1977-11-23

ROUTINE PROCEEDINGS


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, I rise under the terms of Standing Order 43 on a matter of urgent and pressing necessity. My motion pertains to today's Supreme Court decision in the GIGOL case which has serious constitutional implications for the jurisdiction of provincial governments over mineral rights within their boundaries. I therefore seek leave to move, seconded by the hon. member for Moose Jaw (Mr. Neil):
That the government introduce emergency legislation to protect the people of Saskatchewan from an estimated tax liability of half a billion dollars and to check the federal government's encroachment into the jurisdiction of provincial governments over natural resources.


Mr. Speaker:: Hon. members have heard the proposed motion. Under the terms of Standing Order 43 such a motion requires the unanimous consent of the House before it can be put. Is there unanimous consent?


Some hon. Members:: No!


ROYAL CANADIAN MOUNTED POLICE
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43.
I move, seconded by the hon. member for Perth-Wilmot (Mr. Jarvis):
That the Prime Minister make at the earliest possible moment a statement to explain why his government is now defending a position contrary to the one the Prime Minister expressed himself in this House on June 20 last, when he indicated that the Keable Commission was perfectly legal, because under our constitution and under our Criminal Code, the administration of justice comes under the attorneys general of the provinces.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTED WITHDRAWAL OF APPLICATION TO STOP KEABLE INQUIRY-MOTION UNDER S O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity under the provisions of the standing order.
The federal government has applied to the Quebec Superior Court to halt the Keable inquiry into illegal police activities in Quebec and seeks to have the entire inquiry declared to be unconstitutional. In view of the fact that the administration of justice is clearly a matter within the jurisdiction of the provinces and that the granting of any relief sought by the Solicitor General is an infringement of provincial rights, and in view of the fact that the apparent reason for making the motion is to stifle the Keable inquiry, I would move, seconded by the hon. member for Greenwood (Mr. Brewin):
That the Solicitor General be instructed by this House to withdraw the application to halt the Quebec inquiry and permit it to proceed without interference even if there is some good reason why certain documents sought by the inquiry cannot be produced.


Mr. Speaker:: Is there unanimous consent for the motion to be put?


Some hon. Members:: No!


SUGGESTION RESEARCH BE CONDUCTED ON SOVIET VACCINE FOR MULTIPLE SCLEROSIS-MOTION UNDER S.O. 43
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of extremely urgent and pressing necessity.
In view of the fact that the number of people suffering from a dreadful condition known as multiple sclerosis is increasing in Canada, that a vaccine known as the Margoulis Choubladze and used to fight this condition has been developed by Russian scientists, and that this vaccine has been used to treat success-

November 23, 1977
Highways
fully people suffering from this condition and even cure them, I move, seconded by the hon. member for Temiscamingue (Mr. Caouette):
That the House urge the Minister of National Health and Welfare (Miss Begin) to carry out an investigation, in co-operation with the Royal College of Physicians and Surgeons of Canada, into the usefulness of this vaccine and, should the findings prove positive, to recommend its import into Canada.


Mr. Speaker:: Order, please. The House has heard the hon. member's motion. Pursuant to Standing Order 43, this motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, under the terms of Standing Order 43 I rise to present a motion on a matter of urgent and pressing necessity pertaining to statements made to news media today by Leslie James Bennett, formerly with RCMP intelligence and now living in Australia under the name of John B. Ennett to the effect that he was interrogated by the RCMP at the time of his leaving the force. I therefore ask leave to move:
That the Solicitor General advise the House whether it is the policy of the government to interrogate high ranking RCMP officers when they leave the force and if so, why, and specifically why Mr. Bennett was heavily interrogated? Was it or was it not on the subject of infiltration of security services by a foreign power ana, finally, to the knowledge of the government were members of the U.S. Central Intelligence Agency permitted to interrogate Mr. Bennett as well and, if so, why such foreign interference was permitted by the government in the handling of Canadian internal security.


Mr. Speaker:: Hon. members have heard the motion presented. Is there unanimous consent as required under the provisions of Standing Order 43?


Some hon. Members:: No!



TRANSPORT


Mr. John Crosbie (St. John's West):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the fact that the Atlantic provinces have requested the government to share the cost of a 10-year program for reconstruction and upgrading of the Trans-Canada Highway in their provinces on the basis of a 90-10 cost-sharing split but the Minister of Transport refuses

to accept anything other than a 50-50 cost-sharing scheme, and in view of the fact that the Secretary of State for External Affairs stated in Newfoundland that Ottawa's position would be reviewed and reconsidered while the Minister of Transport was stating that this 50-50 offer was the final decision, I would move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House direct the government of Canada to enter into an agreement with the Atlantic provinces so that the costs of reconstructing, resurfacing and upgrading the Trans-Canada Highway in those provinces will be met 75 per cent by the government of Canada and 25 per cent by the provinces thus reconciling the differing views of these ministers.


Mr. Speaker:: Order. Such a motion can be presented for debate at this time pursuant to Standing Order 43 only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD

[Stage Direction]
[ Translation]

Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of National Health and Welfare and it is related to the block financing formula suggested by the minister as regards social services. Considering the decision of the government to drop Bill C-57 during the second session, and given the unanimous rejection by the provinces of this block financing formula in a joint release issued less than a week after the announcement of this formula, did the minister consider other methods for financing or developing social services and, if so, what are these methods?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, I thought 1 had already informed the House on the details of this file, but I shall be pleased to repeat them for the hon. member. When I became minister, I immediately took back the file when the provinces had just been offered a lump sum payment for social services, very much like the one which has already been in existence for one year and which applies to health services. The provinces said in a release that they did not appreciate the way the counterproposal had been made. They did not reject the proposal itself but the way the offer had been made. This is a matter for discussion and it does not affect the substance of the problem. On this, I am only waiting for two formal answers from the provinces. One province refused officially the proposal for lump sum payment while most of the other provinces expressed a preference for this financing pattern. Only one asked to
November 23, 1977

discuss it as quickly as possible; it is precisely what I intend to do.


REQUEST FOR CONSULTATION WITH PROVINCES ON METHOD OF FINANCING
William Heward Grafftey: I should like to put a supplementary question, Mr. Speaker.
It is obvious that there is a lack of consultation between the provinces and the organizations involved. My supplementary question is as follows:
Two months ago during a meeting in Edmonton the provincial welfare ministers called for a federal-provincial conference to discuss the block financing program. This request was repeated by at least eight provinces during the past two months. Considering the importance of the matter for the provinces, could the minister call a meeting of the provincial welfare ministers to together reach an acceptable financing formula for social services?


Hon.   Monique@: Mr. Speaker, I appreciate the question of the hon. member which shows that it is urgent to find a solution and this is also the objective of the federal government.
To the provinces which asked for an immediate federal-provincial meeting, I pointed out two things: First that it was useless to hold a meeting immediately if we did not reach a sufficient number of basic agreements to discuss the principle, and I am obtaining those agreements. Second, I was compelled to say ...
Perhaps I should say in English, to make sure I am understood properly, that most of the provinces are communicating to me agreements in principle which will permit me to meet with them. Second, I should like to say with respect to the second sort of reservation I had vis-a-vis an immediate meeting, back in September, that there was no more money I could put into the pot for distribution to the provinces, and that message unfortunately had to reach home. I think it is beginning to be understood.


William Heward Grafftey: A final supplementary, Mr. Speaker. It is also about the consultations.
The minister is no doubt aware of the fact that several social services organizations, like the Canadian Association for the Mentally Retarded, have objected to the block financing formula, warning against the danger of a lack of federal leadership and the very real danger that the moneys appropriated for social services would be used for other purposes. Has the minister contacted those organizations to discuss their objections? If so, with what results? If no, why not?


Monique Bégin: Mr. Speaker, I was just talking a few minutes ago with a member of the National Welfare Council who
Oral Questions
advised me of the same concerns. I have met, not all of course, but several of the national or local organizations, and they expressed concern about cuts in funds and this, for several reasons.
As for the federal funds directly appropriated to certain projects, I have assured those organizations that there was no question of cutting those funds. The lump sum proposal does not affect them, and they were reassured about that.
As for the general program of provincial accountability, there is, even under the present system, the cost-sharing formula which provides for paying 50-50 the costs of social services. I am looking more fully into that to try and provide groups, mostly local ones, with instruments which would enable them to apply themselves for repayment to their respective provinces. I am thinking in particular of organizations for the handicapped or the mentally retarded.


ALLEGED LACK OF CONSULTATION WITH PROVINCES ON ADOPTION OF BLOCK FUNDING FOR SOCIAL PROGRAMS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare regarding the very heavy-handed and unilateral change of rules in the middle of the game of block funding for the social services act which met with the significant approval of not only the provinces but the various national and provincial agencies involved with social services, a change which led to nothing but anger, frustration and disappointment at the way this government performs. Why did the minister, through her predecessor, change the rules in the middle of the game without giving an opportunity to the provinces and the various national and provincial social service agencies to discuss this matter before bringing in block funding? That is the way federal-provincial relations are supposed to work. Why this heavy-handed approach?


Monique Bégin: Mr. Speaker, it looks as though during a meeting of their members this morning, on November 23, the Conservative party has finally discovered that there was a new proposal being discussed, and consultations have been taking place for two months and ten days. This has been discussed openly. The counter-proposal for block funding was made by my predecessor, on September 15, because at their June 1977 meeting the provinces had made it very clear that they wanted more money under the social services proposal, but they also wanted flexibility and autonomy. We, therefore, listened to what they asked us and gave them the proposal covering a regime of block funding similar or parallel to the one they already have in place and which they like very much.


Some hon. Members:: Hear, hear!


Lincoln MacCauley Alexander: Mr. Speaker, there is one thing I have noticed about the type of consultation this government carries out. The minister is wrong in terms of stating that this matter was introduced with consultation when it was not. She intro-

November 23, 1977
Oral Questions
duced it without prior consultation and co-operation. 1 will ask the minister this: why all the footdragging with respect to a meeting of the federal and provincial ministers of health in order to determine the proper approach to bring about proper funding with respect to social services? Why cannot the minister pick up the phone and organize a meeting in the very near future so that this matter can be determined, in order that what the social services people are looking for will be implemented? Why cannot that be done without the footdragging?


Monique Bégin: Mr. Speaker, I do not understand the foot problem of the hon. member.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Yours is in your mouth.


Monique Bégin: As far as I am concerned, two months and one week of consultation is not enough for a new minister. Second, one province amongst others, Manitoba, had a new government. I respect that democratic process.


Some hon. Members:: Hear, hear!


Monique Bégin: I wanted the Conservative minister of that province to have a chance to learn his dossier and be a full participant. 1 can go on by giving several other answers, but I have indicated the practical problems which made it impossible to have an earlier meeting than now. It is as simple as that.


Charles Joseph Clark: Back to Carleton!


Monique Bégin: I do not recall the opposition party giving permission to this side of the House to increase any amount in the negotiations. I have said very clearly that I have to bring that message home to the provinces.


Mr. Speaker:: The hon. member for Oshawa-Whitby.


Lincoln MacCauley Alexander: Mr. Speaker, now that everything is in place-


Some hon. Members:: Order, order!


Monique Bégin: 1 cannot hear the hon. member.


ROYAL CANADIAN MOUNTED POLICE
John Edward Broadbent: Mr. Speaker, I have a question for the Solicitor General. In announcing his support of the then announced Quebec inquiry, the Solicitor General said in the House on June 21 that Quebec, like Manitoba, New Brunswick and any other province, has a right to inquire into the administration of justice. Considering the extension of the terms of reference for the Quebec inquiry was

made three weeks ago, why is he now proposing a complete withdrawal of that right from the province of Quebec, instead of restricting the federal government's refusal to participate in certain matters only?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, I would suggest to the hon. member that he read the request that I filed before the Superior Court in Montreal. He will find that it contains several conclusions and that some of them do not, of course, request a complete suspension of the Keable inquiry.


John Edward Broadbent: Mr. Speaker, the minister has been considerably more forthcoming in his answers in the past by at least providing more information than he is at this time. With specific reference to the two matters that the Solicitor General has objection to-the request for the lines of authority in the RCMP and the operational procedural manual of the RCMP-does he not think an inquiry established under the terms of reference, which the minister agreed to, has to pursue to its end the matters that would be provided only by obtaining the operational manual and learning the lines of authority in the RCMP?


Francis Fox: Mr. Speaker, 1 think my course of action on this issue was always quite clear all along these debates, both in June and now. Our position has always been that the provincial attorneys general have jurisdiction over the administration of justice and that in the course of inquiries on alleged illegal acts committed within a province, it belongs to the attorney general of the said province to investigate the matter as he sees fit.
With regard to the request submitted to the Keable inquiry, a whole page of allegations show that the Keable inquiry seems to be going beyond the mandate given to it and to be doing much more than investigating criminal acts. It is actually investigating the internal operations and the day-to-day activities of the RCMP. The questions and arguments submitted cover a period going back to 1970 until now. We are actually being asked to produce complete files on all RCMP operations in some fields. As for me, this clearly exceeds an inquiry into specific illegal acts which were brought to the attention of the Keable Commission by the Quebec attorney general.


John Edward Broadbent: Mr. Speaker, in the House on June 17 last when the minister was giving his wholehearted endorsement to the establishment of the commission he listed four matters into which there would be an inquiry and among them is included item C, disposal of documents that were seized at the time. I want to repeat part of the question and hope to get a more specific answer from the minister. If he agreed in principle that the government of Quebec has jurisdictional authority to make such an inquiry into criminal acts, and even the extended
November 23, 1977

terms of reference refer to allegations of four specific criminal acts, and if it is to achieve its stated goal to which he agreed on June 17 in the House, surely it has to obtain such information as the operational procedures of the RCMP. If the minister agrees to that and objects only to certain details, I repeat, why does he not cancel co-operation on the details but at least leave with the province the right to have that inquiry?


Francis Fox: Mr. Speaker, I have no objection to the attorney general of Quebec inquiring into specific criminal acts committed within the limits of his province. That has always been our position on this side of the House. But I suggest that when one wants to have a series of documents such as the organization chart of the security service, when one wants to know how the RCMP goes about getting information on such things as technical or electronic devices, on human sources, and when one is interested in recruiting, relationships, payments and all searches that might have been done by the security service, in interviews on subjects of interest, in infiltration, surveillance and shadowing, in the classification system of the RCMP, in the operations of internal communications between various police forces, in internal disciplinary investigations, in the inquiry led within the RCMP, in relationships between the RCMP commissioner, the director general of security and high officials within the offices of the Solicitor General, the Prime Minister of Canada, the cabinet, the Privy Council, in kidnapping, Mr. Speaker, int-


Mr. Speaker:: Order. The hon. member for Richmond.


GOVERNMENT ADMINISTRATION
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I have a question for the right hon. Prime Minister. Last Friday the Prime Minister told us that Mr. Pierre Andre Bissonnette, who is now First Assistant Under-Secretary of State for External Affairs, will become Assistant Solicitor General on November 29, 1977. Would the Prime Minister tell the House what will be the role of the Assistant Solicitor General in view of the revelations made everywhere, especially in the newspapers in the last few weeks, about the operations of the Royal Canadian Mounted Police?


Right Hon. P. E. Trudeau (Prime Minister):: Well, Mr. Speaker, I expect the new Assistant Solicitor General to play the role assigned to him by the legislation, that is administering the department, and I am convinced that he will do so competently and with great success.


Léonel Beaudoin: Mr. Speaker, I have a supplementary. Could the Prime Minister inform the House how he intends to use this appointment to give more control and more information to the House about the operations of the RCMP in accordance with its true mandate, which is to protect honest citizens?
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, when we consider the budgetary estimates, the House will have the opportunity to call on the new deputy minister and ask him questions about the administration of his department. Of course, general policy matters will continue to be the responsibility of the minister and he will be the one to account for the general policy of his department before the estimates committee.


SOCIAL SECURITY
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, my question is for the Minister of National Health and Welfare. Given that the minister has in the past refused to tell the House what her estimates are for the annual cost of a guaranteed annual income program and refused to say specifically from where the money to pay for it would come and given that I have been told by experts that at least $350 million will be required to get this program off the ground, is the minister still sticking to the story that no new budget funds will be required by her department to implement this program?


Monique Bégin: Mr. Speaker, I answered that question about two weeks ago, and perhaps I can repeat the explanation I gave. Perhaps the misunderstanding arises from the hon. member's view of a universal guaranteed annual income scheme. I was talking about people in three particular target groups who could be and should be the first Canadians to be protected because of their vulnerability. I recall speaking about workers who are under the minimum wage rule. The proposal for these three groups is under study in my department, and we are reviewing possibilities of rearranging the existing budget approved for my department.


GUARANTEED ANNUAL INCOME-PROGRAMS TO BE CANCELLED TO FUND SCHEME
Paul Yewchuk: The minister has stated that she plans to finance this program by rearranging existing programs. Can she tell the House specifically which program she plans to cancel? Does she plan to cancel the income support part of the Canada Assistance Plan, the family allowance or the old age pension? What specific program will the minister cancel in order to get funding for a guaranteed annual income program?


Monique Bégin: Mr. Speaker, I do not intend to cancel programs for those in need. 1 would like to reaffirm very strongly that we are studying rearrangements which would take away-if I can put it that way-from those who do not need universal pro-

November 23, 1977
Oral Questions
grams and would eventually increase the allowances which should be received by families in need.


GUARANTEED ANNUAL INCOME-ALLEGED LACK OF CONSULTATION WITH FOUR PROVINCES
Mr. Dean Whiteway (Selkirk):: Mr. Speaker, 1 have a supplementary question for the same minister. In view of the fact that there are at least four provinces-British Columbia, Alberta, New Brunswick and Ontario-whose ministers were not consulted regarding a guaranteed annual income program, is it the intention of the minister to run this program unilaterally?


Monique Bégin: Mr. Speaker, I do not understand whether the hon. member is speaking of a guaranteed annual income program, which does not exist and the studies to which I just referred, or if he is talking about the block funding proposal under social services legislation.


Dean Waldon Whiteway: Mr. Speaker, I am speaking of the announcement of the guaranteed annual income program which was made prior to any consultation with provincial premiers. In view of the fact that the provinces will be the ones to implement the program, is it the intention of the minister to run the program unilaterally without the consent of the provinces?


