1977-01-28

ROUTINE PROCEEDINGS


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. Since it is now clearly established that the precautions taken in the Prime Minister's Office and Solicitor General's Office respecting the security of sensitive material and the inviolability of the EPO list may have been less than adequate, I move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):
That the Minister of Justice undertake a thorough investigation to determine the actual effect on the lives and careers of persons on any lists of this type in terms of firings, red circling, denials of promotion or any other impediments which in retrospect have been attributable to the course of action taken by the then solicitor general.


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


Some hon. Members:: No!


SUGGESTION EMPLOYEES ON BLACKLIST BE DEALT WITH ACCORDING TO 1963 GUIDELINES-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, in view of the continuing importance of the subject to which reference has just been made, I, too, wish to move a motion under Standing Order 43. It is seconded by the hon. member for Winnipeg North Centre (Mr. Knowles), and reads as follows:
That with respect to those public servants mentioned in the solicitor general's letter of June 15, 1971, the government follow the mandatory policy guidelines originally established by the former prime minister, the Right Hon. Lester B. Pearson, in 1963, viz: (a) those persons be informed by the employing department or agency "when their security or reliability is in doubt", and (b) before any dismissal of a public servant on security grounds, a separate review be undertaken by the government's advisory agency on security policy.


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


Some hon. Members:: No!


Mr. Baker (Grenville-Carleton):: How long are you going to keep on saying no?
[DOT] duo)


REQUEST FOR GOVERNMENT ACTION TO REDUCE PROPOSED INCREASE IN GASOLINE PRICES-MOTION UNDER S.O. 43
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity arising out of recent press reports that the major oil companies have notified the Anti-Inflation Board of their intention to raise retail gasoline prices as of March 1 by about 3.5 cents per gallon, even though increased wellhead prices for crude oil would only justify about 2.3 cents. In light of the fact that this extra increase in price would net the oil companies an extra $78 million in revenues, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the government take the necessary steps to forbid the rise in retail gasoline prices by any more than is justified by the recent increase in wellhead prices for crude oil.


Mr. Speaker:: The presentation of such a motion pursuant to Standing Order 43 requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43 with regard to the extraparliamentary opposition list raised in the House of Commons on January 24. In the absence of any assurance from the Solicitor General, firm or otherwise, that the persons on the list will be notified and given an opportunity to vindicate themselves in accordance with elementary principles of natural justice which dictates such a course of action, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That the minister at least make a declaration in the House as to whether or not these persons are objectionable to the state or merely to the Liberal party, and whether, in his opinion, there is any significant difference.


Mr. Speaker:: Standing Order 43 requires unanimous consent. Is there unanimous consent?


Some hon. Members:: No!

January 28, 1977
Oral Questions



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, in the absence of most of the government-


Some hon. Members:: Oh, oh!


Mr. Goodale:: Look behind you, Joe.


Charles Joseph Clark: In my party, Mr. Speaker, unlike the Liberal party, there is no need for the leader to always look behind him. My question is for the Minister of Finance and it relates to reports that the Prime Minister will respond on Monday to a request by the President of the Canadian Labour Congress that subsequent discussions between labour and government- that is, discussions subsequent to the meeting on Monday- also include representatives of industry. I wonder whether the minister would advise the House if it is now the policy of the government to accept this proposal, which amounts to a tripartite model for discussion of national economic and social policy?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, the question has been discussed by the government, both with the labour side and with the corporate sector. I think it would clearly be desirable to return to a situation where the organized labour movement takes an active and responsible participation in the canvassing of broader public issues in Canada. For my part, if arrangements can be established to have such consultations on a multipartite basis, I think it would be very desirable. Obviously, whether or not this will be done, either in the near future or with the labour movement, will depend very much on the outcome of discussions on Monday. I for one will certainly look forward in those discussions to canvassing further the views which I hope will be helpful in bringing labour back into public discussion.


Charles Joseph Clark: Mr. Speaker, the Minister of Finance deliberately used the word "multipartite". I wonder whether he would tell the House if the government of Canada will be making some kind of concrete proposals to the Canadian Labour Congress relating to multipartitism or tripartitism or something of this sort. Secondly, if a proposal of this kind is going to be made, what other parties does the government propose to include? Finally, can the minister give the House some indication of the nature of this, in effect, new institution which the Minister of Finance and his colleagues will be discussing with members of the CLC on Monday?


Donald Stovel Macdonald: Mr. Speaker, no new institution is involved in this respect, unless one regards a meeting between two or more parties as being of an institutional character. There is no definitive proposal in this regard. What we would propose would be to discuss the circumstances under

which organized labour would really be prepared to come back into discussions with the other major decision makers in the economy. For this purpose "multipartite" would include not only organized labour and the management side, but also, because of the nature of our federalism, should include the provincial governments as well. Concepts very much along that same line will, of course, take place with the provinces in the following days at the meeting of the finance ministers.


Charles Joseph Clark: Mr. Speaker, in effect the Minister of Finance is admitting the failure of the process of separate consultations with separate groups, which was the process undertaken by his predecessor as Minister of Finance. He indicates he will be holding discussions regarding new methods or models with the CLC, the Canadian Manufacturer's Association and with the provinces. I wonder if the minister plans to come before the House of Commons with an indication of the models the government has in mind for subsequent discussion of national social and economic goals on which Final decisions have to be taken by this body?


Donald Stovel Macdonald: Mr. Speaker, indeed I think it would be most appropriate to have effective House discussion on this question. It seems to me at this stage of exploration, however, that it is appropriate to ascertain the mood of the various participants and what concepts they have concerning consultation, and that is in discussion and consultation, instead of what the Leader of the Opposition appears to be suggesting, going with a definitive proposal and saying: That is it, that is what we are going to do. We are approaching it in the mood of saying we think it is desirable that there be this continuing communication among the major decision makers in our economy, and we would like to know under those circumstances how they envisage future participation of the private sector, whether labour or management, in the kind of decisions that governments, and I use that word in the plural, have to make about the Canadian economy.


Charles Joseph Clark: Mr. Speaker, is the Minister of Finance telling us that the government of Canada is going into these discussions with the other partners in the Canadian economy with nothing on its own mind and no model of its own to propose, and that it is simply going to rely upon the other partners to propose what they think is desirable, as it has been relying upon the provinces of Ontario and Quebec, for example, to initiate discussions on post-controls policy, and as it is relying upon the CMA and the CLC to propose some form that will work better than the process that has been followed to this point of separate consultation? What does the government have on its mind? What is it proposing to the CLC and other bodies that it will not tell the House of Commons?


Donald Stovel Macdonald: Mr. Speaker, we have discussed very extensively with the public what kind of proposal we think can be effective. For example, the hon. member and I yesterday exchanged some viewpoints on the possibility of a monitoring institution in the post-controls period. It would be a faulty conclusion for the Leader of the Opposition to say that we are going in without some proposals in our own mind which, in due

course, after sounding out the various parties, will certainly be solidified. The intelligent way-surely, in this regard, instead of the way the Leader of the Opposition would follow, saying this is it; that is all-is to talk about the problem, talk about some alternative approaches that can be taken and, indeed, to have a genuine dialogue with those who are involved.


ATTITUDE OF LABOUR TOWARD WORK COUNCILS AS MEANS OF ACHIEVING INDUSTRIAL PEACE
Mr. Jim Balfour (Regina East):: Mr. Speaker, I have a supplementary question for the Minister of Finance. Is the minister now willing to concede that neither the concept of work councils nor of work-sharing, referred to in the letter, has the support of either labour or management, and subsequently that statements made by the Minister of Labour and his officials to the effect that progress has been made in these areas are simply incorrect?


Donald Stovel Macdonald: Mr. Speaker, I do not think I would make that comment, and I certainly would not make that concession. It seems to me it is important to have constructive discussion on all kinds of ways of improving the collective bargaining system in Canada. The Minister of Labour has been active in trying to determine ways in which the unhappy record of Canada in industrial relations in the last several years can be improved, if possible, by institutional change.


INCOME TAX
James Balfour: Mr. Speaker, will the minister give an unequivocal commitment to the effect that he will give favourable consideration to the proposal contained in the letter, namely, that the cost to workers of metric tool conversion will qualify either as a deduction from income or a deduction from tax?


Donald Stovel Macdonald: Mr. Speaker, of course, consideration will be given to all sound proposals in preparing the budget.
* * [DOT]


PUBLIC SERVICE
John Edward Broadbent: Mr. Speaker, I have a question for either the Acting Prime Minister, or the Solicitor General.


Charles Joseph Clark: Or whoever.
Oral Questions


John Edward Broadbent: Can the minister indicate whether the government's policy is still that set out initially by former prime minister Lester B. Pearson in 1963, when he said on October 25 of that year, as reported on page 4044 of Hansard, that it would be the policy:
... to inform the person involved when his security or reliability is in doubt... Employing departments and agencies will in future be required to tell an employee everything that is possible of the reasons for the doubt, if there is a doubt, and to give him an opportunity to resolve that doubt.
I ask the Acting Prime Minister or the Solicitor General this question, in the context of its still being policy, was it applied in the case of those people who were listed on the former Solicitor General's letter dated June 15, 1971?


Hon. Jean Chretien (Acting Prime Minister):: Mr. Speaker, I do not know if this policy was applied. I will be looking into that and if there is anything to report, the Prime Minister or the Solicitor General will be able to give an answer on Monday.


John Edward Broadbent: Mr. Speaker, may I direct my supplementary question to the Solicitor General and ask him, if, in checking the record and the original letter to which I referred, he discovered if this policy was applied at the time; if it was not, has he taken steps since then to ensure that it is applied?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, the application of the policy, such as the one to which the hon. member referred in his question, would be the responsibility of the individual department to which a recommendation such as the one made in the case referred to was made.


John Edward Broadbent: Mr. Speaker, may I direct a final supplementary question to the Acting Prime Minister. Will the Acting Prime Minister assure the House that the policy first laid down by Mr. Pearson remains in effect; I suspect that it ought to so remain in effect, because it is embodied in the human rights bill which has received first reading in the House, although it has not yet been passed. If the government still intends to implement this policy, will it make sure that it is followed to the letter in the case of those people listed in the former solicitor general's letter. Second, with regard to that point, would he undertake to find out why this policy was not applied in the case of Mr. Rudnicki, who was dismissed?


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not think I have anything to add to what the Solicitor General just told the House. In any event I will be looking into the matter and if something has to be added, it will be done on Monday.


Walter David Baker: You are stonewalling.


Mr. Paproski:: Clearly, we are not getting any answers today.

January 28, 1977
Oral Questions


TRANSPORT
Mr. Girard Laprise (Abitibi):: Mr. Speaker, my question is directed to the Minister of Transport. I would like to ask him whether the St. Lawrence Seaway Authority has made him some recommendations to put an end to the rising debt of that corporation. Will the minister soon tell the House whether he has some plans to that effect?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, the matter has been under consideration and we have reached conclusions on how we ought to treat the total financing and revenues of the seaway. Further discussions are going on and before much longer I will have an announcement to make.


Gérard Laprise: Mr. Speaker, the minister has just stated that negotiations are under way. Can he tell us whether those negotiations are carried on with the American government or only on the Canadian side?


Otto Emil Lang: Yes, Mr. Speaker, they are taking place with the United States.


PUBLIC SERVICE
Frank Oberle: Mr. Speaker, my question is for the Solicitor General. Now that the minister has had the opportunity to become better acquainted with the files in his office and now that he has, upon reflection, confirmed the existence of an extra-parliamentary opposition list, could he tell the House today what other lists are in his files and were uncovered, and since he said that during his tenure of office no such lists were compiled, could he tell the House today what the last date of the most recent list would be?


Francis Fox: Mr. Speaker, I have no knowledge of any list before or after the one to which the hon. member has referred.


ORIGIN OF INFORMATION ON WHICH BLACKLIST BASED
Frank Oberle: I did not ask whether there were any lists prior to the one I introduced in the House. I should like to ask the minister whether there were any lists after the date of June 15, 1971. Furthermore, I should like to ask him whether he could today, since this question is somewhat obscure, provide the House with certain

information as to the origin of the information that was contained in the list. Did the security service of the RCMP supply the information, or was it compiled by the security service operating under the minister's own department?


Francis Fox: Mr. Speaker, there is no security service in existence in this country other than that which is part and parcel of the RCMP.


An hon. Member:: That is not what Drury told us.


An hon. Member:: What about gumshoes Goyer?


Some hon. Members:: Oh, oh!


Francis Fox: As was indicated previously, in answer to the second part of this question, the information that was sent by the then Solicitor General to some of his colleagues has been provided on the basis of a report from the RCMP.


Frank Oberle: Mr. Speaker, the Solicitor General has not answered the question as to whether there were any lists after the date of June 15, 1971. Since he does not recall the most recent date-


Mr. Speaker:: Order, please. With due respect, the minister did answer that question.


REASON FOR DENIAL OF EXISTENCE OF BLACKLIST OF EMPLOYEES
Elmer MacIntosh MacKay: I have a supplementary question for the Solicitor General. Since it appears that top civil servants denied in writing the very existence of the now admitted EPO list, can the Solicitor General inform us whether they did so on instructions from cabinet, or did these people know the truth themselves?


Francis Fox: I really do not understand the intent or the meaning of the question asked by the hon. member. If I knew exactly what he is trying to get across, perhaps I could give him some type of answer.


Elmer MacIntosh MacKay: Mr. Speaker, I will give the minister a chance to read it in Hansard and ponder over it, then tomorrow perhaps he will answer it.


EFFECT ON CAREERS OF THOSE INCLUDED IN BLACKLIST-POSSIBILITY OF COMPENSATION FOR WALTER RUDNICKI
Elmer MacIntosh MacKay: I have a supplementary question for the Minister of Justice. Would he consider instituting over the weekend an investigation into the extent to which those persons included on the EPO list have been affected by their inclusion in it, and can he or the Acting Prime Minister advise us whether any compensation or reparations have been contemplated to date to compensate Walter Rudnicki?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, my answer to the first part of the question would be no, that would
January 28, 1977

be the responsibility of the Solicitor General, and the answer to the second part is that his dismissal is unconnected with the matters that have been raised in the House in the last few days. However, by order of a court of Ontario he was compensated.


ATOMIC ENERGY OF CANADA LIMITED
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources and it arises out of the continual refusal of Lucien Secouri, president of Italimpianti, to provide to the Atomic Energy Commission officials information about the agent who handled the sale of the reactor in Argentina, if indeed there was an agent at all. The question is whether the minister, through the government of Canada, will bring pressure on Italimpianti-to provide information so that the people of Canada can find out whether any agent operated in the matter?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: The hon. member already knows that a specific request has been addressed to Mr. Secouri on my instructions.


James McPhail Gillies: I am sure the minister knows that Mr. Secouri has refused or denied that request. My question was whether or not anything else was going to be done on the part of the government, such as looking at licences and so on.


EXTERNAL AFFAIRS
James McPhail Gillies: Mr. Speaker, my supplementary question is to the Secretary of State for External Affairs. Given the fact that the jurisdiction of the RCMP is within Canada, is the minister, through the Department of External Affairs, requesting the government of Italy to go to Italimpianti, which is partially owned by the government of Italy, and tell it to provide to the government of Canada through AECL the name of the agent, if indeed there was an agent, involved in this obviously difficult transaction in Argentina?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, clearly we would not on our own, that is, within the Department of External Affairs, initiate that kind of action while the committee is sitting. If the committee, in its conclusions or in its deliberations, concluded that it was desirable for the department to undertake some such inquiries, then certainly I would be glad to consider it in a very forthcoming fashion. However, it seems to me that I would not be acting properly to anticipate, in a sense, the actions of the
Oral Questions
committee or to do something parallel with the committee. If the Standing Committee on Public Accounts sees some merit in having inquiries made by officials or people within the Department of External Affairs, then I can certainly assure the hon. member and the House that I would be glad to consider it.


ATOMIC ENERGY OF CANADA LIMITED
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, since my supplementary touches on several departments, for example, the Department of Consumer and Corporate Affairs and the Department of Justice, I would like to direct it to the Acting Prime Minister. Since the whole matter of AECL arises out of the lack of proper records in the minutes of that corporation, I would like to ask the Acting Prime Minister if the government is considering laying charges against any of the executives of that corporation under the Corporations Act of Canada, which requires that all proceedings of the board of directors of a corporation in Canada be duly recorded in the minutes.


Joseph Jacques Jean Chrétien: Mr. Speaker, this does not come under my jurisdiction. I do not know whether the Minister of Justice can give some information about that, but we will inquire and advise the hon. member.


HIGHWAY SAFETY
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Transport. Since a recently retired chief executive of General Motors in the United States says that the inclusion of air bags as a mandatory standard for automobiles would reduce death on the highway by thousands annually, and since Allstate Insurance Company, which has done major research into automobile deaths and injuries, says that in both Canada and the United States death on the highway would be reduced by thousands if air bags were included as a mandatory standard in the construction of cars both built in Canada and imported into Canada, would the minister now reconsider his position and study the matter in the hope that these standards will be made mandatory?


Otto Emil Lang: Mr. Speaker, there is no need to reconsider the position, since we are studying the matter, and we will be watching with great interest the actual statistics which will emerge from the addi-
80008-20%

January 28, 1977
Oral Questions
tional provision of air bags in vehicles under current programs. This will certainly be a very direct and first-hand source of evidence on the question.


GASOLINE-REQUEST FOR ACTION TO LIMIT PRICE INCREASE
Thomas Clement (Tommy) Douglas: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources, and it arises from the application by the oil companies to the Anti-Inflation Board for an increase in the retail price of gasoline by 3.5 cents per gallon. In view of the fact that the 70 cents a barrel increase in the price of crude oil effective January 1 warrants an increase in the price of retail gasoline of only 2.3 cents per gallon, and if we allow 0.2 cents for the increased taxes arising from the increase in the price of crude oil, 2.5 cents is all that can be justified. An additional one cent per gallon may not seem important, but it constitutes an increase of $78 million in the revenue of the oil companies of this country. I want to ask the minister if he can assure the House and the motorists of this country that the government will take steps to ensure that the increase granted to the oil companies for gasoline sold at the pump will not be more than what is justified by the increase in the wellhead price of crude oil.


Alastair William Gillespie: Mr. Speaker, there are two costs involved, as the hon. member made clear in his question. One is the wellhead price, and that will be automatic. As to the question of additional increases over and above that, that will be a matter upon which the AIB will have to be satisfied.


Thomas Clement (Tommy) Douglas: Mr. Speaker, in view of the fact that the Minister of Energy, Mines and Resources is the minister who authorized the increase in the wellhead price for crude oil, does he not consider that he has a personal responsibility to place whatever data is necessary before the Anti-Inflation Board so that the oil companies do not rip off the consumers of this country to the tune of $78 million, particularly in view of the fact that Imperial Oil, for example, increased its profits in the year 1976 to some $264 million?


Alastair William Gillespie: The hon. member is talking about the noncrude costs which might be associated with a further price increase.


Mr. Rodriguez:: This is a recording.


Alastair William Gillespie: If the AIB would like to receive advice with respect to these non-crude cost increases, I would be very pleased to provide it, but I believe that it is fully competent to assess whether wage increases and other costs since the last time the oil companies were able to get an increase are justified or not.


REGIONAL ECONOMIC EXPANSION
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I should like to address my question to the Minister of Regional Economic Expansion.
Last December, in this same chamber, I put a question on the projects which had been presented by the province of Quebec within the framework of joint agreements between Quebec and Ottawa. At the time, the minister replied that he was to have consultations with the new Quebec ministers in that regard. Has the minister had those consultations, and has the new Quebec government come forward with projects, or has it told the minister that it would present specific projects for the south shore area?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, I must say to the hon. member that I somewhat regret, of course, the delays resulting from the change in government. Unfortunately, I have yet to meet my opposite numbers in Quebec for discussions at the departmental level; but I can advise the hon. member that recent-very recent, in fact-contacts indicate that meetings should be held within the next few days. I expect to meet my Quebec counterpart within the next ten days or so, at which time I can discuss with him some of the concerns expressed to me by the hon. member and other hon. members from the Quebec south shore area.


