1977-11-30

ROUTINE PROCEEDINGS


Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of great importance. Whereas it is a known historical fact that more of the fathers of confederation had Gaelic as their mother tongue than either French or English and whereas it is important that Canadians retain the language, culture and traditions of their forefathers, I move, seconded by the hon. member for Cape Breton-The Sydneys (Mr. Muir) and the hon. member for Hillsborough (Mr. Macquarrie):
That on November 30, the feast day of St. Andrew, the patron saint of Scotland, special recognition be given to the Gaelic tongue and that the tartan be worn by all Scots and would-be Scots.


Some hon. Members:: Hear, hear!


SOCIAL SECURITY
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. On November 23, last week, the Minister of National Health and Welfare (Miss Begin) struck fear into the hearts of many people with young families and into the hearts of many old age pensioners with her statement that she would take away old age pensions or family allowances from those who do not need universal programs. I move, seconded by the hon. member for Portage (Mr. Masniuk):
That the minister take the first opportunity to make a statement on motions in order to explain specifically who in her view are the people who do not need universal programs and thereby allay the fears of those who do.


Mr. Speaker:: Pursuant to Standing Order 43 such a motion can be presented only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ANTI-INFLATION PROGRAM PROPOSED RESTRICTION OF PROFITS OF CHARTERED BANKS TO SIX PER CENT-MOTION UNDER S.O. 43
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I wish to move a motion under the provisions of Standing Order 43. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
Whereas the assets of Canadian banks increased in the year ending October 31, 1977 by more than 20 per cent over the previous year, and whereas after tax profits of Canadian banks increased by substantially more than the six per cent increase being allowed in wages and salaries by the government's anti-inflation program, be it therefore resolved that this parliament urges the government and the Anti-Inflation Board to take steps to restrict the profits of Canadian banks to the same six per cent increase permitted to wage salary earners.


Mr. Speaker:: Such a motion can be presented for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of pressing necessity.
In view of the fact that a great many farm producers derive part of their revenue from the production of pulpwood; that thousands of cords of pulpwood have been cut a year and even two years ago and have yet to be sold on account of the diminution of paper production, thus causing tremendous damage to producers as well as to the economy of this country, I move, seconded by the hon. member for Richmond (Mr. Beaudoin):
That this House recommend to the Minister of Industry, Trade and Commerce to consider seriously the marketing of this product to find the best ways and means to activate this sector of our economy.
80027-20 Vi

November 30, 1977
Potatoes


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



THE MINISTRY


Mr. Roch La Salle (Joliette):: Mr. Speaker, pursuant to Standing Order 43, I ask for the unanimous consent of the House to present a motion.
Considering the growing concern among Francophones outside Quebec about a genuine federal program which would guarantee their cultural survival; considering that last October 27 the Secretary of State (Mr. Roberts) announced that he would soon introduce a global policy on minorities; and considering that the participation of the Federation of Francophones outside Quebec in drafting such a policy is essential, I move, seconded by the hon. member for Kingston and the Islands (Miss MacDonald):
That this House unanimously invite the minister in charge to create now a permanent commission within the Privy Council on which the Federation of Francophones outside Quebec would be officially represented.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



AGRICULTURE


Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under Standing Order 43. In view of the decreasing per capita consumption of potatoes in Canada in recent years to an average of 154 pounds during 1971-74 from 166 pounds during 1966-70 and considering that the humble potato, the world's most important vegetable-


Some hon. Members:: Hear, hear!


Eymard G. Corbin: -and by far the most important vegetable crop, dollar-wise, grown in Canada and for many, many other valid reasons which would test your patience, Mr. Speaker, I

move, seconded by the hon. member for Malpeque (Mr. Wood):
That this House urges the Government of Canada to launch with the potato producing provinces a wide scale attack on the diet fadists and assorted calorie quacks who have been downgrading the nutritional value of the spud and that the governments take immediate steps to promote the natural round potato, which is without any doubt whatsoever the best priced ingredient in today's consumer basket.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



FISHERIES


Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the fact that the government of France, influenced by the qualities for which Brigitte Bardot is famed, has banned the importation into France of harp seal pelts thus damaging the interests of honest and hardworking Canadians in Newfoundland, Quebec and the northern territories who earn part of their living from the seal hunt, and in view of the fact that Canada should show some backbone in dealing with France on both seals and separatism, and since there are substitutes of better taste and quality for French champagne, a product made from grapes brutalized by human feet and other means in the production process, I move, seconded by the hon. member for Humber-St. George's-St. Barbe:
That Canada ban the importation of French champagne until such time as the French ban on the importation of seal pelts into France is revoked and that members of the House of Commons affirm their conviction that the interests of Canadian seal hunters far outweigh the palates of French champagne guzzlers in Canada.


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


Some hon. Members:: No.
November 30, 1977



AIR TRANSPORT


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I also rise under the provisions of Standing Order 43 to move an urgent motion. In view of the violation of air safety regulations in northwestern Ontario and the revelation that air inspectors were told by their Ottawa superior not to suspend licences of airlines violating these regulations until "you fully consider the possibility of embarrassment to the minister and any other potential political implications", I move, seconded by the hon. member for Timiskaming (Mr. Peters):
That this House instruct the Minister of Transport to institute a public inquiry into the state of air safety in northwestern Ontario and the reasons air safety regulations have not been adequately enforced.


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


Some hon. Members:: No.



POST OFFICE


Mr. Jake Epp (Provencher):: Mr. Speaker, I would like to move a motion of urgent and pressing necessity pursuant to Standing Order 43. In view of the Postmaster General's recent announcement that first-class letter rates would be increased to 14 cents, and in view of the fact that wicket service on Saturday mornings is to end in rural Manitoba on December 1, all in the name of making the post office profitable once again, I move, seconded by the hon. member for Portage (Mr. Masniuk):
That the salary of the Postmaster General be reduced to $1 annually till such a time as his regular salary can be paid from post office profits.


Mr. Speaker:: Such a motion can be introduced only with unanimous consent. Is there unanimous consent?


Some hon. Members:: No.


Mr. Speaker:: Oral questions.



ORAL QUESTION PERIOD


Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, may I put a question to the Minister of National
Oral Questions
Revenue. Two weeks have past since the disclosure that it was possible to violate the personal privacy of individual Canadian taxpayers by telephoning the Department of National Revenue and asking for information. Serious questions about what the minister has done to plug the leaks in the two weeks since the revelation remain unanswered. Has the minister made investigations within his department independent of those being made by the Royal Canadian Mounted Police? If he has, can he tell the House today if he has discovered the method used to get unauthorized access to personal tax information on individual Canadians, how extensive this practice was and on how many Canadians has tax information been given to unauthorized individuals?


Hon. Joseph-Philippe Guay (Minister of National Revenue):: Mr. Speaker, first of all I should like to say I did answer the question put by the hon. member and the allegations he made about giving out information. I do not have the date of his question but I sent a letter to him yesterday in answer to the question suggesting the allegations made in this House were not true. He has a letter from me on that subject. In regard to the investigations that have taken place very successfully since the allegation of the leak, the RCMP provided an interim report today. I am not in a position to reveal the contents. It would not help the situation if I were to make a report at this time on the progress that has been made. I would rather wait until the final outcome of the RCMP investigation. Departmental officials are also looking into the matter.
No doubt members of parliament will receive many complaints about the difficulty in getting an answer or information over the telephone because in future things will not be done that way. I should like to advise members that if they write to us for information about anyone in their constituency they will need a letter from the constituent authorizing them to get the information. It will also be necessary to have a letter from the member before any answers will be given.


Henry Perrin Beatty: Mr. Speaker, apparently the minister does not understand what was in the letter that he sent to me. It in no way related to the allegations which were made by Mr. Templeton and Mr. Berton about the availability of personal tax data over the telephone. It is not good enough for the minister to hide behind the RCMP investigation. I want to know what he, as minister, has done to investigate this. How extensive have these leaks been in the past? Does he have the names of Canadians whose personal tax information has been given out to unauthorized individuals over the telephone? What steps is he taking as minister to inform these Canadians that their rights are being violated so that they can take the appropriate action?


Joseph-Phillippe Guay: Mr. Speaker, I want to say again that these allegations and comments are not factual. This is not the case. Contrary to what the hon. member is saying in this House, there have been very few leaks out of my department. I told him that we are making an investigation on our own within the department. I am not in a position to give a

November 30, 1977
Oral Questions
report on that at this time. Neither am I in a position to give a report on how successful the RCMP have been this far.


Henry Perrin Beatty: Over the course of the last two weeks the minister has made a number of statements which he is not willing to back up. He has claimed that it is impossible for this information to be leaked over the telephone. If it is in fact the case that these leaks have been very limited, will the minister tell the House today how many instances he has been able to turn up in which this information has been given out over the telephone. How many instances has he found? Surely, that would not jeopardize any police investigation.


Joseph-Phillippe Guay: Mr. Speaker, the only one I have found so far is the case brought to the attention of this House pertaining to the Templeton affair and that of the other gentleman. I have not found any other case so far.


ALLEGATION TAX INFORMATION GIVEN TO POLICE ON ROUTINE BASIS AND FALSE TESTIMONY GIVEN BY DEPARTMENTAL OFFICIAL
John Carnell Crosbie: Mr. Speaker, in connection with the confidentiality of tax information, I would like to put another question to the Minister of National Revenue. An agreement was entered into in 1972 under which it has been stated his department released certain information to the RCMP if it had to do with an organized crime matter. An official in the minister's department, and I want to know whether this is correct, told the Laycraft inquiry that tax information is given to the RCMP and police forces across Canada as a matter of routine, was given to them before the 1972 agreement and is still being given to them, not on the basis of organized crime but as a routine matter. Will the minister tell us whether the evidence of his official is correct? If it is correct, is he putting a stop to the practice? What is the situation now?


Joseph-Phillippe Guay: I will give that consideration, Mr. Speaker.


John Carnell Crosbie: Mr. Speaker, it is difficult to ask a supplementary of a minister who says he is only going to give it consideration. Will the minister check into a situation that has been reported in evidence given to the Laycraft inquiry where an official of his department admitted that he gave false information and false testimony to a judge of the Federal Court of Canada in connection with the investigation of the Royal American Shows matter. He gave two different versions of their cooperation with the RCMP, one to the Federal Court and another to Mr. Justice Laycraft. Has the minister investigated that? Can he or will he report to the House because, if this is true, it should not be tolerated.


Joseph-Phillippe Guay: Mr. Speaker, the inquiry is still going on. I am certainly keeping abreast of it. I am not in a position to say whether a particular employee told the truth to the inquiry. We are certainly looking into it.


John Carnell Crosbie: If the Minister of National Revenue is not in a position to answer these questions, who is? Who is responsible for the department?


Mr. Speaker:: Order, please.


UNEMPLOYMENT INSURANCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, in the absence of the Minister of Finance, I have a question for the Minister of Employment and Immigration. The government announced yesterday that the changes in unemployment insurance eligibility rules would take effect on December 4. Considering that these changes will remove 226,000 Canadians from eligibility for benefits next year and considering that all the provinces in Atlantic Canada strongly opposed those changes because they will lead to an increase in the welfare cost burden on the cities and on the provinces, may I ask whether the minister has calculated the additional impact these changes will have on welfare costs, particularly in Atlantic Canada, and tell us whether the government proposes to introduce any compensatory programs for the benefit of provinces adversely affected?


Hon. Bud Cullen (Minister of Employment and Immigration):: Despite the hyperbole and despite the accusations made by the hon. member and by members in his party, the impact on the welfare rolls of the provinces mentioned will be insignificant-we have indicated the particular figures. We have also indicated that the Canada Works program and other programs will fill in the gap and ensure that those provinces are not unduly affected by this change in the eligibility requirement from eight weeks to 12 weeks-we dropped the figure originally proposed primarily because of representations made by Liberal members of the House from the Atlantic provinces to ten weeks-and given the initiative which people in that part of the country are known to possess I believe they will find little difficulty in getting the extra two weeks employment; they are not primarily interested in getting unemployment benefits but in getting work, and that is the main objective.


John Edward Broadbent: The minister has moved from hyperbole to baloney.


Some hon. Members:: Oh, oh!
November 30, 1977


MANPOWER
John Edward Broadbent: He has admitted that the change will result in increased welfare costs-I think he said there would be a slight increase. I should like the hon. gentleman to give the House the figures because that part of Canada is already worse off than the rest. Since the unemployment figures to be announced next week are likely to show for the first time the number of employed as being in excess of one million, can the minister tell us, in the absence of the Minister of Finance, why we shall have to wait until the end of February for a first ministers conference to deal with the problems facing the Canadian economy?


Jack Sydney George (Bud) Cullen: I think the Prime Minister and the leaders of the various provinces would be more interested in results than in pretending to put on some kind of show. They have an abiding interest in helping the unemployed of this country and to hold a meeting just for the sake of holding a meeting would not help the unemployed.


John Edward Broadbent: I could not agree more. The unemployed want action, not meetings. In the light of the implication of the minister's answer which is that the provinces are somehow holding back-


Mr. Speaker:: Order. If the hon. member has a question to ask, would he please put it?


John Edward Broadbent: Considering that the premier of Ontario as well as the former premier of Manitoba requested such a meeting many months ago, would the minister confirm that the real reason the government intends to wait until the end of February is related more closely to the election plans of the Liberal Party than to the economy?


Some hon. Members:: Order!


NATIONAL SECURITY
Mr. Gilles Caouette (Temiscamingue):: Mr. Speaker, my question is directed to the Solicitor General.
In order to safeguard and protect national security, can the Solicitor General tell me whether the law can at a given time force the Canadian Broadcasting Corporation to withhold some information? If so, who orders the CBC not to broadcast a news item at a given time?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, like any other Canadian citizen, the Canadian Broadcasting Corporation must comply with the legislation governing the activi-
Oral Questions
ties of Canadians. If we had information to the effect that a corporation is about to issue information which is not of public interest but which would indeed affect the security of the nation, the attorney general would then have to take the necessary procedures to prevent it from broadcasting this information.


Gilles Caouette: I would like to ask a supplementary, Mr. Speaker.
Could the Solicitor General of Canada indicate to me whether he instructed the CBC last night, because of national security, not to broadcast over the French network news about the opposition day initiated yesterday by the Social Credit Party, whereas opposition days initiated by other opposition parties are always mentioned? Would the Solicitor General not have instructed the CBC not to mention the opposition day held yesterday?


Francis Fox: Mr. Speaker, it could be said for once that there has been no leak about what has been going on in this assembly.


INQUIRY AS TO FATE OF ANNOUNCED EMPLOYMENT STRATEGY
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I should like to direct a question to the "minister of unemployment and immigration". Given the fact that the so-called economic summit conference of the Prime Minister and the first ministers will not take place till the end of February, and given the fact that we are now into a disastrous situation which is going to get worse, I ask the minister what became of the employment strategy which the government promised to the House before the end of the year. I hope that the minister will not try and duck behind the Canada Works program and the FLIP program.


Jack Sydney George (Bud) Cullen: Mr. Speaker, in replying as Minister of Employment and Immigration to the hon. member for doom and gloom, my I say one of the things which the hon. member seems to forget is that since January the economy of Canada has created some 290,000 new jobs, or one million new jobs in the last five years. However, we cannot rest on that particular laurel because there are a lot of people out of work who want work. This is why we embark on programs like Young Canada Works and Canada Works, creating 116,000 jobs over seven months of a one year period. If we sat back like the hon. member simply wringing our hands, nothing would be accomplished in this country.


James Aloysius McGrath: A supplementary question, Mr. Speaker. Given the fact that the five eastern provinces representing 37 per cent of the population account for over 48 per cent of the unemployed persons in this country, we have enough to be gloomy about, God knows. What new initiatives can we expect from the government, given the fact that 57.4 per cent of the new unemployment is in these five eastern provinces, which

November 30, 1977
Oral Questions
will be further burdened by additions to their welfare rolls? I ask the minister, who is responsible for co-ordinating government programs, what new initiatives he is able to announce to the House, or is he going to wait for the staging of the first ministers' conference in February, with the unemployment rolls growing by leaps and bounds in the meantime?


Jack Sydney George (Bud) Cullen: Mr. Speaker, unlike the hon. member, instead of waiting until the very last minute, in October 1976 we announced a five year program of job creation both for the young and for adult individuals in Canada. I have indicated that one phase of this particular program created 116,000 jobs. If we could move forward the finance bill from clause 4 to clause 116, the opposition would have an opportunity to play a part in creating jobs in this country.


UNEMPLOYMENT-SUGGESTED CONFERENCE WITH PROVINCES ON NEW INITIATIVES TO SOLVE PROBLEM
James Aloysius McGrath: A final supplementary question, Mr. Speaker. I remind the minister, as he well knows, that job creation is lagging far behind the increase in unemployment. That is a serious problem which we are facing in this country which the minister does not seem to appreciate. Given the facts that this critically high level of unemployment is concentrated in the five eastern provinces, one being the province of the minister responsible for federal-provincial relations whom I hear interjecting, can we expect from him and his colleagues any new initiatives? Will they at least sit down now with the manpower ministers of these five provinces and offer something a little more positive than he offered the four manpower ministers from the Atlantic provinces, whom he offered nothing earlier this month?


Jack Sydney George (Bud) Cullen: Here again, Mr. Speaker, we deal with these problems on a full day, full week basis, not in five or ten seconds during the question period. This is an on-going problem that we recognize and live with on a day-to-day basis, and why we are bringing in programs to help the very people the hon. member says we should be helping. We met with the Manpower offices, and this particular meeting was taken on the initiative of provincial ministers to indicate some of the areas that they would like to see changed.


