1977-12-13

ROUTINE PROCEEDINGS


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr
Speaker, 1 wish to move a motion under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. A statement made by the Minister of Employment and Immigration (Mr. Cullen) on the CTV program Question Period" indicated that the development of the Gull Island site in Newfoundland is the type of project that could provide long-term employment. This is worthy of serious and urgent consideration since such a development would assure benefits to not only the Atlantic region but to Canada in added energy resources. I move, seconded by the hon. member for St. John s East (Mr. McGrath):
That the development of the lower Churchill hydro project be placed on the agenda for the federal-provincial conference on the economy in mid-February as a matter of priority.


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


Some hon. Members:: No!


ANTI-INFLATION PROGRAM PROPOSAL TO PERMIT WAGE INCREASES TO EQUAL INCREASES IN COST OF LIVING-MOTION UNDER S O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. The rate of inflation, contrary to the assertion made in Vancouver yesterday by the Minister of Finance (Mr. Chretien), is increasing, not decreasing. We are now experiencing an average for the last three months of almost 11 per cent which is substantially higher than it was at the time when wage and price controls were imposed. In view of the fact that the government has indicated that wage and salary increases will be restricted to
six per cent which will mean a decline in the average Canadian family's standard of living of about S450 for 1978, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House calls upon the government to permit wage and salary increases within the framework of the controls program to at least match increases in the cost of living and thereby avoid any losses in our standard of living.


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


Some hon. Members:: No!


ROYAL CANADIAN MOUNTED POLICE
Mr. Rene Matte (Champlain):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the need to bring to light certain RCMP activities which are at least compromising, if not outright criminal, the reluctance of the Solicitor General of Canada (Mr. Fox) to co-operate with the inquiry commission which has been set up by the Quebec government, the doubts which are entertained regarding the objectivity of the McDonald Commission, which appears to be a duplicate of the Keable Commission, and because the whole thing is aimed apparently at covering up an ill advised authorization issued by the federal government, especially before, during and after the October 1970 crisis, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That the House request the attorneys general and the justice ministers of all provinces to set up a fair and impartial joint inquiry commission to look into the criminal activities of the RCMP.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

December 13, 1977
Sport


THE MINISTRY
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I rise under the provisions of Standing Order 43 to put a motion on a matter of urgent and pressing necessity. Last Sunday on the CTV network program "Question Period", the Minister of Employment and Immigration repeated his contention that Canadians were not suffering from unemployment. He said and I quote " . . . they've had income and they're drawing unemployment insurance now and doing very nicely." Well, Mr. Speaker, the minister has obviously insulated himself from the cold reality that one million Canadians are facing this winter by virtue of their unemployment and rising food and shelter prices. I would move, seconded by the hon. member for Provencher (Mr. Epp):
That the minister's $1,200 a week ministerial income be reduced to the average unemployment insurance benefit of $100 per week.


Mr. Speaker:: Presentation of such a motion would require unanimous consent. Is there unanimous consent?


ROYAL CANADIAN MOUNTED POLICE
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity arising out of the fact that late last week during the hearings of the McDonald Commission Chief Superintendent Donald Cobb was denied the right to name a foreign power operating within Canada let alone the possibility to elaborate on what potentially could be a very damaging factor in our nation's security. My motion therefore, seconded by the hon. member for Central Nova (Mr. MacKay) is as follows:
That this House instruct the Solicitor General to extend the terms of reference of the McDonald Commission in such a way as to allow witnesses not only to identify foreign powers operating within our national boundaries but to allow detailed exposures of any or all questionable practices by foreign interests operating in Canada.


Mr. Speaker:: Is there unanimous consent for the presentation of such a motion for debate?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: Agreed.


Some hon. Members:: No.


COST OF FILMING COMMONWEALTH GAMES-MOTION UNDER S.O. 43
Mr. Bob Wenman (Fraser Valley West):: I rise under the provision of Standing Order 43. In view of the fact that amateur athletes and supporting organizations are struggling to raise money for training in preparation for next year's Commonwealth Games, and in view of the fact that the minister has recently announced a federally financed $840,000 film production of these same Commonwealth Games, and in view of the fact that a satisfactory film of the 1974 Canada Games cost only $12,000, I move, seconded by the hon. member for High Park-Humber Valley (Mr. Jelinek):
That the Canada Council give the Minister of State (Fitness and Amateur Sport) a home movie camera and air fare to the commonwealth country of her choice to make and star in her own movie and the money saved from her $840,000 extravaganza be spent to send athletes for training and competition opportunities in preparation for the games.


Mr. Speaker:: The motion can be presented for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
[Mr. Speaker.)


THE CANADIAN ECONOMY
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask the unanimous consent of this House to deal with a matter of urgent, pressing and most serious necessity. In view of the fact that thousands of people in the Sudbury basin now face the catastrophe of unemployment at a time when there are no alternative jobs for them to go to, and in view of the fact that this government has so far refused to take any action on this matter to protect the jobs of these Canadian workers and taxpayers, and in view of the fact that I now have before me approximately 28,000 cards signed by Sudbury area residents calling on the Prime Minister to take action to protect the jobs of the workers and the lives of the communities in which they live, I move, seconded by the hon. member for Brant (Mr. Blackburn):
That this House instruct the government of Canada to take the following actions as have been advocated by more than 28,000 Sudbury area residents and listed on these cards addressed to the Prime Minister.


Mr. Speaker:: Presentation of such a motion for debate at this time 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 13, 1977



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Prime Minister. The Prime Minister will recall when he announced the imposition of controls he projected that unemployment in the country-excuse me inflation-well unemployment is as bad as inflation, and it is difficult to know which crisis of mismanagement we should be addressing.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister at that time projected inflation would be down to six per cent last year and down to 4 per cent this year. The figures indicate that in fact we are dealing with a rate of 9.1 per cent inflation now; that the Prime Minister was more than 100 per cent wrong in his projections. The fact facing this parliament is that there is no economic legislation on the agenda of the House of Commons now to deal with the twin crises of inflation and unemployment. What economic measures does the Prime Minister and his government intend to introduce to change the direction of an economic program that has obviously failed?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the Minister of Finance and myself have indicated that over the three-year period, that is to say by the end of December 1978, we expect to be on course and to have inflation down to a rate of six per cent or lower. I gave these figures in the House about a month ago and so did the Minister of Finance. Of course, if you look at a month-to-month basis, there are ups and downs.


Some hon. Members:: Oh, oh!


Mr. Hees:: They are all down.


Pierre Elliott Trudeau: Even members opposite know that in the first and second years of controls we were ahead of target and we reached a lower rate of inflation than had been forecast in the guidelines.


George Harris Hees: Through no fault of your own. It was agricultural prices that went down themselves.


Pierre Elliott Trudeau: 1 hear the hon. member for Prince Edward-Hastings saying "It is through no fault of your own because agricultural prices went down by themselves." Agricultural prices are now going up by themselves. It is part of the up and down which has not been controlled by the government or by the controls program. As members opposite know, this recent spurt in inflation is caused essentially by energy and food prices. Energy is responding to a world level of prices. Food is also responding to a world level of prices. We never pretended
Oral Questions
we could control those. I remind members opposite that in July and the month preceding July in 1974, we said that those were two elements we could not control since in the one case the price is set by the OPEC nations.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We now have a yo-yo theory of economic management in the country.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: The Prime Minister asks us to believe that because he was wrong in the past, he is somehow going to be right in 1978. The CPI figures released today provide further evidence of the failure of the economic policy of this government. 1 want to repeat this question to the Prime Minister since there is nothing on the agenda of parliament to bring some leadership to the Canadian economy. Will the Prime Minister of Canada introduce to the parliament of this country immediate measures to try to turn around an economy in which economic leadership has clearly failed under his government? Will there be measures?


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition talks as though he does not know what is in front of the House. Even this very day we have bills proceeding through the House, such as Bill C-l 1 of the Minister of Finance.


George Harris Hees: You mean that tired old bill?


Pierre Elliott Trudeau: It is a tired old bill because the tired old member from Prince Edward-Hastings is making it that.


George Harris Hees: Get some new writers, Pierre. You are running down. I have heard you bad, but that is the lowest you have ever been.


Pierre Elliott Trudeau: These lines happen to come from the hon. member for Prince Edward-Hastings. On inflation, we have indicated that decontrols will begin in April and that before they begin, parliament will have to pass several measures relating to the post-controls period. We are waiting for the opposition to deal with measures in front of the House before putting those forward.


Charles Joseph Clark: The Prime Minister well knows that Bill C-ll which will be passed today has been in effect since June of this year. It is not new. It is not dealing with the problems that are facing Canadians right now. The Prime Minister seems unprepared to bring in the kind of basic reforms that are needed or to recognize that his decade of economic management has been a tragedy for the country. The CPI figures released today indicate that the Canadians who are suffering most are those who can least afford that kind of impact. Will the Prime Minister introduce, preferably before Christmas, measures or announcements of policy assigned to bring immediate relief to unemployed Canadians and Canadians among the working poor who simply cannot afford to pay 16 cents more for every dollar's worth of food they buy?

December 13, 1977
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, the day after we introduce measures of this kind they are always described by the opposition as being insufficient. They say: You did that yesterday; what do you propose to do today? Now, the Leader of the Opposition is complaining about a tax bill which gave considerable relief to the Canadian people and which his party has not yet seen fit to pass. I would remind him, if he wants immediate relief for those hit by unemployment, that this government introduced what is probably the most forward looking unemployment insurance scheme in the world-and it was criticized by people on that side of the House.


Mr. Stevens:: People want jobs, not hand-outs!


Pierre Elliott Trudeau: It was this government which established indexing in connection with family allowances and old age pensions, a provision which does provide relief for those who are hardest hit by the high cost of living. These are measures which the government introduced and which we had to push through parliament, always against the resistance of people on the other side of the House.


Charles Joseph Clark: The Prime Minister can treat this as a joke or as a matter for some kind of debate. The fact is that because of the policies of the government there are countless Canadians who cannot afford to pay for the food, the clothing and the shelter they need. What we want to know is whether the right hon. gentleman intends to go on ignoring the plight of the hundreds of thousands who are in desperate need in Canada today or whether he intends to introduce emergency measures to help the unemployed and working Canadians on low incomes who need help right now.


Pierre Elliott Trudeau: The Leader of the Opposition has referred to those who cannot afford to buy food and clothing. I am not sure whether he was making a dramatic speech or whether he is really concerned with the plight of these people. I would point out that the Canada Assistance Plan is designed precisely to meet such circumstances. It is administered by the provinces and the federal government pays some 50 per cent of the shot to the extent, currently, of some $7 billion a year. If the opposition is proposing that we increase old age pensions, increase family allowances, increase payments under the Assistance Plan-


Mr. Peters:: Hear, hear!


Sinclair McKnight Stevens: Give them jobs!


UNEMPLOYMENT-REQUEST FOR IMMEDIATE MEASURES TO ALLEVIATE
James Aloysius McGrath: My supplementary is addresed to the Minister of Finance and 1 can assure the Minister of Finance that this no laughing matter. The people of this country want jobs, not welfare.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: 1 should like to take up where the Prime Minister left off. Given the fact that of the one million or so Canadians who are unemployed 35 per cent have been unemployed for three months or more-their right to unemployment insurance benefits has expired and they must now fall back on welfare and the humiliation of the means test-


Some hon. Members:: Order!


Some hon. Members:: Question!


James Aloysius McGrath: Since this places an increasing burden on the provinces, which provide 50 per cent of the welfare payments, I ask the Minister of Finance whether he supports the view of his colleague, the Minister of Employment, that the unemployed are doing very nicely, thank you, or whether he intends to bring in immediate measures to deal with the spectre of hardship which hangs over the unemployed of this country right now.


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, we delivered on October 20 last an economic speech in the House which is now considered by the House and I would like to remind the opposition that they voted on second reading for those economic proposals. 1 would like to say that beginning next month, some substantial tax cuts will be granted to average and low wage earners to stimulate the economy and increase demand. I hope to be in position in the next few weeks to introduce a program urging contractors to add to their staff thus allowing a greater number of individuals to find employment. However, 1 do not think that a substantial increase in the federal budget or federal expenditures would improve the competitive position of Canada. What is important at this time is to keep our markets and I am pleased to report to the House that for 1977, we have increased our trade surplus from $1.1 billion to $2.5 billion, which means that Canada's economic situation is improving in relation to other countries. Yesterday,
1 read in the press that according to American economists in 1978 Japan alone would do better than Canada.


James Aloysius McGrath: Mr. Speaker, I have a supplementary question for the Minister of Finance. I would remind the Minister of Finance that in so far as the working poor and the unemployed of this country are concerned his tax cuts are mere tokenism, and they will only last for two months. Is it the intention of the Minister of Finance, given the fact that the only positive response we have had from the minister and his colleagues is that they are going to have a first ministers' conference dealing with the economy some time in February-


Some hon. Members:: Question!


James Aloysius McGrath: Would the minister of interprovincial relations stick to his own business of looking after the provinces.


Some hon. Members:: Oh, oh!
December 13, 1977


Mr. Speaker:: Order, please. Would the hon. member complete his question.


James Aloysius McGrath: If the minister of intergovernmental relations, or whatever it is, will contain himself.


Some hon. Members:: Order.


Mr. Speaker:: Order, please.


James Aloysius McGrath: 1 ask the minister whether it is the intention of the government, instead of waiting for medium term measures to be decided on by a first ministers' conference at the end of the winter, to do something now to relieve the spectre of hardship which hangs over the unemployed of this country who have to get by on $125 a week, or those who no longer qualify for unemployment benefits but have to fall back on welfare? What does the government intend to do about this right now?


Joseph Jacques Jean Chrétien: Mr. Speaker, on January 1 the federal government, through its budgetary measures, will be putting back into the economy $1.9 billion in tax incentives. Those matters were discussed with the treasuries of all the provinces in October and they agreed with the trend of the policies I was proposing. I will be having another meeting with them in January to review the situation, but 1 hope that the measures that we will be bringing in on January 1, 1978 will be passed very rapidly by the House of Commons.


ANTI-INFLATION PROGRAM SUGGESTION WAGE INCREASES BE PERMITTED TO EQUAL INCREASES IN COST OF LIVING
John Edward Broadbent: Mr. Speaker, the finance minister knows that his great tax credit amounts to only $2 a week for the average family. Considering that the rate of inflation now is almost 11 per cent, and given the fact that the minister has decided to change the regulations governing wage and salary increases to restrict them to six per cent, which will mean a substantial drop in real family incomes for all Canadians in 1978, will the minister at least change the guidelines and permit Canadians to have wage and salary increases which are commensurate with the increase in the cost of living?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not intend to change the announced policy on controls. We should begin to lift them on April 14, 1978.


PROPOSED INCREASES IN COST OF AUTOMOBILES AND PETROLEUM-GOVERNMENT ACTION
John Edward Broadbent: Mr. Speaker, may 1 direct my supplementary question to the Prime Minister. Considering that there are two aspects of the cost of living
Oral Questions
in which the government does have a direct role to play and which are seriously affecting Canadians now-1 refer to the increases in the price of petroleum and cars-and considering the fact that General Motors, Chrysler and Ford all have profits substantially higher on the Canadian side of the border than on the U.S. side, according to a government report, would the government now take steps to ensure that the announced price increases which are coming in the automotive industry in January do not take place in Canada, and will he take steps to order the oil companies not to announce price increases in the petroleum sector which are also coming in January?


Pierre Elliott Trudeau: Mr. Speaker, the price of petroleum in this country has been kept, through enormous subsidies, below world prices, since the fall of 1973. Even the Leader of the NDP should understand that Canada cannot continue to subsidize forever its citizens with the taxpayers money and buy our oil in Canada at prices below world prices. This government, over a period of five years now, has brought these prices up slowly. They are moving towards world prices but have not yet reached them. Canadians will have to realize that the world prices for petroleum, the cost of investment in petroleum research and development in various parts of the world, these prices are at datum and we have to live with that. Once again the government has heavily subsidized in particular the five provinces of this country, and done it partly at the expense of the two western provinces, namely, Alberta and Saskatchewan. The NDP Premier of Saskatchewan has always complained that we have kept his prices too low; the NDP Leader in Ottawa is complaining that prices are too high. Mr. Speaker, this government has taken the view that a gradual phasing in of that price was the proper policy to adopt. But Canadians will have to face reality eventually, they will have to face the fact that those are the world prices for petroleum products.
There was also a second question. Perhaps 1 can deal with it next, Mr. Speaker.


John Edward Broadbent: Considering that the Premier of Saskatchewan, contrary to what the Prime Minister is alleging, has always maintained that any price increase should only take place if all the additional revenue were to go to the people of Canada instead of the oil companies, in flat contrast to the policies of this government, I should like to ask the Prime Minister whether he would consider adopting the policy that has been implemented by the Premier of Saskatchewan for the whole of Canada.
Second, to come back to the question he did not answer that pertains directly to the increases in the consumer price index that were announced today, which pertains to automobiles that are owned by 80 per cent of the Canadian families who are paying anywhere up to $1,000 up more per car than Americans for vehicles produced in Canada, will he stop these companies from increasing the price of cars to Canadians this January?

December 13, 1977

Oral Questions


Pierre Elliott Trudeau: In October of 1975 we introduced a measure to control the cost of living, control prices and control incomes. The NDP has never supported it.


Some hon. Members:: Hear, hear!


John Edward Broadbent: It has not worked.


Pierre Elliott Trudeau: Many of the union leaders in the country have never supported it. We are bringing the controls to an end in April. I find difficulty with the logic of the Leader of the NDP who, now that controls which he never supported are coming off, is saying we should start controlling certain products. It does not seem very logical to me.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


ROYAL CANADIAN MOUNTED POLICE
[Stage Direction]
commission all the information he seems to have in his possession. We are sure that the hon. member will be invited to display all his knowledge and to prove, if he can, the allegations he is putting forward.
René Matte: Mr. Speaker, I should like to ask the Prime Minister whether his government will give me the same cooperation as to the government of Quebec? If the answer is similar to the ones given to the House in 1970 and in 1971, or if these questions concern the security of the State, 1 should like, of course, the Prime Minister to tell me to what extent I may count on his co-operation when I appear before the McDonald Commission?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member wants to give evidence before this commission on matters coming under federal jurisdiction, namely on the RCMP, he will have the cooperation of the government. If he wants to give evidence before the federal inquiry commission which would tend, for example, to investigate the Quebec Department of Education, on the pretext of telling about some teachers in that province who show their students how to make bombs, we will say that, unfortunately, such facts should not be brought before a federal commission but rather a provincial one.


René Matte: Mr. Speaker, I would like to address a question to the right hon. Prime Minister. Would he tell the House whether his government will bring all cases of RCMP agents provocateurs before the McDonald Commission, including those of agents who have been reported dead, missing or held in jail?


Pierre Elliott Trudeau: Mr. Speaker, we intend to put before the McDonald Commission all the information we have concerning every aspect of any "irregularity" on the part of the RCMP or of any other security force in this country. We want this royal inquiry commission to know all the information which we have in our possession and which might have any kind of relevance to any irregularity or any misconduct on the part of our police forces.


REQUEST FOR INQUIRY INTO DEATH OF MICHEL V1GER
René Matte: Mr. Speaker, I would like to ask a supplementary question.
In order to further enlighten the House on the very serious cases concerning the 1970 October crisis, could the Prime Minister tell the House whether his government is prepared for instance to inquire into the death of Michel Viger, the one who sheltered and hid those responsible for Pierre Laporte's death? And in spite of all denials that could be made by RCMP authorities, would the Prime Minister agree to bring before the commission all evidence related to the role played by this same Michel Viger within the RCMP?


Pierre Elliott Trudeau: Mr. Speaker, I will do better than that. I will urge the hon. member to testify in person before the commission, to put before this inquiry


THE CANADIAN ECONOMY
Sinclair McKnight Stevens: Mr. Speaker, my question is for the Prime Minister. Faced with the 10.8 per cent annualized inflation which we have had in the past three months, and bearing in mind the Prime Minister's reference to earlier questions that somehow our inflation record is being unduly influenced by world conditions, would the Prime Minister indicate to the House why the Americans have been able to get their inflation level down to approximately one-third of ours in the past three months to which I have referred, and secondly, could he indicate in what way controls have contributed to our inflation level, bearing in mind that the Americans have succeeded in bringing their inflation down to one-third of our level without controls?


Pierre Elliott Trudeau: Mr. Speaker, that is not too difficult to understand. If the hon. member looks at the record of the U.S. performance and Canada's performance in the past three years, he will see that whereas Canada's economy slowed down to the rate of nearly 0 per cent, the U.S. was in a recession; that country's eco.omy was getting smaller by close to six per cent. In that period of time Canadian unemployment was one per cent to two per cent below American unemployment. When you see that trend in an economy, when the American economy actually receded whereas ours was merely growing very slowly, when they had a recession whereas we had a slow-down, when they had very high unemployment compared to high unemployment in

December 13, 1977

Canada, which is now even higher than in the United States, you get deflationary pressures, which means that inflation does not go up quite so fast, which again means that when you reach a recovery stage, recovery from minus six per cent to plus four per cent, recovery is somewhat faster.
These are matters which must be looked at in perspective. In the second part of this question the hon. member asks about controls. He has a figure now on a month-to-month basis which shows high inflation, but he could have looked at any period of time in 1976 and he would have seen that whereas our guidelines for inflation were eight per cent, a factor of six plus two for productivity, the CPI was growing at something like 5.6 per cent on a year-to-year basis. So the hon. member will see that over the long run we have performed much better than our guidelines have shown.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, I hear guffaws. I ask you, as a reasonable man-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please.


INFLATION-EFFECT OF DEVALUATION OF DOLLAR
Sinclair McKnight Stevens: Mr. Speaker, I noticed that the Prime Minister likes to deal with this subject in a very abstract way, as if he has had no hand in the unsatisfactory economic condition of this country at the present time. I noticed the Prime Minister made no reference to devaluation in this country. Would he indicate if he feels devaluation to date has had any hand in raising the inflation level in the country, and if so, how much?


Pierre Elliott Trudeau: Mr. Speaker, undoubtedly the inflation has an influence in increasing the cost of living in this country.


Joseph Jacques Jean Chrétien: Devaluation.


