1977-11-10

REMEMBRANCE DAY


Mr. Speaker:: Order. By virtue of the special order of the House made earlier this month, the hon. Minister of Veterans Affairs (Mr. MacDonald).


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: Mr. Speaker, 1 remind hon. members and all Canadians that tomorrow, November 11, is Remembrance Day. Tomorrow will mark the fifty-ninth anniversary of the ceasefire of the first World War. I suggest that we pause a moment to reflect on the bravery and sacrifices made by Canadian men and women in that holocaust, and in the second world war and the Korean conflict. Our feeling for them is deep and humble.
More than 100,000 Canadian soldiers, sailors and airmen and women served together and died for that ultimate goal, the goal of preserving our democracy and our country. In these days, when many Canadians are concerned about the unity of our country, it is well to remind ourselves of those who gave their lives for its survival. These men and women fought, not for personal gain, nor for glory or for conquest. They fought for their homeland. This was their love. Duty was their creed. Truly they are Canada's heroes.
I would like to remind hon. members of the biblical reference engraved on the memorial arch which connects the Veterans Memorial Buildings here in Ottawa:
All these were honoured in their generations and were the glory of their times.
We, as Canadians, have a special obligation to perpetuate the memory of those who gave their lives for Canada. Let us, in our time and in our way, be worthy of them.
Mr. Speaker, before 1 conclude my remarks this afternoon I would like to read something that was sent to my office a few days ago by a young Canadian friend. It is entitled "A Prayer for Today", and was found among the effects of a Canadian infantry sergeant who perished outside Ortona in Italy on a day in December, 1943. It reads:
Today a bird sang for me. Today I leaned against the strong trunk of a living tree. Today a little lizard ran across my hand. So I am not alone. When I get back to Canada I'll remember this. I will cherish all of life, for all life is really one. I will never again be a destroyer, though that is what man is. This is my dream, that we will learn to live in harmony, not between man alone, but with the whole living world.
Let us, the living, keep the faith of this Canadian sergeant, so that the incentive of this day may speed us onward and toward a better world of peace, freedom and justice.


Some hon. Members:: Hear, hear!


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, on behalf of my party and my leader I join with the minister and all colleagues in the House of Commons in paying tribute to our fallen comrades today, prior to the Remembrance Day ceremony which will take place tomorrow at our national memorial in our proud capital city.
In this time of uncertainty, it should be remembered that some 63 years ago thousands of young Canadian citizens answered the call of the then government of the day to volunteer to go to far off lands, to offer their lives, and in too many cases to give those lives, to preserve peace and freedom, not for Canada alone, but to help protect our allies, whose problems must have been difficult to comprehend.
But it is obvious that their efforts were in vain, for on two future occasions, during the second world war and the Korean War, more of our young men and women again answered the call because our world leaders could not preserve that peace and freedom which we as Canadians treasure so dearly.
However, the passage of time has now brought about a generation for whom World War I has become very remote, and for whom even the other conflicts have no meaningful place in their experience. It is incumbent upon us, we who sit in this hallowed House of Commons, many of us veterans ourselves who experienced the bitter taste of war, to remind ourselves that we are charged with the responsibility of ensuring that some 100,000 veterans who died did not die in vain. And we must continue in our efforts to preserve peace, a measure of prosperity, and above all national unity, because of our commitment to the veterans of Canada.
It is tragic, however, Mr. Speaker, that in this year 1977, while hundreds of thousands of our citizens will attend ceremonies across this land to honour and to pay homage to those who made the supreme sacrifice to preserve Canadian unity, we are threatened with national disunity from within our great country, a threat to our freedom that breaks faith not only with those who fell, but with those who remain, the maimed, the disabled, and those dependents who must wonder today, was their sacrifice in vain.
We can only hope that Remembrance Day, 1977, will instill in the hearts of those minorities, those who are taking this country for granted, those who attempt to fracture a way of opportunity and a quality of life brought about by the suffering and sacrifice of Canadians regardless of race, creed or colour, a reminder of the fact that these men fought together
776

Remembrance Day
for unity in our nation, not as English or French or any other race but as proud Canadians.
To this end, we must dedicate ourselves today because we must continue to believe in peace and freedom and because we will continue to remember them.


Some hon. Members:: Hear, hear!


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, on behalf of the New Democratic Party I join with the Minister of Veterans Affairs (Mr. MacDonald) and with the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall) in noting that tomorrow is Remembrance Day and that we do well to pause and reflect on its meaning.
I should like to emphasize that what we do on a day such as tomorrow is to remember actual persons who paid the supreme sacrifice or who willingly gave everything they had. In that connection I am sure all members of the House will join with me in paying special tribute to the services rendered by the two previous speakers, the Minister of Veterans Affairs and the hon. member for Humber-St. George's-St. Barbe.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: In recognizing their service in World War II we are recognizing the service of all those in all the wars in which this country has been involved, and we pay tribute to that service.
I may say that the minister also brought this matter home to me in a rather personal way when he read a message left by a Canadian infantry sergeant who perished outside Ortona in the latter part of 1943. I say that because it so happens that a close relative of mine, a Canadian infantry private, perished in that same area in the same year. These are the people we are thinking of today, not some vague unknown mass, but actual humans who gave their lives and who served, and it is appropriate that we remember them.
Sir, I am very conscious of the traditions that apply to statements on ceremonial occasions. I am conscious of the niceties that we observe, and, while this is not an occasion for argument or for making points, like the hon. member for Humber-St. George's-St. Barbe, I wish we were remembering those who died and accordingly their survivors more concretely. I wish we were remembering those who lived and paying tribute to their service by something more than the words we are uttering today and the ceremonies in which we shall participate tomorrow.
There is a need to deal with certain matters respecting our veterans, such as the amount of the disability pension and what we do for their widows as well as others who have been forgotten. I would have felt much happier participating in these remarks today had the agenda for this session included a commitment by the government to deal with some of these matters that are unfinished business so far as our veterans are concerned. I hope by saying that on this occasion, whether or not it is appropriate, will help to convince the government that something ought to be done about these matters in this session

November 10, 1977
of parliament. In any case, we welcome the fact that we have these few moments in which to remember those who died, and those who served and are still with us. In the tradition of Remembrance Day, we say from our hearts, we shall remember them.


Some hon. Members:: Hear, hear!


Mr. Charles-Eugene Dionne (Kamouraska):: Mr. Speaker, I am quite pleased to join the members who have so eloquently spoken about the bravery of those who fought during the wars which caused deep concern throughout Canada and created gaps in many families. I know that November 11 evokes the memory of a painful past, of Canadians of all ethnic origins who fought side by side and died together. They are resting together in the cemeteries of the various countries which they helped to liberate. Canadians in every region of the country should pay tribute to their memory by trying to improve living conditions in Canada.
We need understanding and mutual respect as we need to feel united. The poppy which we are wearing reminds us of that feeling of fellowship experienced during the war. It also suggests to us the grand task to be performed in close co-operation-to build a united and strong Canada. The Canadians who died believed in a better future. It rests with each of us to direct our efforts in that sense. We all tend to forget that in 1914 and 1939 two world wars covered Europe and Asia with blood and millions of lives were lost. Thank God, each time our country was spared, but some of our relatives and friends did get killed on the various battlefields. Indeed, each time the Canadians crossed the Atlantic and displayed bravery and courage. Some of them were even great heroes.
But those heroes and their feats of arms are a thing of the past. Somehow, we tend to forget too readily the sacrifices made during that period of our history.
On November 11, let us at least have a thought for those who were killed in action, for those who were massacred senselessly, for the innocent victims of bombings. Remembrance Day should make us aware that those victims gave all Canadians who would follow them a further cause for pride.



ROUTINE PROCEEDINGS


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, in view of the endless series of allegations of illegal acts and the difficulty which the McDonald Commission will have in meeting those quickly and swiftly, and because of the crucial
November 10, 1977

importance of the evaluation of the government's mandate and the terms of its mandate with respect to security services, I move, seconded by the hon. member for Don Valley (Mr. Gillies):
That a special committee of this House be established to consider the violations of the law by the security forces of Canada, the question of ministerial responsibility in relation thereto, and the suggestion by members of the government that the law should be changed to give wider latitude to security forces;
That 20 members, to be named at a later date, act as members of the said committee, with a member from one of the opposition parties as chairman;
That the said committee have the powers to send for persons, papers and records and to examine witnesses; to sit during sittings and adjournments of the House; to report from time to time; to print such papers and evidence from day to day as may be deemed advisable; and to engage such legal counsel and other staff as may be considered necessary; and
That the committee report by March 31, 1978.


Mr. Speaker:: According to the provisions of Standing Order 43 such a motion can be presented at this time for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTION MCDONALD COMMISSION MAKE INTERIM REPORT-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, considering that revelations occurring now, unfortunately almost on a daily basis, indicate that more alleged illegal activity by the RCMP is being undertaken than was originally thought possible, considering that the same revelations clearly indicate political accountability for these activities is required and considering that members of the House of Commons have a serious obligation to deal with other pressing matters in Canada, particularly the state of the economy, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instructs the government to request formally the royal commission investigating the RCMP and its criminal wrongdoing to make an interim report not later than January 31, 1978, and second, that the terms of reference of the royal commission be changed to include an additional clause (d) which would read:
"To investigate and report on the adequacy of accountability procedures designed to ensure effective authority over the RCMP and the adequacy of recent solicitors general in exercising their constitutional obligation in terms of the operation of their department."


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



AIRPORTS


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I too rise under the provisions of Standing Order 43. Three families at Pickering have been served eviction notices effective November 16 unless they surrender their leases to the federal government. They are willing to do this, plus payback rent owed from May, 1975, on the condition that the federal government advise them of the exact amount of government court costs they owe resulting from a court order. In light of this and other inequities which have arisen in connection with the expropriation of lands in the Pickering area, I move, seconded by the hon. member for York-Simcoe (Mr. Stevens):
That the matter of the Pickering expropriation be referred to the Standing Committee on Transport and Communications in order that the minister may appear and clarify all outstanding issues, and further that the Minister intervene immediately to ensure that a fair settlement is negotiated on behalf of those families directly affected by this eviction notice.


Mr. Speaker:: The presentation of such a motion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ROYAL CANADIAN MOUNTED POLICE


Mr. Rene Matte (Champlain):: Mr. Speaker, pursuant to Standing Order 43, I request the unanimous consent of the House to propose a motion dealing with an important and urgent matter.
Since the revelations of the Solicitor General (Mr. Fox) concerning illegal activities of the RCMP in 1972 and 1973 seem to result from the Keable commission; since those revelations prove the urgency of cleaning up police activities; since the situation is such that the people no longer know on which side there was subversion in 1970 and even wonder what kind of protection the country is giving itself under the pretext of state security; since it would be preferable for the government itself to set up a revealing inquiry rather than waiting for journalists and the people to act, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the Solicitor General table in the House all documents pertaining to the activity of the special RCMP committee entrusted with detecting the subversive activities of the FLQ before, during and after the October 1970 crisis.


Mr. Speaker:: Pursuant to Standing Order 43, such a motion cannot be put without the unanimous consent of the House. Is there unanimous consent?

November 10, 1977
Oral Questions


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Perhaps hon. members will agree that in the circumstances it would be appropriate to extend the question period until ten minutes past three.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Secretary of State of Canada, who is responsible in this House of Commons for the Canadian Broadcasting Corporation. I would like to ask the Secretary of State whether his colleague the Solicitor General was speaking for the government and stating government policy when he said last night in Greenfield Park the CBC, and 1 quote:
[ Translation]
... has so much money it does not know what to do with it and that at some point its budget should be reduced.


Hon. John Roberts (Secretary of State):: Mr. Speaker, I want to thank the Leader of the Opposition for his courtesy in indicating to me that he would raise this matter in the House. I think I can reply quite clearly to the hon. gentleman, that in speaking, the Solicitor General may very well have given his personal assessment or comments on the CBC coverage, which is the right of every Canadian. There was not, in my opinion, any indication of a possible threat in the Solicitor General's words. In any case, I can assure the hon. gentleman it is not a question of the policy of the federal government in relation to the way in which the CBC performs its news covering activities, since the CBC is responsible through the Broadcasting Act to the indications which the House of Commons itself has proclaimed for the way in which it will undertake its activities. It is not the activity of the federal government to direct the CBC or lay down indications of how it can perform that duty.


Charles Joseph Clark: A supplementary question, Mr. Speaker. The statement that 1 read into the record and the additional statement of the Solicitor General in relation to investigation into security matters, to wit:

I feel that the CBC unduly exceeds its terms of reference ...


are clear statements by the Solicitor General, who is not just an ordinary Canadian but a member of the Cabinet of Canada and responsible to this House. I think the minister will agree that it would be a reasonable interpretation of the remarks by that minister that they were a threat to cut the funds of the CBC if the CBC did not stop investigative reporting into allegations regarding the security service. The Minister of Industry, Trade and Commerce is correcting my French, Mr. Speaker.


Some hon. Members:: Oh, oh!


Mr. Horner:: That is quite possible, too.


Charles Joseph Clark: Given that interpretation, will the Secretary of State now stand in his place, as the minister who reports to this House on behalf of the CBC, and repudiate the threat that was clear and implicit in the statement by the Solicitor General? Will he do that now?


John (Moody) Roberts: Mr. Speaker, first of all I want to genuinely congratulate the Leader of the Opposition on his efforts to master French in which I think he has been successful.


Some hon. Members:: Hear, hear!


John (Moody) Roberts: Secondly, I hope I do him no disrespect in saying that I seem to recall a few months ago that his wife expressed some disapproval for the way in which the media were covering her husband. She thought their approach was excessive or not accurate. It did not occur to me to think she was in any way trying to intimidate the news media any more than I think the expression of personal opinion on the part of the Solicitor General was any kind of threat.
If I may say so, to be exactly precise in relation to the question of the Leader of the Opposition, it may be that the CBC, as indeed a variety of agencies that are under the wing, as it were, of the Secretary of State, may face budget cuts as a result of the government's restraint program. 1 do not say cuts in terms of what they received last year but cuts in relation to what they hoped to have for their activities. I can assure the hon. gentleman that this question has no relationship to any consideration or attempt to limit or affect or influence or determine the way they perform their duties.


Charles Joseph Clark: Mr. Speaker, I leave the minister to live with his words. He has now said there will be, or very well could be, cuts in the budget. He tells us they will not be related. The Solicitor General last night, in words whose accuracy have not been questioned apart from the hon. member for Crowfoot-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -said that he believes when the CBC carries out what amounts to a parallel inquiry of what is carried on by the McDonald royal commission, then he as a minister of the Crown of Canada, not a spouse of a member, believes that
November 10, 1977

their budget has to be cut. 1 personally am deeply concerned about the implications for free press. I wish the minister would rise in his place and completely repudiate that statement by his cabinet colleague and make it very clear that there will be no cuts.


Hon. Jean Chretien (Acting Prime Minister):: Mr. Speaker, with regard to budget cuts and so on, when 1 was President of the Treasury Board I heard many times from members on the opposite side that the first organization we should look at with regard to cuts was the CBC.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: The Leader of the Opposition is wrong when he says that the Secretary of State indicated there will be some cuts. He said, and I want to confirm it, that at this time every department of the government is being reviewed. CBC is being reviewed. The government must decide with regard to CBC as with every other organization of government how much more money they will have next year. CBC will be subject to the same decision by cabinet as any other department or agency of this administration.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What we have here is an indication, now confirmed by the Acting Prime Minister, that there may very well be cuts in the budget of the CBC and those cuts are in the context of clear threats by the Solicitor General.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


SUGGESTION CORPORATION SHOULD NOT CONDUCT INVESTIGATION PARALLEL TO THAT OF MCDONALD COMMISSION
Charles Joseph Clark: My question to the Acting Prime Minister relates to another very clear implication from the statement last night by the Solicitor General. The Solicitor General implied very clearly that because there is a royal commission of inquiry into allegations regarding security services in this country, the free press of the country should stop its own investigation. Is that the policy of the government of Canada?


Joseph Jacques Jean Chrétien: On the first part of the question, Mr. Speaker, we never mentioned cuts. 1 spoke about the increase in the budget of CBC next year over this year, like every other organization. I wish to tell the House that discussions are going on with the CBC and every other organization of government with regard to the budget for next year. This has been undertaken by the President of the Treasury Board and has been going on for many weeks. Since August there have been many meetings between the President of the Treasury Board and all these organizations. Therefore, there is absolutely no relation. If there is any relation, it is in
Oral Questions
the mind of the Leader of the Opposition who is just trying to ride to power on the back of the RCMP.


Some hon. Members:: Oh, oh!


