1977-04-19

ROUTINE PROCEEDINGS


Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, 1 rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. My motion is prompted by the do-nothing budgeting of the Minister of Finance (Mr. Macdonald) for one million unemployed. In view of the fact that in government waste there lie fallow immense resources for creating and stimulating employment, I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That this House directs the Minister of Finance to make a statement on motions at the earliest possible opportunity to explain what steps he is taking to reassess and reallocate government funds now in unessential programs to the battle against unemployment.


Mr. Speaker:: Order, please. Once again it appears to me that through Standing Order 43 an attempt is being made to ask the House to set aside the order of the day, which is to debate the budget. This motion in effect would allow another debate on the budget, and I think it ought not to be put.


FISHERIES
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I too wish to move a motion under the provisions of Standing Order 43. Fishermen in the province of Newfoundland are again being denied the opportunity to re-enter the fishery as a result of a lack of icebreaking capability. This annual problem should prompt the government to take a more positive and realistic approach toward providing adequate support to what could be a prosperous fishery this year. 1 therefore move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the whole matter of icebreaker service to the fishing industry be referred to the Standing Committee on Transport and Communications and the Standing Committee on Fisheries and Forestry.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Acting Prime Minister. Yesterday I asked the Acting Prime Minister if he would consider making a special reference to the Standing Committee on Finance, Trade and Economic Affairs to allow a number of interested Canadian individuals and groups to make a contribution to the development of a policy to create jobs, which the government clearly lacks. The Acting Prime Minister undertook to discuss this matter with the Minister of Finance. Since government measures to fight unemployment and create jobs are clearly inadequate and are causing severe dislocation for Canadians and since the schedule of that standing committee is much less onerous this year than last year, will the Acting Prime Minister indicate whether the government will agree to a reference at the earliest opportunity?


Hon. Allan J. MacEachen (Acting Prime Minister):: Mr. Speaker, I have not had my discussion with the Minister of Finance on this subject and I have not had an opportunity to discuss the matter with other colleagues, which I hope to do later in the week. Following those discussions I shall indicate whether it will be possible to implement the suggestion made by the Leader of the Opposition.


Charles Joseph Clark: Mr. Speaker, now it appears that one million Canadians can wait while the Acting Prime Minister summons up the energy to lean across the aisle.


An hon. Member:: Right on.


Some hon. Members:: Hear, hear!

April 19, 1977
Oral Questions


POSSIBILITY OF REVISING GOVERNMENT SPENDING PROGRAMS TO ALLOCATE MORE MONEY TO COMBAT UNEMPLOYMENT
Charles Joseph Clark: Mr. Speaker, I should like to ask the Minister of Finance whether he will consider the suggestions made by my colleague the hon. member for Hamilton West yesterday, regarding a reordering of present government spending priorities and a cutting or delaying of programs to which money is now committed but which are not now essential so that we can direct that money to the kind of job creation needed for the more than one million Canadians who, because of the deliberate policies of this government, are now without work?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, over the past 12 months the President of the Treasury Board has been engaged in a very active examination of the spending estimates. The fact that we have been in the process of reducing the rate of increase of federal government expenditure indicates that he has had under continuing examination those programs which should be reduced in favour of priority programs. 1 would remind the Leader of the Opposition again, that the budget had an allocation of something over $1 billion in the direction of various kinds of measures which will have the impact of increasing employment in Canada. Indeed, employment in the first quarter of 1977 has been on the increase and we expect it will increase throughout the year and that levels of unemployment will be reduced.


Charles Joseph Clark: Mr. Speaker, as the minister well knows, his own projections indicate that the net effect of this budget will be to create more unemployment among Canadians rather than more jobs. Just to help the minister and his colleague, the President of the Treasury Board, along, I should like to ask the minister whether he and his colleagues would give us a commitment now that they would seriously consider winding down Petro-Can and directing the money from that expenditure toward creating jobs? Will they also seriously consider, stopping the expropriation proceedings now in effect regarding Pickering airport and in that way create jobs for Canadians whose voice will be heard much more loudly in the next election than mine is now?


Donald Stovel Macdonald: Mr. Speaker, I might just point out to the hon. gentleman that the major expenditure in which Petro-Canada is now engaged is in the process of its partnership in the Syncrude operation in northern Alberta. If he is saying that this major development project, which can make a significant increase to Canadian self-reliance in oil, should be stopped, then 1 think hon. members would wonder about the intelligence of a suggestion that we should move away from that.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, as the minister well knows, the most significant activity of Petro-Can in recent months has been its efforts to find a manager who would stay with the company.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: On this side of the House we would like an answer to the specific question of whether the government would seriously consider taking present expenditures away from the two activities I have cited and directing the money instead toward creating jobs for the more than one million Canadians for whom the only hope under this government if they want a job is, according to the Prime Minister, to quit the country?


Donald Stovel Macdonald: Mr. Speaker, 1 think the House should bear in mind again that the Leader of the Opposition is saying we should discontinue exploration for oil off the Nova Scotian coast as well as the development in northern Alberta and all the other exploration efforts which Petro-Canada now has under way. As to Pickering, 1 think I can say, subject to confirmation by the Minister of Public Works, that the funds for the acquisition of land have now been substantially expended; indeed, they were expended in previous fiscal years.


Mr. Stevens:: Sell them off, then.


Mr. Paproski:: That is what Otto Lang said about his airport.


DATE MINISTER WILL KNOW IF PRIVATE SECTOR HAS TAKEN ADVANTAGE OF TAX INCENTIVES TO CREATE JOBS GOVERNMENT ACTION
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, may 1 direct a supplementary question to the Minister of Finance? It arises from a CP report of April 7 which says that the government will take direct action to generate jobs if private business fails to use the new tax breaks to boost productivity. That suggestion is attributed to the Minister of Finance. In light of the present unstable climate for investment, can the minister advise the House when he will know whether or not the private sector has created the jobs which his tax incentives are supposed to help bring about?


Donald Stovel Macdonald: Mr. Speaker, the hon. gentleman referred to the unstable climate for investment. May I point out to him that it is expressly for the purpose of stimulating investment in Canada that we brought in the budget which I presented on March 31. If hon. gentlemen opposite are suggesting that investment should not be made in the private sector but expanded in the public sector, that, it seems to me, is a rather strange reordering of their political philosophy.


Lincoln MacCauley Alexander: A supplementary question, Mr. Speaker. Apparently the minister is not aware of reports of economists which indicate that the tax breaks included within the budget will not bring about the necessary climate. Let me quote again from that CP report. It reads;
Macdonald said yesterday that, 'having made room for the private sector in terms of tax changes ... if the private sector does not take this opportunity for the purpose of creating further economic growth in Canada, there obviously will be pressure*.
April 19, 1977

Is the minister in a position to advise the House what type of pressure he is thinking about and how he expects it to bring about the climate for job creation, which we all want to enjoy?


Donald Stovel Macdonald: Mr. Speaker, the second time the hon. member read the actual quotation. There obviously will be pressure from, among others, people like the hon. member for increased expenditure in the public sector. The viewpoint taken by this government is that there should be substantial expansion in the private sector in Canada, not only for the purpose of establishing temporary employment in Canada, but also for the purpose of long-run jobs and increasing Canadian productivity.


GOVERNMENT EFFORTS TO HAVE ECONOMY MAKE UP LOST GROUND
Lincoln MacCauley Alexander: Mr. Speaker, may I ask a final supplementary question. Yesterday, when the hon. member for York-Simcoe brought to the minister's attention problems with respect to real growth, the minister answered in part, as reported on page 471 2 of Hansard:
I think one might raise the question whether it would be desirable to have a rate of growth at such a level as to bring about a recurrence of inflation.
Bearing in mind that every percentage point of real growth below a 5 per cent real growth rate, which we should now be enjoying, means a loss of 30,000 jobs, and given that we are now 8 per cent below real growth levels, which means that we have lost some 230,000 jobs, is the minister saying that he will not attempt to bring about any catch up, or that we will continue to have at least 230,000 people unemployed?


Donald Stovel Macdonald: Mr. Speaker, that is a distortion of my response. Yesterday, in response to his colleague's question, 1 said that moving to a rate of growth which would stimulate again an increase of inflation in Canada is neither in the interests of those now unemployed nor, indeed, of the rest of the economy, and that we seek to avoid.


TRANSPORT
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, my question for the Acting Prime Minister refers to the platitudes uttered yesterday by the Prime Minister concerning this government's attitude to western development, which flatly contradicts the governments practice. My question to the Acting Prime Minister is this:


Some hon. Members:: Oh, oh!


John Edward Broadbent: Just listen. Can the minister provide some testimony at this time of the government's good faith. Considering that virtually all the western premiers oppose the govern-
Oral Questions
ment's current transportation policy, and did so most specifically at the last meeting of western premiers, I ask the Acting Prime Minister if he will assure the House that Bill C-33 on transportation, which all the prairie premiers oppose, will be withdrawn from further discussion in this House until the Minister of Transport has had an opportunity to talk to his counterparts in those provinces?
-420)


Allan Joseph MacEachen: Mr. Speaker, I am grateful to the hon. member for raising the question of the Prime Minister's speech because it gives me an opportunity to congratulate him for an outstanding address-


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: -which, as has been indicated, was a message of great significance. In direct reply to the question with respect to the transportation bill, the answer is no, Mr. Speaker.


FREIGHT RATES-POSSIBILITY OF CHANGE IN RATE ON PROCESSED RAPESEED
John Edward Broadbent: The answer coming from this government to the western provinces' legitimate grievances is indeed no. I would like to get some specifics from the government about this new found concern for the west. Since all the prairie provinces have again opposed the freight rate structure as it affects the rapeseed crushing and processing industry, does the government intend to change this freight rate structure as it affects this industry and discriminates against western Canada or does it intend to maintain this iniquitous regulation on the books?


Allan Joseph MacEachen: Mr. Speaker, obviously the speech of the Prime Minister has created a good deal of ferment in the hon. member's mind, a good deal of agitation. He is reflecting my assessment of the speech by the anxiety in his question and the same answer applies.


THE BANK ACT
John Edward Broadbent: The Acting Prime Minister is not only dreaming in his normal way today, but today it's in technicolor. I would like to ask him about a concrete example of the government's concern as opposed to government rhetoric. All the prairie provinces, in addition to the other provinces of Canada, have opposed the white paper on the Bank Act which will force Caisses Populates and credit unions, which are provincially chartered, to make certain deposits with the Bank of Canada for the first time in Canadian history. Since all the provinces, the prairie provinces in

April 19, 1977
Oral Questions
particular, have opposed this provision, will the government give a commitment that when the legislation is brought forward that suggestion in the white paper will not be included.


Donald Stovel Macdonald: Mr. Speaker, we have been receiving from a great many interested persons comments on the Canadian payments system proposal, and in particular the proposals with respect to maintaining reserves with the Bank of Canada. We will take account of those representations when we come forward with the bill to amend the Bank Act.

[Translation)


POSSIBILITY OF PROHIBITING FLUORIDATION OF DRINKING
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, 1 should like to direct a question to the Minister of National Health and Welfare.
Since recent studies carried out by Mr. Dean Burk of the United States National Cancer Institute, and Dr. John Yiamouyiannis of the United States National Health Federation have established that water fluoridation significantly increases the number of cancer cases among the aged, could the minister advise the House whether he intends to prohibit the addition of fluorides to drinking water?


Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, any decision about water fluoridation is a provincial responsibility, and I have not had the opportunity to acquaint myself with the findings of these studies; my departmental officials, however, are certainly aware of them. If these studies prove scientifically valid, they will certainly be discussed by federal and provincial officials who are to meet within the next few weeks.


PRESENCE IN GALLERY OF POLISH MINISTER OF FOREIGN TRADE, MR. OISZEWSKI
Mr. Speaker:: Before beginning another round of questions may I ask hon. members to join with me in acknowledging the presence in our gallery of a very distinguished visitor in the person of the Polish Minister of Foreign Trade, Maritime Economy, Mr. Oiszewski, who is here for the first time.


Some hon. Members:: Hear, hear!


THE CANADIAN ECONOMY
Sinclair McKnight Stevens: Mr. Speaker, my question is for the Minister of Finance. Now that the figures show an advance in the consumer price index at an annual rate of 12 per cent in the first quarter of this year as compared to last year, can the hon. gentleman tell us whether he still stands behind the statement in his budget speech that there is an "underlying trend to lower inflation", and if he still does, would he explain where this trend is to be found?


Donald Stovel Macdonald: As the
hon. gentleman knows, the 12 per cent rate mentioned by him is a statistical distortion.


Some hon. Members:: Oh!


Donald Stovel Macdonald: In fact, the rate is something just over half the figure he stated. It will be difficult through the year to attain the target we set under the anti-inflation program but I think we should be talking about a real figure, not one the hon. member has invented.


INFLATION-GOVERNMENT MEASURES TO CONTROL-REASON CANADA SUFFERS FROM INFLATION AND UNEMPLOYMENT
Sinclair McKnight Stevens: Whether the statistics are distorted or not, prices in food stores are certainly going up. My supplementary question is this: having indicated that supplementary job creation measures might be required this year if the unemployment situation does not improve by September, has he any plans for supplementary measures against continued high inflation if the current rate of increase in the consumer price index does not slow down?


Donald Stovel Macdonald: responded to the earlier part of that question in answer to the hon. member for Hamilton West after his misquotation of me. We are presently in the process of engaging in consultations on decontrol and these consultations will continue later this week at a meeting with management and labour. We are setting ourselves on a course toward removing the controls program, hopefully within the time frame set under the legislation.


Sinclair McKnight Stevens: Now that the controls program has been in effect for 18 months, would the minister explain why the rate of inflation in Canada is still higher than that in the United States where they have no controls? Further, since the supposed purpose of the controls program was to slow inflation without creating unemployment, can he explain why Canada now suffers from both increasing inflation and increasing unemployment?


Donald Stovel Macdonald: May I remind the hon. member that the rate of unemployment in the United States went to 10 per cent. If that is his goal for Canada, we on this side do not share it.


Some hon. Members:: Oh, oh!
April 19, 1977


FOOD PRICES-POSSIBLE FORMULATION OF FOOD POLICY
Mr. James A. McGrath (St. John's East):: The last consumer price index showed the largest percentage of the increase reflected the higher cost of food. This being the case, may 1 ask the minister whether it is the intention of the government, since food, generally, is not covered by the control program, to announce this session the formulation of a comprehensive food policy for Canada which would take into account the sometimes conflicting interests of the Minister of Agriculture and the Minister of Consumer and Corporate Affairs?


Donald Stovel Macdonald: It is
quite accurate to say there has been an increase in the food component of the index. This increase is the result of a sharp rise in the cost of imported fresh fruits and vegetables in the first quarter of the year. Obviously, any Canadian food policy would not affect the food policy being followed in Florida and California.


FISHERIES
Jack Marshall: Mr. Speaker, 1 have a question for the Minister of Fisheries and the Environment. It arises from the fact that fishermen are being prevented by heavy ice conditions from entering into what is a potentially good fishery this year and one which could provide jobs for many Newfoundland fishermen. Has the minister been coordinating any efforts with the Minister of Transport to improve our icebreaking facilities in order to allow the prosecution of the fishery?


Hon. Romeo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, I might say that the latest reports 1 have had on ice conditions is that the prospects for this season seem to be fairly positive; in other words, there should not be unusual delay in the ice moving out. However, the hon. member's point is one which is very well taken. Some time ago I asked my staff to work with the Ministry of Transport staff to see where and how we might use icebreaking capacity which is not required on an emergency basis elsewhere. 1 have not had a report on the matter but I think that that approach is really worth exploring, to see whether it is at all economic. If it is, certainly the job creation which would occur as a result of a positive program would be worth the effort.


Jack Marshall: Mr. Speaker, may I put a supplementary question having to do with another aspect of the fishery which is deficient. Is the minister going to make an announcement on the reintroduction of a fish chilling program which was taken away a couple of years ago? Again this would help conserve fish. There would be more fish for market and this would create more jobs.
Oral Questions


Roméo LeBlanc: The hon. member's expression, Mr. Speaker, was "taken away''. The program was assumed to have fulfilled its role, which was a fixed one in time. However, when it did turn out that some regions were late in taking advantage of it, the hon. member knows that we did extend it. 1 am looking very positively at this. I think full utilization of the fish available on the east coast, in particular in certain areas of Newfoundland, may be as important in some cases as development of new catching capacity. We have a program which has already been discussed with the industry.

[ Translation]


AGRICULTURE
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, in the absence of the Minister of Agriculture, my question is for his parliamentary secretary.
Considering that the producers rejected by a slight margin the establishment of a provincial potato marketing board in New Brunswick, does the federal department intend to take steps to encourage the establishment of this board, either at the provincial level or in a larger regional context at the national level, to bring order and logic in this sector of agriculture?


Mr. Irenee Pelletier (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, the minister was greatly disappointed by the result of the vote of the New Brunswick potato producers, which was-as the hon. member for Madawaska-Victoria puts it-very close. For the moment the minister does not intend to take new initiatives, but we seriously question the proposition made to the New Brunswick potato producers, particularly the information provided to them concerning the marketing board in general or the associations.


GOVERNMENT MEASURES TO CONTROL PRICE OF FARM IMPLEMENTS
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Acting Prime Minister and relates to the speech of the Prime Minister last evening-


Some hon. Members:: Hear, hear!


John George Diefenbaker: Mr. Speaker, if those Liberal members who are applauding had votes in western Canada, the Liberal Party would win some seats in the next election. I listened to the speech of the Prime Minister. It sounded like the elegy of an embattled Prime Minister trying to seduce the western farmer to support his government. So we on the prairies look at it from a little different angle. What the farmers out west want to know from the Prime Minister is this, Mr. Speaker. What is being done to keep down the prices of farm implements which are mounting at a tremendous rate? I have

April 19, 1977
Oral Questions
figures, one after the other; in connection with combines, $28,000 up to $32,000 in a year; seed drills, $7,000 up to $10,000. Cost of repairs is mounting at a rate which is making it impossible for farmers to carry on. Young farmers are leaving the farm because there is no money to be made.
What is the government going to do specifically to meet the serious situation in connection with the present exorbitant and prohibitive farm implement costs which are making it so difficult for agriculture to carry on?


Allan Joseph MacEachen: Mr. Speaker, I regret that the right hon. gentleman misunderstood the purpose of the Prime Minister's address.


Some hon. Members:: Oh, oh!


Mr. Fraser:: You did not know what he was going to say yesterday, Allan, so how do you know now? That is what you told us.


Allan Joseph MacEachen: Obviously, Mr. Speaker, I had further comments to make on the right hon. gentleman's interpretation of the speech, but my time has been taken up by the opposition.


An hon. Member:: Go on CBC and get free time.


Allan Joseph MacEachen: With respect to the direct question of increasing-


Mr. Speaker:: The right hon. member for Prince Albert on a supplementary.


John George Diefenbaker: Mr. Speaker, I repeat my question. I do ask for a lesser degree of noisiness on the part of the opposition than that which characterized the government this afternoon. Let me ask the minister this, and 1 know how anxious he is to answer it. What is this government going to do to help the farmer in connection with farm implement cost which today, with low farm prices, is resulting in a situation bordering in many cases on bankruptcy?


Allan Joseph MacEachen: Well, Mr. Speaker, I have no instant policy solution to the question of rising prices of implements. As I understand it, the trade in farm implements is an international trade. There are no tariff barriers. It is subject to international competition, and with these factors it is not easy to produce an instant solution for the right hon. gentleman.


THE CANADIAN ECONOMY
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, my question is addressed to the Minister of Finance. Would the minister inform the House what his officials forecast in the way of increased employment in the Atlantic and

Gaspe region as a result of the increased tax credit made available in the budget to manufacturers?


Donald Stovel Macdonald: Mr. Speaker, I do not think 1 can give a specific figure in this regard. We have not tried to give a specific figure to an individual measure in the budget.


Andrew Hogan: A supplementary question, Mr. Speaker. Would the minister get the figures and present them to the House; and would he also consider that since there is 60 per cent capacity in the Atlantic region, this is nothing but a public relations gesture and not an effective economic policy. When is the government going to come across with policies that will create jobs in the Atlantic region?


Donald Stovel Macdonald: Mr. Speaker-


Mr. Speaker:: Order, please. The question is clearly argumentative.


POSSIBILITY OF ENDORSEMENT OF PRESIDENT CARTER'S NUCLEAR POLICY-DEALINGS WITH COUNTRIES NOT SIGNING NON-PROLIFERATION TREATY
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. In view of the warm and wholehearted endorsation over the weekend by such government leaders as Mr. Callaghan of Great Britain and the Prime Minister of The Netherlands respecting the farsighted policy changes announced last week by President Carter of the United States regarding the proliferation and use of civil nuclear facilities, 1 wonder whether the Minister of Energy, Mines and Resources would tell the House if there has been any such endorsement by the Canadian government; and if not, why not?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I had some discussions with the presidential adviser, Dr. Schlesinger, when 1 was in Washington with respect to a number of nuclear matters, and at that time it was agreed that Canada and the United States, following upon the earlier discussions between the Prime Minister and the President, would maintain a very close liaison or working relationship aimed at reducing the dangers of proliferation to the world. 1 am very pleased to see that the United States has moved out now.


Mr. Gillies:: Canadians don't have the courage!


Alastair William Gillespie: The kinds of initiatives they have taken are fully consistent with the leadership Canada has given over the last couple of years.
April J9, 1977


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Alastair William Gillespie: It is also important that the House should know that the Prime Minister of Sweden has endorsed the Canadian initiatives in this regard. Hon. members may well know the sensitivity of the issue in Sweden as well.


James McPhail Gillies: Misleading the House; misleading the House.


Allan Frederick Lawrence: Mr. Speaker, my supplementary is directed to the same minister. If this is the rather backhanded endorsement which I was seeking from the minister, I wonder if the minister could tell us whether Canada is right now seeking, as I gather the United States and other countries are doing, any nuclear dealings with any country that has not signed the non-proliferation treaty?


Alastair William Gillespie: Mr. Speaker, I would have thought that the hon. member would have known that that is the situation. We made that statement-


James McPhail Gillies: That is not true.


Alastair William Gillespie: That is a well known statement. That statement with respect to all new contracts was made in this House in December of this past year. It was made very, very clear that Canada would not enter into-


James McPhail Gillies: That is not true, that is not true.


Alastair William Gillespie: The hon. member sounds like a broken record, Mr. Speaker.


Mr. Baker (Grenville-Carleton):: You are a broken minister!


James McPhail Gillies: Mr. Speaker, is the Minister of Energy, Mines and Resources telling this House that Canada stopped its dealings with Spain and with other countries who are not signatories to the non-proliferation treaty?


Alastair William Gillespie: Mr. Speaker, I am telling the House that Canada has adopted a very serious and a new set of safeguards-


James McPhail Gillies: Answer the question, answer the question!


Alastair William Gillespie: So much so that in fact we have suspended over $250 million-probably closer to $300 million-of uranium exports this year against contracts which probably amounted to close to $10 billion. In other words, we have been prepared to put our policy to the test.


James McPhail Gillies: Mr. Speaker, the hon. member is misleading the House. What he is saying is not true. Canada is not suspending its operations.


Some hon. Members:: Right on, Jim; right on!


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: Out, out!
Oral Questions


REGIONAL ECONOMIC EXPANSION
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is to the Minister of Regional Economic Expansion. In view of the need to create new jobs in northeastern Ontario and the lack of an office within the region for the Department of Regional Economic Expansion, can the minister indicate if he is prepared now to open a new office within that region to encourage and stimulate the establishment of new manufacturing and processing industries now?
[Translation)


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, I wish to tell the House and the hon. member that indeed the proposal has been under study for some time. I trust I shall be in a position, within the next few weeks, to announce the official opening of a departmental office in northeastern Ontario, and that the employees of the department will give the information requested and the services offered to the people in general.


FINANCE
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, I would like to ask the Minister of Finance a question which relates to his policies that I have tried to understand. I have done my best, for example, to try to understand his changed attitude toward controls. I would like to ask the hon. minister what has changed since a few months ago when he announced that a policy to encourage investment would not be appropriate and would not be helpful because of the amount of idle plant capacity? I would like to ask what changed in those two months between the time he made that well-publicized speech and the time of his budget to justify his change in position?


Donald Stovel Macdonald: Mr. Speaker, I am not sure to which precise statement the hon. gentleman is having reference.


Sinclair McKnight Stevens: Banff.


Donald Stovel Macdonald: The hon. member for York-Simcoe says "Banff'. I think it is accurate to say that I have not been in Banff for some two or three years.


Ramon John Hnatyshyn: You ought to go. You need a rest.


Robert Lorne Stanfield: Mr. Speaker, with all due respect, I do not think the Minister of Finance can avoid a contradiction quite as easily as that. He must recall, if he was serious as I am sure he was, making that speech. I recall it very well. I am sure there must be some reason to justify the change in the government's position, just as 1 am sure there was some

April 19, 1977
Oral Questions
perfectly good reason to justify its change of position on controls. I would like to develop some confidence in the government and the budget, and I would like the minister to give me that encouragement.


Donald Stovel Macdonald: Mr. Speaker, 1 would be interested to know the quotation on which the hon. member is basing his argument. I would be glad to explain it to him, and indeed many other things.


Steve Eugene Paproski: You may not have that chance. Chretien will probably take over as the next Minister of Finance.


ROYAL CANADIAN MOUNTED POLICE
Mr. Bcnno Friesen (Surrey-White Rock):: Mr. Speaker, my question is to the Solicitor General to whom I sent notice some days ago. I realize that it is not customary to give precise details regarding investigations that are in progress, but I would like to ask the minister whether he would confirm that the RCMP are investigating alleged illegalities involving the operations of the Bank of Montreal in Vancouver as they have affected a constituent of mine, Mr. Larry McHale?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, the RCMP commercial crime section in Vancouver are presently investigating this matter to determine if any criminal charges are warranted against any of the parties involved.


Benno Friesen: Mr. Speaker, will the minister give assurance that all aspects of this case and related ones are being checked, and will the minister in due course inform me privately or better yet, make a full report in the House?


HOUSING
Mr. Jacques Lavoie (Hochelaga):: Mr. Speaker, I want to thank the government members for their welcome. They must not rejoice too soon about the possible effect of some remarks.
Mr. Speaker, my question is directed to the Minister of State for Urban Affairs. As the last Quebec government budget provided nothing for housing and in particular for non-profit corporations-and here I refer to section 44(1 )b) of the National Housing Act-can the minister tell the House whether he has considered other means to counter the refusal of the Quebec government to non-profit organizations to renovate and rent housing according to citizens' means? At the present time it is impossible for those corporations to rent accommodation at a cost commensurate with the means of
[Mr. Stanfield.)
low-income workers and elderly people, especially in Hochelaga-Maisonneuve.


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, 1 well understand the hon. member's disappointment, and I am quite willing to work with him to allay both his frustrations and disappointment.


