposed disallowance of policy loan interest is blatant discrimination against one source of money, namely, life insurance.
That is so reasonable and obvious I cannot understand why the minister will not take a sensible look at the problem.
Lincoln MacCauley Alexander: It is because he is bullheaded.


William David Knowles: I now want to deal with the federal sales tax that is levied against equipment used by public utilities in the various muncipalities across this country.
I am referring to equipment used to keep the utility operational, to make installations and so on. I will not expand on the argument any more other than to read what was written to me by a municipal council in my area. The Dunnville Public Utilities Commission in the town of Dunnville passed a resolution. I believe a copy of this is in the hands of members on all sides of this House. This resolution sets it out better than I could do.
Whereas exemption from federal sales tax and excise tax is provided for municipal water main material; whereas water and electric utilities supply essential services to the same clientele; whereas tax on equipment and materials used for electrical distribution contributes to the increasing cost of servicing housing subdivisions; whereas the benefit of tax reductions would ultimately benefit the end customers, be it resolved that an appeal be made to the Minister of Finance to consider legislation to exempt municipal electric utilities the federal excise tax on electrical distribution material and equipment.
You see, Mr. Speaker, what is good for one section of the public utilities industry is surely good for another, and there is no earthly reason why the government should not see its way clear to do this very thing it is being asked to do. After all, the tax which is presently imposed increases the cost of electrical services to those who purchase them.
I want to turn, now, to another subject and join in representations which have been made by a number of other speakers in this debate in connection with the inordinate amount of paperwork which has to be attended to by taxpayers, more

November 21, 1977
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particularly by small businessmen. They are snowed under by the number of government forms they must complete, and surely it is not beyond the ingenuity of public servants in the various government departments to simplify these forms greatly or to do away with them altogether. The income tax forms themselves are so complicated that small businessmen need to hire accountants to assist in their preparation. Even the ordinary taxpayer finds he cannot get all the deductions to which he is entitled unless he employs an expert to give him advice. I say: do away with the forms presently demanded by Statistics Canada, the Unemployment commission, and so on. There must surely be a way to make these procedures more simple.
I should like, now, to read into the record part of a letter from Mr. K. W. Jones of Caledonia, Ontario, who has, I believe, a legitimate complaint with regard to the government's proposal to tax fringe benefits which certain people enjoy. The letter speaks for itself. Mr. Jones writes:
I am employed by an insurance company whose practice is to provide a mortgage to eligible employees as a company benefit. This benefit is taken into consideration when the company reviews the salary of an employee and is a method of keeping the salary at a lower level. I therefore believe that taxing us on this benefit would be grossly unfair and would also force the employer to review the salary.
Listen to what he says now:
Many different occupational groups enjoy benefits which are not taxable. Employees of department stores receive discounts on purchases; airline and railway employees receive free passes, as do their families; superintendents of apartment buildings receive free accommodation; government employees receive free bus passes-
I should not have read that. That is not true.
Members of parliament, to the best of my knowledge, receive free airline tickes, non-taxable, to be used in the course of their duties. These are only a few examples of the benefits received by employees.
I think my correspondent has put up a good case. If, as an employee, he can get a mortgage at a little below the usual rate, why should he be taxed on that amount, particularly when, as he says, other employees enjoy benefits with respect to which they are not taxed?
My final point has to do with a segment of the agricultural industry which is very important in the area I represent. I refer to the tomato industry. This industry faces a major crisis in Canada, indeed the threat of virtual extinction due to the importation of large volumes of tomato solids, usually in the form of tomato paste. The single most important barrier in the way of supplying current domestic consumption from within Canada is the continued over-exposure of the industry to dramatically fluctuating world market prices and conditions. Put very simply, the industry is threatened by the dumping of cheap tomato paste from countries where labour costs are very low.
Canadian tomato growers have the ability and technical competence to produce consistently all the tomato solids required by Canadian consumers at reasonable prices. However, they have been reluctant to commit themselves to capital expenditures on processing facilities because of the uncertainties which exist in the world market. What is required is some assurance that the industry here will not be forced into bank-

ruptcy by unscrupulous dumping. Such an assurance can be made available to the industry if the government would impose an ad valorem tariff rate of XlVi per cent to become effective immediately.
The situation was explained earlier this afternoon in terms more eloquent than I can command, by the hon. member for Carleton-Charlotte (Mr. McCain) when he was dealing with this subject. Not only would such a duty as I have mentioned help the producers and the processors to expand, but it would mean a more stable price for Canadian consumers-they would not find a certain price quoted at the supermarkets one week, to be followed the week after by a price 50 per cent higher, with a subsequent reduction. Even more important, perhaps, is the number of new jobs which would be provided, not only on the farm but in the processing plants. The vegetable growers marketing board estimates there would be many thousands employed in the food industry, not only on the farm but in the processing industries.
I have tried to give the broad picture, Mr. Speaker. I have touched on a few aspects of the tax program of the government. I have talked about the inordinate, unfair, and ever-increasing tax burden of the taxpayers, and have pointed out that we will soon pass the point of no return. I have also touched on the capital gains tax, insurance, and protection for the farmer and processor of certain market garden crops. I hope what 1 have said will have some impact upon the Minister of Finance, and that when he sits down with his officials and makes some amendments shortly in committee of the whole, some of the matters I have raised will be taken into account.


James McPhail Gillies: Mr. Speaker, I am pleased to have this opportunity of speaking on Bill C-ll for a few moments. I will be one of the last to have the opportunity to speak on second reading since the government, in its usual, courageous way, has introduced closure. Since we have not had a budget debate it seems to me shocking that the minister is sneaking in this mini-budget. I found out this evening that not only is the government invoking closure, but the Minister of Finance (Mr. Chretien) is putting conditions on the terms under which he will appear before the committee to debate economic policy. I have seen the Minister of Finance in the committee only once so far, and I would have thought that given his performance that time that he would want to come back to the Committee as often as he could in order to learn something about the portfolio that he is trying to administer.
I find it quite shocking that there should be a trade off between the number of times the Minister of Finance is willing to appear before an appropriately established committee of the House of Commons and how fast the opposition will put legislation through this House. It has never been intended that this sort of thing should happen in the House of Commons, and it is a shame that it is happening now.
I do not intend to dwell upon the details of Bill C-ll. Rather I want to talk about one or two things which have become
November 21, 1977

