1977-02-14

ROUTINE PROCEEDINGS


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, because this is an urgent matter I ask leave under the provisions of Standing Order 43, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom) to move:
That this House urges the President of the Treasury Board to introduce at an early date the necessary amendments to the Supplementary Retirement Benefits Act so that retired Canadian Armed Forces and Royal Canadian Mounted Police personnel will have their pensions escalated annually, in accordance with the rise in the cost of living, commencing in the year following the year of retirement, regardless of age, thus ending the unfair discrimination which applies to many such personnel.


Mr. Speaker:: Standing Order 43 requires the unanimous consent of the House before such a motion can be put. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT ADMINISTRATION
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, the Prime Minister (Mr. Trudeau) informed the House that the guidelines concerning the use of aircraft by cabinet ministers are sufficient. However, a number of Saskatchewan people have voiced their concern about a recent flight by the Minister of Transport (Mr. Lang). I therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House ask the Minister of Transport to make a statement on motions explaining why on Saturday, February 5, he used a government aircraft to fly out to Regina to attend a Liberal curling bonspiel and social at Milestone, sponsored by the Assiniboia Federal Liberal Association.


Some hon. Members:: Oh!


Mr. Speaker:: Consideration of such a motion pursuant to Standing Order 43 can only be made with unanimous consent.


Some hon. Members:: No.


ABORTION
Mr. J. Larry Condon (Middlesex-London-Lambton):: Mr. Speaker, pursuant to Standing Order 43, I rise on a matter of pressing and urgent necessity, namely the banning by the Public transit systems of Toronto, Ottawa and Vancouver of an advertisement supporting the anti-abortion group known as Valade Vitae Service of Winnipeg which depicts a pregnant woman in an advertisement protesting the killing of 172,265 babies by abortion between 1970 and 1974. This responsible and legitimate message asking the Canadian people to respect the rights of babies is being denied by certain individuals in these transit systems who feel the issue is too controversial.
I therefore move, seconded by the hon. member for York South (Mrs. Appolloni):

That this House condemns the censorship imposed on this anti-abortion group, and that a committee of the House of Commons investigate the blatant infringement on civil liberties.


Mr. Speaker:: Under the provisions of Standing Order 43 such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PRESENCE IN GALLERY OF MR. CLEMENT RICHARD, SPEAKER OF QUEBEC LEGISLATIVE ASSEMBLY
Mr. Speaker:: Order, please. Before proceeding with the oral question period, I have the honour to bring to the attention of hon. members the presence in our gallery of a very distinguished guest who has already become a dear colleague and a friend, and I am sure all hon. members want to join me in wishing him good luck and extending our congratulations to

February 14, 1977
Oral Questions
the new Speaker of the Quebec Legislative Assembly, Mr. Clement Richard.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. James Gillies (Don Valley):: Mr. Speaker, I have a question for the right hon. Prime Minister. It arises out of the continuing discussion on rules governing Crown corporations. Given the fact that it seems that one of the major reasons for some of the great difficulties in which Crown corporations are now finding themselves is that boards of directors are not fulfilling their obligations as well as they might, does the government plan to inform all directors whom they appoint to Crown corporations that they have responsibilities to fulfil as least as great as those specified under the Canadian Corporations Act?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I must confess that I have no knowledge that we are acting in that direction, but it seems to be a very valid suggestion. I have ascertained that the ministers have informed the Crown corporations for which they are responsible, first under schedule B and later under the other schedule of the Financial Administration Act. But I do not know whether or not they have also informed the members of the board of directors. I will inquire and if they have not, it would seem to me that they should take this suggestion very seriously.


POLYSAR
James McPhail Gillies: Can the Prime Minister tell us whether or not the government, as the principal shareholder of CDC, has asked its directors on the board to inform the management of Polysar or to inquire of them what action will be taken to discipline those officers of that company who were engaged in acts which may indeed be repugnant to the standards of corporate practice in Switzerland?


Pierre Elliott Trudeau: I will be pleased to report this suggestion to the Minister of Finance who is the minister to whom CDC responds.


James McPhail Gillies: Can the Prime Minister tell us whether or not it has been ascertained if any Canadian corporations or subsidi-

aries of Canadians corporations were involved-I am now referring to companies in the private sector-in the Polysar situation in Switzerland where it has been reported there were blocked currency deals and the avoidance of income tax? Where there any Canadian companies in Switzerland involved with Polysar in these deals?


Pierre Elliott Trudeau: I could not say, but I will certainly ask the Minister of Finance whether he has knowledge of it. It would seem to me that the committee chaired by the hon. member for Northumberland-Durham might ask this type of question of the officers involved.


GOVERNMENT ADMINISTRATION
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, my question is with respect to the Polysar matter and in view of the fact that the truth of the matter came to light not particularly as a result of effective government controls but rather from vague and random government processes, if even that.
Would the Prime Minister take steps to give the Public Accounts Committee the authority and the staff necessary to make a full investigation of all government controlled corporations, including the power to examine all board minutes, supply contracts and other like documents, which have been denied to the committee thus far in its investigation of the AECL matter? I ask that question particularly in view of the fact that in the cases of both Crown corporations which have been investigated by this committee thus far business practices have been revealed which charitably can only be described as slipshod.


Pierre Elliott Trudeau: Mr. Speaker, I do not agree with the premises of the question. The House will recall that the action which was taken resulted in an assertion and statement being made by independent auditors and lawyers that there was nothing untoward in the actions of Polysar. It was only later that a subsequent inquiry came out with a contrary opinion, and perhaps the committee of the House will be trying to reconcile these two contradictory opinions.
As far as the suggestion of the hon. member is concerned, if it is just enjoining the committee to do everything it can to get to the bottom of this, I would support the desire of the hon. member. However, if he is suggesting that the committee be given special powers, and they are not within the traditions of our parliamentary system, I suggest that this is a matter for the House to decide. If the House wants to make a special reference to that committee, perhaps the hon. member can discuss that with the government House leader, with whom he has daily contact.


Walter David Baker: I want to thank the Prime Minister for his answer, particularly the latter part. In the
February 14, 1977

event an approach was made to the government House leader, could the House be assured that the kinds of matters which 1 have tried to describe, and which the Prime Minister has defined in his answer, would have the support of the Prime Minister? Would he, in fact, speak to his seatmate, the government House leader, so that parliament and the public could be assured that this committee would have the power necessary to make the fullest possible investigation of this kind of activity and, indeed, if necessary, other activities which could from time to time come to prominence?


Pierre Elliott Trudeau: In its very form the question is hypothetical, and my answer will also be hypothetical. If the proposals of the hon. member are in conformity with our parliamentary system, the government House leader would be open to his suggestions; but if they have the effect of changing the parliamentary system into a congressional one, it is possible the hon. member would have some difficulty convincing the government House leader.


POSSIBILITY OF INFORMING FOREIGN COUNTRIES OF WRONGFUL OPERATIONS OF CANADIAN COMPANIES IN THOSE COUNTRIES
Walter David Baker: I think it ought to be clear to you, Mr. Speaker, and to hon. members that the intention is not to change the system but to make the parliamentary system somewhat more effective than it apparently is, judging by news reports with respect to the investigative capacity of the Public Accounts Committee.
However, leaving that aside for the moment, is the Prime Minister taking any steps to indicate his attitude to foreign companies and to foreign governments with respect to companies operating under Canadian aegis in those countries, particularly when, as has been established, there has been a kickback system operated in other countries and certain nationals in a certain country have benefited from the operation of a Canadian company abroad?


Pierre Elliott Trudeau: At this point I do not see what representations the hon. member would suggest I make to foreign countries. I have stated quite clearly and unequivocally in the House that Canadian corporations, subsidiaries of Crown agencies and Crown corporations would have to act in conformity with the laws of Canada and the laws of the countries in which they are operating. Beyond that I am not quite sure what the hon. member would suggest I do.


COMBINES
Stanley Howard Knowles: Mr. Speaker, I should like to direct a question to the Minister of Consumer and Corporate Affairs. In view of the threat made last week by the Canadian Bankers' Association on behalf of
Oral Questions
the 12 chartered banks which are members of that association to take concerted retaliatory action if parliament passes a law requiring banks to pay interest on the money they receive from their depositors all the time they have it, is the minister requesting the officials in his department to investigate this matter under the Combines Investigation Act to see if the banks are acting in violation of the law against collusive action?
Hon. A. C. Abbott (Minister of Consumer and Corporate
Affairs): Mr. Speaker, I deprecate some of the comments made by the Canadian Bankers' Association at the standing committee because I believe they are attempting to exaggerate the problem in order to strengthen their case when they know full well their points are unjustified. I am advised that the provisions of the Bank Act concerning agreements between or among banks apply to banks in lieu of the Combines Investigation Act. Therefore, I understand the director of investigation and research has no authority to launch an investigation. I suggest to my hon. friend that he might better address his point to my colleague the Minister of Finance.


Stanley Howard Knowles: Mr. Speaker, perhaps because the Minister of Finance is not here today my friend would refer that comment to him. As a supplementary question may I ask if the government is firm in its intention to proceed with this legislation and will not be backed down by the intimidation of the Canadian Bankers' Association?


Mr. Abbott:: Mr. Speaker, the government and myself are certainly determined to proceed with this legislation. The Canadian Bankers' Association's principal point was that they could not afford interest being calculated on a daily basis. At no time have I stated that this would be the case; the bill does not state this and they have been assured that we are sympathetic to the point that remote branches that do not have computer facilities would find this burdensome. That is why I suggest they are utilizing this point in their brief to cause wide alarm in the community. It is both unjustified and inappropriate.


Some hon. Members:: Hear, hear!


BANK ACT
Stanley Howard Knowles: Mr. Speaker, as a final supplementary and in the absence of the Minister of Finance perhaps I may put it to the Minister of Consumer and Corporate Affairs in his capacity as second Acting Minister of Finance. In view of the delays that have already occurred can we be told when the government will bring the new Bank Act before parliament?

February 14, 1977
Oral Questions


Anthony Chisholm Abbott: No, Mr. Speaker, I cannot answer that.


MANPOWER
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. I should like to bring to his attention something which I am sure has been brought to his attention already by his officials, namely, an article under date of Saturday, February 12, in the Toronto Star and I quote in part, " .. . unpublished figures leaked to New Democratic Party by Statistics Canada show the number of hidden jobless is at least 300,000." This makes the unemployed now in the neighbourhood of one million with an unemployment rate of some 11 per cent. Has the minister caused an investigation to be made as to the truth of the allegation regarding this leak? If not, I hope he will. Will he also advise the House why Statistics Canada found it necessary to hide some 300,000 people who should have been in the statistics relating to unemployment?


Hon. Jack Cullen (Minister of Manpower and Immigration):: Mr. Speaker, if I have heard any complaints about Statistics Canada it is that they give out too many figures rather than too few. This may be a pet project of an individual. It is all a question of how these figures are used, what their import is and why those in a particular category over a period of time are not in the labour force. There is no attempt to talk about hidden unemployment. I will be making a comment on this in a major address next week. It is a little difficult in the time given in the question period to deal with all the misinformation spread about these particular figures.


An hon. Member:: Do it on motions.


Lincoln MacCauley Alexander: Mr. Speaker, the minister still has not answered my question which is: will he cause investigation to be made to ascertain whether there is any truth in the leaking of those figures to the New Democratic Party? As a supplementary question, would the minister take it upon himself to advise Statistics Canada, and the ministers responsible, that the hidden jobless should also be included in the statistics issued periodically regarding unemployment in order that we may have a true picture of the unemployment rate in Canada?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the reason for the figures, why they are put out and what programs they are based on, have been spelled out over and over again. There is no need for anyone at Statistics Canada or anywhere else to leak figures. They are all a matter of a comprehensive review which covers a myriad of information that is available to all members of the House. I am not so much interested in the fact that there are so many; I want to do something about getting the number reduced.


CANADA WORKS PROGRAM-REQUEST FOR REVIEW OF CRITERIA ON WHICH ALLOCATION OF FUNDS BASED
Lincoln MacCauley Alexander: A final supplementary question, Mr. Speaker. I hope the minister will not ignore my main question. Will he cause an investigation to be made, to determine if there is any truth to the allegation made by the Toronto Start I shall now ask my final supplementary question. Since certain criteria placed before this House and the people of Canada regarding the Canada Works and Young Canada Works programs is based on old statistics relating to the unemployed, will the minister now review the criteria relating to the unemployed and moneys going to high unemployment rate areas? I ask this in view of new findings which apparently cannot be questioned. Actually, it has been suggested that the figures prepared by Statistics Canada show that over one million people are unemployed and that the true national unemployment rate is approximately 11 per cent. Will he review the criteria with respect to the Canada Works and Young Canada Works programs?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the hon. member is saying, "me too," and aiding and abetting the misinformation and garbage being spread by the leader of the New Democratic Party. I again commend to the hon. member a careful reading of my letter sent to every member of parliament, indicating the criteria being used in making allocations under the Canada Works and Young Canada Works programs. We indicated that where the labour force survey figure was lower than that for those registered on the unemployment insurance rolls, we used the higher of the two figures. We used this system to the particular advantage of the Atlantic provinces. I would think my hon. friend would have accepted that. If we are going to keep bandying these figures around without indicating why they are used and what their base is, I think we shall be spreading a kind of mischievousness around the country which is not warranted. Mr. Speaker, the use of those figures reminds one of the reason for "Con" in "Conservative."


Some hon. Members:: Oh, oh!


Lincoln MacCauley Alexander: You had better hurry up and make that statement, for there is lots of hanky-panky going on on the government side.


Some hon. Members:: Hear, hear!


An hon. Member:: There is "libel" in Liberal.


PROGRAMS TO CREATE JOBS FOR THOSE NOT INCLUDED IN UNEMPLOYMENT STATISTICS
Mr. James A. McGrath (St. John's East):: A supplementary question, Mr. Speaker. Notwithstanding the minister's flippant attitude in this House, one must assume that he is concerned. I wish he would express that concern by telling the House what programs he proposes to create jobs for this hidden list of the unemployed. I say this since in my own province, for example, it stands at 28,000 and in the province of Quebec at 139,000,

February 14, 1977

well over one third of the actual unreported job list. Now the minister tells us that his job creation program is based on Statistics Canada figures. I ask him, earnestly and sincerely, does he have under consideration at present extra programs to deal with this supplementary or unreported list of jobless?


Jack Sydney George (Bud) Cullen: Mr. Speaker, if I were basing my criteria on the figures indicated by the hon. member, a different series of criteria would be used across the country. As I indicated in my letter, the procedures we were using worked to the benefit of the hon. member's province; we did this rather than using the labour force survey which leaves out some of the people who are not shown on the unemployment insurance rolls and others listed in a particular area. It represents an increase of about 50 per cent, and the benefits all accrue to the hon. member's province. I would think he should look at my letter again and welcome the changes we have made, indicating that where the labour force survey in our view does not do an adequate job, we have used our own statistics for the betterment of, or at least for the purpose of making more money available, to areas of high unemployment.


UNEMPLOYMENT-POSSIBILITY OF MEETING WITH PREMIERS OF ATLANTIC PROVINCES
Mr. David MacDonald (Egmont):: Mr. Speaker, may I put a supplementary question to the Minister of Manpower and Immigration? In view of his visit to the Atlantic provinces where he will discuss, presumably, just this question, and the suggestion of my colleague from St. John's East with respect to meetings with the four Atlantic premiers-I understand the premiers have indicated their willingness, indeed desire, to hold such a meeting-can the minister tell the House if a meeting has been arranged and where and under what circumstances it will take place?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I do not believe that a meeting has been arranged with the leaders at this particular time. It is a question of whether it is too soon to move into that particular region. However, I shall want to have a look at the suggestion, to see if something positive can come out of it, other than a mere show, by the Minister of Manpower and Immigration going down to see the premiers. I want to talk to people who perhaps can help me to create some jobs.


David Samuel Horne MacDonald: A supplementary question, Mr. Speaker. I hope very much that the minister will have some specifics to discuss with the four provincial governments. I wonder if he could indicate to us what specific programs he has in mind, so that they can come prepared to discuss specific projects or programs which can be undertaken this winter. I ask this in view of the critical situation existing in all four Atlantic provinces and the necessity, as I am sure the minister agrees, for doing something over and above that which is currently contemplated in the Canada Works and Young Canada Works programs. I think he and all hon. members
Oral Questions
recognize that this is but the beginning of attempts to deal with that serious situation in that region.


Jack Sydney George (Bud) Cullen: Mr. Speaker, there has never been any shortage of ideas or plans coming from the governments of any particular persuasion. They have the same concern that I have about the high rate of unemployment in that area. Where there are good ideas coming forward, I will do my best to find the funds to make them work.


STUDIES OF POSSIBLE SITES FOR HYDROELECTRIC PROJECTS IN LABRADOR-EXTENT OF GOVERNMENT ASSISTANCE
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. The minister will recall stating publicly last year that he favoured the government of Canada helping financially with regard to detailed studies being done in Labrador in order to obtain more information on possible hydro sites that could be developed in Labrador. Is it correct that in September the province wrote the minister asking for financial assistance for a series of studies that would cost approximately $2 million to be carried out over approximately three years? If that is correct, is the minister in a position to say what assistance the government of Canada will give toward these studies which will cost $2 million over three years? Is the minister prepared to say now how much the government will contribute?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I can confirm, as the hon. member has stated, that we are looking at the possibility of providing funds for an inventory of hydro resources in Labrador. I am not in a position at the present moment to indicate what the amount might be. I hope to be able to make an announcement in the very near future.


John Carnell Crosbie: Will the minister confirm or deny whether Treasury Board has already turned down the minister's request for $1 million, a 50 per cent contribution, and therefore the contribution will be zilch.


Alastair William Gillespie: Mr. Speaker, I am not sure whether the last word was parliamentary. It may be a well-known Newfoundland expression. I can tell the hon. member that the matter is under active consideration. At the present time, there has been no veto with regard to the program he and I are talking about.

February 14, 1977
Oral Questions SPORTS


GOVERNMENT PROGRAM FOR AMATEUR SPORT-REQUEST FOR REPORT
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, I have a question for the minister in charge of sports and fitness. Given the gold medal successes last week of our swimmers and skaters, it seems a perfect time to ask our minister for sport for a report on where her plans are. Two weeks ago she told the anxious members of the Sports Federation that she would let them know very soon the federal plans for amateur sport for the next four years, that she was waiting for cabinet. What is happening in cabinet about sport?


Some hon. Members:: Oh, oh!


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, in view of the hon. gentleman's prowess in the fitness test, I would like to wish him a Happy Valentine-


Some hon. Members:: Hear, hear!


Iona Campagnolo: -and inform him that following the presentation of the estimates, I will be happy to answer his question in full.


ATOMIC ENERGY OF CANADA LIMITED
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question for the Prime Minister is supplementary to that asked by the hon. member for Grenville-Carleton with regard to examples of representations he might make. It relates to the singular lack of co-operation that the Public Accounts Committee has been getting from the government in its attempts to throw some light into the murky warrens where AECL does its business. In view of the fact that one solution to this Argentine puzzle lies in the hands of Lucien Secouri, President of Italimpianti, who has so far refused AECL's requests to identify the agent, will the Prime Minister make official representations to Italimpianti and, if necessary, the Italian government in order to obtain this information?


Pierre Elliott Trudeau: Mr. Speaker, I take exception to the preamble to the question. The government has been co-operating. We have asked every minister to go to the Committee. They have answered to the extent of their knowledge. It is true there are things that are happening at the end of the line of the Crown corporations of which we do not have control or knowledge. We have urged the committee to seek to obtain as much as it can from officials and anyone who might be connected with the operation. The ministers themselves obviously have a clean bill of health. They have co-operated in every way. I think that the preamble is really justified. In so far as the request itself-


An hon. Member:: Come on, Pierre.


Pierre Elliott Trudeau: Would you like to answer the question? I see the member of the NDP open his hands in anguish. If the member could be present at the committee and get the committee to inquire into areas into which he might have great insight-he shakes his head-perhaps the committee would hear something more than a rattle.


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: I am sorry the Prime Minister was diverted from answering my question. Will the Prime Minister allay the fears of those who might consider the lack of action on the part of government as being disinterest or, even worse, some sort of corroboration of the lack of activity in the investigation by simply informing, through the diplomatic channels, the Italian government and Italimpianti that we will not go any further in the partnership unless we receive the information requested by members on both sides of the House and the committee, regardless of which party?


Pierre Elliott Trudeau: Mr. Speaker, I answered a similar question just last week. I raised the question of whether it was proper to discuss in the House the proceedings of the committee until the committee had finished its report. The questions today substantiate that question mark. When we have a report from the committee, surely the government will then be able to be faced with a reasonable series of suggestions. In the meantime, this kind of second guessing of the committee is not only premature but unparliamentary.


ABORTION
Joseph Lawrence (Larry) Condon: Mr. Speaker, I have a question for the Minister of Justice. It is my understanding that the Minister will be having a meeting in which a brief will be presented from the Planned Parenthood Federation of Canada, a known pro-abortion organization, on Thursday, February 17, in Toronto. If so, will the minister request briefs from the Alliance for Life or some other antiabortion groups so that some balance may be obtained on this important issue?


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. That is clearly a representation as opposed to a question.
February 14, 1977


WEIGHTS AND MEASURES
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. As this country proceeds into metric conversion, there is great concern among cattlemen in Canada. Can the minister advise whether he intends to convert the weights of cattle to metric and, if so, whether he will do that in conjunction with the United States because cattle trade is very much a North American market?
[ Translation]


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, this is an administrative matter which comes under the jurisdiction of the Minister of State (Small Businesses) who is concerned with the metric system. I shall be pleased to convey to him the hon. member's representations.


EXTERNAL AFFAIRS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. What investigation is being made by his department in connection with the Canadian University Students Overseas (CUSO) organization respecting allegations that have been made by most responsible authorities that that organization is an instrument of separatist propaganda in Quebec and, indeed, that the federally financed group have been sending pro-separatist recruiters into Quebec?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I have not personally heard of that specific allegation. From time to time there have been news reports to the effect that some people in non-governmental organizations which receive some form of government support are acting in a way which some people regard as not being consistent with national unity. If the right hon. member will let me have this particular allegation, I will certainly have it investigated along with a number of others that have come to my attention.


John George Diefenbaker: Mr. Speaker, I am surprised that the minister, who is always up to date in connection with his department, is not aware of the fact that Dr. Arnold Smith, C.H., who for 11 years was Secretary-General of the Commonwealth and is now a professor of international affairs at Carleton University, made the statement, and I repeat it, that the federally financed group, not ancillary groups but members of CUSO, have been sending pro-separatist recruiters into Quebec. Does the minister tell me that the matter is apparently so well known that persons like Mr. Smith, who has universal approbation in all parts of the Commonwealth, does
Oral Questions
not know what he is talking about? And if he does, why is it that the minister is in a position where no one has even whispered this to him?