ALLEGED CEILING ON SPENDING AND RRAP PROGRAM IN NOVA SCOTIA-GOVERNMENT ACTION
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the minister in charge of housing, further to a question I posed on April 6 regarding the urgent necessity for more funding under the residential rehabilitation assistance program in the province of Nova Scotia. At that time the parliamentary secretary to the minister very kindly advised that funding had been increased to $107 million. May I ask the minister if he is aware that, despite this increase in funding, the municipalities concerned have been advised that a ceiling has been placed on that spending, and can we look forward to any relief in this very serious situation?


André Ouellet: Mr. Speaker, it is obvious that RRAP is one of the most popular programs in Canada and that it will be impossible this year, like last year as a matter of fact, to answer all applications from all municipalities of the country. I sympathize with the hon. member. I know we would have liked to give much more money for residential rehabilitation. Unfortunately, budgetary constraints make it impossible to carry out within a single year all residential repairs in Canada. This program will be extended over a number of years. We hope to get through that program within the next five or six years, but obviously Canadian municipalities will have to be a little patient about the full completion of the program.


Robert Muir: I would like to join the minister in agreeing that it is a very good program. Is the minister also aware of the fact that as a result of this ceiling mentioned in his explanations many applicants will be deprived of the benefits of this extremely good program, and will he give consideration to those who have already put in their applications rather than cutting them off since they had expected to receive assistance?
[ Translation]


André Ouellet: Mr. Speaker, there is no doubt that people must not be deprived of that program. If, unfortunately, those who submitted applications did not get a positive answer this year, nothing prevents them from hoping that next year their applications will be accepted. It is up to the municipalities to set up a monitoring system for this program and I will certainly be glad to acquaint the municipalities with the suggestion made by the hon. member. I think that the munici-
April 19, 1977

palities themselves must set the order of priorities and the way to receive and process the applications.


INCOME TAX
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, may I direct a question to the Minister of Finance arising out of the Prime Minister's statement last night that the present situation in Canada provides an opportunity for the west to get a better deal. In view of the fact that the western provinces depend for a considerable part of their revenue on the production of raw materials and energy supplies, may I ask the minister whether, in order to assure the country that the Prime Minister's statement is more than political rhetoric, it is the government's intention to change the legislation which at present stipulates that a corporation which pays royalties to a provincial government cannot deduct those expenses as an income tax item, whereas royalties paid to a private corporation such as Canadian Pacific Railways, can be deducted from income tax payments?


Donald Stovel Macdonald: I think I would like to look at the technical difference involved in the hon. gentleman's question. 1 will be happy to do so.


ADMINISTRATION OF JUSTICE
Thomas Clement (Tommy) Douglas: Mr. Speaker, my next question is directed either to the Acting Prime Minister or to the Minister of Justice. In view of the fact that it has always been considered the right of the provincial governments to collect economic rent, particularly in western Canada, and in view of the fact that the federal government has become an intervenor with the potash and oil companies against the Province of Saskatchewan in the matter of that province collecting a fair return for the resources which belong to the people of the province, is the federal government, in order to give some meaning to the Prime Minister's statement last night, prepared to withdraw as an intervenor in the court case in which it is aligned with the oil and potash companies?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, we are aligned neither with one nor the other party to the action. We are in front of the court in the name of the Attorney General of Canada in order to put important constitutional points of view to the court.
Oral Questions TRANSPORT


FREIGHT RATES-REVIEW OF STRUCTURE TO ELIMINATE ANOMALIES-GOVERNMENT POSITION
Thomas Clement (Tommy) Douglas: As a
matter of fact you are more than an observer, you are an intervenor on the side of the potash companies.
May I put my next question to the Acting Prime Minister. In view of the Prime Minister's statement last night that the west is now to get a better deal, and in view of the fact that freight rates in this country for decades have discriminated against the western provinces and the Atlantic provinces, is the federal government prepared to set up the necessary machinery to review the freight rate structure and to remove these anomalies and this discrimination against certain areas of Canada?


Allan Joseph MacEachen: Mr. Speaker, it is certainly the objective of the government of Canada to eliminate any discriminatory features in the freight rate structure. But the bill that is before the House, which the hon. member's leader wishes us to withdraw, does make a contribution to the resolution of certain difficulties in the transport field affecting western Canada and the Atlantic provinces.


Some hon. Members:: Hear, hear!


POST OFFICE
Mr. Cecil Smith (Churchill):: Mr. Speaker, my question is for the Postmaster General. Advertisements in national newspapers, plus 1,200 letters mailed to businessmen in Winnipeg, state that if a parcel is delivered to the Winnipeg post office by six p.m. it will be delivered to any post office south of Lynn Lake the next day. This is false advertising and 1 would like the minister to take immediate steps to have it withdrawn for the simple reason that there are 30 post offices within the Churchill constituency which do not qualify for this service.


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, I am pleased that the hon. gentleman has drawn the attention of the public to the very worthwhile initiative commenced by the Winnipeg post office. We are very pleased with the experiment that is being conducted. It may well be that the hon. gentleman may know of some exceptional instance where a particular guarantee has not been met-


Some hon. Members:: Oh, oh!


Mr. Blais:: -which in effect proves the worthwhile nature of the program.


Cecil Morris Smith: My supplementary question is again to the Postmaster General. If he feels that 30 post offices south of Lynn Lake in the Churchill constituency are insignificant or

April 19, 1977
Oral Questions
that they are guinea pigs on whom he is trying out this experiment, I would ask him to deal directly with the people concerned and not put out false advertising such as this. The Minister of Consumer and Corporate Affairs should be involved in this because it is false advertising.


Some hon. Members:: Hear, hear!


REQUEST FOR DOOR-TO-DOOR DELIVERY IN DALHOUSIE, NEW BRUNSWICK
Mr. Maurice Harquail (Restigouche):: Mr. Speaker, my question is for the Postmaster General and it has to do with the door-to-door postal delivery service in the town of Dalhou-sie. Would the Postmaster General inform the House whether he has apprised himself of the details from the files of his predecessor indicating that people in that town are suffering a hardship and could be assisted in this situation-


Mr. Speaker:: Order, please. Such an inquiry should surely be pursued privately.


Steve Eugene Paproski: Or in caucus.

[ Translation}


UNEMPLOYMENT INSURANCE
Mr. C. A. Gauthier (Roberval):: Mr. Speaker, 1 have a question for the Minister of Manpower and Immigration.
My question deals with the pensioners who have obtained the refund of their unemployment insurance benefits following a decision delivered by Mr. Justice Addy on November 19, 1976. Could the minister tell the House whether he has come to a decision concerning those who have drawn pensions in Quebec and who are presently denied the refund of these benefits?


Hon. Bud Cullen (Minister of Manpower and Immigration):: Yes, Mr. Speaker, that decision was in fact the subject of a press release on February 14 of this year in which I indicated that the money would be paid to the 600 appellants. Those who are in the same category but who have not appealed would receive payments until such time as they began to receive the Quebec pension plan or the Canada Pension Plan.


Charles-Arthur Gauthier: Mr. Speaker, 1 have a suplemen-tary question.
Is the minister aware of the fact that it is the government which has misled these pensioners, for it is following the government decision that they reported to the Quebec pension plan commission. Without that decision, they would never have applied for benefits from the Quebec pension plan commission. I ask the minister whether he realizes that as a result
of government action 90 per cent of the pensioners are most unfairly deprived of their benefits.


COMMUNICATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, my question is to the Minister of Communications. In view of the traumatic experience of the minister's meeting with her counterparts in Edmonton a few weeks ago and being in Winnipeg last night where she was exposed to that performance, I wonder if the minister could tell the House how she intends to proceed now with regard to the discussions she is having with her provincial counterparts about the changes they suggested to her with regard to Bill C-43, whether there will be changes to Bill C-43 before the debate proceeds or whether she will be meeting with the ministers before we have the debate.


Hon. Jeanne Sauve (Minister of Communications):: Mr. Speaker, the only traumatic experience I had in Edmonton is that this meeting worked so well that it sets a precedent. The reason for this success is certainly that the bill the hon. member was referring to has been given a favourable reception by the ministers who attended the meeting. We have considered the broad aspects of this legislation. Provincial officials have since met their counterparts of the Department of Communications to agree on an exact interpretation of the law. I said I was quite prepared to accept amendments if some ministers felt the bill should be amended, but so far there has been no representation for changes from the ministers, which does not mean that some of them are not going to make some suggestions about it.


John Patrick (Pat) Nowlan: Yes, Mr. Speaker, there was agreement. I know the minister did meet in a different atmosphere and that the agreement was to meet sometime in the future. Specifically, does the minister contemplate defining in any way her power of delegation to the provinces, and could that power involve a situation where the provinces themselves could in effect license and regulate the cable industry?


Jeanne Sauvé: Mr. Speaker, clause 9 is quite explicit in that it does authorize the Governor in Council to delegate authority to the provinces. It does not say anything on the kind of delegation which could be done. However, it is obvious that this could be done following collective negotiations with the provinces if they agree to have delegation in the same sectors. But delegation could also be done bilaterally and agreements could vary from one province to another.

April 19, 1977


PRIVILEGE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, I wish to raise what 1 consider to be a matter of privilege stemming from statements by the Minister of Manpower and Immigration (Mr. Cullen) concerning the withholding of unemployment insurance benefits from people who were over 65 and those who were on dependency benefits at the time of the implementation of Bill C-69 on January 1, 1976. I feel I was deliberately misled by responses from the minister to questions I raised both in this House and in the committee, and that the misleading nature of the minister's statements seriously interfered not only with my capacity to act as a member of parliament but also with the work of all other members of parliament both in this House and more specifically in the Standing Committee on Labour, Manpower and immigration.
My concern in this regard arises from the following incidents. I was very concerned about the fact that 18,000 people over age 65 were having certain benefits withheld from them by the Unemployment Insurance Commission, because I felt the commission had the authority to make the necessary payments. Because of this concern 1 raised a question in the House on April 5, 1977, which is recorded at page 4643 of Hansard. 1 will read the question and the minister's response. The question was as follows:
Mr. Speaker, my question is directed to the minister responsible for unemployment. In view of the fact that 18,000 people were unjustly disentitled from unemployment insurance benefits because they were over the age of 65 when Bill C-69 came into effect, and in view of the fact that the minister told this House on February 10 that he was satisfied with information from the Department of Justice that it would not be necessary to amend the Unemployment Insurance Act in order for these people to be paid the money owing to them, could the minister tell the House why his department is now refusing to make those payments?
The minister replied as follows:
Mr. Speaker, as I have indicated, given the numbers to which the hon. member has referred, it did seem appropriate to take, as we did take, the necessary step of contacting the individuals personally to see whether they do in fact qualify. Justice indicated that we had the authority, but so that there will be no doubt we propose to suggest an amendment at the committee stage of the bill.
The minister indicated clearly in that statement that he had been informed by the Department of Justice that his department did, indeed, have the authority to make the necessary payments. In order to clear up the matter further, I asked the following supplementary question:
A supplementary question, Mr. Speaker. In view of the fact that when these people do go to their local office and apply for benefits they are being told by officers of the minister's department that an amendment must be made to the Unemployment Insurance Act, would the minister promise the House that he will inform the minions in the local offices that they are to process the applications of these people so they can obtain their benefits?
Unfortunately, the minister refused to answer that question then, so I elected to pursue the matter further in the Standing Committee on Labour, Manpower and Immigration which was dealing with the estimates of the minister's department with respect to the U1C. A meeting was held that very afternoon at
Privilege-Mr. Rodriguez
3.30, and I was there. I would like to read the Minutes of an exchange which took place in that committee at page 11:6. I put the same questions to the minister in the committee as follows:
Madam Chairman, 1 want to start off by following up a question I asked the minister in the House today with respect to those 18,000 people aged 65 who were collecting unemployment insurance benefits at the time C-69 came into effect in January of 1976. The minister told us in the House that from the advice he has gotten from the Department of Justice there is no need for any amendments to the Unemployment Insurance Act for those people to get what is justly theirs and what the courts ruled is theirs. Now, in the local offices they are being told-and I had a case just last week-it is a lot of B.S., that an amendment has to be made to the act and this decision is going to be pending, et cetera, blah, blah, ad nauseam.
Can the minister clarify this matter so that information can be given to these people?
This is what the minister replied:
Yes, the original advice that we had, from Justice, Mr. Rodriguez, was to the effect that we in fact did not need an amendment to C-27 but in the interests of caution, I guess, for want of a better word, and so that it was not open to challenge, there was a feeling that we should in fact look to an amendment at the committee stage of the bill. I understand, and 1 just got this information today, that Justice have since fortified their original decision, namely, that we do not need an amendment to the bill, so that we can proceed, notwithstanding whether 1 do or do not choose to move an amendment at the committee stage.
I followed with another question which was as follows:
So, Madam Chairman, can the minister give me and the committee the assurance that the local offices will be informed to process these applications rather than putting them off any further?
This was the minister's answer:
1 will ask Mr. Charlebois to comment on the logistics of it, Mr. Rodriguez.
Mr, J. Y. C. Charlebois, deputy executive director of the Unemployment Insurance Commission, got into the act and said:
Madam Chairman, what the minister has just indicated to the committee was information that was given to us just yesterday so the instructions that were given to the field a few weeks ago will have to be changed. This has not been done yet and we will make sure that instructions are issued as soon as possible so that the claims that are being reviewed can be processed right away.
The statements of the minister were clear and not at all open to interpretation. He said in the House of Commons that the Department of Justice indicated that he had the authority to make the payments to the 18,000 people 1 referred to in my questions. That afternoon he told me and the other members of the Standing Committee on Labour, Manpower and Immigration that on that very day the Department of Justice had fortified its original decision, which was as follows:
Namely, that we do not need an amendment to the bill, so that we can proceed, notwithstanding whether 1 do or do not choose to move an amendment at committee stage.
The minister's statements are crystal clear, Mr. Speaker. There is also no question in my mind that what is involved is not a slip of the tongue, considering the fact that the minister had received such information that very day and that it was supported in the committee by top officials-not the little third-class and fourth-class echelon people, but the top officials of his department who were there to advise him.

April 19, 1977
Privilege-Mr. Rodriguez
Acting on the basis of information the minister supplied to me, 1 spoke to members of the press and to individuals in my riding, as well as to those who were advocating the cause of these people and were actively working on this matter. 1 informed them of the minister's exact words which indicated that these people would soon be receiving their payments. Two days later, on Thursday, April 7, I received a letter from the minister. The letter had not been signed, but had been forwarded to me in that condition by the senior assistant deputy minister, Mr. J. L. Manion. The letter reads as follows:
Dear Mr. Rodriguez:
I am writing in connection with the questions you raised in the House and in the standing committee on Tuesday, April 5, 1977, regarding claimants aged 65 and over and claimants eligible for the dependency rate of benefit who were affected by Bill C-69. Your concern was whether we needed to amend the Unemployment Insurance Act in order to make payments to these claimants. I feel that the remarks that I and my officials made may not have left the correct impression and I therefore wish to clarify the facts of the situation.
There are three points, Mr. Speaker. The second point is extremely important and I should like to read it into the record. The second point in the minister's unsigned letter reads as follows:
We received legal advice to the effect that an amendment to the Unemployment Insurance Act was required to implement our decision to pay the claimants who did not appeal but who were in the same position as the appellants. An amendment is contained in clause 48 of Bill C-27 to clarify the commission's powers to reconsider claims. It would be our intention to use the amended authority in C-27 to make the payments to the claimants who did not appeal, subject to final legal confirmation that the amended section can be applied retroactively. If not, a further redrafting of the amendment would be proposed to ensure its applicability to the claimants in question.
Mr. Speaker, first of all, in the House the minister said that the Department of Justice told him that he had the authority to pay. Just yesterday in the committee he said that the department had fortified the decision and that an amendment was not needed in order to pay. In his letter to me two days after the committee appearance, when he found he could not contact me by telephone, in point No. 2 of his letter he said that he needed authority to make retroactive payments. That letter contradicts the minister's statements in the House and in committee, Mr. Speaker. It is not a matter of remarks having left the correct impression; it is a matter of complete contradiction in two statements.
1 believe the minister is deliberately misleading myself and the House in one or both of these statements. On one day we are told that the minister has just received information from the Department of Justice indicating that it is reaffirming its position that payments can be made. Two days later he says exactly the opposite. In that time myself and other members of the House, acting on the basis of the minister's original statements, gave out information which may well be inaccurate. This clearly interferes with the effective work of members of parliament.
If it is the case that the first statements were accurate and the second statements were false, then the minister is deliberately misrepresenting advice given him by the Department of Justice-I suspect, in order to bring pressure to bear on members of parliament to support and cause to pass quickly a piece of legislation they would otherwise oppose, the legislation
[Mr. Rodriguez.)
being Bill C-27 which contains certain amendments to which members are obviously opposed.
Mr. Speaker, either one or other of the statements of the Minister of Manpower and Immigration (Mr. Cullen) was misleading, and 1 believe deliberately so. In either case, my work as a member of parliament has been interfered with. If Your Honour should find that I have a question of privilege, I would move that the matter be referred to the Standing Committee on Privileges and Elections.


Mr. Andre Fortin (Lotbiniere):: Mr. Speaker, just a few brief but to the point remarks in favour of the question of privilege raised by the hon. gentleman who has just spoken. Like many other members of the House, 1 have been misled by the minister in charge of the Unemployment Insurance Commission.
Mr. Speaker, what the hon. member said is absolutely true. Like some of my colleagues, ! did inform my constituents of their possible eligibility for unemployment insurance even though they had received benefits from the Quebec Pension Board.
Earlier on during the question period, the minister replied to my colleague from Roberval (Mr. Gauthier) that there was no such problem. It so happens that a while ago, I do not wish to name names for the moment, 1 myself met with high officials of his department about the payment of benefits to those who had already received benefits from the Quebec Pension Board. The minister insists on saying that these benefits are payable to these persons while it is simply not so. The minister would like us to believe-like the previous speaker said-that we would have to amend the Unemployment Insurance Act while he knows perfectly well that it would also take an agreement of sorts with the Quebec Pension Board for these hundreds upon hundreds of applicants to receive the benefits to which they are entitled.
Mr. Speaker, I support wholeheartedly the motion introduced by my colleague of the New Democratic Party (Mr. Rodriguez). It is a fundamental fight. These people have been misled by officials of the Unemployment Insurance Commission. I might add that even after the minister's declaration in the House, the Unemployment Insurance Commission in Montreal still refused to pay these benefits and certain cases were brought before a board of referees; I will also add that the Montreal beneficiaries have all won out against the Unemployment Insurance Commission. But never mind, the Commission keeps on refusing to pay even though the minister declared in the House and to the Chair that he himself was in favour of it. But we all know that in fact it is not so and members of the House were misled and gave false information to their constituents. It is a fundamental point which warrants serious consideration by the minister to solve this imbroglio once and for all.


Jack Sydney George (Bud) Cullen: Mr. Speaker, 1 welcome this opportunity to comment on the
April 19, 1977

question of privilege raised by the hon. member. On February 14 a press release was issued indicating that we did require legal authority in order to make the payments to those individuals who had not filed an appeal. It seemed to me, however, that given the decision made by Mr. Justice Addy affecting some 600 claimants, we should look into their claims, that we should compensate them without the need of appealing, and that we would be in a position to do the same with those who had gone ahead and had received their Quebec pension and their Canada pension. That was the information I received from the Department of Justice in the first instance.
The question has been raised in the House on a number of occasions and it has been raised in two ways. First, the leader of the Social Credit party raised the issue that members of my department or members of the Unemployment Insurance Commission had advised individuals that they would not be entitled to receive their unemployment insurance after January 1 in accordance with the legislation. That was the intention of the legislation. When those officials gave that information they were describing the bill as it was intended and as it was understood in this House. The question has been raised in the House on a number of occasions of whether the Unemployment Insurance Commission has the legal authority to make payment to claimants 65 years of age and over and claimants eligible for the dependency rate of benefit who were affected by Bill C-69.
More specifically, the question has been raised as to whether an amendment is required to the existing unemployment insurance legislation and/or to bill C-27 to make payments. I regret that some of the statements I have made on the subject may inadvertently have left an erroneous impression. I wish, therefore, to clarify the situation. The facts are as follows. First, the commission had the legal authority to make payments to the claimants who appealed. There were approximately 600. The amounts owing to these claimants have been determined and paid. Second, not being content with that and wishing to go the second mile and provide equity to those who had not filed an appeal but who had made application for the Quebec Pension Plan or the Canada Pension Plan, we sought, and received, iegal advice to the effect that an amendment to the Unemployment Insurance Act was required to implement our decision to pay the claimants who did not appeal but who were in the same position as the appellants.
An amendment is contained in clause 48 of Bill C-27, to clarify the commission's powers to reconsider claims. It would be our intention to use the amended authority in Bill C-27 to make the payments to claimants who did not appeal, subject to final legal confirmation that the amended section can be applied retroactively. Therefore, we had to consult the Department of Justice on two questions of law. We needed to know this: Did we need an amendment? If so, was the amendment contained in the bill sufficient and would it apply retroactively? If it did not, redrafting of the amendment would be proposed to ensure its applicability to the claimants in question.
Privilege-Mr. Rodriguez
Third, in the meantime the commission contacted the individuals affected and reviewed their claims in an effort to ascertain the amounts which will be paid to those who qualify after clause 48 comes into force. In this connection 1 might mention that it would be our intent to implement this change as soon as possible after royal assent of Bill C-27 in order that payments could be effected expeditiously. Finally, the decision rendered by the umpire of the Federal Court is to the effect that our authority to pay claimants aged 65 and over is limited by the provisions of the Unemployment Insurance Act before they were amended by Bill C-69. This means that we only have legal authority to pay these claimants until such time as their Canada Pension Plan or Quebec Pension Plan becomes payable.
Considering the answers which have been given in the House-the hon. member suggested that there was a deliberate attempt to mislead, but I suggest it was not deliberate- and to make certain that he was getting the correct advice, I authorized my officials, without seeing the letter, to write to him and give him the correct picture which I have given him today. There was no intent to mislead, and if the hon. member was led to do some extracurricular work, I am sorry. The individuals involved have been contacted by the commission.


Lincoln MacCauley Alexander: Mr. Speaker, I rise on a point of order. I did not wish to intervene in the exchange between the hon. member for Nickel Belt (Mr. Rodriguez) and the Minister of Manpower and Immigration (Mr. Cullen), and I am not saying that what happened was deliberate; perhaps it arose because of the complexity of the act. It seems to me, if I heard the minister correctly, that he spoke of an amendment contained within the confines of Bill C-27. I am thinking specifically of clause 48. It seems to me that if the minister were prepared to sever the bill, to introduce clause 48 separately, that part of the bill could be given speedy passage and justice would be done. We took a dim view in the First instance of the minister's callous disregard of senior citizens, a disregard shown when they were cut off from unemployment insurance. We were adamant in our opposition to the minister's position in that regard.
The minister may wish speedy passage of Bill C-27, but we do not know what is happening on the other side of the House. We know that some sort of sweetheart deal is being cooked up. I understand well that the minister faces difficulties on his side of the House. To be honest, we face certain difficulties on my side of the House, too. Unfortunately, the minister cannot say when this bill will be given clause by clause study, when it will be introduced for report stage, when it will be given third reading, or even if the bill as presently drafted will ever pass.
We want to be charitable to the minister and get him off this awful hook. Please bear in mind that we did not like what the minister did originally. I know this is a strange point of order, Mr. Speaker. At the same time, let me say that I wish to bring some relief to my poor, dear, frustrated friend, the Minister of Manpower and Immigration, with respect to unemployment insurance. I will go out on a limb and say that we, on my side of the House, will give speedy passsage to the
4766

April 19, 1977
Privilege-Mr. Rodriguez
provisions of clause 48-I have not looked at it-provided it deals only with the plight those now 65 years and over face. Will the minister consider bringing in separately the amendment to the Unemployment Insurance Act contained in clause 48 so that we can provide equity and justice to those who have been unfairly dealt with?


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I appreciate the point the hon. member for Hamilton West (Mr. Alexander) has raised, namely, that a way should be found to solve the problem itself. But I think it is fantastic to imagine that the passage of one clause of the bill which is not in committee will result in the speedy passage of a complicated bill in which many other clauses present difficulty. Perhaps the question could be solved with a special bill dealing with this point only. We would be prepared to go along with that.
Let me point out, Mr. Speaker, that that was not the question of privilege raised by the hon. member for Nickel Belt (Mr. Rodriguez). His point was that in clear language he was given by the minister two statements which were directly opposed to each other. The minister cannot get around it by saying that my hon. friend has had to do some extracurricular work, that he has to read certain material, and so on. The plain fact of the matter is that the answers given to the hon. member for Nickel Belt, and to the whole committee, were clearly in one direction and so fortified, signed, sealed and delivered. A few days later, after my hon. friend and others had acted on that information, the hon. member for Nickel Belt received a letter saying the direct opposite. How can members of parliament carry out their functions if they are treated this way by ministers?
If the minister now admits that he has made a mistake, the least he should do is apologize to the hon. member for Nickel Belt for having misled him on one occasion or the other.


John R. Rodriguez: Resign.


Stanley Howard Knowles: I emphasize that the issue before us is not the question of these people getting, or not getting, their unemployment insurance benefits. The question of privilege-and it is pretty close to a genuine question-is that the hon. member for Nickel Belt has definitely been interfered with in doing his duty as a member of parliament owing to the contradictory statements given to him by the Minister of Manpower and Immigration (Mr. Cullen).


Mr. Speaker:: Order please. The hon. member for Nickel Belt (Mr. Rodriguez) yesterday gave the Chair notice of his intention to raise a question of privilege, and yesterday indicated to the House that because of the minister's unavoidable absence he would prefer to hold the question over until today or when the minister could be present.
The preliminary question for the Chair always to decide is whether the motion or matter put forward by way of a proposed question of privilege is one which enjoys that special status which gives it precedence over any other matter before the House. If it has that special status, other business is set aside and the question put forward by the hon. member takes

precedence over other business of the House and must be considered by the House before it considers any other business.
The hon. member for Nickel Belt has certainly raised a serious grievance, obviously supported by the evidence he put forward in the House today. His debate on the matter was most persuasive. On the other hand, in order to find that the matter enjoys that special status of a question of privilege it seems to me that two conditions must be met. First, if the minister in fact misled the hon. member-and certainly other hon. members have given that indication-the Chair would have to find that the misleading by the minister was deliberate. The second condition is on somewhat weaker ground. It relates only to a question of the form of the motion of the hon. member. That is to say, the motion asks that the matter be referred to the Standing Committee on Privileges and Elections. That, traditionally, has been held to be a form of motion too general to be accepted as a question of privilege because of the obvious problems of definition which would be put upon the shoulders of the committee if the motion were to succeed. I stress to hon. members of the House that I would not want to decide an important question of privilege on the basis only of the second ground, that is to say, on the basis of the form of the motion.
If, in fact, I thought that the matter were substantially correct and ought to have precedence over other matters, as questions of privilege certainly should have, I do not think I would allow a matter as important as that to fail on the grounds simply of form. However, I am more persuaded on the substantial ground, that is, whether the minister did in fact extend an apology to the member and other members who may have been misled by his answers. That is not the question for the Chair to decide. The question for the Chair to decide is whether, if the minister did, in fact, mislead members of the House, was his action in misleading members of the House of such a nature as to be a deliberate action and therefore one which affects the privileges of hon. members? If it was not a deliberate action on the part of the Minister, there are other remedies that lie in the hands of members.
If it is to be pursued by way of a question of privilege, I wish to stress again that in order to qualify as a question of privilege the Chair would have to find that not only had there been actions by the minister to mislead hon. members, but that those actions were calculated and deliberate by the minister for that purpose.
In the circumstances, the minister rose in his place. He explained the answers he had given. He indicated that if in fact hon. members were misled, that misleading was not a deliberate act on his part, but, in fact, was done in good faith on the strength of advice. Obviously, the Chair and the House must accept that explanation by the minister. Therefore, I cannot say, because I cannot find that any action on the part of the minister was deliberately calculated to mislead members, that the motion qualifies as a question of privilege within the definition as we know it.
April 19, 1977



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, I should like to table copies of references from the Anti-Inflation Board to the administrator with regard to the St. Boniface School Division, and M. and T. Products Limited.
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JUDGES ACT
Stanley Ronald Basford: for leave to introduce Bill C-50, to amend the Judges Act and other Acts in respect of judicial matters.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
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[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Hugh Poulin (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, the following questions will be answered today: 152, 772, 997, 1391, 1642, 1733, 1801, 1949, 2084, 2181, 2215 and 2240.