Joseph Adrien Henri Lambert: Mr. Speaker, in the light of the answer just given by the minister, is it proper for the federal Minister of Regional Economic Expansion to make suggestions to another minister of another government concerning some priorities of a program intended to reach that department's objective?


Marcel Lessard: Mr. Speaker, indeed it is and we do it quite regularly. However I hope to have once again the opportunity to take part in the choice of some priorities related to regional development that we discovered in the province of Quebec.


AIRPORTS
Mr.   Albert@: Mr. Speaker, I impatiently wish to put a question to the Minister of Transport.
Considering that airlines serving lles-de-la-Madeleine are forced only too frequently to cancel flights to the islands at the least atmospheric disturbance because of a lack of facilities at that airport-as an example, there were 56 flights cancelled by Quebecair in 1976-could the minister inform the House whether one must wait for a mass uprising by the people
January 28, 1977

before getting adequate navigational aids and improved runways as requested repeatedly for ten years.


Otto Emil Lang: Mr. Speaker, I take very serious note of the hon. member's representations and thank him for bringing these facts to my attention. I want to assure him that I will give sympathetic consideration to the problem and see how quickly we can find money amongst the competing priorities for these funds.


PUBLIC SERVICE
Walter David Baker: Mr. Speaker, my question for the President of the Treasury Board arises out of an earlier series of questions. It relates particularly to the case of the blacklist, which admittedly occurred before he was minister, and one public servant who but for a judicial finding of wrongful dismissal would still be a member of the public service. It affects as well the whole matter of the application of the guidelines to public servants who ought to be in the public service and those who are there now. In respect of this particular case, has the President of the Treasury Board investigated the circumstances of a letter dated June 15, 1971 that was referred to in this House the other day, to ascertain whether the guidelines were properly applied in the Rudnicki case? If so, what has the minister done about it? What recommendation has he made? Is he continuing the investigation to see if the kinds of things that happened to Mr. Rudnicki are not currently happening to other civil servants?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, as the Solicitor General has indicated on many occasions, the actions taken as a result of any such letter were the responsibility of the department involved at the time. As I recall, Mr. Rudnicki's severance from the public service took place perhaps one or two years after the date of that letter. I cannot add to the comment made by my colleague the Minister of Justice in that connection. With regard to continuing investigation, I do not see any necessity for that at this time.


Walter David Baker: Mr. Speaker, I tried to make it clear to the minister that what we are talking about here is a public servant who was wrongfully dismissed. If he had not been dismissed he would likely have been under the jurisdiction of the President of the Treasury Board and this gives him a particular responsibility, which he generally carries. I would ask the minister if he is consulting with the Minister of Justice to see whether the guidelines referred to in this House this morning were breached in the case of Mr. Rudnicki and are being breached generally. If not, would he do so and report to the House because this is important to the
Oral Questions
morale of the public service. This case goes far beyond the case of Mr. Walter Rudnicki.


Robert Knight Andras: Mr. Speaker, I will note and examine carefully the representations made by the hon. member. I assume he is referring to the Pearson guidelines which I shall review.


ADMINISTRATION OF JUSTICE
Mr.  R. Gordon L. Fairweather@Fundy-Royal: Mr. Speaker, my question is for the Minister of Justice. Would the minister care to share with us the letter he says he wrote to the Law Reform Commission about the efficacy of searches made under the Combines Investigations Act and in particular about the extraordinary or at the very least unusual searches made of offices of the Vancouver Sun and the CBC?


Stanley Ronald Basford: Yes, Mr. Speaker. I do not have that letter with me now, but I will deal with the matter on Monday.


SUGGESTED DELAY OF PLEBISCITE ON FEED GRAIN MARKETING SYSTEM-GOVERNMENT POSITION
Mr. Jack Murta (Lisgar):: Mr. Speaker, I should like to put a question to the minister responsible for the Canadian Wheat Board. In view of the uncertainty and the divisions that a feed grain plebiscite would create in the agricultural community and since the Canadian Federation of Agriculture has dealt with the problem at some length but has not arrived at the type of question to be posed to farmers, would the minister consider postponing the vote indefinitely until there is a more general idea of what farmers want as far as feed grain marketing is concerned?


Hon.   Otto. E. Lang@Minister of Transport: Mr. Speaker, I am not sure that I actually received a formal reply from the Canadian Federation of Agriculture, although I know that certain units within the federation have indicated their views along the lines the hon. member mentioned. I had thought it imperative to have the assistance and advice of the federation on the question of timing as well as the content of the plebiscite. I would certainly take into very serious consideration a recommendation from the federation if they felt a delay was required.

January 28, 1977
Oral Questions TRANSPORT


FERRY OPERATIONS IN BRITISH COLUMBIA-GOVERNMENT POSITION ON COST-SHARING
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, may I put a question to the Minister of Transport? On December 21, 1976 the Prime Minister received a telegram from the premier of British Columbia outlining the disparity that exists between the federal subsidy program for west coast shipping compared with east coast shipping. Two weeks ago the minister's officials met with officials in British Columbia to discuss that disparity. Has an answer been sent to that telegram by the Prime Minister and is the Minister of Transport now willing to share 50-50 the cost of the British Columbia ferry operation?


Otto Emil Lang: Mr. Speaker, any discussion of disparities which ignores the special position of the constitutional requirement for ferry services under the terms of union with Newfoundland, I think fails to calculate adequately. We are, however, having discussions and will have further discussions with British Columbia concerning many questions in relation to transportation, and ferries in particular. Those discussions are not complete at this point.


FERRY OPERATIONS IN BRITISH COLUMBIA-REQUEST FOR REPORT ON IMPROVED SERVICE FOR COASTAL COMMUNITIES
Benno Friesen: A supplementary question, Mr. Speaker. Now that the new improved coastal shipping service has been in place for some three months, I wonder if the minister could give us an updated version of what is happening so that the coastal communities do not have to depend on Rivtow tug service for their livelihood and products?


Otto Emil Lang: Mr. Speaker, I think the report the hon. member wants would be longer than I would be permitted to give at this time, since it would involve a survey of the passenger and freight situation along the coast. If he has a more specific question, I would be glad to deal with it.


MANPOWER
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Can the minister explain why the $30 per man-hour week cost of construction materials allowance in the Canada Works Program has not been extended to a single constituency in British Columbia? Has the formula which produced this astonishing result been applied any more accurately than the one that produced last year's original LIP allocations in British Columbia?


Hon. Jack Cullen (Minister of Manpower and Immigration):: Mr. Speaker, I think what the hon. member should be thankful for is that none of them needed this particular assistance under the criteria that are applied. In the province of Ontario only two constituencies qualified for this particular addition. The formula used was that the unemployment rate had to be in excess of 7 per cent for the first quarter of 1976. Second, and I wrote a letter to each member of parliament indicating this so the hon. member already has it, the constituency, according to Statistics Canada, should be in the lowest 20 per cent of all constituencies in terms of either average family income or the medium value of single detached owner-occupied non-farm dwellings. We endeavour to apply the criteria. If the hon. member examined the ridings involved, with one or two seeming anomalies, I think he would concur.


CANADA WORKS PROGRAM-REASON COST OF MATERIALS ALLOWANCE NOT EXTENDED TO OKANAGAN BOUNDARY
Mr. G. H. Whittaker (Okanagan Boundary):: Mr. Speaker, my question is supplementary to that put to the Minister of Manpower and Immigration by the hon. member for Okanagan-Kootenay. In view of the minister's answer to that question, and in view of the fact that unemployment in my riding is at 13 per cent to 15 per cent and the income per capita is lower than the national average, why did the minister indicate that the riding would not qualify when the qualifying rate is 7 per cent unemployment?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I indicated there was a series of criteria that would apply. If the hon. member's figures are correct, I will look into it and see if we made a mistake in that riding.


RESOURCES
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Has the minister made a final decision on whether he is going to add a division to his department to deal with renewable resources?


Alastair William Gillespie: Yes, Mr. Speaker, I have made that decision and I hope to make an announcement with respect to it very shortly.


LABOUR RELATIONS
Mr. Jacques Lavoie (Hochelaga):: Mr. Speaker, I want to ask a question of the Minister of Labour, but in his absence I shall put it to the Acting Prime Minister.
Last December, I asked a question of the Minister of Labour concerning the problems of longshoremen, particularly in Montreal, and since the minister submitted the Tremblay report to me and to the longshoremen's association, nothing has been solved. Can the Acting Prime Minister tell the House whether the government intends to take any step to put an end to the shylocking and the employers' disregard for job security and the code of ethics taking place at the workers' expense?


Joseph Jacques Jean Chrétien: Mr. Speaker, I shall be happy to refer the hon. member's question to the Minister of Labour and I hope he will be in a position to give him an answer early next week.


POST OFFICE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, my question is for the Postmaster General. Due to the mounting problems confronting the general public and business in particular as a result of the bureaucratic policies of the Post Office Department, could authority be granted to postmasters to better manage their offices and thus provide a saving which could be used to provide more boxes and substations in rapidly developing areas with no extra cost to the public purse, thereby staying within the government's restraint guidelines?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, as I indicated to the hon. member for Red Deer after he gave me notice of his question, I fully realize that there are some anomalies, especially in growing areas, relating to the service that is available. I am very much aware of the frustrations being encountered by people who have to wait at general delivery lines and post offices where parking facilities are not available. Having said that, I remind the hon. member that the government has indicated that there are restrictions being imposed on new hiring for the fiscal year. Unfortunately, the Post Office is caught by the same guidelines.


Thomas Gordon Towers: If mail has to go through large postal centres, it sometimes takes eight days to go 200 miles. What action is the government going to take to ensure there will be adequate service that individuals can trust?
Oral Questions


Mr. Speaker:: Order, please. The question seems to have a little larger context than is normally treated in the question period.


TRANSPORT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I have a question for the Minister of Transport. In view of the fact that the report by Dr. Noel Hall on railway pensions, which was finally published last week by his colleague the Minister of Labour, virtually throws the question of improving railway pensions back to the companies and to the government, can the minister tell us what steps the government is going to take to try to improve railway pensions?


Otto Emil Lang: Mr. Speaker, I can tell the hon. member that we will be taking a very hard look at the report and the question of responsibilities. I will be discussing it with some of my colleagues, as I believe he is doing.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, in view of the fact that one specific set of recommendations made by Dr. Noel Hall is that the CPR raise its pension provisions at least to the level of the CNR, will the minister make a particular point of that to his friends in the Canadian Pacific Railway?


Mr. Speaker:: Order, please.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, I wish to direct a question to the Minister of Manpower and Immigration. In view of the government's stated policy that resettlement of immigrants is a necessary and integral component of any successful immigration policy, and in view of the fact that resettlement should include proficiency in one or both of Canada's two official languages, is the government considering conducting English language training courses for immigrants in Quebec entirely under the auspices of the federal government, thus guaranteeing language rights as stated in the Official Languages Act?


Jack Sydney George (Bud) Cullen: Mr. Speaker, first and foremost, it should be realized that English training is provided in large measure in the province of Quebec under the educational jurisdiction that they have. I met with Mr. Couture this morning. I handed him

January 28, 1977
Oral Questions
a letter replying to his suggestion that he was going to close the English language course that is given to immigrants. As a result of this meeting with him, it seems that he is backing off a little from that and is suggesting that his main criticism is the selection criteria, who in fact decides. I think we can work something out. It should also be understood that French training is provided to workers in Ontario but provided in the province of Quebec. Therefore we are working in a bilingual milieu. Rather than fighting about it, I am hoping we can reach an accommodation.


Arthur Jacob (Jake) Epp: Do we then have the assurance of the minister that the proposal to eliminate English courses for immigrants has in fact now been rescinded by agreement?


Jack Sydney George (Bud) Cullen: No, Mr. Speaker, I cannot say that. The only formal indication I have from the minister is to the effect that he is terminating those particular classes. I indicated to him, both in a letter and personally this morning, that I felt that was an error, given the preconditions to actually taking the English lessons. We may have some frame of reference where we can work out an accommodation so that these classes will in fact continue, but I cannot give that commitment until the hon. minister has an opportunity to discuss it with his colleagues. Failing that, as the Prime Minister has indicated, we will look to other avenues to provide this kind of English training, be it comparable to the French training now provided in Quebec. We may provide the English training in Ontario.


ADVICE ON LANGUAGE GIVEN PROSPECTIVE IMMIGRANTS TO QUEBEC
Hon. Robert Stanbury (York-Scarborough):: Mr. Speaker, I have a supplementary question for the Minister of Manpower and Immigration. Is it the practice of his department, as stated yesterday by the Quebec minister of immigration, to advise prospective immigrants that if they settle in the province of Quebec there is no need for them to learn any language but English because that is the majority language of Canada?


Jack Sydney George (Bud) Cullen: Mr. Speaker, if reports that I have had on the speech made by Mr. Couture last night are accurate, the statement he made is in fact not true. We do not give that kind of advice. Second, it should be remembered that Quebec itself provides counsellors to these immigrants who indicate just what the situation is in Quebec. Third, we provide only to the province of Quebec so far, by agreement, something like $175,000 a year. They decide on the calibre and quality of the advertising from the money spent on that particular budget. I was somewhat surprised to have an indication that we were giving misinformation when the information in large measure is given by counsellors from the province of Quebec, with whom we work in very close concert.


TRANSPORT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I have a supplementary question for the Minister of Transport with regard to railway pensions. One recommendation by Dr. Hall was that the trusteeship of both the CNR and CPR pension plans should be placed in the hands of an independent trust company. Has the government given any consideration to this recommendation?


Otto Emil Lang: Mr. Speaker, as I indicated in my answer, we will be giving consideration to this. We have not yet reached conclusions on it.


EXTERNAL AFFAIRS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is for the Secretary of State for External Affairs. After much prompting, a parliamentary secretary on behalf of the Department of External Affairs admitted last night during the adjournment debate that Herrera Perdomo, the former second in command of the Cuban Embassy in Ottawa, was expelled last June for "activities incompatible with his diplomatic status". Can the minister expound on that definition and at the same time advise this House why the expulsion was not made public at the time, or is this a new policy of this allegedly open government?


Donald Campbell Jamieson: Mr. Speaker, it is hard to sort out the different parts of that question.


Mr. Alexander:: You can do it.


Donald Campbell Jamieson: Thank you for the confidence. I will be very glad to try. In the first place, as far as I was personally concerned, when I arrived back in the country yesterday I immediately gave the name of the gentleman concerned the first time I was asked. If the hon. member had asked, I would have given it to him, too.
As to the matter of the publicity surrounding incidents of this sort, I have asked for a meeting with the officials and some of the security people concerned, because I personally feel that this does create some problems. But I am also very much aware of the difficulties which arise when there is publicity associated with events of this kind. I am looking at the situation to determine what changes might possibly be made. Incidentally, this is not a new practice. As far as I know it is one which has been carried on by many governments of this country over a number of years. As to the definition,
January 28, 1977

again, this is a standard definition which applies in all such cases-that the party or parties concerned have carried on in a manner inconsistent with their diplomatic status. That is the wording which is used by the security people, and, I believe, by the RCMP and by the External Affairs Department.


SUGGESTION CUBAN AID PROGRAM BE STUDIED BY COMMITTEE
Otto John Jelinek: I thank the minister for his answer. My supplementary is this: I have reason to believe, as a result of recent information from the minister's own department, that further expulsions on a far greater scale are being considered. In the light of these allegations and the continued disrespect shown by the Cubans for Canadian relations, would the minister not consider it advisable to bring the whole question of the Cuban aid program before the parliamentary committee dealing with CIDA?


Donald Campbell Jamieson: Lest my silence be taken as being some form of confirmation, let me say most emphatically that I have no evidence whatever at this point of what the hon. member called "large scale or additional action being contemplated." I am not in possession of any such information. As to the second part of the question, I would assume there is no barrier as far as the committee is concerned with regard to dealing with this matter when the estimates or the subject of CIDA are before the committee in the normal course.


NATURAL GAS-POSSIBILITY OF EXCHANGE ARRANGEMENT WITH UNITED STATES
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. It relates to substantial volumes of surplus natural gas available in Alberta and which are likely to remain unconnected to markets for some time, constituting a disincentive to further development. Since gas swap arrangements do not result in any net loss of resources, would the minister tell us whether he intends to discuss the possibility of such arrangements with the United States which is currently in some need?


Alastair William Gillespie: I hope there will be an opportunity in the very near future to have discussions of this kind with the new secretary appointed by President Carter. Clearly, a new situation has developed as far as Canada is concerned, and I believe the pricing policies of the government are to a large extent responsible for the increased interest and investment in new gas development in Alberta.


Steve Eugene Paproski: I rise on a point of order, Mr. Speaker. For the last three or four days I have been waiting patiently for the Minister of National Defence in order to question him with
Income Tax Act
regard to a very important thing which is happening in my riding. There has been a secret military report saying that the movement of the Canadian airborne regiment from Edmonton to Petawawa will cost $125 million. There have also been reports that according to the military this move is not necessary and that it is opposed by high military sources. The minister has not been around. I would hope the House leader might be able to bring him in here, maybe next week, so that he can deal with these very important questions.


Mr. Dionne (Northumberland-Miramichi):: On the same point of order, Mr. Speaker, since the House resumed its sittings the Minister of National Defence has been in the House every day but yesterday and today. Therefore, the hon. member's charge is nonsense. The minister has answered all the questions posed with regard to the move of the Canadian airborne regiment from Edmonton. The answers he gave are the facts, and there is nothing further to add.


Elmer MacIntosh MacKay: A brief point of order, Mr. Speaker, with respect to questions on the order paper. I should like, respectfully, to remind the responsible parliamentary secretary to the government House leader that many questions I have on the order paper with regard to Statistics Canada remain unanswered. I ask that they be answered as soon as possible so that we may get on to eliciting further information.



ROUTINE PROCEEDINGS


Otto Emil Lang: for leave to introduce Bill C-34, to amend the Canadian Wheat Board Act respecting the establishment of marketing plans and to amend the Western Grains Stabilization Act in consequence thereof.


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

Donald Stovel Macdonald: Mr. Speaker, I wish to inform the House that I have been advised that it has not been possible to reach agreement under the provisions of Standing Order 75A or Standing Order 75B with respect to proceedings at committee of the whole stage of Bill C-22 which, as the House knows, is an act to amend the statute law relating to income tax. Therefore, I should like to advise the House that I shall propose on Monday a motion

January 28, 1977
Order Paper Questions
pursuant to Standing Order 75C to allocate an additional eight hours to that stage of the bill.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Guillotine!


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Ralph Goodale: Mr. Speaker, the following questions will be answered today: 46, 203, 677, 737, 800, 896, 898, 913, 1,013, 1,067, 1,288, 1,292 and 1,329.
While I am on my feet, perhaps I might point out to the House, in response to the point raised a few moments ago by the hon. member for Central Nova, that the rate of return on all questions this session has been the highest the House of Commons has seen for a long time.


Mr. Cossitt: 1.	Did Mr. W. B. Britain, Deputy Minister of Veterans Affairs, circulate a letter on government owned stationery bearing the letterhead of the Department of Veterans Affairs to various persons in the Public Service appealing for funds for Carleton University and, if so (a) what is the name of the highest ranking person authorizing this use of government material (b) where did Mr. Britain obtain his mailing list and on whose authority (c) how many persons received the letter accompanied by solicitation material and how were they selected (d) who paid the cost of government materials used (e) was the material sent postage free and (i) if so, for what reason (ii) if not, what postage was used and was a government postage meter used?
2.	Is it the policy of the government to allow the use of government facilities and materials for soliciting on behalf of private institutions and (a) if so, for what reason (b) if not, for what reason was it permitted in this case?
3.	What is the complete employment history of Mr. Britain since he joined the Public Service?
4.	Is it the intention of the government to instruct Mr. Britain and other Deputy Ministers to solicit funds for other private institutions in the interests of equal treatment?
5.	What was the total cost to the taxpayer for this solicitation including the cost of (a) paper (b) printing (c) envelopes (d) postage (e) labour?
6.	Was this matter at any time discussed, considered, or in any way dealt with or passed by the Treasury Board and, if so, on what dates and what are the details?


