1977-12-12

ROUTINE PROCEEDINGS


Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. It concerns the current dispute in the Toronto post office which, if not resolved immediately, could precipitate a work stoppage which would have a devastating effect on Canada's economy, which is already crippled by government mismanagement. 1 move, seconded by the hon. member for Parry Sound-Muskoka (Mr. Darling):
That this House urges the government to proceed with urgently needed reforms in collective bargaining procedures in the public service which were proposed by the retiring chairman of the Public Service Staff Relations Board, Jacob Finkelman, over two years ago, and urges the Postmaster General to proceed with the long delayed reforms in the Post Office recommended by the Official Opposition which would introduce co-operation and co-determination by management, labour and postal users in post office administration, in place of the continuing confrontation which threatens to destroy Canada's once efficient postal service.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSED REINSTATEMENT OF SUSPENDED TORONTO EMPLOYEES-MOTION UNDER S O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I too rise under the provisions of Standing Order 43 concerning the vitally important matter of the postal dispute which is now taking place in the city of Toronto and which could tie up the total postal service across the country at this particularly serious time. In light of the fact that the particular dispute which caused this demonstration has been settled to the satisfaction of both sides and in light of the fact that the union is willing to cease picketing as soon as the suspended workers are reinstated, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the Postmaster General be instructed to reinstate immediately the nine suspended workers at the Toronto Central Post Office, and further that an independent adjudicator be appointed to investigate and make final recommendations regarding the suspension of the nine postal workers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


OFFICIAL SECRETS ACT
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I too rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of the fact that section 16(3)(c) of the Official Secrets Act makes possible the authorization of wiretapping directly by the Solicitor General of Canada (Mr. Fox) without a judge's consent in connection with activities directed toward accomplishing governmental change within Canada or elsewhere by any criminal means- and I emphasize "any criminal means"-and in view of the complexities of the federal Canada Elections Act regarding the raising of money and other matters it is quite possible that a candidate for membership in the House of Commons could unintentionally break the law during election time and have his telephone tapped, I move, seconded by the hon. member for Hamilton West (Mr. Alexander):
That the government amend the said act by providing an exemption for any violation of the Canada Elections Act, as it has nothing to do with national security and therefore candidates in a federal election should be guaranteed privacy at their campaign headquarters and other places during federal elections.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

December 12, 1977
Industry


SUGGESTION &quot;HANSARD&quot; BE DISTRIBUTED FREE OF CHARGE-MOTION UNDER S.O. 43
Mr. Eudore Allard (Rimouski):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that French-speaking news media are very reluctant to report interventions made in the House by a number of hon. members, that the number of Hansard subscribers for the current session of the 30th Parliament hardly exceeds 10,000, and that it is of paramount importance that all Canadians be informed of the work being done in the House, I move, seconded by the hon. member for Bellechasse (Mr. Lambert):
That the House urge the government to take all necessary technical steps to make sure that French or English copies of Hansard are made available free of charge to all Canadians who are asking for them in writing, so that they may acquaint themselves with the daily activities of the members of this illustrious assembly.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I rise to move a motion under Standing Order 43 on a matter of urgent and pressing necessity. As Canadian industry must greatly increase its industrial research if we are to lower our costs and improve our quality and design in order to begin to overcome the $11.5 billion per year adverse trade balance we now have in manufactured products, the ones which produce jobs, I move, seconded by the hon. member for Halton-Wentworth (Mr. Kempling):
That the government allow industry to write off 200 per cent of the cost of all current and capital expenditures on industrial research in excess of those made in the base year, the year before the plan goes into operation.
Such a program would induce the additional industrial research we need to make our manufactured products more competitive in the marketplace and capable of increasing sales production and jobs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AIR TRANSPORT
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I rise under the provisions of Standing Order 43 to present a motion on a matter of urgent and pressing necessity. In light of the tragic air crash at Churchill Falls on December 9, 1977 with the loss of eight lives which represents the second fatal crash for the company; in view of the conflict between Air Canada and MOT over the towing of jet aircraft and other equipment across two major runways at Winnipeg Airport to the new Air Canada hangar which will be a safety hazard, and the reported lack of air safety in northern Manitoba, involving illegally operating aircraft, I move, seconded by the hon. member for Provencher (Mr. Epp):
That this House direct the government House leader to provide a reference to the Standing Committee on Transport and Communications to launch a full scale investigation into aviation safety in Canada, and for the calling of any or all witnesses to appear before the committee.


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


Some hon. Members:: No.


FRESHWATER FISH MARKETING CORPORATION
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The board of directors of the Freshwater Fish Marketing Corporation has decided not to make the final payment to fishermen of about $2.6 million for the 1975-76 season, the reason being that the corporation has reached its borrowing capacity. I move, seconded by the hon. member for Provencher (Mr. Epp):
That the government take immediate action to arrange bridge financing so that fishermen will have their final payment for Christmas.


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


Some hon. Members:: No.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I rise under the provisions of Standing order 43. In 1976 net farm income dropped by 20 per cent. Today it was announced that a

December 12, 1977

further drop of around 11 per cent in net farm income has occurred. The forecast for next year is a 5 per cent drop. Operating costs continue to rise. I therefore move, seconded by the hon. member for Greenwood (Mr. Brewin):
That this House instruct the government to take immediate steps to relieve the cost-price squeeze.


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


Some hon. Members:: No.



ROYAL CANADIAN MOUNTED POLICE


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. The former Solicitor General, now the Minister of Supply and Services (Mr. Goyer), made a statement on motions in this House last June 21, outlining his knowledge of the events surrounding the surreptitious entry by various police forces into the premises of L'Agence de Presse Libre du Quebec. In the statement, the minister said: "Let me first address myself to the question of whether or not I had any prior knowledge of the October 6-7, 1972, break-in at the APLQ. My answer to the question is a flat no." He further stated: "Had I prior knowledge of the operation, I would have intervened to prevent it from happening." Mr. Speaker, I move, seconded by the hon. member for Perth-Wilmot (Mr. Jarvis):
That this House requests the former Solicitor General, now the Minister of Supply and Services, to review his statement in this House on June 21 to determine if all matters referred to therein are still factually correct. Should any statements be determined to be at variance with the facts as now known, this House instructs the minister to make a new statement on motions to outline his knowledge of the APLQ break-in.


Mr. Speaker:: Is there unanimous consent for the presentation of such a motion?


Some hon. Members:: No.


Mr. Speaker:: Oral questions.



ORAL QUESTION PERIOD


Walter Gilbert Dinsdale: Mr. Speaker, my question is for the Postmaster General. In light of his assurances that there would be no postal strike this Christmas and
Oral Questions
the recent statement by the president of the Canadian Union of Postal Workers that there would be no wildcat or national strikes during the Christmas season unless the employer provoked the union into a strike situation, can the hon. gentleman inform the House how the post office got itself into the present mess?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the hon. gentleman knows the series of events that led to the present impasse in Toronto. Indeed the reporting has been relatively accurate. If the hon. member had listened to the motion brought by the leader of the New Democratic Party under Standing Order 43 he would know exactly what led to this particular impasse. I want to advise the hon. gentleman that the discussions with the local leaders of CUPW are ongoing and I am still optimistic that we will have the matter resolved in the near future.


Walter Gilbert Dinsdale: Inasmuch as the outstanding issue is the suspension of the nine employees, can the Postmaster General assure the House and the country that this grievance will be dealt with through the normal grievance procedures, rather than necessitating the usual resort to strike action.


Mr. Blais:: As I have advised the hon. gentleman the matter will shortly be discussed with the union. We had discussions with the local union leadership over the weekend, both Saturday and Sunday. Indeed the issue which the hon. member has called to our attention is one under discussion. I would rather not comment until those discussions are fully underway and we are in a position to make a joint statement with the union.


Walter Gilbert Dinsdale: In view of the vital importance of a reliable mail service to small business, to the recovery of an economy faced with high unemployment and inflation, and the general wellbeing of the country at a time of stress and strain in national unity, would the Postmaster General inform the House what special steps he is taking at this time to respond to the overwhelming demand from the long suffering Canadian public that the Christmas spirit not be destroyed by yet another postal strike? And would he use the goodwill of Christmas to assure his workers that he will introduce modern labour-management relations into the post office as has been advocated for a long time now by the official opposition.


Jean-Jacques Blais: I am glad the hon. member has brought the Christmas spirit into his question. We are hopeful that that is perhaps going to be the determining factor in this instance. I call to the attention of the union and all hon. members of this House that we are, Mr. Speaker, in a very volatile situation, in a period of national life when emotions tend to be very high. Every effort that I and my officials can muster, will be used in order to pacify the situation and not inflame it so that indeed solutions can be arrived at reasonably by reasonable people.
I trust that the hon. gentleman by the very reasonable approach he is using this afternoon is going to use his own good offices in order to communicate with his friends within

December 12, 1977
Oral Questions
the post office to ensure that the spirit of goodwill will prevail and that we will be able to resolve this issue this afternoon, or as soon as possible, and get the mail moving again.


THREATENED STRIKE-POSSIBILITY OF LEGISLATED SETTLEMENT
Mr. Stan Darling (Parry Sound-Muskoka):: Thank you very much, Mr. Speaker. I am delighted to hear the Postmaster General talk of sweet reason.
However, if I may put this question to the Postmaster General: in the event of a complete breakdown in current negotiations, is the government preparing legislation to cope with the threat of a nationwide strike?


Hon.   J.-J. Blais@Postmaster General: I can indicate to the hon. gentleman that the strike is illegal and is in contravention of the Public Service Staff Relations Act. I cannot see how the Parliament of Canada can impose another legality on a present illegal situation. I simply indicate to the hon. gentleman that the operations in Toronto are ongoing. There are interruptions now, but we have one post office operating and we have one postal installation operating without the intervention of pickets. There are pickets at two other main installations, but some of the trucks are crossing those pickets. We are attempting to carry on with the mail that is available to us in the hope that within a short period of time, after reasonable minds prevail we will have the system in full operation. For that I seek the co-operation of hon. gentlemen.

Mr. Speaker, it is also obvious that if we are to settle disputes we would need that the spirit of Christmas, which is essential at this time of the year, be not undermined and that people recognize that the important thing is to provide Canadians with a complete and efficient postal service during a period which carries so much feeling.


ACTION TO ENSURE DELIVERY OF OLD AGE PENSION CHEQUES IN VIEW OF THREATENED STRIKE
Stan Darling: If I could pose a supplementary to the Postmaster General. What action has the government taken to ensure delivery of old age pension cheques and other government cheques on time, and what other emergency procedures has the government and the Postmaster General come up with to cope with this possible strike and ensure that Christmas mail will go through.


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the hon. member has identified that there are transfer payments that are presently in the post office. We have family allowances in the mail stream as well as provincial guaranteed annual income cheques. With that sort of valuable mail within the system and the dependence of recipients on the amounts that are forthcoming, especially during this Christmas season,

and the vulnerability of the small businessman which the hon. member has so well identified, I again publicly urge the national directors of the Canadian Union of Postal Workers to recognize the difficulties that we might be incurring if we leave this matter unresolved for a period of time.


THREATENED STRIKE-REQUEST FOR REPORT ON INJUNCTION PROCEEDINGS
Stan Darling: On the question of the injunction requested by the Postmaster General, did the hon. gentleman approach the federal or the provincial judiciary and what is the current situation on this front?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the application for the injunction was made to the Supreme Court of Ontario, as is normal under the circumstances. The hearing was adjourned in order that there might be negotiations under less pressure. We are going to resume the hearing tomorrow morning at nine o'clock and hope that in the meantime we might be able to make an arrangement.


ROYAL CANADIAN MOUNTED POLICE
John Edward Broadbent: Mr. Speaker, my question is for the Solicitor General. A report tabled in the Ontario Legislature on Friday by the attorney general of that province makes it clear that the RCMP carried on a systematic investigation not only of the Waffle group within the NDP but also of the party itself between 1970 and 1973. In his letter to me dated August 26 of this year the Solicitor General states that he agreed completely with a point I made in an earlier letter that the security branch should only be concerned with "groups believed to be committed to the use of non-democratic means in pursuit of their objectives". In light of this assertion, will he take this opportunity to assert publicly that this kind of systematic surveillance of democratic groups in Canada was totally unwarranted?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, the position that I gave the leader of the New Democratic Party in the letter that I wrote to him is, of course, the position of the government. The RCMP has no mandate whatsoever to do any systematic surveillance of legitimate activities of any political party in Canada.


John Edward Broadbent: Mr. Speaker, the minister simply repeated what he said in his letter. I ask him to follow up his assertion, which I welcomed in the letter, with a judgment about the revelation that has been produced in the legislature in the province of Ontario, namely that the RCMP security branch between 1970 and 1973 kept systematic surveillance of the activities of the Waffle group within the NDP and, indeed, the New Democratic Party itself during that time. If that is the case, I
December 12, 1977

would like the Solicitor General of Canada to make his civil liberties position well-known at this time and to say that that kind of activity is something of which he disapproves.


Francis Fox: Mr. Speaker, I have not seen the report that the hon. member refers to which has been tabled in the Ontario legislature. To my knowledge at the moment, there is no information to indicate that the New Democratic Party was the object of systematic surveillance, as the leader of that party puts it in the House today, during that period of time.
There may or may not have been some surveillance of individual members, as we have stated time and again in the House. The fact that one belongs to a political party does not give one immunity from surveillance if there is reason to believe there may be cause for surveillance along the lines I indicated to the hon. member in the letter he is now quoting back to me.


John Edward Broadbent: Mr. Speaker, I find it strange the minister is not aware of the specifics that went into that report. The letter is some months old from the attorney general of that province to the Solicitor General making inquiries about this subject matter. This was followed up, I understand, by the attorney general of the province of Ontario when he was not satisfied with the reply the Solicitor General gave him some time ago. It was followed up with officials within the RCMP. The report is as a result of information provided to the attorney general of that province by the RCMP within the minister's own department. In that report, the attorney general of the province of Ontario said that the inquiries "were broadened sufficiently to put the activities of these individuals in proper perspective". That is a reference to the investigation of the Waffle group being broadened within the framework of the NDP itself.
That is a sheer euphemism for saying that the party itself was being investigated. I therefore ask the minister to assure us that the New Democratic Party were not under surveillance between 1970 and 1973 in a systematic way. Will he clear up the point that is of concern to hundreds of democratically oriented Canadians who were taking part in that Waffle group that they were not in any way indulging in any subversive activities? Will he assert once again that he sees a distinction between dissent and subversion-


An hon. Member:: Oh, go on!


Mr. Speaker:: Order. I have allowed the hon. member to continue for quite some time. He finished by making a declaration as opposed to asking a question.


POST OFFICE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to address my question to the Postmaster General
Oral Questions
and refer him to a news release from the Canadian Union of Postal Workers-I know he has seen it-in which the opinion is expressed that the Postmaster General has not been bargaining in good faith and that he has been hiding the facts. The news release goes on to say that because of the attitude of the Postmaster General the union will continue to do everything in its power to inform the public, the information media and all its members as to the solutions which must be adopted in order to resolve problems within the Post Office involving administration, labour relations and financing. Since the union is prepared to do this, is the minister willing to make a statement on motions as soon as possible, preferably before Christmas, making clear just what the problems are in relation to administration, labour relations and finance so that Canadians may know just what is going on? After all, they are paying a very high price for service they are not getting.


Hon.   J.-J. Blais@Postmaster General: I thank the hon. member for providing me with an opportunity of making a clarification. The press release from which he has read is one which was issued by the President of CUPW after I had made an application for the appointment of a conciliation board in connection with the main negotiations between the parties which are being conducted at the national level. The hon. member will recall that in the press conference which followed that press release Mr. Parrot did say that in his view there would be no interruption of the mails before Christmas. He was referring to the main negotiations between the Post Office and CUPW in connection with the renewal of the collective agreement which terminated on June 30. The questions to which I was replying earlier concerned a different situation, one which has arisen at the Toronto local, and I would beg the hon. gentleman not to mix up the two situations. The dispute at Toronto is completely separate and apart from the main negotiations.


Lincoln MacCauley Alexander: I am not mixed up. The Postmaster General is mixed up. I am simply pointing out that people are paying exorbitant prices for services they are not getting. We understand, now, that there are problems. I will read the press release again because it seems the Postmaster General was not listening. Mr. Parrot said there were problems in the Post Office in connection with labour relations, administrative matters and financial matters and that the union intended to bring those problems to the attention of the Canadian public so that they would know what is going on. All 1 am asking the Postmaster General is to stand up on motions, without giving us any lessons, and make a complete and definite statement as to what is going on in the Post Office so that the Canadian people may know where they are going. The service is costing a lot of money and there is no assurance of mail delivery.


Jean-Jacques Blais: Two or three weeks ago at most I made a statement on motions and subjected myself to inquiries from opposition members. If the hon. member, in his belated interest in the Post Office, had been concerned then he could have directed questions to me at that time. I was here, and I replied to questions by opposition members and some of those ques-

December 12, 1977
Oral Questions
tions were directed to the problems we face in the Post Office. For the hon. member for Hamilton West to try to reveal all of a sudden that there are problems in the Post Office seems to be rather strange. I wonder where he has been since 1975. In 1975 we had a 42-day strike. We have had some interruptions from time to time, but I have indicated to hon. members opposite exactly the measures we were taking. One of those measures is to avoid inflaming a situation by making unsubstantiated statements and by engaging in dialogue with CUPW in surroundings which are more conducive to agreements and arrangements than in confrontation, as the hon. member is suggesting.


Lincoln MacCauley Alexander: Mr. Speaker, will the Postmaster General agree with me that the position held by many people in this country is that the Post Office is in a mess, and it will not get any better under the leadership of the present Postmaster General?


Some hon. Members:: Hear, hear!


AGRICULTURE
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Agriculture.
Considering that a number of industrial milk producers will be without any income for several months because they have met their production quotas, and considering also that the Canadian Dairy Commission is selling powdered milk on the world market below the Canadian support price, which will inevitably involve considerable expenses both for milk producers and for the state, would the minister tell the House whether he has ordered research into a greater use of milk powder in the processing of feed grain as a way of reducing powdered milk stocks?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker,
I am sure the hon. member knows that skim milk powder is being used in many, many different products today. It is highly nourishing. We are doing more research. If the hon. member has any suggestions as to how it can be used, we would be pleased to hear them also. This year in Canada skim milk powder is being subsidized by practically a third or more of its cost, yet consumption went down. I do not know the reason. It was provided in Canada cheaper than in any other country of the world.
[ Translation]


Joseph Adrien Henri Lambert: Mr. Speaker, I have a supplementary question. I think either I did not make myself perfectly clear or the minister did not want to understand the
(Mr. Blais.)
meaning of my question. It was obviously a suggestion I was making in putting this question, because these suggestions come from feed grain producers themselves. Has some research been done on that by Department of Agriculture researchers who are given a budget for that? Did they study the possiblity of using more powdered milk in processing feed grain as well as the effects it will have on the prices of feed? It is only after this kind of study that we will be able to see whether it will be advantageous or not.


Eugene Whelan: Mr. Speaker, research is continuing in our department and research is continuing in the private sector. The government has allocated $4 million for research into all dairy products and not just skim milk powder. Part of that money is being used for research into different ways to use skim milk powder in the baking industry and for total human consumption. There are many ways it can be improved. There is a tremendous amount of skim milk powder, and I do not think Canadians could consume it all. There may be ways to make it more palatable for certain parts of the world, which are not used to eating milk products. There are certain ingredients in milk which have to be taken out, and there are ingredients which can be added to it, in order to make it digestible for them.


LABOUR RELATIONS
[Stage Direction]
Mr. Iren£e Pelletier (Sherbrooke): Mr. Speaker, my question is for the Minister of Labour. Since a few weeks ago the minister appointed a mediator in the dispute involving Radio-Mutuel stations, a dispute which has been going on for 11 months now, could he tell the House whether this mediator has submitted his mediation report and, if so, when we will be informed of the recommendations it contains?
Hon. John C. Munro (Minister of Labour):: Mr. Speaker, the mediator has not submitted his report because he is presently involved in discussions with the parties endeavouring to arrive at a settlement.


POST OFFICE
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, my question is directed to the Postmaster General as well. In view of the fact that less than 10 per cent of the CUPW membership in Toronto voted in favour of the current strike action, and because it has come to my attention this weekend
December 12, 1977

that not nearly all the membership was notified of the meeting, as evidenced by the light turnout, will the Postmaster General consider challenging the legality of the meeting and the ultimate outcome of the strike vote? At the same time, will he give the majority of the responsible membership an opportunity to truly express their opinions on this vital issue?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, the hon. member has drawn to the attention of the House a very important factor. The eventual vote indicated that only something like 634 ballots out of a potential 4,000 had been cast. A small minority of people expressed their support for the continuation of the illegal strike. In view of the situation and my preoccupation with arriving at some arrangement at this time to resume the postal service in Toronto, I will refrain from commenting on the other aspects of the hon. member's question.


ALLEGED THREATS OF REPRISALS AGAINST SOME EMPLOYEES- REQUEST FOR INVESTIGATION
Otto John Jelinek: Mr. Speaker, I appreciate the minister's concern in this regard; but there are a number of very serious matters related to this whole subject. I have it on good authority, after having met with a large number of CUPW members in Toronto this weekend, that many members have expressed not only dissatisfaction with the outcome of the strike vote, but more importantly, have expressed a genuine fear of reprisals which could be taken against them should they even complain publicly of ongoing antics by a number of radical leaders responsible for this disruption of mail at this vital time. Can the minister investigate this very serious charge on behalf of the majority of the membership of the union, a charge which I am sure he is well aware of?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, I will take the hon. member's representations into very serious account.


ROYAL CANADIAN MOUNTED POLICE
Elmer MacIntosh MacKay: Mr. Speaker, I have a question for the Solicitor General. Now that the third attempt to restrict the Keable commission has been unceremoniously refused by Mr. Justice Hugessen, what is the Solicitor General's next step? Has he been cited for contempt as yet? Has he appealed? Has he thought about greater co-operation? Can he bring the House up to date?


