1977-12-01

ROUTINE PROCEEDINGS


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, under the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity. In light of quoted statements from a report prepared by two investigators for the Department of Transport alleging that enforcement of air regulations is at times subject to political pressure and also, in light of the fact that the Director of the Aeronautical Licensing and Inspection Branch of Transport Canada has made reference to the possibility of embarrassment to the minister and other political implications as a result of enforcing air regulations, I move, seconded by the hon. member for Lisgar (Mr. Murta):
That this House urge the Minister of Transport to refer this matter of political interference and its impact on air safety in Canada to the Standing Committee on Transport and Communications and furthermore, that William Slaughter, Andrew Carswell and R. L. Bolduc be allowed to testify and elaborate on their statements.


Mr. Speaker:: Such a motion can be presented for discussion under the provisions of Standing Order 43 only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


TRANSPORT
Mr. Bert Cadieu (Meadow Lake):: Mr. Speaker, I rise under Standing Order 43 on a matter of urgent and pressing importance. Can the Minister of Transport explain to the House why he failed to invite the National Farmers Union and other interested parties to the meeting held yesterday in Saskatoon? These groups are very much concerned with the development of the Port of Churchill and the rail authority because of abandonment of certain rail lines, and should not have been
excluded. I therefore move, seconded by the hon. member for Dauphin (Mr. Ritchie):
That the minister arrange to meet with these groups of concerned people.


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


Some hon. Members:: No.


WHEAT-REQUEST FOR INCREASE IN DOMESTIC PRICE-MOTION UNDER S.O. 43
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I also have a motion under the provisions of Standing Order 43. It is several months since the government promised an increase in the price of domestic wheat, an increase which has become crucial because of rising production costs. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instruct the government to move immediately to raise the floor price of wheat sold for domestic consumption to $4 per bushel from the existing $3.25 per bushel.


Mr. Speaker:: Such a motion can be presented pursuant to Standing Order 43 only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.


UNEMPLOYMENT INSURANCE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a matter of pressing necessity pertaining to a statement made outside the House to an Ottawa newspaper by the Minister of Employment and Immigration, with reference to a question asked in the House by the hon. member for Winnipeg South Centre (Mr. McKenzie) on the subject of the so-called Unemployment Insurance Commission internal fraud squad, namely, that it had not been disbanded but "merely reorganized and it is ever vigilant". I move, seconded by the hon. member for Winnipeg South Centre (Mr. McKenzie):
That the minister explain to the House, in view of this statement on Tuesday, why he answered question number 2765 in my name on the order paper on August 4, 1977, by categorically denying that the Unemployment Insurance Commission has a fraud squad and that he also advise whether Mr. Hi Pong No,

December 1, 1977
Radiation
a former South Korean intelligence agent, is a member of this squad particularly active in the Toronto area.


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


Some hon. Members:: No.


AGRICULTURE
Mr. John Wise (Elgin):: I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Since the Minister of Agriculture refuses to give any firm commitment that Canada's agricultural interest will not be traded off at the present GATT negotiations and consequently the real threat and possibility of further erosion remains not only to the primary producers but also to the food processors in the form of reduced revenue and the loss of jobs, I move, seconded by the hon. member for Northumberland-Durham (Mr. Lawrence):
That the government House leader give immediate approval to a reference of the Tariff Board report to the Standing Committee on Agriculture, thus giving industry people an opportunity for further consultation and input, bearing in mind that the Standing Committee on Agriculture has absolutely no legislation or order of business to consider.


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


Some hon. Members:: No.


PROPOSAL FEDERAL GOVERNMENT ASSUME RESPONSIBILITY FOR PROTECTING PUBLIC FROM HIGH RADIATION LEVELS- MOTION UNDER S.O. 43
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move an urgent motion. In view of the footdragging by the Ontario and federal governments to acknowledge any responsibility for undertaking remedial action to protect residents in March township near Ottawa from high radiation levels, I move, seconded by the hon. member for Northwest Territories (Mr. Firth):
That in the interest of public health and safety, the federal government assume full responsibility for remedial action.


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


Some hon. Members:: No.


AIR TRANSPORT
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a motion under Standing Order 43 and because it requires only the goodwill of this chamber with respect to air travellers from Atlantic Canada I feel certain it will have the support of the chamber.
I wish to move a motion under the provisions of Standing Order 43, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That this House encourage the Minister of Transport to move expeditiously in turning over to Eastern Provincial Airways the "designated" carrier rights now held by Air Canada for service from Halifax to Montreal through points in the state of Maine in the United States of America.


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


Some hon. Members:: No.


RESCINDING OF ORDER REMOVING EMERGENCY LOCATOR TRANSMITTERS FROM AIRCRAFT-MOTION UNDER S.O. 43
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, I wish to move a motion under Standing Order 43. Having regard to a directive issued by the Air Transport Commission earlier this year ordering the removal of emergency transmitters and crash site locators from both private and commercial aircraft, and having regard to at least two air crashes which occurred recently in central British Columbia involving both a rotary and a fixed wing aircraft resulting in extensive air rescue operations at monumental cost to the taxpayers, but more importantly respecting the fact that possible survivors of aircraft accidents frequently perish from exposure to the elements after the crash, I move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That the Ministry of Transport rescind the removal order immediately requiring all types of aircraft to carry the ELT equipment and that serious efforts be undertaken by the government to develop a power source for these transmitters which will not endanger the operation of the aircraft while in flight.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
December 1, 1977


AUDITOR GENERAL
Mr. Speaker:: I have the honour to lay upon the Table the Annual Report of the Auditor General of Canada to the House of Commons for the fiscal year ended March 31, 1977.
May I remind hon. members that, pursuant to Standing Order 65(1 )(q), this report is deemed permanently referred to the Standing Committee on Public Accounts,



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. I would like to ask him whether he intends to call soon a conference of first ministers and, if so, on what date?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, it is a matter which I am now discussing with the premiers during my visit in each of the provinces. I have undertaken to see them all before announcing a date or even confirming that indeed there will be a conference and what will be the agenda for such conference.


SUGGESTED INCREASED PROVINCIAL POWERS OVER CABLEVISION
Charles Joseph Clark: Mr. Speaker, I should like to put a supplementary question. In view of the judgment delivered yesterday by the Supreme Court, if there is such a conference of first ministers, does the Prime Minister intend to take this opportunity to make concrete proposals to the provinces giving them more powers over cablevision?


Pierre Elliott Trudeau: Mr. Speaker, at first sight this item on the agenda would seem far removed from the concerns of the premiers whom I met. To begin with, it would be an economic conference; we are all very concerned over the high rate of unemployment. We intend to prevent another upward thrust of inflation and it would essentially be the matter under consideration. I do not think it would be advisable to introduce the matter mentioned by the Leader of the Opposition. Moreover, he knows that we have already reached agreement with other provinces which would allow administrative arrangements or which would indicate the great flexibility of the federal government in the matter.


Charles Joseph Clark: Mr. Speaker, the Minister of Communications has suggested, I believe, a meeting of all ministers of communications to discuss matters of jurisdiction and administrative arrangements in the field of cable television generally.
Oral Questions
Can the Prime Minister confirm that such a meeting of ministers of communications will take place and can he say whether the government intends to make individual arrangements with each province or to take a common approach for all provinces?


Pierre Elliott Trudeau: Mr. Speaker, the Minister of Communications has made the same proposals to all provinces with a view to greater administrative decentralization. Up to now, the province of Manitoba has given its approval to such arrangements. I believe that discussions are going on in Saskatchewan and Ontario. However, I cannot talk as yet about the attitude of other provinces. But, again, our proposals apply to all provinces and seek to solve the constitutional problem. Since the courts have now pronounced judgment on the constitutional problem, we are coming back to our former position which was to try and find flexible administrative arrangements. I simply wish to point out to the Leader of the Opposition that when we called such a conference about a year ago, the Quebec Minister of Communications had ostentiously announced that he would not attend.


INQUIRY AS TO THE GOVERNMENT'S INTENTIONS ABOUT CONSTITUTIONAL CHANGES
Charles Joseph Clark: Mr. Speaker, is it the government's position that there will not be constitutional change now in the area of communications, but only administrative changes? Is that the federal government's final position?


Pierre Elliott Trudeau: No, not at all, Mr. Speaker. I said to the Leader of the Opposition that the courts have decided on the constitution as it stands. But as far as constitutional changes are concerned, the Leader of the Opposition is well aware that I have indicated several times, from 1968 to 1971 and from 1975 to 1977, and again in recent statements, that we were ready to consider any constitutional changes necessary to provide the country with a better constitution.


G4I7) COMMUNICATIONS POSSIBILITY OF NEGOTIATIONS WITH PROVINCES ON JURISDICTION
Mr. Heward Grafftey (Brome-Missisquoi):: The Minister of Communications being absent, Mr. Speaker, I shall direct my question to the right hon. Prime Minister. Could he tell the House whether the government has changed its policy and become involved with all provinces in a real negotiation process and given up at the same time the bilateral approach it had maintained up to now in its dealings with the provinces in the area of communications?

December 1, 1977
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I am afraid the hon. member is ill informed. In fact, not only have we been doing for a year what he is suggesting we should do, but we started doing it under the mandate of the previous Minister of Communications. We have therefore proposed flexible administrative arrangements with all provinces. Some have agreed to discuss this matter with us and have signed agreements. In this case, of course, these are bilateral agreements, but these arrangements, as I have just explained to the leader of the opposition, result from a proposition which was made to the provinces as a whole.


POSSIBILITY OF MEETING WITH QUEBEC MINISTER
William Heward Grafftey: Mr. Speaker, since the Minister of Communications made known outside the House her intention to call a federal-provincial conference on communications, can the Prime Minister tell the House whether the federal Minister of Communications will soon meet the Quebec Minister of Communications, Mr. O'Neil, before a federal-provincial conference on communications is held?


Pierre Elliott Trudeau: I do not know, Mr. Speaker, if a minister of communications, either Mr. O'Neil or someone else, wants to talk with the minister, there is always the phone, the mail and the choo-choos, I reminded the Leader of the Opposition a moment ago that Mr. O'Neil was the one who refused to attend the conference on communications we had called last year in Edmonton.


FINANCE *


EXPANSION OF NORTHERN TELECOM IN UNITED STATES IN SPITE OF TAX CONCESSIONS TO CREATE JOBS-GOVERNMENT ACTION
Mr. Edward Broadbent (Oshawa-Whitby):: Thank you, Mr. Speaker. I have a question for the Minister of Finance. The minister is aware that Northern Telecom is currently reducing its Canadian labour force by some 1,000 and he is also aware that through the budget measures the House is currently debating the same corporation will get about $2 million in special tax concessions, ostensibly to create jobs in Canada. Is the hon. gentleman aware of a report in today's press which indicates that Northern Telecom is planning to spend $15 million on new expansion, not here in Canada but in the United States, moving for the first time to computer systems in that country? If the minister is aware of this situation, what course of action does he propose to take?


Hon. Jean Chretien (Minister of Finance):: I am not aware of the article to which the hon. member has referred. I will look into it. But I would point out that under Bill C-ll companies are entitled to a tax break only if they invest in Canada. If they invest in the United States they will not benefit from the provisions of the bill.


John Edward Broadbent: The minister should take a more careful look at his legislation. There is a whole series of tax benefits to which corporations are entitled and these are not dependent upon the proviso the hon. gentleman has made. Will he look into this situation? There is no doubt about the accuracy of the report to which I have referred; the corporation is expanding into the United States and investing some $15 million there. They are getting some $2 million in special tax measures which are presently being debated in this House. If the corporation is doing this, will the hon. gentleman ensure that it does not get the money from the Canadian taxpayer?


Joseph Jacques Jean Chrétien: These are two different matters. One involves a reduction of taxes in relation to new investment. If they have no new investment in Canada, they will not get any tax break. The other is the three per cent allowance for inventory purposes, and of course this applies to any corporation with inventories in hand. This is one provision of the tax bill designed to try to help industry keep some inventory in hand and, in doing so, keep some labour working.


John Edward Broadbent: A final supplementary question, Mr. Speaker. Is the minister trying to convince the House that the $2 million which they are going to get, whether for inventory purposes or for related purposes, will create the same number of jobs as if the money were spent directly in the economy?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not sure I fully understand the argument of the hon. member. The 3 per cent production for inventory applies to all companies with inventories. One of the reasons why we have proposed this legislation is that we believe it is important to help industries carry their inventories because when they have inventories they can have longer production lines. This has nothing to do with investments. These companies will benefit from tax incentives if they invest in Canada; otherwise they will get no incentives.


HOUSING
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of State for Urban Affairs.
Last weekend the wild northerly winds reminded us that insulation is always useful. On October 31 there was a meeting in Quebec City between the officials of the Central Mortgage and Housing Corporation, the minister himself and several hon. members and on that occasion the main subject of the discussions was housing and insulation. At that time, the minister informed us that there was a possibility, in the near future perhaps, that Quebec might endorse the Canadian Home Insulation Program and that the residents could take advantage of this federal legislation. Is the minister in a position to tell us today whether there were any developments
December 1, 1977

in this area and, if so, how people will have to proceed to benefit from this program?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, there was an important development this morning at the federal-provincial conference of the energy ministers. Energy ministers for Quebec and Alberta stated that they entirely subscribed to the objectives of the government of Canada in the area of energy conservation. They also indicated their desire to implement in their respective provinces energy conservation programs, which enabled my hon. colleague the Minister of Energy, Mines and Resources to declare that he could consider the possibility of having all provinces benefit from the Home Insulation Program. Therefore I think that as soon as we have finalized the administrative measures to make the program applicable to all the provinces, we will be in a position to announce officially very soon that Quebec and Alberta will also take advantage of this program.


Joseph Adrien Henri Lambert: Mr. Speaker, in view of the Quebec government's delay in making that program available to Quebecers, could the minister tell the House whether some changes will be made to the program so that more home owners may benefit from it?


André Ouellet: Mr. Speaker, it must be kept in mind that this program will be spread over a period of seven years so that the market will not become congested, and particularly in order to prevent too large an increase in the cost of products if demand is unduly high at the outset. This program was spread over a number of years so that in the first months or the first year, older houses in Canada will be eligible. But nobody, wherever he lives in Canada, should feel discriminated against under this program. If his house is not eligible immediately, it will be as the program moves ahead. It appeared to us initially that it was more important to deal first with older houses, precisely those which needed to be insulated more urgently and promptly. But because the two provinces did not join the program immediately, some citizens in those two provinces who would normally be eligible and may have already purchased material could be left out. So we will determine in the next few days whether the program can be made retroactive in those two provinces for those who would normally have been eligible when it came into effect.


FINANCE
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Finance and it arises from the report by the Industrial Conference Board that 17 forecasters who were reviewed across this nation have all made forecasts about the economy different from that of the Department of Finance.
Oral Questions
Given this circumstance, I should like to ask the minister whether he has instructed his officials to re-examine the forecasts they have made that deal with the economy in terms of inflation, economic growth and so on for 1978?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are constantly reviewing forecasts that we make, but we have no reason at this time to change them. We have forecast an economic growth of 5 per cent for next year and a 6 per cent growth in inflation. We have mentioned those forecasts, but sometimes the forecasting game is quite difficult. For example, on October 20 I said the growth for 1977 was to be 2 per cent, and now I am proven wrong as it is going to be close to 3 per cent.


James McPhail Gillies: Mr. Speaker, given the fact that 17 independent forecasters have made forecasts that are different from those of the Department of Finance, would the minister not consider that reason for re-examination of his position? I would ask the minister whether he would be willing to do two things; first of all, would he table or make public the assumptions on which his forecasts were made to parliament so that they can be re-examined and, secondly, would he consider, given the importance of forecasts in the formulation of economic policy, and given the wide divergence between public and private forecasts, convening a meeting of leading forecasters of economic activity in Canada with members of the Department of Finance so there can be a close examination of what is really going to happen in the economy next year so our policies can perhaps be more accurate than they have been in the past?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not really see the advantage of that. I have talked to some people who agree with our figures. I do not think, because there are 17 forecasters with 17 different results that this calls for me to change our position. I suggest that we have good advisers who can make some errors just as others can. This has happened in the past because forecasting is extremely difficult. Last year the OECD and the World Bank predicted 5 per cent growth around the world and it is going to be around 2 per cent. Sometimes forecasters cannot agree among themselves. You just gave an example of 17 who cannot agree among themselves. I do not see what I would gain by having them all around the same table. We could have a good discussion but it would not change the situation.


James McPhail Gillies: Mr. Speaker, I think perhaps the Minister of Finance misunderstood what I said. The reality is that 17 principal economic forecasters from leading Canadian banks and leading Canadian trade associations-every single one of them-differed from the forecasts of the government, not among themselves. Given the importance of economic forecasting for policy making, and surely the minister would agree that we could not have a worse economic performance than we have in this country in the past few years, would he not do the sensible thing and bring this group together to try to Find out if they can improve economic operations? Surely, he must want to do this?

December 1, 1977
Oral Questions


Joseph Jacques Jean Chrétien: According to my experience, Mr. Speaker, it is very difficult to get two economists to agree completely. Very often, opposition members themselves are not in agreement on a number of areas. I took my responsibilities. I announced that, to the best of my knowledge and after talking with government advisors, the Bank of Canada and others, our forecast for next year was 5 per cent growth. I have no reason at this point to change that, especially since we had 5.2 per cent growth in the third quarter of 1976, one of the best performances among developed countries at this time.


THE MINISTRY
Mr. Roch La Salle (Joliette):: Mr. Speaker, in the absence of the Secretary of State, I would address my question to the Prime Minister.
Since some months ago, in a brief to the government-and 1 understand the Prime Minister met them on this-the Federation of Francophones Outside Quebec urged the establishment of a permanent committee of Privy Council, on which the federation would be officially represented, to prepare with the government that over-all policy for minorities. Could the Prime Minister state whether such a committee will be established?


Hon. Marc Lalonde (Acting Secretary of State):: Mr. Speaker, as Acting Secretary of State, I would like to indicate to the hon. member that consultations are now going on, and an announcement will be made officially in due time.


Roch La Salle: The Minister of State for Federal-Provincial Relations knows very well the importance that the establishment of such a commission represents for the federation. In view of a forthcoming announcement, will the minister tell the House if his government intends to approve the establishment of this commission which seems so important to the association.


Marc Lalonde: Mr. Speaker, I have already answered the question of the hon. member in my earlier reply.


Roch La Salle: I have a last supplementary question, Mr. Speaker. I know and everybody else knows that the federation is very concerned and is expecting an answer. My question is very serious, Mr. Speaker. Would the minister give the House his assurance that the federation will really be involved in the development of the overall policy that the Secretary of State intends to introduce?


Marc Lalonde: For the second time in a row, Mr. Speaker, 1 must repeat to the hon. member that there will be an

announcement in due course by the Secretary of State, after the consultations now in progress.


GOVERNMENT ADMINISTRATION
Mr. Gaston Isabelle (Hull):: Mr. Speaker, my question is for the popular Minister of Finance. Considering that the decentralization policy of the federal government affects several federal employees on the Quebec side of the national capital region and that, since the election of the new Quebec government made of idealists and middle class pseudo-proletarians, the real estate market on the Quebec side of the Ottawa river is almost at a standstill and the vacancy rate has reached 30 per cent in some sectors, does the minister intend to postpone his decision concerning decentralization at least, until the "Levesque referendum", to avoid the risk of personal bankruptcy for those many devoted civil servants?


Joseph Jacques Jean Chrétien: Mr. Speaker, we do not intend to change our decentralization policy.


HARBOURS
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, my question is directed to the Minister of Transport. Can he confirm or deny the report, while making a very substantial grant toward the container pier in Montreal, that the Treasury Board has turned down the request of the government of the province of Nova Scotia for a grant for a second container pier in Halifax, Nova Scotia?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, that is not true. Both matters are still under consideration by the government.


Robert Lorne Stanfield: Mr. Speaker, a couple of weeks ago the minister could not recall what the timing would be for the container pier in Halifax. Has he had a chance to refresh his memory? Can he give the House a firm date on which the department is prepared to recommend a second container pier for Halifax?


Otto Emil Lang: Mr. Speaker, it is increasingly evident to us the timing for increased activity in Halifax is such that construction for a new container facility would be about right to begin now.

December 1, 1977


INQUIRY AS TO DECISION ON CONTAINER PIER FOR MONTREAL
J. Michael Forrestall: Mr. Speaker, I have a supplementary question for the Minister of Transport. Is the government about to announce that it has decided to support the expansion of a new public container facility for the port of Montreal, and other related works, to the extent of approximately $85 million? Can the minister now tell the House whether that decision has been taken and will be publicly announced in the next few days?


Otto Emil Lang: Mr. Speaker, that decision has not been taken. Our analysis, that is the Department of Transport with the National Harbours Board, does agree that the need for the facility is now becoming timely. There is a time for it. The consideration of the government involves other things, including our total financial position at this time to do a variety of things that we would like to do. Therefore, the issue is still under consideration.


J. Michael Forrestall: Mr. Speaker, is the miniser indicating to the House that the government has not decided to fund, up to approximately $85 million, the cost of developing and upgrading the contained facilities for the port of Montreal, together with some other related work? Is that what the minister is telling us?


Otto Emil Lang: Yes, Mr. Speaker, that is what I am saying. As I indicated to the hon. member for Halifax earlier, both of these matters are under consideration.


INDUSTRY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. Because of the great need for producing more jobs in this country, and since one of the best ways of doing this is to process a far higher proportion of our raw materials to their finished state in this country, will the government give serious consideration to requiring those who export our raw materials to process a far higher proportion here in this country, and to also make available generous tax incentives, in addition to the DREE grants which have proved to be inadequate, to induce the construction of the additional factories which will be needed?


Pierre Elliott Trudeau: Mr. Speaker, I would remind the hon. member that we have made a clear statement of policy to that effect. We were encouraging as much processing to be done in this country as possible. As the Minister of Finance reminded the hon. leader of the New Democratic Party a few moments ago, we have given tax incentives for investment in Canada in order for these processing operations to be established in Canada with the hope that it would create more jobs.
Oral Questions
I have explained this so often to the hon. member that I am convinced that he does not have a clear grasp of the facts. I wish he would read some of my previous answers which reflect on this, and perhaps he will understand a little bit of what is involved.


Some hon. Members:: Hear, hear!


George Harris Hees: Mr. Speaker, I have gone through the intense boredom of reading the Prime Minister's answers, and there has been nothing forthcoming regarding the answer I want today. Does he not realize the tax incentives offered in the past-the DREE grants and the rest-have not done the job and will not do the job? Is the Prime Minister not familiar with the fact that many countries require those that export their raw materials to process a far higher proportion of their raw materials to their finished state than we do in Canada?


Some hon. Members:: Question.


George Harris Hees: Mr. Speaker, I am coming to the question. If the Prime Minister has got that through his thick head, will he get on with the job, instead of playing the fool in this chamber?


MANPOWER
Mr. Jake Epp (Provencher):: Mr. Speaker, my question is for the Minister of Employment and Immigration. In view of the present unemployment rate in Canada, which is indicated to be one million Canadians unemployed, would the minister explain how Canada Westinghouse is authorized to advertise for workers in British newspapers, and whether or not those applications have Canada Manpower approval?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, being a member of the Conservative Party and a strong supporter of business, I doubt if the hon. member would want us to interfere and tell that company not to advertise.


An hon. Member:: That is a cheap shot.


Jack Sydney George (Bud) Cullen: However, I can say that this does not have the backing of Manpower, and anyone that company would attempt to bring in under those circumstances would have to have skills Canadians do not have. Otherwise, they just would not be allowed into the country. They can spend all the money they want on advertising.


Arthur Jacob (Jake) Epp: The cheap shot of the minister does not need any rebuttal. The point is that we are dealing with people's lives, and one million Canadians are looking for work. Why is it we are authorizing these advertisements in foreign newspapers for skilled tradesmen and turbine fitters when we are spending a

December 1, 1977
Oral Questions
great deal of money on manpower training programs which are obviously not providing Canadians skills so that they can take those jobs? The program is not working.


Jack Sydney George (Bud) Cullen: Mr. Speaker, the hon. member talks about a cheap shot and comes out with misleading information. I indicated that these advertisements are not authorized by the government. They can spend whatever money they want, but these workers still have to clear our department. They will not clear the department if Canadians have these skills and if Canadians can fill the jobs.
I disagree with the hon. member. The training program is excellent. We buy the courses because education comes under provincial jurisdiction. The provincial governments make the determination of the kinds of skills they would like to see and the people they would like to see trained. On that basis, we buy these courses under our adult occupational training program.


SOCIAL SERVICES
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker-


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I thank hon. members for that expression. I gather they are trying to give me a good send-off for my second 35 years.


Some hon. Members:: Hear, hear!


George Harris Hees: To the Senate, Stan.


Stanley Howard Knowles: I thought I had friends here.
I should like to direct a question to the Minister of National Health and Welfare. In view of statistics out of Toronto- which I suspect would be found to be parallel to those in other parts of the country-concerning the increasing number of suicides, a large portion of them being due to unemployment or other forms of economic distress, will the minister have her department undertake a study of the social cost of unemployment with particular reference to suicides, mental illness, physical illness, family disorders and criminal tendencies so that the government, members of parliament and the people at large can be aware of how urgent it is to cope with the problem of unemployment?