MCDONALD COMMISSION-SUGGESTED ADDITION TO TERMS OF REFERENCE AND INTERIM REPORT
John Edward Broadbent: Mr. Speaker, my question is to the Acting Prime Minister. Serious allegations of criminal wrongdoing have reached almost veritable flood proportions. In the past 48 hours we have had Operation Cathedral, Operation 300, the very unwholesome spectacle of two ministers of the Crown not knowing 24 hours ago what was going on and the other spectacle of coming into the House and one minister having known about it yesterday and the other not. Considering the very serious matters facing the people of Canada which ought to be brought before the House of Commons, will the Acting Prime Minister on behalf of the government commit the government to request that the royal commission which is investigating the RCMP bring in an interim report not later than January 31, 1978? Second, will the terms of reference be expanded to include the question of political accountability specifically?


Joseph Jacques Jean Chrétien: Mr. Speaker, that is a positive suggestion by the leader of the New Democratic Party. We will be looking into that. If it is possible, I think it would be desirable to have an interim report as quickly as possible.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, I notice the Minister of Justice rushing over. I hope this will not be a case of the government changing its policy during this question period. I appreciate the Acting Prime Minister's serious response to the question. However, 1 want to be sure that the two aspects of the question are clearly understood. Not only will we get an interim report by the end of January next year but, secondly and crucially, if we want to get rid of the day to day concerns that we on this side of the House appropriately have when matters are presented every day in the press, that the issue of political accountability, essentially to the whole structure of parliamentary government, be specifically referred to in the amended terms of reference. I say that in a serious way because the Solicitor General in previous answers indicated he had no objection to that. If there are no objections, I would like the Acting Prime Minister to commit the government to include that as a specific amendment to the terms of reference.


Joseph Jacques Jean Chrétien: Mr. Speaker, the government feels that the terms of reference of the McDonald Commission are broad enough to cover every aspect of the problem which concerns the House at this time. If the commission wishes to report on the relationship which must exist between the RCMP, its security service and the minister responsible, it is free to do so,

November 10, 1977
Oral Questions
in my opinion. There is nothing in its present terms of reference which prevents it from doing so.


John Edward Broadbent: Does the Acting Prime Minister realize that, from our point of view, this completely undermines the earlier answer? If they do not include a specific amendment to the terms of reference covering political accountability, we will be bogged down day after day as the two inquiries are looking into the matter. The journalists are doing their job bringing these matters to the attention of the public. We on this side have an obligation to raise it in the House. Therefore, the important question of problems in the Canadian economy will be ignored. We will be tied up with the wrong kind of issue at the wrong time.


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not agree with the interpretation of the hon. member. I have before me the terms of reference of the commission. Under (C) it states that the commission is authorized to look into matters regarding the policies and procedures governing the activities of the RCMP. In my opinion, that is enough for the commissions to report on an interim basis as quickly as possible on these problems. If the commission find that its powers are too limited, it can always get in touch with the government. So far, however, we feel there is enough power for this commission to bring about the result that all of us want to have in this matter.


NAME OF PERSON WHO STOPPED OPERATION CATHEDRAL-DATE MINISTER LEARNED OF MAIL INTERCEPTION
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Solicitor General. Yesterday in the House the minister stated that the operation under the code name Cathedral involving mail interception had ended by June 1976 which, coincidentally, is about the same time the APLQ matter was exposed to the full light of day. Will the Solicitor General advise on whose authority it was that these illegal mail interceptions were discontinued?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, in the answer I gave yesterday, I was referring of course to the opening of mail which actually came to an end in June 1976 following instructions issued to the security service by the assistant director general of operations of the security service.


Allan Frederick Lawrence: The deputy director of the security service obviously knew that those mail interceptions were going on, otherwise he would not have had the knowledge to order them discontinued. If he knew about them in June 1976, is the minister telling us now that he did not learn of those mail interceptions at that time? If not, was the non-activity of the deputy director in not informing him of this mail interception to be considered as an obstruction of justice?


Francis Fox: Mr. Speaker, I know that the opposition is always ready to pass judgment and bring in verdicts of guilt hastily. As for us, we feel that all those matters referred to the inquiry commission which was set up to give people the opportunity to explain why such or such an action was undertaken.
I would point out to the hon. member, as I said yesterday in the House, that those activities go back several years in the records of the RCMP, and an attempt is now being made to condemn publicly the person who, at a certain time, decided to put an end to that.


NAME OF PERSON ABOVE DEPUTY DIRECTOR OF SECURITY WHO KNEW OF MAIL INTERCEPTION
Allan Frederick Lawrence: The minister knows, then, that the deputy director of the security services was aware in June, 1976 of the illegal interception of mail by the RCMP. Could he tell us who else, in rank above the deputy director, knew about this mail interception?


Francis Fox: Mr. Speaker, regarding mail interception, we have not been able to determine yet whether any higher authority than the one I have mentioned was aware of these activities at the time.
It is also obvious, Mr. Speaker, following the rather brief study of this case which has been done during the last two days, there is no indication that these practices were known to any minister or any higher authority than the one I mentioned.


UNEMPLOYMENT INSURANCE
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, my question is to the Minister of National Revenue.
For some time now I have been receiving complaints to the effect that a number of farmers in southern Ontario refuse to deduct unemployment insurance contributions and income tax from the wages of Canadian farm workers. Could the minister tell the House whether he has been aware of this situation and whether he intends to take the necessary steps to protect these seasonal farm workers?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: No, Mr. Speaker, it is the first time this situation is brought to my attention but if the hon. member for Abitibi would give me concrete facts about these complaints, I would undertake to investigate this matter with my officials and I will give him an answer as soon as possible.
November 10, 1977


Gérard Laprise: Mr. Speaker, I would like to ask a supplementary question.
Since those farmers are threatening to hire only Mexican workers if they have to comply with Canadian legislation, could the minister tell us whether foreign workers are bound by the same rules as Canadians or whether there are agreements between Canada and Mexico or Portugal providing that cheap seasonal labour can be imported?


Joseph-Phillippe Guay: Mr. Speaker, I think the legislation concerning my department is very specific in that case. If there is anything else I might bring to the hon. member's attention, I would do so when I answer his question.


ROYAL CANADIAN MOUNTED POLICE
Walter David Baker: Mr. Speaker, I have a question for the Solicitor General. Aside from the difference of view with respect to the terms of reference of the commission, which I think could be settled by a willing Solicitor General enlarging them, does the hon. gentleman not agree that perhaps events have now overtaken the royal commission which, according to the chairman, cannot begin serious investigation work until January.


Some hon. Members:: November!


Walter David Baker: Perhaps the Solicitor General owes the country the obligation of recommending the formation of a committee which could work quickly and properly and begin the process in this place. In these circumstances is the Solicitor General prepared to agree to the designation of a committee of this House as was suggested by me this morning and by one of his own hon. friends yesterday, the hon. member for Windsor-Walkerville, albeit on different terms, to bring the issue into the House of Commons so that the investigation could proceed in a way which would not interfere with the business before us with respect to other matters?


Francis Fox: Mr. Speaker, the opinions of the hon. member and the leader of the New Democratic Party reflect, I suppose, a very strong desire on his side, indeed, on both sides of the House, to see the royal commission of inquiry begin its work as soon as possible. We are talking about matters which do, indeed, concern the national security of this country; we are talking about evidence which has to be taken under oath; we are talking about proceedings in the course of which witnesses have to be heard in detail with an opportunity provided for cross-examination, and I still believe that the proper forum is a royal commission of inquiry. However, in view of the strong expressions of opinion in the House today, I would wish to draw the attention of the chairman of the royal commission to what has been said
Oral Questions
in the hope that he will be able to get the inquiry under way earlier than has so far been indicated.


Walter David Baker: Mr. Speaker, the question the Canadian people are really asking now, is: Who is in charge? Is it the government of the day which is in charge and which has neglected its responsibility with respect to the matter? Are these issues to go before a royal commission or is the place for the investigation not to be here where witnesses can be called, where evidence can be taken in camera, where witnesses can be cross-examined and the whole examination take place more quickly than anywhere else? Would the minister not reconsider his position with respect to his unwillingness to refer this matter to a special committee of this House, or, as his hon. friend has suggested, to the Standing Committee on Justice and Legal Affairs?


Francis Fox: I listened to the hon. member and the leader of his party in the course of the month of June. On a number of occasions they made motions under Standing Order 43 recommending very strongly that a royal commission of inquiry be set up. We have heeded their argument to a certain extent. We were not convinced at that time that it was necessary, but later we became convinced it was necessary to establish some forum in which an impartial inquiry could take place into the practices and procedures of the security service. At the moment, the hon. member has reversed his stand completely. Three or four months ago he had complete confidence in a royal commission of inquiry. Today he says the matter cannot be properly handled by a royal commission. I wish he would make up his mind.


Some hon. Members:: Hear, hear!


Walter David Baker: The minister is quite right. In June of 1977, when we were not aware of a whole series of events, a royal commission did seem appropriate. Circumstances have now changed, however; there has been a long series of allegations of illegalities and in view of this change in circumstances, in view of the doubt expressed as to the credibility of the government and of the RCMP, I would ask the Solicitor General to seriously reconsider the position the government is taking and to look to a quick, and, I would hope, a reasonable and proper settlement in what is, after all, the highest court in this country, namely, the Canadian Parliament, as the proper place for an examination by one of its committees of all the issues involved here, because the bottom line of all this is the political and ministerial accountability of the government.


Some hon. Members:: Hear, hear!


Francis Fox: The hon. member has just stated that when he knew nothing about the situation he wanted a royal commission of inquiry. I think the real bottom line of this thing is the national security of our country.


Some hon. Members:: Hear, hear!


Mr. Gillies:: Don't you care about the people?

Oral Questions


Mr. Stevens:: Outrageous!


James McPhail Gillies: You don't care about ministerial responsibility!


Francis Fox: Mr. Speaker, there are a myriad of issues involved with this question which concerns the national security of our country. There are matters related to counter-espionage, there are matters relating to international activities within our borders and these are subjects which cannot be set out in a public forum without affecting unduly the security of our country.


Some hon. Members:: Hear, hear!


Francis Fox: I believe any reasonable Canadian would come to the conclusion that when you are dealing with matters of national security there has to be a degree of discretion which is not readily available in the House of Commons. We are not trying to hide anything at all. We have already stated we would place all the files of the RCMP at the disposal of the commission. I have also directed that all the practices and procedures of the RCMP be brought to the attention of the commission in a clear manner. I would think that is the proper way of handling matters which affect the national security of our country, and that is why I disagree with the hon. member.


POST OFFICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. Yesterday the Postmaster General revealed in the House that he does not know what is going on in the security branch of his department with respect to the opening of the mail. The Solicitor General seems to be a little more forthcoming in the information he has given concerning these and other matters. Because these actions are clearly illegal, the hon. gentleman promised to investigate the subject further. Would he now give an updated report on these illegalities and also inform the House and the people of Canada, who are increasingly concerned over Canada's drift to police state tactics, what action he is taking to deal with the offenders?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the comments of the hon. member which relate to police state tactics are surely not serious.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: Are you kidding?


Mr. Blais:: Yesterday, Mr. Speaker, I indicated to the House that I conducted an investigation with my security and investigation personnel and I had obtained information from them that there had not been any interception of the mails, which would be contrary to the Post Office Act. 1 indicated that to the hon. gentleman. 1 know there have been statements made
(Mr. Gillies.]
November 10, 1977
by the Solicitor General and I am aware of the statements that have been made.


Charles Joseph Clark: You are also repudiating them.


Jean-Jacques Blais: 1 ask the hon. gentleman to look at those statements, and if he can give me any indication that personnel of the Post Office have been involved in opening the mail and he can specify some instance or incidents, I would be glad to look into them.
I would indicate to the hon. gentleman, Mr. Speaker, that with the assistance of senior personnel within the Post Office I looked into every potential allegation, such as the one which was made on one radio station in Ottawa this morning, to ascertain whether there is any ground upon which the allegations relating to interception of the mails can be made, and 1 ascertained, in that particular instance and in other instances, that there are no grounds for those allegations, to the best of the information of my security and investigation services.


Walter Gilbert Dinsdale: Mr. Speaker, it is obvious that the Solicitor General has information which is not available to his colleague, the Postmaster General, and I hope the two of them get together on this vital issue. The Postmaster General has indicated that there are 14 ex-RCMP officers on his security staff. Has the hon. gentleman assured himself that they are not part of Operation Cathedral, pursuing their illegal operations in the Post Office without reference to the Postmaster General; and does he not believe-


An hon. Member:: We have one on this side too, if you really want to know.


Walter Gilbert Dinsdale: Just contain your patience over there. I am addressing this question to the Postmaster General, not to the Minister of Employment and Immigration. Does the Postmaster General not believe that under our system of responsible parliamentary democracy he has responsibility for ensuring that all operations of this kind are within the law; and will he give the assurance to the House and to the people that this is the way affairs are being conducted by the government?


Jean-Jacques Blais: Yes, Mr. Speaker, but I undertake my responsibility as a minister more seriously than the hon. gentleman takes his responsibility as critic of the Post Office for the loyal opposition. I conduct investigations into matters than can be investigated. I do not proceed by smearing the reputations of individuals and by imputing guilt by association, especially when that association arises out of the service of Canadian citizens with the RCMP, which is a federal police force which is indeed one that is worthy of our respect and is serious in the analysis of its procedures.
That is why I am conducting those investigations, and I will attempt to do so with every effort I can make, mindful of the role that the Post Office will have to play before the McDonald Commission when we are called upon to appear before that commission. It is fully my intention to do everything within my power to ascertain as many facts as possible in regard to procedures which the RCMP might have followed in
November 10, 1977

connection with employees in the Post Office in order to be of assistance to that particular commission.


Walter Gilbert Dinsdale: A further supplementary question, Mr. Speaker. It is precisely for this reason, that the responsibility be placed where it lies, which under our system of government is with the government, that I am asking these questions. Will the Postmaster General accept his responsibility and acquaint himself with the facts, which he indicated he was utterly ignorant of yesterday, and assure the House that he will accept responsibility; and will he also assure the House that the affairs of the Post Office are not being conducted illegally? I am not talking about the responsibility of his security personnel but his responsibility. That is the point.


Jean-Jacques Blais: Mr. Speaker, if the hon. gentleman had cared to listen to my comments yesterday, I undertook that responsibility very seriously in replying to the hon. member for Sas-katoon-Biggar, and 1 am fully intent, Mr. Speaker, on doing exactly that. Again the hon. gentleman refers to "facts". If the hon. gentleman has facts which might help me in my investigation-


Charles Joseph Clark: Ask the Solicitor General.


Jean-Jacques Blais: -1 would be pleased if he would make them available to me. I just wish the hon. gentleman would pay some attention. I also indicated yesterday that indeed I recognized that it will be difficult for me to conduct an investigation inside the Post Office unless 1 receive information from the RCMP. That information has been requested and I am still awaiting a reply from the RCMP.


ROYAL CANADIAN MOUNTED POLICE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Solicitor General. Yesterday the Postmaster General stated that there could be no interception of the mail without the authorization of the security and investigation branch of the Post Office. On the same day the Solicitor General admitted that under the RCMP code name, "Operation Cathedral" letters had been opened. What I want to ask the minister is, firstly, was Operation Cathedral carried on with the authorization of the postal authorities? If it was not, how was this interception carried on? Can the minister confirm whether or not the RCMP have paid informants in the Post Office who intercept mail and pass information on to the RCMP, or what other method is used to intercept mail without the authorization of the Postmaster General's department and in violation of the Post Office Act?


Francis Fox: Mr. Speaker, what 1 indicated yesterday was that there was in fact some mail which had been intercepted and was opened by the RCMP on the security service side of the force. This is something that came
Oral Questions
to my attention-the opening of the mails as opposed to the monitoring of the covers or envelopes which has gone on. The question of the opening of the mail was brought to my attention yesterday and I have not been able to determine very clearly the exact nature of the people who are involved. That is one of the reasons I decided to refer the matter to the Attorney General of Canada for his opinion on the fact that there was indeed the opening of mail and, secondly, to the royal commission, in order that a complete investigation can be made.


Thomas Clement (Tommy) Douglas: A supplementary question, Mr. Speaker. When the minister informed the House that there had been illegal actions on the part of the RCMP on several occasions, he said that his senior officials had assured him that there were no further illegal actions which had been perpetrated. Yesterday he told us that Operation Cathedral has opened mail, clearly illegally. 1 should like to ask the minister, in addition, when he first learned about Operation Cathedral, and if he did not know about it prior to the last few days is he then telling the House his senior officials lied to him when they told him there were no further illegal activities by the RCMP? Either the minister was misinformed by his officials or he is misinforming the House, and surely he owes this House an explanation of what disciplinary action he has taken if he has been lied to by those who advise him.