Monique Bégin: Mr. Speaker, there has never been such an announcement.


GUARANTEED ANNUAL INCOME-EFFECT ON MOTIVATION TO WORK
Mr. Jake Epp (Provencher):: Mr. Speaker, 1 would like to direct a question to the Minister of National Health and Welfare. On a previous occasion the minister refused to tell the House what effect a guaranteed annual income program might have on the motivation to work. Can the minister tell the House whether the motivation to work would be affected one way or another if a guaranteed annual income program were implemented?


Monique Bégin: Mr. Speaker, as concerns the first studies that we have already published, a copy of which I have sent to the official critic of the opposition, two of them concern this problem of the work motivation for low income earners and I shall be pleased to send a copy of it to the hon. member who has just raised the question.


Arthur Jacob (Jake) Epp: Mr. Speaker, I have a supplementary question for the same minister. In the documents to which she refers that question was not answered in any detail at all. In view of the fact that the Minister of Industry, Trade and Commerce has some responsibility for productivity with regard to Canadian

manufacturing and workers would the minister tell the House whether there is some agreement on the part of the Minister of Industry, Trade and Commerce that a guaranteed annual income would have no effect on productivity in Canada?


Mr. Speaker:: It seems to me that question scarcely seeks information; it seeks an opinion.


POST OFFICE
Hon. Martin O'Connell (Scarborough East):: Mr. Speaker, my question is for the Postmaster General. In view of the fact that my constituency office in Scarborough East has received 121 telephone calls in the last three days with respect to the slow delivery of a specific item of mail between Ottawa and Scarborough, will the minister investigate the reasons for the slow delivery of over 2,000 letters of invitation which I, as member of parliament, addressed to constituents inviting them to a conference on Tomorrow's Canada on November 19? Such letters were postmarked in Ottawa on November 9, and took 12 to 13 days to reach my constituents.


Mr. Paproski:: You're lucky.


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, I thank the hon. gentleman for giving me notice which permitted me to conduct a preliminary investigation of this matter. I have ascertained that 2,001 pieces were posted on November 9 in the Parliament Buildings and were dealt with at the Ottawa Post Office. Unfortunately, there was a delay in the transportation of the mail from Ottawa to Toronto. The mail had been bagged. The Toronto processing plant cleared the mail within the specified time, in less than two days. Unfortunately, there was more than a nine-day delay between Ottawa and Toronto. In conducting this investigation we also found that other bags of stale mail were found in the Ottawa station.
In conclusion, I want to indicate that this is the kind of co-operation we require of all hon. members in instances of this kind where individual bags have been mislaid and have not been located in the normal course of operation.


ROYAL CANADIAN MOUNTED POLICE
Mr. Roch La Salle (Joliette):: Mr. Speaker, I wish to ask a question of the hon. Minister of National Health and Welfare as I have the clear impression that she has recovered her memory. I wish to come back to a question put last week: in view of the statements made by the minister at Carleton University last week could she tell the House if she said that
November 23, 1977

the political climate of that time-concerning the illegal acts of the security branch-did not justify such an action by the RCMP?


Monique Bégin: Mr. Speaker, I would be pleased to check the date of the two Hansards where I rose on a question of privilege about that issue. Obviously the office of the hon. member did not have time to provide him with that information.


REASON FOR FAILURE TO SUPPLY KEABLE INQUIRY WITH ORGANIZATION CHART
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Solicitor General, and it follows an answer he gave earlier in this House in which he listed a number of documents his department found great objection to producing before the Keable inquiry. Among those documents-and the one which seemed to bother him the most-he mentioned the organizational chart of the security branch as one he could not possibly turn over to the inquiry. Given that under the constitution of this country provincial attorneys general are given a clear mandate to investigate criminal activity, whether that activity is by the police or by anyone else, and to determine who gives orders for criminal activity, can the Solicitor General advise the House how the Keable inquiry can possibly come to a determination as to who gave the orders for the illegal acts in Quebec unless it receives the co-operation of the Solicitor General with regard to the organization chart, or at least the chain of command within the force?


Francis Fox: Mr. Speaker, the answer to the hon. member's question is quite simple. Ever since March, 1976 there has been very close co-operation between the federal government and my predecessor and the department of the solicitor general of the province of Quebec. All the information the provincial department wanted concerning the APLQ matter was brought to its attention. It is also a fact that the province of Quebec can get all the evidence it wishes because we filed with the Keable commission all material relating to the entry of the APLQ headquarters in 1972.
We have also indicated that all persons in the chain of command, and they have all been identified in those documents or through my counsel for the inquiry, are willing to testify in front of that commission. If people are really interested in finding out who did what in connection with a possible illegal entry, the solution is not in obtaining information on the day-to-day operations of the RCMP or requesting the files on RCMP matters that are not related to the entry. The solution is in examining under oath the people who were involved in a position of command at that time. All those people have indicated their willingness to appear before the commission, but not all have even yet been invited to attend.
Oral Questions


SUGGESTION INFORMATION BE GIVEN KEABLE INQUIRY AT IN CAMERA SESSION
Stuart Malcolm Leggatt: Mr. Speaker, it seems perfectly clear that the Keable inquiry itself is not satisfied with the cooperation that the Solicitor General has provided. In view of the fact there is an in camera provision under the Keable inquiry, why does the Solicitor General not take that commission into his confidence? If there are security matters, why does the Solicitor General not deal with those matters in camera with no public exposure whatsoever in those sensitive areas? At least the Keable inquiry could find out who gave the order for the illegal entry.


Francis Fox: Mr. Speaker, there is no problem whatsoever in the Keable commission finding out who gave the order for the entry into the APLQ premises. I gave that in my previous response. As to the hon. member's suggestion that we turn over all federal agencies to any provincial commission that is set up, that is not the position of this government.


SOCIAL SERVICES
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is to the Minister of National Health and Welfare. It is related to the question asked by the hon. member for Brome-Missisquoi. In asking it I would assure the hon. lady that the new government in Manitoba is most anxious to proceed with this legislation because we are hosting the Rehabilitation International Congress and this legislation will have to be in place. In view of the fact the former Minister of National Health and Welfare in effect scuttled this legislation when he changed the financial arrangements with the provinces unilaterally in an abrupt press release of September 16, and the high priority that hon. gentleman, who now has responsibility for federal-provincial relations, gave to this legislation, will the hon. lady call the provincial ministers together at the earliest possible moment to restore the concensus that has been shattered by the arbitrary action of the former minister?


Monique Bégin: Mr. Speaker, I do not accept the premise put forward in the last part of the hon. member's question. All this work is continuing in an effort to find a solution for the betterment of the lives of all Canadians. I know of the hon. member's personal interest in the field of help to the handicapped and the disabled. He can be assured that this block funding still completely covers them. That was made very clear to the provinces. As to the meeting that will I hope take place in the near future, he could help me by asking the new minister in Manitoba to send me a reply.

November 23, 1977
Oral Questions


Walter Gilbert Dinsdale: Mr. Speaker, this legislation has disappeared from the order paper. It was on the order paper. Can the hon. lady assure the House it will be back on the order paper during the present session as was promised in the Speech from the Throne.


Monique Bégin: Mr. Speaker, if there is an agreement on a new proposal, as for instance a lump payment, the proposition was to be implemented on April 1, 1978. So I hope that a new bill will be tabled in time for implementation.


POSSIBILITY NEW BLOOD FRACTIONATION PLANT BUILT IN QUEBEC AND WORK DISCONTINUED AT CONNAUGHT LABORATORIES
Mr. Bruce Halliday (Oxford):: Mr. Speaker, 1 have a question for the Minister of National Health and Welfare relating to the fractionation of blood. Is it the policy of the government that a new blood fractionation plant will be built in Quebec either by the Armand Frappier Institute or the Red Cross and if so, in view of the fact that the government is allowing fresh frozen plasma to be exported to the United States for fractionation when it can be done in Canada by Connaught Laboratory, is it the intention of the government to discontinue the work being done by Connaught Laboratory in Toronto?


Monique Bégin: As to the last part of the question, Mr. Speaker, it is not the policy of the government to interrupt the work of any group, either in private enterprise such as the Connaught Laboratory or of any private donor organization such as the Red Cross Society. As to the role of the Armand Frappier Institute, I will have to send the gentleman a detailed answer at a later time.
With regard to the general problem he has raised, the fractionation of blood is of great importance. I wish to clarify one thing, and 1 will reply in detail on this to my colleague. One blood element, called Factor VIII, which is of great importance in the treatment of haemophiliacs cannot be produced by the Connaught Lab. The Red Cross Society did give a contract to an American laboratory, Highland Laboratories. The Red Cross still provides the Connaught Laboratory in Canada with a lot of elements relating to the production of plasma and other elements needed in the treatment. I am sorry I do not know the technical words.


ADMINISTRATION OF JUSTICE
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Minister of Justice. Eighteen months ago, the government refused to allow the takeover of a company called Canadian VacHyd by a Dutch firm called Indivers. Some 14 months later the Minister of Industry, Trade and Commerce finally gave directions to the Department of Justice to apply for a court order compelling Indivers to divest itself of its control of VacHyd. Some four months have gone by and no court action has been commenced and this is causing serious harm to VacHyd's business. It is a small Canadian company in fields involving both exports and high technology. When will the necessary court action be commenced to deal with this clear and definite case of non-compliance with an act of this parliament, the Foreign Investment Review Act and what is the explanation for the unconscionable delays to this date?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, my officials are in charge of the file. I cannot give the hon. member a precise date when an application may be taken. I understand there are some difficulties with those types of proceedings. When we are prepared to go to court, I will advise the hon. member.


SOCIAL SERVICES
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is to the Minister of National Health and Welfare. It relates to the comment she made earlier in the question period that the reason there has been no meeting of federal and provincial welfare ministers with regard to the new social services act is that she has been unable to obtain agreement in principle for the federal proposals for block funding. Is it now the position of this government that federal-provincial meetings will only take place on those occasions where the provincial ministers have agreed in principle to terms dictated by the federal government, even in areas of concurrent jurisdiction? Is that what the new federalism is all about?


Monique Bégin: Mr. Speaker, I do not pretend to be a constitutional expert. There are days when I am very pleased not to be one. In federal-provincial relations, I understand that the different partners in this case in the social services field, have to reach an agreement in the interest of the good of all Canadians. A counterproposal was made on September 15. I was appointed shortly after that. The provincial ministers studied, analysed and discussed the proposals and then met with their own provincial governments. One by one they started sending replies to Ottawa. I have not received replies from all the

November 23, 1977

provinces. Until we have something to tell each other, I do not understand why we should meet. It is as simple as that, Mr. Speaker.


Flora Isabel MacDonald: Mr. Speaker, I wonder if the minister would care to correct her terminology so that she does not further aggravate the differences with the provinces.


Mr. Speaker:: Order, please.


PENITENTIARIES
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, my question is to the Solicitor General. It results from an inconsistency in penal policy which is unfair to certain guards at Millhaven Prison. His department has refused to give the public the names and records of the convicts at Millhaven who last week took a hostage at knifepoint and barricaded a section and created serious trouble. Just previously, his department gave the public the names of three guards who did their duty by protecting Canadian persons and property in the ultimate wounding and shooting of escaping convicts. Will the minister explain why his department cannot be consistent and cease discriminating against public servants and officials who are performing their duties?


Francis Fox: There is, of course, no discrimination. Guards in the penitentiary service perform a very valuable function in Canadian society. As to the specific question why the names of the inmates were not released, I will look into the matter and get in touch with the hon. member.


FISHERIES
Mr. J. M. Forrestall (Dartmouth-Halifax East):: 
J. Michael Forrestall: I welcome the minister's assurance that we do not intend to give away more of our species which properly belong to our own fishermen and to our own industry.


REGIONAL ECONOMIC EXPANSION
J. Michael Forrestall: May 1
direct a supplementary to the Minister of Regional Economic Expansion? In the light of this very serious blow-we have probably lost between 1200 and 1500 jobs and have quite possibly put in peril or in jeopardy the only major ship repair and shipbuilding capacity in the Province of Nova Scotia, certainly in the port of Halifax-may I ask the minister whether he is now in a position or will soon be in a position to tell us the government's intention with respect to its involvement in the construction of a new floating drydock for Halifax and, at the same time, with respect to the decision respecting the West Coast requirement?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, consultation continues on that subject between the various departments here in Ottawa and particularly the Department of Industry, Trade and Commerce, and when a decision will be made it will be announced by the departments that are responsible for the implementation of the program.


POST OFFICE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Postmaster General and it arises from statements he made to the press last week that
80027-S

November 23, 1977
Oral Questions
district post office officials have been illegally passing on mail to the security branch of the RCMP for 40 years without the knowledge of either the minister or his senior officials here in Ottawa. Were these illegal interceptions of the mail approved by those in charge of the district post offices or were they undertaken by employees of the post offices who had been hired by the RCMP and were they undertaken without the knowledge of the district post office managers or were both methods used to carry out the nefarious practice which the Postmaster General has admitted to the press?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the investigation is still proceeding and a dossier is being compiled in order to permit prompt and complete co-operation with the McDonald Commission. The information we have to date would indicate that the methods varied and that the information was provided at the request of the RCMP, primarily by people involved with security and intelligence in the post office and primarily without the knowledge of the regional managers and their immediate subordinates.


Thomas Clement (Tommy) Douglas: Is the minister telling the House that for 40 years employees of his department have been co-operating with the security branch of the RCMP to violate the Post Office Act without either the RCMP or the Solicitor General informing him of that fact? Is he telling us that one arm of the government does not know what the other arm is doing?


Mr. Blais:: I would say there is some indication, although there are no specific records, that the practice could have gone back to the late thirties. However, from the evidence I have been able to ascertain the practice was primarily during the early part of the seventies and it was at the request of the RCMP. There was no knowledge in the upper echelons of the post office about that co-operation.


JUSTICE AND LEGAL AFFAIRS
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is addressed to the Solicitor General. Yesterday I moved that the two predecessors of the Solicitor General be asked to come before the Standing Committee on Justice and Legal Affairs to give evidence so that the facts of the whole matter might be heard-


Some hon. Members:: Order!


Eldon Mattison Woolliams: My question to the Solicitor General is this: has he discussed this matter with his two predecessors and are they willing to go before the committee and tell all?


Mr. Speaker:: Order. It would take some special permission from the House to enable that to happen.


FISHERIES
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I have a question for the Minister of Fisheries. Can he tell the House the outcome of his meeting with his counterpart, the Minister of Fisheries in Newfoundland? Has any agreement been reached with regard to a joint program to deal with such pressing problems as fleet replacement, and so on?


Hon. Romeo LeBlanc (Minister of Fisheries):: The conversation took place on three basic issues. One was the boat subsidies which I have indicated would not be available for the current year because the allocation is already spent and also because it is clear under the act which allows us to pay these subsidies that they must be paid directly to fishermen not to provincial authorities. Another matter which was raised was the question of buffer zones between areas where different types of gear are in use. I made it clear that these were matters for the regional director in consultation with the fishermen and their organizations who are perfectly competent to deal with them. The provincial government will also take part in these discussions. On the third issue having to do with one plant, Booth Fisheries, I indicated that the report on the present season had not yet arrived, and for that reason I could not give much more information than that which everybody else knows.


INQUIRY OF THE MINISTRY
Francis Alvin George Hamilton: Mr. Speaker, my question is to the Prime Minister, if he would not mind staying for a while.


Mr. Hees:: Come on back, Pierre; you are not working to union rules.


Charles Joseph Clark: This is the kind of contempt that we always get in this House.


Francis Alvin George Hamilton: Mr. Speaker, I would ask your permission to reserve my question until the Prime Minister is in the House.


REQUEST FOR REPORT ON MEETING WITH NEWFOUNDLAND MINISTER
[Stage Direction]
November 23, 1977


Mr. Speaker:: I have the honour to present the first report of the special committee appointed to supervise the implementation of radio and television broadcasting of the proceedings of the House and its committees.


Eldon Mattison Woolliams: Mr. Speaker, I rise on a point of order. It is very seldom that I ever rise in my place-


Some hon. Members:: Oh, oh!


Eldon Mattison Woolliams: -to complain about being cut off on what I consider to be a proper question. My question was directed to the Solicitor General and was: would he consent to have his two predecessors come before the Standing Committee on Justice and Legal Affairs? 1 understand what is being talked about here because we talked yesterday about a cover-up. What I should have liked to ask him is if those two previous ministers would come before the standing committee and tell all they know, so that this cover-up could be brought to an end. That was my question, and with the greatest respect to Your Honour I feel it was in order, asking the Solicitor General whether he had gained their consent.


Mr. Speaker:: Order, please.


Mr. Lawrence:: Mr. Speaker, I rise on a point of order. 1 wonder whether Your Honour would point out to the Prime Minister of Canada that you are the judge of when the question period ends, not the Prime Minister of Canada.


Some hon. Members:: Hear, hear!


Arthur Jacob (Jake) Epp: Mr. Speaker, as you are well aware, I very seldom rise on a point of order, but I do so today for clarification. Your Honour mentioned that my supplementary question today was asking for an opinion. I have gone through the question I asked and, with all respect, I do not believe that is what 1 was seeking. There have been studies on the question of a guaranteed annual income, specifically in Manitoba, known as MINCOM, in which the whole purpose of the study was to find out, among other things, what effect the guaranteed annual income would have on the motivational factor. We know that some of those studies are in the hands of the Minister of National Health and Welfare. They are also in the hands of the minister of health of Manitoba. There is sharp disagreement within the cabinet on the results of that study, and specifically on the motivational effect that the guaranteed annual income has on work and productivity. It was for that reason that the question was asked.
Privilege-Mr. Cossitt


Mr. Speaker:: I thought that the hon. member had two questions, both of which sought opinions as to the motivational factors involved. I do not see how at this point anybody could have anything but an opinion on it, but in any case I thought I gave the hon. member the benefit of the doubt of letting him get away with one question asking for an opinion, and I thought I should stop him on the second.


Dean Waldon Whiteway: Mr. Speaker, 1 rise on a point of order which has to do with the answer given to me by the Minister of National Health and Welfare. I recognize her right to answer or not answer, but not to answer inaccurately. She said that she had made no such announcement of a guaranteed annual income. In point of fact, she did so in this very House, as reported at page 159 of Hansard for October 24, and again on November 7, as reported at page 635 of Hansard. There she said very clearly that the intention of the federal government is to implement a guaranteed annual income. Whether or not we on this side agree, Mr. Speaker, the fact is that she did state the intention of the government to proceed. My question was whether or not she intended to proceed with or without the consent of the provinces.


