1977-11-18

ROUTINE PROCEEDINGS


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. Given that it is in the public interest to protect the privacy of individual Canadians and that it is in particular in the public interest to protect the confidentiality of medical files of Canadians, 1 move, seconded by the hon. member for Provencher (Mr. Epp):
That the federal government initiate the appropriate action in consultation with the provinces to remove the obligation from physicians to write specific diagnoses on medical bills submitted to the insurance plan which pays the insurance bill. By this method information on individual Canadians would remain strictly within the confines of the physicians' offices and thereby lead to greater protection of privacy.


Mr. Speaker:: Order, please. Presentation of such a motion at this time pursuant to Standing Order 43 can be done only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. The Solicitor General said in the House on June 21 that the material burned by the RCMP in Montreal on June 3 "had no value." Two nights ago Chief Superintendent Guy Marcoux head of the criminal investigation branch of the RCMP in Montreal stated about this material, "1 can't be sure they didn't contain any evidence of illegal activities by members of the force", with reference to the RCMP. In view of this contradiction, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instructs the Solicitor General to table a list of all documents that were burned by the RCMP in Montreal on June 3.


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


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, in light of published reports that the vice president of Cuba has indicated an additional 10,000 experts will be sent to Angola, and considering eyewitness reports of Canadians repatriated from that unhappy country that the repression there under the current regime is worse than anything experienced under Portuguese rule, I move, seconded by the hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty):
That this House call upon the Secretary of State for External Affairs to protest directly to the government of Cuba and to the Security Council of the United Nations, any further extension of the Cuban occupation of Angola.


Mr. Speaker:: Order, please. According to Standing Order 43 the presentation of such a motion for debate at this time would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


PENSION ACT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, on the basis of simple justice I hope the House will agree to a motion I should like to present under the terms of Standing Order 43. I move, seconded by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That this House urges the Minister of Veterans Affairs to introduce the necessary amendments to the Pension Act so that the compensation for prisoners of war provided therein will apply to the fewer than 200 Canadian veterans still living who were prisoners of war during World War I, as it does to those who were prisoners of war during World War II.

November 18, 1977
Oral Questions


Mr. Speaker:: Presentation of such a motion pursuant to	government kept strict records on all individuals who call in to
Standing Order 43 can be made at this time only with the	his department over the telephone to request personal informaunanimous consent of the House. Is there unanimous consent? tion on the confidential tax returns of individuals, and also the


Some hon. Members:: 
Some hon. Members:: No.	request?



ORAL QUESTION PERIOD


Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, I have a question for the Minister of National Revenue. Canadians are shocked today to discover that their personal and confidential tax information has been given out over the telephone to an individual who is unauthorized, who simply calls the regional tax office, identifies himself as a chartered accountant and gives the tax officials an individual's name and birthday. Has the minister given strict instructions to his staff that such information from the personal and confidential tax files of individuals is not to be given out over the telephone to unauthorized people without the strict authorization of the individual concerned?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: As I mentioned yesterday, Mr. Speaker, we have given additional instructions to all the 28 regional offices and the directors thereof to provide more security in our department. This has been done. This is part of what the hon. member is speaking of and 1 can assure him that this is the case.


Henry Perrin Beatty: A supplementary question, Mr. Speaker. Mr. Speaker, according to chartered accountancy firms this is a practice which has been going on for sometime. Can the minister tell the House why he was not aware of this practice and why he was apparently unaware of the fact that it posed such a serious threat to personal privacy?


Joseph-Phillippe Guay: Mr. Speaker, I do not accept the statement made by the hon. member in the first place as to whether or not I was aware of it and, secondly, the fact that accounting firms can get that information; I do not agree with that statement at all.


POSSIBILITY NAMES OF PERSONS REQUESTING INFORMATION FROM TAX RETURNS LISTED
Henry Perrin Beatty: A final supplementary question, Mr. Speaker. 1 am astonished and startled that the minister was in fact aware of the facility with which his department's security could be breached and that he did nothing about it. May I ask the minister, has the


Joseph-Phillippe Guay: Yes, we are aware that people could phone in regard to their own personal income tax paper. We would not give the information out immediately. It is a call-back system that we have been using or mailing the information back to the people in question. However, it is not done in the manner in which the hon. member is suggesting. If the hon. member has information contrary to what I am now giving, I would like him to make a valuable contribution to the Canadian people by giving me that information, along with any other information that members on that side may have. It could be very helpful to the investigation taking place at this time.


NUMBER OF OFFICES INVOLVED IN BREACHING CONFIDENTIALITY OF TAX RETURNS
Mr. James Gillies (Don Valley):: Mr. Speaker, I have a question for the Minister of National Revenue. Can the minister tell us today what offices are involved in this nefarious practice of allowing unauthorized people to get access to other persons' income tax returns?


Joseph-Phillippe Guay: Mr. Speaker, I am not in a position to give out any information with regard to which offices are involved. I am not making reference to any offices because I do not want to interfere with the investigation that is taking place at the moment. I can honestly say that the investigation is making considerable progress. I am very pleased with the investigation that is taking place.


James McPhail Gillies: Mr. Speaker, I want to find out from the minister, and surely he has discovered this by this time, whether this program has been going on in all offices across the country or confined to one, two or three offices.


Joseph-Phillippe Guay: I would say no, Mr. Speaker.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


James McPhail Gillies: The Minister of National Revenue is clearly saying to the House of Commons and to the people of Canada that this practice has been confined to only a very few offices of the Department of National Revenue in Canada. That is the statement he made today, that it only happened in a very few cases. Is that what he is saying?


Joseph-Phillippe Guay: Mr. Speaker, I never said anything of the kind. I would never agree to the last question given to me a moment ago or to the previous question to the
November 18, 1977

effect that it has occurred in a very few instances. 1 never said that. Neither will I admit it because it is not the case.


James McPhail Gillies: Mr. Speaker, this is a very, very important matter. The people of Canada are outraged because they thought they had been making confidential returns for their income taxes. The minister has confused the issue. 1 have a very simple question. Can the minister tell us today whether the breach of confidentiality of income tax returns of individual Canadians has occurred in only special cases in a few offices? Is that what he is saying?


Joseph-Phillippe Guay: Mr. Speaker, I am only aware of the allegation made yesterday by the opposition. That is the only thing that has taken place to my knowledge. I would like to say to you, Sir, that the 1,600 employees of my staff are very loyal, and sincere. They consider their oath of office to be sacred. They are not giving out the information about which the hon. member is speaking.



ROYAL CANADIAN MOUNTED POLICE


John Edward Broadbent: Mr. Speaker, 1 hope the very, very clever obfuscations we just heard from the Minister of National Revenue will not be repeated by the Solicitor General. The Solicitor General promised to check out the statement made in Montreal two nights ago by Chief Superintendent Guy Marcoux with reference to the destruction of certain documents in Montreal on June 3. Has he asked his officials in Montreal why documents which might contain information about illegal activities of the RCMP were ordered to be burned on June 3, right at the time RCMP illegalities were being questioned in this House and at the time the government of the province of Quebec was openly considering the possibility of setting up an inquiry into one of these specific acts of illegality?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, I had the opportunity of meeting with the officer in question this morning along with the Commanding Officer of C Division of Montreal. I went over with them in detail the answer I had previously given to the House on June 21 and received confirmation that it was in essence correct. The reason the documents were prepared at that stage is, as I indicated in the House yesterday, simply because there was an internal audit report which was done within the force between May 16 and 19 in Montreal, a report which was subsequently dated, perhaps in error, May 23 of that year.


John Edward Broadbent: In error?


Francis Fox: The date may have been in error. As the hon. member indicated yesterday, May 23 was a holiday. During
Oral Questions
the course of this morning we tried to pinpoint the reason May 23 was actually on the document. It is quite clear that the audit took place between May 16 and 19, and the report would apparently have been typed up on the first working day after that period of time, which probably would have been May 24. Therefore, it is quite possible that the report ought to be dated May 24 instead of May 23.
The reason that the documents were in fact destroyed was that there had been this audit by the audit unit of the RCMP recommending that certain documents in the possession of the special "I" section in Montreal should be destroyed as they were no longer relevant. As far as the rest of the information is concerned, that is contained in my answer to the House on June 21.


John Edward Broadbent: A supplementary question, Mr. Speaker. I thank the minister for providing a lot of information that I did not ask for. I would ask him most specifically, when he met this morning with Chief Superintendent Marcoux and whoever else he met with, did he ask them why documents, which he described two nights ago as possibly pertaining to certain illegal activities of the RCMP, were destroyed at the time when members of the House of Commons were raising questions about certain illegalities involving the RCMP, and also precisely at the time that the government of the province of Quebec was talking about opening an inquiry into a specific act of illegal wrongdoing.


Francis Fox: The answer, Mr. Speaker, is very simple. There has been burning of documents or normal destruction of documents in the force in every division across the country. The burning in question, or the destruction, to use that word, took place on June 3 of this year. While the officer did not indicate that he would want to check with the division officer before answering the question which was put to him by the press, he has now done so and he is satisfied that there was no material, to his knowledge, which pertained to any illegal activities by the force.
This matter having been raised, Mr. Speaker, it will, of course, be open to the McDonald commission of inquiry to determine whether they wish to inquire further into this matter; but at this stage I have reviewed the matter with the commanding officer of "C" Division Montreal, and also with the officer who made the statement. I have seen the internal audit report and there is no indication that any evidence relevant to any illegal activities by the force was burned at that stage. If the hon. member has any information to that effect, we would, of course, be pleased to receive it.



POSSIBILITY MICROFILM COPIES OF FILES DESTROYED ARE AVAILABLE

John Edward Broadbent: The minister said in the House yesterday with reference to an earlier statement that he made that the commissioner of the force had indicated that very strict directives prohibiting the burning of any further files were issued during the course of the inquiries, which indicated that certainly after they had had the initial

November 18, 1977
Oral Questions
burning they decided from then on that there would be no more burnings. It seems to me to raise certain legitimate questions about the credibility of all the documents which are going to be available for the two inquiries to consider.
As a final supplementary question, I should like to ask the minister whether microfilm copies were kept of the documents which were burned. If so, or if records of any kind were kept, will the minister undertake to provide to members of the House a list of all the documents which were in fact burned on June 3 in Montreal?


Francis Fox: Mr. Speaker, 1 think the commissioner of the force issued his directive that there be no further destruction of documents in order to alleviate any concern that perhaps there was the possibility of destruction of evidence. I think the directive was in fact issued after the initial destruction of documents, which is an indication of the complete good faith of the force in this regard. So far as the documents in question are concerned, Mr. Speaker, much of the material was transferred to other sections of the force. Much of the material that was destroyed related to operations for which the special "I" section of the force had given technical aid to other sections of the force, and of course those documents would be available. Any documents which are in our possession, Mr. Speaker, will be made available to the McDonald Commission.



PRESENCE IN GALLERY OF PRIME MINISTER OF ITALY, MR ANDREOTTI

Mr. Speaker:: Before proceeding with the oral question period, I know that all hon. members will want to join me in acknowledging the presence in our gallery of a very distinguished visitor, Mr. Guilio Andreotti, the Prime Minister of Italy.



INQUIRY WHETHER POLICY FOR SUBSIDIES FOR STORAGE IN QUEBEC HAS BEEN DECIDED

Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question was for the Minister of Agriculture, but as he is absent from the House, I shall direct it to his parliamentary secretary.
In a news release dated October 17, 1977, the minister announced that an amount of some $28 million would be paid in subsidies to feed mills and other firms in eastern Quebec which are involved in storing grains, to ensure a better supply and prevent the rising of prices like that which occurred when longshoremen went on strike two years ago. Could the Parliamentary Secretary to the Minister of Agriculture advise the
(Mr. Broadbent.]
House whether the appropriate regulations resulting from this policy have been established and, if so, whether he could advise hon. members of their content so that in turn hon. members may advise their constituents?


Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am grateful to the hon. member for directing this question to me. I can advise the House that these regulations are already well known in Quebec. A Sainte-Rosalie co-op which is already taking advantage of this program has obtained subsidies and financing under the program which was announced on October 17 last. I shall be delighted to provide the hon. member with the relevant information concerning the applications from the owners of feed mill co-operatives in areas which are lacking in storage facilities.


Joseph Adrien Henri Lambert: Mr. Speaker, I thank the parliamentary secretary for his very specific answer. Could he now tell the House whether there is a deadline set for the implementation of that program for the $28 million mentioned? If so, could he also advise us whether after the depletion of those funds there will be supplementary estimates according to the request made by co-operatives or by mills in eastern Quebec?


Yves Caron: Mr. Speaker, that program was set up for eastern Canada and also part of British Columbia for a 5-year period. An amount of $28 million is available under the program for a 5-year period.



CANDU REACTOR-POSSIBILITY PMN OF ITALY WILL OBTAIN LICENCE TO CONSTRUCT

Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I should like to direct my question to the right hon. Prime Minister. While we are honoured with the presence of the Prime Minister of Italy in the gallery, I wonder if the Prime Minister could inform the House if his government, through a major Crown corporation, namely, AECL, has finally completed its arrangements with an Italian state firm called PMN to enable that firm to construct or to licence the construction of the CANDU reactor in Italy?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Prime Minister of Italy and myself, as well as our ambassadors and officials, have attached great importance to this matter. Although conclusions have not been arrived at, both sides are optimistic that such a project will be brought forth and will be very much to the advantage of the two countries.
Hon. members of the House are aware, apart from the financing and technical aspects, that there was a question of safeguards which has to be finally settled. This week in Ottawa we will have the presence of the director of Euratom, Mr. Bruner. We hope, by the end of the week, that arrangements will be made to permit us to reach a satisfactory
November 18, 1977

conclusion which, on the one hand, will meet our very real concern in Canada about proliferation; and at the same time, will permit co-operation to be extended to our friends in Europe. 1 am very grateful to the Prime Minister of Italy for the co-operation and leadership he has taken in this matter.


Some hon. Members:: Hear, hear!


Allan Frederick Lawrence: My supplementary to the Prime Minister is this: Are the Prime Minister or the Minister of Energy, Mines and Resources aware, and have the officials in AECL brought to the attention of the government, that PMN in Italy is a wholly-owned subsidiary of Finn-Mechanica with whom the ex-head of AECL now seems to have very strong commercial ties. Has that been a factor in the decision to select PMN as the licensee in this arrangement?


Pierre Elliott Trudeau: Mr. Speaker, perhaps the minister could be more specific, but I would like to remind the House that we are only now calling for tenders. The contract has not yet been awarded and the calling of tenders is under way. Surely if other companies wish to tender they can do so. No doubt, however, the Minister of Energy, Mines and Resources can provide more details.



COMBINES


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I would like to direct my question to the Minister of Consumer and Corporate Affairs. The minister is reported in the press as having said with respect to his tenure as Solicitor General, with regard to withholding information, and I quote: "It seems they did withhold information from me and from other solicitors general. Some of them argue and will argue that they withheld it because it was not explicitly asked for. 1 wouldn't accept that in many cases." Given that the minister was solicitor general longer than most of his predecessors in living memory, and given that he now holds a very sensitive portfolio in the government of Canada and is responsible for reporting to this House on activities, for example, of the Combines Investigation Branch and for the enforcement of the Combines Investigation Act, is it the hon. gentleman's position-and this raises serious questions, 1 might add, about the competence of this minister-that he can be misled by people who advise him on sensitive areas of his responsibility? I think, for example, of the advice he received from the RCMP when he was solicitor general.
If this is the case, what steps is he now taking as Minister of Consumer and Corporate Affairs to see that he is being supplied accurate information by those whose job it is to advise him, for example, with regard to the Combines Investigation
Oral Questions
Act? I think, now, Mr. Speaker, of the TELESAT decision by CRTC where the Combines Investigation Act went one way and the cabinet went the other.


Some hon. Members:: Hear, hear!


Mr. Speaker:: In so far as the question relates to the minister's previous responsibilities, it is clearly contrary to precedent. However, the minister may wish to express confidence in his officials in his present capacity and to that extent, I suppose, the question has an air of legitimacy. Anything with respect to the minister's previous capacity, of course, is clearly contrary to the rules of the House.


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Every step will be taken to ensure that all questions will be fully answered and that all information will be made available to me.



ROYAL CANADIAN MOUNTED POLICE


James Aloysius McGrath: My supplementary question is to the Solicitor General. In view of the very serious but unsubstantiated charges made by his immediate predecessor, the Minister of Consumer and Corporate Affairs, regarding the RCMP, accusing them of withholding information from the minister and his predecessors, what steps is the minister taking to investigate this situation? If the charges by the Minister of Consumer and Corporate Affairs can be substantiated-and I doubt this very much-then it is incumbent upon the minister to take disciplinary action. If those charges cannot be substantiated, it is obvious that the Minister of Consumer and Corporate Affairs has to do the honourable thing, since he smeared the RCMP, and resign.


Francis Fox: Mr. Speaker, we on this side of the House have demonstrated time and time again over the past few months-not only during the past few days as has been the case on the other side of the House-that we have full faith and confidence in the direction of the RCMP.


Some hon. Members:: Hear, hear!



ACCURACY OF INFORMATION RECEIVED FROM FORCE BY MINISTER

James Aloysius McGrath: Mr. Speaker, I would again quote these words from the statement of the Minister of Consumer and Corporate Affairs: "It seems they did withhold information from me and other solicitors general." Has the minister satisfied himself that he is receiving accurate information from the RCMP in his weekly briefings, since obviously his predecessor, the Minister of Consumer and Corporate Affairs, included him in this blanket indictment?
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Oral Questions
[DOT] (U32)


Francis Fox: Mr. Speaker, in all my dealings with the RCMP I have always found them to be forthright and forthcoming in the reports they have made to me in response to questions I have asked them.



THE MINISTRY


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I would like to ask the Minister of Consumer and Corporate Affairs a supplementary question to try to work a way out of this difficult situation in which the Chair and the House find themselves. If I may speak with the permission of the Minister of State for Federal-Provincial Relations, who does not speak for the House of Commons, I would like to ask if the Minister of Consumer and Corporate Affairs would be prepared to make a statement to the House, to which he is accountable, to establish some proof that he is more competent now to obtain information in his present portfolio than he was in the past.


Mr. Speaker:: The efforts to obviate all of the agony that I have had to go through in preparing a judgment for today are admirable and ingenious indeed; nevertheless, they are unsuccessful.



TRANSPORT


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I want to return to an economic matter. All over western Canada many farmers find themselves in the position of being unable to secure any reasonable share of box cars for the shipment of their wheat. In the absence of the Minister of Transport, who is on one of his periodic political trips to the west, I would like to direct my question to the acting Minister of Transport and ask him whether he will immediately communicate with the railway companies, or whoever is in charge of the allocation of transport, to the end that the unfairness in distribution today will end and a reasonable degree of equality will be assured to those areas which up to the present time have been in the position of receiving much fewer cars than other areas of no more importance.
[ Translation]


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, first I would like to set right some of the remarks the right hon. member on the other side made in his preamble. The minister is not away on a political trip "out west" as the right hon. member said, but having discussions in Winnipeg regarding grain handling, a matter the

minister is quite concerned about. I would also point out that what the right hon. member has been telling us is more a representation than a question.