Pierre Elliott Trudeau: Devaluation.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: If the Canadian dollar is worth less, it means we have to pay more for our imports. Therefore the price of our imports and our import substitutes are higher, which is an addition to the cost of living. This translates itself into a higher CPI figure. That does not mean there are indigenous forces which are forcing the prices up. This means the world is judging that the Canadian economy is not performing up to par, and therefore, the Canadian dollar is not worth as much. This is why the dollar falls and CPI goes up as a consequence.


Sinclair McKnight Stevens: Mr. Speaker, in view of the Prime Minister's answer with respect to devaluation, I was wondering if he could indicate if the Minister of Industry, Trade and Com-
Oral Questions
merce was expressing government policy when he stated last week in this House that he liked the 90 cent dollar, notwithstanding its inflationary impact?


Pierre Elliott Trudeau: Mr. Speaker, I stated in the throne speech debate that the fact the Canadian dollar was worth less was a signal that we were-


An hon. Member:: Worthless!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: It was a signal the markets of the world were giving us to the effect that our costs were too high and our productivity was too low.


George Harris Hees: Why don't you do something about that?


Pierre Elliott Trudeau: I am being asked once again by the indomitable hon. member for Prince Edward-Hastings why we do not do something about it. 1 will remind the hon. member that when we brought in controls he voted with us.


George Harris Hees: Right.


Pierre Elliott Trudeau: The controls have the effect which I stated in my previous answer.


George Harris Hees: But, that did not increase productivity.


Pierre Elliott Trudeau: During the entire year of 1976, we had inflationary rates below our objectives, and we outperformed the inflationary projections. Thus, over the long period, we expect to be on target.


George Harris Hees: But, productivity is away down, and you will not do anything about it.


AIR TRANSPORT
Mr. Roch La Salle (Joliette):: Mr. Speaker, my question is directed to the Minister of Transport.
In December of 1976, Quebec air controllers filed a petition for disaffiliation from CATCA. The hearings of the commission ended in June of 1977, that is six months ago, and since then not a word has been said by the commission about the report it was to produce. Can the minister tell us today when he expects a public announcement about the decision of the Labour Relations Board with regard to the petition of the Quebec air controllers last June?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I would be surprised if any minister would know that in advance of the commission actually finishing its report; but in any case, the commission does not answer to parliament through me.
1808

December 13, 1977
Oral Questions
[ Translation]


Roch La Salle: On a supplementary, Mr. Speaker.
On November 2 last, the Minister of Transport promised, on behalf of the government, to amend the Public Service Staff Relations Act so as to give the board the power to grant the petition of the controllers, and the Minister of State responsible for federal-provincial relations reiterated that promise at a later date. In other words, he added that the federal government had said to the Gens de l'Air: "If you lose your appeal before the board, we will grant it through another act". In view of the circumstances, does the minister still intend to keep his promise of November 1976 which, as I said, was confirmed by his colleague, namely that if need be the government would amend the Public Service Staff Relations Act in order to meet the request of the Gens de l'Air du Quebec?


Otto Emil Lang: Mr. Speaker, the hon. member did not state accurately the change which was proposed or which was promised. If the hon. member goes back and gets the exact words of our statement at that time, I will inform him that that continues to be our policy. We had discussions with various parties during the course of the last number of months as to when we would make a legislative change or introduce one to the House. There was general agreement not to do so until the judgment of the commission came down.


FRESHWATER FISH MARKETING CORPORATION
Mr. Cecil Smith (Churchill):: Mr. Speaker, my question is directed to the Minister of Fisheries and the Environment. Due to a ceiling on borrowing, the Freshwater Fish Marketing Corporation board has decided not to make the final payment of $1.5 million to Manitoba commercial fishermen for the 1975-76 season. The payment was due the first of December. This final payment was to help fishermen to prepare for the winter season and also to provide them and their families with some money for Christmas. Mr. Speaker, this final payment belongs to the fishermen. I ask the minister what action he is taking to ensure that the fishermen will receive this final payment before Christmas. Also, what action is being taken to market the 14 million pounds of fresh fish which is now in cold storage in Winnipeg? Have there been any negotiations with the Food Prices Stabilization Board?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, the hon. member forgot to indicate that this decision was made by the board. The board of the corporation consists of ten members, four of whom are active fishermen. Also he forgot to indicate that the fishermen received some $4 million over last year's payments to them, because of the chance the corporation took by accepting a much larger volume and having the problems which the corporation now has. The board's decision was made with full
knowledge of the facts. The corporation is endeavouring to liquidate the surplus which has been accumulated. At the moment, I will reaffirm my confidence in the board's ability to make this sort of decision.


Cecil Morris Smith: Mr. Speaker, I should like to ask the minister why the chairman of the FFMC, at a meeting in Thompson, Manitoba on November 21, with the Northern Manitoba Commercial Fishermen's Association, made absolutely no mention to those fishermen that there would not be a final payment for the 1975-76 season?


Roméo LeBlanc: Mr. Speaker, the chairman is not a dictator. He consulted the board, and the board made its decision in a vote.

[ Translation]


ADMINISTRATION OF JUSTICE
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, I want to direct a question to the Minister of Justice. Since the use of French in the Ontario provincial courts is tolerated only in a discretionary way and without any legal guarantee, and since section 127 of the Ontario Judicature Act formally forbids the use of any other language than English in Ontario courts of justice, what pressures does the Minister of Justice intend to bring to bear on his Ontario counterpart, Mr. McMurtry, to make sure that section 127 of the Judicature Act is amended so as to allow the use of French in all Ontario courts? Moreover, when does the minister intend to table the amendments promised in the Speech from the Throne aimed at correcting that injustice?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, obviously neither I nor this parliament has any authority over the Ontario Judicature Act. Each province is free, under its Judicature Act or its Juries Act, to provide for bilingual juries in civil and criminal trials within its own province. In the Speech from the Throne we announced that we would be proposing amendments to the Criminal Code to make provision for bilingual juries for criminal trials under the Criminal Code. That legislation will be introduced in due course after consultation with provincial attorneys general.


INDUSTRY
John R. Rodriguez: Mr. Speaker, my question is for the Prime Minister. In view of the fact that the people of the Sudbury basin are disgusted with this government's callous and insensitive attitude toward the lay-off
[Mr. Lang.l
December 13, 1977

notices of INCO and Falconbridge, which can be proven by the 30,000 signatures and cards that I have; in view of the fact that the Sudbury Regional Council last Saturday unanimously voted to call on the government to stockpile nickel; and in view of the fact that France has undertaken the stockpiling of nickel since 1975, can the Prime Minister tell this House, in light of this information and in light of the massive damage unemployment will do to the thousands of families in the Sudbury basin, Thompson and Port Colborne, if he is now prepared to undertake a program of temporarily stockpiling nickel in order to protect the economic integrity of the Sudbury basin and the jobs of the people who will be affected.


Pierre Elliott Trudeau: Mr. Speaker, representatives of the steelworkers union who represent the Sudbury workers attended a meeting with government ministers and officials this morning. A very important discussion took place during which several proposals were made by both sides, and I am confident that with this type of co-operation the unfortunate circumstances prevailing in Sudbury will be alleviated.


RESOURCES
John R. Rodriguez: Mr. Speaker, my supplementary question is to the Minister of Energy, Mines and Resources. In view of the fact that an internal government study recently made public states that the INCO operation in Sudbury is highgrading, a mining process whereby the lower grade ores are bypassed or used as backfill, and in view of the fact that this will make those lower grade ores much more difficult to recover economically and may in fact reduce the useful life of the Sudbury ore bed by many years, can the minister inform the House if he intends to call the management of INCO and Falconbridge before the Standing Committee on National Resources and Public Works so that we can find out the manner in which they are husbanding, exploiting and developing this non-renewable and depleting resource?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I have already met with senior officials of INCO and asked them for the information they are in the process of supplying to the Ontario government. I believe that is the kind of information to which the hon. member is referring.
Oral Questions TRADE


PROPOSED IMPOSITION OF TEMPORARY TARIFF ON IMPORTED NICKEL CARBONATE
John R. Rodriguez: Mr. Speaker, in view of the fact that I have not had much success, I will now turn to the Minister of Industry, Trade and Commerce.


An hon. Member:: Lots of luck.


George Harris Hees: That will be a dead end.


John R. Rodriguez: Mr. Speaker, in view of the fact that Canada is still importing raw nickel carbonate from Australia for processing at the Sherritt Gordon refinery at Fort Saskatchewan which is then sold to the Royal Canadian Mint for coinage, can the minister tell the House if at this time of high unemployment in the nickel industry he is prepared to impose a temporary import tariff on raw nickel in order to protect the jobs of workers in Thompson, Manitoba and Port Colborne and Sudbury, Ontario?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, this matter will be looked into.


LA PRADE HEAVY WATER PLANT-REASON FOR INCREASE IN COST ESTIMATE
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I am sure the House well remembers that last July 18 I asked the Minister of Energy, Mines and Resources to give me an up-to-date estimate of the total construction cost of the La Prade heavy water plant which is being built by and for AECL, one of the minister's Crown corporations, near Gentil-ly, Quebec. Now, six months later, I have finally received a letter from the Minister. I am sure there is a misprint or a typing error in the letter because it indicates that instead of being $453 million the total estimate is now $846 million. That is almost $400 million more than the original estimate of just a few years ago. Is this a typing error? Is there some mistake? Can the minister confirm that this figure, which is almost double the loss on the Argentinian fiasco, is the correct figure?


Alastair William Gillespie: Mr. Speaker, if the hon. member had been doing his homework, as he claims he has been, he would have known that the chairman of AECL provided information to the committee of which the hon. member is supposed to be a regular member.
I suppose there are occasions when the hon. member cannot to present, but if he had been present or if he had read the transcript he would know that the figure earlier in the year was of the order of $751 million. However, that did not include, as my letter indicates, some $50 million of subsidiary or secondary services supplied by Hydro Quebec. That is why the figure he has is higher. There is an escalation in the
80027-45 Vi

December 13, 1977
Oral Questions
estimates of about 5 per cent. This is a very large capital project, and the hon. member must know that the cost of very large capital projects in this country, as in other countries, has a habit of escalating during inflationary times.


Allan Frederick Lawrence: Mr. Speaker, I do not know how the original estimate of $453 million increased by 5 per cent can equal $846 million. Is this the new math? Inflation is hitting this country hard, but not that hard. Would the minister please explain what other factors besides inflation contribute to this financial sinkhole which the minister refuses to supervise or control.


An hon. Member:: What?


Allan Frederick Lawrence: Sinkhole, s-i-n-k. It is a financial sinkhole.


Some hon. Members:: Oh, oh!


Mr. Buchanan:: There is only one "Sine" around here.


Allan Frederick Lawrence: What factors other than inflation affect the construction costs with respect to this matter?


Alastair William Gillespie: Mr. Speaker, perhaps the hon. member should go back, do his homework and read the transcript of the committee meeting.


INDUSTRY
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Prime Minister. He recently had discussions with the provincial premiers. During his meeting with Premier Regan did the question of federal financial assistance regarding the modernization and rejuvenation of the steel mill operated by the provincial crown corporation, SYSCO, at Sydney, come up? As the right hon. gentleman knows, if proceeded with, such a program would provide quite a number of jobs. Can he tell the House if he has anything encouraging to report on this matter as a result of his meeting with Premier Regan?


Pierre Elliott Trudeau: Mr. Speaker, in my private meetings with the various premiers they undertook to concentrate on the overall economic picture, but some time was left in my meetings with them to raise bilateral matters such as the one raised by the hon. member in his question.
Various premiers made several points relative to their provinces, and instead of making a long and indiscreet revelation of all the points they raised with me I prefer to say in general terms that many points of strictly provincial interest were brought to my attention. Those matters could have an impact on the overall economic situation. Premier Regan indeed mentioned several local and provincial projects.


BANK ACT
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, my question is to the Minister of Finance. In view of the fact that business requires much more easy financing, is the minister in a position to say when he will bring in amendments to the Bank Act and whether this will happen before Christmas, or is he thinking that he will require only a one-line amendment to postpone the deadline date of the Bank Act?


Joseph Jacques Jean Chrétien: Mr. Speaker, I will be introducing today a bill to extend for one year the operation of the Bank Act. I will be introducing additional legislation as early as possible when we come back in January so that the committee will be able to start the very difficult work of reviewing the Bank Act again.


Mr. Baker (Grenville-Carleton):: What a courageous government!


WHEAT-REQUEST FOR STATEMENT ON EXPECTATIONS FOR PRICES
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Transport by virtue of his being in charge of the Canadian Wheat Board. What has he to say by way of encouragement to the western farmer concerning the degree to which the price of wheat has gone down in the last couple of years? What are the expectations, having regard to the tremendous increase in the cost of production and the fact that wheat prices today are scarcely higher than the cost of production?


Otto Emil Lang: Mr. Speaker, there are quite a few encouraging things to say. The price of wheat has gone up some 80 cents or 90 cents since its low point last August. That is very encouraging. While that is not the total answer, exports of wheat are at absolutely stupendous levels and will be very much higher than last year. In the course of this year we will have delivered and sold not only our whole crop but likely 100 million to 150 million bushels of reserves from the previous year as well.
In addition, we have made it part of the law of the land that there is a grain stabilization program which does take cost of production into account. That can be a very significant income support to farmers in the event their net cash position deteriorates. In addition to all that, we have held the initial prices of wheat, barley and oats at levels higher than might ordinarily be expected, having regard to what the level of those prices was. This government has always recognized the importance of the grain farmer and his production to this country and accordingly took that risk.
December 13, 1977


John George Diefenbaker: Today the minister has conveniently divided one of his speeches-a summary of what he has been delivering. I should like to ask him what he meant when he said in Melfort the other day:
However, in the case of wheat, costs of production have increased so sharply that several successive years of reduced returns might very well put a producer out of business-
Was he speaking of fact then in his very enthusiastic personalized statement that the western farmer cannot accept, or was he simply trying to cover up the fact that he realizes an international wheat organization cannot be secured?


Otto Emil Lang: Mr. Speaker, I am a little puzzled by the right hon. gentleman's question. I have not been in Melfort for many, many months. He may be confusing me with Roy Atkinson. Certainly, I know no two sources more reputed for gloom than Roy Atkinson and the right hon. gentleman.


John George Diefenbaker: Mr. Speaker, I have before me a copy of the Melfort Journal of November 30.


An hon. Member:: What year?


John George Diefenbaker: The minister says he has not been there. All I have to say is that he must have been in dreamland because what he said is reported and the western farmer realizes that it is the usual nonsense that he produces.


Otto Emil Lang: Mr. Speaker, not only was 1 not there but I should just like to say that does not express my view. My view is of course that low prices such as we saw last August are unacceptable from the point of view of the grain farmer- quite unacceptable from the point of view of cost of production. That is why 1 have been dedicating so much of my effort not only to programs like grains stabilization, not only to wheat sales and farm credit but also to trying to get the best international wheat agreement which will assure a proper return for our farmers.



ROUTINE PROCEEDINGS


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, pursuant to Standing Order 41(2), I have the honour of tabling, in both official languages, the report of the Law Reform Commission of Canada concerning "The Exigibility to Attachment of Remuneration Payable by the Crown in Right of Canada".
Privilege-Mr. Crosbie PRIVILEGE


MR. CROSBIE-PRIME MINISTER'S REPLY TO QUESTION
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rose on a question of privilege yesterday involving the Prime Minister, who has just darted out of the chamber like a scared rabbit. I rose on a question of privilege involving an answer the Prime Minister gave last Friday, which he now has had his agents contradict outside the House, which is embarrassing to the United States ambassador. The Prime Minister stated that a diplomatic note had been sent to the U.S. ambassador complaining that he is running-


An hon. Member:: He has darted back.


John Carnell Crosbie: Since the Prime Minister has returned, Mr. Speaker, I shall sit down and see if he is going to answer the point.


An hon. Member:: What point?


John Carnell Crosbie: My point is that on Friday the Prime Minister stated that he had sent a diplomatic note to the United States government complaining that this government was sick and tired of the United States ambassador running around talking about free trade. This was to back up a statement made by the Minister of Agriculture in a speech on November 29, in Hamilton, to the Ontario Federation of Agriculture. At that time, the Minister of Agriculture said that he was sick and tired of the U.S. ambassador running around talking about free trade.
Last Friday, the Prime Minister stated that a diplomatic note conveying that view had been sent to the United States authorities. I want to know whether this is so, and whether his agents who spoke outside this House and who have no status in this House, no matter who they are or how awe-inspiring they may be outside, are correct. If no note has been sent to the United States authorities, has any verbal or written objection been sent protesting or complaining about the statements or actions of their ambassador in Canada?


Pierre Elliott Trudeau: Mr. Speaker, 1 am sorry that the hon. member did not himself use a little bit of ingenuity to find the answer to this apparent contradiction. It could easily have been done, even by him, if he had referred to his own question in Hansard at page 1729. The hon. member, as often happens, was very wordy, very verbose and rambled on and on. He asked two questions and the Hansard reporter was perceptive enough to put them in two paragraphs. There was a First question and there was what the hon. member calls a supplementary question. My "Yes" answered the first question, Mr. Speaker, and by the time he got into the supplementary I had dozed off.


Mr. Speaker:: Order, please. The hon. member has raised a question of privilege. He raised it yesterday, exposing an answer he had received which he said was evidently misleading. The process which we always follow is that an hon. member who is alleged to have made some remark or answer

December 13, 1977
Committees
which may be misleading is entitled to give an explanation of his answer. The right hon. Prime Minister has done that. The matter does not constitute a question of privilege; it constitutes a question of disagreement on the interpretation of questions and answers given. It is a matter for discussion and debate, not a question of privilege.


John R. Rodriguez: Mr. Speaker, on a point of order, 1 have here some 30,000 cards which are signed and which call on the government to do three specific things, namely, to rescind the lay-off orders at Inco and Falconbridge, to make sure that any tax concessions are related to job creation, and to develop industrial strategies for communities like Sudbury. I know that this does not follow exactly the form of a petition, but it clearly calls on the government to do three specific things. I would appreciate it very much if Your Honour would put a question to the House and ask it to receive unanimously these 30,000 cards signed by 30,000 people in the Sudbury basin as a petition to the government.


Mr. Speaker:: Order, please. If the hon. member wants to present those 30,000 signatures as a petition, it would require only a minor adjustment in form, on which the House may give him some advice. There is, however, no opportunity for the House to amend its already established procedures in that regard.


BANK ACT
Joseph Jacques Jean Chrétien: for leave to introduce Bill C-16, to amend the Bank Act and the Quebec Savings Banks Act.


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

Hon. Allan J. MacEachen (President of Privy Council):: Mr. Speaker, I wonder if the House would deal with a matter which was raised several days ago, namely, the reference to the Special Joint Committee of the Senate and House of Commons on the National Capital Region. If it is agreeable that this motion could be dealt with without debate, I would ask that it be put now. I have consulted with representatives of the other parties, extending back to last week, and there was agreement. I believe it still exists.


Some hon. Members:: Agreed.


Mr. Adrien Lambert (Bellechasse):: Agreed, Mr. Speaker. [English]


Mr. Speaker:: The House has agreed that the motion standing in the name of the Deputy Prime Minister and President of Privy Council be put at this time.


Allan Joseph MacEachen: 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 advisors 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:: Order, please. It is agreed that the motion which has been read to the House and which stands in the name of the Deputy Prime Minister and President of the Privy Council be adopted as it stands in his name on the order paper.


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Douglas Roche (Edmonton-Strathcona):: I wish to present a petition to parliament on behalf of several hundred Vietnamese, Canadian citizens and landed immigrants, urging the government of Canada to demand that the government of Vietnam cease violations of human rights, release political prisoners, allow the reunification of families through the release of certain Vietnamese citizens still in that country, increase aid to refugees, and raise this issue at the United Nations.
December 13, 1977


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: 170, 171, 177, 184, 185, 199, 215, 216, 232, 267, 279, 289, 306, 308, 385, 386, 387, 390, 414, 421, 425, 435, 497, 514, 516, 521, 525, 683, 701, 725, 726, 731 and 754.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Alastair William Gillespie: Atomic Energy of Canada Limited reports as follows: 1. Number of persons under contract-28. Number who are retired public servants-nil.
2. (a) 1975-$80,498. Amount paid to retired public servants-nil. (b) 1976-$146,890. Amount paid to retired public servants-$2,903.


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


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	At October 20, 1977, one person. This person was not a retired public servant.
2.	(a) Nil; (b) Nil.


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


Alastair William Gillespie: The Atomic Energy Control Board reports as follows: 1. Number of persons under contract-28. Number who are retired public servants-one.
Order Paper Questions
2. (a) 1975-$31,155.13. Amount paid to retired public servants-$11,746.71. (b) 1976-$54,257.93. Amount paid to retired public servants-$12,952.61.


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


Hon. John Roberts (Secretary of State):: I am informed by the Canadian Broadcasting Corporation as follows: 1. Seventy-one as of September 30, 1977.
2. (a) $1,622,135; (b) $1,795,426. For both parts, CBC records are not kept in a way which will show whether people under contract to the Corporation are retired public servants.
Note: These figures do not include contracts with programme participants such as actors, musicians, writers and researchers.


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


Jean-Pierre Goyer: 1. Two of whom one is a retired public servant.
2. (a) Nil; (b) Nil.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Canadian Permanent Committee on Geographical Names 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?


Alastair William Gillespie: The Canadian Permanent Committee on Geographical Names reports as follows: 1. The Surveys and Mapping Branch of the Department of Energy, Mines and Resources is responsible for engaging persons under contract to undertake work relating to geographical names. Number of persons under contract, two; Number who are retired public servants-nil.
2. (a) 1975-76-$55,000. (b) 1976-77-$60,000. Amount paid to retired public servants-nil.

Order Paper Questions


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


Alastair William Gillespie: Eldorado Aviation Limited reports as follows' 1 Nil.
2. Not applicable.


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


Alastair William Gillespie: Eldorado Nuclear Limited reports as follows: 1. Nil.
2. Not applicable.


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


Alastair William Gillespie: The National Energy Board reports as follows: 1. Number of persons under contract-one. Number who are retired public servants-nil.
2. (a) 1975-$3,093.60. Amount paid to retired public servants-nil. (b) 1976-$5,170. Amount paid to retired public servants-nil.