apparent as one examines the legislation before the House and, more important, as one listens to what the Minister of Finance has to say about it.
It has been pointed out many times the serious nature of the economic problems of this nation. We have the highest unemployment in Canada since the depression in terms of absolute numbers. We have continuing inflation. If it were not so serious, Mr. Speaker, we could laugh at the joke of the government talking about a 6 per cent inflation rate next year. There is no likelihood that inflation will be at that level. We also have one of the most serious balance of payments problems that we have had in our history.
What was so disappointing about the remarks of the Minister of Finance when he introduced the bill and talked about a minor tax cut was that he gave no indication whatsoever that the government was going to take a new approach to managing the economy. The direction in which the government is moving is so wrong, Mr. Speaker, and the policies the government has been pursuing during the last few years are not working.
How much evidence of this do we need? Unemployment keeps increasing. Inflation keeps increasing. Our balance of payments position keeps getting worse. We have always measured our economic performance against that of the United States and there is usually a six months' lag between what happens in the Canadian economy and what happens to that of the United States. We are out of that relationship now. Surely the government must see that its approach to economic policymaking in Canada is not working any longer.
One had hoped that in the mini-budget presentation of the Minister of Finance we would see at least a glimmer of some new approach to economic policy making, but that was not the case. This is very sad, Mr. Speaker, and it is not really the political consequences of this which are important. What is really important is that one million Canadians are not going to find any work this winter and our economic situation will continue to deteriorate.
How can it be that a country which ought to be one of the richest in the world, that has so many resources, keeps becoming poorer relative to other countries? As my hon. friend from York-Simcoe keeps telling the House, in terms of per capita real wealth in our country has slipped from second place in the world to tenth place. The countries of the world which are improving their economic position are the Middle East countries and other countries with resources. We have resources. Why are we mismanaging our economy so much that we are going in the wrong direction so far as economic activity is concerned?
One of the greatest myths presented to the Canadian people is that they are told that we cannot do anything about our economic performance, that we have to suffer through what we are experiencing today. It is not true, as the Minister of Finance alleged in committee the other day, that nobody knows how to solve the economic problems of the world, that we are all suffering to the same degree. This is just not so. Many countries around the world are improving their economic performance, while ours is getting worse.
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Our trouble, Mr. Speaker, is that the Department of Finance is locked into a budget-making policy that no longer works. The department is still taking the position, as the Minister of Finance himself said the other night, that we can operate on old fashioned, Keynesian, gross expenditure economic policies of the sort we operated on in the early 1950's and 1960's. I say we cannot. A few years ago economists in the United States council of economic advisers and some economists in Canada were saying that we could fine tune the economy to determine how much unemployment and how much inflation we were going to have by adjusting gross tax revenues and gross expenditures. Well, we have given that up because it just did not work.
More important, Mr. Speaker, we have to give up the whole idea that we can manipulate levels of unemployment and inflation in this country by changing gross expenditures and adopting Keynesian theories. The reality-and this is the message I want to get across to the people of Canada this evening, and particularly to the Minister of Finance-is that if the Department of Finance continues to pretend that by making changes to the tax structure only or making extensive changes to expenditure patterns only we are going to solve unemployment and inflation and our balance of payments problem in Canada, then it is absolutely dead wrong. If the deparment continues to adopt this line, this nation will suffer even more tragic economic problems than it is facing at the present time.
It is calamitous to continue saying that we cannot solve our economic problems. We can solve them, Mr. Speaker, but we need a totally new approach. The totally new approach that the Minister of Finance and his department have to take begins with recognition that in a large country such as Canada, with its great regional differences, you cannot now use these former policies. Budgets and economic policies must now be designed to meet the needs of the various regions and sectors of this country.
For example, I find it unnecessary that in this country we have a fishing industry which is not one of the most productive in the world. How is it possible for the government to spend several years negotiating a 200 mile jurisdictional limit off our shores, and yet today we do not have as much as one refrigerator ship which is able to harvest the products of those waters? How is it possible that we are willing to accept 20 to 25 per cent unemployment in the Atlantic provinces and yet not develop a fishing industry? We have one of the largest coastlines of any country in the world, and yet we don't have an international fishing industry. Why don't we? Why hasn't the government done something about this? Why doesn't it start making its budget decisions in such a way as to make certain that we have one of the most competitive international fishing industries in the world?
How is it possible that in Canada between 1970 and 1975 we imported twice as much mining equipment as we exported? How can this be necessary when we have one of the major mining industries in the world? Why is Germany one of the

November 21, 1977
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leading countries in the world in the exporting of mining equipment? Why haven't we developed an industrial strategy that is based upon the resources that we have, and develop, for example, a mining machinery manufacturing industry in this country which is competitive with such industries all over the world. We import more pulp and paper manufacturing equipment than we export, which certainly should not be the case.
We have the incredible situation that we have an energy strategy in this country, if we can call it that, which calls for us in the 1980's to import a portion of our oil needs. We have the largest known reserves of oil in the world and yet, we are going to be net importers in the 1980's. Can you imagine the Japanese being in such a situation? Can you imagine the Germans? Instead of being a net earner of foreign exchange, we have so mismanaged our economy, and have so neglected our resources, that we are going to be net importers of oil in the 1980's, and which, by the way, we don't know now how we are going to pay for it. And so it goes in area after area.
There is no chance that our economy will start moving forward again unless the Department of Finance and the Minister of Finance take a look at the various industries we have in this country in the various sectors of the economy and bring forward tax policies and development policies that make it possible for such industries to operate efficiently and profitably.
Equally important, as the former minister of finance, the hon. member for Eglinton (Mr. Sharp), said at a meeting the other day we must have a new way of making decisions about budgeting. The budget-making process in this country must become open. What we need to do right now, and if the Minister of Finance is serious in saying he wants to bring certainty back to the economy, what he should be doing is calling in leaders from the various industries around this country, and asking them what they need to make them efficient and competitive. From this information he should be starting to establish policies that will be effective in getting the country moving again. Budget-making must be brought out of the closet. It most be open, so that the people of the country, the businessmen of the country, the entrepreneurs of the country know what the government is planning.
The government must also have the courage to make its forecasts about employment, unemployment and inflation public so that business can make plans according to these estimates. Moreover, if the estimates are wrong the minister should come before the House of Commons or before a committee of the House of Commons, and explain why they are wrong.
I don't think Canadians realize the full extent of the economic problems with which they are faced. We have seen the dollar decline. The Minister of Finance has claimed that we have a floating dollar, and 1 would agree with him that the government has not tried to stabilize the dollar at 90 cents, or 92 cents, or 88 cents, although it has had to use a great deal of foreign exchange to keep the dollar from going down further than it has. There is no way that the dollar is not going to decline more if the government maintains the same sort of
economic environment as we are operating in at the present time. The Minister of Finance has a real responsibility to change that environment so that the dollar will not go much lower. Every time the dollar drops we get more inflation, and every time we get more inflation we get less investment. Every time we get less investment, we get more unemployment. Unless we do something about this situation we are going to have a never-ending problem that is precisely the same as the one the British found themselves in in the 1950's and 1960's.
If you examine those countries that have prospered since World War II and those countries which have not, the countries which have prospered have devalued their currency the least. The countries which have had the greatest amount of difficulty are the ones which have devalued their currency the most. How sad it will be if we are now following the British in terms of the management of our economy, and yet that is the direction in which we are going. The constant decline of the dollar will not solve any of our problems.
One of the things I find quite remarkable in Canada in the last decade, is the changing view which is held by the Minister of Finance about his responsibility, and indeed the way in which the press measures the success or failure of the Minister of Finance. It used to be that a minister of finance almost took for granted that he was politically expendable. The reason for this was because strong ministers of finance were always willing to take those actions that were important for the country, regardless of the political consequences which might result. We don't find this happening any more. When have we had a minister of finance in the last few years who has really been willing to take the tough actions that are necessary to turn the economy around? The characteristic feature of the way in which the economy has been managed, and of the way in which ministers of finance have operated recently, has been that they have talked strong and done nothing.


An hon. Member:: Travel to Florida!