John George Diefenbaker: I would like to point out that no parliamentary secretary has any right to answer questions on behalf of the government. In so far as the Minister of Transport is concerned, if he is about government business this weekend, he has not been in the last several weeks.



ADMINISTRATION OF JUSTICE


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is addressed to the Prime Minister. In view of the explosive potential to the national unity of Canada of the Cigol case now before the Supreme Court of Canada, has the federal government, as an intervener against the provinces on behalf of this oil company, received any indication when the decision of the Supreme Court will be announced.


Pierre Elliott Trudeau: Mr. Speaker, I will take notice of the question on behalf of the Minister of Justice. I have not personally received that notice.
V * V



PUBLIC WORKS


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is to the Minister of Public Works. Considering the important economic adjustments required in all sectors of the city of Ottawa as a result of the announced programs of decentralization and relocation of employment centres, considering the urgent need for all levels of government in the national capital region to co-operate in co-ordinating plans for economic diversification of our local economy, and considering also the need for stimulating the private sector in order to create employment in the city of Ottawa, can the minister inform this House what is the status of the Rideau Centre development project and, if when he announced the government's commitment to the Rideau Viking group a few short months ago he had in mind a date of termination of this commitment to the Rideau Viking group, what is that date?


Hon. Judd Buchanan (Minister of Public Works):: Mr. Speaker, as the hon. member indicated, we have given an undertaking to the Viking group that we will work along with them in an effort to reach a satisfactory conclusion. Good progress is being made. We expect the matter to be completed by April of next year. The only complicating factor is that it involves permits and actions by other levels of government. If
November 18, 1977

they should delay, the date could be pushed along, but our target date is April of next year.



RESOURCES


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the fact that Falcon bridge Nickel Company of Sudbury has announced the termination of 560 jobs with a possible total reduction of 800 jobs by the end of next year, will the minister tell the House whether his government is willing to aid the hard pressed nickel industry by stockpiling measures until markets pick up, as was done with uranium, or is sympathy all he can offer to these unemployed miners?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I do not think that kind of cheap shot is going to help the situation one little bit. The hon. member must know that the government has been doing everything it can to try to assist in a very painful situation. It has met with members of the industry, leaders of the community and with leaders of the businesses themselves. 1 spent a considerable amount of time yesterday with the chief executive officers of 1NCO who are also very much concerned about the over-all world situation.
Unfortunately, a stockpiling program is not the answer at this time. If it were, the government would be prepared to consider it, but if the hon. member were to look at the world situation, he would realize that the situation over the last three years has been that inventories have been increasing each year. In other words, there has been a stockpiling system for the past three years, and that has not proved to be the answer for the community of Sudbury.



PROPOSED COMMITTEE TO STUDY LAY-OFFS IN MINING SECTOR

Reginald Cyril Symes: Mr. Speaker, the fact remains that despite all the meetings we still do not have any concrete proposals from the minister.
In view of the fact that the Department of Employment and Immigration estimates lay-offs in the mining industry now total 9,000 across Canada and that predictions are that by the end of next summer up to 20,000 workers in the mining sector could be without jobs, will the minister urge the government to set up a special parliamentary committee to examine the mining industry and make recommendations so that we might avoid this impending disaster?


Alastair William Gillespie: Mr. Speaker, I am sure the hon. member is familiar with the fact that the Ontario government has already set up a select committee to examine the situation with respect to Sudbury and the nickel industry. Undoubtedly, that particu-
Oral Questions
lar committee will want to call many witnesses. Undoubtedly too, because the province has the responsibility for both environmental controls and mining taxes, there will be measures which the Ontario government can take which will alleviate a very serious situation.
As to the mining industry more generally, the hon. member may recall that in an answer to this House I think some ten days ago I indicated that I thought it might be useful to convene a federal-provincial conference of mines ministers, and possibly finance ministers as well, to look at the constraints and difficulties facing the mining industry in this country. However, before that would take place I think it would be advisable for the leaders of the various mining companies-both management and labour-to meet with the particular provinces concerned, so that when the provinces would meet with us there would be some kind of consensus in which both labour and management would have had a significant input.


Reginald Cyril Symes: Mr. Speaker, consultations like that would certainly be well and good, but the minister still has not answered my question. The minister is the Minister of Energy, Mines and Resources for Canada, and it seems to me that the Parliament of Canada certainly has the responsibility to examine this problem. Will the minister take the representation that we set up a committee to look into the mining industry of Canada as a whole under advisement?


Alastair William Gillespie: Mr. Speaker, I have noted the representation.



CONSUMER AFFAIRS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Minister of Consumer and Corporate Affairs. I should like the minister to tell the House whether he makes the same accusations against the public servants who are working for him now that he made against the Royal Canadian Mounted Police, namely, that his public servants are withholding information from him?


William Warren Allmand: No, Mr. Speaker.



ROYAL CANADIAN MOUNTED POLICE


Charles Joseph Clark: A supplementary question to the Solicitor General. There has been some confusion as the House will note as to just what kind of
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accusation the now silent Minister of Consumer and Corporate Affairs was making outside the House. The Acting Prime Minister yesterday said he had been told by his colleague that the Minister of Consumer and Corporate Affairs was speaking about one incident. The press reports are very clear that the minister is quoted as speaking in the plural. I should like to direct a question either to the Solicitor General or the Prime Minister, whoever is informed on the matter, as to what exactly the Minister of Consumer and Corporate Affairs said outside the House relative to his responsibilities as Solicitor General. Did he make the charge that information had been withheld from him on one occasion only or did he make the charge that there had been information withheld from him on more than one occasion?


Francis Fox: Mr. Speaker, I think the Leader of the Opposition would do well to read what was said. As I read it myself, I think the Minister of Consumer and Corporate Affairs did not indicate that he had been deceived but that he had asked for some information. Information had been given to him and he thought perhaps more information could have been given to him at that time.


Charles Joseph Clark: A supplementary question. The precise language, to remind the Solicitor General who is forced to represent in this House a man who will not speak for himself, was, "It seems that they did withhold information from me and from other Solicitors General." In other words, that this was not an isolated practice. Is it the position of the Solicitor General of Canada that that was in fact what the minister said, that the minister was referring to a practice of withholding information or that he was referring to simply one instance of withholding information? Was it plural or was it singular? Do we believe what the minister said outside the House or do we believe what the Acting Prime Minister said inside the House?


Francis Fox: Mr. Speaker, there is no practice of withholding information from Solicitors General within the RCMP.


Charles Joseph Clark: Mr. Speaker, we are in a very difficult situation in this House. The man who made these accusations against the RCMP outside the House will not say anything inside the House. We are told the only person to whom we can direct questions is the Solicitor General. The Solicitor General will not answer the very simple question as to what his colleague said. What accusations did his colleague level against the RCM Police? Did he say that they withheld information from him on one occasion or did he say there was a practice in the RCMP of withholding information from a series of Solicitors General, singular or plural?


Francis Fox: Mr. Speaker, I think it is quite clear that there is no accusation that the Royal Canadian Mounted Police at any point deceived any Solicitor General inasmuch as the way that word is normally used. I think if one talks about deception one talks about wilfully, knowingly, withholding information that one knows ought to be brought forward.



GOVERNMENT ADMINISTRATION


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Prime Minister. In his October 20 statement the Minister of Finance indicated that he hopes there will be a wage ceiling of six per cent next year. Earlier this morning he reasserted his belief that inflation in fact will only be six per cent next year. Would the Prime Minister indicate if his government is willing to hold its own expenditures to a six per cent ceiling next year?


Pierre Elliott Trudeau: Mr. Speaker, we have, as was visible when the President of the Treasury Board tabled the supplementary estimates some days ago, followed on our undertaking to bring down the percentage of GNP which was accounted for by federal budgetary measures. We have been successful in the past three years and we hope to be successful in the future, in spite of the incessant demands of the opposition for the government to spend more money.


Sinclair McKnight Stevens: Mr. Speaker, a supplementary question. To hold the six per cent ceiling next year would require no further spending increases beyond $2.7 billion. Would the Prime Minister give the House that assurance that spending increases for fiscal 1979 will not exceed that amount over the current estimates for this year?


Pierre Elliott Trudeau: Mr. Speaker, we never made that commitment. I think if the hon. member reflects a little bit he will see it would be a commitment very difficult to make and to keep. It is probably not desirable in a time when the country, and even the opposition parties, are asking us to inject more money, more spending power in order to increase consumer demand and to create more jobs across the country.



FINANCE


Sinclair McKnight Stevens: Mr. Speaker, a supplementary question for the Minister of Finance who this morning indicated that if the wage earner finds himself a little poorer because of inflation being higher than six per cent, that is just too bad. Would the minister indicate if he has two standards, one to apply with respect to ceilings in government spending and another to the average wage earner in this country?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I should like to answer the question. We have more than probably 70 per cent of the budget, or a very big amount of the budget which is taken up with transfer payments to individuals, the provinces and so on. In order to achieve that target we would have to cut a lot of those programs that have been voted by the House of Commons and there would be an outcry from
November 18, 1977

Oral Questions FINANCE
the other side. We have said we want to keep the ceiling on the expenditures of the federal government within the growth of the CNP and we will achieve it.



GOVERNMENT ADMINISTRATION


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, a supplementary question for the President of the Treasury Board. When main estimates were released in February the President of the Treasury Board indicated that government spending would be kept to 7.1 per cent for this fiscal year. Yet, when supplementary estimates came down we saw that government spending for this year is to be increased by 10.3 per cent. Given that there may well be, and probably will be, one more supplementary estimate, what assurance can the President of the Treasury Board give the House that government spending is under control and that some of the projections given by the minister and the Prime Minister in terms of curtailing government spending will in fact be realized?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the hon. member is using very selected percentage figure projections. We said last year that the commitment to spending in the fiscal 1977-78 would carry a ceiling of $44,450 million which will represent an 8.2 per cent increase over last year. The reason for the difference between 7 per cent and 8.2 per cent is that the 1977-78 dollar figure has not changed and will not change based on our forecast of spending through March 31 where as we came in $1 billion less for last year, fiscal 1976-77 than we had committed. That reduced the base on which the new percentage increase calculation was made. A rather commendable performance I think.


Harvie Andre: A supplementary question, Mr. Speaker. The President of the Treasury Board has just indicated to the House that the estimates of government spending presented to the House earlier of $46.5 billion in fact are not the estimates of government spending but in fact some other figure has been proferred. From whence the minister produces that is not disclosed. Given that the basis of the official government estimate of spending called for $46.5 billion in this fiscal year, representing 10.3 per cent over projected spending last year, not over actual spending of last year, could 1 ask the minister to explain to the House what new steps will be taken? This is the third year in succession where spending has in fact turned out to be considerably larger when supplementaries have been taken into account than have been predicted by successive Treasury Board presidents when they introduced the main estimates in February of each year.


Robert Knight Andras: Mr. Speaker, on the contrary this will be the third year in a row where the actual final tally of spending will be less than was previously forecast.



VALUE PLACED ON DOLLAR IN VIEW OF INFLATION RATE

Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that the minister has agreed that the inflation rate is very closely associated with the value of the dollar, I wonder if the minister could state exactly what value he has placed on the dollar in view of the six per cent inflation rate.


Joseph Jacques Jean Chrétien: Mr. Speaker, our Canadian dollar is floating. I think its current rate is 90.7. But you will understand that I cannot anticipate what it will be next year. It may be higher or lower.



U152)   FOREIGN INVESTMENT REVIEW AGENCY POSSIBILITY ACTIVITIES WILL BE SUSPENDED-GOVERNMENT POSITION

Mr. Jack Pearsall (Coast Chilcotin):: Mr. Speaker, my question is directed to the Prime Minister. Will the Prime Minister put an end to the current speculation in the press by telling the House whether there is any truth to the rumour that the cabinet has plans to suspend the activities of the Foreign Investment Review Agency for three years?


Pierre Elliott Trudeau: No, Mr. Speaker.



INCOME TAX


Mr. Ray Hnatyshyn (Cape Breton-East Richmond):: Mr. Speaker, my question is directed to the highly briefed Minister of National Revenue. I gave him notice of my question. It is with regard to an operation of surveillance which took place this past summer respecting midways in smaller centres and some larger centres in western Canada. Can the minister confirm whether this close surveillance took place with respect to midways in western Canada and whether or not there have been any prosecutions as a result of this surveillance?


Joseph-Phillippe Guay: Mr. Speaker, I first want to say that the letter I received from the hon. member for Saskatoon-Biggar only indicated that he had some information. He said he had received information pertaining to surveillance of the midway. No other details were given. However, in view of the inquiry in Alberta at the present time, I am not going to make any statement with regard to that particular aspect of it.

November 18, 1977
Oral Questions



ALLEGED EQUIPPING OF OFFICE PERSONNEL WITH DISGUISES FOR SURVEILLANCE WORK

Ramon John Hnatyshyn: Mr. Speaker, I am afraid to give the minister too much notice of the question in case he might have the answer. On the other hand, 1 want to assure him I am not asking about any inquiry taking place at the present time. I am talking about surveillance of midways in smaller centres such as Thunder Bay, Lethbridge, Swift Current and the like. When the minister is making these inquiries of his departmental officials, will he determine whether it is government policy to use office personnel from regional offices in western Canada such as Winnipeg, Calgary, Thunder Bay and Saskatoon, and to provide these office personnel with disguise kits containing golf caps, hand operated counters and wallets to put in their back pockets so that they will be disguised only if they are not standing together.


Joseph-Phillippe Guay: Mr. Speaker, I am very pleased indeed with the details just given to me. I want to assure the hon. member that I will look into this important matter immediately.



RESOURCES


Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is supplementary to those asked by the hon. member for Sault Ste. Marie to the Minister of Energy, Mines and Resources. Given the alarming state of the health of the mining industry in Canada and the catastrophic effects that any further deterioration could have in this sector, and given the fact that this is an industry which touches upon both federal and provincial jurisdictions, is it the minister's intention to attach great immediacy to the federal-provincial conference that he spoke of earlier and to announce the convening of such a conference early in the new week?


Alastair William Gillespie: Mr. Speaker, I do place very considerable importance on such a conference taking place. However, we have to first determine with the provinces whether it is likely to be a successful conference in the sense that they will come prepared and will be ready to discuss what particular measures they would be prepared to take. As the hon. lady has pointed out, the provinces do control the mining rates, the mining tax and the environmental pollution standards. They have by far the largest impact on the climate for the mining industry. 1 wish it were otherwise, but that is the situation.



SOCIAL SECURITY


Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, in the absence of the Minister of National Health and Welfare, I will direct my question to the Prime Minister. I am very pleased that an agreement was signed with Italy yesterday concerning reciprocal pension arrangements. Has any progress been made with regard to signing a similar agreement with the United Kingdom, considering that the former Minister of National Health and Welfare stated on March 9 last that they were pressing us to sign such an agreement?


Hon. Marc Lalonde (Acting Minister of National Health and Welfare):: Mr. Speaker, in my capacity as Acting Minister of National Health and Welfare, I should like to answer the question of the hon. member and say that negotiations with England, the United States and France are still in progress, that the various officials have been holding meetings. I must remind the hon. member that last spring I indicated in my former capacity that I had gone to England personally to encourage Britishers to sign an agreement at the earliest possible time. Their reaction was fairly encouraging but they were facing problems because of the financial implications of such an agreement. We have continued to press the United Kingdom into signing an agreement as soon as possible. As for us, we are ready to sign an agreement without further delay.



PUBLISHING


Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Secretary of State. It is with regard to the meeting which occurred earlier this week with a number of authors concerned about "the possible collapse of the Canadian publishing industry". This is not the first time a representation has been made with regard to the disastrous situation in terms of the remaindering of a number of Canadian books from American sources. As far back as 1972, the Ontario royal commission on publishing said the customs provision of the Copyright Act is "unworkable in practice and . . . should be reviewed and clarified". Why has it taken so long for the government to move with regard to this threat to Canadian authors and publishers and when can we expect some effective response in this regard?


Hon. John Roberts (Secretary of State):: Mr. Speaker, as the hon. gentleman has suggested, the Minister of Consumer and Corporate Affairs and I had a very useful and positive meeting with the authors. As a result of the representations made a few years ago, there was an implementation of a procedure for listing books in what is called the Schedule "C" process. There has been some concern that while this process
November 18, 1977

was a desirable one, it was not working with as much expedition as desired. There is an undertaking to consult with the Department of National Revenue to try to ensure that this procedure is speeded up to the highest degree possible. We are also undertaking to see if there are means to clarify the meaning of the law about which there is some dispute. The result of the meeting was very positive. I think we will be able to see a clarification of the difficulties in the very near future.


David Samuel Horne MacDonald: Will the minister indicate whether any significant action will be taken to establish an interdepartmental committee of the relevant departments, Consumer and Corporate Affairs, Justice, Revenue and his own department? In addition, did the minister or his colleague give any indication to the authors that they would be prepared to make a test case with regard to this particular situation? Will they in the further meeting which I understand will take place later this month give a definite time commitment in terms of some action to take place within the next few months so that the authors and publishers will not be fobbed off over the next two years as they have been for the past two?


John (Moody) Roberts: Mr. Speaker, I would like to point out that it was not a question of fobbing off the authors. Both the Minister of Consumer and Corporate Affairs and I are aware there is a very real problem here and we are prepared to act in relation to it. We have taken actions in the past and we are now trying to make these actions more effective. As to the specific course the hon. member has suggested, that of an interdepartmental committee, it is not clear to me, at least yet, that there is a need for such a mechanism. We want to explore the approaches we developed with authors who met with us, to explore what they have suggested. It is not at all clear that the mechanism which the hon. member has suggested will in fact prove to be necessary.



NORTHERN GAS PIPELINE-INQUIRY AS TO GUARANTEE CANADIAN PIPE USED IN CONSTRUCTION

Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Prime Minister. The Prime Minister indicated in Hamilton on Wednesday with reference to the Alaska Highway pipeline, and I think I quote him accurately, that the Canadian steel industry will have to be competitive if it expects any of its steel pipe to be used on the Canadian portion of the Alaska natural gas pipeline. Will the Prime Minister now confirm to the House there is no guarantee whatsoever that Canadian steel pipe must be used in the construction of that pipeline?


Pierre Elliott Trudeau: Mr. Speaker, this question has been dealt with again and again. Quite honestly, I think 1 must ask the hon. member to use a bit of common sense on this. Obviously, there is a preference. It is written right into the agreement with the United States. There
Ministerial Responsibility
is a preference for Canadian products and Canadian industry for the Canadian portion of the pipeline, but obviously it would be folly to make this absolutely without condition and an absolute guarantee. I suspect that if the hon. member thought about it, he would not be asking for this. The Canadian industry is a very competitive industry. The workers are very, very capable. The technology is possessed by the Canadian industry. However, we cannot say "You can submit any price, no matter what the cost, and we will take your produce." That would mean Canadian consumers would have to pay much more.
This is a matter of common sense. I do not think the hon. member or his party would want to get that absolute kind of guarantee, that at any cost Canadian industry can be assured of the contract.