Hon.   Monique@: Mr. Speaker, I have mixed feelings about my reply to the hon. gentleman. I wanted to join with my hon. colleagues in this House in congratulating him on his long tenure of office and the work he has done on many government programs, but he just made an assumption which is so serious-and I am tempted to say almost bearing on irresponsibility-


Some hon. Members:: Oh, oh!
[Mr. Cullen.1


Miss Begin:: -that I feel obliged to emphasize that there are no facts to justify relating unemployment to the rate of suicides. My department is monitoring this, and this was one of the first dossiers on which I asked for a briefing. We are monitoring and following the work of agencies in the private and para-public sector which are particularly good at analyzing social factors and other factors leading to suicide. The group of people which preoccupies me most is the one comprised of young people. I do not have at this moment a report on that, but before answering other questions on this topic I would like to verify exactly what the hon. member is referring to by talking with him later on.


Stanley Howard Knowles: 
REGIONAL ECONOMIC EXPANSION
Mr. Pierre De Bane (Matane):: Mr. Speaker, my question is for the right hon. Prime Minister.
Considering that newspapers report again that the government intends to eliminate the Department of Regional Economic Expansion and other departments, could the leader of the government tell us if there is some truth in that information which was published again yesterday to the effect that the government intends to eliminate the Department of Regional Economic Expansion?


Pierre Elliott Trudeau: Mr. Speaker, 1 think that the minister himself indicated that those rumours were false. I shall simply add that they might originate from the fact that, more and more, we hear the premiers, their ministers and newspapers congratulating the government for its initiative, recapitulating the amounts spent during the eight or nine years of existence of that department and asking the federal government to continue that beautiful enterprise. I can say to the hon. member that we are satisfied that those rumours give to those who were against it, including hon. members of the party opposite, the opportunity to realize the great utility of that department.
December 1, 1977


CANADA COUNCIL
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, my question is to the President of the Treasury Board. Do all Canada Council contributions have adequate financial documentation?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I will look at each document and give the hon. member a detailed answer. Generally speaking, I presume the arrangements are acceptable, but there have been sone queries, and I believe the Auditor General has looked at that.


Robert Lloyd Wenman: Do recent Treasury Board directives regarding government grant and contribution accountability apply to the Canada Council and, if not, why not?


Robert Knight Andras: I will be glad to go into that in detail with the hon. member when I appear before the committee.


Charles Joseph Clark: Why not now?


ROYAL CANADIAN MOUNTED POLICE
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Solicitor General. It relates to the Ontario government's inquiry into the availability and use of confidential medical reports obtained from the Ontario Health Insurance Program. Is it the policy of the Solicitor General and the government to co-operate fully in assisting this Ontario inquiry?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, it is always our policy to co-operate fully with any provincial commissions of inquiry when they are referring to matters within their jurisdiction.


Some hon. Members:: Oh, oh!


William Herbert Jarvis: I welcome this good news about a change of policy. What seems to be at issue in the Ontario inquiry are the procedures used by security units representing various levels of government to obtain this confidential medical information. I therefore ask the Solicitor General if he intends to be forthcoming and open in providing the Ontario inquiry with the procedures and methods used by any security unit under his direction or control.


Francis Fox: Mr. Speaker, there is only one security service under the aegis of the RCMP, and the hon. member knows full well which one it is. I can only relate that it is our intention as usual to co-operate fully with the legitimate demands of any
Oral Questions
provincial commission of inquiry, as we have done in the past and will continue to do in the future.


Charles Joseph Clark: Until you can get them thrown out of court.


UNEMPLOYMENT INSURANCE
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Some years ago at a time of high unemployment a program was initiated in Moncton entitled "Do it Now". Subsequently there was a national program to encourage local citizens as well as business and all levels of government, to undertake necessary projects at home, in the office, in plants and in government, positively supporting the need for employment in areas such as the Moncton constituency and others in the Atlantic provinces. Would the minister now consider putting an immediate halt to the Unemployment Insurance Commission's promotion of UIC benefits and start promoting a program of employment to encourage citizens, corporations, governments, Crown agencies, Crown corporations to endorse work and employment projects by "doing it now" while men and materials are available?


Jack Sydney George (Bud) Cullen: Mr. Speaker, first of all with respect to the preamble, I would indicate that the advertisements being placed now are for the information of those who might qualify or who are presently qualifying and is the kind of factual information that I think they need. I agree with the hon. member that the particular program he mentions seemed to catch attention at that time and was quite imaginative. I am prepared to look at it. The insulation program and others indicate that the government is in fact "doing it now" and not waiting for spring.


EXTERNAL AFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, may I put a question to the Secretary of State for External Affairs concerning the decision of the People's Republic of China to refuse readmission to China of the Globe and Mail correspondent Mr. Ross Munro upon completion of his current assignment-the similarity in the name is purely coincidental. In light of the fact that no substantive reasons have been given so far for this action by the Chinese authorities, and as it is my understanding that the Canadian authorities are generous and understanding with respect to the movement of Chinese correspondents in this country, will any action be taken by this

December 1, 1977
Oral Questions
government to protest this infringement of the rights of journalists in that country?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I am, of course, familiar with the case the hon. member mentioned. He used words such as "infringement". 1 am not sure if in the truly legalistic sense there is any infringement. As I understand the matter, a limited extension was being sought and the Chinese authorities did not choose to renew or extend. Therefore, whether there is a basis upon which to lodge a formal protest in diplomatic terms, is not clear. In so far as the gentleman himself is concerned, the last information I had was that there had been no request to us by him personally or by his employers to take any action. As I believe the hon. member is aware, that is normally the basis of such action. We are continuing to keep the matter under review but at the moment in any event it does not appear that any useful purpose would be served. I might say that I have also had discussions with the Chinese authorities with a view to opening considerably the access by Canadian journalists within China in a general way.


Donald W. Munro: A supplementary question, Mr. Speaker. Perhaps the word should have been "curtailment" of the activities. It is my understanding that the Canadian embassy in Peking has protested on a number of occasions, two at least to my knowledge, about the freedom of movement within that country. Despite what the minister said about steps he has taken, I wonder whether he can indicate to the House any positive steps he is taking to ensure that western journalists will be able to report freely on things going on in China, as they see fit, for Canadian and western readers.


Donald Campbell Jamieson: Mr. Speaker, to elaborate on the latter part of my previous answer, during a visit of the foreign minister of the People's Republic of China, I made a general representation to him about greater access by Canadian journalists. In addition and subsequent to his visit, at least two representations have been made specifically on behalf of Canadian journalists to my knowledge so in that sense we are indeed urging them to provide more access to Canadians. I have not seen the results of those representations yet, but the general reaction appears to be encouraging.


SOCIAL SECURITY
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, may I put a question to the Minister of National Health and Welfare. Last week in response to questions the minister said that in order to finance the guaranteed annual income she would, to quote her exact words, "take away from those who do not need universal programs" in reference to family allowances and old age pensions. In view of the stir this has caused among old age pensioners in particular, would the minister explain what in

her view constitutes the people who do not need universal programs with reference to the family allowance and old age pension.


Hon.   Monique@: Mr. Speaker, I do not know if the hon. member was present at the meeting of the Standing Committee on Health, Welfare and Social Affairs which I attended yesterday afternoon for the second time, when the estimates of my department were reviewed and when I clearly explained that our programs-which reflect the position of the government and obviously has my full support-to which he is referring are universal and that there is no way they are going to be modified.


Paul Yewchuk: Mr. Speaker, I do not think it is appropriate for the minister to say I was not at the committee meeting when she came in only for the last 20 minutes of it herself. In dealing with this question she did not clarify it but simply waffled on it. I should like the minister to tell the House what she meant when she said she would take away from those who did not need the universal programs. She has not explained that in committee, has not explained it in the House and I think she owes the country an explanation.
[ Translation]


Monique Bégin: Mr. Speaker, we are talking here of social security and the objective of the government as well as that of my department-and I have stated it repeatedly-is to detect the weakest groups in our society, those which are the most in need, so as to grant them additional help.


REGIONAL ECONOMIC EXPANSION
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is for the Minister of Regional Economic Expansion. In view of the fact that his department recently announced a $2,657,500 incentive grant to the Merloni Finanzaria group of Italy to establish a factory in Quebec to manufacture small refrigerators and freezers, and in view of the fact that other Canadian manufacturers in this market, specifically, the Canadian Manufacturing Appliance Company Limited of London, Ontario, has already told its work force that the small appliances market is soft and all indications are for continuing soft markets and future lay-offs may result, can the minister tell this House why his department is using the taxes of Canadian workers to subsidize a foreign corporation in Canada and create unemployment in Canada?
[ Translation]


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: It is a fact, Mr. Speaker, that an offer has been made to this company which will establish itself in Quebec in the near future and I should also tell the hon. member that last
December 1, 1977

week we again made an offer to another business concern, which will open in Moose Jaw, Saskatchewan, and which will also manufacture small refrigerators. These two firms are going to be of a highly specialized character. They are going to satisfy the needs of the Canadian market and also those of an export market.
In the case of the firm to which the hon. member is referring, its production will be exported mainly to the United States to replace products that are already being exported there from Italy by a similar firm. We then expect to conquer this American market with products manufactured in Canada, and the result of which will naturally be the creation of jobs in our country.


John R. Rodriguez: Mr. Speaker, a supplementary question. The minister says that the Merloni group will be aimed at the export market. In view of information given to me by his department to the effect that only 50 per cent of their production will be in the export field and in view of the fact that markets in Canada are soft at the moment, can the minister tell the House what steps he has taken to guarantee that the company will not be taking Canadian money and then making sales in an already soft Canadian market which can only exacerbate employment conditions in Canada?


Marcel Lessard: There is indeed a guarantee which has been required from this firm. It is that it will not manufacture refrigerators of nine cubic feet or more already being produced in Canada or which were manufactured here till recently. This firm will specialize in small refrigerators and it has given us assurances that it will restrict its production, at least for a given number of years, to these small refrigerators. The market it is seeking as a target is largely American, and it naturally entails possible access to part of the Canadian market.

]English]


EXTERNAL AFFAIRS
Mr. Jack Murta (Lisgar):: Mr. Speaker, my question is to the Secretary of State for External Affairs. Has Canada agreed or offered to supply some 50,000 tons of feed grain to the proposed emergency world food bank that was in the news some months ago? If so, is the minister prepared to say when that emergency food bank will be in operation?


Donald Campbell Jamieson: Mr. Speaker, I thank the hon. member for having given me notice of this question. As a result, I can tell him that the 50,000 tons, costing about $7*/2 million, which I announced at the United Nations is part of a total amount in the
Ministerial Responsibility
emergency food reserve of the 500,000 tons. Therefore, our percentage is 10 per cent. This is only about one per cent of the total of nearly 50 million tons of wheat and flour which went into world export trade last year. In terms of any impact it is likely to have on pricing, it is generally regarded by all concerned as being minimal or insignificant.
With regard to the timing, I am not clear as to whether this will be put in at one particular time or how it is going to be drawn from the overall worldwide fund. However, the agency acting for Canada in this regard will be CIDA.


Jack Burnett Murta: The important aspect of the minister's answer is who pays for the grain. This is what the western grain farmer wants to know. Can the minister advise whether that money will go from the federal government to the wheat board to be paid to the Canadian farmer or will it come from CIDA? What method does the government intend to follow in terms of payment?


Donald Campbell Jamieson: If I understood the hon. member, the situation is as he described it, namely CIDA is the purchasing agent. It is a purchase from the wheat board in the normal fashion.


PRIVILEGE
Mr. Speaker:: Order, please. A question of privilege and a point of order was taken a few days ago. I was asked by the hon. member for Saskatoon-Biggar to find disorder, and by the hon. member for Grenville-Carleton to find privilege as a result of events which took place during the question period on November 28. I would like to try briefly to deal with that matter now. It arose out of questions put initially by the right hon. member for Prince Albert to the Solicitor General, but in his absence, and I quote:
-I would like to direct a question to the Acting Solicitor General, namely, the Minister of Consumer and Corporate Affairs-
Subsequently, when that first question was answered by the Minister of Justice, a supplementary question was asked. He said, "The Minister of Justice was one of the two applicants along with the Solicitor General and being the custodian of the Queen's conscience, if the Solicitor General was asked to appear, what would happen?" The third question by the right hon. member was whether the government or the Minister of Justice was going to take a decision. The first supplementary by the hon. member for Perth-Wilmot was in the following terms:
Mr. Speaker, my supplementary question is to the acting minister who, according to the Journals branch, is the Minister of Consumer and Corporate Affairs. However, I suppose pro tern it is the Minister of Justice.
The points of order and question of privilege ask me to find that that is against our procedures. I bring to the attention of

December 1, 1977
Ministerial Responsibility
hon. members the exact wording of Standing Order 39(5) which is as follows:
Before the orders of the day are proceeded with, questions on matters of urgency may be addressed orally to ministers of the Crown-
I stress the word "ministers"; it is plural.
-provided however that-
The rule goes on to cite other aspects which are not relative to this particular argument. The fact that the plural is used in that Standing Order has always been interpreted in such a way as to permit questions to be put to the ministry in general. The question is whether the Chair can direct or require that those questions be put to an individual minister and in turn require that minister and no other to make an answer.
Our practice is based on the authority of the Chair to regulate the question period largely through disallowance of questions or answers which are out of order. Thus, questions which do not relate to the administrative responsibility of the government in general are disallowed, as are those which do not relate to a minister's administrative responsibility but, rather, relate to the minister's personal views or political or geographic responsibility.
Just as the Chair has the authority to prohibit questions, it equally has the authority to disallow attempts to answer which would equally constitute offences against those well-established practices. However, no authority exists in the Chair or in the House, for that matter, to compel an answer or to pass judgment on the quality of an answer if one is given. There are obvious sanctions in the political sphere, but none in our procedures for the obvious reason that it would be impossible to determine when any such requirement had been properly complied with. It is clear therefore, that when a question is put to an acting minister, no disorder or privilege can be found if that specific acting minister does not answer the question. Therefore, I must set aside the point of order and question of privilege on those grounds.
Can I find disorder or privilege in the fact that answers were given by another minister? Our practice in the absence of ministers has included a variety of responses, sometimes by the Prime Minister or his deputy, sometimes by acting ministers or by parliamentary secretaries, and on other occasions by other ministers who share responsibility for the particular jurisdiction or perhaps share a special responsibility for the particular subject matter of the question. In the case at hand, the subject concerned the Keable inquiry and, more specifically, an application to the courts to which the Minister of Justice was or is a party. There is no authority which I can discover which would have enabled me to prevent the minister from answering that question, provided his answers were in other ways in conformity with the procedures I set out earlier. They were in conformity with such procedural requirements and this is so regardless of which of those several capacities the minister is drawing upon to present an answer.
In various circumstances, hon. members who have put questions in the absence of ministers have expressed a preference that the question be answered in one of the ways I have set
[Mr. Speaker.)
out, that is, by an acting minister, the parliamentary secretary, the Prime Minister, his deputy, or by another minister. In other circumstances, when an attempt has been made to answer the questions in that way, members have objected. Sometimes even in the presence of the minister to whom the question is directed, that minister will refer all or part of the response to another minister with whom he may share responsibility or who may, in the particular circumstances, be more knowledgeable about the particular subject matter.
However, I think in the final analysis it reduces itself to this. If any of these practices of sharing or referring questions in any way raises complaint, there is no action the Chair can take because, reduced to the final criterion, if no answer is offered by any minister in any capacity, none can be compelled by the Chair. Accordingly, I am unable to find, in the given circumstances, any matter of disorder or privilege.


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I notice, but it may have been an omission, that in the course of your reasons for judgment today, you ignored any reference to the order in council that had been filed with the appropriate office of the Journals branch by the government of the day indicating to us the acting minister in each capacity as well as the second acting minister. Your Honour ignored that for the purposes of your reasons. You may want to comment on it. I presume the government did not file that order in council with the Journals branch of this House of Commons for nothing. They must have meant this to apply somewhere. This is something Your Honour may wish to comment on after I resume my seat. One begins to wonder what orders in council can be believed when the government openly files one to direct us to something and we suddenly find that in the course of answering questions in the House the government ignores its own order in council or the reasons behind it. There is that question as well.
That is not a question for the Chair. Quite frankly, it is a question of credibility. In any event, Your Honour did not deal with it from the point of view of the order in council, and that was part of my question of privilege. If Your Honour does not wish to deal with it today, that is all right with me, but I should like to have a ruling on the question of the order in council because I feel it is an important one.


Mr. Speaker:: I think that upon reflection the hon. member will find that the pronouncement I just made does have application to the matter. It comes down to the point the hon. gentleman has made. It may touch on matters of credibility or of courtesy, but in the final analysis even if I accept that the Acting Solicitor General on the day the complaint was made was, in fact, the Minister of Consumer and Corporate Affairs-which may or may not have been the case-it seems to me impossible for the Chair to question the capacity in which a minister enters a discussion and attempts to make an answer, as long as the procedure is otherwise correct. If he were out of order, I would, of course, have to stop him whether or not an acting minister had been designated and was seated
December 1, 1977

beside him at the time. Whether this touches other considerations may be a matter for discussion, but there does not seem to be any procedural sanction for that practice.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, may I ask the government House leader the usual business question? I am particularly interested in the matter of the designation of the last allotted day. There have been discussions, and the date December 6 was mentioned, but when the matter was subsequently raised the spokesman for the party opposite stated it would be agreeable to set it for Thursday, December 8. Would the hon. gentleman confirm this? Also, I have received some inquiries about the possibility of a recess over the Christmas period. Could the House leader tell us the plans of the government with respect to that?


Mr. MacEachen:: The date of the final allotted day will be December 8. I understand that this date would be more convenient for hon. members opposite, and it is designated accordingly. As to the other question, it is my intention to suggest that the House adjourn for the Christmas break on December 21 and resume on January 23, 1978. That is the objective; it has not been put into a motion yet.


Mr. Speaker:: It might be appropriate for me to indicate now, in relation to the business of supply, that the only indication I have had of dispute over legislative items or argument about items contained in the estimates and supplementary estimates was that given yesterday by the hon. member for Calgary Centre (Mr. Andre). So I am informing the House that those items to which he referred are the two items which will be argued tomorrow before orders of the day.



ROUTINE PROCEEDINGS


[Stage Direction]
Second report of Standing Committee on Management and Members' Services-Mr. Coates.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]
References to Standing Committees COMMITTEES OF THE HOUSE

Allan Joseph MacEachen: Mr. Speaker, I should like to seek the consent of the House to have references made to two standing committees. I would hope consent to these motions could be given without debate, otherwise I would not proceed with them at this time. One motion has to do with referring the document entitled "The Management of Canada's Nuclear Wastes" to the Standing Committee on National Resources and Public Works.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: There has been a request that this be done, and if there is no objection I would proceed at the present time.


Mr. Speaker:: Does the Deputy Prime Minister have leave to move that motion?


Some hon. Members:: Agreed.


Allan Joseph MacEachen: Thank you, Mr. Speaker. I move:
That the document entitled "The Management of Canada's Nuclear Wastes", tabled November 22, 1977, be referred to the Standing Committee on National Resources and Public Works.


[Stage Direction]
Motion agreed to.
Donald W. Munro: With respect to the tabling just now of this report-


An hon. Member:: It was tabled long ago.


Donald W. Munro: It was tabled, then, and it has now been referred to the committee. Would this preclude consideration of the report by the Standing Committee on Fisheries, Forestry and the Environment? The report is one which has important environmental implications, and 1 am wondering whether it might not be referred at the same time to the standing committee I have just mentioned.


Allan Joseph MacEachen: It would be difficult, I think, to have two committees seized with the same report. Nevertheless, it might be possible to give consideration to accommodating the hon. member's interests. The Standing Committee on National Resources would certainly co-operate to achieve that objective.
The second motion has to do with the reactivation of the Joint Committee of the Senate and the House of Commons on the national capital region. The motion is somewhat lengthy. It has been circulated, I understand, to hon. members opposite.


Mr. Paproski:: No.


Allan Joseph MacEachen: I understood it was circulated some days ago. However, it might have been mislaid in the delivery system. Perhaps what I should do, Mr. Speaker, is read the motion and if hon. members have any objection or question, or if they wish for further consultation, I would defer moving it until a later date.

December 1, 1977
References to Standing Committees


Mr. Speaker:: Perhaps the minister could do that first, and then we could see whether there is an objection.


Allan Joseph MacEachen: The proposed motion would read:
That a special joint committee of the Senate and House of Commons be established to consider and report upon matters bearing upon the development of the national capital region, including the programs and operations of the National Capital Commission;
That 15 Members of the House of Commons to be designated by the House at a later date be the members on the part of this House of the special joint committee;
That the said committee have the power to send for persons, papers and records and examine witnesses; to sit during sittings and adjournments of the House; to print such papers and evidence from day to day as may be deemed advisable; and to adjourn from place to place within Canada;
That the said committee present a final report within 90 days of the adoption of this resolution taking into account the evidence given before the Special Joint Committee on the National Capital Region established in June, 1975, and the evidence given before the newly established joint committee;
That a message be sent to the Senate requesting that House to unite with this House for the above purpose, and to select, if the Senate deems it advisable, some of its members to act on the proposed special joint committee;
That the quorum of the Special Joint Committee on the National Capital Region be fixed at eleven (11) members, provided that both Houses are represented, whenever a vote, resolution or other decision is taken, and that the joint chairmen be authorized to hold meetings to receive and authorize the printing of evidence, when a quorum is not present, so long as five (5) members are present, provided that both Houses are represented; and That the Special Joint Committee on the National Capital Region be authorized to retain the services of advisers and such additional professional, stenographic and clerical staff as is required during the committee's consideration and review of matters bearing upon the development of the national capital region.


Mr. Speaker:: Does the minister have the consent of the House to propose that motion at this time?


Stanley Howard Knowles: Mr. Speaker, despite my permanent caveat against joint committees, I will not object to the putting of this motion.


Joseph Adrien Henri Lambert: Mr. Speaker, I just want to make a remark. I would very much have liked to receive the text of this motion in the two languages, because I feel more comfortable with the French language. So I thank the gentleman who just brought it to me and I might add that I agree with this resolution.


Mr. Speaker:: The House has given its consent to the motion proposed by the minister.


Leonard C. Jones: Mr. Speaker, I do not agree with this motion.


Mr. Speaker:: Order, please.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 66, 178 and 457.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.
[ Text]


Mr. Jones: Are any Department of Industry, Trade and Commerce posts located in (a) England (b) France and, if so, in each case, how many?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: There are two posts located in Britain, namely, London and Glasgow and one in France, Paris.


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


Mr. Alan G. Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: 1. As at October 3, 1977 eight, of which none is a retired public servant.
2. (a) 1975-76, $2,140.70. No retired public servants were contracted during this period, (b) 1976-77, $25,886.91. No retired public servants were contracted during this period.


Mr. Leggatt: In each fiscal year since 1970, what amount was spent in the Constituency of New Westminster by the Department of Consumer and Corporate Affairs and those agencies that report to it?


Alan Gray Martin: Consumer and Corporate Affairs Canada does not record expenditures by constituency. Therefore, exact amounts spent in the constituency of New Westminster are not available.


Mr. Dick:: On a point of order, Mr. Speaker, I did want to put a question to the Parliamentary Secretary to the President of Privy Council. In the first session of this parliament 1 put a question on the order paper on June 15, 1976, No. 5,752. This was moved forward to the second session, where on Monday, June 6, 1977, it was question No. 1,380. It has now been moved forward into this third session, and on Monday, November 28, appeared as question No. 29. I am wondering whether the Parliamentary Secretary to the President of Privy Council would indicate when the government is going to answer this question, which deals with Consolidated Computer
December 1, 1977

Incorporated and the government's involvement with that company.
Another matter which concerns me, and in connection with which I may have been losing certain rights, is that prior to this session I put a series of questions on the order paper during the second session of this parliament which dealt with the Department of Regional Economic Expansion, and in particular the Pembroke-Renfrew designated area. These were questions Nos. 2,559 and 2,623 in the second session of the thirtieth parliament.
On October 14, before the third session commenced, I received a telephone call from the office of the deputy minister of the department in which he suggested that the answers to these questions be made orders for return, on the understanding that the answers had already been prepared and that they could be tabled on October 20 or 21. On October 17 the questions were made orders for return, but they have not yet been tabled. I did not put my questions back on the order paper, in view of the undertaking given on the government side of the House, because I did not want to confuse the situation and have to wait another three months for a reply.
On October 27 I wrote to the office of the President of Privy Council, and on November 10 received a reply from his parliamentary secretary in which he indicated that those questions were not yet ready for tabling, in spite of the fact that 1 had been told by the Department on October 14 that they were. He indicated there was a translation problem; they had not been translated. We are now a long time past that date, and I am wondering when I might expect these answers. I have tried to co-operate by not confusing the order paper by placing the questions on again.