Mr. Speaker:: Order. That was the question which I understood the minister answered.


PRIVILEGE
Thomas Charles Cossitt: Mr. Speaker, I rise on a question of privilege having to do with an incident which took place in this Chamber just a few moments ago and which I think is of a very serious nature and bears directly on the privileges of the members of this House. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) was in the act of asking a question-


Some hon. Members:: Sit down!


Thomas Charles Cossitt: Mr. Speaker, I think I deserve the right to put my question of privilege without all this noise across the floor. The hon. member rose and was in the act of asking a question of the Prime Minister (Mr. Trudeau), who was standing at the back of the Chamber and who in effect waved a piece of cardboard at the House, as much as saying that we can all go to blazes, and then walked out. He showed disrespect for the House of Commons in the most disgraceful manner I have ever seen. I think, Mr. Speaker, it is time that this kind of thing stopped.


Mr. Speaker:: Order, please. The hon. Deputy Prime Minister (Mr. MacEachen).


Hon. Allan J. MacEachen (Deputy Prime Minister and President of the Privy Council):: Mr. Speaker, I think it ought to be put on the record that the Prime Minister (Mr. Trudeau)
80027-5 'h

November 23, 1977
Order Paper Questions
left the House after three o'clock. Under our rules the question period expires at three o'clock.


Mr. Stevens:: The Speaker decides that.


Allan Joseph MacEachen: The Prime Minister had been in his place for the whole question period. He took all the questions that were put to him. He looked at the clock and said that he had other obligations. I agreed with him that the question period, under our rules, was over-


Thomas Charles Cossitt: The government makes its own rules.


Allan Joseph MacEachen: -and therefore I believe it is most unfair for the hon. member for Leeds (Mr. Cossitt) to continue this unjust, persistent, pernicious vendetta against the Prime Minister.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Whether or not the Chair exercises any customary discretion in recognizing another questioner after three o'clock is something that the Chair will decide from time to time.


Some hon. Members:: Hear, hear!


Mr. Speaker:: However, hon. members will realize that under any circumstances the presence in or absence from the Chamber, or departure from or entrance into the Chamber, of any minister or any other member at any time is not the subject of privilege.

[ Translation]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 238, 239 and 326.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Yvon Pinard: In so far as the Privy Council and Federal-Provincial Relations Offices are concerned: 1. Seventeen of which three are retired public servants.

2. (a) 1974-75, $167,547.16; three retired public servants, $22,770; (b) 1975-76, $504,542.65; four retired public servants, $31,565.


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


Yvon Pinard: 1. Eight (none are retired public servants).
2. (a) 1974-75, $44,442.57; one retired public servant, $26,797.12; (b) 1975-76, $77,246.46; none were retired public servants.


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


Hon. John Roberts (Secretary of State):: I am informed by the National Museums as follows: 1. No.
2.	Not applicable.
3.	Not applicable.


Thomas Charles Cossitt: Mr. Speaker, on a point of order, I realize it is early in the session and one might not ordinarily expect questions to be answered so soon, but two of my questions have been on the order paper almost since the beginning of the last session. They are now on the order paper again so the government has had plenty of time to get answers to the two questions.
I refer first to question No. 48 which is directed to the Minister of Agriculture and pertains to a statement that he made in Brighton, Ontario, in which he said, "I use Department of Defence planes quite a bit because I'm an honorary colonel." The question simply asks: does the Department of National Defence permit honorary colonels-and there are many of them-to use their aircraft at will and, if so, how many honorary colonels are there? I think that is a matter of record, and that we should know whether the Minister of Agriculture is able to commandeer an aircraft of the Department of National Defence simply because he is an honorary colonel.
November 23, 1977

The other question I should like to mention just briefly is question No. 45, and I think it is very serious in nature. It has been on the order paper for some time, and goes back to the last session. It concerns the fingerprinting of public servants. I have asked how many have been fingerprinted since this program started, and certain other questions stemming therefrom since the question went on the order paper. I know this is important to a lot of people because of the mail I have received from public servants who are not in sensitive positions whatsoever, but who have either been fingerprinted or ordered to be fingerprinted.
My concern, which I think should be the concern of Parliament and the people of Canada, is that we should receive speedy answers to questions of this kind, because if members are not able to inform the public as to why this program of fingerprinting public servants is being adopted by the government, then something is very much amiss. 1 am not talking about fingerprinting people who are in security positions where such a thing is necessary. I am talking about fingerprinting of a much wider nature, for example, of stenographers and clerks in offices, those people who have nothing to do at all with matters of a sensitive nature but who are now being fingerprinted. I would like the parliamentary secretary to tell us when this question will be answered.


Yvon Pinard: Mr. Speaker, last week I was pleased to note that the hon. member for Leeds (Mr. Cossitt) was back in this House after an absence of several days, which prevented me from giving him the following answer.
In the course of the second session of the 30th Parliament, 3,012 questions appeared on the order paper, of which 281 were put by the hon. member for Leeds, or 9.3 per cent. During the last session, the government answered 2,868 questions, 95 per cent of the total. Out of the 281 questions put by the hon. member for Leeds, the government answered 264 questions, or 94 per cent.
I submit that the hon. member received a very decent and respectful treatment from the government, and we can assure him that in the course of this session we will give him similar treatment. All we ask is that he be patient.


Mr. Jones:: Mr. Speaker, I should like to raise a point with the parliamentary secretary in respect of starred question No. 145. I brought this to his attention personally, as well as to the personal attention of his predecessor, and on several occasions I have been promised an answer. I was informed back in July of this year that this question would be answered; if not during the session it would be answered during the recess. I would now ask the parliamentary secretary whether he would be kind enough to get me an answer within the next week.


Mr. Speaker:: Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.
Mining Unemployment MOTIONS FOR PAPERS


Yvon Pinard: Mr. Speaker, I would ask that all notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


John Edward Broadbent: That this House condemns the lack of action by the federal government to prevent the serious loss of jobs in Canada's mineral industry, and furthermore urges the implementation of an effective mineral resource industrial strategy to preserve and expand employment and to promote further resource processing in Canada.
He said: Mr. Speaker, you will well understand if I say, just as you step down from the chair, that I was tempted to name you as my seconder, but propriety led me in another direction.
On a more serious note, Canadians all over the country know very well we are heading into the worst winter we have experienced since the great depression, in terms of job opportunities. Job opportunities, about which I will be talking in detail, in the resource sector of the Canadian economy are particularly bad, but unemployment is not of course restricted to that sector. There is unemployment in every province and in almost every region of every province, affecting virtually every sector of the Canadian economy.
As we learned well in this House, particularly during the opening week of the session, the resource sector has been particularly badly hit and, as I shall indicate in a few minutes, there are particularly salient reasons for this happening now in Canada.
To give you some figures, I believe this year some 9,000 Canadian miners have been placed on permanent lay-off, that is, they are permanently without jobs. According to forecasts by the Department of Manpower, to which we have had access, during the next six months that figure of 9,000 will increase to 20,000. There will be an additional 20,000 Canadians without jobs, spread across most provinces, but particularly in the northern parts.
It has become a platitude, and one is tempted to say, if not a redundant, a commonplace platitude, of all political parties to suggest that we have a resource based economy. Every politician, the members of my party included, have learned to say almost by rote that we in this country are rich in resources in every province, unmatched by almost any other country in the

November 23, 1977
Mining Unemployment
world, and so on. We know all the general phrases, and the general phrases are accurate.
I was interested to note that the Prime Minister (Mr. Trudeau) said in 1974, by some coincidence perhaps, in the middle of an election campaign:
Resources are both the historic and modern basis of Canada's prosperity.
That is what the Prime Minister said in Sault Ste. Marie in June, 1974. He went on to state in the same speech that resources "are the jumping-off point for the continuing industrial development of Canada".
What the Prime Minister ought to have said in 1974, and what he should be saying now, some three years later, is that because of the Liberal mismanagement of the Canadian economy, instead of resources or minerals being the jumping-off point to prosperity, what has happened is that Canadian miners have been pushed almost to the point of having to jump from the edge of their mine shafts in desperation in terms of lost job opportunities.
What we are now experiencing is the coming home to roost of the economic chickens of C. D. Howe and his resource policy, and this is at a time when Canadian working families particularly are bearing the brunt of that misguided policy which began back in the late 1940's, carried on in the early 1950's, and repeated since ad nauseam by ministers of trade and commerce, energy, mines and resources and finance, one after the other. They have all carried on with this policy developed by C. D. Howe.
What is the essence of this policy, and what has been the guiding framework implemented by Liberals for the past few decades? The essence of it is as follows: first of all we should welcome foreign capital because foreign investment must be encouraged. It does not matter what country is involved, whether the United States, France, Great Britian or Germany. That is the first tool to be used, foreign investment to buy ownership and control of resource firms.
Secondly, and related to that, we must encourage these firms, once they are in control of resources, whether foreign or Canadian owned, to export the raw materials. That in fact is what has basically taken place in the Canadian economy in the past three decades.
What has been the result of basing the economic prosperity of Canadians on this policy started some years ago by C. D. Howe? Let me give you the conclusions. We have very few processing jobs. We have only a very small job intensified processing or secondary sector in Canada.
The statistics are truly alarming. There has been a constant trend in the last two and a half decades toward a diminishing number of jobs in that sector. I suggest that the number should be increasing. In 1950 only 15 per cent of our minerals were exported in unprocessed form. Today that figure has grown to 40 per cent, which is more than a 300 per cent increase since 1950. What that means is that raw materials are being sent abroad and the major job creation part of resource-related economies is growing in other countries. Instead of Canadians getting jobs, Americans, Japanese, Swedes and whomever,
[Mr. Broadbent.1
have been getting them. It is a trend that has been constant and is worsening.
The inevitable consequence of this prosperity, which has been based upon the export of our unprocessed raw materials, is that the development of our materials is dependent upon decisions made by multinational corporations. Almost all the companies that are in control of the resource sector are multinationals. I do not distinguish between Canadian multinationals and American multinationals. They both operate in terms of their global financial interests and have no fundamental loyalty to their countries of origin. It does not matter if we discuss American or Canadian multinationals in this regard.
One of the consequences of this is that the profits made by these companies are being invested overwhelmingly abroad rather than in Canada. I am referring to the profits made as a result of the work of Canadian mining communities in Ontario, Manitoba, British Columbia or Quebec. Instead of those profits being invested in Canada in order to create Canadian jobs, they are going out of the country to other lands.
There has been a net outflow of investment capital ever since 1973. We have exported more capital investment than we have imported. This trend is worsening and is not improving.
I hoped the Minister of Finance (Mr. Chretien) would learn from the mistakes of his predecessors, but instead of learning he is repeating their actions. The government is providing financial assistance to the American and Canadian owned multinationals, which assistance is being used by these companies for investment purposes abroad rather than here. These are the results of this pattern which was begun by C. D. Howe and has continued for some decades. I want to show how distasteful this has been for Canada and why it must stop.
I should like to refer to five Canadian multinational corporations. The naive belief expressed by the Minister of Energy, Mines and Resources (Mr. Gillespie) that all we have to do is develop our Canadian multinational corporations in order to overcome our difficult economic problems, is sheer illusion. The problems we have faced in recent years because of a foreign dominated economy are being repeated now as we develop our own multinationals that operate in the same manner as American, German or other foreign multinationals.
Canadian ownership in itself is not a sufficient instrument to ensure that the multinational corporations in Canadian resource sectors will perform for the long range interests of Canadians. I could provide a list of foreign owned multinationals and how they affect activities, but I will just refer to the Canadian owned ones.
Alcan is one of the world's giants, and it is Canadian owned and controlled. The profits of this corporation increased to $138.8 million in 1977, which is an increase of 560 per cent over the previous year. Not bad for little old Alcan! That company owes Canada $180 million in deferred taxes. Some four weeks ago it received $11 million because of the minibudget of the Minister of Finance. That is Alcan's share out of
November 23, 1977

the budget proposals which are still being debated in this House. What did that company do? Did it use that money for job creation and to extend its operations? Not at all.
The most significant thing Alcan did was to shut down its operations in St. Lawrence, Newfoundland. That fluorspar mine was not losing money. Alcan operated in that community for many decades, thus making St. Lawrence totally dependent upon that mining operation. In spite of the assistance Alcan received from Canadians and the benefits it received from the mini-budget, the firm has decided that it can make more money by importing its fluorspar from Mexico, and will shut down its Canadian operation entirely. The result of that action will be economic ruin for that entire community.
Another large multinational corporation is Falconbridge. It owes Canadians $34 million in deferred taxes. On account of the Finance Minister's mini-budget, it will gain approximately $2 million. What is Falconbridge doing in terms of exercising its social responsibility to Canadians, and particularly mining communities? It has laid off approximately 4,000 workers on a temporary basis, and 500 workers permanently. At the same time this corporation is expanding in South Africa, Rhodesia, and Chile. Those are three marvellous countries in terms of their governments. Those governments are extremely reactionary and severe in terms of repressing their own people. But Falconbridge expands in those countries, lays off Canadians, and is in receipt of tax benefits from our government!
Next I should like to deal with Northern Telecom, which is a wholly owned subsidiary of Bell Canada. Its assets increased from $363 million in 1970 to $705 million in 1976. That poor little corporation has received some $3 million from the government's mini-budget. That is cash which Northern Telecom does not really need. In fact it does not need it at all. Is it taking that cash and creating jobs for Canadians? Not at all. That corporation is also laying off workers in Canada. Approximately 1,000 have been laid off, or will be laid off by that company. Northern Telecom is expanding in the United States and Turkey, but it is receiving financial assistance from Canadians. That is the manner in which that company exercises its corporate responsibilities.
Many Liberal backbenchers from the province of Quebec are interested in Noranda Mines. What about that poor little multinational? Between 1970 and 1976 it more than doubled its assets in Canada. Now they stand at $2,093 billion in terms of its assets. But unlike ordinary Canadian workers or farmers, it gets away with owing taxes. It owes the people of Canada some $86 million in deferred taxes and, as we know, not only do such companies not pay interest on those taxes, they never pay them back. Noranda will receive from the Minister of Finance, who is from the province of Quebec himself, out of his mini-budget proposals, about $5 million this year, an additional handout from the people of Canada.
What is Noranda doing? Is it taking that money to expand its operations? Not at all; it has laid off some 500 workers in four different mining communities in Canada, and there are
Mining Unemployment
another 1,700 miners in the Gaspe region working for Noranda whose jobs are in severe jeopardy. But once again Noranda is not simply cutting back. It is cutting back in Canada, but elsewhere in the world it is going onward and upward.
Noranda is now considering a major expansion of its copper facilities in Chile. It has been operating in Chile for some time, and now it has a major study under way which is intended to lead to a significant expansion of its copper operation in that country. Once again the people of Canada, ordinary workers wherever they live, whether they live in cities, towns or villages, are paying through the tax system channelled right through our Department of Finance into the pockets of this large multinational, not funds to be used to create jobs in Canada but funds that will be used to create jobs elsewhere in the world. That has to stop, Mr. Speaker.
Then of course there is dear old INCO, that poor, poor multinational. The figures are perhaps well known now, even to members on the government side. INCO has had, in terms of profits earned in Canada in the past decade, net profits of $1.7 billion. This year alone they have had a net profit for the first nine months of $95 million. They owe the people of Canada in deferred taxes $378 million. They received in financial assistance through the Export Development Corporation $70 million. This year, in 1977, in assistance from the taxpayers of Canada, they received from the Minister of Finance in his mini-budget a few weeks ago, $10 million. What is INCO doing? Everyone knows what INCO is doing. INCO is laying off Canadian workers in Sudbury, Thompson, Manitoba and Port Colborne.
But again we should not despair for INCO; we should despair for Canadians, because with the $70 million in special financial assistance provided for Canadian workers INCO is expanding, but not in Canada. INCO is expanding in Guatemala and Indonesia, two countries that are quite distant from our own land.
When the issue was raised with officials of INCO about their cut-backs, because sometimes cut-backs have to take place in certain areas, and they were asked why they did not choose some of their operations abroad, a senior branch executive of INCO said that they could get away with it in Canada but they could not get away with it in Indonesia. That shows just how much the Liberal government is prepared to stand up for the interests of Canadian workers.
I could give other examples, but I will not. There are five companies, but the pattern is a common one-tax benefits, write-off concessions intended to create jobs, but not having that effect at all. The same companies are laying off workers in Canada and expanding their operations in other parts of the world. I say on behalf of my colleagues that this pattern of the systematic write-off of Canadian resources at the same time that it is convenient to multinational corporations and profoundly inconvenient to Canadian workers has to stop. We recognize, for example, as the other parties in the House are not prepared to recognize, that there are not only problems with multinationals that are owned and operated abroad but