Stuart Malcolm Leggatt: If we are exercising common sense, Mr. Speaker, perhaps the Prime Minister should know that the consumers of that particular product are Americans not Canadians. If the interest of the Prime Minister is to protect American consumers in terms of the construction of the pipeline, I can understand his answer. But the question remains. In terms of determining the value of the bid on that steel, given the nature of subsidies around the world, including the DISC program in the United States through which steel is being subsidized and the massive subsidies applied to Japanese steel, how is the Prime Minister to monitor whether competitive foreign bids which meet Canadian bids are not under some kind of substantial subsidization when the time comes to let contracts for that particular pipeline?


Pierre Elliott Trudeau: As to the first part of the question I hope the hon. member realizes, because his party supported the construction of the pipeline, that one of the objects is that Canadian gas will be flowing through it one day and it will thus be of advantage to Canadian consumers. If the hon. member is more interested in the shareholders of Stelco, that is another matter. But we are interested in the Canadian consumers who will benefit from that gas eventually.
With regard to the bidding practices of other countries and the possibility of subsidies, the government is conscious of that aspect. Of course, we will make sure that the bids are competitive in a true sense, and if there is any form of subsidy, hidden or not, we shall ensure that the bids take account of that situation and that there will not be any unfair competition against Canadian prices and submissions.


Some hon. Members:: Hear, hear!



PRIVILEGE


Mr. Speaker:: Order, please. Yesterday questions of privilege and points of order were raised together in connection with the

November 18, 1977
Ministerial Responsibility
various requests that some action be taken by the Minister of Consumer and Corporate Affairs to submit to questioning in the House, to make a statement, to appear before a committee, to rise on a question of privilege, or to take a number of alternative steps which were suggested during the various arguments which were put forward. All of them related to the central point which has been referred to, that is, the responsibility of ministers to answer questions, or the limit to which ministers are required to answer questions in the House, depending on what point of view is taken.
In any event, the subject related to the ability of members of the House to put questions to ministers concerning responsibilities not connected with portfolios presently occupied. We have referred to this matter several times in the past, but perhaps I could refer briefly to my ruling in June of this year, which can be found on page 6851 of Hansard;
That situation, it seems to me, is a long way from covering the one at the present time, which is similar to ones which have arisen many times in the past, namely: Can members ask a question of a minister in that minister's former capacity? The clear answer given time and time again, without any doubt about our practices and precedents, has been no. It is tied very directly to the theory of ministerial responsibility, that the present incumbent of a ministerial office has responsibility which goes back for all time. It does not stop at the time that that incumbent took office. Therefore there cannot be two people responsible to the House in the parliamentary sense for that continuing responsibility.
If one minister who now occupies that position is responsible through all time for answering questions in this House, that responsibility cannot be shared by another minister who is a former occupant. If it is the wish of the House to change its practices to say that the House ought to be able to ask questions of a previous incumbent, then the House must also be prepared to accept the argument that the responsibility of the present incumbent of that office stops retroactively back at the time that he took office.
I think that is as clear and explicit as language can be made. With respect to the suggestions put forward, that unanimous consent might be sought in order to get around the difficulty and deal with the matter in some way, I would remind hon. members that on previous occasions upon which unanimous consent was sought I went to great pains during the course of the exploration of that situation to guard time and time again respect and reverence for the basic rule I have just cited. In that regard, I would refer hon. members to my statements recorded in Hansard on June 21 of this year at page 6903 and again at page 6923.
Furthermore, I think hon. members will realize that in any circumstances in which it is the will of the House to attempt to get at a problem whose solution seems in some way to be impeded by the rules or practices of the House, unanimous consent, if forthcoming from the House by way of consensus, and presented to the Chair, is one process in which the Chair has always been willing to co-operate and to make every effort to facilitate the wishes of members of the House. But I think all hon. members would agree that it would be most improper of the Chair to take any initiative or to make any suggestions in that regard.
Therefore, before I could be asked to take any position with respect to any situation which might arise from unanimous consent, it would seem to me I would have to be presented with unanimous consent as a fait accompli with which I might then attempt to deal, but not as something in which I should in any

way be involved from the point of view of initiative or in the search for that consent.
A further point was raised by the hon. member for Gren-ville-Carleton and by the hon. member for St. John's East, that members ought to be able to put a question to a minister asking him simply, not for an answer in respect to a previous capacity but whether or not the minister would be prepared to make a statement, or to appear before a committee or to do anything of that sort.
Obviously, the conclusion is that such questions addressed to a minister are quite proper if they relate to his present ministerial capacity. So it is quite in order to ask a minister if he intends to make a statement or if he intends to appear before a committee, provided the purpose of that appearance or statement relates to his present ministerial capacity. It is equally clear that the question is improper, by reason of our precedents and practices, if it relates to a minister's previous capacity.
Some confusion has evidently been raised by my failure to intervene when the Secretary of State for External Affairs was answering a question raised by the hon. member for Oshawa-Whitby a couple of days ago. I simply want to say to the House that 1 have checked the record and there does not seem to be specific language about negotiations. However, I thought 1 had heard a preamble which related to the minister being involved in meetings and reflecting on problems raised in the past about fluorspar in Newfoundland. It seemed to me there were implications about imports and prevention of imports, the raising and lowering of duties, and some possibility that there might have been negotiations or some capacity in which the Secretary of State for External Affairs might have been involved in the prevention of foreign imports, or activity to help the survival of that industry, and therefore I let the question go.
But if it is the view of hon. members that what took place offends our precedents in any way, I would ask them to realize the difficulty I was faced with in those circumstances and not accept it as any indication of my willingness to permit ministers to answer questions in some capacity other than their administrative responsibility, and, in that particular case, certainly not a former responsibility but, rather, one of a geographic as opposed to an administrative nature.
The rule is clear: ministers cannot be asked questions about their political responsibility in this House unless the subject relates to their administrative capacity in that portfolio. The House seemed to me today to react to that principle, to make an effort to avoid questions which I think they rather expected would be ruled out of order, and then to turn to the Solicitor General who is the present incumbent of this office to press the issue as to what exactly was said and, if there was truth in what was said outside the House, to take action within his department, in accordance with his ministerial responsibility, to determine the truth and accordingly to dismiss officials or, upon determination of the falsehood, to take steps with respect to the position of the minister.
November 18, 1977

All of that is quite correct activity, but it is clear, and I must once again enforce the rule, that questions put to ministers during the question period, and statements made by ministers and questions put to them upon the making of statements within the rules under which we presently operate must be entirely connected with their present ministerial administrative responsibility.


Ramon John Hnatyshyn: Mr. Speaker, I appreciate the ruling you have just made. It occurs to me that in the course of your statement you dealt with a problem which has plagued us in this House, that of a minister, outside the House, making direct reference to and castigation of the department he has nothing further to do with, as was the case with the Minister of Consumer and Corporate Affairs.
In view of the constraints which Your Honour has placed upon us in asking questions in this House, and in view of the fact that I know the Minister of Consumer and Corporate Affairs was anxious, and indeed has the responsibility, to stand in the House and clarify, if that is possible, his smear against the RCMP which he made outside the House, I would ask Your Honour if this is not the appropriate point at which the House might give unanimous consent to allow members of the House, particularly members of the opposition, the next time we meet in the question period to ask questions of the Minister of Consumer and Corporate Affairs directly relating to his accusation made outside the House against members of the RCMP, and the fact that they were not forthcoming with information to him while he was minister, including his predecessor and successor in office.


Mr. Speaker:: 1 thought I covered the possibility of unanimous consent. If the Chair is presented with unanimous consent as a fait accompli, I will attempt to deal with it.



ROUTINE PROCEEDINGS


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, under the provisions of Standing Order 41,1 wish to table, in both official languages, the annual report of the Canadian Saltfish Corporation for the fiscal year 1976-77, pursuant to section 32 of the Saltfish Act.
While I am on my feet, there have been some conversations with members opposite, and with the consent of the House I should like to move that the document be referred to the Standing Committee on Fisheries and Forestry.
Fisheries


Mr. Speaker:: Order, please. Having tabled the document, the minister indicates that there may be some disposition in the House, with consent, to move now to refer the document to the standing committee. Is that the disposition of the House?


Ramon John Hnatyshyn: Agreed.


Stanley Howard Knowles: Agreed.


Mr. Speaker:: Agreed. It is therefore moved by the Minister of Fisheries and the Environment:
That the annual report for 1976-77 of the Canadian Saltfish Corporation be referred to the Standing Committee on Fisheries and Forestry.


[Stage Direction]
Motion agreed to.
Charles Joseph Clark: Mr. Speaker, 1 rise on a point of order following upon the point of order raised by my colleague from Saskatoon-Biggar, and naturally I shall accept the direction of the Chair as to the procedure to be followed here. However, bearing in mind that the House has just given unanimous consent for the tabling of a document by the Minister of Fisheries and the Environment, and following whatever procedure is appropriate, I should like to ask Your Honour to instruct me as to how we might seek now from the House of Commons unanimous consent to permit the Minister of Consumer and Corporate Affairs to make a statement on motions at the next sitting of the House on Monday, which would allow him to state in the House of Commons the allegations and charges which he made against the RCMP outside the House of Commons.
As is the case normally with a statement on motions, this would allow members of the official opposition, and perhaps some of his own colleagues, to ask him questions to determine precisely what it was he said and precisely what it is he means to convey in regard to the withholding of information from him, as minister, on the part of the Royal Canadian Mounted Police.
If it is appropriate, I should now like to ask for unanimous consent of the House to allow the Minister of Consumer and Corporate Affairs to make a statement on motions in the House on Monday covering the charges that he made against the Royal Canadian Mounted Police outside the House.


Mr. Speaker:: Order. The reference I made to unanimous consent as a fait accompli is one which I have made in the past. Frankly, I think it is practical-I say practical, but not absolutely necessary-that rather than another member asking for unanimous consent to permit something to be done, the request, if it is going to be put before the House, ought to originate with the member who wishes that something be done which is prevented by the rules from being done. If I were to put the question whenever one member sought unanimous consent for some other member to do something, I think we would continually be stopping the proceedings of the House. I endeavoured to say indirectly during the course of my ruling, as has been the case in the past, that if one faces a situation of
1030

November 18, 1977
Fisheries
this kind the House should begin in some way to deal with it, but the fact is that I am not faced with it.


James Aloysius McGrath: Mr. Speaker, with respect to your ruling, on the point of order which has been raised by my leader and also on the point of order raised by the hon. member for Saskatoon-Biggar, the fact is that in the course of Your Honour's ruling you indicated that we could proceed at any time on the basis of unanimous consent, which is, of course, a practice of the House.
In accepting your ruling, I say, with respect, that as a member of the House I am prevented from doing a certain act, namely, to direct a question to the Minister of Consumer and Corporate Affairs having to do with a statement the minister made outside the House. The only time I can ask for unanimous consent of the House to direct that kind of question to the minister is at the end of the question period, which would mean, of course, that the opportunity would arise during the next question period, which would be on Monday.
Therefore, in accordance with your ruling, I now ask whether there is unanimous consent of the House to allow me to direct a question to the Minister of Consumer and Corporate Affairs in the next question period in regard to the statement he made outside the House about the RCMP withholding information from him.


Mr. Speaker:: I do not want to appear to be obstructing an effort on the part of the House, but the difficulty that we are in is that we have to recognize some procedure whereby members can seek unanimous consent of the House to do something. If a member rises on a point of order to seek unanimous consent of the House for something to be done, then if that is to be permitted-which is an extraordinary thing-and if a member says he wants to do something which seems to be prevented by the rules of the House, we would have to set aside the rules in such circumstances. The rules of the House themselves might be changed, but I think it would be dangerous if we started to do that.
Usually, in a situation like that, a member will get up in the House and, rather than changing the rules of the House, he or a minister would say he wanted to do something or say something to the House which would require the unanimous consent of the House, and he would so ask. If he did not get unanimous consent, then it could not be done. It seems to me that to permit one member to ask for unanimous consent to compel another member to do something would be to extend the practice somewhat. Before I would ever do that, I should like to reserve the matter and explore it further to see whether I might put that question a little later.
Is the hon. member for Victoria rising on the same point of order?


Allan Bruce McKinnon: Mr. Speaker, it is a very rare occasion when I get into these legal arguments about the business of the House. But I should like to point out to Your Honour, with respect, that if the government had any inclination to solve this problem and enable the Minister of

Consumer and Corporate Afffairs to speak in the House, then the government need only do what it did today, namely, have the Solicitor General stay out of the House and have the Minister of Consumer and Corporate Affairs as acting solicitor general in the House, in the same fashion as the Minister of National Health and Welfare was out of the House today and the previous minister of health and welfare was able to answer questions about his performance in that portfolio.


Mr. Speaker:: Order, please. I will take all of these imaginative suggestions into consideration to see whether there are any questions I can put to the House on Monday.


Charles Joseph Clark: Mr. Speaker, just one last point. There is a very simple way to resolve the problem before the House, and that would be for the Minister of Consumer and Corporate Affairs himself to have the courage to get up and to ask for the unanimous consent of the House-which I can tell him we in our party would be delighted to extend to him-to make a statement on motions next Monday so he will have the opportunity in the House of Commons to make the accusations which he made against the Royal Canadian Mounted Police outside the House. That, sir, would resolve your dilemma, it would resolve the dilemma before the House, and I am sure it would meet the desire of any courageous minister-


Some hon. Members:: Order.


Charles Joseph Clark: -who is prepared to say things outside the House, to say those same things inside the House. I would simply ask the Minister of Consumer and Corporate Afffairs to come to the aid of his colleagues here, to help Canadians know what it is that he is saying-


Mr. Speaker:: Order, please. It seems to me that we have drifted a little from the procedural point into some aspects of substance. I think we should get back to our regular practice at this time.


COMBINES INVESTIGATION ACT AND BANK ACT
William Warren Allmand: for leave to introduce Bill C-13, to amend the Combines Investigation Act and to amend the Bank Act and other acts in relation thereto or in consequence thereof.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
[Stage Direction]


November 18, 1977
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, questions Nos. 133, 220, 221, 222, 310, 311, 312 and 408 will be answered today.
I ask, Mr. Speaker, that the other questions be allowed to stand.


Mr. Speaker:: Does the House agree?


Some hon. Members:: Agreed.


Mr. McKinnon: As of October 1, 1977, what amount has been received as deposits for orders of the "Challenger" business jet to be produced by Canadair?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: As of October 1, 1977, $19.8 million had been received by Canadair as deposits on orders for the CL-600 Challenger business jet aircraft. An additional $1.5 million has accrued through October 31, 1977 for a total of $20.95 million. A further $8-10 million is expected from major customers by year's end.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Fisheries Prices Support Board 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?


Roméo LeBlanc: 1. None.
2. Not applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Foreign Investment Review Agency 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?


Bernard Pierre Loiselle: 1. Nil.
2. (a) Nil. (b) $2100, the whole amount being to a retired public servant.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Freshwater Fish Marketing 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?
Order Paper Questions


Roméo LeBlanc: 1. None
2. Not applicable.


Mr. McKenzie: 1.	Has the Fisheries Prices Support Board 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 Fisheries Prices Support Board in (i) 1975 (ii) 1976?


Roméo LeBlanc: 1. (a) No. (b) No.
2.	Not applicable.
3.	(a) Not applicable, (b) Not applicable, (c) Not applicable.


Mr. McKenzie: 1.	Has the Foreign Investment Review Agency 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 Foreign Investment Review Agency in (i) 1975 (ii) 1976?


Bernard Pierre Loiselle: In so far as the Foreign Investment Review Agency is concerned: 1. (a) No for (i), (ii),
(iii)	, (iv), (vi), (vii), (viii), (ix), (x). (v) 59 employees were engaged from private employment agencies, for varying periods of time in 1975, and 40 in 1976. (b) No.
2.	Main Estimates.
3.	Ontario: (a) 1975, $5.91; 1976, $6.63; (b) Not available, (c) 1975, $32,124.43; 1976, $31,707.79.


Mr. McKenzie: 1.	Has the Freshwater Fish Marketing Board 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?
80025-66V2

November 18, 1977
Income Tax
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 Freshwater Fish Marketing Board in (i) 1975 (ii) 1976?


Roméo LeBlanc: 1. (a) No. (b) No.
2.	Not applicable.
3.	(a) Not applicable, (b) Not applicable, (c) Not applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to St. Clair River Broadcasting Ltd. 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?


John (Moody) Roberts: I am informed by the CBC as follows: 1. None.
2. Not applicable.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, November 17, consideration of the motion of Mr. Chretien that Bill C-ll, to amend to 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. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I am pleased, of course, to have an opportunity to speak on Bill C-l 1 and convey to the House some of the views I have and those which were expressed to me during the parliamentary recess we recently completed. I want, initially, to support my colleague, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), on his very sincere remarks of last evening in which he requested the Minister of Finance (Mr. Chretien) to take a look at the projected use of the social insurance number.
As some members may know, I had a particular experience with a social insurance number as a result of an application made to me by a constituent to assist him. I am concerned that the Department of Finance is going to extend the use of the social insurance number. I find insurance companies now asking that their clients supply them with their social insurance number otherwise they will not handle the RRSP and other documents. This whole matter of the use of the social insurance number is going beyond its original intent.
A constituent of mine who was about 22 years of age at the time, a student at university, told me of an unbelievable horror

story all centred around the social insurance number. He told me his wallet had been stolen. In the wallet he had his social insurance card, driver's licence and birth certificate. The individual who stole the wallet assumed the student's identity by reason of those three documents. He took employment in my constituent's name. He accumulated earnings in my constituent's name, to the extent that when the income tax year ended and my constituent filed his return, as is normal, he was contacted by the Department of National Revenue and told he had not contributed sufficient money; he had not declared all his income because the T-4 slips supplied by such and such an employer had his name, address and social insurance number on them. As a result of this, he was required for a period of two to three years to pay income tax on income he did not, in fact, earn.
In addition to this, the young man was subjected to other types of serious embarrassment. He had his driver's licence suspended, which was no fault of his. The individual using his name bounced cheques across the country and, in fact, used his card as a means of identification. He stole a car, using the young man's name, and was sent to prison. The young man ended up having a prison record, the RCMP had a file on him, and it all evolved around the social insurance number. The identifying item was the number.
I looked into the matter and established, first of all, the fact that his wallet had been stolen. I confirmed that with the local police. I then took him before a notary and had him swear a statement that the evidence he had given me was true. Then I began working from there. However, I was amazed at the difficulty we had getting this matter sorted out. I wanted to have a new social insurance number issued to this man, but it just could not be done. I was told it would take a change in the act to issue a new social insurance number. In fact, when we went to the chief of the central records of Manpower and Immigration, explaining all the details, that it was all on the record and files of the various departments I had contacted, he told me it would not be possible to issue a new social insurance number and the only way this matter could be handled was if my constituent changed his name. Can you imagine that? Can you really imagine a family gathering, where the mother says "This is Tom Jones, this is Bill Jones, this is Harry Jones, but this is Bob Smith"-all because he does not comply with some government regulation.


William James Kempling: This experience had all the aspects of Big Brother. The extension in use of the social insurance number frightens me. After about eighteen months, when we finally settled this matter, the Deputy Minister of Manpower and Immigration came to my office and we discussed the question of the social insurance number. He said that it was not to be used as a means of identification. The deputy minister told me that he had gone to a department store in Ottawa and tried to pay for some merchandise with a cheque. The clerk asked him for his social insurance number. The deputy minister replies, "No, it is not a means of identification."


