1977-10-20

Mr. Walter Baker (Grenville-Carleton):: 1 move, under the provisions of Standing Order 43, a motion on a matter of urgent and pressing necessity, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the government cease its persecution of the public servant, Sant P. Singh, an economist with the Department of Health and Welfare, for his political beliefs and abide by the decision of the adjudicator, J. D. O'Shea of the P.S.S.R.B. who ruled that Singh was improperly disciplined for his political activities, suffered financial loss because of the department's incompetence and that he be entitled to the pay raise which the adjudicator found ought to be paid to him and that this whole regrettable incident be referred to a parliamentary committee for an investigation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CONFLICT OF INTEREST
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity under Standing Order 43. My motion concerns the revelation that there exists within the government a conflict of interest advisory group. In light of the mystery which surrounds this group, I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the President of the Privy Council make a statement on motions about this group and further deal decisively with certain apparently spurious reports that the conflict of interest advisory board consists of Senators Austin, Davey and Giguere and Messrs. Goldfarb and Coutts.


Mr. Speaker:: Is there unanimous consent for such a motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST FOR STATEMENT ON QUESTIONABLE TRADING
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the tremendous economic problems in the country which are undoubtedly being exacerbated by the dumping of certain types of stainless steel from Japan, West Germany and South Africa, as has been pointed out by the Department of National Revenue, and in view of the fact that the Minister of Industry, Trade and Commerce and his predecessor were asked some time ago for a status report on the importation of cheap railway axles which could undermine the position of the only Canadian manufacturer of these axles, namely, Hawker Siddeley of Trenton, Nova Scotia, and no reply has yet been received, I move, seconded by the hon. member for St. John's West (Mr. Crosbie):
That the Minister of Industry, Trade and Commerce make a statement on motions outlining to the House the position and activities of countries which are using questionable trading practices vis-^-vis Canada, so that the House and the country may be apprised of the government's stand on this issue.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN BROADCASTING CORPORATION
Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity dealing with the serious implications of the manner of presentation of the subject matter of the CBC program "The Tar Sands", seconded by the hon. member for Vaudreuil (Mr. Herbert). I move:
That the subject matter of the CBC film "The Tar Sands" be referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts.

October 20, 1977
Social Security


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. John Wise (Elgin):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Considering the depressed state of the agricultural industry-for example, declining grain and commodity prices in many cases falling below the cost of production-the ever increasing cost of farm inputs, further aggravated by serious and adverse weather conditions, and the complete lack of government leadership, generally and particularly in the agricultural industry as demonstrated in the throne speech the day before yesterday, I move, seconded by the hon. member for Northumberland-Durham (Mr. Lawrence):
That the Minister of Agriculture immediately convene a meeting of the provincial ministers of agriculture to discuss all possible methods to alleviate these serious and pressing problems, such as a deferral of all payments of principal and interest on farm loans held by those producers experiencing harvest difficulties as a result of adverse weather conditions.


Mr. Speaker:: Order, please. I made some remarks yesterday about the use of Standing Order 43 during the throne speech debate. I must say that this kind of motion seems to be asking us to set aside the throne speech debate in order to debate the throne speech. I think that is an improper use of Standing Order 43 under the circumstances.


Some hon. Members:: Hear, hear!


SOCIAL SECURITY
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Timiskaming (Mr. Peters), I move:
That this House welcomes the assurance of the Minister of National Health and Welfare that the Minister of Public Works was not expressing government policy when he called for a curtailment with respect to family allowances and old age security, and this House calls on the government to extend these and other social programs as a means of distributing more equally the wealth that is produced by this nation as a whole.


Mr. Speaker:: The motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ELECTIONS


Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I, too, rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that political promises are being made in the province of Alberta to try to win one Liberal seat, namely, that of the Minister of Industry, Trade and Commerce, I move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That all future promises be backed by cabinet approval since the people of Crowfoot lost faith in individual Liberal promises years ago.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Prime Minister who, perhaps to the surprise of his colleagues, referred in his speech in the House yesterday to a matter relating either to a referendum or to a plebiscite. There was some confusion in the language of the Prime Minister. He referred to a plebiscite, which allows an expression of opinion, and to a referendum, which has binding legal effect. I wonder if the Prime Minister can tell the House whether he is talking about a referendum or a plebiscite and what precisely he proposes? What is the general effect of the legislation he proposes to introduce to the House in that regard?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, what we have in mind is a referendum, and I think that what the province of Quebec has in mind is a plebiscite, accepting the distinction the Leader of the Opposition just made. We would introduce enabling legislation in this session if we could get the co-operation of opposition parties. I would want to make sure that it was brought in as a multipartisan bill. I would want to consult with the leaders of the opposition parties and, if possible, with the provincial premiers on this referendum legislation before it is actually brought before the House.


Charles Joseph Clark: Since the Prime Minister is interested in consultation on this question, is it the intention of the government to have this legislation refer exclusively to one question, or does he propose enabling legislation which will apply to a wide range of questions including perhaps abortion, capital punish-

October 20, 1977

merit and, if we are to believe the words of the Minister of National Defence, perhaps even conscription? Is it to be a broad referendum proposal, or is it to apply particularly, specifically and narrowly to one question?


Pierre Elliott Trudeau: Mr. Speaker, the proposal of the government is to have enabling legislation, but on a very restricted basis.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Of course, if the opposition has different views, we would be prepared to consider them.


Mr. Fraser:: We want to know what yours are.


Pierre Elliott Trudeau: You will know them, if you listen and listen intelligently.


John Allen Fraser: That means you have to speak intelligently.


Pierre Elliott Trudeau: The enabling legislation would not be intended to change in any sense our parliamentary system. I still think the responsibility for legislation and policies should rest in parliament. We live under a form of representative democracy, and we do not intend to change that. In this sense we would not want enabling legislation which would permit any government at any time to come forward with referendums to solve problems that the House of Commons or the government find too hot to handle. In this sense it would be a tool used perhaps only for a limited number of years to permit us to deal with constitutional questions and questions of national unity.


Charles Joseph Clark: Since by his own words the Prime Minister is proposing to change the traditions of the parliamentary system and to change them in a way that the government of Quebec is not proposing to change them, is it the intention of the government to have this referendum apply simply to one question relating to unity, or are there other categories of questions which might relate to other broad matters which will also be included? In other words, will the legislation deal specifically and narrowly with one question, or will there be the possibility of moving into other areas?
I gather that what the Prime Minister was trying to do in his earlier answer was exclude questions like capital punishment, abortion or conscription, in which the Minister of National Defence is interested, but is the legislation to be drawn so narrowly that it will focus only on one question?


Pierre Elliott Trudeau: Mr. Speaker, I just answered that. I just said that the question or questions in a referendum would be on the matter of national unity or of constitutional problems, not on other matters such as those which the Leader of the Opposition mentioned.


Charles Joseph Clark: That remains a fairly broad area, and we will have to look specifically at the legislation when it comes.
Was the announcement of the Prime Minister yesterday made on the basis of discussion within the cabinet of Canada, and did it reflect a decision taken by the cabinet?
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I do not know if this question is relevant.


Some hon. Members:: Oh, oh!


Mr. Andre:: You just answered it. Thank you.


DISCUSSION OF PROPOSED LEGISLATION WITH PROVINCIAL PREMIERS
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is also to the Prime Minister. Given that this proposal has very important ramifications for our Canadian parliamentary system, has the Prime Minister had an opportunity as yet to discuss this matter with the other partners in confederation, namely, the provincial premiers? If not, what is his intention?


Pierre Elliott Trudeau: Mr. Speaker, I answered this question in my first reply. I indicated that before giving this legislation first reading I would want to consult with the opposition leaders in the House and with the premiers. I have indicated that I will be visiting with all the premiers in the next month and a half and this is one of the subjects I want to raise with them.


FEDERAL-PROVINCIAL RELATIONS POSSIBILITY OF FIRST MINISTERS' CONFERENCE IN 1977
Flora Isabel MacDonald: A final supplementary question, Mr. Speaker. We know of the Prime Minister's interest in consultation with the provincial premiers which was spelled out at the Victoria conference in the proposal he put forward at that time when he said:
A Conference composed of the Prime Minister of Canada and the First Ministers of the Provinces shall be called by the Prime Minister of Canada at least once a year...
Given that this is the first year since Victoria that there has been no meeting of first ministers and given that the premier of New Brunswick and the premier of Ontario have both in recent days asked the Prime Minister for a meeting of first ministers to discuss questions of national unity and questions of economic recovery, is it the intention of the Prime Minister to convene a meeting of first ministers in 1977 or has he indeed abandoned that proposal which he enunciated at Victoria?


Pierre Elliott Trudeau: Mr. Speaker, the hon. lady will recall that was a proposal we put forth at Victoria for a constitution which would be repatriated and which would have an amending formula. The hon. lady will recall also that this proposition was not acceptable to all provinces and therefore was not proceeded with. Therefore, in that sense there is no obligation to have these conferences, but in the sense that I always convene a conference when the

October 20, 1977
Oral Questions
premiers of the provinces want to have one with me as first minister of the federal government, the intention is still there. I have just indicated that 1 will be visiting all the premiers in the next several weeks. I talked to them on Sunday about this possibility and they have agreed. Of course, in the course of my visits if it appears that we have to have a meeting before the end of this year, we will have one; if not, we will have one next year.


INDUSTRY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. As the minister knows, the unemployment level in the province of Newfoundland has just recently reached the 1932 level, which was the depth of the great depression. As the minister also knows, the Alcan corporation which had profits of some $85 million in the first six months of this year, has decided to shut down an operation in St. Lawrence which employs 175 people. Since the announced date of the shut down is February of next year, does the minister intend to take any action to stop the company from laying off people, which they have done now in advance, and from selling off parts of the property in the community to other businesses?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, the government is fully aware of the problem Alcan presents to the province of Newfoundland and to Canada. We are trying to get together with the company to see whether the whole Newfoundland operation can be sold or the ownership change hands so that it can stay in business.


John Edward Broadbent: A supplementary question, Mr. Speaker. Considering that in a speech made in the community in May of this year the Secretary of State for External Affairs promised that the government of Canada would bring all its moral pressure to bear on Alcan to stay in operation now, and since they have already begun to phase out, including layoffs, will the minister not take steps within the next 24 hours by getting on the telephone to the head of the corporation to say that the government of Canada recognizes the company made millions of dollars of profit in that community in recent years and so has an obligation to stop the shutdown immediately?


John (Jack) Henry Horner: Mr. Speaker, I have written a letter to the hon. member concerning this whole problem and have sent a copy of the letter to the Secretary of State for External Affairs. We are doing everything we can to keep that plant in operation.


John Edward Broadbent: A final supplementary question, Mr. Speaker. I have a copy of the letter which arrived from the minister this morning. There is no assurance whatever in that letter that the government is going to take immediate action to stop the company from moving out holus-bolus before a committee that he said has been set up to look into the situation can even

make a recommendation. In view of the seriousness of the situation which will demoralize a whole town dependent for income on the company, will the minister take immediate action with the company to stop the shutdown pending the report from that committee?


John (Jack) Henry Horner: Mr. Speaker, feldspar is an essential ingredient in the manufacture of aluminum. As the government of Canada, we have many ways of persuasion and we are doing everything possible to have that company remain in business in Newfoundland or to sell out to a Canadian company that will keep the plant in operation.


REFERENDUMS
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, I should like to put a question to the Prime Minister. He indicated in his speech yesterday that legislation on a referendum could be passed. I would like to ask him whether the legislation would deal with the control of referendums or provide directions on referendums which could be held at other government levels or whether it would set forth a procedure to hold a referendum on the constitutional issue?


Pierre Elliott Trudeau: Mr. Speaker, the answer to the first part of the question is no. We do not want to intervene in a legislation at the provincial level, but the federal government could hold a referendum on the matters which I have indicated in reply to the Leader of the Opposition, namely the fields related to the constitution or national unity.


FINANCE
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Prime Minister. As the stock market, which is a very accurate barometer of business and investor confidence, has fallen by more than 10 per cent since the introduction of the last budget, is it the intention of this government to introduce a new budget in the very near future to try at least to restore confidence to the point where it was before the last budget was introduced or if possible, improve it further, and in that way rejuvenate the economy and make jobs available for people who need them?


Pierre Elliott Trudeau: Well, Mr. Speaker, the hon. member seems to think that Canadian budgets have very far reaching effects because the markets of
October 20, 1977

the world have fallen also since last April. The answer to his question is that the Minister of Finance will be speaking in this House tonight. If the hon. member can bring himself to be here, he will have the government's views on the economy and on what we propose to do at this time. There will be six more days left in the throne speech debate which will permit the opposition to indicate its views on the economy. I think this is ideal. We are telescoping the budget debate into the Throne Speech debate in order to save the House time.


George Harris Hees: A supplementary question, Mr. Speaker. Was the Prime Minister not listening when the Leader of the Opposition yesterday outlined some of the things he suggested would get the economy moving? I can assure the Prime Minister that I will be expressing my views tomorrow as to what should be done, if he would like to be here, and I can assure him that I will be here tonight and that "Big Brother" will be listening.


INCOME TAX ACT
Elmer MacIntosh MacKay: Mr. Speaker, I have a question for the Minister of National Revenue and I want to wish him success in a very taxing portfolio. In view of the concerns of many Canadians that the privacy provisions of the Income Tax Act, section 241, are possibly being violated, with police having access to returns, and in view of the practice which has been revealed in the Laycraft commission of inquiry of police trading off wiretap information, which may be in violation of section 170 of the Criminal Code, what can the minister say today to reassure the House and the country that the traditional and statutory safeguards that Canadians have always relied upon with respect to the confidentiality of their income tax returns are being upheld and respected?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: Mr. Speaker, I can assure the hon. member that they are being upheld. In regard to the other wiretap information to which he is making reference, I can say in this particular case a big "no". In any case, everything is kept very confidential in the manner designed by the legislation.


Elmer MacIntosh MacKay: Perhaps the minister could elaborate on that answer, the big "no", when he answers this question. In view of the revelations that have come from the Laycraft inquiry in Alberta, and the skepticism that has greeted some of the evidence, particularly that of Mr. Schwartzak as to the veracity of what was said in the inquiry and elsewhere, will the minister assure the House unequivocally that he will be making a statement on motions outlining precisely the extent to which the Department of National Revenue shares its information with other agencies and departments?
Oral Questions


Joseph-Phillippe Guay: Mr. Speaker, though it was decided not to talk about the agreement, it was not a secret.


Some hon. Members:: Oh, oh!


Joseph-Phillippe Guay: It was discussed many times, with British Columbia in 1975 and with the Quebec revenue department in 1974-75. Further to that, the RCMP initiated the investigation to which the hon. member refers in 1974-75 into a suspected fraud which led to a suspicion of tax evasion. It had been the responsibility of my department to look into that. My department was quite properly asked to join in the investigation, which they did. Surely it is the department's job and the job of the RCMP, who certainly should not notify-


Some hon. Members:: Oh, oh!


Joseph-Phillippe Guay: Surely it is my department's job and the RCMP certainly should not notify my department of suspected tax evasion solely when they suspect major organized crime. In other words, my department acted properly in all instances.


Some hon. Members:: Hear, hear!


ALLEGED CONTRAVENTION OF PRIVACY PROVISIONS- POSSIBILITY OF CHANGING AGREEMENT WITH MOUNTED POLICE
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, I have a supplementary question for the Minister of National Revenue on the same issue. Since he has become minister, has he had opportunity to check, particularly in view of this trade-off of information between the RCMP and his department, the procedures under which his department and its officials have operated pursuant to the agreement that he mentions? If he has had that chance, does he propose to change those procedures, particularly because of information revealed to the Laycraft Commission and the possible violation of those two extremely important sections of two important statutes?


Joseph-Phillippe Guay: Mr. Speaker, the answer to the first part is yes, and to the second part no. We will not change it. We will carry on as we have done successfully in the past, doing the job we were called upon to do, benefiting Canadians.


POSSIBILITY OF AMENDING PRIVACY PROVISIONS
William Herbert Jarvis: In view of the answer of the Minister of National Revenue, I will direct my question to the Solicitor General. I would like him to tell the House and Canadians whether it is his position or view or the intention of the government of which he is a member to introduce amendments to the Income Tax Act, particularly Section 241, or the Code, Section 178, or both. In other words, is it his view that amendments are desirable to give efficacy to the relationship that has existed pursuant to that agreement. Will the minister be more comfortable or will Canadians as a whole be better

October 20, 1977
Oral Questions
served with enabling legislation because of this possible violation that has been revealed recently?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, I do not know to which possible violation the hon. member is referring. The agreement was entered into between the RCMP and the Department of National Revenue. The whole matter was then etched. A legal opinion was sought from the law officers of the Crown. The law officers of the Crown advised us that the agreement entered into between the Department of National Revenue and the RCMP was a valid and legal agreement. As far as we are concerned, Mr. Speaker, it is extemely useful to promote the fight against organized crime in this country. 1 sometimes find it odd that, following a very general debate on the importance of fighting crime which took place in this House last year, the opposition members to a certain extent are attacking agreements which are proving extremely worthwhile in other jurisdictions, particularly the United States.


REASON FOR PUBLISHING AGREEMENT WITH MOUNTED POLICE
Hon. Marcel Lambert (Edmonton West):: My supplementary is directed to the Minister of National Revenue. If, as he says, this agreement, dated April 2, 1972, was disclosed at hearings with regard to British Columbia in 1975, and again in Quebec, why is it felt that at this time the department had to publish what was hitherto claimed and proved to be a secret agreement between his department and the RCMP?


Joseph-Phillippe Guay: Far from being a secret agreement, it was never secret. The so-called secret agreement has been blown out of all proportion. This is a memorandum signed by the officials and is concerned with administrative arrangements. As to the question whether the department has given tax information to the RCMP, the answer, when the department wishes to use the RCMP in connection with the enforcement of the Income Tax Act, is, yes. Communication of such information for this purpose is allowed under the law and we acted accordingly.


REQUEST FOR DEFINITION OF &quot;ORGANIZED CRIME FIGURES&quot;
Marcel Joseph Aimé Lambert: The press release dated September 29 of this year, and referred to by the Solicitor General yesterday in reply to a question stated: "The purpose of these investigations is concerned with the accumulation of unreported and illicit wealth amassed by organized crime figures". I would ask the minister for a definition of "organized crime figures". If there is not to be an unwarranted extension of this agreement and the appointment of RCMP as authorized persons in the case of any taxpayer in this country.


Joseph-Phillippe Guay: I would like to give the hon. member an answer with regard to the definition he requested, and I would like to say that the definition in the department is in terms of any person or persons obtaining income from illegal activities. This is,

naturally, a more narrow definition than I would expect the police to employ since their interest would go beyond the earning of income.


POSSIBILITY OF AGREEMENTS WITH AGENCIES OTHER THAN MOUNTED POLICE FOR EXCHANGE OF INFORMATION
Marcel Joseph Aimé Lambert: Would the minister now tell us whether there are any other agreements between himself as minister, or any previous minister, or any administrative officials such as deputy ministers, with regard to the exchange of information obtained through income tax returns? I have in mind, for example, agreements with the Unemployment Insurance Commission or with the Minister of National Health and Welfare with regard to the use of social insurance numbers and cross-checking to determine whether there is any fraud involving unemployment insurance or for any other purpose.


Joseph-Phillippe Guay: Mr. Speaker, after a good discussion with the officials of my department I should like to tell hon. members that all my officials acted properly and conscientiously, and that everything was done quite in order within the terms of the law.


An hon. Member:: Answer the question!


ROYAL CANADIAN MOUNTED POLICE
Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is directed to the Solicitor General. Would the Solicitor General have any evidence that Royal American Shows are connected with organized crime?


Francis Fox: Mr. Speaker, that is, of course, a matter to be looked at according to the facts. I know that following an investigation of Royal American Shows something like 105 charges were laid in connection with the operation. I should like also to refer hon. members to an act which they all voted upon before the end of the last session, Bill C-51, which happens to contain a definition of organized crime. I suggest hon. members should take a look at it.


Steve Eugene Paproski: That is not what I asked.
October 20, 1977


AIRPORTS
Mr. Albert Bechard (Bonaventure-lles-de-la-Madeleine):: Mr. Speaker, 1 would like to direct a question to the Minister of Transport.
Is he in a position to inform the House and particularly the impatient people of iles-de-la-Madeleine whether he has received a report from his department's officials responsible for the study concerning the construction of an airport at Iles-de-la-Madeleine? In the affirmative, what are the findings of this report and when can we hope to see the achievement of this needed project which is long overdue and is essential to the economy of this region situated in my riding?


Hon. Otto E. Lang (Minister of Transport):: I have received an interim report on the nature of the work being done and on the good meeting which was held in the area. However, I do not yet have a final report and recommendations. I will certainly keep pressing for them and I will make sure that the hon. member is informed as soon as they are available.


SOCIAL SECURITY
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Prime Minister? Is the Prime Minister in a position to confirm the statement made by the Minister of National Health and Welfare to the effect that the Minister of Public Works was not expressing government policy when he called for certain curtailments with respect to family allowances and old age security benefits?


Pierre Elliott Trudeau: I have not seen such a statement by the Minister of Public Works. The Minister of National Health and Welfare does not seem to have seen it, either. I would want to see what that statement was before stating whether it represents government policy or not.


Stanley Howard Knowles: In view of the fact that most of us know what the Minister of Public Works said, may I ask the Prime Minister whether he can assure the people of this country that families with only one child will not have their family allowances discontinued and that other curtailments will not be placed on family allowances or on old age security benefits? In other words, does the government stand committed to the principles of these two pieces of legislation as enacted by parliament?
Oral Questions


Pierre Elliott Trudeau: As enacted by parliament and presented by Liberal governments in the past.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: It is certain that we stand committed to the principles of this legislation. We have in the past and we shall in the future continue to consider ways in which legislation in all areas can be improved, and if there is any way in which we can curtail expenditures and have a better system while abiding by the principles we shall, of course, consider it.


INCOME TAX ACT
Mr. Arnold Malone (Battle River):: My question is to the Minister of National Revenue. Does the minister agree that the secrecy of the agreement between the Department of National Revenue and the RCMP, kept as it was from the knowledge of the chief law enforcement officer of the Province of Alberta, would, in all logic, have precluded the attorney general of Alberta from making inquiries as to its existence?


Joseph-Phillippe Guay: I can only repeat that my department acted legally and if there is any particular question which the hon. member wishes to raise I would refer him to the Department of Justice.


Arnold John Malone: In view of the fact that the attorney general of Alberta does not subscribe to the position which has just been enunciated, will the minister be making a statement on motions outlining his own particular initiatives to improve the efficiency as to the very important department at the present time, causing the Canadian people so much apprehension in their modus operandi?


Joseph-Phillippe Guay: Somebody was criticizing me a while ago for reading an answer, but I can see the hon. member cannot even ask his question properly even though he is reading it.


Some hon. Members:: Oh!


INDUSTRY
Mr. John Crosbie (St. John's West):: A question for the Minister of Industry, Trade and Commerce, Mr. Speaker. The Prime Minister yesterday announced a job creation program involving $150 million but 400 jobs are to be lost at the fluorspar mine at St. Lawrence. Will the minister advise us why he and his predecessor had failed, up to several days ago, to answer letters of July and October 11 from the government

October 20, 1977
Oral Questions
of Newfoundland asking the minister either to impose a tariff on fluorspar imported from Mexico, which is now cheaper than St. Lawrence fluorspar or to restrict imports of fluorspar in order to keep that mine operating? Were these letters answered and, if not, why were they not answered? Does he intend to accede to these requests?


John (Jack) Henry Horner: Mr. Speaker, I will look into the matter to determine whether or not we have got an answer away to the government of Newfoundland as requested. Both the options which have been mentioned are available to us and I can assure the hon. member they are being considered.


John Carnell Crosbie: I would point out that people have already been laid off and that people are being laid off, now. Moreover, the miners in this industry have a terrible history due to radiation problems. When can the minister give us an answer? The first request came in July from the government of Newfoundland but the minister, or his predecessor, did not reply. How soon can an answer be expected?


John (Jack) Henry Horner: Very soon.


PUBLIC SERVICE
Walter David Baker: My question is directed to the Minister of National Health and Welfare. It involves a public servant by the name of Sant Singh employed in the hon. lady's department who was denied advancement in the public service because of his political beliefs-he happened to run as a candidate for my party in the riding of Pontiac.


Some hon. Members:: Shame!


Walter David Baker: That is not my judgment. That is the judgment of the adjudicator for the Public Service Staff Relations Board. The government has now decided to appeal the finding of that adjudicator, Mr. O'Shea, to the Federal Court of Canada. Can the minister tell us how she can justify beginning her tenure of office as the head of the department by continuing this persecution of a public servant and why she does not personally intervene in this case, as the humanitarian she professes to be, one which has been brought before the Federal Court on improper grounds and is really a persecution of Mr. Sant Singh?


Hon. Monique Begin (Minister of National Health and Welfare):: My first comment is that if the assumption put forward by the hon. member were right, it would be obvious there had been enough political interference for me not to continue such interference. The assumption is wrong, as far as I know, and I do not intend to interfere in any way with the process established by regulations concerning the behaviour, classification and promotion of civil servants. The hon.

member said it very clearly. A notice of appeal of the adjudicator's decision has been filed in the federal court, and it is absolutely not the time for a minister to interfere.


Walter David Baker: Mr. Speaker, what the minister is saying by her answer is that a deputy minister in the federal public service now has the unfettered right to destroy the career of a public servant.


Some hon. Members:: Shame!


Walter David Baker: This can be done by actions which have been found by adjudication to be contrary to the spirit of the public service statutes, namely, the right of public servants to participate in political activity.
My question to the minister is: will she not reconsider the impropriety of her answer today and the position she is taking today? Will she not look to her constitutional duties and step into this persecution so found by the adjudication arm of the government? The minister is taking a dreadful position, and she ought to be ashamed of herself.


BEEF IMPORT QUOTAS-REQUEST FOR STATEMENT OF INTENTION
Mr. Ralph E. Goodale (Assiniboia):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. In view of the uncertainty which exists with respect to the future of import quotas on beef coming into Canada, has the minister yet been able to give his personal attention to the question of the development of more precise and permanent import control laws along the lines suggested frequently by such organizations as the Saskatchewan Stockgrowers' Association and recently in a report published by the agricultural committee in the other place?


John (Jack) Henry Horner: Mr. Speaker, yes, we are giving close attention to this problem. Before any announcement is made, we should like to discuss the whole question with the Americans, Australians and New Zealanders.


INDUSTRY
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, I should like to direct my question to the Minister of Industry, Trade and Commerce. In a recent speech to the Canadian Conference on Coal in Alberta, the minister dealt at length with the sale and increased production of coal, among other matters pertaining to the industry, but regrettably, according to the press account of the Edmonton Journal, only
October 20, 1977

made pronouncements on the further development of the western coal fields. May I ask the minister if he is prepared to address himself to the subject of the eastern coal reserves, with particular reference to the opening of new coal mines on Cape Breton Island which would provide much needed employment?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, I should like to send a copy of the speech I made at the coal conference to the hon. member. I dealt with the entire problem of coal development and exports. Certainly, I am aware of the problem with the deep mines in Nova Scotia and the strip mining, and I will encourage the development of both.


Robert Muir: Mr. Speaker, since the minister has a rather strong voice in cabinet and as my former seat mate he is familiar with the problems we are confronted with on Cape Breton Island, would he assure the House that he will do his utmost to have the necessary funds allocated to the Cape Breton Development Corporation, thus enabling the corporation to open new coal mines which, as the minister said at the coal conference in Edmonton, would create additional employment and an additional source of energy for this country?


John (Jack) Henry Horner: Mr. Speaker, my long association with the hon. member has made me very, very aware of the problems in Cape Breton. He can rest assured that his representation will be noted and remembered.


FISHERIES
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, my question is for the Minister of Fisheries and the Environment. I am sorry he had to leave, but I will put it on the record and perhaps the minister would be prepared next week to give us a report on any progress being made to restore Nova Scotia swordfish to the American markets. I hope he is not asking for the support of the Minister of Industry, Trade and Commerce who could only be expected to stick the front end of the fish into somebody important.


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, indeed I will take the representations made by the hon. member.


An hon. Member:: About the fish?


Walter David Baker: Why do you not ask the
fish?


An hon. Member:: Stick it.


Hugh Alan Anderson: I will bring it to the minister's attention. It has been the policy of this government to give due consideration to all fishermen, not only on the east coast, but also on the west coast of Canada.


Some hon. Members:: Hear, hear!
Oral Questions TRANSPORT


DATE OF ESTABLISHMENT OF PRAIRIE RAIL AUTHORITY AND RATE PARITY FOR RAW AND PROCESSED PRODUCTS
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, 1 should like to direct a question to the Minister of Transport. Having regard to the fact that the Speech from the Throne referred in a broad general way to the problems of transportation, could I ask the minister specifically if we can expect any government initiatives in acting upon two of the major recommendations of the Hall report, namely, the establishment of the Prairie Rail Authority and any move by the government to introduce the application of the parity principle on freight rates for processed and raw products?
1 ask this question in reference to the fact that this particular issue has placed a very severe hardship upon the rapeseed crushing industry in western Canada. The application of freight rates is very important to the continued viability of that industry in western Canada.


Otto Emil Lang: Mr. Speaker, as the hon. member knows, the question of the creation of a Prairie Rail Authority is receiving very close attention within the government, and also we have asked the prairie rail action committee to give that item some priority in its own consideration. I will be having further discussions about the Prairie Rail Authority idea and the very many financial implications involved in it with various producer groups, as I have already begun to do.
In the meantime, we have provided $100 million of new money to ensure that the rail rehabilitation program does get under way without any delay. In that way the maximum fiscal improvement which can take place is presently taking place in the prairie rail branch system. On the question of equity, this is a matter of serious concern to us, as we have expressed over the years our belief in the need for greater equity in freight rates between processed and unprocessed products. There are very significant financial implications. We have been discussing this with the provinces in an attempt to reach some rational conclusion about what processing should take place, because the natural advantage in the prairie region does take place there. At the same time there has been special action like the subsidy supporting rapeseed crushers in the movement of oil and meal. Also there is the special subsidy to pay for the differential in stopoff charges between eastern and western Canada. We have tried to minimize the problems in the interim period. We do recognize it, however, only as an interim measure.


Donald Frank Mazankowski: Mr. Speaker, in spite of the fact that the minister has outlined certain initiatives which have been taken with respect to the further development of the rapeseed crushing industry, there is still much to be done with respect to the Prairie Rail Authority. Having regard to the fact that Judge Hall has indicated that the establishment of the Prairie Rail Authority is the key to the entire report of the Commission; and having regard to the fact that the provincial governments of western Canada have been less than satisfied with the

October 20, 1977
Ora! Questions
initiatives and the actions that have taken place to date in regard to the establishment of the Prairie Rail Authority, can I ask the minister if he intends to meet with the western ministers of transportation in the very near future to ensure that the progress is stepped up? Can he assure the House that this very important element of the Hall Commission will in fact be implemented?


Otto Emil Lang: Mr. Speaker, it should be borne in mind that the Hall Commission recommendation of the Prairie Rail Authority was an interim measure. That authority, according to his recommendation, was to disappear from existence by 1990. There are some among the producers organizations in the west who believe that a quicker and clearer resolution of the future of the rail lines involved is actually advantageous. I have been meeting with those producer groups and I must say that I have been receiving from them practically total support for the exact course of action we have been following. Whether I will meet with provincial ministers may depend upon the rather exciting exchange of correspondence which is going on, but it is significant that while the producer groups are saying essentially that we should proceed in the way we are doing, the only ones who think differently are not only the provincial ministers of transport but serious political opponents.