November 23, 1977
Mining Unemployment
there are serious growing problems with multinational corporations that now happen to be Canadian owned.
In the earlier part of my remarks I referred to a speech given by the Prime Minister in the constituency of my colleague, the hon. member for Sault Ste. Marie (Mr. Symes), back in 1974. The Liberals are always good when it is election time; they are always effective in making fantastic promises. The Prime Minister undoes his shirt collar, takes off his jacket and pretends for 30 seconds that he is actually a working Canadian. He trots around the country and says, "If you elect us, by God we'll do these things". You know what he said in 1974 in Sault Ste. Marie? He said that if the Liberal government were re-elected in 1974, the Canadian resource sector would not only provide the number of jobs that it had provided up to that point, but would expand. It would be the jumping off point, to quote his phrase, for greater growth of the Canadian economy.
Central to that strategy as promised in June of 1974 in Sault Ste. Marie was the commitment that if the Liberal government was re-elected, henceforth all future resource development in Canada, new investment, would be 60 per cent, and certainly a minimum of 50 per cent, Canadian controlled.
At the same time the Minister of Energy, Mines and Resources, speaking in support of the Prime Minister's pledge, said the following:
Look around the world at any country that is rich in natural resources. You see that in almost every instance it's similar to this-you know, 60 per cent.
That is from the Minister of Energy, Mines and Resources in support of the idea that if the Liberals were re-elected to form the government which they now have they would move decisively into the area of restoring Canadian ownership to Canadian resources. We know what has happened after the election. In that area as well as others the Liberals forgot their election promises, and absolutely nothing has been done.
On behalf of my party 1 say that it is time that Canadian resources were owned by Canadians and controlled by Canadians for the benefit of Canadians, and it is time that this government which is on the opposite side of the House started to live up to its commitments and moved in that direction.
As I have indicated, it is not sufficient to ensure Canadian ownership of the resource sector. Once that ownership is established, as I have made clear with the examples of Canadian owned multinationals, we have to make sure that the national management of our resource sector, whether it is Canadian or American owned, is operated in the Canadian interest. That is the decisive second step that must be taken. In neither case have we had action from the Liberals. We still have a predominantly foreign owned resource sector, and of course we have no over-all management at all in terms of our long range or short range interests.
What is required in the long range is for us to have an industrial strategy for Canada of the kind the Japanese, the French and the West Germans developed right after the Second World War. They did not sit around and wait for several decades, they developed a long range strategy. In the

case of Japan, they have to import 98 per cent of resource materials to develop their industrial base.
The first thing that we need in Canada is a commitment to a long range industrial strategy that sees as its foundation the rich resources in our country. Related to that we have to develop techniques in co-operation with the provinces to ensure that a higher degree of processing at the secondary level of our natural resources takes place in Canada. There are a variety of tax instruments which can be used in co-operation with the provinces to bring this about. In relation to that as well, in the years ahead we will be very much in favour of using tax policy vis-a-vis corporations to encourage research and development in key sectors. After that has been done in sectors which have been designated by the government, and which make long-range economic sense in the Canadian interest, then corporations should get tax breaks, rather than the other way around, which is what we have now with the Liberals. The Liberals give corporations tax concessions holus-bolus, in the hope that spin-off benefits will come.
These are some long-range proposals which my party believes are long overdue if we are going to create the jobs which are necessary for Canadians, but in the meantime the government must decide two relatively simple things.
First, the government must decide that no corporation in Canada is going to get a special tax break in 1977 or in 1978 unless it is job related. There should be special tax concessions if jobs are created. If jobs are not created, there should be no tax concessions. That is a simple, clear, short-run and necessary policy.
Second, in a number of the sectors of our mining industry where there is now a surplus we argue that the policy should be one of stockpiling. We have done that for Canadian farmers and for Canadian uranium workers in the past. It makes much more sense for Canadians in other parts of our resource sector to have stockpiling until such time as markets improve-and then the products can be sold off-than it does to pay Canadian workers unemployment insurance for doing nothing. Next year we are going to spend $4 billion on unemployment insurance. It makes a hell of a lot more sense to us to take a good part of that money, use it for stockpiling, keep Canadian miners at work, and then sell the product further down the road.
I conclude by saying it is time we had a "Canadian Jobs First" policy for Canadian resource development, and as I said a minute ago, it is time our resources were Canadian owned, Canadian controlled, and operated for the long range benefit of Canadians.


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I would like to participate in this debate because I was amused by the speech to which I just listened. I have never heard anything so negative in my life. If Canada had been built with that kind of defeatist attitude, I do not think we would be where we are today.
November 23, 1977

For years the New Democratic Party has complained about how bad it is to have American multinational corporations reaping benefits out of Canada. Now, because there are some Canadian corporations which are expanding outside Canada and exporting technology, savoir-faire and so on, they are the villains. Of course there are some problems, but they are not the result of foreign ownership. INCO is Canadian owned. Because of the international market situation demand for nickel throughout the world has gone down. There is less production of steel. Often in the resource industry there are ups and downs, and at this time the international nickel market dictates that there cannot be any more nickel stockpiled.
There was stockpiling for three years because it was hoped that the market would turn around. Flowever, any more stockpiling would compound the problem because prices are depressed, and if everyone stockpiles even more, the price will go down further and create more problems. We are trying to find some solution to this problem. We think it is a short term problem.
When Canadian companies like Northern Telecom or INCO are able to expand and go into foreign markets and try to specialize in some fields to promote good industrial development in other nations, we are told that they should not expand outside Canada. We are told that mines are being developed in Guatemala and Malaysia and that that is bad. That is absolutely unbelievable. We are told that it is bad that INCO should develop mines in those countries and that, as a result, our own mines will not be developed. Do hon. members opposite not know that there are other people besides Canadians who can develop mines? The British can go to those countries as well as the Germans and the Japanese. There are dozens of companies which would be willing to export engineering technology which creates markets for goods we can produce, and in mining technology we are one of the best in the world.
If we do not export our technology it is naive to believe nobody else will, because there are many other people who will do that. On any social issue it is typical of the NDP to take the side of the bleeding hearts.


John Edward Broadbent: Like INCO miners.


Joseph Jacques Jean Chrétien: In the case of INCO the NDP is involved not because of its social conscience, but because it is trying to reap benefit for itself.


John Edward Broadbent: You're kidding.


Joseph Jacques Jean Chrétien: Because we have problems in our mining industry, the proposition is that the countries of the Third World should not receive any technical help to develop their resources and that they should be allowed to starve. The NDP is saying that we should not try to help developing nations.


Thomas Clement (Tommy) Douglas: That is a straw man.
Mining Unemployment


Joseph Jacques Jean Chrétien: I can understand that the NDP might say "to hell with the poor nations who have to develop their resources", but we have international conferences at which we are trying to find solutions for the Third World and to help them create jobs for their people in order to bring wealth to those nations so that they can become self-sufficient. I think the attitude of the NDP is appalling. I do not deny that we have problems in the mining industry, but the Leader of the NDP (Mr. Broadbent) in his confusion started to talk about foreign capital. In the case of INCO it is not foreign capital but Canadian capital.


John Edward Broadbent: Did you listen to the argument, you dodo?


Joseph Jacques Jean Chrétien: For ten or 15 years the NDP said that foreign capital in Canada was the heel of the world, but now it has turned around. Members of the NDP say that Canadian companies should not be multinational, that we should not go into foreign fields, and that our own international corporations are as bad as the others. I think they are just trying to confuse the issues.


John Edward Broadbent: They confused you.


Joseph Jacques Jean Chrétien: Of course we are having some problems, but do hon. members think that if we were to nationalize INCO tomorrow suddenly the market around the world would improve and that the Americans would start to buy our nickel?


John Edward Broadbent: Who talked about nationalizing INCO?


Joseph Jacques Jean Chrétien: You did. That is always the solution; if companies do not keep people they should be nationalized. That is what has been done in South America for generations, and that is why they are now in such a mess. Rather than facing problems in a rational way they took the easy, emotional route. They said, "Get the Americans out of here and we will nationalize," and eventually everything closed down.
In the present context my colleagues and I have enterred into discussions with INCO and other corporations to try to minimize adverse affects, and made the proposition to their workers that they share the work among themselves during a difficult period. It is a human approach to the problem, not a rhetorical approach where you offer easy solutions. We have looked at the possibility of stockpiling but it is, I believe, a corporate decision of the company. Even at this time with a slowdown in the demand, we are expecting a turn around this coming year. They have already stockpiled an inventory of something like eight or nine months of nickel. We have discussed this with them and nobody agrees that it is a way out of the situation because it could perhaps depress the market even further.


John Edward Broadbent: Nobody but the miners.


Joseph Jacques Jean Chrétien: Of course we have difficulties in the mining or in the forestry industries, or in any other industry whose economy is up and down, and this sector is affected now. There
1176

November 23, 1977
Mining Unemployment
were very few compliments paid to the government a few years ago when Sudbury suddenly became prosperous because of new discoveries. In that kind of a resource area, it is expected to have its ups and downs.
Now, with the programs we are proposing to labour and management, some of the workers for several months will earn less income than they were used to earning previously. It is a normal trait for many Canadians, and for many individuals around the world.
What I dislike about the approach of the NDP is its kind of Santa Claus approach to problems, that the government should intervene and artificially maintain the situation, with the result that two, three, four years later you are hit with a disaster, due to the fact that you cannot give more than you receive, in any economy in the world. This is exactly the price we are paying today for some previous abuses.
During the years 1973, 1974, 1975 and 1976, we have had a better economic performance than our neighbours to the south. For three winters in a row we have had less unemployment in Canada than in the United States of America, for the first time in history. What is the result of that? We developed a mentality whereby all of us were asking more from the Canadian economy than we were offering. We were faced by demands which were greater than the capacity of the nation to provide, with the resulting devaluation of the Canadian dollar in that we have overpriced ourselves in international markets.
Not long ago we were talking of the need to catch up with the Americans. That was the big issue a few years ago. I understand that there will be some figures released tomorrow-I have not seen them-but internally in my department I have seen some figures. In Canada now, in the majority of the sectors, we are paying ourselves more than our counterparts are paid in the United States. Of course, because of the size of the plants there, and perhaps in some areas better technology than we have, their productivity is higher. The result of that is we have lost numerous markets. We are now in the process of adjustment because Canadians, both in the private sector and in the unions, realized it was the wrong course to carry on with the treadmill which we had in 1974 and 1975 when everything was increasing rapidly. I commend labour, in many areas, for realizing now that they have outpriced their services and are faced with difficult situations.
The pulp and paper industry is quite a good example, where the workers are making $1.50 more per hour than workers in the United States. Last summer in my own riding two paper mills were closed for weeks. They had no orders for their goods. The price per ton of paper in Canada is something like $30.00 more than the price of paper per ton in the United States. So, it can be no surprise to lose markets in those circumstances.
I would like to be a little more positive than the hon. member. I believe that the adjustment process is getting under way; we are becoming more competitive. The settlements for salaries are no longer higher than those in the United States.


An hon. Member:: Three per cent below the inflation rate.
[Mr. Chrttien.J


Joseph Jacques Jean Chrétien: It could be. But you do not talk about the time when it was way above inflation.


An hon. Member:: That has not improved.


Joseph Jacques Jean Chrétien: Come on, come on! You have the result; the results are there. We are not lost in this world. We are told by the international market place that our Canadian dollar is going down.


An hon. Member:: Right on.


Joseph Jacques Jean Chrétien: Here is Canada, my good friend. The guy who was proposing nationalization is three rows behind you. Look at him-he says yes. You should talk to each other because he said-you never proposed that? Perhaps you should check your notes once in a while. I believe we will emerge from these difficulties very soon because of the international readjustment; just as a result of the fact that the Canadian dollar is weaker, we are beginning to be more competitive. Three years ago we had no trade surplus at all. Last year we managed to reach $1.2 billion. This year, in 1977, our trade balance, I believe, is $2.5 billion or more. These things are positive factors which mean that we are returning to international markets.
With respect to nickel I have to admit the demand is low; the same is true with copper. But there are other products we can produce in Canada in the mining industry. The demands for and investment in uranium, for example, are increasing because we have great potential. It is normal that some times some metals are less in demand than others. But why would the hon. member suggest that we sock it to some corporations that have been able to grow in Canada and are now trying to compete in the world? I don't think that will solve the problems. The world has to specialize, it is one of the great challenges we are faced with at this time as a nation. If there is more liberalization of trade in the world, where Canada would specialize would be difficult to decide. I agree that we need industrial strategy-


An hon. Member:: You have been going on and on like that for years.


Joseph Jacques Jean Chrétien: Perhaps the hon. member would let me finish my speech. If he does not understand English, I can try it in French.
There is something in industrial strategy which I would call a catch phrase. We cannot have one industrial strategy in Canada because we have a nation that is so diversified in its nature that we will have to look at it by sectors.
I say let us take the mineral sector-


An hon. Member:: Right.
November 23, 1977


Joseph Jacques Jean Chrétien: We are working on that right now.
Next week, the ministers of energy, mines and resources will meet to look specifically into this problem. It is not very easy in Canada to have a metal and mineral policy. Why? Because Canada is not a unitary state. We must deal with the various provinces and, as a matter of fact, we have a great deal less jurisdiction in this area than they have. Some will say that this is unfortunate, while provincial premiers will say the opposite, but our sphere of action is therefore limited and we must consult them.
There is also the tax issue which is extremely difficult. Over the past few years, there has been a considerable increase in this area, especially from provincial governments. For instance, I visited British Columbia on a number of occasions, and I hope one or two hon. members from that province who are listening to me will support my statement.
The Fiscal policy which was implemented in British Columbia under a NDP government led to a flight of investments. Since that time the new government has been trying to undo what had been done, but it is very difficult and it will take a few years. Many people make the same mistake as the hon. leader of the New Democratic Party (Mr. Broadbent) does when he tells us that we, in Canada must-and I agree somewhat on that point-prevail upon the mining industry to do all the processing and smelting operations here, in this country. I agree this would be quite desirable, but we cannot consume all those goods in Canada and, very often, we have to deal with tariff barriers, within the Common Market, Japan, or other countries which, like the United States, limit the access of finished products to their interior market and sooner or later the time comes when there is no more opportunity for such access. Naturally, the policy of the New Democratic Party would be sensible if we were the only country in the world able to produce metals. Unfortunately this is not so. Africa, Australia, South America, Asia and Siberia are competing more and more with Canada.
I have travelled throughout the world these past years as a minister. I went to Australia. They have uranium deposits at ground level. I also went to Siberia and I was amazed by the riches of these regions. I drew but one conclusion while coming back home, and it is that if Siberia were controlled by capitalists, we would probably lose three quarters of our international markets because I must acknowledge that the great advantage of Communism may perhaps be that there is little unemployment but also that there is little productivity in this kind of industry and this is why they are not competitive against metals and other minerals which we produce here in Canada.
If we had no competition, we could in a way blackmail the whole world, but this is not the case. Depending upon circumstances, we try to reach some kind of equilibrium which will enable us to boost mineral production with a view to expanding refining in Canada. If we try to go too far, not only will we be
Mining Unemployment
unable to sell the refined products but we are even bound to lose the sale outlets for our primary products.
I therefore think that in this difficult situation in which the mining industry in Canada finds itself, it will be necessary to make a joint effort with the provinces, because we cannot escape this problem and it may also be necessary to re-evaluate on the short run the present level of taxation, particularly at the provincial level because federal taxation is rather limited in this field, in order to make Canadian production even more competitive. Yet, no matter what we do, if the demand for nickel remains for some time to come some 15 to 20 per cent lower than what it was two years ago, it is not by nationalizing this industry or by making speeches or even by stockpiling that we will solve the problem. There has to be a demand, otherwise we will have to adjust to a less prosperous situation in certain sectors and try to redirect our investments in areas likely to be profitable on a medium term basis.
For example, in the Sudbury basin, things are not going well as far as nickel is concerned. Nevertheless, the mine has not closed. Eighty five per cent of the miners are still going to keep their job, which is a work force level probably higher by a few thousands than the number of people employed some 15 years ago. This aspect of the situation has not been mentioned. However, very close by, at Elliot Lake, miners are wanted, to work in the uranium industry.


Mr. Rodriguez:: Pack sack miners.


Joseph Jacques Jean Chrétien: Of course, Mr. Speaker, there are such trades which require mobility. It is not a matter of being pack sack miners, it is a fact of life. If at some time, one is forced to move, that is that. I had to accept this myself. I could not have become the member for Saint-Maurice if I had refused to come to Ottawa. That is for sure. My job as a member is to come here, as my hon. friend from Sudbury comes to Ottawa every week. Is he a pack sack member? The duty of a pack sack member is to go-


John R. Rodriguez: Mr. Speaker, I rise on a point of order. I must take issue with the minister's comments about the pack-sack miner as opposed to the packsack politician. There is a great difference between the miner who mines the ore under the ground and the politician who, by choice, seeks to run for some party-


Mr. Deputy Speaker:: Order, please.


John R. Rodriguez: -for $40,000 or $50,000 a year.


Mr. Deputy Speaker:: Order, please. The hon. member knows he will have a chance to make his speech in due time.


Joseph Jacques Jean Chrétien: Mr. Speaker, that is not a point of order. I agree there is a difference. 1 just wanted to say that it is a fact of life. There are too many people who do not want to face the facts. Eighty-five per cent of the people in the nickel industry in Sudbury will still be working there. It is the younger people
80027-6'/2

November 23, 1977
Mining Unemployment
who have the problem. I understand that, and I am terribly concerned about it.
1 hope the other employees in the mining activity there will be willing to accept the proposition of the Minister of Employment and Immigration (Mr. Cullen) who suggested that the work be shared by having a four-day week. Why not share the work with their companions in Sudbury? It will mean having a little less revenue for some time, but it is something they could do.
The member of the New Democratic Party says the government should solve all of the problems all of the time. That is one of their problems. However, it is not the mentality of Canadians.
We hope this problem will clear itself when the demand improves. However, the demand for nickel will not increase by a decree of this parliament. The Government of Canada cannot decree that mines will not be developed in Malaysia, Panama or elsewhere. If those mines are not developed by Canadians, they will be developed by the Germans, Japanese, French or English.


John R. Rodriguez: That is INCO's argument.


Joseph Jacques Jean Chrétien: It is an argument that makes sense. I met with the INCO people only once. I talked to them about stockpiling and so on. However, there is nothing that I, as Minister of Finance, or the government can do about the international market.
The leader of the New Democratic Party says the problem is that this company is a multinational. That makes no difference. Even if it were not a multinational, the international market would not improve. That is a fact.
The federal and provincial governements must look at the problem. We should try to find some mechanism to bring down the cost and make ourselves more competitive. However, in the case of INCO I understand it is not a matter of competition. The miners have been productive and the technology is there. The problem is a slackness in the international market.
The other argument they have put forward is that mines have been developed by INCO in Guatemala and Malaysia. Those mines are not yet in production. Therefore they are not affecting the situation today. On top of that, they have stockpiles for seven or nine months.


John R. Rodriguez: 1 wonder if the minister would permit a question at this point?


Mr. Deputy Speaker:: That could only be done with the minister's consent.

The hon. member is asking the minister whether he would accept a question. Of course, I must point out to the minister that he has only two or three minutes left. So the decision is up to him.


John R. Rodriguez: The minister stated that in the Sudbury basin we have all the technology and all the skills necessary for the production of nickel and that the reason we are in difficulty is that markets are soft. Can he tell the House why it is that the government gives companies like INCO incentives under the tax program to produce more nickel though no incentives will sell the nickel?