James McPhail Gillies: Nothing has been done. We may, this winter have a $1.5 billion to $2 billion deficit in the travel account. We haven't heard a word from the government of doing anything about this. Why not? Because it is an unpopular topic.
When can we have some action on the part of government to start solving some of the problems that we have before us? Business cannot do anything if the government does not provide some leadership and policies. And yet government is unwilling to provide leadership on issues which are so important. Part of the tragedy of the last few years in economic management of this country is that politics has always taken precedence over economics. As long as this happens, as long as we have a situation where the government is afraid to take tough action to try to bring the economy back into shape, we are doomed to continue our decline.
We have other very peculiar situations. I was interested in reading the speech the other night of the hon. member for Crowfoot (Mr. Horner), the Minister of Industry, Trade and Commerce, talking in the House of Commons. Here is one of
[Mr. Gillies.)
November 21, 1977

the men with the levers of economic power in this country, who doesn't understand that it is the amount of money that is put into the system that causes inflation. He did not understand the fundamental, basic, underlying causes of inflation that are examined in any elementary economic text. This senior minister of the Crown is supposed to be responsible for some of our economic management, and he does not understand what is going on.
Any Canadian who has listened to the debate on this bill, and particularly any Canadian who has watched what the new Minister of Finance has said and the manner in which he has dealt with the economy so far, has to be very, very apprehensive. The Minister of Finance has said nothing in this Chamber, or in committee, or so far in this debate to indicate that the government is prepared to take a fundamentally new approach to the management of the economic policy of the country. Yet the evidence is in. How long do we have to go along with increasing unemployment, inflation, and a deteriorating balance of payments before knowing something is wrong with the policies utilized by the government?
The former minister of finance, Mr. Turner, did a great disservice to this nation by going around and saying nothing could be done. That is wrong. And it is not enough to say that our problems are the result of the world situation. It is just not true. The problems are within ourselves and arise because we are not prepared to change the direction of our policies, away from something which served us well in the fifties and sixties but which started going wrong in the seventies.
If the Minister of Finance wants to make a great contribution to the well-being of this nation, he will start immediately to scrap the way in which our budget-making has been done in the past. He will move to analysing the various sectors of the economy in order to find out what has to be done in each of these sectors in order to make them prosperous once again. He must deal with the people who are managers in those areas. He must bring them to Ottawa and start constructing the budget from the knowledge that they bring. Then we will have a reasonable chance of making progress in this country.
If a budget is brought down in the spring which is built around a fundamental economic policy and theory-a macroapproach that general cuts in taxes, and changes in expenditures will solve our problems-it will not work, and we will be faced with an even more devasting situation than we have now and it is not sufficient for ministers of finance to hide behind politics, because the problems are too serious.


Mr. Chretien:: Let us vote on it.


James McPhail Gillies: For far too long ministers of finance in this country have been judged on their political skills and not on their economic capabilities. We know what the difficulties in the nation are. We hope the new Minister of Finance will appreciate what we are losing with one million people out of work, increasing inflation, and the falling dollar. We hope the Minister of Finance will have the courage to come up with a
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new, open system of budgeting which will help make this country prosperous again.


Some hon. Members:: Hear, hear!


John R. Rodriguez: Mr. Speaker, having listened to the hon. member for Don Valley (Mr. Gillies) and other Conservatives, I sometimes wonder if this is not an Alice in Wonderland place.


Steve Eugene Paproski: Go ahead, Alice.


John R. Rodriguez: Here we go again.
Last March the former minister of finance brought down a budget wherein he accepted 8 per cent unemployment and a million persons unemployed. Now the Conservatives criticize the Minister of Finance (Mr. Chretien) for saying we have to live with one million unemployed. Mr. Darcy McKeough, the treasurer of Ontario, that darling of the Chatham Chamber of Commerce, indicated that Mr. Macdonald was a brave man and that he supported his budget. He was prepared to accept 5.3 per cent unemployment in Ontario as full employment. How can they suck and blow at the same time? That is completely beyond me.


Some hon. Members:: Oh, oh!


John R. Rodriguez: Hon. members can make all the smart remarks they want, but I know when 1 touch a sensitive point.
About nine months ago, in February, 1 recall we had a similar tax bill. I spoke for some time opposing that particular tax bill. If some of the Conservatives had pulled their weight, perhaps there would have been an important change in the tax bill, rather than people ending up being screwed.


Some hon. Members:: Oh, oh!


John R. Rodriguez: Mr. Speaker, this is exactly what Liberals do when they bring in a tax bill. Nine months ago I opposed that tax bill on the basis that it did nothing with respect to the question of unemployment. Here we are nine months later dealing with a similar type of tax bill, and I oppose bill C-l 1 as well.
Whenever Conservatives and Liberals talk about the unemployment problem they have consistently refused to take any positive action with respect to it. The Prime Minister (Mr. Trudeau) and the cabinet ministers opposite have indicated that we cannot create employment in this country and that we have to leave that to the private sector. They have indicated that this is the way we have to go-the private sector or the free enterprise system will save us. Either that or we are waiting for the American economy to pick up. We are waiting for the bugles to blow and for the American cavalry to come over the hill and save us.


Mrs. Pigott:: We need to make more friends.


John R. Rodriguez: There is the "Cookie Monster" again. Members opposite have indicated that the private sector will create employment opportunities, but we have to give them tax

November 21, 1977
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breaks and concessions in order for them to accomplish that. They say we have to provide the wherewithal for them to create employment opportunities.
Just a couple of summers ago the government wiped out the Opportunities For Youth program and indicated that it would no longer get involved in the business of creating youth employment but would leave it to the private sector. That summer youth unemployment reached very high levels.
As recently as Tuesday, November 15, in answer to a question in the House, the Prime Minister said that there are measures before parliament in Bill C-ll that will increase productivity, and that somehow or other we have to increase productivity. Also he indicated that tax concessions will have to be given in order to increase productivity, and that jobs will flow as a result of increased productivity. What are these measures which the government indicates will create increased productivity in the country?
The Prime Minister and his cabinet ministers were talking about a $1.2 billion give-away in Bill C-ll, to the corporate sector in order to increase productivity, and the hope is that some jobs will be created as a result of that. The fact of the matter is there is no evidence to indicate that any kind of tax concessions in the past to the private sector created job opportunities to help solve our unemployment crisis.
The government knows very well that over the next ten years the economy must create 2.5 million jobs, and when we put that together with the present 1.5 million unemployed, we must come up with four million jobs over the next ten years. But according to all the estimates of all the experts, the major capital programs that we have going in this country, such as the Athabasca tar sands, the James Bay project, and the pipeline program, can only create about three million jobs. So we will still be short about one million jobs ten years down the road. Has the government developed any kind of economic strategy to deal with the problem? Has it developed any national economic strategy to deal with the economy? Absolutely not.
We on this side of the House, the NDP, have been urging national economic planning for as long as I can remember, since I joined this party and long before I joined it. We say that economic planning must take place in this country. But both Liberal and Conservative members have always looked on economic planning as some sort of communist bugaboo. They think that only communists plan, and the minute you start talking about economic planning, they think you are some sort of communist. They seem to have only one solution to the problem, and that is free enterprise. Indeed they use that term in much the same way that Aladdin used his lamp. They seem to believe that if they repeat the phrase "free enterprise" often enough, somehow or other all the problems in the economy will disappear. But nothing is disappearing; the unemployment problem is not disappearing, and that is a sad fact indeed.
In December of 1975, the Prime Minister in his conversation with Bruce Phillips put his finger on the nub of the

problem when he said that the free enterprise system was failing. In effect, he said that the government should involve itself more in the economy. You should have heard the news media, the Canadian Chamber of Commerce, the Canadian Manufacturers' Association, and the Conservative party react to those words. You would have thought that the heavens were falling when the Prime Minister said that the free enterprise system was failing us. The Prime Minister and his cronies on that side of the House ran for cover when the flack started to come. In effect the Prime Minister got to the nub of the problem, but then he backed away from the solution.