INDUSTRY
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. On September 30 I wrote to the minister asking for an investigation into the fact that Northern Telecom, a subsidiary of Bell Canada, will have laid off 1,000 workers by the end of the year despite a promise to the government that, in return for $140 million loan to Turkey by the Export Development Corporation to purchase telephone equipment, Northern Telecom would create 860 man years annually for the next five years. Can the minister explain why Northern Telecom is laying off workers instead of creating jobs with this government's assistance?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, may I take this question as notice. I am not up on the Northern Telecom matter.


Reginald Cyril Symes: I would like the minister, in his reply at a later date, to also answer the following: In view of the fact that the federal government over the past few years has given Northern Telecom over $1 million in duty remissions, $10 million in grants and $44 million in deferred taxes, why are there no guarantees demanded by the government that in return for this largesse the company be obliged to create jobs rather than lay off workers?


John (Jack) Henry Horner: I will look into that, Mr. Speaker.


EXTERNAL AFFAIRS
Mr. Maurice Foster (Algoma):: Mr. Speaker, I should like to direct my question to the Secretary of State for External Affairs. In view of the importance to Canada of uranium mining in terms of jobs, exports and trade, can the minister say if he has been able to negotiate a nuclear safeguards agreement with the European Economic Community and Japan so that shipments of Canadian uranium which have been curtailed since the start of this year can be resumed?
Hon. Donald C. Jamieson (Secretary of State for External
Affairs): Mr. Speaker, since I discussed this matter in the House prior to adjournment there has been a succession of meetings, the most recent having taken place last week. Progress is being made but so far we have not reached the point where we could resume shipments. I am hopeful that the parties concerned, the customer countries, will be agreeable to meeting the conditions which Canada requires and we are working towards that objective. I hope it can be resolved. I am aiming for some time before the end of the present year.


FINANCE
Mr. R. E. McKinley (Huron-Middlesex):: Mr. Speaker, I have a question for the Minister of Finance. During the last session of parliament this House passed amendments to the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act and we were told at that time by the minister's predecessor that discussions would be held with the banks so that loans could be made by the banks under these acts. I am advised that practically no banks are offering loans to their customers under these acts, and I wonder if any discussions were carried out and whether or not these loans would be made available very soon. This is especially important because of the economic conditions in the country today.


Hon. Jean Chr6tien (Minister of Finance):: Mr. Speaker, I will look into the matter right away. I have not been informed that there is any problem there, but I will make sure that the law is applied and that the loans are made available by the banks.


HOUSING
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. Because of the indecent haste of the former minister in that
October 20, 1977

portfolio to push AHOP programs, people such as those in the Bear Creek estates have been ripped off by fly-by-night contractors, as I have discussed with the minister on numerous occasions, and by the government directive that housing inspectors inspect only for the security of the money lenders, while the home buyer is left out in the cold. I would like to know why there was nothing about housing in the Speech from the Throne and why there is no protection for the home buyer.


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, if all ministers had been allowed to include paragraphs on programs concerning their respective departments, Her Majesty would still be reading the Speech from the Throne. I do not mean that my department has no precise programs on housing to provide Canadians with the houses they need. The program referred to by the hon. member is precisely intended to help people acquire a house, that is low income people who receive important grants to buy their first house. 1 know the particulars referred to by the hon. member. We have discussed that question many times. We have asked our officials in the Central Mortgage and Housing Corporation, mostly those from British Columbia, to verify inspections more closely and correct possible deficiencies in that particular program referred to by the hon. member. This work has been done. We hope that past mistakes will not be repeated in the future.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on a point of order. This is the first Thursday in the session and 1 suppose 1 should ask my first House business question. In the absence of the government House leader 1 want to recognize and congratulate the deputy government House leader who has assumed that responsibility with his new portfolio. If I may say so on this point of order, what has disturbed me and a number of us is that we have now followed the precedent that was begun last year of not having affixed to the Throne Speech a list of the legislation that the government intends to call, which indicates to me that the government may well not be prepared. The minister could drive that suspicion out of my mind if he could undertake to table later this day with our consent, or perhaps tomorrow, a list of the legislation which the government intends to call during the session. I say to him it is important because I believe it can facilitate the work of the session. Is such a list available and can he table it tomorrow?


Mr. Cafik:: Mr. Speaker, first of all I deeply appreciate the kind words of my colleague opposite. I look forward to working closely with him and others in the House to expedite the business of the House.
Privilege-Miss Begin
With regard to the list of proposed legislation for consideration, I am not in a position to indicate that I can do that at this time. Quite clearly, next Thursday, which is a week from now, we will be in a much better position to do that, I think. I can assure the hon. member and all members of the House that indeed we are prepared with legislation for this session and I will make announcements at that time if the President of the Privy Council, the House leader, is not here. So I think that will have to satisfy the hon. member. In the meantime we will continue with the Throne Speech debate, uninterrupted until next Friday.


Walter David Baker: Mr. Speaker, I want to thank the minister for his undertaking that he will be producing a list of legislation next Thursday. With respect to this list, which I look forward to receiving, can the minister tell us whether some bills which appeared on the order paper of October 17, beyond the ones which were extended by order of the House, will be appearing on this new list of legislation? In other words, to what extent will the list he produces indicate the extent of the carry-over of legislation from the order paper of the last session?


Norman Augustine Cafik: I should draw to the hon. member's attention that I did not indicate that I would be producing a list next Thursday.


Walter David Baker: I thought you did.


Norman Augustine Cafik: What I did indicate is that by next Thursday we will have an opportunity to discuss this matter further in a co-operative way, I am sure, and hopefully all hon. members will be made aware of the plans of the government with respect to House business by that time.


Monique Bégin: Mr. Speaker, I would like to raise a question of privilege with respect to the political speech containing no direct question but addressed to me during the question period by the hon. member for Grenville-Carleton (Mr. Baker). With television now in the House, such a practice is misleading to the public. I very deeply resent the hon. member's accusations to the effect that as Minister of National Health and Welfare I am personally continuing the persecution of a civil servant in my department. The hon. member should know that the case of Dr. Sant Singh has to do with a promotion beyond the highest pay range in the ES group of employees and has nothing to do with his participation in any political activities which according to the facts were approved by the Public Service Commission.
I would like the hon. member to display more trust, respect and confidence in the judicial process of this country. Notice of appeal of the adjudicator's decision has been filed with the Federal Court of Canada. I do not intend to interfere with the judicial process. I would like to add that when I was a civil servant I understood that I was in the service of Canada. Now
80025-S

October 20, 1977
Privilege-Miss Begin
that I am on this side of the barrier I will continue to do so in the name of the government.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, I am very glad


some hon. Members:: Withdraw.


Walter David Baker: I intend to stand here all day or until the rabble over there stays quiet in order to answer what is a spurious question of privilege.
First, I did not accuse the minister of personally pursuing Sant Singh, a public servant who is in fact being persecuted by the attitude of the government of Canada. What I did say about the minister is that in what is happening to Dr. Sant Singh she is not pursuing him; in fact, she is neglecting him because of the persecution he has undergone. That is the first thing I want to make clear. The minister cannot pass this off either to the courts or to her deputy minister in this offhand way. She is the minister responsible here for the operation of her department, and she is responsible to the people of Canada and to her public servants. That was the reason we went through the whole matter of decentralizing authority within the public service of Canada. That is point number one.
The second thing is that I do not like that minister talking about my advocating interference with the judiciary. I do not like a minister of this government suddenly taking such a pious interest in the judiciary when the government stands against the judiciary in terms of refusing to allow it to review requests for information, which are to be denied under the government's freedom of information proposal. The government has no reason at all suddenly to become a defender. These are the facts, and 1 have to reply.
On the merits of this case, it was found by Mr. O'Shea, the public service adjudicator, that this public servant was not allowed to see his file, which is contrary to the law.


Some hon. Members:: Shame!


Walter David Baker: The second thing that that adjudicator found, and I am referring to page 33 of the judgment, was that the circumstances of this case are not only suspicious but they also lead to the conclusion that matters other than the grievor's departmental performance were improperly considered. That is the other aspect of it.
Before Your Honour rules on this question of privilege I commend to you a reading of this judgment by Mr. O'Shea. The essence of this judgment is that this public servant was interfered with within the department, aided and abetted by a deputy minister, for his political involvement, this by a government which professes and takes credit of passing a statute which is supposed to permit public servants to engage in political activity. If anyone has a question of privilege in this House it is not the minister, it is I and the public service of this country.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The minister has been extended what is a custom of the House. During the course of the question period remarks are occasionally made or matters are raised in such a manner as to give rise to possible questions of privilege. Therefore, it is the duty of the Chair to hear the participants in those discussions. The minister has been given the opportunity to point out to the Chair the remarks which were made by the hon. member for Grenville-Carleton (Mr. Baker) and which she found offensive. The hon. member for Grenville-Carleton has been given an opportunity to reply.
I did not permit an answer to the question because the question was argumentative. It was an argument and not a question. However, that is a procedural matter. It does not accord with my recollection that the remarks which were made did raise a question of privilege, and neither has anything raised in this discussion to this point raised a question of privilege. Therefore the matter should stop there.


Mr. Blais:: Mr. Speaker, I rise on a point of order. On October 17 last in Hansard at page 8213 there appeared an answer to a question put by the hon. member for Vaudreuil (Mr. Herbert). The hon. member asked, and I quote:
In the past five years, how many public servants have been dismissed for waste, extravagance or misuse of public funds?
Unfortunately, the composite answer given by the Parliamentary Secretary to the President of the Privy Council (Mr. Pinard) does not reflect the answer I provided to him. I wish to read the reply submitted by my department as follows:
In the past five years, 489 Post Office employees have been discharged for various types of misconduct. Records do not allow for a breakdown by ''waste, extravagance or misuse of public funds".


John Edward Broadbent: Mr. Speaker, I rise on a question of privilege. It pertains to the decision of the Minister of Finance (Mr. Chretien) to allocate, with magnificent generosity, about half an hour later today to members of the opposition parties to have access to the details of proposals he will be making in the House tonight. The news media are to be permitted access at least half an hour earlier. The question of privilege I raise is a very important one as it affects all hon. members of this House, particularly in view of the presence of television in the House of Commons.
What we have is the following situation: The Canadian Broadcasting Corporation has decided to televise the minister's speech. No one objects to that. The reason for that is that members of all parties have supported the access of television to the House of Commons to provide the people of Canada an opportunity to see what goes on here. There is a very serious concern, however, if we have a complex matter-really it is a substitute budget we are getting tonight, if we are to believe the publicity of the government-which affects the operation of the House of Commons. When we have had complex measures before, such as a budget, then the responsibility of the government has been adhered to by permitting opposition spokesmen access, not a half hour but two to three hours in advance, to such measures upon which they are supposed to
October 20, 1977

express a judgment within a minute or so after the minister finishes.
If the government expects co-operation not only in this matter but in other matters that affect the House of Commons, then I say most seriously to the Minister of Finance that he had better change that decision and change it fast. He is not going to have as an unqualified right the opportunity to manipulate the news media-because that is what is involved-and at the same time expect to get co-operation on this matter or other matters in the House of Commons from opposition parties.


Some hon. Members:: Hear, hear!


John Edward Broadbent: The minister knows as well as any other member of parliament that this place just will not function unless he behaves in a civilized and decent manner and respects the rules of fair play for both sides of this House.
So I say to you on this question of privilege, Mr. Speaker, that the minister had better change that decision and change it fast or the normal working relationship between the parties in this House is going to break down and break down completely.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I will hear the minister's intervention in a moment. I will recognize the minister on a point of order as it reflects on proceedings later in the day. I think I should establish clearly, however, that what the hon. member for Oshawa-Whitby has raised may indeed touch upon cooperative arrangements for the better and more intelligent debate of events that will take place later in the day and throughout the debate on the Speech from the Throne. It relates to co-operation between parties, however, and there would be no requirement that the Chair could refer to or no obligation in any circumstances of consultation with other members in respect of any speech by the Minister of Finance during the debate on the Speech from the Throne. I could not, therefore, begin to classify it as a question of privilege. The point is made, however, and I am sure the minister would want to contribute to it by way of a point of order.


Mr. Chretien:: Mr. Speaker, I am surprised that the hon. member became so aroused. I talked with his House leader earlier who asked some very reasonable questions. I told him that I would allow critics of his party to come to my office. I wanted to be courteous enough to have the critics for the opposition in my office to discuss that beforehand.


John Edward Broadbent: Half an hour before.


Joseph Jacques Jean Chrétien: I thought half an hour was enough. If it is felt they need more than half an hour, that is all right. Everyone knows me; my speech will be very short. It is not going to be an hour and a half speech; it is going to be 20 minutes. I would like it to be short, precise and to the point. I was led to believe that the critics of the Social Credit Party and of the Tories
80025-5)4
Tariff Board
could understand it in half an hour but if the critics of the NDP need an hour, I can have them in my office an hour earlier.


Some hon. Members:: Hear, hear!


Mr. Jones:: Mr. Speaker, I think there is a question of privilege involving an independent member who does not belong to any of these so-called political parties. If a document is going to be presented to the leaders of the parties, I think there should be fair play to the independent member of parliament. There should be some equality. If there is a question of co-operation here, then I think there should be co-operation toward a person who does not belong to a party. I have a question of privilege, Mr. Speaker and I think Cabinet ministers should start to recognize this privilege.


Mr. Speaker:: Order, please. Again, the hon. member raises a point that may have to do with co-operation but it does not have to do with the regulations precedents or practices of the House. There is nothing to which the Chair could refer to as a basis for deciding the hon. member's point would constitute a question of privilege.



ROUTINE PROCEEDINGS


Francis Fox: Mr. Speaker, with the consent of the House, I would like to table copies in both official languages of a document entitled Memorandum of Understanding between the Department of National Revenue, Taxation and the Department of the Solicitor General of Canada, as I had promised in my answer to a question of the hon. member for Edmonton West (Mr. Lambert) during the oral question period yesterday.


TARIFF BOARD
Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, I should like to table copies in both official languages of an interim report of the Tariff Board recommending certain changes in rates of duty on processed fruits and vegetables.


Mr. Speaker:: Orders of the day.

October 20, 1977
The Address-Mr. Wenman


SPEECH FROM THE THRONE
[Stage Direction]
The House resumed from Wednesday, October 19, consideration of the motion of Mr. Dennis Dawson for an address to Her Majesty the Queen in reply to her speech at the opening of the session.
Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, sometimes sitting here as a member of parliament can be a depressing and frustrating experience. Sometimes I get fed up hearing the complaints of the greedy minority and the demands of those who feel they are not getting their fair share. It is a broken record. I am tired of hearing about the excluded group from the Atlantic provinces, the unheard voice of the west, Quebec aspirations, native peoples' search, amendments to the Official Languages Act, equity of status of the Official Languages Act and policies for official language minorities. These are not the real, deep and genuine concerns of Canadians today.
It is time to start talking not only about these issues but also about the will of the majority of Canadians-Canadians who are fed up because the current government of Canada has over-spent, over-taxed, interfered, over-regulated our lives, debased our currency and all but bankrupted our nation. Perhaps they are angry also because industry is grinding along in bottom gear, with falling profits, which means that more men and women are unemployed in Canada today than at almost any other time in our history. Canadians are tired of being bought with their own tax dollars. Canadians today want only one handout-the government's hand out of their pockets.
What does taxation at a rate of 43 per cent of the gross national product really mean to Canadians? It means the average Canadian-and that is the Canadian you and I represent here today-earning $15,000 per year will pay $7,000 of it to the government in a multitude of hidden and not so hidden taxes. It means the average Canadian who starts work at nine o'clock in the morning will work until 1.30 in the afternoon each and every day of the year before he earns any money that he can call his own. It means the government has increased its spending by 377 per cent since this Prime Minister (Mr. Trudeau) took over the government of Canada.
During the same period wages increased by only 89 per cent.
I ask you, my constituents and the people of Canada, during this tremendous increase of taxes by 377 per cent, have the services the government has provided improved by 377 per cent-300 per cent-200 per cent-100 per cent-zero, or have the services seemed to diminish? I leave that question to you but I know that in the minds of my constituents it is clear that the government of Canada has taxed and taxed and that services have decreased and decreased.
When the Prime Minister became leader of the government, the over-all expenditure, including servicing the debt, was $10.9 b'llion. By its own estimate the government intends to spend $41.1 billion of the taxpayers' money this year and it

has already over-spent by many billions. The government's budgetary deficit for 1976-77 totals $6.3 billion, an absurd growth rate of more than 50 per cent from the previous year. This completely unwarranted deficit is almost as much as the government spent in total during its first year in office. The total direct debt of the government amounts to $12,500 for each of the 9.6 million persons employed in the economy or $5,217 for each of the 23 million people living in Canada. The cost of servicing this debt amounted to $7.9 billion during the past year alone and represents $822.92 per person employed or $343 per capita. I can assure you, Mr. Speaker, that the average Canadian with a family of four does not want to carry $20,000 of debt at a cost to his family of $1,372 a year in interest charges. Given the choice, any family man in Canada would not have incurred this debt on behalf of himself or saddled his unborn children and grandchildren with such a long term burden.
Instead of promises, this government should outline some new policies, policies which will restore our personal freedom, promote economic welfare and achieve a greater degree of social justice. The Prime Minister, when talking to a group of unemployed in London, Ontario, stated: "Our costs are too high and we are taking it too easy; Canadians have to get that message". He and his government should take his own advice. Continually the Prime Minister talks of the unrealistic expectations of Canadians. In his remarks yesterday the Prime Minister commented, as reported at page 40 of Hansard:
1 confess I am somewhat mystified by the fact that in the past few years Canadians seem to have lost a sense of perspective about the country.
In truth, it is not Canadians who have lost their perspective about their country; it is the Prime Minister who has lost his sense of the achievements of which this country is capable. The Prime Minister of this country will have to carry the burden of destroying Canada's vision of itself.
This year's favourite phrase in Canada seems to be that Canada is "an economic mess". Even the finance minister has said frankly that there will be another large gap between the number of jobs which open up in the country and the number of people entering the work force this year and in the near future.
What policies-not promises-have been brought forward to inject some life into the economy? The fledgling finance minister likes to say that our 90 cent dollar will stimulate the economy. To date that economic respite has not occurred. What the finance minister so blithely ignores is what the experience of Britain and other countries whose currencies have been depreciating has shown-that a falling exchange rate tends to start a self-perpetuating slide. A falling exchange rate speeds up the cost-push cycle and erodes whatever benefits are associated with the deflated dollar.
In British Columbia people I talk to are amazed and angered that the federal government cannot seem to perceive clearly the economic and social conditions of the nation's regions. They shake their heads in disgust when they hear of

October 20,1977
the antics of Ottawa. They know that average Canadian incomes have increased 142 per cent since 1968 and they like that. However, at the same time consumer prices have gone up 85 per cent, and most shocking of all, consumer taxes have increased 239 per cent, almost double the increase in incomes. That money has supported the financial atrocities of CIDA, payoffs to middlemen who sell our nuclear reactors, keeping our public service the best paid in the world, the construction of office towers in Hull so that the ones in Ottawa can remain half empty, and the relocation of federal office buildings in Liberal ridings. Of course, I do not have to mention the disgrace of the division of Canada Works funding. In my constituency we are talking in terms of $100,000, a constituency with many times the population of that of the Minister of State (Fitness and Amateur Sport) (Mrs. Campagnolo), which receives $4 million compared to $100,000.


Robert Elgin McKinley: That is Liberal justice.


Robert Lloyd Wenman: That is typical. That is the just society which the Prime Minister has been talking about for so many years. That is the kind of giveaway, the kind of handout, we have seen. As I said earlier, the kind of handout that the people of Canada want is the government's hand out of their pockets.
Back in the 1960's the powers-that-be took hold of the belief that some kind of federal budgetary program or federal regulatory agency could be designed to deal with almost any problem that faced Canada. We had the Canada Pension Plan, the Canada Assistance Plan, the guaranteed income supplement, medicare, the unemployment insurance program which was made the world's most generous. Family allowances were tripled and then indexed; post-secondary education grants were quadrupled. Every aspect of Canadian life has now been infringed upon and infiltrated. A federal regulatory agency is sticking its nose into everybody's business in Canada, to the point where our individual freedom is being eroded.


Mr. Hargrave:: "Big Brother".


Robert Lloyd Wenman: "Big Brother", that is the same one. Some functions of the agencies could be justified on economic grounds, but in large measure the notorious "Big Brother" principle still supports their existence. The policies of successive Liberal governments have led to a general malaise which everyone in this country perceives. Everyone knows there is something wrong; everyone has that feeling.
The Prime Minister said yesterday, as reported at page 35 of Hansard:
This discontent in such a wealthy country must find its causes in the human spirit, and it is there also that the unity of the nation must be found.
Flowery words, good words, true words. I say to you, Mr. Speaker, that the Prime Minister has once again enunciated the problem and even the solution; but the solution will continue to evade him and he will never be able to accomplish or move the nation closer to this type of unity until he is able to remove the discontent from his own human spirit. The nation senses that his human spirit has yet to find the unity that flows from inner peace. The human spirit of our Prime
The Address-Mr. Wenman
Minister is in a turmoil that is reflective of the world around him. He is weak. Unfortunately, he knows not where he leads himself, and is therefore not fit to lead this nation at this time in his life. What a classic tragedy for the man. What a classic tragedy for this nation of Canada. Anger, bitterness, hatred, greed, idleness, fear, distrust, dishonesty-these are the elements of discontent. Love, joy, peace, compassion, wisdom, kindness, goodness, faith and hope, giving, sharing, working, laughing, loving-these are the replacement values so lacking in the human spirit not only of our Prime Minister and our nation but in fact of the world. The ebb tide has swept our Prime Minister far out into the sea and the nation waits in turmoil and confusion looking to the flow of a new tide. The Leader of the Opposition (Mr. Clark) speaks of a new vision, of a place to build and to grow. He has yet to be tested with the exercise and weight of power, but Canadians are beginning to sense in him a new growth and strength of human spirit.
The Prime Minister was right. It is in this depth of human spirit that the unity of this nation must and will be found. Canadians are beginning to focus upon a new era. Canadians across the country are angry and frustrated, and that anger and frustration are beginning to recognize the urgency, the necessity, of changing the government of Canada, a change that will see a redefining, a classification, a grasping and a reaching for new and renewed values. Through these values a new trust of confidence can establish a new pattern of growth and building that will once again rekindle the spirit of Canada.
In his remarks yesterday the Prime Minister said that the federal government will introduce its own legislation to permit and control national referendums. Obviously, he is planning, as he said today, to hold his own national unity referendum. In February of this year I placed a motion on the order paper. It declared:
That in the opinion of this House, the government should consider the advisability of holding a national referendum on the issue of separatism in order that Canadians may be given the opportunity to reaffirm their faith in national unity.
If the Prime Minister had taken some action on my motion in February, much of the uncertainty which pervades the country today and the resulting hardship stimulated by the PQ victory would never have had a chance to build up to the level it has. It is a hallmark of this administration that it continually acts too little and too late. Because the Speech from the Throne was empty of mention of Canada's role of international affairs, I would like to turn to one of the most important issues facing the world today.
The situation in the Middle East is so difficult, so complex and so volatile, that it has erupted in serious wars twice within the decade, and a lasting solution continues to elude the whole world of diplomacy.
It is not within our ability to settle their war and the actual conditions and details of a peace settlement between Israel and the Arab states must be left in the hands of the parties themselves. At the same time, we must recognize ourselves to be part of the global family which suffers so long as there are

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hostilities anywhere on this planet. The cause of peace is not only a responsibility of the federal government, it is a privilege.
The Progressive Conservative Party of Canada recognizes the state of Israel without qualification or reservation and regards its continued existence as right and beyond any question. As one of the few remaining democracies in the world, Israel deserves recognition and support from all those states mutually committed to this basic common ideal. A just settlement must recognize Israel's legitimate concern for security and support Israel's determination to have defensible borders.
Further, demilitarized lines or zones supervised by credible neutral forces such as the United Nations peacekeeping force may have to be established. Such lines or zones may or may not initially conform to legal, permanent and recognized boundaries but might rather reflect the geographic-political realities of the area. While in the future the appearance of ground-to-ground missiles, supersonic fighter-bombers and other sophisticated instruments of modern warfare may in part cancel out the emphasis of strategic depth and topographical barriers, overall security will best be assured through bilateral and multilateral non-aggression pacts backed and guaranteed by the super-powers. Current military capacity and strategy, however, attaches considerable importance to limited territorial concessions.
On the other hand, we must also recognize the existence of the Palestinians and support the continuing desire of the Palestinians to develop the kind of social, political and economic status usually found within the security of a full or associate state status. Such sovereign or associate-state status would establish the apparatus of statehood which would, in turn, see the despair of the Palestinian people diminish and their creativity and responsibility increase. The legitimate grievances and aspirations of the Palestinians must be determined, recognized and resolved.
In actively promoting peace, there are three principles from which Canada must not depart. First, while we can understand the frustrations which have led people to resort to violence and terrorism; we cannot condone it. Such activities-whether in the form of terrorism, sabotage, or open aggression-are unacceptable from any source. Second, equally, we decry any exploitation of people or prejudice directed against any racial or ethnic group; the manipulation by some countries of the United Nations, and the threats which accompany the Arab boycott must all be resisted. Third, we must continue to insist that the Palestinians and the Arab states recognize Israel's right to exist, and at the same time we must continue to express concern regarding Israel's establishment of permanent or semi-permanent settlements in occupied territory.
Almost all the prime movers in the Middle East have expressed the hope that 1977 will see real progress toward peace, and, more specifically, that the Geneva conference will reconvene later this year. Visiting MP's of the Progressive Conservative special committee on the Middle East returned with strong feelings of optimism that 1977 can be an important year, yielding considerable progress toward a settlement in the Middle East.

In every country except Iraq, there was a climate of hopefulness that a course of action leading toward a peaceful settlement, if it is ever to be found, would be best initiated and activated in 1977. Even rejectionist front Iraq, while continuing to support the PLO and stockpile arms, seems to be pursuing a wait and see role by not speaking against peace initiatives by other member states of the Arab league.
The economic burden of maintaining massive modern military machines is weighing heavily on both the Arab states and Israel as a tragic waste of both human and financial resources. While massive arms purchases from both the western world and U.S.S.R. may serve the function of recycling oil dollars and balancing trade deficits, surely the transfer of technology and improved physical and social conditions could provide a more productive and positive vehicle to accomplish the same objective. Tremendous economic opportunities in the field of technological capacity transfer exist in the Middle East for Canadian enterprise and these have scarcely been touched. There are massive capital surpluses accumulating in the Middle East and substantial production facility slowdowns and unemployment in Canada. In view of the current economic situation in Canada, why hasn't our government been more aggressive and successful in bringing the two together?
Beyond diplomatic rhetoric and political grandstanding in traditional world forums and conferences, calm and rational threads of compromise are beginning to come to light. Cautious statements of potential compromise, even when viewed cynically because of their multivested motivations, seem worthy of further investigation and support as the seeds of a preliminary settlement of the Arab-Israel conflict.
Recognizing the interests of all men in the cause of peace, Canada should remain open to the possibility of being a conduit for peace, ready and willing to offer any assistance to bring about a settlement. Canada should therefore be willing to maintain or, if requested, expand its highly respected and competent peace-keeping role in the Middle East.
Although not unanimous, the spirit of Resolutions 242 and 338 of the United Nations have received broad general acceptance and should, therefore, in their original form be the basis of the framework upon which to build a lasting and just settlement in the Middle East. 1977 has become a time most appropriate and conducive for the reconvening of the Geneva convention. Canada should therefore pursue this objective with an aggressive thrust in all international forums, through all diplomatic channels and by all means bilaterally and multilaterally available to the Prime Minister and the Secretary of State for External Affairs (Mr. Jamieson) and more important through the vehicle of parliamentary committee and parliament itself.
Since Palestinians must be heard and seen to participate in discussions affecting their future, we must call for mutual recognition. The PLO must recognize Israel's permanent right to exist and Israel must recognize that the Palestinians have a right to political self-expression and some form of territorial sovereignty.
October 20, 1977

In order to maintain stability during a period of transition, the Arab states should accept that a temporary and credible United Nations presence or demilitarized zone, or both, may have to be established. In order to assure mutual non-belligerency, the superpowers should guarantee through bilateral and multilateral agreement the mutual security of recognized national sovereign borders. The developed world should be prepared to provide substantial international assistance and guarantees that will assure economic stability in the region.
In the face of the vast economic power of the Arab bloc, Canada, while expanding its long-neglected relations with the Arab countries, must reaffirm that it will never sacrifice principle or its sense of humanity to financial expediency. Goodwill and closer cultural, commercial and diplomatic ties with the Arabs do not, nor should not, presume any diminution of our friendship and support of Israel. A political and administrative vehicle must be found which will assure freedom of worship and freedom of movement for three of the world's great religions in Jerusalem.
In view of Canada's important role on the Security Council during this important and significant time, Canada's permanent representative should have prompt and regular access to the Secretary of State for External Affairs. Therefore, a minister or associate minister should be appointed who could give efficient political leadership and guidance for which he would be answerable to the cabinet and to the House of Commons directly.
An amendment to the Bank Act to prohibit any Canadian company, person or bank from supplying information for commercial purposes indicating the racial or ethnic origin, the religion or political affiliation of a Canadian citizen should be presented to the House of Commons.
As long as the Middle East crisis remains unresolved the world continues to confront a powder keg with a fuse of unknown length. Unless international leadership captures, and acts upon, the current positive mood and opportunity for peace it will certainly pass and the cynicism of the rejectionist front position will begin to re-establish its credibility.
The Iraq government's position-that of the leader of the rejectionist front-is that a settlement in the Middle East cannot be found through peaceful negotiation, but rather through force and a final confrontation which will see the re-establishment of a democratic Palestine and the demise of the United Nations created State of Israel.
The world, let alone the Middle East, cannot allow this confrontation that could escalate to Armageddon. The Canadian government's weak initiative in this area is at the best inadequate and inappropriately non-aggressive. For us, as an opposition, to fail to urge our government to positive action in the resolution of the problems of the Middle East would show us not only as derelict in our duty to the Canadian people, but as derelict in our obligations as citizens of the world.
A reconvened Geneva Conference could have positive results if all sides approach the table with a spirit of goodwill and a
The Address-Mr. Martin
capacity to compromise in a way that stresses co-operation rather than confrontation and mutual respect for each other's pride in their deep-rooted cultural identities.
We are all peace-makers. We all want peace and I hope we shall dedicate ourselves today to a concern with the issue of the Middle East in the name of all mankind.