Ralph Goodale: 1 am informed by the Department of Veterans Affairs and Treasury Board as follows: 1. No. After Carleton University secured permission for a campaign, as in 2, below, Mr. Brittain agreed to assume responsibility for generating the further action required to give effect to the campaign within the Public Service. This resulted in a letter to each Deputy Head noting approval for the campaign and providing administrative detail. Additionally Mr. Brittain provided one copy of a letter destined to potential donors, signed by him, which was reproduced in multiple copies by Carleton

University for distribution in departments along with informational material, a pledge card, and a self-addressed, stamped envelope, all of which was also produced by the University at its own expense. This material was delivered in bulk to departments for distribution as in 2, below. No active canvassing took place. Donors sent their donations directly to the University.
2.	It is not the policy of the Government to allow the use of government material for soliciting contributions from employees on behalf of private institutions. Use of government facilities is permitted under certain circumstances. Charitable organizations of a non-sectarian nature and registered under the Income Tax Act are normally permitted to arrange for their literature to be distributed with payroll cheques and to advertise their campaigns on office bulletin boards. In addition, the United Appeal is permitted to use payroll deductions as a means of collecting donations from employees. Since campaigns of individual universities are generally limited to a region and to certain employees in that region, university campaigns have not been permitted to distribute literature with cheques. They have, however, been permitted to address and distribute campaign literature to employees in a government building in the region in which the university is located, using the mail distribution facilities within that building and, if an employee requests it, to discuss the campaign with him and collect contributions from him.
3.	Department of Agriculture: 1949-1954, Junior Administrative Officer, Assistant Chief, Organization and Personnel, Chief, Administration Division, Science Services. Department of National Health and Welfare: 1954-1968, Assistant Director (Admin.), Indian and Northern Health Services, Assistant Director (Admin.), Medical Services, Director General, Administration. Treasury Board: 1968-1969, Acting Assistant Secretary, Management Improvement Branch. Department of Veterans Affairs: 1969-present Assistant Deputy Minister, Deputy Minister.
4.	The government has not directed deputy ministers to solicit funds for private institutions and does not intend to do so in the future. It is the intention, however, to continue to permit charitable campaigns of the limited nature set out in the response to part 2 of this question.
5.	$75.86. There being no direct solicitation or canvassing, the cost to the taxpayer was essentially that incurred by Veterans Affairs in writing to Deputy Heads, printing an information sheet for use by departments and in delivering that material, (a) $1.91; (b) $31.20; (c) $2.31; (d) $15.44; (e) $25.00.
6.	On December 11, 1975, the Treasury Board approved a submission to permit Carleton University to conduct a campaign for funds among senior levels of the Public Service. It was recommended that Carleton University be permitted to conduct their campaign under the conditions previously set for campaigns of this type. The conditions allow for employees nominated by the University to set out posters advertising the campaign. The campaign representative was also authorized to address and distribute campaign literature, using the mail
January 28, 1977

distribution facilities within that building and, if an employee requests it, to discuss the campaign with him and collect contributions from him.


Mr. Cossitt: 1.	How many employees were sent by the Unemployment Insurance Commission to Bathurst, New Brunswick, to look over and report on that city in connection with the planned movement of certain UIC facilities and (a) on what date did they leave and return to Ottawa (b) how did they travel and what was the total cost (c) in what location did they stay in Bathurst and what was the total accommodation and food bill (d) what was the total cost for all aspects of the trip (e) did any employees go fishing while there and, if so, what connection did this have with their duties as UIC employees?
2.	Was any special dinner, party or function of any kind held by these employees at the expense of the taxpayer and, if so, was an amount of money added to each person's regular hotel room bill to cover the cost?
3.	(a) What were the room rates (i) prior to (ii) after such addition (b) what was the total amount added?
4.	What are the names and job designations of UIC officials in charge of the visit to Bathurst?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: 1. Twenty-three, (a) Departure August 18, 1976 Return August 21, 1976 (b) By Rail-$2907. (c) Danny's Motel $2063. (e) $5021. (f) Yes. During the afternoon of Friday, August 20, members of the group were allowed to pursue their own activity. Some chose to investigate the Bathurst real estate situation; others went shopping; and about six or eight of the party went fishing, at their own expense. Since the object of the trip was to permit these employees to form their own impressions of Bathurst as a place in which they and their families might live, these activities were encouraged by those responsible for the group.
2.	On Thursday, August 19, the group entertained a senior civic official and his wife. Each member of the group had $9.25 added as a restaurant charge, to his hotel bill, of which he collected $8.05 as the standard dinner meal allowance. Thus each member of the group was out of pocket to the extent of $1.20 with respect to the dinner. The balance of the cost of the entertainment, $51. was met by hospitality allowance.
Order Paper Questions
3.	(a)(i) $19.98; (ii) $19.98. (b) There was no amount added to the room rate.
4.	Director, National Services; Director, Annuities; Director, Special Projects.


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did Petro-Canada hire, dismiss or transfer employees to other departments and, if so, how many?


Mr. Maurice Dupras (Parliamentary Secretary to Minister of Energy, Mines and Resources):: Petro-Canada reports as follows: Hired, three; Dismissed, none; Transferred, one.


Mr. Muir: 1.	What are the names of the lawyers or law firms on Cape Breton Island employed by the Department of Veterans Affairs and how was each selected?
2.	How much did each lawyer or law firm receive in fees and expenses in the fiscal year 1972-73 to date?
3.	Can an individual securing financing through the Department select a lawyer other than those recommended by the Department and, if not, for what reason?


Ralph Goodale: I am informed by the Departments of Justice and Veterans Affairs as follows: 1. See list following. When considering counsel for appointment as agents of the Minister of Justice the type of case is taken into account and a counsel's competence and experience in that area of the law is considered before an appointment is made.
2.	See list following.
3.	A veteran who wished to be settled under the provisions of the Veterans' Land Act had until March 31, 1975 to submit a loan application. Immediately after approval of the application, the Department of Justice was requested to secure a good and marketable title to the property registered in the name of The Director, The Veterans' Land Act, who, for the purposes of acquiring, holding, conveying and transferring property, is a corporation sole and as such is the agent of Her Majesty in right of Canada. The appointment of a legal agent to search and certify title was made by the Department of Justice and reflected the fact that title was being obtained in the name of the Director rather than the veteran.
Lawyers or Law Firms on Cape Breton Island Employed by Veterans Land Administration
April 1 to
Name	1972/73	1973/74	1974/75	1975/76	Oct. 20, "Evans, Larry	-	621.40	3130.46	2038.85	-Gillis, T. J. K.	6390.00	5644.55	11629.50	8001.60	-Hinchey & Hinchey	1982.50	1195.50	4077.60	4224.00	-Le Blanc, Arthur J.	3157.85	2965.30	5393.32	4679.41	492.50LeVatte, Geo. R.	647.50	-	-	-*	-MacDonald, Simon J. MacLennan, J.	-	230.00	-	Daniel	216.80	-	-	-	-Ross, J. Allister	1753.60	2824.50	578.50	-	296.00Ryan, Murray J.	-	-	-	1248.30	508.10Smith, G. Allistaire	1244.20	-	-	12821.56	39.35
January 28, 1977
Order Paper Questions


Mr. Epp: Are there organizations in Canada that support legalized abortion and who receive funding from the government to support their cause and, if so, for the years (a) 1973 (b) 1974 (c) 1975 (d) 1976, what are the organizations and what funding did each receive?


Ralph Goodale: In so far as the Departments of Manpower and Immigration, National Health and Welfare and Secretary of State are concerned, I am advised as follows: The Department of Manpower and Immigration provides grants and contributions to many organizations whose objective is to facilitate employment or immigrant settlement and which thereby complement the services of the Department. Among the projects are some providing family counselling, and such counselling might cover various aspects of family planning and pregnancy counselling. However, such aspects are incidental to the purpose of the project. No organization whose primary objective is to support legalized abortion has been funded by the government.


Mr. Howie: Have any agreements been reached with any of the Atlantic Provinces for a study of a power pool and, if so, with which provinces and on what dates?


Maurice Dupras: The Department of Energy, Mines and Resources reports as follows: Negotiations are proceeding to develop terms of reference for studies. No agreements have been reached.


Mr. Howie: Has the government made any efforts to facilitate the economic transmission of electric energy from the proposed Gull Island power development site in Newfoundland through Quebec to other parts of Canada and, if so, what form did these efforts take and on what date were they made?


Maurice Dupras: The Department of Energy, Mines and Resources reports as follows: No. However there has been some preliminary discussion between Canada and Quebec at the ministerial level. Further action is dependent upon a decision by the Government of Newfoundland relating directly to the development of the Gull Island project.
UIC-R. E. MacKAY


Mr. Cossitt: 1.	What is the complete history of Mr. R. E. MacKay's employment with the Unemployment Insurance Commission including positions held and dates?
2.	Was Mr. MacKay appointed in any specific capacity such as co-ordinator etc. of the forthcoming move of the Unemployment Insurance Commission's Annuities Branch and Central Index to Bathurst, New Brunswick and, if so (a) on what date and by whom (b) has he been removed from this position and, if so (i) on what date (ii) for what reason (iii) by whom (c) was he one of the UIC employees who visited Bathurst lately to examine the City and its facilities and was his removal from the position made following that visit?

3.	Did Mr. MacKay have anything to do with the matter mentioned in Order Paper Question Number 203, Parts 2 and 3?


Jack Sydney George (Bud) Cullen: In so far as the Unemployment Insurance Commission is concerned: 1. July 22, 1946, Mail Clerk; October 1, 1949, Personnel File Clerk; April 1, 1951, Benefit Computation Clerk; November 3, 1952, Supervisor Claims Preparation; May 25, 1953, Limited Authority Adjudication Officer; February 1, 1956, Full Authority Adjudication Officer; May 2, 1960, Supervisor, Adjudication; November 7, 1960, Benefit Control Officer; April 1, 1962, Senior Benefit Control Officer; July 1, 1964, Standards and Methods Officer; December 1, 1965, Senior Standards and Methods Officer; April 1, 1967, Advisor, Training and Development; July 1, 1968, Advisor, Manpower Planning and Appraisal; January 1, 1969, Senior Advisor, Training and Development; November 17, 1969, Project Officer, Program Implementation; September 8, 1970, Project Manager Personnel, New Legislation Task Force; September 1, 1971, Acting Project Director, Registration Program; May 9, 1972, Project Director, Registration Program; December 15, 1973, Special Advisor, Effectiveness Evaluation; May 15, 1974, Project Manager, Training Systems; February 20, 1975, Director, Field Liaison; June 4, 1976, Director, Special Projects; August 25, 1976, Special Projects Coordinator; November 9, 1976, Project Manager-RCT/UIC Liaison.
2.	Special Assignment Pay Plan Appointment to act as a Special Advisor to the Executive Director Services in all departmental matters related to the government program of decentralization of operations, (a) June 4, 1976-Executive Director of Services, (b) Yes. (i) August 25, 1976. (ii) Mr. MacKay was asked to assume responsibility for the coordination of systems requirements of several special projects, (iii) Director General, Systems and National Services, (c) Mr. MacKay was one of the group which visited Bathurst August 19 and 20, 1976 and his reassignment as outlined above occurred on August 25, 1976.
3.	Yes, as coordinator, Mr. MacKay was responsible for the administrative arrangements for the trip to Bathurst.


Mr. Howie: On November 1, 1976, how many persons were employed in Fredericton, New Brunswick by (a) CMHC (b) DREE (c) the Department of National Health and Welfare (d) UIC (e)the Department of Energy, Mines and Resources (f) the Department of Public Works (g) the Department of National Revenue (h) the Department of Agriculture?


Ralph Goodale: (a) 44; (b) 51; (c) 57 continuing employees, 20 term employees, 21 casual employees; (d) 43; (e) None; (f) 31; (g) 11; (h) 151.
January 28, 1977


Mr. Howie: 1.	What financial assistance has been given for the construction of the Chalmers Hospital at Fredericton, New Brunswick and under what programmes?
2.	What assistance is available for additional medical equipment for the Hospital and under what programmes?


Ralph Goodale: In so far as the Department of National Health and Welfare is concerned: 1. Under the Health Resources Fund an amount of $261,448 was approved for such construction, including an amount of $15,000 for moveable equipment. The Health Resources Fund contribution covers only the square foot area to be devoted to the training of health manpower personnel, (i.e., university oriented nurses, radiological technicians, laboratory technicians, electro-cardiograph technicians, electroencephalographic technicians, registered nursing assistants, physiotherapists and continuing inservice programmes).
2. See 1 above.
In so far as the Department of Veterans Affairs is concerned: 1. Under the terms of an agreement between the Department of Veterans Affairs and the Province of New Brunswick for the transfer of Lancaster Hospital finalized on September 7, 1972, $1,344,568 of the capital grant money was used for the construction of 24 priority beds for active treatment of pensioned veterans at the Everett Chalmers Hospital, Fredericton, N.B.
2. None.


Mr. McKinley: What was the Final cost and the completion date for the contract awarded in 1974 to Shoquist Construction Co. Ltd. to build the POS Pilot Plant Corporation building at Saskatoon?


Hon. Judd Buchanan (Minister of Public Works):: Final contract cost, $2,391,391 (estimated). Completion date, 197702-28 (estimated). The actual date of contract award was 1975-12-18.


Mr. McKinley: What was the Final cost and the completion date for the contract awarded on July 11, 1975 to United Contractors Ltd. for the construction of a customs building at Centreville, New Brunswick?


J. Judd Buchanan: Final contract cost, $273,266.42. Completion date, December 14, 1976. The actual date of contract award was June 2, 1975.
Excise Tax Act CHARLOTTETOWN AIRPORT


Mr. Jones: Has a one million dollar allocation been made for runways in Charlottetown for 1978 and, if so, for what reason can the money not be allocated earlier?


Otto Emil Lang: There are no plans for additional runways at Charlottetown Airport prior to 1979-80. New taxiways and aircraft apron planned for 197879 are integral with schedules allied to priority requirements for a new passenger terminal complex and related facilities.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from, Thursday, January 27, consideration of the motion of Mr. Macdonald (Rosedale) that Bill C-21, to amend the Excise Tax Act, be read the second time and referred to committee of the whole.
Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I should like to bring a number of matters to the attention of the minister. My reason for doing so at this point is to allow him the opportunity to look into the remarks I am about to make and provide me with answers at some appropriate time as the bill proceeds. One of the questions I wish to raise with the minister is this. As we know, he has had to back away from the position he originally took in trying to promote energy conservation through a measure depending upon the weight of cars. He is considering whether it is not more appropriate to impose penalties based on the mileage per gallon or lack of mileage per gallon achieved.
I wonder whether the minister has done any research in a similar direction to determine whether the penalty on air-conditioners might not be counterproductive. The understanding given to us in defence of the imposition of a tax on air-conditioners was that they consume a tremendous amount of energy. This seemed a plausible argument and one which we on this side are prepared to support if it will, indeed, result in conservation. However, representations have been made to me suggesting that in fact air-conditioners might not be especially important in terms of energy consumption.

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I should like to read the following letter to the House and ask the minister to reply to it at an appropriate time. The letter is from Dave's Auto Radio, of Kitchener. It is headed "Re: Bill C-21, automotive air-conditioner tax", and reads as follows:
The proposed purpose of taxing automotive air-conditioners is to encourage people to conserve energy. This is based on the assumption that car air-conditioner units are a heavy user of fuel.
I feel that this is only the case air-conditioning units that operate all the time such as GM's Comfortron. All manual air-conditioners operate only when needed and then only intermittently. These units are thermostatically controlled and as soon as the car's interior reaches the desired temperature, the compressor shuts off.
To be more specific on consumption of fuel, it is a well known fact that a car with the windows down on a hot day will consume as much, or more, fuel than a car with air-conditioning and the windows up. This is because when the windows are down, the car is subject to wind drag. When windows are up, it presents a clean entry into the air.
I believe that you and other MPs are being misled and poorly informed on this matter.
The letter is signed by Mr. Johnson. I do not have at my disposal the kind of research that would be required to know whether the arguments being put forward in the letter are as stated, but I think this is a very important matter. Since the question has been raised and the minister has had to reconsider some of his other approaches to fuel consumption, such as the weight of cars, the minister should tell the House what kind of research has been carried out on air-conditioners and what happens to fuel consumption. Have the facts put forward in the letter been examined, and what conclusions has the department come to?
Another matter I should like to raise at this time has to do with a letter sent to the hon. member for Regina-Lake Centre (Mr. Benjamin) from the Canadian Council of Rehabilitation Workshops. The president, Mr. Les Gray, asked the hon. member for Regina-Lake Centre to have this matter raised in the House when the Excise Tax Act came up for examination, so this seems to me the appropriate time to raise it. I think I could best put the argument in the form in which it appears in the letter, and I will quote directly from the letter and ask the minister what is being done in this regard. At the conclusion of the letter there is some indication that the matter is under study, and once again I should like the minister to report at the appropriate time what the studies have revealed and what conclusions the government has come to in terms of making a policy decision. The letter is addressed to the Minister of National Revenue (Miss Begin) and reads in part:
The purpose of this letter is to bring to your attention certain exclusions in the guidelines under the federal Excise Tax Act related to exemptions of federal sales tax for institutions and facilities whose prime objective is the rehabilitation of handicapped or disadvantaged persons.
A number of the workshops or rehabilitation facilities in Canada are not involved in activities that produce an item that would be considered under the act. Specifically this would be the renovating or refurbishing of items for resale such as clothing, electrical appliances, furniture, etc. In the course of these

activities they must utilize various supplies and equipment to carry out this function, some of these being dry-cleaning fluid, soaps, buttons, paint, nails, electrical wiring, various tools and machinery such as washers, saws, drill presses, etc. that they must purchase and are charged federal sales tax.
The market segment for these goods is extremely selective and economically depressed causing a very low margin of return for the facilities who in turn must reflect this in the payment to the workers, retarding any incentive that may be generated, thereby in large measure defeating the rehabilitative goals of the facility. Being exempt from federal sales tax would greatly assist these facilities in achieving their objectives.
A further consideration is in the area of federal sales tax that is charged in the purchase of building materials for new construction or renovation of the previously mentioned facilities. The current costs of construction have made expansion in this respect extremely limited and I would ask that consideration be given to the exemption of the facility in these purchases or by some means applicable to the contractor.
The third matter of consideration is to a change in the guidelines related to the certification of institutions so as to encompass the broad spectrum of persons that we attempt to rehabilitate. At present, under the strict interpretations, persons who are socially disadvantaged and others who are in a transitional state following confinement to a penal institution, drug or alcoholic treatment centre and who make up the majority of persons in a given facility are not covered in the certification authority granting that facility exemptions of sales tax in production or purchase of materials and equipment.
It would be difficult to determine the exact amount of revenue that would be lost if these proposals were to be acceded to, but I feel it would be very minimal on the scale of the total intake of federal sales tax.
We have been advised that the current guidelines are presently under review and ask that you give the above matter your most serious consideration.
It seems to me, Mr. Speaker, that this, too, is an important matter and for this reason I raise it at this time. Since the matter is under review and we are prepared to make exemptions under the Excise Tax Act regarding certain items of social importance, it is a matter of considerable concern that we know whether the department has come to a conclusion or whether the minister is prepared to grant these exemptions to rehabilitative centres. If some difficulty is caused because there are so many items purchased, then I suggest it is possible from the administrative point of view to institute some kind of rebate or withdrawal system at the end of a purchase period which would reimburse these institutions in respect of sales tax.
I will leave this matter with the minister and give him an opportunity of refreshing his memory or obtaining additional information from his officials, and I would ask him to reply to the two matters I have raised when the bill reaches committee stage.