Some hon. Members:: Hear, hear!


Francis Fox: Mr. Speaker, I gave information to the House last June, as a matter of fact, when a question had been asked as to whether there had been any other illegal activities. It is quite clear that hon. members on the other side are willing to give very clear and very quick legal rulings on certain operations of the RCMP. Some of those operations I believe would require a very serious hearing before the courts to determine the legality or non-legality of them.
As to the question of the Cathedral Operation, the opening of mail, which is perhaps a more clear case than some of the others that have been brought to our attention, the first time I was advised of the actual opening of mail was yesterday during my conversation with the force. 1 was aware of other Cathedral operations which refer only to the question of examining the outside cover of an envelope. That is something I learned of on September 13 of this year. 1 believe that answers the question the hon. member has asked.


DISCIPLINARY ACTION AGAINST OFFICIALS WHO FAILED TO REVEAL ILLEGAL ACTIVITIES TO MINISTER
Thomas Clement (Tommy) Douglas: Mr. Speaker, the minister has not answered my question. The minister has stood before the House on several occasions stating that he had the categorical assurance of his officials that there were no other illegal activities carried on by the RCM Police. Now, he has to tell us that there have been illegal activities carried on. Surely, in terms of ministerial

November 10, 1977
Oral Questions
responsibility the Solicitor General has a responsibility to tell this House whether he was lied to by his officials, and, if he was, what disciplinary action he has taken. This is not a matter for a royal commission, it is a matter of a minister discharging his responsibilities as a minister of the Crown.


Some hon. Members:: Hear, hear!


Thomas Clement (Tommy) Douglas: What action has he taken? If these actions are not legal then the minister should make a case for their legality. If they are illegal, surely the minister ought first to take action against those responsible and, even more important, ascertain why his officials were not aware of these illegalities. If they were not aware they are incompetent, and if they were aware of them and did not tell the minister they ought to be discharged. What is the minister going to do to assure us that he is a responsible minister?


Francis Fox: Mr. Speaker, I think I have already indicated quite clearly in response to other questions, and in the course of my statements in June of this year, that I expect the RCMP in all cases to bring to my attention any matters of possible illegalities in a very clear and unequivocal manner. Since the establishment of the royal commission the RCMP has been in the process of preparing briefs on each one of its investigative practices and procedures, in order to bring them to my attention, first of all, and, secondly, to the royal commission of inquiry. I think in that regard they are being very candid, as other experiences indicate when, during the course of the month of September, the Commissioner of the RCMP retracted a statement by a former commissioner because of an error that had been made, an error that was subsequently brought to his attention by a former officer. In that sense, Mr. Speaker, I think it is quite clear that I expect the RCMP to be very candid with me and to make sure I am aware of any potential illegal problems.


REQUEST FOR DETAILS OF OPERATIONS UNDER CODE NAME &quot;SOURCE 300&quot;-GOVERNMENT ACTION
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question is also for the Solicitor General who has apparently given the assurance that there are no further illegalities, yet we are getting these coming to light almost on a daily basis. 1 should like him to comment or tell the House whether he has investigated the latest revelations of alleged illegal activities by the security service, and can he say whether these allegations are substantially correct? Will he indicate to the house what is his information now as to the number of specific operations carried out under the code name "Source 300"?


Francis Fox: Mr. Speaker, when 1 referred to no other illegalities I was, indeed, referring to my statement in the House on June 17. Since that time, as the hon. member knows, we set up the royal commission of inquiry because we had, subsequent to my statements in the House, information which seemed to have some basis in fact and which seemed to indicate that other possible acts of illegality

had been committed by the force. That is, of course, why the royal commission was set up. If we had no indication then of possible further acts of illegality there probably would not be a royal commission set up today.
As to operation 300 to which he referred today, I have had the opportunity of reviewing this matter once again with senior officials of the force, and the allegations, of course, are substantially correct. There is an operation called "Operation 300" which dates back to at least the mid-1950s-


Some hon. Members:: Tell us about it.


Francis Fox: This concerns the entering into premises by the RCMP on the security service side. This matter is being brought to the attention of the royal commission of inquiry. Once again, Mr. Speaker, there is, I believe, a fairly complex legal question involved which is definitely being underplayed by members of the opposition in their constant attempt to try to make a few partisan points out of a matter that is far too important to be left to partisan purposes, when it affects really-


Some hon. Members:: Oh, oh!


An hon. Member:: Come clean.


Ramon John Hnatyshyn: Mr. Speaker, I simply point out that we on this side of the House are becoming more and more concerned about the way in which the Solicitor General is failing in his responsibilities in respect of the RCMP.


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Mr. Speaker, now that the minister has admitted that the allegations which appeared in the press in respect of "Source 300" are substantially correct, will he tell us whether this information is concurrently being turned over to the appropriate attorneys general for whatever action may be deemed appropriate by the provincial attorneys general involved? Could he also give an assurance to this House that this particular activity, allegedly illegal, has now been terminated and, if so, whether it has been terminated on his orders or, if not, by whom?


Francis Fox: Mr. Speaker, on the question of turning over the Operation 300 files to the provincial attorneys general, as I indicated earlier, this matter goes back to at least the mid-1950s, and probably goes back earlier than that. Our intention at this stage is to turn over to the federal royal commission of inquiry not only the operation 300 files, but briefs on each and every one of the investigative practices of the RCMP.


ALLEGED ILLEGAL ACTIVITIES-SUGGESTION FILES BE TURNED OVER TO PROVINCIAL ATTORNEYS GENERAL
Ramon John Hnatyshyn: Mr. Speaker, in the interest of protecting the reputation of the RCMP, and not having this drag out day after day and month after month until the royal commission will end some two or three months down the road, will the Solicitor General not agree to turn over
November 10, 1977

any information he does have also to the provincial attorneys general for the purpose of analysis as to whether the people who were breaking the law, whether they be in the police force or average citizens, will face prosecution according to the evidence before the attorneys general.


Francis Fox: Mr. Speaker, if the hon. member on the other side is really serious when he says he does not want this matter to drag out in a piecemeal fashion day after day in this House, I suggest to him that he let the royal commission of inquiry do its job and let us get on with the business of the House of Commons.


Some hon. Members:: Oh, oh!


An hon. Member:: You should come clean.


Some hon. Members:: Hear, hear!


BOMBING AT CUBAN TRADE MISSION MONTREAL-ALLEGATION GOVERNMENT ACTED TO FREE FIVE MEN CHARGED
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, in a news story in the Toronto Sun today details of a bombing incident at the Cuban Trade Mission in 1972 are related. It states that two bombs were exploded, and that firemen and police were confronted with Cubans, many of whom were armed with machine guns. Will the minister confirm that the six Cubans who were initially charged with unlawfully having guns were freed of these charges by the Quebec authorities after the federal government intervened?


Francis Fox: Mr. Speaker, the hon. member's story goes back to 1962, as I understand it.


William James Kempling: 1972.


Francis Fox: 1972; that is five years ago, so perhaps he will allow me 25 hours to check it out.


William James Kempling: Mr. Speaker, my supplementary question is directed to the Solicitor General. In checking this out, and if the government is as concerned as it claims to be with terrorists and subversive elements, will the hon. Minister explain why the federal government intervened to have the charges dropped and why it subsequently apologized to the Cuban government for charging six nationals who were armed with machine guns and who had obviously violated our laws?


Francis Fox: Mr. Speaker, I think the hon. member is making a point along the lines that I have been trying to make for a number of days in this House. If there are people going around with machine guns in this country, they ought to be the object of surveillance.


Some hon. Members:: Hear, hear!


William James Kempling: Why did you let them off?


James McPhail Gillies: Why did you let them go?
Questions of Privilege PRIVILEGE


DEFERRAL OF RULING BY MR. SPEAKER ON OUTSTANDING QUESTIONS
Mr. Speaker:: There are two outstanding questions of privilege, one raised by the hon. member for Peace River which relates to some remarks made by the right hon. Prime Minister. In view of the fact that the course to be followed, depending on the outcome of those arguments-which I have now considered very carefully-is that the member who is alleged to have made offensive remarks may have several courses of action to take, it is in keeping with the practices of the House always to ensure that the hon. member is present when the decision is made; therefore, I would prefer to withhold that decision until Monday.
There is another decision outstanding from yesterday. The hon. Minister of National Health and Welfare raised, by way of a question of privilege, some disagreement with interpretations of the press and other members about remarks she made outside the House. That matter was disposed of by the Chair. However, a second question of privilege on the same general subject was raised by the hon. member for Grenville-Carleton. At the time, it seemed to me it had two difficulties which I indicated yesterday. The first was that disagreement between one minister and another, or contradictory statements made by a minister-or, in fact, by any member-does not give rise to a question of privilege. The second was that the hon. member for Grenville-Carleton intended to propose a motion relating to the grievance of another member, which also posed a procedural difficulty.
I undertook to examine the precedents to see whether I was correct in those assessments. I do not propose to elaborate on them, but want to reaffirm my initial impression that alleged contradictory statements by one member or another, or by one minister or another, do not in any circumstance constitute a question of privilege. The most recent ruling on that matter appears in the Journals of November 16, 1971, at page 923. The second is in respect of an attempt by one member to move to the Standing Committee on Privileges and Elections that which has been raised by way of a grievance of another member. It is an extraordinary procedure which was attempted recently, on June 21, 1977, by the right hon. member for Prince Albert, and 1 took occasion to disagree with that practice at that time. That can be found at page 6916 of Hansard. Therefore, I would reaffirm the disposition of yesterday and simply refer hon. members to those precedents.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, on the question Your Honour raised concerning the question of privilege in which I was involved, I should like to point out that I will not be in this chamber on Monday or Tuesday of next week.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: I will be going around the country trying to tell Canadians what this government is doing. I remember the ruling Your Honour made just the other day. If it should be

November 10, 1977
Order Paper Questions
that Your Honour holds there is a prima facie case, and if the right hon. Prime Minister insists on his defiance and refuses to withdraw, it may well be that I will want to move a motion. Would the House and Your Honour agree that the hon. member for Grenville-Carleton, in my absence, if the occasion arises, might move that motion? Perhaps this is hypothetical, but 1 want to hold open that possibility. It will not drag on as long as some of the activities of the Royal Canadian Mounted Police and the government.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Let me hasten to assure the hon. member for Peace River, as I am doing today, that in respect of any ruling I would make now, or in the event of any ruling I would make on some other decisions which might have to take place, I would always attempt to guard very carefully the position of all interested members.


Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, it has come to my attention since I have been sitting in the House today that derogatory remarks were made about my constituents by the hon. member for Crowfoot, now Minister of Industry, Trade and Commerce, who used to be a Tory.


Mr. Paproski:: That is the guy.


An hon. Member:: He still is a Tory.


Andrew Hogan: Because of the time notice, I did not have a chance to let Your Honour know that I wanted to raise a question of privilege today, but I would ask Your Honour's indulgence to allow me to do so on Monday.


Mr. Speaker:: I note the hon. Minister of Industry, Trade and Commerce is not present in the House at this time. Perhaps the hon. member for Cape Breton-East Richmond might want to raise that question the first time the minister is in the House.



ROUTINE PROCEEDINGS


[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 120, 121, 173, 224, 236, 264, 316, 328, 332 and 358.


Mr. Herbert: Are any limitations imposed on the frequency of publication, the number distributed or the unit or total cost of departmental magazines?


Hon. Robert K. Andras (President of the Treasury Board):: Revised policy and guidelines on the management of publications in the government of Canada were issued earlier this year. This document establishes the responsibilities of departments and DSS regarding the pricing, marketing, distribution of various types of publications. Fully-priced publications i.e. publications which DSS consider to be marketable, are expected to recover their costs. However, with respect to other publications, either free or subsidized, there are no specific guidelines which would have the effect of restricting costs resulting from quality or quantity. At the moment, the responsibility to impose such limits rests with departments. However, departmental expenditures for information activities are scrutinized by Treasury Board during the resource allocation process and are approved by parliament through annual estimates.


Mr. Herbert: Has the government issued guidelines to departments on the hiring of outside consultants and, if so, what are the guidelines and what reporting procedure is established if the terms or limitations suggested in the guidelines are to be exceeded?


Robert Knight Andras: The Treasury Board has issued guidelines on obtaining the services of management consultants in the following documents: 1966-2 Guidelines on obtaining the services of management consultants from outside the government. MI-9-66 Policy on the use of management consultants from outside the government. 1967-28 Reporting on the use of management consultants from outside the government. 1968-47 Submission of reports on the capabilities of outside management consultants. These guidelines are currently under review along with the development of more general guidelines for other types of consulting services. All consulting services contracts fall under the government contract regulations SOR/75-530 which establish limitations on departments. For contracts which exceed the limits defined in sections 23 and 24 of the regulations, departments must obtain Treasury Board approval to enter into a contract.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Advisory Council on the Status of Women and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?
November 10, 1977


Hon. Marc Lalonde (Minister of State for Federal-Provincial Relations):: 1. Total number of persons under contract, three. Retired public servants, none.
2. (a) 1975, $55,745; (b) 1976, $77,000. Retired public servants, not applicable.


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


Hon. Janies Hugh Faulkner (Minister of Indian Affairs and Northern Development):: On March 29, 1973, Heritage Canada was established as a national charitable organization independent of government. Therefore all questions should be directed to that organization.


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


James Hugh Faulkner: 1. Twenty-six; none are retired public servants.
2. (a) 1975, $95,700; (b) 1976, $103,000; not applicable.


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


Marc Lalonde: 1. No.
2.	Not applicable.
3.	Not applicable.


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


James Hugh Faulkner: See reply to question 224 answered today.


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


James Hugh Faulkner: 1. (a) (i) Nil. (ii) 5 in 1977. (iii) to (x) Nil. (b) (i) to (x) Nil.
2.	No. They are paid from N.C.P.C. operating revenues derived wholly from northern utility consumers.
3.	Alberta: (a) $6.55. (b) We have no information on actual rates paid by agencies to their employees, (c) (i) $13,316.63; (ii) $25,171.68.


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


Yvon Pinard: For the Public Service Staff Relations Board: 1.
		(a)	(b)
(i)	British Columbia	No	No(ii)	Alberta	No	No(iii)	Saskatchewan	No	No(iv)	Manitoba	No	No(v)	Ontario	Yes-91*	No(vi)	Quebec	No	No(vii)	New Brunswick	No	No(viii)	Nova Scotia	No	No(ix)	Prince Edward Island	No	No(x)	Newfoundland	No	No
* Persons are employed for full days but for limited periods during the two years 1975/76 and 1976/77.

November 10, 1977
Business of the House
2. All such persons are paid from the Public Service Staff Relations Board's Main Estimates.
3. (i)	British Columbia	(a) 1975/76 1976/77	(b)	(c) 1975/76	1976/77(H)	Alberta	- -	-	-	-(iii)	Saskatchewan	- -	-	-	-(iv)	Manitoba	- -	-	-	-(v)	Ontario	S6.04 $5.03	Unknown	$22,181.97	$4,988.28(vi)	Quebec	- [DOT]-	-	-	-(vii)	New Brunswick	- -	-	-	-(viii)	Nova Scotia	- -	-	-	(ix)	Prince Edward Island	- -	-	-	-(x)	Newfoundland	- -	-	-	-


Mr. Orlikow: 1.	What is the total number of Order in Council appointments occupying the range of (a) DM1 (b) DM2 (c) DM3?
2.	How many earn (a) $45,000 or less (b) $50,000 or less a year?


Yvon Pinard: 1. (a) 46; (b) 38; (c) 12.
2. (a) 6; (b) 29.

Mr. Speaker, I ask that all remaining questions be allowed to stand.


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


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I wonder if I might ask the deputy government House leader if he could advise us as to the business of the House for next week. Can he confirm that next Tuesday is designated as an opposition day?


Mr. Cafik:: Mr. Speaker, prior to indicating the order of business for the balance of today and next week, I should like to indicate it was the government's hope that arrangements could be made, on a co-operative basis with leaders of opposition parties, to deal rather expeditiously with four matters, namely, CALURA, the labour standards code, the petroleum corporations monitoring act and the comptroller general's act. We hope it will not be very controversial to refer those matters expeditiously to committee in the next week or so. I regret to inform the House that arrangements for that purpose have not been made, but I will continue to discuss the matter with House leaders.

As far as the specific business of the House for the balance of today and next week is concerned, with the exception of Tuesday being set aside as an allotted day for the opposition, we will continue with Bill C-l 1, the income tax amendments.


