1977-11-01

ROUTINE PROCEEDINGS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion on a matter of urgent and pressing necessity, indeed a matter which is taken as being of the utmost seriousness by everybody except this government which treats it by casting aside questions and keeping the Prime Minister away from the House of Commons. Since the Prime Minister is responsible personally and directly for the integrity of this government and, more specifically, for the direction of national security activities by the government, I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker):
That this House demands that the Prime Minister of Canada be in his seat in this chamber at 2 p.m. tomorrow in order to answer for the illegal activities and cover-up by his government.


Mr. Speaker:: Order, please. Such a motion can be presented for discussion only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I too rise under the provisions of Standing Order 43. Considering that I have been informed that a letter was written to the former solicitor general, now the Minister of Consumer and Corporate Affairs, by the director general of security of the RCMP, dated December 19, 1972, bringing to his attention information about the break-in at L'Agence de Presse Libre in the fall of that year, and considering that the former solicitor general has maintained that he did not become aware of this
break-in until March, 1976, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instruct the Solicitor General to search his files to ascertain if such a letter, referred to as document No. 26 in the proceedings of the Quebec Keable inquiry, exists.


Mr. Speaker:: Such a motion can be presented for discussion pursuant to Standing Order 43 only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FEDERAL-PROVINCIAL RELATIONS PROPOSED CONFERENCE WITH PROVINCIAL MINISTERS CONCERNING CO-OPERATION PENDING COMPLETION OF POLICE INQUIRIES-MOTION UNDER S.O. 43
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to the provisions of Standing Order 43, in view of tensions between federal authorities and provinces such as Alberta and Quebec which are holding inquiries into various aspects of the administration of justice and affecting the RCMP since there are constitutional and legal aspects involved which, in all likelihood, cannot be considered fully by these inquiries until several months have elapsed, I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker):
That the Solicitor General and the Minister of Justice convene a conference as soon as practical with their provincial counterparts to explore, on an immediate basis, ways of mutual co-operation until such time as all of the commissions of inquiry, including the McDonald Royal Commission, have had a chance to come to reasoned conclusions and recommendations.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


ROYAL CANADIAN MOUNTED POLICE
Mr. Ren6 Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous

November 1, 1977
Privy Council Computer
consent of the House to present a motion dealing with a matter of very urgent and pressing necessity.
Considering the confusion which has been created by the illegal actions of the special RCMP committee which is responsible for the security of the state; given the general indignation among the Canadian people and considering that the government is directly involved in this inadmissible abuse of power, this situation resulting from their narrow views on the matter of national unity, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That the authorities who are directly or indirectly responsible for this abuse of power be immediately fired and that, if any minister of the cabinet is involved, he should resign forthwith.


Mr. Speaker:: Order, please. The House has heard the terms of the motion put forward by the hon. member. The introduction of such a motion pursuant to Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


GOVERNMENT ADMINISTRATION
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 public revenues of Canada have been used to purchase and operate a $1 million computer in the East Block due to an idea that "sort of bubbled up" in the Privy Council office, with expenditures hidden under administrative services for the Privy Council, and in view of the fact that one major function of this computer is a highly sophisticated press information retrieval system for the Prime Minister, and since a computer expert states it was intended as a support for the Liberal party and has essentially become a Trudeau research bureau, I move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That the members of the Privy Council office be ordered to desist from bubbling up expensive baubles for the Prime Minister and that access to the computer and its information be given to all political parties represented in the House so that no one will be tempted henceforth to bug the bauble or retrieve the Prime Minister.


Mr. Speaker:: The introduction of such a motion for debate pursuant to Standing Order 43 requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


ROYAL CANADIAN MOUNTED POLICE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I rise on a question of urgent and pressing necessity in accordance with Standing Order 43.
I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That in the light of the fact that the federal office of the New Democratic Party was broken into on December 3, 1972 the government be directed to institute full inquiries into the searching or breaking into the property of any political party in Canada.
I do not refer, as the minister did, to party headquarters only.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. William Knowles (Norfolk-Haldimand):: Mr. Speaker, I wish to move a motion under Standing Order 43 on a matter of urgent and pressing necessity.
The statement in this House by the Minister of Veterans Affairs (Mr. MacDonald) to the effect that the basic rate of disability pension will not be increased because of economic restraint has caused widespread national concern and dismay on the part of veterans' organizations and veterans generally. This refusal by the minister makes a mockery of Canada's commitment to veterans of the First World War, the Second World War and the Korean War. I therefore move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That the matter of disability pensions for veterans be referred to the Standing Committee on Veterans Affairs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Some hon. Members:: No.

November 1, 1977


CRIMINAL CODE
Mr. Gus Mitges (Grey-Simcoe):: Mr. Speaker, under the provisions of Standing Order 43 I would like to move a motion of urgent and pressing necessity. In view of the fact that every reliable indicator and poll in the last five years has shown that about 80 per cent of the Canadian people want to see a return of capital punishment in Canada, and in view of the fact that yet another police officer, Sergeant Ronald McKean, was recently gunned down and killed in Collingwood, Ontario in the performance of his duty, and as the people of Canada should no longer have to tolerate the procrastination of this government in bringing forward a referendum on this important issue of national concern, I move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That the government take immediate steps to reinstate capital punishment in Canada.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: The question period would ordinarily begin at this time. I have received notice of a question of privilege by the Solicitor General (Mr. Fox) which has a basic indication that it may pertain to events which would ordinarily follow in the question period. I should hear it in a preliminary way first, and I will guard the proper time for the question period.


PRIVILEGE
Hon. Francis Fox (Solicitor General):: Mr. Speaker, I rise on a question of privilege which I believe affects the privileges of hon. members of the House and which, in the course of the information I will give, should materially affect the course of the question period today.
During the course of the emergency debate last night the hon. member for New Westminster (Mr. Leggatt) referred in his speech to a document which on its face purports to be a memorandum addressed by Mr. Robin Bourne of the security planning and analysis branch of my department to the Minister of Labour of British Columbia. The hon. member referred to the document publicly, in spite of doubts expressed himself as to its authenticity. I want to report to the House at the first opportunity today that the document did not originate with Mr. Bourne and that it is indeed a false document.


Some hon. Members:: Shame!
Privilege-Mr. Fox


Francis Fox: The paper it is written on is widely available in the Ottawa area. Further, the branch title is not correct. The document is unsigned, and the filing number is not even remotely similar to that used in that branch of my department. It is quite clear that the document is the work of a mischievous person or persons. Unfortunately, the hon. member for New Westminster, who expressed doubts about the document, did not choose to check it out with my office before making it public.


Some hon. Members:: Shame!


Francis Fox: It is my intention to turn the document over to the appropriate authorities for investigation. I sincerely hope that the hon. member for New Westminster would wish to-


Mr. Speaker:: Order, please. If the Solicitor General is permitted to raise matters which might affect the question period, he ought to be confined very strictly to the merits of those matters.


Francis Fox: I would like to raise a second point, but I hope the hon. member for New Westminster wishes to co-operate fully with that investigation so that the mischievous person or persons may be known.


Some hon. Members:: Hear, hear!


Francis Fox: The other point is that yesterday the hon. member for Central Nova (Mr. MacKay) also rose on a question of privilege concerning a bugging device found inside his office. The hon. member, according to press reports, indicated that this could well be the work of the security service of the RCMP. I have had the matter examined and I can assure the House that I, as Solicitor General, never authorized any eavesdropping of the hon. member's office and can further state that the Commissioner of the force assures me that no such bugging was done on the criminal side of the force. However, we on this side believe this to be a matter of the utmost importance, requiring that a full, complete, investigation be carried out in order to determine who is involved in such a despicable act. I wish to assure you, Mr. Speaker, that if you so desire you can count on the complete co-operation of the Royal Canadian Mounted Police in this regard.


An hon. Member:: How about the government?


Francis Fox: This matter is far too important to be dropped with the passage of time. Insinuations have been made. It is time for insinuations to be replaced by the truth and the truth can only come out through a quick, complete and thorough investigation.


Some hon. Members:: Hear, hear!


Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, 1 would first of all like to tell the House that I accept the explanation provided today by the Solicitor General (Mr. Fox)

November 1, 1977
Oral Questions
concerning the nature of the document in that it is what appears to be a sophisticated hoax.


Some hon. Members:: Oh, oh!


Stuart Malcolm Leggatt: But, Mr. Speaker, it is not unusual that any member of this House, given the kind of information that has been available to members in so many areas, would come to the conclusion that the document itself was legitimate. As I say, I accept the Solicitor General's explanation of course. I hope he will go further and not only tell the House that the document itself is false but that the information contained therein is false and that no intelligence activity of the nature alleged in the document took place with regard to the individuals named in the document.


Some hon. Members:: Hear, hear!


Stuart Malcolm Leggatt: I think if he could do that, it would certainly satisfy the House. I do accept his explanation concerning the document, however. I should say also that I am delighted he is following up with an investigation of the document because we are just as interested in getting to the bottom of these things as is the Solicitor General.


Elmer MacIntosh MacKay: Mr. Speaker, I shall be brief. I want to thank the Solicitor General for his statement. I also want to ask a question for clarification- perhaps he has covered this point but I did not quite catch it- did he indicate that it was the RCMP on the criminal side only from whom he had received this assurance or does this assurance cover all aspects of the RCMP or related agencies?


Francis Fox: All aspects of the RCMP, Mr. Speaker.


Mr. Speaker:: Order, please. Perhaps this has contributed to a more reasoned question of privilege on the basis of those matters that have been raised. In any case, the question period would have begun about seven minutes ago and I would therefore propose to continue it until about seven minutes past three.



ORAL QUESTION PERIOD


Charles Joseph Clark: Mr. Speaker, it was certainly refreshing and unusual for us to hear from the lips of the Solicitor General the phrase that the truth can only come out through a quick, complete and thorough examination. We certainly believe that and wish that the government would consequently pay more attention to our demands for a special committee inquiry. In the absence of the Prime Minister who should be here in the House of Commons today-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: -my question is for the Acting Prime Minister. It relates to a letter to me from the Prime Minister received in my office on October 18 this year. I think it important that I quote it. It says in part:
I can, however, state unequivocally, that as long as I have been Prime Minister of Canada no Member of the Federal Parliament without his consent has ever been the subject of authorized surveillance, including electronic surveillance, carried out by the Security Service of the Royal Canadian Mounted Police.
That is the end of the relevant quotation. I would draw to the attention of the House that the Prime Minister explicitly limited that guarantee to the security service of the Royal Canadian Mounted Police.
In light of the revelation made yesterday by my colleague from Central Nova, I should like to have from the Acting Prime Minister the categorical statement that he has sought and received from the security service of the RCMP, and from any other security branch of the government of Canada, an assurance that the statement made to me by the Prime Minister is still operative.


Hon. Jean Chretien (Acting Prime Minister):: First of all, Mr. Speaker, I should like to tell the hon. member that so far as presence in the House of Commons is concerned the Prime Minister has a much better record than he has.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: I had a meeting this morning with the Solicitor General and I have nothing to add to what he had to report to the House of Commons today about the bugging of the office of the hon. member for Central Nova. He asked the RCMP and all branches of the RCMP, as well as any people involved in security, about this and they gave him their word that they were not involved. Because of the importance of this matter, Mr. Speaker, and because it affects all members of parliament, I urge Your Honour to take upon yourself the carrying out of a full inquiry so that we will know exactly who has done this bugging.


Charles Joseph Clark: Mr. Speaker, the Acting Prime Minister very carefully avoided my question. Can we have a categorical undertaking by the Acting Prime Minister, on behalf of the government, that the assurance given me by the Prime Minister in a letter received in my office on October 18 is still operative and that it applies not simply to the security service but also to every other security agency of the government of Canada? Can we have that assurance?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have no security organization but the RCMP. The Prime Minister wrote this letter and we have no changes to make to it.


Charles Joseph Clark: Mr. Speaker, since the Acting Prime Minister, acting in his capacity as Prime Minister for the moment and responsible for all the activities of the government, has now given me a categorical assurance-because that is what I
November 1, 1977

sought-that the undertaking given by the Prime Minister is still operative and that it applies to any security activity of the Government of Canada, will the Acting Prime Minister tell the House whether, before coming to the House of Commons with that assurance, he personally consulted with the director general of the security service, General Dare, with the head of the security planning and analysis branch group in the Solicitor General's department, Colonel Bourne, and did he receive from each of them the unequivocal and total assurance that neither group had any involvement whatsoever, or has had any involvement whatsoever, in the surveillance, electronic or otherwise, of any member of parliament? Has the Acting Prime Minister sought and received that specific assurance from those officers?


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 said earlier that I talked with the Solicitor General this morning and that he sought those assurances from the RCMP. He gave his answer in the House of Commons a few minutes ago and I am thoroughly satisfied with the word of the Solicitor General.


NAME OF PERSON AUTHORIZING SURVEILLANCE OF CERTAIN GROUPS IN COMMUNITY
Charles Joseph Clark: Mr. Speaker, we had on Friday the Solicitor General spell out for the House of Commons the March, 1975 mandate that is supposed to guide the activities of the security service of the government. Yet it has become evident that the government has been engaged in surveillance of individuals and groups who at best are involved in political dissent and not involved in subversion. This includes political parties, the media, labour unions and, for all we know, individual private Canadian citizens. What I want to know of the Acting Prime Minister or Solicitor General is who authorized the surveillance of political parties, the media and perhaps ordinary citizens of this country.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, that is a rather unacceptable question. Yesterday the Solicitor General replied to all questions. He made himself available to the public on Friday. He gave all the facts to the House of Commons as to who authorized the taking of the computer tapes in Montreal. Insinuations like that are not worthy of a responsible leader of the opposition.


Some hon. Members:: Hear, hear!
PARTI QUfiBfiCOIS BREAK-IN-ACTION TO REFER TO SOLICITOR GENERAL OF QUEBEC


Mr. James A. McGrath (St. John's East):: Mr. Speaker, I wish to direct my question to the Solicitor General. Last Friday the Solicitor General reported to the House that he had informed the authorities in Quebec of an illegal act involving
Oral Questions
the break-in of the Parti Quebecois headquarters in Quebec four years ago.


Some hon. Members:: Oh, oh!


James Aloysius McGrath: Those are his words. They are on the record. What we are dealing with here is the commission of two crimes. The first one has been referred to the attorney general of Quebec and quite properly so. What action has the Solicitor General taken to investigate what is a clear prima facie case of obstruction of justice under the Criminal Code by persons within his department or in his office? Clearly this would involve his predecessor, the present Minister of Consumer and Corporate Affairs, in a conspiracy or maladministration. Either way he stands indicted by the people of this country.


Francis Fox: Mr. Speaker, if the hon. member cares to read my statement, he will see that at no point did I ever refer to a break-in at the Parti Quebecois headquarters. That is a statement that has been repeated a number of times by the leader of the New Democratic Party in spite of my repeated statements to the effect that that is not the case. It was a break-in in another building in Montreal which housed the computer tapes.


Some hon. Members:: Oh, oh!


Francis Fox: Further to that, the hon. member asked a question concerning possible obstruction of justice. During the course of my tenure as Solicitor General, I have had the opportunity of reviewing the Tiles concerning possible illegalities. In no case was there any evidence of obstruction by any one of my predecessors. On the contrary, all indications in the file are to the effect that as soon as my predecessor, the Minister of Consumer and Corporate Affairs, became aware of an illegal activity, he immediately advised the provincial authorities so that appropriate action could be taken.
PARTI QUfeBfiCOIS BREAK-IN-POSSIBILITY OF ACTION AGAINST DIRECTOR GENERAL OF SECURITY


James Aloysius McGrath: Mr. Speaker, notwithstanding the statement made yesterday by the Solicitor General to my colleague, the hon. member for Egmont, to the effect that no one within the security service at the time, including the Director General of Security Service, considered this to be an illegal action, clearly an illegal act was committed and has been referred to the attorney general of Quebec. There are at least four sections of the Criminal Code that have been violated, including theft, break and entry, obstruction of justice and conspiracy. In the shameful absence of the chief law enforcement officer of this country, the Attorney General of Canada who has the responsibility here, I will direct my question to the Solicitor General. In view of the fact that he is obviously in a conflict of interest vis-a-vis his predecessor, the Minister of Consumer and Corporate Affairs, with regard to any attempt to commit a conspiracy under the Criminal Code, what action does the Solicitor General intend to take against the Director General of Security at the time who obviously
510

November 1, 1977
Oral Questions
knew that a crime had been committed? Also, what steps will he take to establish a clear objective and impartial inquiry into the operations of the office of the Solicitor General of Canada?


Francis Fox: Mr. Speaker, it is obvious that instead of asking questions the hon. member wishes to act as a judge and, in the absence of due process, condemn people who have entered into certain activities. As far as we, on this side of the House are concerned, we are ready to let the due process of law take place. We believe that the proper person to decide whether someone is guilty or not is a judge who has heard all the evidence or all the facts.


Some hon. Members:: Hear, hear!


Francis Fox: The hon. member also asked about a possible conflict of interest between my office and that of the present Minister of Consumer and Corporate Affairs. It is quite clear that on this side of the House we have wanted to ensure that there is not even the slightest appearance of conflict of interest and that is why we have set up a commission of inquiry which has all the powers necessary to examine any illegal acts committed by the RCMP. Also, in spite of what members of the opposition have said and in spite of what the editorial said in the Globe and Mail this morning, the commission has the power to call the appropriate ministers before it. I might add that the appropriate ministers, both the Minister of Supply and Services and the present Minister of Consumer and Corporate Affairs have already indicated publicly their intention to respond to any request to appear in front of that commission.


Some hon. Members:: Hear, hear!


ALLEGED ILLEGAL ACTIVITIES-REASON FOR DELAY IN INFORMING QUEBEC POLICE AUTHORITIES
John Edward Broadbent: I have a question for the Solicitor General as well, Mr. Speaker. It concerns the obstruction of justice, not on the part of his predecessors, but of himself. I should like to ask the minister why, having learned of the RCMP involvement in arson and theft, two very serious offences, and having informed the Macdonald Royal Commission in the middle of July of this year about such activity, he took more than two months before getting in touch with the police authorities in the Province of Quebec to inform them of the same activity.


Francis Fox: The answer to that question is quite clear. It is interesting to note that the leader of the New Democratic Party accuses me of having obstructed justice when I have brought the matter to the attention of the royal commission of inquiry which he, among others, requested should be set up. We set up a royal commission of inquiry in order that there might be an independent, impartial body to look into these various allegations. We thought it would be improper for the RCMP to conduct a complete investigation of

those matters. We also thought it would be regarded by members of this House as an obstruction of justice if the RCMP had gone outside the force to interview, for instance, former members or other persons who might be involved in those acts.
For these reasons we referred the matter to the Macdonald Commission, but as we had some evidence coming forward of illegal acts we thought it would be proper to refer the matter to the Attorney General of the Province of Quebec. I find it rather an astounding proposition to hold that in cases where we have referred these facts both to a federal royal commission and to the Attorney General of the Province of Quebec that the hon. member would have the gall to talk about obstruction of justice.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, we on this side can put up with just so much rhetorical baloney. 1 have no objection to his informing the royal commission. The whole point of the question is that when the minister found out that there had been criminal wrongdoing involving arson and theft he took more than two months to inform the correct police authority so that they might investigate and prosecute. That is the question.


Francis Fox: I answered the question previously-


Some hon. Members:: Oh!


Francis Fox: -I would point out to the hon. member that in the course of the debate during the month of June when I was saying that these questions involving criminal acts ought to be handled at the provincial level, the hon. member was telling us we were sending the RCMP to the dogs by confining them to a provincial commission of inquiry. The facts are there. We have referred the matter to police authorities. There are other allegations which have been made against the force and they have all been referred to the royal commission in order that they may produce the evidence. If they do come up with evidence, I would expect them to talk to me and to advise me to which attorney general I should refer it.


BREAK-IN AT L'AGENCE DE PRESSE LIBRE-REQUEST FOR VERIFICATION OF LETTER INFORMING MINISTER OF EVENT
John Edward Broadbent: You have not answered the question! Rarely have I heard such blatant nonsense from a lawyer. It is just rubbish. My last question concerns his predecessor but it must be put to the Solicitor General because, in accordance with the rules of the House, his predecessor cannot answer. The former solicitor general, the present Minister of Consumer and Corporate Affairs, said in the House that he did not learn of the break-in of the office of L'Agence de Presse Libre which took place in the fall of 1972 until March of 1976. I was informed yesterday that a letter, signed by the Director General of Security, was sent to the then solicitor general on December 19, 1972 providing information about the break-in that fall. In view of the serious contradiction between those two alleged sets of facts, would
November 1, 1977

the minister investigate the situation and find out whether such a letter was sent on that date and whether it was received?


An hon. Member:: Read the letter!


Francis Fox: Yes, Mr. Speaker.


SMALL BUSINESS
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I know we have been discussing a very important topic in the last few days, but still we should not drop all other matters of importance in Canada. 1 should like to put a question to the Minister of State responsible for Small Business. Can he tell us whether the government, during the summer break which ended recently, studied the problems of small business in Canada and whether, as the minister in charge, he intends to take concrete steps, first, to define what small business is and, then, introduce efficient legislation to better protect it in Canada and enable it to develop normally?


Hon. A. C. Abbott (Minister of State (Small Business)):: Mr. Speaker, my predecessor spent a year studying the problems of small business and a good many of these studies resulted in-


An hon. Member:: More studies!


Anthony Chisholm Abbott: -a declaration by myself on his behalf early in my tenure outlining a ten-point program. But I will confess that the program is somewhat skeletal and thereby hangs a requirement to flesh it out in the coming months. I think that as time goes by we will be bringing in definitive programs which I believe will meet many of the problems faced by small business today. I cannot say they will meet all those problems because small business, like large business today, is facing very serious difficulties. I think we are going to bring in a number of measures-the hon. member is aware of the recent introduction of the CALURA amendments which will go a long way to reducing paperwork now faced by 70,000 small businesses.


Gérard Laprise: Mr. Speaker, on a supplementary. As small and medium-sized businesses are an important source of employment both steady and new, can the minister tell us whether he intends to recommend that a committee of the House study the question as proposed recently, in ten points, by his predecessor?


Anthony Chisholm Abbott: Well, Mr. Speaker, I hope that when I introduce measures in the House I shall have the full co-opera-
Oral Questions
tion of hon. members. I trust that the hon. member for Abitibi will take part in the debate.


NATIONAL SECURITY
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Acting Prime Minister. In April of 1973 I directed a number of questions to the government. One of them was whether the government had considered or developed a scheme under the Defence Research Board, Shirley's Bay, to utilize the central telephone system in Ottawa to keep under surveillance all telephones in the Ottawa area. If that was not happening, I would have expected a direct negative answer from the Prime Minister. But his response was: "It is not considered in the public interest for reasons of national security to disclose the details of intelligence activities."
In the light of recent events, particularly those of yesterday, will the Acting Prime Minister tell us whether or not the Shirley's Bay establishment has the capability of utilizing the central telephone system in Ottawa to keep under surveillance telephones in the Ottawa area and, if it has that capability, whether it is being so used?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, I am not particularly aware of this problem, but I will check and report to the hon. member. I do not think I am in a position to add anything to the answer given by the Prime Minister a few months ago, but I will check and if there is anything new about it, I will report to the hon. member.


POSSIBLE MONITORING OF MEMBERS' LONG DISTANCE TELEPHONE CALLS
Erik Nielsen: Mr. Speaker, can the Acting Prime Minister inform the members of this House whether telephone calls, particularly long distance telephone calls, of members of this House were in any way monitored? Are there tapes being made of the conversations, particularly long distance telephone conversations of members? Does this capability to monitor and tape exist?


Joseph Jacques Jean Chrétien: The answer is no, Mr. Speaker, because I do not think it is in our interest to do that. In a letter addressed to the Leader of the Opposition, the Prime Minister has made it clear that the government had never allowed anyone to monitor telephone calls or keep the Parliament Hill offices of hon. members under surveillance.
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November 1, 1977
Oral Questions


Erik Nielsen: Mr. Speaker, either the Acting Prime Minister did not get the gist of the question or chose to ignore it.


Some hon. Members:: Oh, oh!


Erik Nielsen: My question was this: does the capability exist to monitor and tape telephone calls, particularly long distance telephone calls, of members? Perhaps he could reply to that at a later time after looking into it.
My final supplementary question is: if tapes are kept of telephone conversations, particularly long distance calls, are these tapes listened to on a regular basis at meetings of officers of various deputy ministers, for instance, the deputy minister to the Postmaster General?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not know of any capacity or any capability of this organization to do that. We are here today experiencing a fishing expedition, and I think fishing is better in the Yukon than in Ottawa.


Some hon. Members:: Hear, hear!


Mr. Hnatyshyn:: It depends on what you catch.


ROYAL CANADIAN MOUNTED POLICE
Mr. David MacDonald (Egmont):: Mr. Speaker, my question is for the Solicitor General and it refers to two answers which he gave yesterday. Since the Solicitor General confirmed yesterday once again that the illegal break-in had been "authorized by the most senior level of the security service of the RCMP, and that was by the person holding the rank of director general", and later in an answer to me he said that the cabinet committee on security and intelligence did not know about the illegal break-in, arson and theft because "everyone within the security service at that time, including the director general of the security service, did not consider it to be an illegal operation", I wonder if he can tell the House what made the director general think it was legal? Why was the information on this activity deliberately withheld from the cabinet committee for a period of some years?


Francis Fox: Mr. Speaker, I think there is a commission of inquiry which will have the full opportunity to explore those matters in detail.


Charles Joseph Clark: This is the House of Commons.


Francis Fox: It will have the opportunity of examining the director general and to hear his story. I do not intend to put words into the mouth of the then director general of the security service. I assume the proper place for this type of thing is in front of the royal commission of inquiry. We do not

see why we have set up a royal commission of inquiry if we are going to conduct an inquiry on the floor of this House.


Some hon. Members:: Oh, oh!


Francis Fox: Perhaps the hon. members opposite could make up their minds as to whether they want a royal commission of inquiry, for which they themselves pressed for a long time, or whether they want us to talk about the details on the floor of this House.


Some hon. Members:: Hear, hear!


David Samuel Horne MacDonald: Mr. Speaker, the Solicitor General cannot have it both ways. He cannot make a statement in this chamber on Friday on one of the most important issues which has come before this House for some time and then expect that questions as to ministerial information and responsibility are not going to be answered in this House.


Some hon. Members:: Hear, hear!


MANDATE GIVEN TO SECURITY AND INTELLIGENCE SERVICE
David Samuel Horne MacDonald: The Solicitor General may be a fancy skater, but he has a responsibility to this House. If he is not able to inform the House, perhaps the Acting Prime Minister could, because he is all we have to deal with today. What was the mandate given to the security and intelligence services of the government by the cabinet committee on security and intelligence from 1970 on, which would have led senior officers to believe illegal activities would be justified if not publicly acceptable?


Francis Fox: Mr. Speaker, there was no mandate given to the security service at any time indicating that illegal activities were justifiable in any way. The point has been made time and time again that all their activities had to be carried out within the framework of the law. There are a lot of people on the other side who are willing to judge and would apparently like to be appointed to the bench; but the judgment they are showing in this House certainly is not to their credibility.


Some hon. Members:: Hear, hear!


Mr. Gillies:: You are the one who reported it.