Joseph Jacques Jean Chrétien: That is a question the hon. member has asked me many times. In the budget we are giving some incentives to industry to encourage more investment. If they do not make more investment they will not be able to benefit from the incentives. One of the incentives which will apply is the 3 per cent relief measure in connection with inventories. We have decided to give all Canadian companies a break because of the cost of keeping an inventory in times of inflation. Perhaps they will get some cash there, but the hon. member must keep in mind that corporations such as he is referring to still have some operations under way and that they have to be treated on a basis of equality with other corporations in the land. We cannot penalize them.
I have looked into the possibility of stockpiling. Unfortunately, it is not the solution. I believe we shall have to find other solutions along the lines of what was suggested by the Minister for Employment and Immigration, and try to organize things in such a way that the dislocation will not be too painful. There could be work-sharing programs among the miners; some of the more mobile workers should go to Elliot Lake and other places where there is a shortage of miners.
I had hoped that this debate would have produced some valid suggestions, but unfortunately the motion before us is a typical NDP motion to nationalize everything. They do not live with reality. The reality is that keen competition exists in the world and that the market is depressed. It is not because of an act of parliament or because of a vote in this House that we shall be able to force Americans to buy more nickel and improve the international situation. It is a fact of life today that nickel is much less in demand than it was two years ago.


John Edward Broadbent: Before the minister winds up his cogent, well-reasoned, and carefully thought out discourse on Liberal policy, would he be good enough to answer a further question, because he attacked a speech I never made? He indicated that I was opposed to assistance to the Third World. My colleague will deal with that statement and refute it later. The minister comes from the province of Quebec where textile manufacturing plays a leading role-


Mr. Deputy Speaker:: Order, please. The minister's time has expired and he could continue only by unanimous consent. Is there unanimous consent to allow the hon. member to direct a question to the minister?


Some hon. Members:: Agreed.


John Edward Broadbent: I appreciate that, and 1 will keep my intervention short. The minister comes from Quebec where the
November 23, 1977

textile industry is in difficulty. Does he not see that there is a comparison to be made between the government providing hundreds of millions of dollars to companies such as INCO to expand their mineral operations abroad in direct competition with Canadian workers, and a situation in which the Government of Canada might provide assistance to Hong Kong, Taiwan and Korea for the development of their textile industries?


Joseph Jacques Jean Chrétien: 1 should like to take a few minutes in which to reply, Mr. Speaker. These are two different questions.
In one case the mines are there and the help we have given to any Canadian corporations which operate abroad to develop certain areas is in relation to the goods and services Canadians can sell in the course of that development. If we were to refrain from doing that we would not get the business-we would not be providing the equipment or the engineering services. The mines in Guatemala and Malaysia would have been developed in any case, but they would have been developed by someone else.
In the textile industry there is a completely different situation. There is no suggestion we would provide help to Taiwan and those other nations. The industry is already operating there. We have done something for the protection of the Canadian market by imposing quotas so that the industry in Canada is protected. But nickel is something we sell abroad. We sell very little of it in Canada.


Francis Alvin George Hamilton: Mr. Speaker, 1 feel very sorry for the NDP after the speech just made by the Minister of Finance (Mr. Chretien). I think that if they would reflect for a while on what they have been saying they would realize that the type of representations they have made in relation to a very serious problem have been pretty childish. Their motion is one which in general terms can be supported-it did not mention socialism or the usual NDP panaceas. But I myself will move an amendment before going further. I should like to ask the Minister of Finance to second it in order to get his support, but I know that under the rules I cannot do this, so I shall have to ask one of my hon. friends to do so. The minister will understand when I read the amendment.
I move, seconded by the hon. member for Northumberland-Durham (Mr. Lawrence):
That the motion be amended by striking out all the words after the words "industrial strategy" and substituting therefor the following:
"including a reformed resource taxation policy, to preserve and expand
employment and to promote further resource exploration, processing, and
related manufacturing in Canada."
I know that every party in this House and every member in the House will support this.
Today we are talking about miners. Thousands of them are out of work and before many months have gone by it is likely that 20,000 of them will be unemployed. The essential reason why this should be the case has not yet been mentioned in the debate. There are periodical surpluses on the mineral markets of the world. They are cyclical, and the mining industry has
Mining Unemployment
always been able to cope with them. The difference is that today the taxation policy in effect is by no means the same as it was six years ago.
We had good mining laws in this country, as the expansion of the industry has demonstrated. Because mining is a risk enterprise no taxes were levied during the three-year period following the starting of a new mine. This enabled a rapid write-off of the heavy investment needed at the beginning of the enterprise. Moreover, a taxation level imposed on the mining industry was approximately 30 per cent as compared with some 45 per cent in the case of other industries. Special discrimination was made in the case of mining because of the risk factor and the exceptional difficulties encountered. As a result of these policies the industry was able to employ more and more men each year at relatively high wages.
Into this picture, the royal commission called the Carter Royal Commission was introduced. Its philosophy was that a buck is a buck-a man who believes in that philosophy is not very attracted to taking risks.
The government brought in a recommendation to the House that we should tax mines more heavily, but before the federal government could take action the western provinces of B.C., Alberta, Saskatchewan, and Manitoba tripled and then quadrupled their tax levels. This was in the years 1973, 1974. In 1974 the federal government gave its answer. In the two notorious Turner budgets the federal government refused to make these tripled and quadrupled taxes of the provinces deductible. In effect, it said, "You fellows have gone too far; you are taxing too much, so we are going to bring in a budget which does not accept a tax on your own resources-a tax you have a perfect right to implement-we will make them nondeductible". So in effect, Mr. Speaker, there was double taxation. That is the second point I want to make.
As a result of this double taxation, average taxation across the four western provinces of resource industries, particularly mining, instead of being 30 per cent as it had been traditionally, and about which the NDP members and the CCF before them complained continually, was increased to 85 per cent. Just think, Mr. Speaker, an 85 per cent tax load because of this quarrel between the federal government and the provinces.
Then in 1974 the government brought in the petroleum administration bill wich provided, in spite of the strongest opposition of members on this side of the House, that the federal government was going to control the prices of resource products passing across provincial borders. This was an interference with the constitution but, supported by members of the government, that became the law of the land. The federal government said that if the provinces could not agree on the price to be set, the federal government would impose a price unilaterally. Hon. members should read the debates of 1974 and the warnings which were issued from this side about what this would mean to the resource industry.
Now we have the decision which was handed down today by the Supreme Court of Canada; I have it with me. This will be

November 23, 1977
Mining Unemployment
a decision that Canadians will remember. The case was turned down at the Queen's Bench court level; it was turned down by all the judges of the Appeal Court in Saskatchewan. It was then taken to the Supreme Court of Canada, and even though all of the provinces were against this particular type of case because it interfered with their constitutional rights, in 1974 the federal government decided to intervene on behalf of the oil companies and to say that a provincial government had not the constitutional right to tax products which were produced out of its resources and shipped across a provincial border.
This interference with a basic constitutional right of a province is a landmark in Canadian history. We have adopted the American system of letting our courts decide what is the constitution, instead of the legislatures and the people of this country. It is a momentous decision. And it was not very pleasant for me today, having asked this question of the minister of justice in 1974, and having asked the Prime Minister (Mr. Trudeau) about this case on Friday, when 1 finally got the floor today to deal with a matter so vital to the national unity of this nation, that the Prime Minister deliberately got up and walked out. Immaturity is a disease suffered by many people; it is too bad to see it among prime ministers.
In 1974 the federal government made the decision to press its intervention before the Supreme Court. It pressed the court into this new direction of constitution making without referring the matter to the country. These are causes which all add up to the fact that now on the backs of the miners, not only in Sudbury but in B.C. and ail across the country, the load falls. The chickens have come home to roost.
Not only are mines closing and employment is down, Mr. Speaker, but as the minister rightly pointed out, when you take away any prospect of getting a return on capital with these exorbitant tax levels which average 85 per cent, you force shareholders to move their capital to a place where they can make some money. It is not Indonesia that we should be worrying about. The fact is that companies in Ontario such as Stelco, Dofasco and Algoma last year moved to Wisconsin and Minnesota to mine expensive taconite at an expenditure of around $500 million when we can produce the ore at $15 a ton in Canada.
Why will the people of Canada, who will eventually have to buy this steel, have to pay this high price? Because the law relating to return on capital says that you cannot get a person to spend money unless he is going to make money. Unless, of course, you want to be socialistic and do it at twice the cost.
Although the mining industry is in a serious mess, Mr. Speaker, the difficulties are not insoluble. The tax level is too high. The goose is almost dead. Everyone is trying to grab the gold out of the goose and the goose, before he dies, is trying to stagger out of the country and recuperate.
But we do need answers, and we need them fast. First of all, we must end this silly squabble between the federal government and the provincial governments over who is going to take the most out of the goose. Secondly, we need new methods of financing. This is the responsibility not only of this government but of the companies themselves. It is all right to have long

payouts when you have low interest rates and capital is easy to get. But now that capital is expensive and costs are many times greater, interest accounts for 75 per cent of the cost of running a mine in the early period. We must have quick payouts.
I have spoken on this matter many times in the House over the last four or five years, and although this has been true for many years, it has now become very significant. Under this proposal which I have been putting forward, a proposal which applies to a person who buys a house in this city as well as to a big capital intensive mine costing $150 million, we must get this money paid back fast and reduce the share going to interest to a percentage we can handle, say 10 per cent or 15 per cent of the total cost.
Thirdly, we need a national development policy. There is only one party in Canada which has never deviated from one of its primary purposes, and that is the P.C. of this country and its policy on national development. We know that development has to have the activist leadership of a government, not to run business, not to own plants, but to get things moving, especially in view of our geography, the nature of our markets and, above all, our transportation difficulties.
Because we are a northern country, we have to keep in mind the quality of life factor which is very important in developing the mining industry. As I look ahead for my country, Mr. Speaker, I know we will have at least four new industrial complexes in this country, in addition to the big one which we now have in the eastern townships of Quebec running through to Sarnia and Windsor. These new additional industrial complexes will be the Atlantic provinces; the Quebec-Ontario border area right across the north and the clay belt; the Alberta-B.C. banana-shaped industrial area based on land, resources and markets; and also the Saskatchewan-Manitoba cordillera, the land base, the water and so on.
I am not here to give the House a lesson on how to do this planning, Mr. Speaker. I am simply giving my best evidence in the form of an example. I want to conclude my contribution to this debate not with a feeling of pessimism at miners being laid off; this is going to continue no matter what the government does. This is the government's own fault with this double taxation to which I referred.
A week or so ago I asked the Minister of Energy, Mines and Resources (Mr. Gillespie) about this, and he said "I know it is pretty tough and the rates are too high, but we do not tax as much as the provinces do". He did not even answer my question, Mr. Speaker. Now, when you get nincompoop answers like that, what are we to think of the calibre of the administration which we have? All this is on the backs of the miners today. They are paying the price and are now like the farmers who found over the last 50 years who always pays. This time it is the miners.
In conclusion let me give you one example of how I see this coming. I will use iron as my example. Iron is used in making steel, and to produce steel you must have water and energy. We only have three rivals in this whole business; the U.S.S.R.,
November 23, 1977

Brazil, and Australia. These are three countries, plus Canada, that have large reserves of iron, and in each case they have good reserves of water. We have the advantage in respect of energy.
We talk about developing the Atlantic provinces. I suggest there is not anything they cannot do, because they know they sit very close to one of the largest and richest mining deposits in the world. They know that these Atlantic areas of Quebec and Baffin Island are all in part of the Labrador trough. They know that the only place they can market this area from the top half of the Arctic islands is not down south into Ontario but must be from the sea around Baffin Island to the ports of Quebec and the Atlantic provinces.
With the energy, with the water, with the iron, and particularly with the new direct reduction plants we are starting to build now in Canada, the future of the Atlantic provinces is not dull. To give you an idea of what I am talking about in volume, the United States economy with 220 million people has been built up on 13 billion tons of iron in the Masabi range in Minnesota and Wisconsin.
Do you know what the reserves are for Canada? They are not 13 billion tons. The official reserves, as I have it here, show 35 billion tons, not 13 billion. That is not the figure that the Japanese give for these reserves; it is not the figure the Russians give for our reserves, or what the Germans give for our reserves. They know what we have got as a potential. Under our figures we show 35 billion tons, and the whole U.S. economy is built on 13 billion.
Our steel industry has paid higher wages per hour in Canada since 1961 than our competitors in Buffalo, Cleveland and Gary, Indiana. Our steel industry in Canada is producing a higher quality of steel at a lower price than our competitors across the line, and that is the fact. There is no need for restrictions because of our prowess, productivity, capital well spent, and workers well employed and well directed. There is a good feeling between the labour unions in Hamilton and management. It is not as good in other places, but it is good, and our industry is competitive with our U.S. competitor. We are having a little bit of a problem in competition with the Japanese. I simply point out that the answer is not in respect of wage levels, it is in respect of a combination of those things that make up productivity.
I mentioned a moment ago that the use of direct reduction plants is a big step forward. We have three now, and I think nine or ten should be in place in the next two or three years if we are to take advantage of this technology and because of our large amounts of energy.
The third matter I should like to mention in relation to basic supply and processing, and where these things should be, is the matter of investment. The Gordon Royal Commission over 20 years ago recommended that we set up a development corporation to help get mining investment and industries started in Canada. We have the Canada Development Corporation in place, but I would like you to name me a new mine with
Mining Unemployment
Canadian geologists, Canadian prospectors and investors, struggling to get going that ever received any help from the Canada Development Corporation. That corporation only invests in proven operations. We do need an incentive for investment during the early risk period if we are to give Canadians ownership of these resources.
I differ from the NDP. I want Canadian mines and oil wells owned by Canadians as individuals. We cannot do that without a proper policy of taxation, which means that if they do invest in these things they will not be double taxed through personal income tax, and that the mining companies they invest in will not be double taxed by governments fighting over the revenues of these mines. I would like to see Canadians, as individuals, own this country, as opposed to governments owning it or directing it. That should be included in an industrial strategy.
Before concluding let me give this additional bit of free information. Tariffs today are an obsolete technique between nations. GATT is purely a rich man's club trying to decide how much of the wealth of the new nations it will allow into its protected area. I have proposed, and I repeat again, that the technique of bargaining over the pennies of the tariff is like trying to milk a dried out cow. Sure, you can squeeze the odd drop out, but we are sending our best brains away for four or five years trying to squeeze out that dried up cow. That is all GATT is.
Let us take advantage of our resources in the form of basic supplies of iron, water and energy, and deal with these blocs; the European Common Market, the United States, Japan and any other group or single nation, on our growth rate of exchange.
I end my remarks in support of this motion as amended, to make it clear that we respect the provinces and will work with them, with a feeling of optimism that we are a strong and healthy country, and there is no need to be pessimistic. I am sure I have the right to say that the PC's have demonstrated before, and will again, that this is the only party that has a coherent and logical program to have this development go forward in a free enterprise mode. Thank you very much.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: I should like to put the amendment of the hon. member before his time has expired. That is why I signalled to him just before he concluded. The hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) moves:
That the motion be amended by striking out all the words after the words "industrial strategy" and substituting therefor the following:
"including a reformed resource taxation policy, to preserve and expand
employment and to promote further resource exploration, processing, and
related manufacturing in Canada."


Mr. Knowles (Winnipeg North Centre):: Mr. Speaker, I rise on a point of order simply to say that we have no objection to the amendment, either procedurally or in terms of substance.

November 23, 1977
Mining Unemployment


Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, I listened with great interest to the speeches that have been made on the motion of the New Democratic Party. I wish to commend that party for bringing up such an important matter. However I must say that I am surprised at how lightly the Minister of Finance (Mr. Chretien) is taking that matter. He readily admits that there is a problem in the mining industry.
Yet, in 1974, 1975 and 1976, as he mentioned, the situation may have been better than today, but every year a gradual deterioration in the mining industry was noted. Every year some new restriction was added, there were lay-offs and suddenly in an industry like INCO in Sudbury, there is a massive loss of 3,000 to 4,000 jobs.
When the Minister of Finance argues that the bad situation now prevailing in Canada is due to outside conditions, I would say that it was brought about by the poor performance of the minister and his officials. In fact the minister, his officials and their plethora of highly paid civil servants, economists and statisticians were not able to understand the situation and prevent the problem we are facing now.
It was said in the Speech from the Throne that, and I quote once more: "... high rates of unemployment and inflation are clear signals of the inadequacy of the economic strategies appropriate to simpler times..It was in the Speech from the Throne. We are aware of that situation and what is the minister's response to the present problem in the mining industry? Absolutely nothing! He is good at laughing at others and sneering at other parties, but he is unable to make a valid suggestion. He admits that tax reductions and subsidies have been granted to mining companies and multinational corporations but-as everybody knows-instead of expanding their operations and increasing their production in Canada by investing in secondary industries they invested the money and extra profits in other countries, which means they are competing with Canadian industries and contributing to the reduction and elimination of jobs in this country.
If the government had been a little smarter in the past or if, at least, it could smarten up right now, subsidies and tax credits granted to those companies should at least be made subject to reinvestment in the manufacturing sector in Canada so that we could use the primary industry to obtain minerals, process them in this country, develop our industrial production at home and create jobs.
The minister has advised miners to look for employment elsewhere, and accept the principle of job mobility. He is even cynical enough to suggest that miners divide their working hours, reduce their wages and distribute them on the basis of four working days a week. This government has created the problem and now they say to the workers: It is up to you to solve your problem, it is up to you to work out agreements between yourselves. I would like to see the miners split their time and salary with the Minister of Finance, to see if he would accept that kind of offer. If he did, let him say so and
[Mr. Caouette (Temiscamingue).1
let him actually do it instead of merely suggesting it to them! Manpower mobility! When the emphasis is on decentralization so that people in outlying areas may have jobs. So I come back once more to the government's attitude. How come the government did not use the grants and tax cuts given to corporations to get them to create secondary industries in mining areas? Northwestern Quebec is no exception. Today Noranda Mines is not mining anymore in northwestern Quebec. They only have a smelter that depends on section Horne in Noranda and other mines throughout the country. Although that plant had to lay off people, it still has 1,000 employees or so, even though it is facing competition from foreign countries, not because of material or smelting costs, but because of transportation costs to bring the material to the smelter. There are mines in western Canada, but they find it cheaper to send the material to Japan where it is smelted, because shipping costs are lower. So Canadian material is smelted in Japan, and the government does nothing to stop that and allow our smelters to smelt our own material. The government remains idle.
Recently, I urged the Minister of Transport (Mr. Lang) to see to it that our mines get, not grants but special transportation rates for the material going to our smelters, so that we may save jobs in Canada. We are still waiting for an answer. In such matters, the government is in no hurry to answer. Mines were and still are forced to absorb a 21 per cent cost increase because of fringe benefits, anti-pollution expenditures that did not exist before. Smelters had to absorb extra production costs as high as to 10 per cent to invest in the environment. Those are real costs absorbed by the mines, by the smelters. The government is forcing them indirectly, to get more involved in the environment, but it gives them nothing in return except tax controls, double tax controls. It prevents them from operating on a sound basis. If there is some money to be made, the government does not hesitate. It overtaxes, it double taxes in some cases, when obviously royalties should be at the provincial rather than at the federal level. Because under the Canadian constitution, direct taxation should be at the provincial rather than at the federal level.
We know that the federal government has taken over the power of taxation, which is causing great problems to these companies today. However, when we consider these problems as a whole, is Canada short of mineral ores? Absolutely not. The Minister has just said that everything depends on foreign markets, that other countries are producing nickel, copper and gold, and that those countries are our competitors. Does the fact that other countries are producing minerals warrant dividing or reducing the workload of our people, our work potential? Definitely not. Those two things are unrelated. The simple truth is that we, as Canadians, have not been able, through our government, to develop our secondary industries to the same level as some other countries like Japan or Germany, countries which, we are all aware, were destroyed during World War II. They set up for themselves financial and economic systems which are different from our own to ensure the recovery of their economies. What are we waiting for, in
November 23, 1977