Walter David Baker: Mr. Speaker, I hope we are not falling into the practice of breaching the confidence of House leaders' meetings in the way in which the deputy House leader has done. I want to assure him that I learned the lesson early, when the hon. member for Eglinton was House leader. As he kindly told me, I am kindly telling the deputy House leader that he should learn his job and keep his mouth shut, especially when he is wrong.


Norman Augustine Cafik: Mr. Speaker, I am sorry to hear those remarks. If the House leader of the opposition feels that I have breached the confidence in any way of the House leaders' meetings, 1 would be the first one to apologize.


Walter David Baker: We will talk about it later.


Norman Augustine Cafik: The disposition of myself, on behalf of the government, in relation to the four items I have mentioned has been well known. It was well known to hon. members of this House, as far as I am concerned, prior to any formal discussion of this matter with the House leaders last evening. I am pleased to accept the admonition of the hon. member for Grenville-Carleton. If he feels there has been in any way a slight to that confidentiality, I can assure him that there was no attempt to do that in the statement I made to the House today, nor will there be an attempt to do so in the future.
A co-operative kind of arrangement is absolutely essential to the appropriate functioning of this House, and the hon. member can be assured that I would be the first one to recognize the importance of that.


Some hon. Members:: Hear, hear!



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, November 9, consideration of the motion of Mr. Chretien that Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds, be read the second time and referred to committee of the whole.
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, I rise with some trepidation on this first speech of mine in the televised House. It surely will go down in history as the "shiskabob parliament", as we sit here each day skewered by
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the cameras and roasted by the lights. I trust that the committee which made the arrangements for this innovation in parliament will continue meeting, and meeting with some urgency, to see whether the level of illumination in this place cannot be reduced. We were told during the debate on televising this place that it would serve the purpose of keeping the seats full, but I know that very few members of parliament can bear sitting in their seat longer than an hour and a half without some shading or screen for their eyes. If anything, television has had the opposite effect and is emptying the seats in this place. However, one thing I can say is that the increased illumination has added no brilliance to the performance of the government opposite. It has thrown no light or clarity on its deliberations whatsoever, and has added no lustre to the Prime Minister (Mr. Trudeau) and his cabinet as the days have gone by.
I am concerned about some of the changes which have resulted already. One of those was the failure for any procedural wrangle to develop when it became apparent that the Minister of Finance (Mr. Chretien) was going to add something to the rules of this House by running in, on top of the debate in reply to the Speech from the Throne, a budget without the usual warning and preparation and allotted days for a budget debate.
1 believe very firmly that in the pre-televising days there would have been a group of members led by the hon. member for Winnipeg North Centre (Mr, Knowles) who would have tied up the proceedings of this chamber for at least three days as a protest. One of the things we have yet to see in the televised House is a full-fledged procedural wrangle. 1 trust that the precedent set in the opening weeks will not be followed and that hon. members will have the courage, when the government breaches long-standing traditions of this chamber, to argue, to defend the rights of the opposition and to attack such actions by the government in the future.
I can understand the urgency on the part of the Minister of Finance in wanting to bring in a budget-which is not a budget-in order to undo some of the things done by his predecessor who could not stand it any longer and left the position. With the rate of unemployment across the country, and the shocking rate of unemployment in British Columbia, in the Okanagan Valley from where I come and in other parts of British Columbia as well, it is no wonder that the minister attempted to promise at least some further alleviation.
I know that some of the measures he proposed are supposed to provide some alleviation and that there are clauses in the income tax bill we are discussing today which were placed there to encourage business to expand. But 1 am sure anyone listening to that mini-budget had a sudden apprehension on learning that there would be an additional $150 million applied to job-creation. I am sure that I am not alone in feeling that the present job-creation programs through Canada Works and Young Canada Works programs are not the way to solve the unemployment problem in this country. We need something far more sophisticated than short-range projects which are put forward by groups of citizens who very often do
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not have a great deal of administrative experience but yet are being awarded fairly large sums of money.
The wonder is that the projects work as well as they do; but there are too many which cannot be undertaken, and there are too many organizations, including organizations at the municipal level of government, which are frustrated to see what, to them, would be significant sums of money bypassing them because they cannot manage to fit into the criteria laid out in the programs. I cite the example of the interior exhibition association at Armstrong, British Columbia, which would very much like to expand its facilities and to build a new and large exhibition complex to take care of the huge crowds which now show up for that great annual event. When they applied to the Department of Agriculture, they learned that grants for the construction of exhibition buildings were cut off in 1962, so there are no more. They were told that they could borrow at a reasonable rate of interest, but that does not prevent considerable frustration developing as they see grants that would be signficant to them utilized elsewhere, and very often for the short-term in the local area.
I realize that the Canada Works program is now inviting private participation, and I would hope that for that kind of project it would be possible for an association such as that to arrange this matter with the contractor-because the problem lies in the kind of supervisory effort that is needed for a building of that size-who in turn would be able to pick up some people from the ranks of the unemployed and use them at least on the preliminary work that would be necessary. I feel that there would be room for changing the nature of the Canada Works program to allow more direct use of the money and to allow for greater supervision over what is done with it.
We note, too, that at the municipal level great problems arise in terms of the conflicts with municipal unions and the Canada Works program, and those problems have not been sorted out. We know that the minimum wage and the beginning wage for municipal employees does not mesh with the standard for the works program. A great deal needs to be done there. We are in a difficult situation in this country. The economic climate of the country is affected in terms of the minimum wage here versus that in the United States. Even so, we are conscious of what unexamined acceptance of an ever-increasing minimum wage has done in terms of creating unemployables. One can find in a recent issue of Time magazine, for example, Riesman, the sociologist, being quoted as saying that the minimum wage is the product of-
-an alliance of the better situated labour unions with the liberals against the deprived and the elderly whom people would otherwise employ for household or city work that now doesn't get done.
In the most recent issue we learn that the U.S. Congress voted to boost the minimum wage from its present $2.30 an hour to $3.35 by 1981, and one notes with a bit of surprise that the minimum wage there will not surpass ours, assuming that the one in Canada will stay still until January of 1980. The other day, the hon. member for Sault Ste. Marie (Mr. Symes) cited some figures to indicate how the devalued Canadian dollar changed all that, but we should remember that what

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was done in Canada was put into place at a time and during years when the Canadian dollar was at a premium, and that if the situation is as it was described by the hon. member, that is an accident.
What he did not do was give us an indication of the cost to the country and the ways that the low Canadian dollar contributes to extraordinary costs in other areas. As a member from British Columbia, I realize that the devalued Canadian dollar has made a great contribution to the export picture in that province, but that was only part of the problem. The devaluation of our dollar is a price that the government and Canadians must now pay for the full set of fiscal and financial policies which have been unwise and in use for too long a time.
If one considers the area of taxation-and we are dealing with an income tax bill-here again I have a quibble with my colleagues to the left from the NDP. The English language does not permit them to call a tax concession a gift. They do it all the time. A few years back, taxation was seen as being next to theft. If a government stops its thievery, that does not mean it is gifting anyone. We know that when the NDP were in power in British Columbia they robbed industry blind. They simply did not understand the narrow profit industry in that province. They assumed the boom would go on forever. In collusion with the federal government, they set up situations whereby industries could not possibly be profitable. That is particularly so in the mining industry, but they did untold damage to the forest industry as well.


Some hon. Members:: Oh, oh!


Howard Earl Johnston: My friends can call and shout if they wish, but they know the fate of that unhappy government. Years ago we talked about robber barons. In British Columbia they had a "Robber Barrett." For three years they knew exactly where they were.


Mr. Rodriguez:: What about INCO?


Howard Earl Johnston: 1 do not have time to go into the full implications of that matter. However, I never cease to be astonished as I watch the process whereby any hope of the new international economic order is left in shreds and tatters by the NDP as they talk about INCO. Any question of the transfer of technology is postponed into the distant future. If a corporation can be so much criticized for transferring both technology and operation, one wonders what kind of load would fall on a government which attempted to do the same thing on the same scale. I wish those great proponents of the new international economic order would seriously think about what they are doing the moment there is a crisis in any particular locality in Canada. It is something to which they should give considerable thought.
The worst aspect of calling a tax concession a gift is that the public expects too much from it. If the government says, "If you do a few certain things, we will take less taxation from you", that is quite different from the government saying to a

company that it will give them a grant. Those two matters should be carefully and continually sorted out as we go along, because tax concessions are not the road to a quick economic recovery.
Plants in Canada are now operating at less than capacity. There is no incentive for them to expand with a tax concession. Why should they go out and borrow when they are not using all they have at the present time? The concession of income tax to individuals is a better route to take. It has been meeting some approval from the NDP. For a long time it has been suggested from this side of the House. It has been acted on, but in a way tinkering around the edges of the real problem. The promise of the $100 deduction around January or February will be haled by all who can receive it. However, I remind them that looking into the next year they can obtain almost as much by making a contribution to a registered political party.
I know if this thought comes home, a good many will contribute the $100 to the official opposition because they will very much want to remove this government from power. They will see a way of assisting in getting this country back on to a financial course that makes a lot more sense in difficult times than the one on which this government has been embarked for far too long.
I spoke earlier about exports. It is essential that we succeed in exporting to other countries. Part of the area I represent has some of the finest and largest, and a great many undeveloped, coal deposits that can be found anywhere in the world. We know that the coal market is extremely competitive. There are a great many other parts of the world that are blessed with coal. It is a credit to the miners and the companies that they had the courage and foresight to invest in that part of British Columbia which is in some ways remote even though it is not all that far from the American border. Therefore, it is not usually seen as being as remote as it is, even though it is a long haul from there to the coast. The competitive position in which these coal mines have been put has not been very good. They have been a little too dependent on the Japanese market, which at the moment is in a slump. Therefore, there is double jeopardy. The one useful thing the Minister of Industry, Trade and Commerce (Mr. Horner) said in his speech yesterday was with reference to the hope of diverting some of that coal and sending it east to Canadian markets. I know there is very much concern in that area with the development of coal. The government and the Department of Industry, Trade and Commerce should give a great deal of thought to this question.
I fail to see any indication in the new budget that that area will be a target for the direction of research funds. As I read about research funds, it struck me that a blind eye was being turned toward western Canada. The areas singled out for concession to industries which do research in various parts of the country do not pay a great deal of attention to western Canada. This is a serious omission. For far too long there has been a tendency to see all of the western economy as booming. British Columbia is still a target for internal migration in Canada. We still have a great number of people coming there

l;

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who expect to find work. In an economic turndown, it is difficult, indeed, to find jobs for those people.
1 notice the Minister of Regional Economic Expansion (Mr. Lessard) is in the chamber, I hope he will not sit on the laurels he has gained in signing the present agreements with the British Columbia government which have been more beneficial for development in the north than in the southeast. When there are developed mines that are doubtful of markets in the future, it does not make much sense to proceed immediately to develop additional mines in the north with all the infrastructure necessary to put them in place.
I would remind the minister that the southeast corner and the south of the province will need a great deal of the kind of infrastructure development that the Department of Regional Economic Expansion has undertaken in other places. Rail facilities and roads were built there many years ago, but it is a long time since they have been upgraded. The main rail line in the south was more or less abandoned years ago. I hope negotiations will continue between the government and the province of British Columbia. All members who come from there know that for years just the tiniest trickle came out of the end of the spout, over the Rockies.
Even if the present agreement is accepted and paid up in full every year, it will in no way begin to pay for those long years of neglect, for changes in the department and the kind of development of roads to resources infrastructure, for new towns and that sort of thing. There is a demand, and there will be a demand in the southeast Kootenay corner for at least two new towns even as the existing ones still find themselves scrambling to provide for the influx of population that has followed the development thus far. There is still an important job to be done in terms of reserves and development and adding jobs other than those supplied by taking up the raw resources and exporting them. There is, as well, the question of providing the transportation necessary to keep or expand that flow. Much is still to be done in that area.
I should like to say something about the controls program which has been particularly vexatious in British Columbia. Two groups of people feel particularly aggrieved. Certainly, British Columbia teachers were bound by legally binding arbitration and the laws of British Columbia to accept agreements from arbitration boards legally set up. The agreements were rolled back following the decision of the provincial government to place them under the purview of the Anti-Inflation Board. That could only be done by retroactive legislation, which in my opinion is always reprehensible. To me, the wisest course would have been for the Anti-Inflation Board, when confronted with the situation, to say there was nothing they could do and that the agreements were legally binding because they were made before the jurisdiction of the Anti-Inflation Board had been tested in the Supreme Court.
Of course, it is always easier to roll back wages and salaries than to do anything about prices, and the board could not resist the temptation. Now the teachers who felt they would
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have something closer to justice this year are concerned by the 6 per cent raise limit presented by the minister in the speech he made in this House recently. There is, as well, a 2 per cent plus or minus experience adjustment factor which I suspect will relate to the negotiations in the southeast Kootenay area between coal miners and companies. Here, again, 1 think it is incumbent upon the Minister of Finance and the government to explain very clearly, if that is the situation, that it is they who have broken their word. They changed the rules in the game, and they must accept responsibility for changing those rules as they affect the teachers and may affect the miners. 1 do not think that question has been sorted out yet, but I had a feeling of apprehension as I read the minister's budget speech. It holds out the possiblity of only 4 per cent to people who believed they had been promised 6 per cent in the third year.
In closing, Mr. Speaker, I should like to refer briefly to a speech made in Cranbrook, British Columbia, recently by Mr. Dennis F. Culver, president of the Institute of Chartered Accountants of British Columbia. Referring to this government and its taxation policies, he said:
The ineffectiveness of the federal government in carrying through, logically and methodically, its fiscal proposals has created widespread uncertainty in business, hindered the mobility of capital, and contributed to the general lacklustre performance of the national economy.
A good many people would like to think all of that has been caused by the debate on national unity, yet here is someone, who should be in a position to know, who finds that the root cause is something more than concern, real as it is, about national unity. A report of this speech in the Daily Townsman, a newspaper of the east Kootenay area, reads in part as follows:
Culver said that over the last five years federal government budget proposals-which affect every man, woman and child in this country-have been delayed, killed, amended, reintroduced or disposed of in some way other than what the federal finance minister had originally proposed.
There have been so many changes to the Income Tax Act that the original concept of tax reform-introduced in 1971-has been abandoned.
For example, Culver said, the concept of integration of corporate and personal income was laid down as a cornerstone of tax reform. Since then, many different tax rates and tax abatements applicable to both individuals and corporations have been implemented.
He is concerned about the confusion that this sort of thing causes. He has some good words to say about the bill before us, however. The newspaper report continues:
The 1977 budget, brought down in the House of Commons on March 31, lapsed with the end of the session. It contained major changes to facilitate corporate reorganizations and ease taxes on corporate business income.
I should like to point out that the bill before us is an aberration on the part of this government. It is not the course upon which the Liberal government has embarked over the years. It is a backing, filling and shifting that has been forced on it by the realization it has brought this country to the brink of economic disaster. Some sort of remedial effort must be made immediately. We have this rather half-hearted attempt to do something about a situation that is virtually intolerable.
I am sure that as well as this parliament going down in history as the first to be televised, it will go down in history as the last of the parliaments led by this Prime Minister who has

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led the country not only to the brink of national disunity and total separation but also to the brink of economic disaster.
[ Translation]