Jean Elizabeth Pigott: It is the government that has failed us.


John R. Rodriguez: Both the government and the official opposition support the free enterprise system, and both are failing the country.


Lincoln MacCauley Alexander: That is why you have only 16 seats.


Some hon. Members:: Oh, oh!


John R. Rodriguez: One always knows when one has touched a sore spot. Here are the defenders of the free enterprise system.


Mr. Martin:: Would the hon. member for Nickel Belt (Mr. Rodriguez) permit a question at this time?


John R. Rodriguez: I always welcome questions from the other side. If the hon. member wants to put a question, let him go ahead.


Alan Gray Martin: In view of the hon. member's comments on the free enterprise system-he seems to be condemning both this side and the official opposition for supporting that system-I should like to ask him if he is firmly committed against all forms of free enterprise.


John R. Rodriguez: It is a delight to answer that question, and as I go through my speech this evening I will unfold before the on. member the socialist alternative.


Some hon. Members:: Oh, oh!


John R. Rodriguez: The alternative to the laissez-faire free enterprise system.


An hon. Member:: Skip that speech.


John R. Rodriguez: They can call out all they want, Mr. Speaker, but the fact remains that they have given every single thing to the private sector. What more can you give? They have given tax concessions, they have given grants, they have given them all sorts of tax breaks, but where are the jobs? Just answer that question.
Now I will present to you the socialist alternative. Here we have in Bill C-ll further give-aways. We have here a $1.2 billion give-away to the corporate sector. On what analysis of the economy is that based? Is there any strategy, is there a sector by sector analysis of the economy with respect to what is wrong with the mining sector or the manufacturing sector?
November 21, 1977

Have ministers delineated those sectors and examined them? Is the mini-budget they presented in Bill C-ll designed with that sort of analysis in mind? No, it is not, not at all. It is just dropped in a vacuum because they have to win back the corporate sector in terms of electoral support. There is an election coming up next spring so their bagman has to go around collecting money from the corporate sector.
The Postmaster General (Mr. Blais) has been tripping through northern Ontario. He is the guy who has to bring back three NDP seats. They had him tripping to INCO and Falcon-bridge, but nobody told him they are supposed to be in economic trouble and cannot contribute much. What this bill is doing is again giving $1.2 billion to the corporate sector, with no kind of strategy. It is dropping that sum of money into a vacuum.
The Prime Minister said we must stimulate productivity. The manufacturing sector in this country is operating at only 80 per cent capacity, so why are we stimulating the economy to produce goods we cannot sell?
Coming close to home, a couple of weeks ago INCO laid off 3,400 people effective in February of 1978. Under Bill C-ll INCO will get $10 million to stimulate productivity. I suggested that they should stockpile nickel, but the Prime Minister said that stockpiling is not the answer because one has to sell the nickel. But I ask you, will giving $10 million to INCO help sell the nickel that is stockpiled now? If it would help sell nickel, I would give them $40 million so we could keep the jobs. But I know it will not sell the nickel, and yet INCO will take the $10 million.
Here we have a government that will hand out $1.2 billion in complete isolation, regardless of whether those sectors need the stimulation or not. Everybody gets it, it is carte blanche, it is a blanket approach which has not worked in the past, will not work now, and in fact will never work.
The problem raised by the INCO lay-offs is very important because it brings into focus the problems with respect to the economy of Canada, it brings them effectively into perspective. Here you have a resource economy. You have here a country that has depended for a long time on taking resources out of the ground and selling them. We have never looked on the resources of Canada as the key to unlocking greater sources of wealth. I see here the hon. member for Don Valley, the man who made a great speech in Toronto and said we should not be ashamed to be known as hewers of wood and drawers of water, and we should sell those resources.


James McPhail Gillies: I never did.


John R. Rodriguez: That was the Gillies give-away stand. We have never looked at those resources as the key to unlocking greater sources of wealth for our country. What we have done with the handouts and tax concessions given to companies like INCO is to speed up exploitation of the resources in the ground. This is called high grading. They have taken the highest ores out very quickly and made money. Then they move beyond the borders of Canada and establish what is
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called in the corporate world, "market dominance" in other ores, especially lateritic ores.
I recently appeared on the "Sunday Morning" CBC radio program with the president of Noranda, Mr. Alfred Powis. He said that if INCO had not gone to Indonesia and Guatemala some other country would have gone, and asked me if it was not better that INCO should go. I was amazed to open a newspaper a few days later and see that same argument made by the Minister of Industry, Trade and Commerce (Mr. Horner). I relished the opportunity to respond to that type of question, Mr. Speaker. As I said to Mr. Powis, that is a legitimate goal for INCO. If I were on the board of directors I would want to establish market dominance in lateritic ores in Indonesia and Guatelama. But the question must be asked if that is a legitimate goal for Canada.
Does our government exist, does our tax system exist, does our economic system exist to give INCO, Falconbridge, Noranda and Alcan market dominance? Are we monkeys on the corporate string? I say we are not, and anyone in this Chamber worth his salt as a Canadian would say that is not acceptable. That has not been said, Mr. Speaker. Hon. members opposite have crawled and purred like tabby cats. When the catnip is whipped in front of them they purr and do not say anything to INCO.
Are the goals for INCO the goals for Canada? Are we saying what is good for INCO and Falconbridge is good for Canada? I say they are not. We have been caught, however, and have to continue giving them tax concessions because they hold a sword of Damocles over our heads and say they will close down completely if the tax concessions do not continue.
Just to point out how phony some members on the Liberal benches are, Mr. Speaker, I should like to refer to a speech made on behalf of the Minister of Indian Affairs and Northern Development (Mr. Faulkner) by the hon. member for Peel-Dufferin-Simcoe (Mr. Milne) in Yellowknife when he said:
It is clear from recent experience that anticipation of major projects is fragile footing for economic development. It is also the case that even when a major project does proceed, local benefits may be few or the local economy ends up dependent on a single economic activity. Look at Sudbury today or the Yukon during the Anvil strike and you'll understand what I mean. For the long term development of a northern economy, we must avoid hanging our hopes solely on the development of non-renewable resources.
The Liberals have been selling out this country for the best part of 50 years and this member admits it. They have sold us down the drain. Their policy depends on the exploitation of our non-renewable resources without any concept of how that policy fits into a national economic plan or strategy. A national economic plan is the first thing we have to look at, and then consider the role of resources within that strategy.
When INCO came to Canada it was the last of the J. P. Morgan enterprises that was not broken up. He moved the operation to Canada in 1928 because at that time the United States government was starting to break up monopolies. He is reported to have said that Canada was a sanctuary from high taxes and the threat of anti-trust. Forbes Magazine could have