Francis Fox: Mr. Speaker, I would be delighted to bring the House up to date. As hon. members opposite know, the judgment was handed down by Mr. Justice Hugessen late on Friday afternoon. That judgment raises very
Oral Questions
important and far-reaching questions of law. That judgment indicates that a provincial commission of inquiry has the necessary powers to investigate into the operations and the functioning of a federal Crown agency. In my mind that raises very far-reaching constitutional principles. In view of that, I have instructed my counsel to appeal the decision to the Quebec court of appeal.


BREAK-IN AT AGENCE DE PRESSE LIBRE-DATE FORMER MINISTER AUTHORIZED WIRETAP
Elmer MacIntosh MacKay: Mr. Speaker, my supplementary question is directed to the Solicitor General. As we approach the bottom line of ministerial responsibility in this issue, despite the previous equivocation and evasion, will the Solicitor General tell us when his predecessor, the present hon. Minister of Supply and Services, authorized the surreptitious entry and wiretap operation? I should like to know whether it was done retroactively or whether it was done in advance? Is this the practice, or have we swapped the traditional doctrine of ministerial responsibility for a new one called ministerial ignorance, which is one implication of the Prime Minister's press conference on December 9?


Francis Fox: Mr. Speaker, as the hon. member knows, and as all members of the Standing Committee on Justice and Legal Affairs know, particularly those who served on that committee in 1973, something like 1,912 wiretaps were authorized in this country between 1963 and 1973. Also, all members of that committee know that wiretapping was not illegal prior to 1974 and that it was indulged in by every major police force in this country, including the Ontario police, the Quebec police and the RCMP.


ROLE OF MINISTER IN SUIT AGAINST MEMBERS OF FORCE BY EDMONTON POLICE OFFICERS
Elmer MacIntosh MacKay: Mr. Speaker, the minister has not answered this question so I will try one more, with your indulgence. What role, if any, is the minister or his department playing in the extremely interesting civil law suit where the RCMP are being sued by some Edmonton police officers as a result of a bugging incident in Winnipeg. Is the minister doing anything to try to come to a proper conclusion in this matter for the benefit of all concerned? Is he taking any part in this?


Francis Fox: Mr. Speaker, I understand that a statement of claim was filed late Friday in Edmonton or Winnipeg in connection with this alleged case of bugging. As the hon. member knows, the matter has already been the subject of inquiry in front of the Laycraft Commission in Alberta and I presume that the officers who have been sued by the local police will of course wish to file a statement of defence. I would be the last one to wish to prevent them from exercising rights that every Canadian citizen enjoys in this land.

December 12, 1977
Oral Questions


INFORMATION TO BE SUPPLIED TO VARIOUS COMMISSIONS- MINISTER'S POSITION
Mr. Bill Jarvis (Perth-Wilmot):: I have a supplementary question for the Solicitor General. On December 7 in the absence of the Solicitor General, the Acting Solicitor General, the Minister of Justice, in reply to my colleague, the hon. member for Central Nova, indicated that everything that is pertinent to the McDonald Commission's terms of reference would be made available to it by the Solicitor General. I paraphrased the answer. I want to find out from the Solicitor General whether information would be made available to the McDonald Commission which would not be made available to either the Keable Inquiry or the Krever Inquiry. In other words, will the Solicitor General sit in judgment of what will be made available to the various commissions, because that is what I take to be the implication in the reply of the Minister of Justice. If the Keable Commission is constitutional, as it is so far according to our courts of law, is the Solicitor General still of the view that he may refuse to supply that information to the commission?


Francis Fox: Mr. Speaker, the position I have taken in front of the courts is that there is a division of constitutional responsibilities, that some matters come within the constitutional responsibility of the provinces and other matters come within the constitutional responsibility of the federal government. I have always taken for granted that when parliament sets up a federal Crown agency, it reports to the federal parliament not to the provincial legislature. The appropriate place for the investigation of day to day activities or policies of that Crown agency is in front of the commission of inquiry set up by the federal government with the powers to look into its complete operations.


John Edward Broadbent: It was not what you said last June.


Francis Fox: I am not about to refer the complete workings of a federal Crown agency over to the examination of a provincial commission of inquiry which was created, as the hon, member knows, by the provincial legislature and therefore should not have more powers than the provincial legislature which gave it birth.


William Herbert Jarvis: That, in my view, is not what the Solicitor General said last spring. But leaving that aside, the Solicitor General still did not answer my question. Is he to be the judge, not the courts of the country, of what he will supply to a constitutional provincial inquiry, whether it be in Edmonton or whether it be the Krever Inquiry in Ontario or the Keable Inquiry in Quebec? Despite the fact that the courts say those commissions are acting within the constitution, will the Solicitor General be the final judge of what material will be supplied to each of them?


Francis Fox: Mr. Speaker, if I were to be the final arbiter of what would be supplied to the Keable Commission I would not have filed an appeal to the Quebec Court of Appeal.


KEABLE COMMISSION-POSITION OF MINISTER
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is supplementary to those just asked. The minister has indicated that he intends to appeal that most excellent decision and, as a result, I presume we are going to waste a little more of the taxpayers' money. In any event, I want to ask him about his position in front of the Keable Inquiry. He was subpoenaed to appear today at two o'clock. Since he is here in the House, I presume he has not answered that subpoena. Will he advise the House whether he has answered that subpoena with another affidavit under section 41(2) of the Federal Courts Act by refusing the documents that the commission has requested under that act?


Francis Fox: Mr. Speaker, I suppose that if I were to follow the advice of Mr. Justice Hugess-en whom the hon. member has just quoted, I would indeed file affidavits under section 41(2), or I would at least consider it. It is my position that the question of filing affidavits does not arise until one has decided whether or not a commission of inquiry has jurisdiction to inquire into those matters. If that commission of inquiry does not have that jurisdiction, I do not see why I would even consider the possibility of issuing affidavits under section 41(2). On the other hand, if the commission of inquiry is finally held to have such jurisdiction, which I believe would be a fundamental change in the constitution of this country, then I would re-examine the documents to see whether or not an affidavit under section 41(2) would be advisable under these circumstances.


MCDONALD COMMISSION-NUMBER OF INCIDENTS REFERRED- POSSIBLE EXPANSION OF TERMS OF REFERENCE
Stuart Malcolm Leggatt: Would the minister say, just so I understand his answer, whether he is now telling the House that up to this point he has done nothing in response to the subpoena from the Keable Inquiry? In any event, my question deals now with the terms of reference of the McDonald Inquiry. Will he now give an unequivocal assurance to the House that all the 26 items which the minister listed in his affidavit of October 12 before the Keable Inquiry, and which he refused to submit to the inquiry, will be submitted to the McDonald Inquiry and, second, would he also advise the House whether the terms of reference of the McDonald Inquiry which are limited to illegal acts, not legal acts, in view of the evidence now of provocations and dirty tricks in the province of Quebec, will be expanded since it can be held in camera? Will he now expand the terms of reference so that the total operation in terms of immoral activity on the part of the security force can be examined as well as the baldly illegal acts?


Francis Fox: Mr. Speaker, first of all I would like to reply to the hon. member's question as to what I intend to do in connection with the subpoena from the Keable Inquiry. As I have indicated to the House before, I have already instructed my attorneys to file an appeal of the judgment handed down by Mr. Justice Hugessen. My attor-
December 12, 1977

neys will be appearing before the commission of inquiry in Montreal this afternoon to make representations on our position. As to the question of whether or not I would undertake to file with the McDonald Commission the 26 items to which the hon. member referred, I would not undertake to do so because I have indeed already done so. So far as the terms of reference are concerned, I think they are extremely wide. If the hon. member cares to refresh his memory he will see that the terms of reference include the right to inquiry into all the practices and procedures of the RCMP, and I cannot think of any terms of reference that could be wider.


Some hon. Members:: Hear, hear!


EXTERNAL AFFAIRS
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Secretary of State for External Affairs. Will he confirm that, as reported in the press during the weekend, the government will be asking president Brezhnev of the Soviet Union in an urgent way to allow Anatoly Shcharansky to leave that country to be reunited with his relatives in Canada, and if Mr. Shcharansky is then allowed to leave, that the government will expedite his admission to Canada by order in council, if necessary? I am confident that these steps, if promptly undertaken by the government, will be supported by Canadians generally as being consistent with the cause of human rights in this country and throughout the world, especially as confirmed by the Helsinki agreement.


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I called in the Soviet ambassador at 1.15 p.m. this afternoon and I made representations to him which reflected the declaration of various members of parliament on all sides. I think there were some 57 or 58 members involved, but I am sure they reflected the views of the House. I also assured the ambassador that there were relatives in Canada who were prepared to sponsor Mr. Shcharansky and that while, as the declaration of the members of parliament said, we did not wish to interfere in the internal affairs of the Soviet Union, I wanted his government to be aware of the fact that the government of Canada would issue an order in council expediting the entry of Mr. Shcharansky into Canada if that were deemed by the Soviet Union to be an appropriate course of action.


ROYAL CANADIAN MOUNTED POLICE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I have refrained from referring to matters that have gone before the commissions. Today I heard the views of the
Oral Questions
Solicitor General in connection with this matter. Do I conclude correctly, after having read the generalizations, philosophical and otherwise, of the Prime Minister in a press conference, that the ministers of this government regard themselves above the law with the rule of law not applying to them? I ask that in view of the statement just made by the Solicitor General that he is not going to appear and that he has it in mind to appeal. If that is so, is the first step not to secure a stay of proceedings rather than stating that some day or some place an appeal will be taken? What manner of qualification within the rule of law is it which will permit a minister day after day and week after week on behalf of this government to engage in diversionary tricks in order to cover up?


Some hon. Members:: Hear, hear!


Francis Fox: Mr. Speaker, I have a great deal of difficulty understanding the question being put to me. It has always been made extremely clear in this country that we have a government of laws and not of men and that everyone is equal before the criminal law.


Some hon. Members:: Oh, oh!


Francis Fox: There is no immunity from the law. However, what the right hon. member is suggesting is that I be derelict in the pursuit of my own duty, which is to see to it, as a minister of the Crown, that federal Crown agencies are not turned over holus-bolus to inquiries of provincial governments.


Some hon. Members:: Hear, hear!


John George Diefenbaker: That is a doctrine which has never before been espoused by any responsible parliamentary government in the history of the British tradition. What the minister says now is that he is here to protect Crown agencies, but he should be here to protect the rule of law and Canadian rights.


Some hon. Members:: Hear, hear!


John George Diefenbaker: The Prime Minister laughs. No wonder he laughs. Look at the way he has diverted from the facts.


An hon. Member:: Shame.


Mr. Speaker:: If the right hon. member has a question, would he put it forthwith.


MCDONALD COMMISSION-NUMBER OF INCIDENTS TO BE INVESTIGATED PRIOR TO ESTABLISHMENT
John George Diefenbaker: Mr. Speaker, you are a prominent lawyer, and you realize that when the Prime Minister places himself in the position of a judge and laughs hysterically he invites what I have said, and I repeat it.
I have followed everything that has been said. I have read every item, and I have a couple of questions arising out of the conduct of McCleery and Brunet. Before the McDonald Commission was set up was there any incident to be investigated by

December 12, 1977
Oral Questions
that commission other than the one the minister described as an isolated incident in connection with the break-in at a left-wing newspaper in Montreal? Was there any other incident to be investigated at the time the McDonald Commission was set up?


Francis Fox: Mr. Speaker, I am not quite clear as to what the hon. member is referring to because when the McDonald Commission was set up it was because we obtained additional evidence indicating that other possibly illegal acts had been committed. The reason for setting up the commission was that there was evidence brought to our attention indicating the commission of other possibly illegal acts or questionable practices.


John George Diefenbaker: Mr. Speaker, that was not the explanation given earlier by the minister. He said there was an isolated incident. When did he secure information from McCleery and Brunet in connection with these other incidents? Was it before or after the commission was set up?


Francis Fox: Mr. Speaker, the evidence referred to by the hon. member was secured during a meeting between the deputy attorney general of Canada and Mr. McCleery on, I believe, June 23, 1977. That matter was the suject of a memorandum to me which was then referred to the RCMP for analysis and examination. The Commissioner of the force reported back to me on June 29 that some further allegations were indeed substantiated. He at that point requested that a commission of inquiry be set up. The government heard his recommendation and decided to follow through with it.


EXTERNAL AFFAIRS
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, my question is to the Secretary of State for External Affairs, who has just returned from meetings with the European Economic Community in Brussels. Has there been any change in Canadian policy with respect to the full scope safeguards on the export of uranium in order to reach the draft agreement with the EEC to resume sales of Canadian uranium, and specifically will Canada retain its veto over reprocessing of Canadian uranium without our specific consent?


Donald Campbell Jamieson: Mr. Speaker, I do not think it would be appropriate for me to answer in detail at the moment because the agreement which was arrived at on an ad referendum basis in Brussels has not yet been discussed among my colleagues or referred to the council of ministers in the European community. As perhaps the hon. member noticed, I did decline to answer those questions in Europe on the ground that I wished to reveal it first in the House of Commons, and I can assure the hon. member that as soon as word is received from the European community as to whether it has accepted the ad

referendum arrangements, I will make a full statement in the House at that time.


EXPORT OF URANIUM-AGREEMENT OF FRANCE ON INSPECTION OF FACILITIES
Douglas Roche: Mr. Speaker, it is precisely because members of this House deserve a statement that we are inviting the minister to make one at the earliest moment and particularly to bring the proposed new agreement with the EEC before parliament for ratification.
I have a supplementary question. Has France agreed to international inspection procedures on facilities which use Canadian uranium, since that is also at the heart of the issue?


Donald Campbell Jamieson: Mr. Speaker, if I understand the question correctly, and without going beyond the parameters I laid down just a few moments ago, I can say that I believe that the arrangements which have been arrived at vis-a-vis the Canada-France relationship would meet the requirements the hon. member has just stated.


REASON CANADIAN DELEGATION IN INDONESIA TO DISCUSS POSSIBLE CANADIAN PARTICIPATION IN COAL MINING PROJECT
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce, but in his continuing absence I will direct it to the Secretary of State for External Affairs, who I expect is knowledgeable about this matter.
Given the situation of both the copper and nickel industries in Canada and in the world today can the minister explain why a delegation led by the assistant deputy minister of Industry, Trade and Commerce, and including a representative of the Canadian Export Development Corporation should be in Indonesia discussing possible Canadian participation in a $1 billion coal mining project in South Sumatra, a project which, if completed, would almost certainly be in direct competition with Canadian coal mines in British Columbia and Alberta and certainly with the maritimes?


Donald Campbell Jamieson: Mr. Speaker, I am not completely familiar with that particular delegation. However, I ask the hon. member to recall that the province of British Columbia in particular has been in constant contact with us-and indeed with me personally in Vancouver some time ago-asking us to arrange for a mission overseas with regard to various forms of international agreements on coal sales from Canada. So it is not just a one-way street.
In terms of any co-operation with Indonesia I suspect- although I do not know the details-that there is involved the sale of Canadian mining equipment or some other high technology or manufactured goods from this country. However, I will make some inquiries for the hon. member and give him a full response.
December 12, 1977


Howard Earl Johnston: Mr. Speaker, I accept some of the points made by the minister about the sale of mining equipment, but I think we are engaged in the short-term rather than the long-term. There is another dimension involved in this particular mission at this time. At a time when Amnesty International in its Indonesia report can say that in no other country of the world are so many political prisoners held without trial for so many years and the unchanging pattern of imprisonment in Indonesia presents the gravest challenge to the concept of international responsibility for human rights can the minister explain why the Canadian Development Corporation should be involved in a venture which could compete not only with Canadian industry but could possibly also involve large scale use of the forced labour?


Donald Campbell Jamieson: Mr. Speaker, the situation in Indonesia has been the subject of many public comments by the government of Canada and by others. Recently I said that the situation continues to concern us, although in fairness one has to acknowledge that there has been an improvement in recent times. The hon. member is opening up a very large question. The same kind of forced labour, for example-if it is indeed that, and I put in that reservation-is undoubtedly presently employed in a $50 million or $60 million cement plant which was also sold by interests in the province of British Columbia and elsewhere.


AIR TRANSPORT
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is directed to the Minister of Transport. Can the minister tell the House whether it is the intention of the government to change the CTC decision of last week and to allow Wardair to compete with Air Canada and CP Air in providing domestic air charters on the ABC concept?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, we have not yet had a chance to review the decision of the CTC or the question of our position and right to do so. My understanding of the decision was not that it excluded any particular carrier but that it gave the right of first refusal, in effect, to the main carriers in the cross-Canada service. I will be looking into the decision further.


Charles Joseph Clark: A supplementary question. While looking at that decision, bearing in mind the very real impact upon Canadian unity that can flow from having more Canadians see more parts of the country, in that context will the minister very seriously review the decision of the CTC with a view to changing the ruling that would limit to a total of 50 the number of domestic air charters allowed next year to the two airlines that have in effect been granted an opportunity to operate in this field without competition?
Privilege-Mr. Crosbie


Otto Emil Lang: Mr. Speaker, obviously I do not think it would be right to argue with the Leader of the Opposition or indeed to have him argue that kind of issue at this point in advance of looking thoroughly at all the issues. Of course the Canadian Transport Commission has the public interest very much in mind in trying to balance charter class fares with the development of ABC charters in this country. The issue is not free of complexity. I do not have to assure the Leader of the Opposition that this government is very interested indeed in trying to encourage the most efficient and economic way for Canadians travelling inside Canada. That will be very much our purpose but of course we have to bear in mind the desirability of retaining scheduled services for the purpose of moving from one part of the country to the other.


Charles Joseph Clark: Will the minister give an undertaking that the principle that guides the review by the government will be that of allowing the maximum possible travel at the cheapest possible cost in Canada by Canadians rather than the principle of the protection of Air Canada?


Otto Emil Lang: Mr. Speaker, there is no intention on the part of the government to protect Air Canada or any other airline in any pejorative sense. I think it is important in this country that our regional, mainline and other air carriers have the proper scope for operations and to provide scheduled services in an efficient and economic manner. The question of what kind and combination of services is available is, of course, one with which we are concerned and we will be looking at the issue from that point of view. Without any doubt we will be trying to assure that there is as much cheap travel for Canadians in Canada as possible but if the Leader of the Opposition seems to think a miraculous wave of the hand is going to produce more of that as though costs disappear and scheduled services can be disregarded I think he is missing some very important points.


PRIVILEGE
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise on a question of privilege which deals with an answer given to a question I asked on Friday, December 9, and reported in Hansard at page 1729. If statements made outside the House are to be taken as correct, then the Prime Minister (Mr. Trudeau) gave an incorrect answer to a rather important question.
My question to the Prime Minister concerned a statement made by the Minister of Agriculture (Mr. Whelan) in Hamilton on November 29 to the effect that he was "sick and tired of the U.S. ambassador running around talking about free trade." I asked the Prime Minister whether a diplomatic note had been sent to the United States complaining of the U.S. ambassador "running around talking about free trade", in accordance with the statement by the Minister of Agriculture.

December 12, 197
Yukon Report
I was trying to find out if this is a statement of the policy of the government, that it is sick and tired of the U.S. ambasssa-dor running around talking about free trade. In reply the right hon. Prime Minister said, "Yes, Mr. Speaker." That means that a diplomatic note was sent to the United States protesting that the government is sick and tired of the U.S. ambassador running around talking about free trade.
Since returning here this morning I see from the Ottawa Journal, in which the earlier report appeared, that someone called Richard O'Hagan in the Prime Minister's office says it was all a misunderstanding. He said it was one of those half distracted answers and that one could not have listened without wondering if he knew what he was replying to. This is quite an explanation-that the Prime Minister in the question period is distracted and does not know what he is listening to and does not know what he is replying to.
This is an apparently incorrect answer on a serious matter, given by the Prime Minister. It affects the United States and must be embarrassing to the U.S. ambassador. I personally do not agree with the statement of the Minister of Agriculture that the ambassador is running around and should not be talking about free trade. I think he is entitled to talk about what he likes and that he is quite an outstanding representative of the United States. The Prime Minister has not told the House that this was a mistake of his, a wrong statement, and that no diplomatic note has been sent. I raise this question now because I think it is a breach of our privileges and is certainly not calculated to improve relations between this country and the United States of America of which the Secretary of State for External Affairs (Mr. Jamieson) is so fond. Could we have the record straightened out?


Mr. Speaker:: Order, please. The hon. member for St. John's West (Mr. Crosbie) raises a question of privilege which he would not have had an opportunity to raise at any earlier time as a portion of his remarks depended upon the presence of the right hon. Prime Minister in the House today to make some clarifying statement. I would presume that in the ordinary course the hon. member's remarks will be brought to the attention of the Prime Minister who will have an opportunity to comment, presumably when next in the House.



ROUTINE PROCEEDINGS


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, under the provisions of Standing Order 41(2) I am pleased to table, in both official languages, copies of the Special Report of the Standing Committee on Rules, Elections and Privileges of the Yukon.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, questions Nos. 132, 250 481 and 764 will be answered today.
I ask, Mr. Speaker, that the other questions be allowed to stand.


Mr. McKinnon: 1.	How many (a) men (b) women applied to join the Canadian Armed Forces between January 1 and October 1, 1977 and, in each case, how many were rejected?
2.	In each case, how many were rejected for (a) education (b) physical (c) psychological reasons?


Hon. Barney Danson (Minister of National Defence):: 1.	Men	WomenApplicants	22,114	4,880Enrolled	8,265	1,295Difference	13,849	3,585.
2. (a), (b) and (c) Statistical data for rejection is not maintained since the DND selection system is based on the evaluation of the whole person and may be based on a single major deficiency or a combination of several minor deficiencies and this in turn will vary depending on the trade. The differences listed above are not all rejections, but in many cases include applicants who have either made applications for trades in which there are no vacancies and such applicants are then placed on waiting lists, or who have withdrawn their applications prior to being enrolled.


Mr. McKenzie: Did Canadian National Railways contribute or donate money to Mr. Geoffrey N. Calvert, an actuary, to compensate him for writing and publishing a book entitled Pensions and Survival-The Coming Crisis of Money and Retirement and (a) if so, in what amount and on what date (b) if not, is CNR a member of the Canadian Pension Conference and did the Conference contribute money to Mr. Calvert to induce or reward him for writing and publishing the book?