Donald Campbell Jamieson: Well, Mr. Speaker, it really is not a question of whispering or saying it out loud; it is a particular allegation.
I said that I had heard other ones. The first question the right hon. member asked did not include the name of Dr. Smith. Had it done so, of course, I would have realized that he was one of the sources from which this kind of criticism has come.
I am looking into this whole question of whether or not there are those who are being, in one way or another, financed by federal funds, by taxpayers' funds from the whole of Canada, and whether they are in fact contributing to what the right hon. member has called the "separatist cause". Certainly, this one I will add to the list if it is not already there.
In so far as penetration of Quebec, or infiltration into Quebec, is concerned, that could scarcely at the moment be called an external affairs matter, and my feeling is that it will be a heck of a long time before it is.


Some hon. Members:: Hear, hear!


John George Diefenbaker: A final supplementary question, Mr. Speaker. The minister has a masterful capacity for evasiveness. He is in charge of CUSO and external affairs. He now says that he has been looking into some allegations. What are those allegations, how many have been made, and when did the investigations start which he now recalls and did not have in mind a little while ago when I first asked the question?


Donald Campbell Jamieson: Mr. Speaker, I may be the master of evasion but the right hon. member is as sure as heck the master of a convoluted kind of question which bears no relation to the one he first asks. I should just like to say, in fairness, that I think the right hon. member would realize that CUSO is in fact a private or semi-private organization-


John George Diefenbaker: Under the minister.


Donald Campbell Jamieson: No, sir, not under the minister. It is an organization to which we give a good deal of support, but it is not an organization which acts responsibly in terms of responding or coming to the minister concerned. It is an organization which has a good deal of independence. But that does not detract from the seriousness of the right hon. member's question. I have told him that I will follow through and he knows I will look into it and give him an answer.


MACKENZIE VALLEY PIPELINE-FINANCIAL GUARANTEES TO ARCTIC GAS-POSSIBLE REPRESENTATIONS FROM UNITED STATES
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources. In

February 14, 1977
Oral Questions
view of the fact that the Arctic gas consortium have not yet formally requested financial guarantees from the government on cost overruns on the proposed Mackenzie valley pipeline, but have indicated before regulatory bodies that they require such guarantees and formal requests will soon be made, may I ask the minister if the Canadian government has received representations from the United States government on the question of financial guarantees by Canada, especially in view of the United States Treasury Department's negative reaction to such U.S. government guarantees for cost overruns?


Alastair William Gillespie: Mr. Speaker, I want to give as comprehensive and accurate an answer as I can. I have just checked with my colleague the Secretary of State for External Affairs. To our knowledge there has been no representation made by the United States government.


MACKENZIE VALLEY PIPELINE-ALLEGED THREAT BY COMPANIES TO REDUCE EXPLORATION IF PIPELINE NOT APPROVED
Reginald Cyril Symes: Mr. Speaker, may I put a supplementary question to the minister on the same matter. Given the threats by certain oil companies in Canada that they will cut back oil and gas exploration in the western Arctic if the government does not approve the Mackenzie valley pipeline, will the minister assure the House that the government of Canada will not bow to these blackmail tactics when deciding whether or not this pipeline should be built, and if necessary cancel the exploration permits of the companies employing such tactics?


Alastair William Gillespie: Mr. Speaker, I believe the hon. member is imputing certain motives which it is far from clear at the present time do exist when he refers to blackmail efforts on the part of the oil companies. I should like to reassure the hon. member that if a decision is taken, whatever the decision may be, with respect to the Mackenzie valley pipeline or any other pipeline, that decision will be taken with the national interest in mind. I have made it clear on previous occasions that the federal government will not be blackmailed or put itself into the position of being blackmailed by any group.


INCOME TAX
Mr. Adrien Lambert (Bellechasse):: 
Joseph Adrien Henri Lambert: Mr. Speaker, on a
supplementary.
To reassure the minister, let me say first of all that I am not from Marseilles but from Quebec, and I am a Canadain right through and through. Just the same, I appreciate the tone of the answer of the minister: it indicates a state of mind that I admire very much because it reveals a will to get to the bottom of things. Here is my supplementary: first, the statement I quoted was not made by the hon. member for Bellechasse but by the Minister of Finance (Mr. Macdonald) who complained that some taxpayers take advantage of the loopholes in the legislation to avoid paying millions of dollars in income tax. He did not say dollars but millions of dollars.
In view of the seriousness of the matter, and so that all taxpayers may be treated fairly, my question is very clear and I make it even more specific: does Revenue Canada, whose responsibility it is to collect taxes, when it discovers loopholes in an act and realizes that taxpayers are using them to avoid paying millions of dollars in taxes, as the Minister of National Revenue (Miss Begin) said-I put the question and put it again-


Mr. Speaker:: Order, please.


Joseph Adrien Henri Lambert: My question, Mr. Speaker-


Mr. Speaker:: Order. If the hon. member for Bellechasse (Mr. Lambert) has a question to put, he must put it immediately.


Joseph Adrien Henri Lambert: I realize once again that the Chair has a perfect sense of justice. Here is my supplementary: I should like to know whether the Minister of National Revenue will undertake investigations, with the cooperation of the Royal Canadian Mounted Police, to find out whether the assertions of the Minister of Finance are really founded, and will those taxpayers be sued exactly as others were who took advantage of Bill C-203?
February 14, 1977


AIRPORTS
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Transport. As figures released by Transport Canada indicate there has been little or no growth in Toronto air traffic over the past two years-in fact, last year there was an apparent decrease in traffic at Malton- and as the minister himself admitted last week that air traffic is declining throughout North America, would he now tell the House whether the government is still intent on saddling Canada with a white elephant airport at Pickering, a gift which, judging from the government's sad performance at Mirabel, where a deficit of $47 million was run up in the first year of operation, is not needed.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the hon. member has once again put together a great number of inaccurate statements. What I said last week, I believe, had to do with air traffic failing to achieve projected levels, which is quite different from saying there were significant downturns. I also believe, without checking the figures-I do not have them in front of me-that the hon. member is looking at part of the figures of air traffic in Toronto, not at all of them, for instance, scheduled and chartered flights. I would be glad to make those figures available. Of course, our basic objective, one with which I would have thought the hon. member might have some sympathy, is to try, in all modes of transportation, to provide effective means of transportation for the people of Toronto.


Sinclair McKnight Stevens: Mr. Speaker, since there is a very serious question as to the need for Pickering airport, would the
Oral Questions
minister tell us whether he has been apprised of the fact that there is severe commuter traffic congestion, especially on trains commuting into the Toronto area, and that $57 million is needed very urgently to relieve congestion in the Toronto shunting yard alone. If the minister is aware of this, would he give consideration to routing some of the funds earmarked for Pickering to help relieve this congestion?


Mr. Speaker:: That is just as clearly a representation as the one made by the hon. member for Middlesex-London-Lamb-ton.


NATIONAL DEFENCE
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is directed to the Minister of National Defence. About a month ago I asked the minister whether he would accept an invitation to attend a meeting in Edmonton to give an explanation in military terms for the moving of the Canadian Airborne Regiment. That invitation was refused, but there was an indication that the Chief of Staff would be in Edmonton very shortly. He was in Edmonton, but he said nothing and refused to see anyone. I am again extending the invitation to the minister. Would he come to Edmonton to give the military reasoning and the cost-benefit analysis related to the movement of the regiment without any equivocation?


Mr. Speaker:: That, too, is a representation.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Can he assure us that the west coast tanker policy co-ordinating group, whose chairman is, I believe, from his department, has been given terms of reference sufficiently wide to enable it to undertake a comparison between the environmental impact, over-all benefit and cost of a tanker port at Kitimat, or Port Angeles, or, preferably some port out on the Pacific such as Gray's Harbour or Neah Bay, so that the best site might be chosen?


Donald Campbell Jamieson: Mr. Speaker, I would have to look at the terms of reference. I would be glad to do that overnight. From the briefings I have received and the answers I gave in the House on Friday, it would seem that the committee is empowered to consider all these questions but without any specific commitment by Canada that it would opt for one alternative or another.

February 14, 1977
Oral Questions


Donald W. Munro: Mr. Speaker, would the minister tell us what plans are in hand to co-ordinate the efforts of this Canadian committee with its United States homologue so that a close study might be carried on the potential port facilities on the west coast and that we will manage in the end to keep these tankers out of the Straits of Juan de Fuca and out of Kitimat?


Donald Campbell Jamieson: Here again, I would ask the hon. member's indulgence to find out precisely what the possible linkage of these two organizations might be, what it is at present and how it might be expanded. 1 will reply later.


ENVIRONMENTAL AFFAIRS
Mr. Bill Jarvis (Perth-Wilmot):: 
William Herbert Jarvis: Mr. Speaker, there are now three committees, one Canadian and two United States committees. Is there any truth in the report that there is a fourth committee, namely a committee of the Department of the Environment to look into the environmental effect of tanker traffic?


Mr. LeBlanc (Westmorland-Kent):: Mr. Speaker, the Department of the Environment is asked to make an assessment of the environmental impact when firm proposals are brought forward.


GUIDELINES TO COMPANIES WITH REGARD TO INTERNATIONAL BOYCOTTS REQUEST LOR EXPLANATION
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. Recently, the deputy minister of Industry, Trade and Commerce issued guidelines to implement the measures the government said, in its statement of October 21, it would be taking to carry out its policy regarding international boycotts such as the Arab boycott. The statement said in part that "all Canadian firms . . . would be required to report instances of their complying with boycott provisions and that such reports would be made available to the public". Can the minister explain
[Mr. Jamieson.)
why, as it would appear from the text of the guidelines, the government will be doing less than it said it would do in its statement of October 21, and will be reporting only those companies complying with the boycott which approach the government to request assistance from it for transactions involving such boycotts and not those companies which do not require its assistance for their transactions?


Joseph Jacques Jean Chrétien: Mr. Speaker, I think the guidelines issued by my deputy minister are perfectly consistent with the government's decision whereby any person required to go along with the Arab boycott should inform us about it and we would make this demand or this agreement public. But in any case, I shall compare the cabinet's decision with my deputy minister's guidelines to ensure that the guidelines do reflect the cabinet's decision.


WHEAT-EFFORTS TO NEGOTIATE INTERNATIONAL AGREEMENT
Lorne Edmund Nystrom: Mr. Speaker, my question is for the Minister in charge of the Canadian Wheat Board. In 1976, prairie farm income fell by around 25 per cent and a similar drop is anticipated by many farmers in 1977, in large part because of international wheat prices. Can the minister tell the House what he is doing in that respect and what progress he has made toward helping negotiate a new international wheat agreement for which many farmers on the prairies are calling?


Otto Emil Lang: Mr. Speaker, we have maintained a constant position in international discussions in favour of the grains arrangement. There has been little positive support from certain key quarters, but we are continuing to pursue the question and will certainly be glad to work towards an international arrangement, if possible. The hon. member might also recognize that the Western Grain Stabilization Plan has been put in place which will be of great assistance to the grain farmer.


TEXTILE IMPORT QUOTAS-REQUEST FOR EXEMPTION FOR SMALL BUSINESSES
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. In view of the fact that thousands of small and specialty apparel shops across Canada are on the verge of
February 14, 1977

extinction as a result of having to comply with the government's quotas on textiles, which it is agreed are necessary for larger textile manufacturers, can the minister appease the many concerns-including those of the Minister of State for Small Business-and take the necessary steps to exempt these small shops from the quotas?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not in a position to do this because 1 do not see why we should make a distinction. We allotted a special quota to new businesses established since 1975 to take particular circumstances in consideration but I do not think that it is possible to exempt everybody while maintaining a sound policy for the textile industry.


INCOME TAX
Mr. John A. Fraser (Vancouver South):: 
Donald W. Munro: Mr. Speaker, I rise on a point of order. In these days when misdemeanours of Canada's young people make instant nationwide news and bring Canada's youth into unfortunate disrepute, and when questions are being asked about where Canada's youth is heading, I rise on this point of order to indicate to the House how refreshing and reassuring it is to learn of a youth movement dedicated to serving those less fortunate than themselves-


Mr. Speaker:: Order, please. I have difficulty in relating what the hon. member is saying to a point of order having to do with today's business. If the hon. member can relate it to a point of order, he may continue.


Donald W. Munro: Mr. Speaker, this is merely to recognize the presence in the gallery of all those who provided to members of the House the golly-gobbles made by members of the Canadian Pro-Life Organization, represented in both galleries this afternoon, by the Ottawa-Hull chapter of that organization.


Some hon. Members:: Hear, hear!
Order Paper Questions


Mr. MacKay:: Mr. Speaker, this is a very brief point of order which I would like to bring again to the attention of the Parliamentary Secretary to the President of the Privy Council. As answers to my questions on Statistics Canada have not yet been provided, perhaps he could leak some of these answers to their proper place on the order paper.


Some hon. Members:: Oh, oh!



ROUTINE PROCEEDINGS


Mr. Howie:: Mr. Speaker, I hereby present a petition relating to contemplated increases in shelter and utility charges at CFB, Gagetown. The petition is signed by 1,100 residents of the town of Oromocto in the province of New Brunswick and recites certain allegations and inequities. The petitioners pray that this House provide such remedy as the House may determine.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 1,309, 1,341, 1,353, 1,364, 1,399, 1,469 and 1,605.


Mr. Woolliams: Does the government have an agreement with the provinces to provide assistance for the provision of legal aid and is the government's contribution 90 per cent of costs in relation to criminal cases and, if so, what amount has (a) been paid to the provinces to date (b) each province received?


Hon. Ron Basford (Minister of Justice):: Yes, the Attorney General of Canada, on behalf of the government of Canada has signed agreements with the ten provinces and the Northwest Territories to provide assistance for the provision of legal aid in these areas. The federal-provincial agreements cover services provided in relation to federal criminal offences. The maximum federal contribution payable to the provinces is the lesser of 90 per cent of claimable expenditures or 50 cents per capita. The contributions are payable annually in arrears. Revised agreements, applicable to 1977/78 payments in respect of 1976/77 provincial expenditures, provide for

February 14, 1977
Order Paper Questions
increased federal contributions of the lesser of 90 per cent of claimable expenditures or 75 cents per capita. The agreement in effect with the Northwest Territories now provides for a federal contribution of 50 per cent of both criminal and civil legal aid costs up to a maximum of $70,000 per fiscal year. Payments are also made annually in arrears. Part (a)
$26,418,000 has been paid to the	ten provinces and
Northwest Territories to December 10,	, 1976.
Part (b)	
Province or Territory	Amounts
British Columbia	$ 2,637,000
(January 1, 1973)*	
Alberta	1,498,000
(January 1, 1973)*	
Saskatchewan	403,000
(April 15, 1974)*	
Manitoba	1,092,000
(January 1, 1973)*	
Ontario	13,107,000
(January 1, 1973)*	
Quebec	5,300,000
(January 1, 1973)*	
New Brunswick	1,013,000
(January 1, 1973)*	
Prince Edward Island	117,000
(October 1, 1973)*	
Nova Scotia	820,000
(January 1, 1973)*	
Newfoundland	249,000
(January 1, 1973)*	
Northwest Territories	182,000
(August 17, 1971)*	
Total	$26,418,000
Effective date of agreement


Mr. MacDonald (Egmont): 1.	Is DREE aware of the comment made in a study by Professor Dudley of the University of Ottawa, that under RDIA as it is now constituted " . . . there is relatively little reason to believe that the relocation incentive desired from the program has been effective"?
2.	In view of the many types of incentives to locate in underdeveloped regions offered to firms throughout the OECD nations, is DREE giving consideration to amending RDIA to provide its offices with a more flexible mix of incentives to offer to potential clients?


Mr.   Eld. Lumley@Parliamentary Secretary to Minister of Regional Economic Expansion: The reply for the Department
(Mr. Basford ]
of Regional Economic Expansion is as follows: 1. Yes, DREE is aware of the comment. The department provided both information and financial assistance to Professor Dudley for his study but his conclusions are, of course, his own.
2.	The department is continually giving consideration to possible amendments to the Regional Development Incentives Act which might improve the effectiveness of the program.


Mr. McKinnon: 1.	As of December 15, 1976, how many (a) CF-IOIs (b) CF-I04s (c) CP Trackers will be fully operational?
2.	In each case (a) how many (i) were originally purchased (ii) remain in inventory (iii) are in reserve (iv) hours of maintenance are needed per hour of flying (b) in what locations are they based (c) what are their roles?
3.	As of December 15, 1976, how many (a) single seat (b) dual seat CF-5s will be fully operational?
4.	In each case (a) how many (i) were originally purchased (ii) are still in inventory (iii) are in storage (iv) are in reserve (v) hours of maintenance per hour of flying time are needed (b) in what locations are they based (c) what are their roles?


Hon. Barney Danson (Minister of National Defence):: 1. (a)
Classified information, (b) Classified information, (c) Eighteen.
2.	(a) (i) CF-IOIs, 66; CF-104s, 238; Trackers, 100; (ii) CF-IOIs, 59; CF-104s, 104; Trackers, 31; (iii) CF-IOIs, Classified information; CF-104s, Classified information; Trackers, 13; (iv) Classified information; (b) CF-IOIs, CFB Comox, BC; CFB Bagotville, Que; CFB Chatham, NB; CF-104s, CFB Cold Lake, Alta; 1 Canadian Air Group, West Germany; Trackers, CFB Shearwater, NS; CFB Comox, BC; (c) CF-IOIs, Air Sovereignty/Air Defence; CF-104s, Conventional Fighter/Bomber Attack; Trackers, Medium Range Sovereignty Patrol; Search and Rescue.
3.	(a) and (b). Classified information.
4.	(a)(i) CF5A, 89; CF5D, 44; (ii) CF5A, 64; CF5D, 41; (iii) CF5A, 18; CF5D, 11. (iv) and (v) Classified information, (b) CFB Cold Lake, Alberta; CFB Bagotville, Quebec, (c) Conventional Fighter/Bomber Attack; Day Visual Reconnaissance; Pilot Training (operational).


Mr. Jones: Has the government contributed, by loan or grant, toward a French-speaking law school in New Brunswick and, if so, in what amount?


Hon. John Roberts (Secretary of State):: No such grant has been made at this time, however, the Department of the Secretary of State has been approached by the Maritime Provinces Higher Education Commission to consider as a special project under the Federal-Provincial Programme of bilingualism in education, financial assistance towards the establishment of a French Law Faculty at the University of Moncton. The matter is presently under consideration.
February 14, 1977


Mr. Crosbie: 1.	(a) How many persons are employed in the regional office of the Department of Veterans Affairs in St. John's, Newfoundland (b) what functions are performed from that office?
2.	(a) Has the Veterans Land Administration Office been transferred from the regional office in St. John's to Sydney, Nova Scotia (b) are the functions of that office, previously performed by an employee located in St. John's, now performed by a field worker who travels from Sydney to Newfoundland periodically and, if so, for what reason was the change made?
3.	Has the Minister made any decision to re-establish a Veterans Land Administration Office in St. John's, staffed by an employee located in St. John's so that the administration of existing mortgages granted to veterans and approval of new loans to veterans for home improvement and repair can be given prompt and efficient attention at St. John's?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: 1. (a) The Department maintains a District Office in St. John's, Newfoundland. The Treatment Services Program has a staff of 13 and the Veterans Services Program a staff of 39. (b) The Treatment Services Program provides eligible veterans with medical, dental and domiciliary care and provides grants and allowances, burial expenses and comforts to those who qualify, and administers the estates and properties of certain veterans. The Veterans Services Program looks after the social and economic wellbeing of veterans, specified civilians, their dependants and survivors pursuant to the various legislation administered by the department, including veterans established under the Veterans' Land Act.
2.	(a) The Veterans Land Administration continues to have an office in St. John's, Newfoundland for interview purposes, (b) Yes. However, wherever it is considered practical, some Veterans Land Administration functions are performed by the staff of the Veterans Services Program of the Department located in St. John's, Newfoundland. This change was made following the retirement in October 1975, of the VLA field officer who was located in St. John's and subsequent to the March 31, 1975 deadline for veterans to apply for settlement under the Veterans' Land Act. There are only 400 veterans in Newfoundland who still have VLA purchase contracts and this number will continue to decline as the veterans repay their loans and receive titles to their properties. The workload associated with this declining number of accounts does not require the services of a full time VLA field officer with headquarters at St. John's and the current workload will be lighter still after March 31, 1977, which is the final date for veterans with subsisting VLA contracts to apply for additional loans.
3.	No.


Mr. Howie: 1.	Have any plans been made regarding the regulation of interprovincial transmission of hydro-electric power in a possible Maritime power pool and, if so, what are they?
2.	Does the government plan to assist in the setting-up and maintaining of a Maritime power pool and, if so, in what way?
Income Tax


Alastair William Gillespie: The Department of Energy, Mines and Resources reports as follows: 1. No.
2. A federal-provincial study is underway. This will develop recommendations for the most suitable mechanism for cooperation in the Maritime region in electrical energy supply and will include consideration of a Maritime Energy Corporation. A decision on the type of federal involvement will be taken after completion of this study.


Mr. Herbert: 1.	Does the Department of Energy, Mines and Resources have a publicity program to encourage greater use of humidification systems in winter and dehumidification systems in summer as a means of reducing the consumption of energy for healing and cooling?
2.	Has the Department considered any program of financial assistance such as that provided for the insulation of homes in Prince Edward Island?


Mr. Maurice Dupras (Parliamentary Secretary to Minister of Energy, Mines and Resources):: The Department of Energy, Mines and Resources reports as follows: 1. Nil.
2. The Program in Prince Edward Island was prepared to offset the projected high electricity rates that result from complete dependence on imported oil for electrical generation. A similar offer has been made to Nova Scotia. Programs of this type are not under consideration for other provinces.


Ralph Goodale: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Speaker:: The questions enumerated by the hon. parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, February 7, consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-22, to amend the statute law relating to income tax, be read the third time and to pass.
Mr. John Rodriguez (Nickel Belt):: Mr, Speaker, last Monday 1 made a few remarks in the House regarding Bill C-22-


Some hon. Members:: Order.

February 14, 1977
Income Tax


John R. Rodriguez: -and since that time many things have happened. I think it is only fair that I declare a conflict. The hon. member for Ottawa-Carleton (Mrs. Pigott) presented me with a can of hard candy which she said were humbugs. I want to declare that in no way will I be swayed by the corporate sector in this House with respect to the discussion of Bill C-22. The hon. member for Central Nova (Mr. MacKay) says they are jawbreakers. 1 do not know. I have had a few of them, and I think that they were meant to sweeten my personality.


Some hon. Members:: Hear, hear!