William Hillary (Bill) Clarke: Mr. Speaker, I do not think it would be proper to comment on Bill C-21, to amend the Excise Tax Act, without taking a brief look, at least, at the history of this excise tax in Canada. I think it is one of the poorer forms of tax which governments over the years have introduced and which this government has perpetuated, added to and changed. I say "poorer form" because it is a hidden tax, the kind of tax that people who pay it really have no knowledge of unless they happen to be versed in the law or business practices. Further, it is a tax that has another tax on it. In

other words, nine of Canada's ten provinces have added a retail sales tax which automatically is increased by this hidden tax known as the Excise Tax. Another poor feature of this tax is the amount of paper work, recording, and so on, which is forced on small businessmen. In fact, it is forced on all businessmen, but it is a greater burden, I am afraid, for small businessmen.
I think the honest policy for the government to take, though I am afraid this government has no intention or perhaps does not have even have the ability or desire to take this kind of tack, would be to replace this kind of tax with some other kind of tax which individuals then know they are paying. I do not know what kind of tax could be substituted, but I should like to put forward one or two ideas. It has been said that a sales tax, particularly this sort of sales tax, is regressive because it is paid equally by rich and poor and has no regard for the situation of the individual who is paying it.
Some four years ago in this House I advocated that the income tax was also an unfair tax and that it should be replaced. At that time I was thinking-in fact, I suggested it to this government-that income tax could easily be replaced by some sort of a consumption tax which would be like a sales tax but need not be hidden and people would know what they were paying. That attracted great criticism from the other side, on the basis that my suggestion was regressive and it would hurt the very people the government wants to help. They cannot have it both ways. They cannot, on the one hand, say that to eliminate the income tax would be regressive, while on the other condoning and in fact supporting a tax such as this excise tax.
It was my contention at the time that exemptions could be granted to help those in lower income ranges to make the purchases everyone has to make of the essentials, which could be exempted from this kind of tax. For example, food is generally exempt now, I believe, and would be exempted from the consumption or sales tax. Other essentials are clothing and housing. The list might be a little bit longer than that, but those are basics and could be exempted.
The critics of my remarks at that time also said that Canada could not get along without an income tax. That is only because we have had governments over the years which have spent themselves into the position where they must have that kind of tax in order to raise the huge revenues they need. 1 would remind the government that Canada got along for 50 years without an income tax-from 1867 until 1917. I would remind it, too, that in 1917 income tax was introduced as a temporary measure to raise funds for the war effort. That went on, as we know, and it was even called the income war tax act until after the next World War, when in 1949 the name of the act changed to reflect its honest purpose and it is now called the Income Tax Act. Just to say the government cannot get along without it because it needs the revenue is not good enough.
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The government examines all sorts and manner of things from beginning to end, ad nauseam, and there is no reason at all that the government could not examine other means of raising the revenue it needs. I know we are not debating the Income Tax Act, Mr. Speaker, but I think it is worth while to draw the parallel so the government might be moved to consider some alternate form of revenue or some other treatment of this kind of tax.
The government has often talked about equity and simplicity, as in fact it did in the white paper on income tax. I do not think there is anyone in this House who thinks our tax system is either simple or equitable. This excise tax is just another example of a dishonest way of raising money from the people, because it is a hidden tax. Hidden taxes really cannot be said to be honest types of taxes. Therefore, I am urging that the government take the opportunity it has of using its facilities to make some real studies to find ways to overcome the problems I am raising.
Dealing with the bill itself, the fact that there are things to criticize does not mean it is a bill in which we cannot find some good features. For example, in the minister's statement last night he made reference to the removal of the sales tax from a number of items which contribute to the conservation of energy. I do not think we can argue very much with that. The proposal is to remove the tax from such items as solar furnaces, heat panels, heat pumps and wind-powered generating equipment. Furthermore, the proposal is to extend the current exemption to include thermal insulation materials designed for use in insulating pipes and ducts used in buildings and mechanical systems.
The minister also made reference to the statement tabled by his colleague, the Minister of Energy, Mines and Resources (Mr. Gillespie), entitled "An Energy Strategy for Canada- Policies for Self-reliance". The reference to that paper, I think, led the government to move to the conservation aspects of this bill, many of which are contained in clause 5.
One of these which I think was somewhat unfair was the addition of the $100 tax on air-conditioners when installed in automobiles. There is one particular aspect of that which I think is unfair to the Canadian taxpayer. That is, it was applied retroactively. That is to say, where a valid contract existed on the budget date, the date of that contract was ignored and the tax was applied also to any vehicle that had been purchased or contracted for prior to that date. This completely ignores the fact that a contractual situation existed between the purchaser and the vendor. Through no fault of his own, the purchaser-or the transaction, in any event-was burdened with an additional $100 excise tax.
That may not be a "life or death" proposition for someone who is contracting to spend a lot of money to buy a new vehicle, but it is an example of the fact that this government has chosen, again, to ignore the effect of contracts and apply its penalties to people it probably did not mean to trap in the first place. In any event, that has been explored, and there is no question but that the tax on air-conditioners for vehicles

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applies as of May 25 in spite of the fact that a contract may have been entered into a month or two before that date.
Clause 5 also refers to a weight tax on automobiles. The idea put forth by the minister undoubtedly is that heavier automobiles use more gasoline and, therefore, they should be taxed to discourage their purchase in order to conserve, in this case, petroleum energy in Canada. However, the minister has presented no statistics to support the argument that this is a desirable form of taxation or a desirable thing to discourage. I do not think I would argue that a heavier vehicle will not burn more gasoline than a lighter vehicle, but that is not the only measure of the use of energy; that is, the amount of gasoline a vehicle may burn. After all, it costs a lot in energy resources to produce a vehicle. I put it this way to the government, that a heavier vehicle may last two or three times as long and may be able to travel two or three times as many miles as a lighter vehicle that is not as well made.
The lighter vehicle may get somewhat better gas mileage and conserve energy in that respect, but if the heavier vehicle lasts twice as long or three times as long as the lighter vehicle, it leads to a real saving of energy; and not only of energy but of resources, because two or three lighter automobiles would need to be produced in order to replace the lighter vehicle which had worn out. 1 do not have the facilities to conduct tests which will prove my argument, but the government has those facilities. I think the government owes it to Canadians to use its extensive research facilities to study what I have been suggesting. It should do it before it imposes a tax which is based on conclusions which may not be accurate.
I shall leave that particular aspect of the matter and mention, before I finish, the aspect of cottage industries. The excise tax set certain limits in the past which at the time were probably realistic but which nowadays are not. Today, many small businesses are struggling to stay alive; struggling, I say, because in most cases these small businesses are not corporations but are run by a proprietor trying to make a living. That proprietor, who may be producing relatively small quantities of goods to sell to consumers, finds himself trapped by the present excise tax limit. He finds that he is included in the $10,000 manufacturing level and a large proportion of his net income must be paid to the government in the form of excise tax. I
I am not saying that the principle is incorrect. After all, many of these people are manufacturers. But this situation is a further example showing that the government has failed to keep pace with what is happening from day to day; has failed to keep pace with the present-day situation. I appeal to the government to stop making band-aid changes to legislation like this, especially to stop making changes which have been insufficiently thought out, because some Canadians are trapped in circumstances they did not design for themselves. I hope there will be some permanent improvement to the system of taxation in Canada.


George H. Whittaker: Mr. Speaker, I cannot let a bill on excise tax go by without saying a few words and expressing some of my own sentiments about the excise tax, a tax which I think is probably more unfair than any other type of tax. It really does nothing: especially, it does not do what the government would like to tell the people it does. I said it does not do anything, but it does: it raises lots of money for the government and many people who are paying it do not really know when and how they are paying it.
The discussion paper of June 23, 1975, on federal sales and excise taxes set out a number of criteria for an effective sales tax, namely, an optimum blend of neutrality, flexibility and efficiency. The paper finally recognized that the tax is not exclusively a revenue source but is an effective means of influencing consumption and resource utilization in accordance with policy goals. I do not agree with those assumptions. How can a hidden tax influence consumption and resource utilization? It is put on at the manufacturing level and people do not realize or recognize they are paying the tax. It is not put on in front of them; it is hidden. If it were put on at the retail level, I am sure retailers would make certain that consumers knew what tax they were paying-and I am sure this would make the government very unpopular.
I do not think consumers would like it if they realized, every time they bought something, just how much excise for federal sales tax was put on the item, especially considering the percentage rates now charged. Therefore, I cannot agree with the philosophy of the paper regarding resource utilization. I do not think this type of tax helps very much to influence resource utilization, especially since the people do not know what tax they are paying and why they are paying it. As I have said, it certainly raises a great deal of money for the government. It would appear to me, from a study of the schedules of excise tax, that the tax is put on those goods which the government feels will be easy marks and about which the people will not get too upset. About the only time people realize the tax is being put on is at times like this when we have the opportunity to tell them exactly what is going on. Only then do they know.
Many logical briefs were presented to the Minister of Finance (Mr. Macdonald) in the past year in support of changes to the excise tax and sales tax, briefs such as the one submitted to the minister by the Canadian Handicrafts Council, which points out many of the inequities affecting Canadian craftsmen. That was a very good brief-but nothing has been done about it. Some craftsmen have to pay the tax, and some do not. Painters and sculptors do not; but silversmiths, leather-craft workers and similar craftsmen must pay the tax. Really, these people are small businessmen. They ply a craft and sell their wares either to supplement income or to make a living. It is the small manufacturer who is caught, who really gets hurt, who really gets confused and who really does not understand what is happening to him.
Small businessmen have to pay the excise tax. Some of them are classed as small manufacturers. Mr. Speaker, there is a limit today of $3,000 which was established over 25 years ago. That limit $3,000 may have been sufficient according to the

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standards of a long time ago, but it is not good enough now. Surely, in Canada, we want to encourage as many people as possible to work for themselves and to start small businesses. Surely, it should be one of our goals to encourage people to work for themselves. Surely, craftsmen should be part of this process. They could easily become the big businessmen of tomorrow, but they are discouraged by an innocuous-sounding tax such as this which stands in the way of their getting started.
I think the $3,000 limit is not high enough. It should be raised to at least $15,000, which would give these types of people an opportunity to start in business and buy the materials they need to become manufacturers and make a living. This is the sort of thing that we should encourage in Canada. Too much has happened in this country in the last few years to drive businessmen and manufacturers out of Canada. They have not been given sufficient opportunities to get started here.
A person who comes to my mind is a pipe manufacturer in my riding who has a business the profits of which are limited to a sufficient amount to allow him to make a living. But this excise tax takes away 12 per cent, which is a large amount for such a small business. He could start the same business in the United States where there is no excise tax, and from there supply the Canadian market. That would not be very good for this country; we would lose a citizen and a manufacturer.
Another nan in my riding who has a small business of his own is making an excellent product, namely, toys. He is struggling to get ahead. But, now, not only does he have to pay the excise tax but he has to do all the paper work as well. It is discouraging to those people, many of whom give up and say to themselves that if they cannot get started in Canada, if they are to be inhibited at every turn, it is easier for them to go on welfare. That is not the way people should talk. We should encourage Canadians to start their own businesses. I say that the small businessman or manufacturer today can have a big business tomorrow. Let us give these people a lot of encouragement.
The fact that this tax will be taken off solar-heat component parts will encourage the development of this source of energy in Canada. That is good and timely. However, if the minister remembers, I have sent him letters regarding the 12 per cent tax on wood stoves. Stoves which use gas or oil, non renewable resources, are not taxed. We have a good supply of wood in many parts of Canada: it is a renewable resource. We are not using wood stoves to any large degree at present, but in the not too distant future we will be using them. I do not know why the tax was imposed in the first place. Perhaps at one time it was put on to encourage people not to use wood but to use oil and electricity. This decision is back-firing today. I think the department should take a long look at the imposition of a tax the result of which is to discourage people from proper resource utilization.
Not long ago the former minister of finance imposed a 10 per cent tax on aircraft, reportedly because of the high fuel
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consumption of aircraft. Yet the small aircraft does not use as much fuel as a car. I have a letter here telling me about a businessman in Calgary who has to use his aircraft to go to Drumheller. It is a C-172 Skyhawk. He uses $2.93 worth of fuel. If he took his car, a Cougar XL, he would spend $16 on fuel. That is a tremendous difference. There is a doctor in my riding, in the town of Kelowna, who uses his aircraft to fly to Vancouver. It saves him time and fuel and it is a much better mode of transportation than a car. Perhaps he should fly on scheduled airlines, but the schedule of the airlines does not fit in with his schedules. If he went on a scheduled airline he would have to stay overnight in Vancouver, but when he uses his own aircraft he can go down and back in the same day and he uses much less fuel than if he travelled by car.
Another point I would like to make is that many different taxes are put on small aircraft, such as the sales tax, the user tax and the user-pay tax at airports, all of which discourage the use of this type of transportation. You can buy an aeroplane for the same price that you can buy a car. Therefore, people should be encouraged to use aircraft. If you really want to know the reason the government puts a tax on aeroplanes, it is that aeroplanes are very popular with most people, although not many use them. This is not the type of reasoning that should be behind the imposition of the excise tax.
Before concluding I would like to make a few remarks about the 10 cent gas tax which was put on by the government. I spoke against it at the time. It has been on now for around a year and a half. It is a hidden tax; people do not realize it is there. I bet it has not stopped people using a half a gallon of gasoline more. They are using just as much gas. People do not know about the tax when they go to the gas pump, and it is costing the government plenty of money to collect it. In some instances people are allowed a rebate on the tax, which means costly paper work. This proposed tax will not solve the problem which the government suggests it will. The government should look at other ways of solving this problem so that people will understand what the government is trying to do. A gas tax is not the right way; its purpose is to raise more money for the government. All it has done is just that-raise more money for the government.
Granted, farmers, fishermen and ranchers get a rebate, but only if they take the time to fill in the necessary forms and send them in. Quite a few farmers and ranchers are not doing that and the government is getting a free ride; but this is a cost to farmers and ranchers. If this government really wants to do something for them, it will take the tax off purple gas. It should not have been imposed in the first place. If the government really wants to do something for them, it will put a stop to all the paper work. Then everyone would benefit without having to file for a rebate. However, I do not think that is the main issue. I do not think the tax should be there at all. I think it is an unfair tax. If the provinces want to impose a tax, they can justify it by using the money for building roads and things of that sort. That is a different matter. But the federal government should not be imposing this tax.
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I hope the minister will reconsider many of the things about which we have been talking and writing to him in the past year, and that he will do something to help small businessmen, small manufacturers and those who want to get into business. Today, $3,000 is not enough; it has to be more. I recommend $15,000.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in view of the fact that it is almost one o'clock, I wonder if I may call it one o'clock and continue after lunch.


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: It being one o'clock, I do now leave the chair until 2 p.m.
At 12.54 the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
Sinclair McKnight Stevens: Mr. Speaker, I begin my remarks on second reading of Bill C-21 by putting a question to the House and to the minister concerning changes that he appears to have made, and which he referred to yesterday, in the bill compared to the ways and means motion produced on May 25 when the minister's budget was first introduced. In this connection I would point out that yesterday, as reported at page 2478 of Hansard, the minister mentioned that they were in a bit of a quandary as to whether they had hit upon the right energy conservation formula; namely, was it correct to assume that the weight of an automobile was the only gauge as to whether it was a heavy energy user? To that end the department seems to have been sufficiently persuaded that their original proposal of May 25 was not adequate. The minister said:
As a result of these discussions the government has been persuaded that an alternative form of tax based on vehicle fuel consumption rather than weight should be explored further by the industry and those within the government with responsibility for energy conservation.
To provide sufficient time for an in-depth study of this alternative, it was decided that the impact of the proposed tax changes should be reduced. For this reason the bill provides for a reduction of 75 pounds in the automobile weight limit and a reduction of 100 pounds in the weight limit for station wagons and vans, rather than-
I emphasize this:
-the reductions of 250 and 350 pounds respectively proposed in the May 25 budget speech. The reductions in the weight limits and the increases in rate of tax applicable to vehicles in excess of the weight limits are effective as of September 1, 1976. The further reductions in the weight threshold proposed in the May budget to come into effect in 1977 through 1979 will not be implemented at this time.
I draw hon. members attention to that reference by the minister. If hon. members review the ways and means motion and compare it with the provisions that are in the bill before us, they will see quite clearly what the minister is referring to. In the motion that was before us on budget night, for example,

an automobile was taken as having a current structure weight or weight threshold level of 4,500 pounds. It was then proposed that the threshold level be reduced, starting in 1976, to 4,250 pounds and then dropping year by year, until 1979, to 3,500 pounds. Likewise, station wagons were to have a current structure of 5,100 pounds, to be reduced to 4,750 pounds by 1976 and eventually to 3,700 pounds in 1979.
As I read the bill before us, the government is suggesting that the weight no* be reduced to 4,250 pounds, as I indicated was the 1976 figure, but be reduced only to 4,425 pounds. That is to say, the 75 pounds to which the minister has referred, and all the subsequent years reductions that were contemplated for 1977 through to 1979, simply will not be put into effect. My point is simply this, and I guess this is a point of order: can this type of variance between the ways and means motion and the bill be tolerated in the House without having the ways and means motion amended to give effect to the bill that the minister is now proposing?


Mr. Deputy Speaker:: I imagine the hon. member is raising a point of order, and this is not his participation in the debate. I will, therefore, call upon the minister on the point of order.


Sinclair McKnight Stevens: I intend it as a point of order, Mr. Speaker.


Donald Stovel Macdonald: Mr. Speaker, it is quite true that the bill under debate today is not in the same terms, with regard to the tax, as was the case with the ways and means motion which was tabled on May 25. In effect, that ways and means motion expired with that particular session of parliament. Therefore, it is the new ways and means motion that was tabled in and adopted by this House as a condition precedent to the introduction of this bill which would govern in that regard. I am advised by draftsmen and legal counsel, and 1 believe that the terms of the bill are in accordance with the authorization from the governor in council under the new ways and means motion.


Mr. Deputy Speaker:: The Chair is ready to listen to further argument if hon. members wish to participate. If not, the matter will be taken under advisement and a decision rendered later, if the House is agreeable.


Walter David Baker: Agreed.