November 21, 1977
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added a further description of Canada, namely, no interference from Canada's elected representatives, either provincial or federal, in terms of economic planning and social accountability-
Where is the social accountability in INCO laying off 3,400 workers? There is no social accountability whatsoever in the way corporations operate in this country. What more could we have done? Under the government's policy of non-interference what more could we have done for INCO? Their taxes have already been deferred to the tune of $378 million, and the Economic Development Corporation gave them low interest loans of $70 million in order to move into Guatemala and Indonesia. They have been given depreciation allowances, "Roads to Resources" grants, postponements and alterations of their pollution abatement programs, and even a pollution abatement grant of $15 million to INCO for the "super stack", but there is no recourse for residents whose property has been damaged by pollution from the two operations in Sudbury to obtain compensation.
The company has been notified when government inspectors were coming to see the premises to ensure that they complied with the safety laws. The province has allowed a suspension of overtime certificates, and so the company could have the workers on overtime to accumulate the present seven-months' stockpile of nickel at Port Colborne and Sudbury. Bill C-ll is a $10-million reward to INCO for eliminating 3,400 jobs in the Sudbury Basin, Thompson, and Port Colborne.
We could not have done anything more for them in terms of handouts, and how did they show their gratitude? The Minister of Employment and Immigration (Mr. Cullen) told this House that he was only notified the night before the public announcement, of the layoffs. The minister of labour in Ontario was also informed the night before. So INCO did not even take the federal and provincial governments into their confidence.
In an interview with a Toronto Star reporter the vice-president of INCO, Mr. W. Curlock admitted that there is no doubt that third world countries like Indonesia and Guatemala are much more likely to act against INCO if it took measures which would seriously affect their social and economic development programs.
They would not even try that stunt in those countries. We have always criticized third world countries as being banana republics, but we have become the banana republic of North America. We have allowed them to come here and operate in any way they want. We have consistently stood on the sidelines and said, "free enterprise, free enterprise, free enterprise". Now we find ourselves having given away our resources and mortgaged the future of the country, and we have no jobs to show for it all.
None of the bulk of research and development for INCO is done in Canada. It is done in the United States and Great Britain. None of the research and development in Falcon-

bridge is done in Canada. We have not reaped the benefits we should have with relation to our resources.
And when these companies do not get their way we get threats. For example, I attended a luncheon where Mr. Jack McCreedy, President of INCO, Canada, spoke. He said there were three factors affecting INCO in Canada. That remark was made months before the announced lay-offs. The three factors he put forward were the following. He said that the federal and provincial governments were taxing INCO to the hilt. Second, he said labour costs had a nullifying effect on the company's ability to sell its nickel. Third, he said there was pressure being brought to bear on the government by interest groups in society with respect to environmental clean-up in the mining industry. He said this was forcing the company to put out extensive amounts of capital to improve the environment and clean up pollution at INCO plants. He said these were all negative factors with respect to the carrying on of business in this country. That was a very clearly implied threat.
Then we have the speech of Mr. John Bonus, who was speaking to the Association of Mines' Ministers in Quebec this past summer. He said there was close to $2 billion in mining development and expansion projects involving the creation of 18,000 new jobs. He said they were ready to begin, provided relief was given to company taxation rates. Mr. Bonus is the managing director of the Mining Association of Canada. He was saying there were 18,000 new jobs on the drawing board and $2 billion in mining investment, and all the government had to do was come up with the appropriate tax breaks and concessions and these plans would be implemented. Does this government really know what is taking place in the mining sector of the economy?
We have charged that there is an inability to plan the economy. Because there is a lack of any kind of national economic plan we find that the government is unaware of what the reserves of nickel and copper in this country are.
Why is it that we find that we have to import processed nickel from the Philippines for the mint in Winnipeg to manufacture coinage?
Why is it that nickel carbonate has to be imported from the Philippines, unloaded at Vancouver, and sent to the Sherritt Gordon Mines at Fort Saskatchewan for refining? The Minister of Energy, Mines and Resources (Mr. Gillespie) said that the process at the Sherritt Gordon refinery at Fort Saskatchewan is different in terms of the kind of nickel carbonate produced in the Sudbury operation. Chemical engineers tell us that that is a lot of malarkey. Nickel carbonate is nickel carbonate, and there is no reason in the world why the Sherritt Gordon operation cannot use nickel carbonate from the Sudbury operation. Keep in mind Sherritt Gordon closed its nickel mine at Lynn Lake last year and laid off some 300 workers, yet we find that the same company is being allowed to bring in nickel carbonate to this country to process at their smelter at Fort Saskatchewan.
Why is it that Falconbridge is permitted to ship nickel matte from its operation in the Sudbury Basin to be refined in its refinery in Norway, while at the same time the INCO refinery
November 21, 1977

at Port Colborne is laying off workers because it cannot keep up its refining capacity?
There is only one logical conclusion, and that is that there is no strategy. The left hand does not know what the right hand is doing with respect to the various sectors of our economy. The Minister of Industry, Trade and Commerce was very surprised to find out that the Japanese have had a temporary import tariff on processed nickel into Japan. At least the Japanese are well aware of the need to protect their refining sector with respect to nickel and copper. We in Canada seem to be the only ones in the world who believe in free trade. The Japanese have had a temporary tariff of 13 per cent on imported processed nickel for years now, yet we have no such tariff.
Then we have the spectre of Alcan closing down in St. Lawrence and laying off the whole work force of that town. The whole town is dependent on the Alcan mining company which closed down. Where did it go? It went to Mexico to get the fluorspar it needs for its operations in Canada. Who do you think owns the fluorspar mine in Mexico? Noranda. Mr. Powis admitted that Alcan had a contract with Noranda to buy fluorspar for use in Alcan's Canadian operations.
They must think we are the stupidest people this side of Wonderland. We have allowed them to prostitute us with respect to our resources. We have allowed it. It is not rape, because we have consented to it. We have allowed them to operate in any way they have wished. They shift capital around. And we have no currency control. We have Noranda and Falconbridge laying off workers, and yet those companies just entered into a contract with the Chilean junta to invest $1 billion in Chile to exploit the copper resources there. We say that our currency can go wherever the multi-nationals want it to go.
This government is liable and culpably responsible for the unemployment problem in this country. The government opposite sits there in its arrogance, without responding to the need to say to corporations that the people elected a government, and that the government will set the rules and plan the economy for its people. The government should determine how these corporations are to operate within our system. The government has refused to take that kind of position.


Jean Elizabeth Pigott: There is a good company up in Timmins.


John R. Rodriguez: The hon. member for Ottawa-Carleton (Mrs. Pigott) talks about Timmins. We have the Lang-Muir mine which just laid off 350 workers.


Jean Elizabeth Pigott: Not that one.


John R. Rodriguez: It closed down completely.


Jean Elizabeth Pigott: What about the one Canada owns? We haven't had a lay-off there.


John R. Rodriguez: We have a Texas-Gulf operation in which the CDC owns shares.
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Jean Elizabeth Pigott: We have not had a layoff there.


John R. Rodriguez: Texas Gulf is coming. They are moving northward. It is obvious that the natural resources of this country are mortgaged against short-term political gains. One of the sad facts is that once this system gets going, we are caught up in the treadmill of giving and giving.
In 1976 we had a deficit as a result of Canadian funds flowing out of this country in direct investment abroad, mostly in mining. In effect, the government wants to balance that. The only way to do it is to encourage foreign investment in Canada. In effect what we do is get caught in the vicious circle of encouraging more foreign ownership in the economy and all that it entails. The minister can nod her head from behind the curtain like a Punch and Sauve show.
I was on a T.V. program recently-


Simma Holt: Mr. Speaker, I rise on a point of order. Considering the conditions in this House, the bright lights and the noise, I would like to move a motion that we have a quorum of one in this House because this is very hard on us.


Lincoln MacCauley Alexander: What kind of nonsense is this?


Simma Holt: I thought maybe the present speaker could stay to make his speech. He has been going on very long. I think he has gone beyond his time.


Mr. Deputy Speaker:: I am sure the hon. member would miss the hon. lady. Maybe we should carry on the way we are doing.