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: The hon. member is not interested in the answer, he is only making a noise.


ROYAL CANADIAN MOUNTED POLICE
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Solicitor General and relates to statements attributed
to his counsel at the Keable inquiry yesterday. Is it the Solicitor General's decision that the mandate of that inquiry only includes acts that may be considered illegal, and that it would be operating outside its mandate if it considered "unauthorized activities that may be immoral or questionable"; is that the Solicitor General's position in respect of the operation of the Keable inquiry?
[ Translation]


Francis Fox: Mr. Speaker, it is not my responsibility to determine which kind of authority has been given to the Keable inquiry. I think an order of the Lieutenant Governor of Quebec establishes clearly the limitations of the jurisdiction of this commission. The Lieutenant-Governor's order in council says that the mandate of the Keable Commission covers four very specific criminal acts, namely the APLQ break-in, the arson of a barn, the theft of dynamite and the obtaining of lists of members of the Parti Quebecois. I think that the order in council also refers to other activities of a similar nature. Obviously our position is that the commission has full authority to investigate the specific illegal acts which are mentioned in the Quebec Lieutenant Governor's order in council but our position is also very clear that the terms of reference of this commission should certainly not include investigation of the day-to-day operations of the RCMP.


KEABLE INQUIRY-POSSIBLE FURTHER ACTION TO INHIBIT OPERATIONS
William Herbert Jarvis: Mr. Speaker, last Monday in the absence of the Solicitor General I asked his colleague, the Minister of Justice, what further action, be it legal or political, was being considered with regard to inhibiting the operations of that inquiry, and he replied he could not answer because counsel was being consulted. Has that consultation been completed, and what action, be it legal or political, is being considered by the Solicitor General and his colleagues?


Francis Fox: Yes, Mr. Speaker, the consultation with our counsels is now over. It was a consultation with our legal advisers about the decision given in Montreal last week by Mr. Justice Hugessen. The consultations dealt with whether or not we should appeal that decision. As hon. members will recall, the decision was simply not to grant the deferment we had required from the Superior Court of Montreal until the study of the merits of our request in evocation on December 6. We have decided not to appeal against the refusal of the deferment pronounced by Mr. Justice Hugessen, but naturally we intend to pursue this affair before the Superior Court of Montreal on December 6 so that the audition on the merits will take place.

November 30, 1977


INFORMATION
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a supplementary question for the Acting Prime Minister. In light of the sorry litany of revelations of irregularities and improprieties which we have witnessed over the last few months, and what from this side of the House, in the immortal words of the Prime Minister, appears to be a "fishy attempt to cover up", I should like to ask the hon. gentleman whether the policy of the government is still that as enunciated by the Prime Minister, that the people of Canada do not need the same protection as the people of the United States in attempts to have legislation to penetrate government secrecy?


Hon. Allan J. MacEachen (Deputy Prime Minister):: Mr. Speaker, if I can penetrate the verbiage of the hon. member's question, I should like to advise him that the government has produced, as he knows, a proposed paper on freedom of information in conformity with the open government which we are operating here.


Some hon. Members:: Oh, oh!


Allan Joseph MacEachen: It is our intention to have the proposals contained in that document considered as well as the recommendations received from such hon. members as my friend, the hon. member for Peace River, who has established quite a reputation for himself in this field.


Gerald William Baldwin: We will forgive the hon. gentleman quite a bit because we know what day this is and we are giving him quite a bit of latitude, Mr. Speaker. I would like to ask the hon. gentleman, in connection with these long-delayed reforms for which the people and parliament have been waiting, whether the government is giving some consideration to adjusting section 41(2) of the Federal Courts Act, an act which was passed by this government about the same time as South Africa passed a similar act to permit attempts by the government to coverup through the use of a certificate? I believe Canada and South Africa are the only two countries which at the same time passed such legislation. Is it this government's intention to reform and adjust this particular act?


Allan Joseph MacEachen: Mr. Speaker, I wonder if the hon. member is casting reflections on a government which stands in such high esteem in the mind of the hon. member for Cumberland-Colchester North who is president of this association. When a change is proposed to that particular section the House will be advised.


INQUIRY OF THE MINISTRY
Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, I have a question for the Deputy Prime Minister. After his longwinded answer I would just like to ask if the Prime
Oral Questions
Minister is unable to attend here in the House today in his kilt because of the secrecy and non-disclosure practices of his government?


Some hon. Members:: Oh, oh!


An hon. Member:: Curiosity killed the cat.


Some hon. Members:: Hear, hear!


An hon. Member:: That's an internal mystery.


LOTTERIES
Mr. Jim Fleming (York West):: Mr. Speaker, I have a question for the Secretary of State. The report of the National Advisory Council on voluntary action, prepared for the federal government, states that voluntary organizations are now getting less revenue than in the past and that government lotteries could be the reason. Will the minister assure the House that the government will study the possible negative effects of various government lotteries on the financial health of the voluntary community?


Hon. John Roberts (Secretary of State):: Yes, Mr. Speaker.
I did have a very useful meeting with voluntary associations a month ago, at which time this matter was brought to our attention. I shall certainly consider very carefully the representation made by the hon. member.


MANPOWER
Reginald Cyril Symes: Mr. Speaker, I have a question for the Minister of Employment and Immigration. Could he explain why the manpower training policy review of September, 1977 for his department indicates that language training funds for immigrants will be cut back since the technical report on which the policy review is based does not provide any justification for cutting back on language training.


Jack Sydney George (Bud) Cullen: Mr. Speaker, first of all the review to which the hon. member refers is specifically that of an idea put to particular provinces. Similarly, if we are able to co-operate with Quebec to the extent that we can increase Francophone immigration to that province and the immigrants are efficient in the French language then there would not be that necessity to train that many people in the other language. This is the idea and concept expressed in the review for consideration by the various provinces.

November 30, 1977
Oral Questions


Reginald Cyril Symes: Mr. Speaker, I still do not have the assurance from the minister that he will not follow through with the cutback in the allotments. I would ask him whether this reasoning has been taken into consideration, that the data shows that language trainees have lower unemployment rates after graduation than basic skill graduates, and that the participation rate of women trainees in the labour force is much higher than normal? In light of that, will the minister review that recommendation to cut back funds so we can proceed with the finding of jobs for immigrants in this country rather than forcing them on welfare?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the funding used for this particular purpose now is very heavily weighted in favour of immigrants, frankly discriminating against Canadian citizens. It may be that rather than cutting back there should be a change in emphasis so that some of that money would be used for Francophones, from whatever part of the country, who have to work in English, or for English speaking Canadians who have to work in French. It may involve simply a shifting in priorities, but we want to look at the whole picture.


CANADIAN BROADCASTING CORPORATION
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Secretary of State. It is now a little over four months since the CRTC inquiry into the national broadcasting system was submitted to the Prime Minister and made public. I wonder if the minister has had time to study the recommendations and implications of this report, and would he be prepared to indicate what follow up measures he has initiated or recommended?


John (Moody) Roberts: I have studied the recommendations and I am reflecting on what our response to them should be.


David Samuel Horne MacDonald: I wonder if the minister can be a little more informative in view of the fact that the president of CBC submitted the "touchstone" document prior to the time the actual CRTC report was made and that it dealt with a number of issues raised in the CRTC report. Has the minister communicated with the CBC management concerning three of the critical areas raised in the CRTC report in which the CBC has fallen short of its mandate, namely, the area of overcentralization, heavy dependence on U.S. television programming, and the isolation between the French and English services?


John (Moody) Roberts: Yes, Mr. Speaker, I have had discussions with the people of the CBC about the recommendations of CRTC.
[Mr. Cullen.)


CRTC REPORT-POSSIBILITY OF PUBLIC INQUIRY INTO BROADCASTING
David Samuel Horne MacDonald: Mr. Speaker, during the Prime Minister's press conference on July 21 last he indicated he might overrule the CRTC recommendation that no royal commission into broadcasting be held at this time, and indeed he indicated that he would ask the Secretary of State to report on the advisability of such a commission within a month. Since some time has passed since then, I wonder if the Secretary of State has yet reported on this and does the government in fact tend to go against the recommendation of CRTC and set up a royal commission into broadcasting, and in particular how does it propose to deal with the critical issue raised by the CRTC of the accountability of CBC and the whole issue of having autonomy without accountability, and particularly its relationship to parliament and the priority that was called for by the CRTC on this issue?


John (Moody) Roberts: When the government comes to a decision as to whether or not there should be an inquiry or a commission it will be announced in the normal way.


WHEAT-SUGGESTED CHANGE IN GRADING SYSTEM TO GIVE RELIEF TO PRODUCERS HOLDING NO. 3 UTILITY GRADE
Mr. Bert Cadieu (Meadow Lake):: Mr. Speaker, my question is for the Minister of Agriculture and I gave him notice of it. Can the minister tell the House whether there has been any change in the grading system to give relief to farmers holding about 100 million bushels of No. 3 utility wheat this year to give a fairer price to the farmers?


Hon. E. F. Whelan (Minister of Agriculture):: I received notice of the question from the hon. member yesterday but I returned to the city late today and I have not had time to check if there has been any real change. I know there have been discussions with the grain trade and farm representatives about this and I hope I will have an answer for the hon. member shortly.


Albert C. (Bert) Cadieu: Is the minister aware that Australia from time to time makes allowances for weather deteriorated wheat by establishing temporary export grades? Why can Canada not do the same thing which would give a better price for the wheat? The fact is that this wheat is of poorer quality with a ' very small percentage of sprouting. I do not think the producer should have to take 40 cents to 50 cents a bushel less.


Eugene Whelan: One reason for the delay in even making a proposal for a grade change was the testing of protein content. What the hon. member says is true according to our findings that for livestock feed, and in some cases for human consumption, it is practically as good. Its only disadvantage is that it
November 30, 1977

does not look quite as good. We are aware of the system that Australia uses for grading wheat.


WHEAT-PROPOSAL TO ESTABLISH PROTEIN PREMIUM FOR UTILITY GRADE
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the Minister of Agriculture who is responsible for the Board of Grain commissioners. Would he take up with the Board of Grain commissioners the possibility of using a protein premium for this vast amount of utility wheat which weighs out just as well and is just as good for the consumers as every other type of wheat but is graded down because of the odd kernels which are sprouting? Would they consider the technique of using a premium grade based on the protein content?


Eugene Whelan: Mr. Speaker, this has been considered but in many parts of the world when you put the protein content first, that is what makes the buyer back off. We have found this because we have stressed the high quality of wheat. The protein content is generally higher than any other wheat in the world. Some of the other grain traders in the world perhaps would rather buy a lower protein wheat and then sell it in the market because they seem to be able to manage their markets in a better way and have better sales when selling a lower grade wheat. At least, that is the argument that has been presented to me.


FISHERIES
Mr. William Rompkey (Grand Falls-White Bay-Labrador):: Mr. Speaker, my question is for the Minister of Fisheries or for his parliamentary secretary. In view of the increase in seal quotas this year, for which the government is to be commended, in spite of the adverse publicity and opposition from groups such as Greenpeace and by Mr. Brian Davies, and in view of the fact that the price of seal pelts in Europe in particular has gone down, can the minister or the parliamentary secretary tell us about the efforts which the department will make through the industrial development branch or other branches of the department to give support to the sale of seal pelts in Europe because of the importance of this issue to fishermen in Atlantic Canada and Quebec?


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Fisheries and the Environment):: Mr. Speaker, first of all let me say that I think it is not only the minister and the government but all hon. members who should try to convince people not only in France but also in Canada and in other parts of the world, that we are dealing with a renewable resource and that the government is protecting the species from becoming extinct. The minister has no control over the actions of the French government, but I assure the hon. member that the minister will do all in his power to support
Oral Questions
the seal hunting industry in Canada and he will also do all in his power to counteract the injustice caused this industry by the tiddly-tinkers from France.


NORTHERN AFFAIRS
Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, I have a brief question for the Minister of Indian Affairs and Northern Development. On June 17 I asked the former minister questions regarding the high cost of food in the north and I referred specifically to the deplorable situation of alcohol, which because it is subsidized, costs less than milk. Following that question the former minister, in a letter dated June 17, indicated that his department would consult the Territorial Council, native organizations and other departments of the federal government regarding this serious matter. I would like to ask the minister if these consultations have been completed and if he is now in a position to make recommendations to the House?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: I am not sure that those consultations are completed but I will check into it and report back to the hon. member.



PUBLIC SERVICE


Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I have a question for the President of the Treasury Board concerning difficulties facing handicapped people within the public service and those who are handicapped and trying to enter the Public Service of Canada. The minister has in his department a very extensive report prepared by the Public Service Commission which cries out for no more reports but for some action. When will action be taken on that report?


Hon. Robert K. Andras (President of the Treasury Board):: As quickly as possible, Mr. Speaker. I assure the hon. member of my definite and personal interest in this area of which, I think he knows from my involvement in my previous portfolio. I join him and others to encourage our public service to act on this.

November 30, 1977
Oral Questions


Walter David Baker: Mr. Speaker, I appreciate the answer. As part of that encouragement, would the minister agree to table that report in the House of Commons so there can be some public involvement in the decisions that will be made and the action which we hope will be taken by the government in this area. Tabling might help to publicize that excellent report.


Robert Knight Andras: This is a good suggestion, Mr. Speaker, and I will personally give it every consideration as soon as possible.



EXTERNAL AFFAIRS


Flora Isabel MacDonald: Mr. Speaker, my question is for the Secretary of State for External Affairs and it concerns his replies in the House yesterday, also contained in the transcript of the committee hearings yesterday afternoon, none of which reassured me. I would like to ask the minister if he can confirm that his position in the discussion next in Brussels with regard to the possible resumption of uranium shipments to West Germany has not changed since the position he stated in the House on April 5, as reported at page 4640 of Hansard when he said:
Unless the agreements bilaterally are of the nature which prevents the transfer to other member countries within the European community, we will not sign that agreement and those supplies will be held up.
Is that still the position of the government?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: I would like to read the statement, but having heard it from the hon. member I think I can give her the assurance that on technological transfers that is a requirement of the policy, and there has not been any change.


Flora Isabel MacDonald: Just so that we will be absolutely clear on this, the reference was to the unrestricted flow of nuclear materials, including uranium, to other countries, and the reference was to the fact that these shipments of uranium could possibly be trans-shipped to another country, France, which has not signed the non-proliferation treaty. Does it refer in that matter to a refusal to sign the agreement until that loophole has been closed?


Donald Campbell Jamieson: Mr. Speaker, I am sure the hon. lady will appreciate that it is difficult to give a detailed and comprehensive answer. I do want to reassure her, however, to the extent that I as a layman have had the matter explained to me, that I believe we are still in the same position as was outlined in my answer at that time.
There are further technical negotiations going on at this point which I outlined recently, and so that I do not delude or give an erroneous answer to the hon. member, I would like to
[Mr. Andras.l
reserve my answer in specifics on the technical matter until tomorrow, and I will be glad to answer at that time.



URANIUM EXPORTS-REQUEST FOR STATEMENT IN POSITION ON SAFEGUARDS

Mr. Allan Lawrence (Northumberiand-Durham):: Mr. Speaker, I have a supplementary for the minister. Bearing what he has said in mind, I think the House and the public deserve to have a very full ministerial statement on such an important matter as this. Why can the minister not make a statement tomorrow in the normal way, if he is afraid of some of the technical terms? It is important enough that the House and the country deserve that type of thing.


Donald Campbell Jamieson: Mr. Speaker, I will be very happy to make a statement at the appropriate time, but I do not think the House or the hon. member would want me at this particular stage to reveal all the details of the negotiations which are under way because there are certain aspects which clearly are going to depend to some degree at least on our ability to reach an agreement and a consensus. I do not feel it would be appropriate for me to indicate the total decision we are taking.
I refer the hon. member to what was, after all, a good hour's discussion on this matter in the committee yesterday. It is in the record. I think I went quite far there in seeking to explain, and let me say that if the hon. member or any other interested member would wish to talk with me privately in the initial stage to determine what is the nature of the circumstances, I would be glad to do that and then subsequently to indicate fully what the conclusions are. However, I want to assure the House that there is no effort on our part in this case to move in any way which does not have the maximum possible degree of support, and if it is possible to achieve that by indicating privately what the nature of the situation is, I would be most happy to do that.

[ Translation]



CANADIAN BROADCASTING CORPORATION


Mr. Marcel Roy (Laval):: Mr. Speaker, my question is directed to the Secretary of State.
Given the reply of the Minister of Regional Economic Expansion yesterday to the member for Montreal-Bourassa (Mr. Trudel) that the CBC had refused to broadcast publicity material whose purpose was to promote the Montreal economy and thus create employment, does the Secretary of State intend to inquire to determine the motives of such a procedure which will not surely help reduce the yearly deficit of the CBC?


John (Moody) Roberts: Yes, Mr. Speaker,
I spoke with an official of the CBC and they indicated that the

November 30,1977
regulations are such that a difference is made between information and promotion. This difference concerned me so I raised the question and was told that the president of the CBC will discuss the problem with the directors of the corporation.



MANPOWER


Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Employment and Immigration. In view of the changes in the Unemployment Insurance Act which I am sure the minister realizes will create more difficulties in the Atlantic provinces, can the minister give a little more information regarding the announcement made by the Prime Minister and reiterated by the Minister of Finance about the $150 million for job creation? That will be of great benefit, but I wonder if the minister would elaborate a little more as to what parts of the country that money will be going to and how much will be going to each area?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I cannot give the specifics the hon. member is calling for because that is at the initiative of the Minister of Finance. As Minister of Employment and Immigration, I have made my representations as to the manner in which I think that money could best be utilized in conjunction with tax benefits. Whether my suggestions will be followed I do not know. It is my view that the representations I make would be heavily weighted in favour of areas of high unemployment.