Sinclair McKnight Stevens: Then I will continue with more general remarks concerning Bill C-21. I believe it is fair to say that many of the provisions and measures announced in the May budget supporting energy conservation, which at least in part are reflected in this bill, are good. I believe it is also fair to say that they are insufficient to begin the task of getting a grip on the enormous energy problems facing Canadians. Far more encompassing measures apart from elimination of the excise tax on alternate energy hardware is needed if we are to ensure an adequate supply of energy for ourselves and future generations.
The Manitoba chamber of commerce, in a 1976 study on energy policy, stated that Canada surpassed the United States in 1974 and boasted the highest per capita energy consumption
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of any economy in the world. It was estimated that we would be importing nearly one million barrels a day of oil in 1985 to meet our needs. The study recommended, among other things, increased tax incentives for research and development of alternate sources of energy, as well as incentives to the home owner to encourage conservation of traditional energy sources. The study found that by upgrading thermal performance of insulation, and by improving the efficiency of furnaces, energy consumption in the home could be cut by 15 to 25 per cent.
To encourage the widespread use of these measures the study urged not just the elimination of the federal excise tax on these items but a federal income tax credit on any expenditure to improve the efficiency of home energy consumption. Storm windows and doors, added insulation materials, caulking and weather-stripping materials were among the items which would qualify for a tax credit. As home heating accounts for 60 per cent of all residential energy consumption, the savings resulting from the upgrading of all substandard housing would be considerable-enough to stretch our energy supplies far beyond their expected life. It is projected that we shall be importing one million barrels of oil a day by 1985. At present prices, the importation of oil will cost us around $5 billion annually. The loss of tax revenue resulting from the provision of tax credits would be more than compensated by the enormous savings under regional subsidies in relation to oil importation and the reduction of the enormous outflow in our foreign exchange to which I have referred.
I believe the points raised by the Manitoba chamber of commerce are worthy of consideration by hon. members. As we know, there is a modest program in being at present through which the government is encouraging the installation of insulation in homes in the provinces of Prince Edward Island and Nova Scotia. We do know that many of the other provinces feel it is unfair to be treating those two provinces differently from others in eastern Canada. In my view, the government should give consideration to the interesting suggestion that a tax credit should be available to those who are willing to improve the quality of the insulation of their homes. After all, energy is used by people throughout the nation, and the government might well consider an approach using the incentive to which I have referred. I imagine that many hon. members have received letters from constituents pointing out that they have made additions or improvements affecting the insulation of their homes, and asking why they could not be encouraged to go even further by a provision of tax credits in their favour. For example, I have received a letter in which a constituent said as follows:
With the energy crisis coming closer with each passing day, it behoves all of us to do what we can to conserve what we have. With this end in view I have insulated my whole house with thermal windows and insulation all over the house. As you can well imagine, this is an expensive undertaking and the thought occurred to me that there should be some recognition of this fact by our government via an income tax allowance.
I have written to Mr. Macdonald, the Minister of Finance, and in his reply he gives me two reasons why this cannot be done. Both, to me, appear specious and irrelevant. He says that taxes on all insulation materials have been removed and
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that if such an allowance were made it would be of more benefit to the wealthy than to the poorer people.
The writer continued:
A similar letter to Alastair Gillespie has, to date, not brought forth the courtesy of a reply, which is to be expected in view of recent revelations.
I do not know what he is referring to there. But surely it makes sense to take whatever steps we can by way of taxation or otherwise to ensure that less energy is consumed in this country. Success in this respect would mean that whatever problems we encounter in the future will be less serious than would be the case otherwise. But let us go further than the present bill contemplates.
I think it is unfortunate that the minister should have to reveal, as he did yesterday, that though the government has had ample time to consider the matter-they have been aware of the problem for several years, as a matter of fact-his department has somehow given insufficient attention to the fact that the test of weight alone is not the most significant test when seeking to determine how to encourage people to use automobiles capable of using energy economically.
I am pleased, however, that the minister and the department are at least wavering on the position formerly taken, and that the criteria may be altered to include considerations which are more meaningful, for example, the number of miles per gallon a car can travel under Canadian weather conditions. As I have indicated, an excess tax imposed on the basis of weight is not necessarily the most effective means of encouraging energy conservation. My hon. friend from Vancouver Quadra (Mr. Clarke) has drawn attention to the fact that by concentrating on vehicle weight it is possible to introduce a distortion into the system of production, which may result in an over-all loss of energy since more would be needed in the production of the cars themselves. That, as I understand it, is the argument put forward by my hon. friend and other colleagues. If stress is laid on the production of light cars which may wear out more quickly than heavier cars, the manufacturer might in the end be required to produce two or three cars for every one of the other vehicles if they were heavier or more reliable.
That is one argument. I should like to advance a second argument. Weight alone, as I have said, is not necessarily the best guide as to which vehicle is the most efficient user of energy. Very often, heavy cars run more efficiently than lighter ones. In any case, the use of the term "weight" can be ambigous because there are four different ways of measuring automobile weight. Mileage per gallon is the best and more equitable. The Department of Finance initially proposed to extend its current excise tax on heavy automobiles to those which are less heavy. Details of this tax were shown originally in the budgetary papers. In general terms, any car weighing in excess of 4,250 pounds in 1976, or 3,500 pounds in 1980, will be subject to a tax in proportion to the excess. The excess tax which was proposed in the budget to encourage fuel conservation was related to the weight of the vehicle.
This move seems likely to encourage the production of lighter cars, but not necessarily cars which use less energy. However, as an official of the finance department put it to me
80008-211/2

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one day, not only do we need lighter cars but we need more efficient cars. The minister in his remarks yesterday stated the same thing, in effect. As reported at page 2478 of Hansard, he said:
The purpose of the tax is not to raise revenue but rather to encourage Canadians to demand, and the auto industry to produce, lighter and more energy efficient cars.
My point is that we need efficient cars, not necessarily lighter cars, because lighter cars will not necessarily show a better record of energy consumption. I should like to put some figures on the record to demonstrate what I mean. For example, there are four classes of car. According to EPA tests in 1976-and I convert the EPA figures into Imperial gallons- there are four classes of cars which show a mileage reading of 24 m.p.g. They are the Cutlass Oldsmobile, Omega Oldsmo-bile, LeMans Pontiac, and Ventura Pontiac. The curb weight of those vehicles is as follows: the Cutlass Oldsmobile, 4,020 pounds; Omega Oldsmobile, 3,445 pounds; LeMans Pontiac 4,010 pounds; the Ventura Pontiac, 3,440 pounds curb weight. These four cars have six cylinders, yet under the original proposal that we were faced with on May 25 the excise tax on the Cutlass Oldsmobile would have been $500, the Omega Oldsmobile would have had no excise tax, the LeMans Pontiac would have had $300 excise tax, and the Ventura Pontiac no tax.
I could give various mileage rating levels for other cars, including relatively small cars and cars that most of us would consider relatively heavy cars. For example, taking another level, the 21 miles per gallon level, we find that the Matador, of American Motors, weighed in at 3,785 pounds; it has six cylinders and would carry an excise tax of $70. The Seville Cadillac, rated at 21 miles per gallon, has a weight of 4,340 pounds, eight cylinders and an excise tax of $480. The Granada Ford, again at the 21 miles per gallon level, has a weight of 3,540 pounds and eight cylinders, but only an excise tax of $30.
I need not go further with these statistics, Mr. Speaker. I have them for most of the current models which are being sold in Canada. The point I want to make is that as originally conceived the department was wrong in its approach of using the weight test as opposed to the more meaningful miles per gallon test to which I have referred. In short, the original provisions are not equitable. In this last case all automobiles achieved the same energy efficiency, yet are taxed, or would be if the original proposals were to become law, in varying amounts due to difference in weight.
I should emphasize that the tax is calculated by the 1980 case, which is when the ceiling would be 3,500 pounds. As the figures demonstrate, cars achieving an average of only 18 miles per gallon will be taxed about $50, yet a car achieving 23 miles per gallon will be taxed as much as $400. Based on an average travelling distance of 12,000 miles per year, the more heavily taxed car will consume 145 gallons less than that which a less efficient car will use. Let me cite further figures to show another way in which the weight tax is not equitable. I

refer, for example, to the Lincoln-Mercury group of cars which under the EPA fuel economy test are rated at 16 miles per gallon. Their weight is 4,928 pounds. They had an average 1976 list price of $13,014. They will have an average list price by 1979, according to the estimate of the automobile industry, of $19,053. The tax in 1979 would be $840, a 4.4 per cent increase, yet the possible decrease in sales will be from 9 per cent to 22 per cent.
I could cite similar statistics for the Chevelle Chevrolet, Seville Cadillac and Century Buick, but the point I wish to make is that the increase in the price of a car due to the weight tax applied in 1979, if the minister proceeded with his original thinking, would show no corresponding increase in fuel economy. The Seville Cadillac, with 21 miles per gallon, would increase in price by 1.9 per cent; the Delta 88, with 18 miles per gallon, by 6 per cent; and the Thunderbird, with 16 miles per gallon, by 3.9 per cent-the Thunderbird being the statistic that I specifically read into the record.
Perhaps the most blatant example of how weight is not indicative of fuel economy is to compare the Renault 5 to the Peugeot 504 diesel. Although neither could possibly be taxed, this illustrates the point well. Both cars are in the top ten when rated by efficiency. The Renault achieves 39 miles per gallon, and the Peugeot 36. The Renault has a curb weight of 1,835 pounds, yet the Peugeot is 3,045 pounds. Using weight as the single factor to predict efficiency is not accurate. As my first set of figures show, the number of cylinders plays a role. So does the size of the engine and the type of transmission used, whether manual or automatic. Although weight may have more effect on the efficiency of an automobile than any other factor, it is still not the best indicator of fuel economy. The EPA mileage figures are the best indicators, as I have said.
I have cited those figures, Mr. Speaker, because I believe it is unfortunate that the minister is not in a position today to give us his new approach. He has simply said that he is holding back, that at a subsequent time the government is going to alter its approach. If we believe sincerely that this measure was right in its intent to try to conserve energy in this country, the fact is that we are stalling. Once again the government is in a dither. It does not know which way to go, and we, the Canadian public, are being asked simply to stand still and not-I emphasize "not"-press for needed tax changes to ensure less energy consumption by automobiles.
Having said that, Mr. Speaker, I hope that in addition to giving us his further thoughts as to what type of approach he intends to bring in at a later date, the minister will also reply to the question why the government does not reverse its tactic. Why is it only suitable to increase excise tax on certain vehicles and not remove it on vehicles which the government thinks are the most efficient when it comes to mileage? Would it not make more sense to identify the cars that are least energy-consuming, and lower the tax on those cars so that people, especially those in lower income brackets who wish to buy this sort of car, can do so at lower cost than is the case today?
January 28, 1977

Although the government says it is not looking for additional revenue, its response is not to reduce excise tax to enable more efficient vehicles to be purchased by people, especially in the lower income brackets. The government proposes to increase the tax on other vehicles. With all due respect, I suggest that this will not have the desired effect which the department thinks it will have. Those who wish to buy big cars, by whatever test they like to choose, are probably going to continue to buy them despite relatively high tax, while the government gives no encouragement at all to persons of lower income to buy the relatively efficient cars, encouragement which a reduction in the excise tax on such vehicles would give.
I would also stress that the effect of the weight tax could be severe. General Motors has announced that starting with their 1977 line, all their full-sized cars will be eliminated. Ford is pursuing a longer-range project which aims to increase the fuel economy of their automobiles. Introduction of a weight tax for 1977 model cars will leave Ford at a competitive disadvantage. All of their new small cars will not be introduced until the introduction of the 1978 models in the fall of 1977. The industry is preparing for 1980 fuel economy measures. Throwing another measure, weight, into the works could undermine the industry's research. I have mentioned this because the minister indicated that they have drawn back, but he has also stated they are awaiting the alternative approach they are going to finally bring in as they review with industry and other officials the proper course to follow in this field.
The weight tax is anticipated to net the government, as it was originally estimated, $35 million. This figure implies that the government has estimated the effect that the tax will have. Indeed, it has not. The figure, rather, is ball-park figure, the average of a tax with no effect on the market and the average earning of a tax with considerable effect. Similarly, the estimated revenue of $7 million from the excise tax on automobile air-conditioners only represents the mean of an upper and lower estimate of $10 million and $5 million. Thus, the statisticians do not know whether the tax will result in the sale of 100,000 air-conditioners or half that many. One must wonder whether, considering the apparent lack of precision in determining the effect, the government is merely instituting another money winner or is really serious about energy conservation. During our committee of the whole review of this bill, I hope the minister will be in a position to give us some estimate as to what he anticipates will be the revenue from the various taxes we have before us in Bill C-21.
Probably the best indicator for the effect the tax will have is the price elasticity given by the industry. In the automotive industry a 1 per cent increase in the price of a car can result in a 2 per cent to a 5 per cent drop in vehicle demand. It is not clear whether this relationship is applicable to individual autos. For instance, rather than having sales of all taxed cars drop by their assigned percentage points, we might find that everyone affected by the tax might buy a less expensive car. Thus, only the most expensive cars would experience a
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decrease in sales. I would emphasize, again, that while these cars may be expensive, they may also be relatively efficient energy burners. Another factor is that the sale of more expensive luxury cars tends to be less sensitive to price changes.
In short, before leaving this discussion of weights I want to note that four kinds of weight measures are used. The weight measure used by Revenue Canada at the moment is the individual weight of the car including factory-installed options as shipped from the plant, plus 25 pounds, as I understand it, for gasoline. The second is the shipping weight of the car, which is the average weight of the model of the car. The third standard is the curb weight, which is the average weight of a model of car equipped with radio, automatic transmission, power-steering and the usual type of equipment on that car. Weights of mid-sized and large, luxury cars include air-conditioning. The fourth standard is the inertia weight of the car, which is the average weight of a model of car, plus 300 pounds to give the effect of a partially-loaded car with two people and some luggage. It is this weight that the EPA uses to determine the fuel economy and emission control standards generally accepted in the industry. If weight is to be used as the basis for an excise tax, it seems that the inertia weight is the easiest to work with and the one that reflects true driving situations.
I have summarized some of our thoughts concerning the provisions of the bill we will be dealing with shortly in committee of the whole. I hope the minister, in his opening remarks, will expand on what he said yesterday. I believe we have advanced an interesting thought in an attempt to ensure greater energy conservation as far as automobiles are concerned. Unfortunately, the government has fallen short in that it has misconceived its approach by putting too high a stress on weight and has not given proper incentive to people to buy the most efficient energy-consuming cars by lowering the sales tax rather than simply proposing that the excise tax be raised on certain other cars.


Mr. Deputy Speaker:: Order, please. Perhaps the House will permit me at this time to invite some clarification from the hon. member for York-Simcoe (Mr. Stevens) on the point of order he raised earlier relating to Standing Order 60(11), in which it is said:
The adoption of any ways and means motion shall be an order to bring in a bill or bills based on the provisions of any such motion.
In his point of order the hon. member spoke of discrepancies between the ways and means motion adopted by the House and Bill C-21 that is before us at this time. While he was making his contribution, I took the opportunity of asking for a copy of the ways and means motion on which this bill was prepared. On looking at the ways and means motion which was presented to the House on October 28, and concurred in on November 3, rather than the one that was presented last session, I find that there is no difference on page 2 between the bill before us and the ways and means motion already adopted.
Perhaps the hon. member would enlighten the Chair by making a specific reference to the page where he suggests there is a difference, unless, of course, the difference has resulted from the fact that he was making a comparison with

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the ways and means motion adopted during the previous session, if I recall well, on May 25, 1976.


Sinclair McKnight Stevens: Mr. Speaker, I believe there is a confusion in respect of the ways and means motions to which you have referred, the original one on May 25 and the subsequent one tabled in this Elouse. The minister, in referring yesterday to his so-called reduction, referred back to the May 25 budget speech and the suggested reductions. In our comparison of the ways and means motion initially brought in on May 25, with the new one, we perhaps misread the second motion in that we felt they were consistent and believed there was still a discrepancy when one compered the bill with that motion. The minister has clarified that and feels there is no discrepancy between the ways and means motion introduced at this session and the bill before us. If he can assure the House that this is so, I will not press the point further.


Donald Stovel Macdonald: Mr. Speaker, I really do not have to give the hon. member that assurance, but I will be glad to do so. If he reads clause 5 of the ways and means motions, he will find the wording is identical. It is difficult to have a discrepancy under those circumstances.


Mr. Deputy Speaker:: That being the case, I would indicate to hon. members that there is no point of order.


Benno Friesen: Mr. Speaker, I have almost to jar myself into reality when 1 remind myself that we are still debating the budget of last May 25. I realize there has been a lot of water under the bridge, but most of the measures we are now discussing are basically housekeeping measures that should have been taken care of a long time ago.
I cannot understand why it has taken so long to bring these measures forward. Actually, I find some measures in the budget attractive. Measures encouraging us to find ways to preserve our energy resources are commendable. I am also pleased to note the provision in the budget which will allow the handicapped, or at least the parents of handicapped children, to deduct certain expenses from taxable income. I have talked to the minister's parliamentary secretary about that particular measure which has been, I think, the subject of a private member's motion. I was pleased to note that the minister is in agreement with my position on that matter and that there is to be an enlargement of those provisions which will benefit those who must incur the expense of caring for handicapped children. I commend the minister for enlarging those provisions.
The bill before us leads me to observe that most of its provisions are revenue-producing ones and are designed to discourage expenditures; for example, which would increase our consumption of energy. On the other hand, some of the handicapped in this country, unfortunately, must still pay excise tax on certain equipment they use. Not long ago a constituent called me saying that she is forced to use a wheelchair on which the government charges excise tax. Because she needs a wheelchair all the time, she is forced to

buy a good one which will not wear out quickly: You must pay more for high-quality wheelchairs, and therefore more excise tax. She feels that she is being penalized for being a cripple.
We have come to a very sorry state in this country if we must raise revenue from the handicapped to fill the government's coffers. Really, such an excise tax becomes a tax on misfortune. Surely we can find other ways of raising government revenues, ways other than imposing tax on the handicapped. We should not look to them to provide this revenue. I know the minister is not interested in collecting money from such people, but this practice has grown up over the years, probably because of an oversight. I give the minister notice of my intention to ask him about this matter when we consider the bill in committee of the whole.
It is anomalous that doctors who treat such patients are allowed to rush to their aid in motor vehicles and to collect a rebate on the ten-cents per gallon excise tax on the gasoline used. Doctors do not supply the government with excise tax revenue in that regard; unfortunately, their patients must pay the excise tax. It seems to me that there is an imbalance in this area which I know the minister will want to correct.
Further to that, I raise the question of how one goes about establishing the legitimacy of a deduction under this heading. Many of these decisions come under the purview or decisionmaking powers of particular tax officials who must deal with a citizen making a claim for deduction. If the official is experienced, or if he has some insight into the problem, he will look kindly at the request for a deduction. But the handy-dandy guide put out by the Income Tax Department talks about allowances for the blind and people in wheelchairs. I suggest that that is a limited way of looking at it. A strict constructionist in the income tax department would construe that phrase as applying strictly to the blind and people in wheelchairs.
Surely a host of other people suffering from a handicap and who incur extra expenses should be allowed a deduction with regard to the equipment needed for their care. Unfortunately, at present they are subject to the tax. We are asking cripples to establish a case for justifying these deductions. In other words, how far are you to go in asking a cripple to prove that he is a cripple? Any dossier compiled about him is likely to haunt him later in life.
Remember how Senator Eagleson of the United States was haunted later in life because at one time he had taken psychiatric treatment! Surely we need more compassion; we need to give specific instructions to departmental officials to be more compassionate. I am making the case that it is time to inject more heart into our income tax measures as well as into the administration of the Income Tax Act and more heart into the implementation of those measures in order to ameliorate the lot of those unfortunate enough to suffer a handicap. Doctors know who those people are. I suggest that we should not collect revenue in this way from those suffering; we should not impose a tax on misfortune.
January 28, 1977


Mr. Deputy Speaker:: Order, please. If the minister speaks at this time, even if only to answer a question, he will close the debate. We are not in committee of the whole.
Some bon. Members: Agreed.


Mr. Deputy Speaker:: Does the House agree that I should now recognize the minister?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: Mr. Speaker, I thank hon. members of the House for the contributions they have made in the difficult area of the Excise Tax Act, and I shall take the opportunity to respond to the points raised last night by the hon. member for Edmonton West (Mr. Lambert) and also to some of the several points raised today.
If I may deal with the comments of the hon. member for Edmonton West, he made an observation with regard to the minimum federal limits for the collection of excise tax. The same point was made this morning by the hon. member for Okanagan Boundary (Mr. Whittaker) to do with the $3,000 limit. It was suggested that because of inflation and the passage of time, that level should be raised. I think I should emphasize that the purpose of that levei primarily is to assist small business. It was based on the calculation on the part of the Department of National Revenue as to the least amount it was worth while collecting in revenue. Having said that, I acknowledge at the same time that if the collection of small sums is hardly worth while for the Department of National Revenue, it is, equally, an imposition for small businessmen, and in that sense I think the comment made by the hon. gentlemen was an important one. This is a matter falling within the administrative duties of my colleague, the Minister of National Revenue (Miss Begin). I can say to the House that the minister has been giving consideration to the currency or appropriateness of that particular limitation, that this matter is under consideration, and that the minister, when she is in a position to do so, I am sure will be prepared to comment.
The hon. member for Edmonton West referred to extensive correspondence which has flowed between himself, myself and others with regard to a particular kind of insulating panel. In one case, as I recall, the panel was made out of compressed straw. The hon. member made the point that since the panel had insulating qualities, it should be treated as insulating material under the Excise Tax Act and, therefore, tax free. To some degree the hon. member for York-Simcoe (Mr. Stevens) raised the same point when he talked about thermal window panes. Both hon. members in their comments put their finger on the difficult borderline of what is essentially a building material and what is essentially a material used for insulating purposes. The position which has been taken in the law is one that is directed purely to insulation such as bats to be fitted into the walls or ceilings of a house. Obviously, these would be tax free.
Excise Tax Act
Others which have a primary building quality to them, or at least in addition to the quality of insulation-and of course every piece of material has to a degree the quality of insulation-also have a structural quality, would be treated as building materials and therefore taxable. In particular cases there will have to be an administrative determination as to what is primarily insulation and what is primarily structural material. This has been a difficult area to define under the Excise Tax Act.
The hon. member for Waterloo-Cambridge (Mr. Saltsman) raised a number of questions, one on this bill and one in more general terms with respect to correspondence received by the hon. member for Regina Lake Centre (Mr. Benjamin). The first question raised by the hon. member for Waterloo-Cambridge was on automobile air conditioners. If a car with the windows down on a hot day has more drag than if the windows are up, and therefore the air conditioning is on, is it not counter productive in an energy conservation sense? The response that would be furnished by the energy conservation branch of the Department of Energy, Mines and Resources, I believe, would be that the argument might be valid at highway speeds, although even at highway speeds the standard flowthrough mechanism would have a cooling effect in the car. At less than highway speeds we do not have the same drag problem, and in that sense it is obviously felt by energy conservers that the air conditioner does not have that much advantage for energy conservation.
With regard to the correspondence between the Canadian Council of Rehabilitation Workshops and the Minister of National Revenue, several basic questions arise. First, one of the principles under the Excise Tax Act has been that a manufacturer, for example a manufacturer in a rehabilitation workshop, can become a licensed manufacturer under the Excise Tax Act and in that sense will be exempt from the payment of sales tax on materials that he uses in manufacturing, but in turn would have to collect sales tax when he sells to a subsequent purchaser. The problem, if I understand it, raised in the correspondence arose in a situation where you have rehabilitation workshops which repair articles of furniture, equipment, or other articles. The position taken with regard to repairing artisans is that in providing a service of that kind they are not generally exempt from excise tax under the statute and they are treated as other people in that they have to pay sales tax.
On the question of the certification of institutions, this is obviously a problem of the practical application of some criteria. I should indicate to the House that the decision in this case is made by the Department of National Health and Welfare which, for the purpose of these exemptions, certifies a particular institution. The issue that was raised was whether, in addition to physical disability as one of the causes of an institution being exempted from tax, that provision should also be extended to institutions which provide assistance or opportunities to those who are socially disadvantaged, such as released inmates of penal institutions, rehabilitated addicts, or

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persons recovering from alcoholic addiction. This is obviously a difficult decision, but the Minister of National Health and Welfare (Mr. Lalonde) has to determine, in accordance with criteria, what is appropriate. I would be quite happy if the organization would like to address comments to my colleague on these criteria, and naturally I will accept the minister's judgment on this point.
The hon. member for Vancouver Quadra (Mr. Clarke) gave us an interesting approach to the taxation system. He has put himself out as a long time opponent of the income tax system. Apparently he is also an opponent of the excise tax system. His prescription is that the government should return back to the time prior to the 1914-18 war. I think that a lot of us in some respects would be delighted to have the community as a whole return to that distant era.