Mr. Orlikow: 1.	For the fiscal year 1975-1976, what contracts for professional services were let (a) for studies, surveys and analyses into present or future policies, programs or information analysis, and their efficiency and effectiveness (b) into the examination of the administration or internal operation of the Department of Communications?
2.	How much was committed on each contract and to whom?
3.	What were the comparable figures for the fiscal year 1973-1974?


Mr. Ross Milne (Parliamentary Secretary to Minister of Communications):: 1 (a) and 2.
1973-1974	1975-1976
(a)	484,175.27	312,080(b)	Nil	23,700
3.
Order Paper Questions
Item Number	Purpose of Contract	Contractor1.	Consulting services towards the analysis of extended Area Service as it relates to both local and toll rates and revenues and the collection and organization of telephone tariffs subscriber information, message, volumes and other relevant statistics.	S.F. Murby2.	The operational application of the National Policy and planning simulation model.	Claude Autin3.	To review the dependent and independent activities in the critical path program for the implementation program for interconnection of voice NNAD devices to the public switched network.	Tele-connect Ltd.4.	Development of an effective project management method for the control of performance time and cost of the Spectrum Management System.	Designetics International Inc.5.	To assist DOC in providing their input to an Inter-Departmental Committee responsible for recommerding to senior federal department officials, a policy with respect to the proposed development of a computer/communications system for health care systems in Prince Edward Island.	Bureau of Management Consulting/ DSS6.	To establish methodology guidelines for the development of spectrum utilization policy in the Department of Communications.	Bureau of Management Consulting/ DSS7.	To develop procedures for the coding of input and amendment forms used in the IRLS.	Maxiplans unlimited8.	A comprehensive state-of-the art report on Computer Conferencing.	General Conferencing Systems Ltd.9.	Operational Application of the "National Policy and Planning Simulation (NPPS) ModeP' for Communications, to issue currently influencing communications policy.	Sores Inc.10.	Operational Application of the "National Policy and Planning Simulation (NPPS) Model" for Communications, to issue currently influencing communications policy.	Laval University11.	Analysis of the spillover of U.S. Television Advertising into Canada.	Donner & Lazar Research Associates12.	Study to collect and analyze data on Children's Television viewing.	Nostbakken Consultants
Amount
23,250
4.000
31,200
14,850
4.000
15.000 6,750 6,500
95.000
25,930
24,100
2.000
80012-2 3V2

April 19, 1977
Order Paper Questions
Item Number	Purpose of Contract	Contractor13.	To outline the range of possible retaliatory meaures that are being considered by the American government and regulatory agencies because of CRTC's general implementation of the commercial deletion policy which limits U.S. advertising on Canadian cable television system.	Gerald Kline14.	To undertake a study of the programming potential of FM subcarriers with respect to the maximum utilization of the FM broadcast spectrum and to prepare a report.	David B. Gillick15.	To advise on preparation of National Communications Act.	H.O.R. Hindley16.	Co-ordinating, planning and organizing the work of the Canadian CCIR consisting of thirteen study groups covering the various technical aspects of CCIR activities.	W.A.C. Schultz17.	To develop a "Request for Proposal" (RFP) system for the preparation of policy research and evaluation submission to the Social Policy and Programs Branch.	Com/sult Group Inc. Brian Segal18.	To develop forecasting methodology for the multi-period Accounting Model incorporated in the Department's national policy and planning simulation model. To conceptualize the possible linkages between forecasting in the context of Multi-period accounting analysis and goal programming.	J.C. Young19.	To provide advice to the Department of Communications, Pacific Region in the development of a spectrum visage plan for 1985.	Cantel Engineering Associates Ltd.1 (b) and 2.	1.	To analyse the organization and the operation of the Department of Communications' administrative services.	Bureau of Management Consulting/ DSS2.	Prepare flow charts of the current operations of the Telecommunication System and Management Branch. Assist in the development of a long range plan for the mechanization of GTA work processes, and to develop management guides to TSMB.	Maxiplans unlimited3.	To conduct a general study of the Technical Systems Management Branch of the Government Telecommunications Agency on behalf of DMC.	Maxiplans unlimited
Amount
4,800


Mr. Munro (Esquimalt-Saanich): 1.	Was Mr. Jean Charpentier appointed as a member of the staff of Treasury Board and, if so (a) on what date (b) at what level (c) in what capacity (d) was it by open competition and, if not, by what means (e) what were his qualifications (0 what was his (i) starting salary (ii) salary following his probational period?
2.	Was Mr. Charpentier appointed to fill a (a) Public Service vacancy (b) post that had just been created and, if so (i) what were his duties (ii) what was the job qualification?
3.	Is Mr. Charpentier presently employed in a Treasury Board function and, if not (a) where is he now serving (b) what is his present status vis-a-vis the Public Service (c) what is his classification (d) what are his duties (e) what is his salary?


Hon. Robert K. Andras (President of the Treasury Board):: 1.
5.000	Yes. In the Temporary Assignment Pool, (a) August 3, 1976; (b) Senior Executive Officer Level 1; (c) Policy Adviser; (d)
5.000	Yes. (e) The temporary assignment pool is composed of senior executives trained and experienced in disciplines related to the various aspects of policy formulation and implementation for the Government of Canada. Mr. Charpentier's academic training and broad experience in communications and personal
27,500 abilities meet these qualifications. (0 (i) S27,500-536,500; (ii) Not applicable.
2. (a) Yes. (b) Not applicable.
4 200	3. No. (a) Prime Minister's Office; (b) public servant; (c)
senior executive officer level 1; (d) press secretary; (e) $27,500-$36,500.


Mr. Howie: 
Mr. Howie: 1.	Was there an interruption of service at the Fredericton, New Brunswick, Post Office on Monday, December 13, 1976 and, if so (a) what was its nature (b) how long did it last?
2.	Has the cause of the interruption been resolved and, if so, in what manner?
Order Paper Questions
26 and $750 million under Section 28 of the Export Development Act. Any losses that occur under the self-insurance approach are charged to the respective Parliamentary appropriations in the year in which the loss is paid or the repair is made. The year of payment or repair may therefore differ from the year of loss.


Hon.   J.-J. Blais@Postmaster General: 1. (a) At the Fredericton, N.B. Post Office on December 13, 1976, 22 letter carriers and three supervisory letter carriers applied for sick leave and left the office, (b) The interruption was for a single day, December 13, 1976.
2. This type of work stoppage is known as a sick out and jurisprudence in such cases has been well established. In the absence of concrete proof that employees are not sick, management cannot deny sick leave. Since that incident, several meetings to attempt resolution of problems have been held and a number of joint problem-solving meetings have changed the atmosphere from one of confrontation to problem-solving.


Mr. Herbert: Has the government agreed to assume contingent liability for all forms of insurance coverage and, if so, in what amount?


Robert Knight Andras: The policy of the government is still to act as its own insurer. Over the years certain exceptions have been made to this policy as follows: (a) insurance is placed on the Supreme Court Library due to the value of the books; (b) insurance is placed on steam boilers in government buildings, operated and controlled by the Department of National Defence, in order to secure safety inspection services; (c) the Department of External Affairs insures all crown-owned vehicles operated at Canadian posts abroad; (d) the Department of National Revenue places value declarations on outgoing shipments of duty stamps and bonded manufacturers. Further to this the government is the insurer under two programs, namely: (i) up to an aggregate amount of $250,000,000 of loans made by private lenders under the Adjustment Assistance Program, and (ii) up to $2,000,000 in respect of certain contributions under the Grains and Oilseeds Program. Central Mortgage and Housing Corporation is authorized to provide insurance for various purposes under Section 12 of the National Housing Act up to an aggregate of $25 billion and the Export Development Corporation may insure loans up to an aggregate of $750 million under Section


Mr. Herbert: 1.	Have any discussions taken place, or are any in progress or projected, concerning government participation in any sewage treatment projects on the Island of Montreal?
2.	Under what terms would there be federal financial participation in such projects and would any agreement include forgiveness of a part of the loan principal and/or interest?
3.	Is there a limit in enabling legislation on the amount of any such participation in time or amount?


André Ouellet: am advised that the following applies with respect to Central Mortgage and Housing Corporation: 1. Yes; a sewage treatment project is currently in progress on the Island of Montreal, with CMHC participation in the form of loans and grants.
2.	Federal assistance for sewage treatment projects is provided under Part VIII of the National Housing Act in the form of a loan, not exceeding two-thirds of the eligible cost of the project as determined by CMHC, or a grant of up to 25 per cent of the amount of the maximum loan that could have been made on the project, if the financing is obtained elsewhere. In the case of a loan, 25 per cent of the principal amount of the loan, and 25 per cent of the interest that has accrued in respect of the loan advanced as of the completion date of the project, are forgiven.
3.	No.


Mr. Clarke: During the period June 1976 through November 1976, were eight dental chairs purchased by regional offices of the Department of Supply and Services, and fifty-one dental chairs purchased as part of complete dental operating equipment set-ups by head office in Ottawa and, if so, in each case (a) what was the date of each contract to supply (b) what was the number of chairs (c) what was the price of the chairs (d) what was the name of the successful bidder (e) what was the total number of bids obtained (f) was the low bid accepted?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Yes.
(a)	(b)	(c)	(d)	(e)	(0Date of Contract	Number of Chairs	Price	Name of successful Bidder	Number of Bids obtained	Was the low Bid acceptedJuly 15, 1976	Two portable	$500 each	Depot Dentaire Canada Ltd. Montreal, Quebec	Two	YesSeptember 1, 1976	One portable	$490 each	D. E. Wahler Saskatoon, Sask.	One (1) Sole Source	Not applicable
April 19, 1977
Order Paper Questions
(a)	(b)	(c)	(d)	(e)	(0Date of Contract	Number of Chairs	Price	Name of successful Bidder	Number of Bids obtained	Was the low Bid acceptedSeptember 30 1976	Four	1 <& $2,556; 3 <& $4,145. Complete dental operating equipment set-up including chairs	D. E. Wahler Saskatoon, Sask.	One Sole Source	Not applicableOctober 5 1976	One portable	$516 each	D. E. Wahler Saskatoon, Sask.	One Sole Source	Not applicableJune 2, 1976	51	$5,497 each. Complete dental operating equipment set-up including chairs	Ash Temple Toronto, Ontario	12	No The lowest priced bid did not meet the requirements.


Mr. Roy (Laval): 1.	During the fiscal year ending March 31 (a) 1974 (b) 1975 (c) 1976, did CMHC receive any demands for mortgages for the construction of new housing units and. if so, how many were (i) approved and for what amount (ii) refused?
2.	For the same years, how many contractors received loans and grants and what were the amounts in each case?


André Ouellet: am advised by Central Mortgage and Housing Corporation as follows: 1. (a), (b) and (c) (i) See following table, (ii) Data reflecting the number of applications for mortgages to finance the construction of new housing units, which were refused, are not readily available.
2.
Gross CMHC Loans Approved for New Housing Canada-1973-1976 Total	Builders' Loans
Year	Loans	Units	Hostel Beds	$000	Loans	Units	$0001973	7,495	27,902	3,235	458,843	5,630	5,630	106,3961974	12,364	30,475	5,020	654,471	9,029	9,031	219,8731975	17,677	45,437	4,797	1,188,357	13,618	13,618	390,1341976	3,278	23,333	2,818	621,079	1,654	1,654	52,925
Note: CMHC fiscal year is the calendar year.


Mr. Whiteway: 1.	With reference to the booklet entitled The Seal Hunt prepared by the Information Branch, Fisheries and Marine Services, Department of Fisheries and of the Environment (a) what department is M.C. Mercer employed in (b) what is the cost of each print appearing in the booklet by Mr. David Blackwood (c) were there prints purchased or paid for that did not appear in the booklet and, if so, what was the cost in each case (d) what was the total number of booklets printed (e) what was the (i) cost per booklet (ii) total cost?
2.	What criteria were used for distribution of the booklet i.e. request or promotional distribution by the Minister?
3.	As of the date that the answer to this question is prepared, how many booklets have been distributed?


Mr. Jim Fleming (Parliamentary Secretary to Minister of Fisheries and the Environment):: 1. (a) M. C. Mercer is a marine biologist employed as Program Adviser, Marine Mammals, Resource Services Directorate, Fisheries and Marine Service, Department of Fisheries and the Environment, (b) $1,000 was paid to artist David Blackwood for the use of all prints by him appearing in the booklet "The Seal Hunt", (c) No. (d) 100,000 English, 30,000 French, (e) (i) 26.9 cents; (ii) $35,000.

2. Distribution of the brochure "The Seal Hunt" has been designed to place it in the hands of elected representatives, the news media, and organizations and individuals genuinely interested in learning the facts about the seal hunt. Initial distribution of the booklet "The Seal Hunt" was made to the following:
	English	French
Members of Parliament and the Senate	400	400Members of Provincial Legislatures	1,500	300Parliamentary Press Gallery Fisheries and Marine Service Mailing	140	75List Fisheries and Marine Service offices,	3,000	600headquarters and regions	20,000	7,000Department of External Affairs	7,000	3,000Other Federal Government Offices	5,000	1,000Committee on Seals and Sealing	140	50Canadian Wildlife Federation	300	100Canadian Council on Animal Care	280	50Total	37,760	12,575
Sample copies were also forwarded to Provincial Departments of Education, from whom orders have been received to date totalling approximately 55,000 English and 6,000 French. Of these, 20,000 English have yet to be distributed. Further distribution has been primarily to respond to requests resulting from media publicity or to supplement quantities previously received.
3.	Number of copies distributed as of March 25, 1977, was 82,200 English and 26,112 French.


Mr. Fairweather: 1.	In (a) 1974 (b) 1975 (c) 1976, how many prosecutions were instituted for infractions under the Radio Act?
2.	Have any citizens band radio licenses been revoked during the past 3 years and, if so, how many in each year?


William Ross Milne: In so far as the Department of Communications is concerned: 1. (a) 19; (b) 16; (c) 7.
2. (a) 1; (b) 1; (c) None.


Mr. Cossitt: 1. What are the names, job designations and salaries of all persons employed by, on loan to or working in the office of the honourable Member for St.
April 19, 1977

Boniface since the date he was appointed Minister without Portfolio and up to the date the answer to this question is prepared?
2. In each case, what specific duties have any such persons carried out since the honourable Member joined the Cabinet?


Hon. Joseph-Philippe Guay (Minister without Portfolio):: 1.
Name
		Date of
Position	Salary	Appointment
C. Favreau C. Cardinal R. C. J. Smith J. E. Mullally
Special Assistant Private Secretary Special Assistant Special Assistant
up to $22,900 up to $17,900 up to $22,900 up to $22,900
3/11/76
16/3/77
14/1/77
Appointed 6/12/76 Terminated 15/3/77
2. Assist the Minister as directed by him.


Mr. Herbert: In each of the past five years, what was the value of construction work carried out by the Department of Veterans Affairs?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: 1972-73, $3,268,600; 1973-74, $3,433,546; 1974-75, $2,504,150; 1975-76, $2,629,405; 1976-77, $3,087,628.


Fabian Hugh Poulin: Mr. Speaker, would you be so kind as to call starred questions Nos. 1304 and 1991 ?


Mr. Dinsdale: 1.	Were Olympic souvenir stamp cases on sale for $3.25 (U.S. funds) at a Canada Post Office counter at the American Stamp Dealer's Association Exhibition held in New York City, November 19-21, 1976 and, if so (a) did the same case retail at $6.00 in Canada at that time (b) was the face value of the stamps in the case $5.15 Canadian funds (c) what was the reason for selling the case at a lower price at the exhibition (d) will Canadians be offered the opportunity to purchase these cases at a lower price and, if so, how many cases will be available for sale at a reduced price?
2.	On what date were the answers to these questions prepared?


Mr. Walter Smith (Parliamentary Secretary to Postmaster General):: Mr. Speaker, the answer is as follows: 1. Yes. (a) Yes. (b) No. The Olympic Souvenir Stamp Case contains $5 of Canadian stamps at face value. However, these stamps are affixed to a panel embedded in the lid of the case, (c) Faced with the prospect of an unsold inventory of the Olympic Souvenir Stamp Case, and since the Olympics Act does not authorize the sale of Olympic products beyond the 31 December 1976, it was decided to reduce the selling price of the case to $3.25 on sales of 2,000 or more units at one time. The cost
Order Paper Questions
of any surplus inventory would represent a direct expense against Olympic revenues and the sale of the remaining inventory of the case at a discount price was authorized in an effort to reduce this expense. The individual sale of the Olympic Souvenir Stamp Case at the special bulk discount price at the American Stamp Dealers' Association Exhibition in New York City was inadvertent.

(d) The answer is no. The Post Office will not be offering Canadians generally an opportunity to purchase cases at a lower price, since arrangements for the sale of the remaining inventory to a Canadian firm were completed in December 1976.

2. The Government takes responsibility for the answers it provides to questions and for the process involved in replying to such questions. It is not appropriate therefore to provide information about internal administrative arrangements.


Mr. O'Sullivan: 1.	Was a decision taken to charge the former Prime Minister and Right Honourable Member for Prince Albert $1.25 for each copy of the Canadian Bill of Rights issued to him in order that he might respond to requests from Canadian schools, students and other institutions and individuals and, if so (a) on what date (b) by whom (c) was there prior consultation with the (i) Minister of Supply and Services (ii) Prime Minister?
2.	Since publication of the decision, how many interested Canadians have contacted the Department of Supply and Services volunteering to pay in order that copies of the Bill of Rights might continue to be supplied to the former Prime Minister and Right Honourable Member for Prince Albert?
3.	What is the total amount of contributions made by Canadians for this purpose and what has the Minister of Supply and Services done with the funds?
4.	What are the names and addresses of all those who have so offered and, in each case, what was the amount of the donation?


Mr. Rod Blaker (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, with respect to the matter of charging the former Prime Minister and right hon. member for Prince Albert (Mr. Diefenbaker) $1.25 for each copy of the Canadian Bill of Rights issued to him, the answer is as follows: 1. No. Pursuant to regular invoicing and accounting procedures and following the immediate fulfillment of a telephone order for 300 copies of the Canadian Bill of Rights from the Right Honourable J. G. Diefenbaker's office on November 8, 1976, the Right Honourable gentleman's account was charged $225.00 which represents the total list price of the items ordered less a 40 per cent discount allowed to Members of the Federal Parliament, (a) On November 23, 1976, an invoice was issued, (b) The Publishing Centre, pursuant to regular departmental sales procedures, (c) (i) No. When on a later date, the office of the Right Honourable gentleman inquired as to why a charge had been made for the above items, the Minister of Supply and Services confirmed the application of the regular sales and discount policy, (ii) No.

April 19, 1977
The Budget-Mr. Hopkins
2.	Up to the date of this question, a single letter to that purpose signed by twenty-two individuals has been received.
3.	A cheque in the amount of $210.75 was attached to the above letter and has since been returned to the sender.
May I dispense, Mr. Speaker, with the reading of the names and addresses of the 22 signatories at Electra Hall, University of Windsor, Windsor, Ontario?
Mi'. Speaker: Is that agreed?


Some hon. Members:: Agreed.


Mr. Speaker:: That portion of the reply which has not been read will be printed in Hansard as if it had been read.
[Editor's Note: The portion of answer referred to above follows;]
4.
Names and Address
Robert Nicholson	Electra Hall
Tim Hilborn	University of Windsor
Joan Urguhart	Windsor, Ontario
Wayne R. Robinson "
Karen Bridge Alan Greening Kathy Weaver Kevin Haxill Walter Hilldrett Gerald Mclsaac Marc Alchuk
Margaret McBeth	"	"
Lou D'Angelo Virginia Charron Rita Bourris B. Kupchak Brian Prunaulk William Wise Howard Miller Dwight Robinson John Siddall
Cathy Malory	"


Fabian Hugh Poulin: I ask, Mr. Speaker, that the remaining questions be allowed to stand.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 18, consideration of the motion of Mr. Macdonald (Rosedale) that this House approves in general the budgetary policy of the government, and the amendment thereto of Mr. Stevens.
Mr. Leonard Hopkins (Renfrew North-Nipissing East):: Mr. Speaker, when the House adjourned this debate last night 1 was discussing the subject of anti-nuclear energy bias on the

part of the CBC. I want to quote in part a second letter that I received on this subject. The letter, dated October 29, 1976, was written by one of my constituents to the president of the Canadian Broadcasting Corporation:
I am writing to you in connection with the broadcast of "Concern" on October 20, 1976. I refrained from writing earlier until I was able to obtain a transcript of the program.
As a hatchet job on an entire Canadian industry, it was very well done. As an objective discussion of a serious topic it was a disgrace to the CBC. Although there will presumably be equal time given for a rebuttal of this one-sided presentation, the public interest would have been better served by having knowledgeable people on the program, who could correct the untruths at the time, so that the listener could make an informed judgement between different points of view.
As just one example of an untruth, but one so simple as to demonstrate the low level of knowledge of the people participating in the program is the following statement by Mr. Ian Connerty (Canadian Coalition for Nuclear Responsibility).
$1.8 billion has been spent building a couple of reactors we do have in Canada and at this point in time today-the output of energy from those two reactors
is-
The writer goes on to say:
In fact, we have four large reactors operating at Pickering, Ontario. The first of these reactors went into service in 1971 and the fourth in 1973. The total cost of all four reactors was under $800 million, less than half the cost figure quoted by Mr. Connerty for two.
I should like to refer to a document entitled "The Canadian Nuclear Program: Safe and Sound" and commend its reading to members of the House. It is written by Mr. J. A. L. Robertson of the Chalk River Nuclear Laboratories, Atomic Energy of Canada. In it he discusses the issues involved in the use of nuclear energy, including reactor safety, radioactive releases, plutonium hazards and uranium supply, after which he offers some very useful conclusions. I feel this material should be read by anyone who intends to comment publicly on a very important Canadian industry in the energy field.
I should now like to say a few words, about freight rates. Section 276(1) of the Railway Act provides in part:
Except as otherwise provided by this act, all freight rates shall be compensatory.
This places a statutory duty upon the railways to ensure that all freight rates are compensatory except as otherwise provided by the Railway Act. The only exceptions to this provision are those set out in section 271 with respect to the Crowsnest pass rates and in section 272 with respect to eastern rates on grain and flour. Under the authority of this statute, the Canadian National Railways increased freight rates on wood material coming into a major veneer plant in Pembroke by 13.3 per cent early in 1976. This increase followed a previous increase of 15.38 per cent which was put into effect on January 1, 1975. In the course of a meeting in early February, 1977 between the Minister of Transport (Mr. Lang) and the maritime premiers, the topic of freight rates was discussed at great length. I quote from a news release dated February 8, 1977:
A topic of particular concern to the premiers was the impact on regional economic development of the application of cost effectiveness to the transportation system. Mr. Lang and the maritime premiers agreed that where economic development objectives required it those objectives would take precedence over the commercial viability of the services concerned.
April 19, 1977

During the discussion, Mr. Lang reiterated the federal government's commitment to regional economic development. To this end he emphasized that the objectives of a transportation system should be to serve as an effective instrument of support for the achievement of national and regional social and economic objectives as well as to achieve an efficient transportation system throughout Canada. Both Mr. Lang and his provincial colleagues have agreed that such a system should also provide accessibility and equity of treatment for users. Mr. Lang further indicated that following further consultation with the Atlantic provinces he would propose an amendment to Bill C-33 now before parliament to reflect that agreement.
I must congratulate the Minister of Transport on what he had to say with regard to the transportation needs of the maritime provinces, because he was dead right. In order to assist the natural resource-based industries in areas covered by the Regional Development Incentives Act, I would ask the Minister of Transport to take the same constructive and realistic approach to the question of freight rates in the Ottawa Valley when reviewing his suggested amendment to Bill C-33. Transportation costs are an important factor in attracting industry to areas which are not close to major markets. Such considerations are imperative when local raw materials have to be brought to a local industry. If freight rates are to be allowed to escalate on the basis of a provision in an unamended statute, such as section 276(1) of the Railway Act, this will only work against the excellent program which DREE is providing. Transportation and DREE should work together. I congratulate the minister for taking this particular initiative.
I should like to draw your attention, Mr. Speaker, to a question which was asked in the House on February 8 by the hon. member for Lanark-Renfrew-Carleton (Mr. Dick). It appears in Hansard as follows:
Mr. Speaker, my question is for the Minister of Regional Economic Expansion. Since the minister and his department have supposedly been in consultation with the province of Ontario about a joint venture, a general development agreement for the county of Renfrew since 1973, and promised in 1974 that Renfrew county would be in line for the next joint venture following the $17 million for Cornwall, and since in 1976 Ontario, because it could not get the co-operation and agreement of the federal government, had to do it alone and pump $2 million into Renfrew county, I ask the minister, when will the federal government honour its commitment and sign an agreement with the province of Ontario to help with infrastructure and other basic developments needed in this high unemployment county?
This is a real concern of ours. The fact is that nowhere in the records of that Cornwall meeting did the Hon. Mr. White, who was representing the Ontario government, or the minister responsible for DREE, ever mention Renfrew county.
Joint federal-provincial studies are currently under way regarding the development of a potential GDA initiative involving the Renfrew-Pembroke area. Discussions originally started in 1974 were delayed until recently to await completion of provincial development strategy for Renfrew county. Therefore, it is not the fault of the federal government that this matter has been delayed. In the meantime, recognizing the area's special needs, on the expiration of the special area program for Renfrew county on December 31, 1975, the federal government responded by including the Pembroke-Renfrew area as part of the designated region for Ontario under the Regional Development Incentives Act. This designa-
The Budget-Mr. Hopkins
tion will extend until 1981 and I am grateful to the minister for making this possible.
Since the special area designation in April, 1970, incentive offers totalling $9,927,959 have been made to companies locating or expanding in the Renfrew-Pembroke area. The precise provincial government outlays included in the $2 million referred to in the question by the hon. member for Lanark-Renfrew-Carleton do not involve the general development agreement in any way and would not qualify for inclusion because of prior commitments by the province. So the way that question was worded was misleading.