John R. Rodriguez: I hear the hon. member for Assiniboia (Mr. Goodale). He was pretty loud on Monday night. As the parliamentary secretary to the government House leader, he had the responsibility for organizing the timing of this debate in the House. If I was speaking for a few hours last Monday, it is his fault in the House and he has to accept the responsibility.


Some hon. Members:: Oh, oh!


John R. Rodriguez: I would have far preferred him to have stood and accepted responsibility for the mistake he made, and 1 would be prepared to forgive him for having made it.


Ralph Goodale: There was no mistake, John.


John R. Rodriguez: I hear shouts across the aisle from the hon. member for Northumberland-Miramichi (Mr. Dionne). He said I was delaying the House and I was preventing the taxpayers of Canada from getting their rebates. In looking at the hon. member's riding, I see he will get $800,000 under the Canada Works program. That means the unemployment rate must be pretty high in his riding. I wish he would stand in the House and I wish he had stood at the report stage of the bill and spoken about unemployment in his riding. But all he can do is make remarks from behind the curtain across the way.
It is only fair to deal with whether the taxpayers of Canada would be delayed in receiving their rebates, if they have rebates coming to them. On checking with Revenue Canada, I find the following statistics show that National Revenue processed only 3 per cent of all tax returns by mid-March, and this bill will come to a vote long before we get to that stage of the game. But what is more significant, we on this side of the House argue that tax rebates can take place without the passage of this bill. After all, we had the example of Bill C-21.
I see the hon. member nodding in recognition of this.
That legislation dealt with excise tax legislation appeals and sales tax exemptions. It relates to the same May budget. It has been administered by the Department of National Revenue as if the bill had been passed.
To nail down this argument and once and for all to put it to rest, I want to put some figures on the record. Figures from the Department of National Revenue show that by mid-March 1.9 per cent of returns on taxable income were processed, and 5.5 per cent on non-taxable, for a total average of 3 per cent.

By mid-April 17.5 per cent taxable and 27.5 per cent non-taxable were processed and the total average was 20.2 per cent. By mid-June 33.1 per cent taxable and 43.6 per cent non-taxable were processed and the total average was 36 per cent. By mid-August the figure for taxable had jumped to 89 per cent, and 95.2 per cent for non-taxable, and the total average was 92.3 per cent. By mid-November, 98 per cent of all returns had been processed by the Department of National Revenue.
I bring these figures to the attention of the House to lay very effectively to rest the criticism which came from the benches opposite and from those to my right that our careful examination of Bill C-22 has somehow denied or delayed the taxpayers of Canada getting their rebates. As these figures show, Canadians waiting for rebates have not been jeopardized in any way.
I will be dealing with that matter again, but one thing which has really struck me is the time we have spent on this bill. All the provisions of Bill C-22 were mentioned in the May, 1976, budget. We have to keep the timetable in mind because it demonstrates very clearly that the allegation that we on this side of the House have delayed the bill is incorrect. It is alleged that we have embarrassed the government and that we are trying to obstruct parliament.


Reginald Cyril Symes: Never.


John R. Rodriguez: I know we never obstruct parliament. Parliament will not be obstructed by the 16 members of the New Democratic Party or by one little school teacher from the backwoods of northern Ontario. If that should happen, God help democracy in Canada.


Some hon. Members:: Hear, hear!


John R. Rodriguez: As I said, all the provisions of this bill were mentioned in the May, 1976 budget. When was first reading of this bill? November 5, 1976. The government says it is concerned about the taxpayers of Canada; it says it is concerned about rebates. But when did we start second reading of the bill? December 2, 1976. When we came back after the Christmas holidays, what was the first item for parliament to debate? Radio and television in the House. I see the hon. member for Assiniboia banging his desk like a seal flipping his flippers.


Ralph Goodale: You voted for it.


John R. Rodriguez: I wish a couple of ministers would throw him a fish.


An hon. Member:: He would throw it back.


John R. Rodriguez: If he kept it, he might get mercury poisoning. What are the priorities of this government? I recognize the importance of radio and television in the House. I recognize it even more since last Monday. It would have been wonderful to have had radio and television in the House, because we could have taken this show right across Canada, to
February 14, 1977

the embarrassment of the government which is so incompetent and incapable of administering its own legislation.


Some hon. Members:: Hear, hear!


John R. Rodriguez: All we asked for was ten hours to look at the clauses of Bill C-22 in some detail. Instead, we spent 7'h hours on Monday and 2'h hours on a closure motion debate. Today we will use four hours to consider this bill. When we add it up, we get nine hours.
Would it not have been easier and much more productive for the Minister of Finance (Mr. Macdonald) and the government House leader to have agreed with the New Democratic Party and permitted ten hours of debate on the clauses of Bill C-22? It seems to me that we on this side of the House are very reasonable people.


Mr. Kaplan:: It seems to you.


John R. Rodriguez: The hon. member had his chance to make a speech. He deferred, so I am taking his time. His idea of democracy is that all debate is unreasonable. I recall the hon. member for York Centre (Mr. Kaplan) in the committee in the old days. He never wanted discussion of any bills at all.


Ralph Goodale: Have you ever been to the Saskatchewan legislature? You should see how Blakeney operates.


John R. Rodriguez: We are reasonable people and we are quite prepared to discuss these things. All we asked for was ten hours to look at this legislation. Much has been said about our wasting time, taking up parliament's time, and all the rest of it, but I sat in this House and listened to unending debate on gun control which took months and months. Then it went to committee, and it still has not come back to parliament. That was a waste of time. We spent seven months debating capital punishment in this House. So for members of the government or members to my right to say that the New Democratic Party is filibustering or wasting time is not being fair at all. We have tried to give considerable and detailed examination to the provisions of Bill C-22. We have kept completely open minds. We have no axe to grind.
Something else happened since last Monday. People across Canada started to respond and I think it is only fair for me to mention some of those people who responded. There was a response from Elliot Lake. I received a telegram which says: "Congratulations, John. Kick them in the "-" ankles. It is from Roy and Evelyn Raftery of Elliot Lake. Here is another one from Sudbury. This one says: "Dear John, Give them hell". That is from Phil Landry, Mick Lowe and residence. Here is one from the boys from Bay Street. It says: "Congratulations ... on behalf of vast majority of Canadians and incidentally all teachers. Don't forget AIB. Keep it up." It is from Frank, Doug and Pat, the boys from Bay Street. I do not have many friends on Bay Street. As a matter of fact, there are only three of them, and I hope to make their acquaintance.
Here is a telegram from Winnipeg: "No more tax concessions for corporations and the wealthy. Keep up the fight".
Income Tax
That is from Jim Durcan. Here is one from Capreol, Ontario, where I live. It says: "You may have done something to change the rubber-stamp image of parliament". That is from Catherine M. Gilbert. Keep that in mind. Here is one that I am very proud of:
Best wishes. Local is proud of representation provided constituents of Nickel Belt which our members worked and elected you. It is gratifying that the Sudbury region has a spokesman for the wage earners and the unfortunates of Canada. It is unfortunate the Liberals or Tories have not the quality of members in the House they portrayed to the voters during an election. Our union's voice is with you.
That is signed, "Dave Paterson, President, local 6500, United Steel Workers of America." Mr. Speaker, that is the largest local of union members in all Canada, with some 16,000 hourly-rated employees. Here is one that really throws the lie in the teeth of any member across the way. I hope the hon. member for Assiniboia is listening. He was yelling across the floor the other day, "They want their RRSPs". Here is a letter that touches the heart:
Mr. Rodriguez, keep up the work. I will gain if the bill passes, but I would rather give up the gain to give the break to the old aged or the underpaid.
It is signed, "Josie Budnick".


Mr. Peters:: There are a few benevolent people in this country.


The Acting Speaker (Mr. Turner):: The hon. Parliamentary Secretary to the Minister of Finance (Mr. Kaplan) on a point of order.


Robert Phillip Kaplan: Mr. Speaker, would the hon. member permit a question?


The Acting Speaker (Mr. Turner):: Would the hon. member for Nickel Belt (Mr. Rodriguez) permit a question from the Parliamentary Secretary to the Minister of Finance?


John R. Rodriguez: Certainly. Any time, Mr. Speaker.


Robert Phillip Kaplan: Mr. Speaker, has the hon. member received any telephone calls, letters or telegrams asking him to sit down?


John R. Rodriguez: No, Mr. Speaker. Since this started last Monday I have found what a wellspring is within the Canadian heart. When you get letters such as that last one, you know you are on the right track. When people across the country are prepared to say, "I stand to gain from this thing, but the things you have said are very important," we ought to take a good, hard look at them. The hon. member can yap and ask all the questions he wants. Here is an example. On Monday I got up and made my few remarks in a humble-


Some hon. Members:: Oh, oh!


John R. Rodriguez: -and sincere way to the House. Lo and behold, in the Toronto Star of February 8, alongside the story covering what I said in the House is an article headed, "Ottawa to close income tax loophole in retirement plans".

February 14, 1977
Income Tax
This is a Canadian Press article. I hope hon. members are listening, because I want to put it on the record. It reads as follows:
Federal tax investigators say they are cracking down on taxpayers using loopholes in registered retirement savings plans to avoid millions of dollars in income tax every year.
They knew it all along.
A Revenue Canada official said in an interview, the department is about to pounce on several hundred persons who have been using a wrinkle in the law.
But in the case of a second savings incentive program-registered home ownership plans-he said an unknown number of persons have used the plan as a tax dodge.
This is done simply by changing ownership of the home they already own over to the spouse's name. Both loopholes were created in November, 1974, when John Turner, then minister of finance-
He is the man who went to his eternal reward in the bosom of Bay Street.


An hon. Member:: They should have put closure on the loopholes.


John R. Rodriguez: That is right, but we never seem to be able to catch those loopholes.


Reginald Cyril Symes: Or the minister.


John R. Rodriguez: The article continues:
-introduced changes in regulations to permit establishment of retirement savings plans on behalf of spouses.
At the same time, he created the registered home ownership plans "to assist young people in accumulating the capital required for a down payment on a house."
Both savings programs are vigorously promoted by chartered banks and trust companies at this time of year because deposits must be paid into the plans by March 1 in order that the amount of the deposits may be deducted from last year's taxable income.
For most people, the maximum amount that may be deposited in a registered retirement savings plan-commonly called a RRSP-is $3,500.
The money is taxable only when it is withdrawn from the plan. The theory is that the money will be withdrawn only in later years when a person is retired and therefore subject to a lower tax rate.
When the government introduced "spousal" plans in 1974, some taxpayers began to engage in what the revenue department considers sham transactions. Typically, these sham transactions work this way-
These are what we call the loopholes in the plan. That is what we on this side of the House are against. It is really the crux of the whole thing. Here was an opportunity for a minister who really felt that the country should be supported by the taxes collected from those who had earned from the society and ought to be paying their fair share of taxes. Surely a tax plan is not to be set up so that every Tom, Dick and Harry, his dog and cat, can climb through the loopholes. I hope the minister is thinking about what I am saying. Here are the loopholes, according to this article:
The husband, the highest earner and therefore the highest taxed partner in a marriage, deposits $3,500 in a registered retirement savings plan (RRSP). He does this in his wife's name and before the March 1 deadline.
The husband deducts the $3,500 from his 1976 taxable income.
Shortly after the March 1 deadline, the wife-who is in a lower tax bracket- cashes in the RRSP and reports the money as taxable income for the current year, 1977.
[Mr. Rodriguez.)
This technique, merely a way of transferring income into a lower tax bracket, can be repeated year after year.
"There's a fair number of people who have done it," the revenue department official said.
"We're going after a few hundred, and serving notice on everyone that we're going to stop letting them play games."
How nice, Mr. Speaker! As the hon. member for Waterloo-Cambridge (Mr. Saltsman) says, of course the trust companies, banks and insurance companies are going to report them. You can just see it. It is too ludicrous. Let some low income earner who is on unemployment insurance take out of the unemployment insurance fund something that he is not entitled to, and then see how he is tracked down. He can never escape: everything but bloodhounds are put on his track. This is the kind of loophole that we want to discuss and bring home to this government again and again. Something has to be done to plug that loophole. The income tax system must have credibility for the large number of Canadians who pay taxes. If people see that it has no credibility, they lose faith in the democratic process. That affects what we are doing in this House. We have to try to bring that home to the government.
The hon. member for York Centre wants to know if people have asked me to sit down. Mr. Speaker, I am prepared to stand here and talk until doomsday if that is what it will take to bring home to the Minister of Finance that something is seriously wrong with the system. That is only one loophole, but there are others in Bill C-22 that we want to discuss. As long ago as April, 1976, the minister was made aware of this loophole and urged in a meaningful way to block it. Mr. Speaker, an article which appeared in the Ottawa Journal of April 13, 1976, succinctly and clearly pointed out one of the loopholes in our law, a loophole which still exists in Bill C-22. The article read:
A few readers expressed mild annoyance that editorials on this page recently criticized illegitimate but nonetheless legal ways to avoid personal income taxes without giving enough detail on how to cash in on the bonanzas, in question.
They weren't just joking, either. They really didn't see why a minority of taxpayers should exploit tax laws in ways that weren't intended to be used but which are not prohibited by law. The Journal doesn't see why, either-but since giving detailed financial advice isn't one of the functions of editorials, the "how-to" details on tax dodges will have to be found elsewhere.
But some advice can and should be given. It's for the federal government. If a particular method of tax avoidance is considered an "abuse" of the tax laws, don't wait for more and more taxpayers to commit the act before cracking down on it.
If no change in the law is necessary to prevent fast "rollovers" of tax-free cash between husbands and wives under the guise of a registered retirement savings plan, for instance, then make it clear with a stern announcement.
Spell out what kinds of transactions qualify a taxpayer for the $1,000 interest income deduction from taxable income. If a quick buy-and-sell trade with bonds is considered an abuse, then explain exactly how long such securities would have to be held to qualify the taxpayer for the legitimate deduction.
Where Revenue Canada frowns on a tax avoidance device but is powerless to stop it because of the way the law is written, it should put pressure on the finance department for the necessary changes in law to close loopholes. The government should announce ahead of time its intention to make such changes. This would be a comfort to the majority of taxpayers who don't use loopholes and a useful service to the expanding minority who are being lured into them by the government's apparent laxity.
February 14, 1977

The need for clarification was well expressed in a recent brief to the Minister of National Revenue by the Canadian Federation of Independent Business:
The Journal quoted part of that brief as follows:
When the department remains silent on how it will treat certain flawed sections that can be easily abused, uncertainty and cynicism on the part of the majority of taxpayers who wish to be fair is the result.
The article went on to say:
If there is one thing Canada doesn't need more of, it's uncertainty and cynicism about the tax system. The government faces a massive job of cleaning up the incredible obscurity left over from tax reform that took effect in 1972. But the kinds of loopholes at issue here-such as in the RRSP, investment income deductions and the registered home ownership savings plan-are more recent imperfect creations than tax reform. They are also easier to tidy up in the interests of fairness and a healthier public attitude toward taxation. That job should be done now.
To that we say "Amen". That job should be done now. It is obvious to anyone reading the clauses of Bill C-22 and noting the existing loopholes that the theme of the bill is "one good loophole deserves another." The loopholes are legion. Considering that the provisions of Bill C-22 were mentioned in the budget of May, 1976, surely the Minister of Finance, together with his parliamentary assistants and nabobs in the bureaucracy, has had sufficient time to consider these loopholes and move effectively to block them. I do not blame the Minister of National Revenue (Miss B6gin), for the responsibility lies with the Minister of Finance. In this connection I cannot help noting another article which appeared in the Ottawa Journal of November 27, 1976, entitled "An ounce of cure." The article reads as follows:
Revenue Canada has let it be known that, among others, a tax dodge called the quick bond trade is under intense scrutiny and that taxpayers found to have used it will be pursued. The aim is apparently not to punish but to recover funds lost to the government under the device and to discourage its use in future. But it's almost a token exercise.
The quick bond trade usually works this way: Persons with less than the allowable $1,000 in tax-free interest or dividends arrange to buy and sell a bond simultaneously, acquiring accumulated bond interest that is tax free. The cost of the transaction, including the accumulated interest they bought from the previous bondholder, is tax deductible.
The attraction of the deal is obvious. Someone might acquire $1,000 in instant tax-free income while the $1,060 or so that it cost to acquire the income is reduced by the amount of the taxpayer's marginal tax rate. For someone in the 45 per cent bracket, for instance, the net cost of acquiring the $1,000 would be about $585, leaving a profit of more than $400 at the expense of other taxpayers. This could be done every year.
The weakness of Revenue Canada's campaign against this abuse is the limitation of the tax law. It can be used against "sham transactions" in which it is clear that no money changes hands, but it's doubtful whether it will prevent the same deal being carried out over a short period in which real money is put at risk. Since some bonds can be bought with little short-term risk for only four per cent down, the slightly less quick bond trade will still be wide open to abuse.
This, sad to say, is the problem with several other tax loopholes that should be closed. Revenue Canada is working to foil a significant number of taxpayers, for instance, who set up registered retirement savings plans for their low-or-no income spouses and then collapse the plans immediately to obtain a tax saving. But the loophole will apparently still remain for those with the small patience to allow a decent interval before skinning the taxman for the same amount.
The most effective place to crack down on tax loopholes is at their source. The source is the finance department, not the revenue department. Under the guise of stimulating savings through tax incentives, the government through the finance department devised too many abuse-prone tax laws. The revenue department's watchdog efforts may serve only to cause determined tax-avoiders to use more discretion. The impact on the millions of dollars lost annually in tax collections may be minimal.
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I point out that the articles I have quoted from this afternoon came into my possession as a result of events which took place last Monday evening. People concerned about the direction in which our country is heading, and the cynicism prevalent in our government, sent this material to me pointing out those further loopholes as evident in the material which I have placed on record this afternoon. Last Monday evening, toward the end of my remarks, the hon. member for York-Simcoe (Mr. Stevens) stood up and asked a question. He asked: What is the model for our tax system? That is a fair question, considering we are discussing a bill with such implications for the Canadian taxpayer. My model is the model of this party, the New Democratic Party: we believe there are three basic principles to a tax system under a socialist government. First, the tax system ought to be redistributive. There is no question about that. In this regard, the Carter Commission stated, in volume 1 of its report, page 6:
We are firmly convinced that this redistribution is necessary if we are to achieve greater equality of opportunity for all Canadians and make it possible for those with little economic power to obtain a decent standard of living.
That is our first principle, that the system must be redistributive. Not even a Tory would quarrel with that. But that principle would have to be accepted on all sides of the House. The second principle in our tax model is equity. I again wish to refer to the comments of the Carter Commission, volume 1, page 4:
The first and most essential purpose of taxation is to share the burden of the state fairly among all individuals and families. Unless the allocation of the burden is generally accepted as fair, the social and political fabric of a country is weakened and can be destroyed.
We know that is happening today. There are grave disparities between the bottom one-fifth of the Canadian population who every year receive a smaller percentage of the economic pie while those at the top receive a greater percentage. It was certainly neither fair nor realistic for the Prime Minister (Mr. Trudeau) to stand on January 26 and say he does not care if the rich in this country get richer as long as the poor get richer. He was obviously speaking in a vacuum. He does not realize the implications of the spread within the Canadian economic system. What has happened to the just society? Did it dissipate like dew in the early morning sun? We no longer hear much about the just society.
The third factor in our tax model is progressivity. I cannot stress that enough: the system must be progressive. Therefore, the three principles are redistribution, equitability and progressivity. It must be imposed on a broad base which embraces practically all forms of income and wealth. We are not alone in this position: it is not an isolated position. The Carter commission buttresses the principle of progressivity. I quote from page 272 of volume 2:
The greater the income, the greater should be the relative net contribution of the family or individual.
We do not have a progressive income system. The government knows full well that every time it comes in with a program or indexing exemptions, a registered retirement sav-

February 14, 1977
Income Tax
ings plan, a surtax or a child care allowance based on a formula dependent on income, it destroys the concept of progressivity. The higher up the income scale you are lucky enough to be, the greater the advantage with these kinds of programs. We fall into the trap of saying that all Canadians who are working and earning a wage can take advantage of the registered retirement savings plan, the registered home ownership savings plan or any of the other 18 loopholes in the system. However, we know full well that those at the bottom of the scale could never afford to take advantage of that sort of program.
We see a model with three principles. Our model is based upon the principle of ability to pay. There must be equality in tax treatment between men and women and between persons in like circumstances. I cannot stress that enough. Our model is based on reducing the gap between the rich and the poor by greater reliance on progressive, direct taxes on income and wealth. We have pleaded with successive Liberal and Tory governments to ensure progressivity in the tax system by using tax credits. We harp on that time and again. However, we do not get anywhere. We have not gained one inch in getting them to move toward a system of tax credits which would be the forerunner of a guaranteed annual income in this country.
That would be one of the best ways of eliminating poverty for over one-quarter of our people, 5 million Canadians, who live below the poverty line. What a travesty of our traditions, with so many living in poverty! Every time members go to the parliamentary restaurant they enjoy scrumptuous meals at cut rate prices, subsidized by the taxpayers of Canada. They should be asking themselves whether there is anything that can be done in this House to make the tax system fair and just.
Last Monday I suggested-and there were howls from the other side of the House-that when one looks at the income tax system in Canada one cannot help being impressed by the obvious close consultation between the wealthy in Canada and those who sit on the government benches. When I threw that out there was a whole slew of catcalls and howls.
1 mentioned that the former minister of finance, John Turner, had gone to his reward on Bay Street where I am sure he is earning a lot more than he was earning in this House. The suggestion I made in this House is not as far out as some may think. I read a recent copy of Maclean's magazine, and in the section headed "People" on page 44, lo and behold, what is the scenario I read? It is:
If anybody still harbors any doubts about who really runs Canada, the following anecdote should dispel them. Recently Jean-Pierre Goyer, federal Minister of Supply and Services, phoned John Angus "Bud" McDougald, the head of Argus Corporation and the man in control of about two billion dollars in assets. Mr. Goyer said he'd like to talk with McDougald about the Canadian economy and Mr. McDougald said he'd be happy to oblige.
"I'd like you to come down to the parliamentary offices in Ottawa for our meeting," Goyer said. "If you want to see me, I'm at 10 Toronto Street in Toronto", McDougald replied. "Well, generally everyone comes to see me", Goyer said. McDougald said, "I'm not everyone". Goyer went to Toronto.


Mr. Goyer:: I rise on a question of privilege, Mr. Speaker.
[Mr. Rodriguez.)


The Acting Speaker (Mr. Turner):: The Minister of Supply and Services (Mr. Goyer) is rising on a point of order.


Jean-Pierre Goyer: Mr. Speaker, I am very glad that the hon. member permits me to make a rectification, thus eliminating the need of my writing to the Maclean's editor. I simply want to say it is true that I asked to meet this distinguished Canadian businessman, but I asked to meet him in Toronto where I had other business to do on that day. There has never been any misunderstanding between Mr. McDougald and myself about the date and the place for this meeting. The hon. member is kidding.