Robert Muir: Mr. Speaker, I want to thank the minister for his answer. In light of the fact that at the moment there are between 3,000 and 4,000 applicants for employment at the Cape Breton Development Corporation-one place alone on Cape Breton Island-and in view of the fact that this minister has worked underground and has gone through the rigours of mining, would he educate the Minister of Industry, Trade and Commerce and ask him not to make derogatory remarks about Cape Breton miners and their work ethics?



SUGAR CONTENT OF BREAKFAST CEREALS-PROPOSED LABELLING REQUIREMENT-POSITION OF MANUFACTURERS

Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, my question is for the Minister of National Health and Welfare. In August in a joint communique the Minister of National Health and Welfare and the Minister of Consumer and Corporate Affairs revealed that some of the leading breakfast cereals in the country were over half sugar. They also revealed that they had instructed the manufacturers of the cereals to indi-
Oral Questions
cate the percentage of sugar on the labels of their products. I would now like to ask the minister whether a reply has been received from the manufacturers and, if so, what is it?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, I do not have an answer right now. I would prefer to have 24 hours and give one in the House tomorrow.



POSSIBILITY OF LABELLING ALL PRODUCTS WITH HIGH SUGAR CONTENT

Lorne Edmund Nystrom: Mr. Speaker, in view of the fact that several government studies, such as the diet and cardiovascular study here in Canada and several studies in the United States, have recommended drastic reductions of the intake of sugar in our diets I would like to know whether the minister is considering extending this policy she has advocated regarding cereals to other foods which are heavily laden with sugar.



EXTERNAL AFFAIRS


Mr. Lionel Beaudoin (Richmond):: Mr. Speaker, my question is for the Minister of External Affairs. The CBC reported last week that the Quebec premier has never received a letter which had been sent to him in May by Mr. Leopold Senghor, President of the Republic of Senegal. The CBC added that this letter is said to have been delivered to the Canadian embassy in Dakar, and the government of Senegal would have raised a strong protest because of this. Could the minister indicate whether he has indeed received a letter of protest?


Donald Campbell Jamieson: Mr. Speaker, I am afraid I cannot give the details on that. It is not something which has recently been brought to my attention. I will be glad to look into it and let the hon. member know. I feel quite certain, however, that if we were asked to transmit a message from one of our embassies to whoever the party was we would have done so, but I will look into it.



PRESENCE IN GALLERY OF PRIME MINISTER H. E. JORGENSEN OF DENMARK

Mr. Speaker:: I will recognize the hon. member for Edmonton Centre to conclude the question period, but before doing so

November 30, 1977
Oral Questions
may I ask hon. members to join with me in calling attention to the presence in our gallery of a very distinguished visitor, the Prime Minister of Denmark, the Right Hon. H. E. Jorgensen, who is visiting us here as part of a goodwill tour. We certainly wish him and his party from Denmark the best of success.


Some hon. Members:: Hear, hear!



COST OF HALF-TIME SHOW AT GREY CUP GAME-SUGGESTED USE OF MARCHING BAND TO REDUCE COST

Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, I would like to direct my question to the Minister of State (Fitness and Amateur Sport). In light of the fact that the Edmonton Eskimos made a great contribution to national unity last Saturday-


Some hon. Members:: Oh, oh!


Kenneth Earl Hurlburt: -and in light of the fact that constituents of mine are interested in finding out the cost of the half-time show during the Grey Cup game, would the minister confirm that those half-time festivities cost approximately $100,000?


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: No, Mr. Speaker, I will not confirm that they cost $100,000 but I will give the precise cost. The cost was $60,000, $10,000 paid by the CFL. We had an audience of seven million people on television and 70,000 people in the stadium in order to show the people of Canada the rich diversity of amateur sports that there is to share.


Kenneth Earl Hurlburt: A short supplementary question, Mr. Speaker. In light of the fact that this country is in the worst financial position of its history and in light of the fact that many marching bands were available to put on a half-time show at 10 per cent of the cost, may I ask the minister if she checked with some of the greatest marching bands in Canada who could have put on the show for one-quarter the cost?


Iona Campagnolo: Mr. Speaker, I certainly hope the hon. member recalls the amount of money that was put into Lethbridge for the Canada games. I think I do not have to remind him that the budget was set in the estimates last year and he had full access to the committee hearings. I believe he will have the same opportunity this year. From the letters I am getting I am sure that most Canadians feel the same way.



ROUTINE PROCEEDINGS


Mr. Speaker:: Order, please. Perhaps hon. members will recall that in March of this year I made a ruling in respect of the procedural regularity of legislative items contained in the estimates. In the course of that ruling I pointed out that in future I should like to find a regime for avoiding some of the difficulties we face when these points are argued.
In the past, we have been faced with these arguments as part of the supply bill only when the supply bill was introduced. It seemed to me at the time that this presented us with some grave difficulties in that the arguments themselves could be prepared in advance. However, there was no machinery by which defences could be prepared and, therefore, no prepared argument on both sides of the question which could be of assistance to the Chair in attempting to make a decision. In fact, in making a decision in that sort of eleventh-hour atmosphere the Chair never had any assurance that the arguments had in any way been brought to the attention of the ministers concerned. Often, ministers do not address themselves to that particular moment of our procedures and may have no way of knowing that matters had been called into question.
I extended a general invitation to the House to suggest procedures by which we might experiment to find a remedy for this difficulty. Some supplementary estimates are coming up again for finalization. I want to indicate to the House that I am not doing this in order to invite objections. I have had indications in an informal way that there is a desire to argue some of these matters. I think it is incumbent upon me to suggest to the House a procedure which I hope will be found to be a little more equitable and will at least serve as a useful experiment.
Since Friday of this week has been designated as an allotted day, a supply day, the second last in this trimester, it would seem appropriate to me that arguments on this matter ought to take place at that time. This would have the advantage of giving the Chair an opportunity to consider the arguments sometime prior to or on the last supply day, and making a decision before the introduction of a supply bill. It seems to me that I ought to make this suggestion to the House today in order to ask members who wish to take issue with any such item to please give me notice so that I can indicate it to the House by three o'clock tomorrow afternoon. This will give both sides of the House the opportunity to examine these contested items and to prepare argument on one side or the other. It will also give the Chair the advantage of prepared argument on both sides which can be considered before I try to make a ruling at the time the supply bill comes down.
I should like to indicate to the House that my purpose is simply to try to introduce some intelligence into our discussion or dispute on these matters, and avoid the obvious difficulty of
November 30, 1977

doing it in the last-minute atmosphere of the supply bill itself. On the other hand, I am not attempting to enforce a rigid regime on the House. Certainly, if after trying this method of dealing with these items there are suggestions which might improve that procedure or, on the contrary, objections to it, I would be pleased to hear them.
For the moment, I am asking the co-operation of the House in advising me by two o'clock tomorrow which items might be under dispute so that I can announce them to the House at three o'clock. It seems to me that, in fairness, I ought to hear that argument on a supply day and therefore it ought to be done on Friday, which would be the second last day and the last day prior to the day when the supply bill will be introduced.


Walter David Baker: Mr. Speaker, I just want to make one comment with respect to this matter. As I understand the situation, there are grave doubts about dollar items in the estimates which have been placed there because the government has not followed, generally, the practice that Your Honour dealt with extensively the last time. There is a questionable practice on the part of the government. I am not arguing that it is a questionable practice, but it is questionable. The point is, it is not there because the opposition has engaged in questionable practices.
If we are going to have that kind of argument in the House, I would respectfully suggest it is inappropriate for Your Honour to use one of our allotted days for the purpose. We would be quite prepared to co-operate and argue the matter tomorrow, which would allow us to settle the matter well in advance and still leave the allotted day. There is some work involved in preparation for an allotted day, so we should not have an allotted day for discussion of the subject. I do not argue with your procedure, sir, but I am a little concerned- indeed, worried-that you should choose an allotted day to deal with a matter that involves questionable practices on the part of the government. We would be quite prepared to proceed tomorrow on the matter, which happens to be a full parliamentary day and not part of a day.


Mr. Speaker:: Order, please. The difficulty about proceeding tomorrow is that no advance notice could be provided. Part of the regime which I am trying to set in motion is one which would give participants advance notice so that arguments could be prepared. One of the disadvantages we faced the last time was that some items were raised on the floor of the House and were not defended or disputed. I had no way of knowing if the minister had ever been advised that those items were going to be called into dispute. That is part of the procedure that should be clarified.
I hope the arguments will not be very lengthy and that no injustice will be done. Since the matter is related to the supply process, however, it seems appropriate that it be done on a supply day. That is why I am doing it now, instead of doing it on the final supply day which is when it would ordinarily take place. It seems to me that if I do not do anything about it, then it will use up part of the supply day, being the last supply day.
Estimates
Instead of that, I am using up part of the second last supply day. After we have tried this, if there are representations further to that made by the hon. member for Grenville-Carleton I shall certainly take them into account.


Allan Joseph MacEachen: Mr. Speaker, the procedure which you have proposed is quite acceptable to us. I would say, in respect of the view expressed by the hon. member for Grenville-Carleton to the effect that the government is engaging in questionable practices, that in preparation of the supplementary estimates we have been very careful to examine the rulings made by the Chair. We have attempted to take these into account and adjust the supplementary estimates accordingly. To my knowledge, quite a number of items are brought forward by various departments as a matter of urgency which I refuse to have included in the supplementary estimates in order to conform as fully as possible with Your Honour's previous rulings. There may be a debate as to the implementation of those rulings, and if so we will attempt to defend what we believe is in conformity with them.


Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, if it is of any aid in facilitating the proceedings of the House, I am prepared to indicate now that the two votes which give us some concern in terms of being proper are 31a, under Regional Economic Expansion dealing with the Cape Breton Development Corporation, and L56a of the Department of Transport dealing with the surface transportation program. These two, we feel, contradict the judgment made by the Speaker in March when commenting on using supplementary estimates to, in fact, amend legislation.

[ Translation]


FISHERIES AND FORESTRY
[Stage Direction]
First report of Standing Committee on Fisheries and Forestry, in both official languages-Mr. Bechard.
(Editor's Note: For text of above report, see today's Votes and Proceedings.)

Allan Joseph MacEachen: Mr. Speaker, I would like, under Standing Order 59 and because of an inadvertent omission in the original reference of the supplementary estimates, to move that votes L36a and L37a relating to the Department of External Affairs for the fiscal year ending March 31, 1978, be referred to the Standing Committee on External Affairs and National Defence.

November 30, 1977
Order Paper Questions


Walter David Baker: That is agreeable, Mr. Speaker.


Mr. Knowles (Winnipeg North Centre):: Yes, Mr. Speaker; we are always ready to help the government correct its mistakes.


Mr. Speaker:: That is agreed, and so ordered.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 186, 277, 285, 393, 396 and 462.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Eugene Whelan: In so far as
the Canadian Dairy Commission is concerned, the answer is:
1.	None.
2.	Not applicable.


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


Eugene Whelan: In so far as
the Canadian Dairy Commission is concerned, the answer is:
1.	(a) (i) to (iv) nil; (v) 15; (vi) to (x) nil; (b) (i) to (x) nil.
2.	Main Estimates
3.	(a) (i) Ontario, $5.39; (ii) Ontario, $6.00; (b) Hourly rates paid by employment agencies to their employees are not known to the Commission, (c) (i) $10,287.; (ii) $7,880.
[Mr. MacEachen.l


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


Eugene Whelan: In so far as
the Canadian Livestock Feed Board is concerned, the answer is: 1. (a) (i) to (v) nil; (vi) 17; (vii) to (x) nil; (b) (i) to (x) nil.
2.	Main Estimates.
3.	(a) (i) $4.78; (ii) $5.00; (b) Hourly rates paid by employment agencies to their employees are not known to the Board, (c) (i) $8,902.; (ii) $6,557.


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


James Hugh Faulkner: 1. Nil.
2. Nil.


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


James Hugh Faulkner: 1. Nil.
2. Nil.


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


Robert Knight Andras: In
so far as the Treasury Board Secretariat is concerned: Nil.
November 30, 1977


Yvon Pinard: Mr. Speaker, I ask that all notices of motions for the production of papers be allowed to stand.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, I gave notice that I want to draw to your attention and the attention of the parliamentary secretary the fact that notices of motions for the production of papers Nos. 7 through to 43 have been on the order paper since last August. They go right back into last session. These papers deal with the cartel that the government helped organize among uranium producers of the world. The government has maintained there is nothing secret about what they did, yet they seem to wish to conceal the facts and continue a cover-up by not responding to these notices which have been on the order paper since last August. I hope the government will try to clear the air on this subject by at least producing, or giving an explanation why they do not produce, the papers to which I am referring.


Yvon Pinard: As a matter of fact, Mr. Speaker, I have noted that two thirds of all the notices of motions which appear on the order paper are in the name of the hon. member for York-Simcoe (Mr. Stevens). Two thirds of the notices of motions have therefore been referred to the department concerned and the hon. member will be advised of the replies as soon as we have received them from the the department.


Mr. Speaker:: Shall the remaining notice of motions for the production of papers be allowed to stand?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, November 28, consideration in committee of Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds-Mr. Chretien-Mr. Ethier in the chair.
The Assistant Deputy Chairman:: House again in committee of the whole on Bill C-ll, an act to amend the statute law relating to income tax and to provide other authority for the raising of funds. When the committee rose on Monday last, clause 4 of the bill was under consideration.
On clause 4-Employment expense deduction.
Income Tax


Lorne Edmund Nystrom: Mr. Chairman, at the close of the session on Monday I was starting to make a few comments on clause 4. I had asked the Minister of Finance a couple of questions about the clause. Just to review for hon. members who might not have been here on Monday, this clause will increase the allowance that will go to workers for employment expenses from $150 to $250. In 1972 the government provided employees with a blanket deduction for expenses incurred in their work of 3 per cent of their total income from their office or their other employment up to $150, whichever was the lesser. What is happening here is that the $150 allowance is going to be increased to $250 for the subsequent taxation year.
The argument I made to the Minister of Finance on Monday was that I agreed it was a good idea for workers to get an employment allowance-we all agree on that-however, I stated that a much more equitable way of doing this would be to get away from the allowance and give workers a tax credit. If you have a tax credit, it will be redistributive. The minister said he found it a good idea, but it would be a fundamental change in our tax system. It was very significant when he said "fundamental change".
The other point I made is that a tax credit would not be something new in this country. We already have a tax credit with regard to contributions to election campaigns. If somebody contributes $100 to a political party, he does not get a $100 exemption on his income tax; he gets a tax credit. That tax credit is 75 per cent, or $75. Any member who contributes $100 to an election campaign gets back $75 regardless of his work. If this were to be made an exemption of $100, it would be worth a lot more to a member of parliament or someone making a lot of money compared to someone who does not make much money. Therefore, it would redistribute income in this country. That is the argument I made, which I hope the government will take seriously.
I can give a couple of examples of tax credits in this country. One hypothetical example is a $400 credit for a family of four. If the income is under $2,000, they receive back the $400. If the income is between $10,000 and $12,000, they only get back half, $200. If the income is over $20,000, they do not get any of it back. That is the way a tax credit works. Therefore, there is a redistribution of income when you give this benefit. A $400 exemption would be worth much more to a high income earner than a low income earner. That is why we make the argument for a tax credit.
There is another argument one can make about the increase in the employment deduction. An across-the-board deduction can be very inequitable. For example, there could be two employees both earning $15,000. They both get the same deduction. Those two employees could have totally different expenses. One employee could walk to work and get a great deal of exercise, while the other employee has to drive several miles. He has a legitimately higher expense than $250, although he receives the same benefit. Another example is one employee earning $15,000 and another earning $5,000. The employee earning $15,000 may not have very high expenses. He may walk to work and have no personal expenses whatever.

November 30, 1977
Income Tax
The employee earning $5,000 may have to take a bus or the subway or drive his car to work every day, which can be very expensive. In that case it is inequitable because both employees get the same deduction. The response of the government to this argument is that if we were to have all the flexibility required to have an equitable system, you would achieve your credit. I can understand the argument they are putting up. I should like to suggest to the government-I see there are no ministers in the House-


Mr. Drury:: There are.