Otto Emil Lang: The Management of Canadian National Railways advises as follows: Canadian National Railways did not contribute or donate money to Mr. Calvert. Canadian National is a member of the Canadian Pension Conference. Canadian National's information is that the Conference did remunerate Mr. Calvert under arrangements related to the study that led to the publication of the book referred to.
December 12, 1977


Mr. Yewchuk: 1.	Did the Department of Labour receive any inquiries concerning occupational health matters from private citizens or businesses in (a) 1972 (b) 1973 (c) 1974 (d) 1975 (e) 1976 and, if so, how many?
2.	Does the Department have a policy respecting responses to such inquiries and, if so, what is it?
3.	Is the Department in any way obliged to deal with complaints relating to occupational health matters of national scope?


John Carr Munro: 1. Labour Canada receives many inquiries from private citizens or businesses related to occupational health matters. No comprehensive departmental records are maintained because inquiries are received in our Regional Offices and at Headquarters by telephone, letter, and personal visits to our offices. However, the following information pertains to the number of written inquiries to the Minister's office concerning occupational health matters: 1972-0; 1973-4; 1974-6; 1975-6; 1976- 6.
2.	Responses to inquiries dealing with occupational health are prepared by knowledgeable occupational safety and health specialists who work in the Regional offices or the Occupational Safety and Health Branch of Labour Canada.
3.	Labour Canada is obliged to deal only with complaints relating to occupational health in those businesses which fall under the jurisdiction of the Canada Labour Code-Part IV (Safety of Employees).


Mr. Epp: 1.	Are Canadian TV stations airing the information campaign conducted by the Post Office Department aimed at reducing vandalism of post office property and, if so, which stations are doing so?
2.	(a) What is the cost of the advertising campaign (b) who is the advertising agency (c) were tenders called and, if not, how was the agency chosen?


Hon.   J.-J. Blais@Postmaster General: 1. There was no compaign aimed at reducing vandalism in the Post Office.
2. Not applicable.



GOVERNMENT ORDERS


Hon. Allan J. MacEachen (for the Minister of Finance) moved: that Bill C-ll, to amend the statute law relating to income tax and to provide other authority for the raising of funds, be read the third time and do pass.


Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, on November 7 I replied to the minister on second reading of this
Income Tax
bill. Since that time we have heard the minister repeat ad nauseam, and quite frankly in a way that I think is totally unworthy of him, that he had been sitting here listening to debate on this bill for 32 or 33 days and that he has been forced to move closure on two occasions because the debate has taken an unconscionable length of time.
Just for the uninitiated I have before me a copy of Bill C-ll. It contains some 100 clauses, with 225 pages of text. It covers a great diversity of sections within the Income Tax Act. For example it introduces amendments to the Old Age Security Act. Then, lo and behold, just a little trailer, well hidden under the back end of what you might call this huge vehicle, is an increase in borrowing authority of $9 billion. Well, the former minister of finance had tried to tuck it in on another occasion in an appropriation bill for supplementary estimates, where there was no opportunity to debate the increase in this borrowing limit. Fortunately, we spotted that attempted bootlegging. And it was a straight bootleg, Mr. Speaker, of an authority which would be slipped through the House. I am sure there was not even two members on the backbench who were aware of it-possibly the Cabinet knew about it; certainly the Minister of Finance knew about it; and possibly the parliamentary secretary. That is dishonest government. Legislation should not be handled this way when it deals with more than one particular statute and becomes an omnibus bill.
Certainly there are different principles involved in this bill. I would like to know, Mr. Speaker, just what might be the principle of it. It is described as an act to amend Income Tax. It comes into the Committee of the Whole as provided for by the rules of the House. All other legislation should go to committee, but a provision to amend the borrowing authority of the government is tacked on to this bill illegally, I suggest, because of the principle of it not being an amendment to the Income Tax Act but an increase in the borrowing authority.
There are changes in the Old Age Security Act included. Therefore the bill then becomes an act to amend a number of statutory enactments. Under that guise it should not be in this House but in the Committee of the Whole. The House cannot have it both ways.
I did not speak on a point of order at second reading with regard to this matter, nor did I speak in the debate on closure, but I am going to have a good deal to say about closure with regard to this bill. In the House over the past month a picture of misrepresentation was given. What else could the minister expect than what has happened during the past month?
We commenced in October with the Throne Speech debate. It was interrupted on October 21 on the Thursday of the first week of debate by a mini-budget, which in itself should have had a six-day debate. But no, it was bootlegged into the middle of another debate, which by tradition gives ministers and members of this House an opportunity to canvass conditions socially and economically, generally or in particular-whatever their choice may be.

December 12, 1977
Income Tax
On top of that along came the INCO lay-offs one day later, October 21, and Mr. Speaker refused a motion under Standing Order 26 saying that the matter could be discussed during the Throne Speech debate. Of course it could. Of course it was, but I think improperly. There was ample opportunity to use Standing Order 26 for sittings at night to discuss the whole question, instead of directing that a debate should take place with regard to a particular subject to the prejudice of other members. There were many members, Mr. Speaker, who were deprived of their right to speak during the Throne Speech debate because of those two actions, the introduction of the mini-budget and, secondly, the deliberate intrusion into the debate of the INCO situation which should have been handled in a different way.
Therefore when Bill C-ll came up for debate, many members who wanted to touch on subjects which were germane to income tax spoke on second reading, and the debate was there. The material was there. When was this going to be debated later? Next spring? The situation was now, and one could readily expect that the debate on second reading would be extensive. As reported at page 661 of Hansard, during second reading I said:
I hope some of the provisions will merit the fate they deserve and be defeated in the Committee of the Whole.
There were some very minor changes, but they do not go nearly far enough because the minister has had the temerity- I would not say gall-to use closure in committee of the whole. He is faced with this intriguing process. For purposes of information, he tabled a number of amendments to sections which were not reached before the guillotine fell. The net result is that he could not present his amendments or have them moved by one of his colleagues so that even without debate the House could consider the amendments.
In the end this bill will pass. The amendments will have to be introduced in the other place, and the bill-if they pass it there-will have to come back here for approval as amended by the other place. Of course those amendments will then be subject to debate. What does the minister hope to gain? He gains nothing by the premature use of the guillotine.
Let us look at how much time was taken up by the debate on second reading. There was a total of 27 hours and 20 minutes from November 7 to November 24, with interruptions for opposition days and Remembrance Day. On Monday, November 7, there was two hours and 53 minutes of debate; Tuesday, November 8, three hours and 14 minutes; Wednesday, November 9, two hours and 32 minutes-


An hon. Member:: Too much time.


Marcel Joseph Aimé Lambert: Members opposite feel there is too much time spent on legislation. They have not even seen it. They are not interested in it. Their participation in legislation is nil.
On Thursday, November 10, there was one hour and 18 minutes of debate; Monday, November 14, three hours and 25

minutes; Tuesday, November 15, opposition day; Wednesday, November 16, two hours and 23 minutes; Thursday, November 17, three hours and ten minutes; Friday, November 18, two hours and 30 minutes; Monday, November 21, two hours and 45 minutes, for a total debate on second reading of 24 hours and ten minutes.
There was a time allocation debate of two hours and 17 minutes. On Tuesday, November 22, there was the grand total of 30 minutes. On Wednesday ther was no debate because it was an opposition day. On Thursday, November 24, there were three hours and ten minutes. Therefore there was a total of 27 hours and 20 minutes for the bill, and two hours and 18 minutes for time allocation.
Let us look at committee of the whole. On Thursday, November 24, after the vote there were eight minutes; Friday, November 25, two hours and 56 minutes; Monday, November 28, three hours and 52 minutes; Tuesday, no debate, opposition day; Wednesday, November 30, two hours and 54 minutes; Thursday, December 1, three hours 40 minutes; Friday, December 2, opposition day; Monday, December 5, the debate on the allocation of time, two hours and five minutes, and then 30 minutes in committee; Thursday, December 6, three hours and 28 minutes; Wednesday, December 7, one hour and 42 minutes; Thursday, December 8, last opposition day; Friday, December 9, two hours and 50 minutes, for a committee stage total of 22 hours and one minute on a 225 page bill with more than 100 clauses.
Do members opposite have any idea of what is income tax and the number of subjects covered? How can they say we have spent too much time on this bill considering that it covered the income tax provisions of the March 31 budget plus the so-called budget in October? I am sorry, it was not March 31 but June, because it was in July that we passed certain amendments to the March 31 budget, if my memory serves me right.
During that time we did raise certain subjects that merit a great deal of attention. I am sorry that the government members did not feel persuaded to read in particular clause 75 of Bill C-22 passed in July under the guillotine, whereby it is a condition for purchasing and cashing Canada's Savings Bonds that the owner thereof shall have a social insurance number. This is nothing but pure bureaucracy run rampant.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: It is totally contrary to the words of the late Prime Minister Pearson when introducing the concept of social insurance numbers some 13 years ago. Not only that, but the forms for purchase of this year's Canada Savings Bonds provide for the inclusion of a social security number. All the minister said is that we have been using them here and using them there, and they are on the income tax forms. There have been a number of salami slices from time to time, and some of their use is absolutely debatable. The use of the social insurance number is not compulsory at this time. There are thousands upon thousands of senior citizens, married women who have never had employment and children who
December 12, 1977

are too young to take employment who are the owners of Canada Savings Bonds. In future they cannot cash any coupons on Canada Savings Bonds without obtaining a social insurance number.
I have had scores of elderly persons come to me. Frankly, a number of them never had to have a social insurance number. They retired before the social insurance number scheme was even introduced. Therefore there was absolutely no need for them to have a number.
I invite hon. members on both sides of the House to examine the application form and the requirements and the instructions for obtaining a social insurance number. With the rush that is now on, in many instances there is a delay of three to four weeks. It is centralized in some office over on Riverside Drive.
The law does not state that one has to have a social insurance number. Why should a housewife who has never worked and has no intention of working be forced to take a social insurance number if a husband or a relative makes her a gift of Canada Savings Bonds, or if she should inherit them?
What about children? It is one of the better habits of parents that can afford it, and it is surprising how many can, to start their teenage children on the useful pattern of saving by giving them a Canada Savings Bond or two. It used to be one could get them for $50. Now they cost $100. It sounds somewhat ludicrous that a 12-year-old child should get a $100 bond as a birthday gift, but with inflation that kind of value is no longer strange. Yet what else could one do in order that a child might get interest?
I thought, speaking privately to the Minister of Finance (Mr. Chretien), that he had not heard of this particular provision when it went through as part of the March budget. I spoke out on second reading, but it is evident he soon hardened his mind. I must say it is my intention, if my bill is reached-I have a private member's bill already on the order paper-to seek the repeal of that section. I hope there will be an opportunity to have the subject debated because I am sure that the correspondence and telephone calls I have received duplicate those which have come to the attention of almost every member in this House.
I am against the principle that there should be this watchdog over me and over everyone else in the country in the form of a social insurance number. It is wrong. Oh, it is nice from the point of view of the bureaucrat, but it has been proven time and time again that anything which is administratively convenient deserves to be looked at three times, not twice, and I am sure this system is likely to infringe upon the ordinary rights of the citizens.
We are getting so wrapped up in controls of one form or another, whether at the federal level or at the provincial and municipal levels, that we can scarcely call our souls our own. 1 think people are fed up with this, totally and utterly fed up with it. And it is time we did something about it.


Some hon. Members:: Hear, hear!
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Marcel Joseph Aimé Lambert: The government is for the benefit of the people, it is not the people for the benefit of the government and those who administer government.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: If that is what qualifies me as a Conservative then I am proud to be a Conservative when I say those words.
My hon. friend from York-Simcoe led a long fight with regard to the taxation of income benefits from insurance policies. There was, it is true, a retreat from the proposals contained in the original June budget; I am glad to say the minister did withdraw, the result, I imagine, of pressure from his own back benches as well as from pressure by members on this side.
Insurance looms very large in the minds of the citizens of this country who are not rich, and often not in receipt of moderately high incomes. There are many, many people who pay in a pittance on small policies which represent their conception of how they can best put money aside within their means, modest as they may be. These savings provide a well of investment funds for this country to use-they would amount to a great deal more if the state at all three levels did not take 43 per cent of the gross national product, in which case a lot more money would be available for insurance and investment by the people generally, and they would not then be obliged to rely on the great, God-Almighty state to provide for them after retirement.
Somebody asked me today: Do you think the demand for social services, homes for the aged, day care centres and so on, is the result of government action? Mr. Speaker, it is hard to say which is the chicken and which is the egg. Is it because we are now in the seventies that we feel the state should have the responsibility of looking after each and every one of us beyond the age of 65, and that it should also have the responsibility of providing facilities for the care of children while they are of pre-school and elementary school age? Is that the state of our society today?
To get back to the subject of insurance and taxing the benefits thereof, certainly there have been changes. Even now, the minister has backed away from the idea that interest for a loan from an insurance company would not be counted as an expense of business if the money had been borrowed for the purpose of carrying on the business. I think the original proposal was nitpicking, a process of making it more difficult for citizens who must comply with the Income Tax Act. There are too many examples of this.
Take the loans for the purpose of home insulation. What a joke! They are subject to agreement by all the provinces and are subject to a maximum limit of $350 restricted to homes built prior to 1941. I understand that some of the provinces may make supplementary loans or grants. But it is all subject to income tax. What incentive is there, Mr. Speaker? What encouragement is there to insulate a home at a cost probably in excess of $350 in many cases only to find that the money, when eventually received, is subject to tax?

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We want as many people to insulate their homes in order to conserve energy. The principle of the plan is quite good, if we want to save energy. I have saved energy. I doubled the insulation in my home this year, and I spent the $350 on an aluminum door. My wife has told me that already it is very apparent that we are going to save a fair amount on our heating bill this winter. Even with the severe cold and heavy snows we have had so far, the house is much more comfortable. Why tax the plan? I regret that part of this particular bill.
I had hoped to see much more in the way of incentives in this bill. There are some incentives, hopefully for scientific research. The hon. member for Wellington (Mr. Maine) spoke in this debate earlier. Of course he stressed, as a caveat, that there should not be bureaucratic bungling or the insistence on so many rules that, no matter how well-intentioned the plan, it would be totally negatived by the philosophy that a good idea must be smothered with paper work. I might not agree with the hon. member on a lot of things, but on this one idea I do.
There are a number of other subjects which will be covered by my colleagues in this third reading debate. I do not promise it will be short, because closure is counter-productive.


Lincoln MacCauley Alexander: Right on.


Marcel Joseph Aimé Lambert: If there has been a few more days allowed for consideration by committee of the whole, third reading would have been a matter of formality.


Some hon. Members:: Oh, oh!


Marcel Joseph Aimé Lambert: The hon. "kid freshmen" in the back benches on the government side speak as if they are wise veterans in this House. They have not seen the operation of this House from both sides. I learned about parliamentary procedure when I was a parliamentary secretary on the other side and from sitting in the chair. This House has a certain temper. By agreement between House leaders legislation moves. There is far more achieved by consensus between House leaders. I have participated in a lot of negotiations conducted in that manner.


An hon. Member:: Since 1867.


Marcel Joseph Aimé Lambert: After the hon. member is here another two months, he will change his mind, because two months is a relatively long time to him. If there is agreement between the House leaders, legislation will move. The worst one can do is impose the guillotine. It has been used fairly frequently of late. I suggest to hon. members that its continued use will be counter-productive. Government members have been invited to speak, to participate and to represent the ideas of their constituents. Far too many of them indicate the representation of their constituents in important legislation by sitting in their seats and remaining silent.


Some hon. Members:: Hear, hear!


Marcel Joseph Aimé Lambert: They do not express themselves in caucus; they do not look at the legislation in caucus.


An hon. Member:: When did the hon. member even sit in government caucus?


Lincoln MacCauley Alexander: We can hear you through the wall.


Marcel Joseph Aimé Lambert: Government caucus is less important than opposition caucus. Hon. members opposite should find time to participate in caucus. They should ask their fellow members to participate, and then they will see how much time is spent.
I do not like this bill because of the number of things it does and because of some of the things it has omitted to do. I do not intend to vote for it.


Some hon. Members:: Hear, hear!


Mr. Arnold Peters (Timiskaming):: Mr. Speaker, I agree with one thing that the hon. member for Edmonton West (Mr. Lambert) said, and that is on the problems which have developed as a result of the use of closure in regard to this tax bill.
The government had a large number of amendments which it wanted to incorporate in the bill, but it was unable to incorporate most of them. In fact seven or eight essential amendments should have been incorporated, but most of the government amendments did not get into the bill. There were approximately 70 or 80 amendments to this bill, most of them from the government side.


Mr. Lumley:: No.


William Arnold Peters: Am I wrong?


Edward C. Lumley: You are wrong.


William Arnold Peters: Well, there were 40, 70 or 80. It seems to me there were a lot, because on two or three occasions thick sheafs of amendments were tabled. At least there were 25 or 30.


Edward C. Lumley: Less than 30.


William Arnold Peters: In any case, this bill was so bad that the government wanted to amend it in a number of ways. Perhaps this is the help the government receives from its backbenchers. If that is so, they deserve all the more credit. Backbenchers on the government side should be aware of the fact that their input has been restricted because of closure, and many of the proposed amendments did not get into this legislation.
A tax bill is an important piece of legislation. It is certainly important to the government and to the country, and if there ever were a time when the country needed help, it is now. I think that the major problem in Canada, now with 1.5 million unemployed, is the creation of jobs, and one of the things which the income tax system can achieve is to change the distribution of income, usually by providing those who are in a position to make more income with the possibility of making
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more purchases, thus creating more jobs. That is not what the government has done.
The government said that what we have to do is to give corporations a sum of money which will allow them, as one hon. member said, to modernize their production facilities, and to provide incentives to them to increase their production so that more people can be employed. What the government has allocated for that purpose under this tax bill is $1.2 billion. Opposition members and Liberal backbenchers should have said to the government that that is not the way to do it. The 1.2 billion will not increase productivity but will go into savings. It cannot go either into increasing productivity or into modernization. It is estimated that, on the average, production capacity in Canada is operating at about 80 per cent.
One of the clauses in the bill which we did not reach because of closure makes this clear, and I am sure that some government members have done surveys and would be able to indicate to the government that it was making a mistake in spending $1.2 billion to increase our production capacity when already we are operating at only 80 per cent of that capacity. This has resulted in very few jobs in the past. Other incentives of a similar nature have not produced much in the way of jobs.
There are many people who are in great need of consumer goods and in great need of housing. In fact they are in need of almost all goods that our factories can produce, yet they do not have the money with which to purchase these goods. If these budget resolutions now translated into this tax bill were to produce jobs in Canada they would have to do so by reducing the income tax of those who do not have enough money with which to buy the goods which they need, and which are necessary to provide jobs and to increase our productive capacity. We have not done that. Again we are providing corporations with assistance which we know will not be of much help in that respect. The only justification for this is that they have contributed heavily to a particular political party during an election, and $1.2 billion might probably be well spent in that regard.
We did discuss several clauses of the bill and it seems to me that one of them had a great deal to do with the unity of our nation, namely, the provisions regarding the insulation program. This program could not be better designed to divide the country if Rene Levesque had decided to bring in that kind of legislation himself. People in one part of Canada do not get the same breaks as people in another part of Canada.
We have a joint program in Prince Edward Island and Nova Scotia under which the people in those two provinces will receive $500 to insulate their houses, but in other parts of Canada, such as in Ontario, people cannot receive money to insulate a house unless it was built before 1921, and the maximum amount is only $350. This is a small program. Anyone who has bought any insulation material or done any insulation work on his property will know that $350 does not go very far. Now it is to be considered as part of one's taxable income anyway, so it will not amount to a full $350 for the purpose unless you have no income. And if you have no income, you could make better use of the $350 than to use it to
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insulate your house because you would probably be using wood to heat the house, and the more wood you cut, the less wood you will need because you get warm cutting wood.


Mr. Dionne (Northumberland-Miramichi):: Is the hon. member suggesting we should burn our houses?


William Arnold Peters: This is probably what the hon. member from New Brunswick believes. He is probably the kind of man who would do that. He is probably too lazy to shift his ass to cut down wood for burning so he would probably burn his house. I hope he does not decide to burn his neighbour's house as well. He has not had experience in cutting wood, although he comes from a province where there is wood and where people do cut down wood. The point I am making is not for that kind of member. He will go his own happy way to Brockville one of these days anyway, so we will not have to worry about him.
We are interested in having uniform programs across the country so that a Canadian in New Brunswick will not have to burn down his house to keep warm. People in New Brunswick, in British Columbia or in Prince Edward Island should have the same kind of insulation program.


Maurice Adrian Dionne: Mr. Speaker, may I rise on a point of order? To begin with, the hon. member who has just been wasting the time of the House has used some very unparliamentary language.


Some hon. Members:: Hear, hear!


Maurice Adrian Dionne: I am prepared at any time to put up my knowledge and ability in wood cutting against the hon. member's abilities in that regard, and I am also willing to put up my knowledge of the bill. The hon. member has just referred to some 80 amendments. There were only 26 amendments proposed, 15 of which have been passed, and 11 of which are very technical amendments. If he wants to participate in this debate, he should stick to facts instead of making erratic statements.


William Arnold Peters: I did not identify the hon. member. He identified himself in his remarks. If the shoe fits him, let him wear it. If the hon. member has something to say, he should stand up and make a speech like anyone else. It seems to me that we have given him credit which he does not deserve.
The point I was trying to make is that if we are interested in establishing unity in this country, sooner or later we will have to establish an insulation program that will be made available to all Canadians at the same price, that will operate in the same way and that will provide the same benefits to all. Frankly, I think we should establish such a program because it is an excellent way of reducing the heating bill, but if we are to have a program, not only should we be able to assist people in insulating their homes but we should ensure that there are not rip-offs by producers of insulation material.
There are insulation shortages in many areas. In the last two years the increase in the cost of insulation has been fantastic.