Yvon Pinard: Mr. Speaker, we will look into it.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, November 30, consideration in committee of Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds-Mr. Chretien-Mr. Turner in the chair.
The Deputy Chairman:: Order. House again in committee of the whole on Bill C-ll, an act to amend the statute law relating to income tax and to provide other authority for the raising of funds. When the committee rose yesterday, clause 6 of the bill was under consideration. Shall clause 6 carry?
On clause 6-Exchanges of property.
Income Tax


Mr. Crosbie:: Mr. Chairman, I spoke on this clause yesterday, so I will not take too much time provided we get answers to the points we are making. The minister was not here yesterday, but I imagine that this morning he read Hansard and knows the points which were raised. I want to put a few questions to the minister about the home insulation program. A provision in this clause makes taxable grants to people under the home insulation program in six of the provinces of Canada, namely, Newfoundland, New Brunswick, Ontario, Manitoba, Saskatchewan and British Columbia. These provinces have entered into an agreement with the federal government. I understand that today the energy ministers are meeting at a conference in Ottawa. The provinces other than Nova Scotia and P.E.I. are very upset at the program, in view of its discriminatory features, and they are proposing changes or perhaps a new program of their own. I further understand that Quebec and Alberta may now join the program. This means that eight provinces will be discriminated against, instead of six.
The point I am making is that under the program people in these six-or it may be eight-provinces who receive a grant to insulate their homes better, to a maximum amount of $350, must add that to their taxable income. This is only one aspect of the discrimination of the program in the six provinces compared with the program in Nova Scotia and P.E.I. where the amounts are not taxable.
I am sure that the minister is not a minister of finance who wants to bring into this House discriminatory legislation. I do not think the minister wants to see taxpayers in Quebec, Ontario, Newfoundland New Brunswick and so on, treated differently from the taxpayers of Nova Scotia and Prince Edward Island. I am, therefore, asking the minister if he will agree to remove this particular provision from clause 6, namely, subclause (5) which permits the government to carry out its announced intention of making the grants taxable.
I should like to see the home insulation program changed entirely, but I am not going to speak at length now because members from other provinces may want to speak on it. However, I do have a number of questions to ask, and the first is whether he will withdraw this discriminatory provision. I suggest it makes no sense. I cannot see any reason for the government of Canada telling recipients of grants in these provinces that they must add the amount to their taxable income and pay tax on it. Taxpayers of P.E.I. and Nova Scotia do not have to add their grants to their taxable income. I say it is an outrage. It takes my breath away. I find it so dumbfounding I can hardly speak. Indeed, I wish I knew another language to speak, such as Afrikaans or something, because I find this so repugnant and it is why the Canadian public must know about it.
Secondly, how much do the officials estimate they will get from this tax, in terms of revenue? For example, the program has been extremely unpopular. It started last January in the two provinces of Nova Scotia and Prince Edward Island. The new program in the other six provinces started on September 1. They all accepted with great reluctance. My information

December 1, 1977
Income Tax
is-and the minister can confirm this-that as of November 25 of this year, just six or seven days ago, there were only 5,096 applications received by CMHC for grants under this program, rather than the several thousand a day they were expecting from six of the ten provinces of Canada. I understand 2,270 cheques had been mailed out, for a total of $508,000.
It appears that this program is not popular with the public which has realized its tremendous inadequacies. The public is not very keen on it. I compare that to the situation in P.E.I. and Nova Scotia, Mr. Chairman. In those two provinces, up to June 9, and I only give the figures to June 9 because that is all I have, because of the improved nature of their program-a much better program they have been given-there were 28,106 applications received, just from these two small provinces, with 15,845 approved, with 4,717 grants paid up to that date. That is just in those two small provinces. The amounts that have been spent in respect of the ones that have been received and approved is $5,749,000. We can see that this is a very popular program in Nova Scotia and P.E.I., and justly so. It is a good program there. It is a better program. They get a better grant. They do not have the same restrictions, and the people down there are applying for it, whereas in the other provinces it definitely is not very popular.
I should like to ask the minister whether he can give us what his people calculate he is going to get in tax revenue by making these grants taxable in the other provinces? The estimate given by the Minister of Energy, Mines and Resources of what the program would cost across Canada in the other eight provinces, had they all gone into the program, not including Nova Scotia and Prince Edward Island, for the seven-year duration from September 1 to September 31, 1984, was potentially $1.4 billion. It was estimated that this year the program is going to cover 133,000 units, at a cost of $45 million. That forecast certainly seems wildly out, Mr. Chairman, if my information is correct that there are only some 5,000 applications, with only $500,000 spent to date. We are now at the beginning of December and we have this month, January, February and March-four months left in the fiscal year-and it seems very unlikely that the program is going to cost $45 million in this year or that it is going to cover 133,000 units. The estimate given for next year, 1978-79, is that it would cover 462,000 units, at a cost of $145 million. There is no indication, from the acceptance of the program to date, that this will be so at all.
I want to start with two questions. I have a lot of other questions and a lot of other observations too, but I am sure other members have so I will start with these two questions, Mr. Chairman. Will the minister tell us why he is discriminating against eight provinces in favour of two? Secondly, would the minister tell us what revenue he thinks he is going to pick up from that provision this year? In addition, what are the new figures in respect of what it is going to cost? It certainly is not going to cost $45 million.


Joseph Jacques Jean Chrétien: Mr. Chairman, perhaps I could save some argument if I explained now that there are two different programs. One was introduced because of a particular situation in Nova Scotia and P.E.I. Those provinces are almost completely dependent for their power on the importation of oil. Prince Edward Island is 100 per cent dependent on oil for its power. As you know, the cost of this energy has increased at the fastest rate anywhere, and faster than all other alternatives available. In terms of Nova Scotia, it is 84 per cent dependent on imported oil.
When we introduced that first program it was because we realized we needed some flexible policy. This is why we have some policies that apply under regional economic expansion, and so on, in different regions of Canada depending on their problems. The Canada Works program does not provide the same amount of money to everybody, and nobody claims that it is discriminatory because the situation is different in some areas than in others. We started that program with $500 in Prince Edward Island and Nova Scotia. After that we realized that this was a good means of saving some energy, perhaps other types of energy, and we decided to introduce a new program for the rest of Canada in the amount of $350. This was introduced by the Minister of Energy, Mines and Resources. It was decided that, rather than give $250 to everyone, it was better to give $350 with a tax on it. In this way the benefit to the rich from the program would be less than to a person who does not pay tax at all. This is another form of equalization. If we followed the other route with the money available to the government we would have given $250 to everyone, whatever their income. We decided to make the amount higher, but some will have to reimburse part of it if they are making greater revenues. I believe there is some element of justice there between the rich and the poor provinces.
There are two different programs. The one for P.E.I. and Nova Scotia had been established for the reason that these were the only two provinces so dependent on oil imports-100 per cent in P.E.I., 83 per cent in Nova Scotia, 32.5 per cent in New Brunswick, 1.7 per cent in Newfoundland and only 0.3 per cent in the province of Quebec.


John Carnell Crosbie: What are your figures?


Joseph Jacques Jean Chrétien: Mr. Chairman, I just explained that we decided on this program because of the added cost of oil in the Canadian economy to those provinces dependent on imported oil for the development of electricity rather than other forms of energy. We started that way, and expanded the program to cover other provinces with a different type of scheme. I just wanted to give that explanation. It is not my program, it is the program of the Minister of Energy, Mines and Resources. He decided to go with the $350 on a taxable basis rather than $250, not taxable, because we did not want to give exactly the same subsidy to each of the provinces, rich and poor.


Joseph Adrien Henri Lambert: Mr. Chairman, I should like to make a few remarks on this program which is likely to improve
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the homes built before 1921. At first, this program was not available in the province of Quebec because of the reluctance of the provincial government. Elowever, according to the reply given today by the Minister of State for Urban Affairs (Mr. Ouellet), it seems that the negotiations are making good progress and that Quebecers will finally be able to avail themselves of this program. But the Minister of Finance should not take away with one hand what a department is giving with the other.
It is unthinkable that this grant, which is not very large but will nevertheless prove useful, should be taxable. For instance, in the case of a wage-earner with an income of some $10,000, the taxation rate is, let us say, 15 per cent; so he is then very likely to have to pay out the $350 he may have received as an insulation grant. That is why I feel that the Minister of Finance should reconsider his position and look very seriously into the purpose of that isolation program. It is not designed to help millionaires who live in well-insulated residences, but it is aimed at low wage-earners who live in houses which, while comfortable, are not adequately insulated. Heating costs are higher and there is less comfort. Such are the conditions in most houses built before 1921.
I do not want my comments to be considered as being against the program, on the contrary. I would like it to be extended. That is why I asked the Minister of Urban Affairs today whether it would be possible to make up for lost time. He held out some hope saying that he would do his utmost to make the program and the applications filed in Quebec and Alberta retroactive under the regulations.
I realize that the Minister of Finance has a very heavy responsibility and that he must find funds to cover the administrative costs of all departments. However, it should not be merely an accounting procedure. If the Department of Urban Affairs or the Department of Industry, Trade and Commerce gives $350 to an individual, a home owner will have to refund $275 in his income tax return. It is no longer a $350 grant. This must be watched closely. I ask the Minister of Finance to reconsider seriously whether it would be possible for him to find some other sources of income and to remove from Bill C-ll the clause which will specifically make taxable as income a grant which will surely become less effective if Bill C-ll remains in its present form. I always consider that this will particularly apply to low and middle income people. Considering that the purpose of this program is precisely to help those people, I think we should not trick them, we should not give them the cards to take them back immediately after; of course, they shall never win if we take the cards back after giving them. I ask very seriously to the Minister of Finance to introduce an amendment to Bill C-ll, and I think that all Canadians will be very thankful for this.


Mr. Chr6tien:: Mr. Chairman, to answer the hon. member, I think that the purpose of taxation in an area such as this one is to make the subsidy more useful to low income people than to people who pay a lot of taxes. This was considered the most
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favourable way to enable people in the lower income brackets to have $350, because probably they do not pay much tax or they pay no tax at all. Those people will not be taxed. The higher the income, the higher the tax to be paid on this amount.
Of course, we always have a difficult choice to make in public administration. What is the best method to spend the available funds? We thought we should use this method and that it was preferable to give $350 to the poorest people than to give $250 to both rich and poor people.


Mr. McGrath:: Mr. Chairman, I should like to make a few brief references to the remarks of the hon. member for St. John's West and the response of the minister thereto. I was astounded when I heard the minister's rationale for making a distinction between Prince Edward Island and Nova Scotia on the one hand, and the other six provinces on the other hand that are coming in under this program for the $350 taxable grant. It makes no sense and it does not stand up to scrutiny and analysis. Surely the minister must realize that.
We are not dealing with the cost of electricity. It is the cost of heating homes that we are dealing with. Surely that was the rationale behind the grants in the first instance. If it is looked at from that basis, then the minister's arguments do not hold at all. In Newfoundland, over 70 per cent of the homes are heated by oil, the same offshore oil which has to be imported into Prince Edward Island and Nova Scotia. In Prince Edward Island, approximately 98 per cent of the homes are heated by oil. In Nova Scotia, approximately 90 per cent of the homes are heated by oil. Thus, why make a distinction? It really defies logic and it makes no sense.
The only reasonable rationale one can arrive at is that there was election fever in this country last summer. Presumably the word went out from the Prime Minister to all ministers to put together whatever programs could be used as part of an election platform. In this regard, the government had the program implemented in Nova Scotia and Prince Edward Island. It was designed to come to the rescue of Gerry Regan and his Liberal cabinet in Prince Edward Island which was in trouble at the time. This program was generous and adequate, but certainly not overly generous. Each householder could receive $500 tax free for the purpose of insulating a home or helping toward the cost of insulation. Quebec and Alberta refused to go along with the program because there was no adequate consultation with the provinces.
The government decided this would look good on an election platform-$350 to every Canadian householder for the purpose of insulating homes. One can get away with that in election rhetoric and on an election platform. My colleague has indicated that one would be required to spend over $500 in order to receive the $350 which was taxable; so this hastily conceived and hastily executed program came into existence. Now it is a total flop and a failure. There is no way in which the minister can rationalize or justify the inequality of a $500 tax free allowance to householders in Nova Scotia and Prince Edward Island and a $350 taxable allowance in the rest of the

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country. This program has been perceived by Canadians as a bad one, hence the very disappointing response to date from the people of the six provinces qualifying for the program.
I have a question for the Minister of State for Urban Affairs. Why was a new bureaucracy established outside the existing establishment of CMHC? Why was it established in the city of Montreal, in a province that is not participating? There is only one logical explanation for that, and that is because Montreal is the constituency of the Minister of State for Urban Affairs, and the Prime Minister. Why could the government not use the existing offices of CMHC? These offices are already established right across the country, and have adequate personnel. Why did the minister not use the provisions of the Income Tax Act, which would require no additional establishment? An amendment to the Income Tax Act could be made for the tax deductible allowance up to a certain amount for insulating homes. Surely that would have been the simple way to do it. It would have been the fair and equitable way, as well.


Joseph Jacques Jean Chrétien: And expensive.


James Aloysius McGrath: As a result of a partisan response to a political situation last summer, we are faced with this hodgepodge that the minister cannot justify in any sense. What we are being asked to approve is a program which discriminates against the people of Newfoundland, New Brunswick, Ontario, Saskatchewan, Manitoba and British Columbia. The fact these provinces do not have Liberal governments does not have very much to do with it, although I am suspicious. One can only conclude that the government moved in the case of Nova Scotia in order to get Gerry Regan out of a tight jam. The government had no response to the energy crisis in terms of a national energy conservation program, but it took a step in the right direction. I concede that this was a step in the right direction. But instead of applying the program to the rest of the country, we have to pay a penalty. In Newfoundland and New Brunswick we have to pay the same price for offshore oil as they do in Nova Scotia and Prince Edward Island. We are talking about the price of oil in terms of heating a home and in terms of conserving consumption in order to do our part in this energy crisis.
I ask the minister to reconsider the answer he gave to the hon. member for St. John's West, and to tell us where he gets those misleading statistics with respect to the amount of electricity which is generated by oil in Newfoundland as opposed to the amount of electricity generated by oil in Prince Edward Island and Nova Scotia. That really has nothing to do with it.


An hon. Member:: Certainly it has.


James Aloysius McGrath: We are talking about the price of home heating oil and about the price of heating a home. There is a small percentage of homes in Nova Scotia and Prince Edward Island heated by electricity. However, the vast majority of

them, as is the case in the rest of Canada, are heated by oil, so why not have the same program apply to all of Canada, instead of this discriminatory program which we are now asked to support?


Leonard C. Jones: Mr. Chairman, this particular clause of the bill is obviously the most disturbing. It reminds me of a cliche which, reworded, would go something like this, "The government giveth and the government taketh away, but sometimes the government taketh away before it giveth". I think that is what has happened in this situation.
This clause not only discriminates against some parts of this country and their citizens, but it is also based on a double standard. If we must have taxation and taxation statutes, they should be fair, equitable and just. This particular clause is not just or equitable. It is certainly unjust and discriminatory. It is not even good legislation. I do not know who drafted this clause or who caused it to be drafted, but I suggest that the minister should use his good common sense and legal background. Let us not hold this legislation up any further. There is nothing to be gained if we have to have a few more mandarins going over a few more forms.
The minister should withdraw this clause. Is the clause an indication of some things which are to come in the future? Are all government grants, subsidies, forgivenesses, reduced interest rates and benefits given to people under, for example, NIP and other programs to be taxable in future under the Income Tax Act? I would like the minister to answer that question. It is a fair question, and if he is fair he will answer it. If he is utterly fair and true to the people of Canada and this parliament, he will not only answer it but he will withdraw this clause.


Roch La Salle: Mr. Chairman, I should like to take the occasion to raise two points. First, of course, that grant, which is not a real one, and that lack of consultation which should have been considered necessary. I feel that Quebec, perhaps like one or two other provinces, could probably have benefitted from those grants at the same time as some other provinces did. The responsible minister will probably understand that it is likely that such lack of consultation with the provinces results from the fact that the provinces have not all accepted the program.
In my opinion, the fact that the provinces are not allowed to participate in drafting a policy is a typical example of lack of consultation. This is unbelievable, Mr. Speaker. I feel that if the minister wanted to be generous at that level of $1 billion, it would have been possible for him to meet with the officials of the provinces, to talk with them about these objectives, about the importance, of course, for the federal government to see that energy is conserved and, therefore, I believe the provinces could have made excellent proposals, and, at the same time, it would have been possible, I think, to come to an agreement and allow every province, according to its own needs and ways, to benefit from that grant and also allow all the citizens in
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every province to benefit from it. But that was not my point yet.
The federal government submitted a program they had drawn up by themselves, and they told the provinces: Take it or leave it. Today we realize that with a new conference the provinces will probably be forced to participate. That is a kind of blackmail I want to denounce. When some people talk about a new federalism, like the Minister of State for Federal-Provincial Relations (Mr. Lalonde) did last Saturday, they do not mean that kind of approach. I have to blame our colleagues from Quebec, who also sit on the other side of the House, for not having urged the minister to invite the provinces to discuss those matters. Some of my colleagues on this side of the House have expressed the same concerns like I did.
It seems to me that if the federal government had been honest when talking of true consultation with its provincial counterparts, it would have been possible for any Canadian to get this subsidy wherever he comes from. That is what I wanted to point out and I regret once again that we, the people of Quebec, did not manage to get it. Of course, they will bring forward other arguments, that the government of Quebec is so particular and so on. There has been a lack of consultation and the absence at the negotiation table of provinces which, in the present context as well as in the future, should be participating in the elaboration of a national policy.
So long as this government will keep the kind of attitude it has shown for so many years, we will keep on experiencing difficulties regarding objectives which are intrinsically good, I repeat, but which are often unpracticable for certain provinces and for certain reasons.
Moreover, Mr. Chairman, the minister responsible for this legislation is trying to justify it by saying that it is not his program after all. That is a fact, we acknowledge that this is not his program. However, he exercises a responsibility today. If the minister responsible for such a program has made a mistake, I think he has the responsibility and the duty to correct such shortcomings and injustices that may be found in this legislation. Once again, we may be told that we are taking perhaps too much time in this House to argue over these things. 1 think that those people who are likely to benefit from these grants are quite interested in learning today that there are still members who understand this injustice and who want and ask in a very democratic way that the minister correct a situation or an injustice which is quite obvious.
Of course the minister says the grant could have been only $250; he now offers $350 to get back part of the money. This reminds me of today's statement on family allowances. In 1977, the government spent more than $175 million a month in family allowances but it does not tell us how many millions it got back by taxation. I call this false representation. It is dishonest on the part of the government to present such measures to the public. It tries to fool the public by telling it it is getting $350, knowing full well that in certain cases this does not amount to $350. The member for Bellechasse (Mr. Lambert) has already talked about this subject as well as other members before me.
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Why don't we clearly establish the true amount of the grant which a particular citizen will get? Most of these homeowners are not people with tremendous revenues, and even if only $15, $25 or $50 are taken off this grant, it is unfair on the part of the minister to present us this subsidy as a $350 grant. Once it is made taxable, it can no longer be called a $350 grant. In those circumstances, I dare believe that the Minister who admitted earlier that it was not his program, although this is hardly an argument, must assume his responsibility and be fair towards the legislation which he is bringing forward. If he wants to be fair, I believe that he cannot avoid his responsibilities. In consequence the tax on this subsidy must be immediately removed.
If the government were to do it, I would be ready to trust them. In other words, the way this legislation has been presented is highly hypocritical. We will not accept that Canadians be misled in this fashion. Clause 5, page 7, must be withdrawn so that this subsidy be totally left to those who meet the criteria and I believe that in these conditions it will meet its purpose as the main purpose of the legislation is fundamentally worth while. In view of the circumstances I hope the minister is going to reconsider the presentation of this bill and tell the House immediately that this subsidy is not taxable.


Mr. Marshall:: I want to make one or two short points in support of my colleagues. The minister indicated that by taxing the insulation grants the program was equal to both the rich and the poor. I want to tell the minister that there are people at the lower end of the income scale, on welfare, who do not even care about tax. They cannot even find the $500 they have to spend to get the $350. So they will not benefit, and they need it more than anybody.
There are people with homes that are not worth insulating. They are spending millions and millions of dollars of government money through welfare, through low and fixed incomes, and they cannot afford oil at $70 or $80 a month which they are paying now in Newfoundland. There are widows on welfare getting $131, and they are paying $60 and $70 of it for fuel because they can only afford an oil stove. What is insulation going to do for them? This has to do with thousands of people not only in Newfoundland but right across Canada. To indicate how quickly this program was put together, to qualify in Newfoundland homes must have been built before 1941. The same with regard to insulation; it has to comply with CMHC standards. Mr. Speaker, we were not even a province of Canada in 1941, we did not join confederation until 1949, so how can we comply with CMHC standards which were never there?


An hon. Member:: Were there houses there in 1941?


James Aloysius McGrath: Answer that one.
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Jack Marshall: Yes. I just say that the government are wasting millions and millions of dollars because they give 50-50 under the Canada Pension Plan to the province and most of that money of the low and meagre income earners is going toward trying to keep a home heated. They are paying too large a percentage of their low incomes for heating, when they cannot even afford food. I ask the minister, is there any humaneness in his body or in his soul? He should recognize the hardship that is being caused. While this program will help a number of people in Canada, it is not going to do anything for the poor who need it most.


Some hon. Members:: Hear, hear!


Mr. McRae:: I am rather appalled, Mr. Chairman, by some of the comments that I hear from the other side, particularly on this clause, section (5) of clause 6. It seems to me that when one talks about discrimination as between provinces, certainly when we are dealing with energy and oil, we have vast discrimination in terms of the subsidies paid to the eastern half of the country, the area receiving oil from offshore, the area east of the Ottawa Valley line. That kind of discimination is extremely important. I would be the last person in the world to say that policy should be changed. I believed it was the right policy when we brought it in, and I support it.
Two provinces, just because they happen to have Liberal governments, are under fire. I find it rather interesting that with respect to the opposition, which has nine or ten seats in the province of Nova Scotia and at least two seats in the province of Prince Edward Island, none of those members is presently involved in this debate. I would like to point out that when we brought in this program-and, many people who have seats in this House and are not here today raised the question at the time-these two provinces had a vast dependency on oil for the production of power. At that time it was roughly 100 per cent in terms of Prince Edward Island, and 65 per cent or 70 per cent-I am not sure of the figure, but it was in that order-for Nova Scotia. The price of oil was something like $1.75 a barrel.
When the world price of oil went to $12 a barrel, and $8 or $8.50 a barrel in terms of what it was costing after the subsidy in those areas, they were in a very precarious situation. The provinces themselves asked for an extra subsidy with respect to that oil, and the federal government, in its wisdom, said, "No. If we give you an extra subsidy on oil it will be a subsidy year in and year out. Since heating and electrical needs depend a great deal on oil-not all heating needs, of course, but certainly electrical needs depend totally on oil-we want to do something that will put you in a better position so you will not consume as much oil." That is precisely why we set up this program in Prince Edward Island and Nova Scotia. Those provinces wanted to move in this direction, and we assisted them. No other province has a dependency of greater than than 30 per cent for oil and hydro.
I think this is important. We responded to a need in an intelligent way. One of the ways of responding was to grant a permanent subsidy to those two provinces to help them pay for

the oil, but we said no, that was not the intelligent way to go about it; the best way was to support them in terms of developing an insulation program, which is being used, which means they will be using a great deal less oil. I cannot too highly stress the importance of this insulation program. I would like to see a much better program for the rest of the country. I am one of those who fought very hard for the program. However, I realize that a government which is $8.5 billion in deficit cannot afford to do everything it wants to do.


Some hon. Members:: Oh, oh!


Paul Edmund McRae: I believe the $1.4 billion for the program for all the ten provinces-actually, eight of them will be using it-is a rather important step. It seems to me that we should be encouraging this program and the whole notion of insulation. One of the hon. members from Newfoundland is concerned, and rightly so. He has shown that concern constantly in this House.


Donald W. Munro: I rise on a point of order, Mr. Chairman. The purpose of being in committee of the whole is to ask specific questions relating to clauses of the bill before us. We are now dealing with clause 6 and its various subclauses. The present comments are merely a defence, as I understand it, of the provisions and are not directed toward asking questions.


An hon. Member:: Filibuster.


Donald W. Munro: I would ask the hon. member, if he has questions, to ask them so that the rest of us can put some questions.


Charles Robert Turner: Order, please. I suggest that the decision of last week was that an hon. member could speak for 20 minutes and then ask questions.


Paul Edmund McRae: Mr. Chairman, I would like to make a point. Three members spoke for their full time dealing with this particular problem, condemning the program in Prince Edward Island and Nova Scotia.


Some hon. Members:: Question.


Paul Edmund McRae: I am going to ask a question. I am also going to try to put the whole problem in perspective. I believe very strongly the most important thing we have to do in the next ten years is develop a conserver society.


Some hon. Members:: Question.


Paul Edmund McRae: I sat and listened when you did your bit. Now you listen.


Some hon. Members:: Question.


Paul Edmund McRae: I have 20 minutes. I will get to the question. I will not take any longer than is necessary. In another six or seven years we will have a serious problem in this country. By
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1985 there will be a world oil supply problem. There must be a lot more conservation. I would like to see a lot more money put into this program, but the government's position at this time is very difficult. In any event, $1.4 billion is a good start. I cannot see a more fair way of doing this than by giving the most you can, taking more from those who can afford it and less from those who cannot. Otherwise, the money would be much less. Those who cannot afford it will not be able to do it. They will be stuck with higher fuel bills. While this clause is not desirable, it is necessary and the government has to be supported in this situation.
I would like to hear some comments from members from the two provinces that have been mentioned with regard to how they feel about the necessity of the program put into effect in December of last year and February of this year. It was an absolute necessity. Those two provinces would have been bankrupt if something like this had not been done. I do not think the other provinces of this country have the same need. I agree they do have need. We do not discriminate against any province; we try to help each province with its special needs. This was a special need; therefore I will support what has been done under this program. I will give all the support I can to it.
Has the minister or the parliamentary secretary any indication whether the provinces of Quebec and Alberta are still considering coming into the program? I ask this because it would have some bearing on the cost to the federal government.


Mr. Lumley:: Mr. Chairman, my understanding is that discussions are taking place even at the present time with regard to those two provinces.