An hon. Member:: He cannot change his SIN.

November 18, 1977

What frightens people is that we have a program set up for social purposes, using it as an identification number, which is going to be suddenly stretched into another area. I was in Montreal the other day attending a conference where we were discussing the new Combines Investigation Act which was introduced in the House just today. A question was asked about the seizure of records by the authorities of the combines investigation branch. We already have wire-tapping legislation. Are we likely to see, in the near future, amendments to the wire-tapping legislation allowing the combines investigation people, aside from seizing our records, to tap our telephones? This is the sort of uncertainty which is brought about by the use of the social insurance number by other departments.
I should like to refer to some other things which happened to this young man whose card was misused. The chap who used his name and identity travelled through the United States committing fraud. He was brought to justice by the state police in Texas. At that time, he revealed to the police the fact that it was not his real name and he was using fraudulent documents. Those documents were taken from him in Texas.
After being released, he returned to Canada. He went to the closest post office and picked up an application form for a replacement card, filled it out, and received a replacement card in the mail. He did that, as well, with the driver's licence and birth certificate. After obtaining these replacements, he started all over once again. He was eventually found in Woodstock, where he had worked at a gasoline station. Actually, 1 found him in jail because he was charged with a fraudulent act. What was amazing about this case is that nobody on the government side was prepared to do anything about it.
The Minister of National Revenue did not know whether he was responsible, even though the victim was being asked to pay taxes on money he did not earn. The Minister of Justice indicated that it was not his problem. The Solicitor General said that he did not know what he could do about it, but would look into it. I never heard back from him. The young man is a victim of circumstances, because a criminal record will follow him which does not belong to him. We attempted to have that record cancelled. The RCMP argued about this-


An hon. Member:: Don't attack the RCMP.


William James Kempling: The Minister of Consumer and Corporate Affairs brought a fingerprint card to my office and asked if I could arrange to have my constituent fingerprinted.


An hon. Member:: A do-it-yourself program.


William James Kempling: That is right, it was a do-it-yourself program. Can the situation be imagined? The police had a file on an innocent man indicating that he had stolen cards, bounced cheques across Canada and had several fraud charges against him. They had a file on this man which contained the man's name, address, social insurance number and a set of finger-
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prints which did not belong to him. The fingerprints belonged to the real culprit, and that is how we sorted it out.
I received more co-operation from the RCMP than I did from any other department 1 dealt with. I asked the RCMP to look into this matter and to run a comparison between the name, social insurance number and fingerprints. Lo and behold, the force indicated that the fingerprints on the file did not belong to the innocent party. Because the culprit had a criminal record for stealing a car, I was able to follow up his fingerprints and arrive at his name. Finally, it was all sorted out. The difficulty we were faced with was getting this criminal record cancelled. Eventually, we were able to get it wiped out.
Most of our provinces have legislation which allows you to look into the credit records of individuals. What concerned my constituent, after this matter was sorted out, was that private credit reporting agencies would have criminal records and other fraudulent charges shown against his name for offences which he did not commit. As the hon. member for Qu'Appelle-Moose Mountain indicated, 1 hope the minister will take this matter under advice, and at the time we are considering this bill clause by clause I hope he will bring forth an amendment to section 5(2), (3), (4) of the Income Tax Act and not allow an extension of the use of social insurance numbers into other programs.
I should like to quote the following from the privacy and computers report to the Department of Communications:
Two major new income security programs will, if introduced, extend the use of the social insurance number. The Family Income Security Plan (F1SP) will, since the cheques will be payable to mothers, require the registration of those mothers wishing to benefit. Proposed old age security legislation will also require the use of a social insurance number. The scale of benefits from both programs will be income-related, and it is expected that stated income will be confirmed by the Department of National Revenue.
It is possible that a de facto personal identification number will develop in Canada, either through an ever-widening use of the Social Insurance Number (despite its limitations) or indirectly through credit card and bank account numbers. However, it is important to ensure that a single identifying number should not be adopted in Canada, directly or indirectly, without a full examination and public debate of its merits and consequences.
This is the crux of what we are concerned about. If these changes are made, there will not be enough time to debate them. As the hon. member for Qu'Appelle-Moose Mountain indicated yesterday, the change was slipped into a piece of legislation last year. It was disguised in very legalized terms so that the members who were under the hammer of closure did not really have an opportunity to examine it very quickly. It was contained in the legislation and subsequently the bill passed. Fortunately, the whip of our party, the hon. member for Edmonton Centre (Mr. Paproski) said "On division", because he spotted the matter and realized we should not pass it, thus indicating that we supported the government on this particular measure.
If, in fact, it is the intention of the government to bring in a single identifying number for all Canadians, the matter should be brought forth and debated in the House in order for all of us to express our views on it. I am very much upset about the way we seem to be trapped by more and more regulations

November 18, 1977
Income Tax
which in fact have the force of statutes. The people enforcing them are not responsible to parliament. Of course, the difficulty we face in this matter is that most of the legislation which is brought in indicates, in the preamble, that the governor in council shall attach regulations thereto upon proclamation. Further down in the legislation it is usually indicated that the governor in council may change regulations from time to time as required. Therein lies the problem. We are being regulated more and more, which is costly.
A representative of Bell Canada appeared before a committee last year and informed us that it cost the company $15 million annually to comply with government regulations. Also, we were told that the fastest growing division of Bell Canada was their legal department, because of the massive amount of government regulations which have to be dealt with. Members of parliament have a responsibility to do what they can in order to attain some measure of control over the imposition of regulations on society, and placing in the hands of bureaucrats powers beyond those of the Parliament of Canada.
Having said those things, I should like to turn again to discussing some of the aspects of Bill C-ll. 1 do not intend to get into the details of the bill, because we will be studying it clause by clause, but I want to dwell briefly on the insurance aspect. In its wisdom, the government has seen fit to move away from one portion of the insurance adjustments recorded in the budget speech of last March. When it came to light that it was the intention of the government to tax insurance policies upon the death of an individual, we were, obviously, quite upset.
What particularly upset me was the fact that the government was going to deem that a person had cashed in a policy before in fact dying. In other words, an insurance policy was going to pay a beneficiary a certain sum of money, but in its desire to collect revenue from that policy, the government was going to say that something was done which really was not. The government was going to deem that that policy was cashed in, so that it could collect some taxation on it. At that point I said to my colleagues that I hoped one of the insurance companies would have the courage to test that in the courts, because I do not think any government should be able to deem that something was done which was not done.


Mr. Douglas (Nanaimo-Cowichan-The Islands):: They cannot deem you are dead.


William James Kempling: Perhaps they can deem that you are back to life. These fellows will try anything. However, it seems to me that that would be a very unfair way of trying to sneak away with some revenue. When we looked into it, we found that the insurance companies could not have cared less. It was not going to affect them one bit. It was going to affect policyholders, but it was also going to affect dramatically insurance agents who sell insurance, because they sold policies in good faith and would have to go back to their clients to tell them that the policies were going to be taxed.

We asked some officials about this. They could not even tell us how much revenue they would get from the tax. I suppose like many other hon. members, I prepared a little article for the newspaper castigating the government for this terrible deed. I encouraged my constituents to write to the minister asking him to withdraw, and to send me copies of their letters. I received literally hundreds of letters on this matter. I have spoken about it on many occasions. I assume hon. members from both sides of the House have been put under pressure and the government has yielded and withdrawn that feature of the legislation for reason.
However, one thing I am concerned about is that the government still insists on not allowing interest on loans which are taken against insurance polices to be a deductible expense. This is unfortunate. Many small businessmen, particularly those in the retail trade, use their ability to borrow on their insurance to help them in the conduct of their businesses. Many small retailers have a great deal of difficulty obtaining financing. Some of them do not have a very broad financial foundation upon which to base their businesses. They have to keep a large variety of merchandise in order to survive, and many of them have to buy ahead for, for example, Christmas.
They have difficulty getting financing at banks because most of them are in rented premises. Some of them have leased fixtures and some of their inventories are on consignment, so they use their ability to borrow from insurance companies against their insurance policies. I think it is a step backwards to tax these loans. It is rather ironic that if you want to buy a Canada Savings Bond you can go to one of our chartered banks, borrow money from the bank to buy the bond, and deduct the interest charges as an expense; but if you go to an insurance company to borrow $1,000 against an insurance policy, you find that the interest cost cannot be deducted from your income. When we get to clause by clause study, many hon. members will speak about this and, hopefully, we will be able to get the government to yield on that point as well.
Another thing I want to deal with is the whole matter of confidence in the government and in the economy. I am a businessman; I have worked for large and small businesses. 1 am still involved in a business. Because of those facts, when I am in my constituency or travelling around the country, people in business contact me and tell me about their problems. I am really upset about the number of businessmen who are not sure they are going to make it through the year. Some of them have told me they will be surprised if they survive through the spring of 1978.
That is a deplorable situation. Part of this is due to the competitive nature of business, and part is due to the inability to get adequate financing in order to operate businesses. Many businessmen are looking at their earned surplus accounts and calculating how long it will be before those earned surplus accounts are down to zero and they begin to eat into their capital funds.
As I see it, the difficulty is that the government of this country for the past ten years has spent more time dividing up the nation's wealth than it has in concerning itself with
November 18, 1977

productivity. It is quite evident to anyone involved in any manufacturing process, or in any business at all, that if productivity had remained static over the centuries, man would never have emerged from the Stone Age. The only time we make any social progress at all is when we have a gain in productivity. We just cannot have a social gain unless there is an accompanying, equal gain in productivity.
The government employs more than 2,000 economists, I am told, and I understand that the Department of Energy, Mines and Resources has more than the Department of Finance. That may be explained away by saying that the quality is a little higher in the Department of Finance than it is in the Department of Energy, Mines and Resources.
Increases in productivity result from many factors. We hear people saying that Canada is far down the list with regard to productivity. They look at the OECD scale and see that we are tenth or eleventh behind a number of what we might call emerging countries, in some instances. However, there are many factors involved in productivity: capital, the quality of labour, the quality of organization and management, transportation, taxation, regulations and competition policy. All those factors are present when we consider productivity. If a business has difficulty getting capital and has to pay a high price for the capital it uses, whether it be working capital or investment capital, then that is going to be reflected in its productivity equation. When we look at this factor alone, we find that in the area of manufactured products, last year we had a trade deficit of about $10 billion.
The best information I have been able to obtain so far is that the estimate is there will be a trade deficit of $11.5 billion. If that deficit were in balance-in other words, if we did not have a trade deficit on manufactured products-we would be employing about 800,000 more people, which is about the number of people unemployed give or take 100,000.
I have talked to a great number of people in the manufacturing trade who asked what is going on in GATT. They want to know what we are doing at the GATT conferences. I would particularly appreciate it if the minister would take note of these remarks regarding GATT. When the hon. member for Rosedale (Mr. Macdonald) occupied the finance portfolio, 1 asked him about the GATT negotiations. His reply was not very complimentary, and I will not repeat it. It is in Hansard. I am not very pleased with what he said. The fact is that most people in the manufacturing trade do not know what is going on at GATT. Many have told me they are afraid they are going to wake up one morning and find they are no longer in business, that the tariffs that protected them have been taken away or altered to such an extent that they can no longer compete.
It is not a happy feeling to have invested in plant and machinery and to have expertise in marketing, and then find you are no longer able to compete because of imported products. The minister has talked about our trade deficit and balance of payments problems. There are two ways to alleviate
Income Tax
your balance of payment problem: one is to export more, and the other is to manufacture domestically more of the things you are going to consume. In other words, you export less.
There are two ways to attack that problem. We always seem to be talking about exporting more. Every time we do that, we seem to import more. No efforts have been made, that are evident anywhere, to establish a sound, solid, secondary industrial base in this country. In fact, a succession of ministers, in the years I have been in this House, have even questioned whether we can establish a sound secondary industrial base in Canada. Of course, it goes without saying that if we do not have this, we are certainly not going to be able to employ the growing number of people we have in this country. Therein lies another frustration.
In the few minutes left, I must tell a final story about a constituent of mine whom I met in my riding when I was home last week. He is a stationary engineer, in his fifties-around the age where if you become unemployed, it is difficult to get a job. Although people say they do not discriminate on the basis of age, in fact they do.
This man was ill for about a year, he had recovered and was having difficulty finding employment. He went to the Manpower office and saw a job listed there for a dishwasher. He asked the counsellor where the job was located, so that he could apply for it, because he just had to have something to do. The official said my constituent should fill out a form. The first question was, "Do you have any experience?" He replied, "I have been married for 37 years." That did not matter; they wanted to know if he had any professional experience in washing dishes, otherwise they would not recommend him for the job.
It all seemed rather silly. He asked if there was a training course to show him how to wash dishes, but there was not. He went home and looked in the yellow pages of the telephone book, under the "restaurants" section, and finally found the restaurant that was advertising for a dishwasher. He applied for the job and got it. That whole situation is a pretty sad state of affairs.
Mr. Speaker, when we get to clause by clause consideration of this bill, I shall participate in the debate. At that time I intend to raise several points of controversy in the legislation. With your permission may I call it one o'clock, Mr. Speaker?


The Acting Speaker (Mr. Ethier):: Is it agreed that we call it one o'clock? If it is not agreed to call it one o'clock, I have another speaker, the hon. member for Winnipeg North (Mr. Orlikow).


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, this country is facing the most serious crisis it has faced in peacetime since the early 1930s. Last month, on a seasonally adjusted basis, 886,000 people were unemployed-over 100,000 more than in October, 1976.


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

November 18, 1977
Income Tax


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
David Orlikow: Mr. Speaker, this country is facing the greatest crisis in unemployment which it has seen since before World War II and since, as we call them, the hungry, dirty thirties. The situation has been accelerating over the last two or three years. For each month of this year we have had substantially more unemployment in this country than we had for the same month last year. Also, in every month in 1976 there were more unemployed than in the same months of 1975.
In October of this year we had 886,000 people unemployed, compared to 769,000 in October, 1976. In other words, Mr. Speaker, we had more than 100,000 more unemployed in October, 1977, than we had in October, 1976. The rate of unemployment, on a seasonally adjusted basis, grew from 7.4 per cent in October, 1976, to 8.3 per cent in October, 1977- an increase of almost 100,000. Here we have a Liberal government, with the Prime Minister (Mr. Trudeau) and minister of Finance (Mr. Chretien) who come from the province of Quebec. Both of them have been telling the people of Canada and the people of Quebec what a disaster the whole idea of the separation of Quebec would be for the people of Quebec. If one looks at Quebec's unemployment figures for October, 1977, we see there were 283,000 people unemployed, compared to 234,000 in October, 1976-an increase of almost 50,000.
The seasonally adjusted rate of unemployment in Quebec grew from 10.1 per cent in October, 1976, to 11.4 per cent in October 1977. If one looks at the rate of unemployment among young people aged 24, he will find that in October there were 383,000 unemployed in that age group-almost 50 per cent of the total unemployed. In Quebec, the percentage of young people unemployed is somewhere between 14 and 16 per cent. The Minister of Finance can do nothing more to promote the feeling of separatism than to permit this completely unacceptable rate of unemployment to continue. How can one expect the young people of Quebec to support a country-Canada- in which they cannot find jobs, when they have the best education this country has ever been able to offer? Is this a temporary situation? The Minister of Finance is quoted in the October 7 Globe and Mail as follows:
Canada's unemployment rate will not go down in the next year and a half because the economy will not grow fast enough ... real gross national product increases of 2 per cent this year and between 4 and 5 per cent next year will increase employment but not enough to make a major impact on the rate of unemployment.
When the former minister of finance delivered his address in the spring of this year, he predicted an increase of 4 per cent, plus, in the gross national product. Of course, the increase has only been half that amount. The reason for that wrong estimate is that finance ministers have consistently been given incorrect information by their senior advisers in the depart-
[The Acting Speaker (Mr. Ethier).]
ment. If the Minister of Finance wants to begin trimming the fat off the public service, he should start with the senior people in his department. They have been giving ministers of finance incorrect information for the past four or five years. The minister admitted that unemployment would not decrease and, in fact, could well increase in the next year or so. He was merely repeating some of the forecasts made by all economists with the exception of those made in the minister's department.
On October 25 the Toronto Globe and Mail reported the views of the chairman of the Ontario Economic Council, Professor Grant Reuber, who said:
Ontario probably will have high unemployment and inflation and slow economic growth during the next ten years-
That opinion is not surprising. That situation has been vividly brought to our attention as a result of the ruthless lay-offs by the International Nickel Company at Sudbury, Thompson, Manitoba, and Port Colborne, Ontario. This will mean a loss of about 4,000 jobs within the next few months. Sudbury will lose 2,800 jobs, Thompson 650, and Port Colborne 375. In Sudbury the payroll will decrease by over $40 million if the cutback lasts for a whole year. In Thompson there will be a loss of about $10 million in wages, and in Port Colborne about $4'/2 million. In Sudbury, where there is really no other industry, the workers will lose over $40 million in wages. Between $12 million and $15 million of those earnings would have gone to federal, provincial and municipal governments through taxes.
In addition, the workers would have spent money on food, housing, automobiles, stoves, refrigerators, television sets, and so on. That loss does not just mean a reduction of $40 million in wages. The Canadian people will have to pay approximately $560,000 a week-close to $30 million-in unemployment insurance. Therefore, the loss will be almost twice the $40 million figuie. Not only will those who have been laid off suffer, but so will the small business people in Sudbury, Thompson and Port Colborne whose livelihoods depend on purchases by Inco workers.
That is not the end of the losses. Last summer Inco hired about 1,100 students, and the summer before they hired about 1,400. Those students, who depend to a large extent on work in the mines in Sudbury in order to continue their education, will in all likelihood not be able to continue unless the federal and provincial governments increase sharply their loans and student aid grants. However, that is very unlikely.
We are not talking about a poor corporation but one of the most powerful in this country. I want to put on record what the federal government and the Ontario provincial government have done for this company which in one fell swoop is laying off almost 4,000 people. From 1967 to 1976, Inco's profits totalled $1.7 billion. This multinational corporation owes the people of Canada $368.9 million in deferred federal taxes. As far as I am concerned, that is an interest-free loan to International Nickel.
This money was used to develop sources of nickel which will be sold in Guatemala and Indonesia. The money used to build these companies was obtained from Canadian workers. It has
November 18, 1977