Mr. Alan Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I should like to divide my remarks in this debate into three categories. I should like to speak initially on questions relating to the state of the Canadian economy. I then propose to address a few remarks to the subject of the gap which so obviously exists at the present time in the area of what we might refer to as national understanding across our great country. I should like also to address a few closing remarks to the existing and greatly increasing energy crisis which is now facing Canada.
Let me deal, first of all, with the state of the economy. I was not in the House yesterday when the Leader of the Opposition (Mr. Clark) spoke in this debate. I missed his contribution and accordingly I searched today through the record of Hansard to see whether I could find any really cogent remarks he might have made on the subject, particularly for any carefully-reasoned recommendations which he might have put forward. Such recommendations were largely absent and I found this somewhat surprising, because although he did indicate that other speakers on his side of the House would deal with other aspects of the Speech from the Throne, it seemed to me that in view of some of his public utterances around the country we might have expected him to take the earliest opportunity to direct his remarks in the House to those recommendations which he and others in his party have been working on to cure the ills which they discerned in our national economic affairs.
We note that the distinguished member for Rocky Mountain criticized the government for its deficits, indicating that these seemed to be growing by the week. In the next breath, though, he was proposing recommendations which in his view would help cure some of our economic woes, and among those recommendations was a proposal which would result in less revenue flowing to the government. I do not wish to argue the merits of the proposal itself. Indeed, it might at times be in order to increase the amount of a deficit already running at a substantial figure. The point is, he cannot have it both ways. He cannot make a solid argument criticizing deficits in government accounts while on the other hand putting forward recommendations which would result in substantially reduced revenues to the treasury.
I do not think the Canadian people are entitled to expect that a leader of the opposition should be deeply versed in economics or accounting theory, but I do think that in a country with a budget running to some S40 billion one might anticipate that those who occupy such an important position as that of Leader of Her Majesty's Official Opposition should at least have a basic understanding of what it means to create deficits and the effect reduced revenues would have on those deficits. How can one advance a recommendation which would have the result of reducing revenue while at the same time

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arguing that deficit should be reduced? Everyone who operates an ordinary bank account recognizes that when the flow of income is reduced the deficit position, if there is one, will be worsened. I mention this only because it seems to illustrate the lack of depth of understanding of members opposite. This is so often evident in the comments and proposals to which the Canadian people are subjected, either in the House or outside it-a real lack of understanding of how economy operates and how the system of government expenditures and revenues form a part of it.
It seems to me further that this kind of irresponsibility is all too typical of so much of the negative criticism which has the effect of creating increased pessimism across the country. Yet this is the type of criticism we continue to hear from the opposition benches, criticism which is not accompanied by careful, rational suggestions for improvement. I say the Canadian people are entitled to more from those who occupy a key opposition role in our governmental system. We are hearing a great deal these days and months as to how poorly Canadians seem to be doing economically. This is enhanced to a large extent by the irresponsible statements coming from senior people on the opposition side. This, in turn, creates more and more sensational headlines. It results in leaving with Canadians a greater sense of insecurity and concern than is justified to some extent, under the circumstances. This leads to a position where many members of the public create in their minds fears and concerns which are quite unwarranted.
Some substantial Canadian financial publications of recent date have indicated that there is a turn coming in the economic picture in Canada. Some of these things may result from government actions. Later today we will hear from the Minister of Finance (Mr. Chretien) who will give Canadian people, hopefully, some indication of how the control system is eventually going to be phased out and what methods will be used to accomplish this. In a sense this will provide a blueprint for the next several years and will give Canadians, both businessmen and consumers, an indication of what form of continuing regulation they may anticipate, if there is to be any at all. This will assist business to make investment decisions of a long term nature, as well as assisting ordinary Canadians to make their personal business decisions and investment plans.
The pipeline decision was made by this government some time ago. It was satisfactorily negotiated with the United States. Hopefully it will come to fruition in Washington in the near future. It will be a new major incentive to the Canadian investment program, and it will spill over to many, many other areas of the economy. As I indicated during the debate on this issue, the potential effect of this pipeline on our economy in all parts of Canada is going to be a very significant boost, not only to the actual dollar picture, but to the general morale of Canadians. Attitudes are improving in the country. The pessimism which seems to have prevailed in our business community as recently as several months ago is waning. It is waning in the face of hard information to the extent that any business

forecasts can be hard information. The best economic minds are now indicating that improvements are on the way.
The opposition knows, although they will refrain from mentioning it because it is not in their political interests, and most Canadians know that the economy of Canada does not operate in a vacuum. It is dependent on what goes on in the western hemisphere, particularly with our neighbours to the south. Generally the signs of a turnaround are coming. A new onset of capital spending is anticipated in the second half of next year. By 1978 housing starts are anticipated to go up to 255,000 units, compared to some 235,000 units this year-a significant increase.
There are areas in this country which will continue to have troubles which may well worsen as we move into the 1980s, regardless of how strong our economy becomes. I am referring to the balance of payments situation, that is, the amount of cash going out of the country as compared to the amount of cash coming into the country. Cash goes out not only for the purchase of goods and comes in not only from the sale of goods. Every time Canadians travel abroad and people from abroad do not travel in Canada, we have a double effect on the balance of payments picture. In other words, Canadian dollars go out of the country and foreign money does not come in. I hope we never have to discourage Canadians from travelling where they wish, but we must do more to encourage people from outside this country to come and see what we have to offer in Canada.
In Europe today the cost of living and the cost of travelling for a tourist is far more than it is in Canada. During this past summer I witnessed that. There is a tremendous opportunity available to us to encourage people to come and see Canada. Frequently Europeans hear about the United States, but Canada does not tell them enough about our great country and the facilities we have. This would be of interest to them.
Mr. Speaker, may I call it one o'clock?


Mr. Deputy Speaker:: It being one o'clock, I do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Alan Gray Martin: Mr. Speaker, when I spoke before the luncheon adjournment I mentioned that one of the ways in which we might be able to help our balance of payments situation would be by encouraging further inflows of tourists from abroad, and I mentioned in particular the European continent where the cost of living and the cost of travel is fantastically high. In fact, it far exceeds the cost in this country. I believe that this country could offer a bargain to prospective European travellers in that respect.
October 20, 1977

At the same time, while not recommending any form of control measures which would prevent Canadians spending money outside the country, I think we should encourage Canadians to do much more travelling within their own country. That encompasses a great deal, including measures to reduce the cost of transportation facilities-it is frequently cheaper to travel outside the country than within it, which seems unreasonable, and including the kind of accommodation facilities that are available to ordinary Canadians as they move across the country. I suggest that this is a very important aspect, not only for our balance of payments but also in promoting greater national understanding, a matter with which I will deal in a moment.
To conclude my comments on the economy, 1 would like to refer again to the optimism with which I believe Canadians should be viewing the future. At the same time, I think we must be concerned about the problems which have given rise to such a serious situation in the last few years, to our increasingly high rate of unemployment and, in particular, we must take a much closer look at our secondary manufacturing industry- whom should we be protecting, and whom should we not be protecting; whose jobs should be protected, and whose should not?
I am somewhat concerned about the negotiations that are apparently under way in Geneva relating to GATT, as a result of which we may find ourselves accepting increasingly freer trade practices. My real concern is that as we "give" in some areas, in terms of lessening our import restrictions or customs duties, we should obtain freer access to those markets where non-tariff barriers are creating a problem. I refer, for instance, to restrictions on government spending policies of other countries, whether they will buy from outside as well as inside the country, and other types of measures that are of great concern to the Canadian manufacturing industry which is attempting to enter these export markets.
Other areas in which we have seen encouraging signs in the last few years include that of wage settlements. The Prime Minister (Mr. Trudeau) referred yesterday to wage settlements. According to my notes, they amounted to 8.8 per cent for the year ending the first quarter of 1977, which is a vast improvement over prior years-and this in an area where we continue to be told that we are quite uncompetitive with our neighbours to the south. Control over rates of inflation will continue to be important. We will have to convert many of our savers into buyers. I am sure Canadians will move into that pattern, but they will do it with care and caution. As a government, we must show the leadership that will help them.
I conclude these comments on the economy by referring to a recent address by Mr. Rowland Frazee, president of the Royal Bank of Canada and president of the Canadian Bankers' Association, in which he said that we, as Canadians, should not lose our perspective, that we have many natural technological and human resources which are a real bounty to us, and that our institutions are strong. He suggested that we should be concerned, but not alarmed, and that hard work and a sense
The Address-Mr. Martin
of purpose are qualities which Canadians must foster anew in themselves.
There will be trade-offs, as the Prime Minister has mentioned, in such areas as what percentage we are going to own of our Canadian industry versus jobs that might otherwise be provided, as well as various other areas. But we must not put the blame on others for our situation; we must look to ourselves and realize that an increased standard of living is simply not a God-given right for every Canadian.
1 should now like to address my remarks to the need for a greater degree of national understanding in this country. Here I purposely refrain from using the term "national unity because, frankly, I do not really understand just what that term means. 1 have a certain concept of national unity which I am not sure is shared by other colleagues in the House from other areas of Canada. I feel, however, that national understanding-understanding among the peoples of various regions of the country-is a very important factor. A large gap exists there. In fact, I suggest that the election of the Parti Quebe-cois government last November 15 is largely the result, on the one hand, of 110 years of misunderstanding and, what is worse in my view, of 110 years of completely inadequate measures by governments at all levels and by citizens generally to try to overcome this problem.
We have as yet no separatist government in the west or in the east, but it is conceivable that this phase could develop. The situation in Quebec was, perhaps, brought about by factors that we may not find in other regions of the country. Nevertheless, we are being told over and over again that the alienation of people in various regions of Canada is very real in terms of their relationship with central Canada, and the over-all problem is by no means restricted to Quebec.
Unless we tackle the problem for what it is, and not for what we might like it to be, in my view ultimately we shall be faced with a potential break-up of this country into various segments, each of which will ultimately seek its own destiny. We shall, indeed, have let down our sons, daughters and grandchildren if we allow this mentality to develop. That is to say nothing of letting down past generations, starting with the Fathers of Confederation, who looked upon this country as one in which they had a very strong belief.
Even if over generations we may have been guilty, to a degree, of a sin of omission in not doing our utmost to promote a greater degree of understanding across the nation during our maturing stage, the point to bear in mind is that the real issue we are facing is not a Quebec issue but a Canadian issue. As members of parliament, I feel we must look at the problem and tackle it with this attitude in mind. It is as serious a Canadian problem, that adults in one section of Ontario recently poured scorn upon the concept of an all-French teaching institution in a neighbourhood where French-speaking Canadians form a significant nucleus of the population, as it is a serious problem that the government of Quebec has told residents of the province that instruction in the English lan-
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guage in future will be available only to a small, privileged class whose numbers will steadily decrease in the years ahead.
We must somehow move beyond the early, adolescent stage at which our country has arrived. We must cease to be referred to, and refer to ourselves, as hyphenated Canadians. A Canadian is a Canadian. In my view, that must be the byword for our future. We may, indeed, be Canadians whose mother tongue is one of the two official languages, be it English or French, or we may be Canadians of one of the many unofficial mother tongues. These are prevalent languages which are frequently heard across this country, many of them in my own community and in my own riding. These people came to live in Canada and to adopt it as their home. Their immediate roots are in other areas of the world.
If we continue to fail to understand one another adequately, we will be unable to keep this great country together. I think the problems we have faced and are now facing in Quebec will tend to rear themselves in other areas over the course of the years. We must tackle them in a positive way. It is unacceptable that we should wait for yet another separatist government to be elected somewhere else in the country, before doing something. We must take some responsibility for ensuring that our children receive a form of education which will include a far greater exposure to both official languages and cultures than has been the practice in the past.
Without proper education in these areas-and it has been woefully inadequate over the last century-there will be no real development in bridging what I refer to as the understanding gap in years to come. There will be no significant closure of that gap, and without that closure I again say it is doubtful it Canada will be able to endure in any meaningful way over the long term. Constitutional conferences, patriation and amendment of the British North America Act-perhaps these things are important, but most important is the development of a substantially increased degree of understanding among Canadians. This is something which does not have any replacement, and that factor cannot be overlooked.
A great deal is being said about national unity and national understanding. As members of parliament, I think we will be drawn into this debate more and more. We have a responsibility to talk about it in our ridings, to encourage citizens to talk about it, and to do all we can to encourage the intermovement of people between the areas of concern and the areas in which they live. If we come from an area which does not seem to be concerned about the issue, we must put the matter on the table and seek together, as Canadians, ways in which to develop solutions which will be acceptable. I am sure that with a proper, mature outlook we will be able to develop solutions which will be acceptable, if not to all Canadians, at least to the majority in each region of this great country.
In my opening remarks I mentioned that I wanted to make a few comments on the energy situation. I choose to do so at this time because it seems to me this is an extremely complex matter. Many Canadians still feel that they are completely uninformed. Therefore, I would like to put on the record a few facts which I think are important. World demand for energy

by the year 1990-13 hears hence-expressed in equivalent barrels of oil, will be roughly 160 million barrels per day, compared with 85 million barrels today. This figure is roughly double. Our situation is really no different and the increase has substantially reduced from that forecast in the early part of the 1970s. The forecast includes the assumption that conservation programs will be meaningful throughout the world, particularly in Europe and North America where there is a massive use of energy.
We do not know what the price of oil will be by 1990. A very informed source mentioned the other day, in conversation, that in his view the price could go to $25 a barrel. That is probably on the high side. On the other hand, we must understand that every time we spend a dollar on imported oil, that contributes to our balance of payment problem. I think the Leader of the Opposition (Mr. Clark) was somewhat irresponsible in his comments yesterday relating to the economy. In my view, he was definitely irresponsible in his comments on the energy situation when he said in his opening remarks: "This means no net imports of oil or of any other major fuel". I belive he was referring at some point earlier to the year 1985. That may be an ultimate goal. If it is an ultimate goal, I suppose it could be realistic, but it certainly is not realistic if he was referring to 1985 or 1990.


Walter David Baker: He didn't say that.


Alan Gray Martin: Canadians will be faced with increasingly heavy imports and an increasingly high bill, and the analyses I have seen by the most prestigious authors indicate no real impact by solar, wind, biomass, geothermal or other sources of energy by the year 2000.
Nuclear energy will be coming in in a bigger way, along with all the problems associated with it; but we must accept that this is probably an alternative which will be unavoidable. More and more, Canadians must address themselves to energy problems. They must discuss them in the way I hope they will discuss, more and more, our problems of national understanding and the economy. The energy situation cannot be segregated from any one of these problems. It has an increasingly high profile and it must occupy that position in the minds of thinking people in this country.
I shall conclude my comments which have dealt with those three areas. I have dealt with the state of the economy, the concern I have about the lack of adequate understanding among the various regions and peoples of this country, and the need for us, as a federal government, to attack those problems directly. That means doing something to encourage the provinces more and more in the field of education. We do not have rights in that field, but we certainly must have some kind of persuasive power. We are elected representatives, too. I have dealt with the energy situation. I solicit more and more concern and attention on the part of the government and Canadians to this increasingly significant problem, which will be very serious within the next 15 to 20 years.
October 20, 1977


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I welcome this opportunity to participate in the throne speech debate in this Silver Jubilee, or twenty-fifth year of the reign of our sovereign Queen, Elizabeth II. We were very fortunate to have Her Majesty present for the opening of the new session of Parliament, and I join with all hon. members of this House who wish her good health and a long life in which to carry out her many and manifold duties.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: The Queen is the living symbol of all that is good for Canada and for the Commonwealth. All of us present in this chamber are part of Canada. What Canada is and what Canada will be depends upon how much you and I and all Canadians participate in and contribute to making it a Canada of which we can all be proud.
At this point I wish to extend my congratulations to the hon. member for Louis-Hebert (Mr. Dawson) and the hon. member for Malpeque (Mr. Wood) for the capable manner in which they moved and seconded the address in reply to the Speech from the Throne.
The presence of Her Majesty at the opening of parliament was significant at this point in our history, for it gave visible evidence of the fact that we have in Canada what is known as responsible government under a constitutional monarchy. Gathered in the Senate-or the other place-were not only the elected members of parliament but also the senators and Her Majesty the Queen. The three, together, constitute the Parliament of Canada, and no single authority can work without the other two. We can pass bills in this House after three readings, and they can be given three readings in the Senate, but they cannot become a legal enactment until they receive royal assent, or the approval of the Queen. This is a fact which, unfortunately, is not readily recognized even today by all members of parliament or by all those who have been granted the temporary right to serve as premiers of our provinces.
Ever since the election of the Parti Quebecois under Rene Levesque, the question of Quebec separating from the rest of Canada and the need for strengthening national unity has been in the spotlight. It has been under discussion and in the hearts and minds of Canadians from the Atlantic to the Pacific. We can no longer pretend that the stunning separatist victory is not splintering our country. No matter how many of the voters who turned to the Parti Quebecois in despair over an inept and corrupt provincial Liberal government do not really want to leave confederation, the fact remains that they have put in power a party whose very reason for existence is the establishment of a separate Quebec state.
With a solid Parti Quebecois majority in the National Assembly, the real question no longer is, "Will Quebec separate?" The question is, "When, and how, will it happen?" The Prime Minister (Mr. Trudeau) maintains that he has no mandate to negotiate any form of separation with any province. That is correct, but unfortunately it does not mean very
The Address-Mr. Crouse
much. He had no mandate, either, for imposing wage and price controls. In fact, he won an election by ridiculing such measures. Having destroyed his credibility, the Prime Minister cannot expect to be readily believed even if what he says is what people really want to hear.
Yesterday the Prime Minister said that he is going to put before the House a proposition about a referendum. Unfortunately, Canadians have to learn the hard way that what matters is not what the Prime Minister says, but what he eventually does. What he does depends upon the requirements of the "new society" jigsaw puzzle that he is putting together. He, and he alone, knows where to fit the pieces.
For quite some time during the Quebec quiet revolution the Prime Minister and Mr. Levesque shared basic political ideas and aspirations. Both fancied themselves then-and do today-as democratic socialists dedicated to the structural transformation of our society and its institutions. In this sense their goals remain similar if not identical.
The Prime Minister wants to restructure Canada from coast to coast, while Mr. Levesque limits his new society blueprints to Quebec for the time being and uses Francophone nationalism for establishing his own sphere of operations. Neither has, as far as I know, renounced his ideological base or his objectives. This means that they disagree only over methods and not over substance.
In his political essay, "The Practice and Theory of Federalism", Pierre Trudeau, the writer, said:
Radicalism in different parts of Canada must be implanted in different fashions.
He also said:
Perhaps even parties with different names may preach the same ideology in different provinces.
Mr. Levesque and his Parti Quebecois are doing exactly that. The Prime Minister's only objection concerns Mr. Levesque's selection of nationalism as the principal tool of socialism. This is not far-fetched speculation on my part, for Mr. Trudeau, the writer, said:
I should like to see socialists feeling free to espouse whatever political trends or to use whatever constitutional tools happen to fit each particular problem at each particular time.
Mr. Levesque could argue that he is following the Prime Minister's advice, and he does-except for his separatism plan, which violates the Prime Minister's injunction, stated as follows:
-federalism must be welcomed as a valuable tool which permits dynamic parties to plant socialist governments in certain provinces from which the seed of radicalism can slowly spread.
That is the only point on which these two French Canadian socialists really clash. It is also the point on which Mr. Levesque parted company with the Liberal party in Quebec just at the time the Prime Minister was beginning to exploit his switch to the Grits from the impotent New Democratic Party-where both he and Mr. Levesque belong. Neither the Prime Minister nor Mr. Levesque is likely voluntarily to give up his chosen approach to the building of socialist strongholds in Canada. It should not be impossible, however, or even too
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October 20, 1977
The Address-Mr. Crouse
difficult for them to work out parallel and even mutually advantageous courses of action if given sufficient time.
I mention these facts because there are, obviously, still some people in Canada who believe that the Prime Minister is the only one capable of dealing with his separatist colleague in Quebec.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: I hear some applause from the other side, Mr. Speaker.


An hon. Member:: Very little.


Lloyd Roseville Crouse: Because of the sameness of their ideological backgrounds, nothing could be further from the truth. To follow this type of logic can only be compared to the thinking of the passenger on the Titanic who moved his deck chair from the lower level to the upper deck for greater safety.
The Prime Minister knows that the present language laws of Quebec are unconstitutional. He also knows that the quickest way to settle the legal status of the legislation is to refer it to the Supreme Court of Canada for a ruling. This action can only be taken by the Prime Minister, and although it may not be politically popular in the province where he said he would live if it separated, it is an action that he should take if he would assume his full and proper responsibilities as Prime Minister of this country.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: In my opinion, if the Prime Minister is not prepared to carry out his duties as they apply to all Canadians, then he should have the common decency to resign his position and let someone take over the office who is willing to govern fairly and equitably Canadians in all parts of this country.
There are a number of sections in the British North America Act which substantiate my statement that the Prime Minister and his government are not facing up to their responsibilities. I shall not quote all the sections, but I read them backward and forward this summer during the recess and found that section 93, for example, is relevant. It reads as follows:
In and for each province the legislature may exclusively make laws in relation to education, subject and according to the following provisions:-
(1) Nothing in any such law shall prejudicially affect any right or privilege with respect to denominational schools which any class of persons have by law in the province at the Union-
Subsections (2) and (3) of section 93 spell out clearly that all the powers, privileges and duties conferred by law at the time of Union shall be the same for the Queen's Protestant and Roman Catholic subjects in Quebec. Subsection (4) of section 93 states quite clearly that in case no provincial law which guarantees equal rights is made, then the Parliament of Canada-I repeat, Mr. Speaker, the Parliament of Canada-may make remedial laws for the due execution of section 93.

I ask you, sir, why has this not been done? Why has section 93 of the British North America Act, along with a similar section, section 129, been ignored? We are also ignoring, today, section 133 which guarantees the right to speak English or French in the Parliament of Canada as well as in the legislature of Quebec. Why have we gone beyond this requirement in the British North America Act? The throne speech states that we can expect new measures relating to the constitution. I ask the Prime Minister and any minister in his cabinet, if they do not respect the present laws in the British North America Act, how can we expect them to uphold any new changes that may be made in the constitution?


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: I submit that the Prime Minister and his government, by deliberately sidestepping their responsibilities as spelled out in the British North America Act and in the Canadian Bill of Rights as assented to on August 10, 1960, are guilty of carrying out the most massive "con" job on the Canadian people that we have ever witnessed in the history of this country. How many Canadians today can stand and say, in the words as written in the Bill of Rights by that former great prime minister, the right hon. member for Prince Albert (Mr. Diefenbaker):
I am a Canadian, a free Canadian, free to speak without fear, free to worship God in my own way, free to stand for what I think right, free to oppose what I believe wrong, free to choose those who shall govern my country. This heritage of freedom I pledge to uphold for myself and all mankind.
Unfortunately, Mr. Speaker, not too many in the Liberal caucus today can stand and repeat those words. The members of the government party have been muzzled. They have conformed only too readily to their leader's description, when he wrote in Cite Libre, to quote the Prime Minister in an earlier day "the Liberals are a bunch of idiots" and "a spineless herd that run like animals to the trough". That is what the Prime Minister thinks of the Liberal party.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: How else can one explain the silence of the Liberals, who are today the governing party in Canada, and their denial to some Canadians of their basic human rights? The Bill of Rights provides, among other things, the right of the individual to equality before the law, the protection of the law, freedom of religion, freedom of speech, freedom of assembly and association, and freedom of the press. There is more, Mr. Speaker, but I would point out that already some of the guarantees of the Canadian Bill of Rights have been abridged by this government which has failed to carry out its responsibilities.
This failure to govern justly and in accordance with the law has been excused by the Prime Minister and his colleagues as being necessary, for to do otherwise, they say, would affect our national identity and national unity, which they claim is our biggest problem-bigger even than unemployment, inflation, lawlessness, violence, moral decay and the general social
October 20, 1977

breakdown which has occurred in Canada under nine years of the Trudeau administration.
I agree, Mr. Speaker, that the paramount issue of our times is not inflation, unemployment and the resulting social unrest caused by these two evils. Serious as these problems are, they are not insurmountable. The discomfort, unrest and concern that they cause will eventually force people to act and to put things straight, provided that the reform machinery of the democratic system has not been too badly damaged or destroyed during the Trudeau years.
In my opinion, the paramount issue of our time is, therefore, the preservation of our democratic system. This means the preservation of our basic freedoms which we tend to take as our birthright and which are threatened today as never before by the sanctimonous hypocrisy of the present Liberal administration. Unfortunately, most Canadians take their personal and political freedoms as much for granted as the air that they breathe. This may be due to the fact that through an accident of history or geography we are located in one of the most sheltered and secure spots on the world map. It is no exaggeration to say that had our southern neighbour been a country like Germany or Russia, Canada may not have emerged from the colonial stage as a separate political entity. It is, therefore, rather obvious that Canada exists today as a self-governing, free country only because it is lucky enough to have democratic America as its big neighbour along the longest undefended border in the world.
Moreover, as I view the new wave of totalitarianism which is clearly under way, it is equally obvious that the one and only real safeguard of the freedoms we take for granted is America's strength. Alone, Mr. Speaker, we are defenceless. Whether we like it or not, whether we admit it or not, it is a simple and self-evident fact that only the United States among the democracies still has the power to make a direct attack on any member of the Atlantic alliance too risky. It is that power, and nothing else, which has kept the armies and the tanks of the Soviet Union behind the iron curtain under what is called detente. For years the primary objective of communist strategy has been the splintering of NATO and the isolation of the United States. Under the present government, Canada has been a willing pawn in this power play. We have reduced our contribution to NATO. We have reduced our armed forces to something like 72,000 people.


Mr. Danson:: It is 78,000.


Lloyd Roseville Crouse: The Minister of National Defence (Mr. Danson) has corrected me; he says it is not 72,000, but 78,000. That is only four times more than the communist forces that we are indirectly helping finance in a war of aggression in Angola. It is a shameful participation in NATO and in the detente that we share in enforcing throughout the world. I say to you, sir, that we are facing dangerous times.
None of these acts by the present administration has gone unnoticed by the United States, whose leaders can well recall that it was our Prime Minister who went to Moscow and ranted about American threats to our identity from a cultural,
The Address-Mr. Crouse
economic and perhaps even military point of view. Just imagine where those words were said, Mr. Speaker. "Please come in and save us from the threat of American aggression"! Nationalism, therefore, as it is presently being-


Barnett Jerome Danson: He did not say that.


Lloyd Roseville Crouse: The Minister of National Defence can make his own speech, but I happen to have the Prime Minister's address in my office. If the minister does not happen to have it, I will supply him with a copy, which states very clearly the words 1 have repeated. I took those words from the Prime Minister's speech; I just copied them, and they are exactly as he uttered them when he was in the Soviet Union. So let us not have any foolishness on that score. I know that the Minister of National Defence is quite capable of taking care of himself, but I have quoted to this House and to the people of Canada the words of our Prime Minister. If the minister is ashamed of them, he can make his own defence of the Prime Minister at another time.
Nationalism as it is presently being practised in Canada through its Quebec separatist version, with the underhanded approval of our Prime Minister and his government, is as destructive today as it is out of date. At stake in this abrogation of responsibility by the Prime Minister and his cabinet is not our identity-as he implies-but, rather, our total freedom. That is what is at stake.
Faced with these facts, faced with the mismanagement of our economy and our blundering nationally and internationally, Canadians do not need to wonder about the loss of confidence in our country by Canadian and international investors. Our dollar has dropped from a peak one year ago of something like $1.03 to 89 cents the other day. And is it any wonder? What else can we expect when Jean-Luc Pepin says publicly that it may be too late to save Canada? This buttresses my contention that he and his colleagues should never have been appointed to lead the Canadian unity debate. This work and most of our royal commissions should be under the chairmanship of someone in the Canadian Senate. After all, some four former premiers sit in the Senate as senators, yet one of them has so little to do in the Senate that he has time to draw his full pay as senator and also draw his full pay as president of Dalhousie University.
I believe that the Senate should be retained, but I also believe that it should be put to work in the manner I have described. We could then put some of the best business and legal brains to work on some of our major problems. As we are all well aware, these problems are manifold, and the words in the Speech from the Throne are the clearest admission to date by the Trudeau government that its economic policies are not working and must be changed. Business failures, with the consequent loss of millions of dollars, are taking place at an unprecedented rate across Canada this year and are expected to continue at an accelerated pace in 1978 and beyond.
The latest figures show that as of August 18, business failures reached 2,612-an increase of 29 per cent from what

October 20, 1977
The Address-Mr. Crouse
was a record figure last year of 2,030. At this rate, bankruptcy losses by the end of 1977 could easily reach $600,000 or more. This is why Maclean's magazine, in its September 19 issue, carried as its headline "Big Mac's Big Mess". In fact, the article pointed out that neither Walter Gordon, Mitchell Sharp, Edgar Benson or John Turner, "Big Mac's" predecessors, were capable of coming even close to predicting the budget deficit.
Headlines state this year's deficit could be a record $8 billion, so it is understandable why the finance minister resigned. The whole government should resign, along with the high-priced bureaucratic advisers who have got us into this financial mess. You may well say, "It is easy to criticize, but what do you propose as an alternative?" I just made one proposal-put the senators to work. That would cut down on the money being wasted on royal commissions. That is as good a place as any to start.
The ad hoc measures which have been the hallmark of this government must cease. This country is crying out for leadership. This applies to our citizens whether they are engaged in agriculture, fisheries, forestry, mining, or whether in large or small business. What seems to be lacking is a sense of direction, a forward plan. We need, at the very least, a three-year plan, with an immediate objective in the field of economic management, to strive for stable economic recovery in order to stabilize employment. The present economic situation simply cannot be allowed to continue.
Confidence is lacking. In fact, confidence in Canada has been destroyed. No sensible individual or company will take a chance by investing capital in any industry in Canada when governments at all levels-federal, provincial and municipal- are now spending $84.2 billion a year, which works out to almost 42 per cent cent of our $202 billion gross national product. Twelve months ago, 60 per cent of the economy was still in the private sector. Now it has shrunk to 58.4 per cent. Whether we like it or not, we simply must cut back on the frills. We must cut down unnecessary government spending and rearrange our spending priorities in a manner that will stimulate the private sector.


Some hon. Members:: Hear, hear!


An hon. Member:: No more Mirabels.