Canada to change our economic system in order to put our own economy on the road to recovery? We have the skills, we have the brains to do this. The only missing factor is always the same: the money factor, the economic factor, which is the very basis of the economy.
As I said earlier, the unemployment and inflation rates clearly demonstrate that the economic methods which were established in a less complex era have now become obsolete. What alternative does the minister suggest in the address he has just made, in his crying about the New Democratic Party and the other opposition parties, what solutions, what economic changes does he suggest? Absolutely nothing. He does not get off the beaten path. What does the government do to stimulate investment in small and medium-size business? Absolutely nothing. However, in the mini-budget we find for example that these companies are allowed to invest more money in underdeveloped countries without any restriction, and that the government intends to give them more benefits so that they can invest even more money in those other countries. 1 am in no way against investment in third world countries but I think that some areas in Canada bear much similarity to the third world.
In some areas, 15 per cent are unemployed according to statistics on unemployment. Finally, the labour force is only 60 or 61 per cent. I will give an example in the province of Quebec. In my constituency of northwest Quebec, there are 14.4 per cent of unemployed and 59.8 per cent of working people. However, when you add up both, you get 74.2 per cent of the people either working or receiving some unemployment insurance. The remaining 25.8 per cent are unemployed and are no longer entitled to unemployment insurance benefits. Why are those people who are no longer contributing to production in Canada, not mentioned?
Why are they not included? They are unemployed. This means that there are almost 40.2 per cent of unemployed in an area such as the northwest. For the whole of Canada, the figure practically reaches 40 per cent. Suggestions have been made with regard to financing but no way has been sought or found to finance any new production with new funds and not only with loans as is the case now. Taxes! The Prime Minister can answer. Who is willing to lend money without interest? The Bank of Canada can create such credits based on production, not on the activities of chartered banks, not on our neighbours, but based on the Canadian production of natural resources, on the development of our own resources. When the government understands that the Bank of Canada can issue new credits according to our new rate of production, it will be wonderful. I think most members in general admit willingly that in spite of our problems, our national production still increases yearly.
Our production has been considerably reduced in the last few years, but it still increases. In view of this increase, we could issue new credits which could be distributed to create or to help medium and small businesses and the secondary industry, which would effectively enable our primary sector to operate and to develop our resources, not to export them to other countries as is the case at the present time, but to refine
Mining Unemployment
and transform them into finished products in Canada. Afterwards, the surplus of finished products could be offered on the international market. We would have then guaranteed our workers that they will be able to work in Canada.
That is the essence of the problem, Mr. Speaker, and these are the most valid answers to the problems now facing our primary sector. But the same is true for the Americans. I was a member of a parliamentary delegation some time ago and I was told in the United States that in that country the same attitude prevailed. Our government, our marvellous Liberal government has the same attitude. I was told in the United States that it is impossible to exert too much pressure on multinationals and large companies because then they will close their doors and there will be 800,000 more unemployed. Then what shall we do? We may well say: What are we to do? Well we must find means to solve this economic problem instead of copying others, especially our American neighbours.
I heard that the Islamic Bank allowed interest-free loans to countries where it operates. But the government is not intelligent enough to realize that instead of choosing to increase its debts, it would be well advised to ask the Islamic Bank how the interest-free loan system works. This method should be used and applied in Canada, and this would solve our real problems.
We finally come to the conclusion that the government is not interested in solving that problem. The only thing it is preoccupied with in this dilemma is finding a way of taxing somebody and if the problem persists, as it does, to wash its hands off the whole thing and say to the people that it is their fault. As in the case of miners for instance, they say: Not our fault, yours; share your work week with others and that will do it.
Mr. Speaker, that sums up what I had to say in concluding I would add that in the view of the Social Credit party, rather than doing things the way they have been done for years such as in 1974, 1975, 1976 and again this year-granting tax exemptions to these multinationals-the government should hand out that money to small and middle size businesses which would know how to develop the secondary sector which would in turn stimulate production within the primary sector and thus solve the problem which is now facing the mining industry in Canada.


Mr. Bob Kaplan (York Centre):: Mr. Speaker, I know we are dealing today with mining industry, but since the hon. member for Temiscamingue (Mr. Caouette) opened his speech with some remarks about the manufacturing industry, I would like to answer some of them. He referred to other countries like Japan and some European countries where the manufacturing industry is doing a lot better than over here. I agree. Then he said the only thing Canada needs to achieve the same success as those other countries is a better monetary policy. I challenge him to prove to us that the monetary policy in Japan and the European countries he has referred to is in any way related to the Social Credit policy. I do not think he could. What they could teach us, and from which we could no doubt benefit, has nothing to do with monetary policy.
We could look at the suggestions he made yesterday for a monetary policy which aims at preventing the outflow of

November 23, 1977
Mining Unemployment
Canadian money without government's approval and all kind of red tape. That is not the solution and would only make the problem worse.
Those of us on this side of the House know very well that things are not going well in the economy. The mining sector is an example of one area in which things are not going very well.
One comes to the House on an opposition day ready to hear the ideas that the opposition would implement if they were in power, but when one hears about a new monetary policy of the sort which the Social Credit members described yesterday, one's reaction is, "no, thanks." That is my reaction to that. As to some of the ideas that have been put forward by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) and by the Leader of the NDP (Mr. Broadbent), I would like to turn to some of them in the limited amount of time I have. The conclusion I come to is that we are better off not taking the advice that they have put forward.
Some have suggested, in their questions and comments in the House in the days past, that we could keep the miners working at their present level in Sudbury at INCO if we were prepared to begin stockpiling. Maybe it was done in the past in some other sectors, so they say, "Let us do it in this sector." I do not see that as any kind of solution to the problems that INCO is facing right now. On the contrary, as the Minister of Finance (Mr. Chretien) indicated, that is the kind of approach that you can run with for just several months. There is $1 billion worth of nickel lying on the ground already, taken out by INCO. That is no solution because there is a limit to what the present weak Canadian economy can put in to support one particular sector.
The idea they put forward that somehow or other the developments in which Canadians are involved offshore are responsible for the problems we face at INCO has no connection. The solution does not lie in continuing forced production in a world which temporarily does not have any demand for the amount of nickel which can be produced.
The solution lies in ideas like the one suggested by the Minister of Employment and Immigration (Mr. Cullen), job sharing. On the subject of job sharing I want to extend that concept a little further than it has been extended in this House so far. Job sharing is not relevant just to workers who have been laid off from a particular industry. I suggest that we ought to be looking into job sharing for the benefit of young people who are coming into the labour force and finding- temporarily, I again insist-that they cannot get good well paying jobs because the labour force, growing at a rate of over 200,000 new jobs a year, is just not growing fast enough to take them in. They have a claim to job sharing in the same way workers who are being laid off have a claim to job sharing.
I would like to see a little less respect from the NDP for the vested interests which exist for existing jobs, and a little more willingness to explore the kinds of solutions which a regrettably slow growing economy has to face. We must face up to

the kinds of solutions which will provide employment for young people in tough times and which will make it easier for people who are about to be laid off. Stockpiling certainly is not the solution.
Hon. members of the NDP indicate that the Canadian government should not have helped Canadian companies like INCO to find business opportunities offshore. Taking that further, they say we ought to remove incentives and that we ought in fact to have positive disincentives in order to force Canadian industry to remain in Canada and not to go looking offshore.
Let us first look at our motivation for going offshore. We are going offshore partly because that is a responsibility developed countries have to developing countries. Developed countries must assist developing countries to realize their potential. We are also going offshore to find jobs for Canadian workers and to find profits for Canadian companies. Canada benefits when Canadian enterprises find offshore opportunities.
I visited a nickel project in Guatemala. I went through the plant and met the workers there. I saw a lot of Canadian equipment in that operation. If that Guatemalan project had been developed by some other country-as it inevitably would have been because it is a very good project-we would not see Canadian engineers working there and we would not see Canadian equipment going to the project to the extent we do. When Canadian companies go offshore, Canada benefits. The companies get extra profits, there is more manufacturing output for Canadian enterprises, and extra jobs are created for Canadian engineers who direct, organize, and get these projects off the ground. That is all to the good.
There was also some objection to foreign ownership. INCO is not a case of that, but it was argued that we ought to do more to promote Canadian ownership in the mining sector. I want to say a word about that because I am very strongly in favour of Canadian ownership. As much as anyone I recognize the dangers of heavy foreign ownership of certain sectors of the Canadian economy; for example, in manufacturing where there is a truncation and a fragmentation which take place because of the extent of foreign ownership. However, I would like to make it very clear that, in my opinion, foreign ownership is not a negative feature when it comes to mining. The mines are here in Canada. The identity of their owners and their nationality are very much less important than in any other sector.
I would go so far as to say that as much as Guatemala is prepared to welcome Canadian investors who want to come and see opportunities developed for the benefit of both sides, Canada should be prepared and should continue to be prepared to welcome foreign investors who want to come and support Canadian mining opportunities and see them developed. I do not think there is any negative side to it. I do not think Canada loses anything when the development of our mines takes place through foreign owners. It is not that we should not encourage Canadian ownership in the mining field. I do not want to take the time to describe the tax benefits and
November 23, 1977

the allowances which are available to encourage Canadians, and which are not available to foreigners. We do what we can, but I do not think we should be worried about the extent of foreign ownership in the mining sector.
I want, in the remaining time at my disposal, to talk about taxation issues. The NDP made a great deal of the amount of incentive and encouragement the tax system has given to mining in Canada. When the Conservatives speak, they will no doubt emphasize the other side of it, the enormous burden- referred to by the hon. member for Qu'Appelle-Moose Mountain-we place on the mining sector which prevents it from doing the kind of job it wants to do and which our resources justify.
On the one hand, the NDP says we have imposed too little taxation, and on the other hand, the Conservatives say that taxation has been a very serious burden for the mining industry. I want to suggest-and refer to some statistics-that the level of taxes imposed by the federal government is very much in line with the taxation other countries impose on their mining sectors. After all, that is the important thing. Investment in mining is very mobile. It is ready to go to countries which are ready to encourage it to come to them. I think it is extremely important for us to have a taxation system in the mining field which is comparable to the taxation systems which exist in other countries. I want to suggest that we do have that kind of system.
Let me refer to some evidence which was put before the Senate banking committee by the president of Noranda. He came to the Senate to complain about the very high level of taxation in the mining industry. As far as the federal government is concerned, I think he was laying a bum rap on us. He used the example of Brenda Mines in British Columbia. He hypothetically translated its activities for the year 1975-I believe it was-into what would have happened in Ontario and Nevada if that exact mining operation had been conducted in those places. He found that the over-all burden of taxation on profits was discouraging and, as he said, devastating, in Canada. I agree with him. I think the over-all aggregate level of taxation in Canada on the mining sector is very much too high, and I think that explains why new mines have been opening at a very slow rate in the last few years.
The actual tax burden Brenda paid that year in British Columbia was 71 per cent of its profit. If the Brenda mining operation for that year had been conducted in Ontario the burden of taxation would have been 49 per cent, while in Nevada the rate would have been 28 per cent. So to repeat, to keep the figures before the House, in British Columbia it was 71 per cent in that year; in Ontario, it would have been 49 per cent; and in Nevada, it would have been only 28 per cent.
Then the president of Noranda Mines did a further calculation. He indicated what the difference would have been if the prices of the product sold by the mine had doubled, costs unchanged, but prices doubled. He showed the results would have been worse. In British Columbia, instead of paying 71 per
Mining Unemployment
cent in taxes the company would have had to pay 83 per cent. In Ontario, instead of paying 49 per cent it would be 56 per cent, and in Nevada, the company, instead of paying 28 per cent, it would be 31 per cent. The president of Noranda called this burden incredibly perverse. It is obvious, with tax levels of 83 per cent, you would not have any new mines encouraged or any mining encouraged at all.
I might note that the burden of taxation in British Columbia was introduced by the NDP government which was defeated subsequently. To the extent it is still in the province, it is a legacy, an NDP policy.
Here we have the NDP saying we need a new industrial mining policy.


An hon. Member:: That is true.


Robert Phillip Kaplan: I am glad they were not more specific about what the policy would have been, because if they had recommended the policy their colleagues in British Columbia actually introduced, with companies having to pay a rate of tax of 71 per cent, and as high as 83 per cent in the hypothetical case introduced by Noranda, you can imagine what kind of mining operations we would have in this country.
A point the president of Noranda Mines did not emphasize in his testimony was a comparison of where the taxes were being paid, what proportion was going to the federal government, and what proportion was going to provincial governments. He presented several charts with his evidence, but he did not refer to them very specifically in giving his testimony. The charts showed Canadian federal tax compared to American federal tax was within 10 per cent. There was only a 10 per cent difference between Canadian tax and the American federal tax on the Brenda Mines' operations of that year. Although the aggregate burden was 71 per cent in Canada versus 28 per cent in the United States, nearly triple the total, the Canadian tax was within 10 per cent. In the operation of the higher profits example he gave, Canadian federal taxation would actually have been lower than in the United States.


An hon. Member:: How come you are not specific in these numbers?


Robert Phillip Kaplan: The hon. member has asked for specific numbers. I could table the charts if the House would allow me to do so. The Canadian federal tax is not particularly out of line. As I have indicated in the higher price example, it is lower. In the B.C. higher profit case, if Ottawa took no tax at all the burden on the company would still have seen more than double in British Columbia than in Nevada. In other words, Canada's federal tax on mining-and this is a conclusion from these figures-is no worse, and it is usually more favourable than tax in the United States.
The mining companies of Canada when they come to Parliament complain tremendously about their tax burden. They are entitled to complain because the burden is too high but it is not a matter that the federal government can cure. In the case of new oil prices, a company, with profits, which does maximum

November 23, 1977
Mining Unemployment
exploration here in Canada, can reduce its federal tax rate to 4 per cent of its total taxable income.


An hon. Member:: Nonsense. Where do you manufacture those prices?


Robert Phillip Kaplan: Federal taxes on oil can be reduced to 4 per cent. On hard rock, as I have indicated, they are well within line of the level of taxation in the United States.
Members opposite, particularly the hon. member for Qu'Ap-pelle-Moose Mountain, made a case out of the fact that the royalty deductibility was disallowed by the federal government. That sounds fairly serious. It did increase the tax burden they pay to the provinces. What has to be borne in mind is that natural resources are primarily provincial assets. The provinces are entitled to royalties from these assets. They are also national resources, and the federal taxpayers, as a whole, are as entitled to draw some federal revenue from those enterprises as they are from any other businesses that are conducted in this country.
Take the example of the province of Alberta, and the members opposite from Alberta can stand up to try to defend the Alberta government on this point. It tried to cut out the share to which the federal taxpayer is entitled from oil revenues. That just could not be accepted by the federal government representing federal taxpayers as a whole.


An hon. Member:: We do not know what you are talking about.


Robert Phillip Kaplan: Hon. members say I do not know what I am talking about, but they can stand up when their turn comes and try to make their case.
I think there is a lot to be done to encourage the mining industry, particularly the hard rock mining industry. But, it is a bum rap to try to argue that the federal government has a disincentive tax policy, Mr. Speaker, because it does not.