John R. Rodriguez: That is typical of the arrogance of Liberal members. When the heat gets too much, they want to leave the kitchen. That is the Liberal coward's way out. 1 was on a program the other day with the hon. member for Matane (Mr. De Bane).


Simma Holt: On a question of privilege, Mr. Speaker, the hon. member said something about our place being in the kitchen. One of the members suggested that our place is in the kitchen. I think we are doing very well in the House of Commons and can do without that kind of chauvinist remark.


John R. Rodriguez: I will repeat my remark. I said that is typical of the arrogance of Liberal members, and whenever it gets too hot they want to get out of the kitchen. If the hon. lady does not see herself in the kitchen, that is fine. She can stay here and participate in the debate.
1 was on a program not very long ago with the hon. member for Matane, a Liberal member. In response to a question by the interviewer as to what can be done about the economy, he said in a very doleful manner that there is nothing that can be done because the government has lost the will to do anything about the economic problems of this country. At least there is one honest Liberal.
As if to confirm that, on Wednesday, November 16, the Minister of Finance responded to a question from my leader,

November 21, 1977
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the hon. member for Oshawa-Whitby (Mr. Broadbent). My leader asked the following question:
I want to get it very clearly from the finance minister. Is he saying that this corporation can respond in this way, a corporation which is making hundreds of millions of dollars profit annually and which has benefited from the labour of the people in that town for many, many decades, and that there is nothing the Government of Canada can do in face of that action by the Corporation?
The minister replied:
The answer is no, Mr. Speaker.
That is typical. They cannot do anything. They just sit on their hands and warm their seats. If they had any kind of intestinal fortitude, they would call in the president of INCO and the president of Falconbridge. They would tell them not to lay anybody off. They would sit down with them to find ways and means of reducing their production levels of nickel and copper. They should be told that laying off 3,400 workers is not in the best interest of Canada and Canadians, that they should keep on those workers. Then should follow an economic strategy for that sector of the economy.
We in this country have always socialized the losses in the mining industry, never the profits. It is time the government started thinking in a serious way about national economic planning with an investigation, sector by sector. It could then design a budget that fits the needs of that particular sector and present that to parliament, rather than this sort of ad hocery in a vacuum.


Mr. John Wise (Elgin):: Mr. Speaker, in view of the closure motion put forth today by the government, I do not intend to take my full time allotment to participate in this budget debate on Bill C-l 1. I am certain there are many members, if not on the other side, certainly on this side, who want to put forth suggestions and recommendations. That is their obligation and duty as they represent their constituencies.
Sustained opposition to tax measures should not be muffled by a closure motion. Indeed, when warranted, such opposition is necessary and should be encouraged. Sustained opposition has paid dividends in the past, and it would be no problem to recite many examples of them.
For example, the provision for the deferral of capital gains tax on family farms would not have been brought forward by the government in 1972 or 1973 if it had not been for many members of this side making continuous representations. On that point we are convinced that the deferral which now exists on family farms should be extended to partnerships and to farms that are incorporated.
Second, the deferral of a capital gains tax provision, if reinvested in a similar business, would not be in this Bill C-l 1 if it had not been for members on this side of the House making representations. Another example is the deferral of certain moneys received from compensation payments if reinvested within a two year period. I am convinced we would not have that measure if it had not been for a number of members on this side making representations to ministers of finance. I am certain that provision could be and should be extended to apply to all forced sales.

We on this side certainly talked a great deal also about the need to provide incentives to business.
Another example is the removal of legislation to tax earned income payments on death benefits from insurance policies. I recognize that the government has backed off somewhat on that provision. I am certain that over the past number of months members from all sides have received representations from their constituencies. Some may say that many of the representations were from insurance companies and insurance salesmen. I checked my file of correspondence. Although some representations were received from insurance companies and salesmen, many have come to me from a number of policy holders.
This provision has been of great benefit to a large number of people, particularly in the small business community where their only source of backing in a good number of cases is the fact that they hold a fairly good insurance policy and they can rely on that. As far as we are concerned, the government should back off completely from that measure.
Another evidence of the way in which sustained opposition has provided great benefit to the Canadian people is the fact that the gun legislation ended up by being much less offensive than the government had intended.
With regard to the recommendations of the standing committee in connection with the election expenses bill I am sure that if anyone examines the record he must accept the fact that it was members on this side, particularly our leader-


An hon. Member:: Which one?


John Wise: An hon. member asks "Which one?" There is no question which one. There has only been one, and with any luck the hon. member who made that remark will be on this side of the Chamber after the next election and the present Leader of the Opposition (Mr. Clark) will be Prime Minister of Canada. A great deal of credit is due the Leader of the Opposition for getting the government to realize the shortcomings of that piece of legislation.
These are but a few of the gains made by the country as a result of sustained interest in debate and because of a vigilant opposition. Many of these gains are still inadequate. Nevertheless, all have been made possible by continuous representations on the part of members on this side.
I shall not quarrel with the incentives offered by the minister to the business community. It is hoped that sufficient stability can be achieved in our economy and that business will be in a position to take advantage of these measures. So far it has not chosen to do so even though most of the incentives available appeared in the budget of March 31. The future does not look particularly promising with controls still in effect, record government spending, a record government deficit, the 90-cent dollar, and continuing confrontation between government and the business and labour sectors.