Stanley Howard Knowles: I would say idyllic.


Donald Stovel Macdonald: I see the hon. member for Winnipeg North Centre (Mr. Knowles) is here, and I think of my own antecedents in Winnipeg, for example. Indeed, in some cases the time prior to 1914 might have been idyllic. On the other hand, social conditions in which many people lived at that time were far from being so.


Walter David Baker: You will provoke Stanley to a speech.


Donald Stovel Macdonald: Fortunately I am closing the debate.


Stanley Howard Knowles: There is still the committee of the whole.


Donald Stovel Macdonald: I would have to say that, much as one might be sympathetic to the vision to the hon. member for Vancouver Quadra about an older and in some sense simpler era, the intervention of the government on the whole has been for human betterment in Canada, so I suppose I would have to disagree with him on that fundamental principle.


Stanley Howard Knowles: Things were simpler in the Garden of Eden.


Donald Stovel Macdonald: I would defer to the hon. gentleman's obvious experience in that regard.


Mr. Fairweather:: There was no mayonnaise then.


Donald Stovel Macdonald: With regard to the more basic proposition as to whether the sales tax should be abolished altogether and replaced by other taxes in the community, it was estimated in connection with the Carter commission and, I believe, in subsequent discussions, that to replace the current revenue for the government from the sales tax would require something like a 25 per cent increase in personal income tax, or conversely a 65 per cent increase in corporate income tax. In that sense one would have to consider whether this is really desirable. It would become an outward and evident tax, but

also become a very heavy one for individuals to bear, particularly those in certain income categories.
One of the advantages of the sales tax is that the person who uses an item and bears the tax in some cases is in a position to pass it on, and to that extent it is related to the use of a foreign article rather than imposing the cost on the community as a whole.
The hon. member for Okanagan Boundary raised the question of solar heat and asked about the tax on wood stoves. I think there is an argument not just for abolition of the tax on wood stoves but also on other kinds of heating devices which might burn vegetable material. I think his observation in this regard is in the form of a representation which I am prepared to discuss with my colleague with regard to the appropriateness of stimulating a greater use of those energy materials in addition to solar heat and wind generated energy.
Finally, before I deal with the extensive presentation of the hon. member for York-Simcoe with regard to automobiles, I wish to deal with the matter raised by the hon. member for Surrey-White Rock (Mr. Friesen) with regard to wheelchairs. I am advised that on wheelchairs as such there is no tax, but there may indeed be a problem of definition. Perhaps the hon. member and I could talk about the particular item to which he was referring because it may well be that it is not classified under this particular area, in which case I would be glad to be given further information and to consider it. On wheelchairs as such I acknowledge the thrust of the hon. gentleman's argument that this is not the kind of assistance to a handicapped person which should be subject to extra taxation.
With regard to the argument about the changes in energy conservation measures, there was indeed a parallel between the thinking of the hon. member for York-Simcoe and that of the government on the use of automobile fuel and the possible changes in the taxation system to try to encourage a more efficient use. I have to go back again to the purpose of the change in midsummer as a result of the May 25 budget. The budget proposals really did have the effect of compelling two of the major manufacturers in Canada to come forward and indicate that they were not on the timetable required to handle the weight tax, that they were not trying to solve the energy conservation problem by reducing weights, but that they had a more efficacious method of doing so, and therefore they thought that they should be left with some room within the next year to try to find some other means. One of the major Canadian manufacturers has indeed gone the lower weight route, and that manufacturer will have had the benefit of the lower tax rate.
Others in the group have not, but they are trying to arrive at the same end by different means, and it was on that basis that it can be said that the May 25 budget was effective in putting the pressure on to encourage a greater effort on the part of the automobile industry to come up with a proposal of alternative means of saving energy in automobile locomotion which the government can accept, and therefore by that means we have
January 28, 1977

been effective in stimulating the industry to bring about a faster timetable than would have been the case with an alternative proposition. I just emphasize again that there is a quality of probation in these particular changes and, as I indicated to the industry, we will be prepared to hold off for a year. Unless there can be satisfactory evidence that we are indeed moving to a good alternative formula, then the weight tax will be back again in a form like that in which it was initially introduced.
It is not a question of the government not being able to make up its mind. The government has made up its mind on the weight tax. The weight tax has really compelled the other two firms to come to terms with the measures they propose to take in order to reduce energy consumption.
I think that deals with the main principles of many of the points which have been raised, but there may be additional questions, particularly when the officials get down to the floor, so I will close by thanking hon. members for their contribution and by indicating that I am prepared to entertain further questions as we go through the bill clause by clause.


Some hon. Members:: Hear, hear!


[Stage Direction]
Motion agreed to, bill read the second time and the House went into committee thereon, Mr. Ethier in the chair.
Clauses 1 to 5 inclusive agreed to.
The Assistant Deputy Chairman:: Shall clause 6 carry?


Sinclair McKnight Stevens: Mr. Chairman, you are moving with great haste.


Some hon. Members:: Hear, hear!
On clause 6.


Sinclair McKnight Stevens: Mr. Chairman, at some point in our clause by clause study I would like the minister to give us the benefit of some direct answers on points raised not only by myself but also by some of my colleagues. I would be interested to know what net government revenue the government anticipates might have been raised under its first weight tax proposal on automobiles and what is the estimated revenue under the proposal now before us.


Donald Stovel Macdonald: Mr. Chairman, I hope to be able to get that in just a moment.


Sinclair McKnight Stevens: While the minister's officials are compiling that, I wonder if they would also give us the figure for what revenue they anticipate from the excise tax on automobile air conditioners, the other revenue figure I referred to, and if they are still looking that up, perhaps I can put a third question to the minister.
Would the minister be good enough to expand on his remarks of yesterday concerning the government's thinking as to what approach it might take to try to ensure that the production of more efficient automobiles will be encouraged as far as the excise tax system is concerned, bearing in mind the
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various approaches which can be taken, the weight test, efficiency tests, and the miles per gallon type of test?


Donald Stovel Macdonald: On the latter part of the question, there is almost no tax on lighter automobiles, so there is hardly any to take off under the circumstances.
With regard to automobile air conditioners, the estimated revenue is $7 million.


Sinclair McKnight Stevens: When the minister says that there is practically no tax on lighter automobiles, 1 wonder if he could explain that more fully. Does he mean that there is no excise tax? To what extent is there a federal tax on what can be regarded as a comparatively low priced, light weight or small vehicle?


Donald Stovel Macdonald: My reference, of course, was to the weight tax. There is a general excise tax of 12 per cent. I think I would have to respond by saying that as opposed to dropping that further with regard to automobiles, if one is to have an excise tax, an automobile is not an unreasonable commodity on which to levy it as opposed to basic clothing or food. That is a reasonable source of tax. The rate is 12 per cent. I think 850,000 units were sold in Canada last year, and that is obviously a significant source of revenue. We have adopted the approach, rather, of imposing the requirement of a further weight tax rather than taking it off.


Sinclair McKnight Stevens: I would like to explore with the minister the rationale behind that. As I said in my remarks at second reading, it appears to me that it would be much more of an incentive to reduce or eliminate the 12 per cent tax on some types of vehicles which are regarded as being truly energy efficient as opposed to adding a tax at the upper level on cars which are, in the mind of the government, either too heavy, too expensive, or too inefficient as far as energy consumption is concerned. I am not clear why the incentives should not be given to lower the 12 per cent tax as opposed to adding on a tax as contemplated by the government.


Donald Stovel Macdonald: Mr. Chairman, it is the answer I have just given. It has a cost in terms of the lost revenue. It seems reasonable to recover that revenue.


Sinclair McKnight Stevens: Mr. Chairman, I should like to ask the minister why he indicated yesterday that essentially it was not revenue production they were seeking but energy conservation. Do the two things not go hand in hand? If it is energy conservation they are seeking, surely by lowering the 12 per cent excise tax on the small vehicle they are getting exactly what they want, energy conservation. If it is not revenue production they are looking for, why do they not do this in a meaningful way?


Donald Stovel Macdonald: Mr. Chairman, the hon. gentleman is confusing two things. The comment I made was with regard to the additional taxation that would be raised by the weight tax. In basic terms what I have just referred to in revenue loss is a general excise tax that is available. If we are
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Excise Tax Act
successful in our objectives and people move to lighter cars, then there will still be a substantial amount to be collected by the 12 per cent excise tax on automobiles. To put it this way: to remove all or part of that would be to give up a substantial revenue source which would have to be paid in another way. The amount I was referring to was the additional revenue to be gained from that weight tax. If we were successful in bringing everybody down to more efficient cars we would be delighted. The revenue loss involved in the hon. member's suggestion could be substantial, and we feel it would have to be borne by taxpayers in some other way.


Sinclair McKnight Stevens: Following on the minister's comments, instead of telling us there were, I think, 850,000 cars purchased in Canada, I wonder if he could give us an estimate of what revenue accrues to the federal government as a result of the 12 per cent tax on automobiles. Could he give an estimate of how much actually accrues with respect to automobiles that up until now by their weight standard were regarded as light vehicles?


Donald Stovel Macdonald: Not a detailed figure. One could come up with an approximation but we do not have an actual figure on how the sales tax breaks down between lighter or heavier cars. On the weight tax, I think the estimated tax structure to be achieved would be between $5 million and $10 million. The over-all recovery on all automobiles is something which would require a little preparation.


Sinclair McKnight Stevens: Mr. Chairman, when the minister says that the weight tax revenue would be somewhere between $5 million and $10 million is he referring to the original May 25 budgetary proposal or the provisions in Bill C-21?


Donald Stovel Macdonald: That is the increase. The actual revenue now is $15 million.


Mr. Kempling:: Mr. Chairman, I should like to ask the minister for some clarification in regard to air conditioners. A constituent of mine is an importer of air conditioners for automobiles, trucks, and industrial equipment. He has had a great deal of trouble with the department about the excise tax. It was my clear understanding that the tax on air conditioners does not apply to motor vehicles over 16,000 pounds gross weight-to hearses, ambulances, and vehicles over 12 passenger carrying capacity, off-highway vehicles, and agricultural equipment. Would the minister confirm that air conditioners installed in those vehicles do not require payment of the $100 excise tax?


Donald Stovel Macdonald: Yes, Mr. Chairman.


William James Kempling: Mr. Chairman, this constituent informs me that the department says because he does not hold a sales tax licence he has to pay this tax upon importation of the product. Mack Truck, International Harvester, and the Ford Motor Company import the same item from the same company and they do not pay tax. In other words, they tell him that the importer is the end user and therefore must pay the tax. I wonder if the minister could clarify that.


Donald Stovel Macdonald: As I understand the situation, Mr. Chairman, if he were a licensed dealer he would be exempt from payment of the tax. Where he is an unlicensed dealer, or a licensed manufacturer not having an excise tax licence, if he sells a vehicle without an air conditioner, under exempt conditions he may then claim a refund of the excise tax which he has paid.


William James Kempling: That is pretty cumbersome. This man is a national distributor of air conditioning units and has dealers all across the country. He brings these in for heavy duty trucks and for agricultural and off-highway vehicles and so on, by the trailer load. It seems to me one of these air conditioners could not be installed on an automobile without putting a big evaporator on the roof. This man has a tremendous amount of money tied up. He distributes across the country, he has to charge his area dealer and then the dealer has to get a certificate from the end user, and the process works all the way back. That could take months. Surely it should be evident to anyone that an air conditioner the size we are talking about could not be used on an automobile. The drive mechanism would not even suit an automobile engine. This seems to me a cumbersome way to go about it, and it ties up funds unnecessarily. Could the minister suggest a solution?


Donald Stovel Macdonald: Mr. Chairman, I want to ask myself why this man has not applied for a licence to become a licensed dealer. If his business is so considerable, one would have thought this the logical step. Of course I cannot comment on the situation, but that seems the obvious route for him.


William James Kempling: The difficulty is that he has not been able to get clarification on this from people in the Department of Revenue at Hamilton. Right now I believe he has several thousands of dollars tied up in it. He told me that they were even threatening him on the telephone with going back on some shipments he had received previously and charging back taxes. Does he have to do a certain percentage of his business at the wholesale level in order to get a licence?


Donald Stovel Macdonald: Fifty per cent.


William James Kempling: If it is less than 50 per cent, what does he do?


Donald Stovel Macdonald: He is not then eligible for a wholesaler's licence.


William James Kempling: Holy mackerel! If he does $10 million worth of business but does not do $5 million of it wholesale, he would still have to go this route? That is about the volume he is doing, I believe. He would have to pay all the excise tax and probably seven, eight or ten months later get his funds back. Surely to goodness there is another way than that to identify it.


Donald Stovel Macdonald: Just to correct the hon. member, Mr. Chairman, the average refund is within 30 days.
January 28, 1977


William James Kempling: Just to correct the minister, I will lay him what I have in my pocket against what he has in his that it is not 30 days. I will bring a lot of people who will show it is not 30 days. I know personally.


Donald Stovel Macdonald: The hon. member is very confident, Mr. Chairman, but I intend to rely on National Revenue.


William James Kempling: How much do you have in your pocket?


William Hillary (Bill) Clarke: Mr. Chairman, I want to follow up the line of questioning that my colleague from York-Simcoe was taking. That is in connection with the energy saving versus the revenue producing aspects of the tax on the excess weight of cars. Perhaps I can start by asking the minister if the government has considered that lighter cars might last a shorter period of time? Although they burn less gasoline, they might in the end use more energy because of the energy and other resources used in the production of the larger number of lighter cars that would obviously be required.


Donald Stovel Macdonald: I am sorry, Mr. Chairman, I was in conversation with my official. Will the hon. member repeat the last sentence?


William Hillary (Bill) Clarke: I am not sure if I can remember the last sentence, Mr. Chairman. I think the last part was that a greater use of energy and resources would be required to produce a larger number of lighter cars that might be required, as the heavier car would last a longer time, even though it would burn more gas during that period of time.


Donald Stovel Macdonald: Mr. Chairman, 1,000 pounds, for example, would save about 15 per cent of the energy need to make a car and its components. It seems to me there is not a substantial difference indicated in the hon. member's objection. Perhaps I do not follow his reasoning very well.


William Hillary (Bill) Clarke: I will look at the revenue side first then, Mr. Chairman. If the object of this tax is to raise more revenue rather than to conserve energy, it will probably do that in that more lighter cars will likely have to be produced and sold and, therefore, a greater tax incidence would have to occur than if heavier cars were produced which would be longer lasting. That would indicate there would be a desired effect if revenue is the desired result.
If we want to save energy, the minister's point is that a heavier car would burn more gasoline. I conceded that when making my remarks on second reading. However, I ask whether the government has done any studies to indicate the relative position of the extra energy used by a heavier car compared to the extra energy and resources that would be needed to produce the larger number of lighter cars which, presumably, do not last as long as heavier cars?


Donald Stovel Macdonald: Is that true?


William Hillary (Bill) Clarke: The comparison would be interesting. Since the government has the facilities, I wonder whether a study such as that has been made.
Excise Tax Act


Donald Stovel Macdonald: Just to make it clear, Mr. Chairman, when we are talking about revenue not being the objective we are talking about the weight tax. The obvious objective is to get down the weight of automobiles. Just to be clear, the obvious goal in revenue terms is zero. Of course there is a general sales tax beneath that on all automobiles. I would require to be convinced that the hon. member's basic proposition is accurate. I am not sure that heavy means long life, particularly in eastern Canada where, among other things, salt is a serious fact of life.


William Hillary (Bill) Clarke: I am not sure of that either. That is why I asked the question whether the government had done any research in that vein. I will presume it has not.
I would like now to ask about a slightly different topic, the tax on air conditioners. Why did the government find it necessary, when the minister announced on May 25 the $100 tax on air conditioning systems for automobiles, to make that retroactive? In other words, why wasn't the sanctity of a contract that had been entered into a month or more before May 25 respected, and those people allowed to have the transaction completed without the interference of the government?


Donald Stovel Macdonald: Mr. Chairman, it has been the general practice that, where a change of this kind has occurred, it should be effective as of budget night. One can think of a range of possible options sooner or later from the date of budget night, but the final conclusion, from experience over time, is that from an administrative standpoint and probably fairness standpoint this is the most reasonable way to handle it. One of the difficulties, of course, is that it would give a distinct advantage to those manufacturers who have a substantial inventory on hand as of budget night, for example.


William Hillary (Bill) Clarke: That explanation may be all right for those who were contemplating a purchase, but for those who had purchased in good faith under an existing contract there is nothing in budget history to imply that existing contracts should not be honoured. However, the minister has given me an answer, and I thank him for that.
It is my understanding that the minister in his closing remarks on second reading made some reference to my earlier remarks which he did not seem to understand. They concerned the imposition of a sales tax and the personal income tax.
I am not sure where I saw the term used, but in the minister's budget remarks he referred to the sales or consumption tax. I cannot find that at the moment. If it were necessary, I am sure I could dig it up. In any event the reference was made to a consumption or sales tax, implying that the government sees them as being the same.
The purpose of my remarks is not to say that all taxes are bad. I am simply remarking that the government seems to have a great inconsistency in that it uses this kind of a hidden tax, the personal income tax, and many other kinds of taxes. However, each kind of tax comes from the same taxpayer. Each kind of tax requires a substantial bureaucracy here in
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Ottawa to enforce and collect it. Each kind of tax requires a similar bureaucracy in the private sector. In fact every business is required to make the calculation, whether it be a corporate income tax, personal income tax of the individual proprietors, or sales tax returns for the excise tax. All of these taxes go on and on.
The thrust of my remarks was that the government should spend more time exploring ways to ease the burden on the taxpayer so that he is better able to judge where he is being taxed, where the burden of tax lies in his daily life, and to simplify the burden from the point of view of reducing the bureaucracy required on the part of the government, and thereby reducing the size of the bureaucracy that is required in business.
The government seems to forget, in all its dealings in the various tax fields, that there is ultimately only one source of tax revenue, and that is the ordinary taxpayer. The taxpayer deserves far more consideration from this government than he is getting. I am thinking of the proliferation of the demands made upon him and the disregard shown for the individual, whether he be a labourer, a salaried person or a businessman. That was the essence of my criticism of the tax systems. It is not that I criticize them per se. Of course the government needs its revenue. But in my view the government ought to give greater consideration to the source of this revenue, to the nature of its revenue base.