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

December 13, 1977


Mr. Donald Wood (Parliamentary Secretary to Minister of Regional Economic Expansion):: The reply for the Atlantic Development Council is as follows: 1. (a)(i) to (ix) no. (x) yes, two in 1975-76 and two in 1976-77. (b) No.
2.	No, these employees were paid from the main estimates.
3.	(a)(i) to (ix) not applicable, (x) $4.45 in 1975-76 and $5.23 in 1976-77. (b) Information on the terms of employment between agencies and their employees is not available, (c) (i) $1,253.16 for 1975-76. (ii) $2,065.90 for 1976-77.


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


John (Moody) Roberts: I am informed by the Canadian Film Development Corporation as follows: 1. (a) Yes. (i) no; (ii) no; (iii) no; (iv) no; (v) no; (vi) yes, five employees; (vii) no; (viii) no; (ix) no; (x) no. (b) Yes. (i) no; (ii) no; (iii) no; (iv) no; (v) yes, one employee; (vi) yes, two employees; (vii) no; (viii) no; (ix) no; (x) no.
2.	No. Regular budget.
3.	(a) Average hourly part-time rate in Quebec (agencies): $5.88; (b) Proprietary to the Agencies; (c) (i) 1975: $346.00; (ii) 1976: $3,103.07.


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


Alastair William Gillespie: The Canadian Permanent Committee on Geographical Names reports as follows: 1. The Surveys and Mapping Branch of the Department of Energy, Mines and Resources provides staff to perform the functions of the CPCGN's Secretariat, (a) and (b) Nil.
December 13, 1977

2. Not applicable.


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


Alastair William Gillespie: Eldorado Nuclear Limited reports as follows: 1. Nil.
2 and 3. Not applicable.


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


Hon. E. F. Whelan (Minister of Agriculture):: In so far as
the Farm Credit Corporation is concerned, the answer is: 1. (a) (i) to (iv), nil; (a) (v), 6; (a) (vi) to (x), nil; (b) (i) to (x), nil.
2.	No. They are paid from Corporation funds.
3.	(a) (i) Ontario, $5.35; (ii) Ontario, $5.99; (b) Hourly rates paid by employment agencies to their employees are not known to the Corporation, (c) (i) $1,411.09; (ii) $3,554.95.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Board of Examiners for Dominion Land Surveyors 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?


Alastair William Gillespie: The Board of Examiners for Dominion Land Surveyors reports as follows: 1. Nil.
Order Paper Questions 2. Not applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Columbia River Treaty Permanent Engineering Board (Canadian Section) 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?


Alastair William Gillespie: The Columbia River Treaty Permanent Engineering Board (Canadian Section) reports as follows: 1. Nil.
2. (a) and (b) Not applicable.


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


Alastair William Gillespie: The Energy Supplies Allocation Board reports as follows: 1. Nil.
2. Not applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Interprovincial and Territorial Boundaries Commission 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?


Alastair William Gillespie: The Interprovincial and Territorial Boundaries Commission reports as follows: 1. Number of persons under contract-2; Number who are retired public servants-1.
2. (a) 1975-76, $18,430.10; Amount paid to retired public servants, $3,050,00; (b) Nil.
Note: The above costs were shared by Saskatchewan, Manitoba and Canada for work on the Manitoba-Saskatchewan and the Saskatchewan-Northwest Territories Boundaries.
1816

December 13, 1977
Order Paper Questions


Mr. McKinnon: 1.	What are the details concerning the unscheduled docking of HMCS Assiniboine which resulted in Shelburne Marine Ltd. of Shelburne, Nova Scotia getting a $110,062 contract?
2.	Were there other costs in connection with the unscheduled docking?


Jean-Pierre Goyer: 1. In reply to a request for proposal, Saint John Shipbuilding and Drydock Co. Ltd., Saint John, N.B. offered a price of $172,754.58 for the known work, plus an allowance of $31,558 for estimated work arising, for a total estimated cost of $204,312.58. The Department of Supply and Services judged the price to be unacceptable and issued an invitation to tender to six companies. Only one bid was received, that of Saint John Shipbuilding and Drydock Co. Ltd. who tendered the same price as before. DSS did not consider this price to be acceptable for the work to be performed and led them to seek another source. As it happened, the delay in finalizing the price with Saint John Shipbuilding allowed another company to bid on the requirement since, in the interim, that company's docking facilities had been certified by DND as being able to dock the vessel concerned. Shelburne Marine Limited submitted a price of $110,061.68 for the known work plus an allowance of $30,540 for a like amount of work arising, as considered for Saint John Shipbuilding, for a total estimated cost of $140,601.68. The contract was therefore awarded to Shelburne and negotiations were terminated with Saint John Shipbuilding and Drydock Co. Ltd.
2. The total job including all work arising was completed at $146,914.36.


Mr. Friesen: 1.	How many persons have been hired by the Department of the Secretary of State since January 1, 1976, to work on the enrolment of new citizens or to process new citizenship applications?
2.	How many persons are working on citizenship applications in (a) Montreal (b) Metro Toronto (c) Hamilton (d) Vancouver and, in each case, how many use as their first or second language (a) German (b) Portuguese (c) Chinese (d) Hindi (and dialects of) (e) Italian (f) Spanish (g) Greek?


John (Moody) Roberts: 1. Since January 1, 1976, 94 persons have been hired by the Department of the Secretary of State to work on the enrolment of new citizens or to process new citizenship applications. Staffing has taken place as follows:
Registration	1976	1977	Total New StaffHeadquarters Citizenship	11	23	34Courts	12	48	60Total 	23	71	94
2. Thirty-six persons are working on citizenship applications in Montreal. None of these employees use the language listed as their first or second language. Sixty-five persons are working on citizenship applications in Metro Toronto. The number using the languages listed as their first or second language are: German, 1; Chinese, 2; Italian, 5; Greek, 4. Eight persons are working on citizenship applications in Hamilton. The number using the languages listed as their first or second language are: German, 1; Italian, 2. Twenty-eight persons are working on citizenship applications in Vancouver. The number using the languages listed as their first or second language are: Chinese, 3; Hindi, 2; Spanish, 1.


Mr. Elzinga: 1.	Was it government policy during wartime (1939 to 1945) to encourage the re-use, after a degree of reprocessing and purification, of automotive lubricating oils as fuels for home heating in an attempt to conserve scarce fossil fuel reserves?
2.	Is the government (a) aware of (b) currently commissioning studies into the efficacy of this type of policy and, if so (i) on what date were such studies instituted (ii) have they been completed and, if not, on what date are they expected to be completed?
3.	What have been the findings and recommendations of the studies?
4.	Has official notice been taken of the studies, their findings and recommendations and, if so, in what form?
5.	Has any action been taken on the recommendations and, if so, what specific action?
6.	Will the studies be tabled in the House of Commons or referred to a committee of the House and, if so, on what date?


Alastair William Gillespie: l.to 6. See reply to Question No. 2,314 asked by Mr. O'Sullivan in the 2nd Session, 30th Parliament which was tabled in the House of Commons on October 17, 1977.


Mr. McKinnon: 1.	Did Ian Martin and Associates Ltd., Ottawa, receive a contract numbered 08MY.3616002-11 for $45,108 for technical services-Leopard Tanks and, if so (a) for what purpose (b) were there personnel in the Department of National Defence who were competent to perform such services?
2.	For what reason were such services not supplied as part of the normal services that the Firm of Krauss-Maffei would provide as part of its contract with the government to provide 128 Leopard I tanks?


Hon. Barney Danson (Minister of National Defence):: 1.
Yes. (a) and (b). On all major DND contracts it is the practice to have a technical representative in the contractor's plant representing the operational and technical agencies of National Defence Headquarters. In regard to this major contract there was a need to supplement the skilled manpower available to DND by one additional skilled engineer knowl-
December 13, 1977

Order Paper Questions
edgeable of tanks. This engineer will be located as a DND technical representative, at the contractor's plant.
2. See (a) and (b) above.


Mr. Herbert: 1.	Are departments advising public servants in bilingual positions that they will receive an annual bonus of $800 and, if so, will a (a) unilingual person filling a designated bilingual position be eligible for the bonus (b) degree of competence in the second language be necessary and how will this be ascertained?
2.	Will the salary of a person presently receiving a 7% premium as a bilingual secretary be reduced when the 7% exceeds $800?


Hon. Robert K. Andras (President of the Treasury Board):: 1. The implementation of the Bilingualism Bonus has been effected relatively quickly and employees are either in the process of now receiving the Bilingualism Bonus payment or are being notified that it is forthcoming, (a) Unilingual persons filling an identified bilingual position are not eligible for the bonus; (b) Yes, a degree of competence in the second language will be necessary. Each bilingual position has been assigned a linguistic competence level. Position incumbents are tested by the Public Service Commission to determine whether or not they meet the required level.
2. A person presently receiving a 7 per cent premium as a bilingual secretary will not have this amount reduced if it is in excess of the $800 Bilingualism Bonus. However, the amounts generated by the 7 per cent of salary formula were frozen at the amounts being paid as of October 15, in those instances where some employees were receiving in excess of $800 per year.


Mr. Howie: Have any community courses been funded in Fredericton, New Brunswick by the Department of Employment and Immigration since January 1, 1977 and, if so, what were the courses and what was the extent of the funding?


Hon. Bud Cullen (Minister of Employment and Immigration):: Canada Manpower Training Program Places Purchased and Purchase Cost For Community Courses Funded in Fredericton January 1, 1977 to September 30, 1977
Type of Training	Course Name	Places Purchased	Purchase Cost sPublic Full-time	Apple Production	20	750Skill	Maple Syrup Production	20	1,900Artificial Insemination Technician	5	28,180Forest Ranger	168	210,255All Around Logger	10	5,663Carpet Laying	30	38,228Carpentry	10	36,54 iBusiness Education	25	51,089Total	288	372,606Type of Training	Course Name	Places Purchased	Purchase Cost jPublic Full-time	Switchboard Operator	16	2,540Apprentice	Construction Lineman 1	83	33,896Construction Lineman 2	44	10,742Construction Lineman 3	23	6,654Utility Lineman 2	13	3,176Utility Lineman 3	33	9,270Utility Lineman 4	48	11,489Electrical Mechanics 1	8	2,139Electrical Mechanics 2	8	2,244Stationary Engineer 2nd Class	20	1,937Stationary Engineer 3rd Class	8	1,224Stationary Engineer 4th Class	8	1,360Total	312	86,671Public Part-time	Stationary Engineer 2nd Class	10	1,406Apprentice	Stationary Engineer 4th Class	1	10Engine Fitter Marine 1	1	75Total	12	1,491Private Full-time	Vocational Teacher Training	43	21,930Skill	Total	43	21,930Grand Total	655	482,698


Mr. Howie: Since April 1, 1977, have any contracts been let for the renovation or improvement of PMQ units owned by the Department of National Defence at CFB Gagetown and (a) if so (i) to whom (ii) in what amounts (b) if not, are any improvements contemplated?


Barnett Jerome Danson: Yes. (a)(i) and (ii):
Contract Award	Contract	
Date	Value	Name of ContractorApril 7/77	$ 25,055	Safety First Fire Protection Ltd.May 4/77	269,248	H.D. MacMacklin Ltd.May 13/77	145,900	Atlantic Fence Ltd.August 30/77	4,950	L.W.S. ElectricSeptember 30/77	77,652	Delta Electric Co. Ltd.


Mr. Howie: Since January 1, 1976, have any studies been authorized or are any presently being conducted on the disposal of radioactive waste?


Alastair William Gillespie: The Department of Energy, Mines and Resources reports as follows: A three-man study team have examined the problem of the management of Canada's nuclear wastes and their report has been tabled in the House of Commons on November 22, 1977. There are continuing studies related to the subject of high level radioactive waste disposal being carried out by a team of Atomic Energy of Canada Limited and Energy, Mines and Resources experts. Medium and low level waste management problems are being studied by many groups including Ontario Hydro, Atomic Energy of Canada Limited, Eldorado, other uranium mines, Department of Environment, Department of Health and Welfare, Ontario govern-
8 00 2 7-46 'A

December 13, 1977
Order Paper Questions
ment departments, etc. The Atomic Energy Control Board is monitoring most of this work for its regulatory function.


Mr. Howie: Since January 1, 1976, how much money has been spent by the government in a search for pools of oil under the ocean floor off the Atlantic Coast?


Alastair William Gillespie: In so far as the Department of Energy, Mines and Resources is concerned: EMR's Geological Survey of Canada spent $360,000 directly on oil and gas basin studies and hydrocarbon inventories in this area off the Atlantic Coast.
In so far as Petro-Canada is concerned: Jan. 1, 1976-Sept. 30, 1977-$35,276 million.


Mr. Howie: 1.	On November 1, 1977, what research programmes were underway at the Agricultural Research Station at Fredericton, New Brunswick?
2.	How many (a) salaried (b) contractual employees were on staff on that date?


Eugene Whelan: 1. Livestock Freeding Programme; Potato Programme; Environmental Quality Programme; Tree Fruit Programme; Berry Programme.
2. (a) 109; (b) None.


Mr. Howie: Since April 1, 1977, what amount was paid to farmers in New Brunswick to assist with fruit farming?


Eugene Whelan: Nil.


Mr. McKinnon: 1.	Is the Department of National Defence buying knives worth $48,000 from Grohmann Knives of Pictou, Nova Scotia and, if so, how many are being provided under the contract?
2.	Under what function of the Department will the knives add to its efficiency?


Barnett Jerome Danson: 1.
Yes. 4,000 sheathed knives.
2. These knives are used primarily for survival and safety by CF Aircrews, Paratroopers and Search and Rescue personnel. They are also used as a tool by upper deck seamen in the performance of their duties aboard ship.


Mr. McKinnon: 1.	Is the Department of National Defence buying "smock parachutists" at a cost of $101,530 from Peerless Garments Ltd., of Winnipeg, Manitoba and, if so, how many are being provided under the contract?
2.	Which units will receive the garments?


Barnett Jerome Danson: 1.
Yes. 2,200 smock parachutists.
2. The Special Service Force.


Mr. Howie: Will an additional pay increase be made to Armed Forces personnel to offset increases in energy and utility charges?


Barnett Jerome Danson: No.


Mr. Howie: On what date is the next scheduled pay increase for members of the Armed Forces?


Barnett Jerome Danson: Military compensation is based on the principle of comparability with matched Public Service Groups and is subject to continuous review. Salary revisions have historically occurred on October 1 for General Service Officers, Medical Officers and Men while April 1 has been the effective date for Legal Officers, Dental Officers and Generals. The last pay increases were on April 1 and October 1, 1977, respectively.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, December 12, consideration of the motion of Mr. MacEachen (for the Minister of Finance) that Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds, be read the third time and do pass.
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I realize that this bill has had considerable examination; in fact, longer
December 13, 1977

than the government wanted. After two weeks in committee, I still have a few comments to add. I refer, first, to the statement that the Minister of Finance (Mr. Chretien) included in his economic and fiscal statement. At page 8, he said this:
First, I am cutting taxes for low and middle income taxpayers by $100.
He went on to say how that was to be done in order that there would be stimulation in the economy during the months of January and February. In committee, 1 raised the matter of these cuts with the minister or his parliamentary secretary, and asked whether they would really be effective. It had been drawn to my attention, through negotiations with the Minister of Finance and the ministers of finance for the provinces, that certain adjustments had been made in provincial tax rates, resulting in substantially increased provincial income tax rates.
A constituent of mine who is an income tax consultant worked out two examples, and 1 was able to show the minister that in fact a taxpayer would not be saving the amount of money through the tax cuts for which the Minister of Finance took credit. In some cases it would appear that with the increase in provincial tax rates, even though the federal rates had dropped, giving a saving in federal taxes, the additional increase in provincial taxes would actually result in a much smaller gain, or in some cases a loss. In other words, the taxpayer would end up paying more than he had previously.
Whilst we are at third reading stage of this bill I would like to refer to the life insurance provisions. We note the minister's own words at page 9 of his economic and fiscal statement. He said:
As a result of representations from members on all sides of the House, I will not be proceeding at this time with the measure for taxing the investment income realized by a policyholder on the death of the person insured.
It is nice to know, Mr. Speaker, that the government can be influenced by pressure. I wonder, at times, why they bring these things in in the first place. If they had thought them through initially, they would not have had the problem. During the committee stage, the minister introduced amendments which we were only too willing to receive on this side of the House. Interest on loans really is interest on loans, and following the time-honoured traditions of the Income Tax Act, money laid out to produce income should be deductible for income tax purposes.
We on this side of the House felt it was only fair that this should apply to anyone who has borrowed-it does not matter whether it is a policy loan-and some arguments were made that it is not really a loan when you borrow from an insurance company. I never could follow that argument. In any event, the government has finally realized that interest paid on that kind of loan should continue to be deductible. We welcome that move.
Now, this 3 per cent inventory allowance which may affect some individuals was, in the admission of the parliamentary secretary, an arbitrary figure. There does not seem to be any logical basis for having chosen 3 per cent. However, if one looks at the inflation rate, which surely must affect inventories as well as everything else, 3 per cent on inventories at a time when we have inflation of 8 per cent or 9 per cent is not going
Income Tax
to have the desired affect. It certainly will not solve the problem. The reason for having this provision in the first place was so that inflationary profits would not be taxed, and the effort that is being put forth by this 3 per cent allowance will not solve that problem.
I asked the minister, during the committee stage, why the last in, first out method had not been examined. I believe it was the parliamentary secretary who replied that it had been considered but was deemed to be more complicated. As an accountant, I wonder what could be fairer than trying to match current costs, that is, inventory purchases of today, with current revenues, that is, sales of today. It has always been a principle of good accounting practice that current costs should be matched against current revenues. However, the government do not seem to have gone that route and we are glad they are doing something in the area of relief on inventories, but I am not sure they have chosen the correct route.
I now turn respect to clause 16(2) of the bill. I should like to read part of it:
"15) That where a resident taxpayer so elects in his return of income for his 1977 or any subsequent taxation year, all his gains and losses for the year and all subsequent years from the disposition of shares (other than prescribed shares), bonds, debentures, notes or similar obligations issued by a Canadian Corporation shall be deemed to be capital gains and capital losses of the taxpayer, except where the taxpayer is a dealer or trader in securities-
There is a fundamental problem contained in this little section. I see it as the government digging a great big hole beside the taxpayer and inviting him to fall into it. I wish to refer to the committee hearings because the questions and answers are quite important here. The hon. member for Timis-kaming (Mr. Peters) asked whether it was going to affect individuals, entrepreneurs, explorers, and so on. He was talking about corporations. The parliamentary secretary said:
Mr. Chairman, this clause is written not only to assist individuals, but primarily venture investment corporations.
There we have it. It is designed to do both things, help venture corporations and assist individuals. There we have it in the words of the government. As reported at page 1739 of Hansard, I asked the parliamentary secretary the following question:
It it possible that subclause (2) could be used to the peril of an individual taxpayer who makes an election? I presume it is one he makes for life. A taxpayer might find himself in a position where he was in the business of trading in securities. If he had not made that election, he would have the right to declare his income and losses in the regular way. What about the man who might find himself in such a position?
The parliamentary secretary replied:
The hon. member is correct: it is a very difficult decision for an individual to make.
Already, under the law, an individual who is selling securities has the right, without making any election, to declare his gains and losses as capital gains and losses. Already, under the existing legislation, the Minister of National Revenue (Mr. Guay) has the right to decide that that individual is in the business of trading or dealing in securities and to say that the

December 13, 1977
Income Tax
income therefrom is not a capital gain but, rather, is income in the ordinary course of a taxpayer's business.
A taxpayer can already make that decision on a year by year basis. The government can already make the claim, which the taxpayer would have to disprove, that he is not entitled to make that declaration of that gain as a capital gain. What is the purpose of having a section like this, which is supposed to aid the individual, when obviously if you follow it through only harm will come to the taxpayer? If he makes the election, he has made it for life. That is quite clear. He can no longer go back and say that he wants to be in the business, if he should happen to be in the business; but the government has the option to come along later and say that in fact he was in the business.
I have another reference to the committee debate on this same point. I was quite surprised at the results. After lunch, on the same day, 1 asked the government about that election. 1 stated that I was concerned about this because it appeared to affect individual taxpayers as well as promoters and developers. I pointed out to the government as follows:
When an individual resident of Canada decides to make an election, he is bound by that election for the rest of his taxpaying years.
I explained to the government:
Subclause (2) (5) indicates that an election under subsection (4) does not apply to a disposition of a Canadian security by a taxpayer who, at the time the security is disposed of, is a trader or dealer in securities.
That is quite clear. The response by the parliamentary secretary was as follows:
Mr. Chairman, the answer to the question is yes. There is always a question of fact to be resolved in cases of this nature.
I asked:
Why did the government feel it was necessary or desirable to dig this large hole for taxpayers to fall into?
The parliamentary secretary replied:
I think that most individuals will know whether we are dealing in capital losses or gains, but the basic premise is to try to reduce uncertainty where there is doubt.
I submit the government has not done that at all. All they have done is put this terrible problem before the taxpayer who already has many problems arising out of the tax system. I do not want to take any more of the time of the House than necessary. I will conclude by urging the government to look at these situations before putting them into the proposed legislation which, with the action of closure that was imposed by the government on the House, means that these problems are not solved.
Since 1970, this government has been promising us simplicity and equity in our income tax law. That was the reason given for the tax reform legislation put before this parliament. It is obvious to anyone who has been studying Bill C-l 1, and to all taxpayers in Canada who in the next four months will be wrestling with their income tax returns, that we have neither simplicity nor equity in the tax system in Canada.


Mr. Lumley:: Mr. Speaker, I rise on a point of order. I wish to thank the hon. member for Vancouver Quadra (Mr. Clarke)

for pointing out an error which I had not noticed previously. At page 1742, instead of "we are dealing in capital losses or gains", it should read "they are dealing in capital losses or gains". I thank the hon. member for bringing that to my attention: I had missed it.