GOVERNMENT ADMINISTRATION
David Samuel Horne MacDonald: Mr. Speaker, my final supplementary is for the Acting Prime Minister. Perhaps he will be able to clarify this situation. With respect to the secret million dollar computer located in the basement of the East Block, which serves the Privy Council and the Prime Minister's office, can the Acting Prime Minister indicate whether
November 1, 1977	COMMONS
any security or intelligence information, gathered either legally or illegally, has been fed into this computer? If so, who has had access to it, and has the information that has been gathered illegally now been disposed of?


Joseph Jacques Jean Chrétien: Mr. Speaker, this computer which is now at the Privy Council is for the exclusive use of the Privy Council and the federal-provincial relations committee. It stores any information related to the activities of that office as in any other department. However, it does not collect information about national security.


NATIONAL SECURITY
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is for the Acting Prime Minister and it is designed to seek clarification of that remarkable four-year period between the Parti Quebecois break-in and the time when the Solicitor General, the Prime Minister and other ministers were made aware of the illegal act. Is it the policy of the government to allow the director general of the security services, General Dare, to proceed with surveillance activities, including illegal operations against political parties, labour unions, farm groups and individuals, without prior reference to and approval from General Dare's superior, the Solicitor General?


Joseph Jacques Jean Chrétien: Mr. Speaker, the government has never authorized any official to commit illegal acts in Canada. General Dare received new directives from the government a few years ago and this entire organization now works according to directives issued by the government in 1975, I believe.


REQUEST FOR TABLING OF GUIDELINES FOR SECURITY SERVICE
William Herbert Jarvis: Mr. Speaker, evidently there was no answer. I have a supplementary question for the Solicitor General. In view of the answer of the Acting Prime Minister-


An hon. Member:: You have already indicated that there was no answer. Make up your mind.


William Herbert Jarvis: In view of the answer of the Acting Prime Minister, would the Solicitor General be willing to table in this House the guidelines which are now in place, together with those which were in effect prior to January 9, 1973, to ensure that the director general of the security services does not make what the Prime Minister prefers to call "technical" breaches of the law in his attempt to apprehend real criminals and not
DEBATES	513
Oral Questions
at the same time deny the obvious rights of private citizens of Canada?


Francis Fox: Mr. Speaker, as far as the present mandate is concerned, the hon. member can refer to the speech I made in the House on Friday. I described and quoted from that mandate in detail. It is included in my speech.


Ramon John Hnatyshyn: Selective discussion.


Francis Fox: Hon. members opposite have honed in on one possible offence against the Parti Quebecois, which is included in my speech, but perhaps in that process they are referring to a number of policy directives which were included in my speech. I ask the hon. member to refresh his memory.


Charles Joseph Clark: He is evading the question once again.


Mr. Allmand:: You cannot read either.


TRANSPORTATION
Mr. Ian Watson (Laprairie):: Mr. Speaker, I would like to direct a question to the Minister of Transport.
Could the minister tell the House what is the present situation in the negotiations with the province of Quebec about a lane to be used only by buses on the Champlain bridge between Montreal and the south shore?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I think that the National Harbours Board will give its approval tomorrow to the agreement with the government of the province of Quebec. We are awaiting approval from the province of Quebec.


ADMINISTRATION OF JUSTICE
Francis Andrew Brewin: Mr. Speaker, I should like to address my question to the Solicitor General as well. Today the minister said that there was a delay in informing the attorney general of Quebec about allegations of criminal actions pending a royal commission. I ask him whether the fact clearly is that the administration of justice, primarily, generally and certainly in this case, is the responsibility of the provinces? Why should the provincial administration of justice be delayed pending an inquiry that may take months, even years? I ask this question in light of the fact that thousands of other people, probably even tens of thousands, have answered in the courts charges of theft, arson and of breaking and

November 1, 1977
Oral Questions
entering. Why is special treatment given to these particular people?


Francis Fox: It is not a question of particular treatment given to anyone. The question is really one of developing evidence in examining complaints that have come in. What the hon. member is suggesting is that every time a complaint comes in concerning the operations or practices of the force, I should send the complaint to the provincial attorney general. The fact of the matter is that we have set up a royal commission inquiry which will examine the complaints to obtain factual evidence as to whether or not these complaints are substantiated.


Francis Andrew Brewin: To see whether you can cover up.


Francis Fox: I really do not see how, by referring the complaint to a royal commission of inquiry, which is chaired by a judge of the Supreme Court of Alberta, I can be accused of covering up.


John Edward Broadbent: Because Quebec had the information, that is why.


Francis Fox: I would hope that the royal commission of inquiry will examine, as a priority matter, all the complaints, which may include allegations of illegal activities. If in the course of the examination of these complaints they come up with hard evidence that there has been a commission of an illegality, I assume that the royal commission of inquiry will advise me of the evidence they have come up with and will recommend that that evidence be brought to the attention of the relevant attorney general of the province. I really do not see why, if that is the attitude of the members of the NDP, they were pressing to such an extent to have the royal commission of inquiry. What they are saying is that they want a royal commission of inquiry but they do not want it to do anything.


Some hon. Members:: Hear, hear!


Francis Andrew Brewin: Mr. Speaker, I would again like to ask the Solicitor General whether he is now claiming there is any doubt whatever that there was an illegal break in? Did it take months for the royal commission to discover that fact?


Francis Fox: I hope, Mr. Speaker, that it can be handled quite expeditiously by the royal commission-


Some hon. Members:: Oh, oh!


Francis Fox: -along with the other complaints that have been made. Once again, Mr. Speaker, the proof is in the pudding. We have referred all these complaints to the attention of the royal commission of inquiry and we expect them to examine them in an impartial light and to come to relevant conclusions.


PROPOSED CONFERENCE WITH PROVINCES TO ESTABLISH WORKING RELATIONSHIP PENDING REPORTS OF POLICE INQUIRIES
Elmer MacIntosh MacKay: Mr. Speaker, the hon. member for Greenwood is aware, as we all are in the House except for the Solicitor General, that the terms of reference of the McDonald Commission are not adequate to do the job for which it was set up. In view of the growing tensions that are becoming so obvious between federal justice authorities and provinces, particularly the provinces of Quebec and Alberta, does the Solicitor General have plans to meet with his provincial counterparts as soon as possible in order to come to some interim working relationship until such time as the various commissions of inquiry are able to complete their work, which may take some months, and in order to facilitate the position of the police who are being caught in the middle of this important situation?


Francis Fox: I met the attorneys general of all provinces, along with the Attorney General of Canada, during the month of June. I believe the situation as described by the hon. member is not quite exact.
While I am on my feet, Mr. Speaker, I would like to draw the attention of the hon. member to a point of misinformation which was contained in his speech last night when he once again, in an ominous fashion, tried to indicate that there was some plot between the government and the House and the fact-


Some hon. Members:: Order.


Mr. Speaker:: Order, please.


MEASURES TO ASSURE CO-OPERATION BETWEEN VARIOUS POLICE FORCES
Elmer MacIntosh MacKay: Mr. Speaker, if I have given, advertently or inadvertently, misinformation in the House, certainly my record in the House is far below that of the Solicitor General.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: The record is available for all to see. I want to ask the Solicitor General, in order to facilitate and co-ordinate proper and amiable relationships between various police forces in this country, what new initiatives does the Solicitor General have in mind following, or in addition to, the meetings held from time to time of the criminal intelligence service of Canada? Does he have any new initiatives to meet what is obviously an urgent situation?


Francis Fox: I say that in spite of the misinformation, the hon. member does not have the courage to stand up and ask the question which would permit us to clear it up. There are a number of initiatives that have been taken by the government in connection with the Canadian Association of Chiefs of Police in order to ensure greater co-ordination among the police forces of this country. So far as
November 1, 1977

attorneys general are concerned, I indicated, along with my colleague, the Minister of Justice, during my conference with the attorneys general last June, that we are ready to explore methods and means to have greater co-operation among all attorneys general because we think it is extremely important in the fight against crime in this country which is a matter of interest to all Canadian citizens.


NATIONAL SECURITY
[Stage Direction]
PURPOSE OF OBTAINING LISTS OF PARTI QUEbECOIS MEMBERS-POSSIBILITY INFORMATION GIVEN TO POLITICAL GROUPS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Acting Prime Minister and it is a follow-up of the general import of the question from my colleague, the hon. member for Egmont. It relates to the exchange of information. Certainly the raid or the break-in, whatever the Solicitor General wants to call it, of the two premises, that is the APLQ premises and the printing plant utilized by the PQ in the province of Quebec, had for its purpose, even though there was not a scintilla of evidence of any crime having been committed, to obtain lists, in one case a subscription list and in the other case a membership list. My question to the chief lieutenant of the Prime Minister in the province of Quebec, the temporary head of the government here today, the Acting Prime Minister, is this: The Minister of State for Urban Affairs in the House late last spring indicated that as the chief political organizer for the Liberal party in Quebec he had in his possession a list of all known separatist sympathizers in the province of Quebec. Is there any connection between these lists that the security services were after and the list now in the possession of one of the ministers from the province of Quebec? What was the purpose in getting those lists as far as the security service was concerned?


Joseph Jacques Jean Chrétien: The answer is no.


Some hon. Members:: Oh, oh!


Some hon. Members:: Why?


An hon. Member:: Answer it.


Joseph Jacques Jean Chrétien: Mr. Speaker, I gave a clear answer, Mr. Speaker. It is no.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: When my colleague, the Minister of State for Urban Affairs, referred to a list of people who belong to the Parti Quebecois, let me say that I know a lot of them in my riding and anyway 1 am not worried about the next election.


An hon. Member:: Why don't you worry about the country?
Oral Questions


Allan Frederick Lawrence: I am glad the Acting Prime Minister can be that definite and that blunt in his answer. Perhaps today he will not be able to give me that assurance, but I wonder if he would make a very thorough check so that he could assure the House and the public tomorrow that no information gathered by the security services of the RCMP or any other security service of this government has in any way been passed through, passed over or given to any other political groups in this country as distinct from governmental groups either at the provincial or the federal level.


Joseph Jacques Jean Chrétien: If I can make myself clearer, 1 will reply in French. La reponse est non.


Some hon. Members:: Oh, oh!


Allan Frederick Lawrence: Mr. Speaker, I want an assurance


Some hon. Members:: Sit down.


Mr. Speaker:: Order, please.


KNOWLEDGE OF MINISTER AND PRIME MINISTER OF SCOPE OF SECURITY OPERATIONS
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, my question is for the Solicitor General. When the MacKenzie report was tabled in the House in 1969, I made a statement with, I think, the full approval of the House, that it would be completely unacceptable for the House to have the security operations of this country put beyond the knowledge of the Prime Minister or the responsible minister of the government. Is it the position of the Solicitor General and of the government of this country today that the scope, not to mention the methods, of some of the security operations conducted in this country in the intervening years were beyond the knowledge of the supposedly responsible minister and the Prime Minister?


Francis Fox: Mr. Speaker, as far as I am concerned it is quite clear that during the course of my experience as Solicitor General the RCMP security service was already operating under a very clear mandate which was given to it by the government in 1975. It was also made very clear to the security service and the commissioner of the force that all operations of the security service were to be carried out in full compliance with the law. The law, of course, has been amended since the period in question, and a number of new safeguards which I enumerated last night-eight or nine of them-have been introduced by the government to ensure greater accountability and greater control of the security service of this country.


Robert Lorne Stanfield: 1 wish the Solicitor General or the acting Prime Minister would give me a simple answer to a very simple question. I did not ask the Solicitor General whether security operations have been conducted within the law. I asked him whether it was the position of the government that the scope of the operations-for example, surveillance of the

November 1, 1977
Oral Questions
Parti Quebecois and others-was beyond the knowledge of the responsible minister and the Prime Minister. That is the question I asked, and I would like a simple answer.


An hon. Member:: Yes or no to that.


Francis Fox: Mr. Speaker, 1 can answer from my own experience as Solicitor General for the past year that I have had weekly meetings with the head of the security service.


Charles Joseph Clark: That is not the question.


Francis Fox: I am kept fully apprised of the scope of the surveillance which is done by the RCMP in our country at the moment.
KNOWLEDGE OF PRIME MINISTER OF SCOPE OF SURVEILLANCE OF PARTI QUfiBfiCOIS


Robert Lorne Stanfield: Mr. Speaker, perhaps I can get an answer from the Acting Prime Minister to that very simple question. When the Prime Minister speaks as he has about surveillance of the Parti Quebecois by security operations in this country, is it the position of the Prime Minister that the scope of these operations was beyond the ken or knowledge of himself and the responsible minister, despite the emphasis we placed on the importance of this when the McKenzie report was tabled in the House back in 1969?


Joseph Jacques Jean Chrétien: Mr. Speaker, I cannot answer on behalf of the Prime Minister on this specific case. According to what I know in the case, as soon as the Prime Minister knew that there was an investigation going on about the Parti Quebecois he immediately ordered that that investigation stop, and the moment the Solicitor General learned that there had been some illegal activity he immediately referred the case to the attorney general of the province of Quebec.


ROYAL CANADIAN MOUNTED POLICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker,
I would like to direct a question to the Solicitor General. I want to have some clarification as a result of the statement he made last Friday. Perhaps you will excuse me, Mr. Speaker, if I give a preamble.
The minister asked the people of Canada not to be overly hasty in their judgment of this case. Those are strange words coming from the Solicitor General. He said the following:
The action was taken on the authority of officers whose motives were of the highest order and beyond any doubt. It was authorized and carried out in the absolute conviction that its sole object was to promote the security of Canada given the political and social climate prevailing in 1973.

Was the Solicitor General suggesting to the people of Canada that the conduct engaged in in 1973 was and is acceptable to the Government of Canada, particularly the Solicitor General? That is what I want to ask. Has the minister an answer?


Francis Fox: Yes, Mr. Speaker, I would be delighted to repeat the answer I have already given to the House at least ten times in the past two days, and that is that any illegal operation is of course unacceptable to the government of Canada.


Some hon. Members:: Hear, hear!


ADMINISTRATION OF JUSTICE
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is to the Solicitor General as well, and I for one am delighted by his obsession and commitment to arriving at the truth in the most expedient and efficient manner; the truth, incidentally, to which only he seems to be a stranger.
Having regard to the fact that the minister relies totally on the royal commission to bring out the truth about all these matters and because of the fact that there will be the revelation of at least ministerial indiscretions if not criminal involvement by ministers, I would like to ask the Solicitor General if he is now prepared to commit himself to forgoing his executive privilege which is inherent in section 41(2) of the Federal Court Act under which he can withhold evidence and documentation from this commission. Is he prepared to forgo this executive privilege in this case?


Francis Fox: Mr. Speaker, in theory I cannot answer the question, but it is my intention to make all documents and all Files in the possession of the RCMP available to the royal commission of inquiry. There may be some cases where I will ask the royal commission of inquiry not to make the contents of those files public if the matter of national security is involved. However, I will make all the files which are in my possession available to the royal commission of inquiry.


Frank Oberle: The minister has told us that he is not prepared to forgo his executive privilege, and there may be documents which will be withheld by him.


Some hon. Members:: Oh, oh!


Frank Oberle: If the minister is extending this qualified co-operation to the federal royal commission which he himself appointed, will he also not forgo his executive privileges with respect to the commissions which are operating at the present time in the provinces of Ontario, Quebec and Alberta?
November 1, 1977


Francis Fox: Mr. Speaker, the answer is quite clear: I definitely will not. It is my duty to exercise the rights which have been conferred on me by parliament under section 41(2). A provincial commission of inquiry has no right whatsoever to inquire into the day-to-day operations of a federal agency. That would definitely go against the terms of our constitution. It is my intention to make all documents available to provincial commissions of inquiry inasmuch as they relate to criminal actions which have been committed within the boundaries of those provinces, but I will not allow a provincial commission of inquiry to go on a fishing expedition with regard to matters which are of no concern to them, that is, the day-to-day operations of an agency of the federal government.


Some hon. Members:: Hear, hear!


PRIVILEGE
Ramon John Hnatyshyn: Mr. Speaker, I rise on a question of privilege arising out of the revelation made yesterday by the hon. member for Central Nova and the action taken by Your Honour in response to it. My question of privilege deals with the sweep and the investigation which is being conducted, at Your Honour's behest, of the offices of members of parliament on Parliament Hill and Your Honour's invitation to hon. members from both sides of the House to request, if they deem it appropriate, that each of their offices be investigated by some authorities with respect to electronic devices and telephone-tapping devices.
If this offer is being made, if this service is being performed, and if police officials or others are coming on to Parliament Hill at Your Honour's request and with your consent, it seems to me that that consideration ought to be extended beyond Parliament Hill. With the greatest of deference to Your Honour, I think it should be extended to constituency offices which are funded, if not totally, at least partly by the House of Commons. Indeed, if hon. members deem it appropriate, it should be extended to their residence telephones.


Some hon. Members:: Oh, oh!


Ramon John Hnatyshyn: The heckling comes from hon. members opposite because they may think they have information we on this side do not have. But the point is that I have received complaints from constituents, and concern has been expressed that information given to and communications made with members of parliament at constituency offices and at their residences may be the subject of wiretaps, scrutiny and surveillance by certain agencies, firms or persons we do not know at this time.
Because of the fact that the House of Commons budget provides for constituency offices, because the discussions there are between constituents and members of parliament, and because political discussions between members of parliament
Ways and Means
and their colleagues are sacrosanct to our system of government, the courtesy Your Honour has extended to members with regard to their offices here ought to be extended further to include constituency offices and residences of members of parliament. I would ask Your Honour to see if it is possible to provide that kind of service to us as members of parliament in the continued performance of our duties.


Mr. Speaker:: Order, please. The hon. member for Saskatoon-Biggar makes the suggestion that the Chair consider extending this service, or making it available to members, upon request, in respect of constituency offices. I will take the matter under advisement and see whether it is feasible.



ROUTINE PROCEEDINGS


Joseph Jacques Jean Chrétien: that the ways and means motion to amend the Income Tax Act laid upon the Table, Thursday, October 20, 1977, be concurred in.


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


[Stage Direction]
Motion agreed to.

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
80025 -34
[Stage Direction]
November 1, 1977
Ways and Means
Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 50, 125, 144, 193, 207, 208, 214, 297 and 298.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Cossitt: 1.	What was the total strength of the RCMP during each of the past four years and what is the strength of the force at the present time?
2.
2.	How many persons left the RCMP by (a) retirement (b) personal choice (c) dismissal, or any other reason, during each of the past four years and what was the total of all those leaving the RCMP during the past four years combined?
3.	Did the government at any time in the past four years investigate a morale problem in the RCMP particularly in higher levels and, if so, was one of the reasons found to be political interference with performance of RCMP duties?


Francis Fox: 1.
Regular Members	Special Constables	Civilian Members	Total1973/74	11.097	847	1,093	13,0371974/75	11,872	1,169	1,230	14,2711975/76	12,336	1,248	1,357	14,9411976/77	12,340	1,238	1,443	15,021April 77	12,431	1,243	1,448	15,122
Regular Members, Civilian Members and Special Constables Only
(a) Retirement (b) (Pensioned)	Personal Choice (Time Expired) (Free Discharge) (Purchased) (See Note 1)	(c) Dismissal and (Dismissed) (Unsuitable)	Other (Died) (Invalided)	Total1973/74	135	338	73	26	5721974/75	153	384	36	32	6051975/76	184	375	40	10	6091976/77 Total	193	354 (Resigned- see Note 2)	8	7	562 2,348
Note 1: These terms were used to describe methods of voluntary discharge pursuant to the now repealed RCMP Regulations 162, 166, and 167. For clarity, "time expired', was the method to discharge a member who declined to re-engage on expiration of his initial term of engagement; "free discharge" was the method to discharge- (a) a regular member, other than an officer, with more than five years service in the force; and (b) a civilian member at any stage of his service who requested to be released from the force, and "purchased" was the method to discharge a regular member, other than an officer, with less than five years service in the force who requested to be released. A condition of release by "purchase" required the payment of an amount of not less than $200 nor more than $432.
Note 2: On may 14, 1976, the commissioner granted members the option of taking a voluntary discharge while facing disciplinary action. Members are taking advantage of this option and this has reduced the number actually being discharged as unsuitable or by dismissal.
3. No.


Mr. Herbert: 1.	Did the government recently receive a report concerning the anglophone minority of Quebec outside of Montreal and, if so, does the report indicate that (a) the Quebec City area and the Eastern townships counties of Arthabaska, Megantic, Drummond, Wolfe and Shefford have reached the point where the
anglophone presence is no longer of significance, that anglophones in these areas have accepted the predominance of French, and all of those who have to be bilingual in order to function have already made the transition (b) the Gaspe, the Eastern townships counties of Richmond, Sherbrooke, Compton, Mississquoi and Stanstead as well as Hull, Papineau, Argenteuil and Gatineau are all moving in the direction of francophone dominance and to these may be added two counties which still have relatively substantial anglophone populations- Brome and Huntingdon, and that in both cases, recent demographic changes as well as attitudes of residents indicate the trend is toward increasing francisation and francophone ascendance (c) Hull and Gatineau are marked by a general trend towards increasing linguistic and attitudinal francophone predominance?
2.	Does the report contain any indication that the Quebec francophone majority is in danger of being dominated by the anglophone minority?
3.	Has the government communicated the contents of the report to the Quebec Provincial Government?


Hon. John Roberts (Secretary of State):: 1. A report on the anglophone minority of Quebec outside Montreal was submitted to the Department of the Secretary of State in March 1977. (a) Yes (quoted from page 72 of the report), (b) Yes (quoted from page 73). (c) Yes (quoted from pages 74 and 75).
2. Yes, in the dominantly anglophone township of Pontiac. As Hull and Gatineau are considered "transitional areas", the general trend towards increasing linguistic and attitudinal francophone dominance might be threatened or even reversed in future as a result of expansion of Federal Government facilities, the presence of the National Capital Commission, and the influence of the anglophone majority in close proximity and able to reinforce the use of English by the anglophone minorities of Hull and Gatineau.
[Mr. Speaker.)
November 1, 1977

3. No, but the report has been made available to the public and has been forwarded to libraries as a resource tool.


Mr. Jones: 1.	Was the name Canada Day designated by law as the name of the official holiday on July 1 and which was formerly known as Dominion Day?
2.	What authority does the government have to issue material and letters referring to July 1, 1977 as Canada Day and the week preceding as Canada Week?
3.	Is it the intention of the government to change Dominion Day to another date closer to June 24, St. Jean Baptiste Day?


John (Moody) Roberts: Insofar as the Secretary of State is concerned: 1. No.
2.	The government uses the statutory designation "Dominion Day" in official texts in which reference is made to the July 1 holiday. There is no act forbidding the use of the term "Canada Day" or "Canada Week".
3.	No.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Canadian Intergovernmental Conference Secretariat 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?


Yvon Pinard: 1. Number of persons under contract-3; retired public servants-nil.
2. (a) 1975-76-$18,333; (b) 1976-77-$17,743. Retired public servants-not applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Commissioner of Election Expenses 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?


Yvon Pinard: 1. One retired public servant.
2. (a) Nil; (b) $100 to one retired public servant.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Commissioner of Official Languages 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?
Ways and Means


Yvon Pinard: The Commissioner of Official Languages reports directly to Parliament and not through a minister. Questions can be made directly to him.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Economic Council 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?


Yvon Pinard: 1. Number of persons under contract-50; retired public servants-2.
2. (a) 1975-$311,782; (b) 1976-$378,1 19. Retired public servants-$6,925.


Mr. McKenzie: 1.	Has the Commissioner of Election Expenses 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 Commissioner of Election Expenses in (i) 1975 (ii) 1976?


Yvon Pinard: 1. Nil.
2.	N/A.
3.	N/A.


Mr. McKenzie: 1.	Has the Commissioner of Official Languages 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 (6) average hourly rate paid to employees (c) total amount paid by the Commissioner of Official Languages in (i) 1975 (ii) 1976?


Yvon Pinard: The Commissioner of Official Languages reports directly to Parliament and not through a minister. Questions can be made directly to him.
80025-34 >/2

November 1, 1977
Air Canada



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Order, please. 1 wonder if I might take this opportunity, because of the amended procedures during the short term with respect to the conduct of the adjournment debate proceedings to 6 p.m. instead of 10 p.m., of informing the House, pursuant to Standing Order 40, that the questions to be raised on the adjournment motion at 6 p.m. are as follows: the hon. member for Winnipeg South Centre (Mr. McKenzie)-Industry; the hon. member for Surrey-White Rock (Mr. Friesen)-Customs; the hon. member for Provencher (Mr. Epp)-Central Mortgage and Housing Corporation.



GOVERNMENT ORDERS


[Stage Direction]
The House proceeded to the consideration of Bill C-3, respecting the reorganization of Air Canada, as reported (with amendments) from the Standing Committee on Transport and Communications.
Mr. Stanley Knowles (Winnipeg North Centre) moved:: Motion No. 1 -
That Bill C-3, an act respecting the reorganization of Air Canada, be
amended in clause 7 by striking out lines 6 to 9 at page 4.


Mr. Baker (Grenville-Carleton):: I rise on a point of order, Mr. Speaker. When we were dealing with the question of carrying business over from the last session of this parliament to this session, an understanding was reached among the various parties that we would proceed with the bills at the stage at which they are. Unfortunately, the amendments that were on the order paper-I am referring to one dated July 11, 1977-have not been set down.
There have been discussions among the Minister of Transport (Mr. Lang) and representatives of our party indicating that all those motions which stood in the name of the hon. member for York-Simcoe (Mr. Stevens) could be put down today as if they had been set down in the ordinary course, and would be considered during debate on Bill C-3. I understand that to be the case. I would ask the agreement of the minister for unanimous consent to do that, so that the essence of our understanding in the last session may be carried out.


Otto Emil Lang: Mr. Speaker, it would be agreeable to us to give consent to allow those motions to be heard. Naturally, I am interested in hearing the further wisdom of hon. members on the subject of the Air Canada bill. If it is more convenient to

do so with regard to these motions, I am pleased to do so. I am given to understand that we may be able to dispose of these matters very quickly.


Mr. Speaker:: Order, please. I take it that the sense of the agreement is that this bill, having been carried over from the last session, will be reinstated in the same position as it was in the previous session, and that it would be inequitable to restore the bill without restoring the report stage amendments that were outstanding at the time the restoration was made.
Therefore, I take it there is unanimous consent that the motion be now put that the report stage amendments outstanding at the time the bill was ordered restored, or at the conclusion of consideration in the last session, be now reinstated along with the report stage of the bill, in order that they can now be taken into consideration. Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed and so ordered.


Walter David Baker: Mr. Speaker, there is one further matter with respect to House business. We are now proceeding with Bill C-3. In view of the motions that were put down today by the Minister of Finance, could I ask the deputy House leader of the government about the legislative program? Does the bill that flows therefrom now take priority in terms of House business, as indicated earlier? It would be very helpful if we knew that, and when it would be taken up the first time.


Mr. Cafik:: Mr. Speaker, in response to the question, I had informal discussions with the hon. member to the effect that today we will deal with the Air Canada bill. Bill C-3, followed by Bill C-8, the Canada Labour Code; then we would move to Bill C-7, CALURA. The ways and means motion tabled today will be dealt with on Thursday, I think, subject to some adjustments. I will speak to the hon. member and other House leaders later if there is any change.