Lorne Edmund Nystrom: The Solicitor General is here, but he is at the back. There is another, but he is dancing around, so he is hard to see. Anyway, I am sure they do not know much about finance so I will direct my questions to the parliamentary secretary, who is much more knowledgeable. Why does not the government consider, for example, if administering a really fair system is likely to be too costly, starting with a $250 floor? I think that would cover most of the workers in the first place; their expenses would be less than $250. But there are many people whose expenses are higher than that and who are treated very unfairly by this law. I suspect this concerns a small minority of workers.
Why cannot everyone have the benefit of a $250 law and, after that, if it can be proved to the taxation people that expenses are higher, why cannot the whole amount be claimed as a legitimate expense? I think it is fair on another ground. People engaged in business in this country are allowed to deduct their legitimate business expenses. Why should there be one rule for those who are in business and another for those who are not in business? The only reason I have been given so far is the bureaucratic complexity involved in rectifying the situation. I have made my suggestion, now, to the parliamentary secretary.
While I am on my feet, I want to take advantage of the occasion of this discussion on clause 4 to call attention to something which I do not think many people realize. That is, since tax reform in Canada in 1971, the inequities in the taxation system have not decreased; they have become greater. One way of closing the gap is to take a clause like the one before us and change it so that workers and low income people are treated a little better. I want to put a few statistics on record to prove the point I am making. The figures I have in mind relate to income prior to taxes. They are taken from the thirteenth annual review of the Economic Council and show the distribution of income. The population is divided into five groups and 20 per cent of the population is in each group. In 1965, before taxes, the worst off 20 per cent of the population was receiving 4.44 per cent of the national income. In 1974, nine years later, they were getting only 4.02 per cent of the national income. So the lowest 20 per cent saw their incomes, as a percentage of national income, drop during that period.
Now I move to the other extreme, to the group which was best off. In 1965 they received 41.35 per cent of the national income. By 1974, the figure was 42.52 per cent. In other

words, their share of the national income was increasing. That is before taxes. One might say the purpose of a taxation system, among other things such as collecting revenue for all our programs, is to redistribute wealth. People should pay for programs on the basis of their ability to do so. I knew that this was not the case prior to tax reform. The system was not effective in redistributing income or, at least, not as significant as we in this party think it should be in that regard. But I worked on the assumption that since tax reform in 1974 some of the loopholes had been blocked and that we had a fair taxation system.
Once again I wish to put on record some tables from the source I have just used, showing that the gap is widening. I turn to the redistribution impact of income tax in 1971 and 1974. The population is again divided into five groups. The percentage change in share resulting from income taxes in 1971 before the impact of tax reform was this: when taxes were taken into account in calculating income the lowest group, which received only 3.65 per cent of the national income, saw its share of the national income go up by 0.6 per cent. By 1974, after tax reform had been in effect for a while, their share of the percentage of the national income increased by the same figure-0.6 per cent. In other words, the percentage increase, after tax reform, was zero. So the tax bill which was brought before the House had no impact at all on lower income people in terms of giving them a greater share of the national income. I think that is very sad indeed.
Take the second group. Before tax reform, in 1971, the taxation system had raised their share of the national income from 10.6 per cent by an additional 0.9 per cent. In other words, after taxes were considered, their incomes rose by almost 1 per cent. After the tax reform changes in 1974, their percentage of the national income, following taxes, went up by 0.9 per cent, which means they were worse off after tax reform than they were before. The net change was a drop of 0.1 per cent; their income declined by one-tenth of 1 per cent.
I will analyse very quickly the third, fourth and fifth groups to see what happened. In 1971, the third group saw its share of the national income go up by 0.6 per cent. In 1974 it did not go up by as much; it went up by 0.5 per cent, a net drop of one-tenth of 1 per cent. The fourth highest group includes people receiving significantly higher incomes. In 1971 their income went up by 0.1 per cent and by 1974, after tax reform, their increase was zero. The change amounted to 0.1 per cent.
I see this as satisfactory, because after tax reform those who are at the higher end of the system should be getting less money. When one comes to the highest group, though, containing those who receive more than 40 per cent of the national income, they received 42.9 per cent of the national income in 1971, after taxes had been paid, and in 1974 their income declined by 2.7 per cent. After tax reform, however, their income dropped by only 1.9 per cent, so tax reform gave them an additional three-tenths of 1 per cent of the national income. I do not think that is right. I think the taxation system should help to redistribute income. The point I am making to the parliamentary secretary, in the absence of the minister, is that
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tax reform has not redistributed income in this country as many of us believed it would.
One of the objectives of any sane parliament in 1977 is, surely, to attempt to improve the conditions of those people in this country who are poor, those who do not have enough money to buy colour television sets and new cars, paint their houses or take vacations, and the like. One way of making conditions better for them is by giving them tax breaks, and one of the ways of doing this is by amending clause 4 which is before the committee. We should make provision for a tax credit in place of the exemption which the minister has already rejected.
I suspect that the minister personally sympathizes with the idea of a tax credit, but that he feels the problem lies with the bureaucrats in the department who do not want to change the old, conservative way in which they have been doing things. If this is unacceptable, then my other suggestion is that we give workers with legitimately high employment expenses a tax break by way of a deduction similar to that allowed businessmen who legitimately incur high expenses. If both these suggestions involve too much bureaucratic difficulty, then why not establish a floor of, say, $250? If that is unrealistic, then perhaps it should be $300 or $200. I will leave that to the statisticians of the Department of Finance. Then workers with legitimately high expenses can be compensated. I would ask the parliamentary secretary to respond to my suggestion and tell me why this cannot be done.
May I make one other point before the parliamentary secretary replies. As a result of our research, we have found that Canada is probably the most rigid industrialized country in the world so far as not allowing workers to deduct legitimate expenses is concerned. If other countries in the European Common Market and the United States can do it, Mr. Chairman, why not us?
Mir. Lumley: Mr. Chairman, as my minister related to the hon. member the other day, the hon. member is advocating a basic structural change to the tax system. What he is saying is that our tax system is not progressive enough. Some may agree with him, and others do not totally agree. However, I am sure the hon. member will agree that there must still be a method of defining exactly what is taxable income. The employment expense deduction is a method of trying to determine what is taxable income.
The hon. member referred to the royal commission on taxation. During the arguments presented to the royal commission, the commission looked very favourably on an employment expense deduction and came to the conclusion that the most fair way to implement a deduction of that nature was to apply it on a flat-rate basis. There will always be differences of opinion as to what the base figure should be. A few years ago it was $150. It is now $250. I am sure the hon. member appreciates that we receive representations from people in all walks of life. Special categories are set up to meet individual cases. Moving expenses apply to all categories.
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If I may reiterate what my minister said to the hon. member the other day, although his opinion on a more progressive tax system may be valid, I am sure he will agree that we still must have a method of defining what is taxable income, which is why we use the employment expense deduction.


Lorne Edmund Nystrom: Once again, Mr. Chairman, I understand the argument of the parliamentary secretary. In response to a question which I put to the Minister of Finance on Monday, the minister said that if we were to account for all the legitimate expenses of workers the task would be an absolute nightmare and it could not be done. I agree that it would be a bureaucratic nightmare if every worker was dealt with individually. But would the parliamentary secretary deal with my specific point about establishing a floor of, say, $250 which everyone could claim? Then if people submitted additional vouchers claiming higher expenses, they could be given a credit. I said that perhaps my figure of $250 should be $300, or more or less, but only a small number of workers would be involved and there would be more equity. I am thinking primarily of people who live in rural areas and who travel some distance to work, such as people in Newfoundland and places like that. Their expense of getting to work is higher than those who live and work in large metropolitan areas.


Mr. Lumley:: Mr. Chairman, as the minister told the hon. member two days ago, it would be an administrative nightmare-in fact, virtually impossible-to have a voucher system for each individual who wants to claim an expense of this nature. I am no expert on the implementation of a system of this nature, but our officials say that it is almost impossible.
[ Translation]


Mr. Allard:: Mr. Chairman, I would also like to make a few remarks on the amendment in clause 4 of Bill C-l 1. There we find that a taxpayer will be allowed to ask for a deduction, not exceeding $250, equal to 3 per cent of the income from an employment or an office.
We are all aware that the cost is tremendous for any worker who has to travel to go to work. We all know that inflation has a direct bearing on people's income and that travelling by car, especially in cities where traffic is heavy, requires more highways and so on.
On March 28, I suggested to the House, through a motion under Standing Order 43, that any worker using public transport to go to work be allowed to deduct all such travelling expenses from his income tax. This would naturally have the effect of stimulating Canadian workers to use public transport.
This would allow for the deduction of expenses incurred to go to work. Obviously, if there are 50 workers who use public transport, who take the bus, there will be that many drivers off the roads. This would also save a very great quantity of energy, particularly at a time when it is a source of concern because of its high cost; thus, this would have the effect of saving energy. At the same time, there would be some savings on the many grants the government must give for the construction of roads, etc.

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To that end, Mr. Chairman, I should like to move an amendment to subclause 4(1) of Bill C-ll, on page 3, which reads as follows:
That subclause 4(1) of Bill C-ll be amended by striking out lines 17 and 18 on page 3 thereof and substituting the following:
"er, equal to the lesser of $400 and 3 per cent of the aggregate of'
And adding thereto:
"or a deduction is allowed for all costs incurred while travelling to and from work by wage-earners using public transportation, on submission of receipts and vouchers."
In other words, the workers who can produce evidence that they used public transportation will be entitled to deduct the expenses incurred even up to $600. I think that at present the amount is too low and, as I said a while ago, this would certainly relieve the congestion in cities and result in a saving of energy and subsidies.


Edward C. Lumley: Mr. Chairman, while we understand the well-intentioned motive behind the hon. member's motion, he must realize that you cannot use the tax system to solve basic problems in respect of urban transit. Some of these problems are individually controlled-do I drive a large car, a small car, do I live close to my work, or far away from it? The final point in respect of the hon. member's suggestion is that, again, it would be a bureaucratic nightmare, involving reams of paper and vouchers, which obviously would not facilitate the easy implementation of a measure of this nature.


Eudore Allard: Mr. Chairman, this is not what I asked the Parliamentary Secretary to the Minister of Finance (Mr. Lumley). It is quite simple, it is merely a matter of producing receipts to the effect that a person has used public transport during working hours. It is somewhat the same as when someone files his income tax return and produces receipts to obtain certain deductions allowed by the act, it is as simple as that. That is all I am asking for in this amendment; that the government increase to at least $400 the expenses incurred by those who use public transport to go to work.


Edward C. Lumley: Mr. Chairman, there is discrimination involved inasmuch as there are many people who do not have access to urban transit and would not be in a position to benefit from the hon. members' suggestion.


David Orlikow: Mr. Chairman, I could not help but be struck by the comment of the parliamentary secretary in answer to questions put by my colleague, the hon. member for Yorkton-Melville, regarding business deductions. The parliamentary secretary said, as the minister has said on earlier occasions, that an attempt to get workers to account for actual expenses in order to obtain deductions would involve an administrative nightmare. I think those are the words he used. I suppose it would, as it is the workers who are concerned, but apparently it is not for-
[ Translation]


Yvon Pinard: I rise on a point of order, Mr. Chairman. I understand that you have asked hon. members to take part in the debate concerning the amendment moved by the hon. member from the Social Credit party. I am wondering whether the hon. member is dealing with the amendment or rather with a matter that has already been raised by one of his colleagues.


Charles Robert Turner: I understand that he is speaking on the amendment. The hon. member for Winnipeg North.


David Orlikow: Mr. Chairman, I was speaking on clause 4. If you want to deal with the amendment first-


Charles Robert Turner: Order, please. I referred the hon. member to the amendment. If he wishes to discuss the clause, he may do so at a later time; but we should dispose of the amendment first.


Mr. Laprise:: Mr. Chairman, I would like to give my support to the amendment of my colleague from Rimouski (Mr. Allard) and give some explanations about that amendment. I do not know whether the parliamentary secretary to the minister did understand the amendment which the hon. member for Rimouski just read out and which you read yourself immediately afterwards but I feel hon. members may not fully appreciate the purport of that amendment. The original version of the clause of the legislation before us simply proposes to increase the present exemption from $ 150 to $250 a year.
We found that $150 was definitely not enough and the additional $100, considering the sharp increase in the cost of gasoline, auto parts and so on, cannot offset the expenses incurred by workers who have to commute to work. My colleague from Rimouski has moved an amendment to increase the basic amount to at least $400 or 3 per cent of all expenses incurred. Therefore, Mr. Chairman, there is nothing excessive in that basic part. The amendment goes on:
or a deduction is allowed for all costs incurred while travelling to and from work by wage-earners using public transportation, on submission of receipts and vouchers.
This means that the person who prefers to use a public transit system to get to work, when such a system is available, may choose to do so and obtain the deduction of the true expenses he or she has incurred, upon submission of the necessary vouchers. It does not take a wizard to understand that. I feel that the employees of the Department of National Revenue are quite capable of holding the accounts. They have the accountants they need, and if they need more, we can supply some who can hold the accounts and check what expenses have really been incurred. In my opinion, my colleague the hon. member for Rimouski has introduced an amendment which has a lot of merit and which should deal more fairly with the Canadian workers and employees who must travel to get to work.

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Yvon Pinard: Would the hon. member allow a question on the amendment?


Gérard Laprise: Yes, Mr. Chairman.


Yvon Pinard: Mr. Chairman, would the hon. member indicate whether his amendment entails an extra appropriation under Bill C-11? If so, did he obtain the Governor General's recommendation, as provided under Standing Order 62?


Gérard Laprise: Mr. Chairman, it is not for me to seek such a recommendation. If the minister accepted the amendment, it would be up to him to apply for such recommendation if required, although I am not sure it is required in the first place. There is no problem.


Yvon Pinard: Mr. Chairman, I respectfully submit that this amendment ought to be rejected because it is out of order. Since the hon. member said he does not need to apply himself for the Governor General's recommendation, I assume he recognized he was seeking an extra appropriation. And since there is no recommendation, it seems the amendment is out of order. I would ask the Chair to reject it as such.


Stanley Howard Knowles: Mr. Chairman, perhaps I might say a word or two on the point of order just raised by the parliamentary secretary. If I understand the amendment correctly, it does not request that more money be paid to someone. This is not a money bill of the kind to which there is attached a Governor General's recommendation. This is a tax bill. We have been over this matter scores of times. It has been ruled that an effort by means of an amendment to reduce the amount of tax payable is in order. All the hon. member is seeking to do is reduce the amount of tax payable by increasing the amount of these deductions.


Charles Robert Turner: Order, please. I do not believe we need go any further into that. The hon. member for Winnipeg North Centre (Mr. Knowles) just explained this very well, in the same terms I would have used myself. Specifically, the amendment does not seek any extra appropriation, it simply changes the tax structure. Therefore, the hon. member's amendment is valid, and we are now discussing it.


Sinclair McKnight Stevens: Mr. Chairman, when dealing with this amendment, I hope the hon. member will correct me if I misinterpret what he has proposed. I understood he would like to have the maximum amount that may be deducted as an expense allowance raised from S250 to $400.
The minister spoke yesterday on this amendment, and I am very sorry he is not able to be with us today, because his colleague, the Minister of Employment and Immigration,
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seemed to be quite testy today because the bill was not receiving hasty passage.
I suggest the ministers get their act together. If they want legislation passed through the House, they should try to be present here. However, I will come back to that later. On Monday, the Minister of Finance, in dealing with the amendment now before us-that is, the government amendment which proposes to raise the expense allowance from $150 to $250-said that it would cost an estimated $115 million so far as federal loss of revenue is concerned. Can the parliamentary secretary give us a breakdown of that figure? How many employees are involved, and what do they assume the rate of taxation to be?


Charles Robert Turner: Order, please. I have difficulty understanding the relevance of the remarks of the hon. member for York-Simcoe to the amendment before us.


Sinclair McKnight Stevens: Of course my comments are relevant, Mr. Chairman. They are relevant to clause 4. I was saying that on Monday the minister told us that the total cost of raising the tax by $100, so far as the expense allowance was concerned, was $115 million. I ask the parliamentary secretary to give us a breakdown of that figure, following which I will ask him for an estimate, based on that reasoning, of the cost of raising the exemption as suggested in our amendment from $250 to $400.


Edward C. Lumley: The $115 million to which the minister referred a couple of days ago will affect approximately 6.5 million taxpayers in Canada.


Sinclair McKnight Stevens: I do not have a calculator with me, Mr. Chairman. Can the parliamentary secretary tell us what he assumes will be the average tax the 6.5 million people will be paying, and the average percentage the government will be losing by raising the limit by the extra $100?


Edward C. Lumley: I am sorry, Mr. Chairman, but I do not have an answer to that specific question. I will try to obtain that information.


Sinclair McKnight Stevens: If they are able to calculate the cost of the increase of $100 to which I have just referred, can the parliamentary secretary give us an estimate of the cost if our colleague's amendment is carried; that is, to raise it from $250 to $400, which is a further $150?


Edward C. Lumley: As the hon. member knows, that is a very complex calculation and we certainly cannot do it right now. But if the hon. member insists, we can take the time to do it and will report back the answer.


Sinclair McKnight Stevens: I think it is quite relevant if we are to vote on this amendment. I think one of the important things we have to know is how much money we are talking about. I believe all of us would love to give a $1,000 exemption, but if we are to be responsible we should try to get an estimate of how much revenue we are talking about. I take it from the parliamentary secretary's response that we cannot simply multiply by 150 per cent the estimate of moving up by $100. In other words, to

November 30, 1977
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move up from $150 to $250 is not to go up by 40 per cent, which it would be if we went up from $150 to $400.


Edward C. Lumley: According to a rough calculation, it would be approximately $175 million in addition to the $115 million.


Sinclair McKnight Stevens: I take it, then, that the parliamentary secretary is using the arithmetic of simply going up 1.5 times what was originally calculated. When the hon. member for Gatineau spoke on this subject on Monday, he stated that in Quebec the allowance was already $500. I take it he was referring to the provincial allowance. Can the parliamentary secretary tell us if that is so. Is there a $500 maximum allowance in Quebec? I would also be interested in knowing what are some typical provincial exemptions. If Quebec allows $500, does Ontario allow less than that?


Charles Robert Turner: Order, please. I have great difficulty in finding the relevance of the hon. member's questions to the amendment before us. The hon. member is referring to provincial matters, and I see no relevance to the amendment before us.