John R. Rodriguez: Mr. Speaker-


Mr. Prud'homme:: There he goes, enjoying his own fun.


John R. Rodriguez: It is not fun. If the minister can find time to run down to see Mr. McDougald, when is he going to find time to see Jerry Beaulieu at the car wash in Toronto? That is not an isolated incident. On December 12, the Minister of Consumer and Corporate Affairs (Mr. Abbott), who had a lot to say in this House the other day about what we were trying to do with this bill, took a ride on the bankers' association plane to Toronto. When we were dealing with Bill C-16 in committee I asked if the minister had paid for his trip to Toronto.


Some hon. Members:: Order.


The Acting Speaker (Mr. Turner):: Order. I suggest that the hon. member get back to the terms of Bill C-22, the bill under discussion.


Jean-Pierre Goyer: You do not want me to meet with businessmen?


John R. Rodriguez: Yes, you want to meet with businessmen, but you also want to meet with lower income Canadians. This is very apropos the bill, Mr. Speaker, because the minister is getting advice from the top end of the economic scale of taxation. One should also get advice from those at the bottom.


The Acting Speaker (Mr. Turner):: Order. I would ask the hon. member to get back to the bill under discussion, Bill C-22.


John R. Rodriguez: Mr. Speaker, I am talking about the income tax laws of this country, and that is what Bill C-22 is all about. Any minister who wants to get advice from the corporate sector in this country should be prepared to get advice from those who earn small salaries in Canada, because they have a lot to say about the problems that face working class Canadians. However, I am not surprised by all of this. As I said before, we know the relationship that exists, and unfortunately this whole question of credibility comes into play. Bill C-22 brings the credibility of the Income Tax Act into question. One has to look at the relationship which exists among those who are responsible for writing the tax laws of this country, those who are responsible for administering the tax laws of this

country, and those who at the other end receive the effects and benefits of that system.
In this regard, Mr. Speaker, as I have just read into the record, we have seen the relationship of the former minister of finance who has gone to his reward on Bay Street. Mr. Simon Reisman, who was the big mandarin in that department, has gone to his. reward in the corporate world, giving advice to businessmen on how to deal with government. Isn't that just ducky, Mr. Speaker? But does anyone go to the outports of Newfoundland or to northern parts of Ontario to find out how the laws that we are debating in parliament contained in Bill C-22 affect the lives of people here? Do they really touch their lives at all? A lot of the clauses in the bill, as I have pointed out before, do not really touch the lives of the large majority of our people. It seems to us on this side of the House that only a small minority are able to take advantage of tax programs such as RRSP, RHOSP and the elimination of the surtax on those with incomes of over $30,000.


An hon. Member:: Tax developers.


John R. Rodriguez: Mr. Speaker, a member across the way is interjecting and making comments. He had his chance to make a speech but he was so mousey that he sat there and did not rise. That is why I am on my feet. If he wants to make a speech, he can wait until I am finished.
We in this party have argued consistently that the legislation which is outlined in Bill C-22 is regressive in nature. One of the principal reasons for saying this is that Bill C-22 increases the tax deferrals and loopholes and adds to the numerous subsidies already present in the Income Tax Act which are largely beneficial to the wealthy and affluent. It is a deliberate deviation from the principle of progressivity. It is a primary deviation from the principle of equity, Mr. Speaker. It deviates from the principle of redistribution which we have talked about as our model for an income tax program in Canada.
The clauses on child care, registered savings plans, registered retirement savings plans, disabled persons and the registered home ownership savings program are inequitable in their application since they always give greater benefit to those at the top of the income scale than to lower income groups. As well, they are absolutely of no benefit to the poor who are outside the tax system because their incomes are too low. These deductions and deferrals must be reviewed in the light of more information that has come to my attention.
Hon. members on the government side keep on repeating that we have a fair taxation system and that the fiscal benefits we have been discussing do not unduly favour high income earners at the expense of low wage earners. Government statistics are impressive. Indeed we have been told that the vast majority of taxpayers who benefit from those deductions belong to the group of people at the bottom of the income scale. They continuously put forward impressive statistics
Income Tax
which show, they say, that most fiscal benefits go to those who earn less than $10,000 a year. But statistics, Mr. Speaker, do not always tell the truth.
It reminds me of the story of a statistician. I believe he used to work for the Department of Finance and he once wanted to cross a river but did not know how deep it was. Looking up available statistics, he learned that it was three feet deep on average. As a statistician of the Department of Finance, he thought that information was quite enough. And, Mr. Speaker, do you know what happened to him? He drowned. His own statistics misled him, just as the Canadian taxpayer is misled by the statistics given to him by the government. Yes, the average depth of the river was three feet; but, Mr. Speaker, in some spots it was two feet, in others, five and even eight feet; and that is where we lost our statistician.
Mr. Speaker, we do not want Canadians to suffer the same fate. Unfortunately, just like the statistician who worked for him, the Minister of Finance allows himself to be misled by statistics that do not always tell the whole story. The minister tells us that 77 per cent of deductions allowed for child care go to families whose income is less than $10,000. The government likes to quote such striking figures. We do not question their accuracy. But those same figures hide the truth. That is, that in terms of dollars, child care allowances are more profitable to Canadians in high income than in lower income brackets.
The National Welfare Council, in its report entitled "The Hidden Welfare System" states as follows:
A deduction always gives a greater benefit to the person with a higher income and a lesser benefit to a person with lower income. This is because deductions always take money out of a person's highest tax bracket-the bracket which is taxed at the highest rate applicable to his income.
Of course, we are not opposed to increases in child care allowances. But we are opposed to a tax system that provides for a considerably higher tax savings to the taxpayer who can best afford to pay the expense, and consequently has less urgent need of the subsidy afforded by the tax system. Deductions always give that type of results. The higher the deduction, the greater the disparity.
The National Council of Welfare gives us an example which shows how tax savings accrued from this deduction are much higher for the well-off than for the low income taxpayers. It illustrates how a person with an income of $6,000 a year, who is eligible for the child care deduction would save $257 whereas a person with an annual income of $20,000 would save $380 in tax with the same basic exemption. This is a good example of the type of situation the present government is hiding with its impressive statistics. This is the same kind of situation which made our statistician drown. We have a tax saving of $257 for the low income earner and one of $380 for the upper income taxpayer; is this what the government calls a fair tax system?
If we really had a fair tax system, as stated by this government, could they explain why in 1974 there were 252 citizens with an income of over $50,000 who did not pay any tax, and among them 17 had an income of over $200,000? Could they give us an explanation as to why the gap between the wealthy
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and the poor becomes greater and greater every year? We can explain this, Mr. Speaker. Amendments like the child care deductions tend to reinforce inequality, to maintain if not increase the gap between high income and low income groups. Our alternative is to replace this unfair child care deduction system by a tax credit system. Let me quote the Canadian Council of Welfare report; it says:
The way to eliminate this inequity is to replace the child care deduction with a child care credit.
When fiscal allowances are socially justified, as is the case for child care allowances, they should benefit equally all wage earners, and this can only be achieved by fixed tax abatement system. Tax abatement is the best way to distribute the national income. This has nothing of a revolutionary idea. Some provincial governments use them to finance social programs. The federal government is well aware of the way these tax abatements are used. In fact, they are working very well as far as election expenses deductions are concerned. There are a great number of well-off benefactors who are friends of our Liberal and Progressive Conservative colleagues and who are well aware of the value and advantages of this particular use of the tax deduction system. I believe, Mr. Speaker, that we could at least take a first step towards a fairer Canadian tax system if the Liberal would be as concerned about the financial condition of the individual taxpayer as they are about the financial position of their own party.
If the government really believes, as it says it does, in a fair tax system, it will implement a tax credit system where it is required, particularly in the area of financial assistance to child care expenses, care of elderly and disabled people, as well as a variety of other important social programs. One of the benefits provided by the tax credit system is to ensure the payment of tax on every dollar earned. Now, I understand this might be a horrifying thought for a Liberal government and their Progressive Conservative friends who would be greatly alarmed by the loss of loopholes in such an advantageous tax legislation. They will certainly create dissatisfaction among their friends from the big industry. However, it is a measure of which the other 95 per cent of our people might take advantage.
Bill C-22 is unfair. It grants higher deductions to those at the top of the income scale. Take corporations, for instance. The higher corporate tax is not paid by the rich. The share of all revenues paid by corporations to the tax system has rapidly decreased during the past few years. From 1962 to 1970, corporate contributions to federal revenue have decreased by some 38 per cent whereas the contributions paid under personal income tax have gone up by over 23 per cent.
Not only are those Canadians who are in the lower 20 per cent income bracket becoming poorer every day but they carry a heavier tax burden. In the main, the tax system does not assist at all in redistributing incomes in Canada and Bill C-22, with amendments such as clause 21, relating to deductions for child care, emphasized even more the unfairness of the Canadian tax system.

As I stated, the child care deduction always gives greater benefit to the person with a higher income and lesser benefit to the person with a lower income. This is because deductions are always taken out of a person's highest tax bracket, the bracket which is taxed at the highest rate applicable to his income. The way to eliminate this-and this is documented by the National Council on Welfare-is to replace the child care deduction with a child care credit. A tax credit is just what its name implies, a credit of a fixed amount which each taxpayer could apply against his or her tax bill; in other words, a fixed amount of tax which he or she would not have to pay.
How is it possible to have that kind of tax credit with respect to election expenses and contributions? How is it possible to have that sort of tax credit applied to contributions to a political party? To me, that is a very fair way to go about it; but if we can do it in politics, why is it not possible to do it with respect to child care? They can no longer say that a direct tax credit is not workable, because it was that Liberal gang over there which used to tell us on this side that a direct tax credit would never work. But suddenly they needed party funds, and lo and behold, up pops a tax credit. Yes, we voted for it because we felt that any contribution to a political party should be above-board. We said, "No more handing over of envelopes in boardrooms. No more trips down to 10, Toronto street." No, sir, all contributions to political parties should be above-board, we believe. We do not object to that, but by the same token we believe that with regard to child care allowances there should be a direct tax credit and it should be above-board so that everybody sees where your hands are and nothing is done under table. Surely that principle should carry over. What gets to me is that in the House we have the power to do that. We can allow a direct tax credit to people who have to work and support a child. The child care reduction was replaced by a credit of $350. Women earning $6,000 and women earning $20,000 would receive the same fixed amount.


William Arnold Peters: But the minister says that screws up the percentages.


John R. Rodriguez: The actual tax dollars are not applied in a fair manner. The minister may have figures about how nicely these dollars are distributed in percentages. He may say that 60 per cent of the people take advantage of the child care allowance, but how much is that in dollars and cents? That is what we on this side are interested in. The minister keeps giving us percentage figures, but we are talking about how much that is in tax. Cuanto dinero, is what we ask. That is important. The hon. member for Winnipeg North Centre (Mr. Knowles) says "Si si". That is true. That is the response we have had in the House to tax credits. That is what we want to see. On top of all this, the child care clause is discriminatory, which I am sure the hon. member fo Edmonton West (Mr. Lambert) will never be able to understand. At least he may live to regret his words. I do not have to deal with him any longer; that has all been taken care of.
February 14, 1977

An interesting letter with respect to child care allowances was published. I think that this woman, Joan Foley of Toronto, makes a very good point. This is what she says. First, she thanks the editor of the Toronto Star. Then she writes:
Thank you for your excellent editorial rebutting the objections by MP Marcel Lambert to increases in child care on deductions in ("Dumb, Dumb, Dumb," February 7).
My only regret is that you did not include among the legitimate reasons why married women work that, like their husbands, they appreciate the dignity which comes from being financially independent through paid work.
If it is conceded that both men and women should enjoy access to this status in the community, then it is not necessary to defend the working married woman by reference to the inadequacy of her husband's income to provide a reasonable standard of living for the family.
It also follows that the child care deduction should be applicable to the income of either parent.
Or is this twenty-first century thinking?
Joan Foley Toronto
Of course, she refers to the editorial which appeared in the Toronto Star of February 7, 1977, entitled "Dumb, Dumb, Dumb", and refers to the hon. member for Edmonton West with regard to his outmoded ideas on why women have to work and the results of sending their children to day care centres.


Marcel Joseph Aimé Lambert: Like many other people, she does not read carefully.


John R. Rodriguez: Since the hon. member says I misunderstood, I will read the article because I think it is appropriate in view of the challenge with regard to my understanding of what it is all about. The article reads:
Someone, perhaps Anne Dea of Edmonton who's an Alberta representative on the federal Advisory Council on the Status of Women, should tell MP Marcel Lambert (PC-Edmonton West) the facts about the role of women in the last quarter of the twentieth century.
Lambert, objecting to income tax amendments that would raise the amounts working parents can deduct for child care costs, was complaining that women go to work for frills, not out of economic necessity.
He should try telling that to the 357,000 Canadian women in the labour force who are widowed, divorced or separated, who are supporting themselves and in many instances their children, too.
And what about the 1,198,000 single women in the work force? They don't work for frills-they work to pay the rent, to buy food and clothing, to pay their taxes. Lambert wouldn't approve, of course, but some of these single women have children to support too.
As for the 2,303,000 married women in the work force, they aren't working for frills either. They're working because, in many areas of this country, it takes two incomes in a family to pay off the mortgage on a house. Or they're working to send children to university or even, in some instances, to send their husbands to university. Some of those married women have alcoholic husbands, or unemployed or disabled husbands; without their earnings, these families would be on welfare.
Lambert opined, too, that children sent to day care centres become social monsters.
This would come as a great surprise to child welfare workers, for example, who find day care centres an excellent way of rescuing children from the risk of being neglected or abused by their parents.
But perhaps Lambert is one of those unreconstructed nineteenth century persons who doesn't want to be confused with facts. He is, after all, the same man who told a group of university students in Edmonton in 1972 that women wouldn't need abortion reform if they just kept their legs together!
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So much for the progressive ideas which emanate from the Tory benches with respect to the child care allowance. We have seen how progressive the Tories are with regard to unemployment insurance, and now we see it with regard to taxation. I want to say that I reject everything which was outlined in that editorial and in what we sat and listened to a week or so ago.


Marcel Joseph Aimé Lambert: Mr. Speaker, I rise on a point of order. I do not think the hon. member for Nickel Belt (Mr. Rodriguez) would intentionally mislead the House, but when he says he rejects all that appears in that Toronto Star editorial, I would do the same because it is based on a story which was a gloss of my remarks in this House the other day. The hon. member knows that, and he seizes on one small point out of context and then tries to build a case. His speech is as bad as the Canadian Press story was that day.


Some hon. Members:: Hear, hear!


John R. Rodriguez: We flushed one from the benches opposite, and now we have flushed another pigeon from the bushes over here.


Some hon. Members:: Oh, oh!


John R. Rodriguez: I am not going to get into a debate with the hon. member for Edmonton West, but I sat in the House, I read Hansard, read it again and reread it.


An hon. Member:: Why don't you do it now?


John R. Rodriguez: I will get to Hansard in a minute. I read it before I made my speech on Monday. I thought I had dealt with the hon. member very effectively, but then, lo and behold, somebody sent me this editorial and I felt that it was very apposite to put it on the record so that we could have a complete picture of where the Tories stand on this bill. While I am dealing with this, I should also say that is the reason I am on my feet today after the few remarks I made last Monday night. It seems to me the Tories and Liberals agreed in principle with what is contained in this bill, and having done so, neither saw fit-


Steve Eugene Paproski: Who were you sleeping with in 1972?


John R. Rodriguez: The hon. member for Edmonton Centre (Mr. Paproski) asks a good question. We went to bed with the Liberals because we looked at the alternative and we did not think we could go to bed with him. He needs a face-lift.


Steve Eugene Paproski: Shame on you, Rodriguez.


John R. Rodriguez: The hon. member for Edmonton Centre keeps his legs crossed. I would not go to bed with him.


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: Those are not very nice remarks.
80008-531/2

February 14, 1977
Income Tax


John R. Rodriguez: It was a choice between worse and worst, and we chose worse. Nobody could fault us for that. The clauses of this bill with regard to child care are not acceptable. We take exception to the child care clauses, which we Find discriminatory. The child care provisions are unacceptable because the method of deduction is unclear. It is based on the assumption that women must bear the full responsibility for child care. Such discrimination was excellently outlined in a letter to the Minister of Finance, the Minister of National Revenue, the Minister of Justice (Mr. Basford, and the government; from the Women and Law Association. I want to read that letter into the record. It reads:
Dear Sirs:
Re: Income Tax Act, S. 63, Child Care Expenses.
The Child Care Expenses section contains other discriminatory aspects which should be investigated and corrected.
1)	The policy of this section is unacceptable since it assumes a woman must shoulder the child care responsibility. She must bear the expense of the babysitter when she goes out to work in the paid labour force. Women generally earn 60 per cent of men's incomes. (Statistics Canada, Dept, of Labour, Women's Bureau). Thus either her husband pays for child care and she deducts it (which is unfair to the husband, who should be able to deduct his real expenses). Or, she pays the expenses (usually more than the permitted deduction) and her earning power and consequently her financial independence is considerably reduced. This sex-stereotyped division of responsibilities is especially discriminatory. A clause should be developed which allows for maximum flexibility of responsibility and/or joint responsibility.
2)	An indirect discrimination results from the absence in the definition of child care expenses (S 63 (3)(a)(ii)) of persons studying in full-time institutions. Under "earned income" there should be added a provincial or Canada loan or grant. As well, to S 63(3)(a)(ii) the phrase, "and to persons engaged in full time study at an accredited institution", should be added.
3)	The $1,000 per child is inadequate and unrealistic in terms of the present cost of living and cut-back wages. A person running a business is entitled to deduct the full amount of expenses. Yet a maximum is placed on child-care expenses. Caring for children is a worthy valuable activity and full recognition of its value should be reflected in tax policy.
4)	The child care expense deduction should be from tax payable-
I hope hon. members opposite are listening. It looks as though they are all asleep.


An hon. Member:: Oh, oh!


John R. Rodriguez: There is one hollering from the back. 1 want to repeat that last paragraph:
4) The child care expense deduction should be from tax payable and not from taxable income as at present. Baby-sitting expenses are approximately the same whether the parent is at a $5,000 a year annual taxable income level or a $50,000 a year taxable income level.
I do not think this is seeping into the minds of hon. members opposite. We talked about the principle of progressivity. The government is undermining that principle because the child care allowance is going to be deducted from income. A specific suggestion is being made here that it ought to be a form of direct tax credit. Now I see that we are not alone; we are in good company in this regard. We have been saying that for years, but it takes a very long time for an idea to seep into the minds of hon. members opposite. I suppose they do not want to act on any progressive ideas. The only ideas they want are those which help their fine-feathered friends down on Bay Street. The letter goes on as follows:

The lower income person is therefore paying a higher proportion of income for child care and benefits least from a deduction from taxable income. This discriminatory discrepancy should be rectified.
In conclusion, since the described discrepancy in allowable deduction for child care expenses between a single parent man and a single parent woman is so clearly discriminatory, our Association would like a clear explanation from you as to why this section is drafted this way.
While you give your assurances-


Miss Blgin:: Your party never supported the Royal Commission on the Status of Women. I do not think you ever spoke publicly in favour of its recommendations.


John R. Rodriguez: The minister has found her voice. She is chirping that we never supported the Royal Commission on the Status of Women. Running for the leadership of this party was a fine woman and a strong proponent of bettering the status of women in this country, Rosemary Brown.


Monique Bégin: Why did you defeat her, then?


John R. Rodriguez: The minister is a Johnny-come-lately-I should say "Janey-come-lately". We had Grace Maclnnis here, the only woman in parliament for years and years fighting constantly for women's rights. For the minister to come chirping in now as if she is just coming out of the bush, she has another think coming. This party has been on record as standing up for the rights of women in this country for years and years. We will have to wait and see if the Badgley report is going to make any changes to the Criminal Code of this country. Let us see where they will put their mouths. I know where: where they put their heads-in the sand. The letter continues:
Will you give your assurances that this section will be amended to eliminate discrimination and the blatantly unfair discrepancies before the budget changes are given final reading? We are awaiting a response before proceeding with further analysis of the underlying policy of this section.
Thanking you in advance for your prompt attention to this matter, 1 am,
Yours truly, Kriss Boggild Chairperson, Women and Law Association
Articling Student Caucus
Mr. Speaker, I think that letter succinctly and clearly outlines the problems with regard to child care expenses. It puts on record the very questions we wanted to raise and which we were going to raise in committee of the whole before we were gagged. That has been our position consistently with respect to these kinds of clauses in the bill.


Mr. Pelletier:: What is the punch-line of your speech?


John R. Rodriguez: Mr. Speaker, I am amazed at how Liberals find their voice when they know there is a time limit on debate. They all want to make speeches. That is the only time you hear them. At committee they sit like bumps on a log. They represent a vote. I know how boring it must be to sit in the back and not be able to participate in the discussions that guide the destiny of our country.
February 14, 1977


Irénée Pelletier: It is not as boring as listening to you.


John R. Rodriguez: You do not have to stay. We can adjourn and come back tomorrow. I do not mind. I know how embarrassed you all are. Somebody asked me if I am embarrassing the government. Sure I am.


An hon. Member:: You are embarrassing the country.


John R. Rodriguez: Every time we try to hold up this kind of legislation, they are squeaking. They did not have much to say in committee of the whole. Not a Liberal spoke on this bill in committee of the whole.


Lincoln MacCauley Alexander: They could not get a word in edgewise.


An hon. Member:: Do not forget you were on the committee.


John R. Rodriguez: Yes, and you hear me when I am in committee too.


Irénée Pelletier: How can we speak, then?


John R. Rodriguez: This bill creates loopholes. We have said there are three principles to our model of a tax system. First, it has a redistributive principle; second, an equity principle; and, third, a progressivity principle. As we look at the clauses in Bill C-22 and see what those principles are-


An hon. Member:: What about incentive?


John R. Rodriguez: Incentive for whom? I am glad the minister's parliamentary secretary raised the question of incentive. On the weekend a young man named Kenny Fawcett called me. His father was the member for Nickel Belt in 1965-68, a representative of our party. He was a fine gentleman, as many members of the House may recall. His son started work this year as an apprentice electrician at National Steel. He wanted to earn some money, so he worked hard and took all the overtime he could get. At the end of two weeks he got his pay cheque. The income tax was $ 150 for two weeks of hard work. When they talk about incentive, is it incentives for the working class? Is it incentives for the savings companies, the banks, financial institutions, the wealthy? They do not talk about incentives for the little guy. Why not give the little guy more incentive? He would be very productive. This young man wanted me to tell parliament about his case, and that is what I am doing, so I am glad the hon. member raised the question of incentives. Who becomes incited to save, to take advantage of the loopholes? I have just gone through some of them, but there are more loopholes.