Donald W. Munro: Mr. Chairman, I am pleased that the previous speaker mentioned the number of the subclause which we are discussing. One of the comments I made in my earlier intervention in the debate on second reading was related to the complexity of the bill and the difficulty of finding, in this 225-page document, the matters of concern to my constituents. I was unable to be here during the past couple of days when this bill was being discussed. I came back to learn that clause 6 was under consideration. I then learned that the home insulation program was the particular matter under discussion. I had been raising matters under clause 6 which had to do with exchanges of property, the roll-over of family properties. I may be wrong in having considered that that is a matter treated in this section. However, in clause 6(2) there are certain definitions which have a bearing on the matter of the roll-over of properties, not necessarily corporate properties but family properties, farm properties in particular.
When I intervened on November 16 I asked a couple of questions. I would now like to get specific answers to those questions. I do not know whether the parliamentary secretary is in a position to answer or whether some of the advisers might be able to help him on this matter. Is any thought being given to providing an index or glossary for bills of this complexity so that anyone who has to go through it, whether it be
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a member of parliament or a tax adviser, could find their way much more easily than at present, knowing exactly what elements are being covered? That is my first question. I have four more I would like to ask.


Joseph Jacques Jean Chrétien: Mr. Chairman, I shall certainly look into the hon. member's suggestion. If I can help the hon. members of the opposition to understand the bill better, I shall be happy to do so. I personally find a legislative measure like this one very complicated and very difficult.


Donald W. Munro: I find it difficult to follow the minister. There are some factors grouped together in one clause or in another. An index would certainly be very useful to all members.

The second question has to do with the specific matter of the taxation year. I am not sure whether it would be here, or whether I would have to look into the Interpretation Act, or where, but whose taxation year is at issue when we are talking about the exchange of a farm property? I am looking at page 4 of the bill, subclause (2) and the amendments under 13(4) which have been changed. Is this the taxation year of the government or of the individual who is making the return?


Joseph Jacques Jean Chrétien: Mr. Chairman, it is the fiscal year of the individual, not the government.


Donald W. Munro: I thank the minister for that answer. It does clarify it. At about line 25 or so it is stated:
-in his return of income under this part for the year in which he acquires, as a replacement for the former property, a property (in this subsection referred to as a "replacement property")-
There is a time element involved here. We are talking about a change of property from one that is now being used to one that will be used, the existing property and the replacement property. Is the time measured from the acquisition of the new property or is it measured from the time of sale of the old property? This is very important because there is a two-year averaging possibility in determination of the capital gain.


Joseph Jacques Jean Chrétien: Mr. Chairman, it is in the income tax return after he bought his property.


Donald W. Munro: Therefore, the sale of the previous property can be made, for determination of the capital gain, within the two-year period following the acquisition of the replacement property?


Joseph Jacques Jean Chrétien: To qualify, the property must be real property and the replacement must be acquired before the end of the year following the year of the sale.


Donald W. Munro: Yes, but this prejudges the issue of a change of property, that the sale must take place first and the acquisition follows, if I follow the logic of that statement. It is not always possible to do this. Sometimes the
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acquisition has to precede the sale. I do not think one has to go to a bank in order to carry out such a transaction. A piece of property may go on the market and it may have to be bought before the sale of the property already owned.


Joseph Jacques Jean Chrétien: In order to qualify, the properties must be real property and replacement must be effected before the end of the year following the year of the sale. So the purchaser has to acquire in the year after he made the sale.


Donald W. Munro: Is the minister saying that the period is not two years, as I understood at one time, but only 12 months?


An hon. Member:: It could be nearly two years.


Joseph Jacques Jean Chrétien: Under the present rule regarding roll-over treatment, the replacement assets are to be acquired within two years.


Donald W. Munro: Then if it is a matter of a sale and an acquisition, does it matter which operation takes place first?


Joseph Jacques Jean Chrétien: I understand that a person could buy before selling. Obviously, it would be before the sale, so it would be even better for him than if he had to wait. So he has one year after acquisition.


Donald W. Munro: One year after the acquisition in order to determine the amount which might be considered as the capital gain?


Mr. Peters:: That is not true.


Donald W. Munro: There seems to be some doubt about that aspect of the operation. I am not trying to cause puzzlement; I am trying to clear things up for an accountant who is advising a client in my riding as to the best way of dealing with this matter, so that he may determine whether he should proceed now with either a sale or an acquisition. There is one further cloudy issue in my mind along with these others. I do hope I am clarifying these issues.


Joseph Jacques Jean Chrétien: Perhaps the hon. member would allow me to read a statement which I have before me. It will probably clarify this complex question. I can understand that it is difficult for everybody, even for me, to understand this complex question clearly. This is an important change. It expands the tax deferral, commonly called the roll-over, on certain dispositions of appreciable property. When a depreciable asset is disposed of for proceeds which exceed its unappreciated capital cost, the recapture of the depreciation allowed in previous years may occur. The special roll-over rule eliminates its recapture to the extent that the proceeds are reinvested in a replacement property. Under a roll-over, the property is not exempted; the tax is simply deferred until the replacement property is disposed of.


Donald W. Munro: I thank the minister for that clarification. It is on the record now and I leave it to the accountant to interpret it. The first of my final two questions in this area is this. Suppose by some chance the farmer in question should decide to obtain a property which will cost him more than the property he now holds, as a replacement property, because he needs more pasturage or a greater extent of hay meadows than he holds on his current property. He can get it, say, because it is in an area where the unit land cost is less expensive than his existing land. Suppose he obtains his larger property at a smaller unit cost than he sells the old property. In that case his apparent capital gain could be large. Is it, then, a legitimate capital gain? Does he have to make a capital gain on the basis of acre for acre, or is the capital gain just the difference in what he nets from the proceeds of the total sale as against the acquisition of the new property?


Joseph Jacques Jean Chrétien: There is another clause which deals with capital gains. We are talking about a completely different problem here. When we get to clause 13(4)( 1) the hon. member probably will get the explanation he wants. We will be coming to that clause later on.


William Arnold Peters: Yesterday, Mr. Chairman, the hon. member for Moncton made the very true statement that maybe members of parliament should give consideration to scrapping the whole act, starting over again with language that the minister, the officials and others can understand. If we are here to make laws just for the lawyers, then we have done a great job. Most of the discussion which has taken place on the clause we are considering does not refer to anything which is in the bill. The bill does not even mention the insulation program. There is a clause which says that the provisions of another program outside the bill will be allowed to be taxed and outlines the manner in which it is to be taxed.
If the minister were smart, and he is, and if he were interested, which he may be, then he would consider scrapping the kind of legislation before us and would be concerned with writing simple legislation which says exactly what it means. I think it would do a great service to the country and it would certainly save people a lot of legal fees. It would save us trying to understand a lot of jargon, and it would save us having to ask a lot of questions, if the legislation were in language which you could read and understand.
I was interested in the argument which took place about the insulation program. That is dealt with in clause 6. The arguments which took place were mainly over two points. For the first time, the present minister has done a very good job in relating the grant to income tax. He said that a flat amount would not be given, but that the amount allowed would be taxed. This would result in equality between the low end and the high end. Normally, when we give tax exemptions under the heading of personal income tax we provide a big benefit to the high income earners and very little benefit to those in the low income range. Often this goes further than meets the eye. It may result in a substantial reduction of the total tax the taxpayer is paying. It may place him in another category and
December 1, 1977

the savings may be in the hundreds, or even thousands of dollars. It all depends on the category in which the taxpayer concerned is already placed.
I agree with the minister, although I recognize there is some argument from those to my right that there may be a measure of inequality here. In my opinion, that is the way the income tax structure should be rewritten and it should be done in such a way as to take out a lot of the junk now in it. I could read some paragraphs to you, Mr. Chairman. It would defy Shakespeare to tell you what they meant. There is one right here:
(a) Property, the proceeds of disposition which were proceeds referred to in the subparagraph-
Then it gives about four places where you can look it up. It all means absolutely nothing except to a lawyer who is going to take a case involving, say, the selling of a property where the proceeds are used for a purpose related to something else altogether. No wonder people just pay their income taxes without ever knowing what for. It is like receiving a parking ticket or speeding ticket; you never go to court to fight it because you know you will not win the argument anyway.
Some bright professor at Osgoode Hall had his students examine this bill and write a critique on it. I gather each student dealt with a different section of the bill. I should like to read part of what was said about this clause. I think the minister may be interested in it since he believes in national unity. The conclusion is this:
Unfortunately the changes are proposed at a time when they might inadvertently help the separatist cause in Quebec. Many firms are already leaving that province and setting up business elsewhere. These tax changes will make it even easier for them to make such a move.
He is referring there to the roll-over provisions. In talking about the present law, he comments:
When a taxpayer disposes of capital property he must pay tax on any capital gain or recapture of capital cost allowance that arises from the sale. There are provisions for exceptions with respect to involuntary replacements such as those that occur when property is destroyed by fire and replaced or rebuilt with insurance proceeds. If the replacement occurs within the time specified by the act the taxpayer can defer capital gain or recapture to the extent that the proceeds of disposition are used to acquire a replacement property.
All very simple, I presume.
There are no provisions for a deferral for any other reason; for example if a farmer sells his farm in order to buy a larger one he will have to pay tax on any capital gain arising from the sale.
Hon. members will be aware that there are cases where even a different use of a property results in an involuntary sale, and capital gains tax has to be paid. These comments are by a young person at Osgoode Hall who one day will be one of the legal beagles of our society. Some of these young students will find their way into provincial legislatures, and some into the federal parliament. Others will end up as the civil servants who make these stupid laws and hon. members will be surprised to find that, even though they are broad-minded today, five years from now they will be as narrow-minded as the rest of their colleagues in that particular field. He then commented as follows:
Income Tax
According to the budget document "The existing tax treatment of voluntary replacements is an impediment to desirable relocations by businessmen and farmers." In this respect the change should increase the mobility of capital and encourage the expansion of small farms and businesses into larger more economical units.
The previous speaker was inquiring about that.
(2)	Presumably, since the provisions are not confined to small businesses and farmers, the largest benefits will flow to large business relocations. A major merchandiser might close a downtown store, relocate in a plaza and defer capital gains tax on the sale of the downtown location, or a business may take advantage of local subsidies encouraging relocations in another community. While there may be good social arguments in each case that the relocation is not "desirable" the companies will still benefit.
(3)	A "replacement for a former property" is defined in the proposed bill as property which" ... was acquired by the taxpayer for the same use as the use to which he put the former property". This will undoubtedly cause problems of interpretation. How "same" must the use be? Could, for example, a businessman sell land and buildings in the city and purchase unimproved land in the suburbs with the intention of building on it and be eligible for the tax deferral?
Here is a young lawyer asking the lawyers whom the minister has at his command how much sameness there must be. I presume he is asking these questions rhetorically of his students, but be that as it may, it would be nice if a young student, before getting his degree, found out what "sameness" was. How should this clause be interpreted? As for a businessman selling land and buildings in the city and purchasing unimproved land in the suburbs, my guess is he would be eligible for a tax deferral. This is how all developers make their money. They pretend to be farmers although they are not competent to farm, but they defer taking a decision on their property and in that way get a deferral. If I can give a non-legal opinion, I would say they could get a deferral here. This professor continues:
Such interpretation problems can be resolved by litigation-
Which will make his job interesting and very rewarding.
-but in the meantime there will be a degree of uncertainty that is not conducive to good business planning.
This is why you need lawyers, Mr. Chairman, one who is certain and one who is uncertain. Then you have that little man with the odd hat and gown down at the front who judges which one is more uncertain about the question than the other. Almost every word in this legislation requires a legal definition and leaves a great deal of uncertainty. I continue:
(4)	The gain deferred in effect provides an interest free loan to the business. The benefit gained from such relocation may or may not justify this form of tax subsidy.
I should have liked him in his tender, developing years to say whether he thought it did or did not, but I suppose the fact that he raises the question is an indication that he questions whether or not this is good practice.
(5)	There may be problems with anticipatory conversion. Can an ongoing business purchase new premises and move into them gradually, then sell the old location and still claim the tax relief? This would seem to be a legitimate and often necessary step and on principle would comply with the intent of the provisions. However the act does not specifically provide for such transactions and on a literal reading such deductions probably would not be allowed.
Then he adds his last comment, which I quoted first, that allowing roll-overs of this kind and transfers from one province to another will help the separatist cause, and that many

December 1, 1977
Income Tax
businesses are moving out of Quebec now probably because of the tax structure of the federal government. I should also like to refer to the inability of the federal government to assist unity in this country. Mr. Chairman, why did the federal government decide not to pay the same subsidy for insulation of a house right across Canada? Why did we not decide to do that? Why do we not say to every person in Canada who wants to insulate his house which is of a certain type and of a certain age that we will give a subsidy? We could write it off under the income tax, or do whatever we liked. But we did not do that.
Instead, the people in P.E.I. and Nova Scotia are in very bad shape, so we say that we will give them a special subsidy of $500. If any other provinces want to participate, we will give them a different kind of program. This is why we have all the problems of disunity in this country. The federal government has no guts. The federal government does not provide anything. We did not even build the Trans-Canada Highway across this country. The only thing we ever did in the way of unity in this country was at the initial stage of confederation by putting a railway across the country. We did not put the Trans-Canada Highway across the country; we joined up a bunch of provincial highways and called them the Trans-Canada Highway.
We now have the opportunity to help people with respect to insulation. The Liberal member for Fort William said he supported this program because he thought it was a good one. For whom did he think it was a good program? Is it a good program for all Canadians? Why has the federal government not got the guts to put in a program of its own and say it will use the income tax to pay for it, but it will be a federal government program? Then if somebody in Quebec wanted to insulate his house, we could give him the same benefit as somebody in Nova Scotia. No bloody way; that is not the way we do it!
We made one concession to Quebec. We put all our head offices down there. This is very interesting, because I cannot phone the minister of energy or the minister of the environment and get a copy of the regulations. I have to send a letter to Montreal. You cannot phone, because they will not answer the telephone in Montreal. You have to write a letter to Montreal before you can even get a bulletin. Isn't it really time that we put in a federal program? The minister is a federalist. How can he agree with the crackpot programs we work out on an individual basis, with one province played against another-and they are played one against the other? If Newfoundland wanted this program, it would be different than the one for P.E.I. and Nova Scotia. British Columbia is to have a different one. The one you are working out today with Quebec will be different again. They are all different. Why are they not Canadian? It is just as cold in Ville Marie as it is in Haileybury, but they are just across the river, one in Quebec and one in Ontario. Why should two citizens, one in each place, not be treated in the same way? No wonder there is disunity in this country.

Even a simple little thing like the federal government making money available, not very much but some, for insulation is done on a different basis in different provinces. The money should be available to everybody. These people pay the same money for their postage stamps. There are many things they must buy for which they pay the same, so why is there not equality when we have a program like this? I am having difficulty with another program that is in another part of this bill.


Joseph Jacques Jean Chrétien: Mr. Chairman, perhaps the hon. member would permit me to ask him a question. Is he advocating that the programs under DREE should not apply in northern Ontario?


William Arnold Peters: I am suggesting that the programs under DREE should apply the same in northern Ontario as they do in other parts of Canada, but they do not.


William Arnold Peters: No, I am sure they do not apply in the same way, because we have to get approval from Toronto. Where do we in Northern Ontario find our worst enemy, but in Toronto?


William Arnold Peters: There is a master agreement you are renegotiating now. I talked to the Ontario minister and he said you were pretty tough negotiators. He was blaming you. But it is my opinion that you have to go to him to get your master agreement, and you can only do what you agree to do. Another province will agree to do something different, so it is different in Quebec than it is in Ontario. Anyone from northern Ontario or northern Quebec knows our provincial capitals may not be our best friends on most occasions.
I am making a plea to the minister. This minister sincerely believes in unity. I am sure he does. He would have gone as provincial leader of the Liberal party in Quebec if he did not believe that. He believes his role is here, and he is going to make this his role. Will he explain why we are playing around with this kind of clause. Why do we not just put it into the other act and put in here that all people can take advantage of it? I congratulate him on the way he has written it in, and I congratulate him for the fact that he is giving greater benefit to the little guy than to the rich one. I congratulate him on the system he is using. This is a system we have used for a long time. I would like to see him talk to his colleagues, because he has to supply the money for any plan they have. He is now in a position to do this. He should provide some equality for the various programs in the provinces. This young student will be interested in your answer, because it is his charge that this roll-over program is going to be divisive and will do nothing for unity.


Joseph Jacques Jean Chrétien: Mr. Chairman, in reply I would like to say that this roll-over program is intended to help people who want to expand their businesses. This will give them the opportunity of having the necessary liquidity to progress. I think it should


An hon. Member:: They are the same.


An hon. Member:: There is an office in Sudbury.
December 1, 1977

be looked at in that light, but it has no relationship whatever to national unity. You can stretch the discussion very far in this House if you want. For example, on the question of a subsidy for the insulation program, that is in this bill because when the program was announced by the Minister of Energy, Mines and Resources, in collaboration with the Minister of State for Urban Affairs, they said the program would involve $250, untaxable.
This is not really my program, but I am ready to defend it. I am defending the position of the government, but it is stretching the rules of this House a bit when we get involved in a debate in which I am not really the minister responsible for a program. It so happens that when the program was debated in the House of Commons, it was known that it was in the package; but the time to debate it was at the time the program was presented to the House of Commons, and not at this time. We started with a program that had relationship to the cost of oil in the maritimes. The production of electricity in P.E.I. is 100 per cent dependent on imported oil, and in Nova Scotia it is dependent on oil to the extent of 83 per cent. This program was well received there. We have tried to find a way that would extend the program somehow across the land with the resources we have available.
I do not blame the hon. member for suggesting that we should make it equal across the land whatever the cost is. This is the policy of his party, the NDP, to spend as much as you can; the public sector should do everything. I do not agree with that policy, but I accept it. What puzzles me in a debate like this is the position adopted by the official opposition. They are always criticizing us in this House because of the level of government expenditures. They say we are terrible about spending and we could not care less about it. However, his colleagues here are asking us to extend this program without putting a tax on, which would cost the taxpayers $500 million over a period of seven years. The same people are telling me not to spend so much money. The hon. member should talk to his friends, because it would cost $500 million more to adopt what he is suggesting this afternoon. Members of that party are always suggesting that we spend more and more, and then they get up and complain because of the level of government expenditures. I hope that hon. member will talk to the hon. member for St. John's East.
Perhaps I should point out that the financial critic for the opposition party, the hon. member for York-Simcoe, has chosen to absent himself from the House today. Perhaps that is because he knew his colleagues were going to put pressure on me-


Steve Eugene Paproski: Mr. Chairman, I rise on a question of privilege. Our financial critic will be here this evening. He was delayed because of flying conditions in this area. I do not think the minister should make that kind of statement at this time. He should withdraw that statement.


Joseph Jacques Jean Chrétien: I am very pleased that the hon. member has raised that question of privilege, because yesterday I was in
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Toronto talking with the executive of the Canadian Chamber of Commerce.


Stanley Howard Knowles: Your friends.


Joseph Jacques Jean Chrétien: I did not happen to be here. I am always caught in the middle. Because I was not here yesterday, I have to excuse myself. I would have preferred to be here in order to listen to the remarks of the hon. member for Joliette, the hon. member for St. John's East, the hon. member for St. John's West and the other Tory members from Newfoundland. The hon. member for Provencher indicated that this was a bad policy. Things would be worse if the Conservatives were in power.


William Arnold Peters: Mr. Chairman, I am interested in the erudite remarks of the hon. Minister of Finance. He understands the economic background of the requests made by various parties. My party believes in universal benefits for everyone. The minister has indicated that he is willing to negotiate those contracts up to $1.4 million with any of the provinces. Perhaps that would mean one would not receive $250-


Joseph Jacques Jean Chrétien: Mr. Chairman, the hon. member has referred to $1.4 million. I should like to point out that the figure is $1.4 billion. Apparently there are 1,000 million in a billion.


William Arnold Peters: I thank the hon. minister for correcting the figure I referred to.


Charles Robert Turner: Order, please. I regret to interrupt the hon. member, but his allotted time has expired.


Mr. Hamilton (Qu'Appelle-Moose Mountain):: Mr. Chairman, I should like to return to the subject raised by the hon. member for Esquimalt-Saanich concerning the principle of the roll-over. All of us agree that this concept of rolling over from one type of property to another is now being recognized to a limited degree in this legislation. Some 15 years ago I recall the hon. member for Edmonton West spoke about this question at a tax foundation meeting. It has taken that long to get into the tax records of this country.
As the minister is aware, my party voted in favour of this legislation on second reading but we wanted to make proposals in order to improve it. I am concerned about the use of the words "Canadian privately-owned corporations". The original budget motion referred to the disposition of capital property after March 31, 1977, and contained provisions relating to involuntary dispositions being modified. It is the word "involuntary" which caught my attention. Surely this deserves some thought before any amendment to this legislation can be made.
The Minister of Finance and other government members have travelled to various countries of the world. They proposed to the newly-developing nations the setting up of joint enterprises with Canadian subjects on one hand and national subjects on the other. This was in an attempt to get certain enterprises started. The Minister of Finance made that pro-

December 1, 1977
Income Tax
posal on a trip when he was the minister of industry, trade and commerce.
Young Canadians have put their technical know-how and managerial experience into the joint enterprises with the newly-developing nations. Lately, nations have demanded that half of the shares of the joint enterprise be owned by nationalists, which is only natural. That would leave 50 per cent of the shares in the joint enterprise to be shared among those who provide the capital, the administration or management and those who worked on the idea. More and more Canadians are receiving incomes because of their technical know-how.
Since these nations do not have the money to pay big salaries, Canadians have received their returns in the form of shares in these joint enterprises. The minute a joint enterprise becomes successful, the majority of the shareholders want to buy out the shares. Usually because it is provided in the bylaws of the company, suddenly these Canadians are informed that their shares will be bought by the majority of the other shareholders. When they return to Canada with those shares, they can be treated as income or capital gains even if the shares were not paid for in the beginning. I hoped this type of property would be considered under this legislation.
On Monday I asked what the objection was to non-Canadian, privately-owned corporations having the same advantage under clause 3. I should like to ask the minister the same question under this clause. In this concept of property and the transferring of it, it should be equitable to the young Canadians who have attempted to establish these joint enterprises around the world. What would be the objection to giving those Canadians the same roll-over privilege for using their expertise and know-how to help the joint enterprises in newly-developing nations?


Arthur Jacob (Jake) Epp: Mr. Chairman, I have a few comments I should like to direct to the Minister of Finance in regard to the insulation program that we are discussing at this time. As a general rule, I agree with the minister that Canadians are asking for too much from the government. This government has shown the lead by spending 43 per cent of the gross national product, which is too high. We have moved the area of fair taxation to the area of confiscation.
Referring to the remarks of the Minister of Finance in reply to the opposition asking for more funds, surely there is a difference with regard to an energy conservation program which would have long-term effects on Canada's balance of payments.


Charles Robert Turner: Order, please. It being five o'clock, it is my duty to rise, report progress and request leave to consider the bill again later this day. Is that agreed?


Some hon. Members:: Agreed.
Progress reported.


William Arnold Peters: Mr. Speaker, I rise on a point of order. We have made some progress, but I should like to ask the unanimous

consent of the House to continue with Bill C-ll for the next hour.


Mr. Kaplan:: No.


Mr. Benjamin:: Why not? We are trying to help the government.


Mr. Deputy Speaker:: Order, please. Even with the request of the hon. member, there is nothing to prevent the Chair from going through the normal procedure. What is being suggested is that the committee sit beyond five o'clock, so I will ask whether hon. members are ready to return to consideration of Bill C-ll in committee of the whole. When shall the committee have leave to sit again? Later this day?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Now.


Mr. Deputy Speaker:: Hon. members have heard the suggestion made by the hon. member for Timiskaming (Mr. Peters) to come back to the committee of the whole House to consider Bill C-ll.

The hon. member for Timiskaming (Mr. Peters) suggests that we return to the consideration of Bill C-ll in committee of the whole.


Robert Phillip Kaplan: Mr. Speaker, instead of giving up this important private members' hour, perhaps we should sit between six o'clock and eight o'clock.


Mr. O'Connell:: Mr. Speaker, I think all of us are aware that the party represented by the hon. member making this suggestion is conducting a filibuster against Bill C-1001, and it is just another form of that filibuster to suggest that we not discuss it now but, instead, discuss Bill C-ll. I think it would be more conducive to the proper order of our business if the hon. member and his colleagues would agree to send Bill C-1001 to committee. Then we would be pleased to discuss Bill C-ll.


Mr. Deputy Speaker:: We have not yet reached private members' hour and consideration of the bill to which the hon. member refers.


John R. Rodriguez: Mr. Speaker, I rise on a question of privilege. I am really hurt and annoyed by the reaction of the hon. member for Scarborough East (Mr. O'Connell), who has accused my colleagues of filibustering some private member's bill which is being smuggled into the House by him. The hon. member accuses us of filibustering. I resent that, and my hon. colleagues and I demand that he withdraw his remarks.


Mr. Deputy Speaker:: I must say that the Chair cannot go as far as accepting the request of the hon. member. The hon. member for Scarborough East (Mr. O'Connell) has expressed an opinion. I do not think he went as far as imputing motives
December 1, 1977

which are unparliamentary, so I cannot accept the question of privilege of the hon. member. It is the impression of the Chair that there is not unanimous consent to suspend private members' hour.


William Arnold Peters: Mr. Speaker, I would like to withdraw the request I made. 1 had the impression that the hon. member for Scarborough East (Mr. O'Connell) had remained in Toronto due to travel difficulties. I was surprised when I saw him after I made the request. I did not expect the hon. member would be here to sponsor Bill C-1001, so I assumed we could go ahead with Bill C-ll.


Martin Patrick O'Connell: Mr. Speaker, I appreciate the comments of the hon. member and I am pleased that he will withdraw his suggestion, but I have been in the House this afternoon.


William Arnold Peters: I am sorry; I did not see the hon. member.


Reginald Cyril Symes: A question of privilege, Mr. Speaker-


Mr. Deputy Speaker:: I hope it is not related to the point we have just disposed of.