Lloyd Roseville Crouse: As one of my colleagues has stated, no more Mirabels, no more $500 million blunders.
In Atlantic Canada, the fishing industry is crying out for a definite government policy that will encourage its gradual expansion. Despite the declaration of a 200-mile limit on January 1, 1977, some 70 per cent of the fish caught off our coasts is still harvested by foreign fleets. Our packing and processing plants are not operating at capacity. Our fishermen, given the proper equipment, could harvest an estimated $1 billion a year crop, but they are handicapped by government rules ard regulations and by lack of investment capital. There is a growing feeling in Atlantic Canada that the federal government is intentionally delaying the regrowth and develop-

ment of our fishery in order to accommodate foreign fleets whose countries serve as a market for western wheat and central Canadian industry.
Obviously, the present fisheries minister does not want the Canadian fishing fleet to be rebuilt, because this would require the phasing out of foreign fishing efforts, an action the present government is not prepared to take. How can the present government and its apologists explain the fact that the fishing industry and a development policy for the industry is not even mentioned in the Speech from the Throne? Since we do not have one single Canadian registered ship capable of catching and freezing roundnose grenadier, silver hake, argentines, squid, capelin or offshore mackerel-all species of fish which are soft in texture and which must be frozen as quickly as possible after removal from the ocean-our unemployed citizens are asking why this absurd situation is allowed to continue.
Our unemployed shipbuilders are asking why suitable ships cannot be built. Our unemployed contractors, electricians and plumbers are asking why cold storage facilities cannot be built. They are required right now in places like La Scie and Twillingate, in Newfoundland, and Vogler's Cove in Nova Scotia. Our businessmen are asking why marketing and sales machinery cannot be established, and why fishermen and other required specialists for this new fishery cannot be trained.
The Minister of Fisheries (Mr. LeBlanc) has stated in the press, over television, and yesterday in response to my question in this House, that it is useless to consider rebuilding the fleet at this time, since Canadian ships would simply be replacing foreign ships in depleting the fish stocks on our continental shelf. This is nothing more than nonsense. It is incorrect and untrue. Canadians cannot deplete the species I mentioned, for we do not have one ship of our own with the capability of catching and freezing these fish. However, the foreign fleets have this capability and they also have the markets. While the minister sits in his seat, wrings his hands and tries to make political hay and says nothing can be done, the foreign fleets still continue to denude our banks of fish, while our two major "industries" in Atlantic Canada, namely, welfare and unemployment, continue to expand at an accelerated pace.
The minister and his colleagues are seemingly unaware that if we had started yesterday on the construction of at least two freezer trawlers which are a minimum of 240 feet in length and have a capability of operating in distant areas, it would be two years at least before one new ship would be delivered. In the meantime, our fishermen should be trained to operate freezer trawlers so they can learn the new technology that is required in order to be successful.
To encourage new ship construction or replacements for old ships, we should consider establishing a system of investment allowances as a form of tax remission. To put it briefly, under this system-and this is only to illustrate the principle-if a ship cost $100 built in Canada, it would be set up on the books at $175 for depreciation purposes. Investment allowances is a method used extensively in Europe. Because it must be earned,
October 20, 1977

used by the same company and subject to recapture, it costs the government nothing directly.
The same rule of thumb could apply to our inshore fishermen on the Atlantic coast and the British Columbia coast who also require new ships in the 45-foot to 65-foot class. Since these ships are generally built of wood, an inshore fleet development plan would spark a chain reaction in the production of jobs throughout the whole of Atlantic Canada and, indeed, in all parts of Canada. Since the Fisheries Improvement Loans Act, through the banks, does not seem to be working, there should also be set up a central mortgage and shipping corporation to provide fisheries development funds at special rates to fishermen desirous of upgrading their boats and equipment.
The same lack of planning is seriously affecting the development of agriculture in my province. Due to mismanagement of the entire economy, approximately 35 cents out of the average Nova Scotian's food dollar finds its way back to the farmer. The rest is gobbled up by freight charges, shipping charges, processing and packing charges between the time commodities leave the farm and are purchased by consumers. Even though agriculture in Nova Scotia is one of our oldest basic primary industries, after centuries of farming there is still no vehicle available to producers which provides them with a suitable income for an honest day's work.
Canada has always had a cheap food policy, but what the farmer receives today for his labours and what the consumer pays for his products bears no relationship one to the other. As a result of this situation, the ratio of farmers to the population is declining. While they are producing more food than ever, we have to ask ourselves whether or not we want the agricultural industry in Nova Scotia to continue.


The Acting Speaker (Mr. Turner):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue only with unanimous consent. Does the hon. member have unanimous consent?


Some hon. Members:: Agreed.


Lloyd Roseville Crouse: Thank you, Mr. Speaker. I will only be another minute. The capital investment in the average farm for land, equipment, buildings, feed and other expenditures is massive, and some form of stabilization program has to be worked out to enable our farmers to remain in business.
In closing, I say to this House that if the economic problems of Canadians are resolved, there will be an easing of the political and social difficulties throughout Canada. However, if our economic problems are not resolved, our social and political problems will compound. The longer the delay, the more severe will be the adverse consequences of that delay. For all these reasons I intend to support the amendment moved by my leader, which clearly states that we no longer have any confidence in this government.
The Address-Mr. Francis


Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, first of all I should like to congratulate the mover and the seconder of the address for their contribution to our proceedings, one which, I am sure, augurs well for both of them.
I should like to deal with two major areas: first, bill 101 and the tactics of the government of Canada with respect to it, and then with some of the problems of the national capital region.

First of all, Mr. Speaker, I would like to thank my colleague, the hon. member for Maisonneuve-Rosemont (Mr. Joyal). I have read and reread the speech he delivered in this House on October 19, 1976. He discussed minority rights and everything that happened in the province of Manitoba in the 1890's.

A year ago in this House my hon. friend from Maisonneuve-Rosemont (Mr. Joyal) dealt most eloquently with the injustices which were perpetrated on a minority language group in the province of Manitoba. His words today reflect a sincerity and conviction which for me carried just as much weight now as they did then. I differ from my hon. friend in my views respecting many areas of his speech, particularly with regard to the treatment of public servants, but I stand with him on the question of minority language rights, along with other members of the House. I welcomed the statement of the Prime Minister (Mr. Trudeau) that bilingualism is to be the very cornerstone of our approach to national unity and that it will have to be written into the Constitution of Canada in some way so as to guarantee absolutely the equality of the two official language groups from coast to coast. There is no question in my mind that this must be the ultimate objective.
It is perhaps worth while reviewing the events which took place in Manitoba in the years following the action of that province in 1890. When my hon. friend from Maisonneuve-Rosemont first spoke on this matter, my reaction was to think, "This was a long time ago, and I cannot atone for the sins of my forefathers. Nevertheless, I am quite prepared to admit that an injustice was done and to do all I can to correct it." Someone has said that a nation which cannot learn from the past is doomed to repeat it. In 1890, the government of Manitoba abolished, by resolution, the use of the French language in the legislature. It then proceeded to enact legislation abolishing separate schools. Both the Anglicans and the Roman Catholics appealed to the Supreme Court of Canada and then went to the Privy Council, where lay the ultimate decision as to the constitutionality of the legislation. The bulk of the legislation was held to be valid and constitutional. Then the minority group in Manitoba appealed to the federal cabinet under section 22(2) of the Manitoba Act of 1870. That section is parallel to section 93 of the BN A Act under which a similar appeal would still lie. The cabinet of the day listened to the minority appeal, but Sir John A. Macdonald died in 1891 and in the five years following his death four ill-remembered

October 20, 1977
The Address-Mr. Francis
men succeeded him as prime minister. It fell to Sir Mackenzie Bowell-

-the leader of Canada's Orangemen, the then Prime Minister to stand for minority rights. The Conservative government introduced measures in Parliament for the protection of minority rights. The 1977 Liberal government must do the same to protect minority rights.

Mackenzie Bowell said they would ask the Privy Council whether an appeal by the minority lay with the cabinet of Canada. The answer was yes. There were public hearings, and the government of the day introduced a remedial order instructing the restoration of the separate schools. The government of Manitoba did nothing. Then the government of Canada, under Sir Mackenzie Bowell, introduced a remedial bill which was debated at great length. It was filibustered, and failed to pass by the time the life of the parliament expired in 1896.
When Laurier came to power with the Liberals in 1896, a compromise was negotiated with Manitoba which for the first time provided a legislative base for the instruction and use of the French language in the schools of that province. It was an act of shame by the province when, some 20 years later, that right was abolished. However, we can be proud that it was subsequently restored and has been enlarged and strengthened by the province in recent years.
As a result of that situation, when the government of the day realized it could not disallow a bill which was clearly within provincial competence, Blake introduced a resolution in the House of Commons in 1890. The resolution said the government should have the option of going before a court of the land to determine the constitutionality of the bill. Sir John A. Macdonald supported the resolution and it was passed after debate, becoming the basis of section 55 of the Supreme Court of Canada Act.
I sincerely hope that a matter as delicate and as fundamental as this will not become the subject of partisan political politics. I welcome the statement by the Prime Minister with regard to a referendum. The leader of the New Democratic Party said there was no reason for a referendum. One very good reason would be that it could be conducted in the two official languages. There is no reason to think that the referendum of the Parti Quebecois will be conducted in the two official languages. The federal initiative on a referendum is a very wise and good measure which I am pleased to support.
I was pleased to hear the Prime Minister say that a flexible attitude will be maintained with regard to federal-provincial negotiations. It is my sincere hope that there will be a testing of the constitutionality of this provision. It is significant that the sections of the Manitoba legislation which were tested related to schools and not to the abolition of language rights. They were not tested untii 1909 and 1916, 19 years and 26 years after the legislation, respectively. It is not the right thing

to leave private parties at their own initiative and expense to test piecemeal before the courts, over a long period of time, before constitutionality can be established. Machinery was created as a result of the previous experience which allowed an option for the government to examine.
A great bulk of the legislation in Bill 101, which I have read carefully, will be declared constitutional; some sections will not. But I hope there will be an orderly testing of those sections which are not constitutional. One cannot count on the actions of private parties to initiate these matters. If the government were to refer the question to the courts, the argument would run that there is no way in which the country would win. If the legislation were found constitutional, of course, that would set the seal of approval upon it. If it were found unconstitutional, it would be an Anglophone court which would impose this upon the province. That would give Mr. Levesque an election issue.
The legislation is either constitutional or it is not. If it is constitutional, a reference to the courts will not change anything. The argument is that an Anglophone-dominated court is going to do it. The superior courts of Quebec are Francophone-dominated. One could also argue, "How are the Anglophone minority groups in the province of Quebec going to get a fair hearing?" The argument is that the Federal Court cannot test it because it is dominated by Anglophones, but meanwhile all the testing is by courts dominated by Francophones in the province of Quebec.
If the courts were to declare the legislation constitutional, there would be an option available to the minority, under section 93 of the British North America Act, to make an appeal to the federal cabinet. That was the parallel option which the aggrieved minorities in the province of Manitoba utilized so effectively following the legislation of 1890 and the decisions of the Privy Council. I hope the answer of the government of the day will be, if minority groups were to appeal to the cabinet, "We will do as much for you as the Conservative government did in 1895 for minorities. We will give you a fair hearing. We will consider the remedial measures." I hope the cabinet would not say, "This is coming to mother for things you should not come to mother about". Confederation means just that, that there is an appeal to some kind of central authority which will assume responsibility for minority rights across the country and is prepared to take the consequences of taking a stand for minority rights.
I am not sure I understood the Prime Minister's remarks correctly. I should like to quote from Hansard of October 19, 1977, page 38, as follows:
The French language and culture must be preserved in the province of Quebec, but it must also be preserved among the French-speaking minorities in the other provinces, in the same way as we suggest that the English-speaking majority in the other provinces must of course ensure the preservation of its own language and culture in the province of Quebec for the English-speaking minority.
Is it the responsibility of the other nine provinces to preserve the English language and culture in the province of Quebec? The Prime Minister said that if this is not done, we will have the two solitudes; we will have a province speaking only French and the rest of Canada speaking only English, and
October 20, 1977

there is no future. I agree. But what is the business of confederation all about on the fiscal front, the civil rights front and all fronts, unless an aggrieved minority can come to mother whenever it has a problem?
My good friend and colleague, the hon. member for Maison-neuve-Rosemont, made an eloquent statement with respect to what happens to a nation if it does not respect minority language rights. I hope he will agree with me that the crisis of language rights in respect of a minority in Quebec is as serious today as it was in 1895 in the province of Manitoba, where Francophone rights were very abruptly, unjustly and wrongly abused by the government of the day.
I know there are others who will participate in this debate, and I realize the Speech from the Throne gave a general outline on the matters we should be concerned about. I should like to refer briefly to two or three matters which give me concern. The Speech from the Throne of September 30, 1974, reads in part as follows:
Amendments will be proposed to the Public Service Staff Relations Act.
The Speech from the Throne of October 12, 1976, reads in part as follows:
Measures will be proposed to improve the collective bargaining system in the public service, to reduce the adversarial nature of the process and to ensure an equitable relationship between compensation levels in the public and private sectors.
In 1974, the Finkelman report was made public. It was an excellent document prepared by the former chairman of the Public Service Staff Relations Board. It was referred to a joint committee of this House and the other place. A report was brought down in January, 1976, recommending very extensive improvements to the Public Service Staff Relations Act. Then, when we had a strike of the air traffic controllers this summer, this House had to legislate to bring them back to work.
I did not participate in that debate because I had to wrestle with my conscience on the balance of responsibility, whether I should participate, extend the debate and extend the strike, or whether I should defer my comments to a later date. I chose the latter. There will be more strikes, there will be more disruptions, and there will be more trouble if the government does not come to grips with the Public Service Staff Relation Act and the Public Service Employment Act.
On February 4, 1977, the president of the privy council made a statement to this House announcing a special inquiry on the Public Service Employment Act. I have endeavoured to catch Your Honour's eye in order to ask questions relating to whether a chairman has been appointed to this special inquiry. It is now 816 months later. There were two individuals named: the one on the official side was Mr. Brittain, and the one on the employees' side was Mr. Davidge. I have had no indication of any public hearings or activity. This inquiry is long overdue.
I should like to say a word or two about the National Capital Commission. In 1974, we had the benefit of two reports prepared by Mr. Douglas Fullerton, a former chairman of the National Capital Commission. These were extensive as a result of an inquiry conducted at public expense. While I did not agree with the conclusions, I felt the analysis was exhaus-
The Address-Mr. Francis
tive and the point of view was refreshing. The hon. member for Hull (Mr. Isabelle) found the bulk of the recommendations to his liking. While I had some differences, I respected the very careful work and preparation which had taken place.
That report was referred to a special joint committee of this House and the other place. The committee held very extensive hearings. The Premier of Nova Scotia appeared before the committee as a witness, as did the finance minister of Saskatchewan, other provincial cabinet ministers, heads of regional governments, and, representations of all regional councils. There were public hearings with citizens' committees. That committee undertook to do an extensive and thorough job, but unfortunately it completed its hearings close to the end of the session.
It is my sincere hope that the committee will be reconstituted in order that it can prepare a report for the government. The government could stand just a little advice as to what could be done to improve relationships among regional municipalities, provincial authorities, provincial members of parliament and federal members of parliament. Some of us who have observed events over a period of time have views as to how matters can be improved. I have the honour of representing Ottawa West. There are problems in that constituency as well as in neighbouring constituencies.
I am referring to a problem in adjusting to a series of moves which appear not to have been too well co-ordinated. In 1975, the report of the National Capital Commission suggested that
25.000	jobs would be moved out of the Ottawa-Hull region as part of the government's decentralization program. That program has been implemented in various stages. There was the recent announcement by the new Minister of Finance (Mr. Chretien) indicating perhaps the latest stage in this program. In addition, there is the relocation to Hull. Perhaps 15,000 to
20.000	positions are being moved to that city. The net result has been the abandonment of some six million square feet of office space in the city of Ottawa, two million square feet of which represented temporary structures which could be demolished, and four million square feet of which was privately leased accommodation. That accommodation is now available at bargain rates for office and commercial accommodation for anyone who wants to locate in the national capital.
On top of this we have restraint on the hiring of public servants, which is long overdue and perfectly justified, there is no question about it. But what does the National Capital Commission advise, with all these streams of information in its hands-the body with the experts, the body whose duty it is to advise the government what to do? Its advice is to go ahead with two satellite communities of 100,000 people each, one in the Carlsbad region, in the southeastern section of the city, and the other in the Aylmer region in Quebec, with a transportation corridor linking them.
They published a document called "Invitation to Dialogue". Dialogue should have taken place between one arm of the NCC and another arm before they published the document,

October 20, 1977
The Address-Mr. Francis
because they just did not put A and B together and they did not draw conclusions as to the growth of the national capital. As a result, the province of Ontario acquired several thousand acres of land for a land bank, and there has been a little friction over this misunderstanding. The province does not feel it can proceed and that, indeed, it has been induced to acquire land which it cannot turn to any useful purpose at this point. This is an understandable reaction, Mr. Speaker.
Although I welcome the new chairman and the new minister, both of whom are fully aware of their responsibilities in this area, the expression of federal interest in the national capital through a Crown corporation has, even by its concept, certain limitations. The Auditor General has made a number of observations on the conduct of the affairs of this corporation, observations which are not complimentary. A number of other events have given us reason for concern, and I know the new chairman is taking stock of the problems he has inherited. I look forward to a much better relationship between the minister, the new chairman and the regional municipalities. The problem has been compounded on the Quebec side by the developments since November 15 and the election of the Parti Quebecois government-
[ Translation]
-member Jocelyne Ouellette, the minister responsible for the region, who simply dislikes the federal government and simply says that she intends to give them the boot.

The minister who has been elected has adopted a very belligerent and hostile attitude toward any federal activities in this area. The task still remains of sorting out the respective responsibilities of the Department of Public Works, the Department of Transport, the NCC and the various arms of the federal authority in this area in order to develop rational and reasonable long-term plans and present them to the regional planning board in a co-operative way-not a dictatorial way; not by threats such as, "You must do this" or, "You cannot cross federal lands" in an attempt to lay down, in an unco-operative and dictatorial way, to the regional municipalities and their elected officers what they must or must not do.
Those of us who visited Washington were impressed with the federal agency in Washington, the National Capital Planning Commission, which is not permitted to own an acre of land and which is kept in a purely advisory capacity, in great contrast to the situation in Ottawa. I think the government of the day could profit from a report by this committee, putting together the evidence it has acquired and presenting it to the people of Canada and to this parliament for appropriate action.
I do not like to sound negative, because one does not achieve very much by doing that. I hope that what I have said has called to the attention of the government some measures that are urgent and essential to the good government of this country through the public service and to the good government

of the national capital through the instruments that it chooses to exercise.


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, to read the throne speech one would think that Canada is the whole world, that wrestling with the economy and the national unity question has exhausted this government. Despite our position of influence on the Security Council of the United Nations, the government has no international initiatives to offer. Apparently we do not even need to think about the international scene. When our house is in order, then we will be able to live happily ever after.
How different is reality? Terrorism, international murder, skyjacking, are direct frontal attacks on modern society-as we have seem in Europe this week-yet the government ignores these new realities.
Human rights violations are spreading, and political prisoners are increasing, but the government has nothing to say, not even a word of congratulation to Amnesty International which deserves the commendation of all members of the House for being awarded the 1977 Nobel Peace Prize for its efforts to free prisoners of conscience and abolish torture.


Some hon. Members:: Hear, hear!


Douglas Roche: The list of global problems is awe inspiring. There is the rapidly escalating arms race, the increasing danger of the proliferation of nuclear weapons, racism in Africa, shortages and maldistribution of food, population pressures, the threat to the environment, the persistence of massive poverty, the competition for control of marine resources, the complex problems of energy, the dwindling supplies of nonrenewable resources, and the whole spectrum of international economic ills from inflation, unemployment and indebtedness to problems of unstable commodity and money markets.
Does the government actually think that this conglomeration of problems poses no danger to Canada? It is time for the government to wake up. Canada's interests extend beyond the excessive introspection that characterizes our present stance. What has happened to the vision of Lester B. Pearson who recognized that Canada has a meaningful role to play in international affairs? The exertion of creative leadership in the world community would, in my view, contribute to the solving of our internal problems by giving us a renewed sense of purpose. But the Pearson vision is gone, obliterated by a government which cannot even lead Canadians, let alone the world community.
As Professor John Holmes notes, we have entered middle age as a nation; we have lost the enthusiasm of ideals without having acquired the solid purpose of maturity. Mr. Speaker, new Canadian policies of enlightened internationalism are urgently needed, for modern events tie us more closely than ever to the rest of the world. Our energy future is directly affected by decisions made in the Middle East. Our grain sales depend, in part, on the fields of China and India. Our economic viability as a nation depends on our ability to compete in growing markets abroad. Our security, both physical and
October 20, 1977

spiritual, depends increasingly on the capacity of the developing nations to provide economic and social opportunity to the one billion people who now live in misery. I would have excused the government for saying that all this is too much to solve within the confines of one throne speech. I cannot excuse it for blithely ignoring the real interests of Canada in a new, interdependent global community.
On September 26, the Secretary of State for External Affairs (Mr. Jamieson) went to the United Nations General Assembly to make his annual speech. Tired of the customary platitudes, the minister attacked the UN for its poor performance and warned that the world body was heading for oblivion unless it showed itself to be more effective. This attack may have given vent to the frustrations of the minister about the UN, but his speech would have been much more helpful had he encouraged, rather than scolded, the UN.
The chief value of the UN is that it is gradually building the framework for a legal system to preserve world order. This is a long process, exacerbated by the long confrontation between east and west, and now between north and south. We have the UN's specialized agencies and a string of world conferences on food, population, human settlements, industrialization, the deserts and water-to name just a few-to thank for our new understanding of the limits and constraints on human life and behaviour on this planet. National governments are learning that they must co-operate because of the physical and economic interdependence of the whole planet. But it is a hard lesson and it calls for patience, not short tempers.
The UN cannot force governments to adopt global strategies. It can only use its power of moral persuasion. That is why international consensus is so vital, and why Canada ought to be more aggressive in working to build a consensus which will lead directly to a safer, more just world.
When he was at the UN, the minister announced that, subject to parliamentary approval, Canada would donate $7.5 million in food grain-roughly 50,000 tons-to an emergency grain reserve. The throne speech does not even refer to this commitment. Similarly, the minister chided the UN for not discharging fully or effectively its responsibilities in the field of human rights. Could the government not give the human rights issue its proper priority by raising its voice in the chorus of international concern? The government limits its concern about human rights to the very real cases of family reunification, but that is too narrow an interpretation of this deep, deep issue.
Rather than criticizing the UN, the Canadian government ought to be building world opinion to support the UN Special Session on Disarmament to be held next May and June in New York. The spectre of nuclear war, insists UN Secretary General Kurt Waldheim, "is unquestionably the most terrifying potential threat to us and to future ages". At least six nations now have atomic capability, and two dozen or more are at the threshold, producing as a by-product of their energy
The Address-Mr. Roche
programs the starting kit for several thousand atomic bombs, if they so wish.
Arms spending has now reached $350 billion a year. This magnitude is almost impossible to grasp, but it can be expressed as two-fifths of the combined gross product of all Third World countries. Military uses of science now consume the research work of 400,000 highly qualified scientists and engineers. Exotic names are attached to each new invention and they are always presented as a further consolidation of deterrence. But a single-minded attachment to deterrence has trapped both nuclear powers, the United States and Russia, in a vicious cycle. Each side is now engaged in a technological race for the maximum improvement or perfection of its deterrents.
Bad as the present situation is, it is bound to become worse as nuclear capacity spreads. The possibilities of accident, misinterpretation of orders, theft of nuclear weapons, nuclear terrorism and blackmail would be greatly multiplied in a proliferated nuclear world, the kind of world we are heading into. Whatever value the doctrine of mutual deterrence might have in a bipolar world or in a world of many nuclear powers with great differences in their geopolitical, military and technological positions, those values are now changing. Our world is becoming a more dangerous place because of the spreading military technology which has led the Stockholm International Peace Research Institute to conclude: "The probability of a nuclear world war is steadily increasing".
The scandal of arms is not confined to the nuclear threat. Although the superpowers and the other major industrial nations are the big spenders, the number of Third World countries with highly sophisticated conventional weapons is growing. The Third World's share of world military expenditure has risen from 5 per cent in 1955 to 17 per cent now, but much more dramatic has been the increase in the Third World's share of the international arms trade. About three-quarters of the current global trade in arms is now with the Third World. In fact, military spending of Third World countries in the past decade-I think this is probably the most shameful fact which can be brought before the House today- has increased twice as fast as their economic base and now exceeds the total amount they spend on education and health combined.
The international arms trade links eager sellers and eager buyers, as revealed by the 18-month Lebanese civil war which killed 40,000 people. Arms were smuggled and purchased by both sides, from all factions: east and west, communist and capitalist, idealistic and greedy. The lucrative arms trade around the world not only undermines disarmament talks but is also a direct threat to development because it is an invitation to coups, grotesque overspending on imported weapons, and misplaced priorities. In both a nuclear and conventional sense we are on a path to destruction.
We know what needs to be done to avert a calamity. Efforts to achieve progressive worldwide disarmament must be aimed primarily at balanced mutual arms reductions on three levels: first, on the level of the superpowers where the goal is to

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The Address-Mr. Roche
lessen, if not eliminate, the danger of holocaust; second, on the level of all would-be members of the nuclear club, with the containment of horizontal proliferation as the objective; and third, on the general level of all states, large and small, in order to reduce the chances of war and violence by limiting the amount and destructiveness of arms transferred in international trade.
The Special Session on Disarmament is an attempt to focus world opinion on the arms question. Kurt Waldheim predicts that "it will be the largest, most representative gathering ever convened to consider the question of disarmament". The substantive issues will be a comprehensive test ban agreement, strategic arms limitations, non-proliferation of nuclear weapons, and reduction of the arms trade.
A great amount of preparatory work is under way. Some 45 countries have already given their views about the agenda. The U.S. submission states that if effective disarmament is to be established, the difficulties of definition, balance, verification, conflicting political purpose and insecurity must be addressed. The Canadian government wants the session to produce a basic final political declaration that would lead the way to a further session to actually implement a new co-operative approach to arms control and disarmament.
Already there is concern that the raising of public opinion not create false expectations that would only lead to more public disillusionment and frustration. The best that can be hoped for is that the special session will reach agreement on general principles for effective disarmament measures that will be negotiated at a future date. Even this modest agreement, measured against the present chaos, would be a major accomplishment. It is to this end that I urge the Canadian government to raise its own priorities of involvement in the disarmament session and the preparation for it. For all of this will enable broader studies of comprehensive disarmament programs, including both nuclear and conventional weapons, of reciprocating measures of unilateral restraint, of across the board budget reductions, of the impact on the arms race and disarmament, of the explosive questions of the link between disarmament and a new world order.
I quote a statement made by a famous man a few years ago. He said:
Every gun that is made, every warship launched, every rocket Tired, signifies, in a final sense, a theft from those who hunger and are not fed, from those who are cold and are not clothed.
It was President Eisenhower who said that while he was still in the White House. The joining, then, of disarmament and development problems into a single theme is not a new notion. But we now have a better understanding of how the arms race is literally stealing from the poor of the world. Five presidents later, in his foreign policy speech in June this year at Notre Dame University, Jimmy Carter declared:
We can no longer separate the traditional issues of war and peace from the new global questions of justice, equity and human rights.

Nowhere is the new, positive value of interdependency that characterizes the global village more compelling than in the struggle for justice. The acceleration of scientific and technological developments has opened up the possibility of maximizing the physical, mental and social well-being of everyone. But it is only from the reduction of military expenditure that the vast resources needed for development can be obtained.
Philip Noel-Baker, winner of the Nobel Peace Prize, maintains that the torrent of funds poured into defence should be diverted into the more fruitful waters of development. He said:
Since 1945, the arms race has led governments to spend vast resources on armaments, resources which ought, on grounds of morality, on grounds of equal human justice, on grounds of enlightened self-interest, to have been given instead to ending world poverty. That is how world armaments are the cause of world poverty.
When countries from all regions and at all stages of development are involved in major and minor arms races, little time and less money can be devoted to improving the lives of ordinary citizens. The violation of humanity represented by neglected education, inadequate or non-existent health services, malnutrition and repressive regimes which are shored up by arms from the factories of the rich is a destructive power that seems less devastating than war only because its true magnitude is not easily measured.
Barbara Ward has estimated that the money required for a full program of development of the poor countries over the next decade is only one-half the world's annual bill for weapons. Of course, beating swords into plowshares is a challenge of epic proportions, requiring governmental policies of enlightened internationalism. That is why Canada has a duty to lead and to show the Canadian people by its actions that it is leading.
It simply does not follow that reductions in arms expenditures will automatically divert money into development channels, though it is clear that such reductions are a prerequisite. A public commitment to a "new growth" world community is needed to unleash new and dynamic economic forces that would stimulate creativity, innovation and economic activity across a broad front. If expenditures on war, which are inherently wasteful, can be a stimulus to the economy, how much more value to the real capital stock of our society could be increased production of the goods of life.
Exploring the linkages between disarmament and development requires a moral approach deep enough to reflect the full spiritual and human dignity that every individual derives from his humanity, and responsive enough to cope with the interrelated and interlocking world crisis converging at this moment in history.
The special session of the United Nations offers the world a new opportunity to ensure survival. Mr. Speaker, I suggest that Canada could make a special and distinctive contribution to the success of the special session by convening a panel of all living Nobel Peace laureates to help stimulate public discussion.
We could help to develop a better understanding of the link between disarmament and development by encouraging public
October 20, 1977

research into problems of converting defence industries into civilian ones, by linking development assistance policies to Canadian policies on disarmament, supporting the efforts of the non-governmental organizations, and by working more closely with other countries on the disarmament issue.
Mr. Speaker, if we are to recover for Canada an important role in world affairs, it will be necessary to raise our sights. Enlightened internationalism demands a discernible spirit of co-operation. That is a simple word, but a difficult accomplishment. For example, we have not been co-operating in the development of a safe world community by selling nuclear reactors which increase the risk of horizontal proliferation and impose an inappropriate technology on developing countries. Nor does the government build a true spirit of international co-operation by forming a uranium cartel which drives up the world price of uranium through illegal action. We could do much more to co-operate with the United States, our best friend and our best customer. Finally, we could produce a better spirit of co-operation within Canada by clearly establishing priorities for world peace and justice.


Alan Gray Martin: Mr. Speaker, first of all I want to congratulate my colleagues, the hon. member for Louis-Hebert (Mr. Dawson) and the hon. member for Malpeque (Mr. Wood), the mover and seconder of the address in reply to the Speech from the Throne, for their thoughtful remarks. As they noted, we in Canada are at a decisive turning point in our short history. We are at the kind of turn that is leading us back to the very beginnings of our country. There we find ourselves face to face, as did the founding fathers, with the fundamentals of a constitution, of economic life and, above all, with the most fundamental of questions for us-the terms under which free citizens, Francophone and Anglophone, will live together in the same homeland.
Some seek to improve the mechanics of our relations through constitutional changes-for example, by entrenching official minority language rights-while others want to press down on the accelerator of economic growth.
There are, indeed, many necessary mechanisms in our relationship that do need improvement. Let us improve them soon. The Prime Minister, for his part, has pointed the way to greater unity through essential changes of these kinds and with specific proposals in economic and constitutional fields.

But he has always insisted on the fact that mechanisms will be pointless unless Canadians everywhere in Canada strike at the root of the evil. Truly, the root of that evil is not the constitution, nor the sharing of powers, nor the economy: it is a matter of dignity, the dignity of man.
As for me, I also feel that the ailment which afflicts us too often in Canada is a meanness of spirit. That disease, that lack of generosity of spirit prevents us from dealing with our Francophone compatriots on an equal footing, or from recog-
The Address-Mr. O'Connell
nizing in them a community worthy of our respect, and from giving them the place that is rightfully theirs in all parts of the country and in all spheres of activity in our society. The challenge for us, at this critical point in our history, is to create with them, everywhere in Canada and Quebec itself, a relationship based on dignity and respect. We will have to show that generosity of spirit, to which the right hon. Prime Minister (Mr. Trudeau) invites us, and without which no mechanisms will work. I feel optimistic about a better future, because that generosity of spirit is obvious in an ever increasing number of Canadians, despite obstacles, despite our problems.