Sinclair McKnight Stevens: I will explain the relevance of my remarks, Mr. Chairman. We are saying that those who work at present are entitled, before they pay income tax, to an exemption of $150. The government proposed that that amount be raised to $250. A member of the Social Credit party has said that $250 is not enough, that it should be $400. What I want to establish, first, is how much money we are talking about. The government says that $100 will cost $115 million in lost revenue. Then we were told that another $150 would likely cost approximately 150 per cent more; that is, $170 million.
The other point is that if people are already enjoying a higher expense allowance in a province such as Quebec than we are willing to give them, it is relevant to consider what the federal authorities should be doing. What I would like identified is whether the hon. member was correct when he said on Monday that the expense allowance in Quebec is $500. If it is, I think it is relevant in that the $250 appears to me to be rather low, so far as the federal government is concerned, if Quebec feels the exemption should be as high as $500.1 would like to know what is the situation province by province.


Edward C. Lumley: The figure with respect to Quebec is accurate, but I would like to remind the hon. member that our taxation system is entirely different. For example, Quebec does not have indexation, nor does it have deductibility for dependants.


Sinclair McKnight Stevens: Did the parliamentary secretary say there is a $500 employee exemption?


Edward C. Lumley: Yes, Mr. Chairman.


Sinclair McKnight Stevens: Does he know, for example, what it is in Ontario?


Edward C. Lumley: All provinces, with the exception of Quebec, have the same tax collection agreement with the federal government, so far as I know-but I will check it out.


Stanley Howard Knowles: I would like to ask a question about the estimate the parliamentary secretary gave us. Frankly, I think a more relevant comparison would be between what it would cost to support this amendment and some of the concessions we are making to corporations in this tax bill. But with respect to the figure of $170 million, compared with $115 million, that is obviously some arithmetical stepping up. I remind the parliamentary secretary that there is a 3 per cent ceiling, and if we do raise the maximum to $400 but leave the 3 per cent in, many workers earning $10,000 or $11,000 a year will not get the full $400. So I suggest that the cost of changing that figure from $250 to $400 is not in the same proportion as changing it from $150 to $250. In other words, I think the figure would be a lot less. But in any case, we think it is a good idea.


Edward C. Lumley: Mr. Chairman, just a slight correction, in case the hon. member misunderstood me. It is an extra $170 million over and above the $115 million. Obviously, I am not a mathematician. This was a very fast calculation we made, but we will try to get that figure verified.


Stanley Howard Knowles: That is exactly the point. The $115 million was what the cost would be to go from $150 to $250. Now the parliamentary secretary is saying it will take another $170 million to go from $250 to $400. That is in the same proportion. That would be the case if everyone was going to get it. My point is that many workers will not get the $400 because of the 3 per cent ceiling. Therefore, the actual extra cost would be a lot less than $170 million. I hope the parliamentary secretary's nodding will get on the record.


Edward C. Lumley: As I stated earlier, we have not done a precise calculation. The hon. member could very well be right. We will try to verify this figure for him at a later time.


John Carnell Crosbie: Mr. Chairman, I have a question on this clause, and if we cannot get the answer I suggest we stand this clause and go on to deal with some of the others so that we can make some progress. It is not our fault that we are being delayed on this. I have a question in connection with this clause. This clause which the government is proposing is going to apply to the nine provinces which have the federal government collecting their income tax for them. Is this clause proposed without permission from the nine provinces involved, or without consultation? Quebec collects its own tax, and the taxes of the other provinces are collected by the government of Canada. This clause will cause a loss of revenue for the nine provinces whose taxes are collected by the federal government. Did the federal government seek the consent of those nine provinces for this clause, as well as for the other changes in the income tax system?

November 30, 1977


Edward C. Lumley: Mr. Chairman, this is not different from any other changes in the bill or in any other previous budget. The federal government examines the system as well as individual situations. For example, the government found that the $150 deduction is totally inadequate in view of the inflation we have experienced in the past couple of years. We do not discuss every single aspect of a tax bill with every single province.


John Carnell Crosbie: That is just the point I wanted to bring out. 1 am glad the parliamentary secretary verifies that. I am not talking about federal income tax imposed by the federal government for its own coffers; I am talking about taxes imposed by nine provincial governments to raise moneys for provincial purposes which are collected by the government of Canada as a convenient administrative method, so that we do not have 10 or 11 governments collecting income and corporate taxes. The government of Canada collects it as an administrative mechanism to avoid a complete nightmare, but then when it makes changes in its own tax-the point I am getting to-it also makes changes unilaterally for the nine provinces whose taxes it collects. That is the situation, is it not?


Edward C. Lumley: Mr. Chairman, I am sure the hon. member is aware that the nine provinces voluntarily entered into tax collecting agreements with the federal government. The provinces still have the prerogative to have their own individual taxation systems over and above anything the federal government does.


John Carnell Crosbie: Then that is what they will have to do.


David Orlikow: Mr. Chairman, I rise to support the amendment proposed by the hon. member from the Social Credit party that the tax exemption be raised to $400, but I want to say that I am less than enthusiastic about any system which gives automatic exemptions to people. Whether it is the $150 exemption we had last year, the $250 exemption which is proposed by the government for this year, or the $400 exemption proposed by the Social Credit party, we are not taking into account all the actual expenses an employee incurs. These expenses include those incurred in getting to and from work, having to buy tools, or whatever. When the hon. member for Yorkton-Melville was suggesting changes, the parliamentary secretary repeated something the minister said a few days ago; that is, that it would be an administrative nightmare to have to get the accounting done in a more detailed way.
I am struck by the attitude of the minister and his department about the difference between how to treat working people and how to treat self-employed and business people. For the latter group we permit a host of exemptions-it would take me all day to list them-and there is very little accounting. I am going to put some of these exemptions on the record. I am sure many working people in this country will say, "By golly, we are getting an extra $ 100 exemption, and that is good", but the only reason they say that is that they do not know the kinds of tax breaks this country gives to self-employed and business people. I am not saying that is necessarily wrong. I
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am saying, however, that there ought to be the same approach to working people as there is to business people.
I suggest to the parliamentary secretary that what I am suggesting is not very radical. During the election campaign which took place prior to his election, President Carter said: "When a business executive can charge off a $55 luncheon on a tax return and truck driver can't deduct a $1.50 sandwich, then we need basic tax reform". Is the situation in Canada the same as it is in the United States? If the parliamentary secretary consults his officials I think he will find that that is precisely the case. A businessman can deduct $55 or $250 for a dinner if he has it with some of his prospective customers. The tax department will not question that at all. That would be a legitimate expense. He can take his customers to a golf club and pay the green fees, or he can buy a wedding present for the daughter of a customer or prospective customer and charge that off as business expense. He can take a business trip.
A former minister of finance, Mr. Turner, spoke to a convention of Canadian business people a couple of months ago; I think it was the Institute of Financial Analysts, although I may be wrong about the specific organization. Where were they having their convention? In Bermuda or the Bahamas, and the expenses are considered business expenses. The delegates can deduct the expense of going to that convention and they do not have to pay taxes on the cost of that trip. A doctor, lawyer or businessman can deduct the expenses for his automobile. That can be a very substantial amount of money. For example, he can deduct the expenses for gasoline, oil, automobile insurance and even for the depreciation of his car. If he has a $15,000 car, he can depreciate it in the first year at 30 per cent. For car expenses alone, a businessman can charge off expenses of between $4,000 and $5,000. If he is in the 40 per cent to 50 per cent tax bracket, as many business people are, he will pay about $2,000 less income tax. I am not saying that is wrong, but I am saying the working man does not have that opportunity. A man who can walk to work will be able to deduct the $250 which the government is proposing, but if he has to drive 50 miles each way every day he will not be able to deduct the costs involved or depreciation on his car. On the one hand, very generous treatment is given to selfemployed and business people, but the treatment of working people is very tough.
I quoted from a speech made by President Carter on the subject of tax deductions. He proposed some very tough tax laws which are being considered by the House of Representatives and the Senate in the United States. He suggests that the government monitor very closely the kind of business expense 1 have spoken of-for example, the business lunch. A spokesman for the American Hotel and Motel Association is quoted in the Toronto Star of November 12 as saying:
It doesn't take a lame-brain to figure out this could really hurt these people. You walk into any Washington hotel, restaurant or dining room and look around at the way people pay. You can tell they're on expense accounts.
If they pass this thing, you'd be able to shoot a cannon in those restaurants and not hit anybody.

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Is the situation any different in Canada? If I were to go to the Chateau Laurier, the Skyline Hotel, the Inn of the Provinces or any good restaurant in Ottawa, Toronto, Winnipeg or Montreal, I am sure the bulk of the people eating those expensive luncheons would be putting them on expense accounts, paid to a large extent by the taxpayers of this country. Meanwhile, if we pass this bill, the working man can only deduct the niggardly amount of $250 for the whole year. That is probably less than some business people can deduct in one day for business expenses.
When he spoke last week, the hon. member for Waterloo-Cambridge mentioned an analysis of this bill made by law students at Osgoode Hall in Toronto. I should like to put on record some of their observations about this particular clause which will permit employees to deduct either $250, or 3 per cent of their income. I commend these comments to the parliamentary secretary because they come from a group of people who in future will be in the business or self-employed category and will take advantage of the exemptions proposed in the bill. Referring to clause 4, the report reads:
1.	This piecemeal deduction will do little to increase the disposable income of working Canadians. Assume a worker is in a 30 per cent tax bracket. If the government allows him an extra $100 per year by way of the deduction, his tax savings are $30 annually, or about $1.60 a week, with which additional consumer spending is to be done.
2.	The employee expense deduction is highly inequitable. It violates both the principles of horizontal and vertical equity.
(a)	Two employees who both earn $15,000 will get the same deduction even
though each may be incurring for different expenses in earning that income.
(b)	Vertical equity is violated since a person earning $15,000 may incur far
fewer expenses than a person earning $4,000. Nonetheless, the former will be
able to claim a far greater deduction than the other.
3.	The employee expense deduction, present or proposed, discriminates against the working poor. A large percentage of Canadians earn under $8,000. To award these people an arbitrary sum which they are to deduct to cover their expenses is highly insulting. They are not able to claim a full deduction of $250, when perhaps incurring similar if not greater expenses than a higher salaried employee. This is so since all Canadians earning less than $8,333 are restricted to claiming 3 per cent of their income as their expense deduction. Not only has the government failed to raise the 3 per cent minimum ceiling in order to help this income class, but it has failed to realize that this mode of calculation might only be justifiable if expenses incurred were a function of earning income. However, as has been stated, many people in higher income brackets spend less in earning income than the persons in lower income groups.
4.	The employee expense deduction, with or without the proposed increase, does not provide a reasonable deduction for expenses incurred when earning income. Rather, it is the product of political compromise. The government has chosen a sum arbitrarily without the aid of statistical data. It merely retreated from the compromise suggested by the authors of the Carter report, i.e. to give employees a maximum deduction of $500. However, such a figure was felt to be too generous.
5.	Therefore, if required to justify the present figure of the deduction, the government should complete and publish a study of its costs and benefits which it promised to undertake long ago.
6.	Ideally and practically speaking, all employees should be able to deduct the reasonable costs of earning income. Were the government so sensitive to the fact that "all Canadians face expenses of employment" (p. 19, budget supplementary papers) it would meet the problem of employee expenses head-on by eliminating the distinction between business and employment income.
That is precisely what I have suggested, Mr. Chairman. There should be no difference between expenses incurred by employees and expenses incurred by business people. It has

been argued that this would make the administration and collection of taxes very difficult; in fact, the parliamentary secretary said it would be an administrative nightmare. I do not believe that the working people of Canada, those who are employees, are less entitled to expenses incurred in the course of their work than are business people and those who are self-employed. I shall support the motion of the Social Credit party, Mr. Chairman, and I should like the parliamentary secretary to tell the House why the government continues this approach to the calculation of expenses that affects working people differently from those who are self-employed or in business.


Edward C. Lumley: Mr. Chairman, I cannot state specifically whether expense deductions are the same in Canada as in the United States. We think we have one of the best taxation systems in the world. Just to take one aspect of that, we have the highest threshold of income before taxes in the world. The hon. member's example was an individual making $8,333, with two dependants, who does not pay any income tax whatsoever. I am not aware of how many countries have that particular tax provision. When you talk about businesses, those expenses are restricted to legitimate expenses.


Some hon. Members:: Oh, oh!


Edward C. Lumley: If there are some allowances that are not correct, then they should be brought to the Department of National Revenue. That is exactly what National Revenue does and is there for. As far as taxation goes, only legimate expenses are to be allowed on tax forms.
Mr. Chairman, the bureaucratic nightmare which I referred to earlier is not just a question of the amount of paperwork involved; it is also a question of determining what are legitimate expenses, if you want to use his example with regard to individuals. For instance, the motion on the floor at the moment with respect to cars, does that mean the individual who drives a big, gas-consuming vehicle has a larger expense deduction than the individual who drives a smaller car and conserves energy? Does that mean the individual who buys expensive suits gets a larger expense deduction than the individual who wears Levis? If he talks about equity, Mr. Chairman, I do not see where this suggestion would solve the equitable situation that they advocate.


David Orlikow: I would like to ask the parliamentary secretary a question. He says we have a very equitable tax system. Would the parliamentary secretary explain, and tell me if I am correct in my statement that a businessman, doctor, lawyer or architect can deduct a substantial percentage of the expense of running his car which he uses for business, including the cost of gas, oil, automobile insurance and depreciation on the car? If he confirms one can do that, will he explain to me why a working man living, for example, in Gimli, Manitoba, who has a job in Winnipeg, 50 miles away, and drives to and from work every day to keep his job cannot deduct a percentage of his car expenses the same way a businessman can? In the examples I have just recited, if they do not have the same rights, where is the equity?
November 30, 1977


Edward C. Lumley: Not only the doctor, to which the hon. member refers, has that, but so has every salesman-anybody who has to use a car for business. The doctor or salesman cannot claim expenses travelling to and from work in that deduction: absolutely nothing for personal use.


Mr. Ritchie:: Mr. Chairman, I would like to say a few words on this subject. I might say I am inclined to agree that we should look at the increase to $400 or some amount. In the United States they are having a violent argument over this so-called "one martini" lunch.


An hon. Member:: A three martini lunch!


William Gordon Ritchie: A three martini lunch. From what I read, it looks as if the three martini lunch is going to stay. Maybe a few other things will go-for example, stadium box seats- which will hurt the Grey Cup equivalent in the United States, or the hunting lodges. In addition, the clamp the United States put on large conventions outside the country has been a very great boon for the hotels, and so on, in that country. That is something we should think about. This is a very difficult topic to be fair about. I think there is one aspect I have not heard discussed in this House today, although I have not been here for the whole day. But it is the fact that for tradesmen there has been the problem of tools with the changeover to metric. Generally speaking, from what I have heard, a tradesman who requires tools needs somewhere between $400 to $500 to buy them.


An hon. Member:: At least.


William Gordon Ritchie: For instance, I was on the aeroplane the other day and an individual who is not a tradesman mentioned to me that his two daughters had two bicycles, and he could not do anything with them-


Charles Robert Turner: Order, please. Perhaps it would be helpful to the members if I reread the amendment. It is in French. We have an amendment to clause 4 which reads as follows:

That subclause 4(1) of Bill C-l 1 be amended by striking out lines 17 and 18 on page 3 thereof and substituting the following;
"er, equal to the lesser of $400 and 3 per cent of the aggregate of'
And by adding thereto:
"or a deduction is allowed for all costs incurred while travelling to and from
work by wage-earners using public transportation, on submission of receipts
and vouchers."

I would ask hon. members to limit their remarks to the amendment. Once we dispose of the amendment, we can return to clause 4.


William Gordon Ritchie: Mr. Chairman, I was merely trying to point out to you that the $400 limit for a tradesman to buy a new set of tools to cope with the metric system, which we in our wisdom brought in and which was the worst possible thing at this time because it will increase inflation and cause expense to
Income Tax
our working people, is certainly too little. Generally speaking,
I believe within this year and the next year all tradesmen who buy their own tools are going to be required to buy them because this is the time of change. I would suggest, as has the hon. member for Winnipeg North, that it may be wise to look at this $250 or $400 and attempt to assess more carefully what the actual expenses are of individuals, so we can be fair in this regard. I did not feel it would be such an administrative nightmare as that which the parliamentary secretary has suggested.


Charles Robert Turner: The hon. member for Timiskaming.


An hon. Member:: Which one?


Some hon. Members:: Take the two at once.


Mr. Peters:: With one of us coming from Ontario, and the other from Quebec, with exactly the same problems, we will probably make the same remarks and support the amendment which is on the order paper. Mr. Chairman, I am surprised the parliamentary secretary indicates there is some fairness in this provision. It is not fair, and everyone knows it is not fair. The doctor in the course of his duties has to drive to his office, to the hospital, he has to drive between the office and the hospital and maybe to a patient's house-although not too many doctors are making house calls these days-but they all have big cars and they all write off a portion of that expense. This is true with anybody in any particular job, except a straight worker-the guy carrying the lunch pail: he does not have the right to write anything off. We have allowed him, over the years, to get to the stage where he can write off $150. You can call it what you like-for clothes, for tools or transportation. But in the other Temiscamingue riding, and also in mine, many of the mines have closed and to get a job the guy has to drive another 40 or 50 miles. When he drives, it lessens the amount of income he receives from the wages that he earns. If it happened to anyone else in any other category except the workers, he would be allowed to write off a portion of that expense. Before I entered this House I had a job where I had a car provided to me-and you were not allowed to drive it to church.


An hon. Member:: Shame!


William Arnold Peters: You were not allowed to drive it for groceries. That did not bother me, because my wife had a car and she could do those things.


An hon. Member:: Could she go to church for you?


