1977-06-22

ROUTINE PROCEEDINGS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, in light of the extraordinary debate and statements yesterday which unfortunately raised more questions than they answered about the integrity of Canadian government institutions, 1 seek the unanimous consent of the House of Commons to move a motion under the provisions of Standing Order 43 on a question of urgent and pressing necessity. I move, seconded by the hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty):
That the committee of the privy council, by order, instruct the Chief Justice of Canada to appoint three justices from among the justices of the provincial superior courts, the Federal Court of Canada and the Supreme Court of Canada, who shall be constituted by the committee of the privy council to be commissioners under Part 1 of the Inquiries Act to inquire fully into all of the circumstances alluded to in the statement of the Solicitor General to the House of Commons on Friday, June 17, 1977 and in the statements by the Minister of Supply and Services in the House of Commons on Tuesday, June 21, 1977 and the interpretation placed on the doctrine of ministerial responsibility by the Minister of Supply and Services and any matter bearing upon or related thereto, and to consider such other matters as may appear to the commissioners to be relevant and to report fully thereon.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SUGGESTED INQUIRY INTO SECURITY OPERATIONS-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, considering that the government has not admitted any political wrongdoing, 1 am not surprised that it did not agree to that motion. To us it was a completely acceptable motion under Standing Order 43. My motion under Standing Order 43 is not as broad in scope as the one proposed by the Leader of the Opposition (Mr. Clark), and in view of the government's expressed concern about this issue I hope hon. members opposite will agree to my motion.
Considering that the RCMP has taken part in a criminal break-in in Montreal and also that there was a persistent and successful attempt by the RCMP to conceal that fact for many years, and considering furthermore that other incidents involving the RCMP in other parts of Canada raise the question about the possibility of a continuing policy of illegal activity and concealment from political supervision, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instructs the government to establish forthwith a Royal Commission which would investigate security operations procedures of the RCMP and the process of accountability of the RCMP to the office of the Solicitor General.


Mr. Speaker:: Order, please. Presentation of such a motion for debate pursuant to Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CONFLICT OF INTEREST
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, pursuant to the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity. In view of the fact that a Mr. Neil Ledray, head of the Federal Department of Indian Affairs and Northern Development, municipal engineering section in Saskatoon, qualified for a $90,000 DREE grant to establish his own business while still in the employ of the government, and who on previous occasions was instrumental in blocking attempts by a reputable firm in Toronto, C.M.S. Equipment Limited, to obtain similar assistance towards exactly the same type of business operation, I move, seconded by the hon. member for Hastings (Mr. Ellis):
That the Minister of Regional and Economic Expansion along with the Minister of Indian Affairs and Northern Development take all appropriate steps to rectify this unfair practice involving quite obviously a conflict of interest by a government official.


Mr. Speaker:: Order, please. Presentation for debate of such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

June 22, 1977
Oral Questions PUBLIC SERVICE


REQUEST FOR COMPENSATION FOR EMPLOYEES WORKING IN BOTH OFFICIAL LANGUAGES-MOTION UNDER S.O. 43
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, under the provisions of Standing Order 43 and seconded by the hon. member for Yorkton-Melville (Mr. Nystrom), I move:
That this House notes that the statement on bilingualism made yesterday by the Secretary of State included nothing to implement the commitment made to federal public servants that by the end of June there would be an announcement concerning adequate compensation for those who work in both official languages, and this House therefore calls on the President of the Treasury Board to keep the government's commitment and make such an announcement not later than June 30, so that this important issue can be resolved without delay.


Mr. Speaker:: Under the provisions of Standing Order 43 unanimous consent of the House is required for the presentation of such a motion for debate. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, my question is for the Prime Minister. The Leader of the Opposition has moved a motion under Standing Order 43 setting out specific terms for an inquiry into the Montreal break-in at I'Agence de Presse Libre du Quebec and related incidents. Given the legislative timetable, the mood of this House and the consensus emerging in the House, does the Prime Minister not think it in the best interests of parliament and the government to call for such an inquiry?


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker.


Elmer MacIntosh MacKay: That is very interesting because on June 15, 1976 at page 14500 of Hansard during the capital punishment debate the Prime Minister said:
It is essential that people have confidence in the law, essential that they have confidence in the ability of the legal process to protect them against the lawless.
I am certain the Prime Minister remembers this quote. Consistent with this statement and the concern expressed by Commissioner Nadon in St. John's yesterday will the Prime Minister not reconsider his approach and have assessed the degree of ministerial and administrative responsibility which is becoming increasingly obvious in this affair and not leave the whole brunt of it to the RCMP as far as accepting blame is concerned.


Pierre Elliott Trudeau: Mr. Speaker, the intention is not to have the RCMP bear the brunt of the blame. I think that is the effect of the questions of hon. members opposite in the last few days. If the hon. member wants to blame the government he was invited yesterday by the former Solicitor General to make a specific charge against him.


Elmer MacIntosh MacKay: A final supplementary, Mr. Speaker. The Prime Minister takes this doctrine that every time the opposition has to blame the government-and goodness knows there is enough to blame them for-they have to make a specific charge. He is introducing a new doctrine. I want to remind the Prime Minister of another statement he made. I am sure he appreciates being reminded of his deathless quotes. On February 7 this year at page 2777 of Hansard the Prime Minister said:
I do not think the people suspect the RCMP of conducting themselves as the FBI do.
I share his hope and his conviction but is he prepared to help assess some of the political responsibility for this whole unsavoury mess which it is becoming increasingly evident is not an isolated incident and is directly attributable to the incompetence of a succession of Solicitors General? Will the Prime Minister not reconsider and tell the House clearly and unequivocally how he can abandon the responsibility for the federal police force on a matter of national security to a provincial inquiry?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member pinpoints the issue to one of political responsibility. If that is the case surely this is the place, the House of Commons, where political responsibility should be debated, as it was at great length last night, I understand.


Mr. Hnatyshyn:: And with great effect. There are lots of sombre faces on the government side.


BREAK-IN AT PRAXIS CORPORATION-REQUEST FOR REPORT ON INFORMATION SUPPLIED BY MEMBER
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Solicitor General. As the House knows,
I met with him on Monday to lay before him certain information relating to the extra-parliamentary opposition concept and the related break-in and fire at Praxis Corporation in Toronto.
I expressed the hope to the Solicitor General at that time that he would be in a position today to assess the validity of the information I gave him, to tell the House today in general terms what he has done about it, and what the results of his investigation so far have been.


Hon. Francis Fox (Solicitor General):: Mr. Speaker, as I indicated yesterday during the question period the hon. member met me and gave me some information which he believes tends to indicate the occurrence of an illegal break-in at the premises of Praxis Corporation in Toronto. 1 have directed my officials to bring all the information brought to my attention to the attention of the attorney general of the

June 22, 1977

province of Ontario, since, if an illegal break-in had taken place it would have been an illegal act committed in Ontario and, in the circumstances, the matter would come under the jurisdiction of the attorney general of Ontario. I have also directed my officials to examine the information, to determine if there are any implications concerning the department of the Solicitor General but have not yet received a report on the matter.


Frank Oberle: A supplementary question, Mr. Speaker. 1 am concerned about two distinct infractions, one of them, of course, being the crime of breaking and entering which, as the Solicitor General rightly says comes under the jurisdiction of the attorney general of Ontario. However, an investigation was carried out in the interest of national security, which certainly falls under the jurisdiction of the Solicitor General of Canada.
I ask the Solicitor General, how much more time does he need in order to make a statement to the House on these allegations, and what will be the nature of his further investigation?


Francis Fox: Mr. Speaker, I think 1 have already indicated to the House a number of times that the RCMP was not involved in any way with the break-in at Praxis-


Mr. Dick:: What about the offence of possessing stolen goods?


Francis Fox: -Corporation. Therefore I do not think the rest of the question follows.


John Edward Broadbent: What about the possession of stolen documents?


Francis Fox: Perhaps if hon. members would care to refresh their memories by reading what I said yesterday, as reported in Hansard, they would see that the documents in question were turned over to the Metropolitan Toronto police department.


John Edward Broadbent: After seven years.


Francis Fox: Yes, but no matter what the length of time is they were turned over.


John Edward Broadbent: Come on!


Paul Wyatt Dick: It is still possession of stolen property.


Francis Fox: The Crown attorney in the province of Ontario looked at the documents and concluded that there was no illegal action on the part of the RCMP in that regard. 1 do not know if hon. members are suggesting-


John Edward Broadbent: Who kept the stolen property for seven years? Was that not an offence?


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Why don't you lay an information?


Francis Fox: Mr. Speaker, some hon. members of this House obviously would like to substitute their judgment for that of
Oral Questions
the Crown attorney. As far as we are concerned on my side of the House, we are willing to take the advice of the law officers of the Crown.


BREAK-IN AT PRAXIS CORPORATION-INVESTIGATION OF THOSE INVOLVED IN DESTRUCTION OF DOCUMENTS
Frank Oberle: A final supplementary question, Mr. Speaker. I should like particularly to ask the Solicitor General if the RCMP officer, whose name I gave him on Monday and who is alleged to have been directly involved in the conversion of the documents, has been investigated. Further, has the minister investigated the already admitted involvement of Inspector Venner in the destruction of the original documents stolen from Praxis Corporation?


Francis Fox: Mr. Speaker, I am not too sure what the hon. member is getting at. At some point he suggested that someone would have been in the Department of the Solicitor General-he mentioned the Solicitor General's office-who would have been involved in some way in the Machiavellian scheme which he described and in which he apparently believes. With respect to the precise names he has given me, no one in the Solicitor General's department at that time bore those names. However, I want to make sure that neither the first name nor the family name is in question. Once I have completed the inquiries, 1 will be pleased to make a report to the House. If, of course, there is a question concerning an investigation which the attorney general of the province of Ontario ought to be undertaking, the appropriate course would be to have that investigation carried out by the attorney general of the province of Ontario rather than on the floor of the House.


ALLEGATIONS OF ILLEGAL BREAK-INS BY FORCE-REASON FOR REFUSAL TO HOLD INQUIRY
John Edward Broadbent: Mr. Speaker, I have a question for the Prime Minister. Is the Prime Minister aware that during the past 24 hours a former RCMP corporal has said that illegal break-ins have been a continuing practice for a number of years by the RCMP. That statement flatly contradicts statements and assurances coming from the top level of the RCMP in recent weeks. Keeping in mind that senior officials in the RCMP and several ministers of the Crown systematically concealed knowledge about a break-in from the government, I would like to ask the Prime Minister what apparently changed his mind in the past 48 hours or overnight about the need for a specific inquiry into the accountability of the RCMP to its political authority?


Pierre Elliott Trudeau: Mr. Speaker, we have constantly taken the view that the break-in in Montreal, which was an illegal act by an RCMP officer, was an aberration, an incident, and an isolated one. 1 have had repeated assurances from the Commissioner of the RCMP and from the Director General of Security that this was an isolated incident and it was in no way a general or special practice of

June 22, 1977
Oral Questions
the RCMP to have break-ins. This was discussed very clearly with them in my office in the spring of last year and with the then Solicitor General, at which time I told the House we had considered an investigation into the kind of matter that the hon. leader of the NDP is talking about. We had these specific assurances. It is these assurances which have been repeated by the present Solicitor General and by myself. This assertion quoted by the leader of the NDP is obviously in contradiction of this.
Apparently there is an allegation by a former RCMP member that there have been generalized illegalities. Naturally, the Solicitor General will look into these allegations and see if there is any truth to them. If so, we will have to take further action. I am still going on the assumption that the RCMP acts constantly within the framework of the law and that the incident in Montreal was an aberration, an exception, which is not excused or condoned, but it was isolated.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, the recently found faith of the Prime Minister in the RCMP-


Some hon. Members:: Oh, oh!


John Edward Broadbent: -is a little disturbing in view of the information that we now have. The Prime Minister, the present Solicitor General and the former Solicitor General in statements made within the past three days of sittings of this House have all intimated at various times serious degrees of feeling of unease with regard to the accountability question. Considering that it was the RCMP at the top level in Ottawa some four years ago which refused to tell a series of Solicitors General of their own illegal activity, why is the Prime Minister now prepared to accept from the same sources their testimony only that no systematic wrongdoing has been undertaken in the past or is continuing now?


Pierre Elliott Trudeau: Mr. Speaker, I am not accepting their testimony only. Hon. members opposite have made various allegations. The government, through the Solicitor General, has inquired into them. If the hon. member has other allegations to make, let us hear them from him. He has just quoted a statement made by a former RCMP officer to the press. Naturally we will inquire into that. I am not just taking the RCMP Commissioner's word for it. We are looking into every possible accusation put forth from any source on either side of the House or across the country.
Naturally, we want to make sure that the RCMP act within the law and that when they do not they are properly punished. But we can do no more than accept the word of these people who have dedicated themselves to the public service in the police force of Canada until it is flatly belied by some specific charge. Such charges can be inquired into. The Solicitor General has welcomed information from across the aisle and he will look into any allegations which are made.


ACCOUNTABILITY OF FORCE TO POLITICAL AUTHORITY-GOVERNMENT POSITION
John Edward Broadbent: The Prime Minister knows that the method of investigating such allegations in the past has been to require the RCMP to look into the charges made against him. What reason do we have for believing that the investigation will be any more systematic or fair-minded than that? The Prime Minister and other ministers have referred in the last few days to the inquiry which is going on in the province of Quebec, conducted by the government of that province, and the terms of reference of that inquiry do not include the possibility of looking into the question of the accountability of the RCMP to the political authorities in Ottawa. Is the Prime Minister satisfied that this important matter has been adequately dealt with in the last few days and that there is absolutely no need for an inquiry into this aspect?


Pierre Elliott Trudeau: I cannot say that the question of accountability has been completely settled to the satisfaction of the government. We indicated in the House the other day that certain measures had been taken and that others would be taken in the fall pursuant to Judge Marin's inquiry and recommendations. I am open to suggestions on that matter. I certainly would not expect a commissioner appointed by the government of Quebec, even if it were within his terms of reference, to make recommendations to us as to how we should interface with the RCMP.


John Edward Broadbent: That is exactly why I am suggesting an inquiry.


Pierre Elliott Trudeau: Precisely, Mr. Speaker. I do not think an inquiry such as is proposed by the hon. member would be any more enlightening than if members of the House and of the government, in a constructive mood, seek to find ways of increasing accountability. I think this is a political question. I do not see the great advantage-


Mr. Fraser:: It is a judicial question.


Pierre Elliott Trudeau: The question of accountability is not a judicial question.


John Allen Fraser: The question of how you determine the truth is a judicial question.


Pierre Elliott Trudeau: So I understand. The hon. member for Vancouver South wants to follow some other alley. He is, of course, entitled to rise in his place and ask a question-if he can articulate one.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: But if he wants to remain on the subject he must realize that the present question and answer have to do with political accountability of the force to the minister, and not the question of the truth. That is another subject with
June 22, 1977

which the minister is preoccupied. The hon. member should reflect a little more on the question of the truth.


Some hon. Members:: Hear, hear!


STATUTORY HOLIDAYS
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to put a question to the President of the Treasury Board.
At the beginning of May, the Treasury Board decided that federal civil servants working in Hull would have to take the day off in the province where there was a statutory holiday. The federal civil servants complained that they would rather take the day off on the first Monday of August instead of June 24. The Treasury Board has reconsidered the matter and decided to leave the choice to civil servants working in Hull so that they can take the day off on June 24 or on the first Monday of August. However, Quebec civil servants working in Ottawa were expecting to be dealt with in the same way, that is to have a choice between the two holidays. It now appears that such will not be the case and that they will have to take the day off in August and not on June 24, St. Jean Baptiste Day. Could the President of the Treasury Board tell the House whether the problem has been solved, because it will soon be June 24 and if not will he take some steps to render justice to those employees? I think that such a gesture would be an indication that we really wish to live peacefully in Canada?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the most recent decision is based exactly on the final comment made by the hon. member with regard to trying to find a reasonable temporary solution, at least, to celebrate the day in good harmony within the province. Indeed, we have given the option to the federal employees in Hull in the province of Quebec to take June 24. That same option had not existed in Ottawa and is not going to be extended to the Ottawa side. But even that temporary decision of leaving the option open on the Quebec side is intended to apply only to this June 24 and not the following year. This decision has been made in full consultation with the public service union bargaining agents and we hope that we are looking forward to a happy celebration of both holidays when they take place.
[ Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, considering that this is an important matter, can the minister tell the House whether during the week he received representations from the union representatives of civil servants for the granting of what 1 enunciated in my first question, and in the circumstances, could the minister also tell us whether he considers that these
Oral Questions
representations are fair and whether he will give effect to them for June 24?