Sinclair McKnight Stevens: Perhaps I could return to the line of questioning I was putting to the minister. It turned on the amount of revenue the government expects to get from the new taxes which are before us. As I understand it, the minister told us there would be some $7 million on account of the tax on air conditioners, and between $5 million and $10 million on account of the automobile weight tax. This represents a combined increase of some $12 million to $17 million flowing into the treasury.
Bearing in mind the minister's candid statement that the purpose of the new tax was not to raise revenue but rather to encourage Canadians to demand, and the auto industry to produce, lighter and more energy efficient cars, my question is this: why would the minister not consider, in addition to imposing this new tax, reducing taxation on lighter cars by a like amount? He tells us he expects to get between $5 million and $10 million in extra taxes. Would he not think it appropriate to lower taxes on the lighter cars, presumably on the more energy-efficient cars to which he referred, by a comparable amount?


Donald Stovel Macdonald: As I indicated earlier, a basic amount flows into revenues from existing automobile taxation. I suppose there might be a marginal rate change but I am not certain that this would be practical from an administrative standpoint. We have to recognize with regard to the excise tax generally that automobiles are a source of revenue, and we expect they will continue to be so.
(Mr. Clarke.]


Sinclair McKnight Stevens: Would the minister at least go thus far: would he, between now and the next budget, give consideration to lowering the tax on the more efficient cars within the parameters of the revenue to which reference has been made?


Donald Stovel Macdonald: Some of the conservationists might take exception to that and argue that by making a further tax cut I would be encouraging the acquisition of cars, but I will look into that suggestion.


Sinclair McKnight Stevens: I am pleased to get that assurance from the hon. gentleman. If he is belaboured by the conservationists I hope he will remind them that the light, energy efficient car to which I am referring is very greatly needed by most Canadians for commuting to work and for other necessary aspects of their livelihood. In short, it is an essential in spite of what some conservationists might attempt to tell the minister.


[Stage Direction]
Clause agreed to.
On clause 7.
Sinclair McKnight Stevens: Clause 7 includes the energy conservation equipment item. Can the minister tell us whether any studies have been carried out to show how practical are some of these energy conservation devices to which the clause refers? We know, for example, about the possibilities of solar energy generation, wind generators and so on. Surely the department, or a related agency, must have carried out studies as to how practical it is to encourage people to go in for these alternative ways of heating. If so, what has been the result of such a study?


Donald Stovel Macdonald: There have obviously been a variety of advances in this field. The insulation materials are all of longstanding application and the effectiveness of the existing materials has been well proven. Heat pumps, for example, do not represent a particularly esoteric technology. On the other hand, there is a rapidly expanding field of technology related to the use of solar energy. The wind generator has been known for a long time, of course, even if really effective means of exploiting that source of power has not been discovered. But to the extent that there is new technology involved here, or the improvement of existing technology, the goal is to encourage the development of better and more efficient devices, and we think it worth while to pursue this course.
The basic question the hon. member raises is, of course, an important one. There are long steps yet to be taken in technology, and this is why we are bound to move cautiously when conservationists tell us that we should not be using fossil or nuclear fuels. We think more favourable tax terms would assist in the technological development which is necessary.


Sinclair McKnight Stevens: I do not think anyone would disagree with the minister when he says people who go in for these less conventional energy sources should be encouraged. I was wondering, though, whether he is giving any consideration to dealing with one of the basic problems, that is, energy storage. Has he, for instance, made any overtures to the power companies in the
January 28, 1977

various provinces to see whether they would agree to buy power which might be generated by the wind or by solar rays? As I understand it, one direct approach would be an arrangement under which power generated by a wind generator could be fed into the system of a power company and drawn back as needed over subsequent days or months. This would be a very practical approach if it could be worked out. At the present time expensive storage battery facilities are required whenever privately generated power needs to be held for future consumption.


Donald Stovel Macdonald: I would be glad to pass on the hon. member's comments to my colleague, the Minister of Energy, Mines and Resources. In preparing the tax bill the department did not have that kind of conservation in mind. It is an interesting thought.


Mr. Douglas (Bruce-Grey):: I have one question for the minister. It arises from clause 7. Reference is made, on page eight, to thermal insulation materials designed exclusively for insulation purposes, storm doors and storm windows for buildings. Would thermopane used in construction or reconstruction fall into that category, or could you make it fall into that category?


Donald Stovel Macdonald: I am advised it does fall into that category.


[Stage Direction]
Clause agreed to.
Clause 8 agreed to.
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Ethier):: When shall the bill be read the third time?


Donald Stovel Macdonald: By leave, now.


The Acting Speaker (Mr. Ethier):: Is leave granted?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.


PRIVATE MEMBERS' PUBLIC BILLS
The Acting Speaker (Mr. Ethier):: Order No. 12, the hon. member for Simcoe North (Mr. Rynard). Shall the order stand at the request of the government?


Some hon. Members:: Stand.
Lobbying


The Acting Speaker (Mr. Ethier):: Order No. 13, the hon. member for Kingston and the Islands (Miss MacDonald). Shall the order stand at the request of the government?


Some hon. Members:: Stand.


LOBBY REGISTRATION ACT
Walter David Baker: that Bill C-214, to register lobbyists, be read the second time and referred to the Standing Committee on Privileges and Elections.
He said: Mr. Speaker, lobbying has not been a subject of great concern to Canadians, in contrast to the attention given to it by legislatures, journalists, and political scientists in the United States. Because of the profound differences between our systems of government, I doubt that Canadian lobbyists will ever achieve the important and sometimes controversial status that they now have there. Nevertheless, the direction in which our parliamentary system should be evolving-toward a more open government with a more influential House of Commons-leads me to believe that we should begin now to establish a framework for the operation of lobbyists before any serious problems develop.
First, Mr. Speaker, what is a lobbyist? I think of a lobbyist as someone who seeks, by means of contact with persons of power or influence, to have a significant effect on executive or legislative actions to be taken by the government of Canada. Lobbyists may act directly for themselves, or on behalf of organizations which hire professionals to make their case. Lobbyists are, in short, special interest and pressure group publicists or their representatives.
Lobbying has had, especially in the United States, a pejorative connotation-and I think that is rather unfortunate-but it is an important and absolutely necessary part of democratic government. Lobbyists are able to provide legislators with feedback on the actual operation of government programs in the field. There is, as we all know, many a slip between bureaucratic theory, on the one hand, and field experience, on the other hand. The sooner governments and all of us find out about that, the better our programs might be understood.
Lobbyists also provide background information of a more general nature about action that is under consideration. We are all used to dealing with "pressure" from associations which are to be affected by legislation, but in fact much of this pressure is informed argument which is sometimes difficult to refute. It is also preferable on many occasions to deal with a carefully prepared presentation by a spokesman for a scattered interest group rather than to deal with the unorganized and incomplete ideas of a large number of individuals. Finally, I put it to you, Sir, that lobbyists are useful when we want to try out ideas, as we soon find out if they have any merit or whether those ideas are simply naive. All these functions

January 28, 1977
Lobbying
performed by lobbyists are indispensable to the reflective as well as the responsive politician.
Naturally, pressure can take illegitimate and illegal forms and have unfortunate consequences, and these dangers bring me to suggest registration of lobbyists. There is, of course, the possibility of bribery, blackmail or other questionable practices. It is the hope that contacts, which must be made with the knowledge of anyone who cares to examine a register, would be less likely to have a shady dimension. There is an even greater danger that if pressure is carried on secretively or unobstrusively, all sides of a debate will not be heard and legitimate points of view or bodies of information will be excluded until a stage in the debate when decisions have been irrevocably taken. At the present time, Mr. Speaker, that seems to be when a bill has been introduced in the House of Commons.
Or there may simply be a suspicion that pressure behind the scenes is by that very fact illegitimate pressure, and the resulting policies might not obtain the support they merit because people feel that certain groups or types of groups have had an unhealthy impact. Then there is the other side of the coin. If we have that knowledge and know that all arguments have been equally heard, I think there would be a tendency for there to be a reconciliation of the diversity of groups which are affected by decisions that might be taken.
In short, the purpose of the bill is to ensure that lobbying, as much as possible, is conducted in the open so that people can see who is trying to influence what, and if necessary respond. Where lobbying is done with the knowledge of everyone concerned, there is a better chance that it will be done openly and that improper practices will have a smaller chance of survival or success. The process of decision making should become more educational and the results more acceptable.
My bill would take the first step toward publicizing lobbying activities in Canada, though I have to say at the outset, Mr. Speaker, that it is a small step indeed. It defines lobbying, to paraphrase, as the actions of any person or any group attempting to influence the course of either legislative or executive action. It establishes a register of lobbyists to be administered jointly by the Clerks of the two Chambers. Lobbyists must set down their names, the person or group on whose behalf they are acting, and the duration of any contact. This information must be supplied before any contacts are made, supplemented with any new information applicable and submitted afresh at the beginning of every year. I have included penalties for non-compliance of up to $5,000 per month and prohibition from lobbying for two years, to show that the register which is set forth in the bill is intended to be taken seriously.
I would not deny that this is little more than a beginning which leaves a good many questions unanswered, and many of these questions have been suggested by people writing to me from all across the country about the bill. A bill discussed in the United States House of Representatives on this subject last year ran to 39 pages, and this matter is already the subject of extensive legislation there.

If I might indicate some of the unanswered questions, I put them as examples and there are probably more. Do we want to monitor the type of lobbying activity as well as the existence of the activity? How do we classify officials of companies or organizations who come to Ottawa only briefly to meet officials or legislators? Does it matter who instigates discussions between lobbyists and officials? Should we consider contact with a minister's or member's staff as lobbying? When does assistance to our constituents become activity on behalf of, or in response to, a lobbyist?
The intention is that those whose principal function is to lobby on behalf of others be regulated, not those whose occupation is administrative or whatever, but who occasionally must defend their interest by contact with politicians or officials. This is not an easy distinction to make, and I would welcome the views of others on the proper bounds for restrictions, and would like to see serious consideration by a committee of this House of the whole question.
The question that will occur to many members may be, why should it be necessary to contemplate action when we have survived without it for over a century? As I suggested earlier, I believe we are moving in a number of ways, or at least we should be moving, toward more open government. This will create both opportunities and dangers. To date lobbyists have dealt principally through public service channels, and in theory at least these contacts have a minimum of danger because the interests and motivations of those concerned are clearly defined and established within an administrative framework. If legislators become more prominent in policy formation, I believe lobbying activity will increase and should be open, because in the political process motivations and interests are not so easily defined or traced.
I believe that the role of legislators will change for a variety of reasons. First, it appears to me that people have become increasingly demanding of their members of parliament, and they will perhaps become more demanding after they watch us on TV. They will, I believe, expect us to be more critical and more creative. I think too that members are increasingly equipped to meet this challenge and are intent on doing so.
Secondly, I believe that within the next few years, and it is my hope, we will have a freedom of information bill which will enable members of this Chamber to participate in the discussion of policy options prepared by the public service. Perhaps we will need a change of government before that degree of open policy debate is obtained, but it is coming, and the increased insight and opportunities we will have will invite contacts from those who now restrict themselves to permanent officials.


Some hon. Members:: Oh, oh!


Walter David Baker: Do not be too subjective, I would suggest to hon. members.
Thirdly, and particularly if this party transfers to the other side of the Chamber, which would seem likely, our committees
January 28, 1977

will be given the power and the staff to undertake investigative and creative functions on behalf of the House. Again, as the number of participants in the debate on national priorities increases, the presence of lobbyists will become more pervasive. I hope too that we can make private members' hour more conclusive and, if we do, the lobbyists will be after us to champion their views, or oppose someone else's.
Fourth, to be realistic about the results of any change in government which may take place there would be more pressure group activity, particularly because many policies which are non unchallengeable as part of the dominant mythology would be subject to review and debate on any policy, and any policy shift invites lobby contacts.
Finally, I hope lobbying is conducted more openly in the future because of a trend in respect of pressure groups which has already developed in our society. Some hon. members may have seen the text of a speech delivered June 6 by the hon. member for Halifax (Mr. Stanfield), the former leader of our party. He said at that time:
We are becoming a society of well-organized groups representing a particular interest or point of view. The number of groups organized to put on pressure have become legion. This is increasing the tension and distrust in our society; and it is increasing the difficulty of reaching a consensus as a basis for government in a country where consensus has always been difficult to achieve anyway. People not only see their own particular interest but have an organization to promote it. This has already led to a lot of governmental floundering and could well make government initiatives very difficult to take; and further increase the sense of frustration among citizens.
These special interest organizations are more attractive to join and support than political parties because political parties are not designed to serve (although they sometimes do) particular interests. To get elected they have to appear at least to be serving the interest of the country generally, rather than some particular interest or cause. So to a growing number of Canadians, political parties seem to be less attractive in serving their cause then does that particular organization designed specifically to serve their cause.
He concluded in this way:
This is leading to a hardening and strengthening of the pushing of particular interests and attitudes which emphasize division and conflict and a weakening of the only institutions we had which encouraged some regard for the common welfare and some recognition of the other fellow's point of view, especially national political parties.
It is a rather wise statement about what is happening in our society today.
Let me conclude by saying I hope the registration of all lobbying groups or individuals will illustrate to Canadians the intricacies of group accommodation and the need to pursue a consensus which is unlikely to fulfil all the aspirations of any particular group. I hope openness will encourage realistic expectations among our electors as well as continued aboveboard dealing between pressure groups and administrators and politicians.
Lobbyists also provide background information of a more general nature about action that is under consideration. We are used to dealing with pressure from associations, associations which are affected by legislation. I think that in the course of our dealings with this pressure the hon. member for Halifax spoke of, with the development of associations and groups within society, each of us as members of parliament feel there must be some response. When that activity, which
Lobbying
we regard as legitimate in the course of interaction which must occur between the private and public sectors, reaches the proportions it has, then there is nothing wrong and nothing inhibiting in having those who would engage legitimately in that activity register their interests and their extent, and to keep that registration fresh with the Clerks of both Houses of this parliament.
It is in that spirit, a spirit that I hope this House will agree is in accordance with a movement toward openness in government, which at least from our point and I hope from the other side will be coming, that I ask this House to consider this bill. I ask the House to send it to committee at least for study. I said during the course of my speech that I did not regard it as the last word, by any means, but this is the first word in respect of a problem and concern of many people.
A jurist once said that not only must things be correct and proper, they must appear to be correct and proper. I think this bill will go a long way to helping not only the substance but the appearance of the substance in regard to a legitimate public activity.


Mr. W. Kenneth Robinson (Toronto-Lakeshore):: Mr. Speaker, I welcome this opportunity to speak on the bill presented by the hon. member for Grenville-Carleton (Mr. Baker). The subject of registering lobbyists is something that has long interested me. I am certain the hon. member will appreciate that I too have a bill on lobbying, Bill C-248, but it looks as though, according to the pecking order in getting bills before the House, that the hon. member is much more successful than I.
The explanatory note to my bill reads:
The purpose of this bill is to require the identification of lobbyists, persons who, in the interest of others, seek to influence Senators or Members of the House of Commons to vote or use influence for, or against, a matter which may come before parliament. Nothing in the bill restricts lobbying, paid or otherwise, or in any way interferes with the right of the public to make representations to Members of the Senate and of the House of Commons. Similar legislation in effect in the United States requires that lobbyists register with the Clerk of the Legislature and secure an identification card from the said Clerk.
I note that the explanatory note to the hon. member's bill reads:
This bill provides for the registration of lobbyists, and a declaration by them stating in whose interest they are working. It imposes a fine and disqualification from lobbying for those convicted of evading these provisions.
The two bills have much in common. I am sure hon. members appreciate that bills to do with lobbying have been dealt with by other jurisdictions, but that this subject has not been seriously dealt with in this country.
I presume the intention of this bill is to make the public aware and provide for public scrutiny of the individuals and organizations that hope to influence government policy and legislation. This would also allow the civil service, with whom many lobbyists deal, to know whom they were really talking to and why.

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Lobbying
This proposal certainly has its merits. Lobbying can be defined as the deliberate organization and application of effort to influence public policy, generally for the benefit of some specific person or group. Consequently if this bill came into force, any person or persons attempting to affect some legislative change, extract some favour or influence policy, could be identified through public disclosure. This would also allow the public to gauge lobbyists, success by the subsequent rejection or acceptance of their proposals by the government.
However, the basis of this bill seems to be founded on the premise that interest groups and the government and civil service are in adversary roles. I am not at all convinced that this is the case. In a recent study concerning pressure groups and government, David Kwavnick discovered that there are many benefits to be had from the co-operation of interest groups and government officials. Certainly it is apparent that cabinet members frequently request information from organizations that fall under their jurisdictions. The meetings between the Minister of Labour (Mr. Munro) and the President of the Canadian Labour Congress are one such example. I think it is fair to say that Canadian politicians are willing to consult with specific interest groups. I might also add that this could be extended to the civil service. As Kwavnick points out, "the popular notion of government officials having continually to fend-off badgering, bullying, and bribing lobbyists is a long way from the truth."
Robert Presthus has said, regarding lobbyists, that the rise to prominence of standing committees has "made interest group directors more aware of members of parliament." However, Mr. Presthus contends, with some justification, that this awareness is diluted by lobbyists concern with cabinet members and senior civil servants. A statistical survey shows that only 15 per cent of lobbyists focussed their attention on members of Parliament, while 40 per cent concentrated on cabinet ministers and 26 per cent on the public service. Clearly backbenchers have low priority. Conversely, of federal and provincial members of parliament questioned, only 18 per cent placed any importance on lobbyists as representatives of community interest.
It is to this point, civil service interaction with lobbyists, that I would like to address my comments. According to Walter Lee, who could be described as the lobbyists' lobbyist, "policy is nearly always made by the civil service." Mr. Lee goes on to say that the only effective way to influence proposed legislation is to "anticipate it well in advance." He also contends that a lobbyist working through carefully selected contacts in the civil service can make his case.
The Toronto Star, of June 21, 1975, reported that business and industry are almost eager to help with and perhaps influence the planning and policies of the civil service. The Star goes on to say that it is with this sub-cabinet group that lobbyists have their greatest influence. Certainly a substantial percentage of lobbyists agree, according to Robert Presthus. Mr. Speaker, I might also point out that various organizations campaign for a president or chairman who is familiar with government routine and is known in government circles-for

example, the case of Mr. Simon Reisman, ex-deputy minister of finance who has become a "consultant".
As we all know, many large associations and organizations have taken offices in Ottawa for the express purpose of lobbying. The biggest of these, the Canadian Manufacturers Association, the Canadian Labour Congress, and the Canadian Federation of Agriculture, present briefs and publicize their views before each federal budget. They also maintain year-round contacts with civil servants who may be working on legislation that effects them.
The survival of any organization that claims to represent its members effectively depends on its ability to persuade the power holders to recognize them as a legitimate bargaining agent. Interest groups have developed links with the existing political and social structure to ensure the protection of their interests and also to keep open direct lines to the government.
It is my contention that it is well and good to demand that lobbyists register. It would act as a point of clarification. However, what effect would it have on the civil service?
A fairly substantial school of opinion suggests that a great deal of lobbying is concentrated on senior civil servants. Would a member of an interest group have to register if he were to talk with a government official? What about the non-lobbying co-operation that now exists between such departments as Supply and Services and private enterprise? When a pencil supplier places a bid with Supply and Services would he have to register as a lobbyist? After all, any initiative he might show in encouraging Supply and Services to award him the contract could be interpreted as lobbying.
I received a letter from the executive director of the Canadian Trucking Association with regard to this particular issue. The letter, dated November 7, 1974, was addressed to me, signed by A. K. Maclaren as executive director, and originated, according to the letterhead, apparently from 130 Albert Street, Suite 300, Ottawa. He allowed that to alleviate some concerns and to satisfy curiosity it might not be a bad idea to require people who wished to make representations to government to register. However, he also supposed that 95 per cent of all representations were made off Parliament Hill. He questioned the efficacy of restricting lobbying controls only to Parliament Hill, and wondered if a chat between a constituent and his member of parliament that touched on some current legislative matter could be construed as lobbying.
In conclusion, Mr. Speaker, I think that my hon. colleague has brought an important issue to our attention. Certainly the public has the right to know who is working behind the scenes, for whom he may be working, why he is doing so and, perhaps most important, for how much. In many cases members of this House would benefit from this information as well as the people of Canada. Free and easy access to this type of information would also mean that any questionable activity would quickly come to light, and consequently it is likely it would cease.
Despite the fine efforts of the hon. member to control and publicize this practice, I must state that there are many

questions that remain untouched. How will registering affect the interaction of civil servants and lobbyists? And how could this interaction be monitored, if it were theoretically controlled? I might add, Mr. Speaker, that while I have used the term "civil servant" freely here today, I appreciate that not all officials are subject to lobbyist pressure, and I have not intended to impugn the characters of our civil servants in any way.
I must commend the hon. member for Grenville-Carleton, but I must also call for further study of this complicated and complex issue.