Stanley Howard Knowles: Mr. Speaker, I refrained from taking part in the point of order discussion that arose a few moments ago because I have no objection to last session's report stage amendments being reinstated. However, I understood it the other way. I thought it was required that we put our report stage amendments back on the order paper, but apparently I am the only one who did.


Mr. Mazankowski:: You probably never left the place.


Stanley Howard Knowles: Mr. Speaker, according to the order paper it was filed on October 21, and by then most hon. members were back here too. However, I am also caught by surprise because I thought we would be debating the bill to amend the Canada Elections Act this afternoon; but here we are on Bill C-3 and in particular we are on my report stage amendment, which is one that was put down in
November 1, 1977

the previous session and debated but not voted on prior to the prorogation of that session.
The standing committee which dealt with the bill wrote into it a clause which was not there when the bill was given second reading in the House. The clause is one which was proposed in one form or another by members of the Progressive Conservative party, and although the government did not accept the precise wording proposed by the Progressive Conservative members, it did accept the idea. As a result, there was put into the bill subclause 7(1.1) which reads:
In discharging its responsibilities under this act, the board shall have due regard to sound business principles, and in particular the contemplation of profit.
We think it was a mistake, Mr. Speaker, to put that sort of language into this bill. We think the purpose of an organization like Air Canada should be mainly to provide service to the people of Canada, and that it is a mistaken view to say that its main purpose should be the contemplation of profit. We are not suggesting that its purpose should be to go into the red; we are not opposed to the making of a profit if things work out that way. But we do suggest that it puts Air Canada off on the wrong foot, if you can say that about an airline, to say that its main purpose should be the contemplation of profit. Therefore, we think that those words, which were put in by mistake when the bill was in committee during the last session, ought to be removed, and this is why I have put down this report stage amendment to remove lines 6 to 9 of clause 7 on page 4 of Bill C-3.


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker,
I welcome the opportunity to speak on the new Air Canada Act, Bill C-3, a measure respecting the reorganization of Air Canada, and I particularly welcome the opportunity to speak on the motion moved by the hon. member for Winnipeg North Centre (Mr. Knowles). The hon. member for Winnipeg North Centre is a very respected member of parliament and the second senior member of parliament in this country. I was somewhat amazed, however, when I read his motion requesting removal of this clause which provides as follows:
In discharging its responsibilities under this act, the board shall have due regard to sound business principles, and in particular the contemplation of profit.
In my opinion, Mr. Speaker, that should be written into every act today which deals with Crown corporations and government agencies, not only in the federal government but in the provinces. What the Canadian people are looking for today is better management within government and the cutting out of much waste and mismanagement costing hundreds of millions of dollars. I do not know whether the hon. member for Winnipeg North Centre has read the Estey report, but it was a very critical document so far as Air Canada management is concerned.
I am sure the hon. member for Winnipeg North Centre is well aware of the number of times I have spoken in regard to Air Canada, particularly its finance branch in Winnipeg where there were no end of problems in connection with unaccounted for airline tickets totalling at one stage some 225,000. Last spring Mr. Taylor, president of Air Canada, informed us that this number had been reduced to about 80,000 tickets.
Air Canada
I think the amendment presented in committee by the hon. member for Vegreville (Mr. Mazankowski), to the effect that Air Canada be accountable and that it operate in a businesslike manner, is an excellent one. If I may just refer to the remarks of the hon. member for Winnipeg North Centre on July 19 last when the bill was at report stage, the hon. member made this comment, as reported at page 7810 of Hansard:
The business world has had charge of this country for 110 years and has had plenty of opportunity to pursue sound business principles. And look at the mess we are in today.
Well, Mr. Speaker, we are in this mess in our country today because we have had a number of provincial socialist governments as well as one here in Ottawa. We had the Barrett government which was in power in British Columbia for three years and exercised no sound business principles whatsoever. They turned a $50 million surplus into a $500 million deficit in just three years. The Canadian people are fed up with this kind of government. They want some sound business principles introduced into the operations of government, Crown corporations and the like.
Despite the missing airline tickets and the mismanagement outlined in the Estey report, Air Canada has still been allowed to increase air fares. I have objected to this because it is one other way in which the Canadian public has been gouged. Air Canada should be put on a sound footing first, before being allowed to increase air fares. This is another example of how we would protect the Canadian public, Mr. Speaker.
In explaining his motion, the hon. member for Winnipeg North Centre said this:
It is not our suggestion that the board of Air Canada should work hard to achieve a loss, but we do think that the main purpose of a government-owned corporation should be the provision of service.
I agree there should be provision of service, but if the airline has unprofitable routes, the government should subsidize them. In committee last spring, Mr. Taylor had no objection to the motion having to do with Air Canada being run in a businesslike manner; as a matter of fact, as I recollect it, he welcomed it. The hon. member for Winnipeg North Centre went on to say:
-we are faced with massive unemployment today, with runaway inflation and with conditions which deny to our people the kind of economy and justice to which they are entitled.
Unless we have more sound business principles and are able to deal more effectively with business in Canada, there will not be any businesses to deal with. There is a mass exodus of businesses and investment money from this country because businessmen and investors do not trust socialist governments.
What four men have done to this country, Mr. Speaker, is just unbelieavable. One of them, Mr. Barrett, has been removed. Premier Schreyer of Manitoba had a very bad record in Manitoba, as a result of which there has been a mass exodus from the province of businesses and investment money which is attributable to the socialist climate. Then when Mr. Blakeney nationalized the potash industry of Saskatchewan, he put the fear of death into American investors throughout the United States. In addition, we have a government today which governs

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Air Canada
by order in council, and has also put the fear of death into the business community. Thus you can see, Mr. Speaker, why it is so important that we return to sound business principles while there are still some businesses left in this country.
Another example of a government that did not operate on sound business principles was the Schreyer government in Manitoba. When it left office we were told there was a deficit of perhaps $21 million. We have since found out that the deficit in Manitoba will reach $71 million. It can, therefore, be seen that sound business principles were not exercised in Manitoba. The new Manitoba government will have to get along with the many money-losing ventures the socialist government entered into in that province. It has cost Manitoba taxpayers a tremendous amount of money.
The Manitoba government did not use sound business principles when it went into the airplane manufacturing business. Saunders Aircraft cost Manitoba taxpayers $38 million through this failure. Also, they are in the bus manufacturing business. This has cost the taxpayers over $35 million. It goes on and on. They even got into the Chinese food business. I like Chinese food, but I like to buy it from a Chinese restaurant, not the government. They did not last very long in the Chinese food business. However, I have not seen any Chinese restaurants fold up in Manitoba; they use sound business principles such as we want to see introduced into the Air Canada Act and the Air Canada operation.
Another example of governments getting involved in business and not using sound business practices is the socialist governments which have been in Saskatchewan for many years. Their bauxite factories, and all the rest, folded up.
Another reason a clause like this should be introduced with regard to this particular Crown corporation operating on sound business principles is found in a recent statement by the Auditor General. He said:
The present state of financial management and control systems of departments and agencies of the government of Canada is significantly below acceptable standards of quality and effectiveness.
We feel very strongly about the fact that unless the systems are corrected the day may well come when I cannot give a clear certificate on the accounts of Canada.
That is what we want from Air Canada, a clear certificate of the accounts. We do not have that now; this was highlighted in the Estey report. The business community, business people and investors are looking for sound business principles. I wish to quote a financial expert who wrote an article in the October 3 edition of the Winnipeg Free Press. He stated that clients investing outside the province will cost the province 4,000 jobs. This is because of having a government which did not use sound business principles. They were interfering with the business community, causing them no end of concern.
The article points out that you can live with a lot of high taxes and government interference, but you cannot live with uncertainties brought about by socialist governments. No business or investor will invest when there is uncertainty. That is
[Mr. McKenzie.)
why there was such a mass exodus of businesses leaving for the United States. Who ends up paying for this? It is the Canadian taxpayer: he must pay the huge amount of money required to operate the Unemployment Insurance Commission.
A further example of why we should be operating on sound business principles is the uncontrolled spending and uncontrolled growth we have had with the federal Liberal government. In ten years the federal budget has skyrocketed by 350 per cent, from $8.8 billion to a forecast $46 billion in the fiscal year April 1, 1976, to March 31, 1977. Transfer payments of $21.4 billion represent a little more than half the current budget. Of these, more than $9 billion went directly to Canadian citizens in social welfare expenditures such as old age security, family allowances and unemployment insurance payments.
Everyone in Canada knows that the hon. member for Winnipeg North Centre is the champion of old age pensions and veterans pensions. We have all supported him in this. I am sure he will agree that if all government departments and Crown corporations operated in a businesslike manner, a lot more money would be available for pensions. I would sooner see money spent on pensions than allow Crown corporations to operate on their own, not properly accountable to parliament.
Because this government has not been using sound business principles, the national debt of the federal government will be around $28 billion at the end of the fiscal year, the result of budget deficits in 20 of the last 23 years. The interest on the national debt, which was $1.2 billion in 1967, will be around $4.6 billion at the end of this fiscal year, making it the third largest federal expenditure after health and welfare, economic development and support. If the government were following sounder practices, the money would not be going out to pay this huge debt. More money would be available for pensions which the hon. member for Winnipeg North Centre and others speak about on a regular basis.
With regard to businesses leaving Canada because of the uncertainty here, I wish to point out some of the reasons for their leaving. Uncertainty is the many-headed monster that has been established by the various socialist governments we have had across Canada. It has been perpetuated by our collective leadership.
What seduces businesses to look south of the border is not necessarily the big market, the bigger tax incentives, lower taxes, lower interest rates, less government interference, a more stable work force with better motivation and a strong sense of the work ethic, lower wages and high productivity; rather, these factors more often than not are just the last straw for belaboured-by-paper-work businessmen pronounced guilty until proven innocent by the all-powerful and daily growing governments of our day. Any one may tend to be just the icing on the cake of uncertainty.
Because we do not deal in sound business practices with the business community, we are governed today by order in council, something I do not support. It causes uncertainty and lack of accountability. This has been highlighted by the many auditors general reports we have received over the past few
November 1, 1977

years. Under the circumstances in this country today, and after the election in Manitoba, it has been made quite clear that the people want to get back to responsible government. The government which has just taken over in Manitoba gives every indication that it will be a down to earth, no nonsense government. This is what the Canadian people want.
1 suggest that the hon. member for Winnipeg North Centre reconsider this motion calling for Air Canada not to be accountable, because the Canadian people are calling for Crown corporations and all government departments to be accountable. It is time we took a step in this direction. I say to the hon. member for Winnipeg North Centre that once we get on to these sound business practices there will be a lot of money for increasing pensions for veterans, senior citizens and everyone else. I therefore suggest that he reconsider his motion at this time and withdraw it.


Mr. Peter Stollery (Spadina):: Mr. Speaker, I should like to say a few words on the motion put by the hon. member for Winnipeg North Centre (Mr. Knowles). I begin by wondering about the comments of the previous speaker, which sounded to me more like Manitoba politics than anything pursuant to the motion or to the bill we are considering. 1 really do not understand what this has to do with a defeat or otherwise in Manitoba provincial politics.
We are dealing now with an important Crown corporation and with a principle which has been injected into the debate by the hon. member for Winnipeg North Centre, namely, whether a Crown corporation should give first priority to making a profit or whether its first duty is to serve the public. In my view, the hon. member for Winnipeg North Centre takes the rather extreme view that we should abandon the idea of such a corporation operating on the basis of sound business principles.
Before pursuing this subject further, I should like to draw attention to the rather excellent job, in my opinion, which Air Canada has done in the past year or 18 months since the new president took charge. We all know that it is customary for people in this country to complain about Air Canada. I think it is time we paid Air Canada some of the compliments which are due to it, particularly under the management of the new president.
When I hear about the desirability of applying sound business principles to the airline business, 1 find difficulty in thinking of any airline which operates solely on the basis of those principles, that is, without a great deal of government assistance. The airline industry is famous for the various forms of government assistance it requires, ranging from direct subsidies to contracts for carrying mails and contracts for carrying government employees.
The purchasing of aircraft is, in itself, a complex business. We all remember what happened a year or two ago with the Lockheed experience. We know, for example, that Lockheed was selling airframes-it was not the case in Canada-to various airline companies, using very dubious procedures. The best example of an airline which operates in accordance with
Air Canada
business principles would, I suppose, be Pan-American, and I do not think Pan-American is any paragon among airlines. The last time I was on one, they had cockroaches in the galley.
I took great interest in bringing this to the attention of the stewardess.


An hon. Member:: Why were you in the galley?


Peter A. Stollery: I was having a drink, of course. That is what I was doing in the galley.


Mr. Peters:: It is pretty bad when you have a cockroach in the booze.


Peter A. Stollery: Yes. As the hon. member for Timiskaming (Mr. Peters) said, it is pretty bad when you have a cockroach in the booze.
I think we should give credit where credit is due, and the improvement in Air Canada is due in great measure to the new management. Everyone in Canada complains about Air Canada. I think that in the last year or 18 months Air Canada has done a fantastic job in improving the service, while at the same time operating generally on the basis of sound business principles. I think we would be very remiss if we did not insist that an airline should pay regard to sound business principles, and I see no reason why Air Canada should not at least contemplate making a profit: it may not do so, but I do not see why we should tell them that they should not even contemplate a profit. If that were the approach, I think the taxpayers of Canada who have to make up the deficiency if the airline does not make a profit would not find the situation very satisfactory.
I say this to the hon. member for Winnipeg North Centre: I think Air Canada should serve routes on which it is bound to take losses, otherwise there is no reason for the existence of Air Canada. If only profitable routes were served, there would be no point in having a national airline. I also think that Air Canada should have the right to operate on the profitable routes to offset losses incurred in maintaining flights to cities which private airlines cannot possibly serve without government subsidy. Airlines and government subsidies seem to go together-this includes private airlines-and will increasingly go together as energy becomes more expensive and the cost of buying new fleets of aircraft increases.
I cannot at this time go into the various financial arrangements among the regional air carriers and federal or provincial governments. I will simply note that Western Airlines is now owned, I believe, by the government of Alberta because that government-which, incidentally, is known to be a great supporter of free enterprise-has, presumably, decided it should get into the aircraft business on the ground, for all I know, because there are parts of western Canada which require to be served by a state-supported airline.
Whether there is a credit balance shown at the end of the year means nothing because of the many forms of subsidy which can be made available. We are most unfair to Air Canada in asking them to do so many things at once. We want

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Air Canada
them to serve parts of the country which cannot be served by other airlines. We want them to make a profit. We want them to give better service than is given by similar airlines in other countries. We want them to put in fewer seats than do similar airlines in other countries. In effect, we have asked them to do what is impossible; and when they cannot do it, we complain. I do not think that is right.
I cannot agree with the motion, because it would be folly to operate Crown corporations in other than a businesslike way as far as possible. Such an approach would discourage Crown corporations from even contemplating making a profit, and that is something which no responsible government could endorse. So with all due respect to the hon. member for Winnipeg North Centre, when he reflects on the motion which he has put on the order paper I am sure he will see that it really does not make sense even to one who fundamentally supports the concept of this kind of Crown corporation, to one who believes strongly that Air Canada should serve communities across the country, and to one who thinks that Air Canada, particularly under the new management, has done an excellent job in satisfying a lot of very difficult and almost irreconcilable requests of the government, members of parliament and the House of Commons.


Some hon. Members:: Hear, hear!


Donald Frank Mazankowski: Mr. Speaker, I should like to rise in opposition to the motion which we are debating.
I listened with interest for a while to the hon. member for Spadina (Mr. Stollery), and I did not know whether he was for or against the motion. I had difficulty following his rationale, but it was nice to see him back on board. It should be noted that this particular amendment had the support of the Liberal and Conservative parties in committee.
We are not debating whether Air Canada is a good or a bad airline. We all agree that the airline stacks up very well in terms of all the carriers involved in the carrying of passengers, both domestically and internationally. It is fair to say that the leadership and management which is provided by the present chief executive officer is sound. Actually, it goes beyond that: the kind of managerial expertise that the present chief executive officer has brought to Air Canada augurs well and creates, probably, a new climate of confidence in the area of Crown corporations. This is something which is really needed, having regard to some of the revelations which have occurred during the past 12 or 18 months.
The hon. member referred to the fact that the airline industry is heavily subsidized, which is true. There is not one form of transportation in this country which is not subsidized in some way, shape or form. This bill sets out to provide the avenue for which the subsidy can be identified, which is important. The hon. member referred to the fact that Pacific Western Airlines was taken over by the free enterprise government of the province of Alberta. PWA is certainly better off in the hands of a private enterprise government than a socialist

government. Given the record of achievement of the Barrett government in British Columbia, it clearly speaks for itself.
When the hon. member for Winnipeg North Centre (Mr. Knowles) introduced this amendment he said the following:
Mr. Speaker, the purpose of this report stage amendment to Bill C-I7 is to strike out a few ridiculous lines which were written into the bill when it was in the hands of the Standing Committee on Transportation and Communications.
All we are saying here is something which is very, very significant, particularly at this juncture in our history and our economic climate. The words the hon. member for Winnipeg North Centre wants to remove read as follows:
(1.1) In discharging its responsibilities under this act, the board shall have due regard to sound business principles, and in particular the contemplation of profit.
This is a directive to the board of directors of Air Canada, comprised of the chairman and the president appointed pursuant to section 5. I heard the hon. member for Winnipeg North Centre refer to those lines as being ridiculous and all I can say is that if we have more than an average number of Canadians who feel that way, then we are in serious trouble in this country. This particular amendment was thoroughly and extensively debated in committee. I think it is reasonable and realistic, and certainly it is a fair directive to advance in any business enterprise, be it a private enterprise venture or a Crown corporation. The hon. member seems to disregard anything which would characterize efficiency, orderly management, productivity or profit. It seems that sound business sense is something the hon. member does not have in his vocabulary.
There has been an implication by the hon. member for Winnipeg North Centre, and I believe the hon. member for Spadina, that good service cannot be provided and at the same time a profit made. As far as I am concerned, the two are almost inseparable. If you have a good enterprise which is functioning smoothly, doing a good job, making a profit, expanding, upgrading and streamlining its operations, in order to maintain a proper capital equity and cash flow, and in order to streamline and mechanize, you have to make a profit in order to provide that service. These two principles are compatible with one another. I see no difficulty in combining the two and providing a directive to any business enterprise which is engaged in the transportation of people. As the hon. member for Winnipeg South Centre (Mr. McKenzie) said, many of the economic problems we have in this country and many of the problems we have in some of our government-run agencies are primarily because sound business principles have not been the primary motivating factor.
The hon. member made reference to the mismanagement in government circles and the fact that the Auditor General indicated in his last report that the government is close to losing control of the purse-strings, and even parliament. It behooves us all to take a second look at operations involving the use of public funds. When we are dealing with a Crown corporation such as this, we are dealing with public funds. The hon. member also said that we have been engaged in pursuing sound business principles for the last 110 years. I categorically reject that statement. The facts speak for themselves. The hon.
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member for Winnipeg South Centre elaborated on that matter as well.
One of the reasons we in our party supported this amendment was the fact that we felt it gave the airline a directive and, indeed, a mandate. The former chairman of Air Canada had long complained that he did not really know the specific mandate of Air Canada. He did not know whether the operations of Air Canada should be conducted in contemplation of a profit, or whether it should be strictly operated along the lines of providing a service at any cost. We think it is important that a realistic definition of a mandate be provided in the terms of reference for a piece of legislation which governs a multimillion dollar corporation such as this.
It is sound practice on the part of parliamentarians who act in the interests of Canadians to provide such a directive. This is particularly important in view of the fact that there is another important clause in this bill, clause 9, which gives the governor in council authority to pay to Air Canada the losses that are incurred as a result of any directive which may be made to the corporation for the provision of service in an area where it is deemed to be in the public interest that such service be provided.
This will not involve total cross-subsidization. The cost, as I understand it, will be clearly identified and will be paid for out of the public treasury. That is all the more reason for the over-all objective and goal of the corporation being that the operation be conducted on the basis of sound business principles and in anticipation of profit. So I think that particular clause certainly balances any fear which some may have that routes might be lost because the provision of service on a particular regional line may or may not be economically feasible. I think that is a very important element.
In a corporation such as Air Canada, or in any other enterprise, there will always be a certain amount of cross-subsidization. As I see it, some routes would make a very good profit, some might show a loss, and some might show a medium amount of profit. So I think one has to look at this point in a global context. I think we should not single out any particular line, but if-as the bill has provided-a service is needed which cannot be provided on an economic basis, the government has the power to direct the airline to provide it and to cover any losses that evolve therefrom.
Reference has been made to the present chief executive officer of Air Canada, and I simply want to reiterate the sentiments expressed. I think I would go even further and say that both our Crown corporations which are engaged in the transportation of people and goods, CNR and Air Canada, are guided by very competent men. The president of CNR, Mr. Robert Bandeen, and Mr. Claude Taylor provide Canadians with an excellent example of competent leadership. They have distinguished themselves in their endeavours in both fields of transportation, and I think we can look to these two gentlemen to provide the kind of leadership that will be necessary as we approach challenging times in the transportation industry.
Air Canada
I think, also, we can look to these gentlemen to put their corporations on a sound business footing. It certainly behooves us to give them the tools and the instruments to do their job as effectively as possible. I want to say one thing in conclusion. Air Canada and, for that matter, CPA will have to take their blinkers off with regard to domestic charter operations. The concern is that any domestic charter operation may undermine regular scheduled air traffic. I believe that argument is overstated. It is interesting to note that Air Canada, for example, plans to triple the available seat capacity on its low-cost, charter class schedules for travel within Canada in the peak summer season next year.
There is every indication that this kind of market is growing and will continue to grow, and I do not think the corporation should be blinded by the fact that it cannot now merchandise the kind of package that the consuming public is demanding these days. Let me go back to the time a few years ago when, in my view, Air Canada did not establish a solid footing in the international air charter business. They were left in the dust. Then they wanted to pay an abnormally high price for the operations of Wardair so as to get a foothold in the air charter business.
I hope they will take a second look at their position in reference to the domestic air charter service, that they will approach it with an open mind, having regard to the realities of the marketplace and to the fact that there is a vacuum there which should be filled and will be filled in one form or another. While I am on the subject of domestic air charters, let me say that I think they will provide an excellent vehicle for assisting this country in its desperate need to achieve a greater sense of national unity. I think that some form of domestic air charter system would help alleviate the lack of understanding which exists from region to region in this country, and would provide an opportunity for Canadians to get to know each other better. I think it would assist us in our balance of trade, particularly with reference to tourist industry dollars. Many of those dollars go outside this country, dollars that could well be spent here if we developed a more reasonable charter package for Canadians.
I know that the former commissioner of official languages made some very relevant observations in this regard. I think it will require, not only the leadership of Air Canada and Canadian Pacific Airlines but also initiative and leadership from the federal government. I hope that at the earliest possible moment the Minister of Transport (Mr. Lang), the Prime Minister (Mr. Trudeau), the Minister of Industry, Trade and Commerce (Mr. Horner) and all other ministers who have some influence in this area will sit down with the management of our national airlines and map out a strategy for encouraging domestic air travel in this country, one which would reap benefits not only in the economic sense but for national unity.
Again I want to express my opposition to the motion that has been introduced by the hon. member for Winnipeg North Centre. I hope he will reconsider it, having regard to some of the enlightened comments that have been made from this side

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Air Canada
of the House, and give Air Canada the kind of tools and mechanisms that they need to do the job.


Some hon. Members:: Hear, hear!


Otto Emil Lang: Mr. Speaker, I should like to say only a few words at this time about the motion which has been proposed and about the remarks just made by the hon. member for Vegreville (Mr. Mazankowski). I should like to say, first of all, that I welcome him back to his role in the transportation field. I think it is a very important task and I am glad to see him in that role. I may say that I was delighted to hear him repeat the words of praise of his predecessor as transportation critic. When I recommended the appointment of the president of Air Canada, I was very pleased to hear the kind words of praise from his predecessor. Now it is even more wonderful, after a good period of operation by the president, to hear those words confirmed by the hon. member for Vegreville.
I appreciate his remarks and I thank him, also, on behalf of the president of Air Canada, because I think it is an airline which is doing an increasingly good job. Our purpose in the House today is to ensure that under the bill before us Air Canada is free to do just that, and to do it more effectively. It is for that reason that I join the hon. member in opposing the amendment of the hon. member for Winnipeg North Centre (Mr. Knowles). The acceptance of that amendment would defeat the spirit of this bill.
The bill represents a significant step in the course of Air Canada's history, because it is a demonstration of the belief by the House of Commons that the airline has come to a certain stage of maturity at which it should be freed from the burdens of special government obligations, and at which it should also be relieved of the special advantages which have sometimes been given to it.
The bill does that with regard to contracts. It does that in requiring Air Canada to apply for licences in the ordinary way. It does that by setting up a system in which we hope Air Canada will engage with other airlines in special services which are not justified on an economic basis, whereby we can make it possible for all the airlines to offer to provide those services and have competition between them as to which one will provide the services most effectively. In all these ways we are recognizing that there is a possibility now for the airline, which was created in 1937 as Trans-Canada Air Lines, to be in full competition without special burdens or privileges from the government or from the structure by which it has been created.
I think what has happened is that time and circumstances have changed. In putting this bill forward, I do not disagree at all with the spirit which moved the Hon. C. D. Howe in 1937 when he saw the need to put Trans-Canada Airlines together to provide national airline services for this country. But times have changed, and I am rather sure that the Hon. C. D. Howe would fully agree with the change which is being made here, in

that the airline situation has reached that degree of maturity where we can free it in order to compete.
The Right Hon. C. D. Howe would fully agree that the special position of Air Canada in relation to the government is no longer a necessity. Indeed, the spirit of competition was difficult in the airline industry as long as special obligations and special burdens existed. I am, therefore, very interested in seeing this bill move forward and the whole new status of this corporation recognized.
I emphasize that it is a matter of this House and this government recognizing that where it is possible for a private sector-like operation to do a job effectively, that indeed is where it should be done. We are, in effect, giving the airline that kind of status while not yet having decided that, as owners of the airline, it is commercially right or the time to dispose of our investment interest in it. I see this happening with Air Canada and I see it happening with Canadian National, both of which now have good, strong management teams which can pull the airline and the railroad, respectively, forward effectively. I foresee both of them making profits over time as their effective operation continues.
1 emphasize that where we want a service performed as a matter of public policy, it is seen by us to be our obligation to quantify the cost and to be prepared to pay it, rather than impose it in a hidden fashion upon other users of the service. It is because the amendment here moved would seem to negate that spirit that I, also, will oppose it and hope that other hon. members will do so.