That is his position on nationalism. To continue the Canadian federal state as a Canadian reality, we do have to refashion some of the Terms of Union as urgently as we must solve our economic problems. Solving economic problems alone will not

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The Address-Mr. O'Connell
do it. After all, the movement of independence grew over the past 15 years in Canada during one of the periods of our greatest economic growth and development. It grew in good times and in poor economic times. Restoring economic growth, beating inflation, building new homes and curing unemployment will indeed remove causes of discontent and divisiveness. But more fundamental causes are pushing us around that historic corner. It is a turn we can negotiate successfully provided we face the basic issue square on-I do not say that the leader of the New Democratic Party does not face it-and not run after every traditional or standard-type issue in front of us.
In his speech yesterday, the Prime Minister noted that in the 20 years between 1951 and 1971 the real income of Canadians more than doubled; that is, that after considering inflation and taxes, the standard of living, of purchasing power, or however we express it, real income doubled. The point I want to make is that we can do it all over again. It is well within our potential, but not under present industrial policies. We do not yet have the full policy framework to do this all over again, nor the best type of industrial organization to do it, and it is these questions 1 should now like to address.
[ Translation]
The Canadian industry, and more especially the manufacturing sector, is confronting a serious problem more alarming and persistent than an economic cycle and more disturbing than the high rates of inflation and unemployment contributing to its worsening. I am referring to that deep and long-term erosion of forces, erosion which will not be checked by controls over the inflation rate, nor by the thorough development of resources, nor by the construction of a pipeline, nor by launching extensive projects in the field of energy, nor by the higher growth of our service industries which is already quite considerable. That weakening is translated by a constant decrease in our competitive power at the international level due to the high cost of goods, a lack of productivity-the Prime Minister (Mr. Trudeau) said so in his speech yesterday-and also on account of an overly great reliance on technique. This decline is reflected in a constant flagging on the internal market as far as the products derived from both current and advanced technologies are concerned.
We shall not be able to solve the fundamental problems by imposing price and wage controls, by creating new budgetary incentives or reducing the value of our dollar, although these measures may conceal the deep tendencies. In the present economic situation, we cannot admit this downward trend in the industrial sector. In the coming months, we shall have to establish an economic strategy which will start the transfer of the major part of the manufacturing industry in Canada to a more efficient technical base. Only the improvement of this base will enable us to continue and to win the fight to increase our productivity and to deal with the rising costs while maintaining our competitiveness on world markets.

The Science Council of Canada concludes that Canadian manufacturing is in a cul-de-sac. It is in relative long-term decline. It is in a phase of de-industrialization. A committee of this parliament's Senate found that the "general weakness" of Canadian manufacturing has reached "crisis proportions". I would like to propose to my colleagues in the House some elements of an industrial strategy, looking at these issues over the next decade. First, the government and the country must set themselves the goal of an expanded manufacturing sector, viable in the world's economy. I do not think we have that goal today. This means a reversal of present industrial weakness and decline.
It is for the national government to set out within the year a policy framework to support such a commitment. This will require consultations with the provinces, labour organizations and business as urgent and as far-reaching as those under way with respect to the political situation of the country.
In Canada we devote a smaller share of our total economic activity to manufacturing than any other industrialized country. Yet there is little doubt that the potential in Canada for improving productivity by expanded trade in manufactured goods is unsurpassed by any other industrial country. The policy framework and industrial reorganization to achieve this and to set us on that path of doubling our real incomes over the next two decades has yet to be developed by governments together with the main economic partners.
Second, we have to select industrial sectors with the promise of life in them, and concentrate on them. This is not to neglect the other sectors, but it is to concentrate and push forward in selected ones. The most evident ones are transportation, communications, telecommunications, new oceanic industries, resource processing, petrochemicals, plastics and energy, to mention the most evident.
How do we ensure the emergence of internationally competitive units within these industries? Often this will require amalgamations or consortium arrangements, as is happening in the white goods industry. It will require concentration on fewer products and lines. It will mean specialization for the benefit of longer production lines. These are not unfamiliar goals. The point I am making is that the policy framework is not conducive to their realization in the near-term. To encourage this kind of reorganization, government policy must ensure Canadian processors and workers a sufficiently large share of our domestic market in chosen sectors so as to provide the base load for optimum scale production and for specialized production.
An assured market is, moreover, the springboard for expanded trade. In turn, expanded trade reassures occupation of the domestic market. Above all, large-scale specialization based first and foremost on the domestic market is the foundation for research and development and for the resulting engineering of product innovations which alone enables firms to stay competitive.
October 20, 1977

The home market is crucial, yet it is being eroded. A variety of policies will be necessary. Let me illustrate the variety. In textile fibres, where scale is important, retained tariffs and vigorous anti-dumping action will be one component of appropriate policy. In apparel, where scale is not important but low-cost imports are, quotas are the only way. For selected industries or sectors of industry, tariffs should be retained and related to minimum threshold size or base load as one part of over-all industrial policies.
A policy objective, therefore, for Canadian policy-makers and trade negotiators is to ensure that greater home market interaction and complementarity between and within industries in Canada is supported in accord with industrial strategies by selective tariffs and quotas. Protection or support should reduce after a reasonable transition and development period.
Assuring the home market for Canadian producers requires recognition that the industrial process is made up of many interdependent links from raw material to the finished product. This means that some intermediate stages in manufacturing processes, for example plastics producers, makers of components for other enterprises, constitute the crucial domestic market for raw material producers. In turn, such intermediate products need further home market outlets in the form of derivative or other products. Good examples are found throughout the manufacturing sector and are easily illustrated in the petrochemical industry, where large-scale production of basic materials requires domestic markets for base loads, which in turn require further home markets for processing derivatives-for example, ethane, ethylene, polyethylene, polyvinyl chloride.
These linkages and interdependencies throughout the home market are often denied in Canada by the impact of U.S.A. tariffs escalating against the export of such processed intermediate products surplus to the Canadian market. European and Japanese tariffs have a similar impact on Canadian industrial expansion.
A "Buy Canada Act" should be adopted for a transition period of at least ten years, to require in some instances, and encourage in others, the purchase by governments of Canadian products. The industrial policy purpose here is to collect the market or aggregate it in chosen sectors and within criteria to ensure optimum scale and specialization, thus supporting employment and providing the base for product innovation. Such an act should be based on federal-provincial agreement in order to include, for example, provincial hydro systems, and be patterned on the present policies of the U.S.A., Great Britain, Switzerland, Japan and others. This is an objectionable, though necessary, non-tariff barrier designed to support the transition period during which the strategic goal is an expanded, technically efficient, innovative and internationally competitive manufacturing sector.
A further major policy objective for us should be to encourage more Canadian multinationals, like the success stories
The Address-Mr. O'Connell
represented by Massey-Ferguson, ATCO Industries, Northern Telecom, Noranda, Polysar, McCain Foods, Wajax Industries, Dominion Road Machinery and Electrolyser Corporation. What is the point of encouraging Canadian-based multinationals? It is partly to attain scale, partly for the broad base upon which to specialize production by plant and by country, and partly to expand production through trade based on this successful form of industrial organization.
The most important lesson to be learned from these Canadian multinationals is that they do their research and development and their resulting engineering for product innovation here in Canada. In fact, all multinationals reserve their principal research and development and product innovation for the home country, thus giving the parent company a world edge in new products as well as weight and influence in determining world market shares for its subsidiaries. On the other hand, subsidiaries are starved of technological development capability and, like much of Canadian industry, become trapped in the cul-de-sac of technological dependency at the very time when domestic ability in product innovation turns the key to international competitiveness. The source of success of Canadian multinationals is their Canadian-based capacity to innovate.
The recent Senate hearings make this point in case after case. ATCO, for example, established a new world industry for remote region housing and other buildings during what Ron Southern calls "a great innovative period" in that company. Northern Telecom became a world leader in telecommunications technology and innovative manufacturing based on Canadian research and development when court action in the United States forced it to separate from its U.S. parent and sink or swim in Canada.
Massey-Ferguson lead the world as the result of innovations in the design and construction of combine harvesters; the Canadian steel companies lead North America through innovations based on their domestic research, development and engineering. Dominion Road Machinery of Goderich, a Canadian-owned firm, is the world leader in motor road graders, based on its own research and development, on its innovations in design and manufacturing and on strict product specialization. All do not merit roses. The subsidiaries of a few foreign multinationals in Canada do well, but most do not because of dependency on parent company technology. This weakens Canadian capacity.
The testimony is clear. It takes size, export markets and, above all, an assured sizeable domestic market to succeed. But it is the related research and development and the entrepreneurial innovation that is central to the whole industrial process in today's conditions. The critical weakness in much of Canadian manufacturing is its lack of capacity to innovate. The branch plants of foreign parents are useless so far as innovation goes. The more developed subsidiaries of foreign parents have mixed records. Canadian strategy must, therefore, promote Canadian-based multinationals in order to ensure a home base for research and development and for innovation. Without this, general incentives for research and development will prove ineffective.

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The Address-Mr. O'Connell
Encouraging multinationals really means encouraging Canadian companies to establish their own subsidiary assembly, processing and manufacturing plants in foreign trade areas as well as joint ventures with companies in host countries while retaining research, development and product innovation in Canada. Such foreign subsidiary operations lead to major benefits to the Canadian home market in terms of components shipped to subsidiaries abroad or in additional head office employment, as well as the attraction of top managerial talent and the valuable research, development and innovation advantages. Multinational activity fosters specialization and, indeed, obliges innovation, thus ensuring the maintenance of position in the home market and expanded opportunities in foreign markets.
New guidelines should be issued through the Foreign Investment Review Agency to align its decisions with the industrial policy objective of building Canadian-owned and controlled firms in chosen sectors with the capability to attain size, specialization and innovation.
A key element of industrial strategy is the adoption of policies for further processing as far as the market permits, and even further for transitional periods when strategic goals are being pursued. For example, there is further scope for the manufacture and export of fabricated metal products. Asbestos processing has become a major objective of Quebec industrial policy. Food and other agricultural products' processing is an objective of western Canada, as is the further processing of petrochemicals, uranium, heavy oil and forest products. In the Atlantic area, the processing of fish, agricultural products and forest products is central to the objectives being fostered, as is the development of new marine industries to take advantage of the 200-mile economic zone.
Significant impediments to processing are United States, Japanese and European tariffs as they escalate against each further stage of processing. Nevertheless, we should set the processing goal in front and centre and adapt our trade initiatives, freight rate policies, regional development policies, domestic market shares and other policies to reach the goal.
Another element of strategy is to ask parliament for a special small business act to highlight and focus the policy commitment to serve the needs of the small owner-managed sector. The act would consolidate existing programs and generate a coherent set of policies ranging, for example, from manpower training and management training to small business consortia, new venture formation, a fair share of procurement for small independent firms through set-aside programs, and access to financing. The sector singled out here is composed of small and medium sized but independent business firms formally represented by a single plant. This sector is usually more labour-intensive than capital or energy-intensive. It is often community-oriented, or serves regional markets. Many play a substantial role as subcontractors to large firms. They cover some 95 per cent of all businesses in Canada and are estimated to provide over one-half of all Canadian jobs. Their productivity, cost competitiveness and capacity to innovate are important to trade and to import replacement.

The expansion of these firms and of this sector is a valid objective of good social and community policy, of good regional development policy, as well as an offset to the industrial concentration necessary in other sectors. Moreover, their healthy development is a necessary condition for an industrial policy that also fosters larger scale, more specialized and competitive firms. The two go together; and the small owner-managed sector with employees up to, say, 200 to 300 persons, must be brought in from the periphery of policy to its very centre.
I do not have time here to discuss the role within an industrial strategy of a ventures capital corporation, of measures for providing incentives and financial assistance to private inventors, or the establishment within the public service of the principle of fair comparison with selected outside employers as the guiding principle for public service collective bargaining. But what I am suggesting is that in such revised industrial policies as I have sketched here will be found important keys to a more unified country.
Present industrial policies are changing too slowly to relieve an accumulated frustration with blocked economic development in most of Canada's six economic regions. Inter-regional tensions are unnecessarily high and persisting. Stronger interregional ties are not only attainable through a revised framework of industrial policies with obvious benefits to national unity; these ties or linkages are the very foundation for industrial development advantageous to all. An important point to recognize is that Ontario and Quebec, forming the industrial heartland of Canada, are in serious long-term economic difficulties. In Ontario this is only now becoming apparent. The two provinces have entered a period of relative weakness and decline-


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


Some hon. Members:: Agreed.


Mr. O'Connell:: I thank my hon. colleagues for allowing me to continue. I should reach my conclusion in approximately two minutes. These two provinces have entered a period of relative industrial weakness and decline, particularly evident in many sectors of manufacturing. To the extent that weakness and decline have set in, and to the extent that the present policy framework will not lead to a transition to a more technically efficient and internationally competitive industry, then grave implications arise for national unity. Such an uncorrected trend, if prolonged, could result, on the one hand, in less willingness to share with other regions through equalization or other disparity related programs and, on the other hand, in greater pressures from strong provinces for a more decentralized federal system so they can better look after their own economic interests as they see them.
October 20, 1977

The problems of the industrial base in Ontario and Quebec mean that this economic region, too, as well as all the other regions, now has good reason and all have joint economic cause to come together again, as they did 110 years ago, with their joint and several difficulties, to reassess together their economic interdependence and to find in redesigned national policies a path out of the cul-de-sac in which most now seem to be caught.
The central thesis of my remarks, then, is that the remaking of the regional economic framework of this country ranks in stature with the remodelling of its political constitution. This will require that same generosity of spirit to which the Prime Minister called our attention again yesterday.




The Acting Speaker (Mr. Ethier):: Order, please. Before recognizing another hon. member, and undoubtedly with leave of all hon. members, I have the honour and the pleasure to call attention to the presence in our gallery of the President of the Republic of Gabon, His Excellency El Hadj Omar Bongo.


SPEECH FROM THE THRONE
[Stage Direction]
The House resumed consideration of the motion of Mr. Dennis Dawson for an address to Her Majesty the Queen in reply to her speech at the opening of the session.
Harvie Andre: Mr. Speaker, as is traditional, it is my pleasure to congratulate the mover (Mr. Dawson), and the seconder (Mr. Wood), of the Speech from the Throne and their replies to Her Majesty. They did so with a lot more aplomb and self-confidence in their maiden speeches than 1 did in mine. I congratulate them accordingly. Also, 1 should like to congratulate the speaker who preceded me, the hon. member for Scarborough East (Mr. O'Connell).


Some hon. Members:: Hear, hear!


Harvie Andre: I have always enjoyed his contributions to debates in this chamber and have found them very erudite and worth while. Given the paucity of talent in the cabinet, it has always struck me as strange that the Prime Minister (Mr. Trudeau) has kept him out of the Privy Council since his election in 1974.
The Address-Mr. Andre


An hon. Member:: He agrees.


Harvie Andre: I should like to direct a few initial remarks to the comments of the hon. member for Scarborough East. I am pleased to learn that he has read the very excellent report of the Science Council dealing with Canada's manufacturing industry. He has clearly adopted many of its observations and recommendations as his own. I presume that within the workings of the Liberal party there will be an opportunity to communicate those observations to some who are in a position to make decisions.
I hope the hon. member will not mind if I remind the House that during the 1972 election campaign the then minister of industry, trade and commerce of the Liberal government promised a new industrial strategy for Canada. That was one of the election promises. He said that this was being worked on and would be revealed to the nation soon after as the policy framework which would deliver us to the new utopia.
When the House returned, after considerable questioning by those of us on this side, the Minister of Energy, Mines and Resources (Mr. Gillespie) was moved to indicate that while it was too much to expect an all-encompassing industrial strategy, they were working on a sector plan which would soon be revealed. Further questioning revealed that if the sector plan was coming, it would be a long time coming. Subsequent ministers of industry, trade and commerce have dropped the language entirely from their statements and comments. It was not until the Science Council's report that the subject was raised again. It is far more vital now than it was in 1972 when it was first announced.
I should like to deal briefly with some of the aspects of an industrial strategy. Basically, I agree with the points raised by the hon. member, but he could have raised a few more. For some time he dwelt on the question of Canadian multinationals being important to the development of an indigenous Canadian innovative capacity in research and development. He is absolutely right in that sense, but that is only a part of the problem. As was diagnosed in 1970 by the special Senate Committee on Science and Technology, Canada spends less on industrial research and development in science technology than any other western industrialized nation. The Canadian government supports research and development less than any other western industrialized nation. Out of the research it supports, it spends more on basic research, rather than applied or applicable research, than any western industrialized nation.
Whereas the hon. member has properly identified one problem, he did not get to the root of the problem, which is the commitment of this government to the value of science and technology as an important ingredient in our future industrial development. This has been articulated in huge volumes of studies and analyses by virtually every economic group within the country that has looked at this problem. The failure of this government to respond positively to these recommendations which have been coming forward in great volume since 1970 is one of the major reasons we are in such a difficult position today.

October 20, 1977
The Address-Mr. Andre
The hon. member could have added to his list of points, more direct incentives for Canadians to invest in the manufacturing sector. As it is now, there are very few investors, if any, who are interested in pursuing investment in this area. Something direct has to be done by way of tax incentives. Something must be done to improve the labour relations atmosphere in the country. Investors are faced with conflicting opportunities for investment in capital-intensive industries or labourintensive industries. They opt for the capital more often than not, even with a lesser return, in order not to put up with the hassle which comes with trying to manage a labour-intensive business in today's atmosphere.
Also, something which should be an aspect of industrial strategy is simply to reduce the burden of paperwork and bureaucratic hassle which falls upon the industrial community. Several years ago the Financial Post carried out a survey of Canadian industrial leaders and came to the conclusion that something like 35 per cent of executive time in Canadian business was spent dealing with government-initiated requests, and so on. That represents a tremendous waste of high-priced talent and a tremendous cost of doing business. Also, it is a tremendous disincentive to industrial activity. It should be removed.
Before getting on to major area that I wanted to speak about, I compliment the hon. member on his address. His eight-point program could be augmented by the three or four points which I have mentioned. I might re-emphasize that it is not this chamber which needs the education, so much as his own colleagues within the Liberal government, since they have been promising an industrial strategy for many years and they seem to bring it out only at election time and when they need that sort of support.
This is the fifth throne speech I have listened to since my election in 1972, and it is the first one I have heard delivered by the monarch. With due respect to Her Majesty, let me say that it was the most fatuous of the five throne speeches I have heard. Her Majesty-and I am sure she is too gracious a lady to ever admit it-must have been a little puzzled at having been brought all this distance to read that empty speech. I am sure the people of Canada expected a little more. Douglas Fisher, in a column in the Toronto Sun issue of Wednesday, October 19, described it as follows:
Throne speech a giant yawn of banal observations.
He went on to say:
In 20 years of scanning federal speeches from the throne, I can't remember one that matches this year's in slightness of content or in the flood of banal observations; 3,600 words in 49 paragraphs which we all will mercifully forget tomorrow.
Ronald Anderson, writing in the Globe and Mail issue of Thursday, October 20, describes the throne speech as follows:
As an agenda for action, however, the speech is more than customarily deficient. It deals almost exclusively in broad generalities and pious hopes. The government has used the speech from the throne as a means for giving itself a royal pat on the back, rather than as a vehicle for outlining the way in which it proposes to
[Mr. Andre.)
deal with the problems facing the country. The elegant prose fails to conceal the muddled thinking and the policy vacuum that exists in Ottawa.
These are some of the things that have been said. Traditionally, the throne speech is the opportunity and the occasion upon which the government, Her Majesty's ministers, outline to the House of Commons the government's intentions for the coming session. It declares what it has in mind by way of legislation, its program of action for the coming year. Given the thrashing that a lot of our traditions have suffered under this government, it is not surprising to see this tradition of the throne speech disappear and to see us end up with the throne speech of this year which, as Douglas Fisher described it, was full of banal generalities, and a giant yawn.
There are two possible explanations for this dull, bland and banal throne speech. The first is that we have a tired, worn-out, weak government which has no plan of action and which had nothing that it could put into the throne speech by way of a program. In this case, those who subscribe to this view, I presume, would include the hon. member for Vaudreuil (Mr. Herbert), who described this as the worst cabinet in 30 years. Certainly, I think the evidence would indicate that this explanation is most likely. However, let me say in fairness that there is a second possibility. That is the explanation given by the Liberal apologists who state that the Machiavellian gurus in the bowels of the PMO and the PCO decided that they did not want to waste the publicity that comes from giving the good stuff to Her Majesty, and will save the meat for the Prime Minister and other cabinet ministers, so as to maximize the public exposure and publicity that comes from it.
Anyone who sat here, or dozed through the Prime Minister's speech yesterday realized that that theory does not stand up to close examination, because the speech of the Prime Minister was easily as banal and fatuous as was the throne speech the day before. In fact, in terms of new initiatives being announced, there were only two possible items of news within the Prime Minister's very lengthy speech: one which was stolen, as the Prime Minister admitted, from the Minister of Finance (Mr. Chretien), which dealt with an additional $150 million for job creation-I expect we will get a rerun of that tonight-and the second which dealt with the proposed referendum. As was clearly indicated in the question period this afternoon, that was a last-minute addition which the Prime Minister had not cleared through cabinet, and indeed a previous committee of the cabinet had discarded the idea; but presumably the gurus in the bowels of the PMO, after observing the reaction to the throne speech, thought the Prime Minister had to have something to say, so this was dug up and thrown in.
That is tragic, because the problems which the Prime Minister spoke about in his speech are real. What the country needs now is leadership, not an election lecture. But a lecture is what we got, a long lecture on the problems of the country with no solutions offered whatsoever, no recognition of who caused the problems.
There is a third possible explanation for the banal throne speech, and it also comes from the Liberal apologists. Basical-
October 20, 1977

ly, it is the thesis which suggests the problems are so horrendous that no solution is possible; that if there were a possible solution, then the geniuses in the Liberal cabinet would have discovered it and would have expressed it in the throne speech. That is the school of thought articulated by W. A. Wilson, among others. It is simply hogwash, because there are solutions to the problems-excellent solutions.
Part of the solution to the difficulties within the manufacturing sector was expressed earlier this afternoon by a member supporting the government. All that is required is some leadership from the government and from the Prime Minister and the cabinet to examine the variety of approaches and different solutions available to these problems and to select those which are best, given the circumstances. All that is needed is that that kind of leadership be given, that an intention be declared to pursue certain courses of action, to present them in the throne speech and then to submit them for debate here in the House. That is the kind of leadership that is desperately needed today, because at the basis of all the complaints, frustrations and difficulties which exist in the economy is a real desire for leadership and for a sense of direction. Canadians would like to know that somebody is in charge, that somebody is concerned, that somebody is taking action to try to get this country turned around. There is no evidence of that in this government. If it is not to come from the federal government, pray tell us where is it to come from?
Possible solutions to the economic problems of this country and avenues for government action have been articulated by my leader. They will be articulated by other hon. members speaking on behalf of the Progressive Conservative party. They have been articulated by scores of business writers in the nation's media, and by experts within various economic organizations. This morning's Ottawa Today contains a column by Carol Goar which gives the advice of several recognized experts, economists in Canada, in terms of action the federal government should be taking. There is ample advice, if the government would simply assume its responsibility and heed it.
Another cause of our weak economic position is government spending. In this regard, I think the Prime Minister has at least partially recognized that the spending of his government is at the root of the problems the economy of Canada is facing today. At page 33 of Hansard for Wednesday, October 19, the Prime Minister is reported to have said:
If it is true that our present malaise comes from living beyond our means as a nation, the remedy should be rather simple. It should be to live within our means. Here, again, I am saying that to live within our means as a nation we must produce more if we want to continue to consume as much. I know that our government and other governments in Canada have made the mistake, as I said earlier, of trying to give too much to the Canadian people by way of social benefits, without Canadians being prepared to pay for them in terms of slowing the increase in their real gains.
As I indicated, that is a partial admission of the fact that the spending habits of this government over the last decade are very much at the root of the problems this country is facing today. The Prime Minister went on to say that his President of the Treasury Board (Mr. Andras) has grasped the seriousness
The Address-Mr. Andre
of the situation and is trying to deal with it. Well, there is precious little evidence to indicate that that is the case.
I think it is worth while-and I would like to ask the indulgence of the House to do this-to deal in some detail with the question of government spending, why we have reached the level of spending we have reached today, of some $45 billion per annum, and what can be done and should be done in order to change this situation. We must reduce the tremendous take of government from the people of Canada and leave within the pockets of Canadian taxpayers more of the money they earn, so that they might pursue the activities which are necessary to get the economy rolling again.
It has to be admitted that there are tremendous pressures on governments to spend. There is no question that governments are under constant pressure from this group and that group, and from this region and that region to spend more and more. However, that is the price of leadership. Governments must resist and make reasonable decisions in the face of these pressures. That is what governments are supposed to do. While I admit that there are those pressures on governments, I also submit that it is the responsibility of government to deal with them and not to submit to them automatically.
The second reason is that the revenue-producing system used in Canada has a high degree of elasticity built into it. There is an automatic increase in government take as the economy grows, even though there is no increase in taxes. The government take increases faster than the economy as a whole, so the government is in such a position that if the economy grows, its revenues grow at a much faster rate; therefore, it has additional revenues which it can, and does, spend.
A third very important reason that government spending has increased is inflation itself. Here I do not restrict myself to talking about the increased cost of the services and products governments must buy; I refer to the increased revenues which accrue to governments as a result of inflation. Governments have a vested interest in inflation. In fact, given today's taxation structure, if the economy were to increase by zero per cent in terms of real growth, but inflation were to increase by 10 per cent, government revenues would increase by 16 per cent.
Governments get an automatic, real increase in revenue from taxes taken from our pockets as a result of inflation, without any growth in the economy at all. That could, and should, be changed. That inflationary factor should be removed from the total taxation system. Governments have a right, a need and an obligation to tax, but it should be a real tax which is out in the open and imposed with the knowledge of the people. We should not have the sneaky kind of taxation which governments impose as a result of inflation.
It must be admitted that it is politically easier to spend than to save or be thrifty-and this government is well known for its willingness to take the politically easier path. In looking at his career or at his political credentials, each minister likes to point to the great, multi-billion dollar programs he has introduced during his reign in whatever department. That is a

October 20, 1977
The Address-Mr. Andre
political reality. I suppose we have to live with that, but it should be resisted by a responsible government.
The fifth reason for high government spending is the fact that the federal government can print money. This privilege is not open to many other people. If people in the private sector are caught at it, they are thrown into jail. However, it is something the government does, and has done with incredible frequency over the last few years. This is another type of sneaky taxation. As the government goes to the Bank of Canada to sell its bonds, for which it is paid in freshly printed notes, it debases the currency we carry in our pockets. In other words, the government taxes us again in another sneaky way.
A sixth reason for increased government spending is the poor example set by this cabinet, and by the Prime Minister in particular. How can one, with a straight face, try to impress upon the civil service the necessity of conserving, being thrifty and looking after each penny, when ministers fly all over the country-sometimes for business and sometimes for pleasure-running up horrendous transportation bills? The Prime Minister spent several hundred thousand dollars to renovate and improve 24 Sussex Drive. Ministers spend tens of thousands of dollars to decorate their offices. They put up wallpaper worth extraordinary amounts of money per yard and then tear it down because the colours clash a little with the couches they choose. These things have a very important, over-all effect on the mentality which exists within government circles. It is impossible and impractical to expect people to operate under a system which is basically, "Do what I say; don't do what I do. Do what I tell you to do; don't follow my example". Yet that is what this government has been practising, and it has much to do with the attitude which has existed within governments, the attitude of spend, spend, spend.
The seventh reason for the incredible increase in government spending has to do with the poor administration of the trust that the cabinet, and particularly the President of the Treasury Board, is supposed to administer. I will not go into detail here except to repeat just one phrase from the report of the Auditor General of last November. It reads as follows:
Based on the study of the systems of departments, agencies and Crown corporations audited by the Auditor General, financial management and control in the government of Canada is grossly inadequate. Furthermore, it is likely to remain so until the government takes strong, appropriate and effective measures to rectify this critically serious situation.
If words like "critically serious situation" appeared in the audit of a corporation in the private sector, they would cause that corporation to be de-listed immediately from any public stock exchange, because if that did not take place the stock would fall through the floor and would cause the dismissal of at least the president and the chief financial officer, if not a call by the shareholders for the dismissal of the entire board of directors. Yet we have this kind of statement from the Auditor General of Canada about the people who are spending $45 billion of Canadian taxpayers' money in a haphazard, shoddy manner.
What has the government done about those recommanda-tions? One of the key recommmendations of the Auditor General was the establishment of the position of comptroller

general. At first the President of the Treasury Board made many pious statements about this proposal conflicting with ministerial responsibility, and so forth. However, seeing that there was a basis to this recommendation, the President of the Treasury Board finally conceded that a comptroller general should be appointed. That was on April 25 of this year. On May 30, in answer to a question in the House, the minister said he was actively searching for a comptroller general and expected to appoint one soon. It is now October 20, more than 11 months since the Auditor General first made that recommendation.
We have no comptroller general and we have no evidence that any changes have been made within Treasury Board or any other department or agency of government to implement these recommendations of the Auditor General. As far as we know, the government's financial management is as shoddy, improper and inadequate as it was a year ago when the Auditor General first reported on this matter. That is absolutely intolerable.
The eighth reason government spending has increased so fast is sheer deceit on the part of the government. I will give an example of what 1 mean. On February 19, 1975, the then president of the treasury board, in introducing the main estimates for 1975-76, said that $28.24 billion was only an 11 per cent increase over the previous year. He claimed it was a very modest increase. We pointed out that the change between the main estimates, year to year, was 30 per cent. He said that was not a fair comparison. The people of Canada were told by the minister, through the media, that the government was being very careful in holding government spending down to an 11 per cent increase, when the supplementary estimates for the following year showed that the increase was actually 27 per cent.
Precisely the same thing happened the year before and the year after-and the same thing is happening now. This is outright deceit on the part of the government. They are apparently unwilling to tell the people of Canada honestly, how much of their income is being spent and by how much it has increased over previous years.
In the spring of this year, for example, when new estimates were introduced, the government boasted that there was only a 7 per cent increase over the previous year. The former auditor general of Canada, Maxwell Henderson, then pointed out what the president of the treasury board failed to admit; that in fact a great deal of this so-called reduction in government spending was merely a transfer of responsibility to the provinces, and that when these factors were taken into account the rise in spending was closer to 10 per cent than 7 per cent.
If the government would correct its actions in these eight areas, Mr. Speaker-and in particular the last one-to be more honest with the people of Canada, that would go a long way toward controlling government spending. As the Prime Minister indicated, lack of such control is at the root of many of our economic problems. Certainly, that question must be
October 20, 1977

addressed if we are to solve the over-all economic problems which exist in the country.


Mr.   Jean-R. Roy@Timmins: Mr. Speaker, at the outset of my remarks 1 hope I have your indulgence to say a few words of a personal nature. You well know, Mr. Speaker, that since early May I have been absent from the House due to illness. During that illness I had much time for reflection. So often during that reflection the bonds and friendships made in this House came to my mind, and I want to say that any illness a member suffers is, in one way, an advantage. It gives one an opportunity to renew perspectives and reflect upon the friendships formed in this House with other members, irrespective of their political persuasion. It is at such times we realize how deeply are those bonds of friendship which we form, and how much they mean to us. With your permission, I should like to thank my colleagues for their concern about my health, for their kind words, and certainly for their prayers. All of these were helpful, very comforting and satisfying to me.


Some hon. Members:: Hear, hear!