Joseph Adrien Henri Lambert: Mr. Speaker, even if, like the government and my colleagues, I would like to end the study of Bill C-ll, I will want to participate in the debate on third reading to make some positive criticism on this piece of legislation.
It is obvious, Mr. Speaker, that a bill with 116 clauses could not be studied in one scoop. As far as we are concerned, the government has no reason to complain about filibuster because we have limited our speeches as much as possible. However, it is our duty to express our views by defending the interests of our constituents. First of all, I appreciate that the employment expense allowance has been increased from $150 to $250 starting from 1977. However, it is not sufficient. The government should consider that workers who must travel a long way to and from work have increasing expenses because of inflation. Corporations have the privilege of entering the travelling expenses of their employees as deductible expenses but it is not the same for an individual. Therefore, my colleague the hon. member for Rimouski (Mr. Allard) put forward an amendment to clause 4 of the bill proposing to raise the deductible amount to $400. The amendment was turned down by the government majority.
I therefore urge once again the Minister of Finance (Mr. Chretien) to accept an amendment increasing the deduction to at least $400. I think that would be fair to workers who must necessarily incur expenses each day to go to work. The government is now convinced that it is urgent to boost personal income to stimulate the national economy and for that purpose, it is granting a $100 income tax reduction. Taking into account the fact that individuals get only 40 per cent of the national income comparatively to 60 per cent for corporations, while individuals pay 60 per cent of taxes and corporations only 40 per cent, it is urgent that the government seriously consider a readjustment of tax distribution to make it more reasonable.
Mr. Speaker, Bill C-ll provides an economic incentive for the Maritimes and the Gaspe Peninsula through tax benefits. However, I wonder why the Minister of Finance has excluded from those benefits the south shore area between Levis and Riviere-du-Loup. I even wrote to the Minister of Finance in that connection to ask him to introduce an amendment to clause 60(10) to include in Bill C-ll the Bellechasse constituency which is part of the south shore. Unfortunately, the amendment was not introduced, so the industrialists and private concerns of this area will be deprived of those benefits since, even if they are limited it is with those scraps that an area can develop and provide employment for workers. Mont-magny is a town of 13,000 inhabitants founded many years
December 13, 1977

ago with many activities, but it has remained stagnant for some years, not because it has been represented in the Canadian Parliament by this speaker, this is not important, because what is important is to use local benefits, in Montmagny as elsewhere, to urge the industries to grow and other individuals to set up business to allow a normal development.
Mr. Speaker, I would like to give an example. There are three textile industries in Montmagny and it is because of the tenacity of the administrators of those industries that they have managed to survive, even if the number of jobs has come down. I would like to give certified figures which do show that imports have had harmful effects on the development of the industries located in Montmagny. For example, take the case of Bermatex Inc., an industry which was set up a few years ago and provided many jobs. That little business provided a livelihood for 60 people three years ago. Today, as I am speaking to you, there are about 37. This means that there has been a substantial drop. Yet in spite of all the inconveniences, the fact is that the price for a pound of texturized polyester thread, which was $1.85 three years ago, is now $1.30. That is why I say the administrators of those companies are making unbelievable efforts to try and continue to operate and maintain a reasonable level of employment.
In 1973, only four years ago, Consolidated Textiles provided employment for 187 people and there are now 123. And in 1975 the company had to make a choice: close its doors or continue to operate without profit. It chose the second option and continued to operate with very modest or no profits. So, for the last two years, the Montmagny plant has been operating at near capacity but it must sell its product at cost prices. It is also producing inventory but it is starting to get very high. These are details I obtained from the administrators themselves. They cannot do any long-term planning now because of market uncertainty and they could very well be closing down in a month or two. They have been waiting for an economic recovery for two years and they are beginning to get discouraged.
I also met the owners of Dionne Spinning. They told me of their concerns about the market because of massive imports which are not curbed fast enough and if we continue in that direction, we are soon going to see another gearing down in the operations of those textile companies. Unemployment is going to go up and we are going to find ourselves in an excessively serious situation.
To administer is to foresee; that is why I draw to the attention of the Minister of Finance (Mr. Chretien) those very important matters. I should also like to give some figures to prove what I just said about the textile industry. In 1976, retail sales in the clothing industry amounted to $5.5 billion in Canada. The textile and clothing industries give employment to 200,000 Canadian workers. Those jobs represent one in twelve in the Canadian manufacturing industry. In Quebec, those jobs represent one in four jobs. In other words, they have considerable importance, representing as they do 70 per cent of all manufactures and 65 per cent of all jobs in the Quebec clothing industry.
Income Tax
But Quebec city is in Canada, and I hope that it will continue to be, even though some people occasionally try to spread the rumor that the Social Credit Party of Canada is a separatist party. For my part, I do not believe this. I know what I am. I am in favor of a true Canada, but I want all the regions of Canada to be treated fairly. This is what a central government should do. It should ensure fair distribution and give equal opportunities to all areas of the country, and when one area has certain economic difficulties, it is the responsibility of the federal government to take action and try to give special treatment to this area so that its residents can have a standard of living that is at least equal to that of other Canadians. Mr. Speaker, more than ever today, we must find immediate answers to help the remote areas of Canada since the businesses, companies and industries which operate in these areas do not have the same advantages as those in large centres. This is why there must be special programs to enable those businesses to operate at a production cost comparable to that of plants established in major centres so that they will receive orders for their products, sell those products, stay in business and give employment to the workers of the area who will then be able to pay the same taxes as other Canadians.
Mr. Speaker, many of these businesses are in small communities which depend on them for their survival. These industries are established in high unemployment areas. I would like to quote a few figures to show that the Textile and Clothing Import Control Board did not do its job. From 1970 to 1976, imports increased by 145 per cent. Imports from Taiwan increased from 973,000 units in 1961 to 80 million units in 1976. Imports from the Republic of Korea increased by 1,000 per cent between 1970 and 1976. Mr. Speaker, clothing imports per capita in Canada are among the largest in the world. But the percentage of total Canadian imports subject to limitations are among the smallest. In the United States for instance 71 per cent of imports are restricted and Americans spend $11.50 per capita on imported clothing.
What is then the situation in Canada? Only 7 per cent of imports are restricted while Canadians spend $19.50 per capita on imported clothing. That is why I say that while the 1970 Canadian textile policy may have helped the Canadian industry, it certainly did not succeed in curbing the steady rise of imports. Even the new quotas imposed on November 29, 1977 did not bring much change. Again, we must acknowledge the failure of this policy since it has not led to significant improvement.
Mr. Speaker, I shall quote another example: Old quotas allowed the importation of 726,000 sweaters from the Republic of Korea. New quotas allowed the importation of 704,000 sweaters over the same period of time, that is only a 3 per cent reduction, which is not enough. Now, as far as the market is concerned, in 1971, the domestic market share was 73 per cent and the importation market share, 27 per cent. In 1976, importations accounted for 45 per cent of the Canadian market while in 1975, they were almost stable. One year later, they had increased by 10 per cent while the domestic market

December 13, 1977
Income Tax
fell from 73 per cent in 1971 down to 55 per cent of the market.
Mr. Speaker, 1 quoted those figures to demonstrate that we should apply our control policy more strictly to help our industries face these difficult times. It may seem a good idea to import sweaters for $3.00 when it cost $3.25 to manufacture them in Canada. There is a 25 cent difference, but if our youth is unemployed, do you think we are better off buying those sweaters for $3.00 when with 25 cents more we could buy them here and provide jobs for our people? If we keep buying foreign goods because it is cheaper, while Canadian workers are unemployed or on welfare, we can be sure of one thing: People who are working will be taxed and overtaxed and one day or the other, they will get discouraged and refuse to support all those who are doing nothing while they have to work around the clock.
Mr. Speaker, here again it is the duty of the government to use every possible means to give all able bodied men and women an opportunity to contribute to the gross national product and work in our country even if it means spending a few dollars more on consumer goods.
We just voted before the weekend special estimates under which the government is empowered to borrow an amount of $9 billion for administrative purposes in Canada. And certainly, what with the borrowing policy of this government and the public sector financing needs, a major part of those $9 billion will go in debt servicing. Further opportunities for profit will be given to those who are in control, who have the monopoly over the process of monetizing the nation's credit. This is the most outraging aspect of the management of public affairs. In this country, we are forced to crawl before those who control the nation's credit in order to produce things, to ensure the services needed by the people.
Mr. Speaker, I should like to put forward a proposal to change the situation. We are told sometimes that we never make any positive suggestions, well I just made one, and I would like to make another. Namely that the federal tax on building materials be lowered. That tax significantly increases building costs because it adds to the cost of materials and to the provincial tax. Tax over tax, this is senseless. What would happen if we abolished the tax on building materials? I am just about convinced that if we lowered the interest rates and the tax on building materials, then we would see the realization of many projects dear to the hearts of Canadians. Construction would gain momentum. Masons would be at work and so would bricklayers. For houses and buildings made out of bricks, bricklayers would be necessary, carpenters and day labourers would be at work, as would roofers, electricians, plumbers, merchants and those people who engage in transportation. Just imagine the impact of two such proposals as lowering interest rates and lowering or repealing the tax on building materials. Just imagine how many workers could be given employment, not to mention office personnel who would have more work to perform because there would be more invoicing, more collections, more phone calls, more communications-


Mr. Nystrom:: Except for the economists!


Joseph Adrien Henri Lambert: Except for the economists, that's right, for they work only when everything goes well. They give recipes when everything is working well. But when everything goes sour, they just withdraw by saying: Find your own solution to your problems! This is just about what they are doing with this present government which has to tackle with major problems and even if the Minister of Finance (Mr. Chretien) said today that economists have told him that only Japan is going to be in a better economic position than Canada next year you may find another economist who is going to say just the opposite in January. They are not numerous yet they cannot seem to agree among themselves.
It is quite a problem today to trust economists. Why? Not because they do not know anything. Of course not. Indeed they know a lot of things, but they want to administer in 1977-78 with old formulas dating back to 25, 30 or 40 years ago, when there were fewer innovations, less progress than today, when it took more manpower to accomplish all sorts of things. They want to administer in the same way, though it is impossible. We are not going to scrap our tractors, do away with innovations for the sheer pleasure of saying that we are going to put men to work. If this is the objective, if such are the formulas chosen by our economists . . . Incidently during the weekend I saw a power shovel in my riding and it did a very good job, there was only one operator, but if we are to do away with progress and innovations in order to be in tune with the spirit of the day, namely to hire 100 workers with small shovels that are three feet long, small round shovels, and if there are still people without jobs, to hire them to work with teaspoons, that does not make any sense. What is being suggested to us looks very much like that.
Mr. Speaker, there is also an electrical panel box manufacture in Montmagny; its operations were a real success and helped, I believe, 90 workers; today it has barely 30 employees and the business is having a hard time of it. Why? Because construction is at a standstill, the plant gets no orders and therefore manufacturing has stopped. In other words, the situation is really serious on the south shore. That is why I should have liked the Minister of Finance to take that into account in clause 60(10) of Bill C-ll. I am asking him once again to consider seriously the possibility of amending that clause.
I should also like to speak for a few minutes of a problem concerning the Canadian economy. Unfortunately, as early as a month or even five weeks ago, too many of our dairy producers exhausted their quotas until next April. To those of them who send their milk to the processing plant, a penalty will apply, namely a fine of $7 per hundredweight. It is better for them not to send it. If they do not deliver it, the milk will have to be thrown away and this does not pay much. These people have obligations to meet, they must live and if we do not find a way out pretty soon, many of them will go bankrupt. The bank will force them to go under; because they have obligations, whatever they own is mortgaged, and they will go belly up. Yesterday I put a question to the Minister of

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Agriculture (Mr. Whelan) to find out if the research staff in his department have done something to use more powdered milk. The problem is, when we make butter we have to make powdered milk. This powder is sold on the world market at a lower price than the support price on the domestic market, and producers are paying for the difference in order to maintain our dairy industry and from time to time the government also grants subsidies to compensate and adequately sustain the dairy industry.
Sometimes we can even hear some members say: consumers are paying for that. Consumers are being penalized. Mr. Speaker, as regards the subsidy of $2.66 per hundredweight which the government gives to industrial milk producers, if the government did not subsidize them, consumers would have to pay for it because the value of the product depends upon the established support price. Therefore I say it is the duty of the government to maintain our dairy industry but without imposing too heavy a burden on the consumer. That is why this support policy is a good one and I want to say it. This policy must be maintained. But given the surpluses in milk powder inventories, some feed and milk producers have made the suggestion-which 1 made yesterday to the minister and which 1 repeat again today because I feel it is worth considering carefully-that more powdered milk be used in animal feed.
How could that be done? I believe this powder should be sold to feed producers at the same price as elsewhere, it would then result in a homemade production, to be used at home. Therefore, we would be in a position to lower our inventories and to enable those who are presently without quotas to have some in January or February of next year. At least let us consider the issue, let us be serious about it. We have qualified people who can do this kind of research and get at the root of the matter. We should move immediately before it is too late, because that is now the only industry, the main industry in Quebec which ensures a rather stable income to most farmers. That is why once again 1 am urging the government to go ahead without any hesitation. If we spend money on research in this field, it will be a good investment and you can be sure that Canadians would not be angry at the officials who will make such a decision. I hope these few remarks I wanted to make on third reading of the bill will make the government understand that hon. members are here to represent the people and to submit their problems and bring to the attention of the government a number of solutions we sincerely find appropriate. We have nothing to lose by trying them. Those we have tried have put us on the verge of bankruptcy and cost us money, so it could not be worse than it was.


Mr. Fred McCain (Carleton-Charlotte):: Mr. Speaker, there has been a multitude of complaints lodged by the government that this procedure has taken a little too long to suit them. I think it has taken too long because the government has continuously assumed an adamant position which is unacceptable to a great many Canadians.
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Any government which is prepared to recognize the demands which the public is making to give the concessions which are necessary to facilitate the economic development of this country can expect to get support from all parties in the House, and can expect that there will be reasonable limitation of time consumed in the debate of amendments to the budget. But as long as virtually all of the subjects which have been suggested for change have been called out of order, or by other means given no consideration, certain members of the House will make remarks in addition to those they have already made.
On behalf of those who have been helped by the moderate changes which have been made, I want to express appreciation. While there was a change in the insurance structure, the government was not prepared to go all the way. They would not recognize that basically there are those whose only estate when they leave this world may very well be their insurance, whose only means of borrowing may be their insurance. They have ignored this, and they have taken a step in the wrong direction inasmuch as those who might have practised an element of frugality, who might have desired to be selfdependent and not at a later date dependent upon the state, have instead been denied that by the introduction of frivolous and discouraging tax regulations remaining in respect of the life insurance industry.
On behalf of the multitude of Canadians who have used this as their means to acquire self-dependence rather than government dependence, let me say that I think the government has taken a very retrograde step in leaving any part of that insurance legislation in place.
There are other subjects which have been mentioned in the House in a very repetitive way and to which the government has paid little attention. The preceding speaker constantly takes in this House the part of the farmer. I commend him for that, because there are too few voices on Your Honour's right to have any influence; therefore, the voices must come from Your Honour's left. The problem of the transfer of farm property has been recognized to some degree by the government, but the fact that federal and provincial governments have encouraged farmers to incorporate has been ignored. There is no vehicle available to transfer the incorporated farm to the next generation without the imposition of capital gains tax.
I received a telephone call this morning from a family of six, a father and five sons. They accepted the encouragement of the governments to incorporate. The sons have worked for their father, at virtually no return to themselves, in order to establish a rather valuable property. The have watched the land enhance in value. Now they are faced with the fact that their father is not as young as he was and there is no vehicle for that family to retain the farm if the father passes away. The enhancement of land value in their area is such that they would have to sell in order to pay capital gains tax.

December 13, 1977
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The Minister of Veterans Affairs (Mr. MacDonald) is familiar with this problem. I plead with him to have the problem recognized at the next cabinet meeting and before the next budget. Farmers should not be left stranded, which is the case at the moment. The corporate tax return of the farmer is beyond the ordinary farmer's means. He does not understand it and is required to employ a qualified accountant. If a farmer filed his income tax return as an ordinary wage earner, he would break the law in many ways. I appeal to the Minister of Veterans Affairs, who is a farmer, to look at this provision and to have it changed in the next budget.
Many phases of agriculture have suffered hard times as a result of lack of protection for certain products grown in Canada and, to a degree, imported from foreign sources. For the last four years this fact has been a topic of discussion among the various farm organizations. Because of the tariff report and its various recommendations, once again farmers are protesting that it does not meet the needs of certain aspects of New Brunswick agriculture.
If the recommendations of the Horticultural Council and the National Food Processors' Association were accepted, and if the duty were imposed upon imported processed and fresh foods, the cost to Canadians would be 48 cents each per year, which is less than the cost of two cups of coffee. That is what it would cost consumers to provide an element of protection to the Canadian agricultural industry. Such protection would increase processing and the production of many horticultural products. This would increase employment, particularly as it relates to the agricultural area.
These recommendations have fallen on deaf ears. The opposition has requested that the problem of tariffs be referred to a committee of the House. Also, they have requested that the various organizations in the agricultural field appear before that committee, in the presence of our GATT negotiators, in order to put the cards on the table so that the problems will be understood first-hand. The Minister of Finance (Mr. Chretien) promised a few weeks ago that I would receive an immediate answer on that subject. The question has been repeated and it was presented under Standing Order 43. Still no action has been taken.
The Canadian negotiator who will deal with agricultural products in Geneva is in Ottawa until December 21. I appeal to the government to immediately convene a committee of this House, while agricultural representatives are here for the Outlook Conference and while the Geneva negotiator is here. That committee should convene tomorrow morning in order to have farmers, negotiators and members of this House exchanging views on what Canada requires. We require action, which was not included in the amendments to the budget. No doubt my suggestion will be ignored.
When the agricultural chemical industry of Canada was in trouble, restrictions were imposed on the import action of chemicals by farmers, which resulted in a 50 per cent increase in the cost of their chemical requirements in the pesticides field. Why cannot the users be protected to the same degree as the chemical pesticides industry? Why cannot we receive

something for something? I do not quarrel with the protection of that industry; I quarrel with the downright, flagrant neglect of the protection required for a healthy agricultural industry.
Complaints have been received because containers were coming into Canada too cheaply. The can manufacturers received a 30 per cent duty on cans coming into Canada. I do not quarrel with that, because it provides some Canadian employment. However, I quarrel with cans being filled with food produced by Canadians and being sold at prices which Canadians cannot afford. There must be an element of protection for our industry as a whole, but certainly it should be extended to agriculture. Agriculture has requested a surtax, or a vehicle by which the importation of products which destroy various sectors of our horticultural industry is prohibited. There has been no mention of a surtax, no suggestion that it will be part of the structure which will be negotiated at the next meetings to be held in Geneva.
Farmers cannot find adequate vehicles in order to move their products safely from coast to coast. There was nothing in the mini-budget to stimulate transportation in order to move horticultural products. Hon. members opposite want this legislation passed in a hurry, but this is our only opportunity to discuss the subject.
There have been complaints regarding the effect of capital gains. Last night I discussed this problem with a gentleman who indicated that there was an excellent business opportunity in his community. He indicated that his family could establish a little business which in approximately 10 years or 15 years would grant them an element of independence. Also, he said that after ten years of work on the part of his family, the government receives his money in the form of tax on capital gains. Therefore, he indicated that in his old age he might as well join the rest of the people who draw unemployment insurance, welfare benefits or other forms of assistance.
The Canadian tax structure is detrimental to economic development. It discourages investment and entrepreneurship. It encourages the flight of accumulated capital from this country.
I do not think anybody has any idea of how many entrepreneurs in this country have created vehicles outside this country by which to avoid the capital gains tax, income tax and other taxes which this government has imposed in a non-competitive way. The government wants money in a hurry.
Any budget which encourages employment development and entrepreneurship will pass through this House quickly, but any measure discouraging agriculture, the small businessman, the big businessman or the family businessman, will take time because opposition parties are going to seek breaks for Canadians. They will take as much time as is necessary, in the hope that there might be a little chink somewhere in the armour of the Minister of Finance and that he will no longer consider himself the god of knowledge in the field of finance, which he seems to think he is.
December 13, 1977

The agricultural industry needs a change in the tax structure and in the tariff structure. The policies of the Department of Agriculture need changing. Further recognition of the requirements of Canadians with respect to transportation is needed. Speeches have been made on behalf of family businesses in Canada, and they will continue to be made until economic policies furthering the development of Canada are put into play. These policies should include tax relief so that development can be encouraged. Until such time as measures like these appear in budgets, it will take time to put measures through this House. It would have been much more appropriate to alter the bill we are dealing with than to impose closure on two occasions. That is inexcusable and Canadians do not accept it.