William Arnold Peters: Mr. Speaker, I was quite perturbed by the remarks of the hon. member for Winnipeg South Centre (Mr. McKenzie). However, he does not hold a candle to the Minister of Transport (Mr. Lang) who, if I heard him correctly, has almost reached the stage where he is about to sell CNR and Air Canada. He says he can see the day coming when we will sell the profitable parts and keep the unprofitable parts to provide service. The Minister of Transport certainly has a friend in the Postmaster General (Mr. Blais), who feels he should get into the field of establishing his own ground carrier system in competition with some of the other carriers.
It always surprises me when I hear people such as the hon. member for Winnipeg South Centre say that one of the problems is that this service has to make a profit and fit into the good old free enterprise system, or that governments should not run anything except to break even or make a profit. I asked one of my colleagues about the background of the hon. member for Winnipeg South Centre, because I thought he was a rich entrepreneur, like many other hon. members, who had speculated in mining ventures, in oil, the stock market or something of that nature. It is very interesting to learn that he is only an embittered employee of a government-run organization.
He comes to Ottawa and takes out his frustrations on a Conservative-established Crown corporation, the Manitoba Telephone System. That was established, I understand, in
November 1, 1977

1908 by Grandfather Roblin. I really wonder about the mentality of people who use their perverted backgrounds and their frustrated hopes as a reason for their position with regard to something as important to the people of Canada as Air Canada.
It is true that Air Canada will not be used by everyone. It is true, as the minister just said, that it is going to be subsidized for those who need the service and use it. It may be that the minister is not part of the jet set. Perhaps he does not want to be, or perhaps the jet set does not want him; but there is a certain class of people which travels by air, and these people are subsidized all over the world. Mr. Speaker, I know you are a world traveller. How many countries have you travelled to where you have seen aeroplanes with the names of the countries on them, and known full well that they were leased or that the money to buy them was a gift?
This is true all around the world because there is a certain pride attached to air travel, and most countries want to have good airlines. Despite what the government has done to our airline, we have a good airline. What has the government done to it? It has allowed regional carriers to drain off much of the lucrative business in weekend travel to many countries. You can go to airports all across Europe, in the Caribbean or in Mexico and find Wardair, Quebecair, CP Air, Western Pacific or any of the five regional carriers sitting at those airports in conjunction with Air Canada.
It is interesting to note that even in Great Britain the tourist operation has been combined with the major carrier. The reason was prestige, and it was also economic to do so. Yet we ask a national airline to carry passengers into areas in which it is difficult to provide service. We ask the national airline to provide this service because it is the right of the Canadian public to travel on its national airline. We ask the national airline to go to areas where it is not feasible or profitable to operate, yet we tell the board of directors that it should use good business practices.
I have had the opportunity to be on the committee studying the estimates of the Department of Transport over a number of years. I have seen the machinations which have taken place in obtaining financing for Air Canada. I have seen the difficulties it has had because it has been a stepchild of the government. It has been relegated to the foster home of Canadian National. I am aware of the great difficulties, and I congratulate the government for making this change and for putting the airline into the position where it can borrow on its own and establish sound business practices. But we say it has to make a profit.
We say that the board "shall have due regard to sound business principles". Everybody agrees with that. If it went on to say, "in particular the national interest", that it would provide additional air service, we would understand that. Maybe it should be thinking of going into some of the other branches of air service. When we say that the board of directors in particular must give consideration to making a profit, let us not kid ourselves: we are doing exactly what the Minister of Finance (Mr. Chretien) says we are trying to do-
Air Canada
we will split it up into profitable and non-profitable areas. The profitable areas will sell, and the unprofitable areas will operate.
In the past even Conservative governments which contemplated establishing Crown corporations always had as the principle reason that they were the most economic way of providing maximum service. This was done with hydro by a Conservative government in Ontario, and with a telephone system by a Conservative government in Manitoba 70 years ago. It has been done in every province where they have contemplated providing necessary services to the greatest number of people at the lowest possible cost. They do this knowing full well that the operation has to be subsidized if they are to provide any kind of equality in areas disadvantaged by distance from resources, or in any other way.
I am quite surprised at the number of Conservatives who are violently opposed to any kind of government-run operation. It is true the Liberal party does it badly, but that does not mean government-run operations, under proper management, could not be well run. I think the first part of the sentence is admirable; we should employ sound business practices. You will remember the machinations of this government in order to raise finances on a number of occasions for Air Canada. It is a wonder it exists at all; it was a political practice, not a business practice.
I agree with the hon. member who said we now have good management for Air Canada in Mr. Taylor. He also said we have good management in Canadian National. I disagree with his view about Canadian National, but I agree that we have pretty good management now in Air Canada. I think the management now can run it whether it is a private company or a Crown corporation. What is important is how the government will provide the financing for the corporation-whether we lend money to it as a private company or a public company.
If I were the manager of Air Canada and I had to make a profit, it seems to me the logical way to do it would be to keep on boosting fares. But even I, who know nothing about business, know that as fares are boosted there will be fewer passengers. That happened when we raised the price of milk, and I suppose it happens with other commodities. There comes a time when the price is higher than people are willing to pay, so the competition wins the business. That is true with airlines as well. Socialists may have a solution that others do not have. We could eliminate the competition. That is what multinational corporations do.
The hon. member for Spadina (Mr. Stollery) mentioned a number of airlines in the United States. But there are fewer now than a year ago, and next year there may be fewer still. They are becoming consolidated by various means. It is probably true that even the United States will only be able to support two or three major carriers. We could do that as well by nationalizing and putting them altogether. In that way we would get all the business and then decide how to run it efficiently.

November 1, 1977
Air Canada
I am not really suggesting that, Mr. Speaker, because there may be merit in having small carriers. I think they should come under Air Canada, however, for such things as reservations, raising capital to buy replacements, and so on, and there should be an orderly division of what airlines are to do in specific areas. For instance, Air Canada went to Sudbury and opposed the advent of Nordair. It also opposed Bradley, which is now First Air, and they have no intention of running that line themselves. If they do run it, it will be at a time when it is going to lose money, and that is not good business practice. That is just keeping both feet in the manger while not being able to get your head in to eat the hay.
I think Air Canada should be the bright spot in advertising Canada around the world. This would cost money, of course, if we are going to use it as a flagship of the nation, then we should encourage it in sound business practices. If it makes a profit, that is good; but let us not cut services, let us not cut safety factors or the things that have made it a good airline. It seems to me we are saying that if the board of directors does not make a profit, then it ought to resign because it has not fulfilled its main requirement, the "in particular" requirement of making a profit. That is not what I think is important. Having a good airline and servicing the people is important. Whether it makes a profit is inconsequential.
If you consider the way in which we raise the necessary money, it has never made a profit. I do not think an airline in the world that is operated as the flag ship airline makes a profit. I know of 20 or 30 that are highly subsidized, to the detriment of running the country. That is true of airlines that in the past have borrowed large planes from Great Britain and have operated at great loss.
I do not think a national airline has to make a profit, Mr. Speaker; I do not think hydro has to make a profit; I do not think garbage collectors have to make a profit; nor do I think the Post Office has to make a profit. These are services that we need and depend upon. The people would scream if any of these services were removed. We have to pay for them, and they are necessary. Not too many people in this country would want us to be without an airline.
I think the Minister of Transport will find that his conservatism is too much for the swing that is taking place in the west. He will find himself out-conservatizing the Conservatives in western Canada. I do not think Canadians travelling abroad would want to think that their airline was not the flagship airline. They would not substitute that for regional carriers or, in my opinion, for anything else. Canadian Pacific Airlines travels the world, yet it does not receive the adoration which the Canadian public appears to have lavished on Air Canada over the years. Nevertheless, we expect that this measure will cost money.
I agree entirely with the members of the committee who studied this bill, that Air Canada should be placed on a sound business footing. Never was an organization established in such a haphazard way as Trans-Canada Air Lines, which later

became Air Canada. The Minister has tried to hide behind C. D. Howe, and I am sure C. D. Howe would not talk to him if he were here today. Just the same, C. D. Howe did not use business principles; he just made it happen. One day we had an airline. It was established under Canadian National and it could not be, and probably never would have been, a viable organization, given its initial Financial basis.
Over the years things really did not change much. Its debt was transferred to Canadian National rather than carrying even a book debt. All kinds of machinations took place. This was bad business practice because it allowed management to do many things it should not have been allowed to do. The accounting system was poor. In addition, the airline could not even hire an auditor until the government, through its patronage structure, chose one for them, and then it was a considerable period of time before an audited report was submitted to parliament.
No one will disagree that Air Canada should be put on sound business principles and that this change is desirable, but our objection is not that. We say, never mind the service; never mind providing reasonably priced air tickets for Canadians to travel across Canada. Indeed, we are in great trouble, Mr. Speaker, because you can travel to Europe for less than it costs to go from here to Vancouver. If you are operating a national air line for Canadians, it seems to me it should be cheaper to travel across this country than to cross the ocean.
Air Canada has an excellent reputation for service, and this must be maintained in a way other than profit being the deciding factor. Therefore, I hope we can at least agree to remove the words "in particular" from this clause which provides that the main function of the board of directors is to chase and to anticipate profit for our national airline.


Mr. Ralph Stewart (Cochrane):: Mr. Speaker, I had the good fortune to serve on the transport committee at the time the Air Canada bill was before it, and we discussed these matters thoroughly and completely over a period of a few weeks. It is rather unfortunate that the hon. member for Winnipeg North Centre (Mr. Knowles) was not on that committee. He cannot be a member of every committee, of course, but it is unfortunate that he was not able to be with us when we discussed all these matters and the particular amendment which he has proposed. We spent considerable time on it. I think the hon. member for Vegreville (Mr. Mazankowski) is to be commended for having proposed that amendment in the committee, with which most of us concurred. He should also be commended for the remarks he made today; I think he put the whole matter into proper perspective.
We can hardly compare Air Canada, a Crown corporation, with some of the other Crown corporations, such as the hydro utilities in the various provinces which were referred to by my hon. friend for Timiskaming (Mr. Peters). In this case we are dealing with a corporation, a company, which is in competition with others. The hydro utilities are not necessarily in competition per se. The airlines are, and the competition is very stiff.
November 1, 1977

Air Canada is one of the greatest airlines in the world and is among the top eight or nine. It has been giving excellent service to various parts of the world and has a very good name. Those who have travelled with various other lines would agree that the service offered by Air Canada is good and that it is continually improving. This is particularly so since the present president took over the airline, as mentioned by a couple of members here today.
I am a little concerned, as was the committee, that by an amendment such as this we are trying to tie the hands of the president of the company so that it is unable to compete on equal ground with other airlines. I think that is a bad aspect of this amendment. Unfortunately, as soon as the word "profit" enters the picture, our socialist friends immediately become concerned. I do not mind the word "profit". I am happy to say that there are still a few of us who believe in the free enterprise system, and certainly I do not think that "profit" is a dirty word. Every company should be based on sound business principles and be ready to make a profit. If they are not ready to make a profit, then they should not be in business. Every other company with whom they compete is in business to make a profit.
This bill makes provision, in cases of an unprofitable operation, for the governor in council to instruct the directors of Air Canada to remedy the situation; for example, by subsidizing certain routes which are essential but which are not in themselves profitable. That is understandable and this is well provided for in other parts of the bill. This is why I do not understand the hon. member for Winnipeg North Centre insisting that clause 7(1.1) be deleted so that the words "sound business principles, and in particular the contemplation of profit" are removed.
It seems to me we cannot tie the hands of the people we have appointed to run Air Canada. If I remember correctly, there are in this bill about 28 places where the words "governor in council" appear. Reference was made to this in the committee hearings. It was suggested that each time the words "governor in council" appeared, the bureaucracy was entering the picture and trying to run the corporation. Many of us in the committee who believe in free enterprise were concerned about this aspect. We do not want the bureaucracy running a company such as Air Canada, because the bureaucracy already holds too much power in other Crown corporations. A bill will be coming before the House before very long which will try to control or restrict the power of the bureaucracy within Crown corporations. Some of us have been suggesting for a number of years that Crown corporations should be more answerable to the House of Commons, for example.
I conclude simply by saying that I urge all members in the House to vote against the motion proposed by the hon. member for Winnipeg North Centre.


Mr. Jack Murta (Lisgar):: Mr. Speaker, I preface my brief remarks by saying it is nice to see all the private enterprisers coming out of the woodwork this afternoon in connection with
Air Canada
this amendment to the legislation. We are talking about, and I sometimes think that members of the House of Commons go off on a tangent, the principles under which we would like to see the board of Air Canada operate. The amendment states:
-the board shall have due regard to sound business principles, and in particular the contemplation of profit.
However, we still find that our socialist friends in the House of Commons get very upset when we talk about an intent with regard to sound business practices. We on this side have given general agreement to the Air Canada Act. As the hon. member for Vegreville (Mr. Mazankowski) stated, the airline certainly appears headed in the right direction at the present time, with the new president and chief executive officers. For that all Canadians should certainly be happy and thankful.
There are a few things we do not particularly like in the proposed legislation. We feel it would be of benefit to the Canadian travelling public if the appointments of the no more than 13 people to the board of directors were made on a regional basis. At the present time, many things are dealt with or looked at in the context of regional make-up. If there are to be 13 appointed to the board of directors, they should certainly be looked at in the same way.
I may be mistaken, but I believe at the present time there are four people on the board of directors from Quebec, two from Ontario, one from Nova Scotia, and one from western Canada. I could be wrong, but I believe that is the present make-up. It would be fair and proper to say that if we are looking at a total of 13 people on the board of directors of Air Canada, we could consider three western Canada, four from Ontario, four from Quebec, and possibly two from the mari-times. This would give us roughly the kind of split we have in population. If that were the case, people from the regions would have far greater input into the regional problems which affect Air Canada from time to time.
I wish to go on record as stating that I feel the motion of the hon. member for Winnipeg North Centre (Mr. Knowles) is nonsensical. For example, everyone in business in this country should employ businesslike practices and, not necessarily make but should contemplate making a profit as one of the goals to which they adhere. It is totally irresponsible and ridiculous for the New Democratic Party to propose the kind of amendment they have. At various times, in various parts of Canada, we find that the word "profit", or even the contemplation of profit, is considered dirty. That is ridiculous. I do not think, in all seriousness, that the NDP mean what they say. If they do, my guess is that the NDP will come back with a significantly reduced number after the next federal election.


Some hon. Members:: Hear, hear!


Jack Burnett Murta: The hon. member for Winnipeg South Centre (Mr. McKenzie) spoke earlier this afternoon. He indicated the kind of problems that governments have, and certainly the federal government is no stranger to these problems, when forming, running and operating Crown corporations or arm's length corporations which have a tie, or are under the jurisdiction of the government when this, at least intent, of profit is

November 1, 1977
Air Canada
totally disregarded. The hon. member for Winnipeg South Centre said, and rightfully so, that we in Manitoba are looking at in the neighbourhood of a $71 million deficit this year for the same reasons the hon. member for Winnipeg North Centre is trying to strike out the words "sound business principles, and in particular the contemplation of profit." What we are seeing is a reflection of the thinking that took place in Manitoba being reflected by the NDP here in the House of Commons.
We are generally against the proposed amendment. We will be voting for the way the bill stands at this time. We welcome the opportunity to investigate, talk with, talk at and talk about Air Canada. It has been a controversial subject in the House, certainly over the seven years I have been here. I see no reason why it will not be controversial in the future.
One area where there will be controversy with regard to Air Canada is the decision that will presumably be handed down by the Canadian Transport Commission in the not too distant future. That is on the whole question of domestic charters and the rates being charged in Canada vis-a-vis those being paid by Canadians who travel to other parts of the world. There are questions on both sides of this very important question which is attracting public attention more and more all the time. I certainly feel that the decision which will be rendered by the CTC in, presumably, a relatively short time will be a landmark decision. It will be very important, regardless of the way in which the CTC rules on the issue. Hopefully, we will have a full discussion in the House of Commons on that time.
I close by saying that Air Canada has done a reasonably good job. It appears it will do a good job in the future. I urge the members of the NDP either to vote against their House leader or have him stand up and strike his motion from the record. As I said before, it is nonsensical and has no place in this legislation.


Mr. Leonard C. Jones (Moncton):: Mr. Speaker, my remarks will be very brief. For a while this afternoon I thought this was a mutual admiration society. Many fine remarks were made about the chief executive officer of Air Canada who, incidentally, is a native of my constituency. It proves that we send from the maritime provinces some of the best administrators in Canada. Possibly a maritimer should head CN as well.
I do not agree with any of the remarks that have been made about CN management. It needs a really good kick to straighten it out and to bring it up to proper status.
With regard to the amendment, let there be no doubt that I am a true free enterpriser. I believe in making a profit. However, this service, Air Canada, is a public utility. It is time that governments and the people of this nation realized that railways, Air Canada and other transportation facilities should, above all, be providing service. The words in the clause of the bill which have been referred to read:
In discharging its responsibilities under this act, the board shall have due regard to sound business principles-
If it stopped there, it would accomplish what is right and proper for any Crown agency. However, it adds these words:
-and in particular the contemplation of profit.

"Contemplation" goes further than "intent". Contemplation of a profit means more than intent to make a profit. Besides, these particular words conflict with other provisions which say that if you do not make a profit, you can go to the governor in council and maybe get a subsidy. If you have to do it the way Canadian National does it, by making application for discontinuance of service, it is pretty awful. I fear that putting in these words would only give the directors of Air Canada an excuse for further reducing the quality of air service in the maritimes, as well as increasing fares and other changes. In the maritime provinces, particularly in my constituency, scheduling and service are already very rugged; they are terrible. If you are going to Montreal, you have to get up in the middle of the night. I am talking about people who live in Nova Scotia or New Brunswick.
I repeat, I am a true enterpriser. You ask the tax collector. He knows how much money I pay to this bloody country. It is blood money, I can tell you. We praise Claude Taylor, the chief executive officer or the president of Air Canada, but he will not always be there. Maybe one day the government will get someone from another part of the country to fill that post, someone who is not so concerned about the situation in the maritimes.


William Arnold Peters: They will get rid of him.


Leonard C. Jones: As the hon. member for Timiskaming (Mr. Peters) says, if he is good they will get rid of him. I urge the Minister of Transport (Mr. Lang) to have the courage to get up and say, "We shall delete those words about the contemplation of profit. They do not mean anything."


Mr. Hogan:: We are suffering from this corporation right now in the Atlantic provinces.


Leonard C. Jones: It is only wise to delete those words "in contemplation of profit". Air Canada is a public utility and each of us is entitled to service from the corporation. We in the maritimes are just not getting it. We are not getting anything from the government except a hand-out here or a hand-out there. It is like Hallowe'en-trick or treat.


An hon. Member:: Did you get your trick last night, or your treat?


Leonard C. Jones: I got both. 1 do not object to the word "profit". I am a free enterpriser. I do not appreciate members on the other side referring to all of us in this part of the chamber as socialists. I do not know they are all socialists in the NDP. I am not; I am a free enterpriser. I know that a buck is a buck. But I wonder whether all the members of this House know that a buck is a buck. The people of Canada do not seem to know it yet, or they do not seem to realize it.
There are other words in the bill which conflict with this proposal. The minister and others make use of a passage in the bill which sets up an obvious fiction, that you have to declare a discontinuance of service and apply for a subsidy. It makes

November 1, 1977	COMMONS
only good sense to take out the word "profit". If you are going to put it in, put in words like "in contemplation of profit and service". That is what Air Canada should be concerned about.


Mr. Paul E. McRae (Fort William):: Mr. Speaker, I must say I find myself very much in agreement with the hon. member for Moncton (Mr. Jones) with regard to this bill. I want to make one or two comments about one or two of the remarks made from the other side, particularly by Conservative members and especially by the hon. member for Winnipeg South Centre (Mr. McKenzie).
I believe there is a very strong feeling on the other side that we would be better off without Air Canada and without Canadian National. It seems to me we have had a constant struggle in committee even to hold on to what we have in terms of Air Canada and Canadian National. I notice that the hon. member took a long swipe at the government, talking about expenditures going up 350 per cent: I believe that was the figure he used. It seems to me there are too many of these loose figures being used in the House. I do not deny that the figure is correct, but these figures, taking them as they are, really do not tell the story.
In this country, taking a fixed, 1970 dollar-in other words, a non-infiated dollar-and leaving out inflation as a factor, means that personal consumption since 1968, the year the Prime Minister (Mr. Trudeau) took over the reins of government, rose by 52 percent. In the period from 1970 to 1976, the gross national product increased by 42 per cent. But the cost of government services rose by only 41 per cent, on the basis of fixed dollars. So government spending has not been out of line when one discounts the inflation factor.


An hon. Member:: That is the same speech as you gave last week.


Paul Edmund McRae: I will give it again and again, because this is an important matter. If we blame the government for everything and we use figures which are not correct, because there are other factors, then we in government have to keep saying it over and over again so the Canadian people will understand that governments cannot take responsibility for all the problems of this country.
I am very concerned about where Air Canada is going. Without doubt, we have in this country one of the finest airlines in the world. Air Canada has to be one of the half dozen finest airlines in the world. It is a fine airline because it serves not only the large communities of this country but also the medium-sized communities. It does things well. It is very important to the hon. member for Moncton-


Otto Emil Lang: On a point of order, Mr. Speaker, there have been the usual discussions and I understand there is agreement in the House to an order that if any votes are required on the report stage of Bill C-3, they should stand adjourned until tomorrow afternoon at 3 p.m.


Stanley Howard Knowles: You mean, deferred.
DEBATES	______53]
Public Reports


Otto Emil Lang: Deferred.


The Acting Speaker (Mr. Turner):: Is it agreed?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: Agreed and so ordered. It being five o'clock, the House will now proceed to the consideration of private members' business, namely, public bills, private bills, and notices of motions.



PRIVATE MEMBERS' PUBLIC BILLS


Mr. Hal Herbert (Vaudreuil) moved: that Bill C-201, respecting the cost of publishing public reports, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
He said: Mr. Speaker, the bill we are discussing this afternoon derives from a feeling in the public sector that there is certain waste and inefficiency in the printing and publication of documents. Certainly there is a definite lack of communication among the public service, politicians and the public. That lack of communication cannot be attributed to the number of documents published by the various departments and agencies. Part of the problem in the offices of members of parliament is the number of documents issued. It is absolutely impossible to even scan the material which crosses our desks every day.
The bill I have introduced comes about because of a comment of a constituent, a doctor and a professor at MacDonald campus of McGill University, who drew attention to some legislation which exists in the United States. There were two objectives there: one was to publish the cost of all public documents, and the other one was to ensure annual verification of mailing lists to ensure that everyone who wanted documents would receive them at the correct price, and those who no longer wanted them would so indicate. My constituent pointed out that the identification of cost created a public awareness before public documents were wasted.
The explanatory note in my bill reads as follows:
The purpose of this bill is to ensure more adequate cost accountability in the production and dissemination of government and other public reports.
For the benefit of those persons reading Hansard, I should like to review briefly the four short paragraphs which form this bill. Of course the first paragraph is the title of the bill, "Public Reports Cost Control Act". The second paragraph attempts to define the word "report". It reads as follows:
"report" means any annual, biennial, regular or special report or document of which at least 500 copies are printed and that may be distributed to the public.

November 1, 1977
Public Reports
The third paragraph deals with the statement of cost and the purpose of the report. It reads as follows:
Every person making a report that is intended to be submitted to or laid before parliament or either of the Houses of Parliament shall include in the report under the imprint or catalogue number a statement of the purpose and cost of producing and publishing the report.
Also, this paragraph includes the definition of the word "person" as including a minister of the Crown, a commissioner appointed under the Inquiries Act, a Crown corporation, a department and a commission, board or tribunal. The fourth paragraph of this short bill deals with the criteria in determination of cost, and of course is simply an assurance that all costs in connection with the publication should be taken into account. It reads as follows:
For the purpose of determining the cost of producing and publishing a report, there shall be taken into account any special expenditure for additional salaries, equipment, materials or services made necessary for the formulation, composition, printing, publication and distribution of the report.
Persons issuing documents should know-and if they do not, they will be forced to find out-what moneys they are going to be spending in publishing a report. I would assume, if there is any kind of efficiency in any department, that those costs are known in advance, so that there are no additional costs in ascertaining what the figures are. The public should be aware of the cost of every document they receive. This short bill would attempt to make sure that the department is aware of what moneys they are spending; that they communicate that information to the public at large; and that the public will be aware of the amount of money that is being spent in communicating to them the various reports and forms of communication sent out by the various departments.
With those few explanatory remarks in mind, I hope hon. members will see fit to pass this bill on second reading.


Some hon. Members:: Hear, hear!


Mr. Joe Flynn (Kitchener):: Mr. Speaker, the private member's bill proposed by the hon. member for Vaudreuil (Mr. Herbert) is, I am sure, based on noble intentions. As everyone is acutely aware, we are in a time of economic restraint throughout the government of Canada. The growth in the public service has been reduced to under 1 per cent, and the over-all man-year allotment for many departments and agencies of the federal government has been drastically reduced. This is an important part of our over-all economic policy. Coupled with the efforts of the Anti-Inflation Board, the Canadian government's personal austerity program is having a real effect on the economy. This bill proposes the following:
Every person making a report that is intended to be submitted to or laid before parliament or either of the Houses of Parliament shall include in the report under the imprint or catalogue number a statement of the purpose and cost of producing and publishing the report.
This is, by itself, not a great concern. However, the hon. member goes further, and again I quote directly from the bill which reads as follows:
For the purpose of determining the cost of producing and publishing a report, there shall be taken into account any special expenditure for additional salaries, 
equipment, materials or services made necessary for the formulation, tion, printing, publication and distribution of the report.
composi-
I shudder to think of the added cost that such a proposal, if enacted, would mean to the taxpayers of this nation. This bill is a far-reaching, more or less omnibus type of bill because it is meant to apply to every document, report or other like publication that is to be presented to either of the two chambers of this parliament. Surely it is easy to see that the sheer volume of annual reports, background papers, etc., which are brought before the House of Commons and the Senate of Canada will mean substantial expenditures above and beyond the real cost of publication, if this bill is made law. Not only will the taxpayers carry the production and publication costs, but also they will have to carry the cost of the additional staff required to carry out the mandate of this legislation.
There are in excess of several score of government agencies, boards, commissions, etc., as well as over 30 separate ministries in the federal government. In order that this legislation is to be fully enacted and implemented, the additional staff requirement of the public service will be in excess of several hundreds, possibly thousands, of people. With each person receiving a salary commensurate to the gravity of his or her duties, it is not inconceivable to foresee increased expenditures of several million dollars.
The hon. member for Vaudreuil wants the cost per copy to be calculated to include such items as equipment, materials and additional services that are the result of the publications production. It is important to note that this is to apply to every stage of production, from the cost of the original thought process involved in the publication's beginning to the final distribution cost at the end. Without doubt, Mr. Speaker, the criteria for determination of the cost of publishing reports, as outlined in this bill, will result in the expenditure of many more dollars than are likely to be lost due to faulty financial accounting in the publishing sections of the various federal government departments, agencies and other bodies.
It will come as no surprise to hon. members that within each department of the federal government, and on the staff of every board, agency, Crown corporation, commission and other like bodies, is a person or persons directly responsible for the proper administration and direction of government funds. The publication sections of all of these bodies are also subject to similar scrutiny. Certainly there can be no misunderstanding in this regard. The mechanisms are already in place to regulate and to ensure proper financial management. This bill will merely duplicate existing practices and procedures. I cannot see usefulness in duplication.
This bill is certainly too wide in scope and in intent. In the final analysis, it is not going to save the Canadian taxpayer any money, and it is very likely that, if enacted, it will add to the publication cost of the federal government, a cost which will be borne by the Canadian workingman, the Canadian taxpayer. It will also result in an inevitable increase in the number of public service employees. In short, Mr. Speaker,

November 1, 1977

this bill, which I am certain was drafted with the intent to save the Canadian taxpayers' money, will result in additional expenditure of more of the Canadian taxpayers' money.
It is on these grounds that I cannot support this legislation, but I would like to commend the hon. member for Vaudreuil for his efforts in this regard. Unfortunately, I find that the costs of the implementation and the direction of this proposal are simply too prohibitive.