Reginald Cyril Symes: Mr. Speaker, the hon. member for Scarborough East (Mr. O'Connell) accused hon. members in my party of conducting a filibuster. I dispute that. That has a negative overtone which Your Honour said was not there. My definition of the word "filibuster" is "deliberate delay". We are examining the bill and bringing out our criticisms of it. I do not think that should be complained about.


Mr. Deputy Speaker:: In my opinion the hon. member's remarks demonstrate that the Chair was right. The hon. member is disputing the point of view of another hon. member. What I said was that although the remarks of the hon. member for Scarborough East might have been interpreted as a reflection upon hon. members, in my judgment it was not a reflection imputing motives. In my mind, and I am sure in the minds of hon. members, words used in debate blaming other hon. members of delaying legislation have been used very regularly in this House. Perhaps using the word "filibuster" might not be pleasant-


John R. Rodriguez: Terrible; absolutely shameful.


Mr. Deputy Speaker:: -or one of the best of our parliamentary practices, but I feel that the point raised by the hon. member does not represent a question of privilege.
Bell Canada



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment at 10 p.m. are as follows: the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack)-Penitentiaries-Millhaven-Reason for withholding names of inmates involved in hostage-taking; the hon. member for Northwest Territories (Mr. Firth)-Public Service-Delay in contract negotiations with nurses in Inuvik area-Request for report; the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall)-Industry-Pulp and paper-Effect on Canadian industry of loans to foreign countries to establish plants.
It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper. As there are no notices of motions (papers) listed, the House will proceed to the consideration of private bills.


PRIVATE BILLS
[Stage Direction]
The House resumed, from Thursday, November 24, consideration of the motion of Mr. O'Connell that Bill C-1001, respecting Bell Canada, be read the second time and referred to the Standing Committee on Transport and Communications, and the amendment thereto of Mr. Leggatt.
Leslie Gordon Benjamin: Mr. Speaker, I had just commenced my remarks prior to six o'clock last week and I wish to complete them in the time allotted to me.
At the outset I would like to say that I never thought I would live long enough to see the feelings of my colleague, the hon. member for Nickel Belt (Mr. Rodriguez), hurt so much.


An hon. Member:: That ought to go down in Hansard as the joke of the century.


Leslie Gordon Benjamin: If the hon. member's feelings are hurt and he feels wounded by the remarks of my good friend, the hon. member for Scarborough East (Mr. O'Connell), hon. members can imagine how I must feel.


An hon. Member:: You are grinning from ear to ear.


Leslie Gordon Benjamin: I really do not care what the hon. member for Scarborough East wants to call our participation in the debate on Bill C-1001. If he chooses to call it a filibuster, there really is not much the hon. member for Nickel Belt can do about that. If the hon. member wants to call our exercising
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Bell Canada
what we consider to be our duty and responsibility a filibuster, that is up to him. It is not the way I and many other members, of parliament look upon that kind of participation in debate.
The bill presented to us has in it matters that are nothing new as it pertains to some of its provisions: they have come forward in this House concerning other corporations and entities in our country. I am surprised, Mr. Speaker, that Bell Canada would have the nerve to want to make these kinds of changes in view of their protestations with respect to their desire to provide great public service, telephone communication service. One would think that they would be anxious and available for full public scrutiny, that they would have no objection to coming before the parliament of Canada.
The provisions in this legislation allow them to evade that kind of examination, scrutiny and accountability. I do not think any self-respecting company which provides a public utility would want to do that, and since it is in fact a public utility is all the more reason it must be subjected to the maximum public scrutiny and accountability. Something like a telephone line, a sewer line or water line is a natural monopoly. It is a monopoly because it is so impractical and economically stupid. You do not have to be a socialist to agree to this. You can be a good free enterpriser having competing telephone lines running down a street side by side, or two competing water or sewer lines. So it is, in fact, a monopoly and it is providing a public utility.
If Bell Canada needs more capitalization for the operation of telephone communications systems, they are quite welcome to come to parliament at any time to ask for that increased capitalization authority and explain how they would use the increased capital to improve the telephone and other communication facilities they are now providing to the public. But no, Mr. Speaker, I have not sensed much of that. I believe the passage of this bill means they will then be able to branch out; they will be able to venture into other kinds of enterprises, other kinds of businesses. We know, in this country, from bitter experience what has happened when a public service or utility has been allowed to go beyond its original purpose. One has only to look at the CPR which for many years siphoned off millions in profits or used the value of assets or their borrowing capacity to pile up capital investments in enterprises other than the provision of a railroad transportation system.


An hon. Member:: Then get the subsidy.


Leslie Gordon Benjamin: They were able to move into profitable areas other than the provision of a railroad transportation system, and made excellent profits. One has only to look at CP Investments Limited, Marathon Realty, Canadian Pacific Oil and Gas-you name it, Mr. Speaker-Cominco, CP trucks: what the hell that has to do with the railroad I have not been able to figure out. As a result of that, their rail transportation suffered, and still does. I, for one, have no faith whatsoever that in allowing Bell Canada to have a few billion dollars more of capitalization ability is going to mean a substantially

improved telephone service to people in the parts of Canada which Bell Canada serves. Bell Canada will be into a lot of other things and will become a monopoly in other fields.
My colleague, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas) last week effectively pointed out, and I need not repeat his figures, and threw into a cocked hat the arguments of the hon. member for Winnipeg South Centre (Mr. McKenzie), because Bell Canada is serving larger cities that cost more when the opposite is the case and always has been. I am happy that no one else has tried to sell that kind of silly economic argument.
The treating of a telephone system as a public utility in our law is logical, because that is what it is, a public utility; and, of course, we have always said and believed it should be publicly owned. But if it is going to be privately owned, it is all the more reason why it should remain under the aegis of the parliament of Canada, answerable and accountable to its customers, shareholders and to the people of Canada through this parliament. It is all the more urgent that the matter of public control and accountability be retained. This bill weakens, if not destroys that principle. One would think that would be pretty straightforward, Mr. Speaker. This is not socialist dogma that I am putting forward.
Private enterprise governments of various levels in this country and other parts of the world have long since recognized and operated on the basis of anything that is a public utility is, in most instances, publicly owned and controlled as a Crown corporation. Or, failing that, there is a strong and strict requirement for that privately owned corporation operating a public utility to be accountable to a legislature or a parliament. Our experience with the regulatory agencies in Canada, CTC or CRTC, as far as the majority of the public is concerned has not been too good. In the overwhelming majority of decisions made, those two illustrious agencies have come down on the side of the corporation wanting some benefit, and wanting to be relieved of some responsibility or liability. No matter how many briefs and submissions have been made by ordinary citizens or members of parliament, organizations or members of the other place the decision almost invariably of the so-called regulatory agencies have come down on the side of CPR, Bell Canada or some such outfit.
So the experience of what regulatory agencies do historically has been bad as far as the people of this country are concerned. In fact, Mr. Speaker, the actual regulation provided by the CTC, and later the CRTC as far as we are concerned is unacceptable. They have been, in my opinion, from their actions and the results of their decisions, unwilling to act on behalf of the public, on behalf of the consumers of telephone service. They have allowed telephone rates to go up even when Bell's increases have been unjustified. In 1976 this candidate for expansion into the private sector, the beneficiary of this bill if it were to pass, had a net income, after taxes, of $289 million. They not only have that kind of profitable operation, but accumulated deferred corporation taxes as of 1976-and God knows what they will be by the end of 1977-of $719 million. That is an interest-free loan from the people of
December 1, 1977

Canada. Included amongst those people of Canada are the subscribers of Bell telephone. They are paying twice. They pay the rates that Bell charges and they lose the benefit of taxes that should have been collected from Bell.
I hope the day comes when the total deferred taxes of Bell Canada are equal to what would be a reasonable purchase price of the whole damn company. We could just say to Bell Canada, "Now we are even. Your unpaid taxes equal the value of the company, and we are taking it over". We could give them $1 to make it a legal agreement.


John R. Rodriguez: And bus fare.


Leslie Gordon Benjamin: We could write off the books of Canada the amount Bell owes in the form of deferred taxes. The people of Canada would then take over ownership of the company.


Robert Phillip Kaplan: What about the 22,000 shareholders?


Leslie Gordon Benjamin: The hon. member asks about the 22,000 shareholders. I have a list of all the widows and orphans who own Bell Canada. I could use up all my allotted time by reading it. There are "poor" shareholders like Canada Life, Canada Permanent Investment, Canada Permanent Pooled, which is the same investment, Canada Trust Investors, Canada Trust RSP-I wish it read "RIP"-Canadian General Life, Canadian International Investor Trust, Capital Growth, Commercial Finance, Confederated Life, Confederated Dolphin-I suppose that is some kind of fish outfit-and Crown Life.
I bet these are all welfare cases. If corporate investors did not get their earnings from their investment in Bell Canada, I am sure they would have to apply for welfare! The list also includes Crown Life, Dominion Life and Eaton Commonwealth. We must make sure the Eaton family does not end up in the line-up at the Toronto welfare office. There is also Economic Investments. It is an economic investment. If you had the bucks and bought some shares over the past few years, you would have done pretty well. I wonder if I have provided the hon. member who asked me about the 22,000 shareholders with enough names to satisfy him. If not, one of my colleagues would be glad to finish reading the list. In our list of these "widows and orphans" are the likes of names that I have already read.


Mr. Deputy Speaker:: Order, please. This might be the time to inform the hon. member that the time allotted to him has expired. Before he carries on or opens another line of discussion, it will be necessary to seek the unanimous consent of the House. That is the only way he can continue.


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: There does not seem to be unanimous consent.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker,-
Bell Canada


Some hon. Members:: Hear, hear!


Max Saltsman: I should perhaps caution my colleagues to be a little careful with their applause until they have heard me speak. Life in Ontario is somewhat more complex than life in Saskatchewan when it comes to these issues. I sometimes envy the rather straightforward manner in which these matters can be tackled under these circumstances. I want to speak to some extent as a person who has always admired Bell Canada. In my view, Bell Canada is one of the best companies we have in this country. I have been around the world, as have most of us who are here. I do not think there is a finer telephone system in the world. I say this as a preamble because I have some criticisms to make. However, I want to put it in that kind of perspective.
With regard to nationalization, I am not particularly fussy about nationalizing Bell Canada. I do not see that it would save the taxpayers of Canada any kind of money. I should point out that while some of the companies who hold shares in Bell Canada may not exactly be starving widows and orphans, we are looking at a lot of corporations, whether it is the Eaton Corporation or others, who are investing on behalf of many thousands of shareholders. As I said, I wish things in Ontario were as straightforward as in Saskatchewan. However, there is no way that anyone is going to nationalize Bell telephone without paying compensation to the people involved. We are not talking about a faceless corporation but a lot of people who have invested their money. Whether carefully or otherwise is beside the point. The point is there will have to be compensation. I would just as soon Bell telephone had the headaches as a government corporation.
If nationalization takes place, it will not be because the government can make more money with Bell Telephone than what it is costing at the moment. The complexity of the arguments back and forth about how much money Bell is making, how much they are entitled to make, and the government's efforts to discount those arguments, as well as all the complex arguments that take place, will be so great that somebody will throw up their hands and say enough is enough.
I wish to make a few comments on Bell telephone. It is one of the few companies in this country that is Canadian. Were it not for Bell telephone, that part of our industry would be dominated by foreign ownership. Were Bell telephone not as big and powerful as they are, they would have been taken over by foreign corporations a long time ago. I realize we now have legislation which prevents that. However, in terms of effective research, and this is not to say that Bell telephone does all it should or does not get very considerable benefits from our tax system as do other corporations, to some extent they utilize those benefits to a greater extent than other corporations. Bell Canada gets blamed for almost everything that goes wrong. Sometimes I think that corporation does not have a friend in the world. A lot of that is not the fault of the corporation, but a lot is. To some extent, this debate demonstrates what the problem is with Bell Canada.
Let us talk about the things that are not Bell's fault. You cannot help but be big if you are in the telephone business. It
80027-24'/2

December 1, 1977
Bell Canada
is silly to have competing corporations. You cannot help but be a monopoly if you are in the telephone business. In many ways, Bell telephone is a kind of government within a government. This is really important. Like governments, they cannot please everyone. The difficulty is that Bell does not recognize that it is unique. Sometimes they say they understand it. My feeling, from talking to people in Bell, is that they have not sufficiently recognized the kind of responsibility that goes with being big, with being a monopoly and with having to please everyone as governments in fact try to do but not always successfully. Like governments, all kinds of things get heaped on their head by virtue of the fact they are like that. Bell wants to operate and be a business like other business, when in fact it is not a business like other businesses. This is the critical difference and why Bell gets itself into far more difficulties than is necessary.
I started my remarks by saying there are many things about Bell for which we should be happy and grateful. However, when Bell starts to behave in the way it does, it never seems to put its best foot forward. If it does, it winds up with that foot in its mouth.
One senses a feeling of resentment among Bell executives that they should have to go to the House of Commons and ask for the powers they feel they should possess. But Bell is in a very special position. It is not a business like other businesses because it is a monopoly and because it plays a social role in our society. Telephones are no longer a luxury, they are a necessity, a public service. In this situation Bell should be prepared to explain in some detail the reasoning behind its requests and to answer rationally to the House of Commons, Bell Canada is almost a government within a government. It should recognize its social responsibilities and be prepared to subject itself to the same kind of examination as, for example, government agencies.
Some people talk about nationalizing Bell Telephone. I do not want to nationalize Bell Telephone. But if the corporation argues that it is only a private organization whose only concern is to satisfy its customers and its shareholders-and I believe an effort is made to do this-then all those responsible will find themselves in trouble. If the company were to recognize its special responsibility I think it would do very well when it came to the House of Commons to ask for certain additional powers, and so on.
I believe the company has a very good case to make in terms of its expansion. I, for one, believe that if Bell is open about things and is subject to the scrutiny of the House of Commons, there is no reason why it should not expand into other fields. However, I am reluctant to see it expand in the absence of some justification for such a course. Bell executives want the House of Commons to give the company a blank cheque with which to do as it pleases.
Perhaps the actions the corporation has in mind are good, but we should not be called upon the accept this automatically. It sometimes happens that the severest criticism voiced in the
[Mr. Saltsman.l
House of Commons is directed against Crown agencies and other instruments of public policy. If my hon. friend from Regina-Lake Centre, whom I admire greatly, thinks that nationalizing Bell is likely to solve all the problems, he need only look toward AECL, or Air Canada, or some of the other agencies which have been the subject of attention from time to time in this Chamber. There is no guarantee that bringing industries under nationalization will automatically make things better. What makes agencies responsible to the public purpose is the fact that the House of Commons can scrutinize their operations.
I realize it is a nuisance for a private corporation to be obliged to come to the House of Commons where, for example, my hon. friends from Northern Ontario can ask questions about their constituents getting adequate telephone service. They bring up the case of constituents living two miles or so from a telephone line and ask why they cannot be connected to the service without having to pay very large sums of money. Well, we are trying to help not only the service from person to person but from province to province and from region to region. We do not say to a person that because he was silly enough to live outside the main centres of population he should be deprived of the services of hospitals, of television, education and so on. I am sure Bell Telephone executives would agree that a person should not be left without hospital services- from what I know of them, they are decent, humane people. But when it comes to telephone service they take a different view, though access to a telephone might be just as vital in some circumstances as access to a hospital. They say, "If you want to get a telephone it will cost you $2,000 to spring a line because we are not in your district."
We say that a company in the position of Bell Canada has a special social responsibility, but I know what the answer would be. It would be along these lines: "If we accepted such a responsibility it would be unfair to our stockholders or to telephone users in other areas, because people in those other areas might be paying more for telephone service if we extended uneconomic lines to people living in more remote areas."
I am sure that people in Waterloo-Cambridge, for instance, are already paying out money to help those in other areas of Canada. And they are happy to be doing it. That is part of being a Canadian. We had a flood in my area a few years ago and we were helped by people in other communities. That is what being a Canadian is all about. This is what we find so hard to get through to the consciousness of Bell Canada-the idea that it is not a business like other businesses. If the corporation insists on taking the line that it has responsibility only to its shareholders then it will invite the kind of answer given by my hon. friend from Regina-Lake Centre who says, "If that is the situation we shall have to nationalize the company." It is an understandable response.
In some ways Bell behaves like a government and it has to be treated like a government. Governments have always complained that the opposition wants to criticize their actions too much. Consider the system of dealing with estimates in the House. There are some advantages about the new system, but
December 1, 1977

a great deal has been lost since the practice of examining estimates directly in the Chamber was abandoned. Members of the House of Commons could say, as we have been saying during this private member's hour, that they would not allow certain items to go through or certain estimates to pass until they had been given satisfaction. The government complains, of course, that the opposition is being irresponsible, that it is holding things up. But how else in a society like ours, where the government exercises a virtual dictatorship, particularly in the years just following an election, can members air regional grievances? How do you force the government to back off its high horse without the opposition performing its function of saying it is not prepared to let legislation go through unless these grievances are satisfied?
The same can be said of Bell. How do you get Bell to back off its very lofty, estimable, but nevertheless very real high horse? We cannot, unless they come to parliament and get approval. When they come to parliament for approval we will raise issues which we have raised with them privately over the years, and regarding which we have not yet received satisfaction. Either we get that satisfaction or Bell will not get what it wants. That is the situation. Surely Bell should understand its role and should meet the members of the House who have grievances such as I have outlined. Members from northern Ontario in particular have longstanding grievances with Bell. It is not a matter of losing face or hurting pride but of recognizing the social responsibility of a company with a charter like Bell Canada.
Bell would be well advised to understand its role. It is not like other companies. If a person is not satisfied with the service of a particular company he can go somewhere else. It is not like going to the government. Of course, if you are not satisfied with the government you can take care of it at the next election, but how can you take care of Bell? Without a vigilant opposition to scrutinize the operations of Bell when it comes to the House of Commons, Bell is relatively unfettered. I realize there are controls, regulatory agencies and so on, which do a reasonably good job, but they cannot deal with the special problems of different regions caused by grievances against Bell Canada.
I see you are getting somewhat restless, Mr. Speaker, so I will sum up. Bell creates problems for itself by not accepting with pride the fact that it is an effective corporation. It does a good job, but it also has a special public responsibility. It must admit it is not a company like others and that it must accept its social responsibility. It must admit that it understands the sort of grievances which are raised by members of the opposition and that it must work harder to persuade members of the opposition of the correctness of its position. If this sort of change in attitude were to take place in the boardrooms of Bell, I think everyone would be happier and Bell might have more friends in this country, among whom I hope I am numbered.
Bell Canada


Mr. Derek Blackburn (Brant):: Mr. Speaker, I enter this debate because I represent the riding of Brant where the telephone was first conceived, I believe in 1874. In my riding there is a very fine Bell homestead, the upkeep of which costs Bell Canada very little, though it nonetheless likes to take pride in the fact that Alexander Graham Bell spent a summer there, during the course of which he conceived the idea of the telephone. I only wish Bell were a little more charitable to some of its customers than it has been to the Bell Homestead Foundation in Brantford.
I realize that the state of Massachusetts and the mayor of Boston, when we were celebrating a couple of years ago the 100th anniversary of Alexander Graham Bell's concept, took some exception to the claim that the telephone was actually invented in Brantford, Ontario, rather than Boston, but I think that all those very mute Liberals who have not spoken on this bill will agree that it is nice to know that the telephone was at least conceived in Canada, not another country.
We are discussing here a very significant and important bill. Bell Canada has a monopoly in its field. It is a privately owned company which is sustained as a monopoly through legislation in the provinces of Ontario and Quebec, and to some degree in New Brunswick, the Northwest Territories, the Yukon, and perhaps in other parts of Canada as well. Not only is its presence in those provinces guaranteed; it must also accept the guarantee of service.
I should like to relate to the House for a few moments a rather tragic situation-I do not mean emotionally tragic- which exists in my constituency. It has to do with the Six Nations Indian reserve and is really a legal problem. In 1959 the Band Council passed a certain resolution, and passed another one in 1960. According to Bell Canada's lawyers, Bell cannot upgrade service until these two resolutions are withdrawn. I was on the reserve a few weeks ago for the opening of a beautiful new school on the Six Nations reserve called the Jamieson Memorial School. The Jamieson family on the Six Nations reserve has made an outstanding contribution to the field of education, medicine, and other endeavours, particularly agriculture. I do not know how much the school cost to build but I would say it was in the neighbourhood of $300,000 or $400,000. Yet this school had no telephone, and the reason for this was some legal hang-up with Bell going back to 1959.
Since Bell cannot instal a telephone in this brand new school, Mr. Speaker, what would happen, as has happened in schools in other jurisdictions, if a child gets ill or injures himself at sports, or suffers some mental or physical affliction? How can the school call an ambulance if this brand new elementary school, the teachers in which are doing a fine job, cannot use the telephone? It cannot even telephone the parents of children in need of assistance.
I think Bell Canada pays its top executives a salary of around $200,000 a year gross, yet because of some legal hang-up going back to 1959 Bell cannot put one damned telephone into this new elementary school on the Six Nations Reserve. Obviously something is wrong with Bell Canada.

December 1, 1977
Bell Canada
I have waited a long time to make these remarks. The people on the Six Nations reserve did not ask me to make them, but I am now putting them on the public record. If we examine the situation in other remote areas of Ontario and Quebec, just to take these two provinces alone, we will find the same kind of hang-ups with Bell Canada. Rural service is not the same as urban service. Something has to be done about this.
If Bell Canada is given carte blanche to expand its investments and enter into new ventures, without being accountable to the House of Commons or one of its committees, and at the same time enjoys a monopoly, then we are not assuming our responsibilities as members of parliament. Bell Canada cannot have it both ways. It cannot be a government sponsored monopoly, and then move into the private sector and expand.
Although I was not present when the hon. member for Regina-Lake Centre (Mr. Benjamin) made his remarks, my understanding is that he indicated the answer was to nationalize. The hon. member for Waterloo-Cambridge (Mr. Salts-man) indicated that perhaps it was not the best idea, but if Bell Canada did not clean up its act, the only alternative would be to nationalize it. I am not saying that we should nationalize Bell Canada, although other members of my party believe in that concept. If Bell Canada were nationalized, the cost of buying out that very large corporation might be borne by Canadian taxpayers, and the net result might be higher rates and poor delivery. Crown corporations properly managed by their personnel, and not by Liberal appointees, can make a profit and provide a good service. Further, they are required to take a loss now and then in certain rural and remote areas of the country where private enterprise would never dare to enter.
How can a monopoly have the best of both worlds? Taxpayers are backing up big corporations like Bell Canada, even though it is providing a certain minimum level of service and it is a privately owned corporation that is making a profit. Bell Canada has been given money by an act of parliament through the CRTC. Regardless of the Anti-Inflation Board, that firm has received one increase after another in the past three years. If we are going to provide it with money in this way, it cannot earn money in the private sector as well. If the company finds it more lucrative, obviously it will move more and more into the private sector and less and less toward providing a service to its customers.
It has been argued that if the government goes against "Ma Bell" a lot of shareholders will suffer. The unwillingness to eliminate widows and orphans has been emotionally presented. I am not trying to downgrade or be critical of the orphans or widows of Bell Canada employees; but I should like to point out some of the large companies which have holdings in Bell Canada. Confederated Life holds 63,087 shares; Manulife Diversified has 101,200 shares; United Corporations has 80,142 shares; and the list continues.


Robert Phillip Kaplan: Mr. Speaker, I have a question for the hon. member. How many stockholders or policyholders do these

corporations have? I am talking about the large stockholders of Bell Canada which have been referred to here.


Derek Nigel Ernest Blackburn: We are referring to private investment versus public investment. We are not talking in terms of individual shareholders of other corporations. We are referring to the amount of money invested by large corporations in a private corporation which has a monopoly attached to it. That is what we are talking about.


An hon. Member:: Right on!


Derek Nigel Ernest Blackburn: In fact, I think the hon. member's question is quite out of order. If the hon. member for York Centre (Mr. Kaplan) is now appearing in this Chamber as a great champion of big corporations backing Bell Canada, I will sit down and let him have the floor. What about the subscribers? Are they not entitled to a choice? We are talking about the shareholders of Bell Canada, the subscribers of Bell Canada, and Bill C-1001. If the hon. member wants to make a speech, as far as I am concerned, he can. I think his constituents will be very upset if he rises and makes a speech right now championing large corporations that have invested in Bell Canada. That corporation is increasing its prices for services to private people, industries and corporations. Perhaps the hon. member should think of that before he rises to his feet.
Mr. Speaker, may I call it six o'clock?


Mr. Deputy Speaker:: Order, please. The hour appointed for the consideration of private members' business having expired, I do now leave the chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration in committee of Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds-Mr. Chretien-Mr. Turner in the chair.
Charles Robert Turner: When the committee rose this afternoon clause 6 of the bill, as amended, was under consideration.


Arthur Jacob (Jake) Epp: Mr. Chairman, just before we rose for the dinner hour I was pointing out that, to a great degree, I was in
December 1, 1977

sympathy with the minister's interpretation of remarks relating to spending. I suppose the task for the minister and for all of us is to rationalize spending into those areas where it could do the most long term good, and simply eleminate it in those areas which are non-productive.
During second reading debate on Bill C-ll I raised a question as to whether the minister has considered the rollover provision for primary property. The question was whether the roll-over provision for primary property would allow the sale of a family farm or family business, and whether taxes could be deferred by buying into a bigger unit. Can a farmer or businessman roll over his farm or business to a close family member without the assessment of capital gains? I am willing to put an upper limit, that is, a dollar value, but without question capital gains taxes militate against sons and daughters taking over farming operations. Can the minister give me some indication as to why that was not extended?


Joseph Jacques Jean Chrétien: Mr. Chairman, I understand that 98 per cent of farmers qualify for that roll-over, so I do not see why the hon. member is preoccupied with this. Most family-owned farms can be rolled over.