An hon. Member:: You should have told him about your case.


John R. Rodriguez: The hon. member knows how I voted on the increase in wages. Members of parliament are perfect examples of incentive. We have more examples of how the loopholes work. The thing that gets me is that it is not just a few in parliament who are learning how to take advantage of the loopholes in Bill C-22. A magazine called Quest is distributed
Income Tax
from home to home. In the February, 1977, issue there is an article entitled "Your money-how happy marriages can pay off in real cash at tax time", by William Scott. The article reads:
She's a wonderful woman, your wife. But now there's some even better news. She's more wonderful than you realized-she's worth money to you. Real, hard cash that you can put in your pocket.
It's all thanks to the government, which has devised a number of nice tax advantages for the married couple. Yet surprisingly, few married couples take advantage of the breaks available.
Don't just think of her as friend, companion, lover, and helpmate. She also could be the best tax shelter known to man.
Most of the tax advantages available to the married man flow from a sharing of property.
The hon. member says he knows that. He designed the tax system and he stands to benefit from it. The article goes on:
Perhaps that's why so few Canadians take full advantage of them. There is still an unrealistic, macho attitude around that says the man is supposed to have the money while the woman has the kids. Indulging that kind of attitude will cost you hundreds of dollars in taxes you don't really have to pay. For those of us who'd simply rather have more hard cash, here's some good news:
For a start, if you're earning about $30,000 and have the family house in your name, you're being about $500 unrealistic.
With a taxable income of about $30,000, your marginal tax rate-the rate charged on the last dollar you make-is 51 per cent, even if you live in Ontario (we shudder to think what it is in Manitoba). That means a $1,000 tax deferral will actually save you $500 in cash you will otherwise have to pay in taxes. That's $500 of real, extra cash in your pocket.
Here's the catch: that $1,000 deferral is available to you only if the family house is not in your name, nor held in joint tenancy, but is in your wife's name.
If you do not own a house now, you are entitled to deposit up to $1,000 a year for ten years in a registered home ownership savings plan. You are allowed to have only one of these plans in a lifetime. Once you have deposited for ten years, you are not entitled to make any further deposits.
But until then, your annual contribution is deductible for tax purposes. And, even better, you can get the money out tax free if you spend it to purchase a house, or to purchase furnishings or improvements to a house.
Those 10,000 tax-free dollars can be your down payment on a summer place. They can pay for the antique furniture you've always wanted. They can even give you a heck of a start at building that addition you've been planning to put on the back of the house. And while you're saving the $10,000, you're also saving $500 cash every year in income taxes. So-putting your house in your wife's name is worth about $500 a year. When you are old and gray and full of years, you'll pay a lot less in taxes if you are both drawing pensions.
The first $1,000 of annuity income from a registered pension plan at age 65 is tax-free. That's why it makes a lot of sense for you, as you are making deposits into a registered retirement savings plan, to make them not in respect of yourself, but in respect of your wife. The normal pension plan your employer operates has to be paid out to you. But an RRSP-whether it is a group RRSP at work, or a personal plan you are setting up-can provide a pension for your wife. The contributions to the plan are still deductible from your income for tax purposes. The limit on the size of your contribution-$3,500, less any moneys that you have been contributing to a company pension plan, or 20 per cent of your income-whichever is smaller-are the same if you are contributing to an RRSP for your wife as they are if you are contributing to your own plan. If you do not belong to a plan, the contribution limits are $5,500, or 20 per cent of income-whichever is smaller.
Setting up an RRSP for your wife can also provide you with some relatively short-term advantages. If she is not employed, she can draw the money out of the plan, and although she will be taxed on it when she draws it out, the total income in that year will be so small that the tax should be minimal. This is not to suggest that you can get into the habit of contributing to an RRSP for your wife every February 28th, and having her cash it in every March 1st. The contributions-like all transactions that have tax effects-must be genuine transactions.

Income Tax
But if a need for the money does arise, she can cash in the plan, and the money will be taxed at her rate-not yours.
The Department of National Revenue will depend on insurance companies, trust companies and banks to report withdrawals from the plan. I can just see them reporting that. I continue quoting:
But the real advantages of establishing pension income for your wife are at retirement. Then you will not only have two incomes-and therefore be taxed at a lower rate-but you will also have two pension income deductions of $1,000 each. The savings are really quite substantial.
The article continues:
Why settle for $1,000 worth of tax-free interest income when you could have more?
Your first $1,000 worth of interest income from Canadian sources is tax-free. Any interest costs you have to pay in order to earn this income-if, for instance, you borrow the money which you use to invest to earn interest-is also deductible against your income.
The same goes for your wife-and even better, if she earns some interest income, you are entitled to claim the rest of her $1,000 interest deduction against your income.
The next point is really interesting. I continue quoting the article:
Let's say you have $100,000 lying around the house. You decide to give it to your wife. She invests it at 10 per cent, and makes $10,000 on it in the first year. The attribution rules bring this income into your (the husband's) hands, and the $10,000 income is taxed at your rates. It's stacked on top of the other money earned and taxed at your marginal rate, not at hers. On the other hand, let's say you lend that $100,000 to your wife. You draw up a reasonable repayment schedule, have it notarized. She still invests it at 10 per cent, and still makes $10,000, but now the $10,000 is taxed in her hands, and at her lower marginal rate.
Like any transaction that has tax effects, the loan must be a real transaction. The Department of National Revenue had held that this means there must be a repayment schedule that is reasonable as part of the loan agreement, but there does not have to be an interest charge associated with the loan. And the loan has to involve money, not property. You can't lend your shares of Imperial Oil to your wife.
How big are the potential tax savings? Well, let's once again take an extreme case. Let's say your marginal rate is 50 per cent, and let's say the income that can be generated by the money you're going to lend to your wife is $10,000. If it is taxed in your hands, you'll be permitted to keep less than $5,000 of it (as your income climbs above $30,000, the marginal rate increases above 50 per cent). If you lend it to your wife, and it's her sole income, her taxes will be, at the most $3,000. Your minimum savings is $2,000.
The next point bears emphasizing:
If you work for yourself, it makes good sense for your wife to work for you too.
If you are a self-employed person, it may make sense to incorporate, and it will make good sense for you to employ your wife. The money you pay her will be money you don't need to run the household, and it will be money that will be taxed at her lower marginal rate rather than at your higher rate.
This doesn't mean that you can have your wife pick up the mail at your Post Office box every morning, and put her on the payroll at $25,000 a year. The income tax people stipulate that the salary you pay your wife must bear a reasonable relationship to her real contribution to the business. But even if you pay her only $1,000, and your marginal rate is 50 per cent, you have saved about $500 in income taxes.
On incorporation, you can make your wife a shareholder. She will then be in a position to draw dividend income from the company, and the dividend income can be reasonable-not in relation to her actual contribution to the company, but to its total earnings. This can have dramatic effects on the tax bite taken out of the money that is finding its way into your home.
Your wife's total income that year could be $13,000 in dividends. Her total tax liability will be zero. The company paid tax on the dividends coming out at
[Mr. Rodriguez.J
the small business tax rate, and it's better than increasing your income over the $25,000 amount.
Some serious questions arise in connection with these matters. I continue quoting:
What happens if, after I do all these things, my wife runs off with the milkman?
There are two answers to that.
The first is that, despite the escalating divorce rate, most marriages don't end in divorce.
The second answer is that planning your financial life as though your marriage were going to end that way is one of the worst possible ways to run a marriage. Personal financial consultants are often closely involved in marriage breakdowns. They say financial misunderstandings have put more marriages on the rocks than adultery ever has.
And that brings us to the big non-financial bonus you'll gain from making the kinds of income-splitting arrangements described here. You can't make them without talking to your wife about the family's real financial position. You can't make them without involving her. And the marriage counsellors we've talked to tell us that kind of mutual involvement in money matters is a great tonic for a marriage.
So forge ahead. Realizing what a great tax shelter your wife can be not only makes financial sense-it's good for the marriage, too.
So there you have it. I did not know that the government, instead of operating an income tax system, was really providing marriage counselling. It just shows you how you can get all screwed up in this place. We have made a comparison. Asking the Liberals to organize and be responsible for a tax system is like putting Count Dracula in charge of the Red Cross blood bank. We have often stated that opinion. This is again borne out in Bill C-22. So much for helping the homeowners and the wealthy in this country with the various kinds of finagling that can go on with the income tax system.
The hon. member for Sault Ste. Marie (Mr. Symes) said that the registered home ownership savings plan was established to help young couples save for a home. We subscribe to that. All members of this House, regardless of their ideology, recognize that there is a great need to assist young people who are today trying to save a nest-egg in order to be able to purchase a home. When that plan was introduced by the then minister of finance, who has now departed for the upper echelons of Bay Street, we held our criticism. We thought there were certain drawbacks, but we muted out criticism. On the surface at least there were some advantages to which everyone could subscribe. However, the plan is now being abused. When the plan was set up, loopholes were included in it. Is there no logical, fair-minded person in this House? I stated that the principles of our model of a tax system are redistributiveness, equity and progressivity. I challenge any member of this House to stand and say that the Registered Home Ownership Savings Plan is fair.


An hon. Member:: I challenge you to sit down.


Some hon. Members:: Hear, hear!


John R. Rodriguez: Is there any member of this House who thinks that the Registered Home Ownership Savings Plan as presently constituted is fair and equitable? it is a tax haven, a
February 14, 1977

way for people to dodge their rightful responsibility to support this country. If every Canadian taxpayer took advantage of these programs, who would pay to keep this country going?


William Arnold Peters: The poor people.


John R. Rodriguez: Yes, the poor people, the elderly people, as well as the miners in my area and those in Sault Ste. Marie, Timiskaming and Cape Breton. It is these people who pay the administration costs of government. Therefore, my plea today is for the little people of this country, the low wage earner, the disenfranchised.
I want to return to the registered retirement savings plan. That program is also abused. If this minister would stand and say that he is prepared to make changes that would plug the loopholes, we would immediately give our support. I would consider that a victory of sorts for the low income people of this country. However, I do not expect the minister to do that. He had his chance. The registered retirement savings plan is supposed to help thrifty people. No fair-minded person would say that is not a good idea. It is good that younger people are allowed to put money aside for their retirement. They should be able to write off that amount for income tax purposes. However, it is not designed to help thrifty people. It helps the wealthy in a very direct way, the wealthy who have extra income on which they do not want to pay tax. Therefore, this has become another tax shelter. That is our quarrel with these programs and the registered retirement savings plan in particular.
In 1974 there were 3,580,000 people in the $5,000 to $10,000 income bracket who recorded $123,471,000 in RRSP deductions, an average of $34.49 each. In contrast, there were 274,009 people in the $25,000 plus bracket who had an average deduction of $1,501.76.
May I call it Five o'clock, Mr. Speaker?


PRIVATE MEMBERS' MOTIONS
The Acting Speaker (Mr. Turner):: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions, and public bills.
Notice of motion No. 4, the hon. member for Ottawa-Vani-er (Mr. Gauthier). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Turner):: Stand at the request of the government. Notice of motion No. 7, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). Shall the motion stand?


Some hon. Members:: Stand.
Inquests


The Acting Speaker (Mr. Turner):: Stand at the request of the government. Notice of motion No. 10, the hon. member for Egmont (Mr. MacDonald). Shall the motion stand?


Some hon. Members:: Stand.


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


Ralph Goodale: Mr. Speaker, you will soon be coming to motion No. 14 standing in the name of the hon. member for Wetaskiwin (Mr. Schellenberger). I understand there is agreement to proceed with that item today.


Some hon. Members:: Agreed.


ADMINISTRATION OF JUSTICE
Mr. Stan Schellenberger (Wetaskiwin) moved:: That, in the opinion of this House, in consultation with the provinces, the government should take such steps as will ensure that all required witnesses are in attendance at future coroners' inquests in the provinces or territories.
He said: Mr. Speaker-


An hon. Member:: Don't talk about income tax.


Stanley Kenneth Schellenberger: Anything would be better now than income tax. The worst air disaster in the history of the Canadian Arctic occurred on October 30, 1974, when a Lockheed Electra transport plane crashed 2'A miles short of the landing strip at Rea point on Melville Island. Thirty-two men were killed as a result of the crash of the four-engine cargo-passenger aircraft which was owned and operated by Panarctic Oils Ltd. The aircraft was on a routine biweekly flight to change drilling crews at the site of one of Panarctic's operations. Three miles short of the landing strip, the plane was put into a nose-down position and power was reduced, thus increasing the rate of descent and making impact with the sea ice, far short of the runway, inevitable. Of the 34 passengers and crew on board the flight, 31 were killed immediately. The three survivors were exposed to a chill factor of some 75 degrees below zero Fahrenheit until they were rescued approximately two hours after the crash. The flight engineer, Gary Weyman, and the First ofFicer, David Hatton, survived the crash, but a passenger who had survived the initial impact died on the way to hospital in Edmonton. The cause of the crash was not immediately known.
OO)
Since October of 1974 the circumstances surrounding the accident have been subjected to three ofFicial investigations. The initial inquiry and inquest conducted under the authority of the coroner's ordinance of the Northwest Territories was one of those. Due to the limited powers of the inquest to establish the true facts of the crash, two subsequent investiga-

February 14, 1977
Inquests
tions were necessary. The Ministry of Transport conducted the investigation of the accident and Judge W. A. Stevenson was commissioned on November 20, 1975, to conduct an independent public inquiry into the circumstances surrounding the crash of the Lockheed Electra.
Only with the publication on June 29, 1976, of the evidence uncovered by the last inquiry was all the available information given to the public. It was a full 20 months after the accident before all relevant evidence was presented to the public. Relatives of the passengers killed in the crash, and relatives of the crew members, were left in a state of limbo during this time period. Civil suits were stalled and allegations and rumours concerning the captain of the Electra, Brian Thomson, were allowed to proliferate.
The prolonged time period between the actual crash and the release of the report of the independent inquiry was due to one further factor-the inability of the coroner, Mr. Walter England, to subpoena witnesses at the time of the inquest if their place of residence was outside the Northwest Territories. As a result, the two most important witnesses, the two survivors of the crash, were not in attendance at the inquest. Because the co-pilot and the flight engineer resided outside the Northwest Territories, and thus outside of the jurisdiction of the coroner, there was no way of compelling these men to attend. The jury was thus denied the best evidence available for determining what had caused the crash.
Section 21 of the Coroner's Ordinance of the Northwest Territories stipulates as follows:
A coroner may issue a summons in Form H respecting any person, who in his opinion, may be able to give material evidence at an inquest requiring him to appear at the time and place mentioned therein, to testify to all matters within his knowledge relating to the subject matter of the inquest and to bring with him and produce any document, book, paper or article that he has in his possession or under his control relative to the subject matter of the inquest.
While the powers outlined in the ordinance are extensive, and no doubt effective in most cases where witnesses are residents of the Northwest Territories or provinces, depending on where the inquest is held they are useless in terms of compelling the presentation of evidence from witnesses who normally reside outside the area of the inquest in this case. With respect to the Panarctic crash, the limited jurisdiction of the coroner entirely frustrated the inquest. The two survivors were both in the cockpit of the aircraft at the time of the crash and could have provided the jury with important information concerning the last two minutes before the crash.
Up until the last two minutes the plane had been in a normal descent pattern. At a point approximately three miles from its destination the aircraft, which had been travelling some 300 feet above sea level and 250 feet above the Rea Point airport, went into an abrupt descent and struck the sea ice. It broke up on impact, with the bulk of the craft ultimately breaking through the ice. The jury, however, was denied a first-hand account of the pilot and crew's actions and reactions during the last two critical minutes of that flight. In addition to the two crash survivors, several employees of Panarctic Oils Limited refused to testify at the inquest and could not be subpoenaed to attend the coroner's inquest because they were

outside the coroner's jurisdictional boundaries. Important background information concerning the procedural operations and regulations of both the Rea Point airport and Panarctic Oils Limited was thus unavailable to the jury.
The lack of jurisdictional authority of a coroner's inquest is, or should be, a matter of general concern to all Canadians. In this particular instance the type of plane involved is commonly used all over the country. If there had been some defect in it or in the way it is commonly operated which contributed to this disaster, the Canadian public had a right to know about it within a shorter period of time than 20 months. The north, in particular, depends upon air transportation and the people of the north should be able to have some confidence in the safety of their air transportation.
Further, this was one of the few occasions when members of a turbo-prop or a jet plane's flight crew survived a crash. Their testimony as to what happened in the last few moments was potentially of great value in preventing similar tragedies in the future. The Panarctic disaster clearly indicates the need for legislation making it possible to compel the attendance of witnesses at an inquest, even if they live without the boundaries of the province or territory concerned. Since coroners come under provincial jurisdiction, this would probably require legislation by all provinces, a thing not always easy to achieve. But it is surely in the interests of every province that an inquest investigating a crime or an accident anywhere in Canada should be able to get the evidence that it needs.
For more than a year after the accident public suspicion and ignorance surrounding the incident remained unanswered and undealt with. This situation could have been avoided if the jurisdictional authority at the initial inquest had been broader. Despite the competence of the jurors, they were unable to arrive at a conclusive interpretation of the events leading up to the crash. Realizing their inability to gather all the evidence, the jury recommended that a federal inquiry be set up to investigate the crash. It is also significant that one of the jury's 14 recommendations was that the powers of the coroner be broadened to enable him to subpoena witnesses from anywhere in Canada.
Despite the evident need for a public investigation, the government stalled and delayed the establishment of an independent public inquiry. Frustrated and concerned with this inaction on the part of the government, I rose in the House of Commons on July 25, 1975, as recorded at page 7935 of Hansard to ask the then minister of transport, Mr. Marchand, the following question:
Will the minister request that another inquiry be sought in Alberta so that the co-pilot and flight engineer may be subpoenaed to attend and this whole matter can be cleared up?
Mr. Marchand, the minister at that time, replied to the effect that he was studying the question and would give me an answer at a later date.
During the same summer, my hon. friend from Okanagan-Kootenay (Mr. Johnston) also questioned the then minister of
February 14, 1977

transport as to whether he would establish an independent inquiry into the accident. Mr. Marchand was evasive in his reply and would offer no commitment that an inquiry would be launched. Still there was no action on the part of the government. Realizing that it was choosing to ignore pleas from the House of Commons, I issued a press release in August of 1975 in the hope that the public, once made aware of the situation, would pressure the government into taking action. Finally, on November 20, 1975, Judge William Stevenson of Edmonton was ordered by the government to conduct a full public inquiry into the crash.
The delay in setting up the inquiry can only be regarded as irresponsible. Mechanisms for carrying out a full inquiry were available to the federal government which alone had the jurisdictional authority to summon witnesses regardless of their place of residence in Canada. Yet the inquiry was consented to only after substantial pressure from both within and outside the House of Commons.
The reluctance of the federal government to establish a full inquiry highlights the need for joint action on the part of the federal government, the Northwest Territories and the ten provinces to broaden the subpoena powers of coroners. In this case it would have been more efficient, and much less heartbreaking, for the relatives of those killed in the crash if the initial inquiry had been able to assemble and analyse all the evidence. As it was, relatives of those killed in the crash were still trying to obtain death certificates for the victims a year and one-half after the accident. Settlement of estates was held up because of the unavailability of death certificates. When they did become available, some relatives were forced to travel to the coroner's office in Yellowknife and pay a fee in order to obtain them. As a result of the circumscribed nature of the coroner's power of subpoena, three inquiries were necessary and 20 months had to pass before the facts were known to the public.
The minister of justice, on November 3, 1975, acknowledged the feasibility of action to extend the jurisdiction of coroners. In reply to a question from the hon. member for New Westminster (Mr. Leggatt), he stated:
The solution to that problem is the enactment by the provinces of a uniform reciprocal recognition of subpoenas as was recommended a year ago by the uniformity commissioners. I urge provincial attorneys general to consider that report carefully and to act upon it. I would be happy at my meeting with the provincial attorneys general to raise this issue with them.
A co-ordinated effort on the part of federal, provincial and territorial authorities is essential to a successful attempt to extend the subpoena power of coroners. I strongly urge the federal government to take the initiative in bringing the necessary provincial and territorial officials together so that they can agree upon the means of changing existing coroners' ordinances. While it is clear that the subject falls under provincial jurisdiction, this is an obvious case where the federal government must accept its role as co-ordinator and urge the officials involved to consider the matter.
It was imperative from the beginning that the true story of the Panarctic crash be made known to the public, and it was extremely unfortunate that the facts were so long in coming to
Inquests
light. It was not until June 29, 1976, that Judge Stevenson revealed that the immediate cause of the accident was the action of the crew. Judge Stevenson held that captain Thomas's incapacitation was probably attributable to a cerebral seizure, and his conclusion that there had been a physical malfunction on the part of the captain relieved concern about the airworthiness of Panarctic's Lockheed Electra.
Aircraft are essential in the north to many of our activities. The numbers of flights are increasing substantially each year. Looking at the statistics, one sees that at Yellowknife and Inuvik the number of flights have more than doubled in a five-year period. It becomes imperative that the situation to which I have referred be looked into. Also, I regard the establishment of an independent inquiry commission to investigate transport accidents within federal jurisdiction as a crucial priority.
The hon. member for Dartmouth-Halifax East (Mr. Forre-stall) has introduced a private member's bill to this effect, and I strongly hope that members on both sides will lend their support to this legislation. As outlined in the explanatory note to Bill C-220, the commission would have exclusive but selective authority as against any other federal body to investigate all accidents resulting in death, injury or property loss occurring on any means of transportation under federal authority. Such a commission would help avoid conflicts of interest arising in cases where transportation accidents are investigated by the federal body which is responsible for making and enforcing the rules under which the transportation system operated when the accident occurred.
In conclusion, I should like to reiterate the importance of taking action to extend the power of subpoena enjoyed by coroners. Only when such broader powers have been conferred can Canadians be confident that all the evidence needed for a proper inquest will be presented.