Mr. D. M. Collenette (York East):: Mr. Speaker, unfortunately, I was detained a few moments ago and did not have the benefit of listening to the arguments put forward by my colleague, the hon. member for Kitchener (Mr. Flynn).


An hon. Member:: A copy is in the research office.


David Michael Collenette: I am sure that the points he made were very valid, but I detected from what he said that he is against the bill. This is the second night in a row that I have risen in private members' hour to support my colleague, the hon. member for Vaudreuil (Mr. Herbert) in what I consider to be a very worth-while suggestion incorporated in bill form. As we can see, the purpose of the bill is to ensure a more adequate cost accountability in the production and dissemination of government documents and reports.
Since I came to Ottawa three years ago, I have been struck with the amount of paperwork that comes across a member's desk. In fact, 1 have here a few publications which I can show to the cameras, if they want it. I am sorry, Mr. Speaker, I am just being facetious. Some of the material that comes across our desks is very expensively produced, not just the photographs but the other art work and writing, and I am sure that much money is needlessly wasted in the dissemination of these various reports. It seems to me that we are entering a new phase in our society where the public is at last concerned about where all their dollars go. I think it is safe to say that in the post-war years we have experienced an expanding role of government, and certainly I have supported the expanding role of government to bring very much needed social services to the majority of Canadians.
It has been inevitable, I think, that the role of government in society has been expanded. But along with this expansion has come the inevitable growth of the bureaucracy to support the activities of increased government intervention in society. As a result we have seen, perhaps, that the real accounting of government has not been as proficient as it should be. This has been brought out, I believe, in the reports of the Auditor General going back a number of years. Certainly, the most recent Auditor General was quite critical of government spending. I see one of my colleagues in the opposition chuckling with glee at my position. It is certainly not an anti-government position. I think it is incumbent on members on both sides of the House to ensure that the people of Canada get full value for the tax dollars that are spent.


Some hon. Members:: Hear, hear!
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Ramon John Hnatyshyn: You are jeopardizing your chance to become a parliamentary secretary.


David Michael Collenette: I did not hear all the arguments against the bill advanced by my colleague, the hon. member for Kitchener, but I understand that one of the basic arguments from the government's point of view is that the enactment of this legislation would perhaps create needless duplication and would not be in the best interests of the public. But from my experience on the Hill, I feel that it would be in the interests of the House and in the interests of the people of Canada if members on both sides allowed this bill to go to committee after second reading.
Mr. Robert Daudlin (Parliamentary Secretary to Secretary
of State): Mr. Speaker, I, like the hon. member for York East (Mr. Collenette), stand in my place for the second time in as many days this week to speak on a bill that has been put forward by the hon. member for Vaudreuil (Mr. Herbert). I should start by complimenting the hon. member for bringing to the attention of the House last night not only the motion regarding education, but the problem tonight which has struck me probably as much as, if not more than, any other problem since I came to this place.
From the time of my arrival at the House it has become more and more painfully obvious that a single person cannot keep pace with the volume of material, the reports upon reports, the summaries of reports, and the two-page documents describing reports, that come across a member's desk day after day. Indeed, one is struck, as well, as the hon. member for York East pointed out, with the quality of the reports and one asks oneself what they must have cost. I am sure that you, Mr. Speaker, as other members of the House, have seen from time to time the beautiful, glossy prints, the heavy bond paper and the photographs and wondered about their cost.
I am satisfied that not all of them are in the public domain or come from the public archives, but indeed we have artistry which requires a high cost to be incurred in order to make use of these documents.
We find very much difficulty using the process of the estimates to determine from a department what the cost of a particular item was, for the reason that it becomes, if not overtly, then by reason of intent or by sheer necessity, somehow lost in the figures which represent the publication costs of that department. Indeed, those costs might be almost irretrievable as a result of having been produced by an agency of a particular department.
However, one becomes struck with what the cost of those documents must be, and the unfortunate thing is that a number of them never really achieve the end for which they were produced, which is to communicate the ideas contained in them. All of us in this place recognize the problem of having too much on our desks to be able to make valid use of the materials, and as a consequence we become selective readers. It becomes almost a painful process to have these beautiful

November 1, 1977
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documents put before us, recognizing full well that they are probably going to be selectively read, scanned and then disposed of.
Although I support the essence of what the hon. member for Vaudreuil is trying to do with this bill, I become very concerned-notwithstanding the comments of the hon. member for Kitchener (Mr. Flynn) that we have a bill which may in a sense be too wide-that it is not wide enough, for at the end of the process we might have the total cost of production of a document which might not be sufficient to cover the problems of too many being produced or ineffective use of the document notwithstanding its limited cost. I think, for instance, of the number of one-page documents which are produced by a Multilith, or what have you, which would be of very limited cost on a per item basis or on a global basis. However, they are totally ineffectual in terms of their use, and I wonder how one could in a bill such as this or any other bill contemplate, on the spur of the moment, achieving the possibility of having that kind of effective control.
I think I would be delinquent if I did not point out to the House that 1 have noticed, notwithstanding all the bills I have described in terms of cost of production, that given the promotion by the government of the day of the idea of restraint, the volume of costly productions crossing my desk seems to be decreasing. The volumes, publications and works which are now coming to us appear more and more to be the type of thing that I have before me, "Policy and Guidelines on Canadian Government Publishing", produced by the Treasury Board. It has cardboard covers with plastic backs and is in simple and readable, yet inexpensive, type. More and more, this seems to be the format we are using. Therefore, 1 cannot but believe that the process of restraint is working its way down through the various ministries and departments and that, indeed, we are getting away from expensively bound and produced documents. Perhaps even without a bill of this type we are moving toward the intention of the hon. member.
That being said, let me return to some of the problems which concern me. We hear in this House constantly-not just from the other side but also from hon. members who sit on this side-that if and when publications are produced by a particular ministry, they should find their way into this House and on to the table at the earliest possible date. One of the greatest concerns I have about this bill is that it might involve another problem which a ministry or agency would have to solve before a document could find its way into the House.
We have heard about difficulties with translation and with having printing done. If we are now to add another obstacle, whereby the printing having been done and the translation having been completed, we then have to have departments going through the exercise of determining the ultimate cost, whatever that might be, I become gravely concerned about how long it might take before a document ever finds its way to the table in this House.
I say that realizing full well that many of the documents which find their way to the table now do not have their true cost, actual cost and final cost established for as long as six

months after their production. It takes that much to draw back from the department the cost of translation, the cost of photography and the cost of publication. If we are to add another six months to the already long period of time it takes for these documents to get to us so that we might deal with them, I think the process will bog down completely, and I am very concerned that a bill such as this, in the terms in which it appears, should go forward to committee if for no other reason than that.
I think that the ill we are trying to cure should be cured. I do not accept the position of the hon. member for Kitchener when he says he is concerned that we are adding more cost, but I do believe, with the hon. member for Vaudreuil, that if we have responsible ministries, they should know before they publish what are the estimated costs of the productions. They should have general, ballpark figures, and they should be committing themselves, under a proper budgetary process, to bringing the productions within their budgets.
I suppose the difficulty in what I am saying is knowing within a reasonable timeframe that in fact you have succeeded in so doing. One has only to think about the possibility of publications becoming popular to the public as well as to this House and to the other place, and in the event of their popularity, a run on documents which require further printing and publication. Would we then get into difficulty, where we really would not know whether the documents could be brought forward? Should we estimate that they are going to be popular? Having so estimated popularity, should we run an over production and then run the risk of coming before the House having spent too much money on documents which did not sell? I am concerned that we might experience something like that. There are difficulties which are almost impossible to overcome at this early stage. How does one project how many should be published? I think actual costs are very difficult to estimate at an early stage of production.
I have pointed out some of my concerns, and I am certain the hon. member has given this matter more thought than I have had the opportunity to do so far. I am concerned, however, that this House might reject the idea, for some of the reasons put forward by the hon. member for Kitchener. I do not believe that we are adding an excessive amount to the cost of government by this particular concept. As I indicated a few moments ago, I think there must be budgetary restraints. There must be publication budgets to which ministries feel compelled to adhere before these items are published.
I think, as well, that there must already be people in ministries whose sole responsibility is to see that publications come within their budget. I find it difficult to believe that one would have to enter into an exercise of creating a whole new administrative and economic tier in ministries in order to get the kind of control which it is obvious the hon. member for Vaudreuil seeks with this bill.
In short, I do not believe that the bill proposed is too wide but, rather, that it may not be wide enough because it does not really deal with what we see happening around here. I am terribly concerned that we might be adding a time problem to
November 1, 1977

already delayed bills and other documents that we would find unacceptable in this House.
I am concerned, although I suppose gratified to some extent that we are already taking this matter under our wing and that there is a response by ministries to the pressures of restraint. I am satisfied that although the concept of the bill is good, it needs more time, more thinking, in order to encompass these concerns I have tried to express, before we send it to committee.
May I again thank the hon. member for Vaudreuil (Mr. Herbert) for allowing me the opportunity to express something that has concerned me for a long time, and may I compliment him for bringing two very important matters before the House within two days.


Some hon. Members:: Hear, hear!


Peter A. Stollery: Mr. Speaker, I should like to make a few comments on the bill. I think it is fair to say that everyone in the House would agree with the concept that we should have accurate cost accountability in the production of the various papers and information distributed by the government. As the previous speaker mentioned, we get some overly spectacular documents from the government and the ministries. Many are expensive and exaggerated.
I am sure we all have days when we look at this stuff and realize that it is produced at a high cost for a limited audience. On the other hand, one of the great costs that is not addressed in the bill is the cost to this House of Commons and committees of answering questions. I am told that it sometimes costs as much as $5,000 to produce an answer. The information sought is readily available to members for many of these questions that are put on the order paper. I am dismayed when I think of the amendments to the Unemployment Insurance Act passed in this House in the last session and the number of questions that were put regarding it when many of the answers were readily obtainable at the parliamentary library.
An examination of this bill gives me the impression that it might cost more to administer it than would be saved by publishing the accounts referred to. One more group of people would be required to produce each set of figures and this cost would go on and on whilst the group grew grander and larger. It too would probably produce a report, another piece of expensive literature, that would end up in the wastebasket along with the mountains of paper that come in all the time.
Like all other hon. members I am sure, when I get one of these expensive three or four-coloured productions on a subject that has a limited audience, I wonder at the expense involved. There are the three or four coloured books issued on such things as the spawning habits of the Atlantic salmon. But of course, members are guilty and some ask as many as 50 or 100 questions, the answers to which are readily available to them but which will cost large sums of money to print out. Referring again to the book published in both languages on the spawning habits of the Atlantic salmon, I have a copy in my office
Public Reports
because the photographs are spectacular. There is a description of the Atlantic salmon proceeding up the rivers on the east coast to spawn and if I remember correctly it also describes how salmon on the west coast proceed up the creeks on Vancouver Island. It would be interesting to know how many people looked at that book which I think was prepared for a fisheries conference. It must have cost a lot of money.


An hon. Member:: Perhaps we did it for the salmon too.


Peter A. Stollery: As the hon. member says, perhaps we did that for some salmon. Somewhere in a river there must be a "salmon library" which is filled with small and medium-sized salmon which study these books in order to learn something about their birthright.
I know other members are waiting to speak on this most important issue, and in conclusion let me say that, although it is hard to disagree with the purpose of this bill, it does seem to present more problems and to raise more questions than it answers.
[ Translation]


Mr. Alan G. Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, it is a pleasure and an honour for me to have the opportunity to address the House on a piece of legislation tabled by the hon. member for Vaudreuil (Mr. Herbert) who is much dedicated to his work here in Ottawa. 1 do not know any other member who is as dedicated and sincere in carrying on his responsibilities in the capital of Canada.

I think the hon. member for Vaudreuil (Mr. Herbert) touches upon an issue which is becoming increasingly a concern of Canadians in all walks of life, namely, the cost of government and government services in general across this country. It really does not matter whether we are talking about the federal level, the provincial level, the municipal level, various government agencies with which the average consumer must interface from time to time, universities, boards of education, hospitals, even down to fancier than necessary food wrappings which one finds in the supermarket, in general the consumer is constantly being faced with mounting concern over what his dollar, whether it be tax dollar or purchase dollar, can buy.
This may sound a long way from the issue of paper and cost accounting of paper used in government, but I suggest that it is not. The issue that is raised by the hon. member for Vaudreuil is in a very real sense a microcosm of this whole problem. The hon. member for York East (Mr. Stollery) made reference a little earlier to recent Auditor General reports. The subject under discussion is an extremely difficult one for individual members, I suggest even for the Auditor General, to come to grips with.
The one thing that hits you immediately, Mr. Speaker, about government departments today, regardless of whether they are at the federal or provincial level, or whether it is some

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type of government agency or service-this is true of the large corporation in the private sector as well-is the tremendous amount of paper of one kind or another that is generated in the ordinary conduct of business. Sometimes this paper is very fancy paper, coloured, expensively printed, and done up in elaborate binders. At other times it can be in very simple form. The point is that this is just one other area of use for which, in one way or another, the consumer must foot the bill.
In some ways it would probably be very difficult for the government or any of its agencies to put a dollar stamp on each order it might process, as this bill suggests. On the other hand, I think what is being proposed is something which might be investigated a little more carefully by various levels of government, perhaps starting with our own, namely, an attempt to cost out various programs which are being undertaken. This may result in some very large figures.
The problem which I think some of us face is that in the past we have been members of committees which have examined expenditure proposals and have seen a program which might, for sake of argument, cost $10 million. I have been on committees with the hon. member for Vaudreuil and I have discussed this question. I think it is very difficult for members to analyse this $10 million and to ascertain just what the money is for. There are paper costs, reports and so on which are all basically hidden, as they must be. After all, you cannot be faced with large lists of items which include the number of paper clips being used, for example.
Nevertheless, the point remains that this $10 million cost represents tremendous value even though it will not figure, as it were, in the actual production of the department concerned to the extent that you can call the service being provided its production. The money is going into overhead, the overhead involved in producing reports for someone to read, on which are based further reports which analyse the situation, and so on further up the line, with various other mini-reports circulating while major reports are in process of preparation.
I honestly do not know, Mr. Speaker, how one comes to grips with this question and I am not sure that this is the answer. However, what the hon. member points up is something which should be followed through by the appropriate agencies, and presumably by Treasury Board, so that the ordinary taxpayer is constantly thought of in determining the kind of overhead that is associated with government services. As I say, this overhead can vary from paper to office supplies, to office space, to furnishings, and all the rest of it.
The average consumer in Canada today is not convinced that there is a general feeling of cost consciousness among the various levels of government, universities, school boards, or organizations which do not have to worry about a bottom line or have to meet a payroll which is contingent upon the profit they make. The ordinary consumer does worry about how much organizations determine the amount to be spent by way of overhead. I suggest they will worry more and more in the future, and will insist upon more cost consciousness throughout all these kinds of organizations.

This bill requires each printing order of more than 500 copies to be costed as such, the total amount and the per copy amount. Knowing the way government bureaucracies tend to operate, this would probably mean that someone would have to say; "We will have to hire a number of extra people to do this for us". I can see this situation spreading throughout each department, each bureau, as it were, and this in itself would create a problem in terms of implementing the program. For this reason I am not completely in support of the detail that the hon. member has put forward, but I very much support the general thrust of this bill.
I hope that somehow or other, as we grapple with the larger items of government expenditure and worry whether we are spending hundreds of millions of dollars in the right place, groups and agencies will also worry about the lesser amounts which, when added together, do not take very long to amount to several million dollars.
In conclusion, I know the hon. member brings this concept forth with the utmost sincerity and a deliberation of his point of real intent to try to pinpoint a concern that more and more Canadians need to have, including members of parliament, in the various costs associated with making the whole governmental process work. To that extent, whether this bill moves beyond this chamber or not, I think he has served a very real purpose. I hope the appropriate persons will take the message back to the departments that are in a position to do something about this very real area of concern.
[ Translation]
Mir. Thomas H. Lefebvre (Parliamentary Secretary to President of the Treasury Board): Mr. Speaker, I want to join my colleagues and once again congratulate the hon. member for Vaudreuil (Mr. Herbert) who has drawn once more the attention of hon. members on a matter of interest to himself and his constituents.

I would like to say, as previous members have stated, that the question in this bill raises many other questions. In other words, should the cost of a public document put out by a government department become the main criterion in deciding whether such a document should be published?
A document may interest very few persons because it is a highly technical and very complicated publication. Therefore it would have a very narrow distribution. It may be very important as a reference document. The cost of each such document would appear very high related to other documents, pamphlets or booklets which had a very wide distribution. Such a technical document, while only for certain scientific groups, may have major repercussions on the way of life and future of Canadian citizens. That is one objection I have with regard to publishing the cost of such a document.
Printers will often quote a certain price for a stated number of publications. Because they then have the plates and the staff is trained to reprint a pamphlet, there will be a reduction in
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cost on further orders. A first run may cost "X" number of dollars for 5,000 copies. Because the plates have been made and the machines are set up, a second, third, fourth or fifth printing will cost less. Therefore, how could you quote a cost of any government or private publication? For 100,000 pamphlets you may have a 25 per cent cost compared with that for only 10,000 in the first run. I am told this happens often, not only with government publications but publications printed for private companies or individuals.
If a pamphlet becomes very popular and there is a heavy demand, the publication will be reordered. The cost per unit will keep going down. Under those conditions it will be impossible to print on the cover of a document the cost per unit. You do not know whether you will be ordering 10,000 or whether this will increase to 100,000.
Government departments make a serious study not only of the cost of publishing a certain text, pamphlet or catalogue, but its importance to the general public. Decisions are not taken lightly. As others pointed out, within each department a careful study is made of the cost of a certain document. They consider whether the importance of a pamphlet, booklet or catalogue should be the main criterion, or its usefulness to the Canadian citizen. They consider the businessmen, farmers, civil servants, professionals and students who would make use of it to develop and improve a particular field of interest.
What is more important, the benefit of a certain publication to everyone interested in reading, studying or using it, or the cost? As I said before, it could have a very small field of interest or a very wide field. Even though it may appear important to a very small group, it could affect every citizen in Canada. The cost of such a booklet may appear astronomical compared to that of a publication which has a run of hundreds of thousands.
As the hon. member for Spadina (Mr. Stollery) pointed out, costs of answering questions placed on the order paper by members of parliament are very high. Some questions are very extensive. However, who would deny the right of a member of parliament on behalf of his constituents if he feels a subject is of sufficient interest to put such questions on the order paper? It may not appear important to other members, but it may be an important question for his constituents.
If every time a question was answered in the House the cost of answering would be stated as $3,000, $5,000 or $50,000, depending on the complexity of the question, it would become extremely difficult. Some questions take civil servants many weeks to compile an answer. Should the cost of answering be a criterion when questions are placed on the order paper?
In conclusion, I would like to congratulate the hon. member for bringing this matter to our attention.


The Acting Speaker (Mr. Ethier):: Order. The hour provided for the consideration of private members' business is now deemed to have expired.
Adjournment Debate



PROCEEDINGS ON ADJOURNMENT MOTION

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

A. Daniel McKenzie: Mr. Speaker, on October 19 I questioned the Minister of Industry, Trade and Commerce (Mr. Horner) with regard to the movement of investment money and businesses to the United States. He provided me with a most unsuitable answer, stating that we enjoy in Canada complete freedom of investment in a free country. That is not the answer I was seeking. There is no way we can cure unemployment, or that Canada can expand, with the mass exodus of businesses and investment money to the United States.
I see the minister is in the chamber. I hope his answer will not be based on the Foreign Investment Review Agency report which reached my office today. It contains the most mixed up civil service jargon that I have ever seen in my life on figures on investment. I hope I will get a more satisfactory answer than that.
I am concerned, and I am sure many Canadians are, when we read articles like "New York Woos Canadians in Ottawa", "United States holding seminars here in Canada to assist in encouraging businesses to move to the United States". We read articles like this: "United States firms shy away from investment in Canada". Here is a report out of Washington.
Worried by a sluggish economy, political uncertainty and a devaluing dollar. United States firms have sliced increases in their planned investment in Canada to $380 million from $804 million during the course of this year, a U.S. Commerce Department survey shows.
I wish we could obtain statistics of this type in Canada. We have to rely on the United States for this information. Further, in the Ottawa Journal this week we read an article headed: "Canada Losing Business Grip". It reads in part:
A United States business said Thursday Canada is losing its grip on business and has only a short time to improve the situation.
John Reardon, chamber of commerce manager in Niagara Falls, N.Y., told a Chamber of Commerce meeting here today that investment money previously spent in Canada is now being kept in the U.S.
I should also like to refer to a recent article in the Winnipeg Free Press. This is based on statistical information compiled by a financial expert. The headline is: "$40 Million Seen Lost to Manitoba; Finance Expert Says Clients Investing Outside Province Will Cost 4,000 Jobs." To some extent this trend should be stopped with the change in provincial government which came about a few weeks ago. The political climate has improved 100 per cent in Manitoba since then.
I should also like to refer to the November edition of Quest, which I hope the minister has read. There is an article in it

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Adjournment Debate
entitled "The Unpatriotic Investor" and it begins with the comment:
The true north is still strong and free. Only it's moving south of the border. The hard facts on how you may be better off investing your money out of the country.
This is a very interesting article. It is all about uncertainty in Canada and the problems created by successive Liberal governments for business and investment in this country.
I heard with great interest the speech which the Minister of Industry, Trade and Commerce (Mr. Horner) made in Toronto yesterday in which he suggested that the business community should bite the bullet. I am suggesting that it is the minister who should bite the bullet and do something about all this investment money and all these businesses moving south of the border. We cannot cure unemployment in the face of this sort of trend, and a trend like this cannot be stopped overnight. Something is radically wrong in Canada and it is the responsibility of the government and of the minister to take immediate action. If the United States can hold seminars in Ottawa to move Canadian businesses to the United States, the Canadian government can hold seminars and find out what has to be done to stop businesses and investment money leaving this country.
I should like to read some statistical information for the minister's benefit. This was compiled by Peter Henry Jerch & Associates, and it covers 42 Canadian smaller and mediumsized active manufacturing and service enterprises. Just 12 were looking for acquisitions in Canada only.
Incidentally, the information given here about these 42 Canadian businesses implies a loss of between 4,300 and 13,000 jobs to Canadians. Moreover, this is information from only one consultant firm. They go on to say:
Fifteen thought they would consider a further investment or acquisition in Canada as a second alternative, which suggests that reason tells them to go elsewhere but that they still tend to be optimistic despite all their complaints. However, 30 of the 42 are either actively looking in the U.S. or have already made one or more acquisition or investment decisions there. These 42 are, incidentally, a fair and representative sample of the average successful Canadian business enterprise. Together they are likely to spend, directly and indirectly, from a low of $63 million to a high of $116 million in their invesments and acquisitions over the next few years. Only between $7 million to $19 million are definitely scheduled for Canada, with the remainder going to the U.S. These aggressive firms know what they are talking about. They currently receive about $9 million annually for export sales. Which means that if they establish a subsidiary, joint venture or the like in the U.S., within the next couple of years they will expend, in investment or acquisition funds, realistically about $90 million. If you then consider that an additional $40 million will not be coming back, the loss to Canada of even this small sample is about $130 million, providing of course that their original Canadian plant stays here. While there may not be as much of a loss to the Canadian government in tax revenue-


The Acting Speaker (Mr. Ethier):: Order. I regret to interrupt the hon. member, but his allotted time has expired.
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, the hon. member has pointed to a problem that Canada has, and I am glad that he is aware of it.
I will not dispute his figures, but he complained about not being able to receive accurate figures. I am always amused, to

some extent, by the fact that people always believe some other government's figures but they rarely believe their own government's figures.


A. Daniel McKenzie: That is understandable.


Mr. Horner:: Perhaps I should set down a few figures for the hon. member. The actual Canadian net direct investment flow to the United States in the past 12 months, from July, 1976, to June, 1977, was $313 million, and not $627 million as the hon. member suggested in his original question.
In fact Canadian direct investment flow to the United States has been declining recently and is considerably lower than the average between 1973 and 1975. I should like to refer to the figures for the past number of years.
In 1971 the Canadian net direct investment flow into the United States was $122 million, in 1972 it was $149 million, in 1973 it was $453 million, in 1974 it was $482 million, in 1975 it was $454 million, in 1976 it was $234 million, and from July, 1976, to June, 1977, it was $313 million. Therefore that indicates that in recent years there has been a decline. We are well aware that there have been some causes for the recent increase in money flowing into the United States.


Mr. Epp:: I wonder why.


John (Jack) Henry Horner: I will give the hon. member some of the reasons why.


A. Daniel McKenzie: You only have three minutes left.


John (Jack) Henry Horner: In recent years we have seen the Government of Canada purchase a potash company from American interests. That money flowed back into the United States. It did not stay in Canada. That was not an act by this government. It was not an act that this government could even stop. It certainly had the net effect of discouraging investments within this country.
Petro-Can bought Atlantic Richfield shares for $340 million. If the hon. member has been following the actions of Atlantic Richfield, in recent years it had to withdraw from participation within the Canadian oil industry.


A. Daniel McKenzie: Who owns Petro-Can?


John (Jack) Henry Horner: So, that $340 million was a net flow out of this country, and more than likely into the United States.


The Acting Speaker (Mr. Ethier):: I regret to interrupt the hon. minister but his allotted time has expired.


CUSTOMS-SUGGESTED INCREASE IN STAFF AT UNITED STATES-BRITISH COLUMBIA BORDER POINTS
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, ever since I was elected about three years ago, I have been making representations in this House regarding the problem of traffic pile-ups at the Douglas border crossing which is in my riding. One of the problems we face is that there is a traffic
November 1, 1977

pile-up in the department. I think it has become the department for recycling cabinet ministers, because in the three years I have been here, there have been four different ministers in the Department of National Revenue. How long the present minister will be in his portfolio and how long he will be in cabinet I do not know.
Last Friday I asked the minister if he would take this problem seriously and deal with it so that it will be dealt with permanently. I got the following illuminating answer. He said, as reported at page 386 of Hansard of October 28:
I shall be pleased to consider the hon. member's representation, Mr. Speaker. I should like also to tell him that he does not need to come into the House to make representations because he can be in full communication with me on a daily basis. But 1 shall be glad to look into this matter and I shall be in contact with him further.
That is no solution to the problem. What I want is an answer. I have been bugging the department for years now on this.


Mr. Harquail:: Is it you who put that bug in MacKay's office?


Benno Friesen: I guess it is a dirty word, and I imagine there is enough fuss about that.


Maurice James Harquail: Is it you who is bugging the department?


Benno Friesen: Let me ask the parliamentary secretary, who is answering for all the ministers tonight, would he please use his own minutes? I want to use mine for myself.


Maurice James Harquail: Go right ahead.