Arthur Jacob (Jake) Epp: I am not speaking about the roll-over of a farm where a farmer buys a larger unit. Because the average age of Canadian farmers is now approximately 60, many people want to get out of their farming operations and roll them over to close family members.


Joseph Jacques Jean Chrétien: They can be rolled over for children or wives, but not for third parties. If this is done within the family, there is no problem.


John Carnell Crosbie: Mr. Chairman, I want to make one last attempt to see if I can talk any reason into the Minister of Finance. I doubt that I can, but I am going to speak dispassionately. I do not want to get excited or to rouse any partisan impulses on the part of any member. I want to speak in a tone of sweet reason. I have not tried this tone with the government opposite before, but I am going to try it now just to see if I can get through to it.
Before getting into this insulation business I would like to mention that the minister of mines and energy from Newfoundland is in the gallery. He is not in the distinguished visitor's gallery or in the diplomatic gallery. He is a humble man, and he is in the people's gallery tonight. He is in Ottawa attending a conference.


Stanley Howard Knowles: All Newfoundlanders are humble.


John Carnell Crosbie: The hon. member for Winnipeg North Centre says that all Newfoundlanders are humble. That is very true, and one of the most humble is the person now speaking.
I would like to get back to clause 6(5) which has to do with the Minister of Finance and the government wanting to make taxable certain grants which will be paid to people who want to re-insulate their homes in all the provinces of Canada
Income Tax
except Nova Scotia and Prince Edward Island. I want to make it plain that we are not suggesting that more money be spent in Canada. We are saying we believe the Nova Scotia and PEI programs are good programs, and we are delighted that the people of Nova Scotia and P.E.I. have them and are going to get grants to help them insulate their homes, which will save on the use of oil, coal and so on for heating their homes. What we say, however, is that the same program should apply to anybody in Canada no matter where he lives, and that the half-baked program which now applies in the other eight provinces should be changed to correspond with the Nova Scotia and P.E.I. program. However, if the government will not do that, at the very least the grants it makes in the other eight provinces should not be added to taxable income, just as they are not added in Nova Scotia or P.E.I.
The Minister of Finance has stated what the government has said from the start of these two programs, and that is that the reason there is discrimination in favour of Nova Scotia and Prince Edward Island is that they have higher electricity costs and that they are highly dependent on oil for the production of electricity. I agree that they are more dependent on oil to produce electricity than any other province, but that is no reason to give them a special program for the insulation of homes. If we are going to institute a program on the basis of need, we should look at all the costs which face the householder.
For example we have a man who lives in Nova Scotia with his family and makes $10,000; a man and his family in Quebec who makes $10,000; and another man and his family who live in Newfoundland who make $10,000, so we have to try to see who is the most needy of these people. It may be the man in Nova Scotia who has the highest electricity bills because in Nova Scotia they use oil more than the rest of us do to produce electricity. Let us assume, which is not true, that the electricity bills are higher in Nova Scotia and that they are lower in Quebec and Newfoundland. But, then we have to go and look at everything that affects the requirements of that man and his family. We have to look at the cost of living in Nova Scotia compared to Newfoundland and Quebec; where is it highest? We have to look at taxes and all the costs the man has to bear, what he has to spend his disposable income on, and we have to look at the people in that province to see what their per capita disposable income is. You have to look at all these factors before you can decide where there is the most need.
Simply because Nova Scotians have the highest electricity costs, which I do not agree they have, but if we assume for the purposes of argument because they have the highest electricity costs, it does not mean they have the most need.
Mr. Chairman, in Newfoundland in 1975 the per capita personal income of an average Newfoundlander compared to the national income per capita was 69 per cent. In Prince Edward Island it was 68.6 per cent. Newfoundland and Prince Edward Island were pretty well the same as far as disposable personal income per capita was concerned. In Nova Scotia it

December 1, 1977
Income Tax
was 79 per cent. The average Nova Scotian was considerably better off than the average Newfoundlander or Prince Edward Islander in 1975. In New Brunswick it was 77 per cent. So that the New Brunswick citizens were slightly worse off than the people in Nova Scotia. The people in Newfoundland and Prince Edward Island were considerably worse off than those in Nova Scotia. Let us say that the average Newfoundlander had a lower income than the average Nova Scotian. Then you have to look at their living costs and which province has the highest cost of living. I can assure you it was the Newfoundlander.
On the basis of need for this program, and looking at the need on a provincial basis, a better case could be made out for the Newfoundlander than the Nova Scotian. There is simply no point in plucking out of the air one aspect-the cost of living of a Nova Scotian and a Prince Edward Islander and comparing that to the cost of living of everyone else in Canada, and saying because that is higher, therefore they need a better home insulation program than the rest of Canadians.
If anyone is listening with any kind of dispassionate approach at all, the reason the government gives for a better program in Prince Edward Island and Nova Scotia falls to the ground. There is no rationale, except a political one. There is no use in the minister getting up and saying because electricity costs are higher in Nova Scotia and Prince Edward Island that they need this program more. As I explained yesterday and this afternoon, they do not heat their homes in Prince Edward Island and Nova Scotia through electricity, they heat them through oil principally, and some coal. Ninety per cent of the homes in Nova Scotia are heated through oil fired furnaces or stoves, and 98 per cent of P.E.I. heat their homes through oil. This program helps them to save oil, but it does not help them to save electricity. It has no connection to electricity. The electricity is only a wet blanket or a red herring thrown out ten months ago to justify having a program in Nova Scotia and Prince Edward Island, and not having one in the rest of the provinces. It is federalism in reverse.
Not only that, but the program offered to the rest of Canada is regressive and inequitable because you receive the same program no matter which province you live in-whether it is a wealthy province or a poor province. Newfoundland has the highest unemployment and the lowest average income and they have the highest petroleum product prices of any part of Canada, yet Newfoundland is offered an inferior program and Nova Scotia and Prince Edward Island the superior one. It makes no sense. The program offered to Newfoundland and the other eight provinces is worse than that offered in Nova Scotia and Prince Edward Island.
I will just recapitulate the seven reasons very quickly. This program is uniform in the eight provinces and it gives the richer provinces exactly the same amount of subsidy as the poorer provinces. It does not take into consideration the fact that in some provinces there are higher energy costs, with the exception of electricity in Nova Scotia and Prince Edward Island. There are higher energy costs in Newfoundland than in Nova Scotia and Prince Edward Island especially when you
[Mr. Crosbie.l
take into consideration the cost of petroleum products, together with the fact that electricity rates have gone up in Newfoundland I would say at least 100 per cent in the past two or three years. You should be looking at energy costs not just electricity.
In Newfoundland you have the highest unemployment and lowest average income levels in Canada and the highest petroleum product prices. The highest prices for gasoline are in Newfoundland. The highest price for oil which you burn in your furnace at home is in Newfoundland. That is where the program is most needed. I am not saying it should not be in effect in Nova Scotia and Prince Edward Island, but you can make a better case on the basis of need in Newfoundland.
Then you look at the climate-where is it the coldest? My God, it is much colder in Labrador, the Yukon, the Northwest Territories, northern Ontario, northern Manitoba, Saskatchewan and Alberta than it is in Nova Scotia and Prince Edward Island. Prince Edward Island and Nova Scotia have relatively mild climates. There should be one program and it should be uniform across Canada and it should be the Nova Scotia-P.E.I. program. The grants should not be taxable and they should be administered on the same base. There is no justification for a different program in eight of the ten provinces, and a better one in N.S. and P.E.I.
As I said before, if it is a question of money, and we realize and we do not want the Minister of Finance to spend more than he can, he has a huge deficit this year-$8.5 billion or $9 billion is it?-the figures stagger the mind. I suggested the solution yesterday, take the N.S. and P.E.I. program and start applying it in part of the country this year, based on the greatest need, based on the unemployment rates, the income levels, the cost of living levels, the climate or whatever and start over the next three years applying it to the whole country, so that all the costs do not have to be implemented immediately. If you do not have the money to apply it in all ten provinces at once, you have already done it in P.E.I. and N.S. for some peculiar reason-which I think is a political one-but in the rest of Canada start to do it over three or four years. Do not continue this half-baked program that is now before the House in clause 6.
Today at the conference of ministers of energy, the eight provincial ministers, excluding P.E.I. and N.S., have made suggestions to the Minister of Energy, Mines and Resources of Canada. They have made a lot of compromises but the one thing all eight provinces are agreed on is that these grants should be non-taxable. I do not know whether the Minister of Energy, Mines and Resources agreed with the suggestions because he would have to go back to the cabinet. However, a very reasonable proposition was put to him today by the other ministers of energy, aside from agreeing that grants should be non-taxable, and that is there be no preconditions in every province. You will recall, Mr. Chairman, that there were four conditions to comply with in order that a province would be able to enter this program-other than N.S. and P.E.I., they did not have to agree to any conditions. I said how unfair it was for the federal government to try to dragoon and push this
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program into effect to make the provinces agree to certain conditions. Today the Minister of Energy, Mines and Resources has agreed to drop that. He has agreed to stop this bully-boy federalism, this Kung Fu federalism which he and the hon. member for Rosedale were so fond of.
If you did not agree with the former minister of finance, the hon. member for Rosedale-Kung Fu-you got the fiscal foot right in your mouth. You had to bend to him, or else. We hope that the present Minister of Finance, the hon. member for Shawinigan-


Joseph Jacques Jean Chrétien: Saint-Maurice.


John Carnell Crosbie: -the hon. member for Saint-Maurice, will be a more flexible federalist and not as Kung-Fu-ish as his predecessor, the hon. member for Rosedale.
The Minister of Energy, Mines and Resources today agreed to drop these provisions. Quebec and Alberta apparently are going to join the program because there are no pre-conditions. If the government can drop the pre-conditions, surely it can do justice to the ordinary taxpayer and householder in Canada and stop this nonsense.
In Newfoundland, New Brunswick, Ontario, Manitoba, Saskatchewan, British Columbia, Quebec and Alberta you are going to be taxed if you insulate your home, because any grant will be added to your taxable income. However, if you are in Nova Scotia or Prince Edward Island, the new tax havens of Canada, you will not be taxed. Surely we should stand this clause over until the Minister of Finance can get the cabinet to ratify dropping this ridiculous, discriminatory, illiberal, undemocratic, and certainly un-Tory measure that he has before the House.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I do not want to be criticial of the government, as you know, Mr. Chairman.


Joseph Jacques Jean Chrétien: You would never do that!


John Carnell Crosbie: Our objection to this clause is not the raising of tax revenue in the right way, or to the tax itself. We object to the fact that it is discriminatory.
The Minister of Finance got up in the House today. I have some respect for his intelligence until I hear some of the things he says. Then I temporarily lose that respect, but my hope rises again. Perhaps he is not as unreasonable as he sometimes appears. He tried to justify this discrimination by saying that the government spends more on Canada Works in some provinces than in others. Sure it does, because there is more unemployment in some provinces than in others. That is why it spends more. But that has no connection with the home insulation program. That is our whole point. It is not footing the money for the home insulation program in areas of need equally across Canada.
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It is not just in Nova Scotia and Prince Edward Island that this is needed. The man in Newfoundland or Quebec who earns $5,000 a year needs it just as much as the man in Nova Scotia.
The estimated cost of insulating the average home is $900. Outside of Nova Scotia and Prince Edward Island the maximum grant is $350. You still have to put up a great deal of your own money to insulate your home.
Along comes the government to encourage you to insulate your home in order to save energy. The department says if your home is properly insulated, you will save 38 per cent of your heating costs. The government will give you $350 if you spend the maximum, but you will be taxed on it. On the one hand they encourage you, and on the other they take it back.
The principle seems to be that the government feels we need to have this tax because it is progressive. The hon. member for Regina-Lake Centre said that he agreed with the taxation principle because the higher your income was, the greater the amount of the grant you would pay back to the government. That is the real NDP principle, progressive taxation. We all happen to agree with that.
The point is that it is not being applied everywhere in Canada. The government should apply that principle to everyone in Canada. Why should the rich in Nova Scotia and Prince Edward Island get the advantage of these grants without tax? If the principle is right, the grants should be taxed all across Canada.
If you want to encourage people to insulate their homes, you do not add the grants to their taxable income. This is the most illogical proposal the government has made in at least two or three days. It makes a lot of the illogical proposals, but this is the worst since I have been here. I am speaking more in sorrow than in anger, as hon. members can see.
The hon. member for Fort William is, according to my observation, an intelligent man. He is very interested in the energy field. He supports the government's program because they use oil more for electricity in Nova Scotia and Prince Edward Island. That just does not wash. It has nothing to do with that. If we are going on the basis of need, it should apply to all ten provinces. The needy in all those ten provinces should get the same treatment. That is not the way it is now. I want to move a motion as follows:
That clause 6 be amended by deleting subclause 5 and renumbering the remaining subclauses accordingly.
Subclause 5 deals with this iniquity which makes the grants taxable. The people who live in the eight provinces outside of Nova Scotia and Prince Edward Island are going to put up a statue to me, if I am successful. It is like no taxation without representation. They have not got any representation on the Liberal side of the House if this is not carried.
If there is a member in this Chamber who can argue that the people of his constituency should be taxed simply because they do not live in Nova Scotia or Prince Edward Island, and his people re-elect him, I say there is something fundamentally wrong with the communications system in Canada. We will

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somehow have to get to every household to be sure they are defeated.
If members opposite who come from Ontario, Quebec, New Brunswick, Newfoundland, Alberta, Saskatchewan, Manitoba, British Columbia, the Yukon and the Northwest Territories vote to tax their people for insulation grants, when those in Nova Scotia and Prince Edward Island are not going to be taxed, they deserve the ultimate punishment, banishment by the electorate. It cannot be justified.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Chairman-I am sorry-I thought the hon. member had finished.


John Carnell Crosbie: I am not finished. I was only taking a breath. If the minister is getting up to agree to withdraw the clause, I will subside and we can get on with this.
There are a couple of other items. Heating bills will be reduced by 38 per cent. This afternoon I made the mistake of speaking for five minutes and asking a couple of questions. I never got another chance to speak until tonight. I will not make that mistake again. I will speak my full time, and then ask my questions at the end.
I do not want the Minister of Finance to be thought of by some people as Mr. Slippery Heels. I know he does not mean to be a slippery heel. He wants to give us the full information and not try to slide around or slip out of anything. I have a great deal of regard for that hon. gentleman.
This afternoon I asked him two questions which he did not answer. The first question was: what do the minister's officials calculate will be the tax return to them by having these grants taxable in eight provinces of Canada? What, if anything, will that be for the government?
The other question was: what is the estimate of the cost of the program excluding Nova Scotia and Prince Edward Island? When the Minister of Energy, Mines and Resources introduced this program, the estimate was that it was going to cost S45 million by the end of March, 1978, and that the program would cover 133,000 units. Their estimate was that next year it would cover 462,000 units and cost $145 million.
I gave figures to the committee this afternoon which showed that up until November 25 there had only been 5,000 applications and only half a million dollars spent. Obviously it will not cost $45 million this year. People are not going for it. They do not like it. They know it is inequitable. Obviously it is not attractive to them despite the fact that they should insulate their homes better. Can we have these figures?
These are my questions that were ignored when the Minister of Finance got up this afternoon and made a political reply, which he should not do. As Minister of Finance, he should not be political. He should be like his predecessors who were never political, the hon. member for Rosedale and the former member for Ottawa-Carleton. They were predatory, but not political. The minister should just deal with the facts.


Charles Robert Turner: Order, please. I regret to interrupt the hon. member but his allotted time has expired.


Joseph Jacques Jean Chrétien: I think I have to reply to this point because I should like to have the amendment disposed of very quickly. I would point out that the cost of the program is $4.7 billion over seven years for the eight provinces to which he referred, and the cost of the program if it were not taxable would be $560 million more, and would increase the total cost of the program to $5,160 million.
The hon. member discussed the design of the program at length. There was further discussion about it today involving the Minister of Energy, Mines and Resources and his provincial counterparts. I gave the reasons why the government had to move in two stages. It is a difficult proposition. I find it extraordinary that, after four weeks spent here in discussing the financial situation of the nation, one member of the House should get up and propose an extra item of expenditure, like $560 million over the next seven years. I say once again that I hope that proposal will be defeated very quickly, and I shall be watching the hon. member for Provencher closely to see what attitude he takes toward it.


John Carnell Crosbie: I do not like to interrupt the minister, but he is not factual. Our proposal would be to extend the same program as they have in Nova Scotia and Prince Edward Island over a period of four or five years. I did not advocate spending another $560 million this year. The hon. member should not twist my words. I do not want to lose my respect for the hon. gentleman, because I did not have too much to start with.


Steve Eugene Paproski: Might I ask the minister a question concerning the insulation program which Alberta has now agreed to join? What was the deal with Alberta, and what other deal did the federal government abandon in order to get Alberta into this program? The answer might shed a little light on things, so perhaps we could have an explanation.


Alexandre Cyr: There was discussion on this subject between the ministers today and they reached an agreement. I do not know the terms of that agreement. I have been in my place here all day, and I cannot be in two places at the same time. The Minister of Energy, Mines and Resources, who is responsible for that program, will be in the House tomorrow and hon. members can put questions to him at that time. We have spent a lot of time in this Chamber today discussing a program which does not come under my department. I merely want to say that if the proposal of the hon. member for St. John's West is adopted we shall be spending another $560 million. You know, Mr. Chairman, I shall be very pleased in my speeches around the nation to draw attention to the double-talk of the official opposition.


Steve Eugene Paproski: I want to know whether this involves any tax. Surely the Minister of Finance must have had a conversation with the Minister of Energy, Mines and Resources before he went into the meeting today. What kind of sweetheart deal did
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he make? Some provinces have stayed out of it, and there must be a reason for them to want to get back into it.


Joseph Jacques Jean Chrétien: The hon. member can address his questions to the Minister of Energy, Mines and Resources tomorrow. I must say I should like to get agreement to this clause quickly. After all, we are on the verge of completing our fourth week of debate on a bill of 160 clauses, and we have reached clause six. We have a long way to go.


Arthur Jacob (Jake) Epp: On a point of order, Mr. Chairman, I have a fair amount of respect for the minister but I do not think he would wish to give an incorrect impression of what I was saying. What I said to the minister was that I would support him in whatever cut he was willing to make to reduce the present 43 per cent of the GNP which represents public spending. I also said there were many ways in which government spending could be reduced.


An hon. Member:: Where?


Arthur Jacob (Jake) Epp: If the hon. member for St. Catharines had been in the committee today and had seen some of the things we spent money on and some of the estimates of the Secretary of State, he would have blushed with shame. I say to the Minister of Finance: Spend money wisely; spend money on projects such as insulation which will enable us to reduce energy consumption and improve the balance of payments. That is the way to go; cut back on programs which are of little or no value.


Joseph Jacques Jean Chrétien: I was merely pointing out that if the committee were to adopt the amendment of the hon. member for St. John's West and make these grants not taxable over a period of seven years, it would cost the treasury $560 million. People can make their own judgment.


Steve Eugene Paproski: The Minister of Finance is trying to convey the impression that he never speaks to the Minister of Energy. I do not see why we should vote on the amendment at this time when the minister cannot tell us what the deal was with Alberta. It is important that we should know. Surely he knew what was happening at that conference.


Joseph Jacques Jean Chrétien: I have great confidence in the Minister of Energy, Mines and Resources, and I am very pleased he was able to make a deal with the two provinces which were not included in the program. I must admit I was not there during the negotiations. Apparently, though, an agreement was reached and I am pleased about it. I am sure my colleague did not go beyond his mandate; I know what it was. I hope the hon. member will not vote in favour of an amendment which will cost more than $500 million. Perhaps he should go and help the Eskimos of Edmonton to play a little football.


Steve Eugene Paproski: I want to ask the minister this; what was that mandate? He will not tell me what the mandate was. He does not know what the mandate was. Maybe Alberta is going to save money for the treasury. The minister is not telling us the truth. I am surprised that the minister should stand there and talk about something he doesn't know.
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J. Michael Forrestall: Mr. Chairman, is the only way to get the floor here by rising on a point of order?


Charles Robert Turner: The hon. member for Broadview.


Mr. Gilbert:: Thank you, Mr. Chairman. I want to direct a question to the Minister of Finance. He has told us it will cost $560 million if we accept the amendment moved by the hon. member for St. John's West. May I remind him that that amount would be spread over a period of seven years, which would mean $80 million a year, or less. In the interest of establishing the principle of fairness and equity in all provinces, rather than just two at the moment, would the Minister of Finance say that this is an unreasonable amount to pay?


Joseph Jacques Jean Chrétien: Mr. Chairman, there is a very funny atmosphere here. The suggestion appears to be, "What's $80 million a year?"


J. Michael Forrestall: Mr. Chairman, I have a very simple observation to make to an otherwise generally intelligent individual. I think that the Chamber, or those in it who are listening to the minister, would reject the sophistry of the position he has been taking in the last 20 minutes, and I think he is aware of that. I would commend to the minister some reading as to why we have a Canada today, such as that by Joe Howe. I would also remind him that he knows precisely what is the position of the opposition in this regard, and I suggest he review his Canadian history. Or is he so narrow minded that he only reads some other histories of Canada?
I say to the minister, don't use that argument unless you want to be divisive in this country. I have watched him and some of his colleagues debate and argue in this Chamber for 10 or 12 years, and I am accusing him of sophistry in the casual, offhanded manner in which he rejected a serious amendment. The minister knows exactly what I am talking about. Nova Scotians and Prince Edward Islanders do not want to be accused of being alone in this nation. Don't stand there and tell me half truths, Mr. Minister, tongue in cheek; because you know differently. Do not ever let me privately believe that you are capable of going to such an extent with respect to a serious amendment to your proposal.


Joseph Jacques Jean Chrétien: I want the hon. member to know that the first program was designed to assist two provinces in Confederation which rely almost absolutely on imported oil for their energy. The energy crisis hit those two provinces more than any others. The federal government designed a special program to aid people in this land who were worse hit by the cost of oil than others. Those two provinces were more dependent on oil, Nova Scotia and Prince Edward Island. We tried to find a solution that would give the people in those two provinces assistance, since unfortunately they were the victims of the increase in the price of imported oil.
We were aware that this might create some resentment. It was not an easy thing to do. I am a member from Quebec and this did not assist my province. As I recall it, I was President

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of the Treasury Board at the time and I had some qualms about it, but I understood that the principle of our Confederation is that when one province is hit by disaster more than any others, it is the duty of the government to come to its aid.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Since people said it was a good idea to make money available for home insulation, we decided to apply the program to the rest of the country, making availale $350 for everyone, part of which was to be taxable. I agree that making the program applicable to two provinces only was a difficult idea to sell to the nation; but any observer will recognize that that action had nothing to do with politics. Prince Edward Island is 100 per cent dependent upon oil for electricity; Nova Scotia is 84 per cent dependent. Those two provinces depend on oil, not only for home heating but for the production of electricity.
Since there was so much complaint about this, the government decided to set up another program of the same type. I wish we had been able to provide $500 for everybody. In the first instance the grant was given to compensate individuals who were hit by the increase in the price of oil more than others. The new scheme has been accepted by all provinces, including my own province of Quebec, and Alberta.


J. Michael Forrestall: What are you talking about? Just look at the distribution of wealth in Montreal.


Charles Robert Turner: Order. The minister has the floor.


Joseph Jacques Jean Chrétien: Mr. Chairman, I have tried to give a down to earth, clear explanation of the reason the government took action. In my judgment, that was the way we should have operated. If a drought occurs during the summer in one area of the country, then we have a special program to aid that area. If there is a flood, again we have a special program. When these two provinces were hit more by the increased price of oil, we designed a program to help them. We wanted to help those who were suffering most from the increase in the price of oil. I should like to have a vote on this matter right away to see who are the responsible members of the House of Commons and who are not.


Charles Robert Turner: The hon. member for Fort William on a point of order.


Paul Edmund McRae: Mr. Chairman, I should like the minister to clarify one point. We are talking about $560 million over seven years-


J. Michael Forrestall: That is not a point of order.


Charles Robert Turner: Order. The hon. member for Fort William has the floor on a point of order.


Paul Edmund McRae: No, Mr. Chairman, I do not have a point of order. I have a question I want to put to the minister. He mentioned $560 million over seven years as being the additional cost of this amendment. He is in no way giving the same

benefits to the whole country as exist in Nova Scotia and Prince Edward Island; this only refers to making it totally tax free?


Joseph Jacques Jean Chrétien: Yes, Mr. Chairman. If the amendment carries this will mean the $350 would not be taxable at all, and the cost to the treasury will be $560 million over seven years.


Mr. Whiteway:: Mr. Chairman, I have five questions for the Minister of Finance, and the fifth question will determine how I vote on this amendment. I was in committee this afternoon with his colleague, the Minister of State for Urban Affairs, so if my questions have already been answered I hope he will forgive me for asking them again.
Does the minister have any plans to extend this home insulation program to any home built at any time, rather than the various years depending on the province?


Joseph Jacques Jean Chrétien: Mr. Chairman, this is a question on the administration of the program, which does not come under me. Thus I am not in a position to give a precise answer to the hon. member's question.


Dean Waldon Whiteway: My second question is: if the Minister of Finance has ever been out in the prairies and has been subject to those howling prairie winds in January and February, he will know that, as important as insulating the walls may be, insulation for windows and doors, such as double and thermal glazed windows, is as important. Would the minister consider extending the program to the insulation of windows and doors?


Joseph Jacques Jean Chrétien: Mr. Chairman, this is another question about the management of the program, which does not come under me. That comes under the jurisdiction of the hon. Minister of Energy, Mines and Resources or the hon. Minister of State for Urban Affairs. As far as the big winds of the west are concerned, I know a little bit about it, even if I am from Quebec. The hon. member should know that my grandfather arrived in St. Paul, Alberta, in 1905.