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, it gives me great pleasure to take part today in this debate on Bill C-ll introduced by my colleague, the Minister of Finance (Mr. Chretien). I guess one could say it is a kind of omnibus bill because it deals with many sectors of the economy. This bill represents an additional effort by the federal government to participate with private entreprise and provincial governments in the revival of the economy which is now going through a difficult period.
Today, Mr. Speaker, 1 want to speak as the minister responsible for regional economic expansion, a department dedicated to the development of the economy but also interested in furthering unity in this country. This is a department which has been quite successful in several areas and provinces. At the same time, it is a department which comes under criticism and 1 will come back a little later to some of those criticisms. Finally, in this debate, most speakers mention what the department has done-very few in the opposition mentioned its accomplishments; they dealt mostly with its failures, and things it should not have done and should have done. The hon. member for Cape Breton-East Richmond (Mr. Hogan), for example, and also the hon. member for Prince Edward-Hast-ings (Mr. Hees) both made certain criticisms, and in some cases, suggestions.
I want to say, Mr. Speaker, that Canada is a political compromise between local, regional, economic, ethnic, linguistic and religious interests, and one could even add that it is also a compromise between various ideologies. Historically, we have been united but at the same time some areas have been poorer than others at one time or another. What is important in all that is that we must be aware of the difficulties certain areas are experiencing and take all the means available to us, and create more if necessary, to correct those difficulties. However we must stop constantly blaming our ancestors, past discriminations we have all been victims of at various times from one standpoint or another. The Department of Regional Economic Expansion was set up to try and iron out regional disparities. So our role is to try and distribute economic growth on a broad basis as fairly as possible, to bring as close together as possible the employment and income opportunities of the regions, particularly in slow growth areas, side by side with those of the rest of the country, without causing harm to the development of those other areas as a whole.
We do not want in any way by our action, Mr. Speaker, to jeopardize or delay the development of other regions which are more advantaged. Our purpose, to be more specific, is to create new growth centres in those regions where the growth potential has not been fully developed. Canada needs strong and big cities because they are necessary to its expansion but it also needs a strong economic base from one ocean to the other. It is not easy to eliminate inequities which have been created

and have developed over almost two centuries of history, but in particular during the last century.
It is obvious that during a very short period only one department has not been able and will not be for a few more years to substantially correct these inequities. During the past seven years, we have made several experiments, tested several programs, either alone, unilaterally at the federal level, or in conjunction with provincial authorities and existing organizations. A large number of those experiments have proved to be a success. Others, for obvious reasons, have not been so successful and in some instances, of course, we have even failed. Unfortunately, failures are those which are most often heard of. Interesting events are considered as a normal thing, in other words success is something one must normally know. What is strongly criticized are failures or half successes. I was accused recently of not being able to answer specific questions, of not caring enough about the number of unemployed and their serious plight.
Mr. Speaker, I repeat in this House that the purpose of my department, my own personal purpose, as well as I am sure that of my two predecessors in this portfolio, is to control unemployment and bring about an improvement in the economic development of our disadvantaged regions. Surely this is the mandate which cabinet has given this department, a mandate recognized by everybody as being a difficult one. And our purpose, as I said a few days ago in an answer I gave in the House, our purpose and my own purpose, in a word the ideal to reach would be to have available jobs for all men, all women who are really willing and who need to work.
I am more concerned, Mr. Speaker, by Canada's future than by its past, even though the latter is full of so many extraordinary events, and I want to say that my department wants to and will play a valuable role in the development of this country as long as it will remain an instrument for timely interventions. And it is precisely that role which is particularly difficult and which certain people, certain regions, certain groups of people do not always understand the way we have set it. The department makes timely interventions; in other words, in cooperation with provinces, organizations, businesses, we identify operation areas, we jointly set up an action plan in relation to an objective to be reached, and we agree on a budget structure and a period over which the program will be spread. That is what I refer to as timely action. When the job is done we withdraw, as we should.
Mr. Speaker, as long as I have responsibility at the head of this department, I will always refuse to see it become a department which operates by the statute book because we would then only play the role that several other departments are very well entitled to play, and we would lose that nature the department has been given when established, that selective nature, indeed even discriminatory in some instances, having to make a choice among the options available to us and to accept some proposals and reject others, a certain amount of discrimination necessarily follows but I think that when the role of the department is well understood, which no doubt is the case most of the time, then it is accepted. Those who
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criticize the department and there are many, do it mostly because they would like to see it do much more. When that kind of criticism is made in a positive and constructive fashion, with suggestions, I accept it.
1 even ask for it because we, in the department and those in charge of provincial governments with whom we negotiate and cooperate, recognize that we have no monopoly on the truth and that in our search for answers for the promotion and development of regions and in our battle against disparities we certainly need the help, cooperation and support from provincial and municipal governments, the people in general but particularly from groups interested in private enterprise, in the industry.
What I mean is that it is not the responsibility of the Federal government and the Department of Regional Economic Expansion alone to fight against disparities. In my meetings with the premiers and the provincial ministers with whom I have regular consultations and negotiations I mentioned that when the Federal government decided to create a department to reduce regional disparities we were acknowledging their existence and that, through the establishment of that department and the budget allocated to it, we had directly contributed to the reduction of those disparities. Therefore I said to the Premiers that if they were satisfied, which was the case for all of them, with the action and decision of the Federal government by which we had recognized the need for urgent action, obviously the same need also existed at the provincial level-I mean the need to acknowledge their disparities and the fact that programs and monies spent by various provincial departments also had a major effect on the development of those areas.
This is why in the last twenty-four months of negotiations, ever since I became responsible for this department, I have always tried to find out what areas within the provinces needed our help most urgently whenever we could give it of course. And if you look at the agreements that have been signed during the last two years you can see that this point of view has been recognized to a large extent by almost every premier and provincial minister with whom I had to negotiate.
On this side of the House, we want to ensure a basic minimum of welfare and prosperity in all regions of the country. We cannot aspire to a strong and dynamic economy if our regions remain poor and underdeveloped. Our regional economy must be based on the image that we have of our country, of Canada's future. However, we must remember that our resources are not unlimited. This bill proves it. Even the other proposal of the Minister of Finance (Mr. Chretien) which finally asks us authorization to borrow $9 million this year should indicate above anything else how our actions and the expenditures possible to reach our objectives are limited.
Because of this situation, we must be even more selective, even more cautious in choosing projects that we can support to reduce regional disparities. If I were to accept all the suggestions that are made to me, 1 would obviously have to commit
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the federal government and the provinces to expenditures of much more than the $500 million now available to the department.
A while ago, we heard a Progressive Conservative member from British Columbia tell us about the progress made these last few months in our negotiations with the provincial government of British Columbia and about the agreements that we have signed and that I have signed personally, in fact, five subagreements which commit the federal government to make considerable expenditures in co-operation with the provincial government. The hon. member recognized that we have made some progress. At the same time, he insisted that we should continue our negotiations and said that certain areas of his province are in great need of our intervention. I thank him for his encouraging words as concerns our department and I can assure him that our negotiations with his provincial government are going on and that next week, during a visit and a conference to which I have been invited, I will go into his province and have the opportunity to talk with the provincial ministers and see what stage we have reached in the implementation of the agreements which we have signed.
Mr. Speaker, if I had a magic wand I would immediately formulate the wish that all those unemployed may find a job, that all depressed areas may flourish again and that all those who want and need to work can do so. But, as we all know, one must be realistic while bearing in mind this kind of tenacity shown by the generations which have preceeded us. They were foresighted people, who had faith and they succeeded in building a great country.
We who are prone to criticize and despair now and then should remind ourselves that those who preceded us and built this country had to face much greater difficulties with more limited means than those we have and we should not forget also that generally speaking the standard of living we now enjoy should make us a lot more optimistic and help us keep faith in the ideal of our forefathers.
There are challenges which we must take up, I am aware of that, and I know that Canadians trust their government to find the remedies which are necessary to improve the present situation as it exists not only in Canada but on the north American continent taking into account the difficult international economic situation. In order to meet the challenges facing our department, we have developed several programs. Canada is a big country, as we all know, and its needs as well as its potential may widely differ from one region to the other. The federal government grants billions of dollars each year to the provinces whose fiscal base is not wide enough to provide the necessary funds for their own development and to afford a satisfactory level of services to the population. In our department, Mr. Speaker, we do a bit more than that. We add to that fiscal base by the spendings which we make in these provinces for their development.
We also act unilaterally to promote industrial concerns. We also support businesses which are from time to time experienc-

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ing difficulties. We have provided funds and we have guaranteed loans. Mr. Speaker, I think 1 can see you smile, because you know what I am referring to. Lately again, as a result unfortunately of some difficult conditions experienced by a particular area in Quebec, we were able in co-operation with the Department of Industry Trade and Commerce, to join our efforts to those of some industrialists willing to carry on and assume the risk. Thus jobs were preserved and there might even be a substantial increase of jobs in the case I am referring to in the city of Valleyfield. This is not a unique case, there are several others, Mr. Speaker, of which my colleagues are also aware.
Some may argue that we do not publicize these facts enough. We should mention them more often. Perhaps we should issue weekly press releases to let the public know what we are doing. The reason might be that we are not that kind of people, for we are satisfied with doing our job the best way we can, trusting that the Canadian public which is aware of our efforts will recognize them, as I am sure it does.
As I was saying, Mr. Speaker, we often act together with the provinces through development agreements. During the past three years, we have signed with them over 80 subagreements which involved more than $2 billion in expenditures. It is interesting to note that this is a federal department which, without making too much fuss, is constantly bargaining with the ten Canadian provinces. It is a fact that there are tensions, that the bargaining is tight, and that there are disagreements. Yet, Mr. Speaker, the 80 agreements which we have signed are conclusive evidence that the bargaining and consultation process is operating efficiently and succesfully.
We have had agreements signed with the ten provinces, Quebec, British Columbia, Newfoundland, Ontario and all the others. We are negotiating with them on a regular basis. This is a sincere attempt at co-operation. We cannot obviously fill all expectations. We cannot approve each and every proposal. It being a matter of priority, we have to make a choice between all proposals, and try to improve present conditions and that is what we are doing on a regular basis.
It is plain that the final disposition lies in the hands of the provincial governments concerned because they are the ones that have jurisdiction over the land and its resources as well as in most of the areas where we want to co-operate with the provinces. Mr. Speaker, this reminds me of an article that has been brought to my attention and it concerns a Quebec provincial minister. I can mention his name because it appears in the article. I quote:
The Quebec Minister, Claude Morin, is suggesting that the Department of Regional Economic Expansion is unconstitutional. That it should not exist because it operates in an area under provincial jurisdiction.
He probably wants to imply that we should further increase our payment transfers to the provinces. I say, Mr. Speaker, that he is not the only one that has made such a suggestion. I heard about proposal which was made some time ago whereby we should transfer to the provinces the equivalent of the

department's budget and allow them the freedom to spend this money as they see fit.
I looked at this proposal and dwelt at length on the effets it would have. I saw what would happen to the federal government's tax structure if such a transfer were made to provinces. Already, we have transferred to the provinces, within the framework of two programs, the shared cost program for the year 1976-77, the sum of $4,506 million, and that was for the year 1976-77.
Fiscal transfers amounted to $3,216 million, which means that federal transfers to the provinces, under two or three minor programs, amounted actually to some $8,130 million. I doubt that $500 million divided amongst the provinces will change anything much; they will disappear in the overall picture just as do now in the vast majority of cases the amounts we transfer to the provinces. Yet, the federal government is accused of doing nothing for the economic development of the provinces. One may wonder, if we are completely responsible for their development, whether we should not review those transfer programs, because after all, if we transfer all that money, it is precisely to enable them to develop their economy, strenghthen their structures, and I do not think that having a department allot those amounts to the provinces directly would solve the problems. Indeed not, Mr. Speaker, I am convinced people would still blame Ottawa for its inaction, for its lack of leadership, its lack of interest. This is why the department has been and still is in existence. And I feel that its scope should be increased substantially, because if we are to be blamed in this House and elsewhere for certain disparities between regions and provinces, let us at least have the authority to act. Our powers are not nearly as broad as would be desirable.
My time is almost up, so I conclude by referring to certain accomplishments, certain situations. In recent weeks and months, the department has been confronted with certain economic conditions such as unemployment, and because of this we have increased our interventions. In the case of the province of Quebec for instance-and I would like to bring this to the attention of my colleagues because there has been criticism in that respect from time to time-because of increasing unemployment in the province of Quebec and especially in the Montreal area, where a 50 per cent increase was experienced in 12 months, the department decided to designate greater Montreal a special area.
1 would like to report to the House that in the course of some four months of operation, we have received over 170 applications for industrial aid projects and, assuming these were ail acceptable and granted, this would entail investments of some $110 million, with the creation of over 4,300 jobs.
1 also take pleasure in informing the House that offers were made to more than 17 of the firms involved. Some have already been accepted, with two announced at this point, and I hope that in the coming weeks other accepted projects can also be announced on a regular basis. These efforts are within our own jurisdiction, because we have had to act unilaterally to assist development. Our contribution will help alleviate unem-
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ployment that has increased at an excessive rate in the larger Montreal area.
A number of statistics could be quoted. 1 know that the House is practically submerged with statistics from various speakers, so I will abstain from bringing more, the purpose of my speech being to support this good piece of legislation brought forward by my colleague the Minister of Finance (Mr. Chretien).
This is a bill for which I am personally grateful to him as a minister, because he pursues what had been announced by his predecessor, Mr. Macdonald, and the provisions of this bill will support the objectives of my own department. Take the investment tax credit-some feel it is not enough and 1 am inclined to agree, but I am pretty patient and systematic: I will proceed gradually-it went from 5 to 7.5 and now it is 10 per cent, and I hope we will succeed in increasing these figures in the next months or years.
I should like to conclude on a comment concerning the people of Saguenay-Lac-Saint-Jean whom I represent here. 1 wish to thank them for the confidence they place in me and to assure them that my department is now working on several projects. We are aware of the potential of this area which is now unfortunately hard hit by a high rate of unemployment, but I have faith in the people of my area and in their dynamism. Judging from past experience and considering the achievements of these people in many areas, such as cooperation, industry, finance, with economic mutual funds among other things, 1 feel that our area will come through, with the assistance of the federal and provincial governments, and I hope the hon. member will realize that it is in his interest to cooperate with us and with the local people in order to ensure the development of those areas and sub-areas. I hope that all those measures will succeed in reducing unemployment, in creating jobs and in keeping our young people in our areas. We must strive to create jobs in order to keep them at home. It is of concern to me as a Canadian and as a Quebecer and as a citizen of Saguenay-Lac-Saint-Jean. 1 ask the House to consider this bill with all the attention it deserves but not to unduly delay its passage, so that we may proceed with other pieces of legislation likely to help the Canadian economy and our fellow citizens.


Mr. Bechard:: Mr. Speaker, I rise on a point of order. Will the minister allow me a question?


Marcel Lessard: Of course, with your permission, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: The hon. member for Bonaventure-Iles-de-la-Madeleine (Mr. Bechard) may ask a question if the hon. member agrees.


Albert Béchard: Mr. Speaker, a point of order. I would like to thank the hon. minister for having agreed to hear my question which is very serious. I know what are the feelings of the Minister of Regional Economic Expansion who represents an area which, in many aspects, is similar to mine. Therefore, I
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would like to ask him if in his efforts and those of his department to eliminate regional disparities, his department is now doing something or some studies with regard to the mining development which is in progress in Iles-de-la-Madeleine-particularly the salt mine which is not in operation at the moment, but at the planning stage-I should also like to know if his department would eventually be interested in the bicarbonate of soda industry or plant which would be built once the salt mine in lles-de-la-Madeleine is operational, and, this time, in the continental part of the constituency of Bonaventure-Iles-de-la-Madeleine, that is in Port Daniel. Furthermore, I would like to know what are the plans of the department regarding the funding of these two industries.


Marcel Lessard: Mr. Speaker, the Department of Regional Economic Expansion is interested in the development and the potential uses of the subsoil of that large area of the province of Quebec, that is the Gaspe region and Lower St. Lawrence and also lles-de-la-Madeleine. It is not the largest part, but it is still important. That project relating to a salt deposit has been known now for several years, and its potential and profitability as well as market possibilities are still to be evaluated. It is a project conducted by a provincial Crown corporation, SOQUEM, that others and myself know quite well and follow very closely.
Now, about the other project, in Port Daniel, the potential of a deposit has also been identified, and, there again, it would seem that the project could be put in operation in a relatively reasonable time. Pursuant to an agreement between the government of Quebec and my department, work is now being carried out with regard to drilling and assessment of the potential in order to know whether or not the project could be put in operation in the near future. These two interesting projects might perhaps further develop the economy in the Lower St. Lawrence area.


Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, I have now had just over five years in this House, during which time I have seen a lot of government budgets that have been criticized in one way or another. The members of my party have not criticized everything in those budgets, but we find our alternate suggestions are seldom taken up by the government.
Of course, the government has indicated that this is not a budget we are debating, it is a tax bill. When I look at the budget of March 31 and cast my eyes over the economic and fiscal statement of October 20 by the Minister of Finance (Mr. Chretien), I notice there is not much difference in their looks or their contents. The government has indicated that it is in a hurry to get this bill passed, but I think 1 should remind the House that this bill arises out of the budget statement of March 31 and that the government has had some seven months in which to get the bill passed by the House.
Since the debate started a few days ago, the government has been putting up speakers every day. Today we heard from the Minister of Regional Economic Expansion (Mr. Lessard), and yesterday we heard from the Minister of Industry, Trade and

November 10, 1977
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Commerce (Mr. Horner). This does not seem to indicate that the government is in any particular hurry to get this bill passed by the House.
After using the red herring of national unity, the Prime Minister (Mr. Trudeau) stated in Calgary earlier this month that the major issue in Canada was economic policy. After having a nice long weekend, he stated earlier this week in the House that he was very happy to be back now that the opposition is turning its mind to economic questions, rather than knocking the RCMP. Only a few days prior to that the Prime Minister decided the economic issue was an important one. I am not sure we can accept the criticism that we finally made that decision ourselves.
As for the knocking of the RCMP, I want to remind the House that on the same day the Prime Minister made that remark, the hon. Leader of the Official Opposition (Mr. Clark) explained some matters in careful detail in the House. On November 8 he indicated that the fundamental principle of the parliamentary system, which is at stake here and which is being violated by the government of Canada, is that ministers of the government must take responsibility for the acts of public servants under their general direction.