Lorne Edmund Nystrom: Mr. Speaker, as the hon. member for Carleton-Charlotte (Mr. McCain) has done, I would like to say a few words about one issue which is not dealt with by this bill; that is the issue of agriculture and farming. The time has come when we should examine our taxation system as it affects farmers. One need only look at the income figures which were released yesterday to determine why that must be done.
At the Outlook Conference here in Ottawa yesterday, it was announced by the Department of Agriculture and by Statistics Canada that the net income of farmers will fall 11 per cent in 1977 over 1976. To put that in perspective, the net income of farmers in 1976 fell by some 20 per cent over 1975. The forecast for next year, as reported in all the newspapers today, is that net income for farmers is likely to fall by another 6.1 per cent in 1978. When a situation like that exists, I do not think any member of this House has to be convinced that many farmers across the country are in dire financial straits at the present time. Their income has fallen for two years in a row, and will fall again in 1978.
What should be done about this situation? There are many things which could be done. As other hon. members have done I have in the past made many speeches about farming, food and agriculture in general, but I want to point out one or two things today about which I think all of us should be aware.
As we know from the statistics released yesterday, farm income has fallen but the consumer price index in respect of the price of food is rising. Just this morning we received statistics which show that the price of food went up by 13.9 per cent between November of last year and November of this year. The price of food consumed in the home went up by 15.9 per cent. When farm income is going down at such drastic rates as 20 per cent last year, 11 per cent this year, and another 6 per cent next year, why is it that the price of food is going up by 12 per cent, 13 per cent and 14 per cent?
The time has come when the government should take a serious look at the middlemen in the food chain and find out why the price of food is going up so sharply while farm income is going down. Our consumers need protection, but the government should also be doing a number of things to protect farmers. Some of these things can be done through our tax system. As the previous speaker said, a number of things can
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be done now to help farmers. The price of wheat has gone down sharply in the last two years; it has dropped radically. The price of wheat is so low that when a farmer produces wheat, he barely meets the cost of production. It costs him almost as much to produce wheat as he is getting for it when he sells it to the grain elevator for sale overseas or for domestic use.
I think the government in general, and the minister in charge of the Canadian Wheat Board in particular, should be moving to ensure that farmers now receive a pay-out from the western grain stabilization fund. That pay-out should be made now, not when an election is announced, which will probably be next March, April or May. The government now has figures on farm income and that income is away down. Farmers deserve a pay-out and I suggest that one should be made now.
As we conclude this debate on taxation and income and how we distribute wealth and income, we should take a few moments to consider the farm income statistics to which I have been referring. We should study the net income of farmers, that is, farm income after costs, depreciation, and so forth. In 1977, net farm income will be $3.3 billion. In 1978, the figure is expected to go down to $3.1 billion. That will be a drop of 6.1 per cent.
At the same time, farm costs are going up and will go up very rapidly. In 1976, farm costs amounted to $7.3 billion, according to federal government statistics revealed at the Outlook Conference yesterday. In 1977, farm costs will rise to $7.8 billion. In 1978, they are expected to rise still further, to $8.3 billion. Hon. members can see that despite the fact that farm income is going down rapidly, farm costs are going up. Thus, the farmer is caught in the cost-price squeeze, the classic phrase we have used on the prairies for so long. The amounts farmers receive for their commodities are going down or staying at the same level, but the price farmers have to pay to produce a bushel of wheat, to raise a steer or a hog, or to produce vegetables or fruit, is going up. How long can this situation continue before farmers are forced off their land? At a time like this the government should be examining farm income and proposing changes which we could pass in this House in order to alleviate the problem.
I want to discuss farm costs for a moment. Many things could be done about high farm costs. I have in my hand a document which was produced for the Outlook Conference, entitled "Farm Inputs". It is dated December, 1977, and was produced by Agriculture Canada. This document states the following:
Although 1977 was a poor year for farm machinery sales compared with 1976, next year looks worse. Manufacturers and distributors of machinery in Canada will face a large decrease in sales volume; their inventories will continue to grow; their margins and profits will fall; and farmers will have little relief from price increases.
Despite the fact that farmers are buying less and less farm machinery-and making fewer repairs because their income has fallen-and despite the fact that the inventory of farm machinery in this country is very high the price of farm machinery remains very high. There is no law of supply and

December 13, 1977
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demand when it comes to farm machinery. Since farmers cannot afford to buy much machinery, one would think the price would be lower; but it has not yet fallen. The government has not told the farm machinery to lower their prices. Of course, it is not just farmers who are suffering, because many people in the farm machinery industry were laid off during the past year. Even in my riding, which does not have much manufacturing, over 100 people have been or will be laid off by the end of the year. 1 refer to the farm machinery industry in Yorkton. Companies such as Massey-Ferguson, Co-op Implements, Versatile and International Harvester have been laying off people because of the drop in farm income and the fact that there is no additional tax relief for farmers.
If any other sector of the economy had suffered the drop in real income that farmers have in the last two years, tax relief would be provided. If corporation profits had decreased by 20 per cent last year and 11 per cent this year, I am sure there would be more tax relief to corporations than is available to farmers. No relief is provided in the bill before us.
The government has conducted many studies of this situation. In the 1960s, a one-man commission under Clarence L. Barber was appointed to study the farm machinery industry. An interim report was produced in 1969 and the final report in 1971. However, I understand the government has put this report on the shelf and is no longer considering its recommendations. Apparently it has no intention of implementing any more of the suggestions made in the report. Its report painted quite a dark picture which endorses the view of the Outlook Conference as expressed in the paragraph I read into the record a few moments ago.
I should like to quote from the Journal of Economics of May, 1972, which I think summarizes the findings of the report very well. A review of the report of the Royal Commission on Farm Machinery, at page 316, reads in part as follows:
The picture of the industry that is drawn in the report is a classic picture of oligopoly: high concentration of output and sales, a history of mergers, entry obstructed by economies of scale in manufacturing and high investment in distribution, restraints on price competition among the leading firms and a gradual decline in their market share, significant price discrimination protected by monopolistic practices, emphasis on non-price competition, failure to exploit fully the economies of scale and to achieve maximum technical efficiency. All these features are discussed and, to some extent, analysed.
The report of the Barber commission gives many examples of an oligopoly in the industry, but the government has taken no action despite the recommendations. I suggest that in a sector where income has dropped so drastically in the last couple of years, the bill should make some effort to improve the position of the farmers.
A number of things other than favourable tax provisions could be done to help the agricultural industry in Canada. I should like to mention just one, tariffs. On average, the agricultural tariff in Canada is less than one-half of 1 per cent. This is one of the reasons we are not self-sufficient in food. When I was in the Niagara peninsula last May, I spoke to fruit and vegetable growers and found that we were no longer

self-sufficient in many areas where we used to be, because of lack of tariffs to prevent the dumping of certain fruits and vegetables by other countries.
Producers in that area would like a seasonal tariff so there would be some protection for their crops when they reach the market. It is strange that in this country some industries- many located in southern Ontario-have huge tariff walls. For many manufacturing industries the tariff is set at around 20 per cent, but the average farm tariff is less than one-half of 1 per cent.
Our farmers are very productive, Mr. Speaker. When the Prime Minister (Mr. Trudeau) complains about productivity, I do not think he is referring to the farmers.


An hon. Member:: Maybe he is.


Lorne Edmund Nystrom: Maybe he is, indeed. Maybe he blames the farmers for not being self-sufficient in food. As the Science Council of Canada has warned, it is possible that by the year 2000 we will not be self-sufficient in food but will be a net importer, despite our vast acreage and all our technology. Even today, according to government statistics, if we disregard grains and oilseeds, we are not self-sufficient in food. This is due to lack of planning by the government. Many people claim that the food we import cannot be grown here, but that is not true. We could grow over 70 per cent of the foods we import. We are not self-sufficient in beef, but we could be if we had proper planning and protection for the farmer. If our farmers were guaranteed a stable income, they could produce food at low prices compared to many of the things this country produces.
Mr. Speaker, because other members wish to speak before five o'clock, I should like to end by saying to the government, again, that the next time a tax bill is brought before the House it should include measures to protect our food producers. 1 would remind the House that last year farmers suffered a drop in net income of 20 per cent, and may suffer a drop of 11 per cent this year-that is, 11 per cent on the 20 per cent-which is a sharp drop over two years. The experts say that next year it will drop by about 6.1 per cent.
The time has come for better planning in the food and agricultural sector of the economy. This could be achieved through progressive tax changes which would help small and middle-sized farmers stay on the land. They would produce more food, make this a better country for all and, hopefully, in an area in which the hon. member for Edmonton-Strathcona (Mr. Roche) is so interested, make a greater contribution to help feed the world.


Sinclair McKnight Stevens: Mr. Speaker, as we draw this debate to a conclusion this afternoon, I think it is wise to remember that the bulk of Bill C-ll came out of a budget delivered by the former minister of finance, the hon. member for Rosedale (Mr. Macdonald), on March 31. At that time, unemployment in this country stood at 8.1 per cent; today it is 8.4 per cent. Inflation was 7.4 per cent at that time, and today's figure reveals it stands at 9.1 per cent. Then the
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minister of finance stated that he anticipated a real growth in our economy of 4 per cent this year. We are now told it is more likely to be 2 per cent.
Cash requirements on March 31 were estimated, Mr. Speaker, you will recall, at $6.4 billion. The present minister had to admit in his October 20 statement that the cash requirements are now $8.5 billion. That is the extent to which this extravagant government has lost control. On March 31, which was budget night, we were told the total budgetary deficit would likely be $7.2 billion. In fact, it was admitted on October 20 that the deficit will be $9.2 billion. Most of us believe that, in turn, was an understatement.
Perhaps the most disturbing aspect of all is not that we have this sad tale of statistics to relate, but this government even today fails to recognize the inadequacy of its economic program. Take, for example, the responses of the Prime Minister (Mr. Trudeau) to questions today. The government expects a rather docile Canadian public to accept unemployment of 8.4 per cent, inflation-in the last three months-of 10.8 per cent, and the all other things we could talk about. Our caucus will not be supporting Bill C-l 1 at third reading; there is no doubt about that-


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: -if that bill is passed-and I hope it is not- let there be no doubt that we have seen 100 per cent of the government's legislative answers to the problems we are living with in Canada. Let every member look at the order paper. You will see there is not one financial bill being offered by this government for legislative processing in this House, in spite of unemployment, inflation and lack of real growth in the economy.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: There is not one bill being offered by the Minister of Finance (Mr. Chretien) after we conclude this debate. Mr. Speaker, my colleagues ask, where is the Minister of Finance? The truth is that the Minister of Finance is presumably some other place playing tiddleywinks. He does not seem to comprehend the magnitude of the problems facing this country.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) has said that he is working on the job employment credit bill. Let us analyse that. On October 20, the same Minister of Finance said in his statement of that date that he had legislation to bring into this House called employment credit, and he was setting aside $100 million to be spent creating jobs in this country. That evening we said, "Good, bring it in. That is the type of thing needed to reduce unemployment. Today, December 13, we are told by his parliamentary secretary that the Minister is work-
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ing on the bill he referred to last October 20. What an utter disgrace we have here.
I want to be fair to this Minister of Finance. 1 said he has nothing on the order paper after Bill C-l 1 is passed, presumably this afternoon. We recall that he introduced a bill for first reading today. What does that bill do? It deals with the Bank Act. Let me read the explanatory note, bearing in mind the unemployment, the inflation and the lack of real growth that we have. What does our Minister of Finance ask us to consider next, Mr. Speaker? The explanatory note reads as follows:
The purpose of this act is to extend, from the 31st day of March, 1978, to the first day of April, 1979, the period during which banks to which the Bank Act or the Quebec Savings Banks Act applies may carry on the business of banking.
Mr. Speaker, what sadder testimony can we have of the inadequacy of this government with respect to our economic affairs? Only yesterday the Minister of Finance made this statement in Vancouver:
I believe that all of us-as consumers, workers, businessmen, or politicians- recognize that the economy cannot be expected to continue to deliver the increases in real incomes that we enjoyed in the relatively easy times of the 1960s and early 1970s.
First as a consumer, second as a businessman, third as a worker, and finally as a politician, I want to dissociate myself from that pessimistic attitude the Minister of Finance took in Vancouver. 1 dissociate the Conservative caucus from the suggestion that we cannot regain the real growth potential that should be ours in Canada. It is absolute balderdash. This House should tell the Minister of Finance in no uncertain terms that we do not go along with the pessimistic attitude he expressed in Vancouver.
I know there are those who believe parliament is becoming-the Prime Minister likes to express this view-increasingly irrelevant, that its institutions are inadequate to cope with today's problems and its committee system, in particular, is little more than a ritualistic exercise which has a marginal impact, say, on unemployment, inflation or the other economic woes to which I have referred. But I have said that I want to be fair to this Minister of Finance. Maybe we have underestimated him in certain respects. While there is some truth to what I have said concerning the inadequacies of this forum, and especially its committees, sometimes we are rather startled to find what happens in committee.
Cast your mind back to a week ago last Friday when the Minister of Finance made one of the few, short appearances he has consented to make before the Standing Committee of Finance, Trade and Economic Affairs. At that time, Mr. Speaker, we were pressing the minister to tell us more about how he was going to relieve the $11 billion end product, manufactured goods, trade deficit we are now experiencing. We asked how he was the going to relieve $11 billion deficit in order to achieve approximately 800,000 jobs that such a deficit means? Lo and behold, what did the Minister of Finance tell us? He told us it was a question of terminology; in fact, it was somehow just a question of definition. For example, wheat really was an end product; if you took wheat and included it in manufactured goods, our over-all picture would look a lot better.

December 13, 1977
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It is important we explore briefly the impact of the Minister of Finance's startling observation that wheat, rather than being a resource commodity, is somehow a manufactured commodity and we are, accordingly, doing much better than we thought. If I might, to specifically quote the Minister of Finance, he said:
How much further can one go in the exportation process? After all, we could scarcely be expected to bake bread for the Russians.
We can ship them wheat if we define it as a manufactured article and then our manufacturing imbalance will look much better because, after all, in the mind of the Minister of Finance wheat is manufactured. I admit that the depth of this idea absorbed us for a time at committee. In the first place, it means-as I said-that our trade imbalance in manufactured goods this year will not really top $11 billion. If we accept the terminology of the Minister of Finance, all we have to do is accept wheat as a finished product. With a simple change of definition, the minister managed to arrest our alarming mounting deficit in manufactured trade-a problem, frankly, that absolutely defeated former ministers of finance to resolve.
That is only the beginning of the impact of this revolutionary way of approaching trade. If the minister's definition of finished products should catch on in the world, then Brazil, Colombia, the Ivory Coast, Angola, Uganda, Ecuador, Costa Rica and Honduras could become important new exporters of finished products. The first five nations I mentioned are the leading exporters of coffee and, to paraphrase the minister, we can scarcely export them to brew it for us. The last three countries are the leading exporters of bananas, and you can imagine their surprise when they discover that they have been exporting manufactured, end products all these years. What more perfect commodity could there be than a banana? It even comes in its own packaging and, as my colleague said, manufactured by God. The banana fits all the criteria of the minister's new definition: it is finished to such degree that there is nothing left to do but export it.
If the minister's definition catches on, then Thailand and Pakistan are important new exporters of finished end products. These nations are the second and third largest exporters of rice, and we can scarcely expect them to make rice pudding for us. This should make the Thais and the Pakistanis very happy, as they have been labouring under the mistaken impression all these years that they were not exporters of manufactured or finished goods.
The new system, however, will not make everyone happy. If the minister is right, then Japan will become a major importer of finished goods, in that she imports about $1.1 billion worth of wheat each year. This is only part of the picture. Poor Japan also imports massive amounts of tea, rice, coffee and other finished products. I suppose it will be only a matter of time before Japan is knocking on the World Bank's door for a loan to help them cope with their staggering deficit in finished products.
[Mr. Stevens.J
What of our neighbours to the south? The minister told the committee that it is not only wheat or barley or the other grains that should be considered as finished goods, but newsprint as well. Imagine the Americans' surprise when they discover that they have squandered away their strong position in the trade of manufactured products by becoming the largest importers of newsprint. Maybe now it is a little more understandable why we have been so generous in giving them export assistance. With such a large debt accruing to us in finished products such as newsprint, the least we can do is build a few steel mills in Texas and New Jersey.
What an amazing breakthrough the minister has charted for the world! With one simple definition he has turned the world upside down. Yesterday's underdeveloped nations are now our major developed ones, and the developed country of yesterday is today's have-not country. We in Canada should be grateful to have such a genius to set the world straight.


Mr. Paproski:: The Shawinigan kid.


Sinclair McKnight Stevens: We should really be proud of this Shawinigan kid. Others may have their Adam Smiths, their Keyneses, Friedmans and Galbraiths; but perhaps the greatest of them all is our current Minister of Finance who continues to dazzle us with reasoning akin to the man who wanted to change the name of Toronto to Miami in order to bring a warmer climate to Canada. We owe a massive debt to this man who has demonstrated, once again, that this government can solve any problem simply by redefining it; that rather than accepting reality, rather than admitting mistakes and correcting policy, this government can simply rationalize the problem away.
We need not worry about our staggering deficit in manufactured items or the hundreds of thousands of lost Canadian jobs which that deficit implies. We need not concern ourselves with these things, the minister tells us, because he can simply redefine our trade statistics to make us look good. Calling wheat a finished product would not create any more jobs than before-but no matter, the minister could always redefine unemployment, too, and that problem would be no more.
In the meantime, of course, the minister is returning us, month by month, into a colonial state. We can export all the food and natural resources we want, and import all the manufactured items we want and the minister will set the books right by declaring wheat and newsprint as finished products. I recommend that the Minister of Finance and the Prime Minister (Mr. Trudeau) tell that to the jobless who are looking for work, especially in the manufacturing field.
It is too bad the minister was not around when the Fathers of Confederation tried to chart a course for Canada that would make it a manufacturing state. The minister could have saved them much worry by telling them that we were already a manufacturing country, that we have our own wheat and, "After all, you can't expect us to bake bread for the Russians." The minister could have told Macdonald that the entire concept of wanting Canada to manufacture goods for export was unnecessary, in that we were already a great exporter of
December 13, 1977

finished products. Such an approach to foreign trade might have changed the entire history of this country.
Looking ahead, with an election coming up, we fancy that the Liberals will want to campaign on this revolutionary concept in trade, and we envisage some 280 Liberal candidates pointing out that the government's policies of the last ten years have put Canada up there with the big ones, with Angola and Costa Rica, with Uganda and the Ivory Coast. No more will people laugh at banana republics. Thanks to the minister's new concept, such countries will become major exporters of finished goods and Canada will be right there with them.
I mention these things because we have in Bill C-ll the epitome, in legislative form, of the government's complacent, stagnant attitude with respect to the economic needs of the country. During second reading and committee of the whole stage we on this side advanced various proposals which we felt would improve the bill. Unfortunately, amendments were forthcoming in only two or three instances.
Bill C-56 proposed the taxation of life insurance policies- the first time such a thing had been done not only in Canada but anywhere else in the world. I am pleased that largely as a result of pressure from this side of the House the government has since backed down and Bill C-ll has been amended further to make taxation of life insurance policies less offensive to those who demanded that their life insurance policies should not be taxed by this government or by any government.
I am pleased, too, that the government has acceded to our request to give the benefit of an income tax cut to all Canadians, especially to those with modest means. But I am disappointed that the increase is so small and that by the use of closure the minister was able to cut off debate concerning the adequacy of the $100 reduction proposed in the bill. If we had been allowed to debate that clause, we would have asked the Minister of Finance if $2 a week was all Canadians needed by way of a tax cut. But we were not given that opportunity.
Many reasons have been advanced to explain the introduction of closure with respect to Bill C-ll, but when all attempts at rationalization have been forgotten, one reason will remain: the Minister of Finance is over his head when dealing with such legislation as this and the longer this subject is debated, the more his lack of depth is demonstrated on the floor of the House. That is why closure was introduced.
During the debate in committee of the whole we were able to bring out certain facts concerning the impact of the capital gains tax. We showed that to the extent the department was taxing capital gains without indexing for inflation, its actions were confiscatory. Hopefully, in a future budget the minister may see the need to put a stop to non-indexed taxation of capital gains. In short, nothing has contributed more to the inflation experience in land prices than the capital gains tax the government imposed a few years ago.
My time is limited, Mr. Speaker. I just wanted to touch on some of the highlights of the debate and draw attention to certain areas in which we feel the bill is particularly deficient.
Income Tax
I wanted to explain why we felt there was no alternative before us but to vote against Bill C-ll. We had hoped the legislation could be improved during the committee stage. We had hoped to persuade the government to increase the employee expenses allowance to $400 rather than the $250 presently proposed. But members opposite used the sheer weight of their majority to deny this to Canadian workers.
We had hoped to get the minister to agree to amend the Income Tax Act so as to remove the social insurance number provision; we do not feel these numbers should play any part in legislation such as this. These social insurance numbers have no place in our income tax system. I am sorry the Minister of Finance did not accede to our request for their removal. I am sorry he cut off debate to prevent members on this side asking him questions as to why he is seeking a further $9 billion in borrowing authority under clause 116 of the measure we are being asked to vote on this afternoon. These are the things which in future weeks the minister will, no doubt, regret having done.
The fact is, there is nothing in Bill C-ll which will in the coming months relieve the unemployment situation, the inflation we are now experiencing, the lack of real growth in the economy, or the tremendous deficit the government is living with. In short, no person who has any sense of responsibility should be prepared to sit in this chamber and vote support for a government which has shown that it is totally inadequate to cope with all these economic problems. In voting against Bill C-ll we are, in effect, voting against the government's economic record, and I call upon all members of the House to do likewise.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: The question is on the motion of the Minister of Finance (Mr. Chretien). Is it the pleasure of the House to adopt the said motion? All those in favour will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Deputy Speaker:: 1 declare the motion adopted. Motion agreed to and bill read the third time and passed.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, please. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be debated at the time of adjournment are as follows: the hon. member for Carleton-Charlotte (Mr. McCain)- Finance-Request for meeting between GATT negotiators and certain industries; the hon. member for Annapolis Valley (Mr. Nowlan)-Agriculture-Veterinary college for Atlantic region-Inquiry as to commitment to finance-Reference of Howe Report to committee; the hon. member for Fraser Valley West (Mr. Wenman)-Canada Council-Proposal that committee review mandate.


Yvon Pinard: Mr. Speaker, there are only fifteen minutes left to discuss a private member's bill, and in my opinion it would be unfair to take only that short period of time to do so. With the agreement of the other parties' representatives, I ask the unanimous consent of the House to call it six o'clock.


Walter David Baker: Agreed, Mr. Speaker.


Mr. Stanley Knowles (Winnipeg North Centre):: Agreed, Mr. Speaker.


Mr. Deputy Speaker:: Does the House agree to call it six o'clock?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: It being six o'clock, I do now leave the chair until 8 p.m. this day.
At 5.44 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.