Stanley Howard Knowles: Mr. Speaker, like the hon. member who has just taken his seat, I should like to see this bill or its subject matter referred to a committee, so that this whole question can be aired and studied in depth. I believe that one way to present the idea I want to place before the House is to tell a story about something which happened in this place so long ago that only one other member of this House was here at the time, and he is enjoying the sun in the Caribbean. Therefore I am not talking about anybody who is here today.
There was a certain government bill which had been presented and which I happened to favour, but which drew the opposition of the life insurance companies of this country. The bill got second reading-after all the government had a good majority and it saw to it that the bill was given second reading-and went to a standing committee. By the time the bill got to that committee we found ourselves faced with a powerful lobby from the insurance companies of Canada. They saw all of us who were members of the committee in our offices, and they made representations to the committee.
My memory of the experience is that of one of the most vigorous lobbies I have known. We had a tough time in the committee. After all, the pressure had been put on, and for a while it looked as if the government bill might actually be defeated in the standing committee. There were two or three members on the government side who had not been attending the committee who were rounded up by a Liberal who had some progressive ideas, and when the vote came, we won. The bill passed in the committee; we defeated the lobby.
The session went on but the bill was never called for third reading. I went to one of my friends in the Liberal cabinet of that day and asked him, "What happened? We defeated the lobby, we passed the bill. How come it has not been brought back for third reading?" He said, "Stanley, you must realize that one of those insurance fellows, one of the men at the top, got to the right cabinet minister". It was not even the minister in whose name the bill was before us but the "right cabinet minister", and that ended that.
If the point of that story is not obvious, I suppose I can spell it out. The lobbying that is effective, or that counts around this place, is not the lobbying of individual members of the House
Lobbying
of Commons but the lobbying of the government itself, the lobbying of cabinet ministers.
I agree with the hon. member for Toronto-Lakeshore (Mr. Robinson) that this matter should be studied. I join him in congratulating the hon. member for Grenville-Carleton (Mr. Baker) for bringing it before us.
I note that in his opening remarks the sponsor made a point which occurred to me, namely, that our situation is quite different from the situation in Washington. There the effects of lobbying on individual Congressmen can have much greater results than the lobbying of individuals here because they have more control of the purse strings than we do. Therefore I say that this question of registering lobbyists may not have as important a bearing here as it has in Washington. It may not be the most important cog in the regime that my friend would like to see established.
I see this as a piece of legislation that goes along with legislation respecting the freedom of information and legislation respecting conflict of interest, and I say to my friend, and perhaps he would even agree with me, that those other two things are more important than the registration of lobbyists.
Reference has just been made to the Canadian Labour Congress, the Canadian Manufacturers' Association, the Public Service Alliance of Canada, the Canadian Federation of Agriculture, and so on. They all have permanent offices here, and the persons who are officers of those bodies, or who are employed by them, lobby. Are they lobbyists within the meaning of this bill? They would say they are not paid for lobbying, they are paid to do the work of their organizations. But, like my friend who has just spoken, I see nothing wrong with those organizations, particularly the ones I named, because they are out in the open making their case.
What concerns me is the kind of lobbying that goes on in ministers' offices behind closed doors. I think that, important as it is to deal with this question of lobbying, completely open government-to use my friend's phrase-is necessary, and in order to achieve that we must have freedom of information which goes all the way-and I do not see any sign of it yet- and we must also have a clearer position with respect to conflict of interest. We have to know what are the financial interests of cabinet ministers, senators, members of parliament, and senior public servants, and if we had better legislation in those areas we would move closer to an open kind of government and the honest decisions that my friend wants.
I hope that the hon. member for Grenville-Carleton does not feel that I am damning his bill with faint praise. I think it is an important subject which should be thoroughly studied, but what I am most grateful for is the opportunity we are given to insist on the importance of these other things as well, namely, freedom of information and clear legislation with respect to conflict of interest. Having said these things, and having given them what I think is their relative importance, I would like to see either this bill or its subject matter referred to a committee so that this important issue can be thoroughly studied.

January 28, 1977
Lobbying


Mrs. Simma Holt (Vancouver Kingsway):: Mr. Speaker, I would like to congratulate the hon. member for Grenville-Carleton (Mr. Baker) on his very important bill and his impressive arguments. Personally I think it is a most interesting bill, but I wonder if it is possible ever to get consensus on what is a lobbyist. As the hon. member for Toronto-Lakeshore (Mr. Robinson) asked, are these various organizations from labour and manufacturers' associations, to the million people espousing the right to live, lobbyists? And should they all be registered? I am indeed extremely ambivalent about lobbyists because I believe that some are sincere and concerned and do not even require registration, while those who are paid lobbyists often are not sincere in what they are doing; they simply want to make their money and run to the next assignment.
I would have many questions to ask if this bill went to committee. I believe that good private members' bills should not be talked out, yet here I am talking about this bill and I have some important things I want to say with regard to the reference of the hon. member for Toronto-Lakeshore to the public service. I am sure that the hon. member for Winnipeg North Centre (Mr. Knowles) has seen, in his long experience, the virtues and dangers of lobbyists in our society. It is said that pressure groups are essential to good government. I fear, however, the pressure point that is most often used is key senior people in the public service-a point illustrated by the hon. member for Toronto-Lakeshore when he said that 26 per cent of the lobbying is on the public service. I suspect that the figure is much higher, and that is why I did want to speak on this subject today. I believe that the most dangerous pressure of special interest groups may be on senior public servants who themselves want to run this country. We have ample evidence of this in my area certainly.
It is with great fear that I see what is happening to this country. There are senior public servants who resent interference from the elected representatives. At times I feel that possibly a few senior key civil servants may well be in collusion with the lobbyists. They are certainly out to control the country through their own offices. They want the elected representatives to take the blame, the flak. They do not want to take the responsibility for actions in the public arena. We are taking the blame for many things that are created by key civil servants who, I am sure, have been influenced by back room lobbying. We will not ever get those people to register.
I think of Bill C-58. We saw Reader's Digest out in the open, but we did not see that great multinational corporation which is now producing an American edition of Maclean's. However, we know its influence was in the back rooms of senior civil servants, and as a result a terrible bill was imposed on the Canadian people. I know some of my colleagues disagree, but all that bill achieved was exactly what Maclean-Hunter intended. Time was driven out of Canada and is now making more money outside Canada from Canadians-three times more, I am told-than the largest amount it made in its 30 previous years inside Canada. These are the kinds of

lobbyists we will not ever get to register. They are in the back rooms.
Yes, it is the government now in power which will take the flack for what the lobbyists like Maclean-Hunter did in the . back rooms. It will always be the government in power that takes the blame. These key public service people-malcontents, power seekers, people open to inducements, will manipulate cabinet ministers, of whatever party, because they know what they are doing, and they do not have any responsibility to the public. They do what they do without being identified; they do it anonymously; and their mouthpiece becomes the cabinet minister. To me this is a personal embarrassment. Ministers are the people whom I feel are the most vulnerable when lobbyists join the support of their executive staffs. We-the elected representatives-then take the blame for what is done as a result. I consider those groups a menace, and their deeds are the signpost to the end of the road for democractic government, regardless of party. Even now there are some who quite openly say that we will not be here four years or eight years from now, but they are here forever.
I must stress that I do not want to offend all civil servants. I am impressed with most public servants. I think most are loyal and maintain their oath, but the malcontents, power seekers, and those who leave themselves open to inducements are the ones I am discussing here. I cannot understand why some of these things are happening. I cannot blame my own ministers, with whom I disagree on some issues. The Northland Navigation fiasco on the West Coast-the tragedy created almost as though by malice aforethought-is one case. What is happening with the CRTC and with cable companies which are not happy with the excessive incomes they are making now is another.
The cable companies want pay television so that they can get an extra $1.5 billion a year. They are manipulating the CRTC so that they can get converters into every home in the country. The situation in Vancouver is a case in point. The hon. member for Surrey-White Rock (Mr. Friesen), the hon. member for Burnaby-Richmond-Delta (Mr. Reynolds) and myself went before the CRTC and fought this. The cable companies deliberately spread the word that we were racists, which is absolutely ridiculous. We fought the plan to take all the American network stations off the dial.
It is obvious to us now that the CRTC and the cable companies want them off so that people will be forced to buy converters. This way they will be able to get pay television into every home, and we will then have to pay for the programs we now get free. This is happening right now. We fought the CRTC and the cable group. They were lobbyists when they first tried to take American network stations off in January last year. We fought them when they took FM off without consultation with those who represented the people in the area.
It was forced back on when the Liberal caucus from B.C. went to the cabinet and raised a protest, along with the protest of our greatest lobby, our constituents. We protested so loudly that the FM decision was reversed.
January 28, 1977

When I talk about our French network stations I am not being racist. I am part of a minority group which knows about racism and the realities of racism. I am not talking about racism. I am talking about economics and realities. The last report of the bureau of measurement indicated that the listening audience to the French network at Vancouver is 400 at prime time, and 100 most of the day; it could be less, but that is the lowest measure possible.
The only time the French network has an audience of any size-1,300-is late at night, at about eleven o'clock, when the pornographic movies come on. The cable companies and the CRTC now plan to take channel 4 off the dial. Channel 4 is the most popular station out of Seattle. They want to substitute for channel 4 the French network station for the sake of 400 viewers. Those 400 viewers could get converters, but it is not profitable to sell pay-TV to only 400. They want the whole population of half a million in Vancouver to have converters so that they can charge for pay television. This is the kind of lobbying and manipulation within the public service that terrifies me.
An incident occurred in Burnaby, B.C., yesterday. Burnaby borders on my constituency. Perhaps hon. members on both sides of this House could learn something from the incident. A fire chief was selected through a proper competition. The deputies had the right to apply, and I expect that they did enter the competion. The best fire chief was chosen from outside the department. He was chosen by the elected representatives.
The deputies in the fire department immediately sent this man to Coventry. They would not co-operate, and their subordinates joined the fight against the new chief. Finally the mayor, Tom Constable, who is a trade union leader and, like myself, concerned about justice for the rank and file-he is a concerned person, and I think a member of the New Democratic Party-fired two deputies yesterday after a long and bitter struggle. Two more are to be fired. This action took place after this long and bitter struggle, after the fire chief was hired by the elected representatives and after the staff members refused to work. I suggest that it is time that these inside lobbies and the people who are manipulating hon. members on both sides of the House go the same way when we have any sign they are disloyal. If they are not working in the best interests of Canada but working for pressure groups with vested interests, we should start cleaning them out.
There has been talk here about blacklists. I do not care about blacklists. I want to talk about some people who came from Simon Fraser University. As a reporter, I knew them, and they were a meance to the university. They did not allow students free access to jobs or to classrooms. Some students lost part or all of their year of study. Yet these people were hired on the federal public service. I wonder why. Few of them I knew were capable of loyalty to the Canadian people. They were not loyal to their colleagues. I hope someone knows they are in the public service, and I hope that they were released if their continuing subversion was noted.
Lobbying
I agree with the hon. member for Grenville-Carleton with regard to a freedom of information bill. I believe we should have freedom of information, but as long as the public service does not want us to know what is going on in the back rooms, we will not have it.
The public servants had already made their decision to withdraw the subsidy in the case of Northland Navigation when they called a meeting. These are civil servants, not the government of Canada. They had already made their decision to withdraw the subsidy, but they said they had to hold the meeting in order to get some members of parliament off their backs.
The hon. member for Peace River (Mr. Baldwin) has cited incidents to me, and I have read about senior civil servants who have said that they do not want members of parliament interfering in their affairs; in other words, it is their country, they are running it, and members of parliament "should stay out of our business." I think it is time we cleaned them out.
I would like to say to hon. members opposite that I am well aware of the little brown envelopes coming to them containing information. I am well aware that civil servants are feeding hon. members opposite information with which they might try to tear this government down. I know that many hon. members opposite are beginning to get nervous because of the danger inherent in this. If those public servants are giving out this information now, they would give it to us if we were on the other side, if that ever came about. I do not know whether it is going to happen. I suppose it will happen some day because society always wants change, but I do not think it will happen soon, probably not for about 20 years.
To be very serious, these few people in the public service do not want democratic government; they want government by civil service. That would be the end of democracy and the start of rule from within by people who are not accountable to the public.
On November 30 in the Standing Committee on Broadcasting, Films and Assistance to the Arts I had my first insight of how we are simply rubber stamps for the people who seem to run this country. That sounds like a very negative way of handling this question of lobbying but I was very discouraged because I have to answer to my constituents-as we all do- for things that I know were not created by members on either side of this House. The estimates were before that committee in an amount around $59,000. A man named Bruce Donaldson of the government telephone agency appeared as a witness. The agency wanted to pay something like $38,000 for furniture. Without any reference to the committee it had increased the staff, at a time of restraint, by 40 people. They just bought the furniture-a fait accompli-and then came with the estimates to be passed.
The hon. member for Fundy-Royal (Mr. Fairweather), bemoaning the terrible telephone service the agency provided, was told that the equipment was very old and could not be replaced. Facetiously, I suggested they could have done what

January 28, 1977
Lobbying
they did with the furniture-simply buy the equipment and bring the account to us to be rubber stamped, and then the Prime Minister (Mr. Trudeau) could take the blame for the government expenditure! That is the name of the game, Mr. Speaker. They do it, we rubber stamp it, and the Prime Minister takes the blame.
It does not matter what we call them-pressure groups, special interest groups, lobbyists-the name is interchangeable. Special interest groups will say they do not want to be called lobbyists, but the word does not change the fact. Spokesmen for unions, industry and large organizations like to pretend they speak for large numbers of people when all too often they have only had an executive meeting. They share the dialogue and then come and say they are speaking for 20,000, or 2'A million, or 20 million people.
As an example, Mr. Speaker, I have received letters from officers of the British Columbia Teachers' Federation protesting the treatment of Dr. Morgentaler. This came in a copy of a most, insulting letter to the Prime Minister of Canada, on BCTF letterhead. But I have yet to find one teacher in British Columbia-and I have shown this letter to many of them- who knew they were involved in this matter. They had the distinct impression their association was concerned about the major problem of education.
This is what worries me, Mr. Speaker. Are lobbyists really speaking for the mass of the people? Will registration of them make any difference? In the case of the cable company, I know that when we get through fighting for channel 4 we will have to fight them again and again on new issues. They will not stop until they win. Lobbyists have a single purpose; they are paid and all they have to do is work on one thing at a time. We have to work on many things and, while we are moving to our next problem, they are concentrating on the one. We cannot change the fact that they are working inside with the public service.
It should not be any comfort to the opposition that there are those who lobby with the aid of the public service-and I do not say all of the public service-in the name of nationalism, as we have seen for example with the television and magazine industry. Nationalism has been the device used for building the empires of the greedy. If this cable lobby succeeds then they could do it to any government, and elected representatives will not have control. One of the executives of the cable company stated that he hoped he could delay KOMO, Seattle's, replacement on channel 4; on the VHF dial by French network to a time just a month or two before the elections, so that he could bring the government down. I say if he could do it to us, he could do it to the opposition.
I should like to refer to lobbying in regard to the proposed gun law, Mr. Speaker. In Vancouver there is a very serious rapist, a frightening person whom the Calgary and Vancouver police feel has been involved in the rape of aged people, and is capable of murder. Bill C-83, the peace and security legislation, was introduced in this House last year. The person involved in those rapes is now free on the streets of Vancouver on mandatory parole. He had to be freed. Under the law it was

legal and his right on completing his sentence under existing law. He is now out on the streets on mandatory parole; the public is angry at us because we have no way of getting him and other dangerous people off the streets.
Recently some hon. members visited a penitentiary on the prairies, and there I talked to two prisoners in segregation cells, a 16 year old and an 18 year old who will be free in four or five months. Neither of them have any fear of death.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member but the time allotted to her has expired. She may continue if there is unanimous consent, however. Is there unanimous consent?


Some hon. Members:: Agreed.


Simma Holt: Thank you, Mr. Speaker. I should like to finish this point. Those two boys have said it does not mean anything to them to kill, and they probably will kill. They do not know why. They do not know anything else, and they are coming out in four or five months. If there had been co-operation for the passage of Bill C-83, which has provisions for dealing with dangerous offenders through indefinite sentences, we could have kept society safe from the Vancouver rapist and these two youngsters who have no sense of life and death. We would probably have prevented this rapist from being released on the mandatory parole that is now his legal entitlement.
I feel this is an important matter, Mr. Speaker, and we ought to work it out. I do not see how we can answer all the questions of the gun lobbys, the pro-life lobbys, the union lobbys who really do not represent the people. But my greatest concern is the inside lobby, Mr. Speaker, the group from within that is undermining democratic government.


Ralph Goodale: Mr. Speaker, I want to congratulate the hon. member for Grenville-Carleton (Mr. Baker) and, if I may say so in the same breath, the hon. member for Toronto-Lakeshore (Mr. Robinson), who have both had bills on the order paper on this general question of lobbying and who both made very able presentations in the House today.
I appreciate the thoughts and the examples given by the hon. member for Winnipeg North Centre (Mr. Knowles) on the subject, and the very interesting and thoughtful ideas we have just heard from the hon. member for Vancouver-Kings-way (Mrs. Holt). We have had a very useful discussion on the question of lobbying by people obviously interested in and knowledgeable about the subject. In addition, in past years the House had devoted many hours to an analysis of the validity of lobbying and the conduct of lobbyists.
If one searches back through the debates of this House, as I have done in examining the bill presented by the hon. member for Grenville-Carleton, one comes across repeated discussions of this topic. Many of these were prompted and promoted through private members' bills introduced by the former member from Surrey, British Columbia. The idea of lobbyists has been rather thoroughly canvassed on these occasions and I
January 28, 1977

think we have benefited by the discussion. I should like to refer to one occasion in particular, April 14, 1970. It was reported at page 5854 of the Commons Debates. This was in the course of one of the debates on a private members' bill of the former member for Surrey.


Stanley Howard Knowles: Barry Mather.


Ralph Goodale: Mr. Mather was the gentleman who presented the subject on that occasion and, I gather from reports, on other occasions as well.
If I could, I would quote a passage from some of the debates at that particular time. However, I will not take the time of the House to do that. If hon. members are interested, I refer them to page 5854 of the Commons Debates where the hon. member for St. John's East (Mr. McGrath) was discussing the question of lobbying. He made some rather interesting points.
Lobbying
I would adopt at least a portion of his wording which has to do with the inequity of legislation of this kind.
The hon. member pointed out that it necessarily establishes separate classes within that broad group generally defined as lobbyists. It creates a basic inequity. Some would have to register, perhaps pay a fee and subject themselves to other restrictions. Others would not be subject to those restrictions even though their actions may be more sinister. I have serious doubts about the efficacy of this kind of proposal.


The Acting Speaker (Mr. Ethier):: Order, please. Since the House agreed unanimously to call it four o'clock at 3:54, the Chair therefore has no alternative at 4:54 but to call it five o'clock. The hour appointed for the consideration of private members' business has expired. It being five o'clock I do now leave the chair until 2 p.m. on Monday next, pursuant to Standing Order 2(1).
At 4:54 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, January 31, 1977