Mr. Roy (Timmins):: I would be remiss if I did not include my constituents in my thanks. At such a time their sympathy and concern for their member of parliament is very much appreciated-whatever they may think of him at other times.
Referring now to the Speech from the Throne, I am very pleased that the Prime Minister (Mr. Trudeau) and the government concentrated on the two major areas which present problems to Canada at the present time-the economy and national unity. I think we would be neglecting our duty, and quite possibly derelict in our duty, if we spent too much time on other issues in this session. Unless we spend most, or all, of our time on these two issues I think we will have failed the constituents we represent here.
There was substantial mention of energy in the Speech from the Throne, but in my view energy is just one element of the economic problems of this country and of the world. We all recall that the energy problem precipitated the crisis in world economies that we see today. I am not a professional economist, Mr. Speaker, but I know that, historically, trade was originally done by barter. Goods were exchanged by one country or one group with another country or group. As trade expanded, a better method of exchange was needed, so goods were bartered for hard currency-gold coins and silver. As trade expanded further, the currency exchanges were too bulky and inefficient, so there came about simple transfers on books of account of goods from one country to another.
This vehicle of currency for international trade became so important that it was actually more important than the exchanged goods. Indeed, in today's international trade there are countries which cannot operate at capacity or cannot sell their goods because the countries which need those goods do not have the funds, credit, or debt-creation capacity to buy the goods. The currency vehicle has thus become more important than the goods themselves, to the point that we now have fantasy currencies. The special drawing rights are what I term
The Address-Mr. J.-R. Roy
fantasy currency, because their only backing is agreement between countries that these special drawing rights are acceptable for trade. In the last 10 to 20 years trade has expanded to the degree that even these special drawing rights do not permit the reasonable exchange of goods or the expansion of trade between countries, so we are looking for new structures. Hopefully, heads of governments and people charged with this responsibility will find a new way of permitting the expansion of trade between countries.
In the area of international trade, no country is more vulnerable than ours because of the large volume of goods we produce and export. Indeed, no country can find itself so easily in difficulty because of world trade crises or slowdowns in world economy. For that reason, I think the throne speech pointed out that there must be structural adjustments, especially in the international economy. But this, I am sure, will reflect on adjustments that will be necessary within the internal economies of countries such as ours. I think the throne speech intimates that to make possible these structural adjustments, to make the people accept the consequences of these adjustments, there must be a change in attitude, one that would say that the people of Canada should take less and sacrifice more, rather than expect and demand more.
Today, Mr. Speaker, I want to present to the government of Canada for its consideration, and I hope eventual implementation, a practical proposal which would make it less difficult to accept those changes, a proposal that would make it more easily acceptable to take less, to make more sacrifices. I am asking the government to consider a massive "Buy Canadian" campaign. 1 think that if we could change the attitude of the Canadian people by making a special effort to encourage the purchase of Canadian goods which they need, instead of buying imported goods we would be well on our way to regaining the economic strength that we had in the past ten years.
I do not mean that Canadians should change what they purchase. If a person needs a refrigerator, he needs a refrigerator. However, the country of origin where the refrigerator is produced has a great deal of significance for the Canadian economy. Some people might say that it costs more to buy Canadian, and in some instances it might, Mr. Speaker. But, surely, the cost to Canadians is not simply the price tag that is put upon an article in a merchant's shop. Surely, the cost of unemployment at the present time, the cost of our presently stagnating economy, is reflected in the cost of that article in the store. So if we can eliminate unemployment and a stagnating economy, we can also eliminate the difficulty in purchasing Canadian goods as compared to imported goods.
The beauty of buying Canadian goods is that it has a double effect. If someone buys a $100 article imported from a foreign country, $100 Canadian goes to that foreign country. But if that person buys a similar item which is produced in Canada, he is putting his $100 into the Canadian economy. So in that respect, by buying Canadian instead of an import he is really

October 20, 1977
The Address-Mr. J.-R. Roy
spending $200 in Canadian funds rather than $100. How quickly we would turn around the imbalance or the deficit in trade which the Prime Minister spoke of yesterday; I refer to the 15 per cent imbalance between Canadian production and Canadian consumption. I feel this is certainly a good way to start completely turning around that imbalance.
Some say that this would not be fair to other countries. Surely, Canadians have a right to exercise their own judgment as to what type of product they purchase, whether it be locally produced or not. Surely, when a Canadian buys a car he has the right-1 would say, the responsibility-to ensure that that car is built in Canada and not in a foreign country. When he buys a can of tomatoes he should have the right and responsibility, if he wants to be helpful to the Canadian economy, to make sure they are Canadian tomatoes and not some foreign product. If he needs a piece of furniture, he has the right, in his judgment, to buy a Canadian piece of furniture rather than an imported piece of furniture.
Some people might say that this is not the way to help the Third World countries. I have no intention of recommending to the government that we stop helping the Third World countries. Surely, the bulk of our imports, possibly in the nature of 80 per cent or 85 per cent, come not from Third World countries but from countries whose economies are presently as strong as, or even stronger, than our own. So there is no argument in that respect. How can we possibly continue to help the Third World countries if our own economy is stagnant and deteriorating? We need a strong economy to provide the funds that are necessary to help these Third World countries. The economies of West Germany, the United States and Japan, for example, are strong. When the slowdowns are finished, because those countries have their own large internal markets they produce goods for their own internal markets. The percentage of their exports compared to production, while substantial, in absolute figures is way below that of Canada.
In Canada we have the reverse situation. We do not produce for our own internal market. We import too many products for our own internal needs. Our exports are 25 per cent of our production, the highest in the world. Our imports are also, percentagewise, the highest in the world. Not only are they the highest in the world, but sometimes they are quite substantially greater than our exports. So in this situation the benefits we derive, in terms of our standard of living, from our exports are neutralized, and even to some degree reduced, by the substantially greater imports which are brought into Canada.
My "Buy Canadian" proposal would have the reverse effect, Mr. Speaker. Surely, exporting is necessary. But the reduction of the number of imported goods, the buying of our own goods in Canada for our own needs, is essential to our own survival. So again 1 implore the government to consider instituting a program to encourage Canadians to buy Canadian goods at any time this is possible.
There are many methods of doing this. I do not propose to give the details of how it should be done today, Mr. Speaker, but it is surely easy to find methods of doing this. For instance, what is wrong with having large posters in every purchasing

agent's office in Canada, reminding him that he should be looking for Canadian goods rather than imported goods? What is wrong with having the same type of posters in stores, shopping centres and supermarkets all over Canada so as to encourage and to influence Canadians to look for Canadian goods on the shelves? What is wrong with having clear identification of Canadian goods, and by advertising encourage the purchase of those goods? What is wrong with using large government advertising budgets for such a program? Much of the advertising budget provided Canadians today by the government is, in the opinion of many people, of very little use. I suggest it could be very much more wisely used by encouraging Canadians to buy Canadian goods.
What is wrong with the Canadian government making a special effort to purchase Canadian goods? I do not want to lay the blame on anyone, certainly not on the Chair or the Chair's officers, but when I came into the House of Commons on Monday I saw that the microphones for the new TV system in the House were manufactured in Austria, and that the television sets in the lobbies were from Japan.
[DOT]	(1702)
I have no axe to grind with regard to the Austrian product on my desk or the Japanese products in the lobby. However, I am sure we have the electronic technology in Canada to put together a television system for the House of Commons that is made by Canadians for Canadians. 1 thought 1 should mention that.
It would be very easy for the government to form some sort of body constituted of merchants and consumers to formulate and put into practice a policy which will encourage Canadians to buy Canadian.
[DOT]	(1703)
[ Translation]
Mr. Speaker, I do not want to miss this opportunity to say a few words about that second important problem, not because it rates second rank in importance, but because there are two problems. Canada is experiencing at present a problem of national unity. This problem exists also in my constituency which has 42 per cent of French-speaking inhabitants. We can understand the anxiety of those people concerning the PQ government and the issue of independence. In this connection, Mr. Speaker, I adhere to the Prime Minister's statement and I rely on him. In my opinion, there is no other individual in Canada who has a better idea of what Canada should be. I know or I have met no one else before or since I was elected to this House who wields as much skill or ability to solve that serious problem as the Prime Minister.
When I hear the speeches delivered in the House and note the positions taken by the opposition leaders, without wanting to criticize them, I wonder how those people can have such inaccurate ideas and be so badly informed about Quebec and Quebecers. I therefore intend to do the utmost to support the Prime Minister in his efforts. 1 had already begun to do so in April, but due to illness, I had to slow down a bit. However, I
October 20, 1977

intend to continue in that direction since my health has improved.
There are two small things I would like to mention today. First, I would like to address the people of Quebec and particularly the PQ government leaders. I would like to ask them-and I appreciate they might not be pleased with or pay any attention to my suggestion-but I would like to ask them-please refrain from distorting facts about French Canadians outside Quebec. I know a little about that because I am of French expression and I come from a French community in Ontario.
To hear Premier Levesque, other ministers and PQ sympathizers in the province of Quebec, it looks as if we were totally oppressed people, whose rights are openly encroached upon, who have major and unsolvable problems in the province of Ontario. I want to make it clear to the people of Quebec and mainly to those in the government of Quebec that it is totally erroneous. I have good reasons to believe that in some communities where the number of French Canadians is very small, they might not enjoy all the rights they are entitled to. Flowever, the great majority of French Canadians outside Quebec live in areas like mine, Timmins, like Hearst, Sudbury, Ottawa, all areas where we are absolutely and perfectly entitled to all the rights that we need and that we desire, and with these rights we can live our life in our language, in French, without neglecting the rest of the community. Quite the opposite, we participate in the life of both the local community and the greater community of our Ontarian neighbours, even though they are not of French extraction.
1 wish the Parti Quebecois would stop misleading the people of Quebec. And if my colleagues of Quebec want to ask me to go in their region to explain how things are where we live to Quebecers who are not aware of the situation, I shall be happy to do so. I had the honour to be a member of the committee on the Constitution a few years ago, as you may remember, Mr. Speaker, and everywhere 1 went in Quebec, I said for instance that in Timmins, there are at least 5,000 or 6,000 students in French elementary schools, that there are at least 2,000 students in a French secondary school-not a bilingual school but a French school- and all that under a public board-not a French board, but a multilingual public board-with all the subsidies and the rights of all other public schools. When 1 told this to our good friends and our colleagues, then to my cousins-because my father and mother were born in Quebec even though I myself was not-people were quite surprised and even astonished. They said: "This cannot be." It certainly is!
1 ask my colleagues to invite me if they have an opportunity to do so, and 1 shall be happy to explain the situation to the people of Quebec. Of course, I have not the linguistic ability of my colleagues and perhaps of many Quebecers, but I believe I can make myself understood. I would say that in Ontario, in the areas where there is a substantial French population, we have certainly stopped living in the past, living in history and living ideals. For our part, we would rather live in the present and for the future. I believe that unless our friends in Quebec
The Address-Mr. J.-R. Roy
do the same, it will be very difficult to solve the problem. I believe there is a recommendation I can make which would be very helpful.
Without mentioning the present Parti Quebecois government which, I am convinced, will not be there for long, I would invite Quebecers themselves to come to Timmins, to come to Sudbury, to come to North Bay and see what is going on over there and learn who are the liars, who is spreading lies among the population. They will be in a position to judge whether it is the Quebec ministers, or the PQ members or us, who come from these areas, who live with this situation and who can say exactly what it is all about. That is why I invite all these people to come and visit us. When you come to see us, you will certainly be welcome and I can say that you will feel at home.
I take as an example, Mr. Speaker, my own riding. Last spring, Mr. Berube, the Quebec Minister of Natural Resources, announced a new aid program for mines, for the operation of mines or at least the exploration of sites to develop mines in northwestern Quebec. We applauded this program because it was long overdue. I believe the minister or the government should have long before taken the initiative of such a program. That is why we applauded. But when the minister made a statement to announce this new program, I was terribly upset by the lies and falsehoods the minister spread about in advance to justify this new program.
First, he spoke of Texasgulf which is located in my city, in my riding. Fie claimed that the federal government was playing a game, and depriving Quebec of jobs to give them to Timmins in the province of Ontario because, he added, the federal government, through the Canadian Development Corporation, in fact controls Texasgulf. Therefore, the federal government had decided, for Texasgulf, that it would build a processing plant in Timmins rather than continue sending the ore to the refinery in Noranda to be processed.
So there we are, Mr. Speaker: Mr. Berube claimed that the province of Ontario restricts producers or refiners of ore to operating in Ontario, which is completely false. According to the Ontario law, 50 per cent of the ore must be processed in Canada, not in Ontario, but in Canada. Naturally, that is why Texasgulf could, until now, send 50 per cent of its production of copper ore to Noranda. An agreement was signed between the two companies, an agreement which benefitted both economically, which is why that agreement is still in force.
He further said that Texasgulf was controlled by the Canadian Development Corporation thus by the federal government, which is once again completely false, as the Canadian Development Corporation controls 30 per cent of the shares of Texasgulf. The shareholders allowed the Canadian Development Corporation to have three directors out of 13 on the board of the company through a gentlemen's agreement. Thus, if the matter had been put to the vote among the shareholders, the corporation would not probably have even three directors. Therefore the government of Canada does not control Texasgulf as they have only three shareholders or directors out of 13. Again, this is false.

October 20, 1977
The Address-Mr. MacKay
He also said that the closing down of the Noranda refinery in the near future was due to the fact that Texasgulf was building its own refinery in Timmins and that the company would begin refining its own products itself in a year or two. Mr. Speaker, the materials coming from the Timmins plant of Texasgulf represented only 15 per cent of the refining work of Noranda. How can you justify the closing down of a plant such as the refinery of Noranda when only 15 per cent of the materials to be refined have been removed? A little later, I read in the newspapers that Mr. Berube stated that it has always been difficult to find a job in the private sector in Canada, especially in businesses where transactions were made in English.
But I can see now or I could see then, Mr. Speaker, that it was not because the company was English, but that the man was very dishonest. I do not think Canadian companies are in search of dishonest people just for the sake of it. So I reiterate my invitation to our Quebec friends. I would like them to come to our part of the country to see for themselves that we Franco-Qntarians, from Ottawa, Timmins, all over-and I shall restrict my comments to our province because 1 did not visit with all French-Canadian communities across Canada-I invite them to see for themselves that we are not being denied our rights, that we live the life that we choose, that we shall continue to do so and that we will always be happy to do so.
In concluding, Mr. Speaker, I fully trust the right hon. Prime Minister (Mr. Trudeau) to solve that problem and I urge my constituents as well as all other Canadians to follow his lead. If we follow his example, a fair solution for all Canadians shall be found.


Elmer MacIntosh MacKay: Mr. Speaker, it is an honour to take part in the debate on the address in reply. I should like to say, first of all, that we on this side are very glad to see our colleague, the hon. member for Timmins (Mr. Roy), back in his place and looking so well.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: We hope he will have a good session and that the illness which kept him from us will not recur.
I should like to pay tribute to the mover and to the seconder of the Address in Reply to the Speech from the Throne. Both these hon. members acquitted themselves very well and 1 wish to add my respect to the remarks made by the hon. member for Louis-Hebert (Mr. Dawson), about the gracious and talented lady, Madam Morin, who served in the House of Commons before he did. She will be long remembered and greatly missed and, as the mover said so frankly, he has a great example when following in her footsteps.
The hon. member for Malpeque (Mr. Wood), also made an excellent speech. I thought perhaps it would have been appropriate for him to have mentioned his predecessor, the Hon. J. A. MacLean, a man who nobly served in this place with great distinction, a man who served his country in time of war and in

time of peace. I think he, too, realizes he has a very big pair of shoes to fill as he sits in the House of Commons to discharge his responsibilities.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: I personally would like to say that we appreciate the way in which Your Honour guided our deliberations here in the House of Commons in the pre-television era. We assure you that your television image is just as good as your parliamentary image and we look forward to your distinguished guidance in a new era in the House of Commons.
Sir, I have to say in all honesty that I found the Speech from the Throne a disappointing document. It really does little to reassure Canadians that the government has any new initiatives with which to guide the country through what is bound to be a very difficult period. I am going to read an excerpt from the Speech from the Throne which I found rather surprising:
The government dedicates itself profoundly to the rediscovery of the spirit of unity. It wishes to learn from all who are interested in Canada and who have thoughts on how it can be made a better place in which to live. It is prepared, particularly, to work with the governments of the provinces, all of whom have a vital interest in a better Canada.
Mr. Speaker, under whose auspices was this spirit of unity, which the government now seeks to rediscover, lost? That is what strikes me so forcefully. What has happened during the past ten wasted years-wasted in the sense of helping this country proceed to its destiny? Is it logical that a government which claims it has national unity as its greatest objective should say that it is dedicating itself profoundly to its rediscovery? There is something very much at fault in a statement like that.
It seems to me, looking back with the benefit of hindsight, that having a prime minister, in this particular case from Quebec, who would naturally be assumed to have a special understanding of Quebec problems, was not as advantageous to the country as one might have logically expected. It is ironic but true that sometimes people who come from a particular region are not necessarily qualified to speak for it. It is interesting to note, for example, that the most profound work on American democracy was not written by an American; the man who exhibited the best understanding of the situation in America as far as democracy was concerned, and whose work is still a classic, was Alex de Toqueville. The man who wrote the best work on racial problems in the United States was a Swede, Gunnar Myrdall. His book was "The American Dilemma".
It seems to me there is a case to be made in saying that our Prime Minister (Mr. Trudeau), who is undeniably a bright man, spent a great deal of his time attending the London School of Economics and Harvard and going off on esoteric pursuits, which was his undoubted right to do, while his contemporaries stayed back in la belle province and coped with life and perhaps have gained a far greater and more profound understanding of the basic issues in Quebec than the Prime Minister has demonstrated. At least this is judging by the results, which have seen a separatist government elected in la
October 20, 1977

belle province for the first time in our country's history. And let us never forget that it was under the present Prime Minister that this occurred.
There is another thing which disturbs me and disturbs my constituents. It is the lack of leadership as far as economic development is concerned. In the words of my leader, if having a finance minister means having a minister of finance with ideas for economic direction in the country, we have not had a finance minister for a long time.
I have to think back to Walter Gordon as being perhaps the last minister of finance in this country who came up with any original ideas. It is not that we agree with all of his ideas, but it was interesting that when he travelled across the country he had the initiative to note that the Canadian domestic market was quite small. Thus, he promoted the idea of the auto pact. He decided Canadian investment was not substantial enough, so he promoted the Canada Development Corporation. He felt that foreign investment was becoming immense, and he decided it would be a good idea to advance the concept of FIRA, the Foreign Investment Review Act. He also recognized that it would be desirable to have tax reform. Thus, he backed the Carter Commission. These things did not come to pass in the time of Walter Gordon. Some of them have been mismanaged, and some of them have only come into effect fairly recently. Can you think of any other initiatives comparable to what this man put forward that have been delivered by his successors? I certainly cannot. This is part of what is wrong with the country.
The reason why a lot of hon. members opposite who are sitting in the cabinet have not had the opportunity to develop any expertise or to develop any reputation in their portfolios is that they have not been in them long enough. They have been playing a game of musical chairs. This is not good for themselves, not good for the government, and not good for the country.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: The throne speech further indicates that "you will be asked to approve a Canadian Petroleum and Natural Gas Act which will regulate oil and gas exploration on federally administered lands and establish a system of royalty payments." Surely the government must be embarrassed by having to put this forward once again. We have been years and years without proper regulations in this sphere. While we have been vaccilating, the United Kingdom has been proceeding to pass regulations and extract vast quantities of oil and gas from the North Sea, deliver them, and have its economy restored by them. Here we are in this country still putting forward the same lame excuse in the Speech from the Throne, that we are going to get around to doing this. The government must surely stand indicted by this particular passage in the throne speech.
Another thing that concerns me in my constituency is the government's record as far as protecting the Canadian domestic manufacturer is concerned. This has national ramifications.
The Address-Mr. MacKay
I dealt with it today in a Standing Order 43. In my constituency we have a very important keystone industry for Nova Scotia called Hawker Siddeley. This particular industry is unique in the country because it has the only Canadian capacity for manufacturing railway axles. It is unique also because it is the only industry in Canada which maintains a full time export development marketing team. Also it is unique because it has been getting one of the shabbiest deals from this government of any large corporation in Canada. In any event, on its behalf, I wrote to the Minister of Transport (Mr. Lang) in August, I wrote to the then Minister of Industry, Trade and Commerce in September, and I wrote to the present Minister of Industry, Trade and Commerce (Mr. Horner) a week ago. I have received no answer from any of them.
I expressed great alarm at the situation where cheap foreign railway axles are being imported into this country under conditions which may very well contravene fair trading practices. It was interesting to note in Tuesday's edition of the Globe and Mail that this practice is not confined to railway axles. The particular article read as follows:
National Revenue says only that stainless steel plate from the three countries and hot rolled and some grades of cold rolled sheet from Japan and West Germany has been dumped. It does not release details on quantities involved.
The article continues as follows:
Dumping of certain types of stainless steel from Japan, West Germany and the Republic of South Africa has been found ...
These are the types of situations the Minister of Industry, Trade and Commerce and the Minister of National Revenue (Mr. Guay) should look into. This particular industry has been a good industry for Nova Scotia and a good industry for my constituency. It employs many hundreds of workers and has a very good record for exports, and a fine record of manufacturing railway rolling stock for Canada and the United States.
It is inconceivable to me that this industry is not getting more support. I understand that of the $100 million western railway rehabilitation plan, about which 1 wrote the Minister of Transport last August, he has seen fit to give an order for 100 cars to Hawker Siddeley and an order for 806 cars to National Car in Hamilton. By coincidence, that is an area where there is far less unemployment. 1 hope the minister will take this as a representation to give Hawker Siddeley the order for the remaining 150 longitudinal hopper cars, which has not yet been announced. Also, I hope he will make certain that these cheap foreign axles, which may be coming into this country in contravention of anti-dumping procedures, will not menace the possibility, and indeed the certainty of this industry getting the order to supply the railway axles for the entire order for this western railway rehabilitation program.
One of the things the people of Canada expect from this government, at a time of economic difficulty, is at least one comprehensive plan to do something constructive for the country. It is significant that the United States of America is prepared to spend billions and billions of dollars to transport non-renewable resources such as oil and natural gas from the north down to the United States, and we in Canada have not exhibited a similar willingness to spend money on the basis of
94

October 20, 1977
The Address-Mr. MacKay
a great national project to bring down from our north a treasure which is far, far greater ultimately than any nonrenewable resource, that is, to generate and bring down into the provinces where they can be must conveniently utilized in a national power grid the hydro resources from this country's north. If they are properly utilized, it would make Canada highly competitive in energy with something which is not, like oil and gas, non-renewable.
Just to cite one example, 1 have been told by knowledgeable people that Artillery Lake in the Yukon, which is approximately 700 miles from Edmonton east of Yellowknife and part of the Lockhart River system, is a natural power site. This particular site could be developed. The electricity could be brought down with little "Line Loss" into some convenient place in Alberta by direct current (D.C.). It could then be stepped down to alternating current (A.C.) and fed into a national power grid which would provide tremendous benefits for the entire country. Indeed developments such as those that are now under way or completed in Kettle Rapids and Long Spruce in the Gilliam area of northern Manitoba are also able to be utilized in a national power grid.
Everyone is aware of the fact that there is surplus power available in Churchill Tails, Newfoundland and in the Bay of Lundy. It boggles my mind to think that in an energy starved era a country with a disproportionate amount of fresh water and unprecedented hydro resources would not at least make a national effort to utilize the greatest and best technology in order to get this renewable energy down to parts of the country where it will do the most good. It is particularly incongruous that in eastern Canada energy costs are so high that any good the DREE program has been doing has been surely wiped out by the tremendous cost which industry faces as far as electrical energy is concerned.
I hope the government in the next little while will realize that in order to get the country united, and in order to give us a sense of pride in being Canadians, we have to undertake some great national projects for the material benefit of our people and for the ultimate prosperity of our nation. We must develop coal mines. We must develop eastern coal mines, as the hon. member for Cape Breton-The Sydneys (Mr. Muir) said today. We must concentrate on storing feed grain in eastern Canada so that our farmers are not impeded by the fact that, as in so many other instances, we do not have rail cars to transport feed grains when we need them.
It is incongruous indeed that there is probably less rolling stock on the railways than there was ten years ago, and yet there are unemployed people in factories in this country who could be making railway cars, instead of drawing unemployment insurance benefits, and doing something for their country and for themselves.
As far as taxation is concerned, I mentioned it a few moments ago in connection with the former minister of finance, Walter Gordon. What we got in 1971 was not a realistic taxation reform. What we got was simply taxation
(Mr. MacKay.]
obfuscation or taxation confusion and difficulty, not reforms. I remember quite well when at one point the government was determined to impose capital gains taxes on the family farm until opposition pressure and, we hope, their better judgment prevailed. We need equity investment and I fail to see why the government, if it does not feel like removing capital gains taxes entirely, does not treat them in a more equitable and sophisticated manner. Why should Canadians who buy equity in Canadian corporations for purposes of educating their children or for retiring, be treated, when they sell these securities, sometimes after several years, in the same fashion as people who bought them the previous month to make a quick buck? What is the justification for this? Why does the government not recognize that for all the net gain it gets out of capital gains taxes, which after administrative costs comes to considerably less than $100 million a year, the very existence of these taxes is doing far more than $100 million worth of damage to this country?


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: As a matter of fact if it got rid of Petro-Can and stopped spending money in that sphere, it would save itself far more money. It would be in money if it did that and if it abolished capital gains tax entirely because, as so many of my colleagues from western Canada particularly have said, we have yet to see any oil or any resources discovered by Petro-Can. It is very interesting that Maurice Strong's first attempt to generate some business was when he went to Hanoi and tried to get a joint venture to get some sort of exploration going off the coast of Viet Nam. They are doing a lot of exploring, but have they discovered anything yet?


An hon. Member:: Why don't you give up?


Elmer MacIntosh MacKay: It is not a case of me not giving up but of the people of Canada giving up on this government unless its members change their ways.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: I was interested-of course I am always interested-in the Prime Minister. He is a talented man and he has a certain amount of tortuous logic on his side when he speaks. After listening to his speech, which was very erudite and replete with patronizing references as to how well we are coping in this country with unemployment and inflation, how much better we are, relatively speaking, then we were before, 1 have come to the conclusion that, as usual, the Prime Minister is taking the debate up to a very high plane, he is dealing with relatives and absolutes. He points out that in some ways we are relatively better off than we were before because we have slowed down the rate of inflation and the rate of strikes. However, he is rather slow to concede that in absolute terms we are, of necessity, worse off than we were in past years. We are worse off because our nation's debts are higher, for example, and our dollar is lower, and we suffer unprecedented unemployment. So I would say to the Prime Minister, to sum up his argument in his submission charitably, that probably his
October 20, 1977

speech indicates that things are relatively bad and absolutely terrible, in this country.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: People are concerned as well about another very basic failure of the government, and I speak parochially here so far as Nova Scotia is concerned, because we are not getting any proper joint federal-provincial initiatives in agriculture. In Nova Scotia 80 per cent of all the food we use is imported. Clearly this is most unsatisfactory. Feed grains is an area where we can be more independent but, according to Mr. Charles Hubbard, president of the Nova Scotia Federation of Agriculture, little research is being done in this area.
The Nova Scotia government has flatly stated that the federal government's 1977 dairy program, which put a 25 cent per hundredweight levy on fluid milk, will cost the Nova Scotia dairy industry $700,000, and reduce the individual dairy farmer's income by approximately $1,000 a year. The levy is clearly too high, and we believe that we should have a long term dairy policy. There should be no necessity for the raising and lowering of quotas buffeting farmers around at the government's whim. This is exactly what has been going on.
The fishing industry in Nova Scotia has not shown any signs of being revived, despite the 200 mile limit that this country finally put in effect at the same time as did the United States.
Again speaking about my constituency, which is a very important priority so far as 1 am concerned, 1 do not see any indication that badly needed bait freezing storage and facilities are being installed federally, provincially, or on a joint basis. I do not see any initiative to improve things in this industry, and this is another thing that is disappointing to me because the Speech from the Throne does not contain any mention of fish so far as I have been able to discover, despite the fact that this industry was one of the reasons why this country was discovered, and still is one of our greatest natural resources.
I say, let us get back to basics in running the country; let us pay attention to developing our fisheries. There are only 800,000 people in Nova Scotia and with some intelligence and the development of primary industries-we would not need large industrial projects-we could get along very well with our fishing, our farming, and our forestry. Yet there appears to be no leadership emanating federally or provincially in this important endeavour for our province.
Another point that 1 wish to make in the context of this debate is with regard to the fears that Canadians have been expressing about what is happening to some of our national institutions. It has not been a pretty sight to see some of the things that have come to light about AECL, Polysar, National Revenue, Statistics Canada and some of the other agencies that were noted in the past for their integrity.
For example, anyone who has been following the proceedings of the Laycraft Commission of Inquiry and has followed the cross-examination of a man by the name of Edmond Swartzack, an official of National Revenue, the cross-examination by Mr. Pitfield, counsel for RAS, and the cross-exami-
The Address-Mr. MacKay
nation by Mr. Berger, counsel for Mr. Justice Faycraft, is struck by the evasiveness and by how perilously close to perjury this man has come. The contention made in the Chamber and elsewhere by representatives of this government that this agreement between Revenue Canada and the RCMP was perfectly legitimate, and not secret, does not stand the test of logic. How in the world, for example, could the chief law enforcement officer of the province of Alberta know enough to make inquiries about this agreement if he did not even know of its existence? How is it that the Solicitor General (Mr. Fox), an erudite man, could say here in the House of Commons that if we want to know the definition of organized crime, for purposes of this agreement, we should refer to a statute that was only passed a short time ago when this agreement, which did not even define organized crime which it was supposed to combat, was put together in 1972? I just do not understand the basic logic exhibited by the government in not co-operating fully with provincial royal commissions.
Another thing that I think will have to be faced pretty soon is what we are going to do about this inequitable section of the Federal Court Act 41(2), which I and other hon. members have discussed at various times with the Minister of Justice (Mr. Basford). Mr. Justice Deschenes of the Quebec Superior Court dealt with this in a very erudite and scathing way last year when he was discussing the case of a couple of young girls from Quebec in whom the Quebec Civil Rights Association showed some interest. They took their case to the Federal Court to find out why these girls were discharged from their jobs. Once again section 41(2) was brought down and frustrated the attempts of these young ladies to find out the truth. In the Faycraft Commission of Inquiry it has been used, and it has been used in other inquiries. It has been used over and over again, but what is the basis for it? If the Americans had this type of legislation, I submit they would never have been able to get to the bottom of their difficulties in Watergate. Just listen to this section in the act. It reads:
When a minister of the Crown certifies to any court by affidavit that the production or discovery of a document or its contents would be injurious to international relations-
That is a very curious thing in relation to a couple of Quebecoise. It continues:
-national defence-
That is incongruous too, for two girls!
-or security, or to federal-provincial relations, or that it would disclose a confidence of the Queen's Privy Council for Canada, discovery and production shall be refused without any examination of the document by the court.
That is the basic keynote, or principle, by the court! Why should a cabinet minister of any government substitute his judgment, biased as it must inevitably be by political persuasion and self-preservation, for that of a Justice in the Federal Court of Canada? The only mandate of a judge is to do the right thing for society. Politicians cannot always do the right thing because of all the political pressures. Lawyers cannot always do the right thing either, as we all know, but a judge is supposed to do the right thing. That is his job, his mandate. Why must we have the situation where even an acting minis-
80025 -iVi

October 20, 1977
The Address-Mr. MacKay
ter, for example, can sign an affidavit which takes away the right of people to have a judge examine the efficacy, the honesty, and the appropriateness of what the Crown is saying and what the litigants are saying? Why do we need it? Section 41(1) is a much more proper section. I will not read it. It is long, but in that particular case a judge does have right and duty of perusal.
I do not want to go on at great length. I think the point has been made. I believe that the Minister of Justice himself recognizes that this is a matter of concern. He said so in the House when he said that the whole Federal Court Act was discussed by the various provincial attorneys general some months ago. That was last March. I urge the government very strongly to take into account the effect this section has and to remove that kind of section, or amend it, so that a judge of the Federal Court does have the right and duty to peruse what a cabinet minister says shall be forbidden to be released.
I hope that as a result of some of these unfortunate revelations which have come out in the past months concerning some of the institutions which people in this country had always trusted the government will make a strong effort to clean up its act and to restore a sense of confidence in the agencies I have mentioned, and in some others as well.
I do not wish to go on too long, but there are a couple of things I would like to say in conclusion. The message I want to leave on behalf of my constituents in this throne speech debate is simply this: I want the government to show some capable management or manpower capability, for a change. So far, mismanagement has been its hallmark. I suggest most respectfully that the government should stop playing musical chairs with the cabinet to the point where ministers are not in their portfolios long enough to develop expertise. I would like to see the government demonstrate some principles for a change because in recent years the Liberal Party has become no longer a party in the federal scene. It has become simply an alliance for power; its credo is expedience; its purpose is to provide avenues for opportunists. The result is that the whole country has lost faith in politicians generally.
The government has left a heritage of cynicism for many Canadians who, as a result of some of the events which have taken place in past months, no longer believe in politics or politicians. The Prime Minister must recognize that billions have been wasted by his government through mal-administra-tion, misadministration, boondoggling, and useless and grandiose projects. Indeed, one might say with some justification that the Prime Minister, among his other attributes, has an edifice complex.
Therefore people in my constituency will be watching with interest to see if the government has learned its lesson and if some of the things it has put forward in the Speech from the Throne, including an opportunity to develop a more open and honest administration, are brought into legislation. They will be looking for the results of more positive management of the economy. The people in my constituency, like all Nova Sco-
[Mr. MacKay.1
tians, are fair, and if the government can exhibit this type of conduct I know they would want me on their behalf to support the government's efforts.