William Arnold Peters: Yes, she could go to church for me if she wanted. They said you had to declare. This is one of the stupid things. There was a court case at that time over the amount you had to write off. It was suggested that you had to deduct 25 per cent of your car expense for personal use. I had two cars. I drove 50,000 or 60,000 miles a year. Certainly not much of that was for pleasure. When I Fded my income tax return, I deducted 10 per cent for personal use, rather than 25
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November 30, 1977
Income Tax
per cent. There was no argument; the department does not argue about such things.
What about the person who has to drive 50 miles to work? Everyone says there should be a pool with four or five people riding in the car. That is fine. But what about shift work? In some places of employment the people come from eight or ten different towns. It is not possible to arrange for a carload. There is certainly no public transportation. What about the man who has to work overtime? A worker in my part of the country may have no lunch left in his lunchpail. This means someone has to drive into the community to obtain a meal for him. No allowance is made for that. If you were a businessman and owned a factory, sawmill or mine, and took the board of directors downtown and treated them to a $100 meal, plus all the booze they wanted to drink, you could write off that amount. However, the poor worker cannot write off the expense of his meal.
Your Honour will be familiar with the complicated system for railroaders. After so many miles or so many hours they were allowed to write off expenses if they lived away from home. This applied only to railroaders. It was very limited, specific and difficult to administer. There are people in northern Ontario and northern Quebec who have to travel long distances for their livelihood. They are willing to do that rather than live off welfare. However, they cannot write off anything. The minister says it would be hard to administer. Mine workers in my area travel from New Liskeard and Temagami, a distance of 45 miles. The mining company must fill out hundreds of forms a day for the government. That is one of the major complaints of industry of all types. It would be much easier if once or twice a year the company could declare, on behalf of the employee, that it is necessary for him to use private or public transportation to get to his place of employment. The Ontario government does not allow you to build a house on the edge of that mining property; you must live in one of the municipalities.
It is about time this government quit cheating the workers of this country and allowed them some of the benefits that are given to other segments of society. If the government is not willing to give these benefits to them, they should cut them off for others. If a worker goes to a restaurant on a Saturday night, he must pay $10 for a meal. That is because every meal served for the rest of the week is to someone on an expense account. Today I take you to dinner, tomorrow you take me. If we both represent business agencies, I can write off your meal and you can write off mine. The department does not even consider the free meal you got while writing off mine. The parliamentary secretary says it is fair. It is not fair. Surely he has been talking to workers in his constituency. He must know that even in the city a worker must use transportation to get to work. That is the cost of him doing business, getting to the plant to do his job in order to earn money to pay taxes to this

government. If we are going to be fair, let us do it with no b.s. The parliamentary secretary is all b.s. if he thinks he can sell the idea that there is equality.


Mr. Pelletier:: What is all b.s.?


William Arnold Peters: You are a master of it. You have a Ph. D. in it for higher and deeper. If anyone can get elected on b.s., it is that member, because he has a Ph. D. in it. We will support the amendment of the hon. member for Rimouski to increase the $150 deduction to $400. However, even $400 is not right. The worker should be allowed the same type of exemption that others receive. It should be fair and equitable. The worker who must work five days a week should receive exactly the same benefits as the businessman whom this government favours. He should be allowed the same exemptions as the high-priced employees are allowed. They can deduct everything from gifts to their girlfriends, to southern trips to attend conventions. If the minister is going to be fair, he will allow the same benefits to the workers of Canada as are allowed to the fatcats.


Mr. Darling:: Mr. Chairman, I wish to make a few comments in support of this amendment. As a representative of a rural constituency, I appreciate the comments of the hon. member for Timiskaming. A great many people in my area must drive a considerable number of miles to their employment. It is nothing out of the way to drive 40 or 50 miles. As the previous speaker mentioned, they are not allowed to deduct the expense for that. At income tax time I receive many letters from constituents asking why they cannot deduct certain expenses. The Department of National Revenue does allow certain expenses for certain types of work. The hon. member for Timiskaming mentioned one example with which Your Honour is familiar. After a certain time, railroaders are allowed certain expenses. In some instances, truckers are allowed expenses. Several construction workers contacted me. They informed me that two years ago they deducted certain expenses and these were allowed. When they did this another year, the expenses were not allowed. I feel there should be some fair way of handling it.
Those who work in rural areas and have only their car as transportation should be allowed more than the government is prepared to allow them. The amount of $400 is certainly a step in the right direction. If the parliamentary secretary recommends that this $400 should be allowed, I am sure it will be across-the-board. That will mean someone living in an apartment who walks across the street to his place of employment will receive the same benefit as the person who must drive 50 or 100 miles to work five days a week. I hope the government will consider this for these workers who, rather than go on welfare or unemployment insurance, are prepared to drive long distances to get to their jobs.


Lorne Edmund Nystrom: Mr. Chairman, I again want to say a few words on the amendment before us. How can the parliamentary secretary justify a businessman in a place like Cornwall being able to deduct his champagne and caviar while a worker
November 30,1977

in Cornwall is not able to deduct his beer and salami sandwich?


Edward C. Lumley: Mr. Chairman, I will reiterate what I said earlier. It is important that hon. members understand this. I have been on both sides of the fence; I have been a labourer and also in the business community. I do not necessarily agree with the presentation made by members opposite.


Mr. Mazankowski:: You are still on both sides of the fence.


Edward C. Lumley: The hon. member for Timiskaming said it all in his original remarks when he said "not for personal use." The exemptions write off only the business portion. Consequently, any expenditures made by individuals for their personal use are not written off. The allowance is restricted to genuine expenses. The royal commission on taxation studied this matter very thoroughly and concluded that the most equitable way of dealing with it was by way of a flat rate.


Lorne Edmund Nystrom: Suppose a businessman in Cornwall is buying the champagne and caviar and entertaining a business friend: he will consume some of that personally; he is not going to watch while his business friends eat and drink alone. If he can write off the whole bill, why cannot the working man write off the cost of his beer and salami sandwich?


Edward C. Lumley: If any of those expenses are for personal benefit, there is no way in which they can be deducted.


Lorne Edmund Nystrom: It is obvious that what the parliamentary secretary is saying is not the case. When a businessman takes out four friends and buys lunch and entertainment for them, he benefits from the entertainment and consumes a portion of the lunch. He does not submit a voucher to the department for only 80 per cent of the bill on the grounds that the other 20 per cent benefited him personally. His portion is considered part of the expense. Why cannot the worker do the same? Perhaps a worker has to meet a fellow worker over a salami sandwich about something which is very important to the job, maybe a technical innovation or a proposal to exchange shifts for a legitimate purpose. The cost of the meal may not be much greater than $1.25. But why cannot a worker deduct that amount? Why is there a double standard? A lot of workers are asking me that question.


Edward C. Lumley: That is exactly what the $250 deduction is intended to cover; it is intended to cover expenses such as that. The hon. member spoke of a businessman taking out his friends. He is not allowed to deduct in respect of taking out friends, only for legitimate business expenses. Legitimate business expenses are one thing, but when you take friends out you pay the bill from your own pocket.


Lorne Edmund Nystrom: The parliamentary secretary tells us the worker gets $250 allowed for these purposes. Why does the businessman not get an allowance of $250, and no more? Or, if
Income Tax
the deduction is for legitimate business purposes, why is it not higher?


Edward C. Lumley: Let us take the hon. member's case and extend it one step further. For example, union dues paid by workers go to a national union. When the officials of that union take people out to dinner for a legitimate business reason, those expenses are deductible, too, in the same way as in the case of a private company.


Lorne Edmund Nystrom: I am not talking about unions; I am talking about the ordinary worker in a plant or factory who may or may not be a member of a union. Why should not the same rules apply to him as apply to the businessman? The businessman can go into a very expensive restaurant to entertain people for business purposes-I will grant that-and he can buy a dinner for those who are with him. But his portion of that expensive dinner is also written off as a tax deduction. An ordinary worker could well be meeting associates for business purposes to discuss matters connected with his job, but he cannot write off an expense so incurred. Why is there a double standard?


Some hon. Members:: Question.


Gilles Caouette: Mr. Chairman, I think it is important that the bill introduced by the member of the New Democratic Party to change the name of the riding from Temiscamingue to Real Caouette should come into force as soon as possible if we want eventually to understand each other. It is clear, Mr. Chairman, that I give my full support to the motion proposed by my colleague, the hon. member for Rimouski (Mr. Allard). This motion is simply an act of justice towards the working people. A number of members of this House among whom my colleague the hon. member for Timiskaming (Mr. Peters), from Ontario, mentioned a moment ago that we are living in vast regions where people have to travel 25, 30, 50 miles, every morning and every evening to go to work. Commuting is neither a game nor a pleasure trip for these individuals; it is a part of their personal expenses in terms of time as well as in terms of money.
They even go as far as depriving individuals from unemployment insurance benefits because they will say they have no means of transportation to go and look for a job 25 miles from their home. If somebody agrees to that wage reduction, because they will have to spend $2, $3 or $4 for gas every day, which the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) does not seem to understand, I believe it is too much and I wonder whether he really is as naive as that.
The fact remains that those people must spend much more than $250 a year to go to work. It would be simply fair to grant them $500 like the province of Quebec is doing. The hon. member for Gatineau (Mr. Clermont) said last Monday that the province of Quebec granted up to $500. He said to the Minister: "I hope the Minister of Finance, in his next budget, will consider the remarks I have just made". The Minister of Finance answered him he was always pleased to do it and he
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November 30, 1977
Income Tax
said: "I certainly will consider as always the remarks made by my good friend, the hon. member for Gatineau". The amendment put forward today enables the Parliamentary Secretary to the Minister of Finance to consider those requests which are genuine given the expenses people incur to travel.
It is also said in the amendment that all costs incurred for public transportation in main centres could be deducted. There are young people in Montreal who have to commute by train or by bus and who spend tens of dollars every week and when I say tens of dollars, that is not much. By the end of the year, over 50 weeks, it means $500 just to go to work. Coming back to the argument which was often raised, namely, the costs incurred by a doctor who is going to work or who must go see his patients, these costs are deductible. It is true he is not travelling very frequently these days but anyway, these costs are deductible.
When the parliamentary secretary indicated earlier that we should not give this opportunity to those who have large cars, this is precisely what the government is doing now. Doctors and professionals driving big cars, even if they shortened the Cadillac, are the ones who drive around in Cadillacs while the worker has to buy a Toyota or some other American or European compact car to make both ends meet. At the same time, the same government allows the price of gas to go up in an area such as the northwestern part of Quebec where gas is as high as $1.10 a gallon; once again this hits the small worker who must travel 15, 20, 25 miles every day to go to work. All that because of bad government administration.
So what we are asking for today-and I think it is quite logical-is to give for once a chance to the worker, to reduce this increase in expenses, this reduction in salary, because when you spend $20 a week on gas, repairs on your car, whether you like it or not, this results in a direct reduction of your salary.
In concluding, I will say that unemployment insurance penalizes those who cannot accept work 20 or 25 miles from home because this is not profitable to them, because in many cases what would the guy earn staying at home? He would earn $ 140 a week staying at home. If he goes to work for $ 140, plus $20 or $25 of travelling expenses, then he reduces his salary and because he refuses the UIC penalizes him, when the other guy in spite of all is willing to go and work even for that reduced salary. This amendment is intended precisely to bring relief to those people who pay, who are willing to go to work. Some professionals go to work knowing that their expenses are deductible but the worker still goes to work knowing that his expenses are not deductible. That is precisely the adjustment sought in the amendment proposed by the hon. member for Rimouski (Mr. Allard).


Roch La Salle: Mr. Chairman, I wish to make a few comments on this amendment which, I think, is very important. Some of my colleagues on this side of the House expressed their intention to support this amendment. I think they are only seeking the justice that we have always wanted for workers in general. The parliamentary secretary to the minis-

ter will certainly reflect on the remarks made regarding this justice required for workers.
I am not one of those wishing that the minister reconsiders the benefits granted to businessmen as it might often be difficult to compare businessmen's responsibilities with those of workers. It is certainly not difficult to feel responsible concerning the needs of workers. I think we must give them a minimum of benefits. Obviously for those who must go to work outside, it is not always a matter of choice. Of course you will tell me that they should find a job close to home. We know very well that it is not always easy to find a job in one's own community these days.
So I think we should give some benefits on that respect to those who succeed in finding a job. And again when we talk about $400 I do not think it is excessive as we know perfectly well that in some cases their travel and employment expenses largely exceed $400.
I think that the hon. member for Temiscamingue (Mr. Caouette) pointed out that this measure would encourage those who often would prefer drawing unemployment insurance rather than accept a $150 job when they know full well that they will lose money if they accept it. God knows if we have problems! The industry and businessmen have problems with unemployment insurance. However, we recognize their usefulness. We also recognize that they cause many difficulties to those looking for employees. Today, through an amendment which is commendable and which we shall support without hesitation, we are trying to offer a compensation that would be, at the same time, a work incentive.
I could perhaps ask: What about when the officials of the minister, for instance, must travel on official business, and I imagine they often have to do so. They probably have such advantages or tax deductions. In view of the present circumstances, why should the workers not be entitled to those same advantages? I hope that our friends opposite understand the importance of this. I think it is important to note that it was judged appropriate for members of parliament to be entitled to deduct certain expenses in view of their obligations. In my opinion, it would be difficult to justify our position to the workers if we refused this deduction of $400 when I am convinced that everyone is well aware of the deductions allowed in the case of members of this House, which are certainly quite justified. How then could we refuse to support this amendment which, in my opinion, corresponds-


Mr. Breau:: Mr. Chairman, I wonder if the hon. member would allow a question.


Roch La Salle: Yes, Mr. Chairman, if it is an intelligent question.


Herb Breau: Mr. Chairman, in spite of the arrogance of the hon. member who suggests that my question could perhaps not be an intelligent one, I would like to ask him if he could, intelligently, explain to the House how this amendment would be an incentive to work because, in fact, I cannot understand how increasing a deduction from $250 to $400 can be a
November 30, 1977

determining factor in motivating someone to go to work. Then could he explain to the committee, if this is the basis of the stance taken by his party, how this amendment could motivate people to work?


Roch La Salle: Mr. Chairman, I was just saying that in many cases, for instance, the worker has to look for work outside and given the amount of his unemployment insurance benefits and the fact that he is unable to benefit from this $400 deduction on additional expenses that he must incur to go to work, he would normally react by saying: I am better off collecting my unemployment insurance benefits than going out finding work for a total pay that is nearly equal to these supplementary expenses. It is true that often he will earn even less than his unemployment insurance benefits provide him with. We have here a possibility of increasing this expenses deduction and I think that this way we could at least give him some motivation since he would be assured to get the same benefits he is getting from unemployment insurance thanks to the protection provided by this amendment.


Mr. Cyr:: Mr. Chairman, before proceeding to the vote on this amendment put forward by the hon. member for Rimouski (Mr. Allard) I would like to ask a question of the Parliamentary Secretary to the Minister of Finance (Mr. Lumley). I would like to know if he has received representations from the labour unions in Canada to the effect that this amount, raised from $150 to $200, was insufficient?


Edward C. Lumley: Mr. Chairman, we continually receive representations from workers from all sectors of Canadian society with respect to this particular tax deduction. This is one of the reasons the amount was increased from $150 to $250.


Charles Robert Turner: Is the House ready for the question?


Some hon. Members:: Question.


Charles Robert Turner: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


Charles Robert Turner: All those opposed will please say nay.


Some hon. Members:: Nay.


Charles Robert Turner: In my opinion the nays have it.
Amendment (Mr. Allard) negatived: Yeas, 24; nays, 33.


Charles Robert Turner: The question is now on clause 4.


Sinclair McKnight Stevens: Mr. Chairman, in dealing with clause 4, I wonder whether the parliamentary secretary would indicate the rationale for the increase from $150 to $250 in the expense allowance? This appears simply to be an adjustment for
Income Tax
inflation from the commencement of the $150 employee deduction and today. Is that correct?


Edward C. Lumley: Mr. Chairman, it involves a little more than just an allowance for inflation. It is basically a response to the number of representations we have had from a number of sectors throughout the country.


Sinclair McKnight Stevens: Mr. Chairman, I would like the parliamentary secretary to be a little more specific than that. What has the inflation level been since 1971? My recollection is that the increase has been 61.4 per cent, and what we have in this increase before us is 66 per cent. Therefore, I would think this basically is an allowance for inflation.


Edward C. Lumley: Mr. Chairman, I have not the figures before me, but using the hon. member's percentages, this increase is greater than the inflation rate increase which he quoted.


Sinclair McKnight Stevens: The point I want to make is that the government is grossly unfair in what it is doing here. It is simply allowing retroactively for inflation in this proposal but is allowing nothing for the future. This means that if inflation continues as it has in the past-that is, 8.8 per cent in the last 12 months-and the Minister of Finance has indicated he thinks it will be at least 6 per cent next year, the $250 allowance will steadily decrease in buying power and somebody will have to come forward and amend this legislation again. If the government wishes to allow some meaningful increase in this expense allowance, why does it not agree to at least a compromise figure? If it thinks $400 is too high, will it allow something like $350? This would not tax the treasury too much but, on the other hand, it would give the workers some assurance that they are getting a little better deal than simply catching up with inflation.


Edward C. Lumley: Mr. Chairman, if the hon. member will look at other clauses, he will see there are many substantial tax cuts for Canadians across the country.


Sinclair McKnight Stevens: Mr. Chairman, we are constantly being interrupted by people suggesting we are not speaking to this clause. I want to expedite the passage of this bill, but here we have the parliamentary secretary referring to other clauses.