Hon. John C. Munro (Minister of Labour) moved: that Bill C-8, to amend the Canada Labour Code, be read the second time and referred to the Standing Committee on Labour, Manpower and Immigration.
December 13, 1977

He said: I am sure hon. members have had a chance to look at Bill C-8, certainly in terms of its general purpose and its immediate objectives of improving the industrial relations system and Canada's competitive position.
Many of the provisions of the bill should be seen against the background of what my colleague, the Minister of Finance (Mr. Chretien), said a few weeks ago in his introduction of some other economic measures to stimulate the economy. Hon. members will recall that at that time he outlined the seriousness of our economic situation. He mentioned the rate of inflation was decreasing, yet it still had a long way to go to enhance our economic performance and position.
In addition he indicated that our output for this year and some of the projections for next year are not as great as we had hoped or as we earlier expected. But despite the fact that we can take some satisfaction in knowing that 250,000 more jobs have been created this year, there are still more Canadians requiring jobs.
The number of Canadians who need jobs is rising faster than the additional job creation that has occurred.
The Minister of Finance also indicated that although we have a favourable balance of payments on the trade side-a surplus of $2 billion-this is more than offset by a deficit in our tourist trade, interest payments, dividends, and so on. With that realistic analysis of the economic situation it becomes more imperative than ever that we improve our labour management relations system in Canada. The fundamental rationale behind the bill is to foster a greater degree of co-operation between management, labour and government in order to tackle some of these problems.
One of the underlying hopes in the bill is that it will foster a greater trend toward participation in various types of consulting mechanisms between government, labour, and management. Before dealing at any great length with those hopes, and just talking about the bill in specific terms, it would be useful if members looked at it in terms of it being divided essentially into three parts.
Which headings embody the objectives of the bill? We are talking first about justice in the work place. Under that meritorious objective, we should put in context the amendments in the bill to Parts III and IV of the Canada Labour Code.
Parts III and IV largely deal with upgrading the labour standards and enhancing the standards, particularly of the unorganized worker, and further, upgrading the safety and occupational health standards of the unorganized worker.
We should realize right away that the immediate impact of these provisions will be on the 550,000 workers under federal jurisdiction. They are primarily in the following areas in the federal sector: railroads, airlines, banking, trucking, broadcasting, grainhandling, communications, and the ports. About half of those 550,000 are unorganized.
Canada Labour Code
It is our hope that Parts III and IV will give at least to the unorganized workers some of the minimum standards which have been won by the organized workers and which are now embodied in their collective agreements. We are not alleging for one moment that they match the standards set out in collective agreements, but we provide here a minimum standard.
With that background, I would like to identify quickly what we propose in terms of Parts III and IV of the Labour Code.
The amendments seek primarily to provide workers with increased job protection. For example, the amendments will extend all benefits of the Code, except those related to hours of work, to managerial and professional employees, providing them for the first time with statutory rights with respect to such basic standards as vacations with pay and general holidays.
Dealing with pregnancy, this will not be acceptable as a cause for lay-off or dismissal. Under the present standard, employers may dismiss an employee with less than 12 months' service solely because of pregnancy. This will be corrected by this amendment.
Additional Part III amendments will provide paid leave to qualified employees when a member of their family dies. They will provide employees with basic job protection during periods of sickness. They will extend protection against unjust firing, with the right to appeal. They will require employers to pay all wages due to employees on a regular and timely basis. The bill also seeks to increase to nine the number of statutory holidays by the addition of Boxing Day.
Dealing with the highlights of the amendments to Part IV, and still dealing with the objective of justice in the work place, the proposals enhance the already comprehensive measures for protecting the safety and health of workers. Specifically, the amendments will first enable the establishment of employer-employee safety and health committees at the worker level which will identify and ensure the correction of work hazards.


Some hon. Members:: Hear, hear!


John Carr Munro: They will also provide employees with a voice in matters related to safe working conditions.
A further proposal would give workers the right to withdraw, without loss of pay, from work situations which they consider pose imminent personal danger. This would be a mechanism by which individual employees could exercise a responsibility, and a right, to remove themselves from work situations which, in their judgment, threatened injury to themselves.
There are provisions to ensure that they are protected against sanctions being unjustly applied to them in the exercise of that particular right.
Those are the proposals which deal with the main highlights in terms of justice in the work place.

December 13, 1977
Canada Labour Code
The second main objective of the bill is to accomplish improvements in the structures of collective bargaining. This is to be done through amendments to Part V of the Code. These amendments deal mainly with improving the system and the procedures of our industrial relations system.
At this juncture I would stress that despite the stresses and strains to which it has been subjected, our collective bargaining process continues to be viable. It will continue to receive the full support of this government.
As it now stands, Part V does allow certain adversarial tensions to remain unchecked, to accumulate, and therefore sometimes to disrupt the system.
The proposals now before the House have the following objectives: to reinforce the collective bargaining system in order to reduce some of the tensions between labour and management; to improve the grievance arbitration system, as another means of reducing tensions; to reduce tensions arising out of the relationships between the individual employee-union member and his union by increasing the protection of the rights of the individual; to reduce the impact upon the public of the adversarial nature of the system by affording greater protection of the public interest; and to reduce unnecessary delays and procedures in the administration of the collective bargaining process.
More specifically the amendments would require unions to furnish members with financial statements; would give the Canada Labour Relations Board more discretion to order representation votes and related run-off votes; would require that unions fairly represent members of the bargaining unit; would ensure fair and objective referral procedures by union hiring halls; and would authorize the CLRB to establish the terms of a first agreement, on referral from the minister.
These amendments would also provide interim certification so that certifications are not held up where there are very serious contentious points requiring further deliberation by the board but which do not in essence affect the union's right to certification. The board could avoid delays by granting interim certification.
Those are the proposals which deal with improving the process and, I emphasize, the process of the collective bargaining system.
As far as improving the structures within which the system operates, the bill provides for only some of the proposals in the 14-point program. They are largely the proposals that you can legislate. Many of the other proposals to improve the structure really do not lend themselves to legislative treatment. They are dependent upon a consultative process that would involve labour, management, and government. Because they depend for their success on consensus, they do not lend themselves to legislative treatment. I might identify a few of these so that these amendments can be seen in the over-all context of what the government hopes to achieve.

First, in terms of structure, we are hoping to set up a collective bargaining information centre. It would be a centre under the aegis of labour, management, and government as equal partners. They would be responsible for the operations of the centre. We then hope the centre would bring out data of an economic nature dealing with collective agreements, industry by industry, in a form which would be of immediate use to the parties at the bargaining table. The data would not be suspect in terms of having a bias as is so much of the data upon which our system relies. We have many agencies getting out this material; labour suspects it of having a bias on the management side, and management, depending on the agency we are talking about, suspects it of having a labour bias.
Because the centre would be under the control and aegis of labour and management, we would hope such an arrangement would involve a precommitment to accept economic data emanating from this body and in that sense would set realistic parameters within which the collective bargaining could take place. We do not have such ground rules today. We think this will have some measurable impact on the structure of collective bargaining.
We are promoting, in terms of its impact on structures, a greater measure of industry-wide bargaining where it is practical. Part of that objective can be obtained through a legislative approach and, indeed, we are suggesting this in amendments to Part V. Hon. members will note that we talk in terms of allowing the Canada Labour Relations Board to promote coalition of broader-based bargaining in certain circumstances. We will ask the unions and, indeed, encourage them under given circumstances, to form a council of trade unions for collective bargaining purposes.
This proposal has considerable merit from several points of view. To have some impact on the structure of collective bargaining, we have promoted labour education. This does not lend itself to a legislative approach. We have already moved in this direction by way of a grant of $10 million to the Canadian Labour Congress on the basis of $2 million a year, to get under way with an educational program, one which I believe will have very tangible and beneficial results.
I would like to move on now to the third main area of the proposed over-all objectives of this legislation, the initiative to improve the work environment. I think it necessary to address this question so that members can see how the amendments to the Code fit in the over-all context of our desire to achieve perceptible improvements in the work environment. We are the first to admit that these amendments should have an impact on improving the work environment, but pertinent measures to enhance that particular objective do not necessarily lend themselves to a legislative approach. Again, to a large degree they require consultative mechanisms which involve management and labour taking over on an equal basis the operation of some of the institutes that will be required to achieve an improvement in the work environment and a greater degree of humanization in the work place.
December 13, 1977

Many hon. members may recall that about two years ago when we had the Canada Labour Relations Council set up here in Ottawa, labour and management participated on an equal footing with government. The council did considerable work in all these areas analyzing in the Canadian setting the experiments of corporations which had undertaken quality-of-work-life initiatives, various types of industrial democracy, and the impact of these experiments on productivity. These studies were undertaken by management, labour, and government together. 1 think there would have been a noticeable consensus arrived at had not labour felt it had to withdraw from such a body during the controversy over wage and price controls. In any event, we are desirous of setting up a quality of work life centre. We want labour to participate in the operational aspects of this centre, along with management and government. In that sense we do not see this as an offshoot of the bureaucracy but rather as a centre separate from the bureaucracy.
The centre would deal with experiments already taking place in Canada as well as in other countries in the areas of job satisfaction, humanization of the work place and various aspects of industrial democracy. Some of these words are "buzz words" that seem to be having an increasingly controversial impact when discussed in Canada. I will try to avoid getting preoccupied with the controversial nature of the labels and talk about the objectives the quality of work life centre would have. It would seek to guarantee a greater sense of equality in the determination of working conditions and job security, a greater sense of participation by labour with management in the determination of those working conditions and job security.
I would be the first to declare, if there are any comments with reference to this, that we do not see this as repugnant to the collective bargaining system.
In the North American context collective bargaining is the primary instrument in industrial democracy. It will continue to be our primary instrument to ensure that workers have a say in the determination of wages and working conditions. At the same time we note that some countries with a very strong and free labour movement have a better economic performance than ours and in some cases fewer strikes than we do. We note also that in such countries there has been a readiness to complement the collective bargaining system by another system which would ensure co-operation in terms of objectives to be achieved through a non-confrontation route.
As we all know, the collective bargaining system is primarily dependent upon an adversarial approach. We should like to see a complementary system as an overlay on the collective bargaining system. This would provide a means of developing at least a broad consensus in Canada between management and labour within which the collective bargaining system could operate with greater success and greater benefit to workers and management alike.
I might say that some of those countries whose economic performance has been better than our own and which do have a very strong and free labour movement have been prepared to
Canada Labour Code
look at worker-directors on boards, workers' councils at the plant level, and so on. The reaction so far in Canada has been somewhat negative on the part of both labour and management. So we, as a government, are saying, without prejudging the matter: let us have an institute which will look into the whole area and see whether some of those attributes cannot be applied in the Canadian context. They are the provisions which provide for the right to refuse work under conditions which a worker perceives to be dangerous to himself; and the proposals dealing with health and safety committees of workers and management at the plant level.
These provisions would fit nicely into the functions of an institute of occupational health and safety, which again would not be part of the bureaucracy but would be under the aegis of management, labour and government. This would provide the parties, on an ongoing basis, with the latest scientific findings respecting noxious substances which form part of the new technological processes being adopted in the work place to an ever increasing degree. A study of this might possibly involve the necessity of further regulations to protect the health and safety of the worker.
Another area of examination which we think would contribute to an over-all improvement in the work environment is a study of the concept of worker sabbaticals, or paid educational leave. This is part of the 14 points. We would like management and labour to come together with government to study the implications of that particular concept. When advanced in that way, of course, it does not lend itself at this stage to legislative treatment.
If the amendments proposed to the Canada Labour Code under the heading of "justice in the work place" and under the heading of "improvement in procedures and structures of the collective bargaining system" are passed, then we may go a long way to improve the lot of the workers of Canada and, at the same time, improve our industrial relations system.
We have come to the conclusion, as a result of conversations that we have had with many people on the management side and on the labour side, that governments in Canada today, both federal and provincial, the labour movement, and management are operating under more severe constraints than have been the case over the decades. These constraints have been imposed by economic situations throughout the world which do not provide governments with the manoeuvrability or the options which are commonly perceived by many people. Whatever the political complexion of government in Canada, the policies of governments do not differ to any significant degree because the constraints are so severe. I need only mention to my hon. friends in the New Democratic Party that NDP governments have found there was some merit in supporting wage and price controls for a period of time. So constraints are there.
The necessity to be competitive is very much on the mind of many labour leaders, certainly those in the secondary manufacturing field in Canada at the present time.

December 13, 1977
Canada Labour Code
If that is true and there is an increasing realization of it, then it seems to me that exclusive reliance on confrontation, which is so much a part of our collective bargaining system, when it comes to resolving labour disputes and indeed become very passe. Many have come to the conclusion that we must develop another type of system which is complementary to that system.
In other words, attitudes in Canada are changing. I think people are looking with increasing skepticism on some of the old rhetoric. People like my hon. friend, the financial critic of the Conservative party, the hon. member for York-Simcoe (Mr. Stevens), will agree that workers and labour leaders are not calling representatives of the business interests "robber barons" to quite the extent they used to. I also detect that some people on the business side are not quite so ready to go around identifying labour as totally irresponsible in every given situation. There is an increasing sense of community of interest on the part of all.
We do not deny, despite the realization that the old rhetoric has had its day and is archaic thinking, that there is still a great deal to be done in terms of changing fundamental attitudes in Canada. We need this before we can ever get the kind of complementary system that is necessary to soften the total reliance on the adversary approach which is so much part of our system.
By the House adopting these amendments, and to the degree that they enhance our capability of achieving some of the other objectives which I have identified and which do not lend themselves to legislative treatment, we hope to accomplish the change in attitude on the part of labour and management which is so necessary for improving our industrial relations system.


Mr. John A. Fraser (Vancouver South):: Mr. Speaker, in rising to reply to my hon. friend, the Minister of Labour (Mr. Munro), it would not be amiss-it has certainly been noted by the House-to remark that after a quick flurry over the provisions of the amendments to the Canada Labour Code the minister spent a good deal of his speech commenting on his 14 points and his non-legislative proposals for a better industrial climate for this country. It was not too many months ago that we heard a good deal of this speech, and 1 think I said in good humour-I am sure it was taken in that fashion-that the minister has made the speech so often now that he really does not need any more speech writers.
I say with all sincerity that the minister is desirous of bringing about a better state of industrial relations in this country. Certainly he has made a great many speeches trying to persuade the Canadian public, especially the labour movement, that this is so. The difficulty is that he has been operating under very trying conditions, most of which have been created by the actions of his own cabinet colleagues.
1 should like to come to some of the points which have to be considered when one looks at labour legislation and industrial relations. I suppose that when one tries to find the key to better relations between labour and management, labour and

government, or labour, management, and government together, the first word to start with is "trust". This may not all be the fault of the Minister of Labour. His difficulty over the last several years has been largely that labour in this country no longer trusts the government of the day.


Mr. Alexander:: And the minister knows why.


John Allen Fraser: The minister knows why. But there is a limit as to how many times the Minister of Labour can make a speech of good intentions against a backdrop of evidence of bad intentions-and not just bad intentions, but thoroughly dishonest changes in government policy and in the word that the government gave to labour.
1 ask all hon. members to remember that in 1974, when this party openly and honestly advocated controls, the government of the day, in a frantic attempt to regain power, denied that it would ever place controls on the working people and the public of this country.


Lincoln MacCauley Alexander: That is what the Minister of Labour (Mr. Munro) said in Hamilton.


John Allen Fraser: That promise was accepted by labour in Canada right across this country, and because labour in this country believed that the government fighting for re-election meant what it said, in many cases they voted for candidates of that government in the honest belief that they could depend upon ministers of the government when they said there would be no controls.


Walter David Baker: They won't be fooled again.


John Allen Fraser: I cannot guarantee that, because the government is pretty skilful at beguiling the various segments of the Canadian community into believing it, even if that belief, in terms of history, does not last very long.
In an item in a newspaper of November 21 there was an interesting comment in connection with the doublecross to which I am referring. This is an article discussing the former minister of finance, the hon. member for Rosedale (Mr. Macdonald). This is what the newspaper clipping says:
Someone found some of 'Thumper's' old pamphlets that hadn't been distributed during the 1974 election campaign. They made for funny reading.
'. . . The Tories propose freezing your wages. But even if your wage is frozen, the price of imports cannot be. For example, the prices of simple everyday things like imported oranges may continue to rise, but your wages won't if they're frozen. So you lose.
'The Tories' solution was tried in the United States. It produced shortages of foodstuffs and other supplies and even higher prices when the freeze ended. As a result, the U.S. abandoned it. Britain tried it. It produced confrontation and violence.
'The Tories can't be allowed to freeze your wages. It just won't work. You know it. We know it.'
That is what the election propaganda said. Anybody who says that a qualification was put on that commitment to labour has
December 13, 1977

only to read the propaganda put out in the campaign by one of the former ministers of the cabinet.


Sinclair McKnight Stevens: They sit over there laughing at us.


John Allen Fraser: The author of the article goes on to say what we know and what labour knows. Tie says:
Fifteen months later, Mr. Macdonald introduced wage and price controls.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: Look at how they laugh over there.


John Allen Fraser: When we talk about a better climate for industrial relations, it is all very well for the minister tonight to talk about it with the backdrop of inflation going down. That is a laugh, after today's figure of 9.1 per cent. It is all very well for the Minister of Labour, working under the cataclysmic chaos that his fellow cabinet members have created, to be tossed out into the maelstrom and told, "You are the Minister of Labour, go and placate these people. Tell them that things are getting better, tell them we'll get them jobs by improving industrial relations". The Minister of Labour has clearly the most difficult task of any member of cabinet when it comes to trying to persuade labour that they should listen to him, no matter how honestly he may be advancing propositions which he sincerely believes are in the interests of the Canadian general public and the labour force.
What happened that has created so much difficulty for the Minister of Labour? Labour walked out of the Canada Labour Relations Council which the minister established and to which he has referred tonight, and which we supported because it was a move in the right direction. What happened to the Economic Council of Canada? Its usefulness and credibility immediately diminished because again labour walked out of it.


Some hon. Members:: Oh, oh!


John Allen Fraser: Adding to an already unhealthy statistical strike record, labour, in a most unusual step in this country, decided to have what they call a national day of protest, but it was nothing more or less than a national strike. It was not a strike against management in the hundreds, in the thousands of work places of this country. It was a strike against the government and it was a way of saying, "We don't trust these guys, they doublecrossed us and we have got to show them".


Some hon. Members:: Hear, hear!


John Allen Fraser: Nobody is advocating another such demonstration. It is the antithesis of our system and no members of the House can condone it. But when we talk about having a better climate, a better relationship between government and labour, or management and labour in the work places of this country, in the name of heaven let hon. members remember who has destroyed any hope of creating that climate, at least for a long time to come.
It also had another effect. It had the effect of the Canadian Labour Congress at its meeting in May of 1976 enunciating a manifesto. That manifesto called for a tripartite decision-mak-
Canada Labour Code
ing body of government, management and labour, and because it was decision-making, it was rejected by all political parties. Eventually it was also rejected by some of the affiliates of the Canadian Labour Congress. Months later, in an attempt to salvage the better aspects of the concept, the emphasis shifted to a consultative tripartite arrangement, which was much looser.
Attempts were made by labour and management to have an effective conversation with the government, but what was the government's response? Hon. members should remember that until a few weeks ago, just before the mini-budget of the Minister of Finance (Mr. Chretien), the Prime Minister (Mr. Trudeau) was still trying to blackmail the CLC executive into giving a promise of restraint, when he knew, the cabinet knew, the Minister of Labour knew, and everybody with any brains in the country knew that the CLC could not give that commitment because they do not control their affiliates. Yet right until the mini-budget which declared the end of controls, the Prime Minister was trying to blackmail labour into giving a commitment that they could not give.
I do not have to give a lecture on the internal workings of the labour movement to hon. members and I should not have to give it to members of the government. I certainly should not have to give it to the Minister of Labour who knows perfectly well how much difficulty that created in the backrooms and in the organizations of the Canadian Labour Congress. Let me just assure hon. members that on this side we realize that, imperfect as the Canadian Labour Congress may be, it is the single most significant focal point for labour in this country, and if there are to be negotiations, if there is to be a treatment of reason, the CLC cannot be embarrassed and put in a position where it cannot deal with the government. But that is what happened as a result of the Prime Minister's blackmail.
What has happened is that there has been a breakdown of any trust between the labour movement and the government, although, curiously and interestingly enough, there has been more consultation between management and labour in the last year than probably at any time earlier in our history. What does that mean? It means that management recognized that there was no way out of this morass unless they ignored the blandishments of the government or the entreaties of the government and dealt with labour by themselves. That is exactly what has happened.
We remember the next doublecross. As hon. members will remember, the Anti-Inflation Board guidelines clearly indicated that if in the coming year of 1978 inflation did not decrease to 6 per cent or less, there would be provision for allowing wage increases above 6 per cent. That commitment to labour was broken. I say with sincerity that the Minister of Labour knows the effect that had on the climate of accord which he has been attempting to establish.
The minister referred a few minutes ago to the difficulties Canada is facing. It is a comfort to realize that the hon. Minister recognizes them. We would be more comfortable if

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we were convinced that other members of the government recognized them. There is no question that most of the observers of the political scene recognize them.
Mr. Bruce Hutchison wrote in an article dated December 12, 1977:
The government can no longer count exclusively, or even primarily, on the issue of the nation's unity when bread and butter issues are over-shadowing it. Hence Mr. Trudeau's belated interest in finance ...
A few weeks ago the Prime Minister delivered a lecture which might have got him through first year economics but not much farther.
The article continued:
Hence Mr. Trudeau's belated interest in finance and Jean Chretien's desperate efforts to control a ruinous inflation, a high unemployment rate and an inherited budgetary deficit that, in normal times, would be enough to sink any government...
The losses are clear to everyone-a mountain of debt, both foreign and domestic, savings eroded, our dollar devalued, our reputation throughout the world gravely damaged.
It is against a background of broken promises and most serious economic difficulties that the minister has the unenviable task of trying to maintain a link between the government of the day and the labour movement. I will give him credit for trying. As everyone is aware, he is operating under difficult circumstances.
The public of Canada should be reminded that federal jurisdiction in labour matters is extremely limited. The minister referred to extra labour propositions. These propositions will have only a limited effect if they are established, because approximately only 10 per cent of the work force in Canada comes within federal jurisdiction. There are approximately ten million people in Canada's labour force and, of that approximately 10 per cent come under the jurisdiction of this House. The rest come under the jurisdictions of the ten provinces and are subject to various provincial labour codes. The workers within federal jurisdiction are subject to the Canada Labour Code. It is important to realize that they include federal servants who are subject to the Public Staff Relations Act.
The 1977 figures indicate that, of the total Canadian work force, 3,149,213 are unionized. The Canadian Labour Congress membership includes 99 unions. Of these, 14 unions have 50,000 members or more. I do not need to list all the unions, but it is important to remember that in the private sector and under federal jurisdiction, and as a consequence subject to the Canada Labour Code, there are approximately 550,000 workers. The most recent figures indicate that approximately 45 per cent of these workers are non-unionized. In addition, approximately 320,000 public servants come within federal jurisdiction and are subject to the Public Service Staff Relations Act. The unionized workers within federal jurisdiction, subject to the Canada Labour Code, are represented by approximately 55 unions, excluding directly chartered CLC and CNTU unions, 40 of which are affiliated with the CLC. The unionized federal public servants are represented by 13 unions, of which eight are affiliated with the CLC.
[Mr. Fraser. 1
A few minutes ago the minister set out the general areas of federal jurisdiction. In summary, the federal jurisdiction involves 550,000 people who are private sector employees and 320,181 people who are public sector employees. If the Armed Forces, the RCMP and others are added to those figures, which is approximately another 100,000 people, the total is just under one million. In the private sector, just over one half are unionized and have the right to strike under the Canada Labour Code, and in the public sector approximately 90 per cent have the right to strike. In the public sector the remaining 10 per cent are senior executives, personnel administrators, the operational methods group, and certain designated essential service employees.
I have taken the time to refer to those statistics because far too often people in the private sector among the public, and within the labour movement, seem to believe that the federal government can effect the answers to a better industrial climate or can solve all the problems that accompany labour and management relations in Canada.
As the minister is aware, the significance of the federal position is the example it sets. As a consequence, any legislation which is passed becomes a signal to the provinces, the labour unions, the private sector from the management side, and the majority of organized and non-organized workers in the rest of the country. It is helpful to enunciate some of the principles which must be kept in mind when one considers legislation in this vital field, and when one is dealing with labour and with management in the hope of establishing better industrial relations.
The first is trust: labour must be able to believe in the government of the day. Without that, all the blandishments and enticements will not work. The second is confidence: both labour and management must believe the government accepts its responsibility to restrain its growth and encroachment on the economy. The degree the government has been increasing its encroachment on the economy has reduced the effectiveness of our private sector to plan, invest, build, and has taken money out of the pockets of the working people. It now ill behooves the government to ask the working people of Canada to bear the brunt of inflation. Of course that has been the complaint of labour, and almost every objective observer in the last two years has indicated that there is much justification in that complaint.
The third is the recognition of the necessity to maintain a free collective bargaining system. The Minister of Labour indicated that is the basis of his own approach, as well as many other things. No matter how helpful some complementary additions to the collective bargaining system may be, I do not believe the country is ready to accept any real, severe encroachment upon the free collective bargaining system. The country is not ready for that yet, and in fact may never be.
In considering legislation and in dealing in an extra legislative manner, as has been suggested by the minister, there is a fundamental point. The fundamental point which has to be remembered is that we have had a history of free collective
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bargaining, and both management and labour want to get back to it as soon as possible.
The fourth point is that in considering these matters there has to be a minimum of government interference in the terms of collective agreements. By that I am not saying that there has not been in the past-and there may well be in the future; there may be now-occasions when labour must submit to legislative moves in the interests of standards. The minister has spoken about some of these, but in dealing with both management and labour it is essential that it be remembered that both management and labour have chosen to work out most of these problems and arrive at collective agreements over the bargaining table.
The fifth point is that there should be a recognition that foreign structures and foreign philosophies of labour relations cannot be transferred to Canada easily. In fact in some cases they may not be able to be transferred at all.
There has been, especially in recent years-partly because of the very high incidence of strikes in this country, which has, fortunately, diminished very significantly during this past year-an almost frantic yearning to go outside Canada to find some panacea to all our woes, and import it here. The government has even paid some distinguished gentlemen to travel abroad-


John Carr Munro: From your riding, John.