Benno Friesen: I have in my hand a letter from a former minister of national revenue, dated March 15, 1976, a year and a half ago, in which he said the following:
Steps taken to alleviate the situation have included expanding our port facilities, decreasing the amount of our officers' clerical work, and hiring university students as casual officers during the summer months. Obviously the situation has not been resolved to everyone's satisfaction.
That is the understatement of the year because just ten days ago there was a line-up three miles long. I received a phone call last Sunday telling me again of a line-up three miles long. As I pointed out in my letter to the minister, people are staying in Washington overnight because they cannot get across the border in time. Is that a way to help our balance of payments?
I have here an answer to a question on the order paper of some months ago. It tells me that in 1966 there were 58 people working at that point, and in 1975, ten years later, there were 63 people, a net gain of only five people in ten years. Anybody who crosses that border point knows that the volume of traffic has doubled, but there is no appreciable hiring of staff to alleviate that pressure.
One of the former ministers told me that they were hiring extra casual help. I pointed out on February 8, as reported at page 2866 of Hansard, that it is no solution to hire help on a casual basis. What we have to do is to put it on a permanent
Adjournment Debate
basis. I am not asking the department to spend any more money. Surely they can cry austerity all they want, but we are not asking them to hire more casual help and increase the load on the taxpayer. All I am asking is that there be more staff, and if there were more staff, there would be greater security and a larger revenue coming into the country. I know for a fact that if extra staff were hired for surveillance there, there would be more revenue to pay for that extra staff they would be hiring.
The minister tells me that one of the solutions they are proposing is a greater use of overtime and more part time help. Overtime is no solution. As I pointed out in the House before, the extended use of overtime is nothing but a health risk for those people who are already working there. After overtime is built up, it is not long before the people working there have to take time off to regain their health. Furthermore, when we have one million unemployed people all across Canada, our government says that its solution is to let those who are already working work overtime. Is that a solution to the problem?
I have it on good authority that a couple of years ago the government had a deliberate policy to encourage overtime because it felt it would be cheaper to let people work overtime rather than hire extra help, as it would not have to pay the ancillary benefits to all the people whom it otherwise would have to hire. That is a great solution to the problem! On the one hand we will pay extra rates for overtime in order to save money on ancillary benefits, and on the other hand we will pay unemployment insurance benefits to people looking for work who cannot find jobs because the government has a policy of letting people work overtime.
I come back to the point I made earlier. I am not asking for an extra burden on the taxpayer by enlarging the burden on the Department of National Revenue's payroll. All I am asking for is that additional staff be hired so that there can be a closer surveillance and therefore better collections at the border, sufficient so that they would pay for the kind of service that the people deserve.
Last week end 4,000 people crossed that border to go to a soccer match. There is a law of physics which says that what goes up must come down. All the department has to do is look at the traffic crossing the border. The department should know that in a day or two people who cross the border will come back. I am not blaming the staff at the local office at all because I know they are working against insuperable odds put up by the mandarins here in Ottawa who will not give them extra man-years to staff that office. If they had the man-years they deserve, they would be able to carry out the surveillance that would allow them to prepare for the staffing they will need in the days ahead.


Maurice James Harquail: Mr. Speaker, the hon. member failed in his comments to refer to the strike in 1975 and to the

November 1, 1977
Adjournment Debate
continuation of Canadian shoppers going to the American side to pick up their groceries.
My reply to the hon. member must be given within the same framework as the letter that the hon. member received from the Minister of National Revenue (Mr. Guay) this very day, as the letter in question appears to cover the points at issue more than adequately. Judging from the hon. member's questions in this House recently, I gather that his main concern is about the slowness involved in processing line-ups of people crossing the border at the Douglas Pacific Highway customs office.
Due to the 1975 labour dispute which shut down Vancouver area supermarkets, the office in question was inundated with people crossing the border to buy groceries. Groceries are dutiable, and at various rates. It therefore took more staff a much longer time to compute customs charges on grocery items. We had to have more staff working than we did prior to the strike, and therefore there was less staff available at the inspection booths at customs. Even though no additional full time staff hiring was possible, the department dealt admirably with the situation through an extended use of overtime.
Although lately there has been a decline from 9,000 to 6,000 in the number of entries by individuals through the customs office, this remains double the number of people crossing the border as compared to the pre-strike period. The department cannot speed up the traffic flow by relaxing its standards of customs examination. I am sure the hon. member would not want to see that done. Six hundred seizures and 2,800 forced payment entries over the last period are evidence of this. There can be no claim of inadequate staffing on the part of the department.
Pertaining to the hon. member's concern about the time businessmen must spend awaiting clearance at the Douglas Pacific Highway customs office, the process of clearing the businessmen in question at customs is necessarily thorough. Normal clearance time is 20 minutes. Although customs offices provide advice and help as time and circumstances permit, it is very difficult to see how this time could be shortened.
Once again the hon. member's concern about staffing at the customs office in question, though sincere, does not appear to be justified, given the facts of the situation, particularly as previously outlined to him by the minister.


CENTRAL MORTGAGE AND HOUSING CORPORATION- MANITOBA-QUESTIONNAIRE CONCERNING SALE OF SENIOR CITIZENS' HOMES
Arthur Jacob (Jake) Epp: Mr. Speaker, I hope the quality of the answer the hon. member for Surrey-White Rock (Mr. Friesen) just received is not any harbinger of the type of answer I am going to get because, if that is the case, frankly we are wasting our time.
The reason I am on my feet once again is that this government cannot be believed. It cannot be believed on the larger issues, as we have seen in this House, and even when we ask

simple, straightforward questions, its answers are not to be believed. I want to put evidence of that on the record today.
On August 27, 1977, I asked the Minister of State for Urban Affairs (Mr. Ouellet) a question regarding a CMHC questionnaire which had been circulated to senior citizens in Manitoba. I asked the minister at the time whether it was the intention of the government and whether it was CMHC policy to buy the homes of Manitoba senior citizens and then to place those people in public housing.
The minister replied saying that that was not the policy of the corporation but it was an investigation carried out by a few social workers in that province simply for study purposes.
Then I asked a supplementary question of the minister. I asked whether he would be able to put to rest the anxiety senior citizens had regarding this encroachment on the one source of dignity they had left, namely, their own places of residence. The minister replied in part as follows:
I do not see why the hon. member blames the Central Mortgage and Housing Corporation for co-operating with people who want to find new solutions to offer more housing to senior citizens and at less cost.
The minister was trying to leave the impression that CMHC was co-operating with others and that this was not an in-house survey by them. But, Mr. Speaker, the envelope containing the questionnaire had a print-out from CMHC, it was addresso-graphed by CMHC, and the return address was that of CMHC. The envelope in which the completed questionnaire was to be returned had the CMHC address of Suite 402-310 Broadway. I think Broadway is still in Winnipeg, Mr. Speaker.
Question No. 34 reads as follows:
There has been a lot of discussion about providing housing for people with mixed incomes. Would you want to live in housing in which people of all income ranges live?
Then there are questions along the lines of, "Are you willing to sell your house?" and "Can the government buy your house?" Mr. Speaker, surely in Canada senior citizens have the right to own their homes.
The government cannot be believed because of the following facts. Mrs. Yhetta M. Gold, executive director of the Age and Opportunity Centre, Inc. sent this material out under the auspices of CMHC. An article in the Winnipeg Free Press on October 28 comments:
All replies, she said, would be treated as confidential.
And further:
Mrs. Gold said she understood that the results of the survey were to be used as an "in-house document" (for the CMHC) to be used as "a tool for their corporation."
I hope today the parliamentary secretary will not get on his flat feet and be another tool of this corporation and the falsehoods that have been spoken.


Maurice James Harquail: We are not deaf.


Arthur Jacob (Jake) Epp: Yes you are, because we keep repeating the questions and you do not give answers.
November 1, 1977

I demand answers from CMHC, on behalf of senior citizens. Is the CMHC, as a social engineer, trying to bring about public housing for senior citizens and their quiet removal from their own homes? Let us not shunt aside the fact that some social worker has circulated a survey, whether it was CMHC that did it or not. Certainly CMHC sent it out, it wanted the results and it is now processing the results. I ask the parliamentary secretary to give us a straight answer and tell us unequivocally that it is not CMHC policy, that the material will not be used, and the intimidation of senior citizens, especially in Manitoba, will be stopped.
Air Canada
the way he did today. Not only that, but at no time were the survey participants asked for their names or addresses. The introductory letter distributed with the questionnaire notes specifically that the respondents are to answer the questions anonymously, and that the replies will be treated as confidential.


The Acting Speaker (Mr. Ethier):: Order, please. The motion to adjourn the House is now deemed to have been withdrawn.
Motion withdrawn.


Maurice James Harquail: Mr. Speaker, I am surprised that the hon. member for Provencher (Mr. Epp) would try to misconstrue the facts. It seems to me that is the situation that has prevailed in the last few days in regard to the attitude of the opposition toward any facts in this House or in the Dominion of Canada.
The hon. member referred to Hansard for Thursday, October 27, when the Minister of State for Urban Affairs (Mr. Ouellet) stated quite clearly that the story the hon. member has related this afternoon is not government policy.
I am surprised that the hon. member misunderstood the intent of the questionnaire circulated last summer to a group of senior citizens in the Manitoba area. However, Mr. Speaker, I am not surprised that the hon. member should take this approach. In his raised voice this evening, which impressed no one that I could see, he tried to put across this contrived idea which he has in regard to work being carried out by Central Mortgage and Housing Corporation costing over $1 billion, money that is being spent in each and every province of the country to assist all Canadians, especially our seniors, find housing. Yet he comes here and relates a story of this kind.


The Acting Speaker (Mr. Ethier):: I do now leave the chair until eight o'clock tonight.
At 6.30 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of Bill C-3, respecting the reorganization of Air Canada, as reported (with amendments) from the Standing Committee on Transport and Communications.
I am pleased to have the opportunity to provide the House with additional comments on the survey to which he refers. This survey was undertaken jointly by CMHC and the Manitoba Housing and Renewal Corporation. It was designed to help determine the current housing situation and expenditure patterns of low income senior citizens. The respondents were selected with the help of the Department of National Health and Welfare, and the list was drawn up from people who were receiving the full income supplement.
I am pleased to report that more than 25 per cent of the people receiving the questionnaires replied. This is a better than normal response to questionnaires distributed through the mails, Mr. Speaker, and I believe this level of participation is a good indication that the people who received the questionnaire did not question CMHC's motives, as the hon. member is attempting to do today, in undertaking the survey.
Moreover, Mr. Speaker, I think it is important to point out that we are not aware of any objections to the survey apart from those registered by the hon. member, who takes up the important and costly time of this House by bringing them in in
Paul Edmund McRae: Mr. Speaker, when we broke at five o'clock for private members' hour, I was talking about being proud of Air Canada and the concerns I have about this bill. I would like to continue in that same vein.
I mentioned that Air Canada is one of four or five of the world's greatest airlines. It leads in many areas. However, as with most Canadian endeavours, we tend to be critical of anything we have that is worthwhile. Canadians inevitably run down whatever is best in our society. That is deplorable.
Air Canada performs an invaluable transportation service in this difficult country. It is a service we badly need. I was very concerned when the minister stated earlier in the House today that Air Canada might be put on a different basis.
I understand there was a paper issued recently. I hope it was not the minister's department which issued it. In any event, discussion is going on about it at the air traffic conference this week. Air Canada may lose the short haul hops and become an airline dealing only with major centres in this country. That bothers me a great deal. If this is done, the medium and smaller sized cities in Canada will be ignored. As I was saying before we adjourned, the people in the city of the hon. member
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November 1, 1977
Air Canada
for Moncton (Mr. Jones) and those in Thunder Bay will lose a valuable service. It is of tremendous importance to us.
If Air Canada is forced, coerced or persuaded to abandon chartered stops in cities like Thunder Bay, Sudbury, Sault Ste. Marie and Moncton, service into those areas will not be as it is today. The way this country is put together, you make your money on the long hauls and lose on the short hauls. It evens out.
The minister or the MOT people say that we can sell some of the short haul trips of less than 500 miles to the local carriers and they will be able to carry on. Northern Manitoba is one area where Air Canada had to give up some service. I do not have the figures because it goes back a few years. What happens when that is done? The rates go up.
Far from being one who objects to local carriers, I must submit that there is no way the local carrier who does not have the long hauls or the profitable Winnipeg, Toronto or Montreal stops can make the kind of money required to carry the short hauls. I am very concerned about that aspect of the minister's speech.
This bill does something that disturbs me a great deal. It ignores service to the Canadian community in favour of good business practices and profit. No one in his right mind would be against good, sound business practices. No one would be against the company making a profit. No one is against Air Canada making a profit.
There were quite a number of arguments, and amendments to this bill in committee. Now as I go through the bill, 1 do not see anything which talks about service to Canadian communities.
This bill is intended to separate Air Canada from its parent, CN. I think that is a reasonable proposition. If it does just that and nothing more, I accept it. If it does not have a preamble and does not set the duties and so on of Air Canada, I accept it.
The difficulty I have with the Conservative amendment is that it introduces into the bill another concept which is not compensated by some notion of service. I dislike the amendment that the hon. member for Winnipeg North Centre (Mr. Knowles) has placed before us. It is too drastic. However, this bill was brought in rapidly. We did not get the notice we needed to put an amendment to correct this. It is too late to do this at report stage.
The amendment I would like to see would read something like this. I would leave in 7(1 )(i) but I would change it. I did this in committee and it was not accepted in committee. This bothers me a great deal because the intentions of the minister in this respect are worrisome. 1 would amend the bill to read in section 7(1 )(i):
In discharging its responsibilities under this act, the board, bearing in mind that service to Canadian communities shall be its prime responsibility, shall have due regard to business principles and particularly the contemplation of profit.
I would leave what is in there, but I would add that portion.

1 am very disturbed, Mr. Speaker. We are beginning to do this with CN. We are beginning to do the same with Air Canada. We say to these companies that their prime role is, in particular, to make profit, not to provide service. Nowhere in the whole act is there mention of service. Now, the charter of Air Canada may contain such reference, but instructions to a board should contain something specific. As I say, I have no objection to those things going into the act but the point of the matter is that profitability then becomes the sole purpose of Air Canada.
I have been sitting in the House for five years and I have never before voted against the government. A few times I have refrained from voting, and on other occasions have considered refraining. But on this occasion I feel compelled to accept the amendment even though I do not like it. I think the amendment is too drastic. But the point of the matter is that it is far more important that the amendment be accepted than that we have a bill which singles out profit as the only justification for Air Canada.
I would hope that somewhere along the line we could obtain the consent of the House to include my amendment. I will not pose it tonight, but at some stage it may be we can get consent to include my amendment which would put service first, followed by good business practice and profit in that order. If that were to be done, Mr. Speaker, I would find the bill entirely acceptable.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, I would like to say a few words about the bill before us. I would first say that I disagree with the principle of the amendment put forward by the hon. member for Winnipeg North Centre (Mr. Knowles), but I would agree that Air Canada, at least in the beginning, provided at least an element of service to the country.
I think the description of Air Canada as some poor little airline beset by private enterprise and hardly making its way in the Canadian scene is not quite accurate. Air Canada carries something like 60 to 70 per cent of the total Canadian air traffic compared to its competitor, CP Air, and the five regionals. By no means is Air Canada a small company, and by no means is it struggling. It should be remembered that the private airlines pay quite a bit more than Air Canada in corporation and dividend taxes. Tariffs are set for all airlines on the same basis, and I cannot see in which way it could be any different.
It has been said that Air Canada is one of the great airlines of the world. Well, when you consider all the people who go abroad you find that they don't make much distinction as to what airline they use. Air travel, at least among the airlines of the developing world, of Western Europe, Japan and North America, fortunately seems to be safe. They all seem to enjoy approximately the same degree of safety and I suspect that, by and large, the services offered by all the airlines seem to be much the same. Much seems to depend upon an individual's own interpretation of service as to whether or not the journey was acceptable to him.
November 1, 1977

We should remember that in Canada air travel is one area in which some competition could exist as compared with, say, railroads where we have only two main railroads which are more or less synonymous with each other and there is not much choice. There is the CNR with a government-appointed board of management, as opposed to CPR as a private corporation. But the boardrooms of both railroads are probably not all that different. And I suspect that the boardrooms of the large air carriers, Air Canada and CP Air, are not all that different from each other, either. I therefore feel that in air travel a certain amount of competition can be engendered.
The hon. member for Fort William (Mr. McRae) mentioned that Air Canada gave service to communities. Well, I can tell him that in northern Manitoba Air Canada never gave any service to the communities there. It was always provided by private airlines.
It is generally considered that if we are going to see the operation of north-south air routes which are reasonably viable, then some of the east-west air routes have to be given to these small private companies in order to make their operations profitable. There just is no way that fares on North-South routes will generate enough income for the companies concerned to remain viable.
We might consider what I understand has happened on the American scene. They have tended to let the larger airlines- those equivalent to Air Canada-fend for themselves. Where subsidies have been given they have gone to what I might call the secondary or tertiary airlines. This is something we might well examine.
Air Canada does not compete in very small centres. It does not compete in my centre. There is at the moment a proposed prairie regional air route encompassing Dauphin, Yorkton, Brandon, Saskatoon and Regina. Nobody seriously considers that Air Canada would be interested in running them because it is recognized that, with the large corporate structure they have, it would be impossible for them to run on routes such as these. It is important to realize that on these smaller routes throughout the country Air Canada cannot operate. There are hundreds of thousands of Canadians who are paying to subsidize Air Canada but who can never take advantage of even taking a ride on an Air Canada flight.
In connection with whether Air Canada should be run along profitable lines there is a report in the Montreal Gazette on October 28 which might be interesting. It states that Air Canada is shifting many of its employees from Montreal to Toronto, causing consternation among the maintenance workers in the union. The reason for this is fairly simple. It appears that Mirabel is not at all successful, that travellers prefer Toronto because is more convenient, and Air Canada, in order to stay in business, presumably has to transfer much of its maintenance staff to the city of Toronto. Many people bypass Montreal and have chosen to go through New York when going abroad.
Air Canada should be charged with running a reasonably profitable organization conducted in accordance with business principles. Travel is not something which, by and large, ought
Air Canada
to be subsidized out of the taxpayer's pockets. There are certain regional areas where travel is necessary and where transportation must be assisted. But by and large, if the public does not pay for its own travel costs, surely the taxpayers as a whole should not be required to subsidize the movement in any great quantity.
There has been some talk of travel for Canadians at a reduced rate. Supposedly we are in an energy crisis situation, and we recognize that one of the greatest users of energy is travel. It is interesting that in the concept of national unity it is said we should have cheap or free travel all over the country. This does not make sense in that the price of energy is rising and we in Canada are not blessed with a lot of cheap energy very far into the future. Some are suggesting that in the early 1980's we could have a real shortage.
I should like to support the idea that Air Canada should be run on sound business lines, and it should be run with the idea of making a profit, subject to the recognition that certain areas in this country are disadvantaged and need assistance. This should come out of the treasury so that it is recognized as a subsidy for that particular area.


Some hon. Members:: Hear, hear!


Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I believe that what is important in this bill is not what is written in the bill but the implications of policies which will flow out of the power given to the government and to the minister, if and when this bill is passed.
The bill itself is rather simple. It provides for the setting up of Air Canada as a separate Crown corporation, split away from the Canadian National Railways which presently owns all of the outstanding shares, and some rearrangement of the financial matters which will be necessary.
We have no objection to that, but on top of that the bill gives the government a great deal more power over the direction and the policies adopted by Air Canada. The minister has expressed a concern about commercial viability. Also he expressed the need for greater competition and for the corporation to show a profit. The minister's obvious lack of concern in regard to the needs of Canadians for service, particularly in those areas which are not on the main routes of any airline, bothers us.
I am not surprised that the hon. member for Fort William (Mr. McRae) spoke as he did a few moments ago. I am surprised at the manner in which members of the official opposition have talked, when so many of them come from areas which are not on the main lines. These areas will really feel the pinch and will experience a reduction in their services if Air Canada is required to have, as one of its major objectives, the showing of a profit.
The fact is that in most years Air Canada has shown a profit in terms of actual operation. The fact is that Air Canada is an efficient organization. The fact is that in recent years, if Air
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November 1, 1977
Air Canada
Canada has not done as well financially as it did earlier, it is because both Conservative and Liberal governments of Canada have opened the lucrative, long haul lines to competition by CP Air with the result that we have an over capacity of seats.
The minister referred to the fact that we have reached the stage where we have a mature transportation system and we can afford competition, and so on. Indeed he invoked the memory of that late great Liberal statesman, the Right Hon. C. D. Howe, who was able to make the economy work so well. Of course it is a long time since Mr. Howe was here. Therefore, in doing that the minister hopes that nobody will remember the role which C. D. Howe played in the establishment of the Trans Canada AirLines, which is known now as Air Canada.
On March 17, 1944, Mr. Howe, who was the minister responsible for the establishment and the running of the national airlines, said that service to the public must be the paramount consideration, and it seemed obvious in 1937 that the cost of non-competitive, non-profit service was the lowest that could be offered to the public. Also he said that an impartial analysis of the situation at that time led to no other conclusion.
I do not think anything has changed since 1937. It seems obvious to me that in a country as large as Canada, with a relatively small population, we simply cannot afford to depend for transportation, the movement of people or the movement of goods, on companies whose main purpose is the making of a profit. It is the areas wihich are not in the mainstream in terms of population which will be the most adversely affected.
In June, 1975, a former Liberal minister of transport, who has gone to his just deserts in the other place-


Stanley Howard Knowles: He is just gone over there.


David Orlikow: We can leave that type of discussion for another time. In June of 1975 Mr. Marchand said the following:
If you look at the size of this country and the distribution of its population you will see that you cannot have a transportation network which is economic everywhere; you cannot have an economic system of transportation to service the north, for example, or to service those regions of the country where the population is very thin. You cannot have an economic system for regions which are remote from the centre.
Then he went on to compare the remote areas, which the hon. member for Fort William referred to, with what happened in central Canada. He said:
In central Canada, for example, many transportation services and facilities are highly developed and competitive, with shippers having a choice as to rail, truck, ship or plane. In some parts of Canada, however, while the facilities and services may be well developed, there is a lack of competition.
That is what has happened in northern Ontario, northern Manitoba, northern Quebec, and I assume in northern British Columbia.
He went on to say:
Transportation policy must therefore recognize the fact that there is a wide range of facilities and services, operating under different degrees of maturity and competition. It must enable each to be treated in an appropriate manner, and not, as is now the case, as exceptions to a policy which relies principally on competition.
The present Minister of Transport (Mr. Lang) has reversed that principle completely. He is now leading us on the road to more competition. All the evidence indicates that that road leads to disaster.
We are discussing Air Canada today, but I would remind the minister of the findings of Mr. Justice Hall in connection with the movement of grain. His findings are that competition simply does not meet the needs of the western farmer, and that what we need is an integrated system, with a great deal of planning.
We see in this bill a proposal really to dismantle the major gains made by Air Canada, to permit a further fracturing of the system, the splitting of air routes which Air Canada has, and the giving of routes to regional air carriers that will be given subsidies. They will not have the profitable routes which Air Canada now has to help equalize the cost. We know, and I can understand, the difficulties of any government, regardless of the political party which is in power, in giving subsidies, particularly in giving subsidies to areas which have very few people and therefore very few votes, and therefore very few members of parliament to represent their needs. So we believe that the aim of the minister is one which will have a very bad effect on Air Canada, and therefore on the ability of the people of Canada to get the services which they need.
One of the things that has disturbed me about this bill is the underlying feeling among members who have spoken. Although they do not want to say it, they think really that Air Canada is not a very efficient organization. After all, how could Air Canada be an efficient organization? My friend, the hon. member for Winnipeg South Centre (Mr. McKenzie), believes, of course, that no government operation can be a success, that no government corporation can provide a service as efficiently as a privately owned corporation, despite the fact that the hon. member worked for the Manitoba telephone system, a publicly owned system serving the whole province, which has been publicly owned for almost 70 years. It was made a public utility by a Conservative premier of the day. It has consistently, until this time, provided the people of Manitoba with cheaper telephone rates than the private corporation which services the vast majority of the people in Ontario and Quebec. Any member of parliament who comes from Manitoba can vouch for the fact that the rates in Manitoba and Winnipeg are lower than the rates in Ontario and Ottawa.


A. Daniel McKenzie: Mr. Speaker, I rise on a point of order. The hon. member for Winnipeg North (Mr. Orlikow) is putting words in my mouth. I have considerably more knowledge of Crown corporations in the province of Manitoba. I am well aware of the fact that the Manitoba telephone system is not
[Mr. Orlikow.J
November 1, 1977

competitive and that it was made a Crown corporation back in 1908-


The Acting Speaker (Mr. Ethier):: Order, please.


David Orlikow: I think that any member of parliament or any citizen of Canada who wants to compare the record of the publicly owned telephone systems of Canada-there are a number of them-with the privately owned systems in Quebec, Ontario or British Columbia, will find very quickly that the publicly owned system offers as efficient a service at a cheaper rate than Bell Telephone and B.C. Telephone. The record is there.
But I want to come back to Air Canada-


A. Daniel McKenzie: Mr. Speaker, again I rise on a point of order. If the member wishes to continue to speak about telephone companies or Crown corporations, we are going to turn this into a debate on how to run a telephone company in a large city or a small city.


The Acting Speaker (Mr. Ethier):: Order, please.


A. Daniel McKenzie: The hon. member knows nothing about this.


The Acting Speaker (Mr. Ethier):: Order, please. I do not recognize the point made by the hon. member as being a point of privilege or a point of order.


A. Daniel McKenzie: I want to protect myself, Mr. Speaker. He is putting words in my mouth. 1 must have some avenue in this House to protect myself. I want to speak out against this.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member might be offended by the comments made by a previous speaker, but surely what he is saying is a point of debate, not a point of privilege or a point of order.


David Orlikow: I do not mind the hon. member for Winnipeg South Centre interrupting me. The more he speaks, the more he proves to everybody who will listen that he does know what he is talking about.


Some hon. Members:: Hear, hear!


David Orlikow: I do not mind his interruptions, Mr. Speaker, provided you keep track of the time which he has taken on his spurious points of order and make sure that I get whatever time members are permitted to have.


A. Daniel McKenzie: On this point of order, Mr. Speaker, are we going to open this up to a debate on Crown corporations? This afternoon I spoke on subsidization of air routes. This gentleman does not know what he is talking about.


Some hon. Members:: Order!


The Acting Speaker (Mr. Ethier):: As I have already explained to the hon. member for Winnipeg South Centre (Mr. McKenzie), the point he is making is a point of debate, an argument. It is neither a point of order nor a question of
Air Canada
privilege, and I think we should hear what the hon. member for Winnipeg North has to say.