Some hon. Members:: Hear, hear!


William Hillary (Bill) Clarke: Later on he said that we have seen far too frequently the blaming of officials in instances where the minister should take the responsibility. We saw that in the case of Larry Stopforth, the executive assistant to the present Minister of Supply and Services (Mr. Goyer), and we are now seeing it in the case of the Royal Canadian Mounted Police. His final reference was to the illegal acts which the House and the country were aware of. He indicated that the purpose was to determine by whom these illegal acts were committed-


Joseph Jacques Jean Chrétien: Mr. Speaker, on a point of order.


Mr. Deputy Speaker:: The Minister of Finance on a point of order.


Joseph Jacques Jean Chrétien: Mr. Speaker, I feel I should rise to indicate that this is not relevant to the debate we are having at this time. This debate concerns the income tax bill, and not the RCMP, etc. 1 am sure all hon. members are aware of the fact that there are some rules in the House which have to be followed once in a while.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please. I must point out to the minister that I happened to be listening closely to the hon. member. I was trying to figure what his argument on the points he raised was leading to, and I imagine that within a few seconds or minutes, he will return to the subject or perhaps satisfy the Chair that he is speaking to the point. Otherwise, I will have to call him to order.


William Hillary (Bill) Clarke: Mr. Speaker, I should like to welcome the Minister of Finance back to the House. I assure him I am trying this up with the remarks made by the Minister of

Industry, Trade and Commerce yesterday in this same debate. Referring back to the remarks made by the hon. Leader of the Opposition on Tuesday concerning illegal acts, by whom they were committed and at whose direction, he concluded by saying the following:
They were committed, so far as is known, by members of the security services, and here I make the distinction between members of the security service and members of the regular force of the RCMP.
It was quite clear from the remarks of my leader that there was no attack by this party on the RCMP.


Some hon. Members:: Oh, oh!


William Hillary (Bill) Clarke: The Minister of Industry, Trade and Commerce was trying to delude the House and himself yesterday into believing we were trying to ride to power, on this side of the House, on the backs of the RCMP.


Joseph Jacques Jean Chrétien: That is true.


William Hillary (Bill) Clarke: The remarks which have been made in this House over the past week would indicate that that is not the case. It is not the purpose of my party to have anything to do with the knocking of the RCMP. I remind the Minister of Finance that it was the leader of my party who during the summer recess urged the government, in view of the worsening economic conditions in Canada, to recall parliament early and to present a new budget. Goodness knows for how many weeks and months the government has refused to bring down a new budget. The government said there would be an economic and fiscal statement, but that is not a budget. All that did is curtail debate and prevent the opposition from having a budget debate.


Howard Earl Johnston: A shameless mockery.


William Hillary (Bill) Clarke: I want to refer to the remarks of the Minister of Industry, Trade and Commerce once again. He referred to the falling dollar. We wonder if he recognizes that the falling dollar is the result of the failure of the economic policies of his colleagues. In Winnipeg, the minister said that the fall in the value of the Canadian dollar has been useful, and said "I hope it stays around for a while".
I wonder if the Minister of Industry, Trade and Commerce has talked to anybody in Canada who today has to pay the increased prices which are the obvious and unavoidable result of this lower dollar which he thinks is such a wonderful thing. While we are talking about responsibility in debate, a matter raised by the Minister of Finance, I would like also to recall the remarks of the Minister of Industry, Trade and Commerce yesterday when he accused hon. members on this side of the House. The remarks I refer to are found at page 758 of Hansard, if the Minister of Finance wants to check that out and if he can get away from his reading. The Minister of Industry, Trade and Commerce said:
There are Canadian citizens on the other side of the House betting that the Canadian dollar will go down more. They are buying American dollars, Canadians sitting on the other side of the House.


Steve Eugene Paproski: A shameful remark, and it is untrue.
November 10, 1977


William Hillary (Bill) Clarke: Hon. members on this side of the House, including myself, challenged the minister to name them. The hon. member for Brant (Mr. Blackburn) raised a point of order, or a question of privilege, to object to that sweeping falsehood which the minister was unwilling to back up. The minister said, "Yes, I can name some", and when he was pressed further he said, "Naturally, the government has to act in defence of that". I do not know whether that means the government will not let him speak. I am sure hon. members opposite often wish he would not speak. We had a similar problem when the Minister of Industry, Trade and Commerce sat on this side of the House; some of us wished he would not speak.
Let me satisfy the Minister of Finance and get down to consideration of the economic policies of this government. In this bill, the minister asks us to authorize the borrowing of $9 billion simply to cover the continuing deficits created by the continuing mismanagement of the economy of this country by this government. I begin to wonder whether the hon. members opposite who have been pulling the strings for the last ten years under this administration really know what it is to have deficits and to overspend. I do not know whether the Minister of Finance has been coaching his colleagues, but I want to refer to some remarks made by the Minister of Employment and Immigration (Mr. Cullen) on Monday in the House in response to a question I put to him. I might say that my question was a serious one concerning the shortfall of the unemployment insurance fund. It is going to pay out $4 billion this year, according to the most recent projections, which will be $1.7 billion short of the amount collected from those insured and their employers.
The minister tries to make the case that the unemployment insurance system is an insurance scheme and not a welfare scheme. My question was simply how the minister thinks it is fair to have taxpayers of Canada who were not eligible to participate in this so-called insurance scheme, because they are not in insurable employment, share in this deficit of $1.7 billion. In his response the minister accused me of playing fast and loose with figures. That was the beginning of his answer. 1 should say "non-answer", because he never did answer my question. The minister accused me of spreading malicious, imprecise information. How irresponsible! In the first place, I mentioned only one figure. I was trying to get some information about how we might relieve these poor taxpayers who are being called upon to suffer as a result of this government's policy. I am going to talk about why we have that deficit in a few minutes, but the response of the minister was that I was being imprecise. I would like to quote his answer, as follows:
He is using the word "deficit" when he knows it is a government commitment to pay a certain amount after the floating average figure has been established.
That can be found at page 636 of Hansard for Monday of this week. If the Minister of Employment and Immigration does not know what a deficit is, how can we be sure that any hon. member opposite knows what a deficit is? For goodness sake, we are in trouble! The government is very good at creating deficits. I just wish it had the ability to recognize
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when we have a deficit. I am sure that the level of the Canadian dollar-it was at the level of 89 cents U.S. at one time this week-is an example of the results of the economic policies of this government. A further result we can see-the figures came out just this week concerning unemployment insurance-has to do with unemployment insurance pay-outs.
I have already mentioned them, but there is an underlying figure which is very important. This should be very interesting to Canadians.
There is a growing number of unemployed-36 per cent of the total, now-whose unemployment period is longer than three months. That indicates that there is an ever-growing number of Canadians whose benefits have expired. The policies of the government seem to be forcing that number up. It seems to be a secret policy of this government to transfer to the provinces the cost of benefits for those unemployed people. After all, if people do not have unemployment insurance benefits, they have to turn to welfare. Those costs are paid by the provinces to a much larger extent than unemployment insurance costs.
Many times the government has told us that the policies proposed by hon. members on this side of the House will not work. The government has never given them a try, so I do not know how it can say they will not work. The thing that the people of Canada and everyone in this House must know is that the policies used by this government for the last ten years have not worked.
It cannot be said that the policies suggested by this side will not work. They have not been tried. There was one policy that the government felt was not inadequate and would like to borrow. Of course, they waited until they had successfully campaigned against it. I refer to the controls program. As has been said many times, the present controls program is not anything like that proposed on this side. The only similarity between the two is the name, "controls." The proposal from this side was for a total freeze of a temporary nature, 90 days, to give the government time to adjust its policies and bring inflation under control. The government somehow came up with the idea that they could do something about inflation with controls, but after two years they should realize they have not succeeded.
According to their own figures, inflation is continuing, and they are projecting over 8 per cent for this year. That is because they have done nothing to control their own expenditures. We cannot expect controls to do anything, if the government will not get their own house in order. Mr. Speaker, I do not think I can put this in any better words than an article which appeared in the Courier, of Vancouver, of September 15, 1977, which stated in part:
However, the serious problem of the moment is the apparent disagreement on the economic issues which is costing Canadian taxpayers dearly. It now seems certain that Turner (an old-style Liberal), did not want a controls program, and resigned when Trudeau (a Liberal-Socialist) insisted. Macdonald-
8002 5-51

November 10, 1977
Income Tax
This refers to a former minister of finance.
-was persuaded to give the controls program a chance, and after nearly two years, had been saying that a decontrol program was coming.
Instead, we know that the former Minister of Finance left. The article continues:
The Liberal party was divided on the introduction of controls and is now divided on their end. Why else did Turner resign, and... call for the end of controls when it is obvious that his party wanted to maintain them? Why else did Macdonald resign after making positive statements about a decontrols program?
The article continues, comparing the differences between this party's proposed controls program and that imposed by the government. It points out that the then leader of the opposition, realizing the devastating effects of inflation, proposed a temporary three-month freeze on wages and prices and even on imported goods in order to break the inflation psychology. This would have given the government time to change its spending habits. The article goes on:
Stanfield knew that controls would not stop inflation (look at inflation in the past two years!).
In fact, although many people say they like controls, prices today are rising faster than wages, just as they were in 1974.
I think I can do no better than read a little more of this article, Mr. Speaker, which is quite a good one. It continues:
The government's policies have undermined the confidence of the private investor in Canada.
We have been telling them that you cannot have people investing without confidence. It goes on:
With little new investment, few jobs are being created, unemployment is rising, the dollar is failling, and government overspending is rising. (The deficit this year is projected-
At that time it was $6,500 million, which was overspending by about $650 for every individual Canadian taxpayer. To return to the article, it reads:
After nearly ten years of Trudeau's administration Canada has the worst economic outlook ever, the highest unemployment in history, and the most divisive atmosphere in memory. The man who said he would "wrestle inflation to the ground", and that "separatism in Quebec is dead", cannot now be seen as the "saviour of Canada". Even the PQ's Jacques Parizeau has described Trudeau as the cause of separatism.
Now he is holding himself out to be the saviour. As far as the present Leader of the Opposition and others in this party are concerned, I will again read from the article as follows:
Joe Clark has been repeatedly urging the government to take steps to turn Canada's economy around. Clark has stressed the need for reduction in government spending, in government interference in the private sector, and in the rate of increase in the money supply. He knows that inflation is caused in Ottawa and can only be solved in Ottawa.
There is nothing in this tax bill or in the economic statement that is going to do anything about these ills. I do not know what the government thinks the role of the official opposition is, but they certainly do not pay it any heed. Again referring to the article, it says:
Progressive Conservative policy is for government stimulation of the economy through incentives to business, particularly small business.
Mr. Speaker, we have heard the government speak of personal tax cuts, and the Minister of Finance seems to be very proud that he has given the opposition what they want, a tax
[Mr. Clarke.)
cut of $100 for the average taxpayer. That is $600 million in total for the country. But the Economic Council of Canada believe that the economy needs a boost of $3 billion.


Joseph Jacques Jean Chrétien: You have just said we have too big a deficit. Try to reconcile the two.


William Hillary (Bill) Clarke: Mr. Speaker, the Minister of Finance shows his inability to reconcile economic facts, just as much as the Prime Minister is unable to reconcile separatism facts. If the government stimulates the economy to the extent of $3 billion, they will get it back double and the budget will balance itself. The government does not give that a chance. If we stimulate the economy, we will find new jobs, new confidence in the business community. The jobs will go to the unemployed, who will no longer be a drain on the unemployment insurance fund. I hope the Minister of Finance will listen, because he seems to have missed the point that the people on unemployment insurance will become taxpayers. That is how he would balance the budget. On the one hand, he would no longer have to pay out large unemployment insurance benefits, and on the other the new employed would be contributing to revenue.
I would refer the minister to the United States where, in an unprecedented move 13 years ago, huge personal tax cuts- about $11 billion-were given in order to get the economy going. At the end of the taxation year it was found that the revenues were balanced exactly. The $11 billion came back in additional personal taxes either from higher incomes or from new taxpayers. I do not know what involvement the minister has with the Economic Council of Canada, but I think he owes it to himself and perhaps to the taxpayers of Canada to refer to their booklet and see what they recommend.
The other way this government seems to tackle the problem is by little "gritty" give-aways-$100 million for this or $150 million for that. And, of course, it goes to the right part of the country: we would not want anybody who does not support the Grit party to get any of these little "gritty" grants.


An hon. Member:: What about Alberta?


William Hillary (Bill) Clarke: I do not know about it, but I can certainly tell the hon. member opposite about British Columbia.


The Acting Speaker (Mr. Ethier):: Order, please. Any hon. member seeking to be recognized should stand and have the Chair recognize him.


William Hillary (Bill) Clarke: If these examples are considered unusual, we should just look at the average. A government riding got five times as much, on average, as an opposition riding. I would not want to suggest there is anything wrong with that, but people may draw their own conclusions. Mr. Speaker, I should not leave the article I read from without giving credit to the writer- myself.


Joseph Jacques Jean Chrétien: Mr. Speaker, I rise on a point of order. I have been listening to the hon. member's speech. He stated that some years ago the United States had a tax cut of $11 billion.
I point out to the hon. member that they do not have an indexing system. With the indexing system that will apply on January 1 next, the tax cut will be about $850 million. Add to that the $700 million cut. That is 50 per cent more per capita than the cut in the United States at that time. When you measure Canada against the United States, you must always divide by ten.


William Hillary (Bill) Clarke: Mr. Speaker, even if we accept the argument of the Minister of Finance, it would be less than half what was recommended by the Economic Council of Canada. I will ask the Minister of Finance another question which I will not allow him to answer because time is running on.


Joseph Jacques Jean Chrétien: Great statement!


William Hillary (Bill) Clarke: He would probably carry on the same as in the question period, anyway. I do not think he will change his practice now. Look at the results of the economic policies put in place by this government. Look at the unemployment insurance payments. According to the government's own figures, payments out this year amount to $4 billion. Collections, according to their figures, are $2.3 billion. According to simple arithmetic, there is a $1.7 billion deficit. The August, 1977, payments were up 25 per cent over August last year. The August, 1977, payments were up 25 per cent over July of this year. Responsibility for that can only be laid at the feet of the Minister of Finance and his colleagues and their so-called economic policies.
The Minister of Finance does not seem to be aware of some of our policies. Therefore, I want to tell him that the leader of my party has called for a massive overhaul of the unemployment insurance system. In particular, we want to eliminate abuses, not only by individuals but abuses of the system by the system. Individual abuses arise when the so-called ski teams received their cheques in the mail at a time when they were not properly looking for work. During the last mail strike thousands of unemployment insurance cheques went unclaimed in Toronto. Presumably those people were too busy at work or play to pick up their unemployment insurance cheques.
I referred to abuse of the system by the system. I refer to the situation which allows a high income person to collect unemployment insurance. On the west coast there are some fishermen who earn large incomes. One I know earns $60,000 during the season. During the off season he is allowed to
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collect unemployment insurance. It is within the rules. We on this side maintain that is not the purpose for which unemployment insurance was designed. The government must decide whether it will be an insurance system or a welfare system. The way it is being operated, with people not entitled to benefits receiving them, it is surely a welfare system. The taxpayers have to pick up the deficit. The Minister of Employment and Immigration can call it a commitment rather than a deficit. I do not care what he calls it. It is still a deficit that has to be paid for by the taxpayer. In some cases it is the taxpayer who is not entitled to the benefits under the program.
We recognize there are great regional disparities. There are places in the province of the Minister of Industry, Trade and Commerce where jobs go unfilled because there are not enough people to fill them. We also recognize that in some of the Atlantic areas there are unemployment rates approaching 30 per cent. The system should work to provide protection for the person genuinely out of work. It should not be done on the backs of those who are not entitled to coverage under the program.
I want to deal briefly with one specific area of the tax bill. I refer to the proposed changes having to do with life insurance. The policies proposed by the government with regard to life insurance are full of inconsistencies. The Minister of Finance is proposing that the interest on loans taken out against the cash value of life insurance should not be eligible for deduction. This is in direct contradiction of any of the rules of the Income Tax Act, which clearly provides that any expense laid out to earn income is deductible.
If that is not a sufficient inconsistency, the minister then says that if you already have a loan from the insurance company, you can continue to deduct the interest on that loan. However, if you want to take out another loan next year, you will not be able to deduct the interest. What is the taxpayer to do? He is faced with all of these inconsistencies. He will not know what way to turn.
The minister's predecessor said they would not allow the interest on insurance policy loans because there was no obligation to repay the loan: it was not like a loan from the bank. The insurance company has a responsibility to its policyholders. Sure as death, the insurance company will be repaid that loan even if they have to wait until the taxpayer dies. It is nonsense to suggest the loan does not have to be repaid.
The government also says it is going to tax the gain on the investment portion of the life insurance policy. They said they would not reach into the grave and tax it when the taxpayer dies, but they will tax it if a policy is cashed in or a loan is taken out. All that will do is force the taxpayer who wants to make a loan against his insurance policy to pay a higher rate of interest. Many insurance policies with cash values have built-in, guaranteed low interest rates.