Robert Knight Andras: Mr. Speaker, that is the decision we have taken and it was based on what we considered to be very fair representation by the representatives of the public service bargaining agents.


ROYAL CANADIAN MOUNTED POLICE
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Solicitor General and it is one of a number of questions which were left unanswered from last evening's debate. Last night I asked the Solicitor General whether he would table a copy of the exchange of correspondence between the office of the former solicitor general and the RCMP which led to the extraordinary decision by the solicitor general not to even acknowledge the letter from the APLQ alleging RCMP complicity in the illegal break-in. Is the minister now prepared to table those letters and, if not, why not?


Francis Fox: Mr. Speaker, 1 am, of course, willing to take the hon, member's suggestions under consideration but I should point out that 1 would at that point be revealing the name of a public servant. I would be very pleased to tell the hon. member, in reply to at least part of his question, that the letter was signed by the then deputy director of security intelligence, who held the rank of assistant commissioner in the force.


Henry Perrin Beatty: A supplementary question, Mr. Speaker. This exchange of correspondence is very germane to this whole question of trying to determine why the former solicitor general did not take the proper course of action. The Solicitor General has given us the rank of the individual within the RCMP who wrote to the former solicitor general. Will he now disclose that individual's name, and would he explain to the House whether or not he has determined whether that individual was aware of the RCMP involvement in the APLQ break-in and, if so, why he withheld this information from the then solicitor general?


Francis Fox: 1 am sorry, Mr. Speaker, I missed the hon. member's question. So far as knowledge within the force of the break-in is concerned, 1 think my statement in the House on Friday was extremely explicit on that point.


REASON FOR FAILURE TO REPLY TO CHARGE OF ILLEGAL BREAK-IN BY L'AGENCE DE PRESSE LIBRE
Henry Perrin Beatty: A final supplementary, Mr. Speaker. The minister did not

June 22, 1977
Oral Questions
explain whether he was able to determine if that individual knew about the illegal break-in and, if so, why he withheld the information from the then solicitor general. In view of the fact that the Minister of Supply and Services has stated that the reason he did not even reply to the APLQ's letter alleging RCMP involvement in the illegal break-in was that the matter fell under provincial jurisdiction and that the incident was being investigated by the Montreal police, has the minister had any plausible explanation from his colleague as to why he did not follow the proper course of action by replying to the APLQ's charges with a letter stating that these extremely serious charges were being investigated by the Montreal police?


Francis Fox: Mr. Speaker, once again I believe that if the hon. member goes back to my statement of last Friday he will find that my statement is very explicit indeed in that regard.


Henry Perrin Beatty: It is not at all.


DOMINION DAY
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Prime Minister. It has to do with the celebration of Dominion Day and-


Some hon. Members:: Canada Day!


Mr. Alexander:: He said Dominion Day.


John George Diefenbaker: -it is a very commendable course which has been arranged. We started it in 1957 and this is going to be the greatest on record. So that it will represent all of Canada and not be regarded as in any way partisan, and in view of the fact that the Governor General, under all the circumstances, will not be able to make a speech to the people of Canada on behalf of the Queen, would the Prime Minister consider having, along with himself, the leaders of the other parties speak for a few minutes on a national broadcast so as to bring about a sense of national consciousness and unity?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I will gladly look into that suggestion. 1 confess I am not aware of the program for July 1, but I will look at that. I would also underline to the right hon. gentleman that the House leaders of the various parties are consulting each other as to the possibility of putting two days aside next week to have a debate on national unity.


John George Diefenbaker: Have it on Dominion Day?


Pierre Elliott Trudeau: Mr. Speaker, I stand corrected; the two days would not be a debate, it would be rather a collective contribu-
[Mr. Beatty.)
tion on the subject of national unity. The right hon. member talked about a broadcast. I must remind him that we on this side have been trying to get broadcasting of the proceedings of the House for a couple of years, but it is his colleagues who have been opposing that.


John George Diefenbaker: Mr. Speaker, if evasiveness were a virtue the Prime Minister, in the answer he endeavoured to give me, would be a saint. 1 am simply asking him not to have it as a partisan thing with him speaking as the leader of this nation, which he is not-


Some hon. Members:: Oh, oh!


John George Diefenbaker: -either on this occasion or on any occasion. I am simply asking the Prime Minister whether, to make this national event representative of all political parties which are represented in the House, he will have them with him to speak on that occasion-


Some hon. Members:: Oh, oh!


Mr. MacFarlane:: Who is your leader?


Mr. Speaker:: Order, please. Perhaps the right hon. member might be permitted to conclude his question.


John George Diefenbaker: Mr. Speaker, the unanimity with which the orchestrated chorus opposite interrupt indicates that they think the Prime Minister is the leader of this nation.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, in this great debate-


Mr. Paproski:: You are our saviour, Pierre.


Mr. Hees:: How was it in that manger?


Pierre Elliott Trudeau: Mr. Speaker, in this great debate about who is the leader of the nation, 1 suppose I could do nothing better than take a leaf out of the right hon. gentleman's book and see who on July 1, 1957, 1958, 1959, 1960 and 1961 spoke for the nation on what they had.


An hon. Member:: Nobody did.


Pierre Elliott Trudeau: If nobody did, I am disappointed. I would have hoped in those days-


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I suppose that was the trouble with our history during that period-nobody was leading the nation.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I see our excellent Secretary of State trying to provide the answer to this question. As he is responsible for the
June 22, 1977

program on July 1, perhaps I could pass the question on to him, with your permission, Mr. Speaker.


Hon. John Roberts (Secretary of State):: Mr. Speaker, 1 am prepared to volunteer to undertake to look into the question and particularly to study those precedents from 1957 on to see if the right hon. gentleman was suggesting that procedure at that time, as he is today.


John George Diefenbaker: Mr. Speaker, those were national events, and no leader of the nation in the position of Prime Minister was speaking at all, because it was a national event. What is going to happen on Dominion Day is that it is going to be a kind of political partisan venture.


BILINGUALISM
Mr. Alan Martin (Scarborough West):: Mr. Speaker, my question is for the Prime Minister. In view of the varying interpretations that appear to have been given by members of the media to the document entitled: "A National Understanding", tabled in this House yesterday by the Secretary of State, will the Prime Minister reaffirm the commitment of this government to the principle of freedom of choice for all Canadians in selecting the official language of instruction for the education of their children?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I thank the hon. member for asking me the question because I-


George Harris Hees: Because you set it up.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


George Harris Hees: I have done that sort of thing myself. That is nothing new.


Pierre Elliott Trudeau: Mr. Speaker, I can assure the hon. member for Prince Edward-Hastings that 1 only have one straight man in the House, and that is him.


George Harris Hees: That is your trouble. You are not good enough to operate with just one straight man, Pierre.


Pierre Elliott Trudeau: Mr. Speaker, I am not sure the colloquial expression "straight man" is quite appropriate in this particular case.


George Harris Hees: Stick to the straight stuff.


Charles Joseph Clark: Lay a charge, Pierre.


George Harris Hees: The umpire just called strike three, Pierre.
Oral Questions


Mr. Baker (Grenville-Carleton):: Sit down, you are hurting the nation.


George Harris Hees: Now, get on with leading the nation, please.


Pierre Elliott Trudeau: Mr. Speaker, all I can say is that we are going to have a heck of a good party later today.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I was beginning to get a little worried that we would never get to it.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Don't you think we are already there?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, the question was extremely serious, and 1 want to emphasize to the House that the paper tabled yesterday by the Secretary of State had as an absolute principle the freedom of choice of parents in selecting the language of instruction of their children.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: That is basic to the philosophy of this party and this government.


George Harris Hees: Of all provinces?


Pierre Elliott Trudeau: Of all provinces, Mr. Speaker. It would certainly be a mistake to qver-emphasize the fact that in the administrative application of this principle, there are delays which are necessary in some cases. It is obvious the freedom of choice of a French-speaking parent in some parts of Ontario is not absolute. The principle is absolute, but it might take some time to provide the schools and the teachers. The principle remains absolute, and we hope that emphasis on this administrative delay does not deter people from realizing that the principle is and must be absolute.


Some hon. Members:: Hear, hear!


REASON FOR DELAY IN APPLICATION OF FREEDOM OF CHOICE PRINCIPLE IN QUEBEC
Charles Joseph Clark: Mr. Speaker, my supplementary question is to the Prime Minister-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. Leader of the Opposition has the floor for the purpose of asking a supplementary question.


Charles Joseph Clark: Thank you, Mr. Speaker. My supplementary is to the Prime Minister, but I require a moment to check yesterday's Hansard.


Some hon. Members:: Oh, oh!

June 22, 1977
Oral Questions


Charles Joseph Clark: The Prime Minister made reference exclusively, when he talked about a delay in the application of that principle which he has just enunciated, to problems relating to facilities. Yesterday in this House the Secretary of State added another reason for a potential delay. Excuse me for a moment. 1 should like to be courteous to the Secretary of State by citing him precisely, but I cannot find that exact reference. However, the reference was that the delay in the province of Quebec of the application of that principle was due to the sense of insecurity of French-speaking Canadians relative to the future of their language. Will the Prime Minister clarify for the House as to whether there will be delays in the application of the principle, which he has enunciated, in the province of Quebec for that reason?


Pierre Elliott Trudeau: Mr. Speaker, the hon. Leader of the Opposition is absolutely right. The principle is absolute, but in the administrative application of it there will be some cause for delay in various parts of the country for various reasons. The paper states quite clearly in the case of the province of Quebec that the present government of Quebec has evoked the principle of insecurity of the Frenchspeaking society in Canada, particularly in that province.
If the hon. Leader of the Opposition looks at the white paper, he will see words to the effect that this opinion on the insecurity is not shared by all and is debatable. Indeed I think it is a debatable question. Further facts and figures will be brought to light which show the justification for the delay evoked by some Quebec authorities and will show that perhaps they are not as great statistically as they claim. Those who govern the province today are afraid of this problem of insecurity. That is why there is some provision in the white paper for delay, if it is justifiable, as it has to be in the province of Ontario and other provinces and as it might be in the province of Quebec. With the principle being there, we will make sure no false excuses are brought by anyone, at least to qualify the principles we put forward.


Charles Joseph Clark: The precise language of the Secretary of State yesterday was:
We understand therefore that in that context-
The context of insecurity.
-it may be regrettably necessary not to persist now with the immediate implementation of that principle of free choice for the education of one's children in either official language.
That is the end of the quotation. The minister was speaking of Quebec. Can the Prime Minister, in light of his answer and of that of the Secretary of State yesterday, tell us what timeframe he is thinking of, when, in his view, it might be possible to persist with the immediate implementation of the principle of free choice?


Pierre Elliott Trudeau: It is indeed difficult to give a particular timeframe because so much depends on the actions of the provinces in this instance. As in the first example I gave, I suppose it would be the time necessary to build schools and to

provide the kind of education to French speaking Canadians in the other provinces that English speaking Canadians in Quebec have enjoyed for the past 150 years. So this catch-up in the other provinces depends a great deal on the will of those provinces to provide this degree of fairness and equal treatment.
In the province of Quebec, the timeframe depends very much on the psychology of those who feel themselves threatened. I, for one, do not think that the majority of Quebecers feel threatened with extinction.


John Allen Fraser: Your paper says they do.


Pierre Elliott Trudeau: If the hon. member reads the paper, which 1 ask him to do-


John Allen Fraser: Which I did.


Pierre Elliott Trudeau: -he would understand what we are talking about, but once again he is following some other alley.


An hon. Member:: You are talking from the other side of your mouth.


ROYAL CANADIAN MOUNTED POLICE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, with your permission 1 had intended to address my question to the Solicitor General, but the Prime Minister is in such good form that perhaps he might like to answer the question. I understand that the Solicitor General has received a telegram from the former Supreme Court justice, Mr. Emmet Hall, on behalf of the Canadian Civil Liberties Union urging a full scale public inquiry into what the telegram describes as the break-in and the apparent case of cover-up by the RCMP. It says that such an inquiry is necessary to relieve pressure on the RCMP and to regain public respect for the laws of this country. I ask the Prime Minister and/or the Solicitor General whether, in light of the views of such an eminent jurist and legal authority as Mr. Justice Hall, if they are not impressed by our arguments, they would not be impressed by the request that he has made and change their minds.


Pierre Elliott Trudeau: Mr. Justice Hall is indeed a very respectable and eminent authority in this field. Naturally, I will take note of whatever representations he has made.


An hon. Member:: You won't do a thing.


Pierre Elliott Trudeau: I am not quite sure exactly what his opinions are, but if he wants to see an over-all investigation of the RCMP, I feel that that might be a repetition of what was done several years ago by a commission of inquiry which recom-
June 22, 1977

mended certain modifications in the administration of the RCMP.


Francis Andrew Brewin: Perhaps 1 might inform the Prime Minister that Mr. Justice Hall in his telegram was extremely specific. He referred to the break-in and apparent cover-up of the matter that took place in Montreal. That is what he and the organization referred to want an inquiry into, and that is what they said was necessary to clear the RCMP and bring public respect for the law of this country.


Pierre Elliott Trudeau: Mr. Speaker, I repeat that 1 did not see the telegram, but if it is a specific desire to look at the break-in and "apparent cover-up", the RCMP officer has already pleaded guilty in court, and the break-in has already been recognized as an illegal act committed by an RCMP officer. The cover-up that the hon. member talks about is one which might or might not have taken place by the police themselves. The Solicitor General seems to have dealt with this by indicating that in their answer to the former solicitor general the RCMP relied on the fact that an inquiry by the proper authorities was being made in the city of Montreal. The question remains as to what happened to that inquiry, and that is precisely within the terms of reference of the Quebec commission of inquiry. I take it that this will provide an answer to the question which concerns the hon. member and, presumably, Mr. Justice Hall.


ADMINISTRATION OF JUSTICE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is directed to the Minister of Justice. Has the government appointed counsel to participate in the judicial proceedings in the courts of the province of Manitoba known as the Forest case and, if so, for what reason?


Hon. Ron Basford (Minister of Justice):: Yes, we have, Mr. Speaker. The counsel appeared on June 10 representing the Attorney General of Canada. The reason we intervened was explained by me in a statement made at that time. We were served notice of the constitutional issue pursuant to the rules of court in Manitoba, and we replied in the affirmative to that. The reason we have intervened is to argue whether it should come before the court of appeal that the Manitoba language act of 1890 is unconstitutional.


Walter Gilbert Dinsdale: Is it not the policy of the government to intervene in all situations of this kind?


Stanley Ronald Basford: It is not the policy to automatically intervene when served with a motive of intervention on a constitutional point. We obviously make a judgment as to the constitutional issue involved and its importance. Obviously, we have made a decision that this is an important constitutional issue and that
Oral Questions
the court of appeal, should it discuss the issue, is entitled to hear the point of view of the Attorney General of Canada.


AIR CANADA
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, in the absence of the Minister of Transport 1 will direct my question to the government House leader. At the meeting of the Standing Committee on Transport and Communications yesterday 1 presented a motion calling for the committee to investigate the situation in Quebec where 2,600 Air Canada employees are requesting a transfer out of the province. My motion was accepted by the committee and the chairman was to request an order of the House authorizing the committee to launch an investigation. Due to the seriousness of the matter, will the minister issue an order as soon as possible?


Hon. Allan J. MacEachen (President of the Privy Council):: I will consider that situation and see what can be done.


A. Daniel McKenzie: As the chief executive officer of Air Canada, Mr. Claude Taylor, has been unable to solve the morale problems and employees are organizing to further their requests for transfers and are also challenging statements made by Mr. Taylor who claims that there are no problems, and as an airline cannot function efficiently or safely with these types of labour problems, will the minister take immediate action in granting the order to the committee or appoint some commission of inquiry?
[ Translation]


Mr. Marcel Roy (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I took part in the committee meeting yesterday and the hon. member's remarks are not quite exact. The president of Air Canada, Mr. Claude Taylor, mentioned that the morale of the employees was excellent. Therefore the hon. member's remarks are completely untrue, which was recognized at the committee meeting yesterday.


EXTERNAL AFFAIRS
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, 1 have a question for the Acting Secretary of State for External Affairs, and if the acting minister is the person 1 think he is, a person of great taste and sophistication, he will be able to answer this question. I will try him out now. I have him ready. What are the circumstances surrounding the embarrassing decision to close an exhibition at Canada House in London, who was the sponsor of the exhibition, who was in

June 22, 1977
Oral Questions
charge of such a decision, and will the minister reverse this blot on the Canadian record?