Mr. Deputy Speaker:: Order. I have to advise the hon. member that the time allotted to him has expired. He may only continue his remarks with the unanimous consent of the House. Does he seek consent? Is there consent for the hon. member to continue his remarks?


Steve Eugene Paproski: Two minutes.


Leonard Donald Hopkins: I wanted to say a few words about small business. We who represent large constituencies somewhat distant from major urban centres realize how greatly we depend on small industries and service industries for the employment of our people. The budget we are considering contains measures which will create employment, encourage incentive and foster regional growth. They will improve the equity market, increase the cash flow of business and provide sources of funds for expansion. They will give more help to small business and venture enterprises, help sustain consumer spending and provide further tax relief, particularly to Canadians of modest income. All of these measures will lead to more jobs.
I want to congratulate the Prime Minister (Mr. Trudeau) on appointing a minister of small business. Small business today needs help in many ways. Some businesses cannot operate because they do not have the extended capital required to get them on their feet and into solid production. I have great faith in the new minister in charge of small business and wish him well in his job.
One final comment, Mr. Speaker. General development agreements involve three levels of government. First of all there is the local government, which in my case is the county of Renfrew and the city of Pembroke, whose representatives have done a good job in putting forward some recommendations to the province and to DREE. When you are dealing with several levels of government, you should not be political, because good relations must prevail. In my area, the province of Ontario and DREE are discussing various measures that have been put forward, and 1 think it is up to us to let them now come up with a final package to inject some very worthwhile and lasting programs into the economy of the upper Ottawa Valley which needs development very badly.
Having commented on freight rates, I should also like to say that the Ottawa Valley, and particularly the upper part of the
4774

April 19, 1977
The Budget-Mr. Rynard
Ottawa Valley, typifies very much the way of life of parts of the maritimes. I suppose one of the major reasons for this is that many people who joined the armed forces in the maritimes ended up at Petawawa and, after leaving the forces, settled in the area. I suppose people in my area have as many relatives in the maritimes as in any other region of Canada. In this regard I should like to thank the minister of DREE for the co-operation I have had from him and his department over the years. As I say, I hope the province and the federal government will very soon come up with a final general development agreement.
I would be remiss if I did not at this time express on behalf of the people of Pembroke and other area municipalities our personal appreciation to the Minister of Transport and his staff for the upgrading and improvement of the Pembroke area airport which is going to take place this summer.


Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I listened with a good deal of attention to the last speaker, the hon. member for Renfrew North-Nipissing East (Mr. Hopkins). At one time he was a protege of mine and I often wondered why he went astray or had got off the beaten path over the years. I listened very carefully to what he had to say, because he is a likeable fellow. Then all at once it struck me: having been taught under Professor Lower at Queen's University, how could he do anything else?
The Minister of Finance (Mr. Macdonald) is, as always, in for a good deal of criticism, as most finance ministers are, though some point praise. But he is confronted with a difficult problem in trying to bring out a satisfactory budget. After 14 years of Liberal governments spending beyond their means, it is no wonder we are in deep trouble today. Some may say that that is pretty partisan, but I want to quote the Prime Minister, (Mr. Trudeau).


An hon. Member:: No one would ever say that of you.


Philip Bernard Rynard: Thank you very much. The Prime Minister said in Toronto that we were spending more than we earned, that the other fellow we are trading with spends less than he earns and produces more. He should have added that he was the fellow who, with his government, printed the money that led us down this path. I should like to deal with a little bit of history for a few moments by reading an excerpt from the monthly letter published by the Royal Bank of Canada:
What is the purpose of all our office work from the clay tablets of Babylon to the punched tape of today's electronic machines except to provide the history of transactions?
There is one qualification to be made: we must use only what is true, significant, and applicable. We must, as Jean Jaur&s, French statesman, philosopher and orator said: "take from the altars of the past the fire-not the ashes."
Keeping that in mind, let me go back to when the electors of this country handed over the reins of power to the Liberals in 1963. At that time Canada was a prosperous country, having the second highest standard of living in the world and an inflation rate of 2 per cent. We had a trade surplus for the first time in ten years, unemployment had been checked, and industrial competition and productivity had been brought to

new heights because of tax laws which encouraged the supplementing of outdated and outmoded methods with new machinery and equipment. Vocational and technical schools had been built all across the country by the federal government to train the people required to operate this new machinery. We had industrial expansion and growth, as a result of which it became necessary to bring in increased numbers of immigrants.
This was the picture in the Diefenbaker era. The revaluation of the dollar gave us a realistic tool with which to encourage industrial expansion and more manufacturing of our own raw resources, in addition to encouraging exports and discouraging imports, all of which prompted economists of the day to state that Canada was one of the best managed countries in the world. Our world markets were enlarged through our going out and doing a hard selling job.
The minister of trade and commerce, the minister of finance and the prime minister himself travelled to many countries. I had the good fortune to be with the then prime minister, Mr. Diefenbaker, on one of those trips and saw first-hand his approach. Every Canadian embassy was aware that the cocktail route would not take care of all our problems. There was fierce competition in the marketplace. The Marshall plan was providing Germany and Japan with new machinery and new equipment; technology in the United States was at work. We had to meet that competition. Any Canadian embassy that did not make its government aware of what its host nation needed and what could be sold to it was warned that promotions had to be on realities. They had to have the staff, and they had to have the personnel who not only looked after the niceties of diplomacy and diplomatic relations but also the realities of the necessity to trade and to sell Canadian goods in the markets of the world. In other words, they were to earn their salaries which had to be paid by the people back home.
In London, George Drew at that time was the High Commissioner to Great Britain. He did an excellent job. Now my old friend, Paul Martin, the present High Commissioner to Great Britain, is working as hard as the traditional beaver doing the same.


Steve Eugene Paproski: Hear, hear!


Philip Bernard Rynard: Paul always earned his salary. When he was in opposition-I sat on the other side of the House then-he was "Dennis the Menace". Good luck to him, and may he long remain in his present position.
As a result of all this, wheat sales were opened up and trade was encouraged, particularly in food supplies. Wheat was sold to countries such as China and Japan. I happened to be in Japan with the prime minister when I saw the children there in the high schools and public schools eating white bread sandwiches and drinking milk. Traditionally, of course, they were eating rice before this. That was salesmanship. We owe a great debt of thanks to General McArthur who was there and put in charge of that country after the last war. That was obtaining
April 19, 1977

new markets and our government of John Diefenbaker took advantage of them. As a result of all this, our wheat sales rose to $1 billion.
I could go on and on. Who would not long for those good old days? There were no divisions in Canada under prime minister St. Laurent and prime minister Diefenbaker. People were Canadians. Why? Because everyone was treated justly. There was no need, then, for saying that the land was strong. We were strong. There was no need to call for a just society. It was not until we had a few years of Liberal government that we needed the just society. And what a just society! Benson's "folly" passed rules and regulations in tax reform, pushed through parliament by closure, which half the members of parliament never had a chance to read. If they did read them, they did not understand them. Half the accountants in the country still cannot interpret them.


An hon. Member:: Just a few remarks?


Philip Bernard Rynard: Do not blame altogether the Ministers of Finance. John Turner could not make them work, and he resigned in disgust when changes he wanted were not backed up by his cabinet colleagues. After all, freedom of movement in this government is becoming financially narrower. As a matter of fact, before leaving the past, it might be well to remind us all that in 1964, really the last year of the legacy left from a previously well-run economy, total federal government spending was less than $7.2 billion. The expected deficit alone for this year is around $7.5 billion, on which there is interest which the Canadian people have to pay of around $500 million. This will add to every taxpayer's bill.
It is a bit unfair for us to compare the increase in Canadian labour costs with those of the United States without presenting the facts. I feel strongly about this. The Canadian taxpayer, if everything is taken into account, pays about double the tax that his American counterpart pays. If the tax breaks had been anything of significance, labour demands would have been much less insistent and our goods would have been priced a little lower. Indeed, the government itself sets the worst example for labour, industry and the Canadian taxpayer in general. From 1970 to 1976 the government increased its spending 150 per cent.
If you look at this another way, you will see right away that this took about 8 per cent of the gross national product. It is a sad fact that the government takes from the Canadian people about one-fifth of their income. While all of this is going on, the labour force in the last ten years in industry and manufacturing fell from 40 per cent to 20 per cent. This is one thing that makes you very sick. It was cut in half. Manufacturing is the lifeblood of labour employment and sales abroad. In addition to all of this, with unemployment at an all-time high, our growth rate is slower and inflation remains high. Our deficit runs higher than the United States, Great Britain, Germany, Japan and Italy.
Here we are, in Canada, with tremendous natural resources. No country in the world is as blessed with natural resources per capita as we are. In Japan there is no unemployment, yet
The Budget-Mr. Rynard
most of its food and raw resources must be brought in from abroad. For example, Japan is able to buy raw resources here in Canada and ship them back to us as manufactured articles for sale in Canada. Our trade deficit, with 23 million people, is $4.3 billion. Great Britain, whose raw resources are in very limited supply, most of them having to be imported also, had a trade deficit of only $3.3 billion. Canada has the worst record of any industrial country in the world.
While all of this was happening, our service industries over the same period of time that manufacturing was declining by nearly half went up by 6 per cent. Seven per cent of our work force is now employed in government administration. We spend more money, or more of our gross national product, than any industrial nation in the world. The figures startle you when you consider that 25 per cent of every dollar earned must come from our exports. When I refer to the service industries, that is something we spend among ourselves. As the hon. member for York-Simcoe (Mr. Stevens) said, it is like taking in the other guy's washing.
Small industries such as Shakespeare in Orillia must purchase some parts of their raw materials for their manufactured articles. On this raw material they must also pay a 15 per cent customs duty. A so-called underdeveloped nation has no duty to pay on its finished products. I refer to a new factory, and this is what happened. A newspaper article in the Packet and Times, Orillia, reads as follows:
Shakespeare Co. Ltd., of Orillia, which makes fishing rods and reels, as well as gun cases, will close its manufacturing operation here on April 15, putting an estimated 30 people out of work. Bill Ardell, the company's vice-president and general manager said today.
This situation is primarily a result of our inability to compete with imported fishing goods from Korea, Taiwan, and Japan, which are not charged any import duties by the Canadian government-
The hon. member who just finished speaking before me has left the House. He said that we are going to help small business. How are you helping small business? I am talking about small business right now. What are you doing for it? The article continues:
The vice-president noted his company has to pay a 15 per cent duty on raw materials . . .
Fourteen employees will be retained to staff the administrative, sales, service and warehousing departments-
They will bring in the goods from outside this country, giving jobs to other countries. The underdeveloped country has no tax to pay even though they buy the same raw product right from the United States. This is how we are treating labour and small business. The article continues:
The minimum starting wage of Shakespeare's plant employees is $3.30 an hour, and increases are given on an incentive basis . ..
The workers were notified recently that their jobs would end ...
The Orillia plant is Shakespeare's only Canadian manufacturing outlet, and the company's American head office is located in Columbia, South Carolina ...
The decision to close manufacturing operations in Orillia was arrived at here; the final agreement was made with the American company.
They could not meet that type of competition. We cannot remain competitive on the Canadian market. Some of the
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April 19, 1977
The Budget-Mr. Rynard
companies that compete with us pay their employees less than $900 a year, which is what we pay our workers for six weeks of work. Also, those companies have no duty to pay. I hope the Minister of State for Small Business (Mr. Marchand) will keep this in mind, because nothing was done to help that company even though its situation was well advertised-and 1 have three pages of it. 1 could refer to other companies in Simcoe North and recount what has happened to them; how they have had to bring in parts from other countries and put them together here because they could not meet competition. The reason is that we have priced ourselves out of world markets. Many small industries in my constituency face the same problem due to the rising cost of energy.
The government has no energy policy. There is little worthwhile research carried out on the development of new sources of energy from methane gas, wind and sun augmented by gas or electricity when necessary. Just last night President Carter of the United States gave a warning that if that country is to survive economically, Americans will have to conserve the energy they are using and find new sources.
It was interesting to hear him speak of coal in his speech. Few countries in the world have the coal supplies which are found in Canada and in the United States. What are we doing to develop coal? I wonder what the Minister of Finance thinks about his side-kick, the Minister of Energy, Mines and Resources (Mr. Gillespie), telling him that all will be well by 1990. I am sorry the minister is not in the House at present. The minister of energy of Ontario has stated that Ontario will be importing two million barrels of oil a day. As I have said, President Carter says that we have underestimated the world's supply of oil and gas. We must get together with them and see what the true story is on Mr. Carter's words that we will certainly be short of supplies. We will be going downhill economically unless we cut down on our consumption of energy and find new sources of it.
The richest country in the world today in natural resources, per capita, is in deep trouble. In the 1950s and 1960s the gross national product grew by 2 per cent a year. Now it is only growing by 1 per cent. Why is that? A program to keep in balance, wages, salaries and other related factors should be growing at the same rate as the GNP. One does not have to be a mathematician to realize that at 2 per cent per year, if you start to work when you are young you could double your money in 35 years. You would have an incentive to work. However, at 1 per cent per year it would take 70 years to double your money. There would be no incentive to work, and without it one loses one's drive. There is nothing to look forward to; your only hope lies in winning a Wintario or a Loto Canada lottery. It is a real tragedy when there is no incentive to work. Perhaps that is why we are less productive than the United States. We are really going back to the times when the pioneer farmer worked all his life just to make things a little easier for his family. He worked from dawn till dark without hope of making money for his old days.
A government politically geared to attracting votes is giving us more than we can afford. The present government could

never forecast costs. It is, itself, the spender. We needed more and more money and the printing machines turned it out. The costs of our manufactured goods increase, and we must have more money in order to buy them. This puts the costs of the products up, so we cannot meet competition abroad. Actually, we cannot even meet it in our own domestic markets. We have had to borrow more and more money abroad just to keep us afloat. Now we are paying out over $11 billion more in interest and dividends than we are receiving.
Basic pay rates should be increased only as production and profits increase. This gives incentives to labour. I am sure that few firms would refuse to discuss their financial statements with labour. This would increase worker interest in the success of the company and in the part they are playing to achieve it. It should be possible for the government to establish new industries in areas where the companies themselves might not be able to do so by building roads, instituting housing programs and building new sites. In 1958 the government built "roads to resources". The provincial premiers played a certain part in that. Some of them have told me that never at any time in the history of this country was there a program as successful as "roads to resources" which was started under the Diefen-baker government. As a matter of fact, it is the only time in Canadian history that a railroad was built which paid dividends. 1 am referring to the Pine Point railway which carried goods and supplies to the Pacific coast.
If 100,000 jobs were produced through a program, this would add about $1 billion to the economy. Of the million or so unemployed, how many are physically, mentally or emotionally disabled and should be retired on a pension? There are a good many. A gentleman came to see me the other day, a war veteran who after the war was over went to work in construction. He is an engineer. He was hurt and received a pension from the Ontario Workmen's Compensation board. Finally he took a lump sum because he wanted to return to work, and he went to work for the federal government, of all things. This man has a bad back; he has to wear a brace all the time. He suffers from numbness in both legs and he is in pain. A year and a half ago he fell and hurt himself again, requiring surgery. He is totally disabled, yet the government is not willing to settle his claim. I saw him the other day, and I will fight his case because I believe an injustice is being done to a man who cannot sit for 10 or 15 minutes, who is taking pills all the time, who can only walk with a cane. Asking that man to work is inhumane and unsafe for the employer.
I wonder how many such cases there are in this country, and I wonder why my friend, the hon. member for Winnipeg North Centre (Mr. Knowles) has not spoken up for them as he has for other forgotten cases. I would say that probably one in 50 people cannot be employed because of one type of disability or another. There are probably 50,000 people who should be receiving disability pensions instead of unemployment insurance benefits or welfare when they run out. Each year we import migrant workers to harvest our fruit, vegetable and tobacco crops. Yet it has been estimated that in spite of this extra migrant labour there have been losses amounting to $200
April 19, 1977

million to $300 million because growers have not been able to obtain labour. Why do we have to import foreign labour? We have a society that will not do its own cleaning up. Why do we have to pay through the nose for it? What is the total cost of transportation and housing for these 5,000 or more migrant workers who are brought in?
There are many people who want light jobs or are new to the job, and they could be used if the minimum wage rate was lower and paid according to the work they want to do. We have to be competitive and our minimum wage scales must be on a par with those with whom we have to compete. I was told recently by an agricultural expert that we pay 30 cents to 60 cents an hour more for 20 per cent less production than the Americans pay right across the border at Niagara. It is no wonder that they can sell their Del-Monte peaches in our marketplaces. We must compete and have lower taxes and less government spending, or we will go down in history as the most profligate nation of all time. I am not blaming labour for all this, because when a government takes one-fifth of what people earn they do not have very much left after living. I would hazard a guess that we would save about $2 billion if the cases mentioned earlier were well administered, and job-creation properly researched to provide jobs that lead to more jobs which need to be carried out. We also had a deficit in tourism of well over $1 billion. That meant we spent well over $1 billion more than visitors spent in Canada. That is $1 billion, in spite of the Olympics on which we sunk another $500 million.
We need the imagination of a government like the one we had back in the Diefenbaker days when we could make this country attractive and when people came here to visit. We need the imagination of the Tory government of the right hon. member for Prince Albert (Mr. Diefenbaker) of 1957 to 1963 which had everyone coming my way to hit the Yukon trail and relive the days of the Klondike gold rush. The old girls were not there, but the new ones took their place and to the ribald songs of 1898 the saga was replayed. If my memory serves me correctly, we had an excellent surplus in the tourist trade that year.


Some hon. Members:: Hear, hear!


Philip Bernard Rynard: There are just a few housekeeping items to remind us that there could be further savings. The government states it is paying $15,945 a month for a Montreal book store which was closed last September to save money. One of those Information Canada stores.
Mr. Speaker, I notice you are looking at the clock. I still have another five minutes.


Mr. Deputy Speaker:: Does the hon. member have the consent of the House to complete his remarks?


Some hon. Members:: Agreed.
The Budget-Mr. Rynard


Philip Bernard Rynard: Public Works Department officials said the rental price was fair if only they could find someone to take over the vacant store front space. I am not being partisan about this, but how many of those things could be cleaned up? It is the responsibility of parliament to do something for Canadians, and this is why I raise these matters. I could go on and indicate other cases like that. I could mention the $750,000 spent by a cabinet minister on private planes. I am not being personal about this-but how much could we save if we were to cut all this out?


Steve Eugene Paproski: What minister was that?


Philip Bernard Rynard: Surely this is not necessary.


Steve Eugene Paproski: It must have been Otto Lang.


Philip Bernard Rynard: I question the necessity of fact-finding tours with committees being sent hither and thither. You would not be found crabbing around the Prime Minister if you were out of the country testing the waters of the Mediterranean. Perhaps that is the reason he wants to get rid of some of those people. I know some hon. members on both sides go on these trips. But are they all necessary? We have energy problems galore, and we are sending committees out on fact-finding tours studying energy. 1 say that the people back home, manufacturers and labour, are finding it too tough for the government to be lending millions of dollars to Castro in Cuba at low interest rates when he at the same time is sending an army to Angola. We should not be sending pure-bred Holstein cattle to Africa to supply milk to undernourished children, only to hear that the chief of the country keeps them for his own private stock of beef for barbecue and eating purposes.


Some hon. Members:: Shame.


Philip Bernard Rynard: These housekeeping items probably cost another $1 billion, and I have already taken $3 billion off our deficit of $7.5 billion. We are simply not producing enough to afford even our present standard of living. We have fallen a long way since 1945. We then ranked number five among producing nations, and we had the second highest standard of living. Neither a strong land nor a just society has stopped the skid. How are we to get out of this mess without irreparable harm being done to this country?
Let us unite Canada. Never before in history has it been as divided as it is today. We are antagonized by unilingualism, bilingualism, multilingualism, and so forth, and our economy is in difficulty. Bilingualism has cost billions of dollars, but what has it really done to unite, or has it disunited? That is what we must ask ourselves. I was brought up in an English community. When I went to school, four languages were offered and two of them were compulsory. I studied all four- English, French, Latin and German. I passed in Latin, the grammar, virgil and written. I was able to pass my French grammar and French literature with fairly good marks. I passed German, but in English I was only ordinary. I was not forced to study those languages. I liked studying French.

April 19, 1977
The Budget-Mr. Broadbent
I think what the Prime Minister stated last night in Winnipeg got nearer to what we should really be doing. We should give people a chance to learn a second language-but let us not force language down their throats, because we will only antagonize them and drive them into multi-separatism.
Let us cut waste, whether it be waste of electricity, gas, oil, coal, wood or any energy-producing material. Let us increase incentives and write-offs to industry because it is labour-intensive and will, hopefully, produce manufactured articles which can be sold in world markets and also increase the hiring of labour as production is stepped up. Let us stop living beyond our means. Our neighbours are living cheaper and producing more. Let us stop government spending and the printing of more and more money. Then, and only then, can we return to challenge the world as we should.
We all love Canada and we all want to be Canadians. I am proud to be a Canadian. The people on my father's side originally came from Europe, to Ireland and to Canada. I have French relatives and I am proud of that. Let us pull up our socks and get to work. Back in the forties we showed the world that there was no nation which could outdo us in the fields of production and ingenuity-on an equal basis. God knows, we have more raw resources than any country in the world. In that respect we are rich. In closing I would like to leave this little verse with the House:
The heights achieved by great men reached and kept were not attained by sudden flight. But they, while their companions slept, were toiling upward in the night.


John Edward Broadbent: Mr. Speaker, all last week the hard working, industrious flacks in the office of the Prime Minister were busy selling what was described as "A speech of major significance"-the performance of which many people witnessed on television last night. The working staff in the Prime Minister's office did this with all the enthusiasm well paid officials can muster under such circumstances. Wherever they were gathered, Canadians were urged to huddle in deep and eager anticipation before their television sets to hear the latest words of advice-indeed, of wisdom-on the question of national unity. It was, we were assured, to be a grand performance. Canadians should assess that speech last night in light of the budget that is now before the House and in light of the performance of this government since 1968. I say this because in life in general, and in politics in particular, it is performance-not talk-that counts.
For me last night's speech had two important aspects. First, in its discussion of bilingualism it was a speech that the Prime Minister (Mr. Trudeau) should surely have made in Canada- whether in the west, in the east or in southern Ontario-not last night, not in the middle of April, 1977, but in the middle of April, 1969 or 1970. In short, Mr. Speaker, the speech was some seven or eight years late. Bilingualism as advocated, explained and implemented by this government has failed to gain acceptance in large measure because its principal advocate, the Prime Minister, has failed to translate the meaning of

that policy and program to Canadians as one of language equality. His failure on this issue is that serious.
What the Prime Minister had to say about the Official Languages Act last night all members of my party and, indeed, I think most civilized Canadians wherever they live would agree with. What he said is involved in the principle of the Official Languages Act is not special or privileged treatment for any group in Canada, but equality of rights for our two principal cultures, French-speaking and English-speaking. In that the Prime Minister is correct. In that, the New Democratic Party supports him. I repeat, in getting around to explaining that important principle of the Official Languages Act just last night, he is seven or eight years late.
It is important to note that this policy of the Prime Minister-which is almost his only policy in terms of holding the country together-certainly was his only policy in 1968 and has remained so since. In terms of his public utterances, it is important to note that not once since 1968 has the Prime Minister gone across the country to try to explain in ordinary language, to ordinary people, what that policy is all about. For him to suggest, as he did last night, that somehow Canadians were failing to respond appropriately to a policy they did not understand is surely the height of irresponsibility. It has been his responsibility in the past seven or eight years to explain that what was at stake was language equality. In that he has been a colossal failure.
Apart from the discussion of the Official Languages Act and what it revealed about the government's failure, the most significant aspect of last night's speech was its total failure, as an allegedly serious speech, to indicate even one positive initiative the government would attempt in coming to grips with a myriad of economic problems that Canadians face, whether they live in Atlantic Canada, Quebec, Ontario or, given the location of the speech, in the west. Not one new, detailed principle was presented by the Prime Minister.
Like the budget before us now, the Prime Minister's speech last night totally ignored the economic realities which are at the root of so many of the problems faced by our people wherever they may live. The rhetoric was fine, but after analysis substance was found to be totally lacking. I did not have an opportunity to watch the Prime Minister on television or listen to him on radio last night.


Steve Eugene Paproski: You didn't miss much.


John Edward Broadbent: The hon. member says I did not miss much. Unfortunately, I have to agree with him because I read the speech with great care this morning to find out just what I had missed.


Steve Eugene Paproski: You would have done better to watch "Howdy-Doody".


An hon. Member:: You should have listened to it.


John Edward Broadbent: I say to the Liberal backbencher that I am going to devote a good part of my comments to what the Prime Minister had to say, because I read the speech with care. It is
April 19, 1977

substance that matters, and too often with radio or television the substance is missed.
It is rare that we have the opportunity of hearing the Prime Minister in this House. On occasion he deigns to come in and drop a few bons mots and pass through after that. In this instance he made a speech outside the House, but so that it will be on the record somewhere I should like to quote some of his words. Here is what the Prime Minister said:
Perhaps the first danger would be to underestimate the seriousness of the situation in Quebec, the determination of the Parti Quebecois government. Paradoxically, because the Quebec situation is so serious, Canadians and their federal government cannot afford to become morbidly preoccupied with separatism, dealing with that situation alone.
He went on to say:
On the contrary. The separatist danger in Quebec requires us, in fact, to continue working as hard as possible to reduce unemployment and improve the economy; to provide better management in government; to meet the aspirations of western Canadians; to do many things.
That is very well said, indeed. He continued-and Liberal members will be pleased to hear the following words:
There are two important reasons for this. First, if Quebeckers in their referendum are to choose to live in Canada, it will have to be a Canada they want to live in-
That is very profound.
-which depends in part on a whole range of national policies and programs. Second, unless all Canadians are reasonably happy with their lot, problems of national unity may erupt again and again in region after region.


Mr. Boulanger:: What is wrong with that?


John Edward Broadbent: Nothing is wrong with that. As a statement of purpose, it is a quote I can support and I am sure all members of my party, and indeed most Canadians, can support it. But the fact is that one of the general characteristics of platitudes is that most people believe them. But it is an utterance that the Prime Minister, of all people, should have choked on. It is a statement which inadvertently outlines the government's own failure. Coming from the Prime Minister, I say it is hypocritical. Those are the words of a man who has failed Canadians in the past and who has done nothing since November 15 to change their future for the better. The Prime Minister has decided to save Canada-


Mr. Cafik:: Platitudes!