On the other hand, I must seize this rare occasion to applaud the Minister of Finance upon the introduction of the provision allowing for deferral of capital gains taxes in cases where farmland is sold and the money is subsequently used to purchase similar land. 1 recognize that this principle applies also to transactions engaged in for the improvement of a business. We in the opposition have been promoting this change for many years. It will enable some farmers to stay in business, and assist others to make improvements which are vitally necessary to the continuance of their operations.
In the past, as hon. members know, farmers have been unable to make what would amount, virtually, to a simple exchange of land to their mutual benefit because of the effects of the capital gains tax upon the transaction. This new provision will assist producers who wish to expand their operations but who were previously reluctant to do so. In addition, perhaps, a few smaller operators will be encouraged to hang on and not to get out of business completely. Unfortunately, this may well be another case of too little too late.
Many of the smaller farmers and operators have already been driven out of business by inequitable tax laws, and I believe the trend to larger holdings will be very difficult to reverse. We on this side do not support the idea that bigger is always better. It will certainly take more than this partial concession by a government which seems bent on destroying family farm operations to bring an end to recent developments. In fact, even in this matter of reinvestment, the new tax provision does not go far enough.
A once-in-a-lifetime exemption from capital gains tax on the sale of farm property could go much further in encouraging producers to expand and improve. It is certainly not too much to ask, and it is far from a radical request. I might remind the minister that there are some in the farm community whose demands stretch further than this. What they are suggesting is the complete elimination of all capital gains tax on the sale of food lands. I should like the Minister of Finance to undertake a study of the financial ramifications of such a move. I am certain the results would indicate massive savings to the industry and a very minor loss to the treasury in terms of total revenue.
Capital gains taxation has resulted in sharp increases in land prices. In most cases, land prices do not really reflect the real value or revenue producing potential of the property concerned. On this subject of capital gains 1 want to point out that the application of this tax to farm land has resulted in an inflationary increase in the price of that land. Many landowners find, at some point, that they have to sell for one reason or another. Before doing so they usually check with the local office of the Department of National Revenue to determine just how much they would have to pay in the form of capital gains tax consequent upon the sale. Suppose the property were selling for $100,000 and they found they would have to pay $10,000 or $12,000 in taxes on the sale of the land. Automatically they add that amount to the price they are asking, and the net result is an inflationary increase in the price of the land.
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All of us have been very much aware of the effect of inflation upon the economy. But the government has certainly failed to recognize the effect inflation is having on the farm community. People in the primary sector of the agricultural industry are very heavy spenders. This is not because of any human failing but because of the demands of their operations. They have no choice. But no adjustments in the area of capital gains tax and the like are made to compensate the industry for the increasing inflationary trend. Small businessmen are adversely affected in the same way.
If capital gains taxes are to remain, I would suggest an upward adjustment of the base value of assets in accordance with an inflation factor to end the taxation of illusory capital gains. It is obvious that in an inflationary economy some or all of the capital gains are illusory in real terms because of the declining real value of money. In Canada unfortunately, I might add, it seems to be declining at a rate faster than most of us can keep up with. What I am suggesting, Mr. Speaker, is an end to this kind of taxation. This position, the minister might note, is winning increasing support among the business community and has already been endorsed by the Canadian Federation of Agriculture, the joint taxation committee of the Canadian Bar Association and the Canadian Institute of Chartered Accountants.
Another related issue to which I and other members have alluded previously is the plight of the farm spouse at tax time. It is almost impossible to believe that such a grossly unfair situation can be allowed to exist in Canada in 1977. Surely our society has progressed further than this. Where else can a person work seven days a week, often 12, 14 or 16 hours a day, yet receive no remuneration whatsoever? For example, the farm wife often makes a very important and crucial contribution to the success of the farming operation. More often than not, her knowledge, influence, and many and varied day-to-day functions are invaluable, yet under our present law a farmer is able to hire and to deduct as an allowable expense almost everybody except his wife. A farm operator can hire his neighbour, his neighbour's son or daughter, even his neighbour's wife, and treat such expenditure as an allowable expense.
The only way that a spouse or other family members who work on the family farm can be entitled to payment is if the farm incorporates. This is often a very long, expensive, and complex procedure, but if this is done they pay lower taxes on the first $100,000 and pay their legitimate labour fees on the farm. But, Mr. Speaker, there is a catch; if they should choose to pass the farm on to the next generation, then they lose the tax deferral provision under existing tax laws.
This represents further evidence of the government's seeming prejudice against family farm operations. We have heard stories about the rage of the farm wife at income tax time, and I am sure we all share that rage. I call upon the government to terminate immediately the perpetuation of such gross indecen-

November 21, 1977
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cies and to put forward some meaningful changes to the tax laws.
I also call upon the Minister of Agriculture (Mr. Whelan) and the Minister of Finance to set up meetings immediately in order to address themselves to these difficulties. If the Minister of Finance and Minister of Agriculture have some problem getting together, I suggest the Minister of Finance should meet with the leaders of the farm organizations of this country, because I am certain both would have a great deal to talk about.
The Canadian Federation of Agriculture has listed many suggestions covering both substantive legislative changes and the correction of the many inequities now present in our Income Tax Act. I heartily concur with the federation's recommendations, some of which 1 should like to review at this time for the benefit of the Minister of Finance and his cabinet colleagues. For instance, let me consider the provisions to enable a farmer to assign land to an appropriate form of retirement savings plan so he may retain his funds for investment for use on the farm. We have talked about this many times. I know that my colleague, the hon. member for Swift Current-Maple Creek (Mr. Hamilton), has brought this idea forward many times in debates in the past, and I am certain such provision could also be applied to farm income. The result would be an independent, self-financing stabilization plan.
The agricultural industry needs an increase in the present $1,000 per year capital gains exemption on farms to $2,000 per year in order to recognize at least a percentage of inflation since 1971. Provisions are also needed for a statistically determined upward adjustment of valuation day values for farm land, particularly when valuation day coincided with a demonstrable period of abnormally depressed prices. I am certain that many examples could be cited to justify this request. Once again, my colleague from Norfolk-Haldimand made mention of this again tonight.
The government should extend to all grain and livestock producers arrangements for deferral of receipts as now applicable to western grain farmers. It should provide that where the taxpayer lives off the land but continues to operate his farm, and this situation exists on many occasions, his accumulation of $1,000 principal residency option should continue. We should have a provision that if a farmer sells his lands but retains his residence, he should, at his option, be able to take the accumulated $1,000 annual exemption at that time.
We also require a provision for a statutory right for a taxpayer to file an amended return up to two years after the original filing to protect against losses of rights in cases of overpayment of tax. I would ask that the Minister of National Revenue (Mr. Guay), who is here, along with his colleague, the Minister of Finance, take seriously some of these recommendations. Incidentally, they are not my personal recommendations, they are the recommendations of the Canadian Federation of Agriculture, which we certainly support. They include a prescribed annual forgiveness of capital gains for land

retained for family farming. I have made mention of that earlier this evening, but I am not going to list all of the recommendations of the federation, although I am sure we could easily support all of them. I just hope that the Minister of National Revenue could take time out of his busy schedule to check some of the recommendations that have been made to the government time and time again by the Canadian Federation of Agriculture.
These are but a few of the recommendations, and these recommendations are worthy of serious consideration and, indeed, support. I think it is time that the government began to become aware of the concerns of the average Canadian, particularly of those in the agricultural industry who have been continuously shortchanged for as long as I can remember.
I conclude by saying that when this bill is before the House on clause by clause study, because of the fact that the government has brought forward a closure motion, that will be the only opportunity for many members to make recommendations on some of its provisions.


Benno Friesen: Mr. Speaker, I appreciate the opportunity to speak on this bill. 1 should follow protocol and complement the Minister of Finance (Mr. Chretien) on his appointment, although I must admit I am torn whether or not I should do so, because I think he was a lot more comfortable in his previous portfolio. The way the Prime Minister (Mr. Trudeau) has been grinding people through this portfolio, I see he is going to be in some difficulty, if not within his portfolio, probably in his health in a little while. I say in all honesty I have always liked this gentleman, and I do not like to see him tortured in this particular portfolio the way I know he is and must be. As a matter of fact when I saw him tonight I thought he already looked excessively tired. I can understand that; it is probably the most difficult job in the government. It is certainly a more difficult job than the Prime Minister's because I think he takes his job more seriously than the Prime Minister does.
I was in the House the other day when one of the members was addressing himself to the problem that last spring we passed a measure in this House whereby people who hold bonds now have to give their social insurance number in order to cash those bonds. If they do not have insurance numbers, or they choose not to give them, which is highly unlikely, the bank is required by the government to deduct 25 per cent from their coupons. As far as I am concerned, that is a bad measure. Aside from that, I noted the attention the Minister of Finance gave to the suggestion that the government should take away that provision in order for people to be able to go to the bank and clip the coupons, without suffering the penalty of a 25 per cent deduction. Perhaps the Minister of Finance may be imprisoned by the system in which he finds himself. By personality and conviction, he is a sensitive person. He would like to do what he can in these kinds of exigencies in which he finds himself. I am sure he will look for ways to delete the provision which penalizes these people.
November 21, 1977

The minister should be complimented for removing the threat of taxation on insurance policies. The government has been flailed continuously for introducing that measure in the House. The government was rightly flailed for that. The government received many representations from our side of the House indicating that this was a bad thing. Perhaps also it received letters from constituents saying that the government should not reach its icy fingers into the grave in an attempt to get money. That underscores the essential problem faced by the government. It sees taxation powers as an opportunity to tax as much as possible, rather than as little as possible. In that the government spends as much as possible, rather than as little as possible, it can easily justify a philosophy of taxing as much as possible. When the government realizes it has missed an opportunity to tax, it looks upon that as a loophole.
Until now insurance policies and their interest have not been taxed as accrued savings. Now the government considers that to be a loophole. Surely everyone is justified in plugging a loophole, which is acceptable if in fact it is such. Over and over it has been demonstrated by the government that part of its philosophy is to tax as much as possible.