Allan Joseph MacEachen: Mr. Speaker, 1 doubt whether I could live up to the advance billing of the hon. member, but I am aware that there was an exhibition at Canada House entitled "Room for Self-Explanation". That may be of interest to hon. members. In essence, and without referring to all the phraseology before me, the exhibit was removed as a result of a decision of the Canadian High Commissioner because he thought that certain portrayals-one particular portrayal-might be offensive or unacceptable to certain persons who may be using Canada House for purposes other than purposes of self-explanation.


Some hon. Members:: Hear, hear!


Mr. Fairweather:: Would the Acting Secretary of State for External Affairs arrange for the Canadian High Commission to visit the Prado in Madrid?


Allan Joseph MacEachen: Well, that work may be equally disturbing.


Mr. Speaker:: Hon. members will realize that since today is the final allotted day, the House will go through the usual procedures pertaining to supply later on this afternoon. In view of recent practices from which we have benefitted whereby hon. members have been provided supply bills as far as possible in advance of their actual consideration, I hope the House will agree, as it has in the past, that the bill be distributed at this moment. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: I would like to indicate as well that a number of hon. members have conveyed to me their compliments to the Hansard reporting staff and to all those associated with both French and English Journals and Debates with respect to the very diligent job they did, somewhat above and beyond the call of duty.


Some hon. Members:: Hear, hear!


Mr. Speaker:: In the spirit of good will which was so evident during the question period I extend the usual invitation to hon. members. I think they have all been invited. The invitation is extended to members of the press gallery as well and, whatever the event of the supply proceedings later on, although the beginning of the festivities for the guests here may be retarded somewhat, I certainly hope that will not in any way detract from the quality of the soiree later on.


A. Daniel McKenzie: Mr. Speaker, I rise on a question of privilege. It has to do with my question to the House leader and my second question which was answered by the parliamentary secretary. The parliamentary secretary stated that I misinformed the House with regard to

Mr. Taylor's remarks in committee yesterday about employee morale. I would like to point out to the House that 1,000 Air Canada employees have formed an organization called "Canadian Aviation Fellowship" because of their concern about conditions at Dorval. I received a telegram from them which states:
Our survey on Air Canada employees at all levels indicates that Air Canada President Taylor totally misinformed ...


Mr. Speaker:: Order, please. The point at issue really is not the question of morale, which is obviously an arguable question. It seems to me that, as far as any possible question of privilege is concerned, the point at issue has to do with what the president of Air Canada had to say about that subject last night. I do not think the hon. member can now get into an argument as to who is right or wrong about the morale of the employees of Air Canada.
What could be argued, I suppose, if the hon. member seeks the floor on a question of privilege, is whether he is correct and not the parliamentary secretary in interpreting the words of the president of Air Canada before the committee. However, I do not think that goes directly to the issue. If the answer was that the hon. member did not correctly relate the words of the president of Air Canada to that committee, that would be an issue of privilege.


A. Daniel McKenzie: Further to that, Mr. Speaker, if 2,600 employees of Air Canada requesting a transfer out of the province of Quebec is not a problem, nothing is a problem. There is a serious problem, and that is why I directed my question to the House leader and that is why my motion was accepted yesterday. There is a very serious morale problem when 2,600 employees are asking to be moved out of the province of Quebec.


Marcel-Claude Roy: Mr. Speaker, I would like to clarify the matter. The hon. member mentioned yesterday what he has just told the House and the president of Air Canada said that this statement was without foundation and that it did not reflect the situation among Air Canada employees. According to him, this resolution has been rejected by the committee. The chairman mentioned that further discussion on this will be put on the agenda of the committee.


Mr. McGrath:: Mr. Speaker, I rise on a point of order arising out of the oral question period today. The hon. member for Wellington-Grey-Dufferin-Waterloo (Mr. Beatty) requested the Solicitor General (Mr. Fox) to table certain documents which had been referred to by the Solicitor General and the Minister of Supply and Services (Mr. Goyer), the latter in his statement yesterday and the former in his statement to the House on Friday. Regarding the references of the Minister of Supply and Services I refer Your Honour to page 6968 of Hansard where reference is made to a letter from the RCMP to the minister, and again another reference earlier on where reference is made to the APLQ's letter, again in the same
June 22, 1977

minister's speech of last evening. My reason for bringing this to your attention is the refusal of the minister to comply. I will be very brief, and perhaps Your Honour can take this under advisement after having had a chance to examine the record.
I refer Your Honour to Beauchesne, citation 159(2), which states the following:
A minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he is prepared to lay it on the table.
I submit that that citation is quite clear. I hope Your Honour will examine the record and perhaps make a ruling at a later date.


Francis Fox: Mr. Speaker, 1 did not have an opportunity to hear all of the argument made by the hon. member. However, I would like to bring to Your Honour's attention, subject of course to verification in Hansard, the fact that my personal recollection is that 1 did not cite the letter in any way whatsoever. I did not have the letter with me. I do not know the contents of it by heart, and I did not cite it.


Mr. Speaker:: Order, please. 1 would like to be clear. We seem to be talking about two different problems. I take it one relates to the possibility of the use of documents by the Solicitor General (Mr. Fox) during his statement on Friday, and I am not clear that there was at any time an application that, pursuant to that, any documents referred to by the Solicitor General might be tabled. Yesterday on a question of privilege the Minister of Supply and Services (Mr. Goyer) clearly referred to and quoted from a letter, but I am not aware that there has been an application pursuant to the reference cited by the hon. member that that document be tabled.
At the moment I am not clear whether in either case there has been a formal application to have a document tabled which was resisted, but I will check the record to see whether that has taken place and, if it has, I will consider whether in either case it was proper for the minister to resist the application.


Mr. Blaker:: Mr. Speaker, on the same point of order, I was a little confused about whether this matter related to the current Minister of Supply and Services (Mr. Goyer), but to the extent that I understood Your Honour's remarks, it does. On behalf of the minister I would like to check Hansard and, if necessary, perhaps the minister could be permitted to make representations on this point of order.


Mr. Forrestall:: Mr. Speaker, the confusion which has arisen between the parliamentary secretary and the hon. member for Winnipeg South Centre (Mr. McKenzie) arising out of proceedings in the Standing Committee on Transport and Communications yesterday afternoon should not be left in the state that it is. There have been accusations of untruths. I think there was some mix up in translation, and the parliamentary secretary did not properly and adequately hear what the hon. member for Winnipeg South Centre was saying.
Committee Reports
Yesterday afternoon the hon. member for Winnipeg South Centre did present a motion to the standing committee which was properly ruled out of order by the chairman. Later in the day at a later proceeding in committee, the hon. member for Winnipeg South Centre reintroduced the motion which the Chair ruled to be a proper motion but simply not possible to put in the context of the bill. There was an agreement that the steering committee would seek a remedy with respect to putting the motion of the hon. member for Winnipeg South Centre. The confusion has nothing to do with the denial by the hon. member for Winnipeg South Centre of the position taken by Mr. Taylor with respect to the morale of Air Canada employees in Montreal and other parts of Quebec. The two issues were quite separate.
I am sure the parliamentary secretary would not want that type of accusation to remain on the record with respect to the member for Winnipeg South Centre. I am sure the distinguished chairman of our committee would concur in that analysis of what took place.


Mr. Speaker:: Order, please. Perhaps I could quickly review today's proceedings. The hon. member for Winnipeg South Centre (Mr. McKenzie) put two questions, one of which was answered by the acting minister and one by the parliamentary secretary. The answer given by the parliamentary secretary was a rejection of the interpretation put upon the words of the president of Air Canada by the hon. member for Winnipeg South Centre. In his question of privilege the hon. member for Winnipeg South Centre went to the heart of the issue as to whether there was poor morale in Air Canada.
That may be an interesting point of argument. The point of privilege, if it did exist, would have had to be that it was the correct interpretation of Mr. Taylor's words by him rather than by the parliamentary secretary. Whether either or any of those statements is accurate or inaccurate is subject to debate. Clearly it constitutes a matter of disagreement or different interpretation between two members and does not constitute a question of privilege.



ROUTINE PROCEEDINGS


[Stage Direction]
Ninth Report of Standing Committee on Justice and Legal Affairs-Mr. MacGuigan.
[Stage Direction]
June 22, 1977
Business of the House

[Stage Direction]
Second report of Standing Committee on Health, Welfare and Social Affairs-Mr. Robinson.
[Editor's Note: For text of above report, see today's Votes and Proceedings.]

Hon. Monique Begin (Minister of National Revenue):: Mr. Speaker, 1 wish to table, pursuant to Standing Order 41, and naturally in both official languages copies of the working agreement signed by American Internal Revenue Service Commissioner Jerome Kurtz and myself on a simultaneous examination of the files of taxpayers under the terms of the tax agreement or treaty that exists between our two countries.


CANADA ELECTIONS ACT
Mr. Jake Epp (Provencher) moved: for leave to introduce Bill C-426, to amend the Canada Elections Act (teachers voting abroad).


Some hon. Members:: Explain.


Arthur Jacob (Jake) Epp: At the present time teachers under contract with the Department of National Defence, who are teaching at Canadian Forces bases located outside of Canada are not entitled to vote in federal general elections. Armed Forces personnel are enfranchised.
The purpose of this bill is to give the right to vote to Canadian citizens teaching overseas under contract at DND schools. It is a bill which would end the discrimination against Canadian teachers who have volunteered their services to Canada, thus enabling us to fulfil our international obligations.


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

Allan Joseph MacEachen: Mr. Speaker, as I shall not be in the House tomorrow I should like to advise the House of the order

of business for tomorrow and next week. Tomorrow we will continue with report stage of the unemployment insurance bill, and next week we will continue with that bill and a number of other bills which are at report stage. No bill will be called that is not at report stage, which includes the Bretton Woods and currency and exchange bills, and the one affecting the Auditor General. I understand two bills have been reported from committee today.
As a result of informal discussions with my counterparts I have been attempting to arrange a two day debate on national unity. The dates that had originally been proposed, Wednesday and Thursday of next week, are running into difficulties. Unless suitable dates can be found for next week it might be in the interest of the House to defer that debate until the following week. I would appreciate hon. members' comments so that I could prepare for either eventuality.


Walter David Baker: Mr. Speaker, I am aware of the difficulties and have considered the possibility of having the debate in the next following week. At first blush that would appear to be the only reasonable solution, but I will check with my colleagues a little later.


Stanley Howard Knowles: Mr. Speaker, I hope the possibility of having this debate on two days the week after next will be considered. As the other two House leaders know, there are problems. We are certainly prepared to enter into discussions so that this may be resolved to the satisfaction of all concerned.


Mr. Goodale:: Mr. Speaker, I wonder if I could bring up a matter of House business that relates to private members' hour in the period between now and the end of the month. There has been some difficulty with the days which would normally be scheduled for private members' business in that period-it would of course be only tomorrow and a week from tomorrow. There have been some discussions and there seems to be a disposition to proceed with private members' hour tomorrow, but to change the normal order of business. We would normally deal with motions for the production of papers tomorrow but I understand there is a disposition to deal instead with Bill C-1001 standing in the name of the hon. member for Kenora-Rainy River (Mr. Reid). At the conclusion of that item we would move to Bill S-2 standing in the name of the hon. member for Scarborough East (Mr. O'Connell), which would probably tend to occupy that hour.
In the following week, instead of calling private members' business at five o'clock on Thursday, there is a disposition to take the hour between five and six p.m. on Tuesday for private members' business and to deal with a number of bills standing in the names of eight members, which affect certain changes in the names of constituencies. For the balance of that hour we would resume debate on the motion for the production of papers standing in the name of the hon. member for Yorkton-Melville (Mr. Nystrom) which otherwise would have been called tomorrow.


June 22, 1977


Walter David Baker: Mr. Speaker, I thank the parliamentary secretary for his courtesy in discussing this matter with me in advance. We agree to his suggestion.


Stanley Howard Knowles: Mr. Speaker, there have been discussions and we agree to the first part of what has been suggested. That is satisfactory. We agree that in the private members' hour tomorrow the time shall be devoted to the two private bills mentioned. The rest of the proposed arrangement having to do with next week is related to discussions we have had about the timing of the debate on national unity. 1 suggest that the House should order today, by unanimous consent, the change for tomorrow but leave the decision as to what we do next week until some of the other questions have been sorted out.


Mr. Speaker:: Is this agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: It is so ordered.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Ralph Goodale: Mr. Speaker, the following questions will be answered today: 2,642 and 2,739.


Mr. Elzinga: 1.	Do members of the Canada Pension Plan Advisory Committee receive a salary and (a) if so, in what amount (b) if not, are they paid a per diem for the meetings they attend and, if so, in what amount?
2.	Do members of the CPPAC have their expenses paid to attend meetings and, if so, what is the method of payment?
3.	Is there any other method of payment to members of the CPPAC?


Hon. Marc Lalonde (Minister of National Health and Welfare):: 1. No. (a) Not applicable; (b) yes, for days spent attending Committee meetings, members receive $100 per day and the Chairman receives $150 per day.
2.	Members of the Advisory Committee are reimbursed for reasonable travel and living expenses which they incur in attending meetings. The members are required to submit an expense claim, with receipts, and a cheque is then issued from the CPP Account.
Order Paper Questions
3.	No.


Mr. Beatty: What is the name of the (a) Minister (b) acting Minister (c) second acting Minister of each department?


Ralph Goodale: See reply to question 1,995, Hansard No. 96, page 4381, dated March 28, 1977.


Ralph Goodale: Mr. Speaker, if questions Nos. 621, 1,508 and 2,372 could be made orders for returns, these returns would be tabled immediately.


Mr. Lambert (Bellechasse): 1.	Did Canada import any dairy products during the first nine months of 1976 and, if so (a) in what quantity was each product imported (b) at what price (c) from which countries (d) through what organization?
2.	Have any companies or cooperatives imported any products and, if so, was it through a permit delivered by the Department of Industry, Trade and Commerce?
Return tabled.


Mr. Mazankowski: 1.	In each of the past five years, what amounts were (a) granted (b) loaned to firms in the textile industry by the government and its agencies?
2.	What was the average (a) rate of interest (b) length of time required to repay the loans in each year?
3.	What was the amount of tariffs and customs duties collected on the import of (a) fibres (b) fabrics (c) finished garments in each year?
4.	What was the total value of textiles (a) imported (b) exported in each year?
Return tabled.


Mr. O'Sullivan: 1.	For each year since 1972, by province, what was the total amount allocated by the Department of National Health and Welfare to the Non-Medical Use of Drugs Directorate Summer Resources Fund?
2.	Of the amount designated to the Province of Ontario, how was it assigned by region and/or municipality?
3.	Since 1972, how many applications for funds under the summer programmes of the Non-Medical Use of Drugs Directorate, Ontario Region, have been received by the Department from the municipalities of (a) Hamilton (b) Burlington (c) Stoney Creek (d) Grimsby (e) Oakville (0 Ancaster (g) Dundas

June 22, 1977
Order Paper Questions
(h) St. Catharines and, in each case, what (i) number and percentage of the applicants were successful (ii) was the total amount granted?
4.	What (a) are the names and addresses of the successful applicants (b) was the nature of the projects approved and funded by the Ontario Region of the Non-Medical Use of Drugs Directorate in (i) 1974 (ii) 1975 (iii) 1976 (iv) 1977 to date?
Return tabled.


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


Some hon. Members:: Agreed.