John Edward Broadbent: I say to the hon. member from my neighbouring constituency that I will deal with the substance in a moment. The Prime Minister has decided to save Canada by substituting platitudes for action. Unfortunately for television viewers, they are in for a series of television reruns, reducing the debate on our country's future to the level of late night television trivia-sombre platitudes totally unsupported by action.
Let us consider the second sentence in the above quotation. I should like to quote it again, particularly for Liberal backbenchers who do not spend a lot of time reading. The Prime Minister said:
The Budget-Mr. Broadbent
Paradoxically, because the Quebec situation is so serious, Canadians and their federal government cannot afford to become morbidly preoccupied with separatism, dealing with that situation alone.
Unfortunately, Mr. Speaker, "morbidly preoccupied with separatism" is an accurate description of the state of mind of the Prime Minister and his government. They are morbidly preoccupied and in a state of total inaction. Instead, they should be positively revealing, through action, the values of a national government committed to economic justice, opportunity and reform. Surely Quebeckers want that. Surely that is why they elected the present provincial government on November 15. Surely, also, that is what Canadians elsewhere want. They are tired of talk and platitudes. They want action-but they are not getting it from the Prime Minister.


John R. Rodriguez: They are not getting it from the Liberals; of that you can be sure.


John Edward Broadbent: The Prime Minister made the following assertion, as he continued his speech, and surely even he ought to have choked while uttering these words:
The separatist danger in Quebec requires us to continue working as hard as possible to reduce unemployment and improve the economy.
Yes, he said we must continue working as hard as possible to reduce unemployment and improve the economy. Mr. Speaker, he neither choked nor smiled when he uttered those words.


John R. Rodriguez: He should have croaked.


John Edward Broadbent: It is absurd to suggest that the government has worked in the recent past to deal with unemployment. And it is cruel nonsense to imply, as he did, that the government is doing anything about future unemployment. As members of the government party acknowledge in private, and as the Minister of Finance (Mr. Macdonald) has sometimes said publicly in moments of candour, the budget we are now debating assumes tacitly that throughout 1977 more than one million Canadians will remain unemployed. The government callously has accepted the continuance this year of the highest level of unemployment since the "great depression". The government, in short, has coldly decided not to deal at all with unemployment. It has refused to recognize that when more than one million Canadians are without jobs, more than
300,000	of them being in Quebec, those very people and the several million affected by their hapless state are questioning not only national unity but the very foundations of the society in which we live.
The Prime Minister concluded the statement I quoted by suggesting that unless all Canadians remain happy with their lot, "problems of national unity may erupt again and again in region after region".


Prosper Boulanger: That is correct.


John Edward Broadbent: Mr. Speaker, I say to the Liberal backbencher opposite that Canadians are not now happy with their lot. They are not happy with the unfair tax system. They are not happy-


An hon. Member:: -with the NDP.

April 19, 1977
The Budget-Mr. Broadbent


John Edward Broadbent: -with more than one million neighbours unemployed. They are not happy with policies which discriminate against the west. They are not happy with higher prices for housing, oil, gas and food. They are not happy, in particular, with the total failure of this government fundamentally to deal with the important question of this country's economic independence. In short, the people of Canada are not happy with a government which has failed them persistently since 1968.


An hon. Member:: Yours is a voice in the wilderness.


John Edward Broadbent: If the government, as a matter of priority, were working hard to reduce unemployment, as the Prime Minister indicated last night, we would now be debating a budget the principal thrust of which would be the provision of jobs. We would not be debating a budget which assumes the continuance of existing high levels of unemployment. We would be debating a budget the thrust of which would be to provide jobs for the one million unemployed. We would not be debating one which provides insufficient funds to employ even those students who will be leaving schools across the country in the next couple of months. When one reads the budget we shall continue to debate for the next few days-


Mrs. Campagnolo:: How many unemployed are there in Jamaica: do you know?


Norman Augustine Cafik: Yes, how are things in Jamaica?


John Edward Broadbent: Mr. Speaker, 1 hear the hon. member for Ontario (Mr. Cafik) asking how things are in Jamaica. Presumably he refers to the fact that I, like many other hon. members-I suspect this applies to the majority of his own caucus-took a brief holiday in the Easter recess. But how that is germane to this debate I should like to know.


Steve Eugene Paproski: When you speak of holidays, speak for yourself.


John Edward Broadbent: I say to the hon. member for Ontario that at least the government of Jamaica is headed by a prime minister who says that his country's leading priority is the creation of jobs. Their last budget was introduced for the purpose of creating jobs. They do not have a prime minister, I say to the hon. member for Ontario, who says to the young people of his country that if they want to work they had better leave the country.


Norman Augustine Cafik: Where is the hon. member's socialist sense of humour.


Some hon. Members:: Oh, oh!


Mr. Deputy Speaker:: Order, please. Hon. members must understand that the Chair also has the right to hear the hon. member speak. I invite hon. members to co-operate with the Chair.


John Edward Broadbent: After hearing the Prime Minister's television address last night and comparing what he said with the

contents of the budget, some Canadians, perhaps in their naivety, might ask themselves if the Prime Minister has read the budget. Does the Prime Minister know what is really going on? Members of this House know very well that the Prime Minister knows what is going on and knows what is in the budget. All Canadians should realize that the Prime Minister's statement last night on television, like his statements in 1968, 1972 and 1974, had everything to do with rhetoric and nothing to do with reality or commitment. The Prime Minister is a master dilettante with power.


John R. Rodriguez: Right on.


John Edward Broadbent: He is a man committed to doing nothing except maintaining his and his party's political power.


Prosper Boulanger: Nonsense. We have one of the best Prime Ministers in the world.


John Edward Broadbent: Perhaps his most cynical utterance last night concerns his new-found sympathies for western Canadians. I am sure all people west of the Lakehead and east of the Rockies were moved by the Prime Minister's touching sympathy for western Canadians.


Mr. Nystrom:: Especially Jack Horner.


John Edward Broadbent: He said, as I am told by those who watched his television address, without smiling that he was not ashamed of the progress made in the west ever since the western economic opportunities conference of July, 1973. That statement itself was shameless. He certainly was not ashamed of it, although he ought to have been. The Prime Minister neglected to mention that the conference of July, 1973, was called when the government was in a minority position in the House of Commons. The truth is that the Liberals had to forget ideas going back almost to the time of Genghis Khan and respond to some of the genuine concerns of western Canada where the NDP then formed three of the four provincial governments.


Some hon. Members:: Oh, oh!


Steve Eugene Paproski: There was also a Tory government out west.


Stanley Howard Knowles: There certainly were no Liberal governments out there.


An hon. Member:: You were in bed with the Liberals.


Some hon. Members:: Oh, oh!


John Edward Broadbent: At the time of that conference the west was led by three provincial NDP governments. There was also one Conservative provincial government. The point is that the western governments came together and applied pressure. The federal Liberals were in a minority government position. They finally called a meeting to discuss the west. They finally discovered that they should have a meeting in western Canada and that they could sit down and discuss policies.


Iona Campagnolo: Wow! Incredible!
April 19, 1977


John Edward Broadbent: Yes, as the hon. lady says, "Wow!" What did the Prime Minister say at that conference? What were his immortal closing words at the conference?


Iona Campagnolo: Read them.


John Edward Broadbent: He said:
Well, thus ends the one and only western economic opportunities conference.
What the Prime Minister (Mr. Trudeau) should have added was, "So, too, ended the Liberal government's commitment to pursue seriously the mutually agreed upon western objectives". Virtually nothing of benefit to the west has followed the conference. And much that has been harmful to Canadians in that part of our country that was already on the law books has remained. There has been total inaction by the government in terms of western concern since that conference. Moving the Mint one day to Winnipeg and another day taking Air Canada and moving it elsewhere hardly constitutes a contribution to what the Prime Minister described as a need for economic opportunities in the west. Nor does supporting multinational companies in the courts in their battle against the people of the province of Saskatchewan help western Canadians.
In three areas of direct policy concern brought up at that conference to which the Prime Minister alluded there has been nothing short of total failure by the Prime Minister and his government to live up to commitments that were made. Just consider them. In transportation we have increased foot-dragging, bungling and, worst of all, the emergence of Otto Lang as Minister of Transport. A communique issued by the premiers who met in western Canada last year to discuss their regions stated:
The western premiers rejected the user-pay philosophy advocated by the federal goverment and expressed dismay at the definite reversal of policy commitments given at the WEOC conference held in Calgary in July of 1973 and by the hon. Jean Marchand.
They said a year ago that the present Minister of Transport (Mr. Lang) turned upside down the commitments made by his predecessor, commitments made at a conference to which the Prime Minister referred with pride last night. The present minister has, in the form of Bill C-33, presented legislation to this House which has the user-pay philosophy as its principal theoretical concept. The premiers of western Canada rightly rejected the user-pay philosophy at the WEOC conference. The Prime Minister had then agreed with the rejection. The previous minister of transport rejected it. The present Minister of Transport, however, is bringing it in in this bill.
Today in the House I asked the Acting Prime Minister (Mr. MacEachen) if the government was going to follow up in some way the general commitment made last night over television, and would it do so by indicating it is going to withdraw that bill from the House until it can be discussed with the provincial ministers involved? I got a negative answer to this specific request to give some flesh to the platitudinous in the commitment to the west made yesterday by the Prime Minister.
The Budget-Mr. Broadbent
Another quote from the western premiers conference of last year reads as follows:
They agreed that progress relative to increased responsiveness from federal transportation policy has been disappointingly slow. Moreover, concern was expressed that the present federal Minister of Transportation, the hon. Otto Lang, has not lived up to definitive commitment given by the former minister, Mr. Marchand, in February, 1975, to correcting a number of serious inequities affecting western transportation.
Following the speech made by the Prime Minister last night,
I also rose in the House today to ask if we were going to get some shift in attitude on this. I pointed out that the freight rates as they now exist discriminate against the prairie rape-seed-crushing industry. This is something that westerners have known for many years, took for granted and now have protested.
A good illustration of the willingness of the Prime Minister and the government to do something for the west would be to change the discriminatory freight rate structure as it affects this industry which is vital to western Canadians. The answer I got from the Acting Prime Minister today, within 12 hours of the Prime Minister's speech, is that the government has no intention of reversing this discriminatory policy.
Only a few days ago Canadian National Railways refused to consider improving the roadbed of the Hudson Bay rail line so that it could carry Canadian government hopper cars and thus move more quickly and efficiently western grain to the port of Churchill. That is a request that western premiers of all political parties have made for many years, to improve facilities at the port of Churchill in order to transport grain produced by Canadian farmers. And, again, it has been turned down in terms of concrete action by the present government.
The litany of transport policy failures in particular areas is only made worse by the government when one considers that in terms of general transportation policy we are virtually in a non-existent state. Instead of imaginative, concrete, specific innovations that would improve transportation policy, we get the Prime Minister going on television and simply adding hypocrisy to an unfortunate situation.
The second area of western concern talked about by western premiers at their conference last year and totally ignored by the present government concerns banking policy. For many years western provinces, regardless of their government, have expressed their concern that the Bank Act be changed to give greater western input in determining their own financial priorities. What do we get from this government? We get a white paper on the Bank Act that is going to give more, not less, power to the federal government. It is going to impinge on the existing right of the provincial governments to have legislative authority over caisses populaires in Quebec and credit unions in the other provinces.
Opposition to the Bank Act change proposed by the federal government has come principally from western Canada where credit unions play a major role for the ordinary people. As recently as this afternoon in the House of Commons, the Minister of Finance (Mr. Macdonald) indicated there would be no change on the part of the government's plans.

April 19, 1977
The Budget-Hon. J.-P. Guay
A third area of concern to western Canadians has been the development of their resources. Last night the Prime Minister made reference, again without irony, I take it, to his commitment to resource development in western Canada. I wondered why the Prime Minister did not choke when he uttered his words about the Liberal government's concern for western resource development in western Canada. He knows it was his government that took the unprecedented step of opposing the province of Saskatchewan in court in defence of multinational corporations in their battle with the government of Saskatchewan which was taking concrete action to get greater control over their own resources for the people of that province. Instead of lining up with and defending the people of that province in their determination to have greater control, the national Liberals lined up with their friends the multinational corporations.
Mir. Deputy Speaker: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue only with unanimous consent. Does the hon. member have consent?


Some hon. Members:: Agreed.


John Edward Broadbent: Mr. Speaker, I thank hon. members for their indulgence. I will conclude very quickly with the following observation. The general point I have been making in my speech with regard to the Prime Minister's efforts over television last night is as follows. The government has with regard to western Canada, the same attitude as it has for Canadians elsewhere-no commitment. It has no general philosophy which says that the principal task of a government is to be concerned with the real problems of ordinary people, and that following up this general commitment there is an obligation on a government to bring down policies which will implement it.
There is nothing in the Prime Minister's attitude to suggest he has that kind of commitment. Instead, we have the opposite. Just as in 1968, 1972 and 1974 we had election slogans and campaigns which were totally devoid of substance, so now we have at this most serious period in our national history, a Prime Minister who almost six months after the election of a separatist government in Quebec goes on television uttering the most banal platitudes, a Prime Minister who has not introduced one new idea, one single policy proposal to deal with the ordinary problems of Canadians whether in the east, in the centre, or in the west. I say, on behalf of my hon. friends, that this is not the route to building a strong, independent, united country. It is not the route we require of a prime minister who has a commitment to make to the country. It is the route solely of a dilettante.


Joseph-Phillippe Guay: Mr. Speaker, I am glad to have this opportunity to present some of my views on the budget. Let me begin by outlining the major considerations which concerned the government in drafting this document. The government faced the prospect of having to stimulate the economy in order to provide jobs for

the fastest growing work force in the western world without setting off inflation again. None of the members of this House like to see unemployment such as we face today; neither do any of us wish a return to runaway inflation. These two considerations limited the government's options in preparing the budget.
It has been called a cautious budget, and rightly so. Inflation is still a serious problem despite controls, and unemployment is far higher than any Canadian would like to see. In these circumstances the government rightly felt the need to be cautious. This was no time to experiment with the economic health of the nation merely to suit a number of critics who are concerned with their own narrow interests, either personal or political.
The third major concern of the government was the level of its own spending. The government had no wish to refuel inflation with its own budget deficit. Along with our general concern about inflation and unemployment, this made it necessary to limit our deficit and, more important still, made it necessary to spend those deficit dollars on the best possible mix of programs to create jobs without starting another round of inflation.
The government was therefore concerned with finding the proper balance. And it is, of necessity, a cautious balance between three major and conflicting areas of concern; first, the level of government spending; second, inflation, and third unemployment. Since the government's own spending always has the potential of causing renewed inflation, it was directed, wisely I think, toward longer term stimulation of the economy. The investment incentives directed toward business will move through the economy more slowly than other measures might have done, but certainly much more safely.
Much of the government deficit arises from efforts directed at minimizing the effects of unemployment, especially among young Canadians. Almost half a billion dollars is going into Canada Works and Young Canada Works programs alone.
The government has also directed attention to lowering the tax burden borne by low and middle income Canadians. The automatic tax relief granted by the indexation of the basic personal exemption alone will put $900 million into the hands of Canadians. Critics of the budget conveniently forget the magnitude of this program which compensates Canadians for the loss of purchasing power due to inflation. We have also raised the exemption for dependent children by $50 per child. Again, this puts a healthy amount into the pockets of low income Canadians with children. The government also raised the employment expense deduction by 66 per cent, from $150 to $250. All these plans taken together will put substantial amounts into the hands of Canadians so they can decide where best to spend or invest. The money will also serve to increase their spending power and, in the longer term, to increase demand in a variety of industries without leading to another round of inflation.
The government has also made certain fiscal adjustments to encourage business to expand across Canada. The government went one step further here by recognizing that certain areas or
April 19, 1977

regions need more stimulation than others. Thus, the government has introduced varying rates of investment tax credit in different regions of Canada; for example, 10 per cent in the maritimes, 10.5 per cent in Manitoba, and 5 per cent nationally. The government has also altered the investment climate for average Canadians through a variety of measures such as allowing capital gains on Canadian stocks to be included in the $1,000 interest and dividend deduction. This will serve to encourage the participation of small investors in the economy and provide a little more incentive toward taking risk in Canadian stocks.
I should like now to read from a statement issued by S. F. Hughes, executive director of the Canadian Chamber of Commerce concerning the budget proposals:
The federal budget announced by finance minister Donald Macdonald was based on an accurate assessment of the difficult dilemma facing Canada today, that is, the need to provide some stimulus to the economy while avoiding a resurgence of inflationary forces and an increase in the federal cash deficit.
The Chamber regards the budget as moderately expansionary in nature. The announced restraints in federal spending will be more than offset by the effect of the tax reductions and will result in a significant yet manageable growth in the government's deficit. However, anything more in terms of deficit would have been irresponsible.
Almost one half of the tax incentives announced in the budget will benefit individual Canadians either as wage earners or as investors.
We support Mr. Macdonald's proposal to phase out controls rather than end them abruptly. This approach is in keeping with the Chamber's perception of the most equitable way of removing the controls.
As I said earlier, this is a cautious budget. I have explained the economic reasons underlying this caution and I have drawn attention to some of the measures we were able to introduce to stimulate the economy despite these limits.
Now I should like to go into some of the social or, if you like, political reasons for which the government had to be cautious. We are still waiting from some agreement from labour and business with respect to the need for restraint in their demands. All of us are concerned about the behaviour of these two powerful groups in the economy when price and wage controls are removed. Unemployment in Canada is high, as I have already said, and this is caused by a sluggish economy. Inflation is still serious despite price and income controls. In these circumstances we undertook to encourage business investment. Again, this is a longer term route, though we sincerely hope business will have the courage to anticipate the economic recovery and expand production immediately.
Looking at the situation in its entirety, though, we have a responsibility to all Canadians and it is one which 1 feel the Minister of Finance (Mr. Macdonald) has conscientiously discharged in the drafting of this budget. He has done it well and honestly in very difficult circumstances and without bowing to the easy solutions which the opposition would have us believe would have solved all of our problems.
The leader of the loyal opposition in Manitoba, Sterling Lyon, and the minister of labour in the Manitoba government, Russ Paulley, were for once agreed that larger tax cuts were called for, according to reports in the Winnipeg press. First of
The Budget-Hon. J.-P. Guay
all, we did what we could to put more money into the hands of Canadians. But beyond that, we recently provided some large tax room to the provinces in the order of $700 million. We can't give away that kind of taxing power to the provinces and still have the same ability left to give Canadians tax cuts.
If the provinces had also provided tax cuts out of their portion of the revenue, the relief for Canadians would have been even more substantial. It is sometimes easy for the provinces to make us appear the bad guys, or to make us look bad, yet they fail to look at their own province and what they are doing for the benefit of Canadians or for the benefit of the people in their own province. Just for example, you do not see any provincial government considering the possibility of taking 5 per cent off the price of a gallon of gasoline. Surely to goodness they could certainly do that.


Mr. Alkenbrack:: Why don't you take off your 10 per cent?


Joseph-Phillippe Guay: It would be nice to take off 10 cents or 25 cents, but the tax on a gallon of gasoline in Manitoba is one of the highest in Canada, so I think some consideration should be given to reducing their tax. Even if there were a Conservative government in Manitoba, I do not think things would be any better. Certainly, when Roblin was premier the Conservatives did not do any better; in fact, he put the Manitoba government more in the hole than it has ever been. So I will talk about that if the hon. member wants to talk about it. A $6 billion or $7 billion deficit is a fairly powerful stimulus to the economy, but it is still a large deficit and is widely distributed; for example, a mix of job creation, business encouragement, tax relief for Canadians and transfer payments to the poorer provinces of hundreds of millions of dollars.
Under the Prime Minister, the federal government has been accused of being centralized and too inflexible. Let us not forget, Mr. Speaker, that the provinces have absolute responsibility in many areas, the best known of which is education. Let us also not forget that in 1945 the federal government's budget represented 70 per cent of government spending in Canada, whereas in 1977, this year, the provinces and municipalities will account for 70 per cent of spending in Canada. This is quite a change.
Let us also not forget that much of the federal budget consists of transfer payments, not spent by the federal government but money that is put into the hands of the provinces through various grants and programs, or put into the hands of pensioners, the unemployed, Indians and so on. All of these groups spend this money as they see fit, but the federal government gets the blame on budget day.
We have told the provinces that we are ready to negotiate a new formula for taxing. We have had ongoing policies of decentralization of federal departments and services. Moving the head office of the Department of Veterans Affairs to Prince Edward Island is a good example, as is the move of the Mint to Manitoba. But we cannot do everything for everyone overnight. And we are willing to continue trying, to accept criticism and adapt to that criticism. But let the criticism be

April 19, 1977
The Budget-Hon. J.-P. Guay
intelligent, let it be honest, let it be constructive. Very little of this has been coming from opposition benches lately. ,
I should also like to take this opportunity to speak about other matters of great concern to all Canadians at the present time. I should like to speak about national unity and about language rights in Canada. For the benefit of the members of the House I should like to examine the position taken by certain Progressive Conservatives from Manitoba, for example, on these questions, and the inconsistencies in that party's position when elaborated in western Canada as compared to Quebec.
Recently the Prime Minister has been accused of being the cause of separatism in Quebec. We soon forget the bombs in Montreal mailboxes in 1961 and 1962 when the government of the right hon. member for Prince Albert (Mr. Diefenbaker) was in office. There had been dissatisfaction in many parts of French speaking Canada long before the present Prime Minister took office.
Let me just talk about the position of some of the hon. members opposite who come from my own province and their worthy contribution to national understanding and national unity. Many of the present members of that party voted against the Official Languages Act and they continue to work and campaign against the equality of languages in Canada. Yet the Leader of the Official Opposition (Mr. Clark) goes to Quebec and tells Quebecers that his party supports the Official Languages Act. If it does, Mr. Speaker, it barely does. But barely supporting it will not keep us a united country, a united Canada.
The hon. member for Winnipeg South Centre (Mr. McKenzie) is a good example of the intelligence and understanding members of the Progressive Conservative party bring to many issues in Canada, and to the issue of unity most of all. The hon. member says he is not against French in Canada or against French speaking Canadians. Yet he is constantly against any government spending to provide them with services in their own language. I should like to refer to the hon. member's impressive record on this question, taken from his own press release of July 20, 1976. It is interesting to note that the hon. member for Winnipeg South Centre is so proud enough of his position to put out a press release on it. The press release is as follows:
Mr. McKenzie stated that his record will show that he has taken a clear stand on bilingualism. First of all, as one of the P.C. members who opposed the Official Languages Act. ..
The Winnipeg PC member then listed some examples of times he had spoken out on bilingualism such as:
1.	Opposition to bilingual labelling and packaging. (Speech March 17, 1975)
2.	Opposition to the fact that CNR employees were not being treated fairly in regards to language training.
3.	That he was the first MP to speak out against bilingual air traffic control services...
In conclusion, Mr. McKenzie said, I think the people of Winnipeg South Centre can see that I have always made clear my opposition to the Liberal government's bilingualism policy.

The hon. member for Winnipeg South Centre has an amazing ability to make opposing statements, because in the House on March 7, 1975, as reported at page 4191 of Hansard, the hon. member said:
This bill is the most divisive piece of legislation that has ever appeared on a federal or provincial statute book. It makes a mockery of the Official Languages Act.
Here are a few of the headlines which appeared in the Winnipeg press on various occasions when the hon. member spoke: "McKenzie hits bilingual labelling"; "McKenzie critical of way language training handled".


Steve Eugene Paproski: So was Spicer.


Joseph-Phillippe Guay: Another headline: "CNR's approach to bilingualism attacked". The Leader of the Opposition should take this illustrious member for Winnipeg South Centre with him when he goes to Quebec to campaign in the forthcoming by-elections.


The Acting Speaker (Mr. Turner):: Order. The minister must refer to an hon. member of the House by his riding, not by his name.


Joseph-Phillippe Guay: As I was saying, the Leader of the Opposition should certainly take the hon. member for Winnipeg South Centre with him when he goes to Quebec, and I am sure there are others who feel the same way he does. It is interesting to me to see the Leader of the Opposition go to Quebec and state that his party is in favour of the government's language policies, while his boys back home vote against them, or deliberately exploit and misrepresent those policies. It may win them some seats in the west, but it could cost us the country in the east. My job and the job of government members is to force these people to stand up and defend their views of Canada.
The hon. member, the Leader of the Opposition, should in fact go to many of these nomination conventions in Manitoba and make it known what his policy is. Then members who will take the convention will also support him in this regard. That will give me the right to believe that the hon. member of the opposition is sincere when he tries to tell easterners that his party is a national party in regard to bilingualism in Canada.
If British Columbia sees Canada as an English country only as a result of the battle on the Plains of Abraham, and they are able to convince people outside Quebec of that view, how can we honestly convince the French speaking of Canada and of Quebec that there is a home for them in this country from sea to sea?
I am sincerely afraid that this hon. member is much more representative of the feeling in his party than is his leader. I am making reference to the hon. member for Winnipeg South Centre. To prove that he is not alone, I would like to read from an extract of an interview on radio station CKFM of Toronto with Mr. George Henderson, a Progressive Conservative MLA
April 19, 1977

in the province of Manitoba, heard March 1, 1977. Mr. Elenderson said:
No, I don't go along with ... I don't want to deny anybody of their rights . .. but I think our objective... should be to work toward one official language in the years ahead-
The announcer said: "Canada has a serious problem on its hands". Henderson went on to say: "I don't think we have a serious problem in Manitoba".


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Hamilton-Wentworth (Mr. O'Sullivan), on a point of order.


Mr. O'Sullivan:: Mr. Speaker, would the hon. minister permit a brief question?


Joseph-Phillippe Guay: I will shortly, when I am through. The moral of these lines must be: "None so blind as he who will not see".

Mr. Speaker, as a French-speaking member from the west, from Manitoba, Winnipeg, St. Boniface, I wish to express my views on Canada even if 1 am not a Quebecer. I shall start by quoting the paragraph of the preface in Mr. Keith Spicer's last report, which, 1 think, gives a good summary of the present situation. He says:
When two peoples face each other in complete inequality, the disadvantaged people, seeing no hope of progress, stays resigned and, in a political sense, calm. Then, when the gap of inequality starts closing, and hope and even expectation rise, the disadvantaged tolerate less and less the remnants of injustice. Instead of satisfying their aspirations, progress toward fairness irritates, and a raw-nerve political awareness condemns as an outrage every vestige of the earlier, genuine domination.
At the provincial level in Canada, we see a lot more than a "vestige of genuine domination".
Mr. Speaker, I am from Manitoba. It is the province of Louis Riel, of Fort Maurepas, Fort de la Reine, the voyageurs, and St. Boniface, the cradle of Christian civilization in the west. It is my province and also that of my father and his father. I am a member of parliament and a minister in the federal government and I have fewer rights in Manitoba, which entered Confederation as a province respecting the two major groups in 1871, than would English-speaking Quebecers if the white paper became law. And this in spite of what Mr. Schreyer says in Manitoba when he deals with that matter on the national network. Again I quote Keith Spicer who says on page 8 of his report about the 1,420,760 Canadians of French ethnic origin found outside Quebec in 1971, and I quote:
. . . of the 1,420,760 Canadians of French ethnic origin the 1971 census found outside Quebec, less than 48% still used French at home.
On one hand, their English-speaking neighbours tend to ignore them, tell them to assimilate, or warn them at least not to ask more than "other" local ethnic groups. Usually the same English-speakers who most loudly denounce Bill 22 in Quebec have been leading the fight for years against free choice of decent French schools and against taxpaid services in French-even when the French "minority" population reaches 50, 70, or 90% of a region or town.
Let us consider, Mr. Speaker, the statistics mentioned by Mr. Keith Spicer on page 33 of his report about the percentage of French-speaking federal civil servants:
The Budget-Hon. J.-P. Guay
3.9% in scientific research; 8.2% in biological science; 5.8% in forestry; 5.1% in physical sciences; 10.2% in chemistry; 12.5% in electronics; 8.6% in meteorology; 9.9% in engineering and scientific support; and 7% in aircraft operations.
Those rather low percentages would be even lower if they covered scientists and technicians working for Crown agencies not outside the jurisdiction of the Public Service Commission such as those involved in nuclear and petroleum research.
If French-speaking civil servants get only 22 per cent of federal positions, and if they represent 28 per cent of the population, they register a loss of 6 per cent. The average salary for those positions-as it is mainly in the technical and senior categories that they are underrepresented-is $20,000 a year and there are 400,000 positions in the civil service.
All those figures show that the French-speaking community in Canada gets 400,000 multiplied by 6 per cent which makes
24,000	jobs and 24,000 times $20,000 which this year makes $480 million less than it should get in salaries from the federal government while the English-speaking community receives in addition the equivalent, that is a difference of $1 billion this year alone. How long has this been going on, Mr. Speaker? Was the pilot strike only an opportunity to protect a monopoly of well-paid jobs? Our English-speaking pilots are surely more honest than that. However, a French-speaking pilot could think it is so.
Mr. Speaker, this being said, even if I would have liked to continue speaking on bilingualism, I would like to say a few words about questions which have been put to me and I hope to have enough time to answer.