John Allen Fraser: -and to come back with a very interesting, exact and accurate document setting out the method of handling labour relations in European countries. As the minister says, one of these gentlemen is from British Columbia, and there is no doubt that in this ongoing debate he has made a significant contribution. 1 had occasion to discuss Mr. Connag-han's report with German trade union people and with members of the German government a year ago, and they complimented Mr. Connaghan on the accuracy with which he portrayed the situation in Germany. However, it is important to recognize also that when one goes to Europe one is constantly warned-as I know the Minister of Labour is aware-that what may work in Germany works because the people there are Germans, and what may work in the Scandinavian countries works there because the people are Scandinavians, but those things may not necessarily work here.
Let me say something about so-called co-determination. It is the view of this party that if both management and labour wish to experiment with forms of co-determination at any level in the work place or in the upper echelons of management, they should be free to do so, but it is also the position of this party that it would be dangerous to force such co-determination by way of legislation. It is far better to achieve these things by voluntary consent in those areas of industry where conditions lend themselves to them than to try to impose them by government edict.
On this same point I noticed that the Minister of Labour did not mention tonight his multi-partite national forum. I am
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sure-and I am watching him smile-he did not think I was going to go through my entire speech tonight without mentioning it. I remind the minister and the members of the government that one of the difficulties in achieving this multipartite national forum is that management is not very enthusiastic about it and labour is opposed to it. No matter how good the idea may be in theory, it cannot be brought about unless the parties consent freely to join in such a proposal.
The sixth point is that in developing labour legislation we must be sure to ensure a balance of power in the bargaining process, favouring neither management nor labour, and to the degree that any labour legislation tilts the balance one way or another it works against a climate of accord over the bargaining table.
The seventh point which must be kept in mind-and this is a serious matter which has been avoided by the government for some years-is that at last in this country there must be a realistic acceptance that there are some strikes in essential services, and those strikes which may not start off as essential service strikes but which are demonstrably against the public interest must be dealt with more competently than they are dealt with at the present time. The most recent example was the air traffic controllers' strike, but there have been others: the rail strike of a few years ago, the strike at the river ports on the St. Lawrence, and the grain strike at Halifax. The Minister of Labour has been through all those strikes, and we all tried, given the limitations of present legislation and present approaches, to do the best we could with them.
However, I have to say seriously that despite the fact that this matter was met years ago by the Woods Report, and despite the fact that over and over again the government has finally had to act-usually belatedly-no serious effort has been made by the government to deal with this problem. There is no question that the climate of distrust between the government and labour at the moment probably makes it almost impossible to discuss the matter, but if the government is not discussing it, I can assure the minister that the public is. We have advocated for a long time the establishment of a public interest disputes commission. There are certain aspects of this approach which need consideration, and 1 would be the first to say-and I say it to the minister and to other hon. members, keeping in mind my admonition of a few minutes ago-that these things should not be done without consultation with both labour and management. It is time we started to consider some approaches which are less damaging, not just to the public interest but also to the image of labour, because in the long run it does no good to have problems occurring over and over again which place labour in the unenviable position of having everybody point at it as being the source of all the problems of the country.
I think it is worth considering that a commission-or some other body which has available to it expertise and some of the data the minister spoke about-should monitor at a certain point certain negotiations, and that well before the legal strike date is arrived at, the commission should report to the cabinet on what the effects on the public would be. That report should

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be made public because it is essential in dealing in this very delicate area that the public fully understands not only the issues in the dispute but also the effect on the well-being of the country if the dispute cannot be settled.
That report should be made available to the public and to the government, well in advance of the strike date. At that point the cabinet could assess, on the basis of that report, what its responsibility ought to be, and could move in advance of the strike under legislation which could be established to postpone strikes for a certain period of time and to provide for a cooling off period and for a further period of negotiation, with as much help as possible from the commission, from a data centre or from the other bodies the minister has suggested, in order to resolve the dispute without the necessity of putting the country through the agony of a national shutdown. This approach may not always work, but surely it is worth trying. It is a thousand times better than the ad hoc system followed by the government in the years since I came to the House of Commons in 1972. Only subsequent to a cooling off period and further negotiations, if the government felt there was no alternative but to end a strike in a particular area, would legislation to do so be introduced in this House.
The circumstances that surrounded the air controllers' strike must not be repeated. In that case the legislation itself set the terms of the settlement and, as this party has said over and over again, that is completely wrong. This House is not the place to set the terms of settlement. It was doubly wrong in that case because it was the employer-this House-that passed the legislation setting the terms of settlement. If settlement is to be forced on both sides the matter must be taken out of this House and put before an independent arbitrator.
Another matter that must be faced because of growing concern in the country is democracy in the unions themselves. I say that, realizing that there is democracy in the vast majority of unions. But where there is seen to be a limitation of democracy and something less than a free and secret vote, the public's confidence in the union movement is diminished. We have instances such as happened only today when allegations were made in this House with respect to the illegal strike in the postal service. Illegal strikes within federal jurisdiction-within the public service-cannot be allowed to take place with impunity. I say that because the working people of this country have to realize, as I think most do, that their freedom and security can only be maintained under the rule of law. To the degree that some union leaders are prepared to take members out on illegal strikes, they will destroy the faith and confidence of the general public in the trade union movement.
Another point is that the law and the process of union organization-application for certification and creation of a first contract-must not be unfairly hindered. I say that because, looking back in history, we must recognize that unions were necessary and, I believe, are still necessary. I think it is also accurate to say that the existence of trade unions and

of a union movement is accepted by the vast majority of Canadians as part of our industrial milieu.
Another aspect is that the Canada Labour Relations Board has to be made more efficient. Union after union and management after management complain of delays and I am sure the minister has heard these complaints. I urge him to consider steps to make that board more efficient in the sense of being able to move the disputes more quickly because, to the degree that they are held up, they aggravate the situation.


John Carr Munro: That is what some of the amendments do.


John Allen Fraser: I recognize that, but I would also ask the minister to recognize, as I am sure he does, that much more must be done.
I also want to emphasize that labour legislation must concern itself with its effect on productivity. That does not mean just a one-way street. It is essential for management to have a productive work force, but it is also essential for management to remember that decent conditions and high morale lead to a much more efficient and productive work force.
My last point, Mr. Speaker, is to say that the answer to industrial relations is not-I repeat not-just to pass more laws. Canada has a vexingly legalistic system now. There are ten provincial codes and a federal code. Every month of the year high salaried people try to figure out how to bring them all in line. Passing another law is no solution. It must be remembered also that the system is, and in a free society always will be, an adversary system to a certain degree. There are differences of position and differences of interest, but when passing legislation the object of the exercise is to increase the level of understanding of each side for the other in the adversary process. In a free society both sides should be grown up enough to be able to handle freedom, and should have enough common sense to know when to dump rhetoric and face the facts. If management or labour wants the government to settle everything, believe me, government is all too ready to move in. It is easy to force a settlement, but it is often difficult for either side to live with it.
We believe there are no magic answers to industrial relations in Canada. What we are talking about are human relations, and anyone-labour leader, public spokesman or politician-who offers an instant answer or an omniscient remedy for the frailties of human nature is selling the public a pig in a poke.
I see my time is getting short, Mr. Speaker, but I beg your indulgence and the indulgence of the House to carry on.


Some hon. Members:: Carry on.


John Allen Fraser: There are some aspects of this bill which any right-minded person living in this country and who has any concern for his fellow citizen, has to endorse. There is no doubt about that.


Some hon. Members:: Hear, hear!
December 13, 1977


John Allen Fraser: For that reason we are going to move this bill into committee after a short debate but, keeping in mind the principles I have enunciated, some things must be examined more carefully in committee.
This bill is not entirely accepted by either management or labour. For instance the effect of the higher legislated standards has to be carefully considered. The danger is, of course, that legislated standards intrude on the collective bargaining system, as both management and labour have remarked.
As I mentioned a few minutes ago, the Canada Labour Relations Board is faced with the accusation that it cannot handle its present workload, and to the extent that the bill increases work for members of the board it must be made certain that these amendments are appropriate and that the board can handle the extra work.
Some areas where work will be increased by the broadening of the board's discretionary powers are the following: altering terms of employment; imposition of first agreements; onus of proof; cease and desist orders; consent to prosecute; remedies for unfair practices; compliance with board orders; representation and run-off votes and others. That is not to say there are problems that cannot be surmounted; it is to say it is going to require careful consideration of the proposals which the minister has put forward.
It would be appropriate for a committee to ask the minister whether consideration has been given to the cost of these amendments and whether that cost will be reflected in price increases or operators' costs, especially in small business. When I mention small businesses there is an interesting comment made by Mr. John Bulloch, head of the Independent Business Association of Canada, in a speech which he delivered November 21 at Queen's University. He said this:
The small business sector is the most free enterprise oriented part of our entire economy and, as such, finds it difficult-if not impossible-to flourish in an atmosphere which rewards non-productivity. The magnitude of this problem is best appreciated in the light of one basic statistic: The small business sector is responsible for about half of the jobs provided by the entire private sector.
That has to be kept in mind, Mr. Speaker. It also has to be taken into account that labour is suspicious of legislation that moves into the unorganized area because it will then take away from labour its legitimate area of activity.
Mr. Speaker, labour is going to ask us to consider carefully the averaging provisions which it feels establish too much discretion, specifically that there is too much discretionary power in the hands of the minister in the amendments to section 29 which allows the permit to be issued and cancelled at the employers' request. They ask how can the minister determine the best interests of the employees? How does the minister meet the 80 per cent approval required by employees for averaging? They are worried about possible employer interference in determining employees' best interests.
Labour claims that the elaborate provisions for adjudicating unjust dismissal are, in its words, purely political. They say that even though the entire procedure is paid for out of the
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taxpayers' pocket-as is proposed in this bill-the real protection to the dismissed worker in the unorganized area is dubious.
In terms of these safety and health committees labour has also pointed out that it is concerned committees are established at the discretion of the minister, and not required on a universal basis. It has said furthermore it is the employer who causes the establishment of these committees, and nowhere are the rights and participation of the trade union defined or even mentioned.
There are reservations respecting this bill from management and labour. As a consequence, when this bill reaches committee it will be the duty of all hon. members to look at all the provisions carefully. It will be the duty of the hon. minister, his deputy and the hard working members of his department to explain clearly and carefully the effects of these amendments, and justify the reasons for them. Although they have been a long time coming, we welcome the amendments and we will support them at this stage. We expect to have a vigorous and hopefully constructive period of examination of the terms of the bill in committee.


Some hon. Members:: Hear, hear!


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, in this bill the minister proposes a number of improvements in the situation of Canadian citizens who come under federal jurisdiction. We should keep in mind, of course, that only about 10 per cent of the labour force in Canada comes under the jurisdiction of the federal government, and that 90 per cent of the working people in this country fall under the jurisdiction of the provincial governments. None of the improvements proposed here will immediately, or in the near future, improve the lot of Canadians who come under provincial jurisdiction.
We welcome the improvements which will benefit Canadians who come under federal jurisdiction-the removal of pregnancy as a cause for dismissal, the requirement that employers pay salaries on a regular basis, the extra day holiday-Boxing Day-the proposals to give workers some rights with respect to health and safety. However, I must say to the minister that I have a great deal of suspicion that most of these will remain simply as clauses on statute books, and very few of them will become effective. I will deal with that in greater detail a little later.
The minister will not be surprised at our support of these proposals; in fact they are long overdue. And he should not be surprised if his proposals have been met with less than 100 per cent enthusiasm by the spokesmen for organized labour in this country. They recognize the fact that these improvements are very minor as compared to the tremendous damage which has been done to the Canadian people by the fact that we have the greatest percentage of unemployed that this country has had since before World War II.
Some members of parliament, myself included, are old enough to remember the hungry, dirty thirties. We have now, Mr. Speaker, more unemployed, and as large a percentage of our labour force as there was unemployed-not in 1933-but
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during the period 1937 to 1939. The unemployment was only eliminated by the advent of World War II when we suddenly found that we could do all the things government said could not be done during that great depression. We found we had the money to put people to work building guns, tanks and planes, all of which were destroyed during the war, even though during the earlier years we could not put them to work building the things which needed so much to be built.
That situation is with us again. Last month on a seasonally adjusted basis we had 900,000 unemployed, 8.4 per cent of the labour force, a id among our young people almost twice that percentage unemployed.
In Manitoba, which never has the highest percentage of people employed or the highest unemployed, last month it had 28,000 unemployed, an increase in the rate of unemployment from 4.7 per cent in October to 6.1 per cent in November.
Given this tremendous calamity, it is not surprising that organized labour, which to a large extent holds this government responsible for our high unemployment, is not enthused by these proposals. The labour movement is suspicious of this government. No matter how attractive government legislation or proposals may be, the labour movement is not prepared to listen to them. One cannot blame it.
Let us look briefly at what has happened in the last two years under a government which was elected to a large extent by telling the Canadian people that it was opposed to, and would not impose, wage and price controls. Despite that promise, a year later it brought them in under the so-called anti-inflation program.
We in the New Democratic Party opposed that program. We said it would not work. The government brought in that program in 1975 because it said inflation was rampant. There was double digit inflation. The inflationary rate on an annual basis was 10'/2 per cent. The government said it had to deal with that, and put limits on wage and price increases.
There was a temporary reduction in the increase in the cost of living. According to figures that came out yesterday, the cost of living in the past 12 months increased by 9.1 per cent. Given an increase between 3/10 and 7/10 of a percentage point each month, as we have had for the past 11 months, when we get the figures for December we will find that for the calendar year 1977 the increase in the cost of living has been about 9Vi per cent, just 1 per cent less than when the government implemented its anti-inflation program.
We opposed the anti-inflation program because it would not be equitable. We pointed out that it would be easy to control wages and salaries, but difficult if not impossible to control increases for self-employed people and professionals. Time has shown that we were correct. In fact increases in income of professionals such as doctors, lawyers, dentists, engineers and architects have been substantially higher than those permitted to wage and salary workers.
[Mr. Orlikow.l
The last decision of the government, a complete repudiation of its arguments when it brought in its anti-inflation program, was to limit increases in wages and salaries in 1978 to 6 per cent. It is obvious to everyone but the Prime Minister (Mr. Trudeau) and the Minister of Finance (Mr. Chretien) that the cost of living in 1978 will undoubtedly increase by somewhere between 8 and 10 per cent.
By bringing in legislation to limit wage and salary increases to 6 per cent, the government is decreeing that the majority of the Canadian people will have a real reduction in their living standard in 1978. When it brought in the anti-inflation program, it was ostensibly because wage and salary increases were running substantially higher than the increase in the cost of living. We have had a betrayal of the interests of the ordinary people of this country by the government. Therefore it is not surprising that the labour movement is lukewarm about this or any other proposal by the government.
I want to say something else about the economic situation before dealing with some of the basic principles of the bill.
As bad as the government's anti-inflation program has been in terms of creating more unemployment, its policy of restraint, supported by the Conservative party, is an even greater disaster for the country in terms of creating more employment.
There are only two fields in which people can find employment in this country. One is the private sector. That sector employs people only when it can produce and sell its products at a profit. When the economy is in recession, as is the economy of Canada and the economies of most of the industrialized world, the private sector does not hire more people. It lays them off. We have seen a host of layoffs of long term employees in recent weeks and months. I could spend my 40 minutes just listing those companies, beginning with International Nickel, Falconbridge, Noranda, and Northern Telecom.
The other field in which people find work is with the government or on projects initiated by the government such as housing, schools, hospitals and so on. At this time, when the private sector is laying off people, federal, provincial and municipal governments should be hiring more people. Instead of putting more people to work, the Liberal government and the official opposition join in a call for more restraint. More restraint will mean more unemployment. In the coming year the rate of unemployment will not be the present 8 per cent plus, but probably 9 per cent. In fact I will not be surprised if it is above 9 per cent in 1978. In fact given this situation, one can understand why labour is suspicious about this bill.
I wish the minister well in the appeals he has made and will continue to make with regard to the need for better co-operation between labour, management, and government with regard to more consultation, working on forms of industrial democracy, and so on. However, they are just words. I do not blame the minister for making those speeches. However, they are much like the sermons that many ministers preach on Sunday mornings, having tittle relevance to life as it is in Canada. The same is true with regard to the view that is frequently expressed that we should try to emulate the peace
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which exists between labour and management in countries such as Sweden and Germany. That peace is based on entirely different conditions than we have or have had in Canada. That peace is based on full employment.
It is relatively easy to get workers and their unions to be successful and co-operative and objective when they have jobs and when they have reason to believe those jobs will continue. It is another thing to persuade workers to be co-operative and reasonable when they do not know whether they will be working or not in a week's time or a month's time. We should not be surprised if, in such circumstances, they try to squeeze out every benefit they can right then.
Then again, it is recognized in a great many countries that unions are here to stay, that they are part of the way in which society operates. Unfortunately this is not always the case in Canada. Many employers, particularly employers in small business, and some in business which is not so small, do everything they can to discourage their employees from joining unions. I have no doubt that the banks, for example, are, and will be, less than enthusiastic about workers wishing to show an interest in joining trade unions. So it is not surprising that workers and trade unions are edgy about any proposals which come from outside-from management, the media, or even from governments which they believe are somewhat sympathetic to their objectives.
Having already indicated that we support and welcome this bill as far as it is likely to benefit the people who come under the jurisdiction of federal labour legislation, I want to turn to consider some of its provisions. I must say I have a good many reservations about a number of the proposals before us, not with regard to their intention so much as the ability of the department and the government, given their present staffing, to do the things which are outlined in the bill.
For example, this legislation will provide where possible a mechanism by which a non-union worker may complain about his dismissal; he will be able to complain to an inspector of the Department of Labour, and if the inspector cannot settle the point he may request that his complaint be referred to an adjudicator appointed by the minister, and that adjudicator would have the power to order reinstatement and compensation if he finds the employee has been wrongly dismissed. I might point out that workers in Canada have so far not had much success in enforcing a provision along these lines, not even the much milder provision presently in the federal Labour Code. All the experience in Canada and the United States shows that many employers who are opposed to the unionization of their workers will use any and all methods open to them to prevent their workers joining unions. There is no evidence, and I say this with regret rather than with condemnation, that the Department of Labour as presently constituted has the ability to police and enforce a provision of that kind.
The bill contains a clause which gives employees the right to refuse to work if they feel that working conditions constitute imminent danger to their health and safety. The procedure is
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that the employee reports such circumstances to his employer who then investigates the problem. If the matter cannot be resolved, a safety officer is called in to make an inspection. Should the employee remain unsatisfied there is provision for an appeal to the Labour Relations Board. Mr. Speaker, the spokesman for the official opposition has already drawn attention to the backlog of work which faces the Labour Relations Board. That is not the only difficulty.
In this period of mass unemployment any worker, particularly in an unorganized plant, who considers making the complaint has to bear in mind the possible effect on his continued employment. To rectify the circumstances about which he has complained might well involve the installation of a costly improvement; a worker is likely to be extremely hesitant about making a complaint because of the possibility of his dismissal.
Another point is this: who decides what the word "imminent" means? What one person may consider to be an imminent danger another might regard as being a necessary or inherent part of the work being done. We shall certainly want to discuss with the minister and his officials in committee precisely how this clause will operate.
Then there is provision for the establishment of health and safety committees in the work place. Such committees would be required in various work places at the discretion of the minister. We approach this provision with a good deal of skepticism. I do not worry too much about the approach taken by the present minister. On the whole I believe that were he to err he would do so on the right side. But we have seen other ministers of labour in whom we would be far less confident.
Employees are to compose 50 per cent of the individual committees whose task would be to identify potential health and safety hazards and to develop management programs related to health and safety. Mr. Speaker, we believe these committees should be set up in all work places employing more than ten people. We do not like the fact that the choice of the members of the committees is left to regulation by the minister. We believe that the employees' representatives, where there is a union, should be chosen by the union, and that when no union exists an election should be held among all the employees. I am doubtful whether the committees could really work in places where there is no union. I suspect employers would put pressure on individual members of the committee who would be inclined to keep in mind at all times the likelihood of their being fired if they made what the employer thought was trouble.
We believe that if and when these committees are set up they must be given training on a regular basis in health and safety aspects at their place of work, that is, if the committees are to function effectively. A committee must decide where and when to hold its meetings, rather than this being left to regulations published under the bill. Committees should also meet at regular intervals.
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Canada Labour Code
I want to deal with one more broad question, and this is where I believe the bill is not much more than window dressing. According to the minister, this bill will bring some order and reason into the whole question of occupational health and safety in those places where federal jurisdiction exists over industry. It is pretty obvious that the federal government up until now has been derelict in its duty to protect the health and safety of workers. Because of this neglect, the number of accidents in work places has been increasing at a steady and alarming rate. In 1968 there were 6.5 million accidents. In 1974 the number had almost doubled; there were 11.5 million accidents. These figures relate to all work places, which would include those under federal and provincial jurisdiction; I do not have a more detailed breakdown between those two jurisdictions.
As a result of the increase in the number of accidents there has, of course, been a corresponding increase in the cost of accidents to industry. In 1968 it was estimated that the cost of accidents to industry was $1,165 billion. By 1973 this had increased to $2.1 billion. When this cost is adjusted for increases in consumer prices, there has been a 30 per cent increase in cost over the five year period 1968 to 1973.
The number of days lost through accidents is greater than the number of days lost through strikes and lockouts. We read a great deal about the harm done to our country and to our economy by strikes, but we read and hear very little about the cost to the country of accidents. The number of days lost in 1974 as a result of strikes and lockouts was nine million; the number of days lost through accidents in 1974 was 11.5 million. So one can see that governments, both federal and provincial, have not really addressed themselves to this problem.
The intervention of governments in this area has, to say the least, been ad hoc. There are at least nine federal departments involved in the area, and among them they administer about 10 separate pieces of legislation, all of which are safety oriented and have little regard for health aspects. Even the safety record shows flaws. The Canada Labour Code, which is the major piece of legislation on this subject, covers employees working in federal industry, except those in the Northwest Territories, the Yukon, and those people who work in shipyards, on trains and planes. These people are covered by separate pieces of legislation, and this legislation will not be improved by the changes proposed in this bill.
We believe that the government should consolidate all occupational health and safety considerations into one department. We believe they should give a great deal more consideration to the health aspects of the work place. We believe they should adopt the philosophy that people in the work place have a right to the same protection as people in the community.
I want to close by pointing out what I consider to be the inability of the minister to communicate with his fellow ministers. The Minister of Labour preaches, I believe sincerely, the need to make great improvements in the way we monitor and control the health and welfare of those who work in business and in industry in this country, while just a few days ago his