Some hon. Members:: Hear, hear!


Mr. Peter Elzinga (Pembina):: Mr. Speaker, I too wish to begin with the traditional congratulations to the individuals who moved and seconded the motion which began the throne speech debate.
On behalf of the constituents of Pembina I wish to convey sincere thanks for the kindness the Queen bestowed upon Canada by sharing her presence with us in her Jubilee Year. We look forward to having the Queen with us once again in Edmonton when she and Prince Philip will be there to participate in the Commonwealth Games next year.
One could not help but notice yesterday when listening to the debate-when the Leader of the Opposition (Mr. Clark) participated and then the Prime Minister (Mr. Trudeau)-the excellence of the speech of the leader of my party. The Leader of the Opposition did such a superb job that the Prime Minister had to bolster himself by scooping the Minister of Finance (Mr. Chretien) and by telling the Canadian people that there would be an additional $150 million spent under the Canada Works Program. This was not supposed to be announced until this evening, and it was obvious that the Prime Minister was fully aware that he had been upstaged by the Leader of the Opposition.
When we participate in the throne speech debate I think we should review some of the things the Prime Minister has done over the past ten years. The present administration has set many records, and I would like to review some of them. Today we have record inflation because of the administration sitting opposite us. We have record unemployment, record mortgage rates, record interest rates and record government spending, and when we review the last ten budgets the government has brought forward, we find that nine of the last ten budgets were deficit budgets. Because of that dubious record we now have our highest level of foreign borrowing. Our dollar is sinking. We on this side of the House were hoping that the throne speech would provide a redirection at the economic level, but nothing was forthcoming.
A great deal of importance has been placed on the national unity issue, and that importance is merited, but it is obvious that if economic trends continue for the next ten years as they have for the last ten years, we are not going to have a country worth saving. Our Prime Minister is so preoccupied with the linguistic issue that he has let everything else slide to the side. Hon. members on all sides of the House have stated the importance of leadership in government. We saw yesterday the type of leadership the Leader of the Opposition can give to this Chamber and to this country.


Some hon. Members:: Hear, hear!


Peter Elzinga: This leadership is also exemplified in the way the Leader of the Opposition has approached Bill 101, which
October 20, 1977

has been passed in the Quebec legislature. Under the British North America Act, the Prime Minister has two avenues open to him in his approach to the legislation passed in Quebec. The approach we have advocated is a reference to the Supreme Court of Canada to test the validity of the legislation.
The second avenue the Prime Minister has open to him under the British North America Act is that, if the federal government so desires, it can disallow provincial legislation, as long as it does so within one year. The Prime Minister has not seen fit to take either avenue, and we wonder where is his leadership in this issue. It is obvious when we travel through our constituencies that the two main issues in Canada today are national unity and the economic policies of our present administration. We have stated what we would do, in the event that we were the government, with regard to Bill 101, but let me share with the House why 1 feel the Prime Minister will not take this approach. I feel that the Prime Minister himself is in support of Bill 101. Rene Levesque and our Prime Minister are in bed together.


Lloyd Roseville Crouse: The odd couple.


Peter Elzinga: When the sheets are pulled over their heads they are holding hands and laughing at the gullibility of the Canadian people on this issue, but when the sheets are pulled back they have a mock pillow fight simply for public consumption. Bill 101 is a fine example of that, and I hope the Canadian people will realize just what is going on between their Prime Minister and the leader of the government party in Quebec, who is dedicated to the break-up of Canada. There can be no doubt in the mind of anyone who has heard our leader speak in the national unity debate before this parliament recessed, about where our party stands on this issue.


An hon. Member:: Oh, oh!


Peter Elzinga: If the hon. member had listened to what our leader said he would be aware of where we stand. He should read Hansard, or listen to the debates.
We saw the government bring in wage and price proposals. We hoped that during the period wage and price controls were in effect the government would re-think its economic policy. In the 1974 election campaign this party stated that wage and price controls should be a temporary measure in order that we could realign the economic policies of the government if we should take power. The government has not taken advantage of the time available to it while wage and price controls were in effect.
When I speak of realigning the economic policies of the government I would point out that it is essential that it curb government spending and that there be a realignment of fiscal policy. This is what we advocated in 1974.
Traditionally a country grows according to its leadership. It becomes obvious not only to those who are sitting in this Chamber but to Canadians at large that Canada has been deprived of leadership for the past ten years. Canada is
The Address-Mr. Elzinga
begging, searching, for leadership. In 1968 when the Prime Minister (Mr. Trudeau) took the reins of power with this government, very little was said about separation. Now in 1977 we have the government of one province dedicated to its separation.
I have dealt briefly with the economy and the national unity debate, Mr. Speaker. There is one other issue that I wish to share with you, however, and 1 do so with a certain amount of reservation. One is elected to parliament to express the views of constituents and often one feels rather hesitant about baring one's heart when aware of one's shortcomings.
This country was built by pioneers who had a deep dedication not only to their country, Mr. Speaker, but also to God. That is what is lacking today from parliament even in the direction that this country is going. We lack the moral idealism that is essential for a country to survive.
Let me just close by sharing with you the thought that it is time that we, as members of parliament, realized that governing Canada is expressed in the words over the doorway to the Parliament Buildings-"God shall have dominion from sea to sea."
Let us strive to show Canadians that we have set that example for them here in Ottawa.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Ethier):: The hon. member for Churchill (Mr. Smith).
[ Translation]


Mr. Pinard:: I rise on a point of order, Mr. Speaker.
There is hardly two minutes left and we agreed with each party's representatives to adjourn the debate at six o'clock to allow the Minister of Finance (Mr. Chretien) to have the floor at eight o'clock. The minister would be followed by a speaker for the Progressive Conservative Party, one for the New Democratic Party and finally one for the Social Credit Party of Canada. The agreement was that the previous speaker-the one who just spoke-would close his remarks at six o'clock. Since it is now a few seconds to six, I ask that the House call it six o'clock to comply with the agreement we had reached.


Walter David Baker: On the point of order, Mr. Speaker, that is the case. There are two and half minutes left and 1 understand that the hon. member for Churchill (Mr. Smith) wishes to speak and will complete his remarks by six o'clock in order that the arrangement the parliamentary secretary has mentioned can go ahead.
[ Translation]


Yvon Pinard: Under these conditions, Mr. Speaker, and since we will come to nearly the same results, I have no objection to

October 20, 1977
The Address-Mr. Chretien
the hon. member speaking for one minute and three quarters or so.


Mr. Cecil Smith (Churchill):: f'Mr. Speaker, it was not my intention to speak before six o'clock but the events of today have brought drastic consequences to the nickel mining industry of Canada. International Nickel has announced that effective January, 1978, in Sudbury and that area, 2,800 people will be laid off, and at Thompson, Manitoba, in my constituency, 650 people will be laid off before the middle of 1978.
I think this is only the beginning of what is going to take place in the mining industry. In the budget the government made no reference to stimulating the mining industry and I should like to ask that the Minister of Industry, Trade and Commerce (Mr. Horner), the Minister of Finance (Mr. Chretien), and the Minister of Energy, Mines and Resources (Mr. Gillespie) immediately convene a meeting with the mining industry of Canada to see if we cannot keep the mining industry in business until such time as they at least have an opportunity to look at the projected layoffs.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Ethier):: It being six o'clock I do now leave the chair until eight o'clock p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Joseph Jacques Jean Chrétien: Mr. Speaker, let me first express my warmest congratulations to the mover and seconder of the Address in Reply to the Speech from the Throne, the hon. members for Louis-Hebert (Mr. Dawson) and Malpeque (Mr. Wood). They performed their task with the excellence that is traditional in the Canadian Parliament.
This is my first speech to the House of Commons as Minister of Finance. I would like to thank members from all sides of the chamber for their good wishes on my appointment. I know they join me in extending my best wishes to my predecessor, the hon. member for Rosedale (Mr. Macdonald). He has set an example to all of us in his sense of duty and his service to this country.
I have been fortunate in being able to attend two major international economic conferences and to discuss the problems of the world economy with finance ministers from many other countries. We all face difficult problems at this time. I was also glad to meet with my provincial colleagues recently. We had a good, frank discussion and I thank them for their advice.
I want to use this occasion to speak on the economy, on controls and on taxes. This is the first possible opportunity to inform the House of my decisions and to get rid of uncertainty. I also want to give the House the opportunity to pass the incentive measures of the last budget and any additional measures that I will be proposing tonight as quickly as possible.

Let me report on the economic situation as I find it.
We have made some progress in bringing down the rate of inflation. Wage increases have slowed down. Increases in non-food prices have been reduced steadily since the start of the controls program. But there have been some setbacks this year because of higher food prices and a weaker Canadian dollar. We have a long way yet to go.
Output has not risen in the last few months as we had hoped. Even if we do much better in the second half of this year, total output in 1977 is only going to be about 2 per cent higher than it was in 1976. Independent forecasters are calling for gains of only 4 to 5 per cent next year. That is not enough to bring down the rate of unemployment.
More people are at work in Canada. Indeed we have already just about achieved the goal set in the last budget of 250,000 more jobs. But the numbers of Canadians wanting to work has increased even faster. Unemployment has risen to 8.3 per cent for Canada as a whole.
We must find more jobs. I will not be satisfied until everyone who really wants to work can find a job. But I cannot promise any miracle solutions. It will take time and effort to overcome our unemployment problems. No one should think that there are any easy answers.
Our balance of payments situation is unsatisfactory. It is true that our exports have risen as a result of the recovery in the United States and elsewhere. This is giving rise to a trade surplus of over $2 billion this year. But we need an even larger surplus. We have had a large increase in our tourist deficit. Furthermore, the deficits on interest and dividends and other services are large and growing. These facts have made the Canadian dollar vulnerable, and it has declined in value.
Finally, the revenues of the federal government are growing more slowly than expected. As a result, our cash deficits are now so large that room for manoeuvre is very limited.
These are the facts we have to face. They stand in sharp contrast to the potential for growth in this country. We have the resources, the land, the skills and the tradition of hard work. We have grown faster than most other countries in the past and there is no fundamental reason why we should not do so in the future.
I do not want a temporary surge which cannot last and which will start the process of inflation all over again. But I do want sustained growth of between 5 and 6 per cent in order to bring unemployment steadily down. The expansion should be led by exports and business investment. We need to improve our trade balance even further and to reduce our tourist deficit in order to put our balance of payments into better shape. The



October 20, 1977

business community should be planning now the new factories which will be needed to produce more in the future.
Government spending should grow less rapidly, but consumer spending can and should grow in line with the economy as a whole. It is this growth, together with higher exports, which will reduce the excess capacity in the economy and create the demand for more capital investment.
What is holding us back? 1 think there are three things.
First, our markets abroad have not grown as fast as had been expected. World prices of wheat, wood pulp and base metals have been disappointing. All countries need to do what they can to get the world economy going again.
Second, we are paying the penalty for letting our costs get out of line.
This is part of the reason why imports have taken an increasing share of the domestic market away from Canadian producers, why there has been such a sharp fall in manufacturing jobs, why we have lost ground in tourism, why new plants are being built in the United States rather than in Canada. Wages are not the only source of these higher costs, but they are the larger part. With controls we have seen new wage increases come down from 20 per cent in 1975 to 8 per cent recently. So we are no longer losing ground compared to the United States. But we have not made up for the ground lost in the past.
We have had to give more protection to some of our weaker industries like textiles by restricting imports. But this is only a short-term solution. We need lower-not higher-trade barriers here and around the world if we are to build efficient manufacturing industries and increase our productivity. The drop in the value of the Canadian dollar has helped in restoring our competitive position. But this is not a fundamental solution to our problems. A falling exchange rate pushes up many costs and prices in Canada. The answer must be found in getting the rate of inflation down, in bringing our costs into line with those of our main competitors.
The third thing holding us back is a loss of confidence. In part this is a result of inflation, slow growth and high unemployment. But the present wave of pessimism seems to have gone too far. It gives too little weight to the progress we have made in wringing out the excesses of the past and building a better basis for future growth.
In part this is a result of political instability. People are concerned about whether Canada will remain a united country and that concern has added to our economic difficulties. I have no doubt whatever that the people of Quebec overwhelmingly believe that Canada is their country. Quebec will not separate from Canada. But until separatism is defeated, it will impede the economic progress not only of Quebec, but of the rest of the country as well.
I want to do all I can to dispel uncertainty-by speaking for a united Canada, by standing firm against inflation, by keep-
The Address-Mr. Chretien
ing down our spending and our taxes and by announcing clear-cut decisions on controls and the economy.
But I need the help of all Canadians. Government cannot do everything itself. A healthy economy is dependent upon a healthy private sector. Consumers must be able to spend more and the private sector must be able to plan its investments with more certainty.
As I have said, there are no miracle solutions to our economic problems. Progress will be slow and it will require hard work, more productivity, lower expectations and greater responsibility on the part of all Canadians.
To stimulate demand without increasing the danger of inflation, I am announcing tonight:
1.	A phase-out of controls beginning on April 14, 1978.
2.	A personal income tax cut of up to $100 for low and middle income taxpayers.
3.	Further job-creation programs.
4.	An employment credit for job creation.
5.	The maintenance of strict restraint on government spending.
I turn now to a discussion of these proposals.
The key elements of the anti-inflation program launched two years ago were price and income controls, a gradual slowing down in the growth of the money supply, restraint of government expenditure and wide-ranging improvements to the structure of the economy.
We continue to give full support to the Bank of Canada in reducing the rate of growth of the money supply and we remain committed to expenditure control. It is our firm intent to keep the increase in our spending within the growth of the economy. We have achieved considerable success, as have the provincial governments.
Our expenditure ceilings are coming under very heavy pressure. Slower growth of the economy is costing us more in unemployment insurance, in payments to the provinces and in interest on the public debt. We are faced with higher outlays as a result of lower wheat prices and the very bad weather during this harvest. Despite these pressures, we will do whatever is necessary to stay within the ceilings set by my predecessor last March.
The controls on prices, wages and other incomes have contributed greatly to checking the inflationary spiral in our economy. But they should not be a permanent program because the government does not believe in excessive intervention in the marketplace. While controls cannot be removed immediately, phased decontrol will begin on April 14, 1978, two and one-half years after the program began.
The further period of control will enable us to make more progress in bringing down the rate of inflation and in reducing inflationary expectations. In the next few months we will

October 20, 1977
The Address-Mr. Chretien
amend the Anti-Inflation Act to ensure effective administration of controls during the period of transition and to minimize the risk of a bulge when controls come off. We will also proceed with establishment of an agency to monitor and report upon price and cost developments.
In the phased process of decontrol beginning next April 14, employees will be free of controls for their guideline years which start after that date. Business will be free of price and profits controls for their fiscal years which begin after that date.
Changes are being made in the guidelines for the third year of the program. They are fully explained in the Supplementary Information I will be tabling. Briefly, the basic guideline for wages and salaries will be 6 per cent. The experience adjustment factor will continue to apply. Dividends will remain under control. The permissible increase will be reduced from 8 per cent to 6 per cent, the same amount as for wages and salaries.
We have no choice but to keep slowing down the increase in costs if we are to get the economy going again and reduce unemployment. Barring unforeseen events, the rate of inflation will come down below 6 per cent next year, so the lower guideline will not lead to a fall in real incomes. Furthermore, I am taking steps to ensure that the take-home pay of lower and middle income workers will increase.
In fact, in the last two years, we have been right on target. We were two points lower in the first year. This year, because of the circumstances I have explained, we are two points higher. That totals exactly the same.
If we had left the regulations unchanged, the guideline would have been about 8 per cent because the consumer price index has gone up by more than the price target this year. But I would like to emphasize that the first two years of the program taken together were just about on target. We did better than the target by almost 2 per cent in the first year and seem likely to fall short by about the same amount in the second year. This was due to two main factors. First, food prices fell in 1976 and then rose sharply in 1977. Second, the Canadian dollar remained quite strong through much of 1976 but has since fallen quite sharply. This has pushed up the prices of the things we buy abroad.
There is no way in which we can protect Canadians from the loss of real income caused by higher import prices. If money incomes were allowed to rise correspondingly, the inevitable result would be still higher prices and we would be worse off.
I turn now to fiscal measures.
While my room for manoeuvre is very limited because of large deficits in our accounts, I believe we can do more to stimulate the economy. The measures I have chosen will serve several purposes. They will offset the cut in the wage guideline for low and middle income wage earners. They will stimulate consumer spending and housing. And they will create jobs.
First, I am cutting taxes for low and middle income taxpayers by $100. I propose to do this by increasing the minimum amount of the 9 per cent federal tax credit from $200 to $300.

This will apply only to the 1978 taxation year. The value of this additional $100 cut will be more than $700 million.
To provide quick stimulus, the reduction will be concentrated as much as possible through the January and February deductions at source. The take-home pay of millions of employees will increase by $50 in January and $50 in February. Many will enjoy a holiday from federal income tax in those two months and some for the whole year.

Here are some examples. A typical married taxpayer with two children and an annual income of $15,000 will see his federal tax reduced in January and February by the full $100. If his income is $10,000 or less, he will pay no federal tax at all in these two months. If he earns about $8,500 or less, he will have a holiday from federal taxes for the year as a whole.
Over 7,500,000 taxpayers will benefit from this tax cut. About 6 million will receive the full $100 cut.
I also wish to announce that the indexing factor for the personal income tax for 1978 will be 7.2 per cent. This means that the basic personal exemption will increase from $2,270 to $2,430. For a family of four, total personal exemptions will rise by $360 from $5,120 to $5,480. In total, Canadians will pay $850 million less in taxes next year as a result. I only regret that the importance of indexation is so often forgotten or ignored in public discussion. That is why I am pleased to repeat it this evening-taxpayers will benefit from an additional $850 million exemption in the early part of the year.
I now turn to our measures of direct job creation. We have already allocated a total of $450 million this year for Canada Works, Young Canada Works and the other job creation programs. These programs will be maintained at this very high level for 1978-79. In addition, we are providing $150 million for work projects with a high employment content. These will be focussed on high unemployment areas beginning immediately. In total, for the current and the next fiscal year, the government will be spending over one billion dollars for direct job creation. All of these funds are being provided within the expenditure ceilings to which we are committed.
The new funds, the additional $150 million, come from the budgetary cuts made by my distinguished colleague the President of the Treasury Board (Mr. Andras).
Mr. Speaker, I also expect to introduce shortly a new program of employment credits for private business firms. This will be a new approach to job creation in Canada, and I have to give careful study to alternative ways for carrying it out efficiently and effectively. I fully expect, however, that legislation will be introduced to initiate this new job credit plan early in 1978, at an approximate cost of up to $100 million. Last, I am taking this opportunity to announce some other tax changes. I will be extending by regulation the fast write-off for anti-pollution equipment until 1980. I will also be extending by regulation for another year the special provision permitting taxpayers to offset against other income their losses on rental housing generated by capital cost allowances. This will maintain the incentive for the construction of multiple unit residen-
October 20, 1977

tial housing. I am bringing the capital cost allowance on wood-frame buildings into line with other kinds of buildings. Furthermore, tonight's Notice of Ways and Means Motion includes changes relating to life insurance, corporate surplus and loans by companies to their employees. 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. Details are provided in the supplementary information.
Members will recall that the March budget proposed $1.5 billion in tax reductions to stimulate the economy. It included a tax reduction for middle and lower income families of up to $50 for each child. It also increased by $100 the employment expense deduction. There were significant measures to improve profitability and encourage business expansion. The investment tax credit was extended and increased. A 3 per cent inventory allowance was introduced. The dividend tax credit was enriched. All these measures are being reintroduced in the Notice of Ways and Means Motion tonight.
Long delays in passing tax bills add to uncertainty. We should move swiftly to enact the measures proposed in the last budget and the new measures I have proposed tonight.
Finally, I want to say a word about the exchange rate. The policies we are following of getting our costs down and our employment up are directed at our fundamental problems. With such policies, our balance of payments will improve. We have operated in the market to maintain orderly conditions. This has involved some loss of reserves during the recent period of decline in the exchange value of the Canadian dollar. However, our reserves remain substantial, and we have the capacity to supplement them substantially should the need arise. We will continue to follow our floating exchange rate policy. I am convinced that confidence in the basic value of the Canadian dollar can best be promoted by sound domestic policies, and not by artificialities.
I should like to repeat, now, something I have said before. There is absolutely no idea in the mind of the government of imposing exchange controls. I know there was a story which was printed and widely circulated and which created some problem, and I know that unfortunately many Canadians have perhaps moved money out of Canada because of that story. 1 think it is extremely regrettable because it could cause some problem for the Canadian dollar. That is why 1 want to state tonight we have no intention at all of imposing exchange controls in Canada.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, I would now like to table the Notice of Ways and Means Motion, projections of the government's revenues and expenditures, supplementary information on the controls program, the text of the government's statement of July 29 to business and labour on decontrol and
101
The Address-Mr. Chretien
post-control arrangements, and details of the tax changes. I shall ask that the Notice of Ways and Means Motion be appended to today's Votes and Proceedings.
Even though we are holding firm to our expenditure ceilings, our total financial requirements are now forecast to increase from $5.5 billion in 1976-77 to $8.5 billion in 1977-78. They will be even larger next year, mainly because we will be paying off $2 billion in accrued interest on Canada Savings Bonds. In these circumstances, to attempt to do even more at this time through fiscal pump-priming would clearly be counterproductive.
With all these measures at work, we can expect the economy to grow in real terms by 5 per cent next year. To do better than that will require a concerted strategy of change and improvement in the structure of our economy extending over the medium-term period ahead.
We have made a start on important elements of that strategy. In the critical energy area, for example, wide-ranging policies on pricing, taxes, and joint private and public investment are helping to develop new sources of supply, improve distribution and economize on use. In the housing area, we are well on the target of a million more houses for Canadians over four years. Federal funds and support are being increasingly channelled into assisted home ownership and rental for people of modest income. We have successfully proclaimed the 200-mile limit for fisheries jurisdiction, to assure effective management and conservation of that valuable resource. For business generally, we are making progress in diminishing unnecessary regulation and filing of statistical forms. The need for efficiency and higher productivity is increasing as we move closer to the hard bargaining of the multilateral trade negotiations.
In all these, and many other areas, much more has to be done by investment policy and basic structural changes. We intend to promote such changes, to seek the active co-operation of the provinces, and to engage as widely as possible in consultation with business, labour and other economic interest groups.
[ Translation]
Mr. Speaker, we must realize that these are difficult times for Canada both economically and politically. But these are also challenging times because Canadians must rededicate themselves to the building of a stronger, more prosperous and more united country.
The solutions to our problems are not easy and they will not all come from government. We must realize not only that the resources of government are limited, but also that we do not want in Canada the type of society where everything comes from the state. Therefore, there will not be any large new social programs nor greatly increased government spending. To maintain our standard of living, all Canadians must learn to work harder, to be more efficient and to be more productive.
While we have serious problems, we should not exaggerate them. Franklin Roosevelt once said that the only thing to fear

October 20, 1977
The Address-Mr. Stevens
is fear itself. I am not afraid. I will not trade the problems of Canada for those of any other country in the world and neither will any member of this House.
In building a country, we have had to cope with all the problems inherent in developing a new land, in fighting a vast geography and a harsh climate, in experiencing severe economic depression, in accepting international responsibilities, in living in an age of great complexity and tremendous change, and we have succeeded.
We must adopt once again the spirit of those who built this country, a spirit of adventure and initiative, a taste for risk, and the determination of the explorer. This is the challenge we must meet.
This country has been too good for too many of us to let it be destroyed! I know that the vast majority of Canadians want to roll up their sleeves, use their imagination, create, and produce in the manner of those who came before us. Each of us has his own contribution to make. Let us do so with enthusiasm. This is the only way we can leave to our children the heritage which we have received-a country rich in the diversity of its people and its natural resources, vast, generous and tolerant, a country which has been, which is, and which will be the envy of the entire world.


Mr. Speaker:: As I am sure all members are aware, the Minister of Finance (Mr. Chretien) was granted some leniency in terms of time when he was making his rather major statement. Certainly, if the occasion arises, the same courtesy will be extended to those who respond to him on the other side of the House.
In order for the minister to append a notice of ways and means to the Votes and Proceedings, an order of the House is required. Is it agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed and so ordered.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in joining in this debate this evening may I also add my congratulations to the mover (Mr. Dawson) and the seconder (Mr. Wood) of the motion, who spoke to us earlier. Our time is limited tonight, and first I should like to say that I feel the budget which was delivered tonight, because it is really a mini-budget, has some good in it and some bad.


Some hon. Members:: Right on!


Sinclair McKnight Stevens: Let me tell you what was not in the minister's statement tonight.


An hon. Member:: The truth.


Sinclair McKnight Stevens: The government offers little hope for those one million Canadians who will be looking for work in the cold wintry months ahead.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: There is little hope for the youth in our country who will be seeking their first job opportunities in the midst of the worst economic conditions in at least the last 30 years.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: For those out of work in our five eastern provinces and for those out of work in all of those high unemployment areas of Canada, let them not look to Ottawa for help, judging from this statement tonight.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Sure, hon. members will recall that the right hon. Prime Minister (Mr. Trudeau) only yesterday, and the Minister of Finance (Mr. Chretien) tonight, spoke about $150 million for the unemployed. What is that in relation to the million unemployed?


Walter David Baker: Nothing!


Sinclair McKnight Stevens: It is $150 per unemployed person in this country.


Steve Eugene Paproski: Shame!


Sinclair McKnight Stevens: Expressed another way, that $150 million may mean 16,000 fresh jobs-with one million out of work in the country. That is this government in action!
Before this evening we had one million unemployed in Canada and we were heading toward our worst winter since the dirty thirties. Having heard the minister's statement tonight, I would suggest we are still heading for that type of winter.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: As I have said, there is some good in the budget tonight, and some bad. Frankly, I am pleased that the government has responded to our constant demand to reduce taxes, as far as the personal income taxpayer of this country is concerned.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, two budgets back we first raised the significant point that Canadian taxpayers were being overtaxed, and we asked that there be a substantial reduction in their favour. At the time the budget was tabled in March, 1977, we renewed our request, and only yesterday the Leader of the Official Opposition (Mr. Clark) asked once again that there be a considerable tax reduction for those earners, especially below the $16,000 a year level.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I am pleased that at long last the government has responded to that request. 1 only wish in future it would
October 20, 1977

respond a little more quickly for the sake of Canadians when we request something.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: When we speak about significant tax cuts- and 1 wish to touch on certain other tax breaks which I think the Canadian public is entitled to-let there be no doubt that we are simply suggesting not a greater deficit, but less federal spending, because we believe if this government were less wasteful there could be a significant further tax reduction for the Canadian public.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: How many of us still remember how startled we were, speaking about waste, to learn that last year alone the government spent almost $1 million on cab fares getting around Ottawa?


An hon. Member:: Shame!


Sinclair McKnight Stevens: And yet they tell us they do not know where they can trim the fat.


An hon. Member:: Participaction.


Sinclair McKnight Stevens: Before this evening we had an inflation rate of more than 8 per cent and the almost certain prospect of a higher rate in the months ahead. Having heard the minister's speech, realizing that he predicts a 6 per cent rate for next year, 1 would suggest that we will not attain that rate in that there is already a 4 per cent built-in inflation on the devaluation of the dollar over the next two years. It is the minister's own officials who have said that that will be so.
Frankly, I would suggest that one further tax cut that the minister neglected to make was a substantial reduction in the sales tax that is charged to Canadians from coast to coast.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Why should the federal government, for example, make more in the sales tax alone on every car sold in this country than the manufacturer, the wholesaler, the retailer, or any provincial government? That fact is true of many other articles as well. The saddest thing of all is the use, as I have said, of the money that the government receives. Speaking about how it spends that money, I wonder how many Canadians were pleased to learn that the Minister of Agriculture (Mr. Whelan) flew on government aircraft a total of 361 times during the last three and a half years, surpassing even the rather staggering record of the Minister of Transport (Mr. Lang).


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: Let me point out to the Minister of Finance that, surprisingly, in his statement, no meaningful reference was made to small businessmen. Certainly any hope that they
The Address-Mr. Stevens
will have less bureaucratic control evaporated with the statement which we have just heard read into the record. It is disappointing that this sector of our economy which produces most of our jobs continues to be ignored by this government which loves bigness for the sake of bigness. The small businessman is ignored by this government which is more concerned about arranging $100 million loans for a corporate few than about helping small businessmen who sometimes ask for a few thousand dollars to help create jobs.
I have said that there is some good and some bad in the minister's statement. One of the good things was the dropping of the proposal to tax life insurance proceeds that were going to beneficiaries in Canada.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Imagine, if that legislation were allowed to pass through this parliament it would have meant that Canada would have been the only country in the world to have found it necessary to tax money that was literally payable to widows and orphans out of life insurance proceeds. Let there be no doubt as to why the government backed down from that taxation proposal. It was because of our insistence on this side that we did not want such retrograde taxation.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Only a month or so ago the leader of my party sent a personal letter to the Minister of Finance asking him to reconsider that tax.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: I could go on, but let us first remember why the government needs these funds which it has shown us tonight are growing further in the form of tax revenues. It needs the funds because it has expanded its spending at such a rate that its deficit in this year alone is estimated to be $9.2 billion.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: To put that deficit into perspective, let us remember that $9.2 billion was almost the size of the total federal budget when the Prime Minister took power in this country. We are told in addition in the minister's statement that not only are we faced with $9.2 billion this year but that next year we have to budget for an additional $2 billion in the form of accrued interest on the debt that this government has run up.
When we speak about tax reductions such as the lower sales tax to which I have referred, let there be no doubt-and I underline this-that we believe $1 billion could be slashed from the government's spending plans with no trouble at all.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: We are not talking about bigger deficits, we are not talking about bigger federal outlays, we are talking about less. In short, we say: restore the income base of
80025-8'/2

October 20, 1977
The Address-Mr. Stevens
Canadians, limit government spending, and we can all enjoy less taxation in this country.
Before this evening our economy was virtually standing still with at least one fifth of our productive capacity sitting idle. Having heard the minister's speech I would suggest that we are still facing that kind of stagnation. Before this evening our dollar had plunged to 90 cents because the world had lost confidence in the government. Having heard the minister's speech, we doubt if that confidence will be renewed tomorrow. In short, only the face of this ministry has changed in the person of the new minister. We have had ten years of economic mismanagement and the government apparently does not learn quickly. In short, it is a government which has systematically demonstrated that it is incapable of managing the Canadian economy.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: You will recall that only yesterday the Prime Minister started to change like a chameleon. Now that his spending spree has caused such harm in the country, we find that the Prime Minister is starting to run with the hounds after having run with the hares. He certainly tells us, you will recall, that we must now be disciplined, that we have grown too soft. But he scarely glances at his own government's lack of discipline. Now he tells us that the goals that we rightly thought attainable in this country-and I suggest most members of the House would agree-are now unattainable. He tells us that our expectations are too high. Imagine, our per capita average income when he took power was second in the world and now it has fallen to tenth, and he tells us that our expectations are too high. Just guess who is ninth? Luxembourg!