Mr. Rynard:: Mr. Speaker, I rise on a question of privilege. I wish to bring to your attention a matter I raised first in this House on February 27, 1975, as reported in Hansard, page 3625, when I drew attention to the fact that a starred question which had been on the order paper nearly one month had not been answered, and I asked why. You replied at that time, Sir, that there is no rule saying starred questions must be answered within a certain time or, for that matter, answered at all. That opinion was expressed on February 27 as reported in the first and second columns of page 3625 of Hansard. I drew attention to the value of the starred question and wondered what was the value of asking a starred question if it need not be answered at all or if it had no status.
I believe, based on the custom of the House, that the starred question which came into being in 1910 is basically a question not put orally because the answer might require a more thoughtful reply, or some research might be needed in order to answer the question correctly. The answer to the question should contain the information desired and, there must be a certain urgency to the question. 1 am raising this matter because, for a long time, we have asked the procedure committee to deal with this matter and provide an answer on the point.
As you know, Mr. Speaker, our rules and customs naturally were based on those of the Mother of Parliaments. The practice throughout the British Commonwealth is that a member of parliament can put a question to a minister on a matter concerning his department. The late Sir Herbert Williams, who asked some 4,000 questions during his long parliamentary career, said that questions asked in the House are perhaps one of the most powerful implements of democracy.
As a matter of interest, the first question was asked in 1721 in the House of Lords, over 250 years ago.
It seems to me, Mr. Speaker, that nothing could weaken the control of parliament more, or better destroy it, than the abolition or curtailment of the right of a member of parliament to ask a question in the House of Commons, a question to which he is entitled to expect an answer.
In the Mother of Parliaments all questions are written and the minister has two full days to answer. Those questions marked with an asterisk, the starred questions, require an oral answer. Otherwise, I understand the answers are printed in Hansard.
In Canada we have the oral question. However, I think it would be wise to refer back to the practices which existed even before we were a united country, before Confederation. Let us see what happened when we were the province of Canada. At that time we operated under British rules as practised at Westminster. So far as I know all questions then were written. With the advent of Confederation in 1867, written questions only were allowed. In 1910, when Sir Wilfrid Laurier was Prime Minister, the starred question was introduced, with the hope that it would tend to reduce emphasis on oral questions which, for the first time, were creeping into parliamentary use.
Only in 1964 did the rules of this House give formal recognition to the oral question which had not been formally recognized before then. The oral question has been part of our practice for a number of years and is now firmly established in our procedure. The 1910 rules did not firmly establish the status of the starred question. In fact the private member was never able to enforce the right to ask a starred question, and ministers answered starred questions orally, or in writing, at their own discretion.
In the sessions immediately preceding the 1955 change in the rules, the right to ask a starred question seems briefly to have been regained. In the days of Sir Wilfrid Laurier, the starred question had to be answered within one day. I point out that one of our Speakers ruled that starred questions were to be answered orally, and in 1955 five ministers drew attention to the fact that questions were starred when the answers were given orally.
In 1955 a special committee on procedure sought to establish more firmly the status of the starred question. It was then given a special place on the order paper on one day of the week. No member was to be allowed to have more than three starred questions at one time on the order paper. When I first came to the House as a member it was the custom, as it had been earlier, to answer starred questions within seven days. It was our custom to ask starred questions under certain conditions, and I point out that most of our parliamentary procedure has evolved from custom. Obviously, that which is customary and works should become part of the status quo. This applies, I suggest, to the starred question as we know it at present.
It is interesting to note that there were no starred questions in our parliament until 1910 or 1911, as I have already said, although written and oral questions evolved as a customary procedure. That shows what custom has done to our rules. Also, between 1929 and 1955, starred questions were not asked. In 1955 the procedure committee once more recognized the starred question.
I could show you, by referring to Hansard, that the starred question has been part of our procedure at least since 1957, that is to say, such questions could be answered. For example, in 1959 Mr. Chevrier commented on why certain starred questions had not been answered. Michael Starr, a minister at the time, also referred to the starred question, as did the right hon. member for Prince Albert (Mr. Diefenbaker) in 1968. I
(Mr. O'Sullivan.]
June 22, 1977

will not trouble the House with quoting what hon. members said, but what they said is on record.
I am not going to trouble you with all the quotations. They are there. I can give the page numbers if anyone wants to look at them. They are in Hansard at pages 2469, 2470, 1368, and so on. I will not trouble the House with them, but hon. members will find it is very definitely pointed out. For example, when I first came in in 1957, the Hon. Lionel Chevrier stated:
Mr. Speaker, may I direct a question to the government through the House leader. I should like to know if the government would not speed up the answers to questions now on the order paper. 1 am informed that there are some 47 questions that remain unanswered. There are as of today five starred questions that are unanswered, and I am sure there are a number of orders for returns-
He went on to state he believed those starred questions should be answered.
I want to come to my conclusions. It is my belief that the starred question was so designated because of its complexity, and making it short enough to fit in for an oral answer by the minister in the House and to give the minister the necessary time in which to look for information required. In other words, it was an opportunity for the opposition to be a little more dutiful in their work, which is to probe for mistakes. It was also a chance for the government to answer a question in a little better style and not have it repeated over and over again to get to the proper conclusion that was satisfactory to the questioner.
The starred question should be given its rightful place, as was confirmed in 1955. The Standing Committee on Procedure and Organization should deal with this question which it failed to deal with over a period of two years, since there seems to have been a silent erosion and maybe a lassitude on the part of the committee to deal with this matter, and by so doing restore the right of the private member to have a starred question answered within a set limit of time. The status of the starred question should be settled. Either it is a useful tool and should be placed in the status quo position, or it should be removed entirely.
I have brought this up for the sake of parliament and for the sake of the position that Your Honour occupies as the ruler and referee of this House, because leaving a question in that position is hardly fair either for a Speaker or private member, or indeed for the government.
All any minister who fails to answer a question within a fair period of time, if he does not have an answer prepared in a week for reasons beyond his control, would have to do is telephone the hon. member or Mr. Speaker to give his reasons, and nobody would be upset about it, and he would be given further time.
I know I had Your Honour's co-operation in this. The first thing I did after raising this matter which led to your reply was to write a letter, dated February 28, 1975, to the then President of the Queen's Privy Council, the hon. member for Eglington (Mr. Sharp), telling him I would like to appear
Order Paper Questions
before the Standing Committee on Procedure and Organization in order to bring their attention to a point which I thought should be looked at and cleared up. I went on from there, not only by letter but by conversation, on many occasions. Over two months ago, and again about a month ago, I spoke to the chairman about this. He knew very well that this was coming up.
I then took the trouble to inform the parliamentary secretary, the hon. member for Assiniboia (Mr. Goodale), that this was coming up before the House. 1 do not think it can be left, not only for Your Honour's sake, but for the sake of every member of this House to be carried on in this fashion. We should be respecting the position of the Right Hon. Wilfrid Laurier and other people who have gone before us.
In the democratic process, erosion should never destroy that which is useful to democracy's survival.


Ralph Goodale: Mr. Speaker, I appreciate the fact that some days ago the hon. member for Simcoe North (Mr. Rynard) gave me notice of his intention to raise this concern which he obviously holds very deeply and has researched very extensively.
I can understand the sincere representations which he has made through the House to the Standing Committee on Procedure and Organization. I hope the members of that committee will take note of his remarks today and take an early opportunity to consider the worthwhile suggestions which he has made.
As he pointed out, at least twice before the hon. member has raised this concern in the House, on February 27, 1975, reported in Hansard at page 3265, and again last summer, July 6, 1976, reported in Hansard at page 15080. In both cases, Mr. Speaker, your response to the point was very clear cut and very clearly in accordance with the established rules and precedents of the House; first, that the star entitles the hon. member to an oral answer, but not the right to demand an answer within a specified period of time; second, that the Standing Committee on Procedure and Organization might examine this question in the course of its re-examination of the procedures of this House.
I have looked quickly at that committee's subcommittee report. I believe that report made one reference to questions on the order paper, which appears in volume 30-9-76 at page 30:61. However, that reference deals only with the place of questions in the daily order of business. I do not believe that the committee actually got to the point of considering the status of starred questions. The hon. member for Kenora-Rai-ny River (Mr. Reid) was the chairman of that subcommittee. He might well correct my interpretation of the subcommittee's report. However, I do not believe they actually gave their consideration to that point as Your Honour previously invited them to do, and as the hon. member for Simcoe North has obviously done again.
These representations today are very worth-while in the sense that the members of the committee may want to take a look at that issue. However, I think that the rules and prece-

June 22, 1977
Motions for Papers
dents on the point are pretty clear that, at this stage, our rules do not require that an answer be provided within any specific period of time.
From a statistical point of view, I should simply note that in this session we have had 29 starred questions on the order paper. Only five of these are still outstanding. Three of the 29 were standing in the name of the hon. member for Simcoe North. At this stage all of those three have, in fact been responded to. Therefore I think that our rate of reply to those questions is an acceptable rate. We always try to do better. I hope the representations the hon. member has made will come to the attention of the committee.


Mr. Speaker:: That seems on all sides to be the most effective result, if in fact we can persuade the procedure committee to re-examine this matter to see if it has any recommendations. At the moment 1 am not able to act on the representations of the hon. member for Simcoe North (Mr. Rynard), but 1 hope that the procedure committee will do so.


Ralph Goodale: Mr. Speaker, notice of motion for the production of papers No. 81 is acceptable to the government.


[Stage Direction]
Motion No. 81-Mr. McKinnon:
That an Order of the House do issue for a copy of the letter sent to the Department of Industry, Trade and Commerce by Mr. W. R. Wilson, Senior Corporate Vice-President, Lockheed Aircraft Corporation, dated June 24, 1976, as referred to in Article 39.60 of the LRPA Contract.
Motion agreed to.
Ralph Goodale: I ask, Mr. Speaker, that the other notices of motions for the production of papers be allowed to stand.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Mr. J. R. Holmes (Lambton-Kent) moved:: That this House condemns the failure of the government to provide economic leadership to Canada's Indians, and in particular its failure to establish and maintain a cohesive and articulate policy on the Indian Economic Development Fund, as revealed and documented by studies, confidential memoranda and other related data.
He said: Mr. Speaker, the importance of the motion before the House of Commons and the issues arising from the motion are recurrent themes that have eroded the credibility of the Government of Canada and its capacity to govern. The absence of financial control since the inception of the Indian Economic Development Fund in 1970 is a dramatic illustration of the Auditor General's oft repeated remark that the Government of Canada has lost control of the public purse.
The absence of policy and the failure of the Government of Canada to adhere to the mandate establishing the program has had a disastrous effect on the Indian Economic Development Fund. The actions of departmental officials, presumably with the minister's knowledge, knowingly making wrong decisions for political purposes, as noted in the Woods, Gordon and Company report, has had a demoralizing effect on the department, has destroyed the credibility of the Department of Indian Affairs and Northern Development, and unfortunately has tainted the vast majority of the Indian community which has been the innocent victim of this charade.
The Royal Commission on Financial Management and Accountability is particularly germane to this debate. The unrealistic information provided to members of parliament, the inability of members to obtain information reflecting the realities of programs, have specifically undermined the relevancy of the standing committee to examine effectively the estimates, and is therefore a direct threat to our parliamentary system.
Before proceeding to specifics I must emphasize at the outset that the victims of the government's incompetence in managing the IEDF are the Indian people in Canada. Let there be no doubt in the minds of members in this Chamber that, on examination of the facts presented during this debate, the bottom line of the ledger will reveal the Indians of Canada as having suffered because the minister and the Department of Indian Affairs and Northern Development have failed to provide the necessary leadership to implement and develop an effective program for the administration of the Indian Economic Development Fund.
My colleagues and I are aware of successes attributable to the economic development program, although it should be noted in many instances that this has been achieved by the entrepreneurship of Indians rather than through the efforts of
June 22, 1977

the Department of Indian Affairs and Northern Development. We also recognize and are prepared to accept a risk factor does exist in a developmental program. In addition, we believe an economic development program can and should in principle be of value to the Indian community.
However, when we have knowledge that millions of dollars-the estimate is between $50 million and $75 million- have been squandered by the government in its irresponsible administration of the program, and when we have knowledge of innumerable social problems in the Indian community that are crying out for help, I say to you, Sir, in the most generous of parliamentary terms, the Government of Canada's actions border on that of criminal negligence.
During my travels across Canada discussing Indian and Inuit problems at the grass roots level, I have been confronted with a recurrent theme, namely, that the minister and the Department of Indian Affairs and Northern Development are insensitive to local needs and, perhaps most important, the funds appropriated by the department for the benefit of Indians are to a great extent never realized by those in need. The IEDF is a glaring example confirming these views.
The realities are clear. Who can have confidence in a minister and a government which has handled in an irresponsible way nearly $200 million when we are confronted with an Indian unemployment rate which is the highest in Canada, a perennial housing problem of crisis proportions, a lack of infrastructure elements which other Canadians enjoy and assume to be not only essential but a right of every Canadian?
In the Indian community health problems are reflected in an infant mortality rate four times higher than the national average. The average age of death is 24 years younger than that of the general population; an increased incidence of tuberculosis, pneumonia, hepatitis and other infectious diseases exists in that community and, according to the Nutrition Canada Survey, dietary deficiencies are more severe than among other groups of Canadians. Alcohol-related, violent death is four times more common than among white people, and educational problems are reflected in part by the unacceptable drop-out rate.
The list is by no means complete. However, I am aware that the government has literally squandered millions of dollars in one departmental program, and if I have knowledge of a group or an individual deliberately ripping off a program for personal gain, I shall do everything within my power to defend the tens of thousands of Indian men, women and children across Canada shackled with social and economic problems. I can assure you, Mr. Speaker, that I will not be content until I am satisfied that every dollar appropriated by the Department of Indian Affairs and Northern Development is maximized and utilized by those most in need.


Some hon. Members:: Hear, hear!


John Robert Holmes: The lack of financial control and fiscal responsibility in the administration of the IEDF is so scandalous that the 1976 report of the Auditor General sounds by comparison
Indian Economic Development Fund like a strawberry social. In his recent annual report the Auditor General stated on page 9:
Based on the study of the systems of the departments, agencies and Crown corporations audited by the Auditor-General, financial management and control in the Government of Canada is grossly inadequate. Furthermore, it is likely to remain so until the government takes strong, appropriate and effective measures to rectify this critically serious situation.
The financial management provided by the government for the IEDF is not grossly inadequate-it is a total disaster.
What are the facts? Initially I would like to quote from the summary of the findings of Woods, Gordon and Company in their review of the Indian Economic Development Fund. Some of their conclusions are as follows:
A perceived mandate for the Fund has evolved in an informal manner. Its present state is not clearly defined nor is it consistently perceived by officers of the department.
The status of the Fund portfolio is not sufficiently documented to enable realistic planning by district, region or headquarters staff in terms of funding or manpower requirements.
There are serious deficiencies in all communications related to the Fund including: management direction and guidance, financial accounting systems, financial and operations reporting systems and planning systems.
Large projects are causing severe strains on the economic delivery system especially in terms of their draw on funds and manpower requirements.
The handling of small accounts is less than adequate. This has mainly been caused by the call on resources-funds, follow-up, and advisory services-by large projects.
Small projects can be handled successfully by the Fund with a modified delivery system and improved communications.
Elements of other Indian Program components (Socio-cultural and education) are appearing in the Economic Development Program-especially in the area of large projects.
Major changes in the delivery system and a clarification of the mandate of the Fund (especially in terms of its relationship to other Indian Program components) are required in order for the program to accommodate and deal with large projects.
The present level of Fund activity is more than the delivery system can handle.
Perhaps the critical nature of the financial control of the IEDF can best be illustrated by quoting in part from a letter dated July 7, 1976, from the director of economic development to key staff personnel in the Department of Indian Affairs and Northern Development, as follows:
I would like you, in concert with your associates in the regions, to develop a more positive and measurable set of criteria to be used in conjunction with loans and contributions. I will expect to see a gradual release of funds tied to such events as the receipt of acceptable monthly accounting statements, productivity quotas achieved as reported through an agreed-to pre-determined process or the establishment of some kind of sensible target or sub-target for the enterprise. I am sure you will agree that many of our more significant problems seem to come to light later than they should. Our efforts to obtain approval to augment regional economic development strength seem to be well received-so I expect to see tighter criteria associated with project monitoring. I also, of course, expect to see close working relationships with our clients.
The second aspect of our operations relates to the apparent crisis atmosphere which seems to be associated with the extension of continuation of guaranteed loans. M. Roy has developed, over a painful period of negotiation, the thesis with the Department of Finance that "we" are now competent to look after most of our own guarantee loan processing. By "we" I mean the regions. Our case isn't improved by such events as being "requested" to renew a guarantee for a considerable sum of money with nothing but 24 hours and an emotional telex to support our case. This sort of thing is not really a good way to run a railroad- let alone a development program. The example we set sometimes leaves much to be desired-would you put on your thinking caps and see if there is some easy process of tracking guarantees so that the element of surprise is minimized?