December 12, 1977
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It behooves the national government to set more rigid production standards than we now have. We have quite often found, after re-examination of insulation, that specifications have been considerably lower than they should have been. There are facilities for testing the R factor, but they are not good enough, and we are being ripped off. We have found that the standards set for insulation have not been met.
Everyone is interested in heating, and we should be giving some consideration to the specifications of electricity, oil, gas, and all the other fuels which are used. While the R factor for insulation has been checked and been found wanting, it is also true that at peak periods Ontario Hydro does not provide the same heating capacity as it does at other periods. Electricity with a factor close to 120 volts, bought several years ago can be reduced in stages of two volts at a time, bringing it down probably four or six volts. Anyone who has electric heating can find at certain times, no matter what their thermostats indicate, that their heating units are not operating at nearly the capacity they do at other times.
This is also true with gas. The BTU rating of gas was considerably higher when gas was first brought to Ontario by Trans-Canada than it is today. Since that time plants using that raw material have been established. They have been able to take out high energy materials such as butane so that a person buying fuel today quite often finds that it does not produce the same number of BTU's as it did previously. We should be able to control those factors. If we are going to subsidize the re-insulation of houses we should guarantee that people get what they pay for.
We should also be providing some benefit to those who buy small cars with small motors. This would bring about a saving in fuel, which will without a doubt be necessary before too long.
Other problems with regard to the Income Tax Act have been discussed at some length. One matter was the roll-over of property. There should certainly be no objection to taxing the capital gain which may result from a roll-over of property, but in addition to expropriations there are other occasions when we should give people at least two years to buy a second property. We have allowed one year for those who have to move for one reason or another.
Ordinary people who get involved in roll-overs are not speculating and are not wanting to make any particular gain, but through the death of a spouse or through inability, because of age or poor health, to operate a business, whether it be a farm or a small business, a person may have to acquire other property he can manage. Two years is an arbitrary figure, and even it would not necessarily allow for changes which are made necessary. A two-year period quite often might work a hardship.
There are a number of changes proposed in this tax bill. Normally a tax bill has very little appeal, but this one seems to have some for larger companies. We are making it possible for large companies to do things which are not necessarily in our interest. At second reading the hon. member for Waterloo-Cambridge (Mr. Saltsman) pointed out that many problems

have developed as a result of giving corporations and small businesses more money than they can spend. When that happens businesses increase savings and, as the Minister of Finance (Mr. Chretien) said the other day, we may be saving ourselves right out of business. I read in a newspaper the other day that Canadians have S285 billion tied up in insurance plans.
When we give money to corporations and that money is retained by them, we find the same thing that is happening in the resource sector. Last week it was announced that 750 miners are to be laid off at Falconbridge. Prior to that 4,000 lay-off notices were given to employees of INCO at Sudbury, Thompson, Port Colborne and Timmins. Aid should be given to the resource sector to help it develop new mining propositions and new sawmills, and to help it modernize. However, when a mine or forest industry develops, management has some control over profits. Mining companies have the control of people's resources. They have some control over the costs involved in the development of resources because they can either "high grade" or "low grade". It is not impossible to know approximately how many tons of ore are available in a particular place and what the price for that ore might be. If the price of the product goes up, the amount of ore can be increased because low-grade ore can be mined. On the other hand, if the price of the ore drops, high grade ore can be mined; in other words, they use only the ore which produces a profit on the international market.
This bill would give companies like INCO a 3 per cent increase on their inventories. I agree that for manufacturing industries this is for the most part necessary. This means that if companies replace their inventories, this 3 per cent will help compensate for the inflationary trend which has developed over the period they have been holding their inventories. However, INCO, Falconbridge, Texas Gulf and other companies have built up inventories of base materials, paid overtime, and produced too much. They now have large inventories. It has been said that Sudbury has a seven or eight month inventory at the present time.
We paid a 3 per cent allowance to INCO to provide for that inventory inflation which they were already able to control by the type of ore they were mining. With the huge profit they had accumulated, the undistributed dividends and taxes they had been able to defer, they decided-and from a corporate point of view there is nothing wrong-to take their mining venture to Guatemala and Indonesia. With the help of export credits and of some other federal agencies they established themselves in countries that will allow them to compete with their own development in Canada. The result is that workers have been laid off in Canada, in many cases permanently, and the indication is that unless the world market increases within a relatively short time they will close the Canadian operations completely.
Miners are very important people, Mr. Speaker. We sometimes forget that there are only 750,000 miners, forest work-
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ers, farmers and fishermen who provide all the wealth of this nation. Except in the financial area of lending money and collecting interest, all our wealth comes from these basis resources. The other ten million or so workers in one way or another are parasites on these industries. Now we find that 4,000 or 5,000 miners may be laid off permanently, and as well we have almost lost that many by attrition. We may soon find that communities supporting these industries are not viable, and that not only 4,000 or 5,000 people will be affected but rather up to 80,000 or 90,000 people who rely on the resultant business.
In spite of the mistakes of the past this income tax bill offers little help. The personal expense allowance has been doubled, but inflation has increased the cost of tools and expenses of the job by about 50 per cent, so this year workers would need $150 just to break even. The worker does not really receive any benefit from this provision and so cannot increase consumption to any degree. It was argued during debate that where it was absolutely necessary for a worker to drive long distances to and from the job, an allowance should be made for this, but the government refused. Concessions have been made to corporations and professional people but not to the working person.
If we are to receive any benefit from a budget and the income tax bills that flow from it, our purchasing power must be increased and jobs provided for those seeking them. These things should be the main purposes of a budget and I hope the Minister of Finance will bring one in without delay. Unless the young people of the country are assured of jobs we will have failed them and ourselves. No country of only ten million workers is rich enough to carry one and a half million unemployed for very long. The burden on the workers is too great and they will revolt. The one and a half million people looking for jobs that are not available will revolt as well, and we will all suffer the consequences. If we could decide on a redistribution of purchasing power perhaps we could eliminate this. Now is the time to look at redistributing the income of the ordinary Canadian rather than looking at handouts to the corporate welfare bums.


Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, in speaking on third reading of Bill C- 111 recognize that in one way we are simply debating with a ghost, namely, the former minister of finance who provided the bulk of these proposals. We have to direct some remarks to the present minister, however, because there was a mini-budget since then.
I should like to start with the question of closure on a tax bill. I do not happen to believe in the principle of closure in a free parliament, and one of the reasons for that was demonstrated in this debate. Rightly or wrongly, this party decided to support the bill on second reading. If my memory is correct I sat in this House for a good many days on second reading and saw the debate winding to a close. We had only a few more speakers when suddenly closure was dropped upon us, and of course second reading was extended by the time necessary for debating the closure motion. To my complete surprise on the important part of the bill, discussion in committee of the whole, when it was clear that members of the opposition were
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seriously concerned about several matters of great import to their constituencies and the whole country, closure was again imposed.
To give an example, Mr. Speaker, one of the subjects on which I did not contribute, but which engaged the attention of many members on this side, was insulation. Perhaps in no other country except the U.S.S.R. is insulation more important than in Canada. At no time in our history have fuel costs been so high and the subject of insulation so important. The government had obviously erred and was caught in a differential type of treatment for the people of Nova Scotia and Prince Edward Island as compared with the rest of Canada. Instead of the minister admitting that the point had been well made and that he would do something to correct the situation, we debated it on and off for four or five weeks, and then the government surrendered outside the House in a meeting with provincial ministers.
My point is that if the government wants to govern, it must learn to recognize the feeling of the House and that discriminatory legislation cannot be put through without a long fight. My point is that closure is wrong, but when it is used it should be used with some sort of judgment and assessment. The House does not like closure, and unless there are matters of great national emergency it should never even be considered. The wrong place to apply closure is on the mundane things of tax law.
This budget did see some tax changes. I think it could be agreed now by all sides that the handling of the insulation program by the government was a failure, and it was made very clear in the debate.
Discussion of other points by hon. members should have been allowed, but this was not possible. We were cut off due to time allocation and closure. In particular, I felt the registered home owner savings plan was a good idea when it was brought in some three years ago. It encouraged the individual to save toward something necessary. The vast majority of people in Canada want to own their own homes. This program was cut off by the government without any consideration given to the tax liabilities of the poor devil who was encouraged to enter the program.
All of us, on both sides of the House, have many cases on file. I cite the example of a clergyman who does not receive much money by the very nature of his calling, who is provided with a free manse-as they call it-and who intends to retire in twelve years. He puts his money aside, a few hundred dollars a year into a registered home ownership savings plan, reduces his tax, and is pleased with the program. It means that down the road when he does retire, without a great pension, he will have a start toward purchasing his new home or the furniture therein. But suddenly it is announced that the program is cancelled. He has the alternative now of taking all that money back this year and paying full tax on it. He does not have the alternative of spreading it out, except if he buys an annuity, which does not meet his needs.

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That is merely an example of the type of things that we, as members of parliament, should be debating, bringing the effect of tax law on individuals in Canada before the minister and before parliament. If I have a dozen examples, I would assume that every other member on each side of the House has an equal number. We cannot all participate in these debates. However, if just a few people had put their views forward, perhaps the minister would have been receptive and a change would have been made before the end of the year. This could have been done if there was a good mood in the House. You can only have a good mood in the House when it is obvious that the government is receptive to a positive, constructive idea.
The member for Edmonton West (Mr. Lambert) dealt with the subject of the social insurance number. We know from personal conversations with the minister that he was as deeply shocked as we were that the civil servants in the Department of Finance and the Bank of Canada would deliberately break a solemn promise of a former Prime Minister made on the floor of this House. The Minister knew that was wrong. He knew the people of Canada did not want this closing in of regulations and controls, and for them to be known after a few years as only a number, not as persons any more. The majority of people in this country, and all members of parliament know I am right. We know that the member for Edmonton West is right. We are only expressing truth. The late Prime Minister Pearson gave his solemn word that this would not be applied to income tax.
When the Minister gave his answer to our proposals in the House that this should be eliminated, he was very impressed with the arguments of the member for Edmonton West, of myself and of one or two others. But then he said, "The civil servants have have told me that it has been on the income tax form since 1966. Therefore, apparently, it is the law of the Medes and the Persians-it cannot be changed. God has spoken! I am simply saying that one wrong in 1966 in breaking that pledge of the Prime Minister made in 1964, does not make it right now-to break it again for the second time.
This is not only with respect to bond coupons. You find out in many places throughout the country that they are demanding social insurance numbers. I am saying to the minister and to the Liberal government: you know that I am right, you know the people of Canada are right. There is not a single solitary argument to support the requirement for giving a SIN number when you buy a Canada Savings Bond. The only argument advanced on the positive side is that if a bond is lost, it will be easier to trace. Do you take away the civil liberties and freedom of 20 million individuals on the argument that you might save or find a lost bond-like a lost $10 bill? It does not hold. Then we have the ministers statement that since the SIN number is on the income tax form since 1966, he could not do much about it today, and so it is an accepted part of the law of the land. In the debate concerning this issue that will continued across the country for the next eight to ten months, the government will be on the defensive, trying to argue itself out of this position on the SIN number.

The government stands condemend of allowing the civil servants of Canada to change a promise of a Prime Minister and to contravene the wishes of parliament by applying the SIN number to everything. Until the government is willing to stand up to these termites who eat away at our freedom, then that government does not deserve to sit in office, and has to go. Ten years, even one hundred years from now the reduction and loss of our freedom will be more important than the mistakes made on the tax side of this particular budget.
We have endured bad taxes for years, and will continue to endure them. But we do not want to have to endure restriction on our liberties. The hon. member for Edmonton West should be congratulated because he was the only member who spotted this when the bill went through last March or April. I certainly take full blame for the fact that I missed it. When I did find out, I did what I could in a constructive way to ask the government to get rid of this silly SIN number on things that are not necessary.
Closure has prevented me from discussing this fascinating principle of the roll-over of capital gains on property. There is certainly no justice in what the government has done in suggesting it apply to farms and suggesting it apply to small business because these forms of private enterprise, these people as a rule do not receive much money during their working years. A small businessman who owns a store, a farmer who owns his farm, from the records we can show that he receives an average income well below that of the working class, and well below what people should be getting for the tremendous investment that they have at the present time. It may interest the House to know that in 1975 the average income of a farmer across Canada was approximately $8,000 per farm. This year, 1977, with the figures in for the first ten months, the average farmer will end up with approximately $4,000 a year. This does not include any reward or return on his interest, labour or management. It is simply the amount of money he will have after he has paid his expenses from his gross income.
This is at a time when labour is going up 6, 8, 10 or 12 per cent a year, and that is a restraint. Government costs are going up about the same level. However, for one important segment of our income earners, the agricultural sector, and equally important to miners, there has been a reduction of 50 per cent of their net income in a two-year period from $8,000 to $4,000.
This question of roll-over should have been discussed as part of an attempt by the government to make it a little more fair for this chap. When he finally comes to the end of his work period, he should have a chance to roll his enterprise over and move into a similar type operation without having to pay a tax on the move.
I did not get the opportunity during the committee of the whole to ask why this principle of roll-over is not applied to ownership in the form of shares. We, as a national objective,
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should be trying in parliament to do everything we can to get Canadian as individuals to own their own country.
Our tax laws discriminate against Canadians owning shares in companies in their own country. That is why we in this country, in major segments of our economy own such a small proportion of the shares of large international companies. Our tax laws discriminate against it. We double tax any person who goes into ownership in the form of shares. We are not going to double tax them under this principle of roll over if they buy in the form of land or property.
We have moved a little bit on shares in the legislation where we have agreed to give privileges to the person who gets options. However, this privilege of being able to be treated differently on options under this legislation, Bill C-11, only applies to a person who gets options in a Canadian-owned private company. Why could this principle not be applied to the foreign-owned private company?
Many Canadians find that the only way they can be rewarded for doing something in Canada or abroad is to take their reward in the form of shares. They not only get their reward in the form of wages, but in the form of shares. But the first thing that happens when a company begins to make money is that they buy out the Canadians. There is usually a by-law of the company, as a type of protection, that you sell back to the company you have joined.
Usually these companies are foreign owned. If they are in newly developing nations, they cannot pay a Canadian very much money for his know-how to make things work so they give him a share interest. If his ideas are good, and the majority of shares are owned by the nationals of that country, the minute the company does well and share dividends on shares are going to be paid, they think of how they can buy you out. When things are going well, they want the dividends to stay in their own country. One can understand that reasoning because we have it here in Canada.
I suggest, as a constructive type of proposal, that we should allow this concept of roll over of capital gains to extend to all forms of property. The accepted philosophy is to make it possible to tax a person when money is taken into income, but when rolling over from one form of property to a similar type of property, the roll-over principle should be allowed to cover all forms of property ownership.
The minister did not respond to the second proposal I made. I hope his staff, including the parliamentary secretary, will bring this proposal to him. These proposals were made for the simple purpose of directing to a new minister, who is not responsible for most of this bill, some ideas to make this a better bill. It is the duty of every member of parliament in the House, including the opposition, to put forward proposals.
Our party voted for this legislation on second reading with the understanding that when it would go into committee of the whole we could put forward proposals to be included in the legislation. We found out, through inexperience maybe, and through a philosophy present on the other side of the House, that they do not want to accept proposals from the opposition.
Income Tax
I still hope they will learn to be democratic and learn that parliament is a place for talking.
Parliament is a place where you can put forward ideas in the hope that occasionally they may be a accepted. I am going to continue that policy of putting ideas forward. However, with the way this bill has been handled, with no sign of compromise and no sign of willingness to accept positive ideas, it is very difficult to keep up this belief.
Another subject that was not discussed in this legislation but should have been was the Turner budget of 1974. This budget we have now and this tax legislation are part of a series of continuing bits of tax law which all add up to disaster in Canada. I suppose everyone looked at the headline in this morning's Globe and Mail. I will read it to the House so that it will show on the record. It reads:
PM lost fiscal gamble; Canada pays with ailing economy
Then follows a fairly substantive analysis of all the mistakes the government has made since 1973 when Turner was the finance minister. The hon. member for Rosedale (Mr. Macdonald) was not able to change this drift and resigned from the portfolio. We see the very well-liked member from Shawini-gan, the Minister of Finance (Mr. Chretien), coming into the position with great enthusiasm that he might be able to turn it around and end this drift of blunders that have been consistently the same since 1973. They have put Canada, a very strong country, having the products that the world wants and having every reason to be going at full blast, into a position where it has lost four years. We have not only been in recession but in stagflation throughout the whole period.
The key phrase that has to be remembered about the Turner budget of the spring of 1974, and repeated again in the fall of 1974, is that it applied double taxation to the resource industries of Canada. That budget of 1974 said to the provinces which owned the resources, "You have gone too far. You have been too greedy in raising your taxes three or four times on the resource industries. We are going to get back at you by doubling the penalty on these resource industries and not making those provincial taxes deductible."
Today in several of our provinces, with the provincial governments having doubled and quadrupled their tax level and the federal government not making the provincial taxes deductible, we have tax liability of 85 per cent to over 100 per cent.
As you look at the mines, they are going down. It is not just the big Inco, Falconbridge and Cominco mines. It is the small Canadian mines which are only producing $100 million worth of stuff a year, pretty small I admit. Craigmont is closing down. It is running out of high grade ore. Gibraltar is closing off. Most people in Canada have not heard of these mines. Nothing was more successful than Gibraltar until Turner's budget came in 1974. I am simply pointing out the obvious. It is not only the 4,000 miners in Ontario, but the miners in every province in Canada-they are going down the drain in a fast slide because of the double taxation imposed in this country in 1974. No attempt has been made in the bill
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December 12, 1977
Income Tax
before us to deal with this vitally important issue. So here we have a nation which should be strong, walking along on crutches.
Things are so bad that even the Prime Minister (Mr. Trudeau) has realized he cannot fool the people any longer talking about unity when the policies of his own government are dragging a powerful country to its knees. Here is a mining industry, the most efficient in the world, with the ore the world needed, forced to its knees, going bankrupt, going out of business. Yet all we are talking about in this House is what kind of temporary, stop-gap measure we can devise to keep the workers employed for a few weeks longer or induce them to share what work there is.
The answer is simple. Tax law is competitive law, and if our tax laws are more severe than those of our competitors the industries which suffer from them will go out of business. Canada does not have a monopoly in world markets.
The budgets of the last couple of years have been bad budgets because they have failed to deal with the great mix-take which was made in 1974, the mistake of imposing double taxation. That mistake arose, naturally, from the philosophy of the government and the mandarins who advise it. Events have shown that it was not to the benefit of the mining industry, and now the administration must face the fact that the tax flowing into the treasury is being reduced rather than the contrary.
The only way in which a government which is bringing this country to its knees can win salvation under these circumstances is by admitting that it made a colosal blunder in 1974, changing its philosophy, and ending double taxation. This means letting the provinces keep what they have; let their tax be non-deductible, and then approach the provinces with the argument that, in line with the action taken federally, they ought to cut their own taxes closer to the 50 per cent level than to the 60 to 100 per cent level which prevails today.
In my opening remarks on second reading I spoke directly to the minister in connection with the theory of potential budgeting. I pointed out that the Economic Council of Canada has already mildly recommended that we move in this direction. I pointed out further that potential budgeting would only work during periods of slack employment and unused plant capacity. These two conditions have now made potential budgeting possible.
Potential budgeting consists simply of making tax reductions applicable to things which are not being done and which the nation wants to see done. This process helps the minister to balance his budget because he is not spending money. Let me give an example-there is only one example, to my knowledge, in the whole world, namely, the experience of the United States in 1964 when a young president, soon to be assassinated, accepted the concept, brand new as it was, and dropped the budget level by $10 billion. Everyone expected there would be a deficit at the end of the year of an additional $10 billion. But because tax reductions were applied to things the country

wanted, and because additional productive capacity was put into existence, government revenues increased; instead of going down by $10 billion the treasury ended up with an extra $19 billion. This was how the American Republic was pulled out of the slump and placed on a rising cycle which lasted until 1968.
I gave that example to the new Minister of Finance and, after talking to him later, I sent him a letter in which I put these ideas on record so that he could make use of them if he wished. To make sure that no one will think this is a secret matter between myself and the Minister of Finance I propose to take the time of the House, in closing, to put those observations formally before the chamber.
Following up my budget proposals in my speech of November 17, 1977, I submit the following paper at the request of your parliamentary secretary.
At this particular moment Canada's interests require a dramatic incentive for individuals to move towards some form of solar assisted energy savings. This need fits in with the opportunity for potential budgeting.
In almost every case solar hardware is capital intensive. In other words, one large capital investment now versus the usual 20 years of annual energy bills.
My proposal is that any type of capital expenditure to reduce utilization by the individual of traditional energy sources should be given the same tax treatment that business gets, namely:
(a)	100% write-off for proven hardware
(b)	150% write-off for hardware still in experimental stages (See Income Tax
Provision 1959-1971).
Then I listed the cases where the hardware has been proven and should be eligible for the 100 per cent write-off. Later, I listed 11 cases of experimental types of hardware which are still unproven. I will mention the 11 items on that list because they are the ones to which the House should pay attention. First, heat pumps. The reliability of heat pumps, whether air sourced or water sourced, has yet to be proven. Then there are the concentrator collectors for solar thermal energy conversion, commonly known as STEC.
The rest of the list reads as follows: heat storage facilities, methane production, vertical axis windmills, solar absorption air conditioning, residential photovoltaics, individual water recycling and conversion of waste to energy, conversion of cow manure to protein, energy plantation and the production of hydrogen. This is a first draft list of items which are within the performance capability of individuals and within reasonable economic parameters-I quote my source for that statement. Finally, 1 said to the minister:
What we are talking about in terms of national energy demand is small in percentage but important in dollars. Windpower, by 2000 A.D., could provide between one per cent and 5 per cent of our total national energy needs. Solar assisted heating of homes and water could by 2,000 A.D. provide between 10 and 15 per cent of our total national needs. Ten per cent of our national energy requirements would cost several billion dollars by 2,000 A.D.
In making these positive proposals 1 am trying to inject into this debate a constructive idea as to the way in which the minister could balance his budget without going further into deficit. I am proposing incentives in favour of the individual who takes the risk of developing techniques which have been carried out in the laboratory but which still remain to be proven by actual experience in a northern climate. Most of these things have been done in Canada, but still are not proven. Canada should move swiftly into using renewable
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energy forms in replacement of the non-renewable forms which are being used at the present time.
What will happen from 1985 to 2000 if we continue to drift along utilizing oil, gas, and coal for our energy? Everyone in North America is dependent on those three forms. The cost will rise far beyond what it is today. It will put the United States and Canada into a tremendous deficit position in their international accounts. We are aware of what that means to our balance of payments position and inflation in our country. The danger should be clear from these figures.
Parliament should back the individual who is willing to take a risk providing things in the energy field. His proportion of the total energy field runs to approximately 15 per cent to 20 per cent. What we are doing is no more than what has been done for business. When business invests money in order to make money, that is tax deductible. That same principle should apply to the individual, if he spends money to reduce the amount of oil and gas necessary to heat his home, heat his water, and operate his car.
Our scientists and engineers have produced the ideas, but they are not allowed to go out and sell them. The knowledge contained in the laboratory report must be translated into an object which works, and that object has to be proven. In order to help the minister balance his budget, in order to alleviate the danger ahead as far as our balance of payments is concerned, and in an attempt to help the individual reduce his costs, 1 put these ideas forward.
We have not distinguished ourselves in the last two stages of this bill, on second reading and committee stage, because closure was used twice. 1 hope that these ideas will be accepted by the minister, the parliamentary secretary and those who make decisions. Then they can tell the mandarins in the Department of Finance and the Bank of Canada that these things will be incorporated into the next budget.
I am too late to save this bill because of the attitude of the government at the present time. We will have another budget in two or three months. Perhaps some of the constructive ideas regarding insulation, roll-over, and capital gains can be implemented. This is what parliament is for: we must be allowed to help the government get this country moving, balance its budget, and at the same time help Canadians. If that is the case, some of the dignity and usefulness will be restored to this place.
Some day a minister of finance will come into this House and realize that for the last 30 years every minister of finance has been under the thumbs of the financial advisers of the government. These financial advisers can be dedicated, sincere, and charming, but they do not know what they are doing. They have been consistently wrong for 30 years. This is a year of miracles, because economists are beginning to admit that they do not know what is wrong. The public servants who advise the Minister of Finance have not faced up to this truth. Perhaps it would not hurt to see a minister of finance applying
Adjournment Motion
ordinary common sense and a theory slightly different from the one used at present.
I reminded the Minister of Finance that he came from Shawinigan. Surely a person with common sense from Shawinigan has an obligation not to follow the sheep who come from the big city, because they are only taught to obey orders. Canadians would like to see some common sense from Shawinigan. The minister should take over the Department of Finance and be reasonable about some of these changes, not to mention the fact that parliament should operate in a slightly more democratic manner.