Edward C. Lumley: Mr. Chairman, the hon. member is very touchy. I did not insinuate that he was slowing down the passage of this clause, which obviously is true on the basis of what has taken place today. What I said was that if he looks at all the clauses of this bill, he will see there are many tax cuts for Canadians all across the country.


Sinclair McKnight Stevens: Let me direct the parliamentary secretary to some comments by his minister on Monday in response to the hon. member for Gatineau who said, very frankly, that he felt $250 was too low. The minister gave every indication he would consider an increase. Can the parliamentary secretary tell us, as a matter of policy, whether his department is willing to increase the level from $250, an increase which was certainly requested by the hon. member for Gatineau and supported by

November 30, 1977
Income Tax
hon. members on this side, as demonstrated by the recent vote on the amendment?


Edward C. Lumley: Mr. Chairman, as my minister stated to the hon. member for Gatineau, he is very sympathetic to any kind of representation for assistance to individuals in this country. However, in respect of this particular clause I have difficulty understanding the hon. member's position. During the second reading debate we heard the opposition refer again and again to government restraint, yet now we hear the finance critic of the opposition suggesting we should spend another $175 million. I have some difficulty in reconciling his points of view.


Sinclair McKnight Stevens: Mr. Chairman, perhaps the parliamentary secretary has his terms a little twisted. There is no spending involved in what we are proposing. It may result in a loss of revenue, that is quite correct, but if the parliamentary secretary has been following our remarks he will know we have consistently been asking for meaningful personal income tax cuts. One way in which the government could make a meaningful personal income tax cut is by increasing this expense allowance. What we are saying is that it is not good enough to simply increase the amount to compensate for the inflation this government has allowed to exist in this country; therefore, the increase should be something over $250 to be meaningful. I have been trying to find out from the parliamentary secretary whether he has had any instruction from his minister in respect of a meaningful increase of $300, $350 or $400, and instead we have been getting a lot of rhetoric.


Edward C. Lumley: With all due respect, Mr. Chairman, I would suggest that $150 million is very respectable. If one considers, in addition, the $500 million in tax cuts in 1977-78 and $1.2 billion in 1978-79, he will realize that these are also reasonable figures.


David Orlikow: Mr. Chairman, let me come back to the so-called equity about which the parliamentary secretary talks; that is, the equity between wage and salary earners as opposed to business people and the self-employed. The hon. member suggested that business suggested that business people could only deduct expenses incurred in doing business to earn income. Let me give two illustrations of the different treatment. The parliamentary secretary talks about a salesman incurring expenses in making his sales. I am sure there must be salesmen based in Cornwall who have territories running from Cornwall to Ottawa. Such a salesman would make his calls between his home base and Ottawa in order to make sales to earn an income. In such case he can deduct his expenses for gas and oil for his car, but not similar expenses for pleasure driving on the weekend. He can certainly deduct expenses incurred in driving from Cornwall to those places on his way to Ottawa.
I presume that if he has to stay overnight in Ottawa in order to see customers the next day, he could deduct those expenses. In comparison with that illustration of the salesman, let us consider the construction worker in Cornwall. There is no

construction going on in Cornwall, but he was able to get a job on one of the buildings which the government of Canada is erecting in Hull.


Walter David Baker: Under the rules now, he could not.


David Orlikow: Let us assume for a moment that he could. In order to earn his living, he has to drive four days a week from Cornwall to Hull. If he drives every day from Cornwall to Hull and returns, why can he not deduct his expenses for the operation of his car which he must drive in order to earn his wages? If he decides it is too far to drive, and finds a place to stay for four nights a week in order to do his work, why can he not deduct the expense of lodgings in order to keep the job? I am not suggesting there is anything wrong with the salesman who makes deductions from his income tax for the expenses he incurs as a salesman, but I am asking the parliamentary secretary why the construction worker who lives in Cornwall is not entitled to the same treatment as the salesman.


Edward C. Lumley: I do not know how many times I have had to repeat the same thing this afternoon. Let me reiterate: The Income Tax Act has never allowed expenses for personal use. They are restricted to legitimate expenses, regardless of the employment of the individual.


David Orlikow: I would like the parliamentary secretary to explain to me why the Income Tax Act proposed by this government and voted and supported by this parliament which has a majority of members from his party, the Liberal party, does not allow such deductions. Where is the rationale behind the sections in the Income Tax Act which permit a businessman, such as the salesman in my illustration, to deduct his expenses, but not a construction worker? I am not saying the construction worker's expenses are not legitimate. I am talking about the legitimate expenses of the worker in Cornwall who has to drive to work to another city or has to stay overnight or stay a few nights in another city to earn his living. Why does the Income Tax Act not permit him to make the same kind of deduction, using the same principle applied to the salesman?


Charles Robert Turner: Is the House ready for the question?


Sinclair McKnight Stevens: I would like to have the response of the parliamentary secretary to certain concerns that have been expressed by municipal officials in Ontario and possibly other areas in Canada who have written to the minister drawing his attention to resolutions which they have passed at their respective council meetings asking that the $150 which is now the employee exemption be raised to $250, if the government has its wish, be clearly applied to them, without any suggestion that they are not entitled to that allowance because of other provisions of the Income Tax Act.
Can the parliamentary secretary tell us what the government's response is to that request, which seems to be a very legitimate request in that those who are on the councils of these various municipalities feel their remuneration is extremely low and they have certain expenses going to and from
November 30, 1977

meetings, and yet are not given the unqualified employee allowance that most people have? I ask this of the parliamentary secretary, bearing in mind that it is the same taxpayer in the country, whether he is paying through the federal treasury or the municipality. It seems too bad that this exemption cannot apply to them.


Edward C. Lumley: I am not aware of the representations mentioned by the hon. member, but if I recall my days in municipal government, as do other hon. members, perhaps, one-third of my remuneration as a municipal elected official was tax-free, or deemed to be expenses.


Sinclair McKnight Stevens: The minister responded to these representations. I have a copy of a letter of October 26. This is one of the obvious difficulties we have in trying to deal with the various clauses of the bill when the minister is not here. In a two-page letter the minister explained certain views that he believes are pertinent to the subject. I wanted to be updated on the matter.
I would like to know whether further thought has been given by the department to making it clear that the $250, notwithstanding the one-third which is deemed to be an expense allowance, be clearly applicable to council representatives who, after all, are being paid for by the same taxpayers as are contributing to the federal treasury. I take it from the parliamentary secretary's response that no further consideration has been given to this matter.


Edward C. Lumley: Not to my knowledge, Mr. Chairman.


William Arnold Peters: I am interested in the phrase which the parliamentary secretary keeps repeating, namely, "personal use". People who have to get up early to drive 45 miles to work are not applying for exemption for personal use. It is not their personal inclination to incur these expenses. They are for the purpose of getting to work, which is part of their job. They cannot get there without driving. I do not think that should be considered as personal use.
The hon. member for Winnipeg North spoke about a worker's job involving living away from home. I would like to recount a case to the parliamentary secretary of a diamond drilling company in the north, where distances are considerable. The diamond drillers go out into the bush and have to stay there for two or three weeks. They can either look after themselves in the bush, or the boss looks after them. If the boss looks after them, that is considered company business and the company can write off the cost of meals and other expenses. There is a set amount for room and board which may be deducted, which they have to pay anyway because there is no alternative. If the company did not provide that, they would have to find lodgings in a tent, sleep in a sleeping-bag and cook their own grub, all of which is not considered as a legitimate expense.
It seems to me that the parliamentary secretary speaks with tongue in cheek, as do some other members on his side of the House who have spoken this afternoon and who represent large ridings and have some of the problems that we know about. They believe that anything over $250 would be of disadvan-
Income Tax
tage to them-they would not know what to do with such a saving, so they cannot support it.
In line with something mentioned by the hon. member for York-Simcoe, I would like to ask the parliamentary secretary whether the government has given any thought to the game it appears to be playing with the workers of this country. Farm boys will understand this. The government occasionally sets the screw on the separator and allows the workers of the country to get a little more cream than skim milk. But frankly, as I see it, this exemption is for the business community and the white-collar workers as opposed to blue-collar workers. Blue-collar workers are still getting skim milk.
Is there any consideration being given to indexing? If the kind of adjustment referred to by the hon. member for York-Simcoe is to be made, perhaps it should be made on an indexed basis. Perhaps adjustments should be made quarterly. That would certainly make things difficult for civil servants who are playing around with computers, but it would make things fair and equitable. The minister's officials do not know anything about work. They do not know anything about jobs. They do not know anything except the city of Ottawa where there is no unemployment.
They will likely be in Ottawa until they are old men and retire with very good pensions. They do not have to drive to work except by choice. Some may live in Manotick, but that is because they want to. The people I am talking about do not have a choice. They drive to work out of absolute necessity. Getting to work is part of the job. Nobody wants to do that on his own time. Most of the workers in this country will be surprised to learn that driving to work at temperatures of 40 below zero on slippery unplowed highways in cold cars is for their own personal advantage. Some of the people of my area will be very surprised. I do not expect civil servants to understand, but some of us who represent workers should understand. Is it not time we represented the people we are supposed to represent, in order that they get some equity?
If a person has to buy a car, pay for public transportation, or make large expenditures to get to work-or to stay at work because it is not economic to drive home-is that not in the interests of the nation? Some people have to do that. In my area it is absolutely necessary to make these large expenditures, because if people do not do so, they will be unemployed. Many hon. members here do not live in metropolitan areas. The hon. member across from me lives in a remote part of British Columbia. He could tell us that some of the people he has worked with and some of the people he has employed have to take boats to get to work, let alone just driving cars. If they do not, they have to sleep in the mill. Perhaps they are paid for that. But I am not talking about people who are given those allowances. If they are, that is fine. I want people to be able to write off some of these costs when they are not paid for them. Hon. members know that this provision is just a sop. The government has just tightened the cream screw a little bit, and some of the people we represent get skim milk.

November 30, 1977
Income Tax
I do not represent very many fatcats. Civil servants are fatcats, but most of them live in Ottawa or Hull. They certainly do not live in Timiskaming. They have not thought of doing anything about the 25 per cent unemployment in my area. The government moved a Liberal from a riding south of mine into the cabinet. The people in his riding do not have the problems of the people in my riding, but they have been stupid enough to vote Liberal for a long time, and they will probably continue to do so. I represent workers, and many of them are disadvantaged because of distance. Every time they go into a restaurant they find fatcats sitting around buying meals for each other. They are fatcats, whether they be civil servants or salesmen from some company.
I once went to an eating place in Ottawa. I saw a man there who was a salesman employed by Simpsons at the time. I knew he was not too well off, because I had had some dealings with him. I did not really think he could afford to eat there. When I saw the menu, I did not think I could either. I thought it was a very expensive place. I told him I thought it was an expensive place for him to be eating at. He pointed out that his supplier was buying. His supplier took all the salesmen in his department to that restaurant. The supplier did not sell to the salesmen. Not one of them was buying a thing from the supplier's company. They were being taken out for good will. I had to pay for my meal. That was why I was asking those questions. Most members of parliament have to buy their own meals, unless they have some outside interest.


An hon. Member:: I thought I saw you at the Chateau.


William Arnold Peters: The only time I go to the Chateau is when somebody invites me for dinner.


Some hon. Members:: Oh, oh!


William Arnold Peters: In most cases I am invited by a manufacturing association, a mining association or any of a number of other agencies. In each case the expense is written off, and I pay part of it. So does the hon. member opposite, and he does not eat the meal. We all pay for that, and we all know that. That is what I am complaining about. If it is good for the fatcats, it is good for everyone.
I remember, 20 years ago, members from rural ridings asking for some relief for workers so that they could pay for lodgings which were necessary if they were to get jobs. I remember hon. members-and I was one of them-fighting for allowances for tools and other benefits for workers. We thought we were lucky when workers did get benefits. The deduction went to $150. Now, in its generosity, the government is going to make it $250. Under no circumstances can the parliamentary secretary stand before his peers in this House and say that that is equitable. It is a sop; it has nothing to do with fairness or equality.
We will continue to have this problem under this government. All we are pleading for is equality. If a company says a man has to drive to work or he cannot get a job, then that man should be given a certificate. We do not give certificates to company officials; they are just given charge cards and every-

one assumes they are company employees. The manager of a company can give a charge card to his wife and she can take the ladies out to dinner and write off the cost. Many women do that. Perhaps they might invite a gentleman on occasion. Let the company make a declaration that a worker incurs certain expenses in the course of his work. We would certainly support that.
Why does the parliamentary secretary stand up and say it is equitable? It is dishonest, and everyone knows it is not equitable. We are cheating those who work and who cannot write off expenses. If the minister says again that it is equitable, I would like him to tell me how expense accounts in this country are checked. Many abuses in this country which are normal procedure in the business community are just not allowed in the United States. It would not hurt to allow workers in this country to write off the expenses incurred in the course of their employment, any more than it hurts to allow the business community to write off legitimate expenses incurred in the course of business. Of course the business community has abused their exemptions on many occasions, but I do not think we would encounter the same abuse by the workers. This $250 allowance will be of assistance to the workers, but in no way should we call it equity.


Edward C. Lumley: Mr. Chairman, if the hon. member and his colleagues are talking about the elimination of abuses in terms of expenses, we on this side are 100 per cent in agreement. He referred to cases of tax evasion, and I hope he has reported them to the Minister of National Revenue who will take very prompt action to investigate them. Like many members on both sides of this House, I represent the public servants whom the hon. member calls non-workers and claims they do not have the same problems as people in his riding. I can assure you, Mr. Chairman, that a lot of us take exception to that. Public servants have the problems the hon. member alludes to. Because of the decentralization program this government has undertaken, a lot of public servants do not live in strictly urban centres but are scattered from coast to coast.


Mr. Jones:: Mr. Chairman, every time the Income Tax Act comes before the House I get so ugly, so temperamental, because I have seen so many people whipped by this act. I really mean "whipped." Reference was made today to municipal officials. Certainly they get one-third, but there is nothing in this legislation to say they are entitled to it. I say it should be contained in the legislation and not authorized by a letter from the Minister of National Revenue or from a district taxation office. That exemption should be included in the bill.
I do not know how many members are lawyers, accountants or businessmen, but I know that very few can interpret this bill. It is beyond interpretation, Mr. Chairman. It is the craziest, most stupid, ridiculous piece of ambiguity and verbosity to appear in the Statutes of Canada.


Some hon. Members:: Hear, hear!
November 30, 1977


Leonard C. Jones: The minister, his parliamentary secretary and all members of cabinet have a responsibility to the people of Canada in presenting this legislation. The bill is not honest. Neither businessmen nor the man on the street can understand it. Lawyers, judges and even accountants cannot understand it. The people who write it do not understand it and cannot give the parliamentary secretary the answers he needs today. Perhaps he cannot interpret their language. Mr. Chairman, the Income Tax Act should be abolished and a 10-page or 15-page act substituted so that everybody in this House would know what they were voting on, and so that the ordinary man in the street could understand it. We sit here year after year trying to interpret something that cannot be interpreted.
The people of Canada have criticized the Income Tax Act in their homes and on the street. When they consult an accountant, he tells them one thing and then a lawyer tells them something else. Even the so-called experts in the department tell them different things. Eventually, when the matter comes before the courts, there is another interpretation. This is a serious business, Mr. Chairman. We should not be applying band-aid amendments to the Income Tax Act year after year. We should do away with it and start over again with an act more appropriate for our country and one that the man on the street could understand. Any piece of legislation that is as ridiculous, ambiguous and as stupid as this does not deserve to be debated. Every member should vote against it so that we get rid of it. Band-aid improvements are no good; they mean nothing.
The.Deputy Chairman: Shall clause 4 carry?


Some hon. Members:: On division.


[Stage Direction]
Clause agreed to.
On clause 5-Royalties, etc., to be included in income.
Sinclair McKnight Stevens: Mr. Chairman, I wonder if the parliamentary secretary could indicate to the House why this clause is retroactive to May 6, 1974.


Edward C. Lumley: Mr. Chairman, as the hon. member knows, when a company enters into a joint venture with the Crown corporation in resource development, the present rules technically forbid the company from avoiding not only any royalties paid to the government or the government agency but also in share profits within the Crown corporation. The purpose of the amendment is to rectify that situation, because it certainly was not intended to separate the profit side from the royalty side. The amendment provides that payments made to a government pursuant to an obligation imposed by statute, as opposed to a contractual obligation such as the royalty legislation of a province, would be disallowed as a deduction. It is an endeavour to facilitate joint action between Crown corporations, government and the private sector.


Sinclair McKnight Stevens: I wonder if the parliamentary secretary could tell the House the significance of the date May 6, 1974?
Income Tax


Edward C. Lumley: Mr. Chairman, if I am not mistaken, this amendment just clarifies actions taken at that time with respect to royalties.


Sinclair McKnight Stevens: Could the parliamentary secretary be more specific? What action was taken, and with whom, on May 6, 1974, that would be clarified by this amendment?


Edward C. Lumley: Basically, it was with respect to the nondeductibility of royalties, Mr. Chairman.


Sinclair McKnight Stevens: Could the parliamentary secretary be more specific? What arose on May 6, 1974, that we are referring to on this section? I should like a little more than "basically it is with respect to the non-deductibility of royalties", or some such answer. Specifically, what are we trying to achieve?


Edward C. Lumley: Mr. Chairman, I am sure the hon. member knows the answer to the question before he puts it. I would refer him to the budget of May 6, 1974, where he can see the details with respect to the royalties.


Sinclair McKnight Stevens: I do not want to delay passage of this clause, Mr. Chairman, but I notice it relates also to page 18 where we find a further reference to the same type of thing. I wonder if we could pass this clause, and by the time we get to page 18 perhaps the minister or the parliamentary secretary will be able to give a more complete explanation of what is covered in this subsection.