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: In view of his new demand for harsh discipline I would like to remind the Prime Minister of a statement he made at the Ottawa Canadian Club in 1972. Probably he does not like to be reminded of this, but I will quote him: He said:
Well, this tremendous growth which is within our grasp is really fantastic. It really boggles the mind to think that one half of our productive base is only beginning to be built now-the productive base that we will have in 1983. Now this, I submit, means the revolution of rising expectations can be very high indeed and still be capable of fullfilment.
Now the Prime Minister tells Canadians they should not have any expectations at all. Frankly, those expectations can still be attained in this country with proper direction from Ottawa, and we would be pleased to deliver it.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: We can be once again not just number two but number one in the world, but we have a Prime Minister who, when he cannot attain certain goals, is a bit like a hockey player. Not being able to put the puck in the net any more, he says, "Widen the net".
[Mr. Stevens.)
We have been told tonight that there will be a phasing out of wage and price controls beginning on April 14 of next year. Frankly, I wonder whether the minister can be believed when he speaks about ending wage and price controls. We had the Prime Minister telling the country on the weekend that we must accept a new discipline, and then he came into the House and said that an example of the new discipline he had in mind was the controls program.
Let us not forget that it was the Prime Minister who, in the 1974 election campaign, promised the Canadian public that he would not institute wage and price controls, and then did so after his election. Can they be believed when they suggest that they are going to go into a decontrol phase period by April 14, 1978?


Some hon. Members:: No way.


Sinclair McKnight Stevens: The frank truth is that we have a Prime Minister who believes in state intervention. He believes that he and his mandarins know better how to run our lives than we do ourselves. In short, he likes controls for others. That is why I suggest to this House that while we are to go through an apparent decontrol program, if the present Prime Minister should ever gain re-election with a majority, we will be stuck with controls for an indefinite period, and that is the truth.
On another occasion I should like to outline some of the plans we would like to see instituted which we feel would restore the momentum of the economy and which would make us once again a viable country. However, I know our time is limited, and I would like to give some time tonight to the hon. member for Waterloo-Cambridge (Mr. Saltsman) who, I know, is anxious to speak in this debate as well.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, to begin with I should like to congratulate the mover and seconder of the motion for an Address in Reply to the Speech from the Throne, and I should also like to thank the hon. member for York-Simcoe (Mr. Stevens) for giving me at least a few minutes of his time.
I want to congratulate the Minister of Finance (Mr. Chretien) and wish him well. He is a man who is very likeable, and for that reason it is a grave disappointment to see the kind of mini-budget he brought in tonight. It is a disaster of the greatest proportions. At a time when the country desperately needs measures, or an understanding of the crisis we face, the minister gives us more of the same things which have brought us to the condition we are in now. We hoped for more from this minister. It is not that we expected he could pull some rabbit out of a hat or work some miracle in the four or five weeks he has occupied his ministry, but that he would at least have some understanding of the kind of serious situation we face in Canada. He read his speech well, but having read it well does not change the fact that he just had platitudes and banalities to put forward.
The minister says that there is no fundamental reason why we should not continue to grow. We have grown faster than most other countries in the past, and there is no fundamental

ill

October 20, 1977

reason why we should not do so in the future. The evidence is quite clear that not just Canada but other countries in the world cannot expect the kind of growth which has taken place in the past, and that the sooner this government gets down to recognizing that something important and fundamental has changed in our society, the sooner we are going to come up with answers.
There will be a few dollars thrown around to do one thing or the other, but we are never going to come to grips with any of the problems. The minister is trying to carry water in a leaky bucket, and until he fixes the leaks in that bucket he is not going to have much effect. It is one thing to admire his industry and his running back and forth with his leaky bucket, but it is another thing to accept the results. What is disturbing to me, and to many people like me, is the kind of complacency and unawareness we see on the government side with respect to what is going on in this country.


Mr. Benjamin:: Like Herbert Hoover.


Max Saltsman: My colleague is right. Herbert Hoover sounded like a sage compared with the kinds of things we heard from the minister tonight. As I said earlier, I did not expect the minister to come up with all the answers, nor do I anticipate that I can put forward all the answers and find a solution to the problem, but the troublesome thing is that the minister is not even asking the right questions, let alone coming close to any kind of solution. There are changes taking place in our society which 1 think should be evident to everyone. There simply will not be enough jobs to go around, and it is not just a matter of throwing more money into creating more jobs. The system is not working.
A couple of years ago the Prime Minister (Mr. Trudeau) made a speech which horrified his colleagues. He said that the market system was breaking down. He was closer to the truth then than he has been since. The market system is in fact breaking down. Things are not working. Certain things which are supposed to have one effect are not having an effect at all, or they are having a contrary effect. We will look at some of those things.
Over the last number of years there have been tax cuts of various kinds, very much like the mild tax cuts or the indexing system that the government is proposing tonight. Those tax cuts were supposed to stimulate consumption. During that period when those tax cuts were taking place and they included sales tax cuts-consumption declined, and nobody asked why. One of the reasons is obvious. Whether they are tax cuts or tax credits, they go to the wrong people. Sure, some of it trickles down, and whenever it does the relatively less well off people receive benefits from our taxation system, but the maximum benefits go to those who already have a great deal.
The minister seems to be very proud of his announcement about how much money is going to be saved by indexing. Some money will be saved, and the amount will be substantial, but let us take a look at how those savings take place. A married taxpayer under 65 with two children under 16 and earning $5,000 a year-that is the government category-saves $1.
The Address-Mr. Saltsman
However, a member of parliament, or someone who earns over $30,000 or $20,000 a year, saves $195. That is some justice. A person fortunate enough to be making $50,000 a year saves up to $537. And then we wonder why these tax cuts that have been made over the years are not having any effect.
If you look toward the savings package it is quite clear what is happening there. At the same time that these tax cuts are being instituted, the government is providing other benefits. Those who are well off and can put their money away in Registered Retirement Savings Plans or Registered Home Ownership Plans do so. They do not put their money into consumer goods.
The truth of the matter is that for many people in our society, tax cuts do not stimulate the consumption that is supposed to provide jobs; they simply go into savings. The people who have needs, who are not saving, who cannot save- the people who would buy stoves, refrigerators and houses, do not have the money. They are not even in the tax system. This whole business of looking toward tax cuts as an answer to our problems has to be seen as an obvious failure, yet the government continues with this kind of approach reinforced by my friends on the right.
Very often the government tends to pick up the ideas of my friends to my right-whenever they pick up any ideas that is where they look. The indexing system was an idea put forward by the Progressive Conservatives, and I think we are paying very dearly for the indexing of income tax. It is one thing to index at lower levels where it gives a more fair distribution of income. When you index at all levels, however, there are very substantial tax savings for the very rich.
The government budgeted for a deficit of some $5 billion- an unheard of deficit-and now finds itself with an $8 billion deficit which is having virtually no effect on stimulating the economy. That was supposed to work. Large deficits were supposed to provide stimulus to the economy and to provide jobs. They are not providing jobs. The tax cuts were supposed to provide incentives to consumption, which was again supposed to provide jobs. They are not providing jobs.
It should be obvious that the system is failing, Mr. Speaker. The system is not working, yet what we have seen tonight from the Minister of Finance is the same old patchwork on the same old leaky bucket. He seems to expect the country to see this as something of value or benefit.


Mr. Woolliams:: There is no water in the bucket.


Max Saltsman: Some of it stays in, but not very much. If we examine one of the proposals the government has put forward tonight, it can be conceded that it cannot be wrong about everything. Here it is on the right track. It suggested putting $150 million into federal spending for job creation. What we would like the government to consider-and we have an amendment to this effect-is that the $1.2 billion in tax incentives to industry that appeared in the last budget should

October 20, 1977
The Address-Mr. Saltsman
be wiped out and added to this $150 million in order to provide jobs.
It is all right for my friends to the right to say the government should get out of business and that the government should get out of the economy. That is exactly what the government has been doing in the last few years in response to the suggestions from my friends in the Progressive Conservative party. It has been cutting back on government expenditures-or trying to; it has been responding in a more conservative way than the Conservatives themselves. What has been the consequence? It has been high unemployment. The theory has been that if the government gets out of the economy, then private industry is going to rush in there and create jobs. They say "free private industry-unfetter the hands of private industry to create the jobs." Private industry has been unfettered, and we have fewer and fewer jobs.
Just this morning my colleague, the hon. member for Nickel Belt (Mr. Rodriguez), told me the very sad news that something in the neighbourhood of 3,000 people in Sudbury and 650 in Thompson are to be laid off. That is unfettering the private sector, Mr. Speaker!
I do not blame the private sector for not being able to create jobs. If the world market for nickel is depressed or if other factors are involved, they cannot be blamed for creating this situation. The point I am trying to make is that they are not in a position to provide jobs despite the fact that mining incentives have been given and tax write-offs have been given. The government has foregone $1.2 billion of tax revenue and that has to be made up by someone else. Despite all this, there are fewer and fewer jobs in the private sector. It is not that the private sector wants to be contrary. If the demand is not there-if foreign countries are not buying the resources that unfortunately we were too dependent upon for too many years, if people are not buying goods and services in our economy, then business cannot respond. In a modern society the stimulus comes from government and no longer from the private sector.
The private sector is certainly a very useful part of our society and should be encouraged. I for one have no hang-ups about that. Many of the groups in the private sector do a good job, but they are no longer in command of the situation. My friends to my right and perhaps across the way might say that is because Canada has become very socialistic. I think the usual phrase is, "business has lost its confidence in the economy, has lost its confidence in the government". I see there is agreement from my friends in the Progressive Conservative party on that statement.


Mr. Bawden:: It is the first correct thing you have said.


Max Saltsman: Then how do you explain the fact that the United States is also going through a recession? Are they socialists?


Peter Colwell Bawden: Their dollar state is better than ours.


Max Saltsman: Their dollar is dropping very, very dramatically in relationship to the British pound, of all things.

While the government can be blamed for a lot of things- and I think in relative terms we could have been better off than Luxembourg-if you really look at what is happening in western society you will see that what we are going through is something virtually every society in the industrialized world is going through. There is inflation all over the world; even in countries where unemployment has been unknown for 30 years there is now unemployment. There is a crisis of some kind in the west. In many ways, and what I was going to say is annoying but it is more than annoying-it is sickening-


Mr. Alexander:: Repugnant.


An hon. Member:: Revolting.


Max Saltsman: The adjectives are coming from all sides of the House from people who have a way with the English language. This is what is so disturbing, having listened to the minister tonight-nowhere in the speech is there any kind of thinking, any kind of clue or assurance that he understands the problem we face. It is always more of the same-"things are a little tough but they are going to improve".
If we look at the history of western society in the early thirties-I am not predicting a recession of the kind we went through then-I see the same set of attitudes, the same kind of blindness, the feeling that prosperity is just around the corner.
I see the same kind of oblivion to the fact that society had broken down. It took the preparation for war and the war itself, ten years of misery, to extricate the western world from the mess it got into.
We have gone through that. We had Keynesian economics. We have had a relatively high level of prosperity in all the western world for 25 or 30 years, but again the free enterprise system, the market system, is facing a crisis. It is a crisis of a different kind, however. The crisis in the depression was one where there was not enough investment, enough stimulus, enough consumer buying power. To some extent that is the same as now, but with this difference-that during those times you had a tremendous, pent-up demand for virtually everything. By government pump priming you were able to get the economy going.
Certainly the determination of Canadians following the Second World War to make sure that we would not go into the same recession that we went into after the World War I gave us prosperity with Keynesian economics. It taught us that if the private sector does not invest then the public sector has to invest, and to that extent the situation is similar today. The private sector is not investing, and why should it invest? It is not a question of consumer confidence; it is not investing anywhere. The point is that plants are idle in many cases, though perhaps not totally idle. They are operating at 80 per cent of capacity. So what is the incentive to invest? The only way investment will take place is if the demand is there. I do not think the private sector would invest any faster if my hon. friends on my right were sitting on the government benches.


John Allen Fraser: Let us just try it.


October 20, 1977


Max Saltsman: That would be a very heavy risk to run. That is really what we have to face, Mr. Speaker.
What is happening? I think one thing that is happening is that the causes of growth have changed. We are no longer in the same kind of world we were once in, a world in which growth was fueled by new frontiers or war. We do not want war or revolution to fuel growth. Growth was fueled by large numbers of children, family formations following the Second World War and for years afterwards. New households were formed, and this called for houses and for all kinds of other goods and services.
Growth was also fueled by immigration. Immigrants who came to this country, contrary to what some people think, created more jobs than they were supposedly to take away. They created a boom in our economy. We went through that, but now we have reduced immigration. There was a pent up demand that was there. There were inventions, such as radios, television. All kinds of things were invented. Now, rather than these inventions spurring on demand, they are creating such automated processes as to wipe out jobs. Many of the incentives which we provide for investment at the same time are destroying jobs that we are supposed to be creating.
This is something that will be on for a long time. I am not suggesting for one moment that we bring back the Luddites and smash up machinery; 1 am simply suggesting that we have to face the reality of a changing society. There was a time when we had cheap energy. We could do all kinds of things because we never worried about energy. But the days of cheap energy are over.
There was a time when people polluted the atmosphere. They did not care about the environment or the consequences of pollution. You had great productivity and you dumped all your waste into a river. We will not stand for that any more. You cannot live off nature in that particular way; things have changed.
There are many hon. members who have been thinking about these problems in the way I and my colleagues have been thinking about them. We have to face the fact that there are not going to be enough jobs to go around, certainly not with the kind of proposals which the government is putting forward. Even if the government were to listen to us, and I think it should, and it took the $1.2 billion in its last budget which it is going to give away as tax incentives, and put it into direct job creation, the situation would improve. If it is going to get 50,000 jobs-although 1 think that is high-out of $150 million worth of investment, Mr. Speaker, you can calculate how many more jobs it would get if it would put those incentives into direct job creation. The incentives have not demonstrated that they have been effective anyway; they have just been giveaways and have done very little good in terms of creating employment.
If that is the case, then we have to be thinking along some new lines. I see from this morning's paper that the American Congress and Senate have both decided to remove their clause stipulating compulsory retirement. We should be going the other way. We should be reorganizing our old age pensions to
The Address-Mr. Saltsman
make it optional for people to retire at an earlier age, in order to provide jobs for young people coming into the labour market.
In principle it sounds like a great idea to say no one should be forced to retire at 65-until you start to look at it. Who are the ones who are hanging on to their jobs at the age 65? They are the executives, the guys with the cushy jobs and the seniority, and they are not letting the others in.


John Allen Fraser: Some have brains and talent too.


Max Saltsman: Yes, they have brains and talent too. My colleagues should not get so excited, because any one of us may be forced to retire before 65. I know that the guy who works in the factory and really slugs it out, whether in an auto plant or in a textile mill, does not want to work after he is 65. He wants to get out of there and get something out of life for all those early mornings he got up, and for the hours of slugging that he put in, and he should be able to do that. I am surprised that my friends on the right took this as personal criticism because I did not intend it that way. I know I have some colleagues who are absolutely irreplaceable, and I would not dream of retiring them at 65. But they are the exceptions.
We are in danger of creating two classes of people in our society. To some extent this is already visible. We have those who have a job and are working, and those who do not have a job now and, unfortunately, in many parts of this country have no prospects of a job. Unless something dramatic happens, they look forward to a jobless youth, and perhaps even a jobless middle age.
What we do at the present time to take care of the situation, to the extent that we do take care of it, is not to provide jobs or look at ways of providing jobs. Rather we have something called the unemployment insurance fund. My leader has made it very, very clear that what this party wants are jobs, not welfare. Those people who are working, whether they understand it or not, are being taxed very, very heavily to pay for those who are not working. How much better to share that work to find a way of providing more employment, to create more of the good things through more people working. If we have to reduce the work week in order to do this, then we should be thinking about it.
Some people say, "Those terrible socialists! If we ever listened to them, they would want to have a very sharply graduated income tax; they really want to hit those guys at the top hard". In some ways that is true. We think that the guy at the bottom has had a rough deal for a long, long time. We think that rather than tax cuts, which do not help him very much, or only marginally, there should be tax credits or, as my friend, the hon. member for Winnipeg North Centre (Mr. Knowles) would argue, demogrant payments, direct payments to everyone.


Eldon Mattison Woolliams: But he won't retire.


Mr. Nystrom:: He will in 10 years.

October 20, 1977
The Address-Mr. Rondeau


Max Saltsman: The example that is put me is that a doctor is not going to work 60 or 80 hours a week if he has to pay more in taxes. 1 say that a doctor should not be working that many hours. Or it is argued that somebody is not going to work overtime if he has to pay too much tax. I say he should not be working overtime when other people do not have a job at all. It is that kind of thinking we have to come to grips with if ever we are going to find an answer to any of our problems.
I was very shocked when I picked up the paper the other week. The Minister of Public Works (Mr. Buchanan) had made a speech in Brantford. He indicated that the federal government was considering some changes in the family allowance. I am sure that will have a lot of support from my friends on the right. One thing they are considering is eliminating the family allowance for the first child. I know the minister has children. He must realize that the first child is the most expensive. Until you have that child, it is virtually like being single. You do not really have any expense. It is the first child that costs you money. That is when you buy the crib, when you need the bigger house, and have many other things to consider.
The minister went on to suggest that they are considering untying the cost of living benefits from the family allowance. That is shocking. The government today talks about how much it is going to do for people in terms of additional tax room, and then it comes along and takes it away with this.
What is particularly shocking about untying or removing the cost of living benefits so that they do not escalate with the cost of living is that the pensions of members of parliament and of civil servants have a full cost of living allowance. It is a strange set of values to discuss it in these terms. I presume the minister was flying a kite for somebody thinking about doing it, and did not want to take the responsibility upon himself.
I see you are getting restless, Mr. Speaker. I want to conclude by again expressing my disappointment with the measures brought before this House tonight, and in particular my disappointment in realizing that the government, despite the terrible experience of the past few years and the horrendous forecast of unemployment for this winter, does not seem to have learned a darn thing.


Some hon. Members:: Hear, hear!


Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, first of all, like all my colleagues who have heard the mover and the seconder of the address in reply to the Speech from the Throne, I wish to congratulate them for their first experience in this House and wish them all the best in their parliamentary function. I also want to congratulate the hon. Minister of Finance (Mr. Chretien) for acceding to this portfolio and wish him well, particularly in the area of finance as we know it in Canada. He certainly deserves to be encouraged to perform

somersaults as unbelievable as those we have witnessed tonight.
At least in his speech tonight he made a few attempts and we already feel a coming election, which will probably take place in 1978, and we realize that the minister has made efforts in this regard because his speech was of a somewhat electoral nature. He tried to demonstrate in his statement that the federal government, through the Department of Finance, tries to promote an economic recovery. But if we read his speech seriously and look at the words and their meaning, we realize there are not too many real facts. He announces some income tax exemptions of about $1.5 billion whereby individuals who earn $15,000 or less would pay $100 less in income tax during the year 1978, which means also a decrease of about $700 million in federal revenues.
He has also told us about the savings which Canadians would achieve under the indexing system whereby the government will allocate $850 million less under this item. However, we have noticed that the minister has made a guess in this regard because no one knows at present what will be necessary in terms of indexing by the federal government in 1978 to cover the amount referred to in its estimates.
Mr. Speaker, I must emphasize that there are some kinds of double talk and electoral promises in this speech. I would draw your attention to page 10, for instance, where the minister got loud applause from his colleagues. He said, as one can read on page 10:
As a result of representations from members of 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.
This is nothing more than a promise, Mr. Speaker: I will not be proceeding at this time with the measure for taxing ... Well, if elections were held in 1978 and if the Liberal Party were returned to power, what would happen to insurance policies, when the minister has been unable to give the House an official guarantee that there will be no taxing of insurance policies. Therefore, we can be sure that if the Liberal Party is still in power following the forthcoming elections, we shall have to cope again with this measure which the former Minister of Finance (Mr. Macdonald) had introduced in his last budget. When we examine the paragraphs which make up the minister's speech one after the other, we find that he is playing on both sides of the fence in order to win elections and return to power.
For instance, in his speech he deals with job creating measures which are still unknown. So there is no way we can find out tonight just how much the government has earmarked for this job creating scheme. There is something which surprises me very much in this budget, and it is that the government will grant $1.5 billion in income tax exemptions, while foreseeing a deficit of some $8.5 billion. This means that the Canadian people will get a deficit of $8.5 billion at the same time as a profit of $1.5 billion. Mr. Speaker, if these are simple, straightforward and just economic principles, this is beyond me.
October 20, 1977

Further on, Mr. Speaker, I would like to point out another electoral gadget on page 51 of the fiscal statement about the home insulation program and I quote:
... $350. These grants are to be included in the recipient's income. If received by a married individual, the grant will be included in the income of the spouse with the higher income.
Mr. Speaker, is this not another election trick or gadget to try to take in suckers? If we read that statement at leisure, if we reread it once or twice, we note that there are more words than facts. The SI00 allowance for any taxpayer earning $15,000 a year or less is emphasized. Mr. Speaker, there is nothing this evening in that statement for those in Canada who earn minimum wages. Mr. Speaker, there is nothing in tonight's budget for all those who do not pay income tax in Canada. Tonight's budget does not mean anything for all those in Canada who live on welfare allowances. For handicapped, disabled and retired people the budget is next to nothing. Mr. Speaker, we know that 20 per cent of Canadian workers live below the poverty line. Mr. Speaker, tonight's budget is not for them.
It made me laugh a while ago, when the Minister of Finance (Mr. Chretien) began reading his budget, to see that my hon. friends from the official opposition accused the Liberals of stealing the Progressive Conservative ploy, the $100 deduction for every individual earning $15,000 or less. If Progressive Conservatives have only the $100 deduction ploy up for grabs the Liberals did not steal much. Mr. Speaker, the Minister of Finance wants to fight inflation by creating employment.
He wants to create jobs just as fast as the present system turns out unemployed people. He reminds me of someone who keeps adding water to a bucket or a pail with a hole in it to try and maintain the water level while the hole at the bottom is getting bigger and bigger every day. The Minister of Finance wants to increase the speed of jobs creation in Canada to ward off rising unemployment by borrowing money from financiers and making it available for various jobs creation programs. His right hand wants to create jobs while his left is turning out unemployed people every day.
Mr. Speaker, I cannot explain, and it is an open secret in Canada, why Canadian industries and private enterprises, in spite of being victimized, as the socialists say, by the harmful results of the federal government's monetary and economic policy, reduce their personnel to go and invest their capital elsewhere or simply close shop. They go and invest elsewhere to set up industries and get cheaper production costs. Tomorrow those very industries will export into Canada products that they could have produced here in Canada yesterday.
Mr. Speaker, the federal government, through its shortsighted financial policy, is itself contributing to create multinationals that it will no longer be able to control tomorrow in forcing Canadian companies to expatriate instead of expanding in Canada, for they have to go and find elsewhere a better and more favourable economic climate and favourable economic conditions which the government has so far failed to give them to be able to produce more cheaply.
The Address-Mr. Rondeau
The problem in Canada, Mr. Speaker, is that we are out of step with international competition. Our industries in Canada cannot produce any more. The present economic system and the government economic trend are forcing companies to grow into multinationals.
I am thinking here of the case of several Canadian shoe manufacturers who can no longer compete with the imports, especially as a result of the economic and financial policies of the government which has practically managed to destroy both the shoe and textile industries in Canada. These are now in the process of setting up shop elsewhere, where labour is less severely taxed and consequently where production is less expensive for the industry. Tomorrow, those formerly Canadian companies will export to Canada goods that could have been manufactured in Canada had they stayed here.
The federal government, through its financial and monetary follies, is forced to tax individuals to such an extent in order to meet its budgetary extravagances that today Canadian taxpayers have to earn $15,000 a year to live, after having paid all the direct and indirect taxes of the government. But if they were taxed less heavily they could live with $7,500 a year and buy the same production with the same dollar having the same purchasing power which would allow us to produce and compete elsewhere after first keeping our own domestic market. Nowadays Canadian businesses which have not yet become monopolies and must meet competition are stifled by taxation and bureaucracy. More and more they want to abandon any proposed expansion because they have realized that the federal and other governments-without taking any risks or investing-are drawing more revenues each week from those industries than the profits essential to the good operation of the whole industry that wants to progress and improve.
Those industries are left with the solution of remaining in stagnation before closing their doors and going elsewhere to invest while reducing their activities in Canada. All private enterprise wants in Canada, Mr. Speaker, is a favourable economic climate that will allow it to breathe and not force it to go somewhere else to do what it could normally do in Canada. The Canadian companies that go abroad to invest by participating in the financing of existing industries abroad will be exporting to Canada tomorrow commodities they should have been exporting from Canada if the government did not always wait for industry to close down or lay off most of its employees before waking up.
The Minister of Finance through investments in job creation programs wants to invest with the right hand, and tonight's budget proves it. He wants to invest $5 in job creation with the right hand but with his left hand he takes $30 out of the pocket of the Canadian taxpayer thus reducing his purchasing power which inevitably increases unemployment.
Mr. Speaker, when you distribute $1.5 billion out of $8.5 billion that means you are taking $1 for $6 because the $8.5 billion deficit is the responsibility of Canadians, money which one day will eventually be taken out of their pockets. So you

October 20, 1977
The Address-Mr. Rondeau
take $8.5 billion out of the pockets of Canadians on the short or the long run and give him $5 today. You take $30 away from him to give him back $5. Mr. Speaker, the left hand of the Minister of Finance is quicker than his right hand with which he gives. His right hand is paralyzed because it is distributing $5 while the taxpayer is being deprived of $30.
The fiscal system in Canada performs better and faster than the job creation system. More money is taken out of circulation as taxes of all kinds than invested. When the banks, for instance, loan $10 million they are repaid $20 million after six and a half years. How is it possible to repay $20 million if the loan is $10 million only? This is mathematically impossible. According to orthodox economists, it is a simple enough thing to borrow $20 million after six and a half years to repay the original $10 million. But the $10 million original debt that has become $20 million after six and a half years will become $40 million in another six and a half years. This means that within 13 years a $10 million loan will require four times the initial amount.
This is the type of system that has created and is still creating inflation. Workers are being insulted, everyone is being insulted, everyone is victimized but the true culprit, the financial system that puts $10 million in circulation and gets $40 million after 13 years. This automatically creates inflation, pushes prices and wages up, and puts us outside international competition.
In the remaining few minutes, I would like to say a few words about inflation, that legalized theft. Our ancestors had to cope with a lot of law-breaking citizens. One of the most popular crimes was coin clipping. As far as we can go back into history, this was a serious crime, so much so that convicted clippers had their hands cut off, both as a punishment and a deterrent from future wrongdoing. Such was the way to rob individuals.
At that time, nearly all coins were made of metal and devaluation was achieved simply by reducing the size and weight of the coins whatever they were: pounds, crowns, florins, shillings or pence. All things considered, the result of this was inflation of the type produced by our present vast devaluation operations.
In a free society like ours, every blow to currency is serious because it affects the way of measuring the value of exchanges between men, which is the very basis of our economic life. If we were to give the same punishment as in the old days to those who are responsible today for devaluation or inflation, 1 think, Mr. Speaker, that we would have to cut off the hands of most members of this government, including the Treasury Board, the Minister of National Revenue, the Minister of Finance and other officials both on national and regional levels. The persons who are responsible for the devaluation of the currency we use in our everyday life are those very same people we elect and hire to govern us. Certainly the union leaders, who every year set in motion the same old mechanism by exerting pressures to get higher wages for union workers, are also part of this group.

This coming winter, Mr. Speaker, we will have more than 1.5 million officially unemployed people, which really means at least two million people who are actually unemployed. Also these figures do not include welfare recipients, all those people who are not formally registered as job-seekers. Unemployment is on the increase and will continue to increase because our present monetary system is so designed. Inflation is on the increase and will continue to increase because the monetary system is so designed. Deficits are on the increase in all areas, as evidenced in the budget. In the 1976-77 budget, our deficit will be close to $8.5 billion. What that boils down to, Mr. Speaker, is that in less than three years we have accumulated an international deficit of $40 billion.
At the present time, our trade deficit is $30 billion. Still we won the war while West Germany lost it and built up a surplus of exactly $40 billion. We won the war and we have a trade deficit of $40 billion. Germany lost the war and has a surplus trade balance of $40 billion.
Mr. Speaker, this means that when we are told that the methods are obsolete, the high unemployment and inflation rates show clearly that the economic methods of a less complex period are not doing anything more today. We deplore the evil. We begin to realize that our systems are obsolete, that they are outdated but there is no solution and we continue in the same system.
Peter C. Newman, a distinguished Canadian reporter wrote in chapter 3 of his book, The Canadian Establishment, what Social Crediters have been saying for 35 years, and 1 quote:
Administering more than a hundred billions in assets the men who run Canada's banks rule the nation's economy. They decide who will succeed and who will fail acting as arbiters of the system-the fiscal father confessors of us all.

While people are getting thinner and running into debt, banks are growing fat and thrive. Mr. Speaker, while we are racking our brains, looking at inflation, unemployment and deficits both inside and outside Canada, there is an organization in Canada which does not make any deficit, where the average interest rate was 6 per cent in 1968 while it reaches a high of 12 per cent today.


The Acting Speaker (Mr. Turner):: Order, please. It being 9.45 p.m., it is my duty, pursuant to Standing Order 38(3), to interrupt the proceedings and forthwith put any question to dispose of the subamendment which is now before the House.
The question is therefore on the amendment to the amendment (Mr. Broadbent). Is it the pleasure of the House to adopt the said motion?


Stanley Howard Knowles: Carried.


Some hon. Members:: No.
October 20, 1977


The Acting Speaker (Mr. Turner):: All those in favour of the amendment to the amendment will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I therefore declare the amendment to the amendment lost.
Amendment to the amendment (Mr. Broadbent) negatived.


Mr. Speaker:: It being after ten o'clock, this House stands adjourned until tomorrow at eleven o'clock in the morning, pursuant to Standing Order 2, subsection (2).
At 10.14 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, October 21, 1977