Some hon. Members:: Hear, hear!


Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, the hon. member for Edmonton West (Mr. Lambert) and the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton) have dealt extensively with the matter of the government using closure on this bill. 1 had intended to speak to that point at some length, but I will not, since they have covered it so expertly.


An hon. Member:: Do you feel the same way?


William James Kempling: I feel the same way as my colleagues, because it is a regressive step for the government to use closure at any time. It was particularly regressive in this instance, because we were beginning to get into the nub of the bill. The government has brought in several amendments, and 1 am sure many more would have come to light had the debate continued.
May I call it five o'clock, Mr. Speaker?


Mr. Deputy Speaker:: Order, please. The House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions and public bills.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Order, it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be debated at the time of adjournment at 10 p.m. are as follows: the hon. member for York Centre (Mr. Kaplan)- External Affairs-Imprisonment in Soviet Union of Anatoly Sharansky-Efforts to obtain release; the hon. member for Central Nova (Mr. MacKay)-Royal Canadian Mounted Police-Minister's use of term "national security"; the hon. member for Northwest Territories (Mr. Firth)-Northern Affairs-Proposed construction of highway between Fort McMurray and Fort Smith-Inquiry as to federal aid.
80027-43'/2

December 12, 1977
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[ Translation]


Yvon Pinard: Mr. Speaker, 1 propose that the Elouse proceed to the consideration of notice of motion No. 8 and that the preceding notices of motions on the order paper be allowed to stand, with the unanimous consent of the Elouse.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Before seeking unanimous consent, perhaps this is the right time to regulate the situation which is shown on the order paper where there are motions stood by unanimous consent previously. There is no difficulty in regard to most of these, but there is with respect to the motion of the hon. member for Levis (Mr. Guay), which was stood at the request of the government on a previous date. I would not want my ruling of December 5 to be retroactive. I do not know under what condition that motion was stood. Was it because of the practice that has developed, because there was a need for the government to use its right to stand a motion at the request of the government? To put fully into effect my ruling of December 5?
I hope the Elouse will agree that all notations appearing below the motions listed be eliminated and that, starting from today, we ensure that only those motions which are stood at the request of the government, after the refusal of an hon. member to give his unanimous consent to proceeding with those motions, be listed as having been stood at the request of the government as distinct from those which have been stood by unanimous consent. Is that agreed?


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Is there unanimous agreement then to standing motions Nos. 2, 4 and 5, as requested by the parliamentary secretary, and to proceed with motion No. 8 appearing in the name of the hon. member for Brandon-Souris (Mr. Dinsdale)?


Some hon. Members:: Agreed.



PRIVATE MEMBERS' MOTIONS


Walter Gilbert Dinsdale: That, in the opinion of this House, the government should set up a special subcommittee of the Standing Committee on Health, Welfare and Social Affairs, to investigate and report on the needs of Canada's physically and mentally handicapped citizens; in order to provide a basis of information, [Mr. Deputy Speaker.)
necessary in avoiding the current costly duplication and overlapping of services, and essential in planning legislation for a comprehensive program of services at the federal, provincial and municipal levels of government to support and supplement the excellent work of voluntary organizations; all with a view to making it possible for the handicapped to live a creative, fruitful and independent life in the family and community, and thereby placing Canada in a position of leadership in the rehabilitation movement in preparation for the XIV World Congress of Rehabilitation International to be held in Winnipeg during June 1980.
He said: Mr. Speaker, I think this is about the fourth occasion in the pre-Christmas season that I have had the privilege of bringing in this motion, or a similar motion, before the House of Commons.
I would like to say right at the outset that last year, as an indication of the fact that this motion is basically humanitarian and has no partisan overtones, the hon. member for York South (Mrs. Appolloni) seconded the motion. I am sure the hon. lady is still in sympathy with its purpose. This year I would be very happy if the hon. member for Winnipeg North Centre (Mr. Knowles) would second the motion, because again I want to indicate that it is bi-partisan in all respects and also because this is the year that the hon. member for Winnipeg North Centre has been specially honoured in the House because of his long years of service. 1 might also say that he is a representative of the geriatric sector of the population which is becoming one of the largest segments of the population in percentage terms, standing at about 10 per cent and increasing fast.


Mr. Knowles (Winnipeg North Centre):: Also the wisest segment.


Walter Gilbert Dinsdale: The resolution that is before the House this afternoon affects very directly the problems of our senior citizens. The reason I like to have it debated in December is that in the Christmas season we are always more responsive and sensitive to humanitarian issues.
Every hon. member is aware of the fact that one of the most popular persons in the rehabilitation movement is Tiny Tim. He represents the large number of children with handicaps. He himself comes from amongst their number and represents them in that successful fund raising program known as the Easter Seal Campaign.
Tiny Tim is associated intimately with Christmas in that famous Christmas story of Scrooge who, in the midst of Christmas activities many years ago, had a change of heart and Scrooge the hard-hearted, turned out to be Scrooge the humanitarian. I hope against hope that this afternoon any reservations that the government might have had in the past with respect to approving this motion will dissolve in the warmth of the Christmas spirit and that today we will be able to obtain unanimous consent for this motion.

December 12, 1977

It is a very simple motion proposing the setting up of a subcommittee of the Standing Committee on Health, Welfare and Social Affairs to give consideration to the needs of Canada's handicapped population in preparation for the World Congress which will be held in Winnipeg in 1980.
Last year we came within a hair's breadth of having this motion approved. The speakers who took part in the debate at that time all indicated that they were strongly in support of the motion, and the one deterrent was expressed by the hon. member for Fort William (Mr. McRae), who was then parliamentary secretary to the minister of national health and welfare, in the following words:
Mr. Speaker, the motion is an excellent one. I have only one reason for not accepting it at this point. It could have been accepted much earlier. However, we are now only a matter of weeks away from a new social services bill being dealt with in this House.
The handicapped in this country have been studied a great deal. It is now time for action. The bill to be introduced is an action bill. Action for the handicapped in this area will come sooner if we follow the normal procedure rather than setting up this subcommittee.
We know now that action has been deferred. I am not going to harp on that theme this afternoon, but the legislation has disappeared from the order paper. There is a promise in the Speech from the Throne that it will be resurrected.
I believe that in anticipation of this important congress in Winnipeg in 1980 we should get on with the very important business of gathering together all the data that is available so that we will have a comprehensive picture of the rehabilitation situation in this country in time for Canada to host that important congress adequately.
1 have the assurance-perhaps that will help the government in making up its mind on this matter-from the government House leader that he sees no impediment to establishing a subcommittee of that kind. Perhaps I should read that assurance from the hon. gentleman into the record again:
As you know, the government will be introducing legislation during this session on the subject of social services, including rehabilitation of the disabled. This bill, after second reading, will be referred to the Standing Committee on Health, Welfare and Social Affairs where witnesses may be called and every facet of the bill considered. I do not think that anyone would object to the kind of work to which you refer being done at that time, perhaps by a subcommittee.
As 1 have indicated, the circumstances have changed from last year with respect to the legislation. That is largely because the funding formula has been changed, and it will be necessary to renegotiate the changed formula with the provincial governments, which have ultimate responsibility for the implementation of any legislation of this kind.
The hon. member for Toronto-Lakeshore, who is now the Parliamentary Secretary to the Minister of National Health and Welfare (Mr. Robinson), and who is with us today, indicated in his statement last year that he was in favour of the resolution as it appears on the order paper today. His only concern was that it be integrated with the proposed legislation. I trust that he will continue his support of the resolution today and also see to it that it gets consensus, because I think it is absolutely essential to have the reassurance that Canada was
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in earnest when it extended its invitation at the World Congress of Rehabilitation in Tel Aviv in 1976 to host the next congress in 1980. We are one year closer to that congress. There are only two years left. The congress will involve 7,000 people from all countries of the world, and it will consider in depth the problems of rehabilitation of the handicapped in all their aspects, including physical and mental handicaps.
There will be a series of seminars in all major centres in the week preceding the congress, which will have a major input in the expansion of knowledge in this field because only the professionals will be involved in the seminars. These will be the various professionals involved in the rehabilitation movement: physiatrists, doctors of physical medicine, social workers, occupational therapists, physiotherapists, psychologists, and other specialists in the field of human relations. There is going to be a post-conference series of seminars throughout North America, so I think hon. members can see that there will be a major breakthrough in the rehabilitation movement.
As I have intimated, the debate last year indicated that there was a misunderstanding of what we are trying to do. We do not want this subcommittee to be set up as a fact finding committee because there is much information available in Canada. It is an attempt to bring it all together. There are at least 48 volunteer agencies which are doing an outstanding job in the field of rehabilitation, but governments have not become too intimately involved in the process up to the present time.
There are rehabilitation centres in every major community of Canada. Recently Nova Scotia opened an excellent rehabilitation facility. A seminar was conducted there under the auspices of the Canadian Rehabilitation Council for the Disabled. A new organization known as COPOH, the Committee of Provincial Organizations on the Handicapped, has just come into being. An executive director has been appointed. He is a well known leader in the field, Mr. Wilf Race. He has worked for the government in several capacities with respect to handicapped citizens. He is handicapped himself, and he will carry the responsibility for the input of physically handicapped citizens in the rehabilitation movement itself. There are outstanding leaders of international repute. 1 previously mentioned Dr. Gustave Gingras.
Canada has been accepted as the host country for 1980 because of our outstanding reputation in this respect. We are not trying to indulge in a fact-finding operation. We want to bring all the facts together in a formal report so that it will be available to the people who visit Canada in 1980. There is an upsurge of interest in Canada and all over the world in the problems of the handicapped. The desire for independent living is being expressed at the present time all over the world.
Last week I attended a debate at the United Nations Third Committee where I was asked to make a statement on behalf of Canada with regard to a resolution which very closely parallels the resolution we have before the House today. Canada is a co-sponsor of that resolution, and its intent is to establish an advisory committee-that is the intent of my

December 12, 1977
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resolution here-which will sponsor the Year of Rehabilitation which is scheduled to commence in 1981. This will flow out of the congress which will be held in Canada in 1980, so hon. members can see that the two go hand in hand.
Let me quote briefly a short excerpt from the statement I made last Thursday afternoon in the United Nations Third Committee as follows:
We view the Committee's primary task as that of promoting greater public awareness of the disabled and the problems with which they must cope. For too long they have been ignored by the community or thrust onto the sidelines with a pension and a shrug. There has been the usual discrimination that kept the handicapped people out of sight and out of mind, hidden away in institutions that were little better than human warehouses. Most severely disabled people died at an early age. Those who survived and made it did so through exceptional ability, family resources, hard work or just plain luck.
Then I went on to congratulate the international community for becoming involved in this process. I am sure hon. members will be pleased to know that the resolution passed unanimously-by consensus, as they say-in the United Nations body. Canada was a co-sponsor and took an active part in the debate. It was supported by a series of other countries, and I will name just a few: Algeria, Argentina, Belgium, Canada, Costa Rica, Cuba, Democratic Yemen, Egypt, Finland, Federal Republic of Germany, Greece, India, The Philippines, the United States of America, Yugoslavia, and so forth. This resolution was unanimously supported.
The congress will be much more significant in terms of humanitarian causes sponsored in Canada than was the Habitat Conference in Vancouver. We hope that the federal government will give the same financial support to the Rehabilitation Congress as it did to the Habitat Conference because I am sure the results will be much more positive.
In closing let me give some of the priorities, as I see them, as we prepare for the 1980 congress. It is imperative that the new social service legislation be in operation. I picked up a publication at the United Nations last week entitled "Recent Trends in Legislation Concerning Rehabilitation Services for Disabled Persons in Selected Countries." Unfortunately, Canada is not included in this presentation. I think it is important that Canada proceed as quickly as possible with its social service legislation so that we might be in the forefront of leadership in this regard.
The second priority we should establish is an advisory committee to keep the government abreast of developments in the field of rehabilitation in anticipation of the 1980 congress. Advisory committees should be operating at the provincial level as well, and the province of Ontario has already set up such an advisory committee.
The third priority is to provide funds for a resource and information centre. We have all this information and we have all sorts of expertise. We have outstanding leadership as well, but it all needs to be brought together so that it can be readily available for the 6,000 or 7,000 people who will come to Canada looking for leadership in two and a half years. The

Department of National Health and Welfare has already sponsored a study through the Chedoke Institute at McMas-ter, establishing the need for a resource and information centre. It must now assist the Canadian Rehabilitation Council for the Disabled in setting up such a centre.
Fourth, the government should provide funds for a coordinator to assist the Canadian Council for the Disabled in organizing the congress. It will be largely a congress of voluntary agencies supported by the federal government, the provincial government, and the municipal government of Winnipeg. This means it will be people talking to people rather than governments talking to governments, and with this sort of dialogue I think we can achieve positive results.
Finally, we should have a subcommittee of the Standing Committee on Health, Welfare and Social Affairs bring in a report on much the same basis as the excellent report brought down by the subcommittee that dealt with the problems in Canada's penal system, operating as a subcommittee of the Standing Committee on Justice and Legal Affairs.
These are all positive recommendations, Mr. Speaker. I do not want to speak at great length, and I wish to allow other members an opportunity to take part. I hope we will get a consensus for this resolution in the Canadian parliament on the same basis as we achieved unanimous support last Thursday at the United Nations.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, I should like to indicate once again my wholehearted support of the motion presented by the hon. member for Brandon-Souris (Mr. Dinsdale). I also want to commend him for the persistence with which he pleads in this House the rights and needs of our disabled people.
The hon. member made some reference to the years that some of us have been here. I believe he is a member of that club himself. In years of service he is about No. 3. There is an advantage to being in this club of members with longevity in that one realizes if he sticks with an issue that is right and just, sooner or later it will be achieved. It is tragic that so many of these issues are won later rather than sooner, but if we have to cope with a government that moves slowly it is a good thing that there are members who stick with an issue until it is won.
I hope today may be the day when the effort of the hon. member for Brandon-Souris (Mr. Dinsdale) is rewarded and this House agrees to the motion which simply states that, in the view of the House, the government should arrange for the appointment of the subcommittee to which the hon. member has referred.
It seems to me that to take that position, especially in view of the international congress that is to be held in Winnipeg in 1980, is an important gesture in showing our increased concern for the rights and needs of our disabled people. It is as recent

December 12, 1977

as during the days when Mr. St. Laurent was Prime Minister that the first disabled persons' act was put on the statute books of this country. There was, of course, a blind persons' act many years ago, but the fact is that we have been slow to recognize the rights of this particular group of people at the federal level. We all subscribe to the theory that there should be more equality of opportunity in our society. We tend to think of that in terms of the greater equalization of incomes of people, but it seems to me this is an area where something more than money is required.
Persons with handicaps or disabilities, start the race of life on unequal terms. They deserve not just sympathy or adequate compensation but every possible opportunity for rehabilitation and training so that they can have a life as nearly normal as possible. I think it is fair to say, as has been said by so many people, that civilization is judged very largely by what it does for those who are old or young or handicapped or disabled in various ways. We have made some strides in this direction in this country but they have been too few and are terribly disjointed. Not long ago the Canadian Council on Social Welfare published a volume entitled On Again Off Again, or something like that, about the disjointed nature of the services and legislation for our disabled people.
1 do not want to take the time of the Elouse because I should like to see the motion considered and passed, not just given the usual treatment of being talked out. I am pleased that the hon. member for Brandon-Souris brought this forward again. I think this House owes it to the disabled people of Canada and to Canada's good name to get more active in this field than we have been to this point. For that reason I hope the House will agree to pass this motion this afternoon.


Mr. Baker (Grenville-Carleton):: Mr. Speaker, 1 rise on a point of order. At the opening of the debate in this private members' hour Your Honour associated my name as seconder of this motion. I am very proud of the association because I have spoken before in this House on these matters and in support of the hon. member for Brandon-Souris (Mr. Dins-dale). I understand it was the intention of the hon. member for Brandon-Souris, however, to have the motion seconded by the hon. member for Winnipeg North Centre (Mr. Knowles) in order to demonstrate this year, as was demonstrated last year, that the motion enjoys the support of all parties.
If it is possible 1 should like the unanimous consent of my friends in this House to withdraw my name as seconder and substitute therefor the name of the hon. member for Winnipeg North Centre so that this very appropriate indication of support could be made to this House and the country.


Mr. Deputy Speaker:: Order, please. Hon. members have heard the request made by the seconder of the motion. Is there unanimous consent to make the change and replace the name of the hon. member for Grenville-Carleton (Mr. Baker) with the name of the hon. member for Winnipeg North Centre (Mr. Knowles), and does the hon. member for Winnipeg North Centre agree to second the motion?


Stanley Howard Knowles: With pleasure.
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Some hon. Members:: Agreed.