It might be an appropriate time to discuss my duties in cabinet and answer some of the questions which members opposite have been asking. Generally, my duties are to represent the people of St. Boniface as their member of parliament. My further duties are to be a member, and by definition a western representative in cabinet. A further duty which is far more delicate and onerous in Canada today is to be the only federally elected representative of more than 300,000 Francophones in western Canada. In Manitoba I still do my normal duties as a member of parliament, besides which I now deal with province-wide situations involving Manitoba and their federal government. This is probably more involved in Manitoba where there is only one federal minister and one other government member of parliament.
Manitoba is a large province. I must re-establish contact, as a representative of the federal government and cabinet, with the areas outside Winnipeg and the major towns. In fact, I intend to visit all of them, which I am doing every weekend when I have time. I must also attempt to remain aware of the problems of a variety of groups such as farmers, fishermen, northerners, cattlemen, miners, Indians, and so on. I try to do that part of my job with more respect for the people involved than a certain minister of the Manitoba government, a member of those humanistic new democrats who said recently of two native candidates who chose a party other than his own, "They've been bought".

April 19, 1977
The Budget-Hon. J.-P. Guay
I have been pleased to have the opportunity to represent Manitobans and westerners without a portfolio because in this way I have been able to deal with a number of western concerns to which I have turned my whole attention. I think western Canada needs that broad based input to cabinet at present because of the small number of government members who represent that part of the country, and also because of the small cabinet representation of the west as compared with that of Ontario or British Columbia, for example.
Because of these broad concerns and because I have a free hand as Minister without Portfolio, I have been able to represent Manitoba farmers, and Manitoba is an important agricultural province. I believe that farming as a way of life should be maintained and encouraged and I carry that belief with me when I attend cabinet meetings.
I am also vitally interested in the resource industries such as mining, fishing and lumber, which are to be found in Manitoba, and I carry their concerns with me to cabinet.


The Acting Speaker (Mr. Turner):: 1 regret to interrupt the hon. minister but I must inform him that his allotted time has expired. He may continue with unanimous consent. Does the minister have unanimous consent?


Some hon. Members:: Agreed.


An hon. Member:: If he allows some questions.


Joseph-Phillippe Guay: I will, as soon as I have completed my remarks.
Because the resource industries do not provide a sufficiently broad economic base for smooth and continued growth, I concern myself also with the manufacturing industries and I encourage the development of the processing industries in Manitoba.
Transportation is critical to Manitoba since we are in the centre of the country. Transportation moves through the province east, west, north, and south, from all points.
Manitoba is also a maritime province with its port of Churchill. Perhaps that is why we are somewhat disadvantaged at present. I represent in cabinet not only the interests of the port of Churchill but also those of farmers, fishermen, miners and manufacturers in Manitoba who need a good, viable port of their own, and I support them wholeheartedly.
I am also vitally interested in the railways. Historically the railways have been closely linked with the west. Many thousands of new immigrants travelled to the west by railway, and many of the west's products today move out by that mode of transport. We must remember that the smaller rural communities continue to require reasonable freight and passenger rates so as to maintain contact with the rest of Canada and the world.
Manitoba, and more specifically Winnipeg, is the transportation hub of the country, and it has been that for a century.

Logically, Winnipeg is still one of the most important, if not the most important ground transportation centre in Canada.
As you can see, Mr. Speaker, the lack of a portfolio has not prevented me from representing Manitobans. In fact it has greatly facilitated this representation by allowing me scope and flexibility which I would have certainly lacked had I had a portfolio, although of course a portfolio allows a minister to do more specific things for various regions of the country, including his own. Indeed, I have been very pleased to have been given the opportunity to represent Manitoba in the cabinet. I have listened to people at the grassroots level and have spoken for them in cabinet. This has been my aim, and I intend to work in that direction.


Some hon. Members:: Hear, hear!


The Acting Speaker (Mr. Turner):: Would the Minister without Portfolio accept a question from the hon. member for Hamilton-Wentworth (Mr. O'Sullivan)?


Joseph-Phillippe Guay: Yes, Sir.


Sean Patrick O'Sullivan: As an old friend of the minister it is with sincere personal regret that I listened to his speech. Since he based part of his argument, distorting the view of the official opposition on the question of bilingualism, upon the remarks made by a provincial representative in the Manitoba legislature, can he say whether the same policy applies to statements made by Liberal members of the Quebec legislature, and do they represent, every time they speak, the federal Liberal party on matters pertaining to language issues and bilingualism?


Joseph-Phillippe Guay: I would like to say, first of all, that the theme of my speech has been the province of Manitoba and I have stayed within that context. I could have certainly developed the theme more than I did in my written notes, whether with regard to Mr. Anderson of the provincial legislature or the hon. member for Winnipeg South Centre (Mr. McKenzie), and I could have also referred to Portage Laprai-rie and other areas. My comments concerned my area. If at other times I have the opportunity to make comments pertaining to Quebec or to any other province, I will speak without constraint. I will be pleased to do so.


Sean Patrick O'Sullivan: Mr. Speaker,-


The Acting Speaker (Mr. Turner):: I suggest that hon. members are getting into a debate. This is what the budget debate is for, and the hon. member will have a chance to make his speech later on. I will entertain one more question from the hon. member for Hamilton-Wentworth and one question from the hon. member for Marquette (Mr. Stewart), and then we will go on to the hon. member for Frontenac-Lennox and Addington (Mr. Alkenbrack).


Sean Patrick O'Sullivan: Since I do not think I received an answer to my question, I shall restate it. When Liberal members of the Quebec National Assembly make statements reflecting their views on bilingualism and language issues, do they necessarily
April 19, 1977

and at all times reflect the policies of the federal Liberal party?


Joseph-Phillippe Guay: I will repeat what 1 said originally. My remarks today pertained to Manitoba only and 1 have no intention of entering into a discussion about any other province, including the province of Quebec. As I said before, and as 1 repeat, I hope to have an opportunity at some future time to state my views concerning members of the Quebec legislative assembly or of the legislature of any other province.


Mr. Stewart (Marquette):: In the remarks of the hon. member for St. Boniface there was an implication that all members of the official opposition from the province of Manitoba are against the bilingualism policy. This surprises me because I represent Marquette, and one of the bilingual districts in Manitoba is the community of St. Lazare which is in Marquette. When the commission dealing with bilingual areas made its recommendations concerning Manitoba they stated in their report that they did not plan on naming St. Lazare as a bilingual district. However, as a result of the representations of the federal representative of that area, that is myself, they decided to make this community into a bilingual district. Is the hon. member for St. Boniface implying that all members of the official opposition from Manitoba are against bilingualism in this area?


Joseph-Phillippe Guay: It is easy to give an appropriate answer to that. What I made reference to in my comments was the 17 members of the official opposition who voted against the bilingualism program.


Donald Craig Stewart: I thought you were referring to Manitoba.


Joseph-Phillippe Guay: I will come to that. With regard to the hon. member himself, I cannot accuse the hon. member for Marquette (Mr. Stewart) of being against the program in any way shape or form, but I can certainly say that most other members from the area have been against bilingualism, and I could certainly name them and quote some of the articles that have been written in the riding of Portage and in other areas where this has occurred. In answer to the hon. member's question I would say that I do not question him and I would certainly not put him in that bag, but I could put a heck of a lot of others into that bag.


The Acting Speaker (Mr. Turner):: Order, please. End of the question period!


Almonte Douglas Alkenbrack: Mr. Speaker, thank you for recognizing me and allowing me to join this debate. Even though as a result I will not be able to complete my remarks before the dinner adjournment, I was pleased to give my consent to allow the hon. member for St. Boniface (Mr. Guay) more time to complete his speech, although some of his remarks were erratic and irrelevant to the business of the House.
The Budget-Mr. Alkenbrack
When I intervened briefly in the minister's speech, I reminded him that his government is now levying a tax of ten cents per gallon on gasoline, and it is certainly not ethical for him to ask any provincial government to withdraw any portion of its gasoline levies unless his government is willing to do likewise.


Joseph-Phillippe Guay: I didn't ask them; I said they could.


Almonte Douglas Alkenbrack: I remind the minister that the federal government is a parvenu in this field and ought not to dictate to any province in this manner.
It was amusing to hear the hon. member for Renfrew North-Nipissing East (Mr. Hopkins) open his speech by making cheap and derogatory remarks pertaining to the good speech made last night by my colleague, the hon. member for High Park-Humber Valley (Mr. Jelinek). Those remarks can be found at page 4745 of Hansard. He also referred, inappropriately, to the Leader of the Opposition (Mr. Clark) and then gave us a history lecture, most of it being a quotation from another historian, the highly respected Dr. Lower from down in my district.
I did not hear the hon. member mention unemployment, the chronic illness of Renfrew county, which is much higher there than the national average. He did not say a word about that, or a word about the problems which go along with our intolerable cost of living.


Leonard Donald Hopkins: Mr. Speaker, I rise on a point of order. If the hon. member would read today's Hansard which contains the remainder of my speech, he would find that I did record my concern about the unemployed in Renfrew county.


Almonte Douglas Alkenbrack: I perused Hansard, and the word "unemployment" did not appear in the remarks of the hon. member.


The Acting Speaker (Mr. Turner):: Order, please. I point out to the hon. member that the hon. member for Renfrew North-Nipissing East (Mr. Hopkins) spoke today for about ten or twelve minutes, and that cannot yet be found in Hansard. It will be in Hansard tomorrow.


Almonte Douglas Alkenbrack: He never mentioned anything of the ills of the county or the intolerable cost of living which the people of Renfrew are experiencing under Trudeau liberal-socialist policies. He said nothing about that.
I mention this because I represent several municipalities in the southwest corner of Renfrew county in this House, and I call upon the Trudeau government to do something constructive toward restoring and stimulating the economy of the people of Renfrew county and of the riding of Frontenac-Lennox and Addington, which includes part of Renfrew county. 1 feel I have a right to mention this in this debate. I ask the Trudeau government to do something about restoring and stimulating that economy by providing work and industry which will endure and survive, not something which will just

April 19, 1977
The Budget-Mr. Alkenbrack
provide people with money for two or three months and do nothing afterwards.
Reference has also been made in this debate to the CBC and to the Liberal party. The Liberal party has begun a witchhunt in the CBC with its inquiry, which was, of course, ordered by the Prime Minister (Mr. Trudeau). The Liberal party alleges that this broadcasting corporation is pro-separatist. It is now evident that the Liberal party is just as intolerant and dictatorial as the Prime Minister.
Thousands of people saw a spectacle last night. Playing the role of an apologist for Rene Levesque, the Prime Minister spoke in Winnipeg instead of in this House and gave the west a lecture on bilingualism and on the Quebec issue. I know many of my fellow members of parliament heard the Prime Minister's speech last night. After he finished, the CBC ran a commentary and interviewed more than one member of the Winnipeg audience. When one westerner, a Mr. Shoultz, made some constructive critical remarks about the Prime Minister's speech, the interviewer promptly withdrew the microphone and would not let him finish his remarks. The only thing we can interpret from that is that this must be a new version of Mr. Trudeau's participatory democracy.


The Acting Speaker (Mr. Turner):: Order, please. The hon. member will refer to the Prime Minister of this country by his title, not by his name.


Almonte Douglas Alkenbrack: Mr. Speaker, like my colleagues on this side of the House I wonder why the Minister of Finance (Mr. Macdonald) bothered to put on that extravaganza on budget night, that charade which masqueraded as the tabling of the budget. I add my voice to the protest which has been raised in the last few days, and I ask why the Minister of Finance did not resign before instead of after budget night. If this budget is his swan song, then I can only suggest that he is tone deaf. He is just as out of tune with the times as his cabinet colleagues, including the Prime Minister.
If the Minister of Finance plans to adopt a new career when he leaves the cabinet, I recommend something other than a career as a juggler. His sleight of hand act on Thursday night was strictly bush league and, as far as I know, he did not fool anyone, with the possible exception of himself.
Budgets are supposed to provide solutions to pressing problems, and the Minister of Finance knows as well as any of us that there are pressing problems to spare. The government creates new problems with every day that passes, and it is time it at least went through the motions of solving a few of them.
The budget does not face up to any of the problems which beg for solutions. It turns completely away from the most immediate and serious problem about which everyone is talking, high unemployment. Saying that it is high unemployment is the kindest way to express it. I am sure that many of those one million unemployed-a large percentage of them chronically unemployed-would have much stronger and harsher words to describe their situation.
The issue confronting Canada today is not separatism, bilingualism, or national unity. The main issue and the main grievance of the people of this country is the collapse of our economy and the many other symptoms which go with that. We have record unemployment. We have no jobs for qualified, willing people. The Prime Minister told them in Toronto that if they want jobs they would have to go to other countries. We have a record high cost of living, with record inflation circumscribing private and personal initiatives. Our outgoing trade is diminishing, and we have record high taxation coupled with the utter ineptitude of the Trudeau government. There is gross mismanagement and waste in government administration. A government which can correct and cure these conditions will have no trouble with social and separatist problems. A thriving economy and busy working people are the best insurance against disunity.
The government makes much of the fact that it is pumping a total of $452 million into its direct job producing programs, Canada Works and Young Canada Works. The Minister of Finance would have us believe that here at last is the magic solution, that everyone will suddenly have a decent paying job, that our young people will be able to plan their lives, and that those who have been bumped out of the labour force will now be welcomed back to their jobs with open arms. But it is not going to be like that at all. What we will get for the $452 million is 150,000 short-term jobs, and the one million unemployed will be virtually unaffected. There will be 225,000 new people moving into the labour force, or should we call it the "looking-for-a-job" force? That means that there will be
75,000	new candidates for the unemployment rolls. It is scandalous.
It appears that my riding will receive about $100,000 in Canada Works funds, and another $60,000 to replace the wharf at Bath. I appreciate that measure because a new wharf at Bath is certainly needed. The one the government built less than a decade ago was poorly planned and badly constructed, so it did not endure against the assault of water and ice in the spring. Of course $100,000 for Canada Works and $60,000 to replace the wharf at Bath is small potatoes compared with what the government is planning to spend in Quebec.
The Minister of Agriculture (Mr. Whelan) says that the farmers in Quebec will be getting the lion's share of the increase in subsidies to be paid to farmers under the new dairy policy. The minister admitted that politics was involved in the hike in subsidies, and in the same breath said that the government was not trying to buy votes in the province.
The plain fact is that the government has been involved in buying Quebec votes with the funds in the federal treasury for a very long time, for the full term of the present government. It seems that everyone except the government can see that the results of that policy have led Canada to the brink of destruction. Another example of this is the revival of the capital works program. The program was revived, but only so that another


April 19, 1977
$215 million could be earmarked for federal construction projects in the coming year in Montreal.
I think that these capital projects in Quebec, such as the Montreal and Hull projects, should be stopped until we see what the situation is going to be vis-a-vis Quebec separation. After all, this is not Quebec money that we are talking about, it is money collected from Canadians all across our country. It is another scandal piled on top of a long list of scandals when the government spends hundreds of millions of those dollars in a vain attempt to shore up the sagging economy and its sagging image.
It is time for someone in the country to exercise leadership in this matter of Quebec versus the rest of Canada, and the place to start is to recognize the fundamental fact that Quebec is still a province of Canada and is therefore subject to the laws of Canada and the Canadian Constitution. For several years now Quebec has been telling us what it is going to do, and what we are going to have to do for it. It has been a one-way street, with all of the dialogue directed at what would be best for Quebec rather than at what would be best for the majority of the people of Canada. I have many written protests from the electors in Frontenac-Lennox and Addington regarding this situation. We cannot spend our way out of this situation, and even if we could it would be a fraudulent use of public funds. The funds collected by the federal government, and held in trust for our people, cannot be used for the benefit of a small sector or a small group of our people to the exclusion and the detriment of the rest of the people.
Still another example of this fallacy is the expenditure of billions of dollars on the federal government's bilingualism program. It has been proven beyond any reasonable doubt that the bilingualism program has been, and is, a disaster of monumental proportions. We are not getting value for our money. It has divided the country into linguistic and even racial groupings, and there has never been a government program or project in our history that has been so damaging to human relations in our country. That is why the Prime Minister made apologies for it last night in Winnipeg, as best he could. In spite of all that, the government has budgeted another $405 million for bilingualism in the coming year. This is money down the drain, at a time when the state of the Canadian economy is the worst in the memory of most if not all members of this House. One of the many reasons why our economy is in such bad shape is that Canadians can no longer compete in world markets, or even in their own domestic markets. The people of my riding, Frontenac-Lennox and Addington, are fed up with this condition, and I have many letters of protest.
It has been noted in these debates that the deficit in Canadian foreign trade as of last year was $11 billion. This deficit is increasing at an alarming rate, every day that passes, and I think that we should all be alarmed at the rate at which it is growing. For instance in 1975 the foreign trade deficit was about $5 billion, and one year later it was $11 billion. That is certainly a sure sign that we are in serious trouble-brought on by Trudeau liberal-socialist policies.
The Budget-Mr. Alkenbrack May I call it six o'clock, Mr. Speaker?


The Acting Speaker (Mr. Turner):: Order, please. It being six o'clock I do now leave the chair until eight o'clock this day. At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
Almonte Douglas Alkenbrack: Mr. Speaker, just before the House rose for dinner I was talking of the sickly condition of the Canadian economy. We used to be a country whose products were in demand all over the world, and that applied to manufactured goods as well as natural resources, raw resources, the export of paper pulp and all grades of paper, including newsprint. Over the past few years we have gradually but surely priced ourselves out of those markets. Our former customers in the United States have been looking around for better deals in these products, and it now appears that the markets for most of our products have been lost to us for all time.
The new suppliers are trying harder to keep their customers than we have done, and a good case in point is the fact that for the fourth year in a row we have been losing customers to German, Japanese and even American suppliers. The cost of production in Canada keeps rising at a faster rate than in any other country, and at present it costs us from 10 to 25 per cent more to produce a product than it costs United States producers to make the same product.
Firms which have deserted Canada for the U.S. claim that it costs 25 per cent less to start up a new industry in the U.S. than it does in Canada, and 25 per cent less to operate, taking into account the costs of labour, materials, energy and taxes. The unions on the one hand, and the Trudeau government on the other, seem to be determined to price Canadian products out of every market left to us and, believe me, there just are not many markets left to us any more. Today's newspapers tell us that the State of Vermont is luring industry away from Quebec and Washington State is attracting industry away from British Columbia.
Last year, for instance, workers in Canadian manufacturing industries received wage increases averaging about 14 per cent; and labour leader Joe Morris wants wage and price controls lifted so that his workers can get even more. They say they will need catch up wage increases to compensate for the wage and price controls of the past two years. Mr. Speaker, that would be a big laugh if it were not so serious. In the United States, where they have not had wage and price controls, the average wage increase for workers in manufacturing industries was below 8 per cent. That is one of the main reasons for their taking away our markets in manufactured products.
Here, in Canada, since the mid-1960's we have seen a rapid expansion in the public sector and a decline in the growth of the private sector. The public sector, the various levels of government, now accounts for about 48 per cent of our gross

April 19, 1977
The Budget-Mr. Alkenbrack
national product, narrowing the field still further for the vital growth factors such as savings, capital investment and exports. We simply cannot continue to operate in this way if we expect to survive as an exporting nation, and that is the only way we can possibly survive. Putting it very simply, we cannot survive unless we export.
The surest sign a country is in serious economic difficulty is when people who work with their own capital begin to leave it, in search of greener investment pastures. We have that situation in Canada right now. Never before in our history has there been such a rush of capital out of the country. It is estimated that last year $1 billion in investment capital went out of Canada to the United States and other countries, but mostly to the U.S. High labour costs, high material costs, high taxes, senseless and harassing government meddling-those are some of the reasons why people with money are packing up and leaving us. The band-aid measures in the budget designed to stem the flow of capital and expertise out of our country fall far short of what is needed. We have arrived at the point where we need a great deal more in the way of inducements than these piddling half measures.
This budget should have set in motion the machinery for scaling down federal government involvement in the national economy. There has to be a turn around in the relationship between public and private sector spending activity. This budget could have been used as the vehicle for announcing a massive cutback in public sector spending, matched by a corresponding reduction in taxes. An acceleration in private sector spending, largely in the investment sector, cannot be initiated without incentives. These incentives must be of such a nature that investors will have confidence not only in our national economy but in our national government as well.
All too often the government has announced incentives, for instance in the way of tax relief, and then either rescinded the measures later or cancelled them out by adding taxes in another area. The budget we are now debating offers band-aid incentives to business, but then it proves beyond a shadow of doubt that the government intends to step up rather than scale down public spending. The ten cents per gallon excise tax on gasoline, for instance, was not rescinded. The government will collect about $750 million this year with that stupid tax which increases the cost of energy.
We find that the federal government, having opted out of succession duty taxes, now plans to tax the proceeds of life insurance policies. As my colleague from Parry Sound-Mus-koka (Mr. Darling) said in his remarks on the budget, the government is reduced to robbing the dead in an effort to grub more money from the already over taxed Canadian taxpayer. That is about the only way to describe the proposal for taxing the proceeds of life insurance policies. Without doubt the government has plumbed the depths of infamy in its tax policies and in the way it has squandered the money squeezed from Canadian wage earners.
Even when the government appears to give the taxpayer a break, there is always a catch. 1 am referring to the proposal to remove capital gains tax from the sale proceeds of a farm or

small business. If you examine that proposal closely you will find that it is only a half measure, one which will allow the government in time to realize a capital gains tax from the sale of a farm or business. For instance, the tax really is only deferred if the proceeds from such a sale are reinvested in another farm or business. An individual or family who worked for 30 or 40 years and wants to sell a farm or business in order to enjoy a few years of retirement will be hit with the tax. In many cases it will no doubt make the difference between realizing, or not realizing, enough from the sale for a family to be able to retire in circumstances that it has a right to expect. In time, even if the proceeds from such a sale are re-invested in a similar enterprise, the government will get its pound of flesh when the business is eventually sold and the proceeds are not immediately re-invested. It is the old story of how this government seeks in every possible way to penalize initiative, resourcefulness, thrift, and free enterprise.
To return to the statements I made earlier with respect to the growth in the public sector, and the impediments that the government places in the path of growth in the private sector, it appears to be a pattern that goes back to the Prime Minister's earlier training and experiences in socialism at the Marxist London School of Economics. Understandably, the Prime Minister has gathered around him a coterie of London School of Economics trained economic geniuses, people who have destroyed more economic systems than any other group of people in the world. To the Prime Minister and his superplanners and the other products of the London School of Economics, socialism is a magic word, the cure-all and the great panacea of the world's economic ills. Well, Mr. Speaker, nine years of that kind of economic gamesmanship have brought us to the brink of moral, political, economic, and social bankruptcy.