Dean Waldon Whiteway: Mr. Chairman, I will group my third and fourth questions together, because perhaps the minister will consider them better answered by his colleague who did not answer them in committee this afternoon.


Monique Bégin: Are these questions as to the amendment?


Dean Waldon Whiteway: They have to do with the amendment. The fifth question, depending upon the minister's answer, will affect how I vote on the amendment. I know hon. members opposite are anxious, but I am now dealing with my third question, and then I will deal with my fourth and fifth questions.
There are many problems in relation to those who sell the insulation and those who install it. Some Johnny-come-lately and Mickey Mouse companies have sprung up overnight in order to make a quick profit on the insulation program.


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Derek Nigel Ernest Blackburn: It is called free enterprise.


Dean Waldon Whiteway: Has the minister looked at this?


Joseph Jacques Jean Chrétien: Mr. Chairman, I wish I could give the hon. member a precise answer to his question; but those questions concerning the administration of the program should be asked in committee when the ministers responsible are present. I will not comment on their behalf in regard to those technical questions.


Dean Waldon Whiteway: My fourth question is: as was indicated this morning on the CBC, there were approximately 60,000 grants applied for, and only 3,000 cheques were sent out in reference to the program. Does the minister project that all the funds will be used this year? If not, will he carry the surplus funds left over into next year's program?


Joseph Jacques Jean Chrétien: I think the hon. member would be well advised to deal with his fifth question right away, because this is another question about the management of the program for which I am not responsible.


Dean Waldon Whiteway: Mr. Chairman, my fifth question is critical to me because I grew up on the south shore of Nova Scotia, although I represent the keystone province of Manitoba. My question will be very simple. It will put my mind to rest, as well as the minds of hundreds of thousand of Canadians, particularly from Nova Scotia. My question is-


Steve Eugene Paproski: Will the minister resign?


Dean Waldon Whiteway: Was any political consideration given to making the provinces of Prince Edward Island and Nova Scotia tax-free under this program?


Joseph Jacques Jean Chrétien: Mr. Chairman, I am pleased to tell the hon. member that there was absolutely no such consideration. It was strictly relative to the fact that Prince Edward and Nova Scotia were dependent on oil. All the figures were looked at before a decision was reached, because we were aware of that very difficult problem. It would have been easier to include another province which had the same situation. Then we would not have been accused of acting in the way we did because these two provinces have Liberal governments. We are not stupid-


Some hon. Members:: Oh, oh!


Walter David Baker: Don't mislead the House.


Steve Eugene Paproski: Once a Liberal, always a Liberal.


Mr. Douglas (Bruce-Grey):: We have to have a chance to speak once in a while.


Joseph Jacques Jean Chrétien: I am glad the hon. member asked that question. There was absolutely no such consideration given to that. It was related to the fact that these two provinces have been hit more than any other province by the increase in the price of oil.
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Dean Waldon Whiteway: Mr. Chairman, I have a supplementary to my fifth question.


Leslie Gordon Benjamin: He has had his five questions.


Dean Waldon Whiteway: This is question No. 5(b).


Charles Robert Turner: Order, please. The hon. member for Selkirk has 20 minutes in which to make his speech.


Dean Waldon Whiteway: When I was growing up down on the south shore of Nova Scotia, one afternoon I had my dog out in the woods, and I had my old twist steel 16-gauge shotgun. I wanted to teach my dog how to retrieve. I had my gun loaded. I threw a stick out, shot, and the old dog never moved.


An hon. Member:: It must have been a Liberal.


Dean Waldon Whiteway: Rather than shoot the dog, I decided to give the old boy another chance. Therefore I will give the minister another chance. I am wondering whether, on closer reflection, the minister might repent and decide to tell us the truth-


Mr. Fraser:: Or be shot.


Dean Waldon Whiteway: We will not hold it against him. There are only two provinces in Confederation with Liberal governments. We realize those provinces are struggling. Perhaps the minister might come clean and tell us if there was any political consideration given to making Prince Edward Island and Nova Scotia tax free under the program?


Joseph Jacques Jean Chrétien: Mr. Chairman, I can only repeat what I said when the hon. member was not in the House. I should like to give the figures for the percentage of electricity generated by thermal processes. Newfoundland is 1.7 per cent; Prince Edward Island is 100 per cent; Nova Scotia is 83.1 per cent; New Brunswick is 32.5 per cent; and Quebec is 0.3 per cent. Therefore the figures indicate those provinces which were suffering most because of the increase in the price of oil.
We have designed a scheme to help those provinces face their difficulties. We have applied the normal principle in this land: when there is a disaster in one area, we attempt to help. All day long members have been accusing us of doing our job because of the political stripes of those provinces. That is absolutely not true.
I am pleased that the hon. member asked his question. I am a little bit of a politician, and I had a funny reaction when I was confronted with that scheme. Sometimes we have to make difficult decisions, and the cosmetics of them are not easily defended. Not only did we want to help those provinces in regard to insulation, we wanted to find a way to help those people who, by sheer accident of nature, were dependent more upon oil than any other part of Canada.


Dean Waldon Whiteway: Perhaps the minister can answer this question: why was the principle not maintained of having those best able to pay being given the least from government help, which they do not need? Why was the grant in Nova Scotia and Prince Edward Island not $1,000 or $2,000, and maintain the

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deductibility or the taxability of the grant? There are some rich people in Nova Scotia and Prince Edward Island. Why did the minister not maintain the principle of its being taxable and simply increase the grant to maintain consistency for our provinces?


Joseph Jacques Jean Chrétien: I tend to agree with the hon. member. The two programs were designed in different contexts. Today we are debating an aspect of one of the programs. The second grant was made taxable. It was felt that it would be more just if the people with some means receiving that grant were to pay tax back to the government. However, the poor would not pay any taxes at all. Perhaps we should have gone to $1,000 for P.E.I. and Nova Scotia and taxed it, but it was not designed at the same time or under the same circumstances. I recognize that the hon. member has a point, but there is nothing 1 can do.
We are debating these programs at the same time. One program has been going on for a few years, and the other one is a new scheme. From the experience of having a grant taxable we felt it would be more just in order to cope with the two personal positions. However, I have to admit candidly that the programs were designed at different times, and sometimes we are faced with some difficult situations like the one we have here. I cannot withdraw anything I have said. They were designed at different times for different purposes.


Leslie Gordon Benjamin: Mr. Chairman, I have been listening carefully, and I must confess that I have some sympathy for those who support the amendment, but I also have some sympathy for the Minister of Finance. At the outset I want to say, as the minister himself has said, that he might be ignorant, but he is not stupid. This minister is a nice fellow, but he would not be so stupid as to bring in a program which would benefit the only two Liberal provinces left in Canada. I believe him. I do not believe the hon. member for Selkirk, or any other accusations or intimations. I believe the minister when he says that the two programs were set up in two different contexts.
I would like to ask the minister a question. If the programs for the people in Nova Scotia and Prince Edward Island are equitable and fair, regardless of the different contexts surely they are equitable and fair for the people of all the other provinces? The programs have an excellent principle. We support the programs 100 per cent. The amendment only suggests that they apply evenly all across the country.
When the minister responds I would also like him to tell us how he calculates the $560 million. That is very important, because we were hit with $580 million the other day.
When the minister spoke about imported oil I understood him to say-I certainly got the impression-that all of a sudden it was just Prince Edward Island and Nova Scotia which relied heavily on imported oil. The minister and everybody else knows that that is the case in all five eastern provinces.


Alexandre Cyr: Mr. Chairman, with the hon. member's permission I would like to clarify this right away. I said that they were more dependent because there was an element in their internal economies which made them more dependent on oil. They need oil for heating their homes, running their cars and so on, but in Nova Scotia and P.E.I. the production of electricity is dependent on imported oil, and when the price of imported oil was increased those provinces were hit hardest. That is why we tried to design a program to help them in a different way. Perhaps we should have used another vehicle, but that was the vehicle chosen at that time. There are statistics to prove that there was a need.
The other eastern provinces are also dependent on imported oil, but because of the use of oil in the production of electricity, Nova Scotia and P.E.I. have more dependence.


Leslie Gordon Benjamin: I thank the minister for that reponse. I think he is correct, except that while all five eastern provinces rely on imported oil-and not just for the generation of electricity-I would like the minister to have his officials look at the costs for home owners in Quebec, New Brunswick and Newfoundland as well as for those in Nova Scotia and P.E.I. In the former three provinces there are a larger number of homes to heat.
This matter has to do with home insultation and whether the cost of it can be deducted for income tax purposes, but the cost of the generation of electricity in Nova Scotia and P.E.I. is not the only consideration. There are people who may have to heat their homes with electricity, and the minister's argument is perfectly valid in that regard, but there are people who have to heat their homes with oil, and the majority of them live in Quebec, New Brunswick and Newfoundland. These people suffer the same kind of handicap as power companies which have to create electricity from oil.


Joseph Jacques Jean Chrétien: Mr. Chairman, I just want to repeat that we have chosen a vehicle to help the people of Nova Scotia and Prince Edward Island because the increase in the cost of oil caused a large increase in the price of electricity over a short period of time. At that time we tried to find a mechanism to help home owners. It could have been in the form of grants, but some said that we should also give an incentive to people to insulate their homes at the same time. We designed a program like that. It was not in relation to the fact that houses were heated with oil, because that is the case in Quebec and elsewhere. It was a vehicle to reimburse those who were affected not just by the increased cost of heating homes but also by the increased cost of electricity. We used that vehicle.
There are people who ask why we have done this just for Nova Scotia and Prince Edward Island and why not for the rest of the land. We designed another program which was less generous. It amounts to grants of $350 of which part is taxable for those who pay taxes, so part of that will come back to the government. The departmental advisers examined the question of who would apply for these grants. They have made calculations. If a person is in the highest income bracket, he will return more than half of his grant to the government in taxes.
December 1, 1977

My officials have calculated that the program will cost $1.4 billion. In fact probably $1.9 billion will be disbursed, and some $560 million will come back into the coffers of the government in taxes.


Leslie Gordon Benjamin: I am glad to get that clarification from the minister in terms of why it was felt certain things had to be done, and why later on there were two separate operations. I appreciate that, and I accept it completely, but I am still not convinced about the $560 million. However, I will leave that aside.
I believe that the principle of re-insulation has to be followed no matter where we live, and the government's desire for energy conservation is laudable. Any benefit the government wishes to use, whether it be a tax benefit, a grant or any other mechanism, should be used if it conserves energy. The government might, however, try to prevent the rip-offs by wholesalers and retailers of insulation materials which are going on all across the country. That would be a benefit. Before the AIB dies an unnatural death, perhaps it should be turned loose on checking the prices of insulation materials at the wholesale and retail levels. Alleged shortages in some cities should be looked into. I recognize that there are legitimate shortages in other cities. Looking into some of these things might be of as much benefit as any grant or tax benefit.
I would like more explanation from the minister about the $560 million. I would like to know how he arrived at that figure. I would also like to remind him of a question I raised earlier, which he has still not answered. In terms of insulating homes, energy conservation and the costs of imported oil, he has really begged the question of what it costs a person in the five eastern provinces who heats his home with heating oil rather than electricity. My suggestion to the minister is that there is the need for a blanket program to cover all of those. Maybe he will do it in his next budget, I hope so and I hope he is making a mental note of this.


Joseph Jacques Jean Chrétien: I do not have the answer as to the cost of heating a home with oil in different provinces. I am not the minister responsible for the program, it is a program in the energy field, and I am the Minister of Finance. I am in a handicapped position tonight to answer for a program which has been designed by the Minister of Energy, Mines and Resources and the Minister of State for Urban Affairs. I am trying to be explicit but those technical questions you are putting to me could probably be answered by an expert in the Department of Energy, Mines and Resources. I do not know that as I am not a specialist in that field. I have to admit that with a lot of humility.


Leslie Gordon Benjamin: The government's program of aid for insulating homes may be valid in the Atlantic provinces where no doubt there are many more homes which are older than homes in the more recently settled parts of Canada, for example, Ontario, the prairie provinces and British Columbia. One of the problems confronting myself and other members from
Income Tax
similar parts of Canada, when you talk about aid and comfort for a person who insulates a home built prior to 1921 is to find one. I have been looking around in my city, Mr. Chairman, and also around the rural part of my constituency for homes still occupied and being used for something else besides a granary built prior to 1921 and it would be easier to find a sod shack that an immigrant lived in. If there were still a sod shack on the prairies, he could take advantage of the program because there were always chinks and holes in the shack the blizzard and wind blew in, and maybe he could save some coal and wood that was burned in that sod shack. The year 1921 indicates to me that the minister and the government are not serious. They do not really mean business about energy conservation. My goodness, even the couple of provinces who have said 1941-that is a remarkable improvement over what the federal government has at the moment. Surely he cannot expect ordinary citizens in this country, let alone members of this House, to really take seriously a program that provides aid to homes built prior to 1921. I do not know how many homes my colleagues on all sides of the House would find in their particular ridings, if they took a reading on it, but there are not many still occupied and built prior to 1921. I have a couple of slum landlords in Regina, but they are not taking advantage of the program, because they are collecting the welfare cheques from people who are living in them.


An hon. Member:: Shame!


Leslie Gordon Benjamin: The minister expects us to accept all the arguments. I do not agree with various and sundry mean aspersions and motives that have been cast upon him, I know he is not that stupid. But I think he is extremely stupid in trying to somehow validate a way of implementing an excellent program and idea. The amendment brings some equity into a laudable objective. The $560 million even if the minister is accurate, I am not sure whether it is $560 million of taxable income or $560 million in income tax that would be lost- which one is it?


Joseph Jacques Jean Chrétien: Income tax we lose.


Leslie Gordon Benjamin: If it is $560 million in income tax he would lose, he can recover twice that amount by forgetting about the rest of the provisions in Bill C-11.


Joseph Jacques Jean Chrétien: I do not want to carry a debate too long on that because I am not the minister responsible for the design of the program, and I cannot have an argument with him. I know the cost of it and when they designed a second program, they included an element, rather than $250 for everybody, they felt it was better to have $350 for everybody and make it taxable, so the rich will return a portion of it to the Crown. Because they have included that in the program, I have one little amendment to Bill C-ll. If you have any quarrels with this, you always have the privilege to take that up with the minister responsible when he is here in the House of Commons or in committee.


An hon. Member:: You are stuck with selling it.

December 1, 1977
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Joseph Jacques Jean Chrétien: I agree.


Mr. Stevens:: Mr. Chairman, it is nice to have the Minister of Finance back with us today. I understand he was looking for me earlier in the House, and I want to assure him that I am here and very eager to get on with the passage of this bill.
If I could take a little different tack dealing with this amendment, I direct the minister's attention to the income tax motion which states that for the 1977 and subsequent taxation years a grant received under the Canadian Home Insulation Program be included in the income of the recipient, or in the case of a married individual residing with his spouse, and the income of the spouse with the higher income. My question to the minister is this: the income tax motion deals only with the Canadian Home Insulation Program, but we find that the wording of subsection 5 refers to an amount received under a program that is a prescribed program of the Government of Canada. Could the minister indicate why we have what appears to be a much wider wording than was initially set out in the income tax motion?


Joseph Jacques Jean Chrétien: I do not understand. There is not a fundamental difference between the two.


Sinclair McKnight Stevens: I realize the minister might be quite tired. But I read the difference. That is unbelievable. The difference is in the income tax motion. It refers to only one narrow program, it refers to the Canadian Home Insulation Program. But when we find the provision in the act, which after all is just across the page, it does not refer to insulation at all. It says it is applicable to a program prescribed by the Government of Canada. That, Mr. Chairman is an entirely different reference, and in fact, let me underline it. I question whether the draftsman have the authority to draft the section the way it is now, bearing in mind that the original income tax motion was a very much more narrow motion than it has ended in the bill that is before us.


Joseph Jacques Jean Chrétien: I can explain, Mr. Chairman, why the drafting looks a little broader than in the actual act. If there are programs of the same nature, it could be that the ministers responsible come to us to extend those programs. If we change the program, the act as drafted will permit us to proceed in the same way. We will have the same legal authority.


Sinclair McKnight Stevens: Mr. Chairman, for the record, the minister better clarify his earlier answer. He just got through telling this committee there is no essential difference between the income tax motion and subclause (5) before us as far as the bill is concerned. Now he has told us there is in fact a difference.
Let us be blunt about it. What the government is asking for in this subclause is an extremely wide power to tax, with no further reference to this House. If you read the technical wording, what it is saying is from now on, if it prescribes a program to be taxable, it is automatically taxable. In other words anything this government chooses to do in the line of

new grants or new programs, rather than coming through us as it did in the income tax motion and saying that it would like to tax the Canadian Home Insulation Program, in future we will never hear of it. It in fact will simply prescribe a program to be taxable. If you like, I will in due course read the impact of what it is doing here. First, I think the minister should clarify for us what exactly he and his colleagues have in mind when they say prescribed program of the Government of Canada.


Joseph Jacques Jean Chrétien: Mr. Chairman, I explained this earlier. I thought it was quite clear. We can introduce a program. It is not a question of having the right to tax. We can decide to extend or modify a program or decide to give more grants, for example. This bill will authorize the government to make it taxable, if it wishes. It is not a matter of taxing.


Sinclair McKnight Stevens: That is bad.


Joseph Jacques Jean Chrétien: We are not asking for the right to tax.


Sinclair McKnight Stevens: You cannot ask us to give you that power.


Joseph Jacques Jean Chrétien: Mr. Chairman, of course we can. It is related to a grant program that we can initiate if we want. We can initiate a program without coming to the House of Commons. Eventually we come, at the time of estimates. In the drafting of this, the drafters have forecast that it could be modified in the future. If we want to apply the same system of giving a grant and taxing it, we are getting this authority for that kind of program and it is related to a program of the same nature. This is the way the advisers are informing me of their purpose in designing this clause.


Sinclair McKnight Stevens: Mr. Chairman, I point out to the minister again that if that is his wish, his draftsman or his officials should have so indicated in the tax motion, but they did not. It asks for a very simple provision, to tax grants received under the Canadian Home Insulation Program. With all due respect, I suggest that is all the minister can attempt to legislate tonight. That is all he has asked for. However, he has now gone further. His officials are attempting, secretively, quietly if you like, to change what they had asked for in the income tax motion. They have drafted the provision before us which broadens it so that now any program that is a prescribed program of the Government of Canada will be taxable. All they have to do is prescribe a program to be taxable.
I feel it is important that we, as members of this House, Find out from the minister exactly why they have so extended the ramifications of this subclause. Frankly, the minister in most of his replies kept referring to grants within the insulation field. However, the proposed subclause (5) does not limit itself to insulation. The word is not mentioned. It could be any program. Will it cover, for example, grants under DREE? If they decide to make a grant under DREE, are they at the same time or some time in the future going to say that is a prescribed program under this subclause, and automatically taxable?
Let me emphasize the section we are amending here, 56(1), which starts off by saying:
December 1, 1977

Without restricting the generality of Section 3, there shall be included in computing the income of a taxpayer for a taxation year-
Then there are all kinds of subheadings right down to (r) in the present act. A little later I will read (s) which is the one they now want to bring into effect. It would say that they may tax any prescribed program of the Government of Canada.
My question is: what authority has he which allows them to shift from an income tax motion that is quite narrow in its ramifications to a proposed subsection in this act that is much wider?


Joseph Jacques Jean Chrétien: Mr. Chairman, I do not have anything to add to what I said in my explanation earlier.


Sinclair McKnight Stevens: Mr. Chairman, may I ask the minister why the section is not clear and why does it simply not refer to a grant received under the Canadian Home Insulation Program, period? Then there would be no doubt.


Joseph Jacques Jean Chrétien: Mr. Chairman, I explained what the government is seeking. If we have to change the program, we want the power to make the added grant like the original grant. It is as simple as that.


Sinclair McKnight Stevens: Will the minister go further and indicate what his officials have in mind? Obviously he is not familiar with the subsection. What do his officials have in mind as to the things they will include as prescribed programs of the Government of Canada that might subsequently fall under this subsection?


Joseph Jacques Jean Chrétien: Mr. Chairman, I explained to the hon. member why we want this broader power. If we decide to give a grant in a fashion that it can be taxable and part of it therefore returned to the Crown if it goes to a different class of citizens, the principle is there. The hon. member is right when he says that is what we are seeking. That is exactly what we are seeking. I admit that very clearly to the committee.
I am not hiding anything. It is not for the officials to decide what kind of grants there will be in the future. It is up to the government to decide.
It is the government that is the government, not the officials.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Chairman, those backbenchers have to do that periodically just to stay awake. They somehow remind me of seals. They have to flap their flippers now and again.
On a point of order, Mr. Chairman, may we have a ruling as to whether subclause (5) is in fact within the income tax motion before us. In short, is it proper? Bearing in mind the income tax motion and the wording before you, Sir, has the government got the authority under that motion to propose subclause (5) the way I have outlined it?


Gérald Laniel: I am very much aware of the point raised by the hon. member and his preoccupation with it. However, I must say that the point of order he is raising is being raised at the wrong time. The clause as it is is in front of the committee
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in its entirety. I find great difficulty in accepting the point of order and making a judgment on a subclause in regard to which there is already an amendment put forward by the hon. member for St. John's West which is proposing to eliminate the subclause. This does not prevent reconsideration at a later moment, but right now, looking at the matter technically, we are considering the amendment of the hon. member for St. John's West to delete that subclause. The matter is not closed, but hon. members will find it hard to convince me that this is the right time to deal with this matter.


Walter David Baker: The difficulty here is that what is contemplated in the statute goes beyond the recommendation of the Governor General. This is very serious, if it is the case. I suggest, with respect, that an issue of this magnitude can be raised at any time, notwithstanding the fact that an amendment has been put to a clause which may well be invalid, depending upon the finding of Mr. Speaker. You have suggested, Mr. Chairman, that the committee has no power to deal with that aspect but, with respect, I ask you to reconsider that opinion. I do think this is an issue of such magnitude that the clause ought to be allowed to stand until the point of order has been dealt with. In the meantime we could go on to deal with another clause. In my view, the members who have spoken have raised a valid point, and I respectfully suggest we let the matter stand in anticipation of a ruling by the Speaker of the House after hearing argument from members on both sides, should that be considered necessary.


Joseph Jacques Jean Chrétien: Mr. Chairman, I find it quite funny that hon. members are assuming rightly that the motion of the hon. member for St. John's West will be soundly defeated when the vote is taken and I entirely agree with them. As for the point of procedure, Mr. Chairman, I gave the explanations deemed necessary to the committee and I leave it to the Chair to decide on the point of procedure.


Mr. Nielsen:: It is not a question of having any fear about the amendment being defeated.


Some hon. Members:: Oh, oh!


Erik Nielsen: The minister laughs, but I am being quite sincere in making my contribution to this argument. One of the fundamental principles with respect to any taxation legislation is that it must be warranted by the Governor General and it is usually brought in under very restrictive terms. Thus, the application of the tax legislation is confined to the home insulation program. What the government is seeking to do in this legislation is to apply taxation to any program, not simply the insulation program, which takes from parliament the right to tax these other programs and gives that power entirely to the cabinet.
Centuries of our parliamentary practice make it clear that all taxation measures must be introduced by a message from

December 1, 1977
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the Governor General in specific terms. I suggest respectfully that the government has exceeded the terms of reference which were brought before the House and that the clause we are considering now, if passed in its present form, would give the cabinet the right to tax instead of the House. My House leader has made a reasonable suggestion. Because of the importance of the substantive point involved, in view of the length of the bill and the progress made to date there can surely be no good reason for objecting to the clause being stood for consideration by the Speaker.


Joseph Jacques Jean Chrétien: It is very often the case that propositions are put before the House of behalf of the government and debated, with the understanding that the rules will be established by regulation. We were discussing that the other day when I had a very agreeable exchange with the hon. member for York-Simcoe. We were talking about when the rate would be fixed. I said it would be fixed before the fall. We were discussing whether the rate would be flexible. I attempted at the beginning of the debate to explain why we were seeking the authority to make detailed arrangements of this kind.
In order that we should not spend the entire evening dealing with this point, I would make the following proposal: let us first vote on the amendment to scrap the whole thing. If that amendment is adopted there will be no need for the point of order. There will be no need to discuss whether it is legal or not. If, later, members on the other side want to take the whole clause into consideration, I can see no objection. There is some validity in the point they raise and I believe they have the right to raise it. There are a lot of precedents for the government's position, but I do not have them here. However, the Chair will look into them.
If the Chair rules that there is too much of a spread and that we should be confined precisely to the prescription in the ways and means motion, I will go along; it will not be the end of the world for me. I am not seeking broad powers. I just want to be fair. I am afraid that in any case we will not pass the bill tonight. It is not in the cards. I would point out that we are on the verge of closing our fourth week on this debate. I like it very much. I am happy. I am smiling all the time. We are having a lot of fun.


Sinclair McKnight Stevens: That would be agreeable to us, Mr. Chairman. I do have a few comments to make and a few questions to put to the minister before we vote on the amendment, but after we have finished making our observations and asking any questions which hon. members may have in mind, there is no objection to voting on the amendment and then turning to some other aspect.


Gérald Laniel: I want to satisfy members of the committee as far as possible, but I must say I still feel this question was raised at the wrong time. I would point out, too, that even the proposal by the minister, one which seems to be acceptable, indicates that the Chair was right in asserting that this point of order was raised at the wrong moment.