Mr. Deputy Speaker:: May I take a second to bring to the attention of the House that before voting on this motion or accepting it, something in the motion might have to be changed. The motion is addressed to the government. I think the House of Commons is master of its own committees and the motion should be addressed to the House of Commons. In due course we will come to that aspect of this problem.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: Mr. Speaker, at the outset I would like to congratulate the hon. member for Brandon-Souris (Mr. Dinsdale) for bringing this very important matter before the House. He has done it before and has shown a great deal of persistence, and he should be congratulated for his persistence as well. I believe the hon. member for Winnipeg North Centre (Mr. Knowles) pointed that out quite adequately. I would also like to congratulate him on the recommendations that he has suggested in his remarks, which I am sure will be considered very carefully by the government when this whole matter is being considered. Whilst I am handing out accolades, I should mention the tie he is wearing today, which I understand has emblazoned on it a wheelchair, being the symbol for disabled people generally. He is to be commended too for this outward manifestation of his feeling for people who are disabled in this country.
Mr. Speaker, it is with great pleasure that I speak on this motion today because I feel that the government has accomplished much in the field of services for the disabled to date. However, as the country is evolving, the services should also expand to serve a larger target group. Society would benefit more if it could give to all of its members a better quality of life that would lead them to become more independent, to participate in industry and society according to their abilities.
Those considered physically handicapped represent a sizeable 10 per cent of the population, and yet, whenever normalization and integration of this group is discussed, two kinds of barriers are mentioned with respect to the physically handicapped, architectural barriers and attitudinal barriers; and for the mentally and socially handicapped, attitudinal barriers. According to a number of professionals in the rehabilitation field, it is really a toss-up as to which kind of barrier is the most important cause preventing the handicapped from full participation in community life. Many of them, in fact, are convinced that attitudinal barriers are the most pervasive kind of negativism. They feel that eradication of these should be a first priority.
In connection with attitudinal barriers facing the handicapped, a Canadian researcher, A. Ruth Hilland, in an article published in Rehabilitation Digest of February 1975, suggests that the roots of this prejudice lie in the fact that society values people because they have social standing, wealth, beauty, are active, useful, productive and efficient. When such criteria are applied to the handicapped it is surprising that they are devalued. She feels that before our attitudes with

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respect to the handicapped can be changed, society's values must be changed. I quote from her statement as follows:
And should it not be possible for differences not to lessen a person's worth, not to mean that he should be treated as 'less than human'? A change in attitude on the part of the non-disabled will come about through increased exposure to the disabled.
She stresses that the exposure should be "normal". In other words, people must see the handicapped every day in normal situations; in the classroom, in ordinary jobs, housing, neighbourhood, clubs, communities, using ordinary transportation and so on. Entertainment channels, she feels, are also a good source of depicting the physically unattractive as esteemed, valued and respected, such as the television serial we have all become acquainted with entitled "Ironside".
The handicapped have always wanted, and are now demanding, respect of their basic rights: the right to rehabilitation, the right to work, and the right to be integrated into society. The handicapped person needs others to understand and to truly realize that he is a person like any other with the same requirement to love and to be loved, to work and enjoy himself, and the ability to overcome his handicap if he is given the necessary technical aids. The sentiment is strongly reinforced by a comment made by Jacques Couillard, the Director of Social Rehabilitation at the Quebec Workers' Compensation Board, and I quote:
Each time that we put the handicapped apart, each time that we treat him differently, we do not help the way he views himself nor the way the public views him . .. instead we make his job of integrating himself into society even more difficult.
This statement is most real to those handicapped individuals confined to institutions, most often homes for the retarded, the aged, or the chronically ill. Granted, they are treated, housed and fed, but nothing else. Is it any wonder, then, that an alderman who lived in an institution in Thunder Bay was first in line for a place in a "group home", an alternative concept in housing, preferable by far to these disabled individuals who do not require nursing care. The disabled want and are entitled to live with dignity and as independently as possible. But more adequate housing fulfils only part of the need; it is also necessary to provide these persons with the services required to live independently. They might include the following:
1.	Attendant care to permit a disabled person to perform such activities as dressing and bathing.
2.	Day care services for those who work and have family responsibilities.
3.	Homemaker services.
4.	Meals on wheels.
5.	Recreation services.
6.	Adequate transportation services.
7.	Access to all community services and employment.
It is possible for the provinces, at the present time, to provide a number of these services through the Canada Assistance Plan, in particular, day care services, homemaker services, and meals on wheels, when the recipient is a person in need. The disabled, however, are also quick to remind govern-

ments that programs in Sweden, for instance, indicate that it often costs less to provide a person with the services necessary to make him independent than it does to maintain him in an institution. For example, when our older population experience difficulty in keeping their homes going, they frequently have no choice but to move into an institution where they could be separated.
No institution can provide the warm, comfortable, normal day-to-day life we all become used to. Disruption of this pattern of life tends to destroy the life of older folks. There are more disadvantages. They have found that a lack of privacy is the worst thing about institutions, especially when it is combined with a feeling of solitude; life then becomes hardly worth living. This situation was portrayed vividly in a film from the National Film Board shown recently on French television and entitled "Au bout de mon age" by George Dufaux.
Many handicapped persons are looking forward to the day when they will be able to return to or join the labour market. Employment to the majority of the handicapped means a regular pay cheque and independence. They do not want special treatment; they want jobs that society accepts as valid work. In essence, the handicapped call for greater employment opportunities within a broader range of formats. They want a job and a chance to prove themselves; they also ask that their abilities and not their disabilities be stressed.
At the Employability of the Handicapped Conference held in Toronto in November 1976, one of the most frequent remarks was that employers in diverse trades and work situations found handicapped individuals to be among some of their best employees-dependable, honest, self-starting and hard working. Despite this well established fact, handicapped people still often find themselves hampered by the attitudes of personnel officers, the physical barriers in many work places, problems of transportation, and by a general lack of awareness of what they can do. Welfare rolls are swollen by handicapped persons who are far from being there by choice but yet have not been able to find any work. Estimates for reducing the welfare rolls paid for by our tax dollars through employment of handicapped individuals range as high as 40 per cent. Only a small segment of the physically handicapped is incapable of working. In a society as technologically advanced as ours, work is no longer defined in terms of physical labour.
The motion now before the House deals mainly with the needs of the physically handicapped. The mentally handicapped, the mentally retarted in particular, have the same need for community integration. Why confine them to expensive institutions and pay for their upkeep when they could be in the labour force earning their own living and or participating in their community's development? In 1967, the Department of National Health and Welfare authorized a special mental retardation fund of $2,500,000 to be allocated over five years to health and welfare research and demonstration projects. In addition, support for research has been made available under the public health research grant. The Canadian Association of Mental Retardation receives sustained assistance in the form of an annual operating grant from the
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federal government and assistance from the provincial governments.
They will be studying, over a period of time, the actual operation of model systems of community services for the mentally retarded in order to arrive at sound decisions concerning the mechanisms and timing of transfer from institutional to communal living. Great interest has, I know, been aroused in the pilot program in Lethbridge, Alberta and its progress will, it is hoped, chart guidelines for the future development of services to the mentally handicapped in Canada.
With regard to employment, it is very unfortunate that a large percentage of retarded adults are embarrassed about working in sheltered workshops and are discouraged by the low status jobs they must do. Employment plays an important role in their life and contributes in many ways to self-confidence and self-esteem. The kind of training they receive often does not prepare them for a regular job. I am sure that there are many valuable and meaningful jobs retarded adults can do and should be encouraged to do. 1 strongly believe that we should establish proper training programs which will prepare and encourage them to undertake a rewarding job. Consider for a moment that mental retardation is one of the major handicapping conditions of childhood, and is one of the most common disabilities.
"The question of income maintenance", states a brief presented by the National Steering Committee of the Physically Disabled, "has been an issue of great concern to Canada's physically disabled population for decades". The advent of the Canada Pension Plan and the Canada Assistance Plan in the mid-sixties provided the disabled with income to meet their basic needs.
The disabled have pointed out, however, that their basic needs are not the same as those of the non-disabled and that, in fact, "any disability", as one of them said, "is a luxury I can ill afford". The same brief explains that the question of protecting a disabled person's income from the erosion of costs incurred as a direct result of the disability is as important as the income itself and has equal applicability to those in receipt of social allowances as it does to those who are able to provide for themselves. For example, many physically disabled person: are capable of accepting remunerative employment, but the costs of transportation to and from work, if the individual cannot use public transportation or buy his own car, may be so high as to make employment unprofitable.
To assess the impact of inexpensive, reliable transportation services for the disabled in terms of employability alone would be an impractical task, and to assess the impact of such a service on other areas of a handicapped person's life would be downright impossible. What I am saying is that this service is not a special favour to the handicapped but a necessity, a right.
As most hon. members are now aware, a block financing proposal has recently been made to the provinces to cover the
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costs of social services including transportation services for the disabled. It represents the substituting of one financing arrangement, namely block funding, for another, the conditional shared cost arrangement associated with the new social services legislation, Bill C-57.
Under the block financing arrangement, the provinces will have more latitude in deciding upon those services which may be funded with the assistance of the federal contribution. It will be the prerogative of the provinces to establish the criteria for eligibility as well as for the specific needs identified within their respective communities.
In the event that the block financing approach is adopted, it will be made clear that one of the purposes of increased federal financing is to support the development and expansion of social services which respond more adequately to the needs of the mentally and physically handicapped and various other groups.
Canada's disabled are entitled to a more "normal", a more equal and a happier lot within our society. Adequate social services legislation is just one step toward achieving this goal.


Lincoln MacCauley Alexander: Mr. Speaker, I had no intention of standing, but when I noticed that another member from the government was going to stand, I became a little concerned because this is the type of motion we can all easily support.
As has been pointed out by my good friend from Winnipeg North Centre (Mr. Knowles), who is a mentor of mine and, 1 think, of a good many members of this House, this motion is not a demand but only an expression of the opinion of this House. Therefore, I wanted to stand up for one or two minutes to congratulate the hon. member for Brandon-Souris (Mr. Dinsdale), who I believe is talking about leadership from the federal level.
The hon. member is trying to have us understand that we must create a climate of acceptance in terms of our handicapped and disabled. We at the federal level must create a climate for concern and a climate for action. This is what he has done in his motion, which states we should set up a subcommittee.
Canada will be the host country in 1980, as I understand it, to some 7,000 people from across the world who have the same kind of concern that the parliamentary secretary just delineated with some emotion. We all have the experience of associating with handicapped people who, in my humble opinion, are seeking equality of opportunity. We all have handicap clubs within our constituencies. I have been very fortunate to attend some of these and have been very impressed with what I have seen. I have been very involved in trying to bring their concerns to my fellow citizens who are more fortunate.
What we are trying to do here is to indicate that there should be leadership from the federal government. In fact, in reply to a question from the hon. member for Grenville-Carle-ton (Mr. Baker), the President of Treasury Board (Mr. Andras) indicated there was a study on his desk which states that it is time for action, time for the federal government to
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show its concern by bringing the handicapped into the public service. This is a very commendable suggestion which we hope will be looked at by the President of Treasury Board.
As the hon. members indicates in his motion, we are trying to make it possible for the handicapped to live a creative, fruitful and independent life in the family and community. Like many people, they do not want handouts or welfare. They believe they have the physical and mental capacity to be productive. That is the message they are bringing to us.
In conclusion, 1 say without any hesitation or reservation that there is a skilled bank in the ranks of our handicapped, mental and disabled from which we have not had sufficient withdrawals. Those are not my words; I have heard that sentiment expressed. It is very touching and moving.
This motion of the hon. member for Brandon-Souris must have our support. The hon. member has had this motion before the government on three, four or five occasions. He must have that support and this sub-committee must be set up in order that we can delve into this vey important matter, hopefully to come up with the required solutions so that these very productive Canadians have an opportunity to be even more productive than they are now.


Mr. Bob Kaplan (York Centre):: Mr. Speaker, I would like to begin by thanking my friend, the hon. member for Cochrane (Mr. Stewart), for allowing me to take a moment of time that was designated to him to indicate my support and enthusiasm for the resolution.
I hope that if a subcommittee is set up and it embarks on this work, it will be very cautious about adopting ideologies with regard to treatment of the handicapped. Those of us who watch events taking place in the United States will be aware of a federal law recently passed which is in the process of implementation now. It is referred to in the trade by the nickname "mainstreaming".
Mainstreaming of the handicapped, particularly handicapped young people, involves removing them from institutions and putting them back into the general community schools. The theory is that in the general community they will learn to integrate better. They will avoid the isolation that comes from being educated and growing up only with the handicapped.
As much as this is an interesting idea, an idea that in the case of many, many handicapped people should be pursued, I want to warn the House and indicate to hon. members that it is extremely dangerous to move so rapidly from one ideology to another. Surveys and studies are indicating now that these institutions which are being abandoned have indeed worked very well for the majority of people who have gone through them.
As for the small minority which might be capable of "mainstreaming", the benefits to them might be outweighed by other factors, for example, the lack of the individual attention or

special consideration available to them in schools or institutions specifically set up to serve their needs.
I wish the hon. member well. I hope a committee of this sort could be launched to do the work he has in mind. I hope, too, that it will learn from the mistakes of the United States, that it will not swing from one ideology to another but adopt a middle course and be guided by the many years of experience, both good and bad, which are available to those dealing with the handicapped.


Mr. Ralph Stewart (Cochrane):: Mr. Speaker, as the hon. member for Winnipeg North Centre (Mr. Knowles) so ably pointed out about a year ago in debate in this House:
One of the ways to measure a society is to see what it does for the less fortunate. The more we do for the disabled and the more we give them the chance to live normal, natural lives, the better is our society.
Access is the key toward promoting this normal, natural life for the disabled. Barrier-free environments benefit everyone. Studies of improved access to the University of Chicago showed that 80 per cent of non-disabled students chose to use the new entrances. Insurance companies report that buildings which have been made accessible to the handicapped by using non-skid surfaces, freely opening doors, suitable step dimensions, and so on, have shown a decreased accident rate for all users.
People in special categories are people who work, pay taxes, answer summonses, and are asked to contribute to voluntary organizations. Too often, however, they are not able to get into places of business, into the office where tax errors can be discussed, into the building where the traffic fine is to be paid, or into the church or "Y" where they would like to participate.
I have said nothing about the inaccessibility of places of education and employment. In view of these facts of life, is it any wonder that somewhat close to 40 per cent of the handicapped are unemployed-note, I did not say unemployable. That this figure is not higher is a credit to the determination, ingenuity and ambitions of those disabled individuals who continue to function in society in spite of the fact that at times it seems to be designed to frustrate and discourage them.
The latest available statistics show that the number of people age 20 to 64 injured in car accidents alone in Ontario increased from 54,053 in 1971 to 62,018 in 1975. This is an increase of approximately 12.5 per cent. Though there is no way of calculating how many were permanently handicapped, it can safely be assumed that a substantial number of these people have been disabled to the extent that they must now depend more on society for aid in the activities of daily living than they ever did before their injury. The enormity of this problem is put in more tangible perspective when you consider that one is seven people in this country cope daily with some form of handicap which significantly affects not only the style, but the quality of their lives.
It is not possible to calculate the number of lives that could be positively revitalized and the amount of potential that could be freed by simply making every building, every facility, and every area of a given community, accessible. Total and auto-
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matic accessibility must be recognized as essential before the quality of life available to able bodied individuals can also be truly shared by the handicapped.
Some may say, "This is an ideal, a dream; that it is simply too expensive to consider the concept of total accessibility". Is it? In 1967 a cost study report in the United States conducted on a one-story building on a level site, a multi-story on a sloping site, and so on, showed a range of 0 to 2.5 per cent increase to accommodate the handicapped, with a saving in one case. The increase was less than 1 per cent unless an elevator had to be added.
The National Research Council of Canada has maintained since 1963 a standing committee on building standards for the handicapped which updated the standards issued with every new issue of the national building code. It is presently called supplement No. 5; a new code was issued in the summer of
1975.	This supplement has been adopted by the government of Canada for new buildings but not for buildings which it leases. A number of provinces and cities have also adopted the supplement or are in the process of developing their own provisions or expanding on the established codes, using supplement No. 5 as a guideline. For example, the social planningand review council of B.C. has a committee on architectural barriers which prepares reports and briefs and encourages the adoption of its version of the supplement. This demonstrates the dynamic and growing involvement of each province with the problems of accessibility and the fact that access is the right of everyone.
The handicapped simply "want in". They "want in" to employment, to community living, to maximum participation in community life, to the planning of systems and services designed to help them. At the same time, they "want out"- out of institutions, out of dead-end sheltered workshops, out of welfare, out of being pitied, out of being thrust on to the sidelines with a pension-


Some hon. Members:: Question!


Ralph Wesley Stewart: The Minister of National Health and Welfare (Miss Begin) has made it clear that she is dedicated to aiding, and, indeed, most anxious to aid, the disabled in their desire to leave the institutions, to achieve integration and to becme full and contributing participants in Canadian society. All of us here will have a part in the achievement of this goal in our capacity as legislators. For this reason it is my pleasure to commend the hon. member for Brandon-Souris (Mr. Dinsdale) for having proposed this motion. It is the type of motion, the type of sentiment, which will focus the awareness of all members on such things as barriers.


Some hon. Members:: Carried!


Ralph Wesley Stewart: It is not, however, by means of a subcommittee that this should be-
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Mr. Deputy Speaker:: Order. The time allotted to the consideration of private members' business having expired, I do now leave the chair until 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. MacEachen (for the Minister of Finance) that Bill C-11, to amend the statute law relating to income tax and to provide other authority for the raising of funds, be read the third time and do pass.
William James Kempling: Mr. Speaker, as 1 was saying at five o'clock, one of the tragedies of this bill is not what is in the bill but what is missing. It is an act to amend the Income Tax Act, and it could have been used as a lever to get the economy moving. Whatever plan is brought forward by the Minister of Finance (Mr. Chretien) in the months ahead most assuredly will contain amendments to the Income Tax Act.
I was shocked to see in one of the major newspapers a headline referring to plant closings and lay-offs. We read more and more about inflation, plants closing, unemployment, increased trade deficits and a staggering balance of payments deficit. We had an inflation psychology before, and now we have the reverse of that in our economy today. People are reading and seeing so much about gloom in the economy that it affects decisions which should be made in conducting business. When one looks at manufacturing industries in Canada, particularly in Ontario and Quebec where the bulk of them are located, and when one looks at the trade deficits those companies face, which are estimated to amount to $11.5 billion by the end of this fiscal year, one realizes that industry is eroding.
In 69-70 the trade deficit in manufactured goods was approximately $1.5 billion. From 1972 the trade deficit increased to a point where it was better than $10 billion in
1976,	and unfortunately it is estimated to be $11.5 billion in
1977.	The budget should have had provisions which would be beneficial to the manufacturing trade, but there is little for them. There is a great deal of discussion about low productivity in Canada, but little in the bill to offset that.
Some people regard productivity as a matter of labour, but it is also capital availability, interest costs, energy costs, man-
800 2 7-44'A
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agement expertise, labour talents, transportation costs, machinery efficiency and the kind and quality of research and development. All of these things play a part in productivity. The $11.5 billion deficit is directly connected with research and development in Canada.
Comparisons have been made between Canada and Japan, and Canada and Germany. In Japan in 1969-70, something in the order of 26 per cent of the GNP was spent on research and development, new plants and machinery. Today they are reaping the benefit of that decision and action. The investment tax benefit in Quebec is 7.5 per cent, in the Maritimes it is 10 per cent, and in the rest of Canada it is 5 per cent. When it is looked at closely, the investment tax credit for research and development is also subject to tax. It is like the insulation tax: the grant is given and then it is taken away. In this case the same thing is being done. The net income from the 5 per cent investment tax, when it is netted out, is approximately 2.5 per cent.
Once again we see the government dealing in sleight of hand taxation. It announces a tax incentive and then taxes that tax incentive. In the case of research and development, people will find that in practice they must deduct from their research and development the 5 per cent investment tax credit before they calculate their tax, and then they must deduct the investment tax credit from the tax payable. The net effect is that they get only half the rate the government says they will get. 1 say that is absolute fraud. Many decisions are going to be made by some people who will not look very closely into this or discuss it with their auditors. Many decisions are going to be made based on the fact that people will feel they are going to get 5 per cent, 7.5 per cent or 10 per cent investment tax benefits, but they will not. They will realize that when they make up their income tax returns next time around.
It is like the insulation grant. The government makes grants because of the energy crisis and comes along after and taxes part of those grants away. The problems facing Canada are real and deep, and the solutions should not be saved or stored for some appropriate political time. That is what is happening now.
The government could have put into Bill C-ll many measures which would have stopped the disastrous attitude which is being instilled and the doom which is abroad in the country today. The government could have stopped a good deal of that with a little bit of blue sky in the budget speech or in Bill C-ll, but it is not there; and judging from what we hear from the Minister of Finance (Mr. Chretien), the Prime Minister (Mr. Trudeau) and all others who speak on these matters, we cannot look forward to a tax cut, in spite of the recommendations of major organizations in this country such as the Economic Council of Canada, the Conference Board, the Canadian Chamber of Commerce and the Canadian Manufacturers' Association. All these organizations have recommended tax cuts at the sales tax level, at the corporate level and at the personal income tax level. Why has the government not done
{Mr. Kempling.]
this? We see the disaster which is upon us in the resource industries and the difficulty our mining industry is in right now. We are now beginning to feel the effects of the 1974 double taxation which was imposed by a former minister of finance, Mr. Turner, and much of our mining industry is in serious trouble today and will be in the future.
Where will employment be created? The government says that new employment initiatives have to come from industry. What is there for industry? There are no particular tax benefits. As I said, the research and development tax credit is a sham. It is only half of what the government says it is, when it is worked out. If industry is to be required to employ the unemployed in this country, it will need much more stimulation than that. That additional stimulation should have been in the budget. There should have been some stimulation for the manufacturing sector of our economy.
It is estimated that if our economy grows at an annual rate of 5.5 per cent, it will take something in the order of five years to bring our rate of unemployment down from its present 8.7 per cent to 7 per cent. There is a tremendous job to be done. At a time when our plants are operating at 80 per cent capacity the government introduces a bill to amend the Combines Investigation Act and has even suggested that the committee hearings on that legislation be limited. This is the wrong time to introduce that type of legislation. Every major economic body in Canada has suggested to the government that there be a major cut, particularly in sales tax and in personal income tax.
The submissions of the Economic Council of Canada, the Conference Board, the Canadian Chamber of Commerce and the Canadian Manufacturers' Association all agree that personal and business tax cuts are needed. They all agree that retail sales tax should be reduced and in some cases removed. They all agree that productivity must be improved if we are to compete in the marketplace in the months ahead.
To the business community the picture facing us is pretty dismal. We are not competitive in any of the minerals we are selling. We have seen what has happened in the nickel industry, and it is suggested that the copper and iron ore industry could be in as much trouble in the months ahead. We have some difficulties in the agricultural industry. They may right themselves, but they are there. Only a few years ago we controlled the world's nickel supply. We had about 95 per cent of it in our hands, and now that share is down to about 40 per cent.
In view of this situation I would have thought that the government would have used this last budget to do something about the double taxation on our minerals. Depending upon which province is involved, that taxation runs anywhere from 85 per cent to 100 per cent. In one province that taxation was over 100 per cent until the residents there saw to it that the government of the day was turned out. We face a tremendous balance of payments problem, and the amount of money that is going into investment in industry is shrinking each month. I wonder why the government contributes to organizations like the Economic Council of Canada and then does not heed its

December 12, 1977

recommendations. I read with a great deal of interest the 14th Annual Report of the Economic Council of Canada. One recommendation which is found at page 87 of the report is as follows:
We recommend that, over the next two fiscal years, the federal and provincial governments implement permanent personal income tax cuts that would increase the annual disposable incomes of consumers by a total of $2 billion in addition to reductions resulting from indexation.
At page 88 we find the following recommendation:
We recommend that provinces reduce their sales taxes by at least 1 percentage point on taxable consumer goods and services other than such items as gasoline, alcohol, and cigarettes.
Recommendation No. 4 at page 91 is as follows:
We recommend that the federal government, together with representative organizations, establish appropriate advisory and consultative mechanisms (with adequate staff resources) to examine serious long-term structural issues.
The following remarks are very appropriate and are as follows:
It is possible to move the economy back to a more desirable growth path, but this will require structural change as well as demand stimulation. Even with the initiatives that we are suggesting, unemployment rates will probably not fall below 7 per cent until after 1980. Inflation will persist roughly in line with the inflation rates of Canada's major trading partners. Without improvement in this country's capacity to control costs and improve productivity, we face the prospect of persistent overall government deficits, no improvement in current account balances, and rising foreign indebtedness. Neither federal nor provincial governments will have much flexibility for new expenditure programs. A concerted effort to improve the structure of the Canadian economy over the medium term is obviously needed.
They finally conclude:
The Council believes that Canadians and Canadian Institutes can cope with the challenges foreseen. This task will require a realistic assessment of problems; it will require imagination to perceive opportunities; it will require confidence to achieve change; and it will require greater trust and understanding among the different groups in the Canadian economy.
How true that is and how wise that group of people was to put those words into the report. The tragedy is that no one on the government side appears to be listening and the shame is that they do not seem to care.
1 know that some other of my colleagues want to contribute to this debate and I have said what I wanted to say. I am unhappy with the progress of this budget; I am unhappy with the fact that closure was imposed on the debate; 1 am unhappy that more was not done. There was plenty of time between the introduction of the budget last March and the introduction of this bill when many things could have been put into the ways and means motion, but the government saw fit to do less than nothing on it.
I am particularly unhappy that the minister has not seen fit to come forward with a concrete plan. In fact, he seems to be telegraphing to the community at large that nothing will be done about taxation; we will have the same level of taxation in the months ahead. He says there will be no personal income tax cut and no business tax cut.
We see the Prime Minister (Mr. Trudeau) arranging a conference of first ministers, and one wonders what they are going to talk about. One of the commentators today said there
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cannot be too much to that conference because the press and the media will be allowed to see what is going on, which in itself is a change of base. The other comment was that the letter of invitation which went out to the first ministers was 11 pages long. The Prime Minister had not much to say in those 11 pages. We are drifting and floating.
The Minister of Employment and Immigration (Mr. Cullen) was in Toronto a few months ago. Speaking to a business group he said that if the business community was not prepared to increase its investment and create more jobs, the government was going to do it. When we look at the mess in the Post Office, I wonder who on the government side will do this.
Look at Air Canada, and at the mess in CNR and DREE. You name it, Mr. Speaker, there is hardly a department in government that has not some real problems. These are the people who plan to bring the Canadian economy back into some semblance of order. I do not think they have the horse sense on the other side to do it. These are the people in the main who got us into this mess and 1 cannot see them getting us out. The only way in which I can show my indignation over the lack of action is to say that when the vote comes, I do not intend to support the bill.