Mr. F. A. Philbrook (Halton):: Mr. Speaker, I appreciate the privilege of speaking in the 1977 spring budget debate. In retrospect somewhere down the road, it could turn out to be a very significant budget for this country.
As unorthodox as it may seem, I will try to be brief and stick to the subject. In deference to my good friend, the hon. member for Hamilton-Wentworth (Mr. O'Sullivan), I will try to speak without reading, that is, off the cuff. Unfortunately he is not here at the moment.
I have to admit that when I first listened to the budget speech, in contrast to previous budgets, I found this one difficult to assess immediately. Having to make a statement on it to the media, one would have to admit that it required some careful study over a period of time, perhaps a week or so. I think that helped a great deal. Usually with the budget we expect some immediate impact, some characteristic feeling about it. While this budget provided some of this feeling, it required extra study.
This budget tended to continue the shift to a free enterprise type of economy. I consider that all to the good. I hope the members of the official opposition will agree with that.
April 19, 1977

There was a great expectation of certain dramatic moves such as the end of controls and perhaps some sweeping tax cuts, at least for the consumer if not for corporations and for business. That might have been very popular, but I think the feelings about such moves were divided. The results were quite unpredictable. As popular as this might have been, it meant that avoiding these traps was a very courageous move on the part of the Minister of Finance (Mr. Macdonald).
With careful study, the thrust of this budget emerges in a number of ways, perhaps half a dozen. First, as I mentioned, there is intended to be less government and more private sector initiative and responsibility. Governments of all kinds feel that desire in the Canadian public and elsewhere. Certainly the Canadian public feels strongly in this way. We have come a long way down the road toward government programs. Many are in place. Now is the time to get back to private initiative.
Second, and this is very important in this time of high unemployment, there is an increasing feeling that we need to create real jobs through investment in the private sector.
Third, we need more regional development on behalf of our fellow citizens in some of the less developed, less industrialized regions. I think all members agree with that.
Fourth, the minister has obviously opted for some specific tax relief, not the broad sweeping changes some expected, but measures that are realistic, possible, hopefully non-inflationary, and of help to those who need help most.
Fifth, there is an honest attempt here to continue implementing government spending restraint to the tune of S650 million, or an annual increase of about 7 per cent, much smaller than in previous years.
Sixth, the anti-inflation fight continues because there must be no end to the controls before there is a commitment on the part of everyone to continue in the spirit of voluntary restraint.
Seventh, there is a call in a general sense for business, labour, and all sectors of the Canadian public to work together on Canadian problems.
Every time there is a budget, and this one is no exception, there is a tendency to describe it in a derogatory way as a do-nothing or stand pat budget. 1 do not believe it is that. For those who take a careful and intelligent look at it, it is a budget that requires some study and interpretation.
There are two problems. It is a very technical budget in terms of measures introduced. Second, it returns a great deal of the initiative in solving our problems, particularly economic problems, productivity, industrialization, jobs, in fact the whole package, to the private sector where it belongs. As a rider to this aspect, the important point is the follow-up. In this case the government has not said it is going to spend so much and going to accomplish so much. It said it would open the doors to the private sector. They now have the opportunity to do what they said they wanted to do. It will take at least six months to get some kind of response and results.
This general approach back to the private sector, free enterprise, is not one which will please our socialist colleagues
The Budget-Mr. Philbrook
in the House. That is not their way of thinking or doing things.
I do not believe it is the way this Liberal party is going in the future. However, 1 have difficulty understanding when our Conservative colleagues tend to criticize a budget or thrust like this roundly.
I will give some reactions to this later, but I would like to quote now from a man who said this budget is honest medicine. He said that he did not think he would be the only person supporting the federal budget "when the smoke clears away in the few days," that is, after the budget had been presented. He said the cure lies in improving the country's competitive position in world trade. We have to be very leary of revitalizing the inflationary pressures that are still there. He applauded the federal decision not to reduce its sales tax. How much more do we want to stimulate consumer spending? "It is good. Our expectations are already too high." The man who said this is the treasurer of the Ontario government, Mr. Darcy McKeough. He is not considered a Liberal and is many times a critic of this particular government's policies. In this case, however, he is right in line. He also said, in the face of criticism from the leader of the NDP in Ontario, that he would have us in the same mess that the United Kingdom is in, dragged down by socialist policies.
His boss, the premier, said he wants to see plans for the post-control period before the anti-inflation program is removed. In this case we have a pretty solid endorsement for this budget from the Ontario government.
From the first there has been one thing that disappoints the suburban riding of Halton and its member of parliament. This is not entirely unpredictable. It is the fact that there was no mention of support, or even a spirit of suppport, for financial assistance to commuter transit such as the GO train in Ontario. I will not go into that subject in great detail because it has been covered in a previous speech. But I thought it would be in the spirit of working through the private sector in terms of boosting Canadian industry, rail cars, buses, and so on, and also in the spirit of energy conservation.
What, then, is the general thrust? It is designed to be in favour of private business and of the economy in general, and also in favour of people, in the sense that they are not separate; they are inseparable, and our best hope of creating employment-the minister has seen this and has done his best to implement it in difficult financial conditions-is to create employment through the private sector. To do this, we have to boost the economy. We have done this in several different ways-in terms of tax changes, to encourage risk taking, and particularly to encourage small business in Canada, in addition to the other thrusts, having a minister for small business, less paperwork and all the rest of it, tax relief for families hardest hit by inflation, and increased employment expense deductions. I shall not go into this in detail because these things have been set out in pamphlets and so on.
The creation of employment is to be done, as we have said, not by government jobs, not by Canada Works programs and

April 19, 1977
The Budget-Mr. Philbrook
so forth, which we now realize are very limited, important as they are, but through investment in the private sector. This makes for real, long term jobs. Other measures include boosting the equity market, the cash flow, the sort of thing business needs to thrive and compete overseas or, at least, to compete here in Canada against imported goods.
Then there is the aspect which is so difficult and upon which we all agree, I think, that of helping regional growth, particularly in the maritimes. Even here, in terms of creating jobs through investment rather than through government, it might not be the NDP approach usually. But when we were discussing the transit policy I noticed encouragement even from that quarter when the members of this party wanted the growth of business, and real jobs, because they did not seem to want handouts.
I do not want to be repetitious and go into all the various points of this budget. Very briefly, to set the stage, there are at least ten different ways in which the budget attempts to help the business community. First, there is an investment tax credit which is not only being continued but is being extended for the needy regions and for research and development in science and technology, which is a great boost for this country. Second, there is 3 per cent inventory deduction. Third, there is an increased dividend tax credit. Fourth, capital gains are included in the $1,000 exemption. Fifth, there is the provision affecting stock dividends for public corporations. Sixth, there are some income tax changes and, it is to be hoped, a simpler income tax process involving much less paperwork. Seventh, there is provision for easing the cost of metric conversion. Eighth, stock options for private Canadian companies, not just for executives but for any and all workers. Ninth, gains on Canadian securities are to be taxed at a lower rate. Tenth, provision is made for deferred taxes on reinvestment with particular reference to farms and small business-this can only be a very welcome move, and, finally, increased sales tax exemptions.
There is certainly enough there to make business interested, and we have reason to expect a good response from business. If we get that response, we hope there will be even more consideration extended with a view to helping make this economy what it should be.
As for the general public, although there may not be sweeping changes, big tax cuts, there are temporary tariff reductions, job creation measures under the Canada Works program costing $100 million-but that is to be added to more than $450 million, making more than half a billion dollars, which is not insignificant in terms of government job creation on a temporary basis in difficult times.
Finally, I would call attention to the exercise of restraint in government spending. I think this deserves great credit. It had to be a great struggle no matter who was involved.
The theme is for government to encourage a combined effort between business and union leaders to fight inflation and to stimulate increased growth through investment. It is bound to take a great effort of will on the part of all Canadians,

particularly Canadian leaders who have often in the past found themselves on opposite sides of the argument.
Of equal importance is the negative aspect of the budget, in a healthy sense, the traps which have been avoided. Here again the minister deserves credit for his courage in avoiding more government spending in areas where there is always great pressure, avoiding more protectionism for our weaker industries and avoiding a premature ending of controls, something which is really not wanted by the provincial governments or by the small business community as represented by the CFIB under the well known John Bullock, and probably not wanted by the majority of Canadian people, if we can believe the polls.
I have already made reference to unemployment. It is a difficult situation. It is an unusual situation compared to experiences in the past-it is certainly capable of a very different analysis from that applicable to the depression of the 1930's. Unfortunately, there has been a great deal of misunderstanding in this field. I believe the minister has been maligned. I notice one headline saying "The Job Problem Will Remain". I think the writer ought to have added the words "for now" because there are many recent studies, reliable studies, to indicate that this is a temporary problem which will end with the 1980's . The most recent study comes from the Ontario Economic Council and I believe it is encouraging to those who want to look at all the facts. Also, this is a world-wide problem and I think we are tackling it as well as anyone could.
The subject of controls is a very interesting one, too, because of the pressure upon the government to remove them. There was an article in the Toronto Star of March 24 entitled "Big Business and Big Labour Can Wait". It talked about a new alliance to end controls, the famous group of union leaders and businessmen. The article asked: Whom do they speak for? Who is running this country anyway? That is a good question and I think that with this budget we once again know who is running the nation. It is the Government of Canada. These controls must not be removed, much as we dislike them, much as we want to get rid of them, until we have a pretty convincing agreement on voluntary restraint.
Again I return to my favourite point. I find it disappointing that there hasn't been some mention of support for urban transit. This is a view with which I understand at least one person agrees, the head of the Liberal party in Ontario, Stuart Smith.
Public reaction to the budget is very interesting. I do not think there is any question but that it has been well received by the business community, perhaps not as well by others, but certainly by those interested in business economics. I might mention again the reaction of Darcy McKeough of the Ontario government. Ron Anderson, a writer on economics, referred in the Globe and Mail to a re-establishment of the business relationship, that is with government, of course. William Daniel, the president of Shell, said that we had "bitten the bullet" and that this would pay off. Forrest Rogers of the Bank of Nova Scotia called it a "sober but constructive budget in difficult times". A large group of bond dealers showed a
April 19, 1977

positive reaction to the budget and called it a tough, anti-inflationary budget, and applauded its tone. Jeff Carruthers of the Globe and Mail said the write-off scheme should boost frontier oil and the search for new gas supplies. F. H. McNeil, chief executive officer at the Bank of Montreal, was quoted as saying that regional incentives are better than subsidies which generally get wasted.
A large group of top executives in Canada were quoted as being in support of the budget. I mentioned Ronald Anderson of the Globe and Mail a minute ago. He is also quoted as saying that the incentives for investment provided in the budget are the soundest approach to job creation, even if there is an inevitable lag before the effects are felt in the labour market. I. H. Asper was also reported in the Globe and Mail as saying that it has taken nearly two weeks but has finally sunk into the consciousness of Canada's tax watchers that the budget contains such fundamental and important restructuring of the tax system that it will surely be looked back on as one of the most important.
A group of economists gave the budget a passing grade and said that it was preparing for the day of recovery. The Globe and Mail lead editorial on April 1 said the budget was important if it works, that it was courageous. The Canadian Manufacturers' Association applauded the thrust of the budget and said it would control inflation and reward industry. The petroleum industry was pleased with the frontier incentives. Apparently there was a positive reaction from the stock market, according to Crang and Ostiguy. Through CFIB, John Bullock, on behalf of small business, said the budget helps and that we will be happy to keep controls. Then finally, Mr. Sam Hughes, of all people, of the Chamber of Commerce, who has often been a very strong government critic, said the budget was good for business and for the economy.


Sean Patrick O'Sullivan: Oh yes?


Frank A. Philbrook: A welcome back to the hon. member. There were, of course, some reactions against the budget. Apparently there was disappointment among oilmen who regretted the failure to make provincial royalties deductible at last-an old argument. Then, of course, union officials disapproved. Some of the leaders of the NDP, both provincial and federal, disapproved, as did some reporters, such as Geoffrey Stevens, who said it was a cruel budget and accused the Liberal government of "out-torying the Tories". Some of the unemployed, of course, were disappointed. But this is a rather interesting group. I have cited and it is perhaps as much a reflection on their ideas and attitudes and their failure to take a general long-term look at the whole situation as it is upon the budget itself.
Personally, Mr. Speaker, I have not found a great deal of public reaction to the budget, which is strange unless it is because of the point 1 mentioned earlier, that it will take time to see what are the results of the budget. So perhaps that is a good thing. Other budgets have suggested immediate promise
The Budget-Mr. Kempling
and have been disappointing. Where there has been reaction from constituents I have found it mainly on two points. The first had to do with the RHOSP changes; some had taken advantage of the loopholes which are now blocked. The second had to do with estate tax, which in recent years we had avoided.
I think the consensus is that the important thing is the follow-up, the response that we get from the private sector to the opportunities provided by the budget, such as the opportunities to invest, to strengthen business, to boost the economy, to create jobs, and all of this through the private sector.
The media also quoted the Minister of Finance as saying that it is a waiting game; that he will watch the economic indicators, but that if necessary, several months down the road-it is not very long and we cannot afford to wait very long-there will be more additional direct federal expenditure in the autumn, perhaps through the supplementary estimates. I take it that means more government spending, more direct government action to create jobs, and so on. If this is the case it will be a very unfortunate turn of events for this country. 1 think our best course now is the one that has been indicated- job creation through the private sector, through business and industry, without government involvement.
As to anti-inflation controls, Mr. Speaker, it seems evident that the intention is to phase these out as soon as possible, because whether we need them or not they are not going to work in the long term. "As soon as possible" seems to be late in 1977, according to the minister, whether or not business or labour co-operate. I think that is also a very sound move.
Finally, Mr. Speaker, if there is one major reaction to the budget in a surburban riding like Halton it has to be in terms of commuter transit, our hope to enlarge our public transit system through the provincial Go-train system. 1 have mentioned the changes necessary in Union Station and the railway bottleneck nearby at Bathurst. These matters are urgent. Perhaps the money is available and there will be commitments in the near future; in the meantime we had hoped to see some mention of this in the budget. I think there is a sincere desire on the part of the people of Halton riding to work through the private sector and participate in some kind of industrial strategy which is going to get the country moving again in the free enterprise sense.


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, let me say at the outset that I regret that the hon. member for Halton (Mr. Philbrook) had to make reference to my colleague from Hamilton-Wentworth (Mr. O'Sullivan). The fact is that he was behind the curtain while the hon. member was speaking. Perhaps the hon. member for Halton should have taken his advice regarding his speech the last time they confronted each other in this House.


The Acting Speaker (Mr. Ethier):: Order, please. The hon. member for Halton is seeking the floor on a point of order.


Frank A. Philbrook: Mr. Speaker, I should like to make it very, very plain, in view of the comment just made by the hon.

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member for Halton-Wentworth (Mr. Kempling), that my reference to the hon. member for Hamilton-Wentworth (Mr. O'Sullivan) was made in a very friendly and respectful sense. 1 think they should know that.


William James Kempling: Mr. Speaker, I am sure the hon. member for Hamilton-Wentworth recognized that.
The tragedy of the budget presented by the Minister of Finance (Mr. Macdonald) is that he lost another opportunity to set the Canadian economy on a straight course to recovery. There have been several lost opportunities. One was when the anti-inflation legislation was introduced. It could have been a pattern for national unity. It could have been a call to the people of Canada to pull together and overcome inflation. It could have called upon all levels of government to reduce spending and ease the tax burden on all citizens. Instead it has become a document that has created terrible disunity in Canada. That is why we are calling for an end to the AntiInflation Board.
The consensus gap between the federal government and the provincial governments has widened; the debate on resource taxation has continued with no resolution in sight. Election promises on urban transit funding have been withdrawn, and months of planning at the provincial and municipal levels frustrated The extension of urban transportation to aid in energy conservation has been brushed aside.
The government, Mr. Speaker, through the Minister of Finance had an opportunity to set us on a straight course to economic recovery. We have a net outflow of investment capital from Canada because of high taxation and a depressed economy, and many investors in Canada, both large and small, have lost confidence in our economy and the government's ability to set it straight. In view of these facts, these investors have taken two decisions: either invest money offshore, outside of Canada, or leave it in the bank and play the short-term investment game.
The action taken by the minister in the budget is better than nothing, but it is totally inadequate to deal with the serious problems we face. The relief given to small business is long overdue. At least it gives the Minister of State (Small Businesses) (Mr. Marchand) something to say, something to work on, but it is not enough to stimulate the small business community. It will do little to cut into unemployment or increase productivity. In fact this is the first budget that I can recall where the government is planning for increased unemployment. The government plans to spend $4.4 billion on unemployment in fiscal 1977, and $5,055 million in fiscal 1978.
The job creation features of this budget are a little more than a sham. They will not create sufficient unemployment to take care of the new people entering the job market, let alone provide employment for any immigrants who may come to Canada. In fact I thought the thoughtless comment of the Prime Minister (Mr. Trudeau), when he was discussing the

unemployment matter with some university students and he suggested they should look outside the country, deserves some kind of a medal for intemperate and thoughtless remarks. It was totally uncalled for. I have said that the tragedy is in the opportunities lost by this government.
Let me turn to some positive suggestions that I think should have been and could have been in the budget. Had the minister acknowledged that we have more than 1,300,000 unemployed, he could have said our budget would be designed to deal with this serious problem. Rather than pay out an increasing amount of taxation in unemployment benefits, he could have said that we are going to put in place taxation incentives to encourage the private sector to expand and employ more of the people who are presently without jobs. He could have said that the revenue realized from the capital gains tax is much less than we anticipated when it was put in place, therefore we were going to rescind this tax. He could have said that we were going to encourage investment in small business. We need venture capital in this field.
The minister could have allowed the creation of small business investment corporations where a 100 per cent writeoff would be allowed and where taxation would apply only when earnings are realized. He could have convened a conference of finance and resource ministers to work out a balance of taxation that would encourage and stimulate resource development and parallel research and development policies to ensure their competitiveness. He could have allowed more research and development incentives to industry to allow them to upgrade their plant products and machinery and technical skills so as to be better equipped to compete in the export market. He could have announced the convening of federal, provincial, and municipal conferences to work out ways and means of reducing the tax burden on the tax producers of this nation, because that is a very serious problem. He could have looked seriously at the concept of zero budgeting at all levels of government and taken the initiative at the federal level to try it on a trial basis in certain departments.
Had the Minister of Finance said we were going to aim at a balanced budget in five years' time and we would make every effort to reach that goal, had he said we would endeavour to cut unemployment by two thirds in that five-year period and work toward making the unemployment insurance fund actuarially sound, where the contributions are in balance with the payout or as close to it as we can get, it would have contributed to a feeling of confidence in the country. Had he announced that he would introduce into the House of Commons for debate Canada's position, aims and objectives at the GATT conference in Geneva, so that industry will know the direction in which we are moving, he would have been applauded from coast to coast.
At this time our industry is operating in the dark. Letters received by many members of this House from industries in their constituencies indicate the complete and utter frustration they are experiencing with our GATT negotiations. Faced with high taxation, controls on profit, high interest rates, and inadequate depreciation allowances, industry has reacted with
April 19, 1977

cutbacks in new plant and machinery development, cutbacks in research and development, reduced employment, and a pause in future planning.
What would the reaction and outcome have been had the minister done this? What would the reaction have been had he taken those positive positions I have just put forward? I believe there would have been a very positive reaction. I believe there would have been a feeling of confidence spread across the country. There would have been a pause and reflection by those who are investing offshore, and a recommitment to Canada and its future. With an upsurge in confidence in the future economy of this country, the Bank of Canada could have pursued an appropriate monetary policy because there would have been a tremendous increase in the velocity of money presently in circulation.
If the Minister of Finance had said in clear open terms, "To hell with socialism; this is a free enterprise economy and only by encouraging and re-enforcing the private sector can we adequately deal with unemployment, trade deficits, balance of payments deficits and inflation,"-had the minister and the government had the courage to say that, there would have been a positive reaction right across the country. But this was not the case.
The government still listens to and is motivated by socialists. If the taxation load continues and government spending at all levels increases, there will be no wealth to redistribute. The government could have moved to decrease spending rather than increase it by almost 10 per cent. It could have reduced taxation beyond that announced in the budget and worked on the take-home pay concept rather than continue the AIB wage controls and profit controls. No, Mr. Speaker, this budget does not deal with the realities of the situation in Canada. Spending $8 million to give employment to 1,000 people under so-called tough conditions could have been better placed to retrain hard core unemployed in useful and productive employment. Spending $4.4 billion on unemployment payments has to be a terrible indictment of this government by its own admission.
There are people who hold a genuine fear for the future of Canada. They see little hope for the regional disparities we face, little hope for improvement, and little hope that four or five or ten years down the road actions taken today will lead to an improvement in these areas. The same uncertainty is evident in our universities in research and development. Their research and development are being frustrated by lack of funding, and long term planning is impossible.
We should be looking at a massive effort into the technology required to bring the tar sands on stream. Most of the cost of a barrel of tar sands oil is in taxation, royalties, and interest on the cost of plant and machinery. Would it not make more sense to tackle this problem openly to relieve the energy costs we face, rather than say we will continue to pay more and more for fossil fuels as stated in the budget? Would it not be more realistic to end the confrontation with the maritimes over offshore resources and give them a realistic base for their economy, than to continue to pursue the present policies of this government? Should we not be committed to a maritimes
The Budget-Mr. Kempling
region that is self-sufficient, strong and economically viable, rather than one that must beg, bargain, and barter politically for handouts from the federal government?
The opportunities lost by the minister and the government will leave a scar on the social fabric of the country for years to come. The people are crying out for a change in direction. They want hope for a reasonably secure future. They are angered at the pious statements by responsible government leaders who say Canadians are living too high off the hog. They are sick at the sight of a government that refuses in practice to curb its own appetite for tax dollars. They know that the events in Quebec on November 15 last resulted from the frustrations of the citizens of that province with a government that was corrupt and unable to handle the economy of the province and keep people employed.
The people of this country are angered at the central government for its continued invasion of their privacy, for the continued erosion of their savings, for the political gamesmanship of confrontation with the provinces, for not realizing the difficulties faced by the urban centres in Canada, for the continued attack on free enterprise and the profit motive, and for the indexing of pensions for senior civil servants and members of this House and the Senate. Yes, Mr. Speaker, the people of Canada are angry. They are angered and frustrated at a government that lacks a sound energy policy, and that refuses to state clearly its position on the future of nuclear energy. They are frustrated that it refuses to move to put some clarity and reason into the ongoing debate on the disposal of nuclear waste, and that allows outright misinformation and uninformed views to have a broad public platform and inflame a highly technical subject for which reasonable answers and solutions are available. The anger runs deep and it will take years to dispel.
It used to be said that the twentieth century belonged to Canada, that this was a country with a great future, and that Canadians were an energetic, productive, and intelligent people. Today we see division, separation, discontent, frustration, misunderstanding, confrontation, and an endless number of pressure groups. We have people who are stimulated toward unrealistic expectations by lotteries, where the odds on winning are unbelievable. We have a country that is being run more and more by regulations and rules that are changed without reference to parliament, where the regulations have the force of statute, and those who make the regulations are not accountable to parliament and the people of Canada.
There are thousands of people in the business community who have contributed to the economy with their skills and enterprise. All they want is a chance to continue to see the benefits of their efforts accrue to them. Like them, I fear for the future of this country. They are tired of the cheap political opportunism. They are tired and angered at the nameless, faceless bureaucrats who guide this country and who write legislation continually reinforcing through regulation the power of the bureaucracy. They are angry at highly paid bureaucrats who show their arrogance by indexing their own

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pensions. They are fed up to the teeth with the bureaucratic flatulence and puffery they read in government releases.
People I talked to before this budget was brought down were hopeful for changes. They said, "Surely we have hit bottom. Surely now they'll come to grips with the problems. Surely the experiment with socialism is over and a lesson has been learned". That is what they were saying. The budget did little or nothing to change the scene, and the government stands condemned before the people of the country.
I despair at the conduct of business of this House, at the secrecy, at the manoeuvring, at the endless reports and studies that never see the light of day. I am disgusted at the argument put forth that we cannot touch certain spending estimates because they are enshrined in statutes. In the commercial world anyone who rested his case on that would be relieved of his responsibility.
When we are presented with a national problem we cannot openly discuss it because the government shrinks from open discussions-rather, it takes refuge in consultants and commissions. "Put it to a consultant or a commission", they say, "and remove it from the House of Commons". That is a standard tactic.
The committees of this House are underutilized. They have little or no authority. Watch the gamesmanship at a committee. There is a two-hour meeting. The minister arrives late- there is not a quorum, so 30 or 45 minutes are lost. Then the minister reads an opening statement-another 15 minutes down the drain. I am convinced that many of these moves are planned because the objective is to cut down the time allowed for questioning. Watch the clock, is the criterion for many committee meetings. Stall, drag it out, frustrate them, then when you want the bill through committee stage, schedule three sittings a day and wear the members down with the pressure of time. We have seen it happen.
I have sat on a committee and have seen a minister with 25 aides from his department in attendance. At one meeting I estimated there were half a million dollars in salaries sitting there, watching the clock, and playing the game.
If this continues, if the secrecy continues, if the manoeuvring continues, then whatever relevancy still remains in this House will be lost forever. Democracy as we know it will be gone, and we will become a people possessed by an all-powerful bureaucracy.
Let me turn now to research and development. The Minister of State for Science and Technology (Mr. Faulkner) dealt with this in his remarks in this debate. But, Mr. Speaker, he missed the point completely. He dealt extensively with statistics of the percentage share of research and development of industry, government, and the universities. He then went on to describe the historical background of research and development in Canada. Well, Mr. Speaker, the minister was merely jawboning. What he said is well known. What he did not say is that the total effect of the budget allowances for research and development combined with Bill C-26 is that there will be less

/ money available for research and development in the period ahead.
The make or buy policy of the government will in time diminish the role of the provincial research foundations. Only 1 per cent of our industry can become involved in the make or buy policy of the government.
What the minister should be saying is what he and the department will do about the decline in industrial research from 1.2 per cent to 0.7 per cent of sales. He should explain how, when ITC cancelled the IRDIA program which gave a 25 per cent contribution to research, the 5 per cent on capital cost allowance can replace the 25 per cent given under IRDIA. He should explain that when cutback spending was called for, the lump sum represented by IRDIA happened to be equal to the amount the department was instructed to cut from its spending. That is how IRDIA was really cancelled. The minister should also explain how he could possibly say in his remarks that the 3 per cent inventory adjustment will benefit research and development. It has no relationship to it whatsoever.
Perhaps the minister will explain how he sees the Enterprise Development Program can replace PAIT. After all, PAIT did have a precise direction, but the Enterprise Development Program is a slush fund that has no technological objectives.
The Minister of State for Science and Technology was playing loosely with some dubious statistics. What he could have told us is how this government, this budget, and the Minister of State for Science and Technology will deal with the $10 billion deficit we have in manufactured products. How will this be dealt with and what changes can we expect in the near future? That is the central question, Mr. Speaker.
In the current world trading environment, customers for manufactured goods are placing growing emphasis on product quality and performance and are unwilling to accept inferior products based on obsolete technology, even when there is a considerable price differential. In order to compete in the international market place we must have a high degree of product specialization. That specialization must be supported by a strong technology that flows from an industrial science policy.
We are not competitive in export markets-we have given up 25 per cent of our domestic markets to imports. We have trade missions travelling all over the world seeking out export markets. But surely you realize that export markets for manufactured goods can only be developed from a strong domestic base. Many of our traditional resource markets have been eroded due to competition and low productivity from worn out plants. Probably the pulp and paper industry is the best example. In Quebec we note that 60 per cent of their pulp and paper plants are more than 40 years old.
The need for a comprehensive industrial strategy has been recognized for several years. The development of a strategy that would employ some of the million plus unemployed must be reinforced by a comprehensive research and development policy. Such a policy should be designed to work closely with
April 19, 1977

the provincial jurisdictions. It should complement their efforts and reinforce the base of their economic planning.
When working with limited resources for research science, funding policies should be designed to put the maximum amount of money to work rather than create unwieldy bureaucracies that siphon off research funds and, in effect, reduce the amount of money available for actual research.
Without adequate research and development in our industries we can never hope to close the gap in balance of payments or cover our trade deficit. Without a massive increase in research and development, we cannot hope to create the new jobs required to reduce the number of unemployed.
The minister could have gone much farther than he did and encouraged industry to make more in Canada, to commit itself to a sound secondary industrial base that would encourage new ventures for Canadian made products to offset our balance of payments deficits.
The minister has failed to recognize the technological limitations of the Canadian manufacturing industry. His policy, or lack of policy, bears this out. The primary limitation arises from the extreme fragmentation of the manufacturing firms in Canada. The median firm in Canada has 11 employees. When you examine the employment data, you see that 50 per cent of all employment is in firms having fewer than 270 employees. Fewer than 3 per cent of manufacturing firms currently maintain an in-house research and development activity. The median size research and development activity consists of two qualified scientists or engineers. It is obvious that units of such a small size are only marginally viable. Past and present research and development policies of the federal government are only applicable to 5 per cent of all manufacturing firms. We must conclude that a major effort must be made to serve the needs of the remaining 95 per cent.
We cannot compete with our domestically manufactured products against imports, and we are not able to compete in the international market. We are in the fourth year of underutilization of our economic potential. Our largest customer to the south is in its third year of growth above expectation. If their market runs on its normal five year cycle and turns down for a period of adjustment, whatever benefits flow from this budget will be lost.
The concept we must encourage is savings, and investment that is transferred into plants and increased production. There must be a return of confidence in the market place. We cannot finance industrial development through short term high interest bank loans. It must come from long term investment with a potential of capital gain. Only the producers of wealth can create investment, and we just cannot expand industry on short term bank financing.
I am disgusted at the forecasted increase in government spending. To continue to take 43 per cent of the gross national product to run all three levels of government is ridiculous. That money would be better spent by the taxpayers on private investment in Canada.
The Budget-Hon. J. C. Munro
I am fearful of what lies ahead. This government still has a mandate to govern. I only hope and pray that it will have the political courage to deal realistically with the serious difficulties which exist in the time left in its mandate, but at this time with this budget I see no evidence. Therefore I cannot support the budget as presented by the Minister of Finance on behalf of the government.