David Orlikow: It is very clear to any member who wants to look at the record that Air Canada has been and is an efficient organization. If you compare it with other airlines in Canada or outside Canada, you find that its record is an excellent one and that its performance is efficient. Air Canada has had difficulties, as have all airlines in recent years because of the tremendous increase in the cost of fuel. But if you compare Air Canada with other airlines, you see that on the whole it has done a very commendable job.
In 1976 Air Canada carried more than three times as many passengers as CP Air. It generated 157 per cent more passenger miles than did CP Air, while incurring only 6.5 per cent greater total loss. We know that CP Air has the profitable runs in this country, that it has the long hauls between the popular centres. It flies from Vancouver to Winnipeg, to Toronto and to Montreal, while Air Canada has the short hauls which my friend, the hon. member for Fort William (Mr. McRae), has to use if he wants to come from Thunder Bay to Ottawa to do his job as a member of parliament. So when it was proposed, as it was proposed recently by CP Air, that its share of the transcontinental routes be increased from the present 25 per cent which it has to 45 per cent, the new president of Air Canada, Mr. Taylor, said the following, and I quote from an interview which he gave to Maclean's magazine:
1 think that is a totally predictable position for CP to take. If I were in their position, I would probably take it too. I would just look at the routes that you can make money on, the ones where you can really make money without any dispute. Toronto-Vancouver, Vancouver-Montreal, Calgary-Edmonton-Toronto: CP provided over half of the capacity on these routes. In other words, they put all their 25 per cent on those big routes so that we (Air Canada) were doing the Montreal-Torontos, the Toronto-Winnipegs, the Winnipeg-Reginas, the Cal-gary-Edmonton-Vancouvers.. .
That is the situation at which we have arrived by taking away from Air Canada some of the best routes in Canada and giving them to CP Air. What we have also permitted CP Air to do over the years was to get out of the short haul routes in which they were involved when they first organized their company and let them get into the very profitable long haul routes. The result is that the CP Air route structure has a higher percentage of long haul flights than Air Canada's route structure. In 1974 the average stage length was 563 miles for Air Canada but 937 miles for CP Air. That is the non-stop distance between airports. Despite this, in all but one of the past 16 years Air Canada has had a higher load factor than CP Air.
In my remaining few minutes I want to deal with the whole concept-which the minister has been advancing ever since he took over the portfolio-of a profitable or commercially viable airline in Canada. That concept is a myth. There is no air carrier which would be commercially viable without the almost $500 million of public assistance. I am talking about the cost of meteorological services, air service administration and capi-

November 1, 1977
Air Canada
tal investment, minus revenues in the form of airports which the public of Canada provides to all the airlines in this country. The total net income loss for CP Air and Air Canada is only 4.5 per cent of the less visible public assistance made in the form of airports and services.
I say that the concept of profitability which the minister has accepted in this bill, on the basis of an amendment moved last session by the Conservatives which the minister has also accepted, particularly if we do not talk at the same time about the need to provide service, is the beginning of a policy which will lead inevitably to poorer service and more difficulties for the people of Canada. Why should Air Canada be tied to the profitability clause, to reduce services or to raise fares when any operating losses are insignificant as compared to the much larger picture of the public's investment in Air Canada?
Based on statements made not just once but many times by the minister about the direction in which he and the department want to go, we feel that this bill-although we support the idea of splitting Air Canada off from the CNR-would move Air Canada and the service it provides to the people of Canada in the wrong direction.


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker-


Mr. Ellis:: Straighten out the socialists, please, Walter.


Walter Gilbert Dinsdale: That is impossible.
I think it is significant that most of the speakers who have taken part in this debate today are from western Canada, particularly the great plains region, and the hon. member from the government side who spoke tonight is from the Thunder Bay region. It goes without saying that a reliable and efficient public transportation system is absolutely essential to the economic, political, and social life of western Canada. Mr. W. P. Webb wrote on this subject some years ago in a book entitled "The Great Plains". He gave us a quotation which I think is quite apropos of many of the things which have been said here tonight, and I quote:
... far from markets, burned by drought, beaten by hail, withered by hot winds, frozen by blizzards, eaten out by grasshoppers, exploited by eastern capitalists and cozened by politicians.
The western people have been able to survive because we have up until recent times had a reliable transportation system.
Some of my colleagues have been suggesting that I take issue with some of the statements made by the hon. member for Winnipeg North (Mr. Orlikow). They say I should take time in this important debate to correct some of the impressions which have come from those "socialist sources". I am not going to take the time tonight other than to support what the hon. member for Winnipeg South Centre (Mr. McKenzie) has been saying as he has been attempting to straighten out the record with regard to the statements which have been made about him.
I think this is an opportune occasion to point out that the transportation system has been going steadily down hill in recent times in western Manitoba and eastern Saskatchewan. I

specify those two areas because they are areas of immediate concern from the standpoint of my political responsibilities in the constituency I represent. There has been a continuing deterioration which is reflected in an economic slowdown, and I want to take this opportunity tonight to bring a few points to the attention of the Minister of Transport (Mr. Lang), who is not with us at the moment, but he will be able to read Hansard. Perhaps he is out watching television. I do not know, but whatever the reason for his absence I think it is imperative to point out that under the new provisions of the legislation we are debating now and have been debating for some time in this parliament in the last session he must try to deal with the new parameters which are provided in the legislation and with the deterioration in first class air service which I shall outline briefly here tonight.
In the 1950's western Manitoba and eastern Saskatchewan had excellent air service. That was almost three decades ago. We had air service which took us right through to Calgary in the west, and of course we had an excellent connection with the city of Winnipeg by air. As Air Canada upgraded its equipment, moving into the turbo prop from the old DC-2 equipment, we were included in the Viscount service. As a result of the service which was provided by Air Canada in the 1950's and I960' we had a marked period of progress. I need not say that in the last decade, for various reasons-there was a change of government in Manitoba, which could have been one of the reasons-there has been a considerable decline in the economic process in terms of industrial development from that which had been noted in the decade of the 1960's.
Air Canada withdrew this service, and it is coincidental with the withdrawal of Air Canada from that important part of Canada that the economic decline set in. The responsibility was turned over to a private regional carrier, Transair, which provided the service under the regional air policy which had been announced by the minister of transport of that day and which was re-emphasized by succeeding ministers of transport. There have been many of them in the game of shuffling cabinet ministers which has gone on in the two recent Liberal administrations. There have been so many changes in cabinet ministers' and departmental responsibility that it is difficult to place the blame, as was pointed out by the Leader of the Opposition (Mr. Clark) during the debate on the Speech from the Throne.
The excuse for transferring the responsibility from Air Canada to the private carrier was that this was going to improve the service under the new, expanded regional air policy. Unfortunately the regional air policy is now in tatters and we have no air service of any kind in the western Manitoba and eastern Saskatchewan region, nor have we had any for the past four years. The rail passenger service has almost completely disappeared as well, so this important economic region of Canada, which includes the city of Brandon, the second largest in the province of Manitoba, is without air service of any kind. This, as I say, has been reflected in the marked decline of the industrial upsurge that began in the 1960's.
November 1, 1977

Two government departments are working against each other, Mr. Speaker. The Department of Regional Economic Expansion has been providing funds to assist regional development, while the Department of Transport has been downgrading the air service so essential in this modern era, to the extent that there is no air service of any kind. To make it even more ridiculous, removal of the air service came at precisely the time a brand new terminal was built at Brandon to serve that part of Canada. It was opened by the Secretary of State for External Affairs (Mr. Jamieson) then Minister of Transport, whose personal appearance underlined that this was a most significant development in transportation for that part of western Canada. No sooner had the air terminal been opened than air service was withdrawn, and 1 do not have to emphasize the stupidity of that decision.
1 am sure the reason the present administration comes under such growing criticism is because of its lack of rational, economic leadership. It just did not make any sense at all. It became an issue in the 1974 election and the Prime Minister (Mr. Trudeau) made a special trip to Winnipeg, where he appeared with the hon. member for Winnipeg South (Mr. Richardson), who was then a member of his cabinet. He has since resigned-I suppose in utter disillusionment and disappointment. At that time it was stated emphatically that air service would be restored at the earliest possible date. Mr. Speaker, that was four years ago and we still do not have air service.
The provincial government of Manitoba attempted to supply a commuter air service to this part of Canada. It was opposed by the Minister of Transport who said it was not adequate and that he wanted to give western Manitoba and eastern Saskatchewan a first-class jet service. This was encouraging, but the minister went further and said he would subsidize not only a commuter service but also a first-class jet service east and west on a daily basis. That is precisely the air service we require. Bids were called for, and Transair made an excellent proposal which was to be processed by the air transport committee. Then there was another development. Negotiations for the takeover of Transair by Pacific Western Airlines were commenced, approved by the Minister of Transport, and so we were back to the drawing board.
You can understand, Mr. Speaker, why there was so much frustration and why there is so much participation in this debate by members from the province of Manitoba.
When a former Minister of Transport who has now moved to the other place, the Hon. Jean Marchand, had responsibility for the portfolio, he hinted that a possible solution was for Air Canada to resume its responsibility to provide quality service and move us into the jet age as had been provided for in the 1950's and 1960's. I have made inquiries of the present minister from time to time and it seems that he is moving in this direction as well. Certainly with Transair out of the picture there is no private carrier that would take on the responsibility.
Air Canada
This legislation gives the minister the power to arrange for one flight per day each way and to use the brand new terminal facility that has been sitting idle for four years. The service could fly in from Regina to Brandon and go straight to the east if necessary. There is a potential market of 150,000 people who at present have to drive to the international airport at Winnipeg, often a distance of 200 miles. Each time I return to my constituency it takes me as long to drive from Winnipeg to Brandon as it does to fly from Ottawa to Winnipeg. This in the year 1977, Mr. Speaker, when the second largest city in Manitoba, Brandon, should be part of a first-class jet service. People still have to drive a long distance and pay substantial parking fees for their car while they are absent. There is plenty of parking at the new Brandon terminal which I am sure would be an added economic attraction to the people of western Manitoba and eastern Saskatchewan who must have rapid, reliable air service if they are to maintain their place in the economic development of Canada.
Some members have mentioned the improvement in Air Canada's service in recent months under the new chairman, Mr. Claude Taylor. I can vouch for that from personal experience. I am sure he would be sympathetic to any gesture by the government to restore the quality service Air Canada once gave to this region of Canada. The latest statement of the minister was in a press release on September 9, 1977, when he pointed out that there is going to be a meeting of minds. It reads in part as follows:
Transport Minister Otto Lang and Air Transport Association of Canada President Angus Morrison jointly announced today that the government and the air transport industry have instituted discussions aimed at developing a new policy for domestic airline service, including mainline, regional and local service carriers.
There needs to be no further discussion respecting the problem I have outlined here, because the gentleman named in this release, Angus Morrison, who is the president of the Air Transport Association of Canada, was formerly actively associated and identified with Transair and was one of the moving spirits in putting forward the proposition that Transair should be given permission by the Air Transport Committee to provide daily jet service in and out of western Manitoba. Obviously he is a convinced individual, and in his current responsibilities he now has direct access to the transport minister.
Therefore, Mr. Speaker, I am hoping that in the very near future we will have the announcement that Air Canada will pick up this responsibility, that there will be the further announcement that the infrastructure necessary for making it possible for Air Canada to fly into Brandon airport is ready, and that this will take place within the immediate future since it is a policy which has been delayed now for four years. It came up as an urgent issue during the last federal election, and it begins to appear that it is going to be an "urgent issue" in the next federal election. I urge the Minister of Transport to use the authority given to him under this legislation to do what he says he wants to do, and to do it as quickly as possible.

November 1, 1977
Air Canada


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I welcome the opportunity to make a contribution to this debate on the reorganization of Air Canada. What the government, abetted by Conservative members in the House, is trying to propose I think is significant. I am afraid that we have another example of the user-pay philosophy of the Minister of Transport (Mr. Lang) that all modes of transportation with which the government has anything to do should be based on the principle of user-pay and profitability.
I and my colleagues have said time and time again, both in this House and elsewhere, that given the geography of Canada and its sparse population from region to region, if we were to adopt the user-pay philosophy, the philosophy which decrees that a transportation system must always aim to make a profit, then we are doing a great disservice to the people of this country, especially those who live in regions like northern Ontario, where 1 come from.
I say this because there are not people in sufficient numbers in these regions of Canada to use the transportation system in order always to make it profitable. If we move in the direction the Liberal government and Conservative members want us to move, then people in regions outside our urban centres will find the number of transportation options available to them reduced. For us in the New Democratic Party, the proposition that must be central to the design of any national transportation plan has to be the concept of service. Service must come before profit.
That is why we are particularly disturbed with an amendment to the Air Canada Act which is incorporated in the bill before us, one which the Conservatives tried to get passed in committee but were defeated by the Liberals, the Liberals then turning around and reintroducing it, supported by the Conservative members. I refer to clause 7(1.1), which provides:
In discharging its responsibilities under this act, the Board shall have due regard to sound business principles, and in particular the contemplation of profit.
We are not against sound business principles, but the phrase which really worries us, Mr. Speaker, is "and in particular the contemplation of profit".
The nature of the air transportation system in this country I find very interesting, from the point of view of looking at what has hapPe,ied over the past few years to our national air carrier, Air Canada, and its major competitor, CP Air. I find it very interesting that during this debate those members most indicative of being in an ideological straitjacket are my hon. friends in the Conservative and Liberal parties, who are wedded to the belief that at all times competition and profit are going to mean benefits to the average user of the transportation system. I am not against competition in certain circumstances. Nor am I against the profit motive. But when it comes to a national transportation system then, as 1 have said earlier, we must consider the aspect of service.
I should like to relate what happened since 1937 when the predecessor of Air Canada, Trans-Canada Air Lines, was first inaugurated. The airline was inaugurated by the government as a public enterprise, since private enterprise was not willing to serve the nation by setting up a national air transportation

system. Therefore a responsible government, under the pressure of the people of Canada and the CCF, the predecessor of my party, moved to bring about a national airline with public money. TCA fulfilled a very important service.
Then when the Conservative government of the right hon. member for Prince Albert (Mr. Diefenbaker) was elected in 1957, it initiated a study of TCA and of the whole business of whether or not there should be competition in the field of air transportation in Canada. There was a great clamour from special interest groups to the effect that Air Canada should not have a monopoly. This was after Trans-Canada Air Lines was formed because other private competitors were not interested in providing the service. In 1957 and 1958 there was a great hue and cry to the effect that we must have competition in Canada in the air transport industry.
The Conservative government of the day hired a British transport expert, Mr. Wheatcroft, to do a study of the air transport situation in Canada. He concluded that TCA was as efficient a service as any in the world, even though it had no competition on the route. However, he said there was one serious deficiency in the service: a highly vocal section of the Canadian public was not satisfied with TCA's service. I should like to quote from his report to the government in 1958. He said:
There can be little doubt that a major reason for the undue degree of public criticism to which TCA has been subjected is that passengers with small grievances have magnified these into major complaints because they do not have the normal redress of taking their custom elsewhere.
This is a fundamental problem of public relations which is faced by any concern with an exclusive franchise. There can be little doubt that, whatever the other disadvantages of introducing transcontinental competition, there would in this respect be substantial benefit for TCA. Competitive operations, in other words, might well make the public more appreciative of the service provided by TCA.
Not because TCA was inefficient, not because it was losing money, but because some people said, "we do not have the option of taking our business elsewhere," the Conservative government followed the advice of Mr. Stephen Wheatcroft and allowed for competition on our national air routes. As Herschel Hardin in his brilliant book on Canadian public economic development, "A Nation Unaware", stated:
The hardest flying that TCA ever had to do was through a thick ideological fog.
What has happened is that since the introduction of competition we have found we have had too much competition in a country like Canada for the kind of passanger service that is demanded. As a result we find what the Americans have found, that a host of airlines competing for a fixed or limited number of passengers can only mean more planes flying with reduced load capacity, half empty or worse.
As the cost of operating those planes goes up, the consumer, the traveller, has to pay by means of higher air fares. The Americans have found this. The studies are numerous to point it out. I would like to give a few statistics to illustrate my point.
November 1, 1977

A study that Wheatcroft referred to at a later date shows in the United States in airline competition from 1952 to 1962 that in 1952, taking an index of competition at 12, the passenger load factor was 67.1 per cent and the return on capital to the industry was 15.3 per cent. By 1962, when more airlines were encouraged to get into the market and the index of competition had risen from 12 to 38, the passenger load factor had dropped to 54.5 per cent and the return on capital was down drastically from 15 per cent to 3.6 per cent. The same thing to a lesser degree has happened here in Canada.
As Canadian Pacific began to take part of the transcontinental service, and many of the regional air carriers took the regional routes, it reduced the passenger load factor of Air Canada and indeed of CP Air to the point that the two national air lines were flying with less than full capacity.
The only way you operate on a profitable basis, about which my friends are so concerned, is to have a plane full or near full each time it takes off. When you introduce a multitude of airplanes and airline companies, because we have a limited population with limited use of the air service, these planes fly with reduced load capacity, and that means a loss. The consumer, the traveller, pays more in higher air fares, and the taxpayer pays more in terms of subsidies to the Crown corporation and indeed in indirect subsidies to the other airlines as well.
We find that by 1960 and 1961, after competition was introduced, both Canadian Pacific and Air Canada began to lose money. Suddenly the great brainstorming among the civil servants was that perhaps we should have a merger and bring things back into a monopoly position. Despite that evidence, that the more competition the greater the loss would be to the airlines, we find that the Liberal government in 1967 extended CP Air's share of the Canadian market. Orange may be beautiful, but the entire airline industry may be in the red as a result of this misguided policy of the Liberal government, supported by the Conservatives, that competition in the airline business is ipso facto a good thing.
We found that the optimum load factor of a plane is around 70 to 75 per cent of the seat capacity. In 1975, CP had a load factor of 59.3 per cent and Air Canada had a load factor of 58 per cent. You cannot operate an airline profitably with that kind of load factor.
If my friends in the Conservative party and Liberal party are as interested as they say, by the amendment they got introduced into the bill, in having profit as the central goal of a national airline system, they would merge CP and Air Canada into one national airline. As I mentioned earlier, because of their ideological straitjacket, they cannot accept that proposition. They will still go along with competition and the airlines will continue to lose money.


Some hon. Members:: Oh, oh!


Reginald Cyril Symes: I see I flushed them out.


Mr. Nystrom:: Now flush them down.
Air Canada


Reginald Cyril Symes: The facts are there. Both airlines are losing money because of reduced load factor. That can be traced directly to increased competition with a limited passenger market in the air business.
Because of competition we are worse off. We have increased costs because of excess capacity, government subsidies and duplication of services. If we were really interested in having an efficient airline service which serves the public interest, we would have a monopoly in the national airline business. However, I am afraid my friends in the other parties will not accept that proposition arising from the circumstances I have described.
If we move toward this concept of user pay which the Minister of Transport is espousing, severing the profitable parts of Crown corporations and returning them to private industry, we have no guarantee that service will be maintained on behalf of the people of Canada. I know very well the results of the concept in my area. We have seen it happen in the form of railway transportation service.
CP rail service between Sault Ste. Marie and Sudbury was subsidized by the government. The railways wanted to get out of the passenger rail service. They put enough pressure on the government to have that service suspended. As a result, the people in the small communities between Sault Ste. Marie and Sudbury, and indeed in those communities, now find themselves with one less option in terms of transportation service. The day after the railway service was cancelled, bus fares between these centres increased.
If that is not bad enough, we now find that the national airline, Air Canada, has reduced the number of flights to Sault Ste. Marie. We predicted that would happen when, a few years ago, the Canadian Transport Commission allowed Transair, or Trashair as the locals call it, to serve Sault Ste. Marie. It increased competition with the national airline and took passenger service away from Air Canada. As a consequence, in order to reduce losses the airline cut back on one of its flights. Transair is now in a state of economic collapse and will be taken over by that great Tory airline, Canadian Western Airlines.
What we find is a move afoot by the ministers officials, as recorded in today's Globe and Mail, that Air Canada would be better to give up short haul low density routes and turn those routes over to private airlines. At the same time, the government would subsidize those private airlines because those routes are not as profitable as the long haul routes.
My stand is that Air Canada should be the major servicer of Sault Ste. Marie and that the regional carriers should not move in because they have not proved to be efficient; they have not maintained the service for the people of the area, and the national airline has always proved to be highly reliable. Air Canada should be given the benefit of passenger loads as high as possible by way of exclusive rights to serve my constituency. I hope the CTC will not parcel off part of that business to a private airline as it did in the past in the case of Transair,
550

November 1, 1977
Air Canada
because we in the north know that that would mean worse service. It is important that we not allow the clause I have described to remain in the bill, and that is why I am glad my hon. friend moved his motion.
Service must be the goal of any national transportation system. If we rely upon the profit motive alone it will mean reduced service in the less populated areas. The idea that making a profit and allowing competition will at all times serve the public best is a false one. It may suit the people who live in the larger cities very well, but it will not suit those in the smaller cities who depend so heavily upon airline service because of their distance from major centres. It is important they have an option always available to them, and I predict they will not have such an option if we move in the direction indicated in the bill before us.
The tourist industry is failing. It is cheaper to fly to Florida than to Vancouver. It seems to me there must be a national airlines system which is affordable and which provides service. This has to be a national goal, and that is why I support the motion standing in the name of my hon. friend from Winnipeg North Centre.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, last July I had prepared a few comments on this aspect of the debate in the old session. We are opposed to the amendment put forward in this new session by the hon. member for Winnipeg North Centre (Mr. Knowles) and it is appropriate I should put my comments on record tonight. They will be short, but I think they apply.
The amendment about which we are concerned tonight, and which has provoked so much chit-chat between our party and the New Democratic Party, has to do with whether or not it is reasonable to expect on behalf of Canadian taxpayers that a Crown corporation or agency, Air Canada in particular, should be managed and operated both within and outside Canada on a sound business basis with a reasonable contemplation of making a profit. To remove this concept from the bill, as the amendment proposes, is, surely, to question the very basis of our private enterprise system.


Stanley Howard Knowles: Hear, hear!


Reginald Cyril Symes: That is the purpose of the amendment.


Herbert Thomas (Bert) Hargrave: In the case of Air Canada, there is no reason why this basic principle should not still apply. I want to make specific comments about one aspect of the air freight side of Air Canada to show that at least some parts of the air freight operation are not being managed in accordance with sound business practice. I am referring to the air freight policy of Air Canada with respect to the transport of livestock, especially cattle, to foreign markets, nearly all of which lie across at least one ocean. I have in mind both purebred and commercial breeding cattle, both beef and dairy.
Canada rightly enjoys a very high reputation throughout the world for the excellent quality and high health standards of its beef and dairy cattle. Our cattle are in high demand, especially

now when market prices are seriously depressed. With very few exceptions, customers or potential customers must be supplied by air freight. Expensive as this form of transport is, it is simply not practical or efficient to move live breeding cattle by boat or truck to offshore customers. Until a few years ago Canada had only one aircraft which was fully converted to permit the efficient movement of live cattle, by which I mean that they could be handled by a fast walk-on and walk-off system in conjunction with large cattle-liner transports. The particular aircraft I am thinking of belonged to Pacific Western Airlines, and it has now either been sold or converted to passenger service.
Air Canada has been involved to a very limited degree, but only with a most inefficient and impractical method. Cattle must first be loaded into smaller, separate crates and then loaded into the aircraft by fork lifts. The process is a time consuming one and does not lend itself to the movement of larger cattle. Accidents, such as broken legs and other similar injuries, are much more likely to happen, and this, of course, is very inefficient and expensive by comparison with the logical walk-on aircraft which are specially converted for this use. Air Canada, however, has not seen fit to supply these specially converted air carriers although they insist on having the "first right of refusal" when it comes to bids from other air freight carriers.
In effect this means that Canadian cattle suppliers or forwarders have a desperation choice, either to truck the cattle to the U.S.A. and then load on carriers other than Air Canada, or pay the higher air freight charges of Air Canada and use its antiquated carriers, and hope to remain competitive enough to attract offshore customers.
Two such Canadian suppliers have had very bitter experiences over this situation. I should like to name them. First there is the Alberta-Canada All Breeds Association with its headquarters in Calgary, a very good organization which has been set up to market special breeding cattle all over the world; and second, there is one that has been in operation much longer, which is known as the World Wide Forwarders of Farnham, Quebec. Both of these reputable Canadian suppliers are continually losing valuable international markets for our Canadian cattle industry because, in effect, Air Canada is essentially restricting Canadian based trade by this "first right of refusal policy" and its outdated, antiquated livestock policy which it has pursued for some time now.
I urge the Minister of Transport (Mr. Lang) to take a look at this very specific part of the Air Canada air freight policy. Since Air Canada is the only carrier in Canada that can realistically get into livestock air freight on a competitive basis, he will find ample support from Canadian cattle producers, forwarders and trade agencies, but the first requirement is a properly modified air freight carrier designed to do the job. This is possible. There are various examples of other foreign carriers which are doing this successfully now.
November 1, 1977

I should like to refer to a related matter dealing with Air Canada and make a comment about the quality of beef that is served on the menus of Air Canada. I am sure most hon. members appreciate the fact that I travel Air Canada considerably. Mostly every week, and sometimes every second week,
I fly from Ottawa, change in Toronto and go on to Calgary. Then either by Time Air or the Greyhound bus I complete the balance of my journey to Medicine Hat. On that rather long trip I am always served at least one hot meal by Air Canada. The comment I wish to make relates to the feature dish, which is beef.
Most of the beef served on Air Canada is simulated steak. It looks like a lovely filet. All of it is produced in either Australia or New Zealand. When you cut into it, it is tough, stringy, and there is not a speck of cover fat on it. It has been frozen and it has been in transport for a long time. It is supplied under a tender system which Air Canada has been employing for some time.
I am not concerned about eating grass beef, and that is what it is. I eat grass beef all the time on my ranch, but at least my own beef has some fat cover on it. There is ample marbling within my beef, it is juicy and tender. The only difference between that home-grown grass beef and corn-fed or barley-fed beef produced in the feed lots in Canada is that it has a slightly different flavour. I am not critical of the fact that Air Canada beef is grass beef but surely, when we can produce the best beef in the world, we should be serving it properly on our own national air carrier system. I want to put in a plea that we ought to do better than we are doing now.


Some hon. Members:: Hear, hear!


Lorne Edmund Nystrom: Mr. Speaker, I was wondering whether the hon. member was preaching for a call that Air Canada should buy his tender, juicy beef.


Herbert Thomas (Bert) Hargrave: We will supply Air Canada any time.


An hon. Member:: How about some from your riding?


Lorne Edmund Nystrom: There is lots of beef in my riding.


An hon. Member:: There is more bull than beef.


Lorne Edmund Nystrom: We have some bull as well for the Conservatives, but it is a rather endangered species. Actually, we have tough old bull for the Conservatives.
I am happy to say a few words on the amendment before us today moved by the hon. member for Winnipeg North Centre (Mr. Knowles), in which he wants to strike out the words: "and in particular the contemplation of profit". When some Conservative members spoke today, they seemed to forget that the hon. member for Winnipeg North Centre is referring to those words. When there is a section like this in the act, Air Canada will see as its mandate the particular objective of making a profit and seeking a profit.
I am not against profits in some industries and in some businesses. When one is dealing with a business like transpor-
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tation, I do not think the primary objective of the airline should be a profit. If it is, the smaller communities will suffer. Sault Ste. Marie will suffer. The Lakehead will suffer. The smaller cities and communities across this country are going to suffer because they cannot make a profit for the company. If the objective is to make a profit, then they are not profitable parts of that enterprise and they will not receive the service to which they are entitled.
I am sure garbage collecting is not a profitable enterprise in this country, but we still have that service. There are various other services in this country which are not profitable. We have made a decision that these services are worth-while and they should be subsidized. It is done as a priority in our society. As a Crown corporation Air Canada's principal objective should not be the making of a profit. If that is its principal objective, then it will not provide service to a lot of communities in this country.
Conservative members have risen in this debate and have indicated that the New Democratic Party is speaking out of turn and is not correct. They are speaking on behalf of the big cities in this country. Only the seven or eight bigger cities in this country will have a good service, because Air Canada can be operated very profitably in those cities.
It is strange that the Conservative party is concerned about enterprise, purity, and making a profit. When other industries are in trouble, suddenly the Conservative party is not a free enterpriser and it wants a little bit of socialism. Some Conservatives often argue for more protection for a lot of the industries in Ontario. I am referring to tariffs, and I am also talking about assistance to some of the corporations in terms of tax grants. All one has to do is take a look at INCO with its socialism for the rich and free enterprise for the poor. That is the type of contradiction which is existent in the Conservative logic.
I can look out west and see how the cattle prices are dropping in Alberta. The cattlemen, who did not want to have a marketing board, are now saying that they want subsidies, support prices, and import quotas and restrictions.


Mr. Hurlburt:: No we do not.


Lorne Edmund Nystrom: Now they want restrictions on beef which is coming into this country. They want some type of intervention, but they still want free enterprise. You can have one or the other, but you cannot be half pregnant.


Kenneth Earl Hurlburt: I suggest the hon. member does not know what he is talking about.


Lorne Edmund Nystrom: I suggest the Conservative party quite often is half pregnant when they make arguments in this debate and other debates.
1 see the hon. member for Lisgar (Mr. Murta) is present in the Chamber. He was with his leader in his riding in August. His leader was talking about how the Wheat Board should expand, but at the same time he indicated that private organizations should be given the authority and the right to sell grain
80025-36'/2

November 1, 1977
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around the world. In other words, he was talking about getting rid of the Wheat Board as the sole grain marketing agency in this country and turning it over to private enterprise like Cargill. This is an example of Conservatives talking out of both sides of their mouths, depending on who their particular audience is.
We have the Air Canada bill before us, and the Conservatives want profit to be a major and main priority for Air Canada. If that is done, it will ruin one of the basic principles of transportation in this country, which is to provide a service to every Canadian regardless of where that Canadian lives, at the lowest possible cost. If that is done, a lot stronger country will be developed than we have today. Also there will be a lot more equity and fairness in the country than we have today, and there will be a lot more dispersed development.
If the country is set up on the profit motive, there will be a tremendous amount of centralization.


Kenneth Earl Hurlburt: What about Manitoba and British
Columbia?


Lorne Edmund Nystrom: If you have subsidized transportation, then there will be more incentive for people to establish industries in this country in places other than Montreal, Vancouver, and Toronto. There will be more incentive for people to live in places other than the four or five big cities in the country if they can have good transportation facilities. I know what I am speaking about because I come from a constituency which has fought for years for a good air service. I believe the hon. member for Dauphin (Mr. Ritchie) has already referred to places like Dauphin, Yorkton, and Brandon. But if you operate a transportation system only on profit, we will never get transportation by air for these centres because they are too small and it is not profitable. The official critic of the Conservative party, the hon. member for Vegreville (Mr. Mazan-kowski), says that is right. He is right, but if the priority of Air Canada is to operate solely on profit, you will not have a service for those communities.


Some hon. Members:: Oh, oh!


Lorne Edmund Nystrom: When the hon. member for Sault Ste. Marie (Mr. Symes) was speaking and the Conservatives started to heckle, somebody said he flushed them out. 1 think the time has come for me to flush them down.


Some hon. Members:: Oh, oh!


Donald Frank Mazankowski: That is what happened in Manitoba to you.


Lorne Edmund Nystrom: That is what happens in a society where huge corporations are given as much leeway as possible to make a profit. That is their guiding light, Mr. Speaker. Their guiding light is the almighty buck, profit, regardless of whom it might harm. This is the same Conservative party which, a few days or a few weeks ago, was talking about the great things that the government has done in defence of INCO, the great tax

write-offs to create some incentives in our society. I am surprised they are not saying "hear, hear!". They want more of those incentives. But what happens when we have a corporation which gets those handouts, laying off workers in places such as Sudbury and Thompson? That is the type of philosophy that the Conservatives and the Liberals have.
As the hon. member for Crowfoot (Mr. Horner) said, both parties are the same. There are as many small "1" liberals in one party as in the other, and as many small "c" conservatives in one party as in the other. He ought to know, he has been in both of them, he has been inside the hides of both of them. He said that both of them had the same philosophy and the same ideology, and the only differences are in the personalities in the two parties. If it comes down to just personalities, there is no real difference if anyone wants to make any real changes.
I argue very strongly that the motion put before the House by the hon. member for Winnipeg North Centre be supported, that we strike out of the bill in particular the contemplation of profit because, if it remains, Air Canada will have it as one of its primary objectives and this will be very destructive and negative for the air transportation facilities in our country.


Jack Burnett Murta: Mr. Speaker, I rise on a point of order just to clarify the total misinterpretation by the hon. member for Yorkton-Melville (Mr. Nystrom) of what the Leader of the Opposition (Mr. Clark) said in my constituency this summer. The reason I waited until now is that I wanted to allow the hon. member to finish his remarks. I did not want to interrupt him. The reference was made in connection with the Canadian Wheat Board. The hon. member is totally wrong.


Mr. Deputy Speaker:: The hon. member cannot use the procedure of raising a point of order to clarify a statement that was made outside the House. If it were a statement he had made himself, he could use the rules of the House to make a clarification, but to give an explanation of something that did not occur in this place can be done only if the hon. member sought the floor and participated in the debate.


Jack Burnett Murta: Mr. Speaker, I have already spoken in this debate. What I meant to do was to clarify an erroneous statement made by the hon. member for Yorkton-Melville which I do not believe should go unchallenged in the House of Commons. It was in connection with what the Leader of the Opposition said in relation to the Canadian Wheat Board. The Leader of the Opposition is completely and totally behind the Canadian Wheat Board, as is the Conservative party.


Stanley Howard Knowles: How far behind?


Jack Burnett Murta: And we feel the Board has done a good job. We are looking at ways to improve their selling function. That is what the Leader of the Opposition said, and the hon. member left a totally false impression in the House of Commons.


Mr. Deputy Speaker:: The remarks of the hon. member prove that he was raising a point of debate, not a point of order.
November 1, 1977


Lorne Edmund Nystrom: Mr. Speaker, I rise on the same point of order. I am sure I have the right to say a couple of words in response to the misleading statement of the hon. member for Lisgar.


Some hon. Members:: No.


Lorne Edmund Nystrom: I was only quoting a reputable journalist from the Regina Leader- Post named Fred Harrison, who had called the office of the Leader of the Opposition, who did not deny the statement.


Mr. Deputy Speaker:: Order, please. Would the hon. member resume his seat? What the hon. member is doing is to prove again that the Chair was right and that the point raised was just a point of debate, not a point of order, something which the Chair did not accept. It is certain therefore that I cannot accept another point of order which is an argument.


Stanley Howard Knowles: It is a draw.


Mr. Bob Brisco (Kootenay West):: It is unfortunate that in dealing with this bill, instead of addressing themselves to it, the NDP have tended to launch into an ideological diatribe, beating their political drum for all its worth. I would respectfully draw to the attention of the NDP the particular passage over which they expressed so much concern, that is, that the board shall have due regard to sound business principles. This is not the complete quote, but there was genuine reason for concern on the part of the NDP with reference to sound business principles.
1 can understand the NDP having difficulty with sound business principles, and I really appreciate their dilemma. Certainly the history of the NDP in British Columbia would indicate that they had a great many problems with sound business principles, but if they look at the clause which gives them so much difficulty and realize that the contemplation of profit is only there as a reference-it is not said there that Air Canada must make a profit, a word which sticks in their throats, they gag on the word "profit"-they would understand it better.
To put this ideological argument to rest, to put the whole thing in its proper perspective, let us quote one of their authorities. I am referring to the backroom mastermind of three Ontario election campaigns of the NDP. The man in question is Mr. Gerald Caplan. What does he have to say about the economic problems of the party he represents? He says:
That lurking fear among potential supporters that we've never met a payroll, that we simply don't know how to run this store ...
David Lewis, the former leader of the NDP, said the following:
One of the real deficiencies in my own leadership was that I was never able to clarify adequately the NDP's proficiency with the economy.
I would be quite prepared to address myself entirely to this bill, but I think first we have to look at it in the perspective of
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the arguments which have been presented by my friends on my left. Mr. Caplan went on to say that the NDP failed to increase its vote because it did not prove itself responsible on economic matters. The red herring of garbage collection was raised here. I fail to see any similarity between garbage collection and Air Canada, and I am sure Air Canada would not appreciate that reference.
If we are going to get involved with whether a particular telephone company makes a profit or whether it is a Crown corporation, I suggest to my colleagues on my left both physically and politically that they examine the record of B.C. Hydro. If they think that Air Canada has a problem making a profit, perhaps they should examine British Columbia Hydro. After all, I notice in the guide which gives us a background and a history of all members of parliament, one member who used to serve the riding of Kootenay West and who said, "These accomplishments," referring to the accomplishments of his party, "include forcing the B.C. government to take over Hydro facilities". How the citizens of British Columbia have rued that day, and speakers from that particular party have expressed that same concern since then.
In Kootenay West there is a small utility company called West Kootenay Power. It is one of those nasty corporate companies which makes a profit. That company services the Kootenays, part of the Okanagan and right through to Princeton. The people of those areas will have nothing to do with B.C. Hydro. Why? Because West Kootenay Power, while it operates at a profit, has utility rates at least one quarter lower than those established by that giant, B.C. Hydro.


Andrew Hogan: Which government nationalized Ontario Hydro? It was a Progressive Conservative government.


Robert Hylton Brisco: You will have your turn, brother.


Mr. Haidasz:: It's "Father".


Robert Hylton Brisco: I did not realize that he was promoted to a father. I hope it will not be long before he is canonized.


Andrew Hogan: Cheap shot there, boy.


Robert Hylton Brisco: By its rates and by the inflated salaries it has paid to linemen and other hydro workers, B.C. Hydro has robbed utility companies of valued employees right across this country. Utility companies simply cannot compete with the wages which are paid by B.C. Hydro.
That is getting far and a way from this bill, but if the members of the NDP are going to bring in red herrings, then I feel responsible to respond to them. They have said that public transportation should never make a profit and that it is there to serve the public. Certainly public transportation is there to serve the public. I do not argue that point, and I do not suggest that in remote areas it will make a profit. However, a clause in this bill says that sound business principles have to be considered. Is there something wrong with that?
Is there some new economic policy of the NDP which would employ other than sound principles? They wail and moan

November 1, 1977
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about small communities which are going to be badly hit and terribly hurt if Air Canada decides to make a profit. At some time I would like to talk to them about the history of Castlegar and of Pacific Western Airlines. As a matter of fact, CP air sold that run because it could not make a profit. However, the economy of the area gradually improved, Pacific Western hung on, and now that operation is so busy that the airports are in need of expansion. The people find that there are not enough seats on the aircraft. We now have 737 jet service instead of Convair or DC-6 service. It is a small feeder service. It goes to Cranbrook, Castlegar, Penticton, Kelowna, and ultimately ends in Vancouver, Edmonton and Calgary, those major centres. It is a profitable run, in spite of the fact that, during the winter months, weather often causes cancelled flights.
We hear about that big, bad corporate monster, CP Air. Thank God we are not talking about CP Rail. I might be in sympathy with my friends.


Andrew Hogan: They are all the same; it is a conglomerate.


Robert Hylton Brisco: My friends say CP Air is busy trying to get more and more routes and more and more profit, and is being granted long hauls. I think it was the hon. member for Winnipeg North Centre (Mr. Knowles) who said it has been granted long hauls, the money-makers. I wonder how many have looked at the number of CP Air aircraft which fly into Ottawa and have compared it with the number of Air Canada aircraft which fly into Ottawa. If there ever was a profitable run, it is that bureaucratic air bus from Toronto to Ottawa.


Andrew Hogan: That is false. Look at the profits for last year. They lost money.


Robert Hylton Brisco: There is no question in my mind, nor in the minds of hon. members on both sides of this House, that Air Canada should operate in a sound business manner. There is nothing wrong with operating in that fashion. There is nothing wrong with attempting to make a profit, and if hon. members to my left are so confused that they think our national airline is not listening to what hon. members say here, is not responsible to parliament or to the standing committee and will not be affected by changes, they are indeed very naive. If Air Canada is squeezing the public in some cases on solely a profit motive, then surely the matter will be before this House in very shot order. So I say, what is wrong with Air Canada or any other Crown corporation using sound business principles and making a profit?


Andrew Hogan: Mr. Speaker, I would like to correct the previous speaker with regard to the profitability of the Air Canada run from Ottawa to Montreal and Toronto. If we look at the figures, excluding the costs of the airports, we find that in the last two or three years, without getting any extra competition from CP Air, Air Canada has been losing money. This is one of the difficulties we have when talking about transportation policy in Canada from the point of view of an area like the Atlantic region.

There is supposed to be competition, but in reality it does not add up to any competition at all.
How can a member of parliament come here and make a distinction in an abstract way between CP Air as an entity and Canadian Pacific as a corporation, which controls everything we see in its advertisements and how it is concerned about profit?
It is terrible that hon. members in the official opposition squabble with one another instead of with the leaders of the present government. This opposition party has shown that when it comes to cutting the cake there is no difference between it and the Liberal party. There is a difference in personalities but not in terms of what the last member called ideology but what I would call "idiology". The difference is basically that these two, large, old parties are committed to the profit motive, even if it means that areas like Atlantic Canada and others do not get the services they should. They deny that, but it is the conclusion that one has to draw from the way they argued tonight and on many other occasions.
Would anyone in their right senses object to a clause providing that Air Canada or any other business should be run along business lines? Does that mean we would therefore have to operate a national airline or national transportation system geared primarily to making a profit? The history of Europe, as opposed to that of this country, shows this is not the case. No one is going to object to the Minister of Transport (Mr. Lang) trying to achieve better business management.
Coming from a region like mine in Atlantic Canada where private enterprise in the form of Hawker Siddeley and Dosco left us high and dry, just as Inco will leave Sudbury high and dry when the minerals are out of the ground, we know that what happens eventually is that the public has to take over. In such regions the profit motive is not paramount, and even in our market system service should take precedence. That does not mean we are against business enterprise but it means that we do our best to minimize losses.
Areas like Toronto, which because of large population can move great numbers of people who have high incomes, can make a profit on certain runs. These people share part of the cost of servicing the Atlantic region, the Kootenays, areas on Vancouver Island or in Newfoundland. That is what Confederation is about, Mr. Speaker. It is part of what the Parti Quebecois is objecting to, leaving aside the linguistic and cultural concerns. Are we or are we not one country?
Because I come from a maritime part of the country must I accept inadequate public transportation so that some company can make more profit by serving central Canada, an area protected by tariffs, import quotas, and other types of protection alien to any kind of theoretical free enterprise system of which you can think?
I admire people who have enough gall to think that others are so stupid that they do not mind these companies that operate in Ontario behind a 40 per cent protective barrier, in furniture, footwear, textiles and other areas. I could go on
November 1, 1977

down the list. They pretend that this is free enterprise. We live in a mixed economy with the government supplying the basic impetus which keeps the economy going. Where private enterprise and incentive come in is in retailing and in wholesaling. Who is going to object to that? What we object to is seeing so-called private corporations getting deferred taxes amounting to millions of dollars, taxes which have run into billions of dollars over the history of this country.
We have been listening to some of these right wing Conservatives who belong to the government across the way, a government which the hon. member for Vaudreuil (Mr. Herbert) has said has one of the weakest cabinets we have ever had. What kind of nonsense is it to say that we have free enterprise? Do the few people in the gallery listening to me tonight believe that kind of malarkey? The North American economy and the economy of the western world are underwritten by government. The risk that private enterprise takes is small because the taxpayers underwrite that risk.
About three weeks ago Ottawa sent 310 jobs to Cape Breton as part of its decentralization program. Twenty-six per cent of all civil servants, give or take a couple of percentage points, live either in this city or in Hull. Certainly I favour Hull over Ottawa. This is probably a hateful thing to say, but I think the Frenchmen have been screwed under Confederation in many ways.
As for the United States, 12 per cent of the civil servants in that country live in Washington. Some 6 to 8 per cent of Swedish civil servants are in Stockholm. With this big, centralized government bureaucracy, are hon. members trying to tell me that the basis of our economy is free enterprise? We are not opposed to free enterprise when it comes to buying a suit of clothes or going into a restaurant, but let us admit the reality of today. In one way or another we have a socialistic system.
With so much being underwritten and paid for by the taxpayers of Canada, either through the federal or the provincial governments, it is pure nonsense to say we have any other system. To call it a free enterprise system is so much nonsense. Yet this is what economic textbooks would have us believe.


Reginald Cyril Symes: Or an ideological straitjacket.


Andrew Hogan: The hon. member who preceded me tried to defend private enterprise when it does not exist. As I say, the whole system is underwritten by the government. One does not need a high school or college education, or to be an economist, to recognize that that is the sine qua non, the basic premise, of our economy today. We have evolved into a mixed capitalist-government economy. Who in their right mind would oppose that today?
The CNR has made a profit for the first time in 20 years. According to what I have read, the Minister of Transport now wants to sell the CNR because he says it is not making a profit. He says this after the Canadian taxpayers have underwritten that profit. What kind of nonsense is this?


Reginald Cyril Symes: It is Liberal nonsense.
Air Canada


Andrew Hogan: What kind of nonsense is it when a private enterprise firm leaves the Cape Breton steel industry and the federal government then turns it over to the provincial government of Nova Scotia and says, "You guys run it on your own"? Seven hundred thousand people, with one of the lowest income standards in this country, and they ask them to make it a competitive international steel industry! Then it wiped its hands clear of them. The people there have been suffering ever since.
Some are surprised and say to me it is an exaggeration that people are committing suicide because they are unemployed. It is not an exaggeration. These people felt what it was like to be constantly unemployed.
I realize I am getting terribly emotional. However, it is time somebody did.
Does anyone really think that the Indians of this country are inferior? Does anyone think they are the way they are because they want to be that way? Is it not because we have put them on reservations?
We are also putting others who are not red skinned on economic reservations. We are doing this to those in Cape Breton, and are in the process of putting those who work for Inco in the same position. This is a beautiful tale to be told about the multinational corporations.
The Canadian Export Development Corporation goes to Guatemala and Indonesia under the guise of helping the underdeveloped countries. At the same time, the government allows Canadian jobs to disappear. Is that what we need to help the underdeveloped world? What is happening?
Eric Kierans was right. He is a professor of economics at McGill University. He was a cabinet member of this Liberal government and sat in the Quebec legislature. He is no red radical socialist. He is a very well off man. He called it the way it is.
What has happened is that we have a marxism version of the twentieth century happening in Canada and all over the western world. It is not to the extent that Marx said it would happen. However, the government has certainly become the ruling committee of the bourgeois, and the bourgeois in our context is the multinational corporation.
The multinational corporations say they want more, without promising they will create more jobs. The Minister of Labour (Mr. Munro) is supposed to be a friend of the ordinary worker in this country. I suggest that he and other ministers look at the figures of CALURA. They will see $10 billion to $12 billion in deferred taxes, with not a cent of interest being paid by the multinational corporations.
An idealistic woman is now head of Health and Welfare. She is trying to scrimp and scrape in order to get the basis for a guaranteed annual income. I will tell her, as Eric Kierans told the cabinet which he had to leave because he could not convince its right-wing people, if they put 10 per cent, which is less than the market price, on the current taxes that are owed,

November 1, 1977
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they would have $1 billion to $ 11/2 billion to start a guaranteed annual income scheme in this country. We do not want to live in a country in which forever the lowest 25 per cent of the people are going to get 4 per cent of the gross national product.
I must say that I have become somewhat modified since coming to parliament. I realize, now, that many politicians work very hard and that they deserve to be higher than they are in the so-called pecking order, but, for God's sake, is not the time here for us to say in this country, in North America, that we cannot go on in this way, that we just have to make sacrifices in order that the lower income people, both here and in other parts of the world, get their fair share? Rhetoric alone will do nothing. We have to build the institutions which will make this possible, and if this is ranting, raving socialism, I apologize to my hon. friends.
When you know them well enough, they are all nice fellows in this Chamber, whether they are from the Liberal party, the Conservative party or whatever. I am talking about human beings. We are a very small percentage of the human beings who live on this earth, and unless we distribute income and wealth in a fairer way we shall find ourselves in still greater difficulty-


Mr. Deputy Speaker:: Order, please. My intention is not to remind the hon. member that his time has expired but merely to ask him to come back to the subject matter of the amendment which is before us.


Andrew Hogan: Thank you, Mr. Speaker. 1 come from the Atlantic region and I can tell you that in the Atlantic region, because of over-emphasis on the profit motive by a Crown corporation, we are getting less service. It is true that only 5 or 10 per cent of our people use the airlines anyway, and we in this Chamber are among those who are so privileged. But there are a lot of people who find they need to fly in certain circumstances because, for example, of the death of relatives living far away in other parts of the country. They are getting short-changed.
I want to tell the hon. member from the Kootenay area that we all understand the need for good business management and so on. But the Minister of Transport is one of the most conservative men I have ever met in my life-next to the hon. member for Crowfoot (Mr. Horner)! That man has no idea what it means to live in an outport in Newfoundland, or what it means to live in isolated areas where transportation facilities are desperately needed. This does not mean you say "to hell with costs completely". Obviously, the Canadian taxpayer, through income tax or sales tax, or indirectly through the very weak corporation taxes, would in the end have to pick up the bill. There has to be a balance.
We are not complaining that a profit might be made. But we suspect that a profit will be made, as has been done so often in the past, at the price of service to Canadians. It is that type of thinking, especially if it is pursued to a logical conclusion in

line with the wishes of the Minister of Transport, which will lead Canadians into great difficulty.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, the socialists are at it again tonight and I think it is important that we should first of all take a look at what they are proposing. Many of their speeches have wandered from the point.
The hon. member for Yorkton-Melville (Mr. Nystrom) spent a lot of time on the phrase "contemplation of profit" and that is what they said they intended to delete. But that is not exactly what the motion of the hon. member for Winnipeg North Centre (Mr. Knowles) proposed to delete. It is going to delete the contemplation of profit, but it will also delete the requirement that the Board shall have due regard to sound business principles. It is important to emphasize that, because the type of thinking-


Stanley Howard Knowles: Read the rest of it.


Sinclair McKnight Stevens: -the socialists have been espousing here tonight is the type of thinking that the Trudeau Liberal government has been following for years. The hon. member decries unemployment. I agree with him, but the unemployment he decries is due to those very socialistic principles which are being espoused in this House tonight.


Some hon. Members:: Hear, hear!


Andrew Hogan: Mr. Speaker, I rise on a point of order. I will not take any more than a minute of the hon. member's time, but I should like to remind the hon. member that I come from an area in which private enterprise left us high and dry. With all the faults of this government, if it did not take over the coal mines and it failed to take over the steel mills, we would be in a worse position.


Mr. Deputy Speaker:: The hon. member is making an argument.


Sinclair McKnight Stevens: Mr. Speaker, before we vote on the proposed amendment, I think it is important for us to see in its entirety what the hon. member for Winnipeg North Centre intends to delete from the bill before us. According to his motion, he intends to delete lines 6 to 9 on page four of the bill. Those lines read as follows:
In discharging its responsibilities under this act, the Board shall have due regard to sound business principles, and in particular the contemplation of profit.
Let us not allow the socialists to confuse this issue. They are making a two-pronged attack First of all, they want to make sure that the directors are not going to be required to follow sound business principles, and second, that they should not carry out their activities in contemplation of profit.


Stanley Howard Knowles: Primarily.


Sinclair McKnight Stevens: It does not say "primarily". This is the type of confusion the hon. member continually attempts to put into this bill. If they want to espouse their garbage, I think it is
November 1, 1977

high time that they at least stick to the facts. The amendment does not say "primarily", although I noticed that they almost uniformly used that type of wording to denote what they were trying to achieve.


Stanley Howard Knowles: The word is "particularly".


Sinclair McKnight Stevens: I thank the hon. member for retracting that.


Stanley Howard Knowles: It is the same thing.


Sinclair McKnight Stevens: Now the hon. member is saying that it is the same thing. If he reads the dictionary, he will find that it is very much different.


David Orlikow: What dictionary?


Sinclair McKnight Stevens: The Oxford Dictionary. 1 think it is important to separate these two things. Surely there should be no serious suggestion that the Board of Directors of Air Canada should not follow sound business principles. Also it should be accepted that, in doing that, the evidence of their following sound business principles is the profit which they make. Their efficiency is simply registered or gauged by profit.
There has been a very serious misunderstanding of this legislation. I understand how the hon. members who did not attend this committee can make such a mistake. They are confusing the operation of Air Canada with service. The reason I feel a clear distinction is necessary is that clauses 8 and 9 of the bill, in my opinion, deal with service in the sense of service where Air Canada is being expected to run an airline into an area which is not viable. In that case the act contemplates the minister may, in effect, order Air Canada into that area, and it will be compensated out of the public treasury for whatever loss is incurred.
We are not saying that if there are areas in Canada that should have air service and it is not viable or profitable to put an air service there, we should abandon them. What we are saying is, let us get it out into the open, let us see what is the subsidy which the government will be called upon to pay, and clauses 8 and 9 contemplate that. They say very clearly that if the minister feels there is a need for a service and he asks the air line to go in, subsequently a calculation will be made of the cost and loss, and the loss will be repaid to Air Canada. So I say that basically the main thrust of the socialists' arguments tonight is really off the point. If essentially they want Air Canada to provide a service into areas that otherwise would not be profitable, they can get that simply by stressing that the Minister should implement clauses 8 or 9 in whatever areas they feel it is desirable to do so.
Air Canada
That is the service side. What we believe is a necessary ingredient in the bill is the provision which the hon. member for Winnipeg North Centre wants to delete, namely, that when you give an airline such as Air Canada $370 million of capital, surely the least we can expect from them is that they will use that capital in a business-like way and make a profit. In short, if they put out $370 million at 10 per cent interest, they can make $37 million before they do anything. What we hope to instill in Air Canada, and certainly in their directors, is a sense that they are given in trust $370 million of public money, and that we hope that in running the airlines they will do so in accordance with sound business principles and will run up a profit, which, I think, is not too difficult.
If we look at the record, I think we have cause to ask that this airline be run at a profit, because for the last three years they have consistently lost huge amounts of public money.


Reginald Cyril Symes: Due to over-competition.


Sinclair McKnight Stevens: Does the socialist from Sault Ste. Marie realize that Air Canada has 50 per cent of the total air travel in Canada at present? If he read the Globe and Mail this morning he would have seen that the total revenue in 1976 of all airlines in Canada was $2.57 billion. If he picked up the annual report of Air Canada he would find that their revenue was $1,125 billion.


An hon. Member:: We want the load factor.


Sinclair McKnight Stevens: If he wants the load factor, it is over 70 per cent. What the socialists love to do is to get big pots of money-$370 million would be lovely. They love to load on to that pot of money as many civil servants as they can hang on to it, and then when they come up with a loss their excuse always is that after all they provided a service. We have to start calling things the way they are. The entire approach of these socialists is a sham and a fraud on the Canadian public.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: You want to continue with the tariffs, the grants, and the subsidies.


Sinclair McKnight Stevens: In 1974 Air Canada had 50 per cent of the revenue of all airlines in this country. In 1974 they lost $18.7 million; in 1975, $24.9 million; in 1976, $22.2 million, for a total of almost $66 million. Is it wrong for members of the House to say simply that if they wish to be recapitalized they should at least make a profit in future? May I call it 10.30 p.m. Mr. Speaker?


Mr. Deputy Speaker:: Order, please. It being 10.30 p.m. this House stands adjourned until tomorrow at 2 p.m.
At 10.30 p.m. the House adjourned, without question put, pursuant to Special Order.

Wednesday, November 2, 1977