I do not want to restrict expressions of opinion. The hon. member for Grenville-Carleton has requested that Mr. Speaker make a decision. We are in committee of the whole and the question is before the Chairman of the committee. I am sure the hon. member will accept my feeling that I should not request the Speaker to make a ruling on the operation of the committee over which I am presiding, unless my ruling is questioned. I would be ready to stand the clause by unanimous consent, leaving the way open to the hon. member to make his request when Mr. Speaker is in the chair, rather than to me. Otherwise I would be more or less making a decision which strictly I have not been asked to make, the request being made of Mr. Speaker.
I hope we can resolve this problem without forcing me to make a decision, since there is apparently unanimous agreement among the committee. If hon. members are so agreed, I would be ready to listen to comments on the clause by the hon. member for York-Simcoe and perhaps permit the committee to vote on the amendment moved by the hon. member for St. John's West.


Sinclair McKnight Stevens: Mr. Chairman, on the basis of your observations I should like to direct the minister's attention to the actual wording of the clause which appears at page 35 of the bill, paragraph (s). In considering my colleague's amendment, which really seeks to strike this provision, it is important we get the full purport of what the provision proposes to do.
The reason I refer to paragraph (s) is that, with all due respect to the draftsman, I do not believe is comprehensible. Essentially, Mr. Chairman, it is worded in such a way that it could be non-applicable. It provides that the income of a taxpayer will be taxable if-and then paragraph (s):
-the amount of any grant received in the year under a prescribed program of the Government of Canada by
(i)	the taxpayer, other than a married taxpayer who resided with his spouse at the time the grant was received and whose income for the year is less than the income for the year of his spouse, or
(ii)	the spouse of the taxpayer with whom he resided at the time the grant was received, if the spouse's income for the year is less than the income for the year of the taxpayer.
I am sorry the minister has left because I wanted him to explain in relatively simple language what on earth the officials have in mind by such complicated wording, wording which I have been advised by tax lawyers is incomprehensible.


Edward C. Lumley: Basically, Mr. Chairman, what the provision is saying is that it is brought into the income of the husband unless the income of his spouse is higher, when it would be brought into her income.


Sinclair McKnight Stevens: The officials may have told the parliamentary secretary that that is what they thought they had said, but that is not what they have in fact said. If my colleague's amendment is defeated, then this is another matter we may have to consider. If paragraph (s) cannot be reworded so that it says what the parliamentary secretary has apparently been told is what the bureaucracy thought they were saying when they
December 1, 1977

initially drafted the provision, then we will have to reconsider our position. Would the parliamentary secretary, between now and the time when we reconsider this clause, presuming that it is going to be stood, take a new look at paragraph (s) to see whether the officials feel the wording is as clear as it might be?


Edward C. Lumley: Mr. Chairman, obviously we will take a look at it, as the hon. member suggests. I remind him I am not an expert in drafting either, but this paragraph has been approved by the Department of Justice.


Sinclair McKnight Stevens: I am sorry the Minister of Finance is not here, Mr. Chairman, because my next question is really a question of policy. It has to do with the fact that one department seems to have said something in regard to taxing insulation grants which is different from what is now put before us by the Department of Finance. I am referring to the little booklet published by the Department of Energy, Mines and Resources called "Keeping the Heat In". At page 91 of this little booklet various kinds of insulation are discussed, and the following appears: "Unlike many other forms of dividends, these are 'tax free' ",
My question to the parliamentary secretary is this. The Department of Energy, Mines and Resources has put out a booklet, chapter nine of which deals with what they call the dollars and cents. First of all, it encourages people to insulate their homes, to take the steps we have been discussing today. The department then represents that these steps will be "tax free", in quotes. Then on October 20 the Minister of Finance comes charging in with a proposal to tax the very grants which the government has been offering certain people in Canada for home insulation purposes. I am asking, is this really fair?


Edward C. Lumley: Obviously, Mr. Chairman, I cannot answer for the Minister of Energy, Mines and Resources, but I will ask him the reason for this.


Sinclair McKnight Stevens: Would the minister attempt to have this matter clarified before we deal with this clause again, and report to us in the House? I see we have a babbling socialist over there who is always trying to speak on behalf of the government. I would remind this babbling socialist that the parliamentary secretary did not say he would report to the House; he simply said he would have a word with Energy, Mines and Resources. Let me assure you, Mr. Chairman, that when you have dealt as long as I have with this rabble on the other side, you have to get it right on the record or you won't get any place with them.


Mr. Darling:: Mr. Chairman, I have been endeavouring to make an intervention since 20 minutes after eight and have finally been recognized. I rise in support of the amendment moved by the hon. member for St. John's West. I represent an area which is a reasonably cold part of this great country of Canada, an area where the economy is not as good as it is in other parts. Therefore I feel the government should consider this amendment. I am quite sure if most members opposite searched their consciences they would feel the same way.
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1 am sorry the Minister of Finance is not here, but I should like to ask the parliamentary secretary to the minister if he would confer with the whiz kids, those mathematical mandarins beside him who figured out that it was going to cost $560 million extra if the $350 grant were tax free, in order to determine if that is correct? Is this correct in terms of dollars and cents in lost taxes?


Edward C. Lumley: Mr. Chairman, it would cost that much more to implement exactly what the hon. member is suggesting.


Stan Darling: Is this on the basis of $350 for every grant?


Edward C. Lumley: Yes, Mr. Chairman.


Stan Darling: Have they given consideration to the statement made by the Minister of State for Urban Affairs that the average grant is not $350 but is $211 ? Let us see the whiz kids answer that.


Edward C. Lumley: Mr. Chairman, the hon. member seems to enjoy taking shots at the so-called whiz kids. I think they are two hard working servants of this government.


Some hon. Members:: Hear, hear!


Edward C. Lumley: Yesterday these so-called whiz kids came up with a figure off the top of their heads of $175 million for the motion proposed by the Social Credit party. Hon. members opposite have criticized that as well. Approximately 24 hours later, these so-called whiz kids came up with an accurate figure of $160 million. Thus, for whiz kids they are pretty well on.


Stan Darling: I thank the hon. parliamentary secretary. I did not mean it in any derogatory way. I am delighted to see the hon. Minister of State for Urban Affairs has just entered the Chamber. If the parliamentary secretary wants to get it straight from the horse's mouth-


Steve Eugene Paproski: The horse's what?


Stan Darling: -the Minister of State for Urban Affairs stated in committee this afternoon that the average grant authorized by his department, and the Department of Energy, Mines and Resources, is only $211 and not $350. Therefore that will reduce the amount considerably. I should like to have the comments of the parliamentary secretary on that.


Edward C. Lumley: Mr. Chairman, obviously when one looks at a program like this there are a lot of assumptions which have to be made. The $211 figure referred to by the hon. member is based on the applications received so far. Obviously that may not apply, depending upon the number of applications received.


Stan Darling: Mr. Chairman, I appreciate that. I am delighted to see the Minister of Finance returning to the Chamber. I am sorry he was not here to answer my earlier questions. I have the greatest sympathy for the hon. minister. I appreciate

December 1, 1977
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what he has stated this evening. He is endeavouring to do a good job. He has to make a decision which would be a difficult one even for Solomon. His decision with regard to the $350 grant is whether it will be taxable or considered part of the income of all taxpayers, other than those in Prince Edward Island and Nova Scotia. Despite the logic of this, it is a difficult thing for members of parliament to return to their ridings and explain this.
Prince Edward Island and Nova Scotia have high costs of electricity, but they will receive tax free $500, almost a third more than other parts of the country which have been just as hard hit economically and where unemployment is very high. Those other provinces should receive the $350 tax free. The government will be in receipt of increased income taxes. That $350 should be given across the board.
Since I thought the minister had flown the coop for the night, I directed a question to the parliamentary secretary concerning the $350 grant. The minister's assistants have figured that it would cost $80 million a year, or $560 million for seven years, on the basis of present grants paid out. I am sure the Minister of State for Urban Affairs will verify that the amount paid out now averages $211. Out of the $80 million paid by the government, it will receive moneys back in income taxes from the people installing the insulation. It is on this basis I think the minister should reconsider, and I am sure the wonderful citizens of Saint-Maurice will bless him for it.


Joseph Jacques Jean Chrétien: Mr. Chairman, I would like to agree with the members of this House. Nothing would please me more than that. But when it is costing $560 million to be nice, I should like to reflect on that before it is called to a vote. I have some sympathy for the hon. member because he has to go to his riding and explain the difference.
We started on this program because we were looking for a vehicle to help the people of Nova Scotia and Prince Edward Island who were worst hit by the increase in the cost of imported oil. They use oil for their automobiles, their homes, as well as their electricity. That was the area most affected. Part of being in Confederation is that when somebody is in worse shape than others, as good Canadians we rush to help them.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: 1 am sure the people in Parry Sound-Mus-koka will be proud of the hon. member. It should be pointed out that we are ready to help when someone in Canada is in bad shape.


John Carnell Crosbie: Mr. Chairman, when I spoke this afternoon at 3.30 o'clock I asked the minister for an estimate of what would be collected in taxes during the next taxation year because of the fact that these grants are taxable in the eight provinces other than Nova Scotia and Prince Edward Island. As yet I have not received an answer to that question.
Now we have this amendment which proposes to eliminate this clause in order for the grants not to be taxable anywhere.

The minister has indicated that it will cost $560 million. That is a misstatement, that is not true, and that is not correct. Before voting on this clause, the minister should provide a calculation of the $560 million in order for us to see how it is reached. The estimate of the Minister of Energy, Mines and Resources was that it would cost $45 million this year, and next year it would cost $145 million. The entire amount paid out in grants will be paid back in taxes, according to the Minister of Energy, Mines and Resources. Thus there is not a word of truth in the Finance Minister's calculation. He has indicated that it will cost $560 million over seven years. There is not a smidgin, a particle, a crumb, an iota of truth in that statement. It is a positive untruth. Let us have the figures.


Charles Robert Turner: Order, please.


John Carnell Crosbie: I have more to say. I am only getting warmed up.


Charles Robert Turner: It being ten o'clock, it is my duty to rise, report progress, and request leave to consider the bill again at the next sitting of the House. Is that agreed?


Some hon. Members:: Agreed.
Progress reported.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, 1 rise tonight pursuant to a question which I put to the Solicitor General (Mr. Fox) on November 23. This matter arose as a result of the refusal of the Department of the Solicitor General to make public the names and records of the convicts who, a week previous, took a hostage at knifepoint at Millhaven, barricaded a section of the prison for several days, created serious trouble and, under duress, obtained certain concessions from prison management which, I am thankful to say, have since been repudiated by the Department of the Solicitor General.
Previously I asked why the Department of the Solicitor General gave the public the names of three guards who did their duty by protecting Canadian persons and property in the ultimate shooting and wounding of escaping convicts. The revealing of the names of these guards placed their safety and that of their families in jeopardy because of potential reprisals. I asked the minister to explain why his department could not
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be consistent and cease discriminating against public servants who perform their duties. The Solicitor General promised me at that time that he would look into the matter and get in touch with me. He has done so, and I thank him for the letter I received from him yesterday.
Although the minister's explanation is not to my entire satisfaction, the minister states that, and I quote:
The names of the 20 convicts were not released to the public so as not to prejudice the result of any criminal procedures that might follow and so as to avoid influencing a jury.
Then in reference to the three officers who did their duty in protecting the public, the minister sloughed that off by saying that the names of the officers were not released by the penitentiary service but by the police force. He was referring to the Ontario Provincial Police in the district.
By what stretch of the minister's imagination would he presume that it would be necessary to try the 20 convicts before a jury? They took a hostage, but did not kill him. They were resorting to a new prison fad of blackmailing through hostage-taking. In this regard I want to congratulate the minister for stating that he will not recognize negotiations with convicts, undertaken under duress. To do so would encourage more hostage-taking in our prisons. Most convicts have a better life than many free Canadians on the outside under our present economic conditions.
However, to get back to the two classifications, the minister protects the names and records of 20 convicts and is still doing so, at least until a judge and jury try them-which I predict will not be the case-yet he would allow the provincial police to publish immediately the names of the three respected prison guards, all men who have given worthy and long service to the Canadian public, and all with families.
It is evident that there is no rapport between the penitentiary service and the provincial police. It should have been understood long ago, when under the new liberalism autonomy was taken away from our prisons, that policing authority was taken away from the wardens and their staffs. What always was a federal authority was tossed into the lap of the province through the provincial police. When that was done, rules and guidelines should have been laid down, and it should have been understood between the two authorities that in every case of this kind the names of public servants doing their duty would be protected.
At the time of this sad incident-the attempted escape of three convicts when two were wounded and one was killed by necessary gunfire-the Department of the Solicitor General let it be known that the case of the three guards would be reviewed in Ottawa and that it could entail a trial. It was even stated that the men might be responsible for their own defences and the expenses thereof. That being the case, and if those circumstances came to pass, the Department of the Solicitor General should be warning the provincial police immediately not to divulge the names of those three men who did their duty to the Canadian people in protecting persons and property.
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Some system, Mr. Speaker, this penal system under the new liberalism! Convicted men in prisons are still first class citizens and the men who guard the public from them or, in reverse, guard them from the public are nobodies. In terms of the Prime Minister's (Mr. Trudeau) statement they are nobodies-away down at the bottom of the Liberal totem pole. Does the Solicitor General not realize that the safety of these guards and/or their families was jeopardized when their names were immediately released? Reprisals could be taken by friends or accomplices of those 20 convicts. Yes, some system we have today-from a government that will not govern. Protection of persons and property is the chief and original reason for government and in these faculties this government is extremely deficient.
Of course the debacle of the penal system under the Liberal government started when autonomy was taken away from each penitentiary, when authority was taken away from each warden, when the warden's courts were abolished, when the government began to listen to the do-gooders, the idealists and Utopians-whose basic principles and tenets are worthy and desirable if we were living in a social Shangri-la, far beyond our lost horizon. This will not work in our sick and troubled society in the protection of persons and property when confronted with convict violence in our penitentiaries. We must meet force with force to maintain security and protection of persons and property. And I want the minister to assure me that never again will the name of a security officer or guard be divulged under the same circumstances we are discussing tonight.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I note the remarks made by the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack) and 1 want to thank him for providing me with a copy of a letter that he received from the Solicitor General (Mr. Fox) on the matter. The Solicitor General did indicate he would respond, and he did so.
I would like to correct two impressions that were created that would appear not to be correct. First of all there is no suggestion that these people would have to be tried by jury, but rather the fact is they could be tried by a jury, and it was to this the Solicitor General was referring. The other point I wish to make clear-in the case of the three officers involved in the wounding and shooting of escaping inmates-the names of the officers were not released by the penitentiary service and the penitentiary service had nothing whatsoever to do with it; it was by police forces, probably the Ontario Provincial Police. I do agree, however, with the hon. member that maybe the penitentiary service people and the Ontario Provincial Police should have a greater rapport. Having said that, Mr. Speaker, there are a few other comments I would like to put on the record.
I would like to point out that on Thursday, October 20 last, a hostage taking incident took place in Range 2 of the special handling unit at the Millhaven institution. One of the inmates

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celled on this range was taken hostage by one or more of the inmates celled in the same range. The hostage was freed on the following day. The police forces were informed of the incident and are still investigating, so I understand. The names and records of the inmates involved in this incident were not released to the press so as not to prejudice the police investigation. This, I understand, is normal procedure, and of course if it were otherwise the result of any criminal-legal procedures that might result from this investigation would be out in the open.
The decision not to release the records of the inmates involved was to avoid influencing a jury which may have at a later date to rule on the guilt of the person or persons who are likely to be accused of a criminal act.
In the case of the three officers involved in the wounding and shooting of inmates, referred to by the hon. member during the question period on Wednesday, November 23, 1977, their names were not released by the Penitentiary Service but by the police forces. There was no inconsistency in the penitentiary service policy governing in such circumstances. It is my understanding that all the inmates celled in this particular range of the Millhaven institution are incarcerated therein as the result of the commission of violent crimes, or because of their violent behaviour which consist in a danger to the staff and other inmates in our institution. In fact some of these inmates' records indicate that one officer of the penitentiary service and three police officers have been the victims of murders, that six officers of the penitentiary service have been the victims of hostage-takings,-


Mr. Deputy Speaker:: Order, please. I have to interrupt the hon. parliamentary secretary because his time has expired.


PUBLIC SERVICE-DELAY IN CONTRACT NEGOTIATIONS WITH NURSES IN INUVIK AREA-REQUEST FOR REPORT
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I am glad to have this opportunity to raise again a matter which I brought to the attention of the House on November 22. This matter concerns the registered nurse members of the Professional Institute of the Public Service working in the Inuvik Zone of the Northwest Territories and Yukon who have been without a contract since December 28, 1976.
The Professional Institute of the Public Service of Canada has warned that the country is headed for a strike by the 2,000 nurses employed by the federal government, and the Inuvik Zone nurses are a part of this group.
It seems a disgrace that persons providing essential services must go for such a long period without a contract. Negotiations between the nurses and Treasury Board have been dragging on for nearly a year, and I submit that the attitude of the Treasury Board has not been conducive to an effective settlement of this dispute.
I believe it is also important, Mr. Speaker, to point out to the House the special conditions obtaining in Canada's north

with which the nurses must deal. The nurses perform essential services in northern communities, and often work under harsh and difficult conditions for long hours.
Many times nurses there have had to risk their lives trying to get their patients to hospital. More than one nurse has lost her life as well as that of the patient in plane crashes on their way to hospital. Nurses often have to work as dentists. Indeed, they have had to do some surgery. They do many jobs that in the south are the responsibility of a doctor.
Nurses in the north are also being discriminated against by being given "compensatory allowance and leave" instead of overtime pay received by all other nurses in the bargaining unit. This compensatory allowance is a fixed sum which does not reflect the amount of overtime, stand-by or call-back time done and earned by a nurse in any one month. Nurses who work in hospitals in the south receive overtime, stand-by and call-back pay, but in the north they do not. The nurses are determined that this inequity be rectified.
I would also like to point out that the nurses are most emphatically not bargaining only for a salary increase, even though their salaries are far behind their provincial counterparts in certain categories. In the view of the nurses, and especially the nurses in the north, working conditions are extremely important and the Treasury Board has been unwilling to discuss this issue.
At the moment both sides are awaiting the appointment of a conciliation board, but this cannot be done until a decision has been reached regarding the number of designated employees who must remain on the job in the event of a strike. I would therefore request the President of the Treasury Board (Mr. Andras) to instruct his officials to sit down and bargain in good faith with the nurses, in the hope that an effective agreement can be reached very soon. I certainly hope this dispute can be settled before Christmas.


Mr. Thomas H. Lefebvre (Parliamentary Secretary to President of the Treasury Board):: Mr. Speaker, we must agree with the hon. member who has brought this subject to the attention of the House on at least one previous occasion when he expresses the hope that this dispute will soon be settled. We must also congratulate the nurses on their devotion to duty in spite of the arguments which have been going on for almost a year with regard to this matter. All Canadians are proud of them and of the great service they are rendering on behalf of the Government of Canada. Indeed, one of the nurses who were mentioned by the hon. member was honoured posthumously by the creation of the Judy Hill Foundation which will make moneys available to help train more medical people to serve in the north.
The collective agreement for the nursing group of the scientific and professional category of the Public Service of Canada expired on December 28, 1976. Negotiations for its renewal between the employer and the Professional Institute of the Public Service of Canada reached an impasse during the latter part of May after nine bargaining sessions. As the group had
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previously selected conciliation as the method for the resolution of bargaining disputes, the Institute, on May 26, requested the Public Service Staff Relations Board to appoint a conciliation officer. Mr. Clive McKee of Vancouver was appointed and met with the negotiating parties on June 29. Mr. McKee was successful in convincing the parties to return to the bargaining table. Early in August, however, and after three more bargaining sessions, negotiations again reached an impasse, and on August 15, the employer requested the board to appoint a conciliation board. In view of the many outstanding issues, the board again appointed a conciliation officer. Assisted by this officer, Mr. Ken Strike, the parties again met on September 12, 13, 14 and 15. Once again, no progress was made.
Parallel to the negotiations taking place for the renewal of the collective agreement, consultations between the employer and the institute were being conducted on the designation of the nurses considered to be essential to the safety and security of patients of federal institutions. No agreement having been reached by early November, the employer on November 4 referred the designation of nurses to the board for decision. Initial hearings are scheduled for December 6, 7 and 8.
The Public Service Staff Relations Act prohibits the board from appointing a conciliation board before the matter of designations has been settled either by agreement between the parties or by decision of the board. Consequently, the appointment of a conciliation board for the resolution of the disputes in bargaining the renewal of the collective agreement must await the board's decision of the designation of nurses as essential to the safety and security of patients.
As I mentioned earlier, little progress was made during negotiations for a new collective agreement on the approximately 126 pages of demands submitted by the Institute to the employer. Much of the substance of the demands was for changes in the language of the expired collective agreement. The fact that only two grievances, both on the same subject, were referred to adjudication indicated that the language had served well the purposes of the employer and the employee.


Mr. Deputy Speaker:: I regret to interrupt the hon. parliamentary secretary but the time allotted to him has expired.


INDUSTRY-PULP AND PAPER-EFFECT ON CANADIAN INDUSTRY OF LOANS TO FOREIGN COUNTRIES TO ESTABLISH PLANTS
Jack Marshall: Mr. Speaker, I appear tonight to elaborate on the reply given me by the Minister of Industry, Trade and Commerce (Mr. Horner) on the state of the pulp and paper industry in my district. This is an industry which is the lifeline of our economy in Newfoundland, one which the government should be protecting through every means available. This industry is hurting seriously, not only as a result of the loss of markets, markets which it is capable of competing for, but more so because of the narrow thinking of our government, which proclaims that
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what it is doing through the Export Development Corporation is helping the country.
Not only is the pulp and paper industry of Newfoundland seriously impeded by the destruction of its raw resource by the spruce budworm infestation, which if allowed to continue will destroy the viability of this industry in Newfoundland; not only is the industry hindered by the lack of a reasonable transportation policy, which is hurting the industry in cost effectiveness and competitiveness due to distance from markets; but the government, through the Export Development Corporation and CIDA, is assisting countries which are and have been potential customers by granting to them interest free loans, technical assistance and engineering expertise to establish industries which compete directly with us. The justification for this is that we are helping Canadian firms sell them equipment, thus creating jobs in Canada. This may be true to a point, Mr. Speaker, but it would be interesting to see in whose favour is this trade-off over the long term.
Notwithstanding that even part of the government's reasons are factual, what are we doing at the same time to allow our industry to compete after we have provided the financial assistance which, in the end, is directed to our foreign markets? A case in point is the related linerboard industry in Newfoundland which had to be closed down due to losses resulting from wood costs and lack of markets. What has the Department of Industry, Trade and Commerce done other than to give the usual stock answer that it was not its responsibility, instead of the predecessor to the present minister taking the initiative and offering help?
If I can give the House an example, it was said that one of the reasons for the closure was inability to break through the market barrier. This linerboard mill in my province is perhaps the most modern in North America, yet it has to close down at a cost of some 2,000 jobs, affecting perhaps 4,100 jobs indirectly. Yet at the same time an American mill in Alabama, having increased its capacity just last summer, has announced expansion of its Union Camp Mill at a cost of $250 million so as to increase capacity by 1,000 tons a day.
It is time for the government to attempt to help our economy. It is fine to offer all kinds of incentives to establish new industries. I have no quarrel with such an objective. But what the government is doing really is ignoring what common sense dictates, namely, that we should be protecting, consolidating, and monitoring what we have, industries which have been successful through their own initiative and entrepreneurship but which are now hurting because of inflated costs of production. I refer particularly to the industries of Newfoundland which need assistance in view of their distance from markets. These industries in Newfoundland established themselves when conditions were normal, but now hesitate to continue operation because of encumbrances which exist as a result of the complacency of the responsible agencies of government.
I hope the parliamentary secretary will give me a more responsible answer than to relegate the matter to some other department. I hope he will give me something positive which I can take to those who require jobs, those who are losing jobs

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and industries which are deteriorating, so I can give them some hope for the future. I know he will.


Mr. Gilbert Parent (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I thank the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). I must comment on the generous applause from all of my colleagues here in the House tonight. When I was just an ordinary backbencher, approximately 100 or 150 people would listen to me speak. I am sure Your Honour is aware of the size of my audience tonight. I had two briefings in order to come to the Chamber and give the hon. member an answer.
Perhaps there is a small misunderstanding of the nature and the reason for the operations of the Export Development Corporation. The corporation makes loans only to foreign buyers of Canadian-made equipment and Canadian services. The fact the equipment will be installed in a project in another country, which in theory or in fact may compete at a later date with a Canadian industry, would not be sufficient reason to deny jobs to those plants making equipment which the Export Development Corporation is financing. The only reason for such a course of action would be that it would prevent the development of a rival industry in another country.
The idea that Canada in this manner, or any other, could prevent another country developing a project is incorrect. Yet
somehow the idea persists in some quarters that if the Export Development Corporation did not finance the sale of Canadian equipment to these projects, then these projects would be halted. If one is aware how fierce international competition is in the sales of equipment to these projects, one would realize the projects will proceed easily without Canadian participation. The only measurable result of not financing such sales will be a drop of Canadian exports.
As the hon. Minister of Industry, Trade and Commerce (Mr. Horner) pointed out, there is a paper industry in Poland. In making this loan we do not believe the Polish industry would serve any markets served by our country. Also we believe a loan made to them for the procurement of pulp and paper machinery in this country would create jobs needed in the manufacturing sector. This would ensure Canadians in our plants would have a chance to keep their jobs. Also they would make money to support their families, and indeed help the country.
Our industries should not be denied the chance to sell their products to other countries. This should be borne in mind by all members.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow morning at eleven o'clock.
Motion agreed to and the House adjourned at 10.30 p.m.

Friday, December 2, 1977