helped to destroy Canadian jobs. The federal tax credit on machinery and buildings have saved Inco $17'/2 million in profits. The provincial sales tax exemption which became effective in April, 1975, saved Inco approximately $25 million in the two years, 1975 and 1976. The federal Export Development Corporation has loaned Inco $70 million to help finance its ventures in Guatemala.
The interest rate is kept a secret, but we know it is below the commercial rate: it is probably below 6 per cent. Inco pays its workers in Guatemala $6 a day, and in Indonesia the workers are paid $6 a week, so it is not surprising the corporation would try to develop its nickel production in other countries to avoid paying wages which workers have been able to persuade or force the company to pay here in Canada. Inco benefited further through fast write-off provisions to the extent of some $48 million in 1976. Yet the government proposes to continue to make tax concessions to corporations which will cost the people of Canada $1.2 billion this year.
The lay-offs at Inco are not an isolated case: Falconbridge has announced lay-offs; Noranda has announced lay-offs. It is estimated that in the coming year up to 20,000 people will be laid off in the mining industry in Canada. I would remind hon. members that this is a section of the economy which since the end of the Second World War has received concession after concession to persuade corporations, mainly multinational in character, to invest money in Canada. We have had very little thanks in return from these corporations, which are not interested in providing jobs in Canada as much as they are interested in making profits. As is evident now, they realize it is easier to make profits outside Canada than inside.
Perhaps the most serious aspect of the unemployment situation is the high rate of unemployment among our youth. Almost 50 per cent of our unemployed at the present time are in the age group 15 to 24, despite the fact that we have spent increasing amounts of money year after year to keep our young people in school, to persuade them that, having finished high school, they should go on to trade schools, community colleges or universities. The prospects for our young people are distinctly gloomy. The jobless rate for those of university age, 20 to 24, was 10.8 per cent, and for those between 15 and 19- in other words, for those leaving high school-it was 19.2 per cent.
I do not think I can be as graphic in describing the plight of the young unemployed as was the Minister of Employment and Immigration (Mr. Cullen) who the other day gave a striking illustration before a conference on youth employment sponsored by the Canadian Council on Social Welfare. He reported that in response to an advertisement for someone to fill a vacancy as a warehouse foreman, 45 applicants came forward seven of whom held Master's degrees in business administration. Could there be a more compelling comment on our failure to deal with unemployment than the fact that seven people who spent five or six years after high school getting a
Income Tax
university education should find the job situation so bad that they would be willing to take work as a warehouse foreman?
What is the position presently taken by the Minister of Finance? I suggest the minister is completely at a loss as to what to do. The Globe and Mail of October 24 carried a short summary of comments and suggestions made by the minister during the preceding weekend. I should like to refer to just two paragraphs from that story to show how confused the minister must be. The dateline is "Ottawa, CP Special," and the first paragraph begins, "Canadians should spend more and save less."
In other words we are in trouble because instead of going out and buying products made in Canada, which would then need to be replaced, thus stimulating the manufacturing sector, Canadians are putting too much of their money into savings accounts in banks or credit unions, or buying government bonds, and so on. A few paragraphs later, in the same story, the Minister of Finance is quoted as follows:
The Canadian worker must lower his expectations and start living within his means.
If I understand anything about living within one's means, the implication is that one must live strictly within one's budget, avoid purchasing goods on credit where possible, and so on. It seems to me the minister is telling people they should not spend everything they make, that they should not buy things on credit, and that they should save money.
Mr. Speaker, he cannot have it both ways: he cannot be right when he says both, that we are saving too much and that we are living beyond our expectations. It appears to me that the minister and his advisers have not really thought out their policies. The Economic Council of Canada issued its annual report a few days ago. I would remind hon. members that the Economic Council was set up by the government of Canada to study the economic situation, to present an annual report and to give advice on the state of the union and on what we should do to make things better.
I would remind hon. members, further, that originally, when the Economic Council was set up, it included representatives from labour, from agriculture, from industry, from the universities, and so on. Some time ago the labour members resigned from the council because of dissatisfaction with the government's anti-inflation program. So this year's report has been made by a council on which there are no labour members, no small "1" liberals, no people who are on the left.
I will just read a few of the names into the record so that members may confirm what I am saying: Ian Andrew Barcley, chairman and chief executive officer of British Columbia Forest Products Limited; S. Robert Blair, president and chief executive officer, Alberta Gas Trunk Line Company; J. A. Brown, dean of agriculture, University of Saskatchewan; Roy Fraser Elliott, Q.C., partner in Stikeman, Elliott, Robarts and Bowman, Toronto; James A. McCambly, building and construction trades department, Ottawa; A. M. Runciman, president, United Grain Growers Limited, Winnipeg. I can attest to the fact that Mr. Runciman is not a very radical person, and I know I am being conservative in saying that.

November 18, 1977
Income Tax
What did the Economic Council propose this year, faced as we are with almost one million people unemployed and the prospect of an increase in the unemployment rate? Let me summarize a few of the proposals made by the Economic Council. They recommend permanent personal income tax cuts of $2 billion, which would be the equivalent of an 8 per cent to 10 per cent reduction in the personal income tax rate and would provide ongoing stimulus to consumer purchasing power equivalent to about $200 per taxpayer per year.
In its analysis of policy options, the council applied a flat 8.3 per cent reduction of taxes across the board and a 25 per cent reduction of the rates paid by the people in the lowest income brackets. This sounds very familiar to me, Mr. Speaker, because the New Democratic Party has been proposing personal income tax cuts, particularly for people in the lower income brackets, for a number of years. According to the Economic Council, a cut of this rate would increase real growth in Canada by about one percentage point in 1978 and would reduce the unemployment rate to 7.7 per cent from the 8 per cent which would otherwise occur. I want hon. members to remember that the 8 per cent which they and others predict, or the 7.7 per cent which the council says will be the unemployment rate if we cut taxes by $2 billion, would still leave Canada with the highest rate of unemployment of any of the western industrial countries of the world.
The $2 billion cut in personal income taxes would be shared, $1.3 billion by the federal government and $700 million by the provinces. The council also believes that provincial sales taxes are an area where cuts could be made, and recommends that the provinces cut their provincial sales taxes by at least one percentage point, except on items such as gasoline, alcohol and cigarettes. A one percentage point cut would mean a tax reduction of about $300 million on the part of the provinces, according to the council. Those are the recommendations of the Economic Council, not a very radical organization. It is a council the members of which, and also the senior staff, have been appointed by the government.
What was the reaction of the Minister of Finance to the advice that was given to him by the Economic Council? Let me read from the Winnipeg Free Press for November 10. I read from the Free Press because I would not want the minister to say he was misquoted or misinterpreted by the hon. member for Winnipeg North. This is what Paul Whitelaw, staff correspondent of the Winnipeg Free Press, says in an article headed "Tax cut plan irresponsible, Chretien says":
Finance minister Jean Chretien says the proposal by the Economic Council of Canada for $2 billion in personal income tax cuts is irresponsible.
Chretien told the Commons Tuesday that "to borrow another $2 billion at this time in an attempt to buy our way out of the economic difficulties we are in would not be responsible.
It is not my belief that irresponsible action on the part of the minister of finance would be of any good to the nation."
It is obvious that the Minister of Finance has rejected the advice of the Economic Council. The acting chairman of the Economic Council, Mr. George Post, in commenting on the

minister's mini-budget speech of October 20, has said it will barely prevent the current high unemployment rate from increasing further. The answer of the minister is that Mr. Post and the Economic Council are being irresponsible.
What the Council said, Mr. Speaker, was that without the stimulus of the kind of tax cuts they are proposing, the economy will grow by only 4.3 per cent a year over the next five years; inflation will average 7.1 per cent; unemployment will average 8.2 per cent. Even with the new tax cuts, this dismal picture will not change much. A $2 billion income tax cut and a $1 billion provincial sales tax cut would produce average growth of 4.7 per cent, keep inflation at 7.2 per cent and reduce unemployment to 7.6 per cent. In other words, what the council is proposing is that we trade a small increase in inflation for a drop in the unemployment rate of about 1 per cent. As I say, the minister is not prepared to take the advice of the Economic Council. We can judge what advice he is getting from people in his finance department by the action which he takes, but we cannot know precisely what they say.
However, Mr. Speaker, we do know what another of his principal advisers has recommended. The Governor of the Bank of Canada, Mr. Bouey, made a speech to the Calgary Chamber of Commerce which was reported in the Globe and Mail for Saturday, September 17, and 1 should like to summarize a couple of the points he made. He said that Canada should not attempt to solve its unemployment problem with policies that would involve any risk of a higher inflation rate. We know that the Minister of Finance and the Prime Minister are taking that advice because they still consider inflation a much more serious problem than unemployment. Mr. Bouey went on to say that the inescapable conclusion is that if we want to achieve and sustain high levels of output and high employment, we really have no alternative but to grapple with inflation and with the inflationary practices that keep it going.
That sounds very familiar, Mr. Speaker, for have we not heard the Prime Minister say that we have to wrestle inflation to the ground? Mr. Bouey went on to emphasize his belief that the persistence of high inflationary expectations in Canada is a "serious obstacle" in the way of better economic performance. He closed his address with this admonition:
Now, considerable caution must be exercised in introducing expansionary measures to stimulate output and employment for fear that such action will give fresh impetus to inflationary expectations and behaviour.
In other words, we are back to the advice of the Minister of Finance that we should not have too great expectations. Every day when I leave this chamber and return to my residence I cannot help but see the glass tower, the office building which is being completed for use by the Bank of Canada. I am told that the cost of this very modernistic and expensive building is between $50 million and $75 million, so I have to assume that what the Governor of the Bank of Canada is saying to the people of Canada is, "Do as I say, not as I do". That, of course, is the attitude we always have on the part of those who have toward those who have not.


Howard Earl Johnston: What's the heating bill going to be?
November 18, 1977


David Orlikow: That we can discuss on another occasion. What does one million unemployed mean, in terms of the Canadian economy, Mr. Speaker? A very good economic consultant, Arthur Donner, who writes regularly in the Toronto Globe and Mail, made the following estimate which appeared in his column on August 17:
The accumulated real gnp and employment losses since 1973 are staggering. At constant 1971 prices, the production losses are estimated at $25.5 billion between 1974 and 1976, and assuming the real growth trends projected for 1977 and 1978, this gap rises in the range of an extra $11.5 billion. To place this figure in perspective, this represents about 42 per cent of the real economic activity in 1976.
These are billions of dollars which could, and should, have been produced but which will not be produced. They represent hundreds of thousands of jobs which could, and should, be available to Canadian workers. What is the approach of this government in dealing with this unemployment problem? Its approach is a further continuation and expansion of tax concessions to corporations and investors as outlined in the budget the former minister of finance brought down last March 31.
We heard a number of members on the government side challenge the NDP, especially the members who have spoken before me, regarding our figures and ask where we got the $1.2 billion or the $1,245 million. We got the figure from the budget papers prepared and tabled by the then minister of finance. Let me put them on the record categorically, to show where that money will go: tax relief in respect of business inventories, $300 million; federal investment tax credits, $485 million; enhanced depletion for high cost oil and gas wells, $20 million; increased dividend tax credits, $120 million; increase in limits for capital loss, $45 million; inclusion of capital gains on Canadian securities, $10 million; other corporate and investor tax concessions, $100 million, with the loss in provincial revenues related to the above, $165 million-or a total of $1,245 million.
It has been our argument that it makes no sense at all to try to stimulate investment in Canadian business and industry when industry is now operating at only just above 80 per cent capacity. In other words, industry is not using its existing investment in plant capacity, and no businessman is going to invest in increased and improved production facilities when he is using just over 80 per cent of his present capacity. The time to invest in improved and increased facilities is when industry is working flat out, at full capacity.
The record is clear that the kind of tax concessions the government is proposing for this year, those included in the budget bills which are, and will be, before us, are the same as those the government has tried in each of the last half-dozen years or more. The fact is that we now have over 8 per cent unemployment, or almost twice as much unemployment, in every province in Canada as we had when the Prime Minister took over that position in 1968. That is what we have accomplished with the kind of tax policies the present government has been implementing in the last eight or ten years.
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We have consistently suggested there are two ways to reduce unemployment, or two ways to prevent the unemployed carrying the burden of the economic mismanagement to which they have been subjected by this government. As I indicated earlier, the first way is through tax cuts such as those proposed by the Economic Council of Canada, that is, tax cuts on personal income, with the greatest being in respect of people in the lowest income brackets. In addition to these tax cuts we have suggested a system of tax credits which would put purchasing power in the hands of the people who need it the most, that is, the 25 per cent to 30 per cent of Canadians whose income is so low that they pay no income tax at all. That is one way we could deal with the problem of unemployment. The way to get people working in this country is for the government to get into a serious and well thought-out and planned program of public works.
As I listened to the Prime Minister and the Minister of Finance during their recent expositions of the situation we are in and what we ought to do, I could not help but close my eyes and imagine somehow that R. B. Bennett and Mackenzie King had returned to Canada. What the Prime Minister and the Minister of Finance are saying this year about dealing with unemployment and getting the economy moving is precisely the same kind of economic nonsense R. B. Bennett uttered when he was prime minister of Canada in-


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Alex Patterson (Fraser Valley East):: Mr. Speaker, when the minister introduced this bill for second reading on November 7, he said the purpose was twofold: first, to implement amendments to the Income Tax Act as announced in his mini-budget, economic statement, or whatever else you choose to call it, as well as those mentioned by the former minister of finance, the hon. member for Rosedale (Mr. Macdonald), in his March 31 budget; and, second, to increase government borrowing authority.
It seems passing strange to me that when we are called upon to debate measures introduced or suggested back in March, the Minister of Finance (Mr. Chretien) should suggest we deal expeditiously with them because of the beneficial results that will accrue from the implementation of such proposals. If they are so important now, they must have been important back then and the government has been remiss in not moving forward with the legislation in order to implement the proposals at a much earlier date.
We in the opposition have a number of serious reservations about the government's attempt to bootleg a proposal to increase its borrowing authority by means of an income tax bill. This appears to me to be a trick that has been used on other occasions. That is, whenever the government wants a

November 18, 1977
Income Tax
measure pushed through the House of Commons to which it feels there will be serious opposition, it attaches that measure to some other more attractive proposals in an endeavour to ensure that support for those measures will outweigh opposition to the objectionable ones.
That is precisely what has happened with this measure to increase the government's borrowing authority. It is objectionable to most members of this House, yet it has been placed in the same bill with certain other, long delayed provisions which industry and business have been promised since March 31, along with tax cuts for low income earners. The government hopes this will ensure the passage of the entire legislation.
1 need not refer to the fact that we on this side of the House are dismayed by what the government has attempted to do regarding income tax amendments. My colleagues have pointed out very eloquently the shortcomings of the government in many areas over the last few days. Yet I am compelled to refer to some areas where I feel the government has failed Canadians. The sad thing is that so much could be done to effect solutions to our national problems, yet so little has been done.
In reply to questions concerning our economy, government spokesmen have stated there is a serious unemployment situation, a high rate of inflation and many other problems. They stated there is little the government can do. Also, we have been advised that possibly things will become worse before getting better. Yet members of the government criticize the opposition for not making constructive suggestions on how to deal with these problems. A great many important proposals have been made by the official opposition. We believe there are many areas where improvements can be made for our economy, but the government would rather muddle along than accept and implement the proposals made from this side of the House.
I should like to deal with something which would have a beneficial effect upon the needs of Canadians, would increase their purchasing power, would inspire confidence and promote consumption. I am referring to the transportation system. Two years ago last July we debated a measure to increase the excise tax on a gallon of gasoline by ten cents. At that time we pointed out that a hardship would be imposed upon Canadians during a time of high inflation.
Many members felt that the provision would not save even a gallon of gasoline but simply would be another burden Canadians would have to bear. I was happy to hear the hon. member for Parry Sound-Muskoka (Mr. Darling) making reference to this particular tax and suggesting that it should be reduced to three cents per gallon. I would go one step farther than that and suggest it should be eliminated altogether.
It is a rather shocking experience to drive up to gas pumps in Ottawa and see, out of a gallon of regular gasoline which sells for 83 cents to 93 cents a gallon, that the government receives approximately 61 per cent. Out of the 83 cents to 93 cents a dealer receives for a gallon of gasoline, he is able to keep only, on the average, eight cents to ten cents. This is appalling. It is not the cost of gasoline which is so out of line; it

is the decision of governments to impose further burdens of taxation upon those who require to use their automobiles in order to carry on their daily activities, commuting back and forth to work and meeting their day to day obligations.
My suggestion is very straightforward and it would help to lower the rate of inflation. I would ask the minister to take this into consideration as he looks at suggestions which have been made. We are told we must move over to rapid mass transportation, but we find in this important area the government has been negligent and delinquent in even meeting the commitments has it made from time to time regarding the matter of urban transportation and a rapid transit system. Right now it does not pay to take public transportation systems; they are expensive, slow, uncomfortable and inconvenient. The automobile is still the cheapest, most reliable and most convenient method of transportation. Until the government sees fit to move in the direction of providing adequate alternate systems, then Canadians should be entitled to maintain their automobiles and operate them at a reasonable rate.
I hope the chairman of the Canadian Transport Commission wins out in his struggle with the Minister of Transport (Mr. Lang) and the vested interests of this country over advance airline charters. This could do wonders for the transportation system in Canada and be a real boon to the consumers of the country.
I should like to refer to another area which is a national problem, and that is with regard to the matter of housing. In the November, 1974, budget the then minister of finance, Mr. Turner, finally saw some light and partially removed the sales tax on building materials. Members of my party knew that this was not adequate. The government saw a little light, but did not proceed too far with it. The result has been that those who desire to construct their own homes are still faced with inordinately high cost because of the continuing tax on building materials.
If the minister reduced the federal sales tax to zero, that is, cut it by 5 per cent, it would mean a saving of some $500 to home buyers. This would have a tremendous effect on the housing market and on the amount of disposable income for Canadians. I should like to refer to a recent press release which reads as follows:
Progressive Conservative consumer affairs critic, James McGrath, and finance critic, Sinclair Stevens, today called upon the federal government to implement an immediate cut in the federal 12 per cent manufacturing sales tax in order to reduce inflation and create jobs.
This proposal has been made time and time again. It has been reiterated by my colleagues, and I would like to add my voice to it. I am sure a great many members in this House have added their voices to this request and will continue to do so. I agree with the comments of the hon. member for Parry Sound-Muskoka who so very eloquently set out our proposals regarding the deductibility of property taxes from personal income tax. There is little being done by this government, and the minister should take this suggestion into consideration.
Also, consideration should be given to allowing interest paid on residential mortgages, up to a certain limit, to be made
November 18, 1977