Roch La Salle: Mr. Speaker, I am going to make some remarks on this motion which is very good indeed and which is further reinforced by the amendment put forward by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). I think it completes a motion which highlights a tremendously interesting subject, given the situation in which we are now.
Of course I read carefully the motion which:
... condemns the lack of action by the federal government to prevent the serious loss of jobs in Canada's mineral industry ...
To be less severe, I would not say that the government did absolutely nothing but that what it did is far from being sufficient, and this was proved, I think. We on this side believe it would be a very good idea to call in the provinces and to cooperate with them, leaving them of course some responsibility in the establishment of the priorities which could be coordinated by the efforts of a federal government, through the

establishment of an industrial strategy, of a long term policy which could only improve the situation.
I also listened carefully to the hon. member for York Centre (Mr. Kaplan) who seems, as a matter of habit, to accept the situation. Making a series of comparisons he explained that in view of the efforts of the federal government, we should be satisfied with the present situation. Besides, by mentioning the reduction of the work week to four days, I feel that he has just given proof of his government's inability to get us out of the doldrums, as far as the mining industry is concerned. In fact I think that if we agree in principle that we should ask the labour unions and the workers for work sharing status, it automatically proves that the federal government is really determined to maintain the million of unemployed which we have now in this country.
To such comments, we say: No! An unequivocal no, and we believe that this government has failed in this area, as well as in many others. We share the government's desire to help other countries, but we believe that the Canadian worker and the Canadian industry are entitled to a reasonable degree of protection. We also share this idea of giving Canadians a chance to work abroad, to be better known outside Canada but that some leading Canadians ought not to be forced to go into exile to work, which is exactly what is happening at this time.
Under the present circumstances, I repeat that this motion is very timely and that it brings about our deep concern about the layoffs taking place in the mining sector. The Minister of Industry, Trade and Commerce (Mr. Horner) and the Minister of Finance have suggested that there could be more. We know perfectly well that in the province of Quebec and in other provinces, we must expect other layoffs which, once more, will increase the unemployment rate. Personally, I believe that there has been a failure which we, on this side of the House condemn: a lack of communication between the federal government and the business community, the employers, the workers and the provinces. In our system, there is no way out unless we can rely upon the collaboration and the understanding from business, labour and the provincial governments. I think this is the solution for a government which will decide to be more open and responsible in those very important fields of our economy in order to solve the present problems we are facing in the mining industry. But this lack of consultation and communication is the direct consequence of the situation which is now prevailing. We are concerned that our low productivity and our high wages may reduce our competitive power and leave us trailing behind other countries. What has this government done to make both industry and labour aware of the dangers which may occur if we do not reach a good level of communication and sincere co-operation in the most important fields, with regard to our long-term policies.
In the remarks he made earlier, the Minister of Finance recognized that we were in a very difficult situation, which seemed to surprise him. He tried to bring us to his viewpoint
November 23, 1977

by telling us: "We are prepared to do something but, after all, a whole series of events took place and brought about this situation." And we, of course, in a spirit of fair play, could perhaps say to the Minister of Finance: we hold you to your word and we will forget the past, the faults, the failure, the weaknesses of your policies and particularly the lack of those, and we will start thinking as you do, that better days are ahead. I think that we should regret, deplore and condemn the government for this lack of market studies, for this failure to work together as I mentioned a while ago, and to co-operate with representatives of all sectors of the economy who could help the government bring about a recovery. A government that would be thinking otherwise certainly could not get the confidence of the members of this side of the House. It is impossible to have any confidence in this government, because of its regrettable attitude which is responsible for the situation we are experiencing now.
Somebody spoke about the drain of capital, there again, it would have been necessary to bring around to the same table investors and managers and explain to them the importance of reinvesting a percentage of their profits in a secondary or a processing industry. Once again there is a lack of contact with the business community, Mr. Speaker, and we easily realize the reluctance of the businessman today. He is waiting to see what will be the long-term policy of the government. The Minister of Finance replied to a question of mine concerning the advisability of holding a meeting of the Ministers of Finance more especially from the Maritimes and Quebec: "Well, I am always ready to welcome them." But he has made no effort to call a meeting to correct the economic conditions and imbalance in the Maritimes, Quebec and the rest of the country.
I feel that the government was wrong not to grant funds for research. As I said a few days ago, Senator Lamontagne recently blamed his government for failing to allot sufficient funds for research. Of course, some are always asking for further expenditures, but the lack of research is, in my opinion, responsible for the conditions which we are now experiencing.
I think that this lack of adequate funds has kept the government from drafting and presenting a long term policy. This lack of adequate funds has also prevented the government from urging certain basic or traditional industries in the mining sector and in others to modernize and improve the Canadian industry and to foresee the relevant markets and changes. This lack of research has also stopped the creation of new products which were increasingly required; research and new product designs were left to a neighbouring country and we were content to play second fiddle.
Again, this lack of research has made Canadians and businessmen unsure of the stability of our Canadian industry. The government is to be blamed for failing to come up with a prevention policy. Ministers one after the other since the opening of this session admit that we are in a difficult situation, they regret and deplore the present situation, they are seeking our confidence and they are asking us to regain public confidence, but this lack of prevention must be very severely
Mining Unemployment
condemned, Mr. Speaker, and I think we must remind the government that it is impossible to renew this confidence, which the government requests despite this incredible shortcoming, through a lack of foresight when it is very well known that to govern is to see ahead, Mr. Speaker. In these circumstances, the government has been seen making incredible efforts in the application of social legislation.
Everyone knows and all Canadians know that the government, through its public servants and experts, has been satisfied to invent social legislation to try to compensate for the lack of courageous or positive policies and initiatives for our Canadian industries. Of course, there has also been reference to the considerable sums distributed or approved by the Department of Regional Economic Expansion. We are not saying that this department has not made any efforts, but once again, was its main objective not to eliminate regional disparities? What are the results, Mr. Speaker? We are still waiting for the beneficial effects of these expenditures and of this policy which had given us so much hope.
The minister today is talking about the essential issue, that is an industrial strategy. Why is it, Mr. Speaker, that in the last 20 or 25 years, and especially in the last 10 years, the present government has not deemed appropriate to develop the industrial strategy which has become essential today when the country is in an economic stagnation because of the lack of government responsibility over the last 10 years. This is where this government has brought us, Mr. Speaker. All the action which has been taken until now has caused major disappointments, and after 10 years we must recognize that we may have 10, 15 or 20 difficult years ahead of us before we can rectify the situation. And we are now told that Canada needs an industrial strategy. I believe that we have every reason to condemn the government for not having developed a prevention policy and for not providing the Canadian industry with a minimum of protection for the Canadian worker. This has been the case in the mines lately and we are now making tremendous efforts in this area.
I recently asked the Minister of Energy, Mines and Resources (Mr. Gillespie) to call a meeting with his provincial counterparts as soon as possible. The Minister of Finance (Mr. Chretien) told us that this meeting would probably take place within four days. Once again, the opposition had to insist on such a vital matter as to have him meet his provincial counterparts and together with the provinces to provide some assistance.
We hear about a national development policy. Earlier, my colleague made a fine statement and stressed the importance and necessity of a national development policy for the transportation of finished products. Regional development: at one point, the hon. member for Temiscamingue (Mr. Caouette) emphasized that some sectors are sorely under-developed. It is obvious that the tax incentives that could be offered to those industries which really want to expand are important. We support all such solutions and proposals whereby the govern-

November 23, 1977
Mining Unemployment
ment helps those sectors facing problems. Some sectors, Mr. Speaker, as everybody knows, face problems, particularly in the field of transportation or in areas remote from the large centres. Yet the government did not see fit to consider drawing up a special transportation policy in order to help those industries to get their finished products to the large markets at competitive prices compared to other industries located closer to the large centres. But I think one has to remind the government of these proposals.
In conclusion, I stress once again, Mr. Speaker, the urgency of adopting such a policy, a long-term policy, an industrial strategy, a national development policy for the mining sector and many other sectors. We will surely have the opportunity to deal with other sectors. It is essential to restore an economic balance between the Maritimes, Quebec and the rest of the country. As shown by the last unemployment figures, Mr. Speaker, it is unfortunate that in the sectors facing the greatest hardships, the number of unemployed keeps increasing. Then, it seems obvious to me that the members on the other side should urge the government to realize how important it is to have a national development policy in those sectors that are especially hard hit.
I know my friends opposite from Quebec. They believe this is due to the political climate in Quebec, as if everything had started on November 15 of last year, Mr. Speaker, while they know very well that the Liberal premier of the time was just as concerned. I notice that the hon. member for Frontenac (Mr. Corriveau) will not take part in this debate as usual, yet his region is affected by the motion now under consideration. When I think of this Quebec member, I believe he should express his disappointment at the lack of worthwhile measures by his own government. I am speaking of the hon. member for Frontenac who, as usual, will not say a word, like many others who are hiding behind the Prime Minister who, after all, is the one to blame for the problems we are facing now and will face for several years to come.
Mr. Speaker, I hope my friends will finally take up the challenge, assume their responsibilities and promote the interests of a province which is suffering and facing unbelievable hardships because the federal government fails to understand provincial and regional aspirations. They must be listened to and the situation corrected through the efforts of a government respectful of the provinces. Mr. Speaker, in conclusion, I express the hope that our appeal will be heard.


Mr. C6t6:: Mr. Speaker, I wish to put a question to the hon. member for Joliette. I want to make sure he is not misleading the House because I have some doubts in this regard.
The hon. member for Joliette referred to Senator Lamon-tagne and said he had blamed the government. Did he have a private conversation with Senator Lamontagne, since he mentioned his name, or was he simply quoting an interpretation from a paper? If it was a private conversation, I take it for granted that the hon. senator really blamed the government. But if this is an interpretation, I think that the member has misled this House as I have already heard him do.


Roch La Salle: Mr. Speaker, I will answer the hon. member for Vercheres right now.


An hon. Member:: Not for Vercheres but for Richelieu.


Roch La Salle: Yes, for Richelieu. I apologize but as he does not often take the floor, I had forgotten the name of his riding. I will first tell him that I did read Senator Lamontagne's report in which he expresses concern for the lack of funds to research and I think that the hon. member for Richelieu had better read that report. He would become aware of and would support me when I blame the government for its paltry funding to research.


Mr. Raymond Dupont (Parliamentary Secretary to Minister of Employment and Immigration):: Mr. Speaker, contrary to what the hon. member for Joliette (Mr. La Salle) has just said, I will refrain from rhetoric and stick to the point. Mr. Speaker, I am pleased to join in this debate on the problems INCO mining is facing in Sudbury and Thompson. To start with, I would like to remind the House that the Minister of Employment and Immigration and his senior officials lost no time in making specific federal services and programs constantly available to the workers and the industry.
As soon as INCO corporation's difficulties were known, senior officials from the Employment and Immigration Commission attended a meeting in Toronto, on October 25 which was also attended by INCO management and union representatives to study the question of the impending lay-offs announced by INCO. That company had announced that it intended to lay off some 2,800 workers in Sudbury, Ontario and 650 others in Thompson, Manitoba. Later, on October 31, officials from the Employment and Immigration Commission of Canada met with representatives from that corporation and from the labour union in Winnipeg to conduct a specific study of the situation in Thompson. Officials from the Ontario government attended the Toronto meeting while officials from the Manitoba government attended the Winnipeg meeting.
The purpose of those meetings was two-fold. First it aimed at ascertaining whether those forthcoming lay-offs were of a temporary or permanent nature. The second was to find the best ways for the Canadian government and the Canada Employment and Immigration Commission in particular to help solve the problems arising out of the proposed lay-offs. The commission officers therefore outlined the various programs and services that could be used by the workers involved, which I will now review. In the first place we have employment services, and in this case special arrangements are made to increase the normal services, in order that offices in the communities faced with lay-offs are made aware of the jobs available in various mines throughout the country. More specifically, the manpower consultative service closely cooperates with industry to give as fast and efficient service as possible.
In cases where lay-offs are notified, special committees have been or can be set up through the MCS to launch joint employer-employee efforts to determine the most adequate
November 23, 1977

solutions to the unemployment problem. In particular, this could determine the most appropriate ways to use and coordinate programs and other forms of department help to solve the current problems. In July 1977, Employment and Immigration Canada thusly found jobs for 1,400 miners.
Let us now turn, Mr. Speaker, to mobility grants. They can be given to jobless workers who need help to locate where employment opportunities exist. The mining industry has benefitted to a significant degree from the manpower mobility program. Some 34 per cent of workers who relocated under the program in 1974-75 found jobs in other mines. Only 4.4 per cent left mining, a significant gain to the mining industry.
We have also offered our training programs. They can be dispensed to unemployed miners wishing to acquire new skills in related or different jobs. In 1974-75, $2,100,000 or 5.7 per cent of the total help under the Manpower Canada industrial training program were granted to mines, quarries and oil well workers.
As the Minister of Employment and Immigration pointed out from the outset of his representations, we will also have our direct job creation programs. The usual type of projects provided by Canada Works could not be the best form of help for the highly skilled mine workers but could undoubtedly provide employment for certain less skilled workers. A much more substantial and important contribution could come from the job creation projects available to other people in the community whose incomes and stability of employment would be adversely affected by the reduced activity of the mining industry itself.
There is also unemployment insurance, Mr. Speaker, which is obviously the most direct and immediate way of dealing with the problem of the income of the unemployed. Nor should it be forgotten that the latest statistics for the second quarter of 1977 show that about 9,000 claimants had previously been employed in mines or related operations. During the meetings held in Toronto and Winnipeg, the management of INCO indicated its intention of co-operating fully in the help that could be provided so the relocated workers could find other jobs. As a matter of fact, since those meetings took place management representatives and labour union leaders continued their collective bargaining and employment and immigration senior officials were kept informed of the proceedings. For example, management made an inventory of available workers and their skills. It helped identify other businesses which would be interested in recruiting INCO workers. Similarly, it arranged interviews for that purpose and gave time off to the workers involved. Talks were also held to make training programs available to INCO workers which could use them to find new jobs.
In addition, Mr. Speaker, the INCO management and the union representatives have studied the possibility of cutting down the number of lay-offs through early retirement. As everybody knows, Mr. Speaker, the Canada Employment and Immigration Commission has introduced a new work-sharing program but the company and the union did not see fit to carry discussions any further, at least for the time being.
Mining Unemployment
The Canada Employment and Immigration Commission is following up the situation at INCO, which includes conversations between company and union representatives and the action of the Ontario government. In fact, the Ontario legislature created a special committee to study the situation and report on actions to be taken to offset the numerous lay-offs which are contemplated by INCO. One can see, Mr. Speaker, that the federal government has been involved in a common effort with company, union and provincial government spokesmen to settle as quickly and as efficiently as possible all problems regarding the lay-offs considered by INCO. I must say that had the hon. member for Joliette (Mr. La Salle) been ready to help the government, he should have taken this opportunity to be more positive.


John R. Rodriguez: Mr. Speaker, in participating in this debate I first of all listened to the Minister of Finance (Mr. Chretien) outline the only solution which the government has come up with in regard to the lay-offs specifically in the mining industry and indeed in the entire resource sector. This proposal was reiterated by the hon. member for York Centre (Mr. Kaplan). The proposal involved work-sharing.
It is very obvious, Mr. Speaker, that the ministers of this government do not even talk to each other, and needless to say their parliamentary secretaries are treated just like the back benchers on the government side of the House. They very well know that the proposal regarding work-sharing was immediately tossed out when it was proposed by the Minister of Employment and Immigration (Mr. Cullen) to INCO and Falconbridge. It was suggested that work-sharing be adopted by INCO and Falconbridge in connection with the lay-offs at Sudbury, Port Colborne, and at Thompson, but the whole concept of work sharing was thrown out. In effect, INCO and Falconbridge told the minister in no uncertain terms that these lay-offs are going to go beyond one year and that they do not know beyond one year whether the men would ever be recalled.
The hon. member for York Centre also talked about worksharing as being the coming solution to our unemployment problem. I am waiting for the hon. member for York Centre to start sharing his job with an unemployed miner. Perhaps if we had enough unemployed miners sharing the jobs of Liberal members we would get some mineral policies in this country.
I had a very remarkable morning, Mr. Speaker. First of all I spoke to the Canadian Paperworkers Union's annual convention in the city of Toronto. Many members were there as delegates to that convention from the province of Quebec, Atlantic Canada, the west coast, and the province of Ontario. After speaking to that convention I had another meeting this morning which was rather significant. I had a meeting with the president of Falconbridge Nickel Mines, Mr. Marsh Cooper, with respect to the particular situation in the Sudbury basin vis-a-vis the employees at the Falconbridge operation.

November 23, 1977
Mining Unemployment
As I flew back to Ottawa this afternoon, Mr. Speaker, I thought about the resource industry of Canada, and what came to my mind immediately was a speech, which I thought I had seen somewhere before, by a Mr. Henry S. Wingate, who had been the Chairman of the Board of the International Nickel Company of Canada. He made a speech on February 18, 1971, and I should like to read a part of the speech to the House because I think it is very significant. If I may quote him, he said:
"The unusual capacity of the mining industry to create wealth for an economy, to literally turn what was once rock or dirt into a valuable metal, and in the process to generate jobs and a large number of supporting industries, needs to be more fully understood by the public generally and by government officials".
In other words, God created INCO and INCO created the nickel in Sudbury and Thompson.
Before I went north to the Nickel Belt in 1962,1 was part of the great mass of the Canadian people who had always taken the resources of Canada for granted. I did not appreciate the implications of those resources, and in particular the nonrenewable resources. It was only after living in the Nickel Belt for some time and seeing the miners at work and listening to them that I understood the nature of the mining industry.
Living in the Sudbury Basin almost at the confluence of two major railroads going east-west and north-south, we are always aware of the north-south traffic. We see the ore cars taking out iron ore, nickel and copper pellets on their journey south, and this same railway system bringing back into the north finished products to be sold to the residents of the northern communities. Those thoughts were with me as I contemplated our non-renewable resources.
One of the things we must keep in mind is that extracting resources from the ground is a very capital intensive operation. That was the first conclusion I came to after seeing it in operation in the Nickel Belt. Indeed, on checking with Statistics Canada I discovered that to create one job in the extractive process, in other words taking the ore out of the ground, it costs $200,000. It cost that much just to put one job in the extractive process into place.
On the other hand, to create one job in the manufacturing, secondary sector of the mining industry it costs $40,000. We immediately come to the conclusion, therefore, that when those resources are taken out, and I have said this in the House many times in the past, these resources are the key to unlocking other sources of wealth for not only this generation of Canadians, but for future generations.
In other words, if we are to get the benefit of these nonrenewable resources we must take the capital generated from the sale of them and ensure that it is invested in establishing an infrastructure which will put into place secondary manufacturing industries related to the primary. I have asked myself, is that being done in the Sudbury Basin?
I was born and raised in a Third World country and saw Alcan exploit the bauxite resources of Guyana. Alcan then put the bauxite on ships and brought it to Arvida on the St.