colleague, the Minister of Energy, Mines and Resources (Mr. Gillespie), said that one of the big reasons for the lay-offs in Sudbury was that pollution controls instituted in that city by the provincial government of Ontario were so tough that industry simply could not afford to live with them. One has only to drive through or fly over Sudbury to get a picture of what the moon looks like, Mr. Speaker, so much of the environment in Sudbury has been destroyed by the fumes and pollutants which have been spewed into the air and into the water over an area covering 50 to 100 square miles. Compare the view of the Minister of Energy, Mines and Resources with the very fine sentiments expressed by the Minister of Labour.
Therefore, Mr. Speaker, to the extent that there are very specific improvements proposed in this bill, we greet them with approval. But we look on the rest as mostly verbiage, as a plank in the next election platform of the Liberal party, a measure which might be implemented, like other pledges in the past, 25 to 30 years from now. To that extent we are, to say the least, pretty critical of the whole package.


Mr. Ritchie:: Mr. Speaker, looking at the hour, I wonder if I might call it ten o'clock?


Mr. Deputy Speaker:: I am sure hon. members will not have any objection.



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

Fred Alward McCain: Mr. Speaker, though my question was primarily related to agriculture, it was initially directed to the Minister of Finance (Mr. Chretien) since the Minister of Finance introduced the legislation adjusting duties, particularly relating to imports arriving in Canada. Unfortunately, seven minutes does not give one anything like enough time to do more than raise questions, so I want to ask a series of questions this evening.
Has the minister compared the relative trade opportunities Canadian agriculture has when shipping to the U.S. versus the opportunities United States agriculture has when shipping to Canada? Has he examined the opportunities for Canadian agriculture to ship to the European Economic Community compared with their opportunities to ship to the Canadian market? Has he examined the opportunities of the most favoured nations to ship to us compared with our opportunity to ship to them? Has the minister ever taken these matters into consideration?
December 13, 1977

Has the minister assessed the impact of the formation of the EEC, particularly as it relates to apples and to Canadian trade in the European market, and to other commodities as well? Has he examined the relative position to date versus the relative position of 20 years ago? Has the minister examined the graphs to show the pattern of Canadian agricultural trade as it relates primarily to fruits and vegetables in the last twenty years? Does he know how much the imports, for instance, of apples have increased, and is he familiar with the decrease in the apple exports from Canada? If he does not have the answers to these questions, then he is in no way competent to pass legislation or, as Minister of Finance, to be a party to the decision as to what trading considerations shall be extended to other nations entering our market.
Does the minister fully understand the impact of the recommendations of the Tariff Board as they have broadened the NOP category to include a number of products not clearly defined, and does he know that as this NOP group is expanded at lower rates of duty, these imports will infringe upon markets for Canadian producers? If he does not, then Canada is not in very good hands when legislation is introduced or when our negotiators go abroad.
Does the minister know that the production of Canadian fruits and vegetables on a larger scale with a better degree of protection, might very well provide the consumers with better prices than they are presently getting from a starved Canadian horticultural industry, plus imports from other lands? Has the minister studied the impact upon our costs of the lowering of duty structures on such items as tomatoes and tomato products, because if he did, he would understand that the cost of tomato products coming into Canada today exceeds what Canadian agriculture would need to produce Canada's requirements in a normal year.
Does the minister know that if all of the recommendations of the Canadian Horticultural Council to the Tariff Board hearings would cost Canadian consumers 33 cents per capita a year, the increase in tax returns to the Canadian government would far exceed 33 cents per capita a year? Does he know that, according to the federal Bureau of Statistics' figures, it is estimated by the Canadian food processing industry that if their recommendations were accepted for the importation of processed products, it would cost Canadians 48 cents per capita a year? We are talking peanuts in respect of protection for the consumer when we are talking about 48 cents per capita a year, but we are talkimg about the expansion of a multi-million-dollar industry and the employment that would go with it.
Does the minister know that when the United States is preparing its case for negotiations, the industry is part of the preparation and a party to the negotiations and that they are guided by the industry? Is the minister prepared to allow comparable input and comparable work along with that group, or is he not? Has the minister checked what has been given away in the last twenty years as we have negotiated tariffs,
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and what we have received? Have we been Santa Claus or have we been Scrooge?
The Minister of Agriculture (Mr. Whelan) summed that up when he said that when agriculture goes to Geneva, it goes in a bikini, indicating it has very little more to give.
Will the minister insist that the Canadian negotiating team get the surtax which has been requested by both the processing industry and the fresh fruit and vegetable industry, with a triggering device that will be activated in time to preserve the Canadian agricultural industry, or will he allow it to continue on the basis of the dumping legislation which cannot be an effective mechanism for the protection of the industry? Does the minister know-I will cite the extreme of change in trade-that in the last ten years mushroom imports and mushroom products have increased by 1,600 per cent? Does he know that mushroom imports today now constitute 70 per cent of the Canadian market?
Since my time is about up, I want to ask the minister for an answer to my initial question: is he prepared, and is the government prepared to support him, in the formation of a house committee to allow the industry and members of the House to present to cabinet ministers and to negotiators, if possible before they go to Geneva, the facts and figures and the needs of the Canadian horticultural and food processing industries of Canada?


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, having been born and raised in Essex county, which is the heartland of Ontario with respect to fruits and vegetables, and having known the Minister of Agriculture (Mr. Whelan) for over 30 years, I do not think any country in the world would have a better spokesman regarding the agricultural industry and the GATT negotiations than we have in Canada.
The hon. member has asked about the possibility of a committee of the House to meet with industry representatives and our negotiators in Geneva. Since the negotiations began, the government has stressed the importance of a two-way flow of information between the government and interested parties in the private sector. The Canadian Trade and Tariffs Committee was established specifically for this purpose. There have also been numerous briefings and discussions between representatives of the private sector, senior government officials and members of the Canadian negotiating, team, and direct consultations with provincial governments, including a federal-provincial ministerial conference in October.
Some members of the opposition have been briefed on the negotiations and have called on the Canadian delegation in Geneva. The office of the co-ordinator for the multilateral trade negotiations has also been very active in publicizing the negotiations in recent months. This office was established to undertake liaison with provincial governments and private sector organizations on the evolution of government policy on the negotiations, and to consult with them on specific issues as they develop during the course of the negotiations.

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1 can safely say that there has been much more consultation during these trade talks than in any previous ones. At present, the government is considering ways to further the consultation process as it affects industry, the provinces, and hon. members on both the government and opposition sides of the House.


AGRICULTURE-VETERINARY COLLEGE FOR ATLANTIC REGION-INQUIRY AS TO COMMITMENT TO FINANCE-REFERENCE OF HOWELL REPORT TO COMMITTEE
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I am not sure who will reply to the question I asked the Minister of Agriculture (Mr. Whelan) earlier regarding the need for a veterinary college in Atlantic Canada. My question results from the report tabled by Dean Howell, who was appointed by the Government of Canada to explore the necessity for a further veterinary college in Canada. There are three such colleges in Canada today. The conclusion of that report was that a fourth college should be established in Atlantic Canada. At the end of the report it was recommended that the college be established in Prince Edward Island.
There are many things I could say about the conclusion reached by this report, but my time is limited during adjournment debate. The fact of the matter is that there are obvious conflicting provincial interests as to where a veterinary college should be established in Atlantic Canada. I have asked the Minister of Agriculture if he would exercise his good office in an attempt to remove the question of where the college should be located from the cross currents of provincial jurisdiction and on to the federal table.
The move to establish another college was commenced long before 1970, but during that year the federal Department of Agriculture undertook a study in order to discover if there was a need, and the department found out there was. Frankly the criteria established by Dean Howell are in open conflict with some of his conclusions. Obviously I am biased concerning the location of the college. It could be and certainly should be in Nova Scotia.
Why should a dean from the Guelph Veterinary College, through his imagination and discussions with Atlantic Canadians, decide to establish a veterinary college in Prince Edward Island? It does not take a professor from Guelph to know that besides lobsters, Prince Edward Island produces potatoes. Prince Edward Island is a field and crop community. I am not knocking P.E.I. because I am a member from the Atlantic community, but the animals in Atlantic Canada are in Nova Scotia and New Brunswick. There are relatively few in P.E.I., and the criterion established by Dean Howell himself is the need to have a veterinary college established next to a degree-conferring university. At the moment the only university in Prince Edward Island, UPEI, is not a degree-conferring university. We need postgraduate facilities in some of the establishments that are already in Atlantic Canada, not in Prince Edward Island.
In the closing moments of this debate I cannot speak on the need for a veterinary college without going back in history. In the time I have left I hope hon. members will put up with a little nostalgia. This is December 13, 1977. It just so happens that a man called George Nowlan, my father, was elected to this House on December 13, 1948, 29 years ago. Perhaps that was before some hon. members were even born. It was certainly before most of my staff were born. I do not want to get too nostalgic, but it is interesting to look at the Journals of this House. I do not think they have been referred to before in adjournment debates, but as I say, my father was introduced to the House of Commons on January 26, 1949.
Perhaps it is because of the conviviality and informality of the adjournment debate that I trespass this far, but having the opportunity to speak in this Chamber on December 13, I feel I should do no less than to pay some respect to my heritage.
I want to refer to other hon. members who are great Canadians or were great Canadians. The day my father was introduced to this House, Lester Pearson, Albert Boucher, Stuart Garson, Leopold Demers, and a man called George Drew were also introduced. I know that does not solve the problem with regard to a veterinary college in Atlantic Canada, and I am the first to admit that.
Regardless of all the facts I could recite from the lengthy document I have in my hand, the fact of the matter is that we have a research station at Kentville, Nova Scotia, which is one of the most viable research stations under the Department of Agriculture. Any veterinary college should be established next to a research station or near animals. That would certainly be in Nova Scotia, in the Annapolis Valley. Many times I heard my father say that a complementary development next to the research station in Nova Scotia would be a veterinary college. Frankly, that is where the field animals are. Because of what my father said I took unto myself the licence to introduce a little personal nostalgia to this adjournment debate. That is fairly unusual, but any member who has been in this House for a while should be exposed to a little nostalgia from time to time.
The Department of Agriculture has lead the movement to canvass whether there should be a veterinary college. The commissioner appointed by the department says there should be one. I suggest that the minister use his good offices toward this end, but initially we should refer the Dean Howell report to the Standing Committee on Agriculture so that all interested parties can come before it.
If the minister thinks there are other avenues we should explore in order to avoid a provincial fight, I would be happy to go along with him as long as there is progress and as long as a veterinary college is established. We do not need provincial cross-currents and jealousies to stymie what Dean Howell himself says is very necessary.


Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, as a result of the disagreement of
[Mr. Lumlcy.J
December 13, 1977

the province of Nova Scotia with regard to the location suggested for a fourth veterinary college, the hon. member for Annapolis Valley (Mr. Nowlan) has asked me repeatedly to hand over the Howell report to the Standing Committee on Agriculture which recommends that a fourth veterinary college be founded at Charlottetown in the Atlantic region.
In his capacity as dean of the Ontario Veterinary College, I am convinced of the impartiality and outstanding qualifications of Dr. Howell in the matter. The Standing Committee on Agriculture may, if it so wishes, look into the matter, get copies of the Howell report by addressing its request to the Atlantic Higher Education Board in Fredericton, New Brunswick. If the committee so decides, it can also review the annual report for 1975-76 of the Atlantic Provinces Higher Education Board, in which it makes its recommendations concerning the Howell report.


CANADA COUNCIL-PROPOSAL THAT COMMITTEE REVIEW MANDATE
Robert Lloyd Wenman: Mr. Speaker, since I last raised the question of the Canada Council grants and contributions, and the Council's abuse of its privilege to distribute tax dollars for the purpose of elevating the artistic standards of Canada, I have spoken to many reporters, heard from many Canadians, and discussed the matter in several different forums. The almost unanimous response of those who have seen the obscene documentation is outright outrage.
I should like to present this material to the House tonight but I would urge the television cameras not to zoom too close to it because I think it would be offensive to the record as well as to the Canadian people to see it. At this point, although I should like to expose the material to the people of Canada and shock them further, that is not my purpose tonight. The reason for the disgust and anger for the inadequacy of judgment and administrative capacity of the Council and the government goes much deeper than a mere scandalous wastage of hard-earned tax dollars.
This material, supported and masquerading in the name of art, is a demeaning degradation of human experience. It is in my view neither creative nor beautiful, it is not even grotesque or or ugly beautiful, it is neither uplifting nor fulfilling, it is not even passionate or erotic; it is simply vulgar degradation of the human experience-vulgar and demeaning at a level well below that of funky graffiti written on the back of washroom doors. This type of vulgarity deserves to be placed in a category of the hate literature of pop art and should not be censored but rather branded as unfit for human consumption, and discarded on the rubbish heap to rot in its own vulgarity.
This material is evil in the broadest sense of the word, and the government has an obligation to fight against this type of
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degradation rather than condoning, supporting, and encouraging the production and distribution of it. This material is not art. It is not right. It is wrong.
The minister, the government, and its vehicle the Canada Council, are weak and full of fear-fearful of not appearing avant garde, fearful of being labelled culturally illiterate. I say that the granting of thousands of dollars for this material proves they do not in fact have the capacity to judge the bottom line of tolerance of either the will of this parliament or the will of the Canadian people.
Not only is the Canada Council supporting literature which most in this House would term obscene, but the Auditor General has lashed out at that body for lack of adequate documentation. Right now it is entirely possible for someone to give the skimpiest budget details, obtain a grant, and spend the first installment in any manner he wishes.
What the Auditor General was more wary of was the unknown abuse of the existing system. In the small sample of grants he examined, requests for documentation of expenses were not complied with. The money could have been spent anywhere and anyhow for all the Canada Council knows.
When I asked in committee whether or not the Canada Council would comply with the Treasury Board regulations calling for tightening up I was informed that they would not do so. That kind of answer does not make the taxpayer-the person who has to put up all this $403 million the Canada Council has spent to date-feel very confident. He likes to know his money is being spent efficiently and effectively, the Canada Council should not be considered a special case for financial accountability on tax dollars.
I have requested that the Standing Committee on Broadcasting, Films and Assistance to the Arts examine the Canada Council's mandate and issue a report of their findings. The body has been with us for 20 years; a time which has been the stage for many changes, and it is time to look at it again.
A parliamentary committee should determine: (1) the nature of the mechanism that will assure accountability to parliament including concerns regarding political direction, financial documentation, and selection criteria; (2) the nature of ministerial responsibility for both financial documentation, grant and contribution selection criteria; (3) a selection process that will ensure that political bias and patronage are not simply replaced with artistic elitist bias and patronage; (4) a selection process that will reflect regional aspirations and realities of our country.
The current minister has directed the Canada Council to begin a program to promote national unity in contradiction of the minister's earlier view that neither the minister nor this

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Adjournment Debate
parliament should direct Canada Council. While promoting Canada's unity is a worthwhile endeavour, this is an extension of the purpose of objectives of the Council and should on this basis alone be referred to the committee and further legislation, should political direction of the Canada Council be considered acceptable by this parliament. Personally, I view the potential for abuse with alarm because of the implication amply demonstrated within dictatorships, communist or otherwise, who have subverted the arts for political ends.
In September the Secretary of State (Mr. Roberts) transgressed his oft stated policy that the Canada Council was solely an arms' length organization when he gave $4 million to that body earmarked for national unity projects. The Secretary of State has started an inquiry into the arts; an inquiry outside parliament and the by-passing of parliament is an all too common action during the last few years and parliament demands that right back. Obviously the Secretary of State believes an examination of the Canada Council and its mandate is necessary. Let us turn the issue over to those who represent the people.
In view of the minister's direction to the Canada Council to begin a program to promote national unity in contradiction of the minister's view that neither the minister nor parliament should direct the Canada Council, and in view of the Auditor General's concern regarding financial documentation, I ask the minister to consider requesting that the Standing Committee on Broadcasting, Films and Assistance to the Arts complete a review of the mandate, and the implications of extending that mandate to include promotion of national unity as well as the accountability, financial procedures, and performance to date of the Canada Council.


Mr. Speaker:: I am sorry to interrupt the hon. member but his time has expired.
Mr. Robert Daudlin (Parliamentary Secretary to Secretary
of State): Mr. Speaker, the hon. member for Fraser Valley West (Mr. Wenman) essentially raises two questions, the first one being parliament's intention when it established the Canada Council, and second the Canada Council's performance of the task set forth for it by parliament.
As the hon. member is aware, the Canada Council was established in 1957 to foster and promote the study and enjoyment of and production in the arts, humanities and social sciences. Parliamentarians at that time were most concerned that they should guarantee the independence of the Council to ensure its freedom from possible political interference. Indeed the hon. member tonight has high-lighted that particular concern which I suspect indicates that parliament, even today, is concerned and that those concerns remain valid.
The essentials, Mr. Speaker, and some of the history that should be brought forward are that the estimates and the
supplementary estimates for the Canada Council must be reviewed by the appropriate Minister, the Secretary of State (Mr. Roberts). The Secretary of State must bring the supplementary estimates before the Standing Committee on Broadcasting, Films and Assistance to the Arts for approval annually. Indeed, parliament has the opportunity at that time to assess whether the estimates are valid and should go forward.
This brings me to the second question raised by the hon. member, that of the Canada Council's performance. Hon. members, both in committee and in the House, have questioned the Council's emphasis on "excellence", yet I am sure that all those interested in the Council are familiar with its explorations program, designed to seek out new forms of expression and public participation in the arts. In its quest for innovation and the imaginative, the council, through explorations, encourages any Canadian to submit ideas for funding, any Canadian with an imaginative idea and the ability to carry it out.
Unfortunately the member opposite does not afford me the courtesy of an opportunity to express myself as was given to him. I would like to go on at great length to discuss his personal views, but I would like to get to the question he raised and give him the answer he seeks. If he wishes to discuss back and forth and not have the answer given, I am willing to give up that time.
The Canada Council has never spurned the off-beat for fear of public criticism-for excellence wears many guises. The hon. member, in calling for a review of the Council's performance, has referred to "disgusting and pornographic" works by a Canadian poet supported by the Council. I agree that not all works created by contemporary artists-whether or not they are supported by the Canada Council-may find favour with the general public or its elected representatives. However, might I remind the hon. member, that many of those whose names rank among the great painters, poets, and novelists did not enjoy public acclaim in their own lifetimes? Indeed, many were obliged to pursue their art in the face of diversity. And while I am not arguing that the poets mentioned in the hon. member's question to my colleague, the Minister of Finance (Mr. Chretien), may necessarily prove to be held in great esteem by all posterity, I should like to argue that, unless all forms of expression are encouraged, we can expect of the future no more than a form of limited cultural development which will be in direct proportion to the restraint applied during the critical growth period.
Might I also suggest that the hon. member has selected for his own purposes examples which do not reflect the general
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activity of the Canada Council and the artists it supports. He is glossing over all those artistic achievements whose success can be attributed to the support received from the Canada Council which is, should, and must be, free from political intercession. I see my time has expired, Mr. Speaker.
Adjournment Debate


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.30 p.m.

Wednesday, December 14, 1977