Stuart Malcolm Leggatt: Mr. Speaker, thank God we are on third reading of the bill so that we do not have to consider it clause by clause; but I think it is important that the appropriate place to have considered the bill clause by clause was during the debate in committee.
The matters which I wish to speak about have been, to some extent, untouched as a result of the closure motion which was imposed on the debate. It is really a sad comment upon the way we do business in this place that somehow we cannot find a rational way of examining something which is as important as a tax bill. Perhaps we could spend less time on some legislation, but surely a tax bill deserves an intensive and meaningful examination by experts in the House, members of parliament who specialize in this matter, with a committee of people considering it over an extensive period of time. We should all have a look at the procedures in this place so that we do not keep running into the problem of our most important piece of legislation going through by default. That is exactly what will happen this week with regard to the bill, 1 am sure.
The purpose behind any income tax legislation from time immemorial has been the redistribution of income. Along with that question of redistributing income, the spin-off from that has been that we use it as a lever in the economy to increase employment or to cure whatever ills there may be from time to time. There is no question that today unemployment is the key problem right across the country. When you examine the fiscal approach to income tax which this government has displayed you find that this legislation will have a negative effect on employment creation.
1 want to deal with that a little more extensively, but before doing so I would like to take a look at what we have been doing over the last 10 or 15 years with regard to our fiscal approach to income tax. Since the Second World War most

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modern western industrial governments have been engaged in creating what I think is probably improperly called the welfare state. We have attempted, through income tax and through various welfare schemes, to redistribute income. It has been the conventional wisdom amongst all political parties that in fact it is desirable that we provide for those who live in our society more equality of income; in short, that we provide more at the bottom and, if possible and necessary, reduce the incomes of those at the top.
In fact, in 1951 when professor Gillespie of Carleton University did an extensive study of this, the poorest fifth of our population accounted for 4.4 per cent of the money income in Canada. In that same year the richest fifth were taking 42.8 per cent of the money income in Canada. Twenty-five years later, after the alleged progressive income tax bill, after significant changes in the old age pension, significant changes in family allowance and significant changes in unemployment insurance, in 1975 the poorest fifth of our population has had their share of the money income reduced to 3.9 per cent and the richest fifth of the population has continued to take 42.4 per cent of the money income. After all these years we have not changed the relationship between the poorest and the richest in Canada.
We have, of course, increased the pay packet. How much real increase there has been is debatable, but the increase in the pay packet has not been the problem. The problem in Canada continues to be the disparity in incomes between regions and between people, and this particular bill not only does not redress this problem, as I will argue, but it makes the problem considerably worse because of the tax provisions, particularly under RRSPs and child care deductions. It continues to redistribute income in reverse by giving those with higher incomes the largest benefits.
We have not had very much in original throught from the government in terms of income tax changes. In the United States we have had the new administration, the Carter administration, starting to examine some of the realities of income tax. One of these realities is something referred to as the three-martini lunch.


William James Kempling: The three-beer lunch.


Stuart Malcolm Leggatt: The three-beer lunch is equally deductible if you are lucky enough to be a businessman. If we look at the present deduction provisions in Canada, the amount of revenue that is lost as a result of those unreal deductions-deductions that are only marginally connected to the question of whether they were incurred in the course of doing business-we could find that the amount of tax we would have to impose on the average or lower level taxpayer could be substantially reduced.
I agree with those who say we have to plug the loopholes that lead to waste in public expenditures, but let us remember there is also waste in the private sector.
As I travel across Canada at public expense and see my friends who travel from Vancouver to Toronto and back to
[Mr. Leggatt.)
attend important meetings, I am not always convinced that such meetings are necessary. If they were not tax deductible there would not be so many. As a result, companies would have more profit, or more money to invest in employment, or, as the hon. member for Halton-Wentworth (Mr. Kempling) suggested, in research and development.
We have to look at the three-martini lunch in this country too. We have to look at a tax structure which shows the operator of a Shell gas station paying a lot of tax whilst the Shell company pays almost none. The operator wonders about the tax system that allows major multinational oil companies to escape with massive deferred taxes whilst he pays through the nose. Those are some of the changes that have not been examined, Mr. Speaker.
If we went back to the Carter Commission principle and decided to tax money as it flows, from whatever source, we could begin to have a genuinely progressive tax system. We have built in so many exemptions, so many anomalies, so many devices that were apparently justified at the time they were argued for, we have given in to so many pressure groups, that only accountants can understand the statute and sometimes not even they.
We have a tax system which lacks principle and lacks a theme. The real tragedy of the rejection of the Carter report is that we could have begun to provide some principle to back up the income tax system. Carter said we should not make distinctions between types and sources of income. When we rejected that principle I believe we also rejected our capacity to redistribute income in Canada. As long as we continue to permit anomalies and loopholes, they continue to exist in a graduated tax scheme, to the advantage of those at the upper end of the tax scale.
If in the last 20 years we compare the percentage of income tax paid by the corporate sector and the personal sector, the corporate sector continues to pay less and less of the total. I offer the following examples. In 1961, 30.5 per cent of the total revenues of the federal government came from personal income tax and 22.7 per cent from corporate income tax. In 1976 the personal sector was paying 43.5 per cent and the corporate sector share dropped to 15.7 per cent. That argues for a further examination of the way we tax.
Since I am arguing in favour of the Carter position, I should point out it was also his position that we should integrate entirely personal and corporate tax. Instead of having a 20 per cent dividend credit, Carter argued that the entire scheme could be integrated. I could accept that as rationalizing the tax system as long as those rates were genuinely progressive.
What we have had is a tax system which has not redistributed income because in the corporate area the capacity for deductions is almost endless. People in business have a tremendous scope and range in their deductions. If we eliminated corporate taxes, if we integrated it entirely, as long as it was progressive and redistributed income in Canada-which it does not-then I would say Carter was on the right track.
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We talk about the person who runs a gas station, works long hours and pays what he believes to be an unfair tax and what I believe to be an unfair tax. The total amount of deferred tax from the oil sector alone-and I am only talking about major companies-is SI,036 million. That kind of money would go a long way toward a guaranteed annual income. If we do not think about moving toward a guaranteed annual income or a refund of tax credit, then nothing is going to be done about unemployment. The idea that unemployment is something out there is a vacuum does not work. Unemployment is created when there is a lack of purchasing power over a large section of the community. It grows like a snowball, and each time someone is laid off, the consuming public is reduced by one.
When the president of Ford Motors asked Walter Reuther what he was going to do when the plant was automated, he replied that he did not see that as the problem. He said, "Who are you going to sell cars to when nobody is working in the plant?" We have to adjust the income tax system to provide purchasing power for people at the low end of the income scale. When you help people of low income you are doing more to spur the economy than at any other level. Someone earning $7,000 or less will spend tax credits if they are made refundable. The money will go back into the economy for food and essentials and thus is a spur to the economy. This income tax bill fails to look seriously not merely at the distribution of wealth but at the whole question of creating employment.
In 1974-and I am sure the latest figures are worse-there were 252 people in Canada with incomes of over $50,000, who paid no tax whatsoever. Under the provisions of the Income Tax Act this was perfectly legitimate. But I would like to examine the equity of each and every one. I think that those who have consistently paid their tax, have not looked for loopholes and have not gone for setting off holding companies etc., to pay their tax, have a right to be represented in this place when 252 people pay no income tax whatsoever.
Of people who file income tax returns, the lowest 70 per cent receive 40 per cent of the tax subsidy benefit. The top 11 per cent get what is an incredible 33 per cent. That has been the effect of what has been alleged to be a progressive income tax system. The National Council of Welfare estimates the federal government lost $6.4 billion in revenue as a result of the exemptions and loop holes, and all of the funny little things that had been built into this system as a result of lobbyists from one part of the community or the other. If you had that $6.4 billion you would not have to worry. You would have a guaranteed annual income scheme. You would not need to worry about it in the future. That represents something like 20 per cent of the federal budget. There is not much question that we have not been redistributing income in Canada.
When the RRSP system came in, people ran around and said, "Good, we have this nice tax shelter for the average guy instead of somebody who is really well off'. The facts are the reverse. People of average income get almost no benefit whatsoever from the RRSP.
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Walter David Baker: What income did you say?


Stuart Malcolm Leggatt: About $12,000. This provision of the income tax cost Canadians in revenue $513 million. That is another provision which not only does not redistribute income, it redistributes it in reverse. For example, if you were earning less than $5,000, your tax saving with an RRSP would be $1.02. If you are earning over $20,000, your tax saving is $551.88. So on a dollar basis the RRSP has done a wonderful job of making the rich richer and the poor poorer.
1 agree it is desirable to try to keep Canadian capital at home to encourage Canadian savings. But this is the wrong way to go about it. It does not make any kind of contribution. At the moment Canadians are saving as if it were going out of style. The problem is not Canadians saving; the problem is Canadians are not spending. To move the economy forward, Canadians must spend. Ask any bank manager or credit union manager and they will tell you savings were never better. But they are also finding that foreclosures were never more frequent than they are right now. Funds that people are now starting to squirrel away must be shaken loose in terms of consumption, not in terms of capital investment, because as so many speakers have indicated before in this House we have lots of unused capacity. There is not much point in increasing our capacity. What we need to do is increase our purchasing power.
The next area of income redistribution in reverse is the provision for child care deductions. Those deductions have been doubled under the bill. The child maximum is now $1,000, rather than $500, and the per family maximum goes up from $2,000 to $4,000. If you are at a $10,000 income level, a $1,000 deduction is worth a tax saving of $210. If you are in a $50,000 income category it is worth $430. Exactly the same process. Those with the highest incomes receive the most benefit from this particular tax legislation and those with the lowest incomes receive the least benefit. I see the Parliamentary Secretary shaking his head. In fact, that is unassailable logic. There is really no argument that can be presented with regard to that particular provision.
What can we do? What are the positive things that we can do in terms of making this bill a progressive bill?


An hon. Member:: Scrap it.


Stuart Malcolm Leggatt: First of all, it has been said many times that we have $1.2 billion in tax concessions. If we took that $1.2 billion and put it in at the lower level as a tax credit, we could create 100,000 to 150,000 jobs in Canada as a result of increased demand. Again, that should go in the form of tax credits. In other words, let the person who does not have sufficient income to pay tax file a return and receive a refund cheque. That cheque will be spent as soon as it is received, and it will be spent on the products of manufacturers who are crying for purchasers. They are not crying for any more tax hand-outs. They have all the tax hand-outs they need, and they have not done anything. They have not created any employment. But it will create employment if we provide people with

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purchasing power at the low end who will spend it on essentials-food, clothing and furniture.
The $400 million capital works program was supposed to create 60,000 jobs. That is the same program that was in place in 1971, and is as cautious and as conservative as anyone can get. We have moved so far right in this country that even that one does not appeal and it makes the Conservatives blush when it is rejected by a Liberal government.
We have $500 million allocated to housing and urban transit. That is hardly revolutionary. Certainly the urban transit section was promised in the last election and 1 am sure we will have it promised again in the next election. There is one thing the government does not like, and that is to waste a promise by keeping it; they like to make the same one over again.
Last but not least, there is $50 million assistance to the small businessmen. Let me tell the government what they are doing to the small businessman in my community. If I want to buy textiles or shoes made in central Canada, I am happy as a Canadian to pay a tariff to keep workers working in Ontario and Quebec, and to some extent in the Maritimes. But what I object to is when the government not only puts a tariff on such goods, but puts a quota on them as well. This means you cannot bring goods into the country, no matter what the price is. In British Columbia the people of the lower mainland say: "Well, if that is what you are going to do I will just go to Bellingham and buy it, because it is available there." Who suffers? The small businessman in my community who cannot bring those products into his store but whose competitors do across the border.
We complain about Canadians being competitive. Here we are with a provision which denies the merchants of the lower mainland an opportunity to compete with the people across the border-at any price. Many people purchasing goods in British Columbia would be happy to pay more if they could obtain the product, but they cannot. I can recite a whole range of products that are not available because of this dumb quota system that has been imposed. It has driven the small businessman absolutely round the bend in British Columbia. What happens when we in British Columbia stand and say we will pay the tariff, but at least let us bring the goods in? When I asked the Prime Minister the other day about where we were going to build our ships in our twenty-ship replacement program, why, we are going to buy six of them abroad! We are not going to use the shipyards in British Columbia or Nova Scotia. We are going to go abroad for that. British Columbians are tired of that kind of attitude. We are willing to pay the price of being Canadian, but do we have to pay double? That is what we are going to do. Canadian workers and Canadian shipyards are not being used sufficiently to build those ships. We will not merely be paying more for products that are being protected, but we do not even allow our merchants a decent chance to compete with their competitors across the border. That is an example of the industrial strategy that this government exercises.
The last thing I want to deal with is an idea that is long overdue. That is the question of a refundable tax credit system. Call it a guaranteed annual income. Call it anything you want. Almost every province in Canada has gone on record as favouring a refundable tax system. I can go through the provinces, starting with British Columbia which did a study in August 1977. I quote from page 2 of the August 1977 study of that cautious and conservative government:
The province of British Columbia recommends, therefore, that the premiers appoint a committee representing all provinces to inquire into the basis upon which a refundable tax credit scheme could be developed and implemented for all Canadians.
The point is the same. A tax credit or tax refundable system puts money in the hands of those who will spend it, and will start getting this economy back on its feet. As long as we have this dog in the manger attitude, this completely cautious, unchanged attitude in terms of the way this government treats income tax, we cannot spur the economy. Another example is the cautious Ontario Conservative government, and I quote:
-the recently announced federal tax credit of $50 per child is a further improvement to the current structure-because the value of this reduction is generally independent of income. However, the credit is not refundable, and so its advantage to low-income persons is limited.
That statement is found in the Ontario tax study No. 14, Ministry of Treasury, Economics and Intergovernmental Affairs. Other governments have done some thinking about this, but not this one. There is no original thinking going on.
I will give one minister some credit for having done a bit of thinking about it. Unfortunately, we can never tell if she is being quoted accurately. The Minister of National Health and Welfare (Miss Begin) said some very interesting things about the idea of a guaranteed annual income or refundable tax credit. I hope she will not be up in her place tomorrow denying that she said this, but I quote from the November 8 issue of the Globe and Mail:
This is sometimes called a negative income tax.
She said three groups-low-income workers, one-parent families and unemployed workers between 50 and 65-would be the initial targets of a program which ultimately could reform the entire welfare system-
Tax credits, such as those for political contributions, are set at fixed levels and give rich and poor the same benefit at tax return time. Rich and poor, for instance, deduct the same amount on their tax forms for children-
"Tax exemptions favour the rich but tax credits favour the poor," she said. "The tax system shouldn't be loaded in favour of any group."
I certainly welcome that statement by the Minister of National Health and Welfare. I hope it represents government policy, but 1 wait in some agony when 1 look at this tax legislation, which does not have an iota of this principle behind it. In fact, it has gone in the reverse direction. I wish the minister had fought a little harder in cabinet to get these very fine principles that she enunciated. I see the former minister of national health and welfare is agreeing to this. In any event, somebody should have been fighting in cabinet to get these refundable tax credits into the piece of nothing tax legislation we are now looking at.
[Mr. Leggatt.l
December 12, 1977

1 left out reference to two very important governments. One was the government of the province of British Columbia which pioneered this question of providing a "mincome" for people, seeing that poor people are well looked after. The NDP government of Manitoba of all governments has probably done the most. They actually instituted and have in place a negative income tax scheme.
I want to give a few examples of that previous government's program; I hope their successors will continue it. In that province, if your income is at the $3,000 level, you can receive a tax refund from the provincial government of $529. That is the maximum they allow. Imagine the effect that could have on the total economy, having a cheque in hand and being able to spend the money on products of manufacturers who are sitting idle looking for purchasers and consumers. There is no indication, other than the obiter dicta of the Minister of National Health and Welfare, that anyone has any real appreciation of this problem.
Let me put it another way. We spend a lot of time talking about DREE grants and regional disparities. The real regional disparities are not DREE grants. They result from the income tax system. The poorest people get the worst break on income tax. Newfoundland and the maritimes, which have the lower average income people, have been shafted by this Income Tax Act. They have not been shafted by DREE because those provinces have not enough attention in terms of capital direction. But their people remain at the low levels of income and are not given the income tax breaks that the rich are given. That is where you find the real disparities of income tax. I wish the rich people of Newfoundland and Nova Scotia would pay some attention to that particular problem. On an average basis, they have suffered the most in terms of this particular principle.
In order to redistribute income, we have to abandon the principle of universality. It is a principle that has been cherished in my party for a very long time. I can understand the rationale behind it. In fact, the provincial governments for some time now have accepted and realized you cannot redistribute income on the universality principle.
If we decided to raise the old age pension to $250 using the principle of universality, that would result in only an additional $7 a month to an income tested recipient. However, it would result in an increase of $107 to someone who is not income tested; in other words, someone who already has a substantial income. It is time we in this House, and I might say we in this party, abandoned that particular principle. In fact, it militates against the redistribution of income to those at lower income levels.
I feel exactly the same way about the debate that raged before I came to this House on the FISP program, or the question of family allowances. Family allowances have to be based on an income tested basis in order to be just. You can no longer use the argument that it is a tax back. I will not accept that argument until we get to a 100 per cent level of tax, and it is probably not desirable that we ever do.
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We have to go to the income tested principle behind the payment of a guaranteed annual income and the payment of family allowances-the whole umbrella of welfare services. There was a time when it was very degrading to have a means test. That has now gone. We are now able simply to look at tax returns to determine income levels. Since that onerous provision has been taken away, we in this House must now abandon the principle of universality and get down to the job of redistributing income to the poor. We cannot do that when we make every program universally acceptable. It is just not cost effective and it is not wise because we do not tax all of that money back.


Mr. Lalonde:: Will the hon. member for New Westminster (Mr. Leggatt) tell me whether the hon. member for Winnipeg North Centre (Mr. Knowles) agrees with his philosophy on this matter?


Stanley Howard Knowles: He knows I don't.