Hon. John C. Munro (Minister of Labour):: Mr. Speaker, as Minister of Labour I am particularly sensitive to the present level of unemployment, which increased to the unacceptable level of 8.1 per cent of the labour force last month. A high level of unemployment is a weakness which has affected all the industrial countries over the last year or two.
Among all the industrial countries Canada is probably the most vulnerable to the recent slowdown in economic activity. Canada must absorb each year the highest proportion of new workers into the labour market. In recent years we have absorbed the largest percentage increase and the largest absolute increase in new workers.
A comparison with other countries gives an indication of the effects of the demographic structure of the country on employment. The OECD has forecast that for the ten year period ending in 1980 the population of working age will increase by 30 per cent in Canada. This is the greatest increase of any of the industrialized countries. The United States is in second place with an increase of 18 per cent, followed by Italy with 8 per cent, France 6 per cent, and finally West Germany and Great Britain with only 2 per cent. One can understand in this context the impact on employment of any weakening of the national economy.
There is another factor which affects employment. I am referring to the increase in prices in a country such as Canada which exports one quarter of its gross national product. Our first deficit in our commercial balance of payments since 1960 appeared in 1975, and this was a troublesome indicator.
Fortunately we experienced a surplus in our commercial account in 1976, but a surplus of $1.3 billion last year represented only half the average annual surplus of our commercial balance in the years 1970 to 1974.
During 1976 the rate of increase in wages was clearly moderating. In the second quarter of 1975 wage settlements in major collective agreements were running at a rate of 18.8 per cent. Since then there has been a significant and persistent downward trend. In the fourth quarter of 1976 new settlements averaged 8.3 per cent, and the trend appears to be levelling off in the first quarter of 1977.
While the Anti-Inflation Board has had a moderating effect on the increase of wages and salaries in current dollars, the improvement in the price performance has effectively brought about dramatic gains in real earnings.
Year over year increases in real weekly earnings-that is the industrial composite-for the third and fourth quarters of 1976 were 4.8 per cent and 4.7 per cent respectively. In the third quarter of 1975, just prior to the introduction of the AIB, the increase was only 2.5 per cent. The 12 month change in
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real weekly earnings to January, 1977, was much more moderate at 2.1 per cent. This, then, reflects partly the increase in the rate of inflation and partly the continuing moderation of the rate of increase of earnings in current dollars.
Real personal disposable income per capita increased by 3.7 per cent in 1976. Prices may not decelerate during 1977 to assure higher rates of increase in real wages and salaries. However, personal disposable income in current dollars should improve with the reduction of personal income taxes as a result of higher personal exemptions and the reduction of the rates of unemployment insurance contributions.
Labour's share of the national income reached an all-time high of 73.2 per cent in 1976. This is part of the long term upward trend in labour's share from approximately 65 per cent in the mid-1950's. Shares of national income and their movements are good indicators, in the short term, of the stages of the business cycle. That labour's share is unusually high at this time indicates that the business sector has been experiencing some difficulty. Corporate profits have declined not only in their share of national income but in their actual level as well. This should be a matter of concern for the labour sector since the ultimate responsibility for job creation lies with the business sector, where profits have traditionally been a major source of investment funds.
It is a fact that Canada has become non-competitive in some of its foreign markets. The increase in wages and salaries in some of our industries has surpassed the increase in wages and salaries elsewhere, notably in the United States, that being our prime trading partner. An economy which depends, as the Canadian economy does, on foreign trade cannot allow itself such a luxury. If this situation were allowed to persist, it would completely undermine the national economy.
Despite the unacceptably high level of unemployment, the national priority continues to be the fight against inflation. The only way to protect jobs and to maintain a high level of employment in this country is to keep our prices competitive with those of other countries or, more precisely, more competitive with our principal trading partners.


An hon. Member:: Come on, John.


John Carr Munro: Somebody said, "Come on, John," but talk to the secondary manufacturing firms in the Hamilton area and tell them what it means in terms of unemployment and lay-offs. Tell the workers there about when we become uncompetitive, and they will not be quite so blase about facts and figures such as these.
I think it would be totally irresponsible to end the anti-inflation measures abruptly unless voluntary restraint were agreed to by business and labour in advance, or there was agreement on some kind of monitoring agency. If the government were to end controls abruptly, that could lead to a resurgence of inflation and consequently a drastic cut-back in our exports and worse unemployment for Canada.
With the greatest possible circumspection I would like to consider for a moment certain criticisms which came from the

labour movement immediately following the announcement of the budget by my colleague, the Minister of Finance (Mr. Macdonald). According to the labour movement, the budget demonstrates the government's indifference to the economic and social hardships of Canadians. The government has been anything but indifferent. It would, on the contrary, be inexcusable or impossible to comprehend if the government were to adopt thoughtless or rash measures.
One could, for example, abolish immediately the entire control mechanism over wages, salaries, and prices, but since wage and salary earners represent 73 per cent of the total national revenue, one can imagine how devastating a new outbreak of rising prices would be for those workers. A return to the kind of inflation we had in the fall of 1975 could destroy all the gains which have been made, gains such as a lower rate of price increases and improved real income over the last 18 months.
If we were to make the Canadian economy non-competitive in foreign trade, we would only be increasing unemployment and we could be accused of adopting an inconsistent economic policy. The leadership of the trade union movement would be the first to lay blame on us-with some justification. We would only incur higher levels of unemployment if we were to end controls, particularly without some kind of voluntary restraint in their place, as we are being urged to do by the labour movement and consumers in the community.
The budget aims to sustain the efforts to lower inflation. The success of 1976 might not be easily repeated since we are faced with rising food and energy prices. Also the lower exchange rate, while stimulating exports and output, will make imports more expensive. A more expansionary policy could not be pursued without creating inflationary pressures and a deteriorating balance of payments situation.
During 1976 while growth in the national product and employment was somewhat erratic, the rate of increase in the consumer price index was gradually declining. In the fourth quarter of 1976, the year over year increase of the consumer price index was 5.9 per cent compared to 10.1 per cent in the fourth quarter of 1975 when we brought in controls. A sizeable decline in food prices contributed significantly to this improvement. However, this situation has been changing. In the first quarter of 1977 the food index was 3 per cent higher than the previous quarter. The increase in the food index was attributable to higher prices for fresh produce, coffee, and restaurant meals. Increased prices for gasoline, fuel, and utilities contributed to the increase in non-food items.
A major economic objective of the budget is to create an environment for a steady growth of output and provide jobs, not only to reduce unemployment but to accommodate a growing labour force.
Expenditures are being directed to create employment. The Canada Works program and the Young Canada Works program have been successfully launched. The additional $100 million, to bring the total to $458 million, will produce many
April 19, 1977

jobs for Canadians this year. In addition, the fiscal measures, the many tax reliefs, the tax incentives, the monetary policies, the devaluation of the Canadian dollar and lower interest rates, will stimulate the economy sufficiently to increase employment.
The budget emphasizes the necessity of restoring confidence in investing in Canadian plant and equipment.
I think hon. members will have noticed the gloomy forecast for the Canadian economy made by the Conference Board a few days ago. On the question of how well they thought the economy would go in 1977, 61 per cent of respondents did not expect conditions to improve, and 25 per cent felt conditions would get worse. Only 8 per cent thought the unemployment rate would drop, and the remainder thought unemployment would remain the same or even increase.
Incidentally, 81 per cent of the respondents to the Conference Board's survey thought that the anti-inflation program was moderately successful.
The measures which the budget is calling for to increase investment are the kinds of measures which will also increase employment. But it is important to be prudent in this area because if there were to be a sudden burst of investment, while this would temporarily improve employment it would also bring about a return of undesirable inflationary pressures.
The budget seeks to maintain a judicious balance between stimulating the economy and improving employment while avoiding the return of inflationary pressures. It provides for an increase in dividend tax credit to 50 per cent from 33'/5 per cent. The existing 5 per cent investment tax credit is to be extended an additional three years. The investment tax credit is to be increased in slower growth regions. The budget proposes to reduce taxes of Canadian individuals and corporations by $1.17 billion in 1977-78. This should also encourage a moderate increase in demand while limiting inflationary pressures.
The future employment outlook has been worsened by a decline in the growth rates of non-residential construction and investment in machinery and equipment.
The importance of this easing of investment in productive capacity cannot be over-emphasized. We must look forward to a time when machinery now idle is once again being fully used. In 1974 the economy ran short of physical productive capacity before it ran short of labour capacity. The incentives for investment in this budget are aimed mainly at those regions where the labour capacity has historically exceeded the physical capacity.
Throughout the seventies Canada has experienced higher growth rates in real gross national product than the United States; in 1976 the advantage turned against Canada. Canada's real growth in GNP, after accounting for inflation, was 4.6 per cent in 1976 compared to 6.1 per cent in the United States. Since the bulk of Canadian exports goes to the United States, an improvement in economic conditions there will help to boost the export-oriented businesses in Canada. A decline in the exchange rate has made our products more competitive;
The Budget-Hon. J. C. Munro further improvements in our competitive position will depend a great deal upon our continuing success in reducing the relative costs of production.
1 would like to come now to a point which is particularly important to me, that is, the co-operation among the major interest groups in the economy, those of the labour movement, business and industry, and consumer groups. We have to work out, on a voluntary basis, a process for consultation which will allow us to make the necessary adjustments to our current economic predicament and to prevent disastrous schisms between various elements of society.
My 14-point program on labour affairs is intended precisely to create a consultative council or forum which would provide facilities for bringing together representatives of the various sectors working together to diminish social conflict. The establishment of such a commission would be particularly useful in the difficult period through which we are now passing.
The process of moving out of controls into a decontrol period depends on consultation and co-operation among the various elements in the economy. Only in this way can we avoid a situation of drastic return to inflationary pressures. The 14-point program which the government is advancing to improve the climate and the practice of labour relations in this country will also have a positive impact on our ability to compete in domestic and export markets. It will do this in a number of ways.
It will, for example, go a long way to improve job satisfaction and the dignity of workers. The program includes a proposal for a national safety and health institute, and safety and health committees at the plant level. We cannot have good production when workers are concerned about their health and safety, or when their health and safety are endangered.
The 14 point program will include a quality of working life centre, which will promote experiments in labour-management co-operation, worker participation and various job satisfaction schemes. This will be linked to a voluntary code of good industrial relations practices.
I think that productivity, as well as job satisfaction, would be improved by the introduction of paid educational leave for workers, and by government funding of trade union leadership training. And I believe that we can help to undermine some of the adversary aspects of collective bargaining by the establishment of the proposed collective bargaining information centre, and by expanding the existing advisory services of my department.
Many of these proposals require the active collaboration of labour and business. My officials and 1 are actively seeking this co-operation and participation. I hope we will draw the right conclusions from the present situation and that we will provide ourselves with the flexible and versatile instruments to deal with our complex economic problems. It is for this purpose that I have introduced my 14 point program and it is for this purpose that 1 support the budget of my colleague, the Minister of Finance.
4800

April 19, 1977
The Budget-Mr. Hargrave


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, may I begin by stating that I consider it both a personal privilege and serious responsibility to speak this evening in this budget debate and, in so doing, to bring forward in this debate at least some of the views of my constituents in Medicine Hat. It seems to me that the Minister of Finance (Mr. Macdonald) clearly established some priorities in this budget and, by so doing, also established clearly certain inevitable consequences. The top priority spelled out was that Canada's inflation fight must continue and be won. Hopefully most Canadians will recognize this crucial need and give their general support to this end.
The inevitable consequence of this budget priority is that we shall face the continuing and, now, all time high unemployment. Further, the controls program of the Anti-Inflation Board will continue for some indefinite time frame. A further consequence of the unemployment issue is that the cost of maintaining the 1 million or so unemployed Canadians will be enormous and at record levels. The minister was less than specific in suggesting how this expense will be met. One can only assume that it will be borne entirely by the Unemployment Insurance Commission. But these details will not come to the fore for some time, perhaps not until after the next general election. Meanwhile the federal deficit will continue to rise substantially, without apparent control. That our national rate of inflation has again risen to levels attained just before the anti-inflation controls were instituted in October, 1974, is indeed frightening and sobering.
To be more specific, I wish to commend the Minister of Finance for the special emphasis in the budget directed to small business and farmers. It is appropriate that both should be linked together, since society often forgets that farmers are definitely small-sometimes not so small-businessmen. The former minister of finance had difficulty associating farms with small businesses. Both are operated in most cases under a family type of management.
The capital gains tax deferral proposal for farmers and small businessmen is a good feature of this budget, which will be well received, I am sure. I am also sure that this item was included as a direct result of the growing realization of what a vicious and ruthless tax the capital gains tax is, especially after a period of galloping inflation. I am thinking especially of the way the tax affects farm lands. In its short lifespan this tax has already caused severe hardship in the transfer of farm lands to appropriate heirs. Surely this tax is so insidious that parliament should consider the complete abolition of this capital gains tax. In the meantime I ask the Minister of Finance to consider having this new capital gains tax deferral item apply to family farm corporations and partnerships.
As a further interim action, would the minister also reconsider the proposal that the roll-over provisions of the capital gains tax for inter-generation transfer should be available to family farm corporations and partnerships? The former minister of finance would not consider this, because small businesses would have to be included. Since this budget has now accepted the similarities as between farms and small businesses, as is

evident in the new capital gains tax deferral provision, why does the government not extend the roll-over provisions to family farm corporations and partnerships? Surely such a progression would be logical.
Now I should like to refer specifically to the serious drought all across western Canada and make particular reference to our beef cattle industry in the west. Parliament should be aware that there is a serious drought all across the three prairie provinces and in some of the interior of British Columbia. The area in Canada affected really is part of a much bigger and perhaps more seriously affected drought area extending over the western half of the United States. The more seriously affected areas are the west coast states, beginning with California and the northwestern states bordering Canada. This general, widespread continental drought has already been compared to the disastrous ten-year drought of the 1930's when we were in a business depression.
With respect to the lack of soil moisture in western Canada both in cultivated farm lands and grass lands, the present situation is every bit as serious as it was in the two low points of the 1930's, that is to say, 1931-32, and the spring and summer of 1937. However, with respect to surface water on the prairies, which is so necessary for stock watering, the situation now is worse than it was at any time in the 1930's. This, of course, is a personal opinion, but I was there during the dirty thirties. I was 13 years old at the start, and 23 years old when those bad conditions ended.
Without realizing it then I now know that those ten years of my early life shaped my entire life, including my philosophical view of life and, even now, my political philosophy. The present drought will not be the complete disaster for cultivated cereal crops which the drought of the 1930's was, because of the benefits of herbicides, pesticides, and much more efficient tillage and harvesting machinery. This time farmers will not have to share limited soil moisture with weeds, as was the case in the 1930's.
However, for the cattle industry and for prairie grass production-and there are approximately 45 million acres of native grassland in the west-this drought will be just as serious as the one of the 1930's, perhaps more serious, considering that there are now twice the number of cattle on the land. Keep in mind that in all Canada we have available a total of 50 million acres of grassland. Therefore the 45 million acres on our western prairies which are now subject to this potential drought are of special significance.
While there have been numerous, recent comments that we have yet to see a drought in February or March, I point out that we have had two consecutive winter droughts for the last two winters. This accounts for our present serious shortage of surface water. The chances of sufficient rain to produce surface water in the short grass ranches on the prairies are now almost non-existent. The good crops of grain, grass, and hay last year were the timely results of just two general rains in mid-June and August. We were very lucky and very fortunate.
April 19, 1977

1 might point out that essentially there has been no rain since last August, and very, very little snow throughout the past winter. 1 want to point out what this means. Our carrying capacity over those short-grass ranges is about 50 acres per mature animal unit, or 50 acres per cow. Under conditions today, based on the amount of grass that is there, or the amount that is not there, it will require 80 to 100 acres of grass to pasture one cow for a 12 month period. That is approximately two cows per quarter section. Think about that.
What has our prairie cattle industry done in the face of this drought? Calf producers have had no difficulty or hesitation in making the only decision open to them, namely, to reduce their cattle numbers to fit the reduced carrying capacities of their ranges, and this includes the capacity to water their cattle, sheep or horses.
As a consequence of the drought there has been a consistent and steady increase in the movement of cattle off the winter and spring ranges, either directly to feedlots for heavier feeder cattle or to the market for lighter stocker cattle, most of which have been shipped to Ontario.
In a 60 mile strip from Medicine Hat through Walsh on the Alberta-Saskatchewan boundary and ending at Maple Creek, Saskatchewan, there have been some 5,000 to 7,000 of these kinds of cattle per week passing through four auction markets in these three locations. Approximately 50 per cent of these cattle could properly be described as "drought cattle", in this case cattle which would normally not have been moved until next fall after a full summer's growth on grass.
On my own ranch which is north of Walsh on the Alberta-Saskatchewan boundary, during the Easter recess we had to move 336 head of two year olds, including all of my replacement heifers, to a finishing feedlot. Further, we had to sell another 210 short yearling steers last Saturday at an auction in Walsh. That was a very difficult decision to make, to reduce our cattle numbers by over one third, but it was necessary for the simple reason that we could not have watered these cattle for more than another week, and the necessary spring and summer grazing just did not exist. The prospects are not there for it.
Market prices for these drought cattle have been surprisingly strong with 550 pound yearling steers selling to prices of over $44 and a top carload price of over $45.40 per hundredweight. These strong prices clearly reflect the general upturn in the total North American cattle industry. They also clearly indicate that our North American free market system is working and working very well, in spite of very irresponsible statements by the Minister of Agriculture (Mr. Whelan), such as the one he made in Tilley, Alberta, last January 19, just a few miles north of my constituency boundary near the town of Brooks, and quoted in "Canadian Weekend" magazine of March 26. This is a direct quote:
The free-marketing system is as outdated as Jesus Christ-and almost as redundant.
The Budget-Mr. Hargrave
I can assure hon. members that is a quote. Some two and a half weeks earlier the same Minister of Agriculture was quite willing to suggest as his only recommendation for the drought that the members of this House of Commons should pray for rain. That was in response to some very serious questions about the drought put by the Leader of the Opposition (Mr. Clark) and myself.
If cattle producers are to take these severe steps to reduce their cattle numbers, as they are certainly already doing, and this will be at some considerable sacrifice, surely it is not unreasonable for governments to share in some forms of emergency actions.
The suggestion 1 am going to make is not new. It was put forward during our House debate on the prairie grain stabilization bill by my colleague, the hon. member for Swift Current-Maple Creek (Mr. Hamilton). The proposal was to use our federal tax system as the instrument to create incentives by cattle producers on an individual basis to make their own management decisions respecting drought.
These extensive forced sales of drought cattle will create abnormally high gross and net income figures for 1977 and possibly future years if the drought persists. Why not have an extension of the capital gains tax deferral item in this present budget which would permit a set-aside of these emergency cattle sales incomes on a tax-free base provided they are re-invested into cattle purchases, not at the end of the one year following as in this budget provision, but at the end of this current drought cycle?
I am proposing a form of special or personalized registered retirement savings plan. In this instance, however, the purpose is not for retirement purposes but for survival purposes. It must be something more than the basic herd provisions of pre-capital gains tax times in that more than the actual breeding herd emergency sales must be provided for through this method.
The prairie provincial governments already have the necessary provisions in their legislation to make their contribution by way of their provincial land tax authority. Crown grazing land rentals in both Alberta and Saskatchewan are determined by a formula that includes two variables; grass carrying capacity and the weighted average market price of grass cattle for the last half of the year based on Calgary for Alberta producers and Winnipeg for Saskatchewan producers.
Since grass carrying capacity has been reduced so drastically, especially in the short grass or chinook zones, in some cases it will be reduced to zero because of no stock water. The current lease rental rates should directly reflect this reduced carrying capacity.
Before leaving this drought issue, I think it is appropriate to remind all members of one of former President Harry Truman's well known quotes:
The only thing new is history we haven't read yet.
We should read and re-read the history of those ten drought years of the thirties. There is absolutely no reason why those same climatic conditions cannot return now, some 40 years

April 19, 1977
The Budget-Mr. Hargrave
later. We should be searching out people who were closely involved then, such as Dr. Asael Palmer, still living in retirement in Lethbridge. We should listen carefully to his words of wisdom after his lifetime of service with our federal agricultural research stations in southern Alberta.
Before I conclude, I want to make some general comments on our Canadian cattle industry. Several years from now when we look back and assess our cattle industry in 1976, it is my personal view that we will label 1976 as the worst year in our history for market prices, in relevant terms of course. I say this taking into consideration the dramatic increases in cost of production affecting every aspect of cattle production including cow-calf and yearling, the feeding side, and even seed stock or the purebred sector. I am now firmly convinced that the single most significant item contributing to last year's disastrous cattle price levels was the impact of those massive offshore beef imports from Australia and New Zealand.
About a year ago, at the start of the second quarter, there was a clear indication of a modest upturn in fed cattle prices in Canada. Some markets had shown increases of between $5 and $7 per hundredweight above the extreme low of market prices, and there was reason to believe this trend would continue throughout 1976. However, at the same time, about a year ago, the steady rise in offshore beef imports began and continued until year end. The Blue Book of the livestock and meat trade gives the following figures for the calendar year 1976. It shows that 188.5 million pounds of beef were imported from Australia and New Zealand. That is the equivalent of 535,000 live Canadian cows. By comparison, Canada marketed approximately 600,000 domestic cows in 1973 and 1974. Supplies of offshore beef represented an increase of 60 per cent over the 1975 level. More important still, these same offshore imports were on top of the largest domestic supply of beef in Canada's history.
That is not all, Mr. Speaker. Those imported supplies from down under were priced as much as 25 cents to 31 cents per pound below similar kinds of beef entering the U.S.A. from Australia and New Zealand. It was this situation which finally brought about the infamous "six cents under" rule proposed by the importers and agreed to by the Departments of Industry, Trade and Commerce and of Agriculture. Surely the rule begs the question: why should there be any discount at all?
The result of all this was that the modest upturn of a year ago collapsed, at least to the extent of $4 to $5 per hundredweight. Domestic cow prices were directly reduced by $3, and a further depressed fed cattle market continued until about two months ago. That cow market drop cost our industry $30 million and lowered its price structure to a point which permitted heavy exports of cows to the U.S.A.-110,000 head in 1975 and 187,000 head in 1976. All these developments were the result of the political decision made here in Ottawa to permit those massive offshore imports. The government's decision in mid-October, 1976, to impose import quotas, the day after the U.S. triggered its meat import law, was simply nine

months too late. The damage had been done-and what terrible damage it was to the entire Canadian cattle industry.


Mr. Deputy Speaker:: Order. It being 9.45 p.m. it is my duty, pursuant to section (7) of Standing Order 60 to interrupt the proceedings and put forthwith the question on the amendment now before the House.
The question is on the amendment standing in the name of the hon. member for York-Simcoe (Mr. Stevens).
All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


Mr. Deputy Speaker:: Call in the members.
The House divided on the amendment (Mr. Stevens) which was negatived on
Alexander
Alkenbrack
Andre
(Calgary Centre) Baker
(Grenville-Carleton)
Beatty
Beaudoin
Brisco
Broadbent
Cadieu
Caouette
Clark
(Rocky Mountain) Clarke
(Vancouver Quadra) Crosbie Crouse Dick Dionne
(Kamouraska)
Douglas
(Nanaimo-Cowichan-
The Islands)
Ellis
Elzinga
Firth
Forrestall
Fortin
Fraser
Friesen
Gauthier
(Roberval)
Gillies
Grafftey
the following division:
(Division No. 37)
YEAS	
Messrs.	
Hamilton	Munro
(Qu'AppcIle-Moose	(Esquimalt-Saani
Mountain)	Murta
Hargrave	Neil
Hees	Nowlan
Hnatyshyn	Nystrom
Hogan	Oberle
Howie	O'Sullivan
Huntington	Paproski
Johnston	Patterson
Kempling	Peters
Knowles	Pigott (Mrs.)
(Winnipeg	Reynolds
North Centre)	Ritchie
Knowles	Roche
(Norfolk-Haldimand)	Rodriguez
Korchinski	Rondeau
Lambert	Rynard
(Edmonton West)	Saltsman
Lawrence	Schellenberger
MacDonald	Schumacher
(Egmont)	Scott
MacKay	Smith
Malone	(Churchill)
Marshall	Stanfield
Masniuk	Stevens
McCain	Stewart
McCleave	(Marquette)
McGrath	Symes
McKenzie	Towers
McKinley	Wagner
McKinnon	Wenman
Mitges	Whiteway
Muir	Whittaker Wise-86.
April 19, 1977

Abbott
Anderson
Andres
(Lincoln)
Appolloni (Mrs.)
Baker
(Gander-Twillingatc) Basford Bechard Begin (Miss)
Blais
Blaker
Blouin
Boulanger
Breau
Buchanan
Bussieres
Caccia
Cafik
Campagnolo (Mrs.) Campbell (Miss)
(South Western Nova) Campbell
(LaSalle-femard-Cote
Saint-Paul)
The Budget-Mr. Hargrave
NAYS Messrs.	Lee	Messrs. McRae	RobinsonCaron	Gendron	Lefebvre Lessard Loiselle	Munro (Hamilton East) Nicholson (Miss)	Rompkey Rooney RoyClermont	Gillespie	(Chambly)	O'Connell	(Timmins)Collcnctte	Goyer	Loiselle	Olivier	Roy (Laval)Condon	Gray	(Saint-Hcnri)	Ouellet	Corbin	Guay	Lumley	Parent	Sauve (Mrs.)Corriveau	(St. Boniface)	MacDonald	Pearsall	Sharp SmithCullen	Guay	(Cardigan)	Pelletier	Cyr	(Levis)	Macdonald	Philbrook	(Saint-Jean)Danson	Guilbault	(Rosedale)	Pinard	StewartDemers	Haidasz	MacEachen	Portelance	(Cochrane)Douglas	Harquail	MacFarlane	Poulin	Stollery Tessier(Bruce-Grey)	Herbert	MacGuigan	Prud'homme	Drury	Holt (Mrs.)	Maine	Railton	TurnerDuclos	Hopkins	Marceau	Raines	WatsonDupont	Isabelle	Marchand	Reid	Yanakis-111.Duquet	Kaplan	Martin	Roberts	
Ethier Faulkner Fleming Flynn Foster Fox Francis Gauthier
(Ottawa-Vanier)
Lachance Lajoie Landers Langlois Laniel Leblanc
(Laurier)
LeBlanc
(Westmorland-Kent)


Mr. Speaker:: I therefore declare the amendment lost.
It being after ten o'clock this House stands adjourned until two o'clock p.m. tomorrow.
At 10.18 p.m. the House adjourned, without question put, pursuant to Standing Order.

Wednesday, April 20, 1977