deductible for income tax purposes. Another matter which is an absolutely ridiculous proposal is the suggestion to make home insulation grants taxable. This is a situation where the government loudly claims their generosity in providing grants for people to insulate their homes in order to conserve energy and then it is made taxable. This is irresponsible and incomprehensible. The minister should take that suggestion under advisement.
We welcome the paltry cuts in personal income taxes announced by the minister. There should be considerably more. After all, this tax will not do much to meet the high cost of living and encourage consumers to purchase goods that are available. The Economic Council of Canada recommended a $2 billion tax cut.
It was very interesting to listen to the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) last night when he challenged the government to cut taxes in various areas. That would promote productivity and create jobs. Additional purchasing power left in the hands of consumers would go a long way toward encouraging production and business expansion, thus opening new job opportunities for thousands of Canadians presently unemployed. Lack of confidence on the part of business and industry, as pointed out by the Economic Council of Canada, is one of the major problems we face at the present time.
I would like now to turn to one of the proposals made in the intervention of the Minister of Finance in this debate, regarding amendments to the Income Tax Act as they relate to the sale and the acquisition of farms and/or commercial businesses. As far as they go these amendments are certainly welcome. This has been a matter of grave concern in the agricultural community for many years, and these provisions will do much to assist that industry and to improve its position economically and contribute still further to the productivity of the nation.
Out in the area which I have the honour to represent this will have very beneficial effects upon our agricultural community; I know it will in other parts of the country, and it certainly will in the area I represent. Although there are still clarifications to be made and there are still various matters to be cleared up, 1 believe the principle will be welcomed by the people concerned.
Likewise, the business community welcomes the amendments but suggests that an extension of the provisions should be considered. In a letter to the Minister of Finance a company in my constituency acknowledged the appreciation of the business community with respect to this measure, but also made some recommendations. It recommended that the proposal be extended to defer from capital gains taxes all moneys received as a result of the disposal of land, buildings, equipment or other assets by a taxable corporation if the following conditions are met: where these funds are used to acquire assets to be employed for the purpose of earning taxable income or where the funds are expended within a certain
Income Tax
period of time from the date of sales, possibly a year, or it could be shortened or extended at the discretion of the minister.
It was pointed out that these additional changes will have a beneficial effect. They will provide a shot in the arm for the economy. They will enable individuals or companies to dispose of non-producing assets and acquire additional earning capacity which would enhance the federal tax base. They will be a short-term incentive to corporations, and so forth.
While we welcome these proposed changes, I suggest that there is still a long way to go. There are many additional moves which can be taken in order to make these provisions more acceptable and more effective in meeting the needs of the agricultural community as well as of the business community across our country.
A number of those participating in this debate have commented on the provisions with respect to life insurance benefits. Here again, while appreciating the announced intention of the government to introduce $10,000 deduction from the total taxable portion of all life insurance policies, the fact remains that even the amended provisions leave the government in the unenviable position of taxing moneys left by deceased persons to assist widows-or widowers, as the case may be-and dependants, on the occasion of the most shattering and trying time of their lives.
There have been various communications which point out that it is amazing that any government would come to the point where it would embark on a proposition like this, where it would tax the benefits which assist individuals at the time of their greatest need. I was talking to a friend of mine who is in the insurance business, and he said he has never yet come across a case where the beneficiary had more than enough money to meet expenses and to meet immediate needs following the death of the breadwinner. I have certainly never come across anyone who fits into that category either, and I doubt very much whether the minister or any members of the cabinet have ever come across such a situation. So I say I do not believe that Canadians want their government to act in such a callous and insensitive manner, or to impose a tax upon these benefits.
With regard to policy loans the minister proposes that proceeds of a policy loan be treated as a benefit paid under the policy. Here again, it seems to be a very strange proposal to make. It is an irrational and unacceptable proposal which deprives individuals of the opportunity to meet emergencies.
Perhaps the government would rather force those with modest incomes to fall into the arms of loan sharks. That is what it is doing when it closes the door to the possibility of loans from insurance companies. That door has traditionally been open to policyholders in times of need. The proposal that interest be taxable in the event a loan is obtained, but if the policy is used as collateral for a bank loan it is deductible, is another proposal which is completely irrational. I suggest that the whole package as it relates to taxation on life insurance benefits should be scrapped because those affected are the ones

November 18, 1977
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most in need of assistance at the most trying times of their lives.
Commenting on this particular proposal regarding taxation, one individual raised a question as to whether it is the intention of the government to tax widows and orphans to the point of further dependence on our social welfare system. This is something which should be considered. People will have to live and get by somehow, and by imposing this tax individuals might be forced to the point of having to go on to welfare because the government is taxing away that which has been provided by breadwinners for those who survive.
One lady placed herself in the potential position of being a widow in society, and she said she could not understand how a government could even propose such a tax with any semblance of a clear conscience. Whether it is conceivable or not, that is what the government is doing, and we certainly hope the minister will consider the situation and accede to some of the recommendations which are being made in this respect.
There is another objective, as the minister pointed out when introducing these amendments, and that is to expand the government's borrowing authority by approximately another $10 billion. This is a suggestion that will cause tremendous protest across the country. At a time when the economy is in a most precarious situation, at a time when Canada is facing problems of catastrophic proportions, at a time when the economy is in the doldrums, the minister requests that the government's borrowing power be expanded by another $10 billion.
An article in the Vancouver Sun on November 8, by Dave Smith, entitled "Economy Labelled 'Ottawa Priority' " had this to say:
Marc Lalonde, the federal cabinet minister responsible for federal-provincial relations, said Monday that Ottawa's first priority for attention is the economy, not Quebec.
Lalonde said the economic outlook was fairly gloomy, but he said that the government would not try to "spend our way out" of the current situation.
Two amazing thoughts are represented here. It is a change in viewpoint of the minister, and certainly of the Prime Minister (Mr. Trudeau) when they finally get around to acknowledging that the major problem in Canada is the economy. Maybe there is hope now that something will be done but, as my colleague says, it will remain a problem as long as the Grits are in office. I think that should be a real incentive for people to make a change next time around, and I believe that they will.
What amazes me is that the minister said they will not try to spend their way out of the mess, and yet they ask for additional borrowing power. What is the government doing? If we look at the figures, there is a tremendous increase in the budget. Over the last ten years federal government spending has quadrupled. It took about 100 years for the government to reach a budget level of approximately $10 billion in 1967, a figure doubled in the following three years, and doubled again in the next four years to a total of $42 billion last year. The

present estimate is about $46 billion. If the government has not been trying to spend its way out, what has it been doing, and what is it doing with all that money?
The national debt stands at over $40 billion, I believe, requiring finance charges of over $5 billion, and yet the minister said they are not trying to spend their way out of this serious predicament. The deficits are estimated at over $9 billion in this one year, and now the demand comes for expanded borrowing authority. 1 do not know just how much the country can stand, Mr. Speaker.
In a speech in Victoria on June 2, 1977, the Leader of the Opposition (Mr. Clark) said:
The federal government's borrowing requirements have now become one of the major forces in driving other domestic borrowers to foreign capital markets- and this drives up our total foreign indebtedness as a nation. Canada now has the dubious distinction of being the world's largest borrower of international capital. Servicing that foreign debt now costs us more than two billion dollars a year- more than $300 for each Canadian taxpayer-and more than one per cent of the Gross National Product. Should our foreign debt servicing requirements reach two per cent of the Gross National Product, we could well be beyond the point of no return-where foreign debt servicing alone would become a chronic and debilitating drain on our international payments.
One of the provisions in this bill covers a request for borrowing authority to an additional $10 billion, and this in spite of high unemployment, Mr. Speaker, which we have to recognize as a very real fact. Some people say it is not as bad as it looks, but it certainly looks bad. Figures from the Maritimes demonstrate that and in British Columbia it was 8.5 per cent for October compared to 7.3 per cent a month ago. Indeed in British Columbia it has rarely fallen below 9 per cent in the nine years the Prime Minister has held power. Unemployment rose from 98,000 last month to 99,000 this month, and for those under age 25 it is 14.8 per cent.
I have received many letters from young people endeavouring to find jobs, and from older people, some professionals, endeavouring to find remunerative and gainful employment in order to make their contribution to society as well as providing for their own needs. Yet month after month, year after year, there is an ever increasing rate of unemployment across the nation. There are also regional disparities that have been brought to our attention.
I should like to deal now with one of the problems facing businessmen in British Columbia and in the Fraser Valley. Many processing industries will close very soon if something is not done to bring a measure of justice and compensation to them. I know it is desirable that industries in certain parts of the country should receive assistance in establishing operations, and I am not complaining about that. We Find these industries under-selling in the markets that people in my province have been serving for years, however, and this is a major problem.
Because of the lower rates of labour in some parts of Canada, because of the completely unjust and inequitable freight rates, and because of other situations that exist, businesses in my area are going to be forced to close their doors.
November 18, 1977

Mr. Speaker, 1 suggest that is not fair; it is unjust and it is not desirable because if there are those who are going to be able to produce and transport their products at a lower price than the cost of production in my area, then there must be some government intervention and compensation to assist the companies in my area to survive.
I am not complaining about those that have received assistance to meet needs elsewhere, but I am complaining about the fact that there is no compensation for those in my area that will have to bear the brunt and perhaps close their doors, lay-off their workers, and do goodness knows what else. I suggest that the minister, in considering all these situations, give consideration on the basis of justice to the matters which I have brought to their attention. This is not only true in the agricultural industries, it is true in other industries as well. I brought this to the attention of the government on a previous occasion.
When other secondary industries are finding it impossible to compete in the markets, on the prairies and central Canada, because of the unfair transportation rates existing at the present time, even though the government has said time and time again that it is going to do something about it, it has not done so, and the injustice continues to exist.
We have the continuing high interest rates; we have the shrinking dollar. What amazes me in the face of all these problems confronting the Canadian people is the increasing burden of taxation, national debt and interest charges, and all the rest. The government is going merrily on its way spending more and more of the taxpayer's dollars. I am not going to say it is all wasted or squandered, I am going to say this, however, that a great deal of it is unwise, unnecessary, and it is high time this government and the Minister of Finance came to their senses and looked realistically at the problems confronting the nation. If they do not do this, we will face greater and greater problems in the future than we have up to the present time, and everybody knows that they are bad enough now. According to the spokesman of the government party we can expect them to get worse as the days come and go.
The ministers state-they continue to throw it across the House-that the opposition are not making any suggestions as to what can be done and how to solve the basic problems. But I say, Mr. Speaker, that if they had been listening to the speeches made by my leader, and by my colleagues through these past months, there is plenty of grist there to keep their mills going a long time. If these suggestions and recommendations were adopted and if implemented, they would find a great many of the problems would be solved.
In order to assist in the building up of the economy in the production of jobs, we have suggested that there should be, as I pointed out before, a substantial cut in the federal sales tax on certain products. Sometimes the people of the country do not realize just how much is being charged in the form of taxes. They look at a product and they say, "Surely it doesn't cost that much to produce this thing", not realizing the high rate of tax which is applied on that product. Not only that, but on the various levels-below the manufacturer's level there are
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others that add a tax, so there is tax upon tax upon tax until a great deal of the dollar is spent not on the product, but in tax paid on the product. Therefore, we suggest there should be a substantial cut in the federal sales tax on certain products. This would assist in the development of our economy, and produce job opportunities for our people.
Another proposal was that there should be restraint in the growth of the government and in government expenditures. I do not have to go back over what I have said before, it has been said so many times in the House now. The government has said that it is going to maintain strict restraints in the carrying out of its functions and in the spending of the taxpayer's money. But the people of Canada are looking in vain for any indication that the government is exercising any restraint in any respect as far as government expenditures are concerned. No matter how much is said about it, no matter how much or how loudly it is trumpeted by the spokesman of the government that they are exercising restraint-by their fruits shall ye know them-and when we look at the records that are before us we cannot see where restraint is being carried out in any respect whatsoever.
There are many other suggestions that have been made. A government formed by the Progressive Conservative party would move in the direction of providing additional incentives to assist the small business community to grow, develop, and provide the services and goods required by the Canadian people.


The Acting Speaker (Mr. Ethier):: Order, please, 1 regret to interrupt the hon. member, but his time has expired. He may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, this amendment to the so-called budget that was introduced last spring leaves a great deal to be desired. Yesterday I raised a question in the House in respect of the possibility of there being a committee of the House meet with the negotiators who are going to discuss and advise in respect of what is possible and what is good for the agricultural industry, particularly as it relates to horticultural products. 1 sincerely hope we receive from the Minister of Finance (Mr. Chretien) a positive answer on that question. It is my understanding that it could be very beneficial, and that farming organizations and the Canadian Horticultural Council are quite prepared to exchange information, make recommendations, and to give strength to the negotiators who are going to try to improve the basic business climate in Canada, but particularly as it relates to the horticultural industry.
There were recommendations made to the Tariff Board which was asked in 1973 to study the requirements of the horticultural industry and its processed products, and report to the government. Yesterday part two of that report became available to those interested in agriculture. It reached my desk last night. Four years after the initial reference to the Tariff

November 18, 1977
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Board, the rationalization of their recommendations, in a book of several hundred pages, ends up on a member's desk at the time the Canadian negotiators are supposed to have tabled their basis for negotiation at GATT. That is like this government in many ways. Once again it has closed the door after the horse has been stolen. Perhaps one might say it has closed the door in the face of a very important industry in this country.
There have already been representations made to government. There has been no publicity on these recommendations but they have been firm, meaningful, and based on the economic requirements of the agricultural industry.
This government has been very generous in its international trade negotiations as it dealt away agricultural security in Canada on behalf of who knows what. I guess I am being repetitive for the fifth year in a row in this House. I make no apology. There has been no acknowledgment of the significance of agriculture to our economy in this budget, in a mini-budget, in a real budget, or in any legislation that the government has introduced since I have had the privilege of sitting in this House.
Perhaps the Minister of Finance, the Minister of Industry, Trade and Commerce (Mr. Horner), or some other minister of government might be interested to note that a headline in a paper this week stated that agricultural implement purchases were down by $1 billion in 1976 and it is anticipated they will be down by more than that in 1977. That represents a lot of jobs to those in the industrial part of Canada.
This ought to ring a bell with some of those who have plants in their constituencies which produce agricultural machinery. However, it seems to fall on completely deaf ears. I mention that because it relates to the tremendous effect that the agricultural industry has upon the total economy of Canada.
I challenge the Minister of Finance, or any of his predecessors or successors, to deny the fact that as you follow the curve of Canadian prosperity in general, you may have a six months lag or six months lead time, but it is basically parallel to the agricultural income that our farmers enjoy.
When our farmers have a declining income, our national economy declines. You can predict the one by the other. Any minister of finance who cannot recognize this when he is submitting a budget is doing a great disservice to the nation. Any minister of finance who allows negotiators to influence him on reductions in duty which one budget after another have introduced into this country, is really defeating himself as he introduces his budget. When will this consumer oriented government begin to protect consumers, workers, and farmers as a total society in this country, by concrete and constructive measures on behalf of all three, because they are a parallel in need and in trend?
Again let me say a billion dollars of agricultural implement expenditures represents a lot of work, a lot of income tax, a lot of revenue, and it contributes to society.

I have not read this tariff report which reached my desk yesterday. I just did not have time to read hundreds of pages and intelligently report on it. However, from information provided to me before the report was on my desk, 1 can tell hon. members what is needed, in addition to what is recommended in that report.
The first thing the Government of Canada should do before negotiating, yielding, or giving anything further in the field of agriculture is examine the tariff walls of our GATT partners as they relate to agriculture and fish products.
The duties that are levied against products going from Canada to the United States are much higher than virtually all of the duties levied by Canada on agricultural products coming north from the United States. There is a number one comparison. If we want to put agricultural products into the European Economic Community, there has to be a famine of a particular product before we can reach their market. The form of the Economic Community strangled agricultural trade between the North American market, both the United States and Canada, and the European Economic Community, saving only those items which they could not produce for themselves or those items which may, in a particular year, be short in their markets, as were potatoes last year and as apples will be this year. I submit there will be some regulation made whereby in the case of a shortage of apples in the European Economic Community, North America can supply them with what they require in a year of scarcity, but only in terms of scarcity.
Let us examine something else. Again I am being repetitive because we are at the door of GATT negotiations. I mentioned these last spring when I spoke in this House. I mention them again. I hope the minister will take note.
Our partners in GATT have built-in protections for industries which are damaged. In the United States it is by legislation. Any tariff structure which may be established is protected by that, with a clause which disallows American negotiators to permit an influx of a product to damage that industry in the United States. That applies whether it be wool, potatoes, apples or any agricultural product, or virtually any other product produced in the United States.
We have not provided our negotiators or our country with a comfortable safeguard. We are protected only by Section 19 of our agreement with GATT. It states that if we do impose something, and we may impose additional duty on a particular product, we in turn must give concessions on another product. Therefore we rob Peter to pay Paul every time we close the door on a particular product which is hurting our industry in Canada.
As we go to GATT this year we could by all means give them the legislative strength so that our trading partners may understand we want and need and will take part of their production, but we do not want and will not take any of their production which is going to be detrimental to our agricultural structure.


Some hon. Members:: Hear, hear!
November 18, 1977


Fred Alward McCain: That means legislative protection to back up our negotiators before they leave our shores. If we are to consider agriculture as an important industry, and it is; if we are to consider the treatment which was extended to the textile industry, and 1 support that; if we consider the support that is being requested for the boot and shoe industry, and they should get some protection; and if we are prepared to protect tens of thousands of jobs in a particular sector of our economy by negotiations with other nations, we are morally compelled to recognize the need of the agricultural industry.
There are tens of thousands of families living on farms, tens of thousands of employees working on farms, and uncounted thousands of people producing the products they produce. We are not looking at the farmer alone. We are looking at the multiplier effect, the purchase of machinery, the processing of food, the transportation of food, the whole item which can contribute to our economy. That is what we are looking at.
Rural and city members have supported the protection of other industries. Agricultural insterests must be protected, and we beseech the city men to move this consumer-oriented group on Your Honour's right to recognize that there are other items besides textiles and boots and shoes which need protection. Those two industries may be in the constituencies of some of those who sit on your right, Mr. Speaker, but so are the farmers. I would support protection for those splinter industries which are in difficulties in this country. I point out again that the hearings which were held to inquire into these matters heard the presentations made to them and outlined the facts.
Consider, for example, the nature of the protection which is presently offered. Unfortunately Canada chose at one point in time to levy specific duties on agricultural products arriving in this country. They ranged from half a cent to 2 cents a pound representing, then, from 15 to 20 per cent ad valorem. At the time they were imposed, these duties provided an excellent level of protection. Our competitors, on the other hand, were wiser. They applied an ad valorem duty to products arriving on their market from Canada. The effect of this is that the amount of duty rises in proportion to the price of the product, and protection is increased accordingly. But what is the average effect today of a specific duty amounting to so many cents a pound? Some estimate that it is as low as .9 per cent. Others estimate that it averages as high as 3.5 per cent. Whatever the actual figure, when it is compared with the ad valorem duties imposed by our competitors it is virtually ineffectual, and it is becoming less and less effective every year as production costs increase.
It seems to me it is useless to make this speech, Mr. Speaker, because for five years I have been trying to deliver this message. For the last 20 years others have been trying unsuccessfully to get it across. 1 wish to quote in a general way the then minister of agriculture when he spoke to the Canadian Horticultural Council about six years ago. His statement was, in effect; the government of Canada has adopted a cheap food policy; you are not going to get help; you are not going to
Income Tax
get protection; if it becomes too hot, get out of the kitchen. That was his closing phrase. Mr. Speaker, it has got too hot in too many instances. Take the example of tomatoes.
About the date that speech was made in 1971 Canada imported 41 million pounds of canned tomatoes-I am rounding off these figures. After that policy had been in effect for six years Canada was importing 96 million pounds of tomatoes. That represents a twofold increase of tomato importation over that period. Well, it got too hot in Canada and some of the producers got out. Our importation of tomato paste went up by six million pounds in the same period, and our importation of juice by two million pounds. Altogether, there was an increase of roughly 56 million pounds in tomato imports consequent upon the fact that this industry in Canada has been denuded of protection. Total imports did not double, but they still hurt.
Go back a little further, to 1962. You will find, Mr. Speaker, that total imports of tomato products amounted to 40 million pounds. In 1976 the total was 151 million pounds. That represents an increase of 375 per cent in tomato products imports during the period this cheap food policy has been in effect. That policy has continued under the present Minister of Agriculture (Mr. Whelan) and it is regrettable that this should be the case.
Earlier on 1 read a large number of figures into the record, but 1 propose to read them again because we are reaching the gate of the GATT meetings and we must press for consideration and protection. At the present time we are paying altogether too much for tomato products because the level of production on the North American continent is down. Because the Canadian industry has been depressed due to unfair competition from other parts of the world, the number of growers producing tomatoes here has been declining almost on an annual basis.
What has science done to help the industry? In 1949 the average crop yield per acre was 5.84 tons. In 1969-70, the average yield was 17.54 tons. By the use of scientific methods now available to them, growers have trebled the yield per acre. They have been able to maintain part of the industry but they are capable of maintaining another 10,000-12,000 acres, which would mean another 7,000 to 12,000 jobs, and in their presentation have committed themselves to doing so at reasonable prices competitive with those of other major suppliers.
This, Mr. Speaker, is the result of the cheap food policy. I wish some of the hon. members opposite could understand that when Canada becomes dependent on foreign sources for its food requirements those same sources are going to take us for more than they should; they will take us for more than the Canadian farmer would get for producing the product at home, and it is being penny wise and pound foolish to open the door to the United States for strawberries, or to Taiwan for mushrooms, and so on. Agriculture has never asked that it should have the benefit of 100 per cent of the market. But it has asked that it be allowed to retain its historic position.
Agriculture has accounted for $1.3 billion in trade surpluses. It is, therefore, an industry worthy of protection, particularly