Edward C. Lumley: This amendment, as well as the one similar to paragraph 18(1), if I am not mistaken, subclause 11 makes it clear the rules governing oil and gas and mineral royalties do not apply to other payments made to governments or Crown corporations.


[Stage Direction]
Clause agreed to.
On clause 6-Exchanges of property.
Edward C. Lumley: Mr. Chairman, we have an amendment to move to clause 6. This amendment is required to the French version of clause 6, paragraph 9, paragraph (13)(21) of the act which defines "total depreciation" allowed. This amendment corrects a translation error in the definition.


Charles Robert Turner: Mr. Lumley moves:
That subclause 6(9) of the French version of Bill C-l 1 be amended by striking out lines 31 and 32 on page 8 thereof and substituting the following:

"of all amounts deducted by the taxpayer and allowed to him in respect of
property of that class under"

Amendment (Mr. Lumley) agreed to.


John Carnell Crosbie: Mr. Chairman, I wanted to speak with particular reference to clause 5 and the amendment. There are so many subclauses in this bill that it is pretty hard to keep track of them, but it implements paragraph 20 of the income tax
1432

November 30, 1977
Income Tax
motion which provides that for the 1977 and subsequent taxation years, a grant received under the Canadian home insulation program be included in the income of the recipient, or in the case of a married individual residing with his spouse and the income of the spouse is a higher income-in other words, this section deals with the so-called home insulation program that is in effect in six provinces of Canada-New Brunswick, Newfoundland, Ontario, Manitoba, Saskatchewan and British Columbia. Those are the six provinces that accepted the home insulation program of the government of Canada which was announced with such great pride by the Minister of Energy, Mines and Resources on June 27, 1977. That program, Mr. Chairman, is discriminatory.
I believe this is the first time, that I know of, that a piece of legislation has been passed by this House which discriminates and attacks residents of six of the provinces of Canada, grants a benefit to the residents of two provinces of the country and does nothing for or against with respect to the citizens of two other provinces. The province of Alberta and the province of Quebec-quite properly, in my opinion-refused to enter into the so-called home insulation program of the government of Canada. They said they were not going to submit to certain conditions the government laid down for that program. Six provinces did enter the program. Two provinces, Nova Scotia and Prince Edward Island, already have a special home insulation program offered to them by the government of Canada, which differs substantially from the program offered to citizens who live in the rest of Canada.
The program I am talking about is the one implemented in provinces other than Nova Scotia and Prince Edward Island, in other words, the non-Liberal government provinces. It offers a program less than is offered in Prince Edward Island and Nova Scotia. Not only does the program offer less, but this legislation is to ratify the decision of the government of Canada that taxpayers who take advantage of this program in the six provinces I have mentioned have the amount added to their taxable incomes, while people in Nova Scotia and Prince Edward Island who take advantage of the program do not have one cent added to their taxable income from the grant.
Taxpayers that hon. members of this House represent- there are representatives here from all provinces, Ontario, Newfoundland, New Brunswick, Saskatchewan, British Columbia and Manitoba are also represented in cabinet, and they are permitting their people who take advantage of the home insulation grant program of the government in those provinces to be taxed on the amount of the grant they receive. I am delighted that they do not have it added to their taxable income in Nova Scotia and Prince Edward Island, but I say that is a benefit that should be made available to everyone who lives in Canada and takes advantage of the program, not just those who live in Nova Scotia and Prince Edward Island.
The program commenced on September 1, 1977, for six provinces-not Nova Scotia and Prince Edward Island-only if the provinces agreed to certain conditions. They had to agree to adopt and implement new building codes, change the speed limit on their highways, remove the sales tax on insulation

materials, and prohibit the bulk metering of electricity-if their residents were to be allowed to enter into this program and have the advantage of it from the government of Canada. Two provinces, Alberta and Quebec, refused to be bullied and refused to have conditions laid down to them. They refused to participate. I say we have to thank the government of those provinces for demonstrating that they were not going to be coerced by the federal government in this respect.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: The program is in effect in six provinces. Let us compare the program in those six provinces with the program in effect in Nova Scotia and Prince Edward Island. In the six provinces I have mentioned-where the program is not very popular; there have been very few applications-the subsidy is available in the first year only for houses built before 1941, if you live in Manitoba and Newfoundland and certain other areas, and if your house was built before 1921 in Ontario and certain other areas. That is further discrimination. But if you live in Nova Scotia or Prince Edward Island, you are eligible no matter when your house was built. That is another aspect of discrimination. I do not know whether this bill is even constitutional. If we had any kind of a constitution, you could go to the courts and have it thrown out on the ground of rank, base discrimination.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: If you live in Ontario, you have to have a pretty old house, it has to be 56 years old to take advantage of this insulation grant. Imagine, in northern Ontario, where it is colder than Nova Scotia and Prince Edward Island, you have to have a house that is 56 years old before you are eligible for the grant! If you live in an old house, say a 150-year old house, and it might be pretty rickety by now, you apply and you receive a grant of $350. It is then added to your income and you are taxed on it. However, if you live in Nova Scotia in a house built last year or this year, brand, spanking new, well insulated, it does not matter when it was built, you receive a grant. Incidentally, the grant down there is up to $500, which is more than if you live in northern Ontario, and it is not added to your income.
Why is that? Should not the residents of Saskatchewan, Manitoba, Ontario, Newfoundland and New Brunswick, Alberta and Quebec and the other provinces be upset about this? I do not know whether they are upset or not. The ones in Newfoundland that I have talked to are upset. I say that the duty of this House is to defeat this clause. This clause should not pass this House. There is no way I am going to vote for it. I do not care what the rest of my colleagues on this side do. However, I feel sure they are all going to vote against it. I am voting against it. I am not voting for something that is going to see people taxed more in the six provinces I have mentioned than they are going to be taxed in two other provinces. Not on your life!
The first discrimination is the age of the house. If you live in Prince Edward Island or Nova Scotia, age does not matter. If
November 30, 1977

you live in Ontario, your house has to be built before 1921, and if you live in Newfoundland it has to be built before 1941. In Newfoundland, only 25 per cent of the houses are eligible, apparently, in the pre-1941 category. Second, if you want to get a grant you have to apply to Montreal. The province of Quebec is not even in this scheme. Even though they refused to be in the scheme, it is administered by CMHC from Montreal. You have to call the CMHC office in Quebec and deal with them, if you want to participate in this program. That is not a convenient or proper centre to have it administered from, particularly in view of the fact that Quebec is not even in the program.
Third, and this is another major discrimination, the program lays down that in six provinces, not Nova Scotia and Prince Edward Island, only two-thirds of the expenditure on insulation materials is refundable, up to a maximum of $350. The maximum you can get if you want to better insulate your home and you do not live in Nova Scotia or Prince Edward Island is $350 maximum or two-thirds of what you spend, up to $350.
In addition, only certain specified insulating materials may be purchased. You cannot just purchase whatever you want in the way of materials. However, if you look at the Nova Scotia and Prince Edward Island, scheme number one, as I said, the subsidy is not taxable. Number two, it can be spent on any insulating material. You are not restricted, in Nova Scotia or Prince Edward Island, as to the kind of insulating material you buy. You are only restricted if you live in the non-Liberal provinces. If the people in your province had the audacity to vote against the Liberals provincially, then you can only spend on certain insulating materials. If you live in Nova Scotia or Prince Edward Island you can be covered for any insulation materials, including windows and storm doors. You can get up to $500 if you have the work done by a contractor, or up to $350 if you do the work yourself. However, if you live in Newfoundland, New Brunswick, Saskatchewan, Manitoba, Ontario or British Columbia, you only get $350. If you go to an outside contractor, tough luck: you will get $150 less if you spend the maximum than if you are lucky enough to live in the Liberal provinces of Nova Scotia and Prince Edward Island.
Has legislation of this type ever been introduced into the House before? I do not think so. The hon. member for Winnipeg North Centre has been 35 years in parliament today, or some fantastic number of years like that. I hope he is here another 35.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I think he will have a little celebration later. When I conclude my remarks, I would be interested in hearing from him whether he ever came across this kind of discriminatory legislation before, in his long experience in the House. His province of Manitoba is one of the provinces being discriminated against.
There is another area of discrimination. In Newfoundland, for example, a house owner has to spend $525 to get a federal
Income Tax
grant of $350, and then he has the $350 added to his taxable income. However, if he lives in Nova Scotia he only has to spend $350 to get $350, and he has nothing added to his taxable income. The President of the Treasury Board is here now. He looks as if this is the first time he has heard about it. I do not think the minister understood that such a discriminatory program against the interests of the people of northern Ontario went through the cabinet. He could not have been there that day. I am sure he will strike a blow for the people of northern Ontario and his district and have this discrimination taken out of the bill. If not, the people of Port Arthur might ask him: How are you representing our interests in the House of Commons, in cabinet and in government, when you permit this to be done to us?
What are some of the other areas of discrimination? I have given some of the worst. The Newfoundland government accepted the program. Do hon. members remember the Minister of Energy, Mines and Resources telling us how enthusiastically this program was received by the eight provinces? I do not say it was deliberate. I do not think the hon. gentleman knows what he is doing, in any event. In fact, there was a report in the Ottawa Journal the other day to the effect that he does not like to be briefed because he does not want to know what it is all about when asked questions. He is like the Minister of National Revenue; I will not say he deliberately misled the House, but he got up in this House and said-


Charles Robert Turner: Order, please. I suggest that the hon. member get back to clause 6 which is under discussion.


John Carnell Crosbie: Yes, Mr. Chairman. The Minister of Energy, Mines and Resources introduced this program with which we are now dealing. That gentleman has, as a feature of his program, that the grant should be taxable in the eight provinces of Canada outside of Nova Scotia and Prince Edward Island. He is the same minister who said that the eight provincial governments were overjoyed with this new program. We now know that Alberta and Quebec did not even accept it. Premiers and ministers from every other province are now protesting against this program. This is something we should vote against. It is tax legislation that is not equitable. It is not fair. It discriminates against every resident of Ontario, Quebec, Alberta, British Columbia, Manitoba, Newfoundland, New Brunswick, the Northwest Territories and the Yukon. It discriminates against them in favour of residents of Nova Scotia and Prince Edward Island.
I support the program being non-taxable in Prince Edward Island and Nova Scotia. That is right and proper. What is the point of trying to help people, presumably of below average income, insulate their homes in order to have better energy conservation, if you are going to give them a grant on one hand and make it taxable on the other? The program in Nova Scotia and Prince Edward Island is a proper one. However, that means we should not be taxing those who get grants in the eight other provinces of Canada. Why should they be treated differently from someone who lives in Nova Scotia or Prince Edward Island?
80027-22%

November 30, 1977
Income Tax
When the program was introduced, the minister tried to give us the excuse that there was a special program for Nova Scotia and Prince Edward Island because the people in those two provinces had to pay very high electricity costs. He forgot to point out-


An hon. Member:: Carried.


John Carnell Crosbie: No, it is not carried. It is not going to carry for a considerable time yet. Is there a gentleman in this House who wants to carry this clause after I have pointed out the discriminatory provisions in it? Not at all. It is never going to carry.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Mr. Chairman, have they no conscience? Of course, the answer is they have not.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: Listen to the cacophony. Originally, a special program was justified for Nova Scotia and Prince Edward Island on the ground that they had to pay higher electricity costs than those in the rest of Canada. The minister forgot to point out that in Nova Scotia over 90 per cent of the homes are heated by oil-fired furnaces, and in Prince Edward Island it is 98 per cent. Electricity did not have anything to do with heating their homes. There is no connection between the high cost of electricity and this program. It will reduce the consumption of oil in Nova Scotia and Prince Edward Island, which is good. That is just what it would do in the rest of the provinces of Canada. However, it has no connection whatever with electricity costs. The people in Nova Scotia and Prince Edward Island do not have electric heating for their homes; they use oil or coal.
Premier Regan of Nova Scotia put the boots to the Minister of Energy, Mines and Resources. He came to Ottawa and assaulted the minister and the government. He forced them to bring in a special program for Nova Scotia and Prince Edward Island. We are forcing the government to bring in a program for the rest of Canada. They are trying to hold back on the rest of Canada, saying that it would be too costly. They say they cannot put the Nova Scotia and Prince Edward Island program in effect for the rest of Canada. If they have not got the "spondulix", if they have not got the dollars to put it in effect all across Canada, they do not have to put it in effect all at once. They could start in certain areas of the country which are economically damaged because of high unemployment. Over the next three or four years it could be extended throughout the whole country. The Nova Scotia and Prince Edward Island program should be extended to the high unemployment areas and northern areas with their colder climate. It should start there and progress to other areas over the next few years. The money does not all have to be spent in the one year.
I have not uttered a word in the last 20 minutes that is not of the utmost sense, that is not a good and valid reason for the members of this committee to do the people they represent justice and justify why they were sent here. For members in

the party opposite to sit there, because they are afraid they might get a tap on the hand, and accept that their citizens are second-class compared to Nova Scotians and people from Prince Edward Island, is inexcusable. I hope I am not going to see that. I hope I shall see the members representing New Brunswick, Newfoundland, Ontario, Manitoba, Saskatchewan, Alberta, Quebec, British Columbia, the Yukon and the Northwest Territories turn thumbs down on clause 6. Let it be taken out. Let us strike a blow for fairness and justice.


Herb Breau: Would the hon. member permit a question?


John Carnell Crosbie: If the hon. member asks a question, I will take another 20 minutes.


Herb Breau: He may need more than 20 minutes to make sense. Talking about party discipline encouraging votes, does the hon. member recall that on the unemployment insurance legislation not very long ago, while members on this side stayed here to vote, he did not have the guts to stay here and vote against his party?


John Carnell Crosbie: I will not bother to answer that.


Robert Knight Andras: On a point of order, Mr. Chairman, it seems to me this is an appropriate moment to do what we not infrequently do in this House, that is to say, abandon partisan politics and honour one among us for whom we all have the greatest respect. I am speaking about the thirty-fifth anniversary of the first election of our very distinguished and well-liked friend, the hon. member for Winnipeg North Centre, who was elected 35 years ago in a by-election to succeed another distinguished Canadian, Mr. J. S. Woodsworth. I think all of us would like to take this opportunity to extend to him our best wishes for continued good health and exemplary service to this country.


Some hon. Members:: Hear, hear!


William Arnold Peters: Mr. Chairman, as one who has had to serve with the hon. member for Winnipeg North Centre and to suffer the indignity of having his English continually corrected, just as the House has had its direction continually modulated by the hon. member, I should like to move that you rise, report progress and ask leave to sit later this day.


Stanley Howard Knowles: At the next sitting.


William Arnold Peters: At the next sitting of the House, or whenever it may be, for the purpose of enabling his many friends to fete him in Room 200.


Francis Alvin George Hamilton: I join with representatives of all parties in paying our respects and offering best wishes to the hon. member for Winnipeg North Centre. He has been well described by the hon. member for Timiskaming as being the conscience of the House-and its schoolteacher, too, if I may say so. My maiden speech was delivered over 20 years ago and I was not allowed to complete
November 30,1977

it because I had used the expression "b.s." The hon. member we are now honouring rose and reminded the Speaker that "b.s." was not a parliamentary word. I was green enough in those days to accept this as good, sound truth and withdrew the term. Two or three years later, of course, with a little more experience, I would have responded that in the part of the country I came from, "b.s." was indeed a parliamentary expression. In those days he used to keep young ministers in line.
I think the House does well to honour a member who has served in this chamber for as long as the hon. member for Winnipeg North Centre. He came here 35 years ago, and with the exception of the period from 1958 to 1962 he has been here constantly. When you get the number of years behind you that he has, I think we should recognize what it means in service to this country.
I have another thought that I want to put forward along the same line, Mr. Chairman, and it is this. Of all the members of this House, in my experience, very few follow the non-union attitude of the hon. member for Winnipeg North Centre. He does not follow any 40-hour work week rule. I find him here on Saturdays and Sundays. He is one of the few members of parliament who tries to answer all his mail, at least until recently. Any member who looks after not only his own constituents but all the people in this country who write to him for help, and tries as manfully as he can to get all his work done and still keep a watchful eye on the conduct of this House and his fellow MPs, deserves the appreciation of us all. I hope we can adjourn the House and join in this little celebration.
______________________________1435
Income Tax


Some hon. Members:: Hear, hear!


Robert Knight Andras: Mr. Chairman, there is a motion before us for adjournment, and the other parties have indicated their agreement. As much as we want to expedite passage of this very important bill and to move it along quickly, in the spirit of recognition of the hon. member and the opportunity to join him in another form of celebration, we would agree to the adjournment.


Stanley Howard Knowles: Mr. Chairman, with a motion before the committee that we rise and report progress so that the House can adjourn a little early, I would be in character if I were to stand up and refuse unanimous consent. But I can hardly do that. I simply want to thank most warmly those who spoke their very generous words just now. It has been a pleasure to be here these first few years of a parliamentary career. I hope to stay around for a long while yet.


Some hon. Members:: Hear, hear!


Charles Robert Turner: Is it agreed that we call it 6.30?


Some hon. Members:: Agreed.


Charles Robert Turner: It being 6.30 o'clock, it is my duty to rise, report progress, and request leave to consider the bill again at the next sitting of the House.
Progress reported.


The Acting Speaker (Mr. Turner):: It being 6.30 o'clock, this House stands adjourned till tomorrow at two o'clock, pursuant to Standing Order 2(1).
At 6.10 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, December 1, 1977