Mr. Ian Watson (Laprairie):: Mr. Speaker, first, I should like to congratulate the hon. member for Wetaskiwin (Mr. Schellenberger) for moving this motion today. It is one which should receive the full attention of both this House and the government, and I hope today's debate will result in action on the part of the government.
The problem which the hon. member has outlined with particular reference to the Panarctic inquest has brought the circumstances into focus. It is one which has existed for a long time, however. From time to time accidents take place involving people from different provinces. Inquests are held, and while attendance at those inquests is often arranged voluntarily, from time to time this is not possible and testimony which is vital to a fair conclusion is missing. The basic difficulty is that there is at the moment no power to compel attendance of prospective witnesses who are outside the province or territory in which the inquest is being held.
The Supreme Court of Canada has held in a recent case, Faber v. The Queen, 1976, that a coroner's inquest is not
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February 14, 1977
Inquests
criminal in nature, but civil. Accordingly, there is no federal jurisdiction with respect to the compelling of attendance by witnesses at coroners' inquests. At present, civil rules of procedure in each province empower a provincial court to issue a commission to take the testimony of a person or persons resident out of the province if this testimony is deemed necessary for a civil suit within that province. This, however, is the kind of process which is subject to many delays. It is not the sort of legal process which you would want to have in order to obtain the evidence of witnesses while their memory of an incident or of an accident is fresh in their minds.
It is essential for the efficacy of the inquest procedure that witnesses come before the inquest as soon as possible after the accident. There has been a move in Canada to achieve uniformity, and the uniform law conference has recommended a draft interprovincial subpoena act. I understand that this legislation has been adopted in Manitoba, British Columbia, Newfoundland and the Northwest Territories. Although the model act does not contain provisions per se subpoenaing witnesses to coroners' inquests, it nevertheless contains sufficient flexibility to allow the law to be amended to include that kind of proceeding as well as proceedings before bodies other than normal court bodies. It is this sort of approach which, I am convinced, will produce the kind of result which the hon. member is seeking in advancing this motion today.
Since I am strongly in favour of what he is suggesting, I do not want to hold up the proceedings any further. I urge the government to listen to what has been said today, and I urge the Minister of Justice (Mr. Basford) to include this question on the agenda of his next meeting with provincial ministers of justice, to push for the adoption of the suggested draft interprovincial subpoena act of the uniform law conference, and to urge that this act include the flexibility necessary to permit the subpoenaing of witnesses not only to coroner's inquests but also before other bodies.


William Arnold Peters: Mr. Speaker, I regret that the hon. member for Nickel Belt (Mr. Rodriguez) is not here to speak, but I am pleased that this matter has been brought before the House, not only the specific case in which the hon. member is interested and the fact that the government and the Department of Transport in particular seem to be running interference for insurance companies, but the fact that inquests have not really been effective because the people who know the story are not usually present. If the passage of this motion will clear up the matter, I am certainly in favour of it.
I am also interested in another accident the circumstances of which were very similar. It happened in Fraserdale, northern Ontario. I am interested in it because obviously we will have to do something about navigational aids and the assistance provided in those areas. Again, in that case, the Department of Transport is running interference for everyone. Information that had come out at the inquest is not available now, and the reports are secret. A couple of private reports are not available. It seems to me that information produced at an inquest should be right out in the open and the Department of Transport should not run interference for de Havilland aircraft

company or the manufacturer of the particular machine. Yet that appears to be the case. They either protect the insurance companies or they protect the companies which manufacture the aeroplanes. The right questions should be asked at an inquest, and the people who can answer those questions should be available, whether they are from the Northwest Territories or any other province. Anything else is totally unsatisfactory.
This afternoon I was discussing the safety factor with a couple of gentlemen who told me that a number of inquests had been held in that area but the reports that were made do not cover a number of important aspects. In both cases there were fatalities and both cases involve aluminum wiring. Everyone knows that aluminum wiring is dangerous and causes fires. The CSA in this country is powerful enough to involve interest groups, but they make no recommendations for a change. In fact, the people who make recommendations at inquests are not the people who should be called. They are the people who protect vested interests.
Three young people died in Ottawa as a result of the use of aluminum wiring. It is difficult to provide a proper connection on aluminum wiring for a single reason which is well documented and pictures are available showing what happens. The fire marshall at the coroner's inquest co-operated with vested interests to ensure that people did not get to the root of the problem. In my opinion the coroner's inquest is not the place where blame should be assessed. That can be done in civilian courts.
In the case of the accident in the Northwest Territories, it is difficult to see what the reason for the accident was because in my opinion there has been insufficient investigation and not enough information made available to enable the coroner's jury to reach a decision. The same was true in the Moosonee area accident in which a number of senior hydro officials and of band 9 council members were killed. It was also true in Sudbury where an inquest was called after a man had been killed and the union charge was that the working place was unsafe. INCO then went in and blasted the rock, thus getting rid of the site. When the jury wanted to look at it, it no longer existed. So it was all right for them to destroy the site, it was all right for them to eliminate all the fixtures in the electrical system which may have caused the fire, and it was all right in the case of the air crashes to make the people who were operating that equipment unavailable. But it is a hell of a way to provide justice. It is a hell of a system.
We should be allowed to find out exactly what happened; the information should be available at the inquest, and the chips should fall where they may. However, in all cases those people will probably end up sitting on coroners' juries making recommendations to prevent accidents, fires or fatalities from other causes in the future.
In a democratic system eliminating the problems we know about is the responsibility of everyone, and I hope that the passing of this motion this afternoon will mean that some of
February 14, 1977

the problems connected with coroners' juries and in connection with bringing witnesses before coroners will be solved.


Mr. Mike Landers (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, first I would like to congratulate the hon. member who took the initiative in bringing forward this motion. I have been here only approximately three years, and this is the second good idea brought forward by hon. members opposite.
At any rate, I spoke to the Minister of Justice (Mr. Basford) today, and he wanted me to assure the hon. member that he will raise this matter once again with the provincial attorneys general. He is sympathetic to the hon. member's motion, and we do not intend to talk this motion out.


Some hon. Members:: Hear, hear!


Mike Landers: The hon. member for Winnipeg North Centre (Mr. Knowles) suggested last Friday we should do this more often.


Robert Phillip Kaplan: So did the Tories.


Mike Landers: So did the hon. member for Grenville-Carle-ton (Mr. Baker). In any event, there are a few short notes I would like to put on the record.
Legislative jurisdiction with respect to coroners' inquests is provincial or territorial, as the case may be, and not federal. Coroners in the territories have the power under territorial ordinances to subpoena witnesses, and this works well so long as the witnesses are in the jurisdiction. However, if the witnesses are somewhere else, there is no way for the coroner to compel them to appear. He just does not have jurisdiction outside the geographical area for which he is appointed. This problem is not unique to the Northwest Territories or the Yukon; coroners appointed under provincial statutes have the same problem.
The problem in the Northwest Territories came into sharp focus about two years ago in connection with the crash of a Panarctic airplane on October 30, 1974. Thirty-two people died in that crash, but two crew members survived. When the coroner was conducting his inquest, he naturally wanted to have the two surviving crew members attend to give evidence. They were outside the Northwest Territories and refused to go to the inquest. The eventual result was that the federal government, on the recommendation of the then minister of justice, appointed a judge under the Inquiries Act to conduct an inquiry into the crash, and under the Inquiries Act the judge had jurisdiction throughout the whole of the country, quite unlike the coroner, and he was able, therefore, to obtain all the necessary testimony.
The problems which arose in connection with the Panarctic inquest demonstrated how important was an earlier recommendation of the Uniform Law Conference of Canada. That conference, which was composed of provincial, territorial and federal government representatives, adopted in 1974 a uniform interprovincial subpoena act. This uniform act provided for a procedure for compelling the appearance of witnesses located
Inquests
outside the territorial jurisdiction of the relevant province or territory. This act was intended to apply not only to ordinary courts but also to subpoenas issued by coroners.
At the time of the Panarctic inquiry the Department of Justice suggested to the officials of the government of the Northwest Territories that they consider having discussions with provincial officials with a view to all jurisdictions enacting the uniform interprovincial subpoena act so that there could be procedures for compelling the attendance of witnesses who are outside the jurisdiction of each territory and province, and so that the statute could apply to coroners and to subpoenas issued by coroners. The officials of the Northwest Territories were very interested and attended at the very first opportunity to take up the matter with the provincial governments.


Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, I shall be very brief. I want to make only one or two comments. First, I want to compliment my colleague, the hon. member for Wetaskiwin (Mr. Schellenberger), for bringing this very important motion before the House. If I may say so, I was very pleased to hear the Parliamentary Secretary to Minister of Justice (Mr. Landers) indicate that this will not be talked out, because it is indeed an important motion.
The hon. member for Wetaskiwin clearly demonstrated the need for federal co-ordination with his comments about the Panarctic crash. There is no doubt that a co-ordinating effort on the part of the federal government, and adequate investigations, are of obvious importance to all of us.
Historically coroners' inquests were primarily to determine how, when, where and by what means death occurred in particular accidents. There is an important component to coroners' inquests, to which my hon. colleague referred, and that is the necessity of adequate information, information from witnesses and other information which is required so that juries can assess adequately the circumstances surrounding accidents. The reason for that is obvious. When a coroner makes his charge to a jury, he points out very clearly that it is important to determine how, where, and by what means an individual died, but he also takes great pains to indicate to the members of that jury that from all the information presented to them, recommendations can be made by the jury. I simply want to say that this is a very important function of juries. All of us who have been involved in this area are well atoare of many excellent recommendations which have been made by juries at coroners' inquests and that in fact their recommendations have effectively prevented similar accidents from recurring.
Again I want to compliment the hon. member for Wetaskiwin for presenting this motion. I was delighted to hear the parliamentary secretary indicate that hon. members opposite will not talk it out. I also hope that the government and the Minister of Justice (Mr. Basford) will act with immediacy on this important motion.


The Acting Speaker (Mr. Turner):: Is it the pleasure of the House to adopt the said motion?
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February 14, 1977
Income Tax


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Walter David Baker: Mr. Speaker, 1 wish to thank the parliamentary secretary, and to suggest that it would be appropriate if we called it six o'clock.


The Acting Speaker (Mr. Turner):: The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock.
At 5.40 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-22, to amend the statute law relating to income tax, be read the third time and do pass.
John R. Rodriguez: Mr. Speaker, as I was saying in my few remarks before private members' hour this afternoon, the Registered Home Ownership Savings Plan is one aspect of the tax system that we, on this side of the House, believe provides more than one tax loophole for people who participate in the program in certain ways.
During the supper hour 1 was visited by a friend who described a new wrinkle to the Registered Home Ownership Savings Plan. The more I hear about this program the more I am convinced it must have more ways than Masters and Johnson in its application.


An hon. Member:: Who is Masters and Johnson?


John R. Rodriguez: The hon. member knows who Masters and Johnson are. Here is a new wrinkle. A man and a woman, married, buy a home at the beginning of January and put it in her name. Then he establishes a Registered Home Ownership Savings Plan and for five years pays $1,000 each year into it. At the end of the five years it has accumulated interest and there is about $6,000 in it. At that point her mortgage comes up for review.
What does she do? She sells him part ownership in the home, for which he pays her $6,000. She then goes down to the bank; it is review time for the mortgage and she puts $6,000 against the outstanding mortgage. And, voila, what is the
[The Acting Speaker (Mr. Turner).]
result? The Registered Home Ownership Savings Plan is prostituted again. That is a new wrinkle. There is nothing illegal about it. But that is the kind of thing we have tried to draw to the attention of the House.
If time had permitted, we would have driven home these points to the minister and done our best to obtain changes in Bill C-22. It is my job to draw attention to clauses of the bill to which we object. We must bring home the injustice of this particular clause to the majority of taxpayers in Canada who cannot afford to take advantage of that kind of loophole.
Peter Myers wrote in the Ottawa Citizen of December 6, 1976, that the RHOSP is amazingly generous. It helps people who expect to buy homes in the future, families who want summer cottages, and even couples who are quite satisfied with their homes already. But like the other deductions, the wealthy benefit way more than low income earners. As I shall show, the facts bear out the truth of this contention.
For those earning less than $2,000 the average amount of grant was $105.21; for those earning between $2,000 and $5,000, the amount of grant was $203.18; for those earning between $5,000 and $10,000, the amount of grant was $264.93; for those with incomes between $10,000 and $15,000, it was $309.93. Those earning between $15,000 and $20,000 received grants of $365.80. For those with incomes between $20,000 and $50,000 the amount of grant was $462.11, and for those with incomes exceeding $50,000, it was $571.06. Those facts clearly show that the rich are getting richer. People at the bottom of the income scale for whom, presumably, the Registered Home Ownership Savings Plan was designed and who have the greatest need, got peanuts.
As we have tried to show in this debate, our model of the tax system is based on three principles: first, the redistributive principle; second, the equity principle; and third, the progress-ivity principle. I do not know if anyone in the House can tell me if this measure which we are debating is based on any of those three principles, or on all of them. In our minds there is no question but that the kinds of loopholes we have been discussing permit high income earners in this country to avoid paying their fair share of taxes which are needed to support the country, and programs which are absolutely necessary if there is to be stability and equity for the people of this country.
We are not alone in our opinion. It is echoed by the National Council of Welfare. Incidentally, the head of that council turned down an opportunity to sit on the Tory policy advisory committee. I find that extremely interesting. That council can by no means be described as a group of left-wing radicals, and this is what it says. I quote:
Imagine a minister responsible for housing announcing a new program of federal-provincial grants intended to encourage home ownership. These grants would vary by a person's income.
Of course such a program is unthinkable. The idea of a grant that increases with income would cause a furor in parliament and among the public. A minister of housing who would suggest such a program in the privacy of a cabinet meeting would be laughed out of the room-not to say out of the cabinet.
However a former finance minister announced just such a program in the November 1974 budget and it became law. The program is called the Registered
February 14, 1977

Home Ownership Savings Plan-another of the savings incentives built into the Income Tax Act.
The purpose of Registered Home Ownership Savings Plans is "to assist young people in accumulating the capital required for a down payment on a house." One could wonder how many young people are in the income groups that derive the substantial benefits. It is certainly interesting to note that among persons making between $5,000 and $10,000 a year, only one in 49 took advantage of this provision. In the income range between $10,000 and $15,000, one in 32 opened up a plan. However in the $50,000 or more income group, the figure was one in 16.
I will not belabour the point. It is obvious, according to the National Council of Welfare and other statistics which have been quoted, that the wealthy are overwhelmingly taking advantage of this generous program. One in 16 of those earning more than $50,000 a year has taken advantage of the Registered Home Ownership Savings Plan.
The loopholes under the plan are indeed lucrative. As I have shown, the plan can be prostituted in all sorts of ways. I draw attention in this regard to the homeowners' dodge whereby many have transferred their property to the wife's or husband's name and taken a tax deduction for a contribution to a Registered Home Ownership Savings Plan. For example, if a man's income is higher than his wife's he might use the scheme as a handy way of saving taxes while at the same time building up a tax-sheltered fund. Any interest earned by this fund is tax free. If the taxpayer contributed $1,000 for ten years at 8 per cent annual interest, the fund would build up to $15,645. A taxpayer in a 30 per cent tax bracket for the top portion of his income would save $300 a year in taxes. If this $300 were invested at 8 per cent per annum, it would amount to nearly $4,700 in ten years. Thus, by contributing $1,000 a year for ten years a nest egg of more than $20,000 would be accumulated.
As I said, one partner in a marriage can become eligible by selling his or her share of a home to the other partner. The share would be sold by the partner with the higher income, who can make the best use of the RHOSP. The tax-free savings can be used to buy a second home or even-imagine this-to buy back the same home from the partner who owns it. That is a new wrinkle. I know that the minister can get up in this House and say, with the help of his charts and Figures, that X percentage of the people have done this or done that. We know that the program is available to any Canadian who can afford to take advantage of it. Unfortunately, few are able Financially to take advantage of the program. Therefore it is not used for the purpose for which it was designed. It has become a tax dodge.
Not long ago I asked, rhetorically, that if every single Canadian were to take advantage of the RHOSP program which I have described, and take advantage of the RRSP, who would bear the tax burden for those other programs which our country needs and which must be supported? How many would bear the burden? There would be very few people. We know who they are. As was pointed out this afternoon, it would be the poor people and the pensioners who would probably carry the burden.
Income Tax
Let us look at the twin program of the RHOSP, and the RRSP. Let us look at the benefits of the Registered Retirement Savings Plan.


Mr. Saltsman:: That is important.


John R. Rodriguez: The hon. member says it is important. It is very important. This party has talked about a national pension scheme for a long time. What do we get? We get the Canada Pension Plan. I recognize that the buddies of the government are in the insurance companies and banks of Bay Street. The government would not want to challenge them on that. It would mean taking away a very lucrative business.
The Minister of Consumer and Corporate Affairs (Mr. Abbott) now wants to fight with the banks. He still has not paid for his airplane trip to Toronto. I want to know why not. That is important, especially when we are dealing with banks, their power, and the way they calculate interest on the savings of Canadians.
The Registered Retirement Savings Plan is supposed to help thrifty people put money away for their retirement.


Max Saltsman: Only rich thrifty people; poor thrifty people do not have any money.


John R. Rodriguez: I wish the hon. member would not talk like that about the hon. member for Ottawa-Carleton (Mrs. Pig-gott). She is just a poor little person.


Mrs. Pigott:: Here is a present for you.


John R. Rodriguez: It isn't ticking, Mr. Speaker. I think I am being bribed. Some people will do anything to get me to close my mouth and sit down. The hon. member has presented me with some cookies. This would be more appropriate for the hon. member for Winnipeg North Centre (Mr. Knowles).


Mr. MacFarlane:: He eats only Arrowroot.


Jean Elizabeth Pigott: I baked them myself.


Max Saltsman: She thinks there's something crummy about you.


John R. Rodriguez: I will not be swayed, Mr. Speaker. I will not be bribed.


Mr. Epp:: You just were.


John R. Rodriguez: I always wanted to get my hands into the hon. member's cookie jar.


Max Saltsman: Watch it. This has been a clean debate so far.


John R. Rodriguez: Well, she has a cookie jar in her office.
Getting back to the Registered Retirement Savings Plan, this was supposed to help thrifty people put money away for

February 14, 1977
Income Tax
their retirement. However, it only helps wealthy people who have extra money they do not want taxed.
In 1974 there were 3,850,000 people in the $5,000 to $10,000 income bracket. They recorded $123,471,000 in RRSP deductions. That is an average of only $34.49 each. In contrast, 274,009 people in the $25,000 plus bracket had an average deduction of $1,501.76, for a grand total of $411,470,000 in excess income socked away. That is absolutely incredible.
The income tax system is supposed to be progressive. It is supposed to redistribute wealth in this country. A former finance minister, who has gone to his reward on Bay Street, opened up these loopholes for his wealthy friends. What is fair and just when those in the average and low income bracket have a saving of approximately $34.49 in contrast to the $1,501.76 for those in the $25,000 plus bracket? It is obvious that we have a big "L" government. With those odds, the poor people lose.
I wish to quote from an article that appeared in the Financial Post "How Savings Grow in Tax Sheltered RRSP". I quote:
This example compares with the accumulation of savings achieved through annual contributions to an RRSP and through a fund produced from after-tax income.
It assumes an individual can, from the age of 35 on, afford to put aside $1,000 a year from pre-tax income for retirement. The effect of assuming a 50 per cent marginal tax rate throughout the period and a 40 per cent rate are compared. Obviously the higher the tax rate, the greater the advantage of tax-sheltering contributions and the interest earned. Annual interest of 7 per cent is assumed throughout the period.
With an annual investment of $1,000 in an RRSP at the 50 per cent marginal tax rate, in ten years a person would have accumulated $14,784. After 30 years, he would have accumulated $101,073. Obviously this plan is not designed for low income Canadians.
Jerry Beaulieu works 60 hours a week in a cold and wet carwash in Toronto. He earns $8,650 a year. There is no way that Jerry Beaulieu can save $1,000 a year to put into an RRSP. Can you imagine Jerry Beaulieu in his overalls and rubber boots walking into that stable establishment called the Royal Bank and saying that he wants to borrow $1,000?


Max Saltsman: Only if he had a gun in his hand.


John R. Rodriguez: Yes, and we know how far he would get with that. Jerry Beaulieu's tax saving would be nothing compared to a tax saving of $470 that is possible for Lloyd Robertson who earns $100,000 a year. I imagine Lloyd Robertson could get by putting his $1,000 a year into an RRSP and getting a $470 tax saving. However, Jerry Beaulieu who works in that dank, damp carwash in Toronto for 60 hours a week and earns $8,650 could not take advantage of that program. Obviously the plan was designed for the friends of the boys in Ottawa.
We should keep in mind the real purpose of the RRSP. We are reasonable people here. I am fairly reasonable. The RRSP was touted as an opportunity for people to put away money for

their retirement years. However, it has been prostituted. The loopholes are so large that elephants can walk through them. And so the RRSP has degenerated and become a tax dodging device for high income earners.


Max Saltsman: They even advertise that.