Mr. Deputy Speaker:: Order, please.
80025-51 Vi

November 10, 1977
Bell Canada


PRIVATE BILLS
[Stage Direction]
The House resumed, from Thursday, November 3, consideration of the motion of Mr. O'Connell that Bill C-1001, respecting Bell Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
John R. Rodriguez: Mr. Speaker, when we closed off last Thursday I was discussing the social responsibility of Bell Canada with regard to its subscribers. I wish to review briefly what I said. When Bell Canada was given the monopoly for telephone service in this country there were some provisions. One was that they would be subject to regulation with regard to their capitalization; that is, they would have to come to parliament whenever they wanted to increase their capital. From the day they received the right to monopolize telephone service in this country, particularly in the provinces of Ontario and Quebec, they have worked consistently to de-emphasize the controls, little as they are, which parliament exerts over the company.
Bill C-1001 is a perfect example of Bell Canada attempting to escape even the puny examination of parliament in terms of increased capitalization. They are going to try to escape the scrutiny of members of parliament as they go merrily on their way accruing for themselves greater profits, greater growth and greater control in their particular field and related fields.
I am absolutely opposed to this bill. As the representative of the constituents of Nickel Belt, 1 would be derelict in my duty if I did not point out to Bell Canada that in my area there are still cases of ten families on one line. I would be derelict in my duty if I sat down and allowed the hon. member for Scarborough East (Mr. O'Connell) to have his little bill so that he could run across to the Senate and get it passed in one day, after which I would have to face my constituents and they would say to me, "How is it that there are still ten families on a line? Why did you let Bell Telephone have its way?"
1 intend to use all the opportunities available to me. This is one of the few occasions on which a backbencher has an opportunity to say, "Hold it, boys. How are the people of Canada going to benefit from this bill in terms of the service they receive? How will this proposal to increase capitalization lead to better service?" The vice-president opened up the books the other day to show me the schedule under which it is proposed to improve non-urban service. I looked in the schedule for places in my constituency, and I could not see any. I asked him why Nickel Belt was not in there somewhere. "Oh," he said, "you must be in the third quarter of 1982." Well, Mr. Speaker, my response to that is he had better take this bill and come back with it in 1982. After we have been given this improved telephone service in my riding, I am prepared to go along with the bill. However, until that time I

cannot say, in good conscience, to the Bell Telephone company, "Yes, you can increase your capitalization." Suddenly, the Bell Telephone company, like St. Paul, is aware of-


Mr. O'Connell:: I rise on a point of order, Mr. Speaker. It relates to the date the hon. member has given-1982. This is the second time I have heard it in the debate. The CRTC, the regulatory body, has ordered the company to direct itself to a rural improvement program over four years ending in 1980. It applies to the hon. member's area as well as to others. It is not 1982-and this is not a matter for parliament; it is a regulatory matter not dealt with in this bill.


John R. Rodriguez: I wish the hon. member for Scarborough East would not try to filibuster this bill by getting up continually to raise spurious points of order. I am glad he raised this point, though. It shows how important it was for some regulatory body to point out to the Bell Telephone company that it had a responsibility toward subscribers in rural areas. One might have thought this would have been one of their first concerns. Why should it be necessary for the CRTC to tell them this? I suggest it is because the corporation has no social responsibility to the people they serve. It has one concept in mind, which is to maximize profits, minimize regulations and keep on growing.
That may be a legitimate goal for Bell Telephone, just as it is legitimate, I suppose, for INCO to get to Guatemala first. But is it a legitimate goal for Canada? I say that what is good enough for Bell Telephone, INCO and Falconbridge, is not good enough for Canada. We have to set our own goals. The goal of this party with respect to Bell Telephone is service, and we have long held that from a philosophical point of view Bell Telephone company ought to be under public control so it can provide the kind of service which we think is desirable.


The Acting Speaker (Mr. Ethier):: I am sorry to interrupt the hon. gentleman, but the time allotted to him has expired.


An hon. Member:: Let him go on.


John R. Rodriguez: I am prepared to do so.


Mr. Lome Nystrom (Yorkton-Melville):: I had not intended to take part in this debate, but I was persuaded to do so by the eloquence of my hon. friend from Nickel Belt (Mr. Rodriguez). Since he has persuaded me, I thought I would spend a few minutes talking about the merits of public ownership, because I happen to come from a province of which my hon. friend from Nanaimo-Cowichan-The Islands (Mr. Douglas) was the premier and at that time he undertook to put the telephone system there under public ownership. I want to argue that the same thing should be done with regard to Bell. We should not tolerate a telephone system in this country whose main objective is to make a profit for its shareholders without really caring about the service it provides.
It is only normal that in the case of a company whose primary objective is profit, one should see a deterioration of service in rural areas. It costs more to provide service to rural areas than to the larger centres: maintenance is more difficult
November 10,1977

and it is harder to make a profit. For these reasons, people in Nickel Belt or similar areas will not get the service which people in urban areas receive. They certainly will not get the service the people in rural Saskatchewan or rural Manitoba receive, where there are publicly-owned telephone networks. In the case of a publicly-owned network, the main priority is service to the people who own it, namely, the people of the province. That is not the motivation of Bell Telephone: that is why I am not interested in expediting passage of this bill. I do not care whether they get the bill this year or not. I do not care at all, because the only reason they want this bill is in order to maximize profits for their shareholders.


Martin Patrick O'Connell: What about the jobs?


Lorne Edmund Nystrom: That is the response we always get from a Liberal or a Tory government. What about the jobs under INCO? The whole philosophy of the government is the "trickle down" theory. They believe that if you give enough to the big corporations, it will eventually trickle down to the small guy at the bottom. But what happens when a big corporation wants more money all of a sudden, or doesn't really give a damn about our country-like INCO-and goes to invest money in Guatemala or Indonesia and says, "To hell with the workers in Sudbury"?


An hon. Member:: They have not said that.


Lorne Edmund Nystrom: They have. After getting all kinds of tax concessions and other benefits from the federal government, they make sure that a lot of the profits they made in this country are invested elsewhere. When we attack the large corporations, or when we delay the passage of a measure which will benefit a large corporation, we are criticized for not thinking about the number of jobs involved, or preventing ordinary people from getting something. Where are the government's priorities?
I was talking the other day about veterans' pensions. Tomorrow is Remembrance Day. Over the last four years or so, the government has intentionally short-changed veterans on disability pension by about S40 million. But today we were discussing legislation which will give the corporations some $1.2 billion, and at this moment there is before us a private member's bill to give the Bell Telephone company more dollars and a lot more opportunity to maximize its profits.


Martin Patrick O'Connell: I am sure the hon. member does not wish to mislead the House intentionally. This bill does not give Bell Telephone anything in terms of money. It permits them a higher capital ceiling. Even to put a few more people on the telephone in the north requires the expenditure of capital, and more funds are needed.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Yorkton-Melville (Mr. Nystrom) has the floor.


Lorne Edmund Nystrom: The apologist for Bell Telephone is filibustering again by bringing in another red herring. This bill seeks to
Bell Canada
minimize the regulations so as to make sure that Bell Canada does not have to come back before parliament as it has in the past. This is a way of providing Bell Canada, in the indirect sense, with more money, giving it an easier opportunity to maximize its profits.
I want to make the argument today for nationalizing Bell Canada, for having a publicly owned telephone system in this country. Any industry such as communications, transportation, or any of the resource industries, 1 think should be publicly owned so that they can provide a service to all the people, rather than maximizing profits for a few people, many of whom may be foreigners.
Many people in parliament, particularly in the Conservative party, may claim that public ownership is not very efficient. They say the public corporations cannot make a profit or operate efficiently. I would argue that in the case of telephones the publicly run corporations are run a hell of a lot more efficiently than Bell Canada. For the benefit of the Tory member who is laughing, I will give him some statistics. People in my constituency are paying a lot less for telephone service than people who live in the constituency of Nickel Belt. My constituents are getting a lot quicker service than those who live in Nickel Belt.
One of the shocks I had when I moved down to Ottawa after I was first elected in 1968 was the inefficiency of the telephone system here. One had to wait so long before getting service in Ontario and Quebec compared to the situation in the province of Saskatchewan. You wait a long time because the customer here is not important. The whole motivation of the capitalist system, or free enterprise system, is the maximization of profit. Bell Canada has a monopoly so it can screw the customer. It has no competition.
By contrast, in my province the priority is the customer, the client, which the company is there to serve. The company is not in existence to make a profit. It conducts its operation with a lot more business skill than does Bell Canada in the provinces of Ontario and Quebec.
Let me give the House some comparable statistics. In the city of Regina there is a publicly owned telephone system. Let me quote the statistics as at August, 1976. In the city of Regina there were 72,400 telephones. Private subscribers paid $5 a month for service. Business telephones cost $11.85 a month. In the city of Halifax where there were 96,249 telephones, private subscribers paid $8.95 and business subscribers $26.
I do not hear the one and only Conservative member in the House, or Liberal members interjecting with cat calls. I have given a real comparison between a publicly owned telephone system and a privately owned telephone system in cities of comparable size. We find that people in Regina get telephone service at almost half the cost of those in Halifax. The business community pays for its telephones less than half what it costs in Halifax. So we have a private enterprise corporation making it tough even for its business friends by charging more than twice what people in Saskatchewan pay.

November 10, 1977
Bell Canada
I have always said, Mr. Speaker, that the socialists in this country are the real friends of small business. To prove this all one needs to do is look at the telephone rates. Business telephones cost $11 in Regina and $26 in Halifax. Who is the friend of the small businessman?


Mr. Parent:: What about Toronto?


Lorne Edmund Nystrom: Someone says "give us Toronto". In the city of Toronto a private subscriber pays $7.45 a month for a telephone.


Gilbert Parent: That is less than Halifax.


Lorne Edmund Nystrom: It is less than Halifax, and that proves my point. Toronto is a big city with some 1.4 million telephones. Because there are so many telephones, you can afford to provide service at a lower rate than you can in Halifax. You do not have this kind of consideration with the publicly owned telephone system. You do not discriminate against people who live in smaller centres. Under the free enterprise system-or the so-called free enterprise system, it is not free at all-the smaller the centre, the higher the rate and the worse the service. This is one more good argument why the telephone system should be nationalized, and it is why I am not going to facilitate passage of this bill.
In Montreal there are roughly 1.4 million subscribers. Surprisingly enough, the rate in Montreal is exactly the same as in Toronto, $7.45 for private subscribers, and $22.10 for business telephones. So again the big city gets the better deal because it has the volume. Small centres have to help subsidize subscribers in big cities, and they help subsidize the profits of a large corporation.
Let me turn to other cities, such as Winnipeg. In Winnipeg there is a publicly owned telephone system, as the hon. member for St. Catharines (Mr. Parent) knows. There are 237,000 subscribers. Incidentally, this telephone system was set up many years ago by a Conservative government and it has been run very efficiently. In 1976 the rates in Winnipeg were the lowest of any city in Canada. I am sad to say that they are even 10 cents lower than the rates in Regina. The Winnipeg rate for private subscribers in August, 1976, was $4.90, and $11.65 for business telephones.
What is the situation in St. John's, Newfoundland? I am sure that if this corporation had any feeling for people in Newfoundland, it would make sure that the people there had telephone service at a very low rate. In St. John's there are roughly 46,000 telephones.


Mr. Douglas (Bruce-Grey):: But what is the comparison in capital investment there?


Lorne Edmund Nystrom: I am talking about the rate charged. In St. John's, Newfoundland, the people are charged $8 a month. Business telephones cost $23 a month. In Newfoundland, of all places, Mr. Speaker, people are charged more for telephones than people in Montreal or Toronto! Surely to goodness this is

another argument for public ownership of the telephone system in this country.
There is a privately owned telephone system in Vancouver, with about half a million subscribers. The charge for a private line is $8.05, and $24.20 for a business telephone.
Let me now turn to Edmonton, that great free enterprise province of the Conservative party. There, "Peter the Red" has a publicly owned telephone system. I notice that the one Conservative in the House is not even reacting to my comments. The rate in Edmonton for residence service is $5.80, which is the third lowest in Canada, with $5 in Regina and $4.90 in Winnipeg.


Gilbert Parent: What is the rate in St. Catharines?


Lorne Edmund Nystrom: I do not have the rates for St. Catharines with me but I am willing to bet that the rates there are a lot higher. If the hon. member wants to defend Bell Canada, then he can rise in his place when I am finished.
In Sherbrooke the rate is $6.20 for private subscribers, and every single city which has a private telephone system has higher rates, in many cases 70 per cent to 80 per cent higher, than the rates charged by publicly owned telephone systems such as those in Saskatchewan, Manitoba, and Alberta. If the members of this House are interested in serving their constituents by giving them a telephone service at the lowest possible cost in these days of high inflation, high unemployment, and a depressed economy, they should join us in arguing that Bell Canada should be nationalized so as to serve the people of Canada better. This company should not be owned by a few shareholders who happen to be fortunate enough to have a few bucks in their pockets, possibly because they inherited those bucks from their granddads or their fathers. Let us take a look at some of these people who own Bell Telephone, some of these little old widows and orphans of the Conservative and Liberal parties who support this great free enterprise system in Canada. We find that the shareholders are large companies, and there are not many widows involved.
Let me refer to a number of them on this list I have, which includes Associated Investors Ltd., with 2,400 common shares of Bell Telephone; Canada Life, owning thousands and thousands of shares; The Canada Permanent Investment Company with some 5,000 shares; Canada Permanent Pooled, 10,000 common shares.


An hon. Member:: And who owns those companies?


Lorne Edmund Nystrom: Who owns the shares of those companies? I suppose they are owned by other companies.
Then we have on the list the Canada Trust Investors Equity owning 15,000 shares; we have Canada Trust R.S.P. owning 62,000 common shares of Bell Telephone; we have Canadian International Investor Trust owning some 12,000 common shares; we have Commercial Finance owning 9,200 common shares; we have Confederated Life owning 62,400 shares, and
November 10, 1977

I could go on and on down the list. It includes Eaton Commonwealth owning 50,000 shares; Investors Growth owning 320,000 preferred "E" shares.


An hon. Member:: What about senators?