June 22, 1977
Indian Economic Development Fund
The content of the letter is self-explanatory. Yet this government attempts to deceive the Canadian people, and in this instance the Indian community, that it embraces all that is virtuous in accountability and fiscal responsibility. Let me simply state that after six years of competent administration of a multimillion dollar program, when the director of economic development is limited to the recommendation of "putting on your thinking cap," then quite frankly 1 think it is time to recommend another type of cap.
Again let me quote in part from a letter dated September 14, 1976, from the assistant deputy minister for Indian and Eskimo affairs to the acting director general of the Alberta region:
It appears that many of the comprehensive undertakings that have been established have created a continuing demand on our cash resources to a point where we may find it difficult to react to new, legitimate and sensible needs of our clients. I have reviewed brief data sheets based upon information provided by your staff and headquarters officials covering some 40 major projects and I must confess that I do not view the future of some of these enterprises with any degree of optimism. Further, I am somewhat dismayed by the apparent initiation of projects which must surely and obviously have inherent in them the requirement for considerable future funding and yet in many cases these projects appear to have enjoyed a somewhat casual start. I suspect that some of our more prominent problem projects started off on too grandiose a scale.
Enclosed with that letter, Mr. Speaker, were a number of examples revealing, in part, the magnitude of the problem. For example, Arcom Systems Manufacturing Limited, total funding $2,630,663, bankrupt and defunct. Arcom Timber Limited, total funding $1,720,000, bankrupt and defunct; Alberta Aspen Board Limited, total funding $9,150,000, with the added note, and I quote: "Flake board plant now shut down due to lack of funds. The future of the plant depends upon receipt of further funds in the form of additional capital involvement. No further funding input from the I.E.D.F." Mis-Tass-Iniy Forest Enterprises Limited, total funding $1,985,858, with the added note: "The plant was destroyed by fire. Some reconstruction commenced. No further funds recommended". Peigan Development Company Limited, total funding $629,565, with a recommendation for no further funding until there is a rationalization of the program. Sawyer Boats with a total funding, as 1 understand it, of $295,000, with the added note: "The project may well be a candidate for bankruptcy".
This list is by no means complete, and I am certain my colleagues who will be speaking this afternoon will be discussing in greater detail not only other financial disasters but other financial difficulties which have been experienced in the operation of this Indian economic development program from its inception. However, it must be obvious from the examples that 1 have given that a crisis does exist and that financial responsibility in the department has not existed and does not exist at this time.
What is even more tragic about this situation, Mr. Speaker, is that the perception has been created that the Indians involved in the ventures have failed. Let me simply say that nothing could be further from the truth. Indeed the evidence indicates that the failure of the program is clearly the respon-
[Mr. Holmes.J
sibility of the minister and the Department of Indian Affairs and Northern Development. I need only refer the House to the report published by Woods, Gordon and Company and to their summary of recommendations which I read into the record at the outset of my comments.
I am tempted to carry on, Mr. Speaker, with the area of fiscal irresponsibility of the government in this regard, but 1 wish briefly to comment on the other important issues which I referred to at the outset of my remarks. As I indicated previously, the absence of government policy and the failure of the Government of Canada to adhere to the original mandate to fund viable small businesses up to a maximum of $50,000 has been a major factor resulting in the failure of the economic development program.
I have been exposed to bureaucratic rhetoric and their efforts to conceal the facts as to the magnitude of the problems. I can recall the former minister of Indian affairs and northern development, who is with us this afternoon, reporting in glowing terms about the success of the program two years ago. I also recall departmental officials, during examination of the estimates this year, valiantly if not convincingly implying to standing committee members that the problems were a recent revelation to the department and that corrective measures were being taken to establish viable alternatives and policies.
The facts do not support these observations. In the first instance, the problems have been apparent since the inception of the program. In the economic development operations study by the Management Consulting Services they stated on page 92:
Problems with the fund were realized from the start and indicated to management through several sources. One major problem, the conflict between creating viable business operations as opposed to creating employment opportunities, was never resolved.
Again in regard to policies I would like to quote in part from the Woods, Gordon report on page 32:
It is clear that the original mandate has evolved in practice although we could find no evidence that formal recognition had ever been given to such evolution. Thus we conclude that the present mandate is not defined. In fact one gets a different interpretation of the mandate depending upon who is giving it.
The report goes on to say:
This situation occurs with such frequency that one is forced to conclude that the staff of the fund is responding to a revised mandate in raising and approving projects, but is trying to clothe them in the trappings of profitability, viability and commercial success; the elements of the original mandate.
We can find no evidence to indicate that there has been administrative response to the changed mandate by means of revised policies, procedures or guidelines, or through deployment of resources.
Again the report went on to say on page 91:
It would be an overstatement to say that there is explicit policy, defined procedures and prescribed guidelines related to the fund.
Despite the platitudes of the government, Mr. Speaker, let me assure you that there is no evidence to suggest that the problems are resolved or that appropriate policies have been established by the government.
A major issue in the administration of the economic development fund is the knowledge that decisions were made for
June 22, 1977

political purposes. I want to quote part of a document from a regional office which clearly illustrates the problem. The program and the name are not important at this time, but the facts contained in the overview of the project are relevant to this particular issue. The lengthy document was prepared and reviewed by the regional staff and contained, in part, the following information:
Furthermore, the money obtained from this "under the counter" dealing was used as payments on ... new truck and new $45,000 house. As near as we can determine, in the absence of records or financial statements, $10,000 was spent on the house and $7,000 on the truck, furnishings, etc. Due to lack of investigation on behalf of district staff, this information only came to the regional office staff after we conducted our own investigation.
Later in the document it was stated:
In view of the above, the writer is at a loss to determine how the district arrived at the above proposal or what it was intended to accomplish. We have now reached the point where we are throwing good money after bad and we will get neither back.
The Woods, Gordon report made several references to this critical problem. 1 should like to quote from page 36 of the report under the heading "Political Relationship", which reads as follows:
A fairly significant number of accounts were reviewed with borrowers who held key positions, at or prior to the time of account development, such as Chief or Band Councillor.
In the next paragraph of the report under the heading "Individual Relationships", the following appears:
A reasonable number of new accounts reviewed included individuals who were, at the time of their application or prior to the application, employed by the department.
At page 63 the report continues:
This type of behaviour is demoralizing for your staff, has long term implications for the credibility of your field people, and is damaging to your entire organization.
The knowledge that decisions were made for political purposes in the handling of funds, which are desperately needed to correct existing social and economic problems in the Indian community, is the most damaging and at the same time most despicable testimony in the chain of events. There is an important difference between incompetence and immorality. Incompetence is unacceptable and yet, not unlike a benign tumor, can be cured if there is the will and determination to do so. Immorality is also unacceptable but differs in that it spreads like a cancerous growth until it has engulfed and destroyed the affected organ. That is the present state of the government.


Some hon. Members:: Hear, hear!


John Robert Holmes: Finally I wish to make a few general comments with respect to the work of the standing committee, which is particularly relevant at the present time since the Royal Commission on Financial Management and Accountability is studying this particular problem in addition to other areas defined in their mandate. The Standing Committee on Indian Affairs and Northern Development, unlike other committees, has for the greater part of its existence been composed
Indian Economic Development Fund of members from all parties who have been genuinely concerned about the Indian people in Canada. This common bondage has eliminated to a great extent partisan politics.
Unfortunately our collective concerns and predictable actions in the standing committee have been exploited by the minister and senior officials. Our preoccupation with the innumerable social, cultural and economic problems facing the Indian community combined with the presentation of departmental estimates in a form that to a great extent is meaningless, set the stage where members irrespective of party were psychologically prepared to accept answers they had hoped to hear, which inevitably led to the dissemination of unrealistic information.
The department has developed a remarkable capacity to undermine the work of the committee in their unanimity of purpose to assist the Indian community in Canada. The examination of the IEDF and the testimony received this year, and in the past, confirm a growing body of opinion that parliament is less relevant than in previous years. Perhaps it is a slight exaggeration to indicate that senior department officials view members of parliament with contempt. However, I do not believe it is an exaggeration to suggest they view members as pawns to be played with on an annual basis. Their game plan is obvious-self-preservation. Its execution is carried out with precision-like finesse.
On those rare occasions when a ministry perceives they are threatened, a steel curtain descends around the department which becomes the exclusive preserve of the elite. I find it remarkably strange such tactics are viewed with tolerance and an aura of respectability. There are no winners in such gamesmanship; however there is a threat to our institutions and the freedom of all Canadian citizens. It is perfectly clear, intentionally or otherwise, that the standing committee has been repeatedly misinformed about the economic development program, which in principle is supported by all members.
During the examination of the estimates in 1975 the former minister of Indian affairs and northern development gave glowing reports about the program, and yet I have placed before the House today evidence indicating there were serious problems from the outset. The answers I received to questions related to the PE-KUN-NEE Garments Ltd. from departmental officials, and the information I have from a documented regional overview of the project, confirm my skepticism as to the information supplied by the government.
The list is endless, but one final example may assist the House in understanding the seriousness of the situation. On Thursday, March 24, as reported in issue 28-A at page 26, I asked a question with respect to the failure of the IEDF. This was early in the proceedings before the majority of the testimony was received. The question I asked was:
Are you finding any common denominator or denominators other than departmental inefficiency?
The assistant deputy minister for Indian and Eskimo Affairs responded by saying:
Management by projects sponsored by either the Indian people who are engaged in the project or in some cases where it has been a joint venture with
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June 22, 1977
Indian Economic Development Fund
non-Indian people including a number of projects that have been in manufacturing, wood products, the whole range of them in which the people who were managing them simply did not have the experience.
That, Sir, was a spurious attempt to deflect the blame from the real villain, the minister and the Department of Indian Affairs and Northern Development. Although the assistant deputy minister attempted to blame joint-venture projects involving non-Indians, it should be pointed out the Woods, Gordon study blamed the department for getting involved in the grandiose projects which always involved non-Indian personnel.
In conclusion, let me simply state the Government of Canada has not provided economic leadership to Canada's Indians, and it has failed to develop a cohesive and articulate policy on the IEDF. As I tried to stress earlier, it is the Indian community which has suffered because of the interference by the government in administering this fund. I should like to recommend that the Auditor General do an in-depth study and review of this particular program. In addition, it would be available for the Royal Commission on Financial Management and Accountability to assess this particular program and can make recommendations so that the committee system can be far more effective in the future.


Some hon. Members:: Hear, hear!


Hon. Judd Buchanan (Minister of Public Works):: Mr. Speaker, the essence of the motion placed before the House consists of two charges: one, that the government has failed to provide the Indian community with economic development leadership, and second, that we have failed to enunciate a cohesive and articulate policy on the Indian Economic Development Fund. I reject both charges, and I think the evidence will establish that if there is any criticism to be made in this area, it is not on those points.
Let me review the recent history of Indian economic development. I think it will be recognized that a landmark was the establishment of the Indian Economic Development Fund eight years ago. It formed a financial base for a major departmental mandate to assist Indian people in creating employment and income-producing opportunities. An important feature from the outset was that Indian people be involved in the design and delivery of economic programs. A source of capital was provided to Indian businessmen and businesses, which were helped and encouraged through the provision of access to basic management skills and technical expertise.
After a period of initial hesitation there was a quickening of interest during the early 1970's on the part of the Indian people, and substantial commitments began to be made. This process has continued with a growing recognition by Indian people of the major role that economic development can play in meeting the serious problems which exist on the reserves.
The currently approved ceilings are $70 million for direct loans and $30 million for guaranteed loans. In addition, the main estimates for the current fiscal year have authorized approximately $15 million in grants and contributions. The establishment of this fund, its operation, the review which was

undertaken after six years, and equally important, the broader socio-economic study now being done in co-operation with the National Indian Brotherhood, clearly represent government leadership in this field.
In the first six years of operation of the fund, we have estimated that employment arising from fund support represented approximately 8,400 man-years. The financing has gone into enterprises in agriculture, forestry, fishing, and trapping, construction, real estate, manufacturing, transportation, and wholesale and retail trades. The employment content has been concentrated in forestry, agriculture and manufacturing, followed by transportation-communication and wholesale-retail.
Indian people in every region have benefited. Let me mention a few outstanding examples. In British Columbia's Okanagan Valley the Osoyoos Indian Band operates one of the most successful vineyards in Canada. The total grape crop goes to the Andres Wine Company of Lytton, B.C.
In Saskatchewan a $29 million program managed by a board of directors composed of Indian, government and business representatives, aims to raise average gross earnings of Indian farmers as well as train 500 Indian persons for jobs in the agricultural industry. Similar programs are under way in Alberta and Manitoba.
In Quebec the fish processing plant of P.M. Packers of Mingan created 92 new jobs, 80 per cent of them held by Indian people. The plant is processing millions of pounds of raw fish annually.
In northwestern Ontario the people of the Whitefish River Band leased 360 acres of their land to Canada Cement Lafarge for erection of a cement storage and distribution plant at a substantial rental income for the well-being of the band.
Those are some of the noteworthy examples. But as I have already stated, and as the hon. member for Lambton-Kent (Mr. Holmes) indicated, our examination of the record shows soft spots.
It is important to realize that what was embarked upon eight years ago was very much a new venture. There was little data available and equally little experience in this field. Assessments differed as to the potential for successful ventures being launched. It is fine to look back now with hindsight and with the cold analytical eye of an accountant at the report used by the hon. member, and I heartily concur in these reports being done. In fact, as the hon. member indicated, this review was initiated during the period when I was minister of this department because I had some concern about these projects. I had some concern about their viability. This is particularly true of the larger projects.
1 think that, by and large, the smaller projects support the thesis of our friend Schumacher-this is not Stanley-that "Small is Beautiful". Part of the problem we got into is that too many of the programs, as the hon. member indicated, were
June 22, 1977

of too grandiose a nature and beyond the initial capacity or ability of the Indian people involved to handle.
It is easy to express criticism and be wise after the event. It is more difficult to develop constructive and workable solutions. We still face a grim reality of Indian unemployment. Almost half the Indian labour force is currently unemployed.
It is estimated that 45,000 jobs need to be created to bring Indian unemployment down to the national average. Social assistance, which now totals close to $100 million a year, has increased by about 30 per cent a year in the past five years. Subsidized housing, health care and penal costs constitute significant additions.
The alternative to a perpetuation of this situation is to make very sure that whatever employment or earning opportunities can be made available to Indian people are made available on a long-term basis and are in keeping with their life-styles and their pace. This takes time and it takes money. The alternatives of long-term maintenance and continual development of the welfare syndrome are simply unacceptable.
Given these concerns, it has not been enough for us simply to assess the effectiveness of our current programming.
Indian thought and Indian assessment are imperative. This means resources for band level planning immediately. It means more organizations, like the national Indian arts and crafts corporation, that can develop strategies and act on behalf of Indians. And, of course, it places greater importance on the long-term studies towards a socio-economic strategy by the National Indian Brotherhood in which the department is co-operating fully.
We are reviewing our current economic development portfolio to re-capitalize and restructure worth-while projects and eliminate projects that are no longer operating, or would cost too much to continue to support.


Mr. Yewchuk:: That will be 75 per cent of them.


J. Judd Buchanan: No, that is too high a number. As I said a moment ago, the indication has been that the thrust should be far more toward the smaller projects where one can learn to develop management skills and expertise and to grow, and this is the direction in which we are now moving.
Let me summarize briefly what is proposed in order to stabilize the financial demands upon the Indian Economic Development Fund.
We have proposed that a sum of $31.7 million be devoted over the next three years to liquidate unsuccessful projects and to restructure projects that are improperly capitalized, by writing off loans and providing further support to those projects which will continue in operation.
We anticipate the need to ask parliament for additional funds in supplementary estimates for the current fiscal year to reduce or delete some of the direct loans outstanding and furnish additional funds for continuing economic development. This would be part of the three-year stabilization action.
Indian Economic Development Fund We are making immediate adjustments to our current program structures to provide for developmental support to projects; to allow the support of differential costs, such as transportation and scale; and to support the development of Indian-operated economic service organizations.
As well, development is going on of improved programs in other areas to support Indian socio-economic development. These include increased emphasis on housing and community services support; increased resources for planning and technical support; improved short-term job creation and employment services programs.
A program review will be undertaken in response to the final report of the socio-economic task force to define a two year program of redevelopment and adjustment to implement agreed aspects of the policy.
Our over-all object will be to make increased resources available for economic development and to increase still further Indian participation in their management and distribution. We know that we will not eliminate all problem projects. We have made mistakes in the past and we will continue to make mistakes in the future. This is inevitable.


Paul Yewchuk: We should throw you out.


J. Judd Buchanan: That would be a bad mistake. We would probably not have enough money to meet all economic development needs-


Paul Yewchuk: We can't afford to keep you.


J. Judd Buchanan: -but these adjustments will allow us to be more efficient, more relevant, and to continue our efforts with the fundamentals of Indian and economic needs.


Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I want to state at the outset what is very obvious, and that is that economic development is inseparable from social development and cultural traits. The native people of the north and native people generally throughout Canada have survived for many centuries in spite of harsh living conditions which have prevailed. In more recent times native peoples have been offered some opportunities and facilities for strengthening their capacity to survive, but survival must be more than mere subsistence supplemented by government subsidy. It must, above all, permit the people to make their own choices as to the place they wish to occupy and the part they wish to play in the evolving society of Canada.
Natives must be given every opportunity to become an equal and participating part of this socio-economic evolution, and we want to make it very clear that we want jobs and opportunities for jobs, not welfare. We do not want welfare in any form. We are determined that we shall have real choices while retaining our distinctive identity and taking pride in our cultural heritage. Some native people welcome opportunities to adopt what may be termed the new ways, while others wish to follow traditional pursuits. Thus, the challenge is to diversify the
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June 22, 1977
Indian Economic Development Fund
approach to socio-economic development to accommodate all. This is not an easy task, but it is not impossible.
In the Northwest Territories, the part of the country I represent, there have been many very big changes in the lifestyle and the economic situation of the native population. The changes have been drastic. They have taken place over a very short period of time, and there have been casualties along the way. I expect there will be casualties in the future as we try to develop a good economic base on which to make a living.
When I think of the big changes which have taken place I think of my grandfather, Dinji Cho, a name which can be translated to "The Big Man". He was born and raised in the bow-and-arrow age. I do not think he met a white man until he was a grown boy. Today his children and his grandchildren are watching coloured television brought to them by satellite. That is a very big change in a very short period of time. When we try to change a culture and bring in different values, there are bound to be casualties, and I am sorry to say that there have been some.
In 1972 in a statement before the Standing Committee on Indian Affairs and Northern Development the then minister, the present Minister of Industry, Trade and Commerce (Mr. Chretien) said, and I quote:
The fur traders, whalers, miners and fishermen who invaded northern regions in the 19th and early 20th century exploited and sometimes exhausted resources for the benefit of distant, non-resident interests. They often showed little or no thought for the well-being or even the survival of the people already there and no concern for what happened to the environment. All they were interested in was getting in, getting rich and getting out.
And usually getting out very fast. That attitude on the part of big companies has not changed.
I cannot help but wonder if anything has really changed regarding that attitude of, for example, oil companies. When I hear the oil companies promising us northerners that a pipeline will solve all our problems, is it any wonder that I doubt that anything has changed? While I do not argue that a pipeline somewhere in the north may be necessary at some time, can anyone seriously suggest that this will help form a stable economic base in Canada's north? To me it is simply a perfect example of the boom-bust syndrome, and boom-bust is not the way to establish a solid economic base.
A couple of months ago I spoke in the budget debate. At that time I wondered if the government was seriously dedicated to socio-economic development. As I said at that time, all the Minister of Finance (Mr. Macdonald) seems to have done is to have fallen into the old trap of giving concessions to the big business community in the hope that it will come through with magical jobs and investment. We have tried that before, and it just does not work well. The Minister of Finance did not seem to understand the unique problems of the north or of natives and other unique groups and regions. If the problems are not recognized in the first place, how, then, can we solve them?
Everyone recognizes that there are basic human needs, included among which is decent housing. Yet many natives are denied that basic human right. They do not have enough

houses, and those who do in most cases have houses which are poorly built and crowded. In 1975 only 51.4 per cent of on-reserve Indian housing was considered to be in satisfactory condition. Of the general population 90 per cent of Canadians' houses were in good condition. On the other hand, while almost 21 per cent of housing for Indians was so bad that it needed to be replaced, only 8 per cent of the general population lived in houses which were in extremely poor condition.
I have said many times and in many different places-and I will continue to do so and press for this until I see some results-that there should be a log housing program for the Northwest Territories.


Mr. Smith (Churchill):: Hear, hear!


Walter (Wally) Firth: I am glad to hear some support coming from that corner over there. Such a program could be started in the western Arctic. Such a program would be very important to the people of the Mackenzie Valley at this time. It would be important to many other areas of Canada as well, I am sure. This program could be truly a joint socio-economic solution to a severe problem. People would end up with good houses which would last a long time. Local labour could be used for this construction rather than having southern manufacturing firms send up pre-fabricated homes which would not stand up to the harsh environment up there. Furthermore, an indigenous renewable natural resource could be used.
To further economic development in the north a program should be initiated whereby people who live in the north could return to the business of harvesting natural renewable resources. A good trapper's assistance program would cost a lot of money, but it would also save a lot of people from the social ills that many in the north suffer.
Many in the north are trying to live in what may be termed the new style. Some become caught in a pay cheque to pay cheque existence, and sometimes it is a no pay cheque to no pay cheque existence for a long time. A self-employed trapper might not see a pay cheque for a few years, but he would be willing to make a living at trapping if he had good equipment, good transportation-whether it be by motorized toboggan or by dogteam-good water transportation equipment and good camping equipment to go out on to the land. If he had all these things, he would be able to take a lot of food supplies from the land by means of harvesting caribou, moose, fish and so on.
After a brief visit to the north one of the ministers across the way mentioned just a few days ago that he found the cost of living up there to be very high. We have to look at northern problems in northern terms and find northern solutions for them. To achieve this, control over economic development must be given to northern people.
My colleagues and I have also spoken out on the AIB, claiming that it does not work. This fact can be no more clearly illustrated than in the north. While the AIB's own figures confirm that nowhere in Canada is it more expensive to
June 22, 1977

live than it is in the north, no special notice is taken of that fact.
In 1971 it was reported that the average family income for Indian people was $4,418, while the figure was $10,368 for the general population. In 1965, it was estimated that over 80 per cent of the native population of Canada was living in poverty, and the trend seems not to have changed appreciably over the past ten years or so.
Perhaps I should correct myself in the use of the word "poverty". I think that what we are talking about here, Mr. Speaker, is closer to what the German economist/philosopher E. F. Schumacher called "misery". He said:
Misery is not the same as poverty. Poverty prevails when people have enough to keep body and soul together but little to spare, whereas in misery they cannot keep body and soul together and even the soul suffers deprivation. Poverty may have been the general rule in the past, but misery appears to have become widespread only in modern times.
He went on to say:
Poor peasants and artisans have existed from time immemorial; but miserable and destitute villagers in their thousands and urban pavement dwellers in their hundreds of thousands-not in wartime or as an aftermath of war, but in the midst of peace and as a seemingly permanent feature-that is a monstrous and scandalous thing which is altogether abnormal in the history of mankind.
I think, Mr. Speaker, that you need only look at the statistics for natives with regard to disease, alcoholism, high unemployment, suicide, and mortality rates, to determine where we fit in Mr. Schumacher's description. We may have been poor before, but now we are truly miserable.
So what is to be done? I mentioned earlier that I should like to see a good housing program in my part of the country. The government's own figures indicate that we need at least 500 more units. Once before in this House I described the housing situation in the north as a disaster. I think, Mr. Speaker, that the best step is to give our native people more control over their lives. While not ignoring the good intentions which brought them about, the fact remains that such legislation as the Indian Act is cold, negative and paternalistic. In short, it is stifling. Millions of dollars are spent in various forms of welfare payments but the situation does not seem to really improve. Yet, if a native organization or other body asks for a little money to try to create a different approach that fits the given conditions of a development area, they are accused of wanting to return to the Middle Ages. Here I would refer to the program I mentioned earlier, a trappers' assistance program for people in the north who want to return to living on the land.
We native people are showing new vigour in our desire to grasp opportunities to better our living conditions. The best base for this would seem to be relatively independent groups at the community level pursuing projects that they believe to be the answer, or even the partial answer, to some of their economic problems. These groups are better able to identify problems, and establish projects and priorities which are most urgent at that level.
The brutal truth of the matter appears to be that any supposition that the government agencies can achieve a conceptually coherent and operationally viable program of inte-
Indian Economic Development Fund grated long-term regional socio-economic development is almost impossible. Past performance will bear this out. The culprit is, quite simply, the whole operational system.
It takes a lot of talent to find an argument that will convince the bureaucrats that a program can be viable. You have to tackle an army of bureaucrats and cut a lot of red tape. In my part of the country it seems we have to cut the red tape lengthwise. That is harder than the traditional way.
Development is acquired by money, diverse work, intelligent long-term sub-regional planning based on confidence, by determination and, above all, by the spirit of a group that knows it has something to contribute and to gain; and is being given a clear, unconstrained open and shut opportunity to prove that.
I know I am repeating myself when I say that a trappers assistance program and a housing program for the north could work well. I must sound like a broken record, but I have to keep saying this although my words seem to fall on deaf ears.
In conclusion, Mr. Speaker, I would encourage the government not to think in conventional, paternalistic terms in its attempts to overcome the socio-economic problems faced by the native people. There is a natural inclination to hesitate and worry about taking the wrong course of action. However, some re-thinking is necessary. We must move boldly ahead. As Sir Wilfred Grenfell said:
It is courage the world needs, not infallibility.. .courage is always the surest wisdom.


Some hon. Members:: Hear, hear!


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I welcome the opportunity to participate in the debate on the motion condemning the government's policy with respect to the Indian Economic Development Fund.
First of all I think 1 should put on the record what that program is. In the publication "Indian Economic Development Fund" issued by the department in 1971, it is stated on page 3:
The Fund, designed to assist Canadian Indians in developing and expanding viable business opportunities will provide job opportunities for Indian people, on and off reserves.
One of the main objectives of the Fund is to ensure that Indian businessmen have access to basic Financing and the managerial, professional and technical services necessary for the successful operation of their businesses.
The Department sees the Fund as an effective link between Indian businessmen and sections of the Canadian business community whose support is required to help Indian people achieve the greatest benefits through economic development. It is a program which can be mutually beneficial to Indian and non-Indian businessmen.
The purpose of the program, based on a 1969 government white paper, was to fund viable small businesses to a maximum of $50,000. It was also to be used as a lever for funds from other agencies such as DREE, manpower and so on.
I came to Ottawa in 1972 and have been a member of the Standing Committee on Indian Affairs and Northern Development since then. Each year as the committee dealt with the main estimates of the department we discussed and considered the Indian Economic Development Fund. Each year we read

June 22, 1977
Indian Economic Development Fund
the annual report and listened to presentations made by the minister and various officials. They talked in glowing terms of this program.
The then minister of Indian affairs and northern development, now the Minister of Public Works (Mr. Buchanan), appeared before the committee when it considered the estimates in 1975-76. As recorded on page 11, issue No. 18 of the committee's proceedings of March 13, 1975, he said:
Another area, an area which I regard as highly significant, is the area of economic development...
Here again the results are obvious, whether one looks at the indigenous Crane Cove Oyster operations in Nova Scotia or the suburb developments on the Sechelt Reserve in British Columbia. All across the country one finds budding Indian and Inuit enterprise, such as: a ski resort at Thunder Bay, Inuit hunting and fishing camps in northern Quebec, a furniture factory at Samson, a motel at Sawridge, a cattle ranch at Beardy's, a bee-keeping operation at Roseau River, and a shopping centre at The Pas.
The hon. member for Churchill (Mr. Smith) will have something to say later about the shopping centre at The Pas.
The minister went on to say:
They are eloquent testimony that Indian businessmen, given the opportunity of advice and resources, can thrive in this country.
Today the minister spoke about plans and history, still in glowing terms. Of course he is no longer the minister responsible. But he spoke of job opportunities. Mr. Speaker, if one examines the figures and charts given to us in the committee when we considered the miscellaneous estimates earlier this year, one will note that there are at present some 2,577 projects outstanding but that the number of native peoples employed on these projects totals only 4,722. In other words there are fewer than two jobs per project.


Cecil Morris Smith: Disgraceful!


Douglas Charles Neil: It came as a real surprise to me earlier this year to learn, after members of the official opposition had done some prodding in committee, that the Indian Economic Development Fund was in a terrible, in fact in an absolutely shocking state. I can say in fairness that the officials who appeared before us were relatively frank about the over-all financial condition of the fund, but it was difficult to dig out certain details concerning the fund and details concerning projects.
If one consults the minutes of the committee meeting of March 24, 1977, one learns that since the introduction of the fund in 1970 some $140 million was advanced. At the time of the hearing $105 million was outstanding. That was made up of grants and contributions of $19.9 million, direct loans of $57 million, and guarantees of $28.3 million. In addition to this funding of $105 million, there has been other funding of various projects, by DREE, provincial industrial development agencies, the Department of Manpower, and so on. In the committee meetings I asked some questions about the extra financing figures and was told those figures were unavailable. Why they are not available I do not know. After all, the department supposedly is administering these various projects and loans.
Mr. Knox, the director of the program was asked questions about the additional financing. After I had asked him such a question about additional financing he said, as recorded at page 10 of the committee report, "The statistics on this are not very good as you can see." That was the beginning of the revelation at the committee hearings. Let me refer to issue 28-A of the minutes of the Standing Committee on Indian Affairs and Northern Development. It is the record of the meeting of March 24, 1977. As one will see if one examines pages 21 and 22 of the report, I asked questions. I suggested that although the balance outstanding on that date was $105 million, in order to salvage the program or the $105 million the Government of Canada or the taxpayers of this country will need to put in between $40 million and $50 million by way of grants and contributions. I raised this point as recorded at page 21. On page 22 Mr. Mackie, the assistant deputy minister, replied as follows:
If I may, Mr. Chairman, the grants and contributions portion of it, of course, is going, for the most part, to viable ongoing projects. In other words, it is a continuing and additional investment in something that is going to continue to earn and be a viable project.
I then went on to say:
I appreciate that. I mean, you are not throwing it into something which is bankrupt. But what I am trying to determine is how much money has been thrown in to try and salvage. You look here and there is $105,274,000 outstanding, and you are putting in $40,000,000 to protect that.
Mr. Ford replied as follows:
Yes, that is the cost of the stabilization process, as we have called it. The total cost would be in the area of forty to fifty million dollars.
That extra amount represents almost 50 per cent of the amount outstanding. I then said I was just trying to assess the program. I said:
... it seems to me that it is going to cost an awful lot of money to salvage what we have. Would it be a fair assessment to say that the program really has not worked out too well over the years?
Mr. Kroeger, the deputy minister, replied:
The program has certainly had its problems. What you have had tonight is an outline of the first truly comprehensive review that has been undertaken of the program's operations since the department got into the Indian economic development business in a substantial way in the early 1970's.
I point out that although the program started in the early 1970's, a comprehensive review of the fund was undertaken only after several years of operation. Mr. Kroeger went on to
say:
There have certainly been problems. It is a difficult environment to operate in. We ourselves as a department, have had to go through a learning process.
The deputy minister's response was the understatement of the year.
The government had set up a good program in 1970, a program which would help the Indian people to begin viable business enterprises. As a result of ineptitude, lack of training and experience, red tape, lack of supervision, which the hon. member for Lambton-Kent (Mr. Holmes) mentioned, and lack of follow-up, the program is a disaster. Unfortunately the failure of this program has placed many Indian people and Indian Bands in a bad light with their non-native neighbours.