Stuart Malcolm Leggatt: The answer is no. I think this Chamber would be a very odd place if we all agreed with each other on everything. I know one thing, though. The hon. member for Winnipeg North Centre (Mr. Knowles) and I are going in the same direction and we are members of the only party that is; everyone else has abondoned the concept.
Since reference has been made to my hon. friend 1 might say that the hon. member for Winnipeg North Centre has made a larger contribution to the redistribution of wealth in Canada than any other person I know; so when we do have a difference of opinion about the best approach to take-and we do disagree publicly in this party from time to time; we disagree in this chamber-it does not detract one whit from my hon. friend's contribution.
I end with a plea to the government. I have no hope we can block this bill, but surely in the next piece of legislation of this type we could begin to go about the serious business of providing a guaranteed annual income or a refundable tax credit for those who fall below the income tax line. Until we do this we shall not be able to accomplish anything meaningful with respect to the redistribution of income in Canada.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, before I make my main speech I would like to mention something I had not thought of till now. There is in my town an experiment started by the NDP government, funded primarily by the federal government, on the effect of a guaranteed income in a community of approximately 10,000 people both rural and urban. While the details of minimum income are closely guarded there are certain obvious things one can see, and from what I understand after discussing the matter with the people involved there is evidence that most interesting and untoward changes have occurred. For example, people arrange their incomes so as to take advantage of the income guaranteed, by the state. If everyone was on a salary and if every dollar that came in by whatever means could be recorded, administration

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might be easier, but in many cases it is extremely difficult to determine the actual income of a particular person or family.
I think we should wait for the results. It appears they will not be assessed for some time but I understand from those who are knowledgeable on the subject that the figures really do not prove anything. They do not prove whether a guaranteed income would work or not, though there are instances where industry was perhaps retarded among individuals who were content to accept what the pay was and let it go at that. I might just add that if anyone wants to think a guaranteed annual income is an easy thing to administer, that it is a cure-all and a panacea, he is mistaken.
In this third reading debate I would like to comment on one or two things. The budgetary changes are not particularly sweeping. Despite a little tinkering here and there they have not changed the situation a great deal. It is unfortunate that closure was invoked in the Committee of the whole stage because certain clauses should have been tested and discussed more carefully.
I would like to dwell on the roll-over provisions, especially with that portion which has to do with capital gains. The mere fact that the government has had to introduce modifications to this tax shows that it is virtually impossible to administer with any degree of fairness without causing serious loss of business, which is the lifeblood of our communities.
During the long debate on the capital gains tax and in dicussion of the white paper on taxation and the subsequent legislation arising out of it, the issue of capital gains arose time and again and we heard a great deal of evidence about the difficulty of assessing capital gains and their subsequent taxation. We heard how in the United Kingdom such files were laid aside because only very senior tax people could work on them. This meant that many years elapsed before complex situations were clarified with resultant uncertainty and dislocation in business. If capital gains tax were introduced on the basis that it was a fair way to tax-and on the surface there is much to suggest this-time has proved that increase of property values which occurs over a lifetime of business is largely a reflection of the inflationary situation of our day. Slavish adherence to the capital gains tax is really a salute to the philosophy of Carter that a buck is a buck and should always be taxed by any manner or means.
In the United States, where the experience was similar to that of the United Kingdom, Congress at the turn of the century passed laws imposing capital gains tax and then spent a great deal of time passing further laws providing loopholes in order to obviate undesirable effects on the economy.
Capital gains tax is difficult to administer. It is regressive and inimical to family business continuity, let alone expansion. No one quarrels very much with the theory that those who buy and sell farms, properties, et cetera, should pay a tax if they do so regularly and are making a living out of it. But the capital gains tax is detrimental in that it hits hardest at those who buy for production, those who spend a lifetime building up a business or establishment only to find that much of their gain is lost through the capital gains tax. If there were no inflation

or if the capital gains tax took into account the inflation rate, there could be some redress. But the situation with respect to capital gains shows there should be a wholesale re-evaluation of the value of this tax. We should examine whether or not it should be done away with altogether or whether it should be drastically changed.
When the capital gains tax was introduced its main intention was not to unduly tax businesses and proprietorships that were of long standing, but to catch the individual who was using the no-capital-gains-tax-situation to buy and sell on short intervals, thus circumventing the normal income tax levies. But the Department of National Revenue had moved to close many of these loopholes before the capital gains tax was even instituted, so it is possible that this tax is now doing considerably more damage than its value. It is felt most severely not by the extremely wealthy or by the large corporations but rather by individuals whose assets are tied up in a small business. If there is to be a capital gains tax it would seem to be more logical that we introduce it on a diminishing basis, as is common in some western countries. If it is meant to catch the individual who buys and sells for profit rather than for the sake of acquiring a productive instrument, surely a diminishing rate of tax should be paid on the capital gains portion. It seems logical to me that if a person holds a piece of productive property for ten years he should pay no capital gains tax.
The present legislation broadens the capital gains principle but in theory at least it recognizes that the tax has serious disadvantages and that it impedes the roll-over of farms and small businesses. Its effect is merely to postpone the tax bill and sooner or later a business will be largely wiped out by the tax liability it will incur. Nevertheless, a quarter of a loaf is better than nothing.
I would like to reiterate the comment I made during committee of the whole, that the important thing will be what is the interpretation of the changes which the government has proposed. As regards farming, it seems that it is going to be very narrowly interpreted and perhaps confined only to land. There should be some way in which regulations should be at least outlined when legislation is introduced.
Furthermore, the intentions of the government can be seriously reduced by the actions of tax officials. My experience has been that our tax system is not particularly sympathetic to individuals who are in business on their own. There is a general feeling amongst many, perhaps because most people are wage earners, that individual businessmen and farmers make too much money and somehow are able to not pay their fair share of tax. There seems to be some change in the public perception of business, as many now realize that a high standard of living necessitates a vigorous and active business climate.
I should like to refer to what is being said about our general economic situation. The present issue of "Canada's Energy
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Resources", issued by the Canada-Japan Trade Council, at page 8 reads as follows:
Canada is a nation heavily dependent on foreign trade. We cannot achieve prosperity by continuing to borrow many billions yearly, much from outside Canada, to pay for governmental deficits and provide social services or offset deficits in balance-of-payments. That's the road, if followed too long, to national bankruptcy. It is employment of people in producing goods and services, generating what can be sold at a profit in Canada or abroad, that is needed to bring better balance to both the internal and the external accounts of the nation. Our "Energy Potential" is one of Canada's greatest means of achieving these desirable and needed ends.
There is no point discussing the merits of a guaranteed annual income if we do not have the goods and services necessary to bring that into effect.
A veteran political columnist, Bruce Hutchinson, in the Ottawa Journal of December 1 published a column called "Two Nations Deep in Economic Trouble". He pointed out economic policies in Washington and Ottawa have followed a course of zig-zags and U-turns, with an unknown destination. It seems that experts in the economy certainly agree that the North American economy is not likely to become much richer in the immediate future, and if there is not wise management, can be a lot poorer.
In the United States the Carter administration has deserted its original design of high prosperity and low inflation and has gone into pump priming, reminiscent of the new deal decade with its tax cuts and huge budgetary deficits. Nor is there much disagreement in Congress about these tax reductions except on details. The U.S. government will run a deficit estimated at $58 billion and next year this will be much larger. Even so, considering the size of our economy, our national deficit of $9 billion plus is still relatively one-third higher than that of the United States. In fact, we are considerably worse off than the United States, and anyone can ask whether larger spending and deficits will assure satisfactory economic growth and full employment. Furthermore, the provincial budgets are showing real deficits.
Turning to the international side, the United States will run a foreign trade deficit of $20 billion to $30 billion, but as Canada's net deficit will be $5 billion, in U.S. terms this would mean $60 billion. Canada's growth rate will be half or less than the U.S. rate, while its inflation rate will be 2 percentage points higher. By most standards, in a country well endowed with natural resources we have brought ourselves to a sorry spot in our economy.
If it were just the economy alone that was in trouble, that would be one thing. We are in trouble in a political way- whether or not Quebec remains within confederation. The Minister of Finance (Mr. Chretien) has listed the problems that are piling up: loss of population, businesses moving out of the province, and a faster rate of unemployment than in the rest of Canada. Slowly but surely Quebec is divorcing itself from the rest of the country, as is evidenced by the Globe and Mail article entitled: "The Black View of Canada from Abroad".
The latest indication of this is in the francophonization of companies. A corporate official of a national company head-
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quartered in Quebec had this to say: "It is becoming more and more apparent to us that employees in English Canada are becoming less and less enthusiastic about working for a Quebec based corporation." Some Quebec executives are complaining that there is an unfortunate nationalization taking over in English Canada. Buyers will purchase products from all over the world, but some say: "We wish you weren't located in Quebec." It is the hardening in the rest of the country against the unreasonable situations that are present in that province, which is quite understandable. Telephone calls by private individuals in the rest of Canada to business in Quebec invariably turn up only francophone speaking individuals, and the smaller the individual businessman, the worse the situation is. Naturally distributors and merchants in other parts of Canada attempt to procure new sources when their supplies are diminished. Some might say this is unfair but it is quite a natural reaction. Not only is this political situation hurting Quebec, but it is also hurting the rest of Canada. It is hurting our image abroad.
When Mr. Davis of Ontario went to Japan, as well as the usual complaint that Canadians produce poorly, he had to refute the possibility of Quebec separation, a refutation that one can question is seriously valid. Fortune magazine has told its business readers that the threat of separation has produced a lack of capital, securities and potential investment in Quebec. There is a very black view taken by a correspondent writing in Finance-Seer, a journal directed to businessmen in the United States. He points out that the PQ leaders are greatly underestimated, and because they have downgraded their plans for a new currency, a new Quebec central bank and a Quebec army, it does not mean they have given them up. He points out that foreign bankers and investors might wake up to the fact that their loans are being paid for in worthless Quebec dollars.
Many of the problems of the Canadian economy may be traced to excessive government spending, with a whole host of programs in the social welfare field. As Canadians found that the necessity to pay and save money for individual care diminished as in the health field, their tax dollars were funnelled to Ottawa and redistributed to the provinces.
This has created great strains on confederation, so much so that it is now in danger of breaking up. Canadians were a lot happier when the people of each region had to look after their own health, welfare and education. This may have brought with it a certain amount of inequity, but this was preferable to the present situation.
Some of these untoward effects in our economy were initiated long ago, but certainly the Prime Minister (Mr. Trudeau) and a past minister of finance, who now lives in Toronto, Mr. Turner, must bear a great deal of the blame for the bad news. That national unemployment rate is 8.4 per cent. Inflation is accelerating. The real labour income of the worker is diminishing, estimated by some to be 4.3 per cent last year. There is a record high current account deficit, with record borrowing abroad. Our budget deficit is some $9 billion and will be higher next year. Our resource industries are falling

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behind. They have been one feature of the economy which has presented us with stability, stemming from the decision of the budget of 1973, when Mr. Turner said, in speaking of overshooting the target, the following:
We recognize that we are running a risk, and that the risk is on the side of overshooting. That is a risk worth taking at this time in the interest of dealing more effectively with unemployment.
It is clear that the Prime Minister and Mr. Turner have lost the gamble. The long years of increased social benefits culminated in the rich and expensive unemployment insurance scheme. With low interest rates and a booming economy, there was too much money in circulation and inflation became double digited.
The decision to keep the domestic oil price significantly below the U.S. level has had its effect, and we have not adapted to this. With our domestic supplies of oil diminishing, we have still to take this step. There does not seem to be any doubt that the increase in the price of oil which will eventually have to come about, will come about when we least wish it. High unemployment was aggravated by the long period of wage and price controls. Had they been short and sharp, the high rise in unemployment would have been stopped, but the uncertainty of many companies in dealing with the Anti-Inflation Board has caused the economy to slip into stagnation. How things have changed since the former minister of finance, Mr. Turner, said in his May, 1974 budget:
We Canadians today have reached at threshold of great challenge and great opportunity.
We have a great opportunity to demonstrate our ability to deal with the deflated economy, with unemployment and with our political realities in regard to the province of Quebec. Nearly all top flight financial people feel that the most important mistake was the overexpansion of our money supply in the 1972-1974 period. It was aided by the high profits accruing to resource and corporate producers, with higher government taxes and higher wages which were not reduced once the commodity boom was over.
Our economy has been badly managed in these few years and we are seeing the result of it still. Even the Prime Minister has said there is no immediate turn around in sight. This budget does little to give confidence to Canadians that we are doing anything more than what the hon. member for Halton-Wentworth (Mr. Kempling) called drifting.


Stan Darling: Mr. Speaker, I am pleased to say a few words on third reading of Bill C-ll. 1 have been in my seat most of the time listening to various speakers. I listened with considerable interest and participated myself during committee of the whole stage. This bill, as we know, suffered the guillotine of closure last Friday. As I mentioned at that time, the opposition and parliament as a whole should not debate this bill ad infinitum without any foreseeable end to the debate, but I believe there were about 16 clauses which we had considered in detail and the 16th clause was passed around 3.30 p.m. Friday afternoon. But the

100 clauses that were left went through by 4.15 p.m. or 4.30 p.m. with great speed and with no debate. As was pointed out by some hon. members during the debate today, a good many of these 100 clauses merited some thought and discussion. I wanted to bring that to the attention of the House.
I am particularly interested in some of the clauses. I am not a lawyer and I am not too familiar with some of these tax credits, but there were certain items which, speaking as a layman and speaking on behalf of a great many taxpayers in the low tax bracket or even on behalf of those who do not pay taxes, merit some comments from me.
First and foremost, the ordinary working man who, prior to this legislation, received an allowance of $150 for business expenditures has felt that this was not sufficient, and the government in its generosity has increased it to $250, which is certainly not very much. I know hon. members opposite will agree that $250 is not a great deal of money in this inflationary period because there are many workers who must drive some distance to their place of work and who must have meals away from home during the pursuit of their jobs. As I said, this includes construction workers. I mentioned to you in particular, Mr. Speaker, that this applies also to railroaders with whose problems you are certainly familiar. I assume you were more familiar with them a few years ago than you are at present, but I am quite sure you have lent a sympathetic ear to that request.
An amendment was brought in requesting that the government reconsider the amount and bring it up to $400. This amendment was defeated and I am sorry that was the case. A great many of these workers have legitimate costs which are pretty high and which they can document. It seems rather unfair that a businessman can deduct his expenses but a good many other workers who have as just a cause cannot. I might say, having been a rural insurance agent for a great number of years and a real estate broker later, that I am well aware that it cost me a lot of money to do business, but I was able to deduct legitimate business expenses. The tax man probably did not look at them all as legitimate and threw out a good many of them, but I guess that is the name of the game.
One other item which was of particular interest to me was the amendments dealing with life insurance. The clauses were amended and the bill, so far as life insurance is concerned, was certainly considerably improved. Originally, when life insurance proceeds were to be paid at death, death tax would be imposed which was, as we said, almost robbing the grave and stealing from widows and orphans. I think that struck home and the government amended the clause.
Another legitimate amendment concerned deduction of interest on a legitimate insurance loan for business purposes, and I recall government members' reaction at the time I proposed this. I can still hear the former minister of finance as much as telling me I was crazy to even consider that. Thank the Lord the majority of the House is crazy along with me, because the government has accepted my proposal to deduct the interest on insurance loans as a legitimate business expense.
December 12, 1977

There is only one kicker left and I wish to bring it to the attention of the House, namely, that if a loan is made on a life insurance policy and happens to be more than the premium, it is considered as income for the year. As I pointed out to the Minister of Finance (Mr. Chretien) and his parliamentary secretary, I doubt there would be more than one in a thousand loans that would qualify under that provision, because in a great number of loans made on life insurance policies the interest which would be eligible as a deductible expense would not be as much as the loan. I felt that because of the bookwork and all the problems the department-I assume it would be the Department of National Revenue-would have in trying to collect those isolated taxes, it would be hardly worth the candle. I wanted to bring that to the attention of the government and in particular the Parliamentary Secretary to the Minister of Finance (Mr. Lumley), who I am pleased to see present here.
The so-called budget-"so-called" because at the time it was supposed to be just a ways and means motion-is supposed to do a good deal of things to generate activity in the economy and provide jobs, but when we ask how many jobs will be generated as a result, many of us are pessimistic, to say the least.
We all know that the unemployment rate is at a high 8.4 per cent. 1 believe that is the highest since 1940, and it is a cause of serious concern to all of us. Programs are in place to provide jobs. The Canada Works Program is of a temporary nature. It is certainly welcome-there is no question about that-but in my riding there is high seasonal unemployment. In Parry Sound-Muskoka I believe we were allotted $1.1 million, which was considerably more than many other ridings, but considerably less than some others. That amount will provide only 311 jobs, and only for a fixed period of time. Something has to be done to put more money into the economy.
It has been suggested-and I agree-that the sales tax is a regressive tax. It hits everybody. It hits those people who do not make enough money even to pay income tax. If the sales tax was reduced, a great deal more money would be put into the economy. People would benefit because they could purchase more goods and services. That would certainly improve the economy.
I come back to what I suppose is a pet theme of mine, that is, the 10-cent federal sales tax on gasoline. To me that is a very bad tax. I believe it was imposed on July 1, 1975. It was imposed to balance our oil accounts, I suppose. Then we were told it was to help conserve gasoline. However, the amount of gasoline which has been saved or which has not been used because of that 10-cent tax is infinitesimal. I said earlier that we might have saved 100 gallons, but it has probably not even been that amount. People are still driving their cars. They still need their cars. Many people use their cars for business purposes. For them, using their cars is a necessity. Working people can deduct the cost of their gasoline, trucks and cars as
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legitimate business expenses, and I agree with that. However, the majority of people are not pleasure drivers; they are not Sunday drivers; they have to use their vehicles, whether they be half-ton trucks or cars, to drive up to 100 miles a day and return. Sometimes they drive even further than that. In order to keep their jobs they have to pay those expenses, and many people feel like quitting because it costs so much to get to and from their jobs. The alternative is welfare or drawing unemployment insurance for the first while.
Most people are proud and want jobs, and if the government will not cancel this 10-cent gasoline tax, the tax should be reduced by seven cents to three cents. A recommendation of that kind was made by the tourist industry. The amount collected by the government since July 1, 1975 with this 10-cent surtax is absolutely astronomical. I would be very interested in knowing what that amount is.
We must cut down on the cost of government. Government expenditures are very high and are very difficult to restrain. We are living in a time of restraint. Various ministers including the Prime Minister (Mr. Trudeau) have stated that because of this restraint the public service has been or will be reduced. Fast week the latest figures showed an increase in the public service of, I believe, about 15,000 persons. I believe the public service now numbers 480,000. At this rate the number will be half a million before too long. The government should be looking into this very seriously.
We have made certain concrete and positive suggestions with regard to this bill. The $100 tax allowance for taxpayers is supposed to take place in early 1978. That amount is not very high, and I do not think it will generate very much economic activity. We hoped that allowance would be put in place in 1977 as well as in 1978 and successive years.
As a member of the housing committee I have spoken with some feeling and force on the insulation program. The grant is to be $350 for eight of the provinces. The unfortunate thing is that that $350 is considered to be taxable income. I admit that many old age pensioners, widows and others who are reinsulating will not pay tax on this grant, but many low income families who are receiving just enough to pay income tax are going to have to. They will probably think two or three times before bothering to apply for a re-insulation grant. I was given astronomical figures by the minister, after consultation with his officials, as to what this is going to cost the government. Of course, I took that with a grain of salt. If the government wants the re-insulation program to get off the ground, it should make the grants tax deductible just as it does in Nova Scotia and Prince Edward Island. I am aware of high electricity costs in those two provinces, but Parry Sound-Muskoka is not exactly the banana belt of the Dominion of Canada. Yesterday morning it was 34 below zero in Burks Falls where I live, and that is the good Christian temperature, not that crazy Celsius.
Insulation is very necessary for the homes in my area and in other northern areas. Surely to goodness if there are high energy costs in Nova Scotia and Prince Edward Island, there are other items of just as much importance which are also

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expensive in northern Ontario, northern Alberta and other northern parts of the country. People in those areas should also qualify under the re-insulation program so that grants can be deducted from taxable income. There is still some time for the government to recant. I hope it will think this over and admit that its proposal is nonsense. We know the number of people who have applied under this program. I mentioned this during the committee of the whole last week. We also know the number of grants which have been approved and paid. The number is very small compared with what the government expected. Those figures prove that the plan cooked up by the Minister of Energy, Mines and Resources (Mr. Gillespie) and the Minister of State for Urban Affairs (Mr. Ouellet) is not successful in creating work. If people would take advantage of this program, that would cut down on energy consumption. 1 hope something will be done in this regard. Clause 116 provided authority for the government to borrow $9 billion. That is another thing that was sneaked in that a lot of us are wondering and worrying about.
The member who spoke previously, the great socialist from New Westminster, made some comments that had merit. He pointed out that 43 per cent of the income tax revenues came from individual taxpayers and a much smaller amount came from corporations. It is because of the items I have mentioned that so much is collected from the ordinary taxpayer. A reduction in the sales tax would benefit everybody and generate more money for the economy. There is also that iniquitous 10-cent tax on gasoline. It is an unfair tax because it penalizes people who cannot claim expenses for driving to and from work as deductible, even in cases where the distance is considerable.
In view of these items, Mr. Speaker, I hope something can be done to amend some of the clauses on third reading. 1 know the bill will probably go through but I am not prepared to vote for it in its present state.


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I have a few short comments to make in this third reading debate which will relate fairly directly to the comments I made on second reading debate on November 17 and in committee of the whole on December 6. On those occasions I dwelt on two major aspects of the impact of this tax bill on Canadian agriculture and I want to dwell on them a little more in some new ways tonight.
The first matter is the serious consequences of the capital gains tax on the roll-over of incorporated family farms and partnerships to the next generation brought about by the ravages of inflation since the advent of the new capital gains approach to the tax system that has been with us for about seven years. This change is distinct from the situation of an individual farmer-one who is not incorporated or in a partnership-who has this privilege of roll-over.
The second matter 1 dwelt on in some detail referred to my representations to the Minister of Finance (Mr. Chretien) and other ministers who made up what I think is properly called a

contingency drought committee composed of eight Cabinet ministers. This committee was quite active last spring and summer and I think it is still active in regard to the continuing and worsening drought in southern Alberta and southwestern Saskatchewan. In this area I called for a tax deferral program that would recognize the particular problems brought on by this drought in the cattle industry in southern Alberta and southwestern Saskatchewan. The program would have to last until the drought is over and grass and feed supplies return to more or less normal. This, of course, may take several years.
The proposal to allow a tax deferral program would encourage the necessary cow numbers to be reduced to levels that could be supported on local grass and feed supplies in spite of the considerably larger taxable incomes that would result from this conditional scale down of cattle. I think it was a reasonable suggestion that I made in the course of the earlier debates. It is the prudent course to follow under severe drought conditions instead of buying expensive feed over a long winter. There is now every indication of an extremely cold and long winter. This was the lesson we learned in the drought and depression days of the 1930's, but there were no tax problems then and we did not have to worry about the level of taxable income.
I am pleased to report three weeks after the suggestions were put forward that I have received good support for them from the farm audience over a wide area, including a big part of western Canada, parts of Ontario and even within this House from members of other parties. This gives me some satisfaction. Since preparing those earlier remarks some additional background information has come to my attention with respect to the capital gains roll-over item.
I should like to refer to the 1971 census figures. In that census tabulation there were 21,019 family farm partnerships or 8.1 per cent and another 7,011 family farm corporations or 3.1 per cent. These 29,000, which the census describes as commercial farms, made up 11.2 per cent of all farmers in Canada in 1971 and accounted for at least 20 per cent of total farm production. Some 113,000 commercial farms accounted for about 77.5 per cent of the total production in Canada in 1971. In other words, incorporated family farms and partnerships account for a disproportionately large share of Canadian farm production.
The figures given by the Minister of Finance showing only 2 per cent of farms being incorporated leave the wrong impression. Not only is the percentage too low but the minister did not look at what the 3.1 per cent produced on their farms- over 20 per cent of the total farm production. This is, of course, together with the partnerships. These categories do not enjoy the roll-over privileges for intergenerational transfer that individual farmers now enjoy. I submit that incorporation does not resolve either the liquidity problem or the ability to pay capital gains tax.
Recently there has been some research announced just within the last month. It was done at the University of Guelph,
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in a study by Gellner and Brinkman. This study found capital gains were an important component of farm returns. Between the years 1971 and 1974 covered by the study, capital gains amounted to 35 per cent of total farm returns. However, the study pointed out that capