1977-04-04

Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, 1 rise under Standing Order 43. Because of growing fears that there will be an African boycott of the Commonwealth Games in Edmonton in 1978 as a result of continued unofficial sporting links between New Zealand and South Africa, 1 move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the government seek to place the matter of full participation in the Commonwealth Games on the agenda of the Commonwealth Conference in London this June.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSED REVIEW OF PAY AWARDS TO SECRETARIAL AND CLERICAL WORKERS-MOTION UNDER S O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise to move a motion under the provisions of Standing Order 43. In view of the fact that the wage and salary increases awarded to House of Commons staff are lower in percentage terms than the increase in the cost of living, that no consideration has been given for a productivity increase and that the increases are discriminatory in that higher paid classifications were awarded increases of between 8 per cent and 10 per cent while the majority of secretarial and clerical staff received only 6 per cent, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instruct the commissioners of internal economy to review pay awards so that the majority of secretarial and clerical workers receive increases of at least 8 per cent.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


SOCIAL SECURITY
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to move a motion dealing with a very important matter.
Since under current legislation a person 60 to 64 recognized as living with someone aged 65 or more is entitled to a pension, and since after the death of the person over 65 the younger spouse automatically loses any right to the pension, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That, until the legislation is amended to authorize the payment of a pension to any 60-year old person, the House ask the Minister of National Health and Welfare (Mr. Lalonde) to introduce a bill amending the Old Age Security Act to allow a 60-year old person married to a person aged 65 or more who receives old age security benefits not to lose the pension following the death of the older spouse.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
Mr. Hal Herbert (Vaudreuil):: Mr. Speaker, under Standing Order 43, on a matter of urgent and pressing necessity,

April 4, 1977
Anti-Inflation Program
because of the implications for all persons in Quebec as well as for all Canadians, I move, seconded by the hon. member for Sherbrooke (Mr. Pelletier):
That the government consider a reference to a standing or special committee of this House of the subject matter in the White Paper on language policy issued on April 1, 1977 by the Quebec provincial government, and that the committee be authorized to call witnesses, to study the constitutional aspects and any possible contravention of the British North America Act; and to consider any conflict with the Official Languages Act and the Canadian Bill of Rights.


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


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I rise on a question of urgent and pressing concern, referring to the CBC television program "Newsmagazine" last night which told of a Soviet research station conducting research activities in areas of the Arctic that are claimed by Canada. This is a most serious encroachment on Canadian sovereignty and can set a bad precedent for the future development of the Arctic by Canada. However, the Secretary of State for External Affairs (Mr. Jamieson) has made no official protest of an action that has been going on for some time and officials of his department have been aware of this. 1, therefore, move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Canadian government make an official protest to the Soviet Union informing them that research station NP-22 is encroaching on Canadian waters.


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


Some hon. Members:: No.


ANTI-INFLATION PROGRAM SUGGESTION THAT PROGRAM BE DISCONTINUED-MOTION UNDER S O. 43
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I rise under the provisions of Standing Order 43 to seek the unanimous consent of the House to deal with a matter of urgent and pressing necessity. In view of the fact that the recent budget has made a mockery of the Anti-Inflation Board in relation to corporate salaries and profits, and in view of the fact that its continuance perpetuates an injustice against working class

people in Canada, I moved, seconded by the hon. member for the Northwest Territories (Mr. Firth):
That the anti-inflation program be immediately disbanded.


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


Some hon. Members:: No.



AIRPORTS


Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, under the provisions of Standing Order 43, 1 rise on a matter of urgent and pressing necessity. Last Friday, W. H, S. Neals, the Pacific Regional Administrator of Canadian Air Transport, has stated that the agricultural land to be used for the proposed third runway at Vancouver International Airport will not be submitted to the provincial environmental impact laws nor will they be submitted to the British Columbia Land Commission for reclassification.
I would, therefore, move, seconded by the hon. member for Nickel Belt (Mr. Rodriguez):
That this House direct the Minister of Transport to submit the land areas and the proposed third runway project to provincial environmental impact laws and also submit it to the B.C. Land Commission for reclassification to demonstrate some effort toward national unity instead of just talking about it.


Mr. Speaker:: Presentation of such a motion requires unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Prime Minister. It concerns the White Paper on language policy which was tabled by the government of Quebec in the national assembly of that province on Friday, a paper which challenges the spirit of the Official Languages Act and possibly contains some conflict of constitutional guarantees relating to minority rights. Since this paper was tabled as a discussion paper, I wonder if the Prime Minister could advise the House whether the government of Canada intends
April 4, 1977

to become formally involved in the discussion, at least through a statement in this House of Commons.


Right Hon. P. E. Trudeau (Prime Minister):: No, Mr. Speaker. We have not contemplated that. I would gladly answer any questions on the subject. I am sure my ministers will feel free to comment on it as it might affect the rights of citizens of Quebec. We do, however, consider it to be a white paper, not legislation as of yet. We very much hope that that white paper will change in some important aspects before it is made into law. I agree completely with the Leader of the Opposition when he says it challenges in some aspects the spirit of the Official Languages Act. I think he would recognize with me that the aim of the white paper in so far as it is to establish a regional culture in Quebec is one which all of us can support. Indeed, it is an aim which the federal government has been pursuing through many of its cultural institufions such as the CBC, the National Film Board, the Official Languages Act and so on. Beyond establishing this culture, it seems to take steps that are regressive rather than progressive. We hope that the citizens of Quebec in particular will prefer an open society where the minority rights are absolutely respected, rather than go back toward a unilingual Quebec and perhaps a unilingual English Canada which is a state to which we do not want to return.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Specifically on the question of minority rights, will the Prime Minister advise whether he or the Minister of Justice have requested the law officers of the Federal Crown to study the white paper in some depth in order to determine whether any of the proposals in fact infringe upon minority or other rights that are guaranteed by the constitution.


Pierre Elliott Trudeau: Mr. Speaker, I did look at that aspect of it as did several of my officials. At this point 1 would venture to say it is very difficult on the basis of the white paper to decide whether anything is ultra vires or not. There are certainly some provisions which, if they are put into law, might be considered ultra vires. At this stage, I do not think there is anything that the law officers of the Crown can do about a white paper, which is merely an expression of intentions and not a legislative act in itself.


EFFECT OF QUEBEC WHITE PAPER ON LANGUAGE POLICY ON INVESTMENT-GOVERNMENT ACTION
Charles Joseph Clark: Mr. Speaker, can the Prime Minister tell us whether the unity secretariat or some other agency of government is planning to review and report to the House of Commons upon the degree to which the white paper policy might place obstacles in the path of new investment which could generate economic activity and guarantee jobs in the province of Quebec.


Pierre Elliott Trudeau: Mr. Speaker, I will consider this suggestion. I do not think that would be directly within the mandate of the group that we have set up in
Oral Questions
PCO. This is a matter of speculation which is just as much in the field of politicians, the financial community and officials.
It is very difficult to know what the effect of a white paper will be. I think it would entail a fair amount of speculation if the white paper cannot be changed.


John R. Rodriguez: What happened to the Carter commission?


Pierre Elliott Trudeau: I am asked what happened to the Carter commission. 1 think that is a lovely non sequilur.


TRANSPORT
John Edward Broadbent: Mr. Speaker, 1 have a question for the Prime Minister. The Minister of Finance indicated just prior to the weekend that the government's promise in the 1974 election of spending some $290 million on urban transit facilities has been permanently shelved. He strongly implied that in the language that he used.
I wish to ask the Prime Minister if the Minister of Finance is stating government policy. Has the government finally reached a decision on this? I ask this question in light of the fact that the cities of Montreal and Toronto and many other communities across the country are counting on funding for this important area of municipal policy.


Pierre Elliott Trudeau: Mr. Speaker, I am informed by the Minister of Finance that he has been misquoted. That is not what he said. In any event, as I indicated to the House a week or two ago, this matter is still before cabinet.


John Edward Broadbent: Considering that the pledge was made for municipalities in general across Canada and considering also that Senator Marchand, the former ministei of transport, specifically promised the city of Montreal that it would get financial assistance to provide a rapid transit facility analogous to the Go Transit in Toronto, when can the House expect the government to give a clear, definitive and positive answer in terns of living up to the commitment it made in the 1974 election campaign?


Pierre Elliott Trudeau: Soon, Mr. Speaker.


FINANCE
John Edward Broadbent: Mr. Speaker, I should like to put a supplementary question to the Minister of Finance. Can he tell the House whether, when he was compil-

April 4, 1977
Oral Questions
ing the budget and at least ostensibly considering job creation programs, he considered the fact that the requirements entailed in the election promise of 1974 included the purchase of vehicles made in Canada, and therefore did he look into the implication of living up to the government's 1974 election pledge to do something about the serious problem of urban transit facilities?


Hon. Donald S. Macdonald (Minister of Finance):: It was
partly because the anticipation was it would have no immediate impact on job creation that we put an additional SI00 million into direct job creation measures rather than what in many cases could be transfer payments to the provinces for expenditures they will already be making.


SOCIAL SECURITY
Joseph Adrien Henri Lambert: Mr. Speaker, I wish to direct a question to the Minister of National Health and Welfare.
Considering that people fairly frequently complain that the amounts of social assistance granted to the poor in the province of Quebec vary greatly depending on whether an over age recipient is living with his or her parents or with an unrelated person, could the minister advise the House whether these scales of payment are set following consultations with his department, or do Quebec authorities set them on their own?


Hon. Marc Lalonde (Minister of National Health and Welfare):: There are very wide scales of payment provided for under the Canada Assistance Plan, but in the case referred to by the hon. member this is a decision which is the sole responsibility of the provincial authorities.


Joseph Adrien Henri Lambert: Mr. Speaker, I wish to ask a supplementary question.
In the other cases, are any negotiations going on between both levels of government to come to an agreement on criteria which will really be acceptable and does the federal government, considering that it contributes at 50 per cent, usually give its support further to the suggestion made to it in this regard?


Marc Lalonde: Mr. Speaker, whenever representations are made to me concerning certain rules which seem unjust to some citizens, 1 mention them to my provincial colleagues concerned, but 1 must remind the hon. member once again that this decision is exclusively incumbent on the province. It may happen that some provincial decisions do not open the way to cost sharing by the federal authority, but such cases are extremely limited: generally speaking, we can say that the provinces are totally free to determine what kind of benefits they want to offer to the needy.
(Mr. Broadbent.)


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. Considering that the minister forecast last May, only ten months ago, that unemployment would decrease, while now it is increasing to historical heights, that inflation would slow down, while now it is speeding up, a $3 billion 1978 national accounts deficit, which he now tells us will be $5.7 billion, or 90 per cent greater than his estimate of last May, can the minister explain to the House why his forecasts of last May were so completely wrong?


Donald Stovel Macdonald: With regard to general economic growth in the western countries, OECD has already pointed out the fact that there has been a general slow down. This would affect the estimates of all the major countries.


Sinclair McKnight Stevens: Mr. Speaker, in view of the truly incredible incompetence in financial management revealed by those totally wrong forecasts of last May, can the minister indicate to the House if he has shaken up the composition of his advisory personnel so that this House may have some faith in the forecasts for this year as tabled in the March 31 budget, and specifically, does he stand behind his forecast of 4 per cent real economic growth for the current year?


Donald Stovel Macdonald: Mr. Speaker, the estimates made by both the OECD and by the Canadian Department of Finance are just that, estimates. They are opinions based on the facts as they appear to be at the present time. I think intelligent members of the House should recognize that these economic facts may change from time to time. This is to be expected.


SUGGESTION MINISTER RESIGN IN VIEW OF ERRONEOUS FORECASTS
Sinclair McKnight Stevens: Mr. Speaker, my final supplementary is to the Prime Minister. Noting the remarkable ineptitude of the Minister of Finance in economic forecasting-


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: -and his obvious reluctance in the current budget to make new forecasts, and in view of the revelation by the Minister of Finance at page 8 of his budgetary document that in the past two years our total current account deficit in Canada exceeded the aggregate net deficit of the United States, Japan, France, Germany, Italy and the United Kingdom all taken together, will the Prime Minister indicate to the House whether he has requested the resignation of this minister, and if he has not, why not?
April 4, 1977


Mr. Speaker:: Order, please. The hon. member for St. John's East.


MANPOWER
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is to the Minister of Manpower and Immigration. During the weekend the Minister of Finance admitted that his budget has to reconcile itself to continuing high unemployment, thereby placing a special onus on the Minister of Manpower and Immigration to maximize whatever programs he has. Can the minister tell the House when the $100 million budgeted by his colleague for Canada Works and Young Canada Works will be allocated? Applications for both programs have already been processed, and there has been a generally low response to invitations for applications to the Canada Works Program.


Hon. Bud Cullen (Minister of Manpower and Immigration):: Mr. Speaker, we hope to put that money to good use immediately. I disagree with the premise of the hon. member's question. The response to both Canada Works and Young Canada Works has been phenomenal, to the extent of six to one in the amounts of funds available and three to one in Young Canada Works. It has caught the imagination of Canada, and I hope it will catch the imagination of the opposition.


An hon. Member:: Oh, come on!


James Aloysius McGrath: Mr. Speaker, I regret the argumentative nature of the minister's reply to a very serious question. In view of the rather favourable, and in many instances innovative, responses by young people to the Young Canada Works Program, in view of the very low funding for the program, and bearing in mind the fact that youth unemployment is running at twice the national average, can the minister tell us what proportion of that allocation will be used for Young Canada Works? Let us bear in mind that universities will be closing for the summer very soon. When can we expect some action?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I will be participating in the budget debate sometime this afternoon or later tonight, and I think rather than a 30-second blurb here this afternoon it might be better to deal with this matter in my speech.


An hon. Member:: It will be a 30-minute blurb.
Oral Questions ENERGY


ARGENTINA'S THREAT TO SEIZE ASSETS OF ITALIMPIANTI UNLESS AGENT USED IN SALE OF CANDU REACTOR NAMED- GOVERN M ENT ACTION
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. The minister has now had four days to consider or confirm reports emanating from Argentina that the Argentinian government intends to seize the assets of Italimpianti in Argentina and to issue an official order forbidding that firm from doing any further business or carrying out any further activity in that country unless the company immediately provides the name of the agent in the sale of the CANDU reactor to Argentina. Because AECL was a signing partner to Italim-pianti's construction contract, how is the present construction timetable affected? Who owns the plant until the construction is completed, has AECL paid money for this elusive agent, and as Italimpianti's partner has a similar demand yet been served on AECL by the Argentinian government?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I think the hon. member's question is based on false premises. We have received no official communication from the Argentinian government.


Allan Frederick Lawrence: Mr. Speaker, it has been four days since this report was made by reputable news agencies here and in Argentina. Has the minister done anything at all to try to confirm this report? I wonder if the government has given any consideration at all, in light of this confirmed position by the government of Argentina, to ending our participation in that construction contract unless Italimpianti tells us who the agent is and what services were performed for that money?


Alastair William Gillespie: Mr. Speaker, we are awaiting a report from our ambassador in Argentina.


REASON FOR SPECIAL BILATERAL ARRANGEMENT WITH WEST GERMANY ON NUCLEAR MATERIAL
Mr. David MacDonald (Egmont):: Mr. Speaker, I have a supplementary question for the Minister of Energy, Mines and Resources. In view of Chancellor Schmidt's avowal last Wednesday that West Germany is determined to go through with its nuclear sale to Brazil of a total nuclear system and in light of the difficulties in Brazil over the weekend meaning that this sale will certainly add to the destabilization of the region, something that is directly contrary to the remarks the Prime Minister reported to the House he had made to Chancellor Schmidt last Wednesday, would the minister explain why we are presently considering a special bilateral arrangement with respect to nuclear'materials with West Germany in light of the increased danger that this Brazil system poses not only to Latin America but to the whole world situation on nuclear materials?

April 4, 1977
Oral Questions


Alastair William Gillespie: Mr. Speaker, it is because we have not been able to get the kind of assurances on the basis of a multilateral negotiation, that is to say between Canada and Euratom to which the European countries are party, with the exception of France.


David Samuel Horne MacDonald: A supplementary question, Mr. Speaker. This logic seems a little bit like Alice in Wonderland.


Allan Frederick Lawrence: Alastair in wonderland.


David Samuel Horne MacDonald: Perhaps that is it. I wonder if the minister could indicate what possible justification there is with respect to our expressed concern for acceptable safeguards that we should give any encouragement to West Germany in pursuit of this particular system in Brazil?


Alastair William Gillespie: Mr. Speaker, the government of Canada has not done so and I want that to be very clear. The point 1 was trying to make a moment ago is that because we have not been satisfied with the negotiations and the kind of undertakings we would be able to obtain or might obtain in negotiation with the EEC and Euratom, we have had to consider, as my colleague the Secretary of State for External Affairs said, bilateral arrangements which would be binding and tougher.

[ Translation]


REQUEST THAT QUEBEC PAY FOR TREATMENT OF CANCER PATIENTS IN ONTARIO
Mr. Gaston Isabelle (Hull):: Mr. Speaker, my question is for the Minister of National Health and Welfare.
Following the unfair, discriminatory and infamous statements issued by the Quebec Department of Social Affairs, to the effect that from now on the department would no longer pay for the treatment of cancer patients of the region of Hull who must be treated at the Ottawa Civic Hospital, does the minister intend to meet with his Quebec counterpart to point out to him the perfidy of such a gesture towards a defenseless class of society, or to convince his cabinet colleagues of the usefulness and pressing necessity of creating some kind of a federal district so that the residents of the national capital region stop being annoyed, worried, frustrated and disgusted by the red tape and administrative whims of the two provinces they have endured for more than a century?


Marc Lalonde: Mr. Speaker, I understand that a Quebec official has given a somewhat astonishing explanation of the decision of the Quebec administration in that regard. I shall ask that administration whether the information published in the newspapers is true and whether that problem can be solved very rapidly to the satisfaction of the patients concerned. It seems to me, indeed, to be a strange decision, and I shall try to obtain

for the hon. member, as soon as possible, the truest information possible.


EXTERNAL AFFAIRS
Walter (Wally) Firth: Mr. Speaker, I have a question for the Secretary of State for External Affairs. How long has the minister been aware of the NP-22 in the Arctic as described in the CBC television program "Newsmagazine" last night and what is the government going to do to clarify Canada's claim sovereignty in that part of Canada?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I think the hon. member is aware that the Department of National Defence conducts regular surveillance flights and has been aware of the existence of this island for sometime. I am advised that on the basis of information available the government is of the view that the presence of this ice island does not constitute a threat to Canadian interests in the Arctic. As far as activities on the island are concerned, these are scientific in nature and much of the information produced is available to Canadian scientists. In addition at the moment it is said to be more than 300 miles from Canadian land and of course its progress is being monitored constantly. We will simply have to determine at the appropriate time what will be done if it drifts farther into Canadian territorial waters.


REQUEST FOR REMOVAL OF RESTRICTIONS ON MEMBERS' PASSPORTS-GOVERNMENT POSITION
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, I would direct my question to the Secretary of State for External Affairs. I have given him previous notice of the question which relates to the initiative taken recently by President Carter to remove all restrictions on United States citizens travelling abroad. In view of that initiative, is the minister prepared to look at the restrictions imposed upon the passports of members of parliament which restricts them from travelling to certain parts of the globe?


Donald Campbell Jamieson: Mr. Speaker, I think the hon. member would agree that a slight modification of his question is required, namely, members are not restricted from travelling but merely from having the so-called special passports apply in the case of Taiwan, Namibia and Rhodesia. The reason for that, of course, is that we are not in a position, not having diplomatic relations with those three countries, to ensure that members of parliament or others are given any special treatment there so it has to be on an "own risk" basis. I repeat, there is no restriction on travel to these countries; it is simply that no special consideration can be given.
April 4, 1977


Ramon John Hnatyshyn: A supplementary question, Mr. Speaker. I am sure it would be possible to make arrangements to take care of Canadian interests through other embassies. 1 wonder if the minister would look into the situation with respect to diplomatic passports and see whether the restrictions imposed by the exception of certain countries being endorsed on the passport could be removed in order to give members the same freedom to travel throughout the world as is given the Americans by the initiative taken there?


Donald Campbell Jamieson: Mr. Speaker, I think perhaps 1 ought to make inquiries to see whether there are any limitations in the new United States policy-which of course we welcome- vis-a-vis, for instance, Cuba, where they do not have diplomatic relations. I realize they are free to go and I repeat, Canadians are free to go. 1 do not know what kind of arrangement they will make for those places where they do not have consular or other representation, but I will be glad to ascertain that.


OLD AGE SECURITY ACT
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare. Can the minister tell the House if the government has as yet proclaimed the effective date for Bill C-35, an act to amend the Old Age Security Act, to come into force and what is the target date for it to come into force?


Marc Lalonde: Mr. Speaker, we hope to have the act proclaimed and in effect by July 1 this year, but 1 am not quite sure whether it has passed third reading in the Senate as yet.


Mr. Knowles (Winnipeg North Centre):: It has had Royal Assent.


Marc Lalonde: I understand it has had Royal Assent so the target date is July 1, 1977.


Allan Bruce McKinnon: The bill has received Royal Assent. I wonder if the minister could tell us the progress of negotiation on reciprocity of old age pensions between the Canadian government and various other governments in Europe, with special reference to the United Kingdom?


Marc Lalonde: Mr. Speaker, as I indicated before the parliamentary committee, my officials had contact with several countries even before the bill received Royal Assent. 1 have personally had discussions with officials from the Italian government in the last few weeks and I expect to have some exchanges with representatives of French authorities soon. As far as consultation with British authorities are concerned, they took place several months ago and my officials were to see what further steps we could take right now.
Oral Questions NATIONAL DEFENCE


SOURCE OF FUNDS FOR PROPOSED YOUTH CORPS
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, 1 should like to address a question to the Minister of National Defence. In view of record youth unemployment running at 16.1 per cent to which the recent budget made no meaningful reference or redress, in view of the press release from the minister that he hopes by the fall of 1977 to have a youth corps at a cost of $8 million which will employ approximately one million young Canadians, can the minister tell us from which department the financing is coming? In view of the fact that Crown corporations set up reports through the Minister of National Defence, is the $8 million coming from National Defence?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I think the hon. member mixed up his figures. One thousand persons will be affected, not one million. The program, not one of employment per se, stands apart from the many employment programs the Minister of Manpower and Immigration has already announced. The budget will be handled through the Department of National Defence, but the amount will not come from the national defence budget per se.


Paul Wyatt Dick: A supplementary question, Mr. Speaker. Does the minister think that by providing that $8 million, the government is making the best possible use of the money for employing 1,000 young Canadians? Also, does the minister not recognize that although 1,000 young people may be employed in this manner, they represent but a drop in the bucket of the half million unemployed young people in this country?


Mr. Speaker:: Order, please. That question would require a much more extensive answer than is permitted.


AIR TRANSPORT
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Transport. Now that the deadline has been extended once again on applications to provide air service to the Prairie regions, a decision which has been pending since 1974, can the minister inform the House if he still expects this urgently needed air service to be started before the summer?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, that depends on the processes now under way before the Canadian Transport Commission. Although they have extended the deadline for the receipt of initial applications, I understand that procedures in relation to applications received earlier have commenced.

April 4, 1977
Oral Questions


Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. Since certain infrastructure will be required at Brandon airport in preparation for the air service between Regina, Brandon and Toronto, will the minister indicate when this preparatory work will commence?


Otto Emil Lang: Mr. Speaker, we have been considering varieties of work which might be required, given the acceptance of different applications. I will soon be analysing the report on this question, to determine what could be done in speculative advance of the final decision.


AGRICULTURE
Mr. Peter Elzinga (Pembina):: Mr. Speaker, my question is for the Minister of Agriculture. Can the minister tell the House if he supports the government's competition legislation, Bill C-42, and the ramifications thereof?


Mr. Speaker:: Order, please. Perhaps the hon. member wishes to ask a supplementary question which is in order.


Peter Elzinga: Mr. Speaker, may 1 ask a supplementary question? Since the provisions of this act will make it impossible for producer operated marketing boards to operate within the law, according to a CEMA presentation which was given to me, is the minister prepared to take up the fight on those sections of the bill?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker,
I think the hon. member should check the record of the House of Commons, because he will find that that bill has been withdrawn. Its contents, I believe, are to be sent to a committee for further study, before the bill is presented again in the House.


INDUSTRY
Harold Thomas Herbert: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. Most commentators from the business world on the white paper of the province of Quebec on language policy are of the opinion that the policy will have little effect on multi-national corporations, but could have a major impact on small businesses. Is the minister considering special measures, to attempt to prop up the already flagging economy in the industrial and commercial sectors of the province of Quebec?


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, of course, if the kind of policy enunciat-

ed in the white paper were to materialize, I am extremely afraid that it would hurt some areas of the Quebec economy to a considerable extent. However, at this time it is too early to make a definite judgment because it is only a white paper and we do not know yet the kind of legislation which will be passed by the government of Quebec.


EXTERNAL AFFAIRS
[Stage Direction]
REQUEST FOR TABLING OF AIDE-M£MOIRE TO UNITED STATES ON PACIFIC SALMON FISHERY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is for the Secretary of State for External Affairs. I understand that the minister's department delivered an aide-memoire to the United States, indicating the Canadian government's support for certain unilaterally devised fishing regulations to be implemented by the Pacific salmon fisheries. Would the minister be prepared to table that particular aide-memoire?


Donald Campbell Jamieson: Mr. Speaker, I am not certain if it was an aide-memoire or note-I do not know what it was. I do know that discussions are going on, but am not sure of their current state, as of today. I will be glad to look into the matter and table whatever it is possible to table. I ought to add that we have an agreement covering both the east and west coasts, which is effective until the end of this year.


FISHERIES
Donald W. Munro: Mr. Speaker, my question is directed to the Minister of Fisheries and of the Environment.
Is the minister prepared to tell the House whether in the drafting of this memorandum, the representatives of the fishing industry on the west coast could be consulted and if he agrees to have the paper referred to the ad hoc committee?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, 1 know that the Friday which preceded the visit of the Prime Minister in Washington, where the agreement was initiated, officials of my department met with representatives of all sectors of the fishing industry in British Columbia, including union officials, and I have no reason to believe that the position of Canada has not been clarified and discussed.
April 4, 1977


FINANCE
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, my question is for the Minister of Finance. Would the minister say why there is a discrepancy between the budget speech and the ways and means motion on the one hand, and the pamphlet "Budget in Brief' on the other with respect to the effective date of the deferral of capital gains tax on small businesses and farms, the former specifying March 31, 1977 and the latter, January 1, 1978?


Donald Stovel Macdonald: Mr. Speaker, the correct date is March 31, 1977.


EXTERNAL AFFAIRS
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, my question is for the Secretary of State for External Affairs. While visiting the Middle East recently, we learned that Soviet Russia had supplied $250 million worth of military hardware to Angola and contributed $1 million a day for the maintenance of Cuban troops in that tragic conflict. In view of the extensive aid program, trade credits and low interest loans we made available to Cuba, would the minister review this situation and advise if we should continue to subsidize Cuba in its foreign military adventures?


Donald Campbell Jamieson: Mr. Speaker, as I answered in the House in the hon. member's absence, according to my recollection-I am glad to see him and his colleagues back-our aid programs to Cuba are running down rapidly. There is not much by way of ongoing assistance of the type mentioned to Cuba. On the other side of the question, we have, of course, made strong representations to the Cubans, indicating our regrets that they have participated in Angola and our hope that they will withdraw from that country and any other involvement in Africa as soon as possible.


Mr. Hees:: Yes, but what about the cash you have given?


Mr. Paproski:: And the two Air Canada DC-8s you lent them.
Oral Questions


BILINGUALISM
[Stage Direction]
Mr. Ren£ Matte (Champlain): Mr. Speaker, I would like to address a question to the right hon. Prime Minister.
In the answer he gave earlier to the Leader of the Official Opposition, the Prime Minister seemed to admit that in the white paper introduced by the government of Quebec on language policy there were some litigious points. In other words, he hoped that these statements of principles would not be stereotyped in the proposed legislation. Could the Prime Minister state what action he intends to take from now until this legislation is presented to suggest any amendments to it?
Pierre Elliott Trudeau: Mr. Speaker, if the Quebec government wanted to secure an official point of view from my government, we would obviously respond to such a request. On the contrary, as I said in answer to a question, members and ministers of this government will be, as Quebecers, perfectly justified to make any comments on the white paper.
I repeat that we totally agree on the basic principles to make an original culture out of the province of Quebec. It is on the means taken that, in our view, partial disagreement exists. And I repeat what I have already said in other circumstances that unless the white paper contains ultra vires provisions, it is impossible to comment on it before examining the legislation. I do not see what the province of Quebec would stand to gain through independence since 99 per cent of the white paper could probably be achieved within the present constitution. Therefore I believe it is a bad start for the Pequist government.


Mr. Matte:: Mr. Speaker, I wish to ask a supplementary.
According to his answer, the Prime Minister considers that 99 per cent of the white paper could be achieved within the constitution. Could the Prime Minister tell us then clearly and specifically whether he found in that white paper anything that would directly challenge the integrity of the Canadian constitution?


Pierre Elliott Trudeau: Well, Mr. Speaker, I repeat that it will depend on the legislation coming as a result of that white paper. And when I say that the constitutional issue now remains hard to settle so long as we have not seen the act, I mean there are several provisions within that white paper which seem to be contrary to an open, progressive, pluralistic and tolerating society. So, I do not say that our government would agree with those goals, but I say that that kind of goal may be followed by a PQ government that believes in independence and advocates the separation of Canada into two parts, one English and another French, which obviously are not our objectives. But it is not sure that most goals proposed under the white paper would be ultra vires.

April 4, 1977
Oral Questions


AGRICULTURE
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to address a question to the Minister of Agriculture. In view of the fact that since January 1 there has been an increase in the number of herds affected with brucellosis, is the minister giving consideration to returning to the vaccination program which was so successful in the 1940s and 1950s?


Eugene Whelan: What we are doing in that area is rechecking to make sure we have covered all the herds, to make sure they are free of the disease. Up to now, 75 per cent of the herds have been tested. There are over 2,800 herds in that area and there are 42 under detention. We want to make sure that they are free of the disease. This is one of the cleanest areas in Ontario as far as the disease is concerned. No, we do not intend to go back to vaccination. We think that would be a backward step, although we do still provide the serum free to veterinarians who want to use it. As the hon. member knows, vaccination protects only about two-thirds of the animals. Also it masks the disease in the cattle. This, of course, makes it more difficult for us to export. We believe that with the new eradication program, and its provisions for compensation, Ontario, which once thought vaccination was one of the better ways of doing things, will change their minds.


Philip Bernard Rynard: Is the minister aware that vaccination is still going on in the province, that, in fact, it is increasing? If he believes this is a retrogressive step in the long run, how does he propose to clear the disease among the herds?


Eugene Whelan: My information is that vaccination has been decreasing. Fewer cattle are being vaccinated because we want our cattle population to be declared free of brucellosis and by following our eradication program we believe we can ensure the most disease-free herds in the world. We intend to continue this program.
followed in deciding to grant this loan, bearing in mind that it was used to duplicate a manufacturing facility already in place?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, first of all may I say to the hon. member that the firm whose plant was built in Winnipeg with financial assistance from my department is producing equipment that is totally different from that being manufactured in his riding and the city of Burnaby. The material produced in Winnipeg in that new plant will replace what was formerly manufactured in San Francisco and then imported into Canada. The Winnipeg production will replace those imports.
With regard to the lay-offs at the Burnaby plant, they have nothing to do with the Winnipeg plant. The few employees who were transferred from Burnaby to Winnipeg are mostly management staff who were promoted and sent to Winnipeg mostly to train the local employees.


Stuart Malcolm Leggatt: 1 hope the minister will check on the kind of equipment which is being manufactured in each of the plants. My evidence clearly shows that it is the same equipment. Since unemployment rates in the Vancouver area have consistently been higher than those in Winnipeg, and since unemployment rates in British Columbia generally are higher than those in Manitoba, may I ask whether these circumstances are taken into consideration when grants are being made? In other words, is the minister making grants under the regional economic expansion program to areas of high as opposed to areas of low unemployment?


Marcel Lessard: Yes, this is the purpose. In this particular case I checked again last week to ascertain what is being produced by this new factory in Winnipeg. I am satisfied from the information I received that what is produced there was not produced by their plant in Burnaby.


REGIONAL ECONOMIC EXPANSION
Stuart Malcolm Leggatt: Mr. Speaker, 1 have a question for the Minister of Regional Economic Expansion. I hope he received notice of it last week. It concerns a grant of some $530,000 to a company called G. T. E. Lenkurt Electric of Winnipeg. This grant meant that the equipment manufactured in the city of Winnipeg simply duplicated manufacture which had already been going on in Burnaby, British Columbia, which resulted in the loss of some 65 jobs in the Burnaby plant. Will the minister tell us what criteria were


ANTI-INFLATION PROGRAM NAMES OF UNIONS DISCUSSING AGREEMENTS ON LONG-TERM RESTRAINT
Mr. John A. Fraser (Vancouver South):: Mr. Speaker, my question is for the Minister of Finance. Last week the minister said discussions could take place with respect to voluntary wage guidelines with some specific unions, not necessarily with the Canadian Labour Congress only. Has any contact been made with specific unions, and, if so, are those unions within the CLC or outside it?


Donald Stovel Macdonald: I was
talking about agreements with regard to long-term restraint probably being within specific industries. On this point, we are carrying on a general discussion with the CLC.
April 4, 1977


John Allen Fraser: Is it government policy at the present time to extend the discussions beyond the Canadian Labour Congress, and is the state of those discussions now in jeopardy as a result of the reaction of the CLC to last week's budget?


Donald Stovel Macdonald: My understanding is that a date is being arranged for the end of this month at which we shall meet business and labour. My colleague, the Minister of Labour has been meeting with a number of unions in addition to the Canadian Labour Congress.


THE CANADIAN ECONOMY
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is directed to the Prime Minister, who has now received five copies of a document from the consulting firm E. P. Fitzgerald Associates of Ottawa, commenting on "The Way Ahead-a Framework for Discussion", the Liberals' white paper for the future, and since the consultant's report contains recommendations concerning tax bonds and a detaxation program, and also recommends that the tax on building materials be reduced by 30 per cent, and deals with ways of reducing government waste and expenditure-


Some hon. Members:: Order!


Mr. Speaker:: Order! Does the hon. member have a question?


A. Daniel McKenzie: I should like to ask the Prime Minister whether he will be tabling this document for hon. members to study. Also what are the government's plans for dealing with this report?


Pierre Elliott Trudeau: I have received many comments and suggestions with regard to "The Way Ahead"-they probably number in the hundreds-and I hope hon. members will not ask in detail what the government intends to do about each of them. I can assure the House that everyone who sends a detailed comment will be given an answer and that provision will be made for further consultation within a very short period of time.


A. Daniel McKenzie: In view of the serious economic problems facing the country, including the high rate of unemployment, would the Prime Minister be prepared to table this document or have it referred to the Standing Committee on Finance, Trade and Economic Affairs for study and recommendations?


Pierre Elliott Trudeau: Mr. Speaker, I am not sure if the hon. member means table "The Way Ahead". That, of course, has already been tabled.


A. Daniel McKenzie: No, the consultants' report.
Oral Questions


Pierre Elliott Trudeau: If he means tabling all the many hundreds of answers and comments that have been made, I understand that the hon. member has a particular vested interest in this paper, Mr. Speaker, but we are interested in the opinions of all Canadians. We are not going to have a parliamentary debate on every matter that is sent in to the government. We will answer this.


COMMONWEALTH CONFERENCE
Douglas Roche: Mr. Speaker, my question is directed to the Secretary of State for External Affairs and refers to the Commonwealth Games in Edmonton in 1978. On March 10 the minister told the House that a number of efforts are being made by the government to ensure that there will be no African boycott. Since then the situation has deteriorated because unofficial sporting links between New Zealand and South Africa are continuing. Can the minister state whether this matter will be placed on the agenda of the Commonwealth conference in June so that a solution can be found which will guarantee full participation in the Commonwealth Games?


Donald Campbell Jamieson: In connection, Mr. Speaker, with the initiatives to which I referred in my earlier answer to the hon. member in March, Mr. Ramphal, the secretary-general of the Commonwealth, was, as he knows, here last week and we discussed the matter in considerable depth. Various proposals were canvassed at that time and various actions will now be taken as a result. I expect that if there has not been a solution arrived at by the time of the heads of government meeting of the Commonwealth, then it will be discussed at that time; but there is still some hope that we can at least move it significantly ahead before that meeting takes place in London.


EXTERNAL AFFAIRS
Douglas Roche: I have a supplementary question for the same minister. Last week Prime Minister Muldoon of New Zealand was quoted by Southam News Services as stating that the Commonwealth Games were "not sufficiently important" for New Zealand to stop its sporting teams from unofficially competing against racially selected South African teams. Because the Commonwealth Games do now stand a chance of being wrecked, thus jeopardizing relations among Commonwealth countries, does the government plan to communicate directly to Prime Minister Muldoon the full importance of this question?

April 4, 1977
Dairy Policy


Donald Campbell Jamieson: Mr. Speaker, through a variety of avenues I can assure the hon. member and the House that there has been ongoing communication with Prime Minister Muldoon and his government. I think they are very fully aware of the circumstances and of the Canadian attitude.



ROUTINE PROCEEDINGS


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, pursuant to Standing Order 41(2) I should like to table, in both official languages, a copy of the terms of reference of an actuarial study of public service pension issues to be carried out by the firm of Tomenson-Alexander Associates.


AGRICULTURE
Eugene Whelan: Mr. Speaker, I should like to inform the House at this time of the main features of the 1977-78 dairy program which has been worked out in consultation with the nine provinces represented on the Canadian milk supply management committee and the Canadian Dairy Commission.
Effective April 1, 1977, there is an increase in the target returns level from $11.45 to $11.86 per hundredweight on industrial milk testing at 3.5 per cent butterfat. This increase is in line with the formula identified in the long-term dairy policy which allows returns to keep pace with increased production costs. Producers will have higher net returns this dairy year because target returns are higher and the in-quota levy is lower. Net returns for this dairy year are estimated at $10.66 per hundredweight compared with $10.10 last year. The increase in farmer returns comes from raising the support price for butter by 10 cents to $1.18 per pound, and by increasing skim milk powder from 68 cents per pound to 70 cents. The federal subsidy payment on industrial milk remains unchanged at $2.66 per hundredweight. It will be paid on all industrial milk shipments up to 100 million hundredweights which is the total production estimated to fill the national requirement.
Total market share quota for Canada is established at 105.6 million hundredweights for the year. This total allows for a 5 per cent sleeve over the 100 million hundredweights projected as the national requirement, and allows for a small protected

quota expansion in Nova Scotia, New Brunswick and Prince Edward Island.
The government will be taking over the current total debt of $152 million of the export equalization fund which was introduced in 1975 to help the Canadian dairy industry cope with increased export losses due to weakening world markets. With the write-off of the fund, industrial milk producers will be paying 15 cents less per hundredweight on in-quota shipments of industrial milk. The in-quota levy this year is set at $1.20 per hundredweight, and the over-quota levy has been reduced to $7 per hundredweight from $8.60.
Fluid milk shippers will be expected to share some portion of the costs associated with the export of surplus skim milk powder. The cheese import quota will remain unchanged from last year at 50 million pounds. The government is allocating $20 million to the Canadian Dairy Commission for handling storage and marketing costs. The $20 million allocated last year to the Canadian International Development Agency to purchase skim milk powder for food aid will remain unchanged, and the government will be spending an additional $4 million on market research to find new uses and markets for this product in Canada.
I realize, Mr. Speaker, that there is a debate of some importance before this House today. I would like, therefore, to close by commenting on the substantial reduction that has been made in the surplus stocks held by the Canadian Dairy Commission. The Dairy Commission at this time has approximately 10 million pounds of butter and some 52 million pounds of skim milk powder unsold. With this reduction, and with continuing attention being paid to controlled, even annual milk supply, I am confident that the Canadian dairy industry is in a far stronger position that it has been for some time and that it can, as far as I am concerned, look forward with confidence to the future.


Mr. John Wise (Elgin):: Mr. Speaker, if ever in the history of this country the actions of a government or the actions and the policies of a minister have caused confusion, frustration, instability and utter chaos, and yes, in many cases, financial ruination, then that prize without question would have to be awarded to this minister and to this government. It is not necessary, nor would it be difficult, to single out or to define those who have suffered the hardships of this government's dairy policy. Unlike most situations where one person's loss becomes another's gain, the situation in this sad episode is that everyone has lost, and lost very heavily, and no one has gained.
If the minister is allowed to continue this pattern of announcing dairy policy containing changes to be effective immediately, and indeed retroactively, or if the minister continues to change policy month by month, then as sure as daylight follows darkness the disastrous situation experienced this past dairy year could, without question, will occur again. Dairy farmers need a lead time of at least 12 months to adjust to change.
To have this government, even stretching one's imagination, continue to refer to its handling of the dairy industry as a

Dairy Policy


Mr. Pelletier:: You do not know what you are talking about.
April 4, 1977
long-term dairy policy is dishonest and a gross exaggeration of the truth that can be supported by facts. When this policy was first announced by the minister-and he has continued to hold it up as a model dairy policy for the world-it was to provide much needed stability in the industry, such that Canadian industrial milk producers would receive the highest possible returns, and it would, to use the minister's own description, make them the best paid producers anywhere in the world. This would not be the first time that a minister of this government has taken a domestic case and made a comparison with a foreign situation in an attempt to hide or cover up his own shortcomings.
Let the minister not leave the impression that the cost of producing milk, or the price received for milk, in the state of Florida, in the Netherlands or in New Zealand has any real relationship or provides any sensible comparison to the Canadian scene. Even an attempt to do so is an open admission and an obvious indication of the lack of understanding of the Canadian dairy industry. This policy, often referred to by the Minister of Agriculture (Mr. Whelan) as the finest industrial milk program in the world, is absolutely ridiculous.


Some hon. Members:: Hear, hear!


John Wise: It has provoked questions, confusion, mistrust and outright hostility among producers, their marketing boards and the industry in general. The minister is all too well aware of that. If the minister wishes to continue to justify his actions and his policies, I admit he is entitled to do so. However, I doubt very much if the milk producer who shipped $5,000 worth of milk in one month and, as a direct result of the minister's policy, ended up owing the provincial milk board $900, would agree. I doubt if the minister would find much support from the producers who shipped $1,800 worth of milk and received $900. There is a long list of similar cases. These are actual results of a policy that the minister says is the finest in the world and one that returns to producers incomes second to none.
It is due to actions like these that one is encouraged to strengthen one's suspicions and doubts about this government's real intention to support a domestic dairy industry. The effects of this dairy policy and its changes today will be felt across Canada. Dairying provides the most important single source of farm income to Quebec, British Columbia, Nova Scotia and the second-most important source of income for Ontario and New Brunswick.
Quebec and Ontario produce, together, 70 per cent to 80 per cent of the total amount of industrial milk, and consequently have suffered most extensively by government mismanagement. Seventy-one per cent of all commercial farms in Quebec are dairy farms. When we take into consideration the fact that the ratio of fluid milk to industrial milk shippers is 1:4, changes in federal dairy policy which adversely affect the industry in turn adversely affect the entire rural economy of the province of Quebec.


John Wise: 1 think I do. I am convinced that the minister will never forget certain events associated with his bad judgment and bad decisions this past year. This statement increases the target price from $11.45 to $11.86 per hundredweight. It should be noted that the producers do not receive that target price. Excluding any penalty, but taking into account haulage, export levies, licence fees, and advertising, the amount actually received by producers would be approximately $3 less. Thus, the return of $9.86 per hundredweight would be realized, consequently less than the estimate by the minister of $10.66.
Production costs do vary, but well documented studies indicate a figure in the neighbourhood of $14 a hundredweight. In many cases producers are subsidizing their own product to the extent of $3 per hundredweight. An in-depth study has revealed that in many cases milk sales alone do not provide sufficient income to cover the freight: the milk cheque income must be supplemented by sales of breeding stock, sales of cash crops and, in many cases, off-the-farm jobs. The real sleeper in this statement is the sentence which reads:
Fluid milk producers will be expected to share some portion of the costs associated with the export of surplus skim milk powder.
It is said that the financial requirements for export losses are $140 million. If they are not, then I am suggesting that the Canadian Dairy Commission has been hoodwinking the respective milk marketing agencies across this country. If they are at $140 million, and if the levy on industrial milk is $1.25 per hundredweight, which by my calcultions would provide $112.8 million, then the shortfall would be $27.2 million. This would mean a levy on fluid production of approximately 23 cents to 25 cents per hundredweight. It is obvious that the provinces do not want a levy on their fluid production. Ontario fluid producers would be asked to contribute $11 million, Quebec fluid producers would be required to contribute $6,5 million, and all other provinces accordingly. This matter must be clarified and the minister should be severely chastised for not clarifying this item in his statement today.


Some hon. Members:: Hear, hear!


John Wise: It would appear to me that $27 million would be a small price to pay for this government, in the name of national unity. I conclude by saying that this year's policy statement given today carries with it the imperfections and scars which result directly from last year's mismanagement and last year's bad judgment.
This policy does nothing to reduce cheese imports. This policy does not even indicate an interest or willingness to impose a levy on foreign cheese imports. This policy does nothing to curb the importation of synthetic cheese products. This policy, by imposing a levy on fluid milk which in the result is greater than what is contributed from fluid milk sales to the government's supported product, which in this case is butter, establishes a very questionable and potentially dangerous precedent. It carries with it the possible eventual break-up of this national plan. One is drawn to believe that this govern-

April 4, 1977
Dairy Policy
ment is simply incapable or is unwilling to implement a dairy policy which will provide the necessary stability to ensure dairy producers of their income and yet be equitable to producers and consumers alike.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, the announcement made by the Minister of Agriculture (Mr. Whelan) today goes a long way in clearing up some of the difficulties that he got himself into during the last two years. It is a policy that he is scurrying on because of the mountain of powdered milk that is left over as a surplus because of the dairy policies of the last two years. Dairy farmers need more quotas. There is an increase in the quotas of 5 per cent. That will help a bit, but I suggest it will not help enough.
The other positive thing I see in the policy announced by the minister today is that the government is absorbing a loss on the export of skim milk powder to the tune of some $152 million. There is another positive note in the policy announced by the minister, and that is the anticipated or estimated increase in net income of dairy farmers or industrial milk producers in this country. The estimated increase is 56 cents per hundredweight. That is small, but I suggest it is welcome after two years of declining income because of the unco-ordinated policy approach the government has taken.
I want to make three or four more points that I think the government and the minister should be thinking of in the long term. Surely to goodness we need in this country a lot more long-term planning for both producers and consumers. We must do something about the surplus of skim milk powder that we have in this country, on a long-term basis. So far we have seen short-term compromise policies. 1 suggest that is really not good enough.
The Canadian International Development Agency is purchasing skim milk powder at less than the cost of production of skim milk powder to the dairy producers. That has to be changed. It is a problem we have to resolve. It is a serious problem not only here but in the European Economic Community and elsewhere where there are very many dairy farms.
The time has come in this country where we should have a national school milk program. I make that point emphatically. The minister has said several times that he endorses that program in principle. That is fine, but somebody has to pay for it. The federal government should enter into a program with the provinces where they pay 50 per cent of the cost of putting milk into the schools of this nation. There are precedents for that in many of the social schemes and health schemes that we have in Canada. Surely to goodness people of this country need to drink more milk. From the point of view of nutrition, they have to drink more milk and eat more dairy products. One way of doing that is by starting early, when people are young, throughout the school system.
If you had a school milk program, and if you had the Coke machines and Pepsi machines thrown out of the schools, perhaps you would change some of the nutritional habits, of young people in this country and at the same time assist dairy

farmers in terms of having a more guaranteed, stable and secure income.
The other thing that has to be done, according to the hon. member for Elgin (Mr. Wise), is to reduce cheese imports. For the second year in a row there has been a freeze on the amount of cheese imports-I think 50 million pounds. I suggest very strongly to the minister that he reduce those imports so that Canadians eat more Canadian cheese. I know people who want to start producing cheese in this country. They are having difficulty because of the lack of imaginative programs by federal and provincial governments, and competition as a result of imported cheese. The government should clarify its earlier position that 10 per cent of Canadian dairy products marketed be filled by imports. If we have the ability and potential to be self-sufficient in any aspect of the food industry, we should have a goal of feeding ourselves and, in turn, being self-sufficient.
One could say a number of other things about the dairy policy, but those are the salient points that come to my mind and to the minds of most dairy farmers in this country. It is important that we keep in mind that we need long-term planning so that dairy farmers can have increased quotas and a secure income. We should look closely at the school milk program, resolving the problem of skim milk powder in this country and reducing the amount of cheese that we import.
[ Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, first of all I should like to thank the Minister of Agriculture (Mr. Whelan) for having sent me this morning a copy of the statement he has just made to the House.
Canadian milk producers, who had a hard time of it in
1976-	77, were anxious to know what the dairy policy for
1977-	78 held in store for them. As the dairy industry is the main source of revenue for about 60 per cent of all farmers in Quebec, it goes without saying that Quebec milk producers were even more worried since the Canadian dairy policy has direct financial effects on their business.
The minister certainly was right in increasing the support price of industrial milk to $11.86 per hundredweight. That will surely help to pay part of the higher production costs. Like everyone else, the milk producer sees his costs increase and the cost-price squeeze is getting ever tighter.
To mention a particular point, Mr. Speaker, there has been an increase in the price of dairy feed during the last months. I have here some invoices sent to me by a dairy producer which show an increase of 80 cents a hundredweight or $16 a ton from November 1976 to January 1977, which means that in about three months prices have gone up by $16 a ton. This is something in terms of production cost! The price of machinery spare parts and other necessaries has climbed to nearly the same extent. Although I am very happy to see that the levy has been reduced to $1.20 a hundredweight, 1 think more than
April 4, 1977

ever that the public treasury should pay for export losses, as does the European Economic Community.
On the other hand, I regret the fact that the government was not able to abolish totally the levy on over-quota deliveries. Let us hope that this unpopular penalty will soon disappear to be replaced by a national school milk program which would be more pleasant and more profitable for the dairy producers as well as for the consumers.
On behalf of the dairy producers of my riding, I thank the minister for successfully talking the cabinet into writing off the $152 million equalization fund debt. I hope these measures will help offset the heavy penalty inflicted upon many producers during the past year.
I am also pleased with the decision to grant CIDA a $20 million subsidy for the purchase of skim milk powder within the framework of their food assistance programs. I suggest that out of the $1 billion we are spending again this year under this item, a larger quantity of this product might be expected to be covered by this amount. As far as research is concerned, in order to find out all possible alternate uses of the product, I urge the minister to do whatever possible in this regard because the future of a number of dairy producers is at stake.
May 1 also draw the minister's attention to a report published in the March 30, 1977 issue of La Terre de chez nous, in which Canada is reported to have imported powdered milk from New Zealand last year. If it is so, would the minister inform the House as to the reason and volume of these imports? Mr. Speaker, I do not object to our trading with other countries, but if Canada is both an exporter and an importer of powdered milk, I wonder how profitable such a trade can be! In my opinion, transportation companies are the only ones that can benefit from it.
Even if this is not a panacea, I sincerely believe that the dairy policy which the minister has just announced will surely be more profitable to producers and likely to restore the confidence of younger producers, in order to ensure the survival of this important industry. I am convinced as well that it will be likely to avoid unruly meetings between the minister and the producers. I hope processing plants will ensure that price increases will serve the best interests of dairy producers and that on the other hand, producers' boards will allocate quotas on an equitable basis.
Since the dairy producers cannot derive any income at present from the sale of calves and feeder cattle because prices are very low, it would be advisable for the commission which investigates beef marketing to make its recommendations known as soon as possible.


John Wise: Mr. Speaker, I thought we would follow the normal procedure and have time for a number of questions.


Mr. Speaker:: We have some time for questions. I did not see any members rising.


John Wise: I am sure my colleagues will have a number of questions. One that must be answered is the one I raised in my
_____4599
Dairy Policy
statement. What is the policy of the Canadian Dairy Commission with reference to the levy on fluid milk producers? Will there be one, or not? Are the losses from export sales $140 million? If so, that is a shortfall of $27 million. If they are $125 million, that is a shortfall of about $12 million. Where do we stand on this whole question of levies on fluid milk? If the levy on industrial milk is at $1.20, and that is high enough, it will produce a shortfall of $27 million. Who is going to pick up the shortfall over and above the $1.20 a hundredweight if no levy is going to be placed on fluid milk producers?


Eugene Whelan: Mr. Speaker, the hon. member has made several comments with regard to fluid milk producers as if they did not contribute anything to the industrial surplus that we were confronted with, and the levy on industrial milk producers. The fact is that in the year 1974-75 there was an increase of 9 per cent in total milk produced by fluid milk producers. Coupled with a decline of 1 per cent in class 1 sales, the result has been an increase of 41 per cent in industrial milk produced by fluid milk producers. Compare that 41 per cent with the 7.3 per cent in the shipment of industrial milk produced in 1974-75.
I could go on and give all kinds of figures to show that the producers have benefited from this program but have not contributed very much. We are asking them to contribute 25 cents per hundredweight. There are only two other avenues I have. If they do not go along with this program, we will work out a percentage of the subsidy we pay them for the surplus that they put into the industrial milk program. It would be much more costly for them to do it that way. Also, the provinces can pay us a grant in lieu of that levy. They can take it out of the treasury of the province.
Butterfat competes in the industrial milk market. We can use it as an example. For instance, last year butter could be brought to this country at about 35 cents a pound. If the fluid milk producer had sold his butterfat skim-off at that rate, you can imagine what it would have cost him. For them to say that they are not involved in this over-all picture is wrong. That shortfall has to be made up. I gather from the figures quoted by the hon. member that he is referring to the total amount of milk, including the sleeve. I was not talking about the sleeve. We are right on target this year.
A year ago today we asked the dairy farmers to produce so much milk. They are right on target at present. They have done what we have asked them to do. They administered the levy and followed the penalty programs. There is no other country in the world that has its dairy production back in line. The hon. member seems to be suggesting that we should continue to produce milk and give more quotas. What are we going to do with it? Are we going to pour it down the well? He has pointed out-


John Wise: Mr. Speaker-


An hon. Member:: Sit down, John, and let him finish.


Eugene Whelan: He has pointed out, Mr. Speaker-

April 4, 1977
Dairy Policy


John Wise: I rise on a point of order, Mr. Speaker. I did not indicate that it was in the best interests of the industry to continue to produce a product for which there is no market.


Eugene Whelan: I did not say you did. I spoke about another member.


John Wise: Yes, you did. With all due respect to you, Mr. Speaker, the minister made another statement that is untrue. I did not say that the fluid milk producers in no way contributed to the surplus position. The minister has not really answered my question. I put it to the minister again, through you, Mr. Speaker. Is it the case, as the minister said in his statement, that fluid milk producers will be assuming a 25 cent a hundredweight levy on their milk? Can the minister say yes or no? People in the industry want to know.


Eugene Whelan: If the hon. member had listened a little bit closer to what I said, he would know that I did not specify which hon. member I referred to. It was the hon. member to his left who said I should issue more quotas. I said I was surprised that members should suggest such a thing, that I should just give more quotas.
What would we do with the product-dump it down the well? I had the impression from what he was saying, and I would have to check the record, that he did not think fluid milk producers should be contributing. He said it would be unjustified and he received applause from hon. members on his side. I gave justification for the reasons I think they should pay into it. That is what I am trying to do.
I will check the record. I am sure that the hon. member has all the figures, and if I knew he would have so much time to make his presentation today I would have put more facts on the record at that stage of the game, because it is obvious who suffers the most because of world surplus problem. Some of the other countries in the world have not alleviated the problem. For instance, the European Economic Community has compounded the surplus problem. The surplus is approximately 3 per cent higher this year than it was last year. At this time last year we had 42 million pounds of butter in storage, and 300 million pounds of skim milk powder. Now we have 10 million pounds of butter in storage and over 50 million pounds of unsold skim milk powder which belongs to the dairy commission at this time. They have done an excellent job, I think, when one considers all the problems with which they were confronted.


Some hon. Members:: Answer the question.


Mr. Ellis:: I have a few brief comments for the minister, Mr. Speaker. I could not help noticing that he ended up with the figure 1066. If I recall history, the Battle of Hastings took place in 1066. If the minister does not do a better job for the dairy farmers, he will have a battle with the people of Hastings. I want to ask the minister whether or not he has exerted any influence on his cabinet colleagues regarding the reduction in the importation of cheese this year, which is really doing the most damage of all to industrial milk producers?


Eugene Whelan: I wish the hon. member knew his dairy policy as well as he knows mediaeval history, because the fact is that we have one of the best dairy policies in the world. No other country has a dairy policy equal to ours. There may be some faults in it, but we are moving along with the program for this year and we are not deviating from the format we have used. It was only a little over two years ago that we had no import quota on cheese. It came in holus-bolus. Now, there is a 50 million pound quota on imported cheese. Before the government imposed a quota, there were no controls. At that time it was heralded as the thing to do.
I read in the Financial Post, one of the great newspapers of this country, that cheese consumption has gone up to the advantage of the importers of cheese. It is a falsehood, if there ever was one, because the imports were held down to 50 million pounds last year and the year before they were also held down to 50 million pounds, but cheese consumption and production went up 15 per cent in this country. The importers got no benefit. They made representations that they were getting no benefit. Yet we find one of the great financial voices of this country printing that kind of garbage and nonsense in the paper to get across the idea to the people that we are not doing the job we want for the dairy farmers of the nation.
I should like to get back to what the hon. member for Elgin said. We will have to raise that money-and those people who contribute to the surplus of fluid milk will have to pay- whether it is 25 cents a hundredweight or whether it be by reducing the subsidy we pay to them. This money has to come from them because they are contributing to the problem. You talk about unifying the nation. Some of the people who are making statements about milk producers participating should check the facts and find out what the producers have gained from the subsidy program.


John Wise: Mr. Speaker, I am sorry, I cannot help but say that the minister did not really answer the question. All we have from him is bombast. The hon. member for Elgin and I asked two or three simple questions, and all we got is bombast and words that mean nothing. The question is: Has the minister had any effect on his colleagues in trying to reduce the amount of imported cheese? It is that simple. We know that the level is too high. We know that more than 50 million pounds is coming in. It has to be reduced.


Eugene Whelan: The hon. member talks about bombast. If he wants to go back to 1066 and rehash the whole history from 1066 to 1977, you can imagine, Mr. Speaker, how long we would be here.
Let me get back to the question put by the hon. member. He asks what right I have to answer him. Consumption of cheese has gone up 15 per cent, and some of our trading partners have argued that since, historically, they have sold us their products and markets have improved, they are entitled to an increase in the amount of cheese they sell us. Canadians are eating more cheese than ever. I have held down the imports to 50 million pounds, as I told the hon. member, and this amount has not increased, nor will it increase. There has been an increase in
April 4, 1977

production in Canada as a result of the $400 million that we are spending on the program this year to develop new products and advertise them.
1 wonder how many people in Canada know that we manufacture and process 63 varieties of cheese. Most people think only imported cheese is available and we do not have the capability to produce a great variety of cheeses here. We do have the capability of producing quality cheeses. Some of the importers have brought in such insignificant amounts that we could not set up processing for it. I am sure the hon. member is not suggesting anything like that. But we have a program and the producers know to what they can gear their production. If they want to, they can gear their production to much greater consumption of high quality products that cheese manufacturers are able to produce in our country.


Lorne Edmund Nystrom: Mr. Speaker, 1 would like to try my luck and ask a very simple and straightforward question of the minister. I hope he will not be too "cheesed off'. The minister has said on several occasions that he favours the principle of a school milk program. I think 1 am right in saying that. Has the minister's department or his office drafted a proposal for a school milk program? How much would it cost to have an adequate program on a national basis? Also, has the minister taken such a proposal to the cabinet?


Eugene Whelan: Mr. Speaker, as I said before, the social services of this nation are not the responsibility of the farmers or of the Department of Agriculture. If the Department of National Health and Welfare wants to have a school milk program for all the school children in this nation, I say that the farmers of this country will produce the milk. They have showed their capability. When I asked for a 5 per cent increase in milk production, I got nearly 15 per cent in one year. Milk for a school milk program can be supplied. But we have to be careful. It is not every child in the country, or in the world, who can consume milk.
There have to be proper allergy tests and this kind of thing. But 99 per cent of children can drink milk without any problem. The province of Nova Scotia has a school milk program. In some parts of the city of Montreal there are school milk programs. Some of the provinces have them. I am not sure whether the great provinces of Saskatchewan and Manitoba have them, but if the governments of those provinces are as forward-thinking as the hon. member says, I would be surprised-if they did not have school milk programs.


Lorne Edmund Nystrom: Since the minister did not say that he is studying such a proposal, I assume that the answer to my question is no, that he has not drafted such a proposal or studied the cost of such a proposal and that he has not taken such a proposal to the cabinet. I assume his answer is no.


Eugene Whelan: You are assuming too much, again.


An hon. Member:: What is the answer?
Dairy Policy


Lorne Edmund Nystrom: I simply want to know whether I am right in interpreting the minister's answer as being no, because if I am wrong it would be very unfortunate to have the minister's words spread across the country giving a negative response to such a great idea. If I am wrong, would the minister please correct me?


Eugene Whelan: Mr. Speaker, I have made that suggestion to my cabinet colleagues.


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I have but a few short questions, and the answers will surely be very short too.
The minister told us in his speech just a moment ago that he had developed his program in conjunction with the provinces, and he mentioned nine provinces. First I would simply ask the minister if it is possible to know the name of the province which has not taken part in the development of his program.
Then, a second short question: Could he tell us roughly how much milk powder has been imported from New Zealand last year? Finally, does the minister know the reasons for the feed price increase for November, December and January, and could he give us an idea of the reasons behind this increase?


Eugene Whelan: Mr. Speaker, with regard to feed prices generally, if soybean meal is being used that would account for most of the increase in feed prices. The cost of soybean meal by the ton has increased tremendously. The hon. member mentioned skim butter milk powder. In Canada, most of that is dumped into sewage systems, and New Zealand has a contract to supply two million pounds of it per year to Canada. Because of a very small dairy industry in Newfoundland, the province of Newfoundland is not a member of the milk supply management committee.


Mr. Yewchuk:: Mr. Speaker, I ask the minister whether he would clarify what he is advising dairy farmers in Canada to do in the coming year with respect to production. Is he advising them to increase, or decrease, their production?


Eugene Whelan: Mr. Speaker, as of April 1, 1976, all provinces were on strict quotas. Before that they were not. Producers were allowed by the provinces to produce, in the hope that some miracle would happen whereby we would allocate all kinds of quotas to them on April 1, 1976. We said at that time that we needed no more than 100 million pounds of milk for our consumption and for our commitments abroad. We are telling them this year that we want 100 million pounds of milk for the production of industrial products in Canada. As I said before, that will allow Nova Scotia, New Brunswick and Prince Edward Island to increase their production slightly.


Paul Yewchuk: I have a question which is supplementary to the question asked by the hon. member for Hastings. The minister indicated that there was a cheese quota last year and that this year he is keeping it down to the same level. However, why does the minister not take the next step which is neces-

April 4, 1977
Dairy Policy
sary, and that is to reduce the import quota below the 50 million pound-


Mr. Speaker:: Order, please. That question has already been answered.


Mr. Towers:: Mr. Speaker, my question is threefold. Has there been any dialogue with fluid milk producers? Second, in those provinces which have embarked upon promotional sales programs, will any consideration be given to them with regard to the levy? Third, can the minister state where the $152 million is going to come from? Is he going to request supplementary estimates from the House?


Eugene Whelan: Mr. Speaker, the $152 million is going to come from the treasury of Canada.


An hon. Member:: How?


Eugene Whelan: The hon. member referred to fluid milk producers. I would like to remind him that I believe there is only one industrial milk producer-or perhaps two-represented on the milk supply management committee. There may be two others who are part fluid and part industrial, but the vast majority of the members of that committee are fluid milk producers. The industrial producers on that committee represent each province, but they do not have very much say. The fluid milk people have the most say on how the program should be run. I believe the hon. member asked three questions, but I cannot remember the third one.


Thomas Gordon Towers: I asked the minister if there has been any dialogue with the milk producers themselves; and, secondly, in those provinces which have embarked upon promotional sales programs, will there be any consideration given to them with regard to the levy?


Eugene Whelan: With regard to the sales promotion programs, we are participating with the dairy processing industry especially with respect to cheese. Under the old program we paid $1 million, but under the program we are suggesting we would be putting in $4 million for the promotion of dairy products. Any dialogue with fluid milk producers takes place with the fluid milk producers themselves. The people on the milk supply management committee are not government people. They are practically all producers, although there are some provincial government representatives who sit in on those meetings with the producers. In meetings since mid-January we have been suggesting this kind of program, but a decision has not been arrived at. Some suggested they wanted one more year to discuss this before making a decision.
For instance, producers from the province of Ontario have said that by the year 1980 they intend to have all class 1 producers put together. In Ontario at the present time there are many class 1 producers who ship their milk to a fluid plant, and the next day they may go to a concentrated milk plant or an industrial milk plant or a cheese plant. The milk is not put into a different tank truck, but it is paid for at a different rate. There is no difference in the quality of the milk

in some 90 per cent of the cases. We are not suggesting that those people who are producing class 1 milk should be in the same category, but the provinces themselves recognize that these people are all one.


Mr. Speaker:: Order, please. I think we should conclude the questioning with the hon. member for Dauphin, the hon. member for Carleton-Charlotte, and the hon. member for Medicine Hat.


Mr. Ritchie:: Mr. Speaker, perhaps the minister can clarify something for me. I believe the 25 cents proposed for fluid milk producers is a new departure. Can the minister inform us whether that covers the so-called skim-off, which 1 believe is reducing from 5 per cent to 2 per cent, or does it go further; and if it does, how much of that 25 cents per hundredweight is over and beyond the skim-off?


Eugene Whelan: Mr. Speaker, the dairy commission has worked out the exact figures. It does include the surplus milk. At certain times of the year some fluid milk producers send 25 per cent of their surplus shipments to the industrial market. It includes more than just the skim-off for the 2 per cent or the straight skim milk. It is a detailed thing, but I can produce figures that show how they have benefited much more in this production area and from the government subsidy. It is not that many years ago, when the dairy commission was first formed in 1966, that they came into this, and I believe it was in 1970 or 1971, when their surplus milk went onto the industrial market, that they even came into the subsidy program. I think it is a fair program. If they went back to the old system, where they did not share in the subsidies, they would be much worse off. If we withdrew the subsidy we are paying on that, they would lose many more millions of dollars.


Mr. McCain:: In many areas the industrial milk producers have a very marginal income. Will the industrial milk producers receive more, or less, per hundredweight of milk during the program for the next fiscal year? Your Honour might say that my next question should go on the order paper, but the information is on the records of the Department of Industry, Trade and Commerce and is available to the minister. Would he provide statistics of the number of pounds of cheese exported by Canada and imported by Canada in each of the last 30 years? I do not want details of the kinds of cheese, but just the total amount exported and imported in each of the last 30 years?


Eugene Whelan: Mr. Speaker, I think these figures are available. The hon. member is aware that when Great Britain joined the European Economic Community we lost a 30-million pound export program of Cheddar cheese to Great Britain just like that, and we have not been able to regain it. We may sell them one million pounds this year under a new program arranged between this government and Great Britain. Over the five-year period we could develop a new market there. Britain just does not have the money to buy Cheddar cheese; that is what it amounts to. The industrial dairy farmers of Canada
April 4, 1977

will have a better year this year. For instance, if they produce 300,000 pounds of milk under this program, they should have $1,700 more income this year.


Mr. Hargrave:: Mr. Speaker, my question to the minister concerns the $152 million powdered milk debt. Is it the policy of the government that this debt will eventually be charged back to the dairy producers and paid by them?


Eugene Whelan: No, Mr. Speaker, the government is absorbing that debt. We compared that to the European Common Market, and the governments there absorbed all these debts because of the world situation. We think this is fair, and it has been discussed and ironed out with the provinces and provincial dairy groups. This is a mutually agreed thing.


CONFEDERATION
Mr. Stan Schumacher (Palliser) moved: for leave to introduce Bill C-412, respecting the holding of a national plebiscite on the separation of Quebec from Canada.


Some hon. Members:: Explain.


Stanley Stanford Schumacher: Mr. Speaker, on many occasions since November 15 last the Prime Minister and other members of the government have said there is an obligation on the part of all Canadians to indicate their views on Quebec staying in confederation. Nevertheless, the government has failed to utilize this House as a forum for the purpose. This bill seeks (a) to allow representatives of all Canadians to ventilate their views on this subject and, (b) if accepted by the House, to allow all Canadians to express themselves in the most direct way possible.


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

Donald Stovel Macdonald: for leave to introduce Bill C-46, to amend the Aeronautics Act and the National Transportation Act.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
_________________________________j4603
Order Paper Questions EXPORT DEVELOPMENT ACT

Jack Sydney George (Bud) Cullen: for leave to introduce Bill C-47, to amend the Export Development Act.


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

Donald Stovel Macdonald: for leave to introduce Bill C-48, to amend the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act.


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

Mr. Norman A. Cafik (Ontario) moved: that the sixth report of the Standing Committee on Finance, Trade and Economic Affairs, presented to the House on April 1, 1977, be concurred in.


[Stage Direction]
Motion agreed to.

Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, 1 would ask that all questions be allowed to stand today.


Mr. Speaker:: Is it agreed?


Some hon. Members:: Agreed.

April 4, 1977
4604_______________________________________
The Budget-Mr. Stevens



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, March 31, consideration of the motion of Mr. Macdonald (Rosedale) that this House approves in general the budgetary policy of the government.
Sinclair McKnight Stevens: Mr. Speaker, the budget of last Thursday has been described as a stand-pat budget; that is, stand pat with more unemployment than last year, and stand pat with less real growth. To call that a stand-pat situation is a bit like General Custer claiming that he stood pat at the battle of Little Bighorn, his last stand. Some day, and I would suggest that today is as good a day as any, this House and this country must start to wake up. Our economy is in serious difficulty. Such irreparable harm has been done in the past six years that we are now faced with a crisis to which few in this country appear to be willing to address themselves. Certainly, this government likes to befog the issue. If the Prime Minister of this country had been president or chief executive officer of a responsible Canadian business corporation, he would have been fired in 1972.


Mr. Benjamin:: Or promoted.


Sinclair McKnight Stevens: And if that business corporation had failed to fire him in 1972, it would now be broke.


Mr. Stanfield:: The directors would have gone to jail for doing what the government did in 1974.


Sinclair McKnight Stevens: If the Minister of Finance (Mr. Macdonald) had been treasurer of such a responsible business, he would have been fired on Thursday night on the tabling of his budget which indicates that his estimates in the May budget, ten months earlier, were wrong on virtually every score.


An hon. Member:: They will be fired in the next election.


Sinclair McKnight Stevens: An hon. member says they will be fired in the next election. I do not doubt that if the government dared to call an election, electors would know how to deal with it on its economic record.


Ralph Goodale: You said that in 1972 and 1974, and you are still saying it.


Sinclair McKnight Stevens: Sir, the minister's national accounts deficit for this year is up by 90 per cent over what he anticipated last year. Unemployment is higher, real growth is lower while inflation remains higher, and our trade remains in imbalance. We find that the current account deficit for this country in the last two years has been greater than the combined deficits of the United States, Germany, France, Japan, Great Britain and Italy. The administration has taken five years getting us into

this mess and it is time they gave us some indication of what the next five years will hold for us, if they remain in power.


An hon. Member:: More inflation.


Robert Lorne Stanfield: Anyway, who would believe them?


Sinclair McKnight Stevens: In the course of my remarks I shall touch upon some aspects of the budget which was tabled last Thursday. My colleague from Lanark-Renfrew-Carleton (Mr. Dick) will speak in more detail on youth unemployment. The hon. member for Vancouver South (Mr. Fraser) will speak on labour matters generally and the government's unsatisfactory handling of labour: The hon. members for Egmont (Mr. MacDonald) and Joliette (Mr. La Salle) will speak on regional disparities, the hon. member for St. John's East (Mr. McGrath) will deal with urban affairs, housing, business and related matters, and the hon. member for Halton-Wentworth (Mr. Kempling) will speak on our country's lack of research and development.
Speaking generally, the federal government has three main tasks with respect to the economy. First, it must ensure that governmental activities are run soundly and efficiently, with the least possible taxation and minimum deficit financing. Second, the government must cultivate an economic climate which will provide full employment for those wishing to work, with a minimum of inflation. To do this it is necessary to inspire confidence in the private sector, which in turn ensures a co-operative and positive attitude as between business and labour. Third, since Canada depends heavily on world trade it is essential for our federal government to structure our activities in a way which will ensure that we remain competitive and able to maintain our position as a trading nation. Those three functions of government are interrelated. If the government is irresponsible in the discharging of its first function, that, in turn, influences the nation's performance with respect to employment, the containing of inflation and the maintaining of our position as a world trader.
This government, sir, has failed in all three respects in the past five years. The magnitude of their failure is not being dramatized. Let us review the facts. Personal income taxation of the average family in Canada has jumped so that today it is a bigger expense for Canadian families than any other single item. It costs the average family more than it spends on housing or food and much more than it spends on transportation. When the Prime Minister (Mr. Trudeau) first assumed power it was not so. Today the average Canadian family spends almost 20 per cent of its income on personal income tax. In the United States that figure is 14 per cent. That difference in taxation is the result of Canadian government's now taking 43 per cent of our gross national product, compared to 35 per cent in the United States.
That dead load in extra government costs, 8 per cent of our gross national product, or in dollar terms about $1,300 per taxpayer, puts a pressure on our productive people that is not shared by their counterparts in the United States. Bearing that added load, our workers demand higher wages to offset the
April 4, 1977

added tax load being imposed by government. It is the take-home pay workers are interested in. If they are taxed more, naturally they will demand that their gross wages go up. And if you not only tax them more but charge them twice the amount for unemployment insurance premiums charged in the United States, is it any wonder our workers demand higher wages than are being paid at present in the United States? In short, it is government greed and lack of responsibility which has contributed to our present plight more than any other single factor in the country.
This greed is shown at the Ottawa level in two ways. First, in the six years ended last October, federal spending jumped 151 per cent, almost twice as fast as the general increase in our economy. Second, since 1971 the government's take of our gross national product has risen from 38 per cent to 43 per cent; and of that 5 per cent increase, 80 per cent has taken place at the federal government level. We have touched on the taxation which has resulted from this federal governments spending spree. We have not touched, however, on the deficits and debt that has been and will be incurred in Ottawa.
Last Thursday's budget reveals that this government intends to run a budgetary deficit this year of $7.2 billion. This deficit is greater than total federal spending for the fiscal year 1964, the year this line of Liberals first took office. That deficit of $7.2 billion means that in addition to paying all of his other taxes, every taxpayer is being charged this year a further shortfall of approximately $500. Interest on that amount will cost each taxpayer about $50 a year, or $4 per month, until it has been repaid in two or three years. What a legacy to leave our children and their children! In our view, the government, if it had abided by its own guidelines which it set for everybody else with respect to pricing, could have cut a further $1.3 billion from its spending plans, which in turn would have meant a $100 tax break for the average Canadian taxpayer. Also, federal cash needs could have been lowered considerably. Such a tax break would have helped to lower wage demands and improve our real growth.
The administration's record with respect to inflation and unemployment, their second function, has been dismal. Under their supervision we have experienced, historically, high inflation and unemployment. How could it be otherwise when we review their irresponsible approach? I have mentioned that in the six years ended last October federal government spending jumped 151 per cent. During that same period, to help pay for that spending they increased the money system in Canada by 99 per cent. Real growth was 31.4 per cent. So is it a surprise that with the money supply being increased three times as fast as real growth we ended up with 55.3 per cent inflation in that period? Even the first six years of Liberal government in Ottawa were better. In the six years ended October, 1970, federal government spending went up 95 per cent. They created 43 per cent more money, experienced 34.7 per cent real growth, with inflation of 24 per cent.
The Budget-Mr. Stevens
But here is the crunch. When you compare the last two six-year periods with what we might call the Diefenbaker six-year period and the St. Laurent six-year period, we see in vivid colour the contrast between responsible government and irresponsible government. Let me put the figures on the record. In the six years ended October, 1964, mainly Diefenbaker years, federal government spending went up 33 per cent, money growth was less than 20 per cent and real growth was 32 per cent, compared with this administration's real growth of 31.4 per cent. But note, inflation in those six years was 7.7 per cent. Let me repeat that in those six years ended October, 1964, real growth was better than the real growth of our last six years, and inflation was 7.7 per cent in the six years, or less than one-seventh of the inflation experienced under this regime.
The St. Laurent years were comparable to the Diefenbaker years. In the six years ended October, 1958, real growth of almost 30 per cent, federal government spending increased by 35 per cent, money growth was 26 per cent, and inflation was 8.6 per cent.


Robert Lorne Stanfield: They probably had better weather.


Sinclair McKnight Stevens: My hon. friend says they probably had better weather. We know it was not. It was better government.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Not only are we faced with this high inflation record, but in the last six years of the Trudeau government we Find that the average unemployment has been higher than in any of the other three six-year periods. Faced with this record of irresponsibility, the administration tries to find other countries that have an even worse record than ours. In doing this they carefully ignore the fact that none of their comparisons are made with countries which have the rich resources we have. Have you ever seen them compare us with the records of other gas and oil exporting nations? Most of the countries plagued by inflation, such as Great Britain, import, manufacture and export virtually everything they deal in. They are not resource-rich as we are. In fact, we have made a good thing out of world inflation by selling our goods on the world market at inflated prices. Be that as it may, our record with respect to inflation is still worse than that of many countries. Take the United States, our main trading partner, for example. Last year our inflation was 9.3 per cent. In the United States, it was 5.1 per cent, and they did it without controls.
The government's own Figures disclose our relatively poor inflation record compared to that of the United States. If Switzerland, with no resources, has been able virtually to eliminate inflation, why must Canada, one of the richest countries in the world, have one of the world's worst inflation records? Not only do we have one of the world's worst records for inflation, but we have the worst record among the industrial nations for unemployment. The Minister of Finance (Mr. Macdonald) says there is little he can do about the one million who will be out of work this year. One million people out of
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April 4, 1977
The Budget-Mr. Stevens
work is comparable to the entire working population of Montreal and its suburbs, or of the Toronto region, being idle-left, if you like, like ghost towns. Or again, one million people is equal to the work force of our four Atlantic provinces and the eastern part of Quebec being forced into idleness. Is that what the minister really means when he refers to stable recovery? We note the minister does not show tables in his budget document with respect to unemployment levels in other countries. Naturally, he would not. Even he could not stomach the evidence of this administration's ineptness in ensuring jobs for our people.
But if the government has failed in its first function of ensuring that governmental activities are run soundly and efficiently with the least possible taxation and with a minimum of deficit financing, and if it has failed in its second function of cultivating an economic climate that will provide full employment for those that wish to work, with a minimum of inflation, it is in its third function of structuring our activities to ensure that we remain competitive and able to hold our position as a trading nation that its deficiencies are most obvious. The government can, to some extent, befog the issue domestically, but not internationally.
Last year our current account trade deficit was S4.3 billion-that is higher than the $3.3 billion deficit of Great Britain, a nation we tended to pity-we even loaned them money as if we were well off. In the past two years this country's current account trade deficit was higher than that of any nation in the world. In fact, it was higher than the total deficit of the United States, Germany, Japan, France, Italy and the United Kingdom put together. And those six nations represent approximately 50 per cent of the world's wealth, while we have less than 3 per cent. If you find these figures startling, Mr. Speaker, look at page 8 of the minister's budget document. Faced with those figures, how can the minister tell us our economy is on the right track? The right track to where-oblivion?
The hard fact is that this country can pretend no longer that we are prosperous. Our prosperity has been conceived essentially on the basis of our taking in each other's washing. This is what the government has fostered with its orientation to government and service-oriented work for Canadians. A larger part of our economy is devoted to services than any western country or any country of the communist block or of the Third World. In 1967, 59 per cent of our labour force was engaged in the service industry, with 6 per cent in public administration alone. By 1976, service employment had risen to 65.5 per cent of our total, with 7.2 per cent employed in public administration. Producers of goods fell from 41 per cent of our work force in 1967, with 24 per cent in manufacturing, to 34.5 per cent by 1976 with 20.3 per cent in manufacturing.
This orientation to service activity resulted in Canada incurring a $10 billion deficit in end products world trade last year. It was $2 billion a few years ago. In short, we are becoming increasingly non-competitive in world markets. Our share of world trade is dropping. In the 1960s it was approximately 6 per cent of world exports. Today it is 4 per cent. In the last

three years our balance of payments deficit has averaged 2.7 per cent of our GNP. Some forecast it will be 7.5 per cent of GNP by the mid-1980s, due partly to a fall off in oil and gas exports which have shoved us up in recent years. The administration may play with figures with respect to our domestic activity, but it is in the external trade area that their incompetence is most apparent. You cannot fool the international market. That is why our dollar, which has fallen by as much as 40 per cent in relation to other currencies, has become known as the "Pierre peso". To all this the minister states there are no short-term solutions-no magic formulas for solving our economic woes. We agree. But where are the minister's long-term solutions? What does he see for the economy in 1980 or 1982? We do not know.
He will not even tell us about fiscal year 1979 which begins less than one year from now. That is why we in this party have asked for two-year projections for the next two years and three-year forecasts for the following three-year period. Let the nation see where we are going, assuming that the government's programs, whatever they are, work. After all, this government has spent the last five years getting us into this mess. Surely they can give us a glimpse of what they see for the next five years may get us out of the mess. If they will not produce such longer term figures, we can only assume that they themselves do not know where they are going or have no plans to relieve the situation other than day to day expediency. The truth, Mr. Speaker, is that it is political expediency, not economic responsibility, that has been the order of the day with this administration.


Mr. Caccia:: Sheer nonsense.


Sinclair McKnight Stevens: The Americans, who expect to experience a real growth greater than our real growth this year, as they did last year, are willing to show five-year figures. Why cannot we? For example, in the United States they anticipate a real growth of 41/2 to 516 per cent per year for the next five years, which would be comparable to 516 to 6V2 per cent real growth in Canada. Does our government see that growth for Canada?
The United States figures show that by 1982 they will be down to a 4 per cent unemployment level. It would cut our unemployment level in half if we could reach that figure in Canada. But what is our plan so far as this administration is concerned? We in the Progressive Conservative party believe that the government should not only be acting on our immediate problems but should be putting into place what they feel is necessary to ensure that we do not have one million jobless or even more in coming years; that we do not have inflation of 4 to 6 per cent or even higher in coming years; that we do not have trade deficits which are the largest in the world which, in turn, require us to borrow foreign funds at high interest to keep us afloat.
This country is uniquely situated both geographically and in regard to resources. Those resources and our geographical location should make us one of the most prosperous nations in
April 4, 1977

the world. Rather than creating a hostile, often frustrating climate for business, we should make this an hospitable country for business activities. If we did that, those who are now routing business away from Canada would then route business into Canada, not only to serve our own markets but for international trade purposes as well.


Ramon John Hnatyshyn: We are going bankrupt fast.


Sinclair McKnight Stevens: Mr. Speaker, it would not take much. First, it would be necessary for the government to satisfy the world of finance and business that they will be more responsible in their handling of our economy. Secondly, they must regulate business less. They must harass business less, and that means subjecting it to fewer administrative tribunals. Finally, they should give business a more assured tax position in the country. Business does not mind paying taxes. But they do mind having the rules changed abruptly which is little short of confiscation of their activities.
An end to the controls program at the earliest opportunity would help restore business and labour confidence. This government, however, does not seem to have the guts to take that type of action. Inflation is contained with responsible monetary and fiscal restraint, not controls. It takes guts to use those levers, however, and with this government political expediency comes first, economic responsibility and reality second. It is their indecision, their waffling that has undermined our prosperity. On the question of controls, even the Minister of Finance admits in his budget document:
The decline in profit margins in 1976 was primarily a reflection of slack markets in Canada and abroad, rather than the controls program. Most firms were unable to earn the margins which the guidelines permitted.
On the wage side, we know that Canadian wages have gone up under controls more than those in the United States where there are no controls. So why are the finance minister and the Prime Minister pussyfooting around telling us they are in a dilemma, not knowing what to do about controls? There should be no dilemma. Get rid of the damn things and start acting like men, instead of kids. This country needs men of courage running it, not a bunch of boy scouts who dither.
Some hon. members have asked what we would have done of an immediate nature if we had had the opportunity of bringing in a budget last Thursday. Let me summarize our position. My leader will, later in the debate, expand upon some of these points. Firstly, with regard to personal income tax, to help the economy resume an acceptable growth rate and to assist in the moderation of wage demands, we believe that a substantial personal tax cut should have been made, and would have been made if we had been in power, which would have given the greatest benefit to those earning less than $8,000 per year, with lesser benefits being realized by those earning between $8,000 and $16,000. The lower the income, the greater the benefit.
Secondly, with regard to manufacturers' sales tax, a reduction of this tax by us would have had a direct effect on price levels in this country. The tax itself is inflationary and is regressive in impact. It should have been reduced. It would
The Budget-Mr. Stevens
have been reduced if this had been our budget. Third, with regard to regional stimulation, although national in scope the greatest part of the burden of unemployment is borne by the five eastern provinces and by young persons entering the labour force. The principal thrust of our efforts to reduce unemployment would have been directed to these regions of the country and to this sector of the labour force.
To stimulate regions and sectors within the economy, some tax changes would have been made, including the following. Firstly, a tax rebate for small businessmen investing in research and development. The credit award could be as high as 75 per cent in the Atlantic region or Quebec, falling to, say, 25 per cent or less in provinces where the economy is performing better. Secondly, we would make tax credits available to corporations in compensation for high levels of tax paid because of the effects of inflation on inventory valuation and capital cost depreciation. In effect, a corporation would maintain two sets of books for tax purposes, one on the existing system, the other using a replacement value accounting system. A tax rebate up to the amount of difference in the tax liability between the two systems could be obtained by a corporation agreeing to invest the difference in a disadvantaged region. A lesser rebate would be allowed to those corporations investing in heavily industrialized areas. This would have been a more meaningful approach than the $300 million hand-out proposed by the administration with respect to inventory inflation. The government's proposal will have minimal effect in relieving unemployment where it is highest.
Referring to long-term tax contracts with companies investing in areas of regional disparity, we believe that the government should be willing to sign a tax contract. Under such a scheme a company which builds a plant in Newfoundland would sign an agreement exempting the operations of that plant from all tax until 150 per cent of the original investment had been recovered. A tax rebate for small businessmen faced with the burden of filling out forms for the federal bureaucracy would have been included in our budget if we had had an opportunity to bring one in last Thursday.


Ramon John Hnatyshyn: The government has no policy. They do nothing for the economy.


Sinclair McKnight Stevens: If I could touch on the small business investment incentive credit approach that we have advocated for some time, this investment credit would be available to any Canadian citizen who makes a direct investment in the equity of a Canadian-owned small business. The credit, which would be 50 per cent of qualified investments, to a maximum of $5,000 per year, would be either offset against the individual's income tax for the year or rebated directly to him. Qualifying investments would include new equity shares of corporations and direct participation in a proprietorship or partnership. A reduction in federal sales taxes on energy efficient cars would favour small cars and, hopefully, domestic production of those cars in addition to helping conserve energy and giving cheaper transportation for commuters.
80012-1 3%

April 4, 1977
The Budget-Mr. Stevens


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Further assistance to encourage the development of urban public transit system is required in Canada and should not have been overlooked by the budget last Thursday.


Mr. Milne:: What is the dollar cost of all this?


Sinclair McKnight Stevens: The hon. member for Peel-Dufferin-Simcoe (Mr. Milne) asks, "What is the dollar cost of all this?" That hon. member should know. His Prime Minister promised $290 million to help urban transit in this country. We are saying that he should live up to that promise. We suggest it is better to spend $290 million, as suggested by the Prime Minister, on urban transportation needs in Canada rather than on such developments as Pickering.
Finally I come to the indexation of capital gains. They should not be assessed on the dollar appreciation of the capital asset but, rather, on a constant dollar appreciation; that is, the appreciation over and above the inflation that has taken place over the period of acquisition to sale. The measure of inflation could be the same as the Department of National Revenue uses to index personal income tax brackets. I emphasize that these tax reductions would not increase the federal deficit, as they would be more than offset by the $1.3 billion that I indicated earlier could be shaved from this administration's spending estimates.
Other policies we would have introduced to ensure a smooth transition to a decontrolled economy, if we had had the opportunity last Thursday, would have been more long-term forecasting of federal revenues and expenditures, as well as forecasts of expected economic growth, inflation and job creation. Each budget should issue forecasts for the two fiscal years ahead. For example, in the case of the March 31, 1977, budget there should have been federal projections for the fiscal years 1978 and 1979. In addition, performance targets for government and the economy should be issued for the three further fiscal years following those projections; in this case, to fiscal year 1982. Longer range forecasts and targets would enable business, labour and other levels of government to plan strategies for the future.
A national economic conference with multipartite representation to discuss the future course of the economy would have been suggested and advocated in our budget. Items on the agenda would have been the methods by which all levels of government could reduce their share of the gross national product. What is the realistic growth target for the nation, year by year? How do we achieve that target, with a minimum of inflation? What is full employment? How do we restructure our economy to be more effective in world trade? I have already referred to that. Zero-based budgeting in certain federal departments at least should be introduced on a trial basis. This would mean all items in the budget are reviewable, ending the present argument that most spending items are statutory or at least untouchable when budgets are being settled.
While to this point I have dealt mainly with colourless statistics, the really tragic result of this government's incompetence in handling our economy is that hundreds of thousands of Canadians are being demoralized. Their outlooks and their ambitions are being dashed. Canada, the land of opportunity, is becoming to them the land of discouragement and disenchantment. Be they university graduates, young farmers or factory workers, they feel the country holds out little promise. It has become a country in which the Prime Minister tells them that if they do not like their job opportunities, then go to another country. He said that his heart does not bleed for them.
True, you cannot get blood from a stone. But it is time our government showed compassion for those who are feeling the brunt of the economic morass into which this administration has led us. On the other hand we have those who, while they may not be unemployed, are watching their savings erode. Their hopes are disappearing with respect to owning a home. They see this happening as a result of inflation. As we think of those who are out of work and finding it hard to get by, it is interesting to note how easily the government keeps defining and redefining the problems and how easily it holds rich men's conferences such as the one in Toronto to discuss the problems still further. They point out the obvious. They point out that many people are moving to our cities from the country; that they are discouraged; that their sense of purpose and their sense of individuality is being shaken. Hope is lost, they point out, among many Canadian people today. The administration, however, is void of fresh ideas for harnessing the energies of these vital people. Instead, the Liberals suggest that we should be reconciled to less growth, which means more unemployment. Like typical technocrats, they suggest it is the goals of yesterday that are wrong, not that they are wrong in failing to allow us to achieve those goals. In the flood of human initiative they say, "Lower the water." We say, "Raise the bridge."
This human tragedy is perhaps better portrayed in a verse written by a former employee of the Globe and Mail, the late Dan O'Connell. He wrote of his experience, having shifted to the city, as follows:
The rolling farmland by the lake,
The mirthful matins in the brake.
The cozy cottage ivy-clad,
The homestead hallowed as a lad,
The stream that teemed with speckled trout,
The homemade rod that fished them out,
The dream of home, a loving wife,
And each ambition lost throught life,
Like ghosts they haunt your heart,
While dead you tread the city's mart.
That is the lot, unfortunately, of thousands of Canadians today. In view of this and in view of the motion that we have before us, I move, seconded by the hon. member for Vancouver Quadra (Mr. Clarke), that all the words after "that" in the motion before us be deleted and the following substituted therefor:

April 4, 1977

This House does not have confidence in the government's budgetary policy by reason of its failure to provide the active economic leadership and foresight needed to reduce unemployment and inflation and encourage confidence and growth in the Canadian economy.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Vancouver South (Mr. Fraser)-Reason for failure of Rail West to receive orders for hoppers cars; the hon. member for Churchill (Mr. Smith)-Penitentiaries- Proposed new institution for Manitoba-Possibility of site at Churchill or Lynn Lake; the hon. member for Egmont (Mr. MacDonald)-Provision of boxcars for shipment of potatoes- Government action.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Macdonald (Rosedale) that this House approve in general the budgetary policy of the government, and the amendment thereto of Mr. Stevens.
Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, recently the hon. member for York-Simcoe (Mr. Stevens) and myself were on a television program. We were asked a question with regard to predicting the budget. The only prediction 1 would make at that time was that the hon. member for York-Simcoe would find it more difficult to criticize than I would. That has turned out to be correct. I must congratulate the hon. member for York-Simcoe for having been able to criticize what was essentially a budget that out-Toried the Tories as far as newspaper reports are concerned.


Some hon. Members:: Oh, oh!


Max Saltsman: 1 wish to refer for a few moments to the statements made by the hon. member for York-Simcoe. He said that this country needs to become a more hospitable country for business. I do not know how much more hospitable this budget could be for business. Out of the tax cuts given of
The Budget-Mr. Saltsman
$1.5 billion, less than $400 million went in the form of tax cuts to individuals. More than $1.1 billion went to business. Perhaps the hon. member for York-Simcoe is suggesting that the less than $400 million that went to individuals should have been turned over to business as well. I do not know how much more hospitable we can be in this country to business.
The crux of our problem at the moment and the reason that we find ourselves in this incredible situation is that this government, in response to pressure from the Conservative party, has out-Toried the Tories and has placed its reliance completely on business instead of using its own common sense.


Ramon John Hnatyshyn: What about pressure from the NDP?


Max Saltsman: When there was pressure from the NDP and the government responded to it, we did not have the unemployment levels we have at this time. There is something to be said for those minority government days. Perhaps it would have been just as well had the government listened to the NDP again, because they certainly do better for the country than when they listen to the Conservatives. In describing this budget, my leader said that in economic terms it is stupid and in human terms it is cruel. I think he was being excessively kind. It is certainly that. In some ways this budget is beyond contempt.


Ramon John Hnatyshyn: "Beneath" contempt.


Max Saltsman: To beat this budget is almost unnecessary in light of the universal condemnation that has been heaped upon it from every quarter of our society, with the exception of a few business people. I ask you, Mr. Speaker, to consider the following. The government is giving concessions to business in order to try to save itself. It has totally run out of ideas. It is so lacking in ideas that the Minister of Finance (Mr. Macdonald) took pleasure in announcing that he was running around consulting businessmen as to what possibly might be in the budget. 1 am not suggesting the minister told businessmen what would be in the budget, but he certainly made a point of saying he was seeking their advice. If he did get their advice, it is certainly bad advice.
We have had a history, over the past five years at least, of tax concessions to business. There has been an almost direct relationship between the amount of tax concessions we have given to business and the decay of the economy. Tax concessions simply do not work. I would not object to concessions to business if there were some evidence to support the notion that the way to get people back to work is to make these concessions. The C. D. Howe Institute, in a recent report, clearly made the case after extensive research-and I am not quoting from an NDP document, as my friends on the right will recognize-that there is no evidence to support the idea that tax concessions to business have had a stimulating effect on the economy or have created extra employment.
A former Minister of Finance sent out a questionnaire asking business whether all the great give-away programs such as depreciation allowances and a lower rate of taxation stimulated employment. He received virtually a negative reply. This

April 4, 1977
The Budget-Mr. Saltsman
is not a question of saying we do not want to give it to business. If I believed, and the evidence was there, that the way to get people back to work was to make it somewhat easier for business by reducing the taxation on business, I might not like it in terms of equity but I would go along with in terms of getting this country going. However, we have destroyed equity by what we have done in relation to what we are giving to the ordinary taxpayers and giving to business. We have got less than nothing from it.
I say this country has not been inhospitable to business. I quote as follows from a recent speech by the Hon. Eric Kierans at McGill University on September 23, 1976:
For the life of me, 1 cannot understand the hostility of the business community to the Trudeau government. It cannot be on the basis of what the federal government has done for, literally, big business has never had it so good. With the exception of the United Kingdom, I doubt that any nation in the world has given its corporate 1,000 a more handsome gift package of subsidies, tax allowances, two-year write-offs, deductibility of merger costs, cheap loans, export credits and insurance than our present Trudeau government...
The goal of the corporation is profit, or at least 99'/2 per cent profit since a half-cent of every profit dollar is given away for charitable purposes.
You can see that Mr. Kierans was trying to be fair in his argument. Then he said:
One cannot say that the corporate sector has not achieved its purpose during the last five years . . . Profits increased from $7.7 billion in 1970 to $17.8 billion in 1975, or an increase of 131 per cent, and yet "unfriendly Ottawa"-
I point this out to my avenging angel, the hon. member for York-Simcoe who puts himself forward as being the defender of the underdog-
-in the words of one outstanding Canadian chief executive, "does not understand free enterprise". And despite popular impression, corporate income tax rates declined during that five-year period. In 1970 corporations paid an effective federal rate of 29.6 per cent on their $7.7 billion in profits. In 1975, the effective federal rate was 26.6 per cent on profits of $17.8 billion. But who, listening to businessmen, would have believed this?
Let me be quite frank and ask you this. Just what will satisfy the unhappy 1,000? What will bring to an end the whining, whimpering and outright misrepresentation of the successes of the past five years?
Certainly not the comments and interventions of hon. friends on my right as expressed by the hon. member for York-Simcoe. This is a myth that is being perpetrated and compounded in this House. The hon. member said the root of our problem is the hostility of the Canadian government to business. I wish they were as hostile to the poor of this country as they are to business. The poor would be better off.
Past concessions to business to some extent account for the mess we are in right now. We have to say: Had we not made all these tax concessions, particularly in the area of depreciation allowances, and encouraged industry to over invest because there was a tax benefit involved in that, we would not be faced with the situation where industry has so much capacity that it cannot use. In fact, less than 80 per cent of that capacity is in use. That is one of the reasons for the high level of unemployment. How, then, does the government justify saying in the budget that we can stimulate more capital investment by increasing the profits of business, when they cannot even use the investment they have now? Probably the investment they have now is what is contributing to the high level of unemployment.

This morning it was my pleasure to pick up a book by Tony Westall, a very distinguished Canadian journalist.


Leslie Gordon Benjamin: Hardly a raving socialist.


Max Saltsman: It is called "The New Society". I guess he took his theme from some of the words the Prime Minister (Mr. Trudeau) spoke last year. Westall talks about corporation profits and what happens in a cyclical period. He writes:
Corporation profits, which had fallen sharply in 1970, rebounded to rise 12.8 per cent in 1972, 35 per cent in 1973, 27 per cent in 1974, before turning down 3 per cent in 1975. Part of the surge in profits was cyclical as the government spurred expansion, and part of it was simply the result of inflation: as world prices soared, inventories of materials held by corporations increased in value and returned superprofits when they were sold. But when the corporation restocked at the new higher prices, much of the windfall profit was absorbed in working capital. Nevertheless, the corporations had made a real gain, although it was in the nature of a one-time capital gain rather than a normal operating profit.
The point I want to make is that one of the measures which my friend, the hon. member for York-Simcoe, did not criticize was the move of the government in this budget toward inflation accounting, which is to take into account the fact that as corporations and companies sell off their stock, their inventory, they have to replace their inventory at a somewhat higher cost and therefore some of the profit is lost in the process. I would be more inclined to go along with inflation accounting, a measure that the government has brought into this budget, if during the period of high profits the government had put an extra surtax on the profits that came from inventory realization. That was not done, nor was there any outcry that there be any kind of indexing on inventory profit, that in fact they should be paying more because this was found money, it was an inventory profit, they bought cheap and were selling dear. Nothing was said among the business community about that. But the minute it starts to work the other way, the government has to bail them out.
There is no balancing. The government does not say, "Sure, you are going to suffer some losses", or, "You will need more capital," or, "You will need a larger cash flow in order to replace your inventories. But you did have profits in the past and you did benefit from inflation because of the increase in your inventory value, and surely one should offset the other." But no, the government says solicitously, "We will give you inflation accounting as well, and give you a few hundred million dollars to compensate you for this business risk". This is the kind of thing that my friend, the hon. member for York-Simcoe, says is inhospitable. He says it does not create a hospitable climate for business in this country.
I would have been far more impressed if during the period when those inventories were rising and being sold off, the hon. member for York-Simcoe had said that the consumers who were buying them should have been able to buy them at cost plus a mark-up for which those inventories had been acquired. But I suppose that is not the correct business attitude to have. What is the point of being in business if you do not speculate? But you speculate only one way with the consumers.
April 4, 1977

This budget does a number of other things which I think are most unsatisfactory. We went through a period called the Carter period. The Conservative government commissioned a study on the taxation system. When it was completed and presented to parliament, it stated that Canada had one of the worst tax systems in the world; it had many loopholes that simply had to be closed. The government, very hesitantly, far short of what Carter recommended, started to close some of those loopholes. Now the government realizes that it made a terrible mistake because in closing those loopholes it has aroused the ire of the hon. member for York-Simcoe who is saying the government is inhospitable to business. Therefore, the government is now proceeding to open the loopholes again in the budget.
The argument is that it is not worth closing them because not much revenue is derived from closing them. Not only that, but we have to provide some incentives in the way of stock options, reduced taxation on capital gains, this despite the fact that capital gains are still only taxed at half the regular rate. I cannot understand the solicitude of the government with respect to capital gains. I could perhaps support the argument that is being made that the value of the capital should be indexed if we had full taxation. But where is the rationale and the justice which says that a guy who works in a shop, a guy who works at the lathe, or a guy who teaches school or performs some other function for which he gets wages or a salary pays on the total amount of what he earns, but the person who gets his income from speculating on the stock market and who makes a capital gain is twice as worthy and therefore has to pay only half the tax? That is a very inhospitable climate for business, 1 must say, particularly when this budget says that one-third dividend on the tax credit is not enough, the government will make it one-half. The budget states that the government has given up the idea of taking stock options as a form of increasing a person's benefit in a company. Now they will let people take stock options and take the benefit without having to bear taxation.


Mr. Clarke:: This really helps the little guy.


Max Saltsman: I love these little guys at the top, and I am delighted that the hon. member for Vancouver Quadra (Mr. Clarke) feels so strongly about the little guy that he designates him as the president, vice-president or the chairman of the board. I think it is delightful to see his solicitude for the little guy at that level, and I commend him for it.
Let me return to something more serious than the hon. member for Vancouver Quadra. Let me say what is galling about this measure. It is quite true that perhaps there is no great revenue loss in this matter, but this is a matter of principle which I think is important. You are going to say to the guy in the shop whose wages are now controlled by AIB, "Don't complain about being controlled by AIB, because it is for the national good". It is for the national good for him to be controlled, but it is not for the national good for his employer to be controlled.
The Budget-Mr. Saltsman
Even when the AIB says they will try to control executive wages, the government realizes it has made a terrible mistake in even trying to move in the direction of equity. Equity does not work for this government; it creates too many problems. So they say, "All right. What AIB cannot do through the front door we will do through the budget by the back door". In other words, "Executive salaries will not be increased officially as it is not permitted under AIB regulations, because that would make the troops in the factories very restless. Therefore, let us give it to the executive in the form of stock options so we can increase their real income, the amount of money they earn, without having to incur tax liability, and then we can say we did not do it through the AIB".
I think a modern society can no longer live without an incomes policy. This party has always supported an incomes policy. In principle, a democratic socialist party has to support an incomes policy, and the chief reason we object to the anti-inflation program is that it is not an incomes policy. It is grossly unfair. It is a distortion and a dishonour to anything one might call an incomes policy, because it sits on one group of people and tells those people that they have to bear the brunt of restraint, and other people are let off in one way or another. If the government finds it really has some control on some things besides wages and salaries, it devises a convenient budget in which they can slip through and evade those controls.
Like all ministers of finance before him, the Minister of Finance keeps talking about U.S. recovery. He keeps waiting for a U.S. recovery to save us. The Yanks are always coming over the hill with their cavalry to save us. But I do not think that will happen this time. Like all countries in the world, the United States has its own problems. In fact, because of its problems it is becoming more protectionist. That is not a criticism of the United States. They have their problems, and the Americans have elected a government to try to deal with them.
I do not want to quarrel with the kinds of measures the United States government takes, but what becomes obvious is that by having the degree of foreign investment we have in Canada-mostly United States foreign investment-whatever benefits it may have in periods of boom, we now see the disadvantages at a time like this. If we have to expand production, and if we have to provide jobs, we have to do it in our own country; it should not be done by another country through its branch plants. However, that is what is happening, and even though the American economy may recover, there is no guarantee that our economy will follow suit until long after that recovery is full-blown. We have to find our own solutions, instead of hoping and praying for somebody else's recovery. We should hope for an American recovery because we are good neighbours and we would like to see the Americans do well, but to go on the assumption that somebody else is going to save our skins is a mistake. It is to some extent an insult to the parliament of Canada and to the people of Canada to think

April 4, 1977
The Budget-Mr. Saltsman
that our government is so impotent that it cannot devise its own solutions to these problems.
When we look at some of the things the government has done, we are shocked at the opposite directions in which those things go. On the one hand the government wants to increase consumption. It feels that consumption is necessary. Every economist who looks at our economy says the consumption pattern is weak and that we have to find some way of stimulating consumption in order to get people back to work. What did the government do in its unlamented, late budget? The government introduced improvements in registered retirement savings plans and in other plans of that kind in order to encourage saving. With one hand the government is trying to encourage consumption, and with the other hand it is trying to encourage saving. What does the government really want? How does the government really see society? This must be one of the most confused governments in the history of this country, and that takes some doing because we have had many confused governments over the years.
In a way, I feel sorry for the Minister of Finance. He is a big, strapping fellow and one should not feel sorry for him. But I do not envy his job. I hear rumours and read in the press- which is the same thing as hearing rumours-that the minister is considering leaving his post or even leaving politics. 1 can understand how he feels. Trying to do something with the job he has been handed is not an enviable task. I think the difficulty which exists is the idea-which almost everyone on the government side and, unfortunately, almost everyone in the official opposition has-that the way to save the country is to save big business and to give it many tax concessions.
That is like the American, Charlie Wilson, theory which is, "What is good for General Motors is good for the country". I do not want to talk disparagingly about businessmen. I know many businessmen, and they are quite intelligent. They know their jobs, but they certainly do not know how to run the country. It is not their responsibility to run the country, and they really do not see beyond their own particular problems. A government which is so business-oriented that it keeps looking in that particular corner to find an answer is very much at the root of our problem.
The reason I say this is that one of the things that impressed me-this is to show that sometimes my better instincts get the best of my partisanship, and I have to be very careful about that-was the broadcast made by the Prime Minister a year ago Christmas. In that broadcast he talked about a new society. He started to lay out some ideas to the effect that the market system was not working the way it was supposed to work, which we in this party have been saying for a long time. I suppose that was unfortunate, because the Prime Minister was immediately labelled as a socialist for saying just a few sentences. He did not get very far, but there was a lot of truth to what he was saying at that time. We are becoming a different kind of society, and what is aggravating and devastating this country is that neither the Liberal party nor the Conservative party want to recognize that unemployment is not something which will just blow away. It is not something

which can be corrected by a little more or a little less deficit financing or by a little more or a little fewer concessions to business. Fundamental changes are taking place in our society, and neither the government nor the Official Opposition are taking them into consideration. This is the central problem. Our pattern of consumption has changed. The demography of our country has changed.
In trying to prepare for this debate my mind kept going back to what I remember of the depression and to what I remember reading. Recently 1 read an interesting book which brought the depression more vividly to my recollection. The book was called "The Dirty Thirties". That book reminded me of what is going on now in this chamber. It is R. B. Bennett and Hoover all over again. They said that prosperity was just around the corner. Perhaps with the best of intentions those blind men could not see that their society was going through a special kind of crisis. The unemployment they were looking at was not something that was going to go away. We are still talking about balanced budgets, the gold standard and blasting our way into the markets of Europe. Those men could not see that the blight of virtually a whole generation at that time was something different, that something fundamental had been altered in the market system and that business was not able to do the job. At first Keynes was not listened to. 1 was not until the war was over that anybody paid attention to John Maynard Keynes. It took a war to get us out of that mess.


John R. Rodriguez: We need another war.


Max Saltsman: For ten solid years there was a mess because the government did not realize that business was not going to pull us out of our troubles and that prosperity was not around the corner. To some extent I think we are going through the same thing. Granted, unemployment is not the hardship it was in the thirties. No one will argue that it is, thanks to many of the ideas my party has been able to impress upon governments over the years.
There has been some amelioration of hardship. We have had unemployment insurance and various other kinds of security measures which take some of the sting out of our problems. They create other problems in the process, but unemployment is still less of a personal tragedy. However, it becomes more and more a personal tragedy as the years go by and as a whole generation finds itself without the opportunity to work. Fundamentally, society cannot exist if people get out of the habit of working. Even if they can survive, our society cannot exist if we break it into two classes, one class having jobs or having the opportunity to have jobs, and the other class being made up of those who are unemployed and who have to be supported by those who work.
We have only to look around this country and others to see what happens during long periods of chronic unemployment. We can see what it does to people's attitudes and how difficult these are to correct later when there are enough jobs. When we talk about the present situation, we have to put it into
April 4, 1977

perspective and realize things will not always be this way. We are told that the baby boom will be over in ten years and then, instead of high levels of unemployment, we will have labour shortages. We will need all sorts of social structures to deal with this, and we will not have the manpower for it.


John R. Rodriguez: They are hoping for a war.


Max Saltsman: Surely there has to be an alternative. Surely we do not have to butcher every generation to get us out of the mess of unemployment. Professor Morgan of the University of Toronto published a little book called "Permanent War" in which he asked if it is not possible for us to summon up ideas, sinews and attitudes to find in peacetime and do in peacetime those things we do in war.
Let us examine where the resources will come from. We are using resources like mad at the moment and not getting anything back except something that is destroying the fibre of the young people and the not so young. These young people have been trained to work and want to work, and parents are trying to impart the work ethic to them. But where are the jobs? How long can this situation go on until they stop searching for work or stop caring and, instead, start asking, "Who needs to work, anyway? There are not enough jobs and no work that can be done".
As a social democratic party we believe in the dignity of work. We think society has a responsibility to ensure that those who want to work have jobs, particularly when there are jobs to be done whether it be for our own poor, work for the future, or work for other countries. We almost need an internal Marshall aid program for the same reasons that the United States brought it in after World War II-as much to save Europe as to save the United States. It is for that reason we must do something more than mouth the kind of platitudes about the road to salvation being the road through business incentives, but this is what we have been hearing from the government and from the Official Opposition.
Mr. Speaker, let me make a few suggestions. One thing we should do immediately is start lowering the age of eligibility for old age pensions. The time has come to do that from a moral point of view, from a humane point of view and from economic necessity. Many older people have told me they would like to stop working, perhaps not at age 60 but, say, 63 or 64. Many young people want to work but have not got the jobs, and the older ones want to know why they should keep on working, thus depriving the young of the opportunity. Young people tell us to retire their parents because they want to work themselves and the parents would like to take it easy. Lowering the age could be done on a gradual basis, one year at a time.
We should also be working with provincial governments on arrangements to ban overtime except in exceptional circumstances. What justification is there for some people working overtime while others are looking for work? Is it because it is convenient for business to do it that way? What sort of society is it that cannot organize itself better than that? We have to redistribute income not only for moral purposes but for eco-
The Budget-Mr. Caouette
nomic necessity. We have reached a point where our middle and upper middle classes save their money and do not spend it on consumer goods. We have reached the point of satiation for many people. We cannot use the old ploy of tax relief. That is all right if you give it to the 20 per cent of the people at the bottom of the scale who will spend the money. It is not a question of morality any more; it is now an economic imperative to redistribute income in order to provide jobs in society.
There are many things we should be doing in the area of public works. How are we going to build an urban transit system ten years hence if we have labour shortages? Railroad beds have to be rebuilt and many other things have to be done which will mean jobs and people going back to work and something useful for society coming out of it.
We need more public housing, and we need to do something about the environment. The columnist Richard Gwynn made some suggestions, as could any of us. We are spending $4 billion for unemployment insurance, and $1.2 billion of this budget is going to business. If you add all the makeshift programs of the government, you are talking about $6 billion or $8 billion. Imagine what that kind of money could do to stimulate the economy and provide the social infrastructure for a civilized life for ourselves and those who come after us. There is so much to be done-museums, preservation of historic buildings-anything is better than putting people on the pogey. We have a budget that is not only going to leave them there but is going to put more people on it. We have run out of ideas and do not know how to handle the situation.


An hon. Member:: That is good for business.


Max Saltsman: It may be good for some business, but most little businesses do not like that. They know that if their customers are not working, they do not spend.
Mr. Speaker, I should therefore like to move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words:
"and in particular this House does not have confidence in the government's policy of giving more than $1.3 billion in tax concessions to corporations and high-income investors, instead of providing such funds for low-income housing and tax cuts for low and middle income earners, both of which steps would make possible jobs badly needed by Canada's one million unemployed."


Mr. Armand Caouette (Villeneuve):: Mr. Speaker, 1 am delighted to rise today not only on behalf of my Villeneuve constituents, but also of all low and middle income Canadians. I intend to deal with the budget speech which the Minister of Finance (Mr. Macdonald) made on Thursday, March 31.
Mr. Speaker, this is in fact my first term in office in the House of Commons, for it is in 1974 that the people in the Villeneuve constituency elected me to represent them here. I have therefore been exposed to a somewhat limited number of budget speeches made by the current Minister of Finance (Mr. Macdonald). Yet, although I may remain a member of the House for a long time to come, I am sure that I shall never
4614

funny but when you witness the performance of the Minister of Finance you realize that the third sentence is certainly not the easiest to believe.
When we consider a budget such as the one under study, a budget which has nothing to offer the Canadian taxpayer, we tend to believe that the government is not proposing any new measure to solve these problems, especially current problems such as unemployment. There is however one favourable result-this budget will not create a deficit. But, Mr. Speaker, that is the last straw. This year, not only do people with small incomes have nothing positive to expect from the budget but there will be a tremendous deficit to boot.
As I said earlier, a family man with four children earning $7,000 a year will have the joy of saving $4 in income tax next year. You know, Mr. Speaker, the kind of deficit that such a person will have to bear with his children. Believe it or not, he will have to bear a deficit of more than $7 billion. Mr. Speaker, that is what I call paying dearly for nothing. 1 for one would be ashamed of meeting my fellow Canadians if I had to present a budget such as the one introduced by the Minister of Finance (Mr. Macdonald). But it is true that the finance minister meets his fellow citizens on Bay Street or St. James Street where he knows he will find friends after having introduced his budget.
As I said earlier, the budget brings no comfort, no hope for the low income taxpayer. Not only did the minister neglect or forget this fact, he added insult to injury. In fact, when speaking to reporters he said that Canadians were not ready for self imposed wage controls and that anti-inflation controls would have to be kept on for an unspecified period.
1 believe, Mr. Speaker, that Canadians are at least as able to control themselves as the government is proud to present an annual deficit of more than $7 billion. It should not be up to ordinary citizens to enforce anti-inflation controls but rather to the finance minister who seems to have difficulty controlling his own expenditures.
Like in his last budget, the minister insists that the government tries to prevent any drastic change to the tax and monetary policy. Last year, he was saying about the same thing: we must not rock the boat. The government did not rock the boat but the economy remained in the same condition, whatever grinning Jean-Luc Pepin may say. Instead of giving us statistics indicating that inflation is not as severe as before, I should like to see the same Mr. Pepin shopping the same way lower income Canadians do. Be that as it may, Mr. Speaker, Social Crediters do not agree with the budget of the Minister of Finance.


Mr. Bechard:: One Social Crediter!


Armand Caouette: All of them!


Albert Béchard: You are all by yourself!


Armand Caouette: They will come back. If you check the ratio between Liberals and Social Crediters, 1 think there are more Social Crediters than Liberals. It is obvious that the monetary
The Budget-Mr. Caouette
and fiscal system is showing a deficit. So this is no time to hesitate and run around in circles.
Action is needed, and the sooner the better, to change the deficiencies in the system and ensure that our enormous natural resources can be developed. We have the means, the equipment, the expertise and the workers needed. How come the economy cannot undertake all those projects that would benefit Canada as a whole? Because the current monetary system is not in tune with the facts of life in our modern world. This is why the Social Credit Party of Canada has been urging a basic reform of this obsolete system of ours. This is why we cannot accept the kind of fiddling we are getting from the Minister of Finance, who will not take the aggressive initiatives that are so vital. He is now saying: "Let us wait, let us not move too much, the problem may disappear by itself'. 1 submit that problem will not disappear by itself. If we want it to disappear, we will have to take adequate steps.
We will have to reform the economic and financial system. Of course that reform is not welcome by those with a vested interest, those who partake in the Minister of Finances' generosity. Clearly, financiers taking advantage of a scarce money situation to sink individuals, governments and small businesses into debt want no change at all. They prefer that the government do not rock the boat, they prefer getting tax exemptions on their investments into businesses that must borrow to remain in business.
This is what we are fighting, Mr. Speaker. Abraham Lincoln once said: "You can fool some of the people some of the time, but you cannot fool all the people all the time". This is still true in our days. Canadians will not be made by the Minister of Finance to believe that this budget serves the needs and aspirations of all Canadians.
Mr. Speaker, I would now like to turn for a few minutes to one specific aspect of Thursday's budget speech, one aspect involving more than 400,000 Canadians. I am referring of course to all those who trusted the government and entered into the home ownership savings program. When the government launched the program three years ago, they said that all those who did not own a house were eligible. They also stated that the money thus set aside could be used either for the purchase of a house or for the purchase of furniture for the spouse's house. These were, Mr. Speaker, precise rules and all those who registered for the programs were prepared to comply with them.
Today, the minister changes the rules of the game. He tells us that if the spouse already owns a house, we cannot be eligible under the home ownership plan. He also says that we will not be allowed to spend the money on furniture any more. Mr. Speaker, according to me, when you play cards and one of the players tries to change the rules in the middle of the game he is called a cheater because he does not comply with the rules which were set up at the beginning. Today, the Minister of Finance says there has been so-called abuses in these programs and he wants to change the rules of the game when more than 400,000 Canadians have accepted to play according to the rules as set originally.
80012 - 1414

April 4, 1977
The Budget-Mr. Cullen
People who started to participate in the home ownership savings plan before the minister's statement in his budget speech should in my opinion under their vested interests be able to continue to participate in those plans for which they applied in good faith when the minister set up this program three years ago.
I have no objection to the minister changing the rules of the game for those who will be going into those programs in the future. They will be doing so knowing that they are subject to new rules. But I think that to eliminate the vested interests of those who participated in that program before the minister's statement would be as unfair and ignominious as could possibly be. I think that is called cheating, whether it is in a card game or in the implementation of regulations by a minister. So 1 ask the minister to reconsider his decision about those who were already participating in his home ownership insurance program before his budget speech.
I think his legal background, which allowed him to learn how despicable and contrary to legal principles retroactive legislation can be, should lead him to refuse to change the rules of the game after people have already entered the game.
Mr. Speaker, I heard several remarks since I rose to speak but I would be remiss if I did not congratulate the Minister of Finance for the only thing that deserves congratulating in his speech. 1 am talking about the courage he had to get up and read a budget speech in the House of Commons, a budget so disastrous that I would certainly not have dared to make it if I had been in his boots.


An hon. Member:: That will never happen!


Armand Caouette: I hope the House can bring this government to reason and have it take concrete steps to put the economy back on its feet. It is time to stop being afraid to rock the boat.


Jack Sydney George (Bud) Cullen: Mr. Speaker, these are tough times to be Minister of Finance or, for that matter, Minister of Manpower and Immigration, but I congratulate my colleague, the Minister of Finance (Mr. Macdonald), for having the audacity and the courage to add to the deficit, recognizing that the economy in fact needed some form of stimulus to help it along. At the same time he showed the sense of responsibility necessary not to do as opposition parties seem to be advocating, that is, to blow the lid off this "pressure cooker" of deficit financing. I think that what we have here is a Minister of Finance who has accepted his responsibility but has taken the risk of increasing the deficit which we now have, at the same time recognizing that he could not give in as the members of the opposition would have him do.
I think the reaction of the opposition parties could have been anticipated in advance, with the NDP critic suggesting that we in fact had been too generous to business, that we had in fact out-toried the Tories, and then the Tories suggesting that we had not been generous enough. What we also find is the rather

interesting phenomenon of the hon. member for York-Simcoe (Mr. Stevens) now out-NDPing the NDP. He suggested substantial tax cuts for those on low and fixed incomes, and said that they should be substantial. I noted that with all the statistics he quoted in his speech, not one mention did he make of how substantial he thought it should be, or by how much more should the deficit be increased.
You cannot have it both ways, Mr. Speaker. You cannot criticize the government for having too large a deficit and then, on the other hand, say that we should have made more substantial tax cuts to assist persons on low and fixed incomes, that we should have cut out manufacturers' sales tax and done a myriad other things.


Sinclair McKnight Stevens: Read my speech.


Jack Sydney George (Bud) Cullen: I understand the hon. member for York-Simcoe's leader is going to flesh out some of these suggestions which have been made by the hon. member for York-Simcoe, so we will be listening very carefully.
Hon. members may recall that when I introduced our employment strategy in the House last October, I pointed out that no priority is more important to the government than helping Canadians to find work. That commitment was valid then, and it is valid now. It has been reinforced by the announcement made by the Minister of Finance about our plans to increase funding for the employment strategy.
As I have previously pointed out, the Canadian economy, despite recent high unemployment, has been showing considerable growth in the number of private sector jobs available. In the past two years employment grew by about 200,000 each year, a greater growth than occurred in the middle or late 1960's when unemployment rates were below 5 per cent.
Our basic challenge continues to be the influx of young people and women into the labour market. Our labour force grows faster than the number of job opportunities the economy is generating. That is the fundamental reason why unemployment has grown and why we have abnormally high unemployment rates this winter.
In outlining the five-year employment strategy last fall, I pointed out that one of the key features would be flexibility. We plan to expand or contract our employment strategy investments as necessary, to add or subtract program elements, and to ensure that the general shape of the strategy is continuously appropriate to the labour market and economic circumstances which prevail from time to time. Accordingly, we have maintained a close watch on the economic circumstances and on the performance of the programs in the employment strategy. This close watch and continuing review have twice enabled us to determine that increases, particularly in the direct job creation component of the strategy, were both desirable and warranted. In other words, we monitored and we were able to prove our case.
April 4, 1977

The first occasion was last December when I announced a doubling of the Local Initiatives Program to the level of $200 million. We are now benefiting from the consequent increase in jobs and will continue to do so through June, when the program ends.
Last Thursday the Minister of Finance announced, as part of the government's general approach to the management and recovery of the economy, a further increase of $100 million in our commitment to the employment strategy bringing the funding for this year along to a total of $458 million.
Taken in conjunction with our other important investments in employment programs, we will be spending some $1.2 billion on programs either to train people for jobs, or help them find jobs, or to make jobs for them. There are very few countries in the world which do as much in either absolute or proportional terms.


Some hon. Members:: Hear, hear!


Jack Sydney George (Bud) Cullen: There are, 1 realize, some who would have us do vastly more-launch some sort of job creation program or perform some miracle of fiscal policy that would, theoretically, guarantee a job for everyone who might want to work. There are those who will say that what we are doing, despite its scale, is far too little. It would indeed be wonderful if we could abolish unemployment with one blow. I want to assure members that if that were possible, we would not hesitate to do so.
The alternatives have been carefully canvassed, reviewed, and considered. There is simply no easy means of achieving all of the objectives at once.
A gigantic program of job creation, running into the billions of dollars, is not a practical proposition, because there are limits to the feasible scope of any one approach to the reduction of unemployment. But it is not practical, as well, simply because there are limits on the degree to which governments can increase their spending without both inflationary and broad social consequences.
Even those European countries which have been most deeply committed to the motion of full employment have found that they cannot guarantee it. Some of them have attempted to reduce their own unemployment by sending foreign workers back home-a policy of exporting their unemployment. Other countries have launched crash programs only to find that much of what they were doing has no effect. They are simply paying to create jobs that would have been created in any event. Still others have adopted policies which seem to have some limited success in maintaining employment, but at the cost of productivity and international competitiveness.
Our employment strategy has been formulated with these realities in mind. I believe that we can take pride in its good sense and its success. We have developed a realistic employment strategy which contains elements directed toward fundamental long run problems as well as the immediate needs for job creation. It is accompanied by an immigration policy which brings to Canada people who are needed to work rather
The Budget-Mr. Cullen
than an excess of people to swell the ranks of the unemployed, or be sent home when not wanted. The employment related programs within the strategy have very little substitution effect. The money goes to creating new jobs, not to paying for things that would have been done in any event. They are probably more precisely aimed at real problems than those of any other country.
I would like to be able to say that our employment strategy will itself bring the country to full employment levels, but that is beyond the capacity of any set of programs or the immediate power of any government. For one thing, we simply do not have the funds. Our employment strategy will altogether create over 600,000 man-months of employment. To reduce unemployment to some target level of 5 per cent or 4 per cent, even through these highly efficient programs, would cost literally billions. Nobody, I am sure, would suggest that these billions should be found by cutting out other federal programs which are so important to our economic and social well-being; nor could we add the vast sums which would be required to existing government expenditures. We must, and I believe can, learn to use our resources even more wisely and more productively.
Our dilemma is that we face real limitations on what can be expended for training and for job creation, at the same time as we must pay far larger sums to sustain those who lack either jobs or training. We are, through the new unemployment insurance legislation, moving to permit people to use these income maintenance payments in the most productive way possible to take needed additional training or participate in job creation projects. The financial linkage of our new unemployment insurance, training, and job creation systems offers great potential scope for the future. It is a way of providing people who are unemployed with training and with jobs, rather than cheques. If we are successful, we will be able to reduce unemployment more without increasing the level of our expenditures.
Our priority at the moment, however, must clearly be to add to the number of jobs available. Virtually all of the increase in our employment strategy funding will go to programs that create new employment, often with an experience or training component, in either community or private sector work.
We are accordingly adding immediately about $50 million to the Canada Works program, to bring it to a full quarter of a billion dollars. This increase to the Canada Works program has been made possible by the enthusiastic reception which the first round received. Over 8,200 applications have been submitted, to a total value of some $435 million. The increase will permit the ministerial advisory boards to recommend the funding of approximately 3,150 projects on this first round with the assurance that there is still no general shortage of good projects from which to choose.
Mr. Speaker, I wonder if I might call it six o'clock.


Some hon. Members:: Agreed.

April 4, 1977
The Budget-Mr. Cullen


Mr. Deputy Speaker:: It is agreed that we will call it six o'clock. It being six o'clock, I do now leave the chair until eight o'clock p.m.
At 5.59 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Jack Sydney George (Bud) Cullen: Mr. Speaker, prior to the supper hour I indicated that we will be adding immediately about $50 million to the Canada Works program. That will bring it up to a full quarter of a billion dollars. I indicated we had received about 8,200 applications for a total value of $435 million. The increase will permit ministerial advisory boards to recommend the funding of approximately 3,150 projects on this first round, with the assurance that there is still no general shortage of good projects from which to choose.
The high quality of the projects is a critical element in the success of a sound job creation program. I have been most pleased with the extremely careful and responsible job that the the ministerial advisory boards have been doing in assigning priorities to projects. I have also been happy with the increasing degree of federal-provincial collaboration in this area. The enthusiasm of the response, the high level of interest on the part of organized community groups and the private sector, the high level of focus on projects of lasting value, and the hard work of the ministerial advisory boards are combining to produce what I believe will be not only the largest but also the best program of direct job creation which has been seen in any country.
Altogether, Canada Works will provide about 348,000 man months of employment to about 77,100 participants this year. Twenty million dollars of the additional funding will go to Young Canada Works. Together with the previous allocation to this program, Young Canada Works will be using some $50 million this summer to create jobs for approximately 32,000 students.
This increase, again, is made possible by the strong public response to this program. A great number of high quality projects have been submitted and it is clear that the ministerial advisory boards have a larger shelf of sound projects from which to select.
The total funding for Canada Works and Young Canada Works for this fiscal year will thus be some $300 million. I will shortly be announcing the allocation of these funds to each constituency and asking the ministerial advisory boards to come together again if necessary to select the projects most needed by both adults and students. The summer component of this program is operated by boards of trade and chambers of commerce and provides work experience of up to nine weeks for potential school dropouts. The winter component provides young people who have left school with an opportunity for

comparable private experience leading to permanent employment.
The Job Experience Training Program is a key response to the perennial problem of the young worker who cannot get a job without relevant private sector experience, and cannot get experience without a job. Our earlier, highly successful pilot projects with the private sector have demonstrated that the program works well in the summer, and I have every confidence that it will turn out to be just as successful this winter. It is a good example of how the private sector and the federal government can co-operate, both to provide immediate employment for young people and to overcome their longer-run problems.
Although our funding increase at the moment is modest, I would like to see the Job Experience Training Program expand considerably. I hope that it may become one of the main instruments of a true partnership to reduce youth unemployment. I have received a number of interested inquiries from the private sector about how they can contribute even more to our employment strategy. If interest continues to build, and it seems practical, I will be prepared to consider a reallocation of funds from other portions of the employment strategy to help provide young people with employment and training through this program.
I should like to be able at this time to announce an increase in the availability of our funds to help provinces launch co-operative education programs. Co-operative education, which ensures that students get relevant work experience and contacts with the private sector during the course of their studies, is one of the better avenues of approach for resolving youth employment problems. Co-operative education programs are not, though, always easy to start up. They take a great deal of planning and collaboration and hard work to arrange. I hope that our further consultations with the provinces on this matter may lead to productive applications for even more than the million dollars of co-operative education projects that we would hope to assist them with this year. Again, if that proves to be the case, I will be prepared to consider a reallocation of funds in that direction.
Most of our extra funding is, appropriately, being provided for the established direct job creation programs which I have mentioned. But I also plan to reserve a small amount-about $3 million-for a new program which I hope to develop with the provinces and private industry.
For some years we have witnessed the situation where we have at the same time high youth unemployment rates and shortages of skilled tradesmen. These skills take from three to five years to produce, by a mixture of training in industry and short courses in provincial institutions. The careers they open up are both interesting and increasingly well paid. Yet despite the real attractions of these occupations, we in Canada have always had to import workers from abroad. Each year some
20,000	skilled tradesmen enter Canada to fill jobs which would otherwise go begging. At the same time our young people have
April 4, 1977

an unemployment rate which, on an annual basis, is currently about 12.8 per cent. We simply must arrange our affairs in such a way as to bring together unemployed young people and the continuing demand for skilled tradesmen.
I am determined that we will fill this gap. There are many difficulties in doing so-the long period of sometimes low wages that apprentices face; employer reluctance to face the high costs of training when their future needs for tradesmen may seem uncertain; reluctance on the part of some unions locals to accept an expansion in the number of qualified tradesmen. These problems are all understandable; what we need is a means of overcoming at least some of them. 1 will be consulting with my provincial colleagues to see whether we can together develop appropriate means of helping industry to take on more apprentices and helping Canada by having more qualified tradesmen when we need them.
Altogether, the increment of $100 million will bring the employment strategy expenditures for this year to over $450 million. The over-all pattern of these expenditures this year reflects both where we feel the immediate priorities should go and the establishment of some new initiatives which may well become the mainstays of the employment strategy in future years.
Of the total sum, some $422 millions are to be spent on one form or another of direct job creation. They will generate
600,000	man-months of employment and help to reduce our high unemployment rate without setting off another round of inflation.
Some $27 million will be utilized for increased training under the Canada Manpower Training Program and the Canada Manpower Industrial Training Program. The remainder will go to increase the scale of programs that help people find or keep private sector jobs, including our youth employment centre.
The employment strategy will also make a very considerable contribution to alleviating both the short and the long-term problems of youth unemployment. Over $96 million will be utilized this summer on youth-specific employment and training programs-nearly four times the $24 million of last summer. If normal ratios prevail, close to $250 million of our employment strategy will be used to help young people get jobs.
Through these various changes we have greatly strengthened the capacity of the employment strategy to combat unemployment this year. The total number of people who will get jobs or training through it will be over 177,000. It will reduce unemployment rates where they are highest and amongst the groups that have the highest unemployment rates. It will have an immediate and beneficial impact on the economy as a whole. It will do that without adding to inflation or pushing us beyond our means.
As I have indicated, however, the employment strategy is far more than just a series of measures designed to provide temporary jobs for those who need them. It is a co-ordinated set of measures, flexible in terms of its application, designed
The Budget-Mr. Dick progressively to attack long-run structural employment problems as well as to bring down high immediate unemployment rates. It is a strategy not just for the year 1977 but for the future as well.


Mr. Friesen:: Mr. Speaker, I rise on a point of order. Will the minister accept a question?


Jack Sydney George (Bud) Cullen: Certainly.


Benno Friesen: Mr. Speaker, I noticed that the Minister of Finance (Mr. Macdonald) in the budget speech last Thursday evening, and the Minister of Manpower and Immigration (Mr. Cullen) in his speech this evening, talked about man-months of employment, instead of the customary man-years. What is the reason for this? I suppose one answer might be this: they are talking about temporary jobs. Some time ago when I asked the Minister of National Revenue (Miss Begin) a question about jobs in a local customs office, she referred to those as temporary jobs and spoke in terms of man-years. Why did the minister this evening speak about man-months of employment? Does he think that if he multiplies by 12 the program will look larger than it actually is?


Jack Sydney George (Bud) Cullen: No, Mr. Speaker. The reason has to do with accuracy. Many programs, including Canada Works and Young Canada Works, are geared on a monthly rather than a yearly basis. Man-months of employment provides a more accurate description. Perhaps the hon. member noticed that I said how many jobs the program will create in one year. Surely it is simple to divide by 12. It is not a question of trying to "con" anyone; it is just a question of these programs operating on a monthly rather than on a yearly basis.


Paul Wyatt Dick: Mr. Speaker, 1 am pleased to participate in this debate, especially in view of the fiction perpetrated by the government party. Divide the
600.000	man-months of work for 177,000 Canadians by 12, and you will see that the government will provide a mere
50.000	annual jobs for the million or more unemployed, or jobs for about 5 per cent of the unemployed. I am glad the hon. member for Surrey-White Rock (Mr. Friesen) asked the minister to clarify the point, because it shows the government has inflated the figures.
I am sorry to note that the minister is about to leave, now that he has read his junk into the record. 1 wanted him to hear some of my comments.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I rise on a point of order. I have been here all day listening very carefully to the addresses which have been made, and I can assure the hon. member that I will read his remarks, but whether he knows it or not there are other jobs ministers have to do besides give speeches and listen to speeches. 1 know of his interest in unemployment and particularly in youth unemployment, and I will read his remarks very carefully.

April 4, 1977
The Budget-Mr. Dick


Paul Wyatt Dick: Mr. Speaker, I am very pleased. 1 hope I can be instructive and help the minister along so that the band-aid approach which has been used will not continue to be used.
The problem with the measurement of unemployment is that the rate of unemployment in Canada is measured as the number of persons in the labour force who do not have jobs. But it is not enough just to be of working age to be a member of the labour force. A person must also have a job or be looking for a job. Thus, if the number of people of working age who are looking for jobs decreases, the unemployment rate will decrease, even though the number of unemployed and the number of people of working age remain constant. This is the reason the unemployment rate may not present a true picture.
For example, in 1975 of the 418,000 possible new workers only three quarters actually joined the labour force, either had jobs or were looking for jobs. In 1976 people were so discouraged that only about one third of the possible new workers, 383,000, entered the labour force. That illustrates the problem. Even though the working age population has not grown as fast as in previous years, if the participation rate among the new working age population had remained at its 1975 level of three quarters, there would have been an extra
145,000	Canadians counted as unemployed members of the labour force. This would have made Canada's unemployment rate for the month of February, 1977, 8.8 per cent rather than 7.5 per cent. The crunch is that if people get tired of looking for jobs because there are none to be found and, as a consequence, they drop out of the labour force, the unemployment rate will no longer reflect the true labour problem. I think it is important that we bear that in mind because the figures have been deflated considerably from what they in fact really ought to be.
The Minister of Manpower and Immigration (Mr. Cullen) indicated how many new jobs he is going to create and some of the wonderful things he is going to do. At the same time in tonight's paper it is reported that the Minister of Finance (Mr. Macdonald) indicates that the budget will not help the jobless. In another newspaper the Minister of Finance is reported to have said he is powerless to reduce the jobless rate. How can these statements reflect what is really happening if the Minister of Manpower and Immigration says he is going to create so many new jobs? One of the ministers has to be wrong. I think perhaps the Minister of Finance is more accurate, especially when we find out that instead of 177,000 new jobs-if we divide by 12 the 600,000 man-months-we would actually get only 50,000 new jobs.
One of the things which is of great concern to me is that the Minister of Manpower and Immigration said early in his remarks that the labour force is growing faster than the number of job opportunities and that we have an "unusually high" unemployment rate this winter. By that I assume the minister means he did not know this would happen. He seems to indicate this problem is temporary.
I note also on page five of the budget that the Minister of Finance said, and I quote:
[Mr. Cullen.)
The most disturbing element in our performance has been the recent increase in unemployment. I am particularly troubled by the unemployment among the young people of this country.
We have given a high priority to direct job creation programs, especially for young people ...
Mr. Speaker, it has been said time and again by the Minister of Finance and by previous ministers of finance that unemployment in our country is of a "temporary" nature, "unusually high" or that there have been "recent" increases.
I would like to speak for the young people of this country. They could perhaps be referred to as being "The forgotten Canadians" by the government. That is not a recent development. The figures I want to give are not temporary figures or figures which are just a little out of the ordinary. In December of 1973 unemployment among people between 14 and 24 years of age was 9.7 per cent. That is a very high figure. In December of 1974 the figure was 10.6 per cent. That was an increase, even back in those days. In December of 1975 the figure increased again to 12.5 per cent. In December of 1976 the figure went up to 13.4 per cent, and in January, 1977, the figure went up to 15.2 per cent. Finally, the actual unemployment rate for young people in February was 16.1 per cent, a further increase.
How can the government talk about an "unusually high" rate of unemployment? How can it talk about a "temporary" situation or about a "recent" increase? If the government would only read its own figures it would realize that this problem has been growing for five years. Our present problem was predictable. The government seems to ignore this and tries to pretend that this is a temporary problem. It always appears to be temporary to this government because it wants to deal only with today; it does not like looking into the future.
The government has announced some youth employment programs for this year, and I think it should be borne in mind the relationship of these programs to what has happened in the past. In 1973 the federal government spent $85.4 million to create 67,000 jobs for youth. Again in 1974 the government spent $85.4 million to create some 67,000 jobs for youth. In 1975 that figure was decreased, although unemployment among youth was increasing. It was decreased to $67 million to create some 37,000 jobs for the young people of this country. In 1976, the year the government really hit rock bottom, it announced in its budget that it would spend $60 million. However, the government did not spent $60 million. In fact the minister has confirmed the figure I have. In his speech today he said that in 1976 the government spent $24 million to create 12,000 jobs. The unfortunate thing is that the minister now boasts that he has almost quadrupled the figure for this year and that he is going to spend some $96 million to try to create, as he said, 177,000 jobs.
How an increase from $85.4 million in 1973-74, which was to create only 67,000 jobs, to $96 million to create 177,000 jobs can be done is beyond my mathematics. I presume it is beyond the mathematics of most people when they consider the minimum wage in this country. The fact is that back in 1973-74 the government was spending $85 million to create work for youth and that only now is it getting back to the same
April 4, 1977

range, and that is not really the same level of spending when we take inflation into account. Until this budget came down the total figure the government had in mind for this year was $55 million to create 33,000 jobs.
Since the government realized that unemployment among youth is completely out of hand because of its irresponsible management of the economy, it has turned around and put together a whole bunch of new programs or added to other existing programs. We find that it is going to add another $50 million for the Canada Works Program and another $20 million for the Young Canada Works Program. On April 4 it announced another $20 million to be put in place for people to start work in four weeks' time. That is what I call unplanned job creation.
The Minister of Manpower and Immigration went through a list of another $3.5 million here, $10 million there, $6.4 million added on to old programs-these are sizeable amounts but they will not be used efficiently because there is not enough time to get things into place. The government is coming in with too little too late. It is not even back to the real spending figures it used in 1973-74 to help the youth of this country, and yet this year we have the highest rate of unemployment among youth in the history of the country.
The government tries to make us believe that it is really interested in youth and really wants to help youth, but every time it announces a program it is only a few weeks before youth is supposed to be involved. Young people who are serious about what they want to do this coming summer should have taken action last November. Application forms for Young Canada Works were issued in January but, Mr. Speaker, they had to be returned by February 26. That was not a lot of time to do any planning. The applications should have been out last November and there should have been an advertising program then.
Another two youth-oriented programs have been announced in the last two weeks but they will not be of any benefit to our youth for this summer. The Secretary of State (Mr. Roberts) announced a Canada student exchange program but he did not know how much money would be available for it. He said he hoped about 30,000 young people would take advantage of it but he did not give figures on how much they were going to get. He said travel costs from region to region would be paid and that students would be matched through a computer. But again, applications would not be available until June, he said. After that the matching will be done, so I do not know how many young people will still be around. By that time they may have found jobs or have started back to school. No wonder the minister did not put a monetary figure on the program. He will have to carry it through to next year to get anything out of it.
The Minister of National Defence (Mr. Danson) also announced a new program. Mr. Speaker, that Katimavik program was announced in the throne speech. Another $8 million will be earmarked for 1,000 young people in 33 job locations. But, Mr. Speaker, they do not know where those 33
The Budget-Mr. Dick
places will be this summer. The minister said he hopes to have the program in place by September, that the young people will be paid $1 per day, and $3 per day will be saved for them and paid at the end of the program. I hope he does not intend to employ anyone between the ages of 17 and 22 who smokes or drinks pop because that allotment would not cover a packet of cigarettes and a coke every day. They will not be able to afford to go to a movie, either. I wonder how they can introduce that as a job program or an employment strategy. I wonder, too, how many minimum wage laws this breaks. I do not think anybody is allowed to work for $1 a day under the minimum wage laws.
These programs have not been well thought out; they are just designed to catch the notice of the press. Youth will not benefit, and unemployment will probably be as high this year as it has been for the last four years.
Since 1953 the government has issued a youth questionnaire each summer relating to student unemployment. The labour force survey used in May, 1975, leads off with the question: was this person a full-time student in March of this year? Mr. Speaker, that is normally a month when people who are students are at school. Next the questionnaire asks: what does this person expect to be doing in the fall? They must answer whether they are going back to school. Then the questionnaire goes into more detail about what sort of educational institution they plan to attend, what they expect to be doing in the fall, and what is the main reason they will not be full-time students in the fall. Student unemployment figures can be assessed as a result of this survey.
Last year the government did not want to show the figures because they would disclose how high student unemployment was. It got rid of that survey and introduced another couple of questions such as: last week was so-and-so enrolled in school, college or university, or, was so-and-so enrolled as a full-time or part-time student, and in what kind of school? If that questionnaire went out in the second week in August of course it would show they were not at university because universities are not open during the first week in August, so a person would not be a student under the criteria of the questionnaire. That is the sneaky way the government tried to deceive young people going to universities. I hope the government will reinstitute the student surveys this summer so that it will be able to project what is going on with student unemployment from one year to another as it had from 1953 until this survey it came out with last year.
It is sad that the government has sunk so low that the Prime Minister (Mr. Trudeau) advised students at the University of Toronto that if they are dissatisfied with job opportunities in Canada, they should go to another country. Not all our young people come from families of relative wealth who can afford to send them overseas to hitch-hike around the world as the Prime Minister was fortunate enough to do. Some of the young people and students in this country have to work for a living, through economic necessity. They cannot afford to spend eight or ten years bumming around the world, much as they would enjoy it. They sometimes have to work to pay back

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university loans, to pay their parents back, or to help the second, third or fourth child in the family.
By and large the young people of Canada want to work. They want a meaningful job in society and they want to have a positive input to help the country prosper and expand. Instead they get a slap in the face. The government does not help with its band-aid approaches.
Here is an example of government advertising for one of the Young Canada Works programs. In part it reads as follows:
The students will work on projects of community benefit that will enable them to test their career aspirations.
In the next paragraph we are told the projects will last between six weeks and 14 weeks. In that relatively short period of time I hope they can find what their career aspirations are going to be and I hope they will get real understanding, at the minimum wage, of the type of work they would like to do. It is a laugh, I cannot say anything more.
The government is deceitful in its treatment of the youth, the "forgotten Canadian," in this mass unemployment which we have. We have a Minister of Finance who says it is beyond his capacity to alleviate the problem. It is the government which created the problem, but now it cannot solve it. It seems that it is just not interested in the young people of this country who want to contribute so much. Young Canadians are the most overlooked, snubbed, and neglected segment of this society. They would have to be classified as the "ignored" or "forgotten Canadians". If nothing else made this self-evident, the Prime Minister's talk to the Toronto university students surely brought this out.
Back in 1972 the Prime Minister failed to take young people's problems seriously. In an article in the Gazette of February 29, 1972, he said that in periods when the economy is slack and jobs are not plentiful, the gap between a pay cheque and an unemployment insurance cheque could be filled by schemes similar to the government's Local Initiatives Program and Opportunities for Youth Program. The idea, he said, is to find something for these people to do-like assistance to the aged, baby-sitting, or teaching languages. Now his government is suggesting programs like Young Canada Works as a stop-gap-but I would like to point out that his band-aid approach has lasted five years already. It is absolutely intolerable to think that this ad hocery should continue.
The report on youth and employment by the Canadian Council on Social Development says that there will be a continued growth of population for those aged 20 to 24 until well into the 1980's. It is well past the time that the government realized that the youth unemployment situation could become chronic unless long-range plans are implemented immediately.
Young Canadians, aged 15 to 24, represent approximately 26 per cent of our total population and about 24 per cent of the total employed labour force, and yet they represent about 46 per cent of the total unemployed labour force as of Febru-

ary of this year. For these young people the future is bleak. As the leader of our party stated a few days ago:
Young Canadians-to whom Mr. Trudeau says: 'If you want a job leave the country'-cannot be expected to develop a work ethic until there is work to have ethics about.
If the Prime Minister were at all capable of understanding how insecure and uncertain Canadians are feeling, he would have never made such ridiculous statements to the Toronto university students. Instead of attempting to understand their feelings-and, I might add, justifiable feelings-of fear over their future prospects, the Prime Minister has treated these people with complete disrespect and contempt. He said:
We're not going to put millions into subsidization of university graduates because they have a bleak view of the future.
Yet never for one moment did he stop to consider why young people just might consider their future so bleak.
A Statistics Canada report on the 1974 university graduates showed that four months after graduation 11.4 per cent of the students were still unemployed and a further 17 per cent were underemployed. A year later, of this same group of students, 7.2 per cent were still unemployed and a further 11 per cent were underemployed, yet the unemployment rate for 1974 was an over-all 6.1 per cent, and only 4.1 per cent for those 25 years of age and over. So, when the Prime Minister says to the Toronto university students:
There's no case for university graduates. They're the ones who get the jobs,
I suggest, in view of the aforestated statistics, that he is simply talking off the top of his head and without any knowledge or commitment.
Youth unemployment has been, and will continue to be, a long-term problem, and not merely a temporary surplus as the Minister of Manpower and Immigration would like us to believe.
The Canadian Council on Social Development dismisses this temporary surplus myth by saying that the 20 to 24 year old age group will continue to grow well into the 1980's. Other myths, such as that young people are over-educated, as the Prime Minister would have us believe, are also dismissed. The so-called logic of why one cannot appreciate a good job until one has experienced a series of bad jobs escapes me, because it certainly never applied to the Prime Minister. But, more important, as our young people grow older, the pattern of poor job experience today will be transmitted into the future- unemployed young people today may simply be the working poor of tomorrow. This is why some long-term planning by government is essential. It is not sufficient to view the high unemployment of our youth as temporary and to offer ridiculous temporary solutions like Young Canada Works, or any other band-aid solutions which last a matter of weeks and then leave the person without a job again.
These young Canadians-the generation popularly known as the "post war baby boom"-have been subjected to a series of "temporary solutions"-from "temporary" classrooms for a school system that could not absorb them all, to being "temporarily" kept off the labour market by the need for a higher
April 4, 1977

education philosophy, and now they are facing a labour market which cannot absorb them, and the federal government says they are a "temporary" surplus and offers them "temporary" stop-gap solutions. If a number of young people have become discouraged and stopped searching for employment, is it any wonder at all?
As a spokesman for youth in our party 1 have had the privilege of visiting many universities and many groups of young people and I find that young people want jobs. They want to add to our country. They also want security. They want permanent, meaningful jobs. Some of them would like to get married and raise a family, others would like to buy a car. You cannot do that on "temporary", stop-gap programs which will give them employment for only six to 14 weeks or, as the Minister of Manpower and Immigration admitted himself, on a month to month basis. They do not know where they will be in the future because the government refuses to deal with the problem. The young people of this country, sad to say, are the "ignored Canadians". They are the "forgotten Canadians", forgotten by this government, and it is a sad indictment that the government will not take steps to cure the highest unemployment rate in our history for the young people of Canada.


Mr. S. Victor Railton (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I feel privileged to be able to enter this important debate. Although I have spoken on one or two throne speeches, this is a first for me on a budget. During his career in the House a member wants to engage in the whole spectrum of activities because, if he is serious, he deems it his duty to contribute all he can to national decisions and issues.
The throne speech opens a new session or a new parliament and outlines new hopes and vistas for government and national consideration. It tries to illuminate short-term as well as long-term targets. A budget speech, conversely, is in one way a pragmatic review of past expenditures. It is a moment of truth. It is also a melange, of targets missed or realized, and it makes forecasts for action both immediate and remote. It is the government's hour of confession and self-appraisal. But implicitly, an honest government and an honest minister of finance will lay bare those unforeseen events which have caused adjustments to estimates. A courageous finance minister gives the country the unvarnished truth, as has the present Minister of Finance (Mr. Macdonald) in this budget. Also because he is an intelligent, patriotic Canadian, with a great deal of ministerial know-how he, as he did last Thursday with the rest of us, looks at the future and charts a carefully planned course of action.


Sinclair McKnight Stevens: You are smiling!


Samuel Victor Railton: Because of obvious difficulties in the present national and international scene, and because sailing these dangerous waters demands high purpose, a clear head, and a happy ending to the voyage, his budget was an excellent compromise. It gave stimulation to the economy, and enough
The Budget-Mr. Railton
tax relief to soften our policy of restraint which, if overdone, would induce further unemployment. Budgets take six to 12 months to show results. But by the end of 1977, and the spring of 1978, the present recessionary period should be safely past. The long-term future will depend on world events, and the imaginative co-operation of all Canadians who believe that this is Canada's century.
Antedating this important budget, Canada was presented with the Parti Quebecois election last November. The government takes note of the fact, and its threat to a united and prosperous Canada. However, it is imperative to carry on as though separation will not happen. We can prevent it if we mobilize the silent majority both in Quebec and Canada as a whole. It is other factors outside Canada which have contributed to our inflation as well as to our unemployment. Turning on a tap of spending, either by increasing wages or prices, or by prodigal job creation, would be irresponsible. Parsimonious restraint on the obverse would only increase unemployment. [Translation]
Mr. Speaker, before this very important budget was introduced, Canada has had to face the electoral success of the Parti Quebecois last November. This government must now pass the test of creating a united and wealthy country. However, we must go on as though separatism did not exist. By mobilizing the silent majority in Quebec and in the rest of Canada, we will be able to work together to maintain our national solidarity. Other factors outside Canada have influenced the levels of inflation and unemployment. To reach our objectives, we must not raise wages or prices, nor create overly well paid jobs which would increase unemployment. [English]
Right here I should like to say that although the previous speaker heaped contumely on the Young Canada Works program, Senator Hubert Humphrey in the United States has taken this program, and the effort of the Minister of Manpower and Immigration (Mr. Cullen), as an example for that country to follow and has brought a bill before the Senate along the same lines as the action taken by our own minister. I think that will serve as a rebuttal of the hon. member's remarks.
World economists and OECD surveys show that in spite of the opposition's misleading doom-and-gloom critics, Canada is still third or fourth in economic performance in the world. She has to live with the realities of a European Economic Community slowdown, the United States recession, demands from NATO for greater participation, as well as obligations to the Commonwealth; and in addition she has to meet the huge recent industrial competition of the poorly paid workers in the Third World. Canada must compete in the traditional pattern, but with great energy and imagination, as well as with true friendship.
Only a minority of Canadians realize that we possess a great land mass with many mineral resources, forests, and extensive continental shelves, along with inland water, great agricultural potential, and a good base of industrial technology. Our geo-

April 4, 1977
The Budget-Mr. Railton
graphical position poses expensive obstacles to our development. This is aggravated by our sparse population. Our cold winters increase costs of home and plant and public building heating, so our industries must add to energy costs of manufacturing the costs of our severe winters.
We suffer by comparison with Japan, the United Kingdom, Europe generally, and our more southern neighbours, the United States, as regards transportation cost. It is so far from one region to another in Canada. In spite of a generous endowment of energy which is contained in fossil fuels, our exploration and development costs increase every few hundred miles further north. For example, a gas well in the Beaufort Sea last year cost $30 million to drill. The minister can state unequivocally that there is no cheap energy anywhere, after surveying our gas, oil, coal, atomic energy and renewable energy resources. Conservation is a must. Reduced demand goes with it. World oil prices will soon rise, and now we have hard decisions to make about development of our energy resources. Priorities are emerging, and the timing of the phases of these developments will depend on our decisions regarding industrial development, regionalization of industry, and to a great extent on our success in settling disputes between labour and industry.
All these factors or obstacles have not prevented the government from upgrading our country's living standard to the world's highest; from providing the best social security system anywhere as regards health, family needs, senior citizens, and veterans coverage. Unionized labour is better paid in Canada than anywhere else. The wage level is still above the United States average. Canada, too, has provided multicultural benefits to her ethnic groups. She has made a very costly attempt through her bilingual policy to preserve Canadian unity and to prevent the disappearance of this nation which has so much to offer her own citizens as well as the causes of world peace and the general acceptance of the principle of the interdependence of nations.
This discussion leads us inevitably to review our industrial and export picture. A recent report from the Science Council of Canada reveals the trend since World War II. Under C. D. Howe, Canada became fully industrialized for war production. In the succeeding 15 years, production and export continued merrily, and prosperity increased by leaps and bounds. Even in the 1960's industrial expansion and resource development continued without any difficulty because the industrial nations, of which we were one, supplied the whole world with manufactured commodities and a lot of its food. Canada had a positive trade balance. She exported raw materials, minerals and timber, and had no trouble selling agricultural and manufactured products.
In the 1970's there was an abrupt change. The Third World "low technology" manufacturing countries now began to swamp the market. In 1973, the Arab oil price bomb was dropped and energy prices were quadrupled. Though exports of our primary products continued fairly strong, our oil and

gas policy now reacted by curbing exports of these resources, and this is continuing.
Whereas we had at least some domestic markets for textiles, leather goods, bicycles and consumer electronics, these can no longer compete advantageously. Similarly, in high technology areas such as fibres, chemicals, heavy machinery, transport equipments, office machinery and appliances, a trade deficit of almost $7 billion has arisen. Even the United States worries about the ascendancy of Japan and Germany in these fields. In this budget one sees the ugly fact that we had to remove the preferential treatment accorded United Kingdom heavy machinery-and Britain is a Commonwealth colleague.
So in Canadian industry, research and development, both government and private, have declined. Productivity is comparatively poor. Our labour costs are higher than those of our immediate and remote competitors. The Canadian investment climate has become troubled. The United States economy is weaker than formerly, and our exports of manufactured commodities have shrunk. Obviously we must find ways to improve our economy and particularly our export record. It is my opinion that we should try to supply at least 60 to 70 per cent of our domestic market in order to build a strong manufacturing base. By increasing our research and development we can keep pace in technology. This technology would be all the better if it had an indigenous Canadian flavour. Our products must have excellence and they must be unique. We cannot allow mere copying of foreign models.
The Science Council of Canada, which confirms my last remarks, also lists six points in the strategy to improve Canada's industrial and export capability, and these are as follows: first, concentration on specialization and selectivity; second, judicious government intervention and support to rationalize industry in its areas of specialization. These moves would stem from assessment of Canada's domestic needs. Third, we would do well to go back to a re-evaluation of the Gray report on Canadian industry, foreign investment, and subsidiary companies. This would encourage Canadian owned and controlled private companies in these selected areas. Fourth, steps must be taken to aggregate domestic markets, and concentrate government purchasing to build efficient Canadian corporations. Fifth, nuclear and defence programs must be harnessed to the policy of Canadian industrial enhancement. Sixth, we possess unique, indigenous industries in Canada. These require pushing and intensification by furthering our own research and development and using complementary foreign technology.
Examples of Canadian indigenous technology with a high degree of excellence are our aircraft industry, our locomotives and rolling stock, both passenger and freight, our ice-breaker cargo ship, our heavy water plants, and that superlative Canadian triumph, the CANDU reactor. We have our communications satellites and communications equipment, our northern drilling and pipe line experience, and our hydro know-how. Our next push should be into the realm of renewable resource technology. This has been brought into the open by Bill C-309 standing in the name of the hon. member for
April 4, 1977

Davenport (Mr. Caccia). Ele proposes an institute for solar energy, which I support in principle.


Some hon. Members:: Hear, hear!


Samuel Victor Railton: The details that I have just outlined must then be taken into account and a budget produced to satisfy the multitude of Canadian needs. Our Anti-Inflation Board has performed very creditably. It has certainly modified the sharp rise in inflation. It has controlled prices as well as wages and salaries. Individuals and corporations have co-operated well.
The government has reduced its increase in expenditures from 24 per cent two years ago to 11 per cent last year, and aims at 9 per cent this year. This was an immense achievement. Its target last year had been a 17 per cent reduction. The civil service has restricted its personnel increase to one per cent annually, below the rate of population growth. Maxwell Henderson misanthropically chides the government for a 400 per cent or more increase in expenditures over the last 10 years, but he conveniently avoids saying that the gross national product has risen at a parallel rate.
High unemployment figures exist everywhere in the world, not only in Canada. We are particularly concerned, however, with the 14 per cent rate for all youth, against the 7 to 9 per cent for all women and 5 per cent for all adults. We worry that the Atlantic provinces have such a high unemployment rate, and Gaspe in Quebec as well. In the middle range are Saskatchewan, Manitoba, northern Ontario and the rest of Quebec. This aspect will, we hope, be ameliorated by introduction of a doubling of the 5 per cent investment tax credit in the Atlantic provinces and Gaspe, as well as raising it to l'h per cent in the designated central areas of Canada.
So, Mr. Speaker, the Minister of Finance fully recognizes the need for an intensified and continued struggle against inflation, unemployment and "business doldrums". He had a very fine line to tread. It is well known that fixed expenditures such as the national debt, social security, Crown agencies, cost shared programs and agreements with the provinces and equalization payments, as well as all the other needs of the economy which I detailed, leave the minister only some 10 to 20 per cent of the total budget which can be changed.
That is why he has set himself some important goals, and they are as follows: first, to persuade us all individually and in groups to lower our expectations regarding our share of the total available national income; second, to remember the need to assist our senior citizens, the handicapped, the pensioners, the veterans and the low income group of workers. His budget has given relief to these groups. Third, to give judicious stimulus to all business, but particularly small business. Too big a dose would cause more inflation; too little would allow business stagnation. He has seen clearly the need to provide for regional disparities. He has wisely left on controls until at least next October, and maybe until 1978. Clearly it will take assurances from both organized labour and industry to accept the decontrols period with promised self-restraint, or the controls will have to remain.
The Budget-Mr. Yewchuk
It is patently foolish for the Leader of the Opposition (Mr. Clark) and the Leader of the New Democratic Party (Mr. Broadbent) to ask for removal of controls immediately. The former is deluded with the free market place philosophy and apparently he is deluding himself and the public. The other, with his socialistic patter, intimates that we are fighting inflation on the backs of the workers. Both men need to get down to grips with reality and be more honest with themselves.
I mentioned the criticisms of the two leaders of the opposition. I have discarded them as being quite trivial. The press has shown that most of their group understand the difficulties facing the Minister of Finance in preparing his budget. They give him credit for having the courage to see things as they really are. They congratulate him on his ability to diagnose our national ills and, as our country's adviser, to realize that major surgery is contra-indicated. The minister is competent and sensible enough to realize that careful treatment and nursing the economy along with patience and devotion will see us through the next few months and provide us with greatly improved national health within the coming year.


Paul Yewchuk: Mr. Speaker, after the good example set by my hon. friend from Welland (Mr. Railton), I would also like to say a few words in French. I am not bilingual yet, but I have been taking courses for a few months. Just the same 1 wanted to say a few words at the outset. I prefer to speak in English, because I want to discuss a matter which is very important for my constituents and for Canada.


Some hon. Members:: Hear, hear!


Paul Yewchuk: I have used that opening, Mr. Speaker, just to demonstrate that the bilingual program has been a failure!
1 want to begin by expressing great regret that the budget speech made no mention of the subject of agriculture. There was a small tax change suggested in so far as selling a farm is concerned and reinvesting the money in another farm within a certain period.


An hon. Member:: It was suggested by us first.


Paul Yewchuk: It was indeed suggested by my party before, but that does not even pretend to come to grips with the problems that are facing agriculture in this country today. Everyone knows that the problem is one of a decreasing financial viability of agriculture as a whole. Concomitant with that, we have a situation where farmers are no longer held in the high esteem that they used to be held in as producers of the country's food supplies. If we talk to some of our urban brethren we find that their treatment of farmers, on many occasions, is such that it indicates that they rate the farmer very low on the social scale. That kind of rating of the farmer is clearly reflected in the policies of this government, and was certainly reflected in the absence of mention of farmers in the

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The Budget-Mr. Yewchuk
budget speech. In other words, the government seems to place the farmers so low on the social scale that they do not even deserve a mention in the budget speech, which should have offered solutions to the many problems farmers are facing all across Canada.
We have seen, over the past decade, and even before that, a fairly steady stream of people from the rural areas into the cities. These people were farmers who, after having given it the good old college try, concluded that there was just no way to continue operating the family farm, gave it up in total despair and disgust, and went to the city to look for better things.


Ramon John Hnatyshyn: Some of us went into politics.


Paul Yewchuk: That is right, some of them went into politics and indeed accompany us in this House at this particular time. We all know that farmers could produce a lot more food for the starving people of the world if they were encouraged and if they were guaranteed or assured of some kind of reasonable return for their labour and investment. There has, by no means, been any such assurance. Therefore, they are not producing to resolve the food shortage problem that the world faces today.
As a result of the difficulty in economic viability of farming operations, we have seen a couple of things which are of concern to me. One of them is that the age of the average farmer is becoming fairly high. In other words, very few young farmers are beginning in this business. If they did, they would only be doing it for love of the lifestyle which a farmer enjoys, rather than with any prospect or any hope of making a reasonably good living doing that kind of work. The result of the aging population of the farm, from the long term point of view, could be fairly serious for the country, making it more and more dependent on imports and less and less able to produce enough food to feed its own people.
Part of the problem has been a very great lack of stability in the farm situation. There have been some small efforts made to combat this instability. One of these has been the grain stabilization program. That in itself has done very little to produce the kind of stability that is required if we are indeed to see agriculture survive.
During the course of the few minutes that I have the floor 1 want to illustrate the problem the farmer faces from the point of view of the diminishing return that he has been receiving for his investment and his labour. Comparing that to the very sharply increasing costs he must face results in an ever-increasing number of farmers just quitting because it is impossible to carry on. If we look at the consumer price index for the past five or six years, we find that it has gone up fairly substantially. In September of 1976 the consumer price of beef was down 13 per cent from a year earlier, while all items, excluding food, were up 9.3 per cent. With respect to food consumed in the home, its costs have gone down by 2 per cent, while services of various types that people buy have increased in cost by 12.3 per cent.
Those figures clearly indicate one very important fact. That is that the net income to the producer of food in this country
(Mr. Yewchuk.)
has shown a drastic decline. If we look at the figures for net income realized by farmers as a group in this country, we note that in 1974 it was $3,804 million; in 1975 it was $4,246 million; in 1976 it was $3,362 million. In spite of drastically increased costs in the period 1974-76, net farm income not only dropped to a lower level in 1976 than in 1975, but to an even lower level than it was in 1974. If you check around the country and examined the incomes of tradesmen, labourers, professional groups or business people, you will not find another group which experiences this kind of difficulty with its income. It clearly shows there are serious problems that need to be corrected.
I have some figures in terms of the investment a farmer must make. They are for Alberta, but I would think they are similar in other provinces. In 1975 the average farm in Alberta consisted of land and buildings valued at $109,000, machinery $25,000, and livestock $17,000. This is the average taking all farmers together, realizing that there are many farmers whose investment is much higher and many whose investment is much lower. The total average investment of a farmer in Alberta is $151,000.
In 1975 the net taxable income that a farmer received on that kind of an investment was $14,000. That includes income not only from his labour but also a consideration for the interest on his investment. Calculated on the basis of a return on an investment, that brings his return to 9.3 per cent. The figure for 1976 was even less, 7.6 per cent.
If the farmer liquidated his assets and made a long term deposit of the cash, his return would have been better than the 9.3 per cent or the 7.6 per cent in both of these years. He would have obtained a better return on his money had he not worked but simply sold his assets and deposited the money. The interest would have been higher than his actual income for the years 1975 and 1976.
In short, the average farmer in Alberta paid to stay in business. Not only did he get less income than if he had not worked and simply invested his money, but he received absolutely nothing for the weeks and months of work he put into the operation of his farm.
I am sorry the Minister of Agriculture (Mr. Whelan) is not here. I would like to ask him whether he feels the policy of the government has been fair to the farmers in Alberta from the point of view of ensuring them some kind of decent income based on the number of hours they put in, as well as based on a return on their investment.
No group other than the farmer works for no financial return. He is the only one in our society today who works for no pay at all. Indeed the return he gets does not properly cover the interest on his investment.
I now wish to deal with the price the farmer gets for his product. It may help members opposite to understand the problem which they obviously have not understood this far. In 1971 he received $1.50 a bushel for his wheat. In 1972 it was $2.87 a bushel, and in 1975 $6.23 a bushel. This year it is
April 4, 1977

down to approximately $3 a bushel. In that five-year period, wheat prices came up to a reasonable figure for a very short time. They have now dropped back to $3 a bushel. These figures will be more significant when I review later the costs the farmer has to pay.
In 1971 it cost $30 per acre to produce wheat. In 1976 the figure was $88 per acre, an increase of 293 per cent. While the price of wheat between 1971 and today has roughly doubled, up by 100 per cent, the cost of producing a bushel of wheat has gone up by 293 per cent. This clearly illustrates the point 1 was trying to make in so far as costs and incomes are concerned.
Between 1969 and 1973 the average price the farmer received for his beef product was $36.28 a hundredweight. That figure takes into consideration the very high price he received in 1972 for a short period of time. In 1973 the price was $46.50 per hundredweight. Today it is about $42 or $43 per hundredweight. This shows that the price the producer of beef receives for his product is lower today than it was four years ago.
Looking at the cost of beef production, we see that it cost about 45 cents per pound of animal gain. The price the farmer receives for his product when he sells it is 43 cents for a pound of beef, even though it cost him 45 cents a pound to produce. His return is less than the cost of production. He receives no consideration for having put a lot of work into that production.
1 want to review some other costs the farmer faces. Gasoline has doubled in cost in the past four years. Binder twine doubled in that same period, and fertilizer is a little more than double in price. The cost of tractor tires has nearly doubled.
The cost of a tractor to pull a four-bottom plough cost $7,500 in 1973. This is a basic tractor without extra equipment. Today it costs $9,500, an increase of $2,000. In 1960, that same machine cost about $4,000. In 1960, the price the farmer was getting for his wheat was in the range of $1.75 a bushel, approximately the same as in 1972. The cost of fuel, equipment and materials doubled in the past four or five years while the price the farmer received for his product, whether it be grain, beef or some other product, remained essentially unchanged or, in fact, dropped a little.
I might pause here to take a further look at the question of beef. This has been an area of great difficulty for the past couple of years. Any of us who have read speeches of the Minister of Agriculture will have seen statements by him that we are producing too much beef, that the market is glutted, and that that is the reason for the low prices. I think this is very far from the truth. The truth is that Canada has not been producing enough beef on an annual basis since 1969 to meet its own needs. There has been an oversupply of beef purely because of imports from other countries, primarily Australia and New Zealand.
I happen to have figures here which clearly demonstrate that the minister has followed a deliberate policy of squeezing out of the beef business hundreds of farmers on the excuse that there is an overproduction, knowing all the while that there is
The Budget-Mr. Yewchuk
no overproduction. The minister is just trying to make room for more and more imports from other countries. In 1975, the last year for which statistics are available, beef production in this country amounted to 2,190 million pounds. We exported about 45 million pounds, leaving 2,145 million pounds of beef available from domestic sources. Total domestic consumption, on the other hand, was 2,335 million pounds of beef, or 190 million pounds more than domestic production. I think that is very significant because the beef producer has been squeezed very severely on the excuse of the Minister of Agriculture that we have too much beef, but the fact is that we have not been producing enough to meet our own needs.
We have to ask ourselves why this government, which is supposed to be responsible to the people and sensitive to their needs, has chosen to follow this destructive course in so far as the beef farmer is concerned. On examining the reasons we find that it is because we have trade agreements with Australia, for example. Australia will buy Canadian manufactured goods and in exchange we will buy their beef. The goods consist of various types of manufactured hardware from central Canada which is sold on the Australian market. Admitted, some of the beef which is imported is of poorer quality and perhaps less costly. Canadian beef production is being sacrificed in the interests of central Canada's manufacturing industry and in the interest of the urban consumer lobby, and the western farmer is being destroyed in the process. That situation is completely intolerable and must be changed forthwith.
I wanted to make some general comments because we are not dealing with just figures when we talk about farmers; we are dealing with people who have chosen to produce food as their life's work and who have chosen to live on the farm because they like that kind of lifestyle, because they love the soil, and also because they realize that for the long-term good of the country Canada must remain self-sufficient in its food production to the maximum extent possible. It is beyond me why the government fails to recognize the situation and why it seems to choose to destroy our agricultural industry and force thousands of people off the land in favour of getting some hamburger from Australia at a few cents less a pound than it would cost to produce in this country. We know that, if that trend continues, agricultural production will continue to deteriorate and in the long run Canada will become more and more dependent on offshore sources for its food supply. And if we reach that stage of dependence we can be sure food prices will become a lot steeper than they would be had we maintained our own production capability.
I am not saying that developing a good agricultural policy is an easy matter. I am not even suggesting that all farmers should be subsidized. I am simply expressing the view that we have a government in this country which has failed totally to recognize the need to develop an agricultural policy which will keep our agricultural industry viable and productive. Unless governments in this country become more attuned to the fact that farmers will not continue to work for no wages and something has to be done fairly soon, Canada will be in difficulty in so far as its food supply is concerned.

April 4, 1977
The Budget-Mr. Yewchuk
Everyone will admit that if there is anything Canada can do well, and if there is anything that Canada is suited for, it is agricultural production. We must recognize that agriculture must remain one of the key industries in this country and that the solution to the farmers' problem is not simply to drive farmers off the land but that other solutions must be found to help them stay on the land, and to guarantee them not only a decent return on their investment but also a decent wage. If that is done, the country will be healthier as a whole.
I mentioned earlier that the average income of a farmer in Alberta in the last couple of years was in the range of $11,000, $12,000 or $14,000, that is, not counting the return on his investment. If you look at that figure by itself, you will find it is similar to the income of some tradesmen such as carpenters or mechanics who make around $7 or $8 per hour. But we must remember that a mechanic, a carpenter, or other tradesmen working at that wage level do not have to invest in their jobs apart from investing the time to educate themselves. Certainly they do not have to invest the $151,000 which the farmer must invest in his land, machinery, and livestock if he is to make a go of it.
In conclusion let me say that I hope someone on the other side will take this message to the Minister of Agriculture. It is of utmost importance to recognize that there is a problem in agriculture and that it is not fair to ask the farmer to work for no wages forever. Farmers, being people who love their country, are willing to contribute to it perhaps as much or more than any other Canadian, but to ask them to work for no wages during the entire stretch of their agricultural career is not what farmers in this country deserve.
It is time efforts were made in marketing on the international scene. I am not taking a position on whether marketing boards should or should not be set up in this country. I think that is a decision which should be left to individual producer groups. However, there are many things which could be done to assist. One would be to aim for a general reduction in imports of whatever agricultural commodities are hampering our own producers. Another thing which could be done would be to provide financing for farmers at lower cost. Steps could be taken to reduce the cost of machinery and machinery parts. We know that a number of years ago the Barber commission on farm machinery was set up. That commission made a fairly large number of recommendations. As far as I know none of those recommendations has been implemented, very much to the shame of this government.
Another aspect is the question of energy on the farm. In Alberta, which produces most of the energy in this country, farmers in my constituency and other consumers in my constituency pay more for a gallon of gas than we pay here in Ottawa. Obviously something must be wrong, when we consider that Ottawa uses Alberta gasoline! Consumers in Montreal as well as consumers in Halifax and Newfoundland are subsidized, but consumers in Peace River, High Level and Lac La Biche pay at least ten cents per gallon more than consumers in

Montreal. When this matter was brought to the attention of the Minister of Finance he simply waved his hands in the air and said that the policy is not to subsidize anybody using petroleum products produced in this country.
Those are a number of suggestions which I hope the government will consider and, if it does, the farmer may indeed survive.


Mr. Paul E. McRae (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, I enjoyed listening to the last speech, which was the only one I have had the opportunity to hear during this short budget debate. Some of the comments certainly indicate the difficulties of the farm community and the difficulties we have nationally with any and all of our programs. The hon. member suggested that we take another look at import controls. Recently I was at a conference with a group of Canadians from all parts of the country. I heard no one from the west talk about free trade, so perhaps in that area the east and the west are beginning to come together.
I am usually very independent-minded and very critical of government budgets. I find things about them which I criticize very severely.


Sinclair McKnight Stevens: You will have a heyday with this one.


Paul Edmund McRae: However, I think this budget is about as good a budget as we could have devised, given the general conditions and the options open to the government.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: How can you say that?


Robert Knight Andras: Because he is honest.


Paul Edmund McRae: There has to be a trade-off when one stimulates the economy between stimulating demand and stimulating investment, and we have traditional proponents of both in this House. Normally the NDP strongly suggest increasing demand, and the Tories are usually concerned about increasing growth by increasing investment. Personally over many years I have looked upon the demand route as being the legitimate or better route, but at this particular time I am not sure. I do not think these are normal times, and since they are not normal times we have to look in many directions, not just in one.


Sinclair McKnight Stevens: It is your government that is abnormal.


Paul Edmund McRae: When we have an inflation rate of 7 per cent and an unemployment rate of 8 per cent, we are not in normal times.


An hon. Member:: You created those problems.


Paul Edmund McRae: We have a 4 per cent growth rate. If we created those problems, why do we have the fourth lowest inflation rate of all the OECD countries? The hon. member should not tell me we created those problems. We have world-wide inflation.
April 4, 1977


Sinclair McKnight Stevens: Give us the figures for other exporting nations. Do not mislead the House.


Paul Edmund McRae: These are not normal times for the whole world, and they are not normal for this country. 1 was interested in the statement of the prime minister of Great Britain, Mr. Callaghan, who said that governments cannot delude themselves into thinking they can buy their way out of unemployment. 1 think that is what we are being asked to do, particularly by the NDP. I must say that over the years 1 have been associated with that party, and with some pride-


Sinclair McKnight Stevens: Confession time.


Paul Edmund McRae: -certainly in the early years because I always felt that the NDP was a progressive party which had some new ideas-perhaps a little ahead of its time-and that it was offering something to the country. It bothers me-because 1 did not leave that party in anger or as a result of any friction-that these new ideas are not forthcoming in these very complex times when problems are so very interrelated. They are dealing in these complex times with the same simple answers they had in the forties, fifties and sixties.
Let us look at the demand side of this budget. It allows the $50 per child allowance and another $100 for work expenses. An extra $100 million is to go to direct job creation. That does not seem like a great amount a money, but in this calendar year the amount of money being fed into demand is far greater than that. It comes to something like $2.4 billion which was not in the economy last year, being diverted to the economy by the government. That comes from $900 million for the indexing of income tax, $300 million for OAS, $160 million for family allowances, $250 million for the reduction in unemployment insurance, $100 million for direct job creation, and a reduction of $300 million for work expenses, and for childrens' allowance. Then there are the other job creation programs. The Canada Works Program starts in April, and that will cost another $365 million. That comes to a total of $2.4 billion. That is a sizeable amount of money going into demand. It is going into people's pockets. It is money which was not there last year.


Sinclair McKnight Stevens: You are printing it.


Paul Edmund McRae: I am saying that there is an injection of money into demand. If I were the Minister of Finance (Mr. Macdonald) I would have been very happy if some of that money which had been indexed on personal income tax could be used in slightly different ways. I would like to have used $200 million of that $900 million indexed on taxation for direct job creation. To say that there is not a degree of demand in this budget or in the government's activities is to ignore that $2.4 billion, and that cannot be ignored. That is a significant amount. It is much larger than all of the other items in the budget.
The NDP has maintained all along that demand is the basic problem and that if we create more money for demand we will solve all our problems. I would like to discuss consumer
The Budget-Mr. McRae
demand. In 1973 there was a real growth in consumer demand of 6.8 per cent; in 1974, 5 per cent; in 1975, 4.9 per cent; and in 1976, 6.3 per cent. Those are very impressive figures, indicating a steady consumer demand for goods and services.
The New Democratic Party says that we need more housing starts, and there is no doubt that we do. In 1976 housing starts inceased by 18.8 per cent to 273,000 starts, the largest number in our history. To say this is not an active economy but one that is in serious trouble and needs more demand is to say that these figures do not mean anything. We had a very substantial consumer demand, growing roughly by 6 per cent per year, and in the housing field we have had the highest number of starts in our history.
I am bothered by the assumption that, simply by injecting another billion or two into the economy, the unemployment problem would be solved. This is a very complex problem with serious structural implications. I do not think any political party should advocate just throwing more money into the pot to solve the problem. I think all parties should look very carefully at the structural nature of unemployment and then try to solve the problem that exists, and not make grandiose gestures throwing billions of dollars around.
Let us analyze the unemployment problem. In the 1950's something like 60,000 young people were coming on the labour market every year, but in 1977 about 250,000 young people will come on the labour market. In that period the population has grown by about 30 per cent but there has been a 425 per cent increase in the number of young people coming on the labour market. That is a massive increase and it creates stupendous problems. Of all industrialized countries, Canada has the biggest problem with the number of young people in the population coming on the labour market each year. This situation will continue well into the 1980's, and putting more money into the pot will not solve the problem.
In 1953 in the age group between 25 and 44, 23 per cent of the women in Canada were in the labour force; in 1974 it was 47 per cent. In the age group 45 to 66, 17 per cent of women were in the labour force, but it was 37 per cent in 1974.
The participation rate is the number of people employed divided by the number of people in the country aged 15 years and over. In 1963 the participation rate in the labour force was 53.8 per cent, seasonally adjusted and today, in 1977, it is 61.3 per cent.
We all know that these factors are extremely important in solving the problem of unemployment, but there is another factor which is perhaps even more important and that is analyzing these figures by region and by age, particularly if we look at the extremes. The extremes are the province of Alberta and the province of Newfoundland. At the end of February in Newfoundland 17.4 per cent of the total population over the age of 24 were unemployed; in Alberta the figure was 4.6 per cent. Newfoundland had four times the number of people unemployed that Alberta had. In Newfoundland 12 per cent of males over age 25 were unemployed while in Alberta it was 2.9

April 4, 1977
Adjournment Debate
per cent. In the age group of 15 to 25 Newfoundland had 28.6 per cent of males unemployed, while Alberta only had 9.1 per cent.
Mr. Speaker, I should like to interpret these figures if I could but 1 see it is ten o'clock, so perhaps 1 could pick up these remarks at this point tomorrow.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Allen Fraser: Mr. Speaker, on February 18 the Minister of Transport (Mr. Lang) announced that the government had released contracts for 2,000 hopper cars worth $80 million. Every one of those cars will be made by eastern firms.
There is a west coast manufacturing company at Squamish, British Columbia, capable of making these cars, which is faced with the layoff of 260 workers. That company bid on the contract. That company is Rail West Manufacturing Company. Rail West did not get an order for a single car. According to the government, the bids were not competitive.
The Minister of Justice (Mr. Basford), whose riding is only 30 miles from the Rail West plant, said that their bid was $10,000 more per car than the average bid price of eastern manufacturers. This was completely misleading. What the minister did not say, or even try to explain, although he is a western minister and should have cared about the jobs of 260 workers, was that the differential in quoted prices declined as the number of cars ordered increased.
The minister tried to make a hero of himself by saying the government would allow a pricing differential of $5,000 per car. Rail West was offered a measly 100 cars if they could build them for $41,000 each. The offer to take 100 cars was ridiculous, and the minister knew that. One hundred cars out of a total of 2,000-is that Confederation or is it just what it seems-tokenism? It is sometimes expected from some ministers, but we are all entitled to expect something better from a British Columbia minister when jobs in our province are on the line.
The fact is that the minister said, "You can build 100 cars if you can do it for $41,000 each.'' Rail West could not do it for 100 cars, but if they had the chance to build 500 cars it could have been done for slightly less than $42,000 per car.
About $8,000 worth of component parts for each car had to be purchased by Rail West from the very eastern companies

that were bidding against Rail West. Even if eastern firms lost 500 of the 2,000 cars to Rail West, they still would have got a significant part of the business for every rail car made by Rail West. Why was this ignored? Was it deliberate? As a result of the direct intervention of the British Columbia government, the Minister of Transport verbally, but not in writing, suggested that Rail West bid for a new and different order of 300 ballast cars. Rail West can make these ballast cars competitively, without a price differential, and compete against eastern manufacturers. And each car, as in the case of hopper cars, will mean business in component parts for eastern manufacturers.
Rail West has put in a bid; the Department of Transport is considering it. It is now time for the government to come through with an order, as 264 jobs are at stake. They are western jobs, and westerners out of work are just as unemployed as anybody else in Canada. While the country is obsessed with Quebec, remember, there are grievances in the west. This is one specific grievance we want to rectify.
It is disgusting for a western company to have to beg for what is fair. It is demeaning for a western member of parliament to have to shove, push, shout and kick, just to get someone in the government to do what is right. That should not be necessary. And if Confederation is to mean anything to westerners, this sort of massive indifference to our legitimate requests has got to stop.


Mr. Marcel Roy (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, in order to debate the point the hon. member has raised concerning Rail West's failure to receive orders for hopper cars, it is appropriate to review the recent history leading up to the awarding of contracts.
Both CN and CP, which conducted negotiations on behalf of the Minister of Transport (Mr. Lang), issued invitations to tender on January 5, 1977, for the 2,000 hopper cars, which would include 100-ton steel cars of 4,550 cubic foot capacity; 100-ton aluminum cars of 5,000 cubic foot capacity; 70-ton steel cars of 3,800 foot capacity; and 70-ton aluminum cars of 4,100 cubic foot capacity. The invitations were issued to four firms, including Rail West Manufacturing Company of Squamish, B.C. A fifth firm, Procor Ltd., chose not to bid.
Rail West had requested and been given a copy of the hopper car specifications several months earlier. On January 10, 1977, officials from Rail West met with the minister's officials, originally to request an extension of the January 17 deadline, but discussions drew out the fact that such an extension would not enable Rail West to improve their bid substantially. In light of this Rail West agreed to put in a bid on the date specified.

Mr. Speaker, we did look favourably upon Rail West's bid. In fact, we invited the company to share in the construction of a number of hopper cars when 2,000 of them were ordered previously. Even taking into account the difference in the cost
April 4, 1977

of steel in that area as compared with other areas, the price asked by Rail West was decidedly much higher than that of the other companies. The price we offered exceeded even that difference, and even then Rail West could not build the cars and could not commit itself to building 100 of them. In other words. Rail West's bid was considered in a very favourable light and it is unfair to raise doubts about the evolution of the situation and to insinuate that all factors were not taken into consideration in the basic study the government made of this important initiative, namely to build 2,000 hopper cars.
Mr. Speaker, the federal government, the Department of Transport and the provincial government are fully aware of the importance of the situation and its repercussions on the 260 persons concerned. That is why we are still having consultations with Mr. Phillips of Rail West.


PENITENTIARIES-PROPOSED NEW INSTITUTION FOR MANITOBA-POSSIBILITY OF SITE AT CHURCHILL OR LYNN LAKE
Mr. Cecil Smith (Churchill):: Mr. Speaker, this evening I want to speak on the maximum security penitentiary proposed for Manitoba. Recently the minister announced that a super maximum security prison would be built in Manitoba. Many locations in Manitoba have been considered, but I feel that the northern part of the province, where the unemployment rate is almost 20 per cent, has been overlooked. Since 45 per cent of the inmates of the maximum security prison at Stony Mountain, B.C., are of Indian ancestry, I feel the government ought to consider building the maximum security prison in northern Manitoba. I will not say in which community the prison should be built. T merely say that since 45 per cent of the inmates would come from northern Manitoba, the government should consider seriously building the prison in that part of the province.
The proposed super maximum security penitentiary would hold between 185 and 200 inmates and employ roughly 200 persons as correctional officers, guards, trades instructors, and in administrative, managerial, and other capacities. The annual payroll would be approximately $3 million, and the local buying would be in excess of $500,000, plus the local buying that would be done through wholesale houses and so on.
I really believe the northern part of the provinces would be an acceptable area in which to place a maximum security prison. We have very limited access by road and rail. Also, the inmates would have an opportunity of seeing their families because in many cases where families may have to travel from northern Manitoba to Stony Mountain they do not have sufficient funds to make that long journey.
Establishment of a maximum security penitentiary in northern Manitoba would benefit the local community concerned, and I should like to cite several such communities. Churchill is one of them. The federal government moved into Churchill in 1946 and established an armed forces training centre. In recent years the operation was transferred elsewhere and the
Adjournment Debate
fort demolished, as a result of which the town lost some $250,000 in taxes. Recently, in a cost-shared project between the province and the federal government, some $30 million was spent to rebuild the town, and now the town is faced with an ever-rising tax debt for the simple reason that the old army fort was demolished. What is needed in Churchill is some development to inject more tax dollars into the community. At the present time the only employment available there is working for the port.
Another community I could cite is the mining community of Lynn Lake. At one time this community had a population in excess of $3,000, but the mine closed down and the tax base today is very limited. At the present time Lynn Lake is being supported by the province of Manitoba. Lynn Lake has a good rail service and there is a good highway into the community. It would make an excellent location for a maximum security prison.
Another location I might mention is The Pas, Manitoba, where within the last four years the federal government has financed a shopping centre to the tune of about $81/2 million. At the present time the shopping centre is only half full of operating stores: the town is really in need of extra development and perhaps a prison could be located there. This community also has good access by rail, road, and air.
Again, I ask the minister to give sympathetic thought to locating a prison in northern Manitoba. As I say, the inmates would have an opportunity of visiting their families, especially since statistics show that 45 per cent of those in maximum security in Manitoba are of Indian ancestry.


Mr. Rod Blaker (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I am taking part in this discussion on behalf of an absent Solicitor General (Mr. Fox) and his parliamentary secretary. I do hope the hon. member for Churchill (Mr. Smith) will accept the remarks I make in the absence of the Solicitor General.
The recommendations made by the hon. member are most completely accepted and well understood. The comments I make are with respect to whether or not some consideration can be give to a penitentiary service north of Churchill or whether, alternatively, there ought to be some consideration given to a penitentiary service in the Winnipeg area.
I understand that the considerations at the present time are these. In the prairie region there is demand for construction of a maximum security institution to accommodate approximately 200 inmates. The criteria recommended by the Canadian Criminology and Corrections Association, which criteria are accepted by the Canadian Penitentiary Service for guidance, require that a penal institution must be located as close as possible to the point of origin of the inmate to be incarcerated so as to allow for the maintenance of close and sound family relationships. Furthermore, access to the services of professionals such as medical doctors, psychiatrists, psychologists and social workers and so on, must be reasonably available. In

April 4, 1977
Adjournment Debate
addition, a reasonable source of manpower, such as people who might service the penitentiary and be of assistance to penitentiary programs, must be available.
The problem is that the inmates mostly originate from the general area of Winnipeg rather than from any other location in the province, and so the penitentiary service, in conjunction with the Department of Public Works, is concentrating on efforts to determine whether or not there would be some benefit in having a penitentiary further north in such areas as those mentioned by the hon. member, for example Churchill or Lynn Lake, or whether it is more desirable to have a penitentiary closer to Winnipeg.
Statistics seem to indicate that most inmates may require services closer to Winnipeg. On the other hand one questions whether the people of Winnipeg want a penitentiary close to their community or whether or not they would prefer it further north, as I have described. Perhaps the hon. member would be interested to know that as yet no decision on the part of people in the Winnipeg area as to whether or not they want a penitentiary in their community has been reached. It is really a matter of the local population deciding where they want the penitentiary.


Mr. Deputy Speaker:: Order, please. I regret having to interrupt the hon. parliamentary secretary but his time has expired.


TRANSPORT-PROVISION OF BOXCARS FOR SHIPMENT OF POTATOES-GOVERNMENT ACTION
David Samuel Horne MacDonald: Mr. Speaker, I want this evening to present to the government and the Parliamenary Secretary to the Minister of Transport (Mr. Roy) the plight of potato growers in eastern Canada. This is not a new matter, as the parliamentary secretary well knows. In fact I have raised it repeatedly since last fall. The transportation problems presently being encountered by potato producers in eastern Canada are certainly not new to them.
A week ago Friday, on March 25, I was attempting to gain from the Minister of Transport (Mr. Lang) three answers. First of all I asked him whether he had seen a copy of the report of the Prince Edward Island Potato Marketing Board indicating the crisis on the horizon regarding the supply of railway cars to move potatoes in the next shipping season and the problems being experienced even now. Secondly, I asked whether the minister had completed his own studies. These are studies he has mentioned over the past few months but which have never been presented to the House or to my knowledge been completed. Indeed the more one looks at the studies that have been carried on by various federal departments, one finds a proliferation of them in the Department of Agriculture, the Department of Regional Economic Expansion, and the Department of Transport, with very little, if any, co-ordination. The replacement of effective action by studies is certainly unacceptable and will be no answer to the potato producers of eastern Canada. Thirdly, because there is a meeting scheduled shortly between the provincial minister of industry and the

Minister of Transport, I asked him if he was prepared to give a definite answer at that time.
The minister of industry, the Hon. John Maloney, indicated in the provincial legislature two or three weeks ago that he recommended that some 1,800 reefers be provided. He sent this recommendation to the Minister of Transport. He will meet with him shortly to see if this decision can be confirmed.
Instead of solutions we are getting half answers, and seemingly half-hearted consideration of the problem itself. I understand there is a proposal presently being considered by the Canadian National Railways which would replace the present refrigerator cars with cars of a similar nature, some 20 or 25 years old, that are presently for sale in the United States from the Boston, Maine and Bangor railroads. They would require extensive overhauls-even with the short term life span of these particular railroad vehicles. I understand the only reason the American railways are disposing of them is because they are in such a decrepit condition that there is no self-respecting railroad in the United States that would consider operating this kind of deteriorated and soon to be inoperable equipment. Like the present reefer cars, the circulation equipment in them does not function when a car is stopped, and as a result there is very serious spoilage.
In checking with a group of producers just the other day, I was shocked to discover spoilage increases have gone up quite considerably this year because of inoperable equipment. One shipper from New Brunswick experienced with a 17-car order a complete freeze-up in which all that particular order was frozen. Another shipper in Prince Edward Island said that last year they had something like 46 frost claims to Toronto and Montreal. So far this year-and they are still not through the shipping season-they have already experienced 58 freeze-ups.
With that kind of situation it is obvious that getting used equipment from American railroads would be totally inadequate. The CNR has done some of its well-known calculations by dividing the amount of potatoes to be shipped by the size of the railroad cars and simply assuming that these will be fully loaded and shipped on a round the clock basis. These are mathematical equations which do not take into account the present marketing situation. They assume balanced shipments and that when a car is available it will be immediately loaded.
I think the railroad term is "demand loading". This would require a drastic change in our marketing system with warehousing and packaging being done at destination points, giving producers less control over their industry and obviously exploiting numbers of jobs in Prince Edward Island. This will certainly be a kind of regional development in reverse.
Obviously the rail lines in Prince Edward Island are incapable of handling the very heavy cars, 110,000 pounds capacity. The advice the Canadian National Railways have given the Minister of Transport to date unfortunately has been unrealistic with respect to the marketing needs and requirements of producers in eastern Canada. I am disappointed at the heavy reliance of the Minister of Transport on only one source of information, which seems to be the railroad in this instance, seemingly ignoring the representation made on both sides of
April 4, 1977

this House from those of us who represent the potato growing areas-members like the hon. member for Madawaska-Vic-toria (Mr. Corbin), myself, the hon. member for Carleton-Charlotte (Mr. McCain), and others. There is also the situation with respect to his ignoring the provincial governments of Prince Edward Island and New Brunswick. I just wonder at the minister's audacity in ignoring those who are directly and specifically representing the marketing boards and those specifically involved in this area.
We need immediately an order for new railroad equipment, insulated boxcars capable of handling the kind of cargo that will be exported to central Canadian markets. It will also have a turn-around value in terms of bringing consumer products into eastern Canada. This has made sense for a long time.
The design for these new vehicles is already available. The order could be placed immediately. There are some 400 cars presently in existence which could be made available to growers in eastern Canada. In addition, over the next two to five years we will need 800 more cars. Obviously 400 should be ordered immediately and another 400 ordered at a very early date, perhaps with some design modification as a result of experience in using these new cars.
With the stand of the federal government at the moment, we have a double standard. As was mentioned in the earlier question by the hon. member for Vancouver South (Mr. Fraser), the government recently ordered 2,000 more hopper cars. This means some 8,000 cars are provided by the federal government to western grain shippers. In eastern Canada we have not as yet had one car either ordered or provided by the federal government for the potato producers of eastern Canada. That is a serious anomaly which I hope the Minister of Transport will very soon rectify.


Marcel-Claude Roy: Mr. Speaker, once again I have the pleasure of debating a matter of obvious concern to the member opposite and to other members from the maritime region, that of the adequate provision of equipment to ensure efficient movement of potatoes from Prince Edward Island and New Brunswick.
Adjournment Debate
Potato distribution is a topic that received extensive examination for at least a decade without the implementation of substantial changes. In most instances it was judged that the present system of using old reefer cars provided the most acceptable system as far as the level of freight rates was concerned. However, it can be said that the total potato distribution system has never been thoroughly examined. There is a lack of definition, of the system requirements for storage, palletization, temperature control, and service to distribute potatoes to their different markets in a cost-effective manner. There is a need to develop long term forecasts of potato production and consumption by provinces, and to determine the desirable improvements to the present distribution system to market potato products in a cost-effective manner.
Transport Canada, along with the federal Departments of Agriculture, Industry, Trade and Commerce and DREE, is continuing to support the efforts of the various parties involved in the search and testing of up-to-date systems to transport potatoes economically.
The suggestion of the Minister of Agriculture (Mr. Whelan) that maybe some new reefer cars should be purchased for the use of eastern potato shippers is being reviewed by Transport Canada, Agriculture Canada, Industry, Trade and Commerce and DREE officials. All concerned federal departments are in support of the minister's intent to help the potato industry. A report with recommendations has been submitted to the Minister of Agriculture and the Minister of Transport (Mr. Lang). A meeting of Agriculture Canada and Transport Canada senior officials is scheduled for April 12, 1977, to plan the next step further to the report's recommendations.
The government shares the hon. member's concern that attention be paid to the timing. On this point may 1 repeat assurances given in the House on February 10 by the minister, in response to the member's question on this subject, that he and the Prince Edward Island premier and minister of transport, have agreed to be very conscious of the timetable in looking at questions such as facilities as well as equipment.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow afternoon at two o'clock.
Motion agreed to and the House adjourned at 10:26 p.m.

Tuesday, April 5, 1977