June 22, 1977

I will admit, as the former minister has said, that a number of the programs have been successful. There is no question about that. Elowever, these are mostly smaller programs, programs which fell within the guidelines initially of being a maximum of $50,000. The major losses are on projects above that maximum.
Just as a matter of interest, some 40 to 50 of the projects included in the $105 million are over $500,000. When I say $500,000, that is the extent of the money that this fund has put into these projects. At the meeting of April 26 I asked the following question:
How many of the 40 to 50 projects over $500,000 looked at by the task force recommended by Knox-Nixon were found to be in financial difficulty?
That is all the projects over $500,000. The response was:
All 40 projects of $500,000 looked at by the task force were found to be in financial difficulty to varying degrees.
In other words all the programs where advances had been made of over $500,000 are, to some degree, in financial difficulty.
I wish to make reference to one project, one of a number on which we have been able to get some information. Other speakers will refer to some of the other projects. 1 wish to refer to the project known as Sawyer Boat Manufacturing Limited of Gleichen, Alberta. The project was set up to manufacture fiberglass boats. The project was not over the $500,000, but it would have been if the recommendations of the business service manager of economic development, Alberta region, had been followed. The project closed down in October, 1976. I believe it went into bankruptcy.
I have some figures. In fact I have three different sets, all of them government figures. It appears at the time the company closed down in October it had received, by direct loan, some $145,000, and contributions of $46,000, for a total of $191,000 from the fund. In addition it had received $12,757 from the Canada-Alberta Industrial Training Program.
I have some figures which are not in agreement with those I have quoted. Presumably they are all official figures. One set of figures I have totals $245,000 and another about $220,000. Which is correct? They are all official figures. Some are confidential, but if we look at the confidential figures the total is $295,000. That was not the figure given to me in response to a question I put in committee. Anyway, it is well over $200,000.
Just prior to its shutting down, there was a recommendation put forth by the business service manager, economic development, Alberta region, recommending additional advances of $400,000 yet at that point in time, according to the information I have regarding the application, the program was in trouble. It was in trouble for various reasons; insufficient capital, poor management, poor bookkeeping systems, and failure to keep records. This is interesting because on the first page of the application it quotes:
This project was initiated about one year ago, and finally got underway toward the end of the year. This was somewhat later than had been planned.
Indian Economic Development Fund
This delay, which can be attributed to our own bureaucracy, had a costly effect on the first year of the enterprise.
I see that I am running out of time very quickly. In questioning in the committee it became apparent that the people from the department who were involved in the loan process really had no knowledge or skill with regard to loaning. They failed to carry out the protections given under the regulations that were promulgated in 1972. If they had followed those regulations there would not be the problems there are today.
The ADM said, and I quoted him a few moments ago, that during that period they were in a learning process. If you are setting up a loan agency you do not have your staff enter into a learning period of six to seven years. That is what has happened under this program.
The program has not been properly supervised. Politics have been involved. There has been carelessness and a lack of direction. The loans and loan applications have been mixed up with red tape. We see the result today. The result is that the taxpayer of Canada is going to have to put up between $40 million and $50 million to salvage an operation of $105 million.


Mr. B. Keith Penner (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, as has been indicated during the course of this debate, the Department of Indian Affairs and Northern Development has been in the economic development business for a very short period of time, about seven years. We knew when we began this program that there would be some risk and perhaps dangers. We were prepared to take them because we thought that the program was an important and necessary one for Indian people.
We admit that there have been some mistakes. We are not entirely satisfied with the way in which the program has been going and what it has accomplished. At the same time, there have been some success stories which we think ought to be on the record.
Last year the Indian Economic Development Fund and the Indian businesses supported by the fund received a comprehensive performance review to lay the groundwork for more effective Indian economic development. Since its inception in 1970, the Indian Economic Development Fund has encountered a number of serious problems stemming largely from a small business support fund attempting to meet a broad range of developmental objectives.
When the program first came into existence its mandate was directed mainly toward small business, but as it went on during the seven year period a number of larger projects were funded or given loan assistance. It is in this area that some problems developed. So now we are taking a very hard look not only at existing projects but at the economic development program itself. We are involving the Indian people in this review, a review which may result in recapitalization and restructuring of some worth-while projects and, in other cases,

June 22, 1977
Indian Economic Development Fund
the elimination of those which are no longer operating well or which simply cost too much to support.
During the past two years a number of key problem areas have been identified. Some of these have been mentioned in the course of debate, and others have not. Allow me to review these problem areas. Because of the nature of the projects involved the IEDF has been used to an increasing extent to support existing projects. Support for existing projects was often provided in isolation of other priorities. The limited contribution funds and greater flexibility of loan funds available have favoured the use of loans and, as a result, many projects were either too heavily debt-loaded or required significant development-type funding before being capable of normal operation. I might point out, of course, that developmental projects have involved extra risk, incurred heavy start-up costs, and sometimes relied on people who, unfortunately, were inexperienced in management.
[ am sure all members are aware that when you become involved in economic development in some of the underdeveloped and needy regions of this country there is certain to be some risk. A great deal has been made about problems encountered by the IEDF in the past seven years, but I should like to remind hon. members that, although these are serious, corrective measures are being undertaken to improve the program so that it can meet its basic objectives. I might say, though, that in contrast with some economic endeavours in other parts of the country, the few failures we have experienced pale by comparison.
It was not long ago that the CBC in its national news drew attention to some economic disasters in the province of Newfoundland. The population of Newfoundland is approximately 522,000, according to the 1971 census, and this is less than double the number of status Indians in Canada-they number about 280,000. The CBC reporter, having considered economic development in that province, spoke about the failure of a linerboard mill at Stephenville as a result of which as much as $200 million might be lost and the town's future placed in jeopardy. He spoke about the shutting down of another industrial monument, a gypsum plant, in Cornerbrook, and about the closing of a massive refinery at Come-By-Chance; the plant, he said, was in receivership and Newfoundland holds the second mortgage of $41 million. He spoke about the failure of a tannery and glove factory, of a chocolate factory, of a woollen mill, of a rubber factory, of a steel plant and so on.
I realize, of course, that reciting a list of these economic reverses in no way justifies weaknesses in the Indian Economic Development Fund program. But I submit that it does underline that in programs of this kind, where a government is concerned and wishes to support economic development in slow-growth regions such as those in which many of the Indian people live, more often than not there is a risk which has to be taken.
To paint the picture fairly, though, reference has to be made to some of the successes. In my view these successes are

outstanding and are well worth putting on record. First, though, I should like to refer to the improvement program which is now under way. During the course of the committee hearings it was emphasized, as hon. members have mentioned, that consultative studies have been undertaken to examine the whole range of Indian economic development programs and to suggest improvement and changes.
A comprehensive controls sytem will be introduced. There will be more closely defined planning and project assessment systems. There will be a longer development period applied to projects, with increased use of appropriate advisory and technical services. Emphasis will be given to the encouragement of small projects, and arrangements made for more complete counselling and monitoring as well as for the integration of projects into the developmental context of the Indian community. The hon. member for Northwest Territories (Mr. Firth) referred to this important need.
As mentioned, the mandate of the Fund was initially directed more to small business. However, in the course of time it became involved in larger projects which required a higher degree of management skill. This is where some of the difficulty became apparent. Let me point out, with respect to small businesses within the Indian community which have received government assistance, that a week and a half ago while visiting the regional office in Toronto and discussing the economic development program officials there told me that small businesses among the Indian people in Ontario have a success ratio which was in excess of the national average. Or, to express it in a negative way, the percentage of failures among small Indian businesses supported by government funds in Ontario was significantly less than for the nation as a whole.
1 think it is worth while indicating to the House what the objectives of the Indian Economic Development program are. They are as follows: to increase employment and income opportunities for Indian people; to involve Indian people in the design and delivery of economic programs; to provide a source of capital to Indian people for economic development, both on and off reserves; to ensure that Indian people engaged in business have access to basic managerial, professional and technical services; to assist Indian businessmen achieve an effective working relationship with the business community at large.
I said I would talk about some successes. In recent years the Department of Indian Affairs and Northern Development has provided leadership and guidance in developing a range of sectoral programs for Indian people working in specific sectors of the economy. Examples are as follows: British Columbia, Indian Fishermen's Assistance Program; Saskatchewan, Indian Agriculture Program; Manitoba, Indian Agriculture Program; Saskatchewan and Manitoba, Wild Fur Programs; James Bay, Wild Fur Program. So as not to take an excessive amount of time I shall refer to only two of these programs and inform hon. members as to what has been achieved. The Saskatchewan Agriculture Program increased the gross value or primary production of no less than 350 farms. It upgraded 135 farms and created 215 new farms. It improved the average
June 22, 1977

income of these Indian farmers from $3,500 to $15,600. It raised total Indian farm income from $1.25 million to $5 million. Up to 500 Indians were trained for secondary industry, and improved economic conditions increased their social uplift.
Now, Mr. Speaker, what was the cost of such a program which had these benefits? Total federal investment, apart from loans, was $51,428 per farm. Total federal investment, development costs were $36,425 per farm. Total farmer investment was $33,200 per farm. Federal development investment broken down on a per man-year basis was $28,032, and per job $12,142. If you compare that with other job creation programs and I think hon. members will find the comparison not only favourable but probably rather outstanding.
Another program of benefit to Manitoba is the wild fur program. Under this program there are increased returns through improved production and marketing by 3,000 trappers, 1,700 of whom are Indians. The program improved trapper income from $850 per season to $2,850 per season. It raised total trapper income from $1.3 million to $5 million. The investment involved: federal investment per trapper was $820; provincial investment per trapper was the same; and trapper investment was $1,367.
While still on the subject of successes may I take a moment to talk about the Indian arts and crafts industry. In 1969 the Canadian Indian was faced with many difficulties in becoming economically viable. Some of the major areas of concern at that time were the following: firstly, as a result of their remoteness from major markets, poor prices, shortages of raw materials and the lack of working capital, many Indian craftsmen experienced difficulties in marketing their crafts, and many other Indian people who would produce did not do so. Secondly, problems exist with respect to consistency of quality control, product design and style, raw material usage and various forms of production methods. Thirdly, the arts and crafts industry, on a national scale, has just been organized. However, further organizational development was required to provide a broader based marketing and management information system. Lastly, despite their interest and pride in crafts, craftsmen and artists did not receive enough in return for their work.
In 1970 the Indian arts and crafts program was formulated as a result of a departmental review of arts and crafts activities and it began to improve in a significant way. The development of Indian arts and crafts has responded positively to the department's approach of joint participation. Once again, the department did not simply develop a program and impose it upon the people; it came through consultation and many joint discussions. In the spirit of this approach, management of Indian arts and crafts has been progressively transferred to Indian ownership.
Success in the arts and crafts program has been largely the result of the enthusiastic commitment and innovative management of the National Indian Arts and Crafts Corporation and
Indian Economic Development Fund its ten member Indian arts and crafts organizations representing Indian artists and craftsmen across Canada in nine provinces and one territory. In a speech on April 26, 1977, the Minister of Indian Affairs and Northern Development (Mr. Allmand) announced that the Indian arts and crafts program will be imminently transferred to the management and operation of the National Indian Arts and Crafts Corporation.
During the course of my brief comments I have made reference to government consultation with Indian people. Hon. members should be advised that the Department of Indian Affairs and Northern Development has adopted a joint working relationship with Indian leaders, with Indian organizations, and with Indian people. This has the endorsement of cabinet and it is, at least, a beginning and a recognition of the need to involve Indian people in initiating policies and planning programs which will ultimately affect their lives. At the political level there has been since 1974 a joint National Indian Brotherhood-cabinet committee where Indian people and government can discuss and reach a consensus on problems and solutions.
With regard to today's debate on Indian economic development, the Department of Indian Affairs and Northern Development has a number of task forces working with the National Indian Brotherhood in connection with this program. As a result of these consultations, this joint endeavour, there will be some improvements and changes made. In the economic development program there will be better control mechanisms developed, administrative procedures will be improved, and there will be some accepted guidelines established to minimize, though certainly not eliminate, the possibility of failure. I say that because some mistakes will continue to be made in the future. Therefore we know by being courageous enough to carry on with a program like this, by being willing to take the necessary risks we will be opening the door to the kind of excessive criticism of our program which we have heard during the course of today's debate.
There will be other projects which will fail in the future, no doubt, but we will not be deterred from working with the Indian people to create jobs and to help them achieve an economic base which can sustain them at a reasonable standard of living according to the accepted value system in this country.


Cecil Morris Smith: Mr. Speaker, as the member of parliament for the Churchill constituency representing a large Indian population in northern Manitoba you have heard me speak many times of the plight of the Indian people. Being a neighbour to these people for many years, I have witnessed first hand the many hardships that they face.
The 30 Indian bands in the Churchill riding are characteristic of the national Indian scene. Despite great efforts on the part of Indian leaders over the last decade, 1976 Canadian statistics report that the unemployment rate of Indians is 50 per cent to 60 per cent, the welfare rate is over 50 per cent, average income per family is $1,500, and the infant mortality rate is 2.6 times greater than for the general population. With statistics such as these we must question what the Canadian
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June 22, 1977
Indian Economic Development Fund
government-or the Trudeau government which espouses a just society-has done for Indian people.
The Indians have made many representations over the last few years for assistance in the area of economic development. 1 have heard them state many times that they want development that will lead to employment and self-sufficiency.
The hon. member for Lambton-Kent (Mr. Holmes) and the hon. member for Moose Jaw (Mr. Neil) raised the issue here today of the Indian economic development fund administered by the Department of Indian Affairs and Northern Development. This fund, established in 1970 with $50 million in capital to distribute over five years, was to assist in the economic improvement of Indians. It was to support small, viable businesses to a maximum of $50,000. Like my colleagues who spoke before me, I share their concern regarding the administration of the Indian Economic Development Fund.
I am deeply distressed about the serious deficiencies which appear to exist in this program.
During our standing committee meetings on the main estimates of Indian affairs, testimony from departmental officials and various studies we have reviewed revealed that there is a multitude of problems surrounding the IEDF program. I am concerned that a program designed to improve the economic situation of Indians has done little more than create situations which reflect badly on the Indian communities involved.
Since the Indian Economic Development Fund was established in 1970 the total investment has been $145 million. Of this amount, several million is being spent either bailing out or writing off a number of the projects. Though the official mandate of the IEDF was to fund small viable projects, we have learned that approximately $45 million is being spent on projects with amounts over $'/2 million, and another $24 million on projects involving amounts between $100,000 and $500,000. Some $69 million out of $145 million is being used for projects that in fact exceed the mandate of the Indian Economic Development Fund.
This in itself is disturbing, when a department responsible for the administration of such an important program administers millions of dollars without a clear policy. I wonder how many Indian people are aware of the collective negative results of this Economic Development Fund, which is ending up with millions of dollars being foolishly squandered.
My concern relates to the number of projects funded by IEDF which are in trouble. Several of these were identified in the Woods, Gordon study on the Indian Economic Development Fund completed in November, 1976. This study prepared for the government explains the difference in terms of success between the small projects as opposed to the larger projects. In dealing with individuals and small enterprises, the fund has had some measure of success. The large complex projects, with few exceptions, are in serious financial and operating difficulties.
At a standing committee meeting on April 26, 1977, Mr. Neil asked how many of the 40 to 50 projects over $!6 million
(Mr. Smith (Churchill).]
were found to be in trouble. The reply was that all 40 projects of over $'/2 million were in difficulty to varying degrees. Further to this it was indicated at this meeting that $50 million would be required to put all the various projects in good standing. This referred to write-offs and additional funding. Surely, this is a sign that financial management and control in this program are grossly inadequate. To the general public having some knowledge of these projects, they will no doubt attribute this trouble to poor Indian management. It is, therefore, necessary to enlighten the public by revealing the inadequacies of the program stemming from departmental deficiencies.
I feel that the Department of Indian Affairs and Northern Development must assume a large part of the responsibility for the deficiencies of the program, for it is the department which is operating the Indian Economic Development Fund without a well defined policy. It is the department which has failed to provide proper administrative advice and controls to the enterprises, and it is the department that has allowed the program to operate in this careless haphazard manner for seven years.
As an example of bureaucratic bungling in the case of the IEDF, let me discuss the multi-million dollar shopping complex which was built on The Pas reserve in Northern Manitoba. The shopping complex, known as The Otineka Mall, is owned and operated by The Pas Indian Band. This is one of the projects funded by the Indian Economic Development Fund which exceeded the $50,000 mandate by $8 million. The final cost of the shopping complex was $8.5 million. This complex is the result of a modest request from The Pas Indian Band to develop a small convenience store to serve The Pas Reserve residents and also highway traffic north of The Pas. This request was initially made to the Manitoba government in a letter from the Indian band dated September, 1970.
Today The Pas Indian band is saddled with a shopping complex which encompasses approximately 193,000 square feet of gross leaseable area and approximately 158,000 square feet of net rentable area on three levels. At present there is a significant area of unoccupied space. The complex is having serious financial problems. The director of economic development for the Department of Indian Affairs has indicated that they are trying to work out the kind of financing the centre can support on a long-term basis. The problems facing the shopping complex are attributed by the assistant deputy minister of Indian affairs to government overbuild.
The chief of the economic development branch of the Department of Indian Affairs and Northern Development explained the problem of overbuild as follows:
The centre was overbuilt-it was built to government specifications through the handling of the construction by the Department of Public Works-and this has been largely responsible for the cost overrun... What this really means is that the specifications or the standards of Public Works are very high for public buildings generally, probably higher than you would find.-in private industry for a similar kind of building, and perhaps arguable too high, or unnecessarily high, for the nature of the building itself.
A second aspect of overbuild is described as being that the size of the shopping centre relative to the market was too large. In other words, it was overbuilt in terms of size.
June 22, 1977