November 18, 1977
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in view of the fact that the manufacturing industry, as has been stated over and over in this debate, is in a $10 billion deficit position. Agriculture remains one of the few areas where by hard work, endurance and suffering we are able to trade with foreign nations which have a surplus. But the consumer has to pay more for tomatoes than he would have to pay had these tomatoes been Canadian.
Now, Sir, what kind of competition do we have? We need exactly the same type of law-and we need to negotiate successfully to get it-as the one 1 outlined as existing in the United States. If we do not get exactly the same thing, then we must negotiate without penalty for a position in which the Government of Canada can impose a surtax on imported products which are obviously being dumped, perhaps at a price below cost of production or the price obtained on the market of the country of origin. Perhaps this is done in search of hard currency, which is the basis for the price of many products which are arriving in Canada. A nation needs an element of hard currency.
The Canadian market will take mushrooms, tomatoes, peaches, to name a few products, so that you do not have to hit very hard in order to get by our duties. But having done that, there is no mechanism which can be put in place to protect the Canadian producer and his crop within the crop year in which the product is being imported, and that is the problem. Our mechanism is too slow. We have to contract with our GATT partners for a mechanism which can work immediately. The hon. member who represents the Kelowna district has told the House time and time again what happens to cherries, and the same thing happens to tomatoes, potatoes, and vegetables. It happens all across the board.
According to this recommendation, the potato industry will have a duty of 10 per cent on frozen products and 12 per cent on other processed products. These are considerably below the former levels and substantially below the levels the industry sought. There are some good things about it. For instance, the rate on potato starch is increased, and there is an outside possibility that this will be of assistance.
When the government was approached 10 years ago to give protection to the potato starch industry, potato starch plants were in operation in Canada. Although an increase in duty on potato starch might bring about capital investment, create jobs, and establish a potato starch industry in Canada, like many of the things the government has done, it is too late. The starch plants in eastern Canada are now closed because they were given no protection. There was no surtax, no emergent measure to protect the Canadian market from the flow of European starches as they arrived well below the cost of production in Canada, putting our potato starch plants out of business.
The Horticultural Council of Canada and the potato processors go on to say in their brief that these duties are far below their recommended tariffs for potato processed products. It is virtually impossible to get them into other countries. Our
[Mr. McCain.)
potato processing industry built branch plants and has sent its expertise around the world. Having developed one market after another, our Commonwealth and GATT partners found a vehicle to exclude our processed products from their markets. Consequently, our expertise and our jobs have stayed abroad where they are producing potato products around the world.
Let me now turn to frozen vegetables in general. The Canadian Horticultural Council, in discussing this question with agricultural officials, declared that the new classifications are logical, the specified rates basically acceptable, but again the nop rates are the lowest. They include peas, beans, corn, carrots and mixed vegetables. The rates are far below the level suggested by the agricultural industry to the Tariff Board.
I ask hon. members of the House to stop and think how many of them have peas, beans, corn, carrots or mixed vegetable growers in their constituencies. From coast to coast in Canada, Mr. Speaker, you find virtually every province has one of these industries which are being eroded by competition.
Another very significant duty is that which is levied on fruit juices. We do not have a lot of juice products produced in Canada, but we do have two major items of importance, apple juice and tomato juice. When a housewife goes into a store and finds grapefuit juice, orange juice or any other comparable juice cheaper than apple or tomato juice, it has been proven beyond question of doubt that juices shipped to our market at unreasonably low prices erode our own market for tomato and apple juice. I say the level of duty should be higher than that recommended by the Tariff Board, yet the rate is reduced to 121/2 per cent. The Canadian Horticultural Council recommended that the rate should be 20 per cent. I think the committee I asked for in my question yesterday is very badly needed.
There is no change recommended in regard to vegetable sauces, so everything is fine there. The recommended rate on vegetable soups, etc., is 12*/2 per cent compared to the current rate of 17'/2 per cent. In other words, the Tariff Board is recommending a reduction.
I believe it is time to adjourn this debate, Mr. Speaker, so may I call it four o'clock?


Mr. Deputy Speaker:: Order. It being four o'clock p.m. the House will now proceed to the consideration of private members' business, as listed on today's order paper, namely notices of motions, public bills, private bills.


PRIVATE MEMBERS' PUBLIC BILLS
Mr. Reid:: Mr. Speaker, I rise on a point of order. There has been some consultation among members and there might be permission given to revert to private members' public bills for the purpose of discharging a number of private members'
November 18, 1977

public bills which are the subject of pornography and obscenity, and sending the subject matter of such bills to committee. If there is consent, I would move, seconded by the hon. member for St. John's East (Mr. McGrath):
That Bills C-206, C-207, C-241, C-318, C-325, C-348, C-399, C-400 and C-402 be discharged and the subject matter thereof referred to the Standing Committee on Justice and Legal Affairs.


Mr. Paproski:: That is so agreed, Mr. Speaker.


Stanley Howard Knowles: We also agree to this motion.


Yvon Pinard: Mr. Speaker, I suggest that unanimous consent be sought the next time we talk about public bills, likely next Tuesday, when we shall probably be able to give our consent, but I cannot make any commitment today since I have not been consulted on this matter.


Mr. Blaker:: Mr. Speaker, I wonder if I might also raise a point in this connection. If the parliamentary secretary to the House leader intends to seek consent to move this bill on Tuesday I should point out that it is my understanding there is another bill on the same subject which unfortunately has not reached the printing stage. I regret that this information was just given me a few minutes ago, but I think I might draw that to the attention to of the hon. member for Kenora-Rainy River (Mr. Reid), so that probably this one might be bundled in with the others that may come forward on Tuesday as well.


Mr. Deputy Speaker:: There has been no unanimous consent so I cannot put the motion.


Mr. Peters:: There may not be on Tuesday either.


PRIVATE MEMBERS' MOTIONS
Mr. Deputy Speaker:: Order, please. Before calling the order under private members' business I should remind hon. members that last Monday at the beginning of private members' hour, following a point of order that had been raised the previous week by the hon. member for Vaudreuil (Mr. Herbert), I opened the door for a procedural debate to take place at this time or, what I had in mind, the next time the motion would be before us under private members' business, and it is at this time that I intended to invite hon. members' comments. However, I notice that the hon. member concerned, the hon. member for Vaudreuil, is not in the House, and with the House leader for the official opposition not being here at this time, I am wondering whether we should proceed with this important procedural debate which I think might have an
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implication in respect of the operation of private members' hour. I would invite the comment of hon. members representing the parties.


James Aloysius McGrath: Mr. Speaker, I would suggest it would be prudent and wise for the House to follow the course suggested by Your Honour and to put this off until the hon. member who raised it in the first instance, as well as some other hon. members who have an interest, are here.


Stanley Howard Knowles: Yes, Mr. Speaker, we will agree to such a postponement, and I hope this time the unanimity will not be spoiled from the government side.


Yvon Pinard: Mr. Speaker, I agree to the postponement, but I want to give notice to the Chair that I intend to take part in this debate and that I would like it to take place when I am present.


Mr. Deputy Speaker:: That is the difficulty, actually, because I know that the hon. parliamentary secretary is to be absent Monday and the following Monday, and next Friday the present incumbent in the chair will not be available at four o'clock. In any event, perhaps hon. members can agree on another time that would be appropriate and available during private members' business in order that we might raise this question in the presence of all interested participants. In any case, I am sure hon. members will leave it to the Chair to take the initiative on the matter.
This brings us to another problem which is more or less related to the point of order we were discussing, and that is the order of business for today. The Chair is at the disposal of hon. members.


Steve Eugene Paproski: On that point of order, Mr. Speaker, I think there has been a disposition to allow all other motions to stand, and that we commence this afternoon with motion No. 13, standing in the name of the hon. member for Okanagan Boundary (Mr. Whittaker), concerning the advisability of amending section 88 of the Railway Act.


Stanley Howard Knowles: Mr. Speaker, without prejudicing our right to discuss the matter at some arranged time, we think we should proceed as has been planned for today.


Steve Eugene Paproski: Perhaps I should add that all other motions should stand at the request of the government.


Yvon Pinard: Mr. Speaker, in that sense I support the motion moved by the opposition member.


Mr. Deputy Speaker:: To satisfy everyone and to protect the Chair, perhaps we could accept the suggestion of the government to let motions Nos. 2, 3, 4, 5, 7, 8, 9, 11 and 13 stand and

November 18, 1977
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ask for unanimous consent when we call motion No. 13 in the name of the hon. member for Okanagan Boundary (Mr. Whittaker), so that everyone will be protected. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Is this agreed?


Some hon. Members:: Agreed.


RAILWAY ACT
Mr. G. H. Whittaker (Okanagan Boundary) moved:: That, in the opinion of this House, the government should consider the advisability of amending section 88 of the Railway Act to provide for the reversion to the Crown of railway rights-of-way, originally obtained as government subsidies, upon their ceasing to be used for railway purposes pursuant to sections 106, 119 or 254 of that Act.
He said: Mr. Speaker, I am pleased to have the opportunity of presenting my private members' motion, which states:
That, in the opinion of this House, the government should consider the advisability of amending section 88 of the Railway Act to provide for the reversion to the Crown of railway rights-of-way, originally obtained as government subsidies, upon their ceasing to be used for railway purposes pursuant to sections 106, 119 or 254 of that Act.
I first became interested in railway abandonment when the CPR made an application some two years ago to the Canadian Transport Commission to abandon a large portion of what is known as the Kettle Valley Railway in my riding. This railway has for many years served as a second rail corridor across British Columbia. Its use has been abandoned for some years now. Rail traffic in British Columbia from east to west has been concentrated on what is known as the main line, and both the CPR and the CNR use a similar route for much of the traffic.
If one looks at a map of British Columbia and studies the very limited corridor being used today for rail traffic, he will quickly see it is very vulnerable in many aspects. This may be all right as long as we have the same road links in existence today. However, road use over the years will be dependent on the same type of energy used today, namely, fossil fuels. Rail lines can be reverted to the use of coal or electric energy that can be generated from other sources than fossil fuels.
I became more interested in rail line abandonment when I realized that at some time in the future, maybe not in my lifetime but certainly in the lifetime of my children and grandchildren, we could very well have to return to rail type transportation. I believe the corridors that have been used for railways are necessary for future transportation in Canada. I come to believe this even more when I look at what could happen in a city such as Penticton, B. C., if the railways are

allowed to abandon their responsibilities and sell off the real estate in these corridors.
It is for these reasons I asked questions of the chairman of the Canadian Transportation Commission, Mr. Edgar Benson. The CTC, under Mr. Benson, decides whether rail lines should be abandoned. I asked what would happen to the rights-of-way when abandonment was allowed, during a meeting of the Committee on Transport and Communications, and his answer was as follows:
As I understand the situation, once we rule that a branch line or spur line can be abandoned, we have no control over the land per se, but the railway may deal with it as it may see fit. Sometimes when the railway makes application for abandonment, some one will have indicated to them that they would like to use the land for a specific use and the railway will undertake to make land available for that specific use.
I asked in addition why the Canadian Transportation Commission could not make it a condition that the land revert to the Crown on abandonment, and Mr. Benson's answer was as follows:
You would have to put that into the Railway Act so we would have the authority to do it.
I also questioned the Minister of Transport (Mr. Lang) on this and received similar answers.
In order to pinpoint the situation, I decided to draw up a private member's bill, which I put on the order paper last session. I resubmitted it this session, and it stands on the order paper as Bill C-222. As well, I submitted the resolution we are debating today. It was listed as No. 13, and by some stroke of luck we are debating it now, ahead of so many others.
By another stroke of luck, the Hall Commission report was laid on the table. I was pleased to see that Mr. Justice Hall, in the Hall Commission report on grain handling and railways in western Canada, came to a similar conclusion as far as rail abandonment is concerned.
I should like to refer to pages 104 and 105 of the Hall Commission report, which reads as follows:
Upon abandonment, the roadbed, that part of the property abandoned, represented by land-vested in the provincial Crown for disposition as may be mutually agreed to between the relevant province and municipal authority, the CNR or CPR, whatever the case may be, have entitlement to recover and remove with one exception, such of the improvements to the property, rail, ties, other track material, ballast etc. as may in their judgment be warranted, culverts, the removal of which might alter established draining patterns or have adverse effects, would constitute the sole item of improvements to be left in place by the Prairie Rail Authority.
We anticipate some objection that the property disposition formula we have outlined involves some element of expropriation of railway property without compensation to the railway company. This cannot be a valid objection.
Under sections 106 and 259 of the Railway Act, the railways have a legal obligation to maintain service on all lines until abandonment approval is given.
In the case of grain related branch lines, the railways ask to be relieved of these obligations taking the position which we do not agree that they are operating these uneconomic lines at a great loss, even when given the branch line subsidies to which we have referred.
In our view, the railways cannot have it both ways. They cannot secure relief from their Financial burdens, as we propose and yet retain an undiluted title to the property "in toto", particularly where as we also propose many elements of
November 18, 1977

value in the property ultimately to be abandoned are likely to be in the interim enhanced by some degree of rehabilitation involving new investment of funds.
We deem it, therefore, eminently just and equitable that in return for permanent relief from their legal obligation to continue a losing operation and of having to restore the abandoned right-of-way to its former condition, the privilege of being allowed to abandon should be made conditional upon giving up ownership of the land in the right-of-way. A substantial portion of this land is quite valueless in any event. There should be no crying over the return of rights-of-way to the Crown.
That is what the Hall Commission had to say about railway abandonment, and I agree with them 100 per cent.
There are five major reasons why abandoned railway right-of-way property should revert to the Crown, whether it be to the federal or provincial government: first, the selling of these rights-of-way would effectively close transportation corridors that may well be needed in future years; second, the Government of Canada has made monumental concessions to the railways in this country: land and tax benefits were freely given to the railways in return for cross-Canada transportation service, and now when these lines are abandoned the property should revert to the government as partial payment for those early concessions; third, through a CPR subsidy company, Marathon Realty, large sums of money are being made from the roughly one million acres of land still held which was originally granted by the federal government to the CPR; fourth, the Canadian Pacific Railway's original mandate was to provide transportation on an ongoing basis to all parts of Canada and that mandate is no longer followed; and fifth, through abandonment, the railway companies are making large financial gains selling property at the expense of the Canadian people.
In conclusion, I should like to point out once again that the Hall Commission report, compiled at the request of the Minister of Transport, supports my stand on rail abandonment. Railways are no longer only interested in transportation. For instance, the CPR is not merely a railroad company, but a huge conglomerate controlling a number of enterprises ranging from mining to air travel, from logging to pipelines. Also the company has investments in almost all major industries. One only has to look at the television ads to see this.
It is our responsibility to keep these transportation corridors open. It is a responsibility of the government to the people of Canada. We have to prepare the future for our children and grandchildren. I may never see the end of fossil fuels in my lifetime, but my children probably will. The importance of these transportation corridors will be evident then. We have to get ready for the future.
I appeal to the House to pass this resolution which I feel will correct an unfair situation caused by the attitudes taken by the railways on the abandonment of branch lines.


Some hon. Members:: Hear, hear!


Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I am grateful to my compatriot from British Columbia, the hon. member for Okanagan Boundary (Mr. Whittaker), for introducing this motion, one which has concerned me for many
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years as a person who lives in the farthest western reaches of Canada.
As he said, the C.P. is no longer a railroad, which is the reason for its existence. In fact the railroad might simply be called a "front" for its exploitation of other interests in this country. The railroad is simply there to further CP's moneymaking, and I would go so far as to say greed. Like the hon. member, I know the reputation of the railway, specifically the Canadian Pacific, which has taken so much of what should be the property of Canadians. I would rather strongly say it is almost like Scrooge who would clobber Tiny Tim, even after the insight of Christmas future!
I support strongly this motion which could lead the government to amend section 88 of the Railway Act, causing the railway rights-of-way, originally obtained through subsidies, to revert to the Crown when they are no longer in use as a railway and for railway purposes. I would go further than the hon. member and suggest, when they use the lands actively for other purposes, that they also revert to the Crown. The crucial words in this objective are: when they are no longer used for railway purposes.
No doubt in the 1880's it was an undertaking of almost inconceivable magnitude to span this huge land. Even today, with all our technology on land, air, and even in the stratosphere for communication purposes, with jet travel and satellite communication, it is difficult to unite this complex, diverse, huge land mass. It is basic to our present economic health and well-being, and possibly is causing our sociological trauma that we have not as yet succeeded in spanning this land. We have not done it with railways, not with communications, not with air travel. In fact, we are in the midst of fearing a national rupture because we have failed to link this land.
Canada is the second largest country in the world, consisting of 3,851,891 square miles. Our country is almost 4,000 miles across and 3,000 miles from north to south. We know how difficult it is, with a population of only 22 million, to link our country. How much more difficult it must have been in the 1880's in this sparsely populated, harsh, huge, unexplored, and frightening land. There were no great machines and technology then with which to build a railroad, yet a great railroad was built. There was an agreement at that time which, I maintain, as implied in the motion of the hon. member opposite, the CPR failed to live up to. It was an agreement to serve this nation and to give something to this nation in perpetuity.
This motion suggests that following the abandonment of branch line operations after CTC authorization has been obtained, lands originally obtained as a result of government subsidies for the purpose of railway rights-of-way should revert to the Crown. This suggestion runs counter to the Railway Act, but I agree that the Act can be changed.
It is said that this is a very complex problem with which to deal, but dealing with it properly would enrich Canada and solve perhaps even the problem of inflation, which I will explain in a few moments.