John R. Rodriguez: Yes, that is the way they advertise them, Mr. Speaker. One has only to look at the great scramble on the part of banks, trust companies and insurance companies whose advertising is designed to get you to put your money into RRSP's. Their advertisements say: "See by how much you can avoid paying the tax man"; "Avoid the tax grab"; and so on ad nauseam. I do not think that that sort of thing is fair to the rest of the taxpayers of this country. I do not think it is fair to the 16,000 hourly rated employees of INCO. I do not think it is fair to people who work for wages on an hourly basis and who are in no position economically to take advantage of these kinds of loopholes and tax dodges. Suddenly the RRSP is the magic formula for escaping taxes and making money to boot.
I could not escape the horrendous ad campaign being conducted in the Toronto subway, which I saw the other day when I was there. There in blazing colour was an ad which read:
How to make money make money.
Start turning your nest egg into a golden future by March 1st.
Both National Trust's 9 per cent "no charge"
RHOSP and National Trust's "high interest"
RRSP will help your money make money.
It's a golden opportunity.
Just walk by any trust company's office, Mr. Speaker, and you will be confronted with similar ads.
Here is another example which I extracted from the Globe and Mail for Tuesday, February 8, 1977. In big black letters was an ad from Credit Foncier reading:
There's more to your RRSP and RHOSP than tax savings.
The tax savings offered by all financial institutions, including Credit Foncier Trust, are identical. That's established by law. The key features you should focus on in choosing your Registered Retirement or Home Ownership Savings Plans are: Security, High Return, Flexibility No Sales or Administration Fees.
And on and on it goes, Mr. Speaker. This is the kind of advertising which is geared toward the people who have the money to invest. Unfortunately it is not the kind of advertising that opens the door to people like Jerry Beaulieu and so many people across the country who earn less than $ 10,000 a year.
The loopholes in the law are incredibly glaring. They are so glaring that Revenue Canada is now concerned about tracking down and closing the loopholes and threatening to prosecute, but they say they cannot, that their hands are tied by the legislation. All the minister had to do when this bill was at report stage was to stand up in this House and announce that he would accept amendments to block these glaring loopholes which permit the tax system of Canada to be used as a rip-off, rather than as a means of collecting tax and redistributing the tax in a fair and progressive manner.
February 14, 1977

As I have said, the loopholes in the RRSP are incredibly glaring, and I have already mentioned a few of them. But there are more. Here is another article by that famous tax lawyer whom I have been quoting incessantly since last Monday because he is an intriguing person. He is Mr. Paul Dioguardi and he writes in the Ottawa Citizen. He has more positions in regard to using this plan than the happy hooker. He headlines his article "Retirement Savings Plan Can Be a Tax-Saving Tool Too," and the article is as follows:
Although the Registered Retirement Savings Plan has been around since 1957, its potential as a tax saving tool has usually not been fully realized. Some time ago an interesting paper covering some of the possible benefits from RRSPs was presented before an annual meeting of the Canadian Tax Foundation.
The first point examined dealt with a spousal RRSP, the second with deductible mortgage interest. In both cases, the paper used tax deductible contribution limits before the 1976 federal budget. Calculations, therefore, are not exact and are presented here for illustrative purposes only.
Our hypothetical taxpayer-let's call him John Q. Taxpayer-is married, has no registered pension plan and is in a 50 per cent tax bracket. He contributes $4,000 each year for five years to his wife's RRSP. Each year the $2,000 he saved by being able to take a tax deduction on the RRSP contribution is used to fund a portion of the contribution.
The remaining $2,000 comes from liquidating some of his income-producing investments which he later repurchases with borrowed funds. (This is necessary because interest on money borrowed to make a contribution to a spouse's RRSP is not deductible.)
At the end of the five-year period the spousal RRSP is collapsed. The value of the assets in the plan, assuming that they have been invested at 9 per cent interest compounded annually, would be $23,940.
It is then necessary to take into consideration the amount of tax which would have to be paid when the money is withdrawn from the plan. This can be set at $7,223 using 1975 tax rates and assuming that the wife has no other income in the payout year.
In addition, one must compute the tax on the lost spouse exemption in the year in which the funds are paid out. This comes to about $822 leaving a net amount in hand, before loan payments, of $15,895.
Mr. Taxpayer then must pay the bank for the $2,000 loans taken out each year. Assuming a tax deductible rate of interest of 10 per cent, his payout would be in the area of $ 11,500.
After working out the mathematics, it can readily be seen that Mr. Taxpayer could have realized, as a result of these transactions, a net profit of $4,395. (The result would be even better using the new $5,500 contribution limit.)
That is proposed in this bill.
Naturally tax savings are more dramatic when using the example of a person in a 50 per cent tax bracket, but the procedure may also be of interest to those at lower tax levels.
Assuming Mr. Taxpayer is a participant in a registered pension plan and has the ability, within the deductibility limitations imposed by the Income Tax Act, to contribute $1,200 each year to a spousal RRSP.
If he had a taxable income in the $ 14,700 range each year and follows the drill previously outlined his tax saving would be slightly more than $1,000.
A spousal plan is not the only way an RRSP can be used to save tax dollars. Another concept utilizes an RRSP to effectively convert part of a taxpayer's home mortgage interest expense into tax deductible interest. It goes something like this:
Assume our friend Mr. Taxpayer has a $30,000 mortgage on his home. It comes up for renewal every five years and there are four more years to run on the mortgage.
For some time he's been making annual contributions of $4,000 to his RRSP. These amounts have not been borrowed and, therefore, over the next four years he will have invested $16,000 in the RRSP out of his free cash.
If he could utilize the $16,000 free cash to pay down the mortgage and then increase the mortgage in order to fund the RRSP contribution, it should be possible to make the interest on the $16,000 mortgage liability tax deductible.
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Instead of using his own money to contribute to the RRSP, Mr. Taxpayer borrows $4,000 from the bank and makes his RRSP contribution from these funds. The $4,000 of his own free cash is then invested in Canada Savings Bonds or other easily cashable securities which pay good interest rates.
For each of the next three years, Mr. Taxpayer follows the same procedure until he has accumulated a bank debt of $16,000 and a bond investment of the same amount.
The only cost he should incur would be the spread between the interest paid to the bank and that received from the bonds. When the mortgage becomes due he simply cashes in the bonds and pays it down by $16,000.
Then he increases his mortgage by $16,000 and uses this additional money to pay off the bank loan.
Mr. Taxpayer is now in a position to claim a deduction of the mortgage interest on $16,000 because that amount was borrowed in order to pay off a bank loan which was originally used for the tax deductible purpose of contribution to an RRSP.
Although both of these alternatives may be of some interest, taxpayers should be cautious in tailoring their tax planning to fit the particular situation. Otherwise the result could be financially unpleasant.
Looking through this proposal, Mr. Speaker, one can readily conclude that it is not lower income Canadians who would be able to profit from the kind of advice which people like Mr. Dioguardi are able to provide with respect to investments in connection with the RRSP program.
We in the New Democratic Party are also completely and unconditionally opposed to clause 65. This clause is one in connection with which we requested extra time for discussion, because at the time the debate at the report stage ended only some two and one-half or three minutes had been spent on clause 65. This clause means that the surtax on high income earners will be in effect only for 1976. The Minister of Finance (Mr. Macdonald) has confirmed that it will not be continued notwithstanding the fact that it was part of the anti-inflation program which is continuing beyond 1976. What a flip-flop!
Back in December, 1975, the Minister of Finance made the following remarks in the House of Commons:
As the House is well aware, it has been our concern from the beginning that the anti-inflation program should be fair, and should be seen to be fair, to all groups in our economy. That is critical to the credibility of the program and crucial to its success.
He went on to say:
In terms of fairness and equity, it is, we believe, only fair that those at the upper end of the income scale, who are able to absorb the impact of rising living costs without undue hardship, should be asked to shoulder some share of the burden ... We have come to the conclusion that a surtax should be levied on all those in the upper income bracket whether they be professionals, independent businessmen, corporate executives, well-to-do farmers or senior public servants. While the guidelines do provide for a maximum increase of $2,400, it is fair to ask those who already enjoy ample means to make a proportionately greater sacrifice in the national interest.
So much for equal sacrifices. But what is to be expected? The minister, when he introduced the surtax at the time of the anti-inflation program, said that those in the higher tax brackets had to bleed a little. Yet, here, under clause 65 he said the tax is being lifted.


An hon. Member:: Boring!

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John R. Rodriguez: You may say it is boring, but there goes the credibility of the government. This tax was introduced along with the government anti-inflation program. It is all right for you to laugh over there, but your turn will come.
What could we expect? The Anti-Inflation Board did not seem to affect Eric Trigg, executive vice-president of Alcan Aluminum, whose salary in the first year of the program went from $147,348 to $162,178, an increase of 10 per cent. Nor did affect John Armstrong, chairman of the board and president of Imperial Oil, whose salary jumped $30,000 in the first year of the program. The elimination of the surtax after 1976 is just another concession to the wealthy in Canada. The tax saving for someone in the $50,000 income bracket will be $402. For someone in the $80,000 bracket, clause 65 will mean a saving of $1,654, and for someone earning $100,000 it will mean $2,491. In total, it will cost the treasury, in other words, the people of Canada, $135 million, and every penny of it will go to the 2 or 3 per cent of Canadians with incomes of $30,000 plus. Is there anyone in the House who will tell me that this is an equitable tax system?
Clause 65 grants substantial savings to the wealthy, savings which are additional to the benefits these groups have reaped by escaping controls through the use of regressive tax measures such as personal income tax indexing and a variety of special tax shelters for high-income earners, shelters which make it doubtful that any individual would report a taxable income of $500,000.
The decision to rescind the surtax means that the burden shouldered by these income groups is being lifted at the time when the average working person is asked to accept stringent limits on wage increases. As far as this party is concerned, the only acceptable change in the application of the surtax would be to increase it.
We turn now to the question of indexing. The hon. member for York-Simcoe (Mr. Stevens) is looking askance at me. I can see it in his eyes; he is asking me: am I going to get into this subject? Well, I will give that some thought, and in due course I will let him know.


An hon. Member:: He is not holding his breath.


John R. Rodriguez: I am not suggesting he should do so. The government whip says the observations made have not been profound. Well, he did not have much to say when we discussed this bill in committee. He was sheepish, almost seal-like in the way he sat waving his flippers, like a seal waiting for a fish. Now he is heckling from his place. I wish he had made his comments at a time when such remarks would have been appropriate. I turn, as I say, to the question of indexing.
It is no wonder the Liberal government is-in trouble. It is no wonder that poll after poll shows that the people are turning away in droves from the Liberal party. The bill before us is the most recent in the long line of mistakes the Liberal government has made. However, the interesting thing about the indexing system is to know where the Liberal government got it. Anyone looking at the income tax system would think that

indexing was thought up by the Liberal government, but the Conservatives have claimed credit for our indexing system.
It was in the minority period-I think in 1973 or 1974- when the government brought in indexing of tax exemptions. I think it was the hon. member for Halifax (Mr. Stanfield) who advocated it in the 1972 campaign. Lo and behold, the Liberals stole the indexing system from the Conservatives and put it into effect. However, that was not the only thing that was stolen from the Conservatives. The Liberals also stole wage and price controls, and we know what is happening in that regard. Another thing stolen from the Conservatives was the latest proposed change to the Unemployment Insurance Act, moving the minimum period of attachment from eight to 12 weeks.
Does it really matter who sits on the government benches, whether it be Tweedledee or Tweedledum? They steal from each other. I am glad the Liberals are now stealing from the Conservatives because that means that our programs can remain intact.


Walter David Baker: Such as they are.


John R. Rodriguez: Our programs can remain intact because they are waiting for the moment when socialism comes to the government of Canada. Hon. members will notice that in every instance when the government has taken a program from the official opposition-and indexing is one of these-it has been a dismal failure.
It is estimated that last year indexing cost Canada $1 billion in taxes.


Max Saltsman: Bay Street thinks that is great.


John R. Rodriguez: The boys on Bay Street think that is great. The fact is that the indexing in our income tax system allows the wealthy to get the best breaks. I was asked what our model for an income tax system would be, and I pointed out that our income tax system would embrace three principles. One is the principle of redistribution. We would want a system which would redistribute the taxes collected. Second, there would be the principle of equity, and third, the principle of progressivity.


Steve Eugene Paproski: You went into that an hour ago.


John R. Rodriguez: I have to repeat it for the Conservatives.


Max Saltsman: You have forgotten it already.


John R. Rodriguez: They have a short attention span; that is the difficulty. However, the indexing system permits the warp in the system to become even more pronounced.


Sinclair McKnight Stevens: Oh, oh!


John R. Rodriguez: The hon. member may ask a question at ten minutes to ten.
February 14, 1977

We have before us Bill C-22, and once again the government admits it stole the policies in this bill from the Conservative party. There is little doubt where these ideas came from, and if there is, it can be cleared up very quickly; all we have to do is ask any frontbencher in the Conservative party.
As we turn our attention to this bill, we see that it has cost the taxpayers $1 billion because of the indexing system. If we had taken $1 billion and used it in a creative manner with respect to tax credits, we could have done much to close the gap. We could have done much in terms of redistributing the wealth of the country and eliminating the massive poverty which plagues so many portions of our great country.
What does the government do when it is time to consider the tax system? It does not do the things the Carter Commission outlined. Time and again changes to the tax system have been suggested, but the government tinkers around with the works and comes up with indexing, and as a result the situation is made even more complicated than it was before.
Earlier I made reference to that great benefactor of the Canadian economy, that selfless corporation performing the big, top, expensive job, to use its own propaganda. If there is any doubt, I speak of Imperial Oil. Some hon. members present may be familiar with that corporation. Fewer still, I am sorry to say, are aware of the massive tax breaks it has received from this "just society".
In 1975, which is the last year for which statistics are available, Imperial Oil, the Rockefellers' gift to the Dominion of Canada, received $76 million in deferred taxes. These taxes are theoretically recoverable at some future date, and I have no doubt that this is what the frontbench of the Liberal party and its philosophical ally to my right, speaking politically and physically, would argue.
However, the fact remains that the Canadian Institute of Chartered Accountants which, in 1968, was so instrumental in recommending the deferred tax break, has now served notice that it is prepared to argue for discontinuance of this very tax loophole by means of which the corporate sector laughs all the way to the bank at the expense of the middle and low income taxpayer.
Indeed, since this unjust and retrogressive tax break was given to the corporate sector, Imperial Oil has accumulated total deferred taxes of $424 million. This is revenue which, on paper, belongs to the people of Canada, but in effect it will never be collected. And who is called upon to make up the deficit but the ordinary taxpayer, to whom the hon. member for Calgary North (Mr. Woolliams) wants to give lectures.
I might feel better if the seven leading oil corporations in this nation-all foreign owned-namely, Imperial, Gulf, Texaco, Shell, Sunoco, BP Canada and Husky, used this windfall to better this country's energy position. However, statistics show us that only one-third of these deferred tax dollars are pumped into exploration. It truly makes a rational mind wonder.
I think it is important that I read figures with regard to the deferred tax picture into the record. These figures are for oil
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companies alone. In 1975 Imperial Oil had deferred taxes of $76 million for total accumulated deferred taxes of $424 million. Gulfs 1975 deferred taxes were $18.6 million, for total accumulated deferred taxes of $182.7 million. Texaco's deferred taxes were $28.3 million, for total accumulated deferred taxes of $85.5 million. Shell had $15.5 million deferred taxes in 1975, and the total accumulated deferred taxes were $84 million; Sunoco, $12.1 million, total deferred, $59.1 million; BP Canada, $12.9 million, total deferred taxes $56.1 million. Husky had $10 million in deferred taxes for 1975, for total deferred taxes of $45.1 million. The 1975 total deferred taxes came to $173.4 million, and that is for oil companies alone.
The total accumulated deferred taxes of the oil companies alone is $936.5 million. These are taxes that will never be collected by the taxpayers of Canada.
Let us not forget that the government is providing corporations with another tax incentive through the 100 per cent write-off in Canadian exploration expenses for taxation purposes. The write-off is being granted not only to energy companies which have enjoyed the advantage of a 100 per cent write-off. Any business, energy related or not, will now be able to qualify for'this 100 per cent write-off.

Mr. Speaker, I wonder to what extent this amendment will promote exploration in our country. It is aimed at encouraging other investors to go into exploration for energy resources, but considering that the companies have other priorities because of the tax system, this amendment will not, in my opinion, have the expected effect.
Given the past experience, how can we be sure that this amendment to the tax system will promote exploration for energy resources? I think that Canadians might well ask themselves this question. Despite the recent increase in the price of oil at the production level the companies declare that they do not get enough incentives to go into exploration, and yet they made record profits in 1976. As of January 1, 1977, the cost of a barrel of crude was $9.75. How do we come up with that figure? The production of a barrel of crude oil costs 68 cents1. In Alberta, for example, the provincial expenses amount to $3.90; the federal tax is $1.64. The profit of a barrel of oil is therefore $3.63, which is 40 per cent of the total price.
I think that our society is rich enough to develop oil exploration in the interest of all Canadian consumers. I tried to show what happened in the case of the largest Canadian oil company, Imperial Oil Limited. Although that company has made unprecedented profit and has increased its liquid assets fantastically, it has not engaged in any exploration, despite the fact that this would be the best way to reassure Canadians about the resources available to our country. I therefore suggest that clause 24 of Bill C-22 will remain without effect in the long run, and that the government will have been had once more by big oil companies. After studying clause 24, it

February 14, 1977
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seems to me that the government is giving in once again to the demands of the oil industry and has shaped this taxation legislation in such a way as to profit that industry.


Jean-Pierre Goyer: But this is not productivity.


John R. Rodriguez: Mr. Minister, I am trying to speak in French.

Added to these benefits for corporations, the government refuses to close the tax loophole which permits multinational firms to set up foreign subsidiaries and then divert income out of Canada to lessen their tax liabilities. The method used is one of lessening their earnings in high tax nations and increasing them in low tax countries. The usual way of lessening tax payments is to underprice exports or overprice imports from a subsidiary, or simply charge artificially high expenses against the subsidiary. This often means that Canada is overcharged and is losing revenue.
We in the NDP have been concerned about this for a long time, and to refresh everyone's memory I will repeat some of the arguments that I made in the House on June 18, 1976, with respect to this matter. At that time I pointed out that we needed an international convention which would prevent multinational corporations from avoiding their proper taxation and from exploiting countries in which they are operating. Indeed, participating in that very debate on international taxation was the hon. member for Waterloo-Cambridge (Mr. Sajtsman) who made some relevant points with respect to the way in which multinationals wheel and deal to escape the tax system in one country as opposed to another.
It is also important that we put on record the question that was asked. It is a very relevant question. The hon. member for Waterloo-Cambridge spoke in the House on February 27, 1976, and it is reported at page 11321 of Hansard of that date. He asked the former minister of national revenue the following question:
On June 12, 1973 the minister's predecessor announced in a speech to the Inter-American Centre of Tax Administrators that the government was launching a campaign to crack down on multinationals evading taxes. On November 19, 1975, the current minister announced the formation of a joint U.S.-Canada committee to study the same question. On February 23, 1976, the minister's department announced that because of spending restraints, all such plans had been shelved. While a penny saved may be a penny earned, in this case does the minister feel that the savings in wages and salaries outweigh the loss of forgone corporate taxes?
In reply the former minister of national revenue stated the following, and I quote his answer because I think it is important enough to be put on the record. He said:
Mr. Speaker, within a month after my appointment to this portfolio, I met with Don Alexander, the Commissioner of Internal Revenue Service in the United States. We set up a committee to look into how we might act under the Canada-United States tax treaty to get at multinationals and transnationals which are using the tax haven to avoid taxes. Mr. Alexander will be back here following the report of that committee. We will be meeting again. I, like every other minister, would like to have all the resources necessary. Personally, I do not think it is a waste of money. I think it is an investment to get back the 
hundreds of millions of dollars. To me, a tax haven is an anathema. Within the scope that we have, both the resources, financial and man-years, we will do our best to plug these particular abuses.
We have not heard any more. The former minister of national revenue has moved on to become the Minister of Manpower and Immigration (Mr. Cullen). The government members are not so anxious to beat the bushes to get out these tax evaders. That was back in June, 1976.
This whole question of multinationals and transnationals escaping their responsibility to support this country with taxes is not something that started yesterday. It is estimated that they have absconded with over $1 billion in taxes. Back in June, 1976, the then minister of national revenue, now Minister of Justice (Mr. Basford), promised to eliminate this loophole. So even before the present Minister of Manpower and Immigration (Mr. Cullen), the present Minister of Justice when he was in that portfolio promised to eliminate the loophole. He said at that time that the practice was costing hundreds of millions of dollars in lost revenue, but like many promises that the Liberal government has failed to keep, it decided to shelve plans to close the tax loophole on the excuse that Ottawa cannot afford the expert investigators needed. Of course this is to be expected, Mr. Speaker. Any government that spends billions of dollars subsidizing the wealthy in Canada is not going to do anything to hurt its friends in the corporate sector.
Let me read from an article which appeared in the Globe and Mail of October 31, 1975, written by Jonathan Man-thorpe, which clearly describes the problem.


Sinclair McKnight Stevens: You have already lost one of your members.


John R. Rodriguez: No, we have not lost one of our members; we are now infiltrating the ranks on the other side. The hon. member for Waterloo-Cambridge is over there. He is better suited to the frontbenches across the way than the backbenches here. He has improved the intelligence on the frontbenches by 100 per cent. The article, entitled "Avoidance of Taxes Costing Hundreds of Millions" begins as follows:
Canada is losing hundreds of millions of dollars a year to people and companies that avoid taxes, and a lot of it is being lost to multinational corporations using their international status to shuffle their profits out of the taxman's reach.
That is how the article starts out. It is estimated we lost $1 billion with respect to corporations, multinationals and transnationals, shifting around on the international scene to avoid paying taxes. It goes on to point out the following:
Multinationals use a number of techniques to minimize their taxes in countries with high taxes and to maximize their profits in countries with low taxes.
The parent company may sell its product to a subsidiary sales organization in a tax haven country. The sales organization would then resell the product to foreign subsidiaries of the parent company, usually with a large mark-up in price.
A straightforward example of how multinational companies can boost their costs so as to avoid taxes comes from the files of the U.S. Internal Revenue Service.
February 14, 1977

The situation was that a manufacturing company in the U.S. had a wholly owned subsidiary in another country that extracted raw materials. The multinational had another wholly owned subsidiary shipping company in a tax haven country that chartered ships from unrelated companies.
Most of the shipping company's activity was in transporting raw materials from the mining subsidiary to the parent manufacturing company in the United States.
But the shipping company also supplied shipping services in a small way to other companies which were not related to the parent. The key point is that it charged the unrelated companies the same shipping rate as its parent company.
On the surface this appeared to be reasonable, but on close examination U.S. Revenue Service Officials decided the shipping company was charging its parent company much too high a rate.
By inflating the shipping costs the parent company was increasing its expenses allowable against income and therefore decreasing its tax. It was also increasing profits of its wholly-owned subsidiary, the shipping company, in a tax haven country.
The U.S. Revenue Service decided the shipping rates were too high for several reasons. They reasoned that the cost to the parent should be much less because its business was on a large scale-
That is not such an isolated incident. In this country we have the example of Falconbridge which operates in my riding. Falconbridge has a totally owned subsidiary in Namibia. There is no double taxation agreement between Canada and Namibia even though there is a double taxation agreement between Canada and South Africa. But South Africa administers Namibia illegally, in spite of orders from the United Nations time and time again. What happens is that the Namibia operation writes off its expenses against the Canadian operation. In effect, we not only contribute to the exploitation of a third country and not only help in the imperialism of Falconbridge in Namibia, but we also assist Falconbridge in writing off a bonanza in taxes to its own credit.
Every time a corporation like Falconbridge does not pay its share of taxes, the rest of the taxpayers must make up for it. I have been after the Minister of Finance, and the Secretary of State for External Affairs (Mr. Jamieson) in the four years I have been in this House to help the situation in Namibia. All we have to do is close the loopholes in our tax structure. They tell me they cannot interfere with the operation of Falconbridge. That is just ducky. Let anybody on unemployment insurance take a week or two of benefits they were not entitled to and they would be hounded to the end of the world.


Some hon. Members:: Oh, oh!


John R. Rodriguez: Hon. members opposite are good at bawling, but when they have a chance to speak they avoid it like the plague.


Irénée Pelletier: You have been speaking for seven hours.


John R. Rodriguez: We took the opportunity that was offered to us to examine the problems of Bill C-22 in detail. I think we have done a thorough job over the last week-an excellent job. One of my virtues has always been modesty. I think we have done an excellent job in trying to bring to the attention of Canadians some of the abuses within the tax system.
There is something terribly wrong when the government of Canada gives in to corporations crying about intolerable tax burdens. I have heard the mining associations claim there is
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only one way we can get the economy moving again. In an interview with a Paris magazine the Prime Minister (Mr. Trudeau) said the worst bitchers in Canada were the banks. Well, they have been replaced. The worst bitchers in Canada today have to be the mining companies. They say that to be able to stir up the economy they need more tax concessions, more exploration grants to be written off taxes, more tax breaks, and more "roads to resources" as they are called in Ontario. All of these things will not improve the unemployment situation by one percentage point. Like greedy cookie monsters they will eat every cookie in sight. I had better hide my cookies, Mr. Speaker.