Lawrence where it was manufactured into aluminum. I lived with that, but I have come to one of the most progressive countries in the world, and I am very proud to be part of it, and lo and behold I find that in 1977, and this has been going on for nigh on 50 years, Falconbridge Nickel still ships out the nickel matte-that is the product after semi-processing-to Norway where the company has its refinery, and it is there refined into a finished product and presumably sold back to Canada.
I do not understand how a progressive government with any sort of policy in respect of the non-renewable mineral sector of this country would ever have permitted that situation to exist for so long. Indeed, it was surprising to hear the Minister of Finance say to my leader, the hon. member for Oshawa-Whitby (Mr. Broadbent), a few minutes ago that he agreed with us that we needed an industrial strategy. I would ask who has formed the government for the last 18 years? Indeed, which party has been the government for the last 40 years, or for the greater part of the last 50 years? I suggest it has been of the same political stripe as those sitting in those seats now.
How much longer must we wait for a strategy that makes the maximum use of the non-renewable resource sector? Indeed, the way those resources are being depleted it is shameful, an absolutely crying shame, to see INCO and Falconbridge at this point in time high-grading the ore, and that means taking out the highest quality ores now at the lowest labour cost because they bring the highest price. It is shameful on the part of this government that permits multi national corporations to rape us and carry on as though they had no responsibility whatsoever for the interests not only of this generation of Canadians but of future generations.
I can understand the reluctance of the Liberals and Conservatives to tackle the multinational mining corporations or to take them to task. I can understand how they can become the apologists, Mr. Speaker. The answer is very clear to anyone who has the time to dig out and read the information. This comes when we see the report of the Chief Electoral Officer of Canada. We find, for example, that the International Nickel Company of Canada Limited donated in the last year $30,885, to be exact, to the Conservative Party of Canada. Noranda Mines gave the Liberals and the Conservatives equally-they back both horses in the race-$16,000 each. Algoma Steel and Denison Mines gave $15,000 to each of those parties. When we look at the entire resource sector we find that every major company has rewarded the two old line parties.


Steve Eugene Paproski: What about the unions?


John R. Rodriguez: I have become cynical in this House. I do not expect a thrust in the direction of establishing a policy regarding the exploitation and development of the non-renewable mineral sector of our country.
It is important that we put into context the importance of the market that Canada has and the part that Canada plays in respect of world minerals. Having regard to nickel, we are responsible for 33 per cent of the world's production. Just a few short years ago, to be exact in 1974, we were producing

ft
,4,

'B-r
*fit
November 23, 1977

for the world 38 per cent of the world's share of nickel. That has now dropped to 33 per cent. It is not soft markets, of which the Minister of Finance spoke, that are creating our problem. It is fairly obvious we are losing our share of the world's market for nickel.
In terms of world production, in the area of zinc we produce 27.5 per cent, in asbestos it is 40.2 per cent, and in copper it is 10.8 per cent. It is also significant that while the government has made attempts at studying a mineral policy for Canada, I dug up a report that was issued by the federal and provincial resources ministers entitled "Towards a Mineral Policy for Canada." In this paper it states:
-mineral policy must maintain its general goal of obtaining the best benefits for Canadians from minerals.
My question would be, has the government set out the goals very clearly and are they known to the multinational mining companies? This brings me to my interview this morning with Mr. Marsh Cooper. One of my first questions was whether the government had approached Falconbridge in order to sit down and discuss what Falconbridge's plans are from here on in with respect to the nickel and copper industries in the Sudbury Basin? Mr. Cooper's answer was, "Not at all; not at all". There has been no communication between the senior level of government in this country and the Falconbridge Nickel Mines that could determine the future lives of so many of our people.
Furthermore, in discussing the matter with Mr. Cooper, he said exactly what the apologists for the mining companies have said, and what was said by the hon. member for York Centre, the Minister of Finance, and the Minister of Industry, Trade and Commerce (Mr. Horner), that if INCO did not go into Indonesia and Guatemala some other company would. Well, I have to put a question to the government. Maybe these are very good goals for INCO and Falconbridge. Market dominance in lateritic nickel ores is an excellent goal for the private sector, but I would ask what are the goals of Canada in respect of its mineral resources? Are INCO's Falconbridge's goals the goals for Canadians? Is what is good enough for INCO and Falconbridge good enough for us?
It should be pointed out that 1974 was a good year for INCO. Its net profit was $300 million. One would assume and expect that the Company recognizes the need for investment and diversification of industry in Canada, and would plough back the bulk of those profits into Canadian development. What did INCO do with $242 million of that profit? It bought a battery company, ESB. As a result of that INCO is before the courts in the United States for infringing the monopoly legislation there. That is a perfect example of money earned in Canada being used to diversify the company's base by buying out a company which already exists, and not investing that money in Canada in a new industry which would create employment.
I raised the following point with Mr. Cooper today: it has been indicated that Falconbridge is doing so poorly on the stock market and in the sale of nickel that it has to lay off
Mining Unemployment
workers in the Sudbury Basin, and yet Falconbridge Mines, McIntyre Mines, its parent company; Superior Oil of Texas, its grandparent company, along with Noranda Mines, have signed an agreement with the government of Chile to invest $1 billion over the next five years in the strip mining of copper in northern Chile. How does that help Canadian unemployment at this time when that investment is needed here so badly? We are saying that foreign investment should come into Canada, and yet we have Canadian investors using moneys earned from Canadian resources to invest in the southern United States, Chile, and all over the world.
In St. Lawrence, Newfoundland, Alcan has closed down an entire community. It was not because its fluorspar mine was not making profit, rather it was not making enough profit. They closed that mine down and intend to go to Mexico where they will purchase fluorspar from Noranda Mines which has a fluorspar mine there. Canadians are fed up with being used as a pawn in an international chess game which the multinational corporations play.
This morning I spoke to the convention of the Canadian Paperworkers Union. Prior to my speech I saw a film entitled "Tembec", for the umpteenth time. The International Paper Company was going to close down one of its operations resulting in the laying off of workers-


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


Alan Gray Martin: Mr. Speaker, I am pleased to have the opportunity today to join in this debate on a very important topic. I commend the hon. Leader of the New Democratic Party (Mr. Broadbent) for putting the matter of the implementation of an effective mineral resource industrial strategy before the House for the purpose of having a day long debate.
Before getting into what I have to say, I should like to comment on one or two of the points made by the hon. member for Nickel Belt (Mr. Rodriguez). He is always a very provocative speaker, and for this reason one is tempted to react to some of the things he says. I do not want to argue for or against the concept of multinationals. However, he might well bear in mind the number of jobs that have been provided for Canadians over decades now as a result of capital that has been brought into this country, and as a result of developments that have been made in Canada by companies that perhaps have not been owned 100 per cent by Canadians, indeed where the majority of the ownership may have been outside the country. It may not be the best way for us to be doing business, but I think we must bear in mind that many Canadians today owe their livelihood to the fact that the multinationals have been here and have been established.
Whenever the hon. member for Nickel Belt quotes these large figures relating to the profits of multinational corporations, as do his colleagues in the NDP, he always refrains from

November 23, 1977
Mining Unemployment
talking about the returns on investment. Three hundred million dollars may be a great deal of money, but he does not tell us what percent of the capital it represents. Is the $300 million a 10 per cent, a 20 per cent or more profit on the money invested? These are the things that must be brought into play when one talks about profits, whether they are excessive or too little. The sum means nothing until you know what kind of money has been invested by the company in question.


An hon. Member:: Perhaps you can tell us.


Alan Gray Martin: I was not the one to raise the point. I was merely saying members opposite have a responsibility, when they are talking about excessive profits, to relate the figures they quote to the capital that has been invested in the first place.
During the two year period when I was chairman of the Standing Committee on National Resources and Public Works I found it regrettable that we were never able to undertake in the committee any kind of study of the mineral resource base in this country. I think it is the responsibility of that committee to get into this area at some point. The reason we were not able to do this is that we were preoccupied with matters relating to energy, and I am afraid the committee might continue to be preoccupied with these matters in the coming year. It has been pointed out by a number of Canadians interested in the activities of our committee that indeed we should be looking at matters relating to our mines and national resources other than those more typically associated directly wth the energy picture.
Again I welcome the opportunity of this debate on this subject and I hope we can find a mechanism in our parliamentary system to have far more discussion in this area since it is so fundamental to our over-all Canadian industrial strategy. This is a very complex issue and the implementation of a mineral resource industrial strategy for Canada involves not only the jurisdiction of the provinces over their mineral resources, as provided under the BNA Act, but also the federal government's jurisdiction in a number of joint federal and provincial areas.
The government recognizes that the Canadian minerals industry is indeed a strong and very basic industry, and it appreciates its responsibility in international trade as a secure and stable supplier of metals and minerals. The federal government, in acting in particular through the Department of Energy, Mines and Resources in co-operation with other departments, such as the Department of Industry, Trade and Commerce, the Department of Finance, the Department of External Affairs and, to some extent, the office of Federal-Provincial Relations, has been carrying out a great many studies in this area.
In addition to direct consultation with Canadian mining companies, the government's actions have involved numerous contacts with the provincial governments, the Mining Association of Canada, and the National Advisory Committee on the Mining Industry. At present there is an interdepartmental committee headed by the Department of Energy, Mines and

Resources, which has formed a task force with the Mining Association of Canada to study the problems of the mining industry in Canada and to make recommendations thereon.
Mineral development in Canada and throughout the world depends ultimately on market considerations. The Minister of Finance (Mr. Chretien) amplified on that this afternoon when he was discussing problems with relation to nickel and in particular, expectations respecting future market trends.
The cyclical nature of supply and demand in the international market place plays a very important part in the decisionmaking process as to whether to develop various ore deposits and the commitment of required investments into such developments. Similarly, the rate of consumption must determine the rate of production in any given market condition, and the situation today in many mineral commodities is indeed-as we are finding with regard to nickel-one of over-supply, with massive inventories overhanging world markets. This condition is further complicated by the continuation of high production rates by some developing countries which rely heavily on their exports of metals and minerals for foreign exchange earnings.


John R. Rodriguez: Tell us about taxes and profits.


Alan Gray Martin: Until recently production in Canada has been maintained at fairly high levels in order to maintain employment in the communities which depend on it, and again I admit to the hon. member for Nickel Belt that the problem in Sudbury is serious, but he knows, as we all do, that 85 per cent of the work force up there is still very gainfully employed in the INCO project. I think it is important to look positively on what is going on, but we are at the same time concerned about the problems of those who are about to be laid off.
In the light of foreseeable consumption trends it has now become necessary to adjust production levels in line with the lower level of demand and to accomplish an orderly reduction of inventory. This has had a very hard impact on employment, not only in Canada but also in most countries which have been forced to take similar action. Some examples are Australia, the United States, and various countries in Europe.
The federal government has developed a number of trade policies which hopefully are benefiting the minerals industry. In this regard the government has directed that Canada participate with other interested countries, including producers and consumers, in an examination of the problems associated with commodities such as minerals, with a view to elaboration of appropriate mechanisms to stabilize markets. For this reason Canada has become a key participant in a number of forums such as the UNCTAD, the International Lead-Zinc Study Group, the Law of the Sea Conference, and the OECD, where the present and future health of the mineral industry will be advanced.
The federal government announced its policy on the further processing of resources prior to export, including mineral resources, in 1973. The objective of the policy is to process surplus natural resources prior to export wherever processing
November 23, 1977

would be internationally competitive and compatible with the development of a sound industrial structure. This policy is still being actively pursued in consultations with the provinces and with industry through federal policies respecting trade and industrial development.
The foreign investment review process and regional economic expansion are two other areas where these consultations are going on, and there is active involvement in endeavouring to maintain and develop a sound industrial structure. Where processing is hindered by measures such as tariff and nontariff measures of foreign countries which discriminate against Canadian further processed resource exports, we are seeking to negotiate substantial reductions or elimination of the effects of such measures, in both multilateral negotiations and in other appropriate ways.
The Department of Industry, Trade and Commerce has always recognized the tremendous importance of the metals and minerals sector to Canada's prosperity and export earnings, and has encouraged aggressive market activities on the part of Canadian producers and exporters, both by the mounting of trade missions to major marketing areas and through the services of the trade commissioners in posts around the world.
Recognizing that the present depressed state of world markets for most metallic mineral products will bring about further reductions in production levels, the government has made arrangements for the Department of Energy, Mines and Resources and the federal-provincial relations office to initiate discussions with the provinces where, after all, control over mineral resources still remains in so many ways. The government is also concerned with the development of a code of practice as to lay-offs in areas of federal jurisdiction in Canada and, accordingly, has initiated action in this regard with appropriate departments.
Throughout the sharp recession and prolonged and incomplete recovery in world demand, Canadian industry has sustained a higher level of output and investment than most industrialized countries. But, in the last few years it has felt the stress of rising costs of energy, materials and labour. Overhead costs have climbed because of the underutilization of capacity. In this situation some of the structural weaknesses, inherent in any changing economy, have become more obvious and more serious.
Recognizing the debilitating effects of inflation on industrial performance, the government has led the nation through a period of restraint in prices, wages, profits, and government expenditures. In preparing for the post-control period the government has confirmed its reliance on market forces and co-operation in the declaration "The Way Ahead"-1 am sure hon. members from all parties have read that closely-and elaborated these principles in "An Agenda for Co-operation". At the same time the government has set the stage for recovery and investment with its spring budget, initiating inventory allowances, and increasing investment credits and other incen-
Mining Unemployment
tives to invest, which it is to be hoped will be passed by parliament in the very near future.
Meanwhile there has been an intensive examination of the performance and potential of individual industry sectors. These are being developed in collaboration with consultative groups of businessmen and are leading to the identification of market opportunities and the potential for specialization and other avenues to increase efficiency and competitive capacity. At the same time the difficulties of adaptation to meet increasing international competition, for some products and industries, are being identified.
The examination of industry sectors has underlined the impact of the many other policies and programs of governments and private institutions on their efficiency and competitive ability. Not only specific industrial grants and incentives, but broader government policies relating to taxation, trade relations, transportation and resource development, have major effects on a wide range industrial operations. At the same time policies of both the federal and provincial governments, establishing standards for the private market place, and providing greater social equity, which I am sure the member for Nickel Belt is interested in, have a cumulative impact on the cost of business operations and investment.
In summary, the government has taken major steps to improve the environment for industrial operations and investment as international markets recover.


The Acting Speaker (Mr. Turner):: The hon. member for Nickel Belt (Mr. Rodriguez) on a point of order.


John R. Rodriguez: Mr. Speaker, would the gentleman speaking permit a question, please.


The Acting Speaker (Mr. Turner):: The hon. member for Nickel Belt.


John R. Rodriguez: I recognize him as a very generous member, he being the representative of my parents in Scarborough West.
Would the hon. member agree, Mr. Speaker, that between 1962 and 1975 the return on capital on metal mining averaged 13.5 per cent, which compares to 10.8 per cent for all other industries in Canada?


Alan Gray Martin: Mr. Speaker, I am not in a position to agree or disagree with that quotation. I will take it as read. However, when my colleague from Nickel Belt indicates a 13 per cent return on investment, he did not say whether it was before or after taxes. I am assuming that it is after taxes, and if he compares that with 10 per cent in other areas, if you consider the substantial risks and heavy capital investment before any returns arise at all in the mineral extraction industry, a 13 per cent return on investment may not, indeed, be at all out of line. I would not suggest that is an exorbitant figure at all.
To continue my concluding remarks, I indicated that the government had taken major steps to improve the environment

November 23, 1977
Mining Unemployment
for industrial operations and investment as international markets recover.
At the same time, an intensive assessment is under way of the opportunities and problems of specific sectors, leading to consultations with both provincial governments and the private sector. Only in this comprehensive framework can meaningful changes in our industrial and trade policies be developed.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, having listened to the hon. member for Nickel Belt (Mr. Rodriguez) I was hoping I would have as much time as he had in order to engage in meaningful debate with him and to prick some of those fanciful balloons he was flying about here this afternoon, quoting figures, always frothing at the mouth, and waxing indignant. The mere mention of certain words such as multinational just raised his hackles. Frankly, I always consider it for cosmetic effect. It sounds good, but is meaningless.
Hon. members want to know whether the mineral industry is profitable or not. It is. However, there is a fantasy about the land that Canada sits on the richest motherlodes of almost all known metals. That is the farthest from the truth. As a result of good technology, we can develop a lot of resources. However, there are dozens of places in the world that have far richer deposits of iron ore, copper, zinc, nickel, and gold, and even oil.
Alberta oil is of a type of geological formation that is among the most expensive to get at because it is pinpoint drilling. It is a matter of finding the domes in the deposits of oil and gas. It is not like in Venezuela or Saudi Arabia, drilling a deep well and finding a huge lake or very large deposit. The drilling and other costs of production in Canada are much higher. We also see this in the drilling for natural gas on the eastern slopes of the Arctic, the cost of drilling wells 16,000 and 18,000 feet. Look at the fantastic cost of drilling wells in the Arctic.
Many people, particularly the New Democrats, dismiss the cost of development of our minerals and the high risk that is involved as something they should not even know about.
I am glad that my colleague has introduced an amendment so that this motion is meaningful. If there has been unprofitable development to this day in the minerals industry in Canada, not only the exploration and development of the raw ore beds or the finding of petroleum and natural gas but the
further processing, it is because of the idiotic tax system that we had and still have.
Those of us who went through that nefarious white paper on taxation which the government produced in 1968, and saw the response from industry and from other governments, are aware that the basic premise for that so-called tax reform measure was astounding, a total misconception, fundamental ignorance of what is involved in the production and processing of minerals in this country. Fortunately, there were some changes, but not enough, and not soon enough.
When I first came to this House over 20 years ago I advocated getting rid of the so-called principal occupation rule, the rule which drove smaller investors among Canadians, as individuals or as corporate entities, out of the independent oil game. It was so much easier for our American counterparts to come in here. They had the advantage. We sat idly by and allowed the rule to stand and to drive Canadians out of the development of their own oil industry. Now the situation is different, but there is no more independent oil available; there is little or no freehold available which is likely to produce.
I have little time and I wish to turn, now, to another subject. First of all, I do not think there can be a national, unilateral mineral development strategy or industrial plan. Such a plan has to be developed with the provinces. We, as Conservatives, objected to the former minister of finance, the hon. member for Rosedale (Mr. Macdonald) ramming down the throat of this House his scheme for petroleum development as far as the Government of Canada was concerned. It was an outright raid on provincial jurisdiction. And if the hon. member for Nickel Belt wants to know what governments can do, let him read the judgment which was pronounced today with regard to Saskatchewan's raid on the petroleum industry and what that is going to cost those people-and the cost of $500 million was likely taken off the backs of other Canadians who were consuming Saskatchewan petroleum products. That is where the payment and the cost are involved.


The Acting Speaker (Mr. Turner):: Order, please. Pursuant to section 11 of Standing Order 58 proceedings on the motion have expired.
It being 6.30 p.m. this House stands adjourned until tomorrow at 2 p.m., pursuant to Standing Order 2(1).
At 6.30 p.m. the House adjourned, without question put, pursuant to special order.

Thursday, November 24, 1977