Roger Carl Young: Mr. Speaker, I rise on a point of order. I wonder if the hon. member would permit a question?


Benno Friesen: I would permit an intelligent question, but 1 am not sure I will receive one from this hon. member.


Roger Carl Young: Mr. Speaker, 1 can provide the hon. member with an intelligent question. I was interested in his comments regarding the necessity of having a social insurance number when cashing in coupons or Canada Savings Bonds, and the fact that a person would suffer a 25 per cent deduction if he has no social insurance number. I should like to indicate that not all Canada Savings Bonds and coupons are held by the proper holders. As I am sure the hon. member is aware, some get lost and some are stolen. The fact that a person would be required to have a social insurance number in order to cash his bond or coupon could make it possible to trace the cashing of a lost coupon or bond. I am putting a question to the hon. member. Does he not agree that there are benefits? I am putting the question to him.


An hon. Member:: Then be brief.


Roger Carl Young: I will be brief, and I will tell the hon. member for Hamilton West (Mr. Alexander) that I can give him a specific case in point which would have been quite easy to prove.


Mr. Deputy Speaker:: Order, please. The hon. member should stick to the question.


Benno Friesen: If that is a question, then I would hate to see the hon. member make a speech.


Roger Carl Young: Answer the question.
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Benno Friesen: It is plain to see, if that is a question, why he is still a bachelor.


Some hon. Members:: Oh, oh!


An hon. Member:: That was a low blow.


Benno Friesen: Yes, that was a cheap shot, but I could not resist it.


Lincoln MacCauley Alexander: We apologize on this side.


Roger Carl Young: Answer the question.


Benno Friesen: The question of the hon. member-


An hon. Member:: You have forgotten the question.


Benno Friesen: The time has come for us to be serious.


Some hon. Members:: Hear, hear!


Benno Friesen: The trouble is that the government takes all of its taxation powers very lightly and it taxes so glibly that it does not mind walking all over the people in the process. The hon. member raises a very good point, but anybody who has had experience with bonds knows that they must be countersigned. At the same time there is no certainty that you will eliminate all the injustices in society. The President of the Treasury Board (Mr. Andras) looks at me. I think he is saying that I am right and that what I am saying is true, because he has had experience in the Department of Employment and Immigration and knows that we cannot build a wall high enough to ward off all injustices.
Let me come back to what the hon. member for Niagara Falls (Mr. Young) raised, that is, the matter of the coupons. He knows very well that there are elderly people who have never had a social insurance number. Will they now have 25 per cent taken off those bonds? It seems to me that it is trying to kill a mosquito with a steamroller, which is hardly justified.
I want to raise another point, and I hope the hon. member for Niagara Falls will agree with me on this one. I received a representation from a group of firemen in my constituency some time ago which raises another important point with regard to taxation policy, that is, that the government very easily, sometimes through oversight, makes money on inflation through its policy on deductions. In this case I was asked if I would make representations to the Minister of Finance to have section 5(1 )(viii) on the subject of income revised. The section reads as follows:
Such part of the aggregate of allowances received by a voluntary fireman from government, municipality ... as does not exceed $300.
That was put into the Income Tax Act ten years ago. Since that time allowances to volunteer fireman have at least doubled, if not tripled and quadrupled in some cases depending on the municipality, and yet the deduction is still $300. Inflation has put a burden on these people because the deduction has stayed the same but the tax has increased. Here is where I take some heart from the nature of the Minister of Finance. I believe he listens and he wants justice for the people of

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Canada. 1 hope he will take this as a representation that the deductibility be raised from the present $300 to at least $1,000. It would make a lot of volunteer firemen very happy. They take their lives in their hands at a fire, and are then penalized by the tax department for volunteering. I hope the minister will increase the deduction so that there will be greater benefit for them and they will not be punished for volunteering in the first place.
The third point I should like to make is that this country has fallen behind the United States in the matter of insurance on moneys on bank deposit. At the moment the ceiling in this country is $28,000 and that sounds a lot, of course, to people who do not have a great deal of money. We need to encourage the lending companies in this country, however, to enlarge their investment pool. In the United States the insurance on savings has been raised to $40,000 to keep up with inflation. We have not done this, and 1 suspect there is a great shift of savings from bank accounts into such things as coin collections, antiques, stamp collections or property. This takes money out of the liquid pool which could be used for reinvestment and for keeping the economy moving. People are doing this to avoid the hazard of investing in a lending institution that does not have adequate insurance. Only an insignificant increase in premium would be required to raise the level of insurance to $40,000. Certainly many people would feel more secure about putting money into savings accounts if they knew the insurance was keeping up with inflation.
The fourth point I come to was raised by the hon. member for Elgin (Mr. Wise) and also by the hon. member for Norfolk-Haldimand (Mr. Knowles), and that is the tax on farmland that is passed on to another member of a family. British Columbia has had experience with land freezes, and in the last four or five years the cry has been "save the farmland." It was a well-intentioned but nervous cry. However, it was also accurate as more and more farmland is being put into non-productive uses. In too many cases the land that could be most easily developed was good farmland and it was subdivided for residential or industrial properties, a further loss in the food production that we are going to need in future. We will be sorry in later years that we have done this.
The cry has been to save the farmland, but it seems to me that approaches the problem from the wrong direction. If this
government focused on saving the farmer, we would not have to worry about saving the farmland. If the farmer could make an honest living we would not have to worry that he might look forward to the day when he can subdivide his farm and retire on the income that produces. We would not have to worry about that. If farmers could get a fair living out of it-and we know they are honest-they would not worry about looking to the day when they could subdivide their property and live off the money they would get from that subdivision, and we would not lose it to the land developer. We have to address ourselves to that problem. I agree with the hon. member for Elgin and the hon. member for Norfolk-Haldimand that if the government would take away the capital gains tax on land which is passed on through the family and protect the family farm in that way, we would go a long way toward saving the farmer, and we would not have to worry so much about saving farmland.
There are many other reasons why the farmer is finding it difficult. I think of tariffs. 1 think, for example, of mushroom farmers in my constituency who are facing an inundation of very cheap, high quality mushrooms, which are being imported from Taiwan and Korea. There is no way, considering the labour force in those countries, that our farmers can compete, except on the fresh mushroom market. The same is true with regard to wax beans, green beans, and all those vegetables which are being canned at almost dumping prices in those Far Eastern countries. Those vegetables are being brought into our country at not much more than half the price for which those same domestically grown vegetables are being marketed, and we are expected to save the farmer. We must get serious about looking after the farmer, and then we will not have to worry about looking after farmland.
I see that it is one minute before 10.30. I wonder if I may call it 10.30 and carry on tomorrow.


Mr. Deputy Speaker:: Is it agreed that we call it 10.30?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: It being 10.30 p.m. this House stands adjourned until tomorrow at 2 p.m.
At 10.30 p.m. the House adjourned, without question put, pursuant to Special Order.