Lorne Edmund Nystrom: I rise on anoint of order, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: The hon. member for Yorkton-Melville (Mr. Nystrom) on a point of order.


Lorne Edmund Nystrom: I wonder if the hon. member would answer a question.


John R. Rodriguez: Certainly.


Lorne Edmund Nystrom: I wonder whether the hon. member would tell the House if he has just accepted a corporate contribution and, if so, what.


John R. Rodriguez: It is not in cash, Mr. Speaker, but it is in kind. I am donating this to the hon. member for Winnipeg North Centre for the kind help he has given in this gargantuan task of examining the 87 clauses of Bill C-22. The hon. member for Ottawa-Carleton says that the hon. member for Winnipeg North Centre needs nutrition because this is Canada Week.


Jean Elizabeth Pigott: Food Week.


John R. Rodriguez: I have always found he has staying power.
There has to be something terribly wrong when the government of Canada gives in to corporations crying about intolerable tax burdens. There is something wrong when the Minister of Finance has sympathy for these poor corporate welfare bums to the extent he now believes profit controls are hindering capital investment. How much are corporations really hurting? In many cases the tax rate for corporations is less than the average income tax rate. Let us consider some examples.
I ask hon. members to co-operate. If they have a piece of paper handy, they can mark down one of the answers I shall call out, and if they get all the answers right, they will score full points.


Jean-Pierre Goyer: You are an aggressive socialist.


John R. Rodriguez: Here is the first question: Do you know what was the approximate value of all mining production in Canada in 1975? Was it (a) $7 billion; (b) $3 billion, or (c) $12 billion? Apparently the hon. member for York-Simcoe has

February 14, 1977
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an answer. Well, according to the Statistics Canada publication "Industrial Corporations-Financial Statistics, July, 1976" the profits of mining corporations amounted to $12 billion in 1975.


Jean-Pierre Goyer: So what?


John R. Rodriguez: And what was the amount paid in income taxes by all mining corporations in Canada in 1975? It was, according to "A", the answer, only $1 billion.


An hon. Member:: What's "B"?


John R. Rodriguez: They paid only $1 billion in taxes in 1975. This figure represents a tax rate of 34 per cent which compares favourably with the tax rate many middle income Canadians pay. It certainly does not indicate that the mining sector is over-taxed. In fact an individual earning approximately $20,000 faces the same tax rate as a corporation in the mining industry.
The fact that corporate income tax is declining is substantiated in an article by Bud Jorgensen, which appeared in the Ottawa Citizen of April 30, 1976. Mr. Jorgensen writes for the Financial Times News Service.


Jean-Pierre Goyer: What is your source?


Mr. Grafftey:: You guys opposite can filibuster after the next election.


John R. Rodriguez: According to Mr. Jorgensen:
The corporate income tax is slowly but steadily withering as a revenue source.
A study done for the Economic Council of Canada shows that corporate tax collections, as a percentage of gross national product (GNP), are almost half what they were 25 years ago.
During the same period, the proportion of personal income taxes collected has gone up by 2xh times.
The study by Prof. J. R. Melvin, 37-year-old economist from the University of Western Ontario, London, Ont., suggests dropping the corporation income tax completely. A royal commission on taxation in 1966 came to a similar conclusion.
Mr. Melvin's study shows that corporation income tax collections accounted for 6.6 per cent of gross national product in 1951. In that year, total personal income tax was less, only 5.9 per cent of GNP. Indirect taxes, such as sales and property taxes accounted for 12.4 per cent of GNP.
By the early 1970's, income tax collected from corporations accounted for less than 4 per cent of GNP.
At the same time the proportion collected from individuals had gone up to about 14 per cent.
The proportion of indirect taxes collected has gone up to about 14 per cent of GNP as well...
Last year, income tax collections were higher and indirect tax collections lower in relation to GNP. but those figures are distorted by the recession holding down the value of gross national product.
The 1975 proportions were as follows: corporate income taxes, 4.2 per cent; personal income taxes, 15.3 per cent; and indirect taxes, 13.5 per cent.
The provinces have taken a bigger share of all types of tax. Local governments, which can only assess indirect taxes, also have had a sharp increase.
Federal collections of corporation income taxes have dropped from 5.7 per cent of GNP in 1951 to less than three per cent in the early 1970's. The provincial share has gone from slightly less than one per cent to slightly more than one per cent.

The big increase for provinces has been in personal tax collections-0.5 per cent to about four per cent of GNP. The federal share increased from 5.4 per cent to about nine per cent.
Indirect tax collections by the federal government declined from almost seven per cent of GNP to less than five per cent. Provincial collections increased from 2.7 per cent to about five per cent and local government collections from less than three per cent to about 4.5 per cent.


An hon. Member:: Are you tired?


John R. Rodriguez: That article shows just how heavily taxed our corporations are. If one considers their share of the tax burden in terms of gross national product, one sees that the share they pay in taxes is declining. That is contrary to the experience in the United States.


Jean-Pierre Goyer: What are your sources?


John R. Rodriguez: I now come to profit controls, a subject very much to the fore. I raise this matter because the statement of the Minister of Finance was clearly politically motivated. A leading government economist, as reported in the Globe and Mail of February 8, 1977, says controls are not holding down profit levels to any great degree since only a handful of companies are directly restrained. Corporations continue to cry about poor investment opportunities in Canada-


An hon. Member:: What is the economist's name?


John R. Rodriguez: -when in actual fact profits as a percentage of GNP have been higher in Canada than in the U.S. since 1970. Let's look at the actual figures as reported by the Globe and Mail of February 8, 1977.


Jean-Pierre Goyer: That is not a good source.


John R. Rodriguez: If hon. members opposite would listen, they might learn something.


An hon. Member:: Is the hon. member suggesting we are not listening?


John R. Rodriguez: Is the minister taking a trip to see Mr. McDougald? I say to the minister, you had better catch that plane and go to see him.


Jean-Pierre Goyer: The hon. member is very exhausting, but go on.


John R. Rodriguez: With respect, Mr. Speaker, we ought to examine the latest figures with respect to pre-tax corporate profits as a proportion of GNP. According to the Globe and Mail of February 8, 1977, between 1950 and 1954 in Canada the figure was 11.8 per cent, whereas in the United States it was 11.6 per cent. Between 1955 and 1959 the figures, respectively for Canada and the United States, were 10.9 per cent and 10.5 per cent; between 1960 and 1964 the figure was 10.4 per cent for Canada and 9.7 per cent in the United States. For the period 1965 to 1969 the figure in Canada was 10.2 per cent, and in the United States 9.6 per cent.


Jean-Pierre Goyer: That shows we are doing better that the United States.
February 14, 1977


John R. Rodriguez: In 1970 the figures for Canada and the United States respectively were 8.8 per cent and 6.8 per cent; for 1971 they were, respectively 8.5 per cent and 7.2 per cent. For 1972 those same figures were 9.3 per cent for Canada and 7.7 per cent for the United States. For 1973 the Canada and United States Figures were, respectively, 10.4 per cent and 7.4 per cent. In 1974 the figures for pre-tax corporate profit as a proportion of gross national product were, for Canada and the United States respectively, 10.1 per cent and 6.2 per cent. In 1975 the Figure for Canada was 9.7 per cent, and for the United States, 6.8 per cent.


An hon. Member:: Shame!


John R. Rodriguez: And for the First nine months of 1976 the figures for corporate profits as a proportion of the gross national product were, in Canada and the United States respectively, 9.2 per cent and 7.9 per cent.


Jean-Pierre Goyer: Was that after or before taxes?


John R. Rodriguez: According to this article, business capital investment in Canada has not been as depressed as in the United States. Canadian business capital investment was 14 per cent of GNP in 1976, which is above the 1961 to 1975 average of 13.5 per cent. United States investment was about 9.5 per cent of GNP last year, slightly under the 9.9 per cent average for 1961 to 1975.
This certainly makes us suspicious about remarks made by J. R. Ferguson, head of an Ottawa financial consulting company, which appeared in the Toronto Star of December 10, 1976. He stated that the tax on profit penalizes efficient companies, undermines the role of profits as an incentive for businesses to become more productive, and has produced a serious contraction of financial markets.
The unfairness of our system of taxation and privileged position of our corporations must be evident.
The immediate past leader of this party spent a great deal of time studying the infamous tax system of this country. He is well versed in our tax system. He wrote a book entitled "The Corporate Welfare Bums". No debate on taxation in Canada is complete without some words from our former leader. It has to be the ultimate benediction in a debate which has ranged in a very studious manner over each clause of Bill C-22. The remarks of the former leader of this party are extremely important. They are apropos because he draws a comparison between the Sudbury Basin and the income tax system. I quote:
Geographers call Sudbury an example of post-glacial topography, but to the Sudbury Chamber of Commerce it is the nickel capital of the world. The post-glacial rocks of the Sudbury basin yield in excess of 20,000,000 tons of ore annually, and through them Canada supplies between 80 and 90 per cent of all nickel in the non-communist world. The demand for nickel is high, and the corporation profits show it.


Arthur Jacob (Jake) Epp: Who wrote this?
Income Tax


John R. Rodriguez: The former leader of this party, Mr. David Lewis. He is remembered in this House. In fact he was one of the most dynamic forces in this House of Commons.


Jean-Pierre Goyer: What happened to him? Where is he now?


John R. Rodriguez: He is carrying on the work which he started. He is presently doing that in our universities.


Arthur Jacob (Jake) Epp: Who defeated David Lewis?


John R. Rodriguez: That is a question. I do not know.


Jean-Pierre Goyer: That is not the only thing you do not know.


John R. Rodriguez: I want to get back to what our former leader said. It is important because it puts before the House the structure of the tax system in this country.
The average income in Sudbury in 1970 was $7,530.
It is not much more than that today. It is about $9,200.
-in that year the basic weekly wage for INCO workers was $138.80. But if the incomes are higher than the national average, expenses are worse. Housing costs are among the highest in the country.
Indeed, according to the latest survey by Royal Trust, housing costs in Sudbury today are the highest in the land. In 1971 the average lot, that is 55 x 120 feet, sold for $6,500. Today the average is $22,000. In 1971, and I quote:
Single-family dwellings costs an average of $26,580 while the average income of families borrowing money for new homes was $14,248.
The cost of an average home in the Sudbury Basin today is $42,000. The amount needed for someone to qualify to purchase a home is $20,000.
To look at the situation another way, during 1971 only the combined incomes of two families earning INCO's base wage would have been enough to borrow the money needed for one new home.
That disparity still exists today.
In addition, severe northern winters result in high heating bills, and food costs reflect the inevitably inflated northern price structure.
We are told that is because everything has to be transported there.


An hon. Member:: What are you doing about it?


John R. Rodriguez: I defeated a Liberal. That is why a Liberal no longer represents Nickel Belt. The former member was not relevant to the scene there. You can go to Toronto and ask Mr. McDougald.
The quote continues:
In 1970 a realty firm associated with INCO built a series of townhouses on INCO property which rent for $225 per month.
The rent has now increased to $400 a month.
Single workers who stay in the company "village", a grouping of trailers outside of Sudbury near the Copper Cliff smelter, receive room and board for $32.55 per week.
That has been eliminated. It has been torn down.
Sudbury faces a problem common to many mining towns. Assets of mining companies are exempt from municipal tax assessments under the Ontario Assessment Act. Municipalities receive payments from the provincial govern-

February 14, 1977
Income Tax
ment in lieu of property taxes, but these are usually far from adequate, with the result that the major burden of supplying adequate municipal services falls to the homeowners. The municipality may do its best; the people certainly do their best, but there is not enough money for adequate cultural and recreational facilities, or to repair roads fast enough or to renovate an older hospital-even to instal a sewage-treatment plant...
The balance sheet of INCO offers an indication of just how much money there really is in mining. The shareholders" equity section of the 1971 statement shows a total or more than one billion dollars, with retained earnings making up $894,969,000 of that.
The 1971 Annual Report indicates that of the 92,217 shareholders, 61 per cent have addresses in Canada, 37 per cent have addresses in the United States, and two per cent elsewhere. Statistics Canada refers to INCO as a Canadian-controlled corporation. However, 49 per cent of the outstanding shares are held by U.S. residents while only 38 per cent are held by Canadians.
The community of Sudbury has long provided INCO and Falconbridge with a great source of wealth. Through generous income provisions at both the federal and provincial levels, they were able to retain most of their earnings. They expanded their holdings, and not just in the mining field. INCO purchased a battery company in Philadelphia with money earned from resources taken out of the soil in the Sudbury Basin. Surely that company could pay its fair share of taxes in this country.
It is time that the causal relationship between the Liberals and the corporate sector was annulled. The public is sick and tired of a Liberal government and Tory opposition which cannot seem to stay out of the bedrooms of the corporate sector. Those who provide and justify innumerable tax breaks for corporations are just as guilty as those who profit from the non-payment of corporate income taxes. People are no longer vulnerable to the tactics of the Liberal government.
As David Lewis writes:
People are no longer very vulnerable to these tactics. They are not likely to be convinced that the Timmins mining companies' use of untaxed profits to buy shares of companies operating elsewhere in Canada or in the United States makes jobs in Timmins. They are not likely to be convinced that depletion allowances keep mines from becoming depleted or companies from giving mines up as the seams of ore narrow down and peter out.
They do see, as have so many tens of thousands of people in northern Ontario and Quebec, how the government must now pay to keep mines alive and people working because the huge profits of the fat years were not taxed.
They see and they wonder. They are not the fools that Mr. Turner takes them for. The people of Canada are not like children who scurry to bed when the Liberal bogeyman comes by. He has been coming too often.
The Liberals arc, however, not alone in their defence of the extractive industries.
As pitiful as the recent income tax reform proposals were, the Tories stridently opposed even those reforms. Progressive Conservative finance critic Marcel Lambert opposed the legislation as "a system of legalized plunder and piracy by people motivated by desire for the have-nots to take from the haves". He criticized the capital gains tax, on the grounds of that famous bogeyman of the Conservatives, uncertainty in the business sector.
Mr. Lambert, like other Tories and Liberals, is a champion of that oppressed underdog, the mining industry in Canada. Speaking in Parliament on May 11, 1972, he said:
With respect to the mining industry, I would like to ask whether the minister has read the recent speeches by the president of the Mining Association of Canada. Has he read the annual report by the president of Noranda? I hope he takes it to heart... I commend it to all members.
I am prepared, Mr. Speaker, to read from the Holy Testament for the benefit of hon. members. Certainly I am not going to refer to the annual statement of Noranda Mines. Let me give hon. members some solace when they think about what they are to do with the tax system. The Liberal government is pathetically blase about the unequal distribution of wealth in Canada. Through Bill C-22 it is saying "We do not care about income disparities, about poverty." While the Income Tax Act is the most useful tool for redistributing wealth, the Liberal government has chosen instead deliberately to use the Income Tax Act to enhance the position of the wealthy in Canada.
What can be expected from a man who arrogantly stated on December 28, 1971, during a CTV interview of the white paper on taxation-


Mr. Benjamin:: This is Trudeau.


John R. Rodriguez: I will tell you what he said:
And I concede your point, too, that it's likely we heard more from the vested interests than we did from the little taxpayer-
Little taxpayers, he calls them.
-who didn't have ... the high paid lawyers to speak for him ... I suppose in participatory democracy there will always be some whose voice is louder than others.
Now, Mr. Speaker, who said that? None other than the Prime Minister, who is leading a government that is sitting on benches, tattered and wracked by scandal after scandal, day after day. One has only to look at Hansard to see them wracked, hanging on the ropes from scandals such as the Skyshops affair, the black list, the judges' affair-dial-a-judge-AECL, Otto Lang and his airplanes; the Minister of Transport-


Some hon. Members:: Order!


John R. Rodriguez: -flying around the country at the taxpayers' expense. It is the same arrogance, Mr. Speaker, the same elitist attitude which was apparent at his press conference on January 26. I want to quote from that press conference of the Prime Minister. He says:
In the last ten years, more or less-since someone
-himself-
-began talking about the "just society"-more or less the percentage of people below the poverty line in Canada has fallen from 21 per cent to something around 8 or 9 per cent.
The Prime Minister goes on to say in his speech:
Once again my philosophy is not one of equalitarianism.
Imagine that, Mr. Speaker: his philosophy is not one of equalitarianism.
I want to make the poor richer, but I do not care if the rich get richer in the process, provided they pay their taxes and they are honest, and everything else. So, that is the answer about your quintiles. We are not trying to bring them together towards some national average.
See how that contrasts, Mr. Speaker, with the kind of income tax system that we on this side of the House see as the model, an income tax system which, as a principle, is redis-



[Mr. Rodriguez.J

tributive in nature; that secondly, has the principle of equity; and thirdly, has the principle of progressivity. Many people used to think that this Liberal philosophy was modelled after John Keynes and John Locke. Well, I hate to disappoint them about the real model of this Liberal party, because it dates back to pre-Biblical times. Indeed it goes back to Roman times. The Liberal model, Mr. Speaker, is not only the model for taxation but also for philosophy. I think that model is based on one Marcus Licinius Crassus.
Marcus Crassus was the first capitalist recorded in history. He owned the only fire brigade in Rome. Oftentimes when a building was on fire Marcus Crassus would line up with his fire brigade and would then negotiate with the owner of the building on the price of putting out the fire. Indeed, history records that Marcus Crassus, by this means, became a very wealthy landowner in Rome. He became the richest man in Rome and used his colossal fortune to further his political ambitions.
His great rival was Pompey, whom Sulla honoured for his military victories. Since he could not equal Pompey in war, he turned to politics. He headed a moderate party between the aristocratic conservative party of Pompey and the radical party of Julius Caesar. Yet, says Plutarch, he was "neither a steadfast friend nor an implacable enemy, but readily abandoned both his favours and his resentments at the dictates of his interests."
Obviously, Mr. Speaker, Marcus Crassus was a Liberal. The hon. member for Sault Ste. Marie (Mr. Symes) says that Marcus Crassus piddled while Rome burned, but I do not know about that.


An hon. Member:: Sure gave them a hosing.


John R. Rodriguez: The Liberals are not the only ones who are indifferent to the problems created by the taxation system in Canada. The Tories are equally indifferent to income disparities and poverty in Canada. They care so much about inequality in Canada that they could not even find 30 seconds of time to say something good, bad or indifferent about Bill C-22 on third reading. This has resulted in my having to step into the breach and make this sacrifice of speaking to this bill in detail.
A glance at the Parliamentary Guide would reveal to all who care to look the great array of wealth among my hon. friends to the right of where I sit. Their interests range from the directorship of a management company and of an apartment company all the way to a fisheries company, a packing company, and a company making wheels, brakes and equipment. One gentleman is a banker. We have bakers, too, and candlestick makers. The hon. member for Calgary North (Mr. Woolliams) is fairly big in oil. Then, of course, there is the "Cookie Monster". And who can forget the generosity of the cookie monster? No one! I think the hon. member for Winnipeg North Centre and I are supplied with cookies enough for a lifetime.
Income Tax
It is certainly not surprising to note that the Tories have given their stamp of approval to Bill C-22. This is the party which thought the government had gone too far with tax reform in 1972. In fact the hon. member for Don Valley (Mr. Gillies) is quoted in the Globe and Mail of October 2, 1973, as having said:
Edgar Benson and Prime Minister Trudeau have offered too much reform in one step. Their reform could not be explained. They could not lead the country in any united, let alone trusting way, to a new system.
The Liberal party's so-called tax reform may be unexplainable and irrational, but the Tory idea of reform, which involves more tax reform commissions and more discussion, is so chicken-hearted that we can never expect anything beyond platititudes. If they are serious about tax reform, even in modest stages, why have we not heard a single concrete proposal from their benches during this debate? There has not been a squeak out of them. Like mice, they run for cover. They run under the desks and scare the hon. member for Grenville-Carleton (Mr. Baker), who is afraid of mice, and ran out of the House.
The socialist party on this side of the House objects to such disparities in income and to too much poverty in one of the wealthiest countries of the world. The Prime Minister says he does not mind if the rich get richer as long as the poor get richer. The fact remains that, despite all supposed attempts by the government to redistribute income, the low-income groups are still receiving a lesser share of total income than during the mid sixties before many social welfare policies were improved.
We believe the income tax system must incorporate the ability-to-pay principle. We have said that in our view an income tax system must be based on three principles. It must be redistributive. It must be progressive. And it must be based on equity. Mr. Speaker, there is nothing in the present system which meets any of these principles.
This bill ought to be thrown out of the House of Commons along with the Liberals and their Tory buddies. We say the tax system must incorporate the ability-to-pay system. Do you know, Mr. Speaker, which income group pays the greater proportion of its earnings in taxes? Is it those in the upper brackets, those in the middle brackets, or those in the lower brackets? The answer is, those in the lower brackets. Some of my hon. friends have guessed it. They will get a cookie for that. People earning less than $8,000 pay the highest proportion of their total earnings in taxes. We also know, according to 1969 statistics, that 8.3 per cent of family units receiving an income of $15,000 paid at a rate amounting to 8.4 per cent less than those earning $2,000.
Here is another question. The top 20 per cent of Canadian income earners get 48 per cent of total income. How much do the bottom 20 per cent receive? Is it 15 per cent, or 3 per cent, or 8 per cent, or 12 per cent? The answer, Mr. Speaker, is 3 per cent.
In conclusion, Mr. Speaker


Some hon. Members:: No, no! Go on!

February 14, 1977
Income Tax


John R. Rodriguez: I move, seconded by the hon. member for Winnipeg North Centre:
That the motion be amended by deleting all the words after the word "That", and by substituting therefor the following words:
"Bill C-22 be not now read a third time, but that it be referred back to the
Committee of the Whole for the purpose of reconsidering Clause 65 thereof."
I place this motion before the House and trust that hon. members will support it.
I asked a question a moment ago. What is the answer? The answer is 3 per cent. It's the rich what gets the gravy, it's the poor what gets the blame.


Mr. Deputy Speaker:: Order. Perhaps the hon. gentleman will permit the Chair to put the amendment before ten o'clock.
Mr. Rodriguez, seconded by Mr. Knowles (Winnipeg North Centre) moves:
That the motion be amended by deleting all the words after the word "That", and by substituting therefor the following words:
"Bill C-22 be not now read a third time, but that it be referred back to the
Committee of the Whole for the purpose of reconsidering Clause 65 thereof."
Order. It being ten o'clock it is my duty, pursuant to the order of the House dated Wednesday, February 9, 1977, to put forthwith every question necessary to dispose of the third reading and passage stage of the bill.
The question is on the amendment. All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those against, will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Mr. Speaker:: I therefore declare the motion carried.
Motion agreed to on division and bill read the third time and passed.


Mr. Speaker:: It being after ten o'clock this House stands adjourned until two p.m. tomorrow afternoon.
At 10.30 p.m. the House adjourned, without question put, pursuant to Standing Order.

Tuesday, February 15, 1977