November 18, 1977
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I would like to go back to the CPR agreement. The CPR was to provide passenger service to this country in perpetuity. I happened to be on a CPR train on the very day the CPR acted to break this agreement. The service went plastic that day, the people who worked on that train said that the intention was to discourage passenger travel and that the railway would like to enter exclusively into the very lucrative field of freight traffic. We in the west know what freight means. It is very costly. We have always suffered from the discrimination of the railway system and inequitable freight rates.
That day on the train I saw the unilateral ending of the pact. The linen was taken off the tables, and the whole train turned cold. It was a very uncomfortable train, and everybody on that train knew that that was the beginning of the end, at the very time when railway travel could have solved our energy concerns and could have provided effective mass transit throughout this country.
Everyone knows the difficulties involved with that early construction, but the subsidy in the agreement was $25 million, a grant of 25 million acres of land, in alternate sections of 640 acres in a belt 24 miles deep on each side of the railroad. Even then they allowed for deficiencies in the fertile lands which were made up for with extra land. In British Columbia about 3 per cent of our land is said to be arable. B.C. is a rocky part of the country, yet here we gave away so much of that arable land-extra land if it was not arable-to the CPR.
By 1950 the CPR was big diversified business. It has become one of the big businesses to which the Prime Minister (Mr. Trudeau) referred in his Christmas message of 1975 when he said that big business, big government, and big unions were destroying the free market system. These big entities control much of this country, and no government can control them. I suspect if we were ever to implement the motion of the hon. member for Okanagan Boundary we would find that we are not big enough-not as big as the CPR and all its subsidiaries to do a thing.
CPR has developed and exploited our natural resources. There are steamships, telecommunications and hotels. The CPR operates its track. It is into trucking, ships, airlines and piggy-back transportation. The CPR has modern fleets of container ships and pipelines. It is involved with leasing, hotels and real estate. With regard to real estate we in Vancouver know Marathon Realty very well. The CPR is involved with oil and gas, mining and forest products.
The point I really want to make has to do with land. Marathon Realty has exploited the land it received free to its own excessive profits. It is said that almost all of Vancouver was once or is owned by Marathon Realty. That was the free land the railway received from Canada. Today Marathon Realty is building condominiums where once there were golf courses and green spaces. Not one inch of that would Marathon return to the citizens of Vancouver or Canada or to the citizens of the other communities where Marathon now owns land. Marathon is without social conscience. It charged the full price to the city when the city wanted a little strip of green space out of Marathon's developments. This has happened

throughout the city and throughout this country. For example, in one condominium development-which is on free land- Marathon charged $56,000 per unit, and I am sure land in Vancouver makes up half or almost half the cost of any real estate development. Within three or four months these units were selling at $83,000, a profit of $27,000. There had been no labour increases. There had been no real inflation in materials, in lumber, etc. yet the prices went up. These same units are said to sell for $110,000 to $132,000 now, only three years later, and not an inch of land has been given back to the community.
That is more than just abandonment. It is use of property for non-railway purposes. The CPR is a railway, and 1 hope the day will come when there is action to retrieve the land before it has all gone into real estate development. With the housing developments in the west and their charging of unnecessarily high prices-considering the free land-Marathon Realty contributed greatly to inflation in the city of Vancouver. When prices go up to that extent, it is a contributor to inflation.


Paul Yewchuk: Have you lost your page?


Simma Holt: 1 do not read my speeches. Some of you do.
I want to close with one thought. I had to look for the thought because it is not my own. 1 have no trouble finding my own thoughts. It is more difficult to find other people's thoughts. Theodore Roosevelt once said that a man who has never gone to school may steal from a freight car-this is appropriate to a railway debate-but if he has a university education, he may steal the whole railroad. A big business like CP can steal the whole land.
This whole country rose up against the Prime Minister and said he was trying to destroy the free enterprise system when he warned in December, 1975, that big business, big unions, and big government were destroying the free market system. They should have said "go to it," because at that time we saw that big business, oil cartels, coffee cartels, Marathon Realty and CPR were manipulating our whole society. That great labour union leader Joe Morris was going to call a national strike to stop the country for a day for his own purposes. We saw that beyond this Chamber, small business was-and is- being controlled and manipulated through big government regulations. We saw all that, and instead of misleading the public on what the Prime Minister was saying, we should have fought together to have all that changed, and stopped the power of the "Bigs". This motion at that time would have been part of the important change which is essential to Canada.
November 18, 1977


PRIVATE MEMBERS' PUBLIC BILLS
John Mercer Reid: Mr. Speaker, 1 wonder if I could ask the consent of the House to go back to a motion I proposed a few minutes ago. I believe I owe the parliamentary secretary an apology, because of all the people in the House he is the only one I forgot to consult.


Mr. Deputy Speaker:: Order, please. I do not want to prevent the hon. member from bringing back the motion that he tried to get unanimous consent on before, but I want to make sure that there is complete consultation and that no member has gone out of the House who would not approve it. I will ask whether there is unanimous consent for the hon. member to revert to his motion. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: The hon. member has asked permission to suspend the debate temporarily and revert to the consideration of private members' bills.


John Mercer Reid: Mr. Speaker, 1 move, seconded by the hon. member for St. John's East (Mr. McGrath):
That Bills C-206, C-207, C-241, C-318, C-325, C-348, C-399, C-400 and C-402 be discharged, and the subject matter thereof be referred to the Standing Committee on Justice and Legal Affairs.


Mr. McCleave:: Mr. Speaker, on a point of information, I am advised that these bills do deal with the matter of pornography and I am quite in favour of having them referred to that committee.


Stanley Howard Knowles: Mr. Speaker, we still agree with the motion.
[ Translation]


Yvon Pinard: Mr. Speaker, as hon. members can see, the negotiations have been speeded up and instead of waiting until Tuesday to discuss this important subject, we shall begin this evening.


Mr. Deputy Speaker:: Hon. members have heard the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Deputy Speaker:: The House will revert to consideration of notice of motion no. 13.
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PRIVATE MEMBERS' MOTIONS


[Stage Direction]
The House resumed consideration of the motion of the hon. member for Okanagan Boundary (Mr. Whittaker):
That, in the opinion of this House, the government should consider the advisability of amending section 88 of the Railway Act to provide for the reversion to the Crown of railway rights-of-way, originally obtained as government subsidies, upon their ceasing to be used for railway purposes pursuant to sections 106, 119 or 254 of that Act.
William Arnold Peters: Mr. Speaker, this must be Friday fever. First we have a motion that everyone agrees to, except the parliamentary secretary to the House leader who does not know anything about it and therefore feels obliged to object. If he had talked to his boss or anybody else he might have been better informed, but I guess that has to be done publicly.
In this very special debate we have been treated to the socialistic idea that if a private company does not live up to its obligations we take our largesse away from it. This must be Barrett fever in British Columbia. I can tell those two hon members, whom I consider to be very right-wing members, that 1 have attended NDP conventions where you could not be assured that this kind of motion would pass without considerable discussion. It was enlightening to listen to the conversion that has taken place, and I hope it lasts for more than a Friday afternoon.
We are certainly very happy to agree to this motion and are of the opinion that it is worth while. We were not only surprised that the two members who have just spoken suggested that abandoned lines should revert to the Crown but that the last speaker went on to say that the Canadian Pacific Railway has abused its position. It was given a great deal of land across the country, and although that land may not have been too valuable at the time, it is now of immense value. That should be given some consideration in terms of its current performance in operating a railway. For both members to indicate that view gives me a great deal of confidence that something will be done about the railways.
I agree entirely with the member who said that when we gave the Grand Trunk Railway and the Canadian Pacific the right to huge tracts of land to be used for a transportation facility across this country to carry passengers and freight, we anticipated that is just what they would do. The mover of this motion indicated they have done it to a degree, but I believe they have done more than that. They have used that money to buy mines and airplanes, they have built airlines and hotels and all those things you see on television. They have husbanded the assets we provided very well, but they have done less well in serving the Canadian public.
As the previous speaker said, they have abused their privileges. Maybe we should not now have linen on the tables and flowers on the tables and silver in the railway dining cars. That

November 18, 1977
Railway Rights-of- Way
custom grew up in the days of the steamers and passenger trains across the country. Perhaps she is right and those things should have gone. But they did not go as an economy measure, rather as a symbol of their decision to end the whole passenger service and the facility for which we had provided the assets.
Not long ago I made a presentation to the Canadian Transport Commission which was considering whether Canadian National should be allowed to drop its line from Toronto to North Bay. I wholeheartedly supported the proposition to drop the passenger service, and indeed I went further and supported the idea of dropping the line from Toronto to North Bay. The service has been so bad on that line that passengers have given up, but everyone looked askance at me because everyone knew that there had to be rail transportation from North Bay to Toronto. In applying to drop that service their idea was that the public would pick up the cost of the line, that people would say, "If you do not drop it we will pay all the operating losses and expenses." In effect that is what they wanted, and that is an abuse.
If the Kettle Valley Railway is going to be nationalized, and even if they take up the rails and drive cars along the rail bed, I think Mr. Herridge, who used to represent one of the Kootenay ridings, would be very surprised at his friends for advocating that. He did not get much support in the years he advocated it being nationalized and used for the common good.
I wholeheartedly support the argument because we gave the ground for these transportation corridors, and we have the right to take it back if it is not being used for the correct purpose. I would think there would be some in my party who would not go so far as to say we should take away the 640 acres on both sides of the line; some of my colleagues may own some of that for all I know. I am not just too sure what that would involve, so I am not sure that I would go quite that far. Maybe I am not as far to the left as some of my colleagues in other parties. I would certainly go so far as to say that where the facility is abandoned we should retain the corridor for which we gave them that grant.
It seems to me that it is very interesting that the railways got all the best corridors through the mountains. In fact they got the only way you could ride through with a horse even in the early days. They looked for the only way to get through the mountains and built a railroad on it. Since then we have tried to get over those mountains and, as my friends have said, we have had to fly over them, there is no other way through them. So if you are going to take the rail line out and eliminate the possibility of hauling passengers, at least let us drive our cars through on that right-of-way, and I wholly support this.
I would have to look at the ramifications. This is the kind of speech my Conservative colleagues usually make. They would have to look at all the ramifications of the nationalization of the Canadian Pacific in the light of accomplishing this particular purpose of retaining rights-of-way. I don't know whether in the end it would be wise to take away their steamboats, their

airplanes, mines, factories, their connections with television and satellites in the sky and all the other things in which they are involved. But I am very pleased that the hon. member from the Kootenays, and the hon. member for Vancouver-Kingsway (Mrs. Holt) lived up to the traditions that have been long established in both of their ridings by socialist predecessors in wanting to nationalize the Canadian Pacific Railway. Even this small step will make the former members, one from Kootenay East and the other from Vancouver-Kingsway, very happy I am sure, and I hope we can support it for their sake as well as for those who remain.


Hon. Martin O'Connell (Scarborough East):: Mr. Speaker, I would like to comment on the motion before us, and to do it briefly. I think there is another aspect of it which ought to be brought forward. The purpose of the motion is to provide for the reversion to the Crown of railway rights-of-way which have been abandoned, if those rights of rights-of-way had been acquired in the first instance through a subsidy procedure for the building and operation of the railways.
It seems to me, following the hon. member for Timiskaming (Mr. Peters), that reversion to the Crown would not indeed ensure that those rights-of-way were retained as rights-of-way for possible future transportation corridors. I took that to be one of the purposes the hon. member for Okanagan Boundary (Mr. Whittaker) put forth. In fact they might well be disposed of, but there is no provision in this motion which would ensure that any proceeds from a disposal would go back into the operation of the railway. I think there are further refinements of this whole procedure which are worth pursuing.
I want to say to the hon. member for Okanagan Boundary that I, too, support the basic principle involved in his motion. I think it is a very sound one. I would prefer to support his Bill C-222 which is coming up, possibly before we recess at Christmas, because in doing so we would get that bill over to committee and then we can look at all the ramifications that really arise. My friend from Timiskaming said he would like to look at the ramifications. He appropriated what he thought were the socialist inclinations of previous speakers, but he abandoned them very soon afterwards by going to a Conservative position. If he wants to maintain both positions it would be better to send the bill, coming soon, to the committee.


An hon. Member:: Nationalize Bell at the same time.


Mr. O'Connell:: I know the NDP want to nationalize Bell Canada, but I want to say to them they are exceptionally wrong in this particular case of Bell Canada-and not to divert from our bill in front of us-Mr. Speaker, the government to a very large extent accepts the principle in the motion.


Some hon. Members:: Hear, hear!


Martin Patrick O'Connell: I am not speaking for the government in an official sense, but I want to read what the Minister of Transport (Mr. Lang) has said recently which would lead me to the conclusion that the government supports the basic principle in a specific instance. We all know that the Hall Royal Commis-
November 18, 1977

sion on Grain Handling and Transportation reported in the middle of May this year, and it recommended a certain amount of abandonment of branch lines in the three prairie provinces. 1 looked at what the Minister of Transport said ten days later, and 1 am quoting from a commentary he made on May 27 of this year, at page 6:
Where any line is in fact abandoned, I want the roadbed property to revert automatically to the federal Crown.
There is our Minister of Transport supporting the principle, but in a specific instance of abandonments authorized by the Canadian Transport Commission.
He said, in addition,
The Government of Canada would then, after consultations with the provinces, offer that land to the provincial Crown involved, for ultimate disposition to a local municipality, or we would offer it for sale as soon as possible to adjacent farmland owners;
1 think some of us would like to ensure that any proceeds would go back into the railway operation, if that is our ultimate purpose. 1 will repeat again what the minister said in August on the same point in responding to the brief of the three prairie transportation ministers. 1 quote from page 4 of a document dated August 15, 1977:
Abandoned Right-of-Way
Where any line is in fact abandoned, the roadbed property should revert automatically to the federal Crown. The Government of Canada would then, after consultation ...
And so on. There twice is reiterated the position of the government in support of the bill.
It seems to me we would be more prudent to have the committee consider what the ramifications are. We have a way of doing it and I intend to support the bill that the hon. member is bringing forward, Bill C-222.
Here are some of the considerations that 1 think cannot be met in this House in the broad scope he has given to the motion. I know he is interested in the Kettle Valley line. It is a specific instance again, but supposing all of those properties revert to the Crown, what would be the burdens on the federal government in maintaining the properties in the meantime? Would it in fact wish to sell them off? Would any sales be consistent with long term planning in a municipality, or even a requirement that there be a federal/provincial agreement on long term transportation corridor needs? We don't know and can't know unless we have much more information.
What are the city properties worth in, say, downtown Toronto, if put into convention centres or hotels or non-railway uses what hundreds of millions of dollars worth of property would automatically revert to the Crown if we accept the motion? We ought to know in some detail the amounts of money involved here and if, in fact, the railways would lose the opportunity of sale of those properties, would they also lose the financial capacity to reinvest in rail networks?
The implications are serious enough that although we can say quite frankly to the hon. member that he has a good principle here, and I think the government is in basic agree-
Railway Rights-of- Way
ment with it, as I have quoted from the minister, however, there is too much involved simply to support the motion. I will indeed support the bill when it arrives.


Fred Alward McCain: Mr. Speaker, it is rather heartening to hear the hon. member opposite speak as he did. As he pointed out, there are a multitude of interests involved in both the bill to which he referred and the motion presently before the House.
It is of interest to the Canadian public that the money which may be realized from what was in many instances granted land for the purpose of the construction of railroads should accrue to transportation. At the moment, it is being deflected by both our major railroads into rental property and sales, and any other venture that can take place, or it becomes a free piece of land for the construction of a very commercial venture without charge to that venture, whether it be an hotel, shopping market, or whatever else may be constructed.
The transportation interests of Canada are getting shortchanged in a very major way with rentals, property sales and so on as a result of the other uses made of granted land, whether it be the New Brunswick Railway Company, CPR, CNR, the Kettle Valley or any other railroad.
All members on this side are very heartened to be assured of some support for the bill which will succeed this motion. I do not think it would really be bad at this moment if this motion were allowed to pass pending the outcome of the bill. I think it should be passed.


Mr. Ian Watson (Laprairie):: Mr. Speaker, I want to add at least a few observations to the ideas contained in the motion before the House today. I myself introduced a private bill during the last session and again in this session concerning the use of abandoned railway lines. I think their use represents a huge potential, during the summer for bicycle paths, and during the winter for cross-country skiing or snowmobiles. In addition, their use could be very important for recreation, and we should not yet allow the railway companies to continue abandoning them without due concern for the public interest interest in the areas where those lines are located.
Something happened recently in the Eastern Townships where, I think thanks to the intervention of the provincial government, it may be possible that a line abandoned by the CP near Brome Lake will be used; on the other hand, I do not think the present situation should be allowed to last because we should probably allow some compensation for those lots. If they have little value, then we could grant the public a right of way which could mean a lot for the future of recreation. In any event, I think we should do the most sensible thing.

I do not want to take away from the time of another hon. member who has indicated he wishes to speak on this. Before sitting down, I want to state that the idea is an excellent one. The railroad should be obliged at least to offer to public bodies, provincial and municipal governments, these sites
1054

November 18, 1977
Railway Rights-of-Way
before taking steps to get rid of them and selling them piecemeal. A means should be provided whereby they can be protected for future public use and the recreational use of all Canadians.
[Translation}


Yvon Pinard: Mr. Speaker, it is regrettable that there are only a few minutes left because 1 would have many things to say about such an interesting subject. Knowing that a bill will be debated after the study of this motion is over, I have no scruples at all in using the remainder of the time allotted to me to express my point of view on this motion even if I have to watch for the time when that bill comes up for debate.
As for the motion before this House tonight, it aims at amending the Railways Act which may seem in itself a rather simple matter at first sight, but which is in fact so complex and full of implications that it would not be appropriate to pass this amendment. Theoretically, section 88 of the Railways Act gives the railway companies the right to dispose of lands which have been acquired as subsidies from the Crown in the manner they deem appropriate. According to this amendment, rights-of-way acquired by railway companies through subsidies would revert to the federal government. Although this proposal is undoubtedly well grounded, the identification of the subsidies and these lands obtained through these very subsidies is truly a complicated matter. The Hall Commission report recommends that following any abandonment of railways, all such tracts of land revert to provincial governments. However,
this bill recommends that they be turned over to the federal government, a matter which upsets the provinces. In short, we are still studying the impact of the Hall Commission report, the concerns of the provinces and the consequences stemming from the transfer to the federal government of lands abandoned by the railways. Given the complex historical process of land acquisition by the railways, the concerns expressed by the provinces and the delays necessary to ensure a fair sharing of these lands, it does not seem appropriate to solve these problems through legislation.
Mr. Speaker, the motion before the House would amend the Railways Act so that rights-of-way originally obtained through federal subsidies would revert to the Crown.
It is a complex and gigantic task to try to determine which rights-of-way were originally obtained through federal subsidies and the nature of railway construction at that time as well as the various forms of subsidies given to an unbelievable number of small railway companies, several of which have now disappeared, while others exist only on paper. To follow up this motion, one would have to-


Stanley Howard Knowles: Question!


Mr. Deputy Speaker:: Order, please. 1 regret to interrupt the hon. member but the time allotted to private members' business has now expired.
It being five o'clock, the House stands adjourned until Monday next at two o'clock p.m., pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, November 21, 1977