I question who is at fault in overbuilding an enterprise such as The Pas shopping complex. It is obvious that at least two departments of government, the Department of Indian Affairs and the Department of Public Works, must take the major responsibility for its present state of affairs.
For the record, I would like to review some of the incidents leading up to the $8.5 million dollar complex at The Pas. As I mentioned earlier, the initiative to develop a small convenience store to serve The Pas Reserve residents and also the highway traffic north of The Pas came from The Pas Indian band in a letter to the Manitoba government in September, 1970. In December, 1970, a Mr. Gordon Fisk was hired as a consultant to the band. In a letter to the Department of Indian Affairs and Northern Development, Mr. Fisk proposed the development of a modest shopping centre of between 20,000 and 25,000 square feet with a food store, a general store, and space for a bank or drugstore.
A further study commissioned by the band from Damas and Smith Limited was completed in January, 1973. This study indicated the need for limited retail facilities on the reserve to serve the Indian population and tourists travelling along Highway Number 10. This study made specific reference to the fact that there is insufficient market potential to support a large scale development.
On June 29, 1973, in a letter to Mr. Keith Taylor, who was then the member of parliament for the Churchill riding, the late Chief of The Pas Indian band, Mr. Gordon Lathlin, wrote and 1 quote:
At one of your visits at the band office I discussed with you our development plans which included construction of a small retail complex.
We have been dealing extensively with the Department of Indian Affairs and it appears that at least the store complex will become a reality in the near future. At the moment we are trying to secure tenants for the building.
The purpose of the development is not only to provide jobs for band members and revenue for the band, but also to provide services to residents of The Pas reserve. In this respect we would like to pursue the possibility of locating a sub-branch of the Post Office on the reserve. Having to pick up mail at the Post Office in town creates a hardship for many people who do not own vehicles.
I am asking for your assistance in pursuing this matter. Please contact the proper authorities to get an indication of what can be done. As we are planning to get construction under way this summer it is important that we get an answer quickly.
At this point, it is evident that the band was still thinking in terms of a small retail complex.
In July, 1973, the assistant deputy minister of Indian affairs invited the property development branch of the Department of Public Works to undertake a re-assessment of the retail and commercial possibilities for The Pas band. They set about their task by way of a Department of Public Works authored department store type of merchandise study. In August, 1973, the DSTM study was completed, identifying the need for additional major commercial facilities in the area of The Pas. In contrast to the Damas and Smith findings, the DPW report concluded that there exists a strong possibility to establish a regular closed shopping mall in The Pas region.
Indian Economic Development Fund
In October, 1973, The Pas Indian band adopted a band council resolution authorizing the Department of Public Works, first, to enter into a contract with an architect to design the shopping centre and, second, to negotiate leases.
The Department of Public Works then had the major role to design, oversee the design and to set up leases and search for tenants.
The townspeople of The Pas expressed a great deal of concern about the proposed regional shopping centre on The Pas reserve. In a letter to the minister on December 18, 1973, Major Jack Kennedy of The Pas questioned, among other items, the justification for the size of the proposed complex which by this time was proposed to be 110,000 square feet. Resource Development Associates Limited prepared a feasibility study for the town of The Pas. This study essentially disagreed with the Department of Public Works study, in regard to, first, size. DPW recommended a complex of well over 100,000 square feet. Research Development Associates recommended a complex no larger than 35,000 square feet. Second, it disagreed in regard to the trade area. DPW stated a 150 mile radius; Research Development Associates stated a 50 mile radius.
Despite conflicting recommendations in various studies;
in June 1974, the Minister of Indian Affairs and Northern Development attended the sod-turning ceremony marking the official start of construction and the Department of Public Works was granted a mandate from the Department of Indian Affairs and Northern Development to construct the shopping centre including the awarding of contracts, construction progress payments, leasing, supervision and the general management of the entire construction phase of the project.
Where were the Indian people in all of this? It would appear that following the adopting of a band council resolution in 1973 authorizing the involvement of the Department of Public Works, it was virtually out of the hands of The Pas Indian band.
Otineka Mall-the Pas Regional Shopping Centre is completed and has been in operation for about one year. It is, indeed, an impressive structure for the area. The end result was 190,000 square feet of retail and office space at a cost of $8.5 million. This is a far cry from the $250,000 complex announced by the minister on July 19, 1973, or even the DPW news release on June 21, 1974, which gave the amount as $4,950,000. Of further interest is the Otineka Mall information sheet which states that the market area covers a 50 mile radius, not 150 miles as stated in the DPW study. Today, the sensible dream of a small shopping complex can be described as turning into somewhat of a nightmare for the Indians of The Pas band. Once again we witness the manipulation of government to the detriment of Indian people.
The financing of The Pas shopping centre complex involved a bank guarantee and a direct loan from the Indian Economic Development Fund. The loan was for $6 million, of which $4 million was guaranteed by the department. There was an over-run. The final cost of the complex is now at $8.5 million. Cost over-run is due to overbuilding.
80018-42)4
Indian Economic Development Fund
If DPW's specifications or standards "are very high for public buildings generally", then why was DPW assigned to build a shopping complex in the first place?
The Department of Indian Affairs would have not been involved in such an enterprise if they had followed their own regulations. The regulations state that loan arrangements under the IEDF are basically for a 15-year term. There is no way that $6 million can be paid back to the department in that length of time.
I see that my time is running out, Mr. Speaker, but I would just like to conclude by saying that it is evident and plain that there are serious deficiencies related to all areas of IEDF including management direction and guidance, financial accounting systems, financial and reporting systems, and planning systems.
I feel the program warrants a complete overhaul so that it might properly be put "on track" to do what it was intended to do-which was to improve the economic conditions of Indian people.
Directions from the government have involved the Department of Public Works and the Department of Indian Affairs and Northern Development in the construction of showplaces across Canada for political purposes only, with no regard to the disastrous and distasteful end result, and leaving an area with a black eye. Writing off $4.2 million is nothing more than a cover-up by the Department of Indian Affairs and Northern Development to protect the bungling of the Department of Public Works in connection with the Otineka shopping mall in The Pas. I believe that the Auditor General should review this program and report his findings to the House.


Some hon. Members:: Hear, hear!


Mr. Bob Brisco (Kootenay West):: Mr. Speaker, the shocking revelations made today by the Conservative members for Lambton-Kent (Mr. Holmes), Moose Jaw (Mr. Neil), and Churchill (Mr. Smith), are a story of corruption, flagrant and patently ugly political patronage, misconduct, mistruths, and mismanagement.


Some hon. Members:: Order!


Robert Hylton Brisco: Wait till I finish. It is self-evident that the Caspar Milquetoast of the cabinet, the Minister for Indian Affairs and Northern Development (Mr. Allmand), has been gulled and misled by his own department. This misguided minister, bumbling along in the sure knowledge that all is well in his ministry, in for a rude awakening on his return to Ottawa, will discover, when he is jerked back into the realm of reality, that his ministry is in disarray and turmoil, that morale is at a low ebb, and that rather than serving the native peoples of Canada they have been used as pawns in a chilling and frightening game of politics-on that I will remark later.
Mr. Speaker, today I am going to review the nauseating account of only five projects funded by this department.
On November 25, 1976, at a meeting of the Standing Committee on Indian Affairs and Northern Development I

June 22, 1977
inquired as to the funding of the Ehattesaht Co-op. The funding is as follows: direct loan, $500,000; guarantee $1,800,000; contribution, $110,000; appropriations $25,000; that is a total of $3,035,000. In addition there was a special ARDA grant advance of $1,843,877 and Manpower training contracts of $44,871, bringing it to a grand total of $4,323,748.
Ever naive, or purposely deceptive, the department added:
The Department's regional office has stated that the co-operative had ample support of competent professionals.
That is auditor, forestry engineers, general manager.
Mr. Speaker, those statements do not square with the facts. In addition, correspondence from those firms which sold logging equipment to Ehattesaht Co-op leads me to believe that Indian Affairs deceived the creditors by creating the illusion that all was peaches and cream and that they had nothing to worry about. These unsuspecting businesses were taken for $2,490,382. It is interesting to note, however, that in the list of creditors there is no mention of More Leasing Limited of Chilliwack, B.C. a company that leased equipment to the co-op, mainly in the form of crew buses and pick-up trucks, a one third owner of this liberally supported firm is Mr. Wilmer Stromquist who, from July of 1974 to May of 1975, acted in a consulting capacity to the co-op, and after that acted as general manager under contract to the co-op.
I ask the minister to tell the House what the consulting fee was and what the salary was as general manager. I ask the minister to tell the House what salary Mr. Stromquist received when he was appointed an employee by the receiver-manager when the co-op went into receivership. I ask the minister to tell the House whether or not More Leasing Limited or any of its owners purchased any of the liquidated assets of the company and, if so, at what price. I ask this because the receiver-manager, as the responsible individual for the total operation of the co-op from May, 1976, to the present, designated Mr. Wilmer Stromquist to act as manager for current operations of the co-operative, that is, removal and selling of all remaining inventory under the co-operative's control.
I ask the minister to tell the House how Mr. Stromquist, described by the minister's own officials as a widely experienced manager of logging operations, could not only sanction but also participate in a trip to Hawaii along with his wife and daughter, two members of the board of the co-op, and two non-members of the board, when he knew the untenable condition of the co-op. To set the record straight, let me quote in part from the department's reply to my inquiry as follows:
The portion of the cost of the trip paid by the co-op was approximately $6,000... At present approximately 25 per cent of the trip cost remains uncollected due to the closure of the operations and lay-off of people concerned.
The final sequence to this disaster is that it was not the Department of Indian Affairs and Northern Development which blew the whistle; it was DREE. It was also a source within DREE who commented that most of Mr. Stromquist's management pronouncements were made from Vancouver and not from the project site.

June 22, 1977

I would like to turn to Sawyer Boats. This outfit received on November 25, 1975, one loan of $55,000, another on the same day of $19,800, and a third on the same day of $25,200. That was over $99,000 in one day for a company which was, in the opinion of the department, "in a precarious position", and a project that "may well be a candidate for bankruptcy". Mr. Mackie did not consider that that type of funding thrice in one day for a firm already on the verge of bankruptcy unusual.
1 turn now to the blatant examples of political patronage at the individual level. I ask why, in the wildest stretch of the imagination, the Department of Indian Affairs and Northern Development would arrange a term loan for Cardinal Family Farms in Alberta for $113,000 with a repayment of $1 a year for the first four years, plus simple interest. I ask how an operating loan for $15,000 under the same terms could be allowed. I ask how it could be done with practically nothing in terms of equity owned by the Cardinal family. The Cardinal family had equity of $10,000 and received $153,000.
1 also asked about Chief Norman Yellowbird of Alberta. He received $22,000. He had equity of less than $2,000. This little story is interesting because one of the conditions of the loan was that Yellowbird dispose of unnecessary equipment, machinery and other vehicles. In spite of this, Yellowbird did not sell his car, and when the second loan was authorized on June 6 the loan contained a condition that the car be sold. Yellowbird traded his car in and purchased a new $6,000 pick-up truck. Previous to this he already owned three trucks, one of which was a pick-up truck in relatively good condition. The money obtained from this under-the-counter dealing was used as payments on Yellowbird's new truck and a new $45,000 house. That is political patronage of the worst kind.


Some hon. Members:: Shame.


Robert Hylton Brisco: Let no one doubt or challenge my intentions.

[ Translation]



Mr. Deputy Speaker:: Order, please. It being 5.45 p.m., it is my duty, pursuant to the provisions of Standing Order 58(10), to interrupt the proceedings and to put forthwith every question as may be necessary to dispose of any item of business relating to the main estimates and for the passage at all stages of the bill based thereon.

Mr. Andras, seconded by Mr. MacEachen, moves that Vote 1-


Stanley Howard Knowles: Mr. Speaker, before you put the motion in the name of the President of the Treasury Board (Mr. Andras) I should like to rise briefly on a point of order. I do not object to the fact that what will be put to the House is the positive motion for this particular item, but
Estimates
I still think, as other hon. members do, that a way should be found for it to show in the record that the reason that positive motion is being put is because a member filed notice of opposition. In this case the notice of opposition happens to be in my name, and I would like it to be clear that the reason we are voting on this one item in the name of the President of the Treasury Board is that we want the opportunity to vote against spending all this money on the Senate.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: I understand the preoccupation of the hon. member, but it is difficult for me at this time to satisfy him, except to indicate to him that he should look at this matter for future times. However, at this time I have no alternative. In raising his point of order I think the hon. member has achieved what he wanted to, without too much debate, of course, but everybody knows that the reason we have a separate vote on that first motion is that there is an item which is opposed by the hon. member.


Stanley Howard Knowles: Mr. Speaker, I rise on one other point of order. I think the word "parliament should be spelled correctly in the English version, not "parliment".


Some hon. Members:: Oh, oh!


Mr. Speaker:: I shall read it correctly!


Robert Knight Andras: That Vote 1, in the amount of $6,925,892 under Parliament for the Senate- Program Expenditures for the fiscal year ending March 31, 1978 (less the amount voted in Interim Supply), be concurred in.


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.


Mr. Speaker:: I declare the motion carried.
++YEAS


MOTION FOR CONCURRENCE IN MAIN ESTIMATES
[Stage Direction]
Messrs.
Foster
Fox
Francis
Friesen
Gauthier
(Ottawa-Vanier)
Gendron
Gillespie
Gillies
Goodale
Grafftey
Gray
Guay
(St. Boniface)
Guay
(Levis)
Guilbault
Haidasz
Halliday
Hargrave
Harquail
Herbert
Hnatyshyn
Holmes
Hopkins
Horner
Huntington
Isabelle
Jelinek
Johnston
Knowles
(Norfolk-Haldimand)
Lajoie
Lalonde
Lambert
(Edmonton West) Lamontagne Landers Langlois Laniel Lapointe Lawrence Leblanc (Laurier)
LeBlanc
(Westmorland-Kent)
Lee
Lefebvre
Loiselle
(Saint-Henri)
Lumley
MacEachen
MacGuigan
Maine
Malone
Marceau
Marchand
Marshall
Martin
Mazankowski
McCain
McCleave
McGrath
Mclsaac
++NAYS
Messrs.
Firth
Gauthier
(Roberval)
Knowles (Winnipeg North Centre)'
McKenzie
McKinley
McKinnon
McRae
Milne
Muir
Munro
(Esquimalt-Saanich)
Munro
(Hamilton East) Murta Neil
Nicholson (Miss)
Obcrle
O'Connell
Olivier
O'Sullivan
Pa proski
Parent
Patterson
Pearsall
Pelletier
Penner
Pigott (Mrs.)
Pinard
Portelance
Poulin
Prud'homme
Railton
Raines
Reid
Ritchie
Roberts
Robinson
Roche
Rooney
Roy
(Laval)
Rynard Sauve (Mrs.)
Savard
Scott
Skoreyko
Smith
(Churchill)
Smith
(Saint-Jean)
Stanfield
Stevens
Stewart
(Marquette)
Stewart
(Cochrane)
Stollery
Tessier
Towers
Trudeau
Trudel
Turner
Wise
Wood
Woolliams
Young-166.
Leggatt
Nystrom
Orlikow
Rodriguez
Rondeau
Symes-14.
Robert Knight Andras: That the main estimates for the year ending March 31, 1978, except the item disposed of earlier this day, and less amounts voted in interim supply be concurred in.


Mr. Speaker:: Shall the motion carry?


Stanley Howard Knowles: On division!
Motion agreed to on division.
Mr. Andras thereupon moved that Bill C-58, for granting to Her Majesty certain sums of money for the public service for the financial year ending March 31, 1978, be read the first time and be printed.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Robert Knight Andras: that the bill be read the second time and referred to committee of the whole.


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Laniel in the chair.
Clauses 2 to 6 inclusive agreed to.
Schedule agreed to.
Clause 1 agreed to.
Preamble agreed to.
Title agreed to.
Bill reported.
Mr. Speaker:: When shall the bill be read the third time? By leave, now?


Some hon. Members:: Agreed.


Allan Joseph MacEachen: that the bill be read the third time and do pass.


Mr. Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: On division.
Motion agreed to and bill read the third time and passed.


Mr. Speaker:: It being six o'clock, this House stands adjourned till tomorrow at 11 a.m., pursuant to order made Monday, May 30, 1977. Again I extend the usual invitation to all members to join me for a small libation outdoors at beautiful Kingsmere.


Some hon. Members:: Hear, hear!
At 6.18 p.m. the House adjourned, without question put, pursuant to special order.

Thursday, June 23, 1977