Lorne Edmund Nystrom: Probably there are many senators who own shares of Bell Telephone. The ones I have named are a few of the shareholders, Mr. Speaker, and as you can see they include very few small ordinary citizens.
Really what the Liberal and Conservative members here are interested in is facilitating the passage of a bill that will make it easier for one of the large, uncaring and insensitive corporations in our country, to go on taking millions of dollars out of the pockets of the ordinary Canadian citizen.
I happen to note a headline in the Ottawa Citizen just handed me which states that Toronto is Bell's ringing headache; that is the city of Toronto. Perhaps some of the Ontario members would be interested in commenting on that. I do not know whether the hon. member from Toronto who is sponsoring the bill has seen that clipping or would care to comment on it.
There are many people in the Conservative and Liberal parties who say, and of course the Conservatives are not too interested in this debate today, that socialists, or people who are interested in public ownership, are not efficient because such companies cannot make any profits, and so on. I have already quoted to you the very low rate provided by publicly owned telephone systems in Canada, as I maintain all telephone systems should be owned. The lowest rates in the country and the best service are provided by the publicly owned telephone companies on the prairies.
Not only that, I find that in Saskatchewan, in spite of very low rates over many, many years, and in spite of the fact that our province is very rural and it costs a great deal to put telephone service in because of the hundreds of thousands of miles of prairie and the little villages, towns, and farms strung out mile after mile, all of which means a very expensive network to build and maintain, the company is still providing the service at the lowest rates in the country, and still comes up making a profit.
Let me quote here from the annual report of the Saskat-achewan Telecommunication Company which is Sasktel. Liberal members might be interested in knowing that at a recent convention of the Saskatchewan Conservative party one of the delegates moved a resolution which would consider the possibility, as I understand it, of selling Sasktel. The leader of the Conservative party got up to his feet, took the microphone, and demanded that the resolution be withdrawn. That indicates that even an extreme right-winger like the leader of the Saskatchewan Conservative party, who demanded that the resolution be withdrawn, is interested in protecting Sasktel.
We can also refer to the Liberal party and to the late Ross Thatcher who was premier of the province. He did not do anything to sell off Sasktel or the Saskatchewan Power Corporation, both of which are publicly owned corporations in that
Bell Canada
province. Indeed, he made sure they were continued as publicly owned corporations. If he had tried to do so there would have been a revolt on behalf of the people.
I started to quote from the annual report of Sasktel-


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Charles-Eugène Dionne: Mr. Speaker, I listened carefully to the previous speakers and I note that Bill C-1001 which has been renumbered now and again deals especially with an application from Bell Canada to be authorized to increase its number of common shares on the market and sell more shares than it is entitled to do under its existing charter to obtain new funds. We note that it is a financial problem.
I am aware that the companies gathered under the name of Bell Canada provide employment to thousands of workers in the operation of the telephone network system. Some subsidiaries manufacture telecommunication appliances while others are specialized in research. On the whole, it is an organization which has made Canada a forerunner in the telecommunication technology throughout the world while providing employment to thousands of Canadians. Quite true. I am a champion of free enterprise and I am pleased to promote it. However, it is proprer to control the development of large companies which can become monopolies. This is why I feel that it is normal to check the amendments requested which, in my view, would remove one of the controls which it is possible to have on that monopoly on behalf of Canadians. In the midst of inflation, while governments are trying to control rising prices and we have just seen our telephone bills increased, we wonder if there is any justification for these repeated requests by Bell Canada which complains that it does make enough profits.
The real question that one must ask is: Does not Bell Canada, with all the profits derived from its several subsidiaries, make sizeable profits? Indeed, the telephone company itself, with all the operation costs involved, can hardly make the sizeable profits required, as is the case for Bell Canada, to make its shares more attractive. But its subsidiaries amply compensate, in our opinion at least, for the slack periods of the telephone company. Without accusing Bell Canada and its subsidiaries of resorting to administrative sleight of hand, let me say that we find the company's request premature and excessive, considering the present economic situation. It must be kept in mind that Bell Canada is a monopoly and it is in this perspective that one must determine what margin of profit is acceptable. Moreover, since Bell Canada is a monopoly, we are in a position to require that it provide all users everywhere in Canada with a service comparable to that in large centres.

November 10, 1977
Bell Canada
Therefore, considering its peculiar and privileged situation, we are demanding that Bell Canada release with the balance sheet of the telephone company those of its subsidiaries so that we might have a fair idea of the justification for its request. Otherwise its claims will not come to an end since obviously the operational costs of a telephone system will always go up. However, from an administrative point of view, it is important that all members of parliament have the opportunity to obtain appropriate information. They should not be deprived, because of legislation, of the right to look into the company's administrative mechanism from time to time.
It must be recognized that we are not dealing with a poor company since its revenues amounted to more than $200 million in 1976. It would be interesting to know how much it cost to provide free telephone service to over 20,000 employees of this company. What are the salaries of its senior managers? According to my information, there are average salaries of over $100,000. How did the company manage to reduce wage settlements with its regular employees by several million dollars? Doubtless, it was inspired by the fight against inflation. I have here an article published in the newspaper La Presse dated December 4, 1976, on the hearing held to take into consideration the request of the company. Let me quote one paragraph:
The contingent of company officials and its troop of lawyers and accountants yesterday evacuated the third floor of the Chateau Laurier where they had been staying for five weeks. A similar hearing lasted 45 days in 1968 and cost the company $760,000.
One must admit those are extravagant expenses. It is high time the company worry about the administrative aspect of its business. When we realize what extravagant expenses are incurred in the various sectors of its administration, I feel we have reason to hesitate in giving our support to a bill that would help reduce the possibilities of obtaining relevant information in due course.
Where telephone line installation is concerned, we know full well there are difficulties and that the service could be improved. Out in the country, we can still find party lines being used by five to eight households. It seems to me the company could improve that situation. I have here a clipping from the newspaper La Presse giving a summary of the difficulties encountered.
This situation is not affecting only individuals. In the city of Laval, a number of businessmen are complaining that they cannot get telephone services even in industrial developments which were planned a long time ago. I am quoting from this article: In Fabreville, the delay in telephone installation is due to a pole problem. It is Quebec Hydro which is responsible for putting up telephone poles for Bell Canada-explained Mr. Albert Gagnon, a Laval contractor. The dealings between the two corporations are sometimes slow, but a great many people think that it is difficult to obtain a telephone line, which is quite embarrassing for us and greatly untrue.
The clients of suburban contractors want absolutely to break the feeling of isolation by having the telephone installed in a number of subdivisions. If they cannot get the telephone,

buyers will become rare. People do not stop complaining: this is a ridiculous situation, Mr. Roger Brousseau, Deputy Industrial Commissioner for the City of Laval, is reported as saying. We work hard to attract industries, everything is planned, carefully prepared, but people complain constantly about the telephone service. There is no problem with Quebec Hydro, why are there problems with Bell Canada? The poles are there, but some industrialists have to wait months when only 500 feet from their plant their neighbour has had the service for a long time. I have seen it in my area. They were waiting for Quebec Hydro to install a pole in order to connect someone who had asked for the service a long time ago.
Some people claim that Bell Canada had them wait several months before installing a private line. But when they asked for a business line, they were told they could have got it in two days. The only difference is in the price: a residential line costs $6.50 in Chomedey and a business line $19.00 a month. In Montreal, it's $7.10 and $20.75 a month.
I think the company representatives should use part of their surplus to improve the telephone service in all the areas where it is necessary. I admit that since a 27 year-old genial inventor discovered the principle of voice transmission over telephone lines on July 26, 1874, cities have grown larger, regionalization has been made necessary by modern life and contacts with telephone operators have become less personal. This modernization offers a number of advantages but there are also disadvantages. The number of telephone calls has considerably increased. Bell Canada personnel is generally tactful, courteous and poised. The organization of such a communication system obviously requires skilled staff; to this we can add repair work which is not always an easy task, especially in winter. When there is a storm, they have to set to work on Sunday, in the evening, at any time; the repairs must be made as quickly as possible.
There are delays especially in telephone installation and I think that the company, which surely wants to keep a rather well-established reputation, should direct its planning efforts in this area. I have here an article from the newspaper La Presse, dealing with the present situation in the province of Quebec. I quote:
There are 31 telephone companies in Quebec but Bell Canada alone accounts for 90 per cent of the Quebec telephone industry.
Actually, Bell Canada holds the most interesting operation areas, namely the main urban centres where rates are higher because of the larger population which can be served and where operations are less costly because of the proximity of services.
For example, one telephone installation in Montreal costs over $800.00 whereas one installation on the North Shore by Quebec Telephone costs $4000.00.
Bell has nearly three million telephones installed whereas the other thirty companies put together have hardly 300,000 sets.
The biggest company operating exclusively in Quebec, the Quebec Telephone, a branch of an American company, has only 190,000 sets installed, even if they cover 40 per cent of the province of Quebec. Needless to say, the other companies are rather small businesses.
I shall conclude by quoting an editorial published quite some time ago, on December 28, 1971, two days before the New Year, but since it summarized a serious situation and also
November 10, 1977

made an important suggestion to Bell Canada, I think it would be appropriate to conclude by reading it. The editorialist wrote about Bell Canada:
Bell Canada gave a very personal gift to its subscribers just before Christmas-an increase in monthly rates. For many people, 50 cents is not a tragic increase, but it is different for many others.
We shall not argue that the telephone has become a necessity nearly of the same order as food. In an era of mordern communications, the telephone is part of the effective operation of a world which has become a victim of its innovations and its intelligence. Bell Canada can rest comfortably in the knowledge that it has a monopoly and that no competitor can bother it.
However, we should like to take this opportunity to make a valid observation to this company. You probably remember the adventure of the dozen boys and girls who got lost in the woods of the Joliette area a few weeks ago. Searches were undertaken as soon as they were missed at a certain place. Two courageous young men walked all night through the snow and discovered a public telephone in a desolate place. They were saved. But were they really? The first question they asked each other was: "Do you have a dime?" One of them found this miraculous item, a measly dime, in his pocket. What would have happened if they had had no money? They had safety within their reach, but they could not have made contact. They could have suffered a terrible fate because of this.
All this goes to say that Bell Canada never gives anything free. Even in a telephone booth you must pay ten cents before reaching the operator simply to ask for information. Then, they will say that Mother Bell thinks of us. This is a striking example of the lack of responsibility of a company whose structures are often debatable.
And the editorialist closes with a suggestion:
-at least correct this anomaly in telephone booths; the communication should be given first without the customer having to deposit this famous dime. There are other aspects to public telephone than its non-urgent use.
I believe that this suggestion deserves to be considered by Bell Canada.


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise to participate in this debate and to express some surprise that an hon. member from Saskatchewan, the hon. member for Yorkton-Melville (Mr. Nystrom), and a member like myself, members who live in provinces which have publicly owned telephone systems which for generations have consistently supplied efficient service at substantially lower rates than now provided by Bell Canada, should participate in the debate while Liberals and Conservatives from Ontario and Quebec, who should be protecting the interests of their constituents, remain silent on this issue.


Some hon. Members:: Shame!


David Orlikow: Let me point out, as did the hon. member for Yorkton-Melville, that the publicly owned telephone systems in Manitoba and Saskatchewan were not some kind of wild experiments instituted by radical governments. I do not remember precisely when the Saskatchewan telephone system was set up as a publicly owned utility, but in my province of Manitoba the telephone system for the whole province became publicly owned and operated in 1908, long before the NDP, the CCF or its predecessor, the Independent Labour Party, were formed.
It was formed long before J. S. Woodsworth, the founder of the CCF and the predecessor in the seat now occupied by the
Bell Canada
hon. member for Winnipeg North Centre (Mr. Knowles), came to this parliament. That publicly owned system was established by a Conservative premier of Manitoba, Sir R. P. Roblin, the grandfather of a later Manitoba Conservative premier. Duff Roblin, and the people of Manitoba have benefited every year since.
I am not going to go over the comparable rates for various cities, but I want to point out to hon. members from Ontario and Quebec, who should be interested, that in the 15 years I have been here there has not been a year in which the rate for telephone service for a month in the city of Winnipeg has been higher than that in the city of Ottawa. And Winnipeg is bigger than Ottawa. We are told by representatives of Bell Canada, when it suits them, that it is very expensive to instal and operate telephones in very big cities because very complicated and sophisticated equipment is required, so I have to assume that, if Bell Canada tells the truth-and I assume it does sometimes-if anything, it would cost more to instal an efficient telephone system in Winnipeg than it would in Ottawa. But every year since I have been here the monthly charge for telephone service in Winnipeg has been substantially less than the amount charged by Bell Canada in the city of Ottawa. Yet we have this strange silence of Ontario and Quebec members and the even stranger introduction of this bill by a member from Toronto.
If this bill is passed-and I can assure the hon. member it will not be passed very easily, if it is passed at all-it will give to Bell Canada the authority and power to charge the subscribers of telephone service in Ontario and Quebec even more than it does now, and to rip off the subscribers even more than it has been able to do up until now. I would not have expected the hon. member for Scarborough East (Mr. O'Connell), who is one of the better members on the Liberal side, to introduce this kind of bill.
Bell Canada comes here and tells members of parliament that this is a bill which simply relates to the company's ability and methodology of capitalization, including the removal of the scrutiny of the appropriate regulatory government agency, which at the present time is the CRTC, and Bell Canada advances reasons, which I will try to analyze briefly, why that kind of regulation-which we have had until now and which, in my view, has not been very successful because Bell Canada has been permitted increases in its rates almost every year since I have been here-is not necessary.
If it passes, this bill would grant Bell Canada the power to borrow, issue stocks, bonds, debentures or other securities as the company deems necessary. It would also give Bell the right to Fix whatever price on such sales that it wishes. Certain clauses of the bill would provide Bell with the authority to establish such voting rights, bylaws, procedures and alterations to share issues as Bell may deem necessary.
The present authorized capital of the company is $1.75 billion. Bell proposes a capitalization capacity of $5 billion. It proposes to broaden the company's incidental and auxilliary powers, and to provide the company with the authority for the alteration, by letters patent, of the company's objectives and
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November 10, 1977
Bell Canada
powers. This would be achieved by revoking the relevant clauses in Bell's act of incorporation and replacing them with the authority granted under the Canada Corporations Act, and the authority for using letters patent as outlined in the Telesat Canada Act. Bell wants to be allowed to change the rate of interest payable on overdue phone bills to "a rate equal to the prime rate as described in section 178(2) of the Canada Corporations Act" instead of the present rate allowed by the CRTC of 6 per cent. These changes might not seem very startling or significant. However, the essence of the bill is to remove Bell from any kind of effective regulation and, in effect, to treat Bell as an ordinary corporate citizen.
Let us look at what happens now when Bell wants the kind of major change it is proposing here in this bill. The bill has to be approved by parliament first, and I would have hoped hon. members from Ontario and Quebec, whose constituents are mainly affected by anything Bell does, would have been participating in this debate because of the importance of the telephone system in the life of every citizen in Ontario and Quebec. In addition to that, after the bill is passed here it goes to a committee where representations can be made by interested organizations.
We know from earlier discussions on similar bills and from representations which have been made to the CRTC-and before the CRTC had authority, to the Canadian Transport Commission-that the most diverse organizations made representations in connection with Bell Canada. You had unions, consumer organizations, the Ontario government, the Quebec government, municipal governments, making representations to the CTC or CRTC because they knew the importance of watching Bell Telephone. They knew that Bell-I do not blame it-a privately owned corporation, is interested in making as much money as it can. The various organizations I have mentioned knew that increasing the rates more than they needed to be increased would dearly cost the people they represented, so they made representations on behalf of them.
The silence of Liberal and Conservative members of parliament from Ontario and Quebec is interesting and significant. The changes which are proposed to take place in the Bell structure and the ability of Bell to do what it wants which are contained in this bill, may not seem startling or significant. But the effect of this bill would be to remove Bell from any kind of effective regulation and treat it as an ordinary corporate citizen.
I suggest to the mover of this motion that one does not have to be a socialist to recognize the importance of regulating a system such as Bell Telephone. Bell is a monopoly; it has almost 100 per cent of the telephone communications business in Ontario and Quebec. Bell did not always have this monopoly, but because of its superior power it has driven all its competitors out of business. We say that if we must have a
monopoly-and we make no excuse for our belief, if a monopoly is the best way to operate a service-it is much better to have a public monopoly than a private one.
It is interesting that in the province of Ontario and in the province of Quebec, neither of which has ever had an NDP or CCF government, the electrical power systems are publicly owned. The hydro system in Ontario was made a public utility by a Conservative government almost at the same time Mr. Roblin made a public utility out of the Manitoba telephone system. The Quebec hydro electric system was made a public utility by a Liberal government in 1962 because it realized, as have many jurisdictions, that if a monopoly is the most efficient way of providing a service, a publicly owned monopoly is best.
We have a privately owned monopoly of the telephone system in Ontario and Quebec. What this bill proposes to do is give that private monopoly the kind of power that would permit and encourage it to increase its rates, to manipulate the books, to purchase more subsidiaries, to channel more of the profits from the subscribers even where the rates are at least partially regulated by the CTC or CRTC, into subsidiaries, wholly or mainly owned by Bell, over which there is no regulation, and which are able to amass profits in the tens and hundreds of millions of dollars.
Bell wants to be able to increase capitalization of its debt or equity when it pleases, without approval of the CRTC or a public hearing. I do not have much trust in Bell, Mr. Speaker. I do not believe it is concerned about its subscribers or its employees.
I have in front of me an article in which Mr. Andy Stewart, President of the Public Service Alliance of Canada, is quoted. The article from The Last Post of November, 1977, deals with the question of indexing pensions. 1 know this is not the time to discuss that question but I should like to put Mr. Stewart's comments on the record. The article reports him as follows:
When the chief executive officer of Bell Canada retired, Stewart said, he received a lump sum payment of $575,000, was made a member of the board of directors at $201,000 a year and was guaranteed a $100,000-a-year pension when he fully retired.
I know Bell Canada knows how to protect the interests of its shareholders, and certainly the interests of its corporate management, but I do not think it is very interested in providing the cheapest possible service for its subscribers. The way in which it has reduced the number of its employees so drastically in the last few years indicates pretty clearly that it is not interested in protecting the rights of its employees.


The Acting Speaker (Mr. Ethier):: Order, please. It being six o'clock, pursuant to order made Thursday, October 27, 1977, this House stands adjourned until Monday, November 14, 1977, at two o'clock.
At six o'clock the House adjourned, without question put, pursuant to special order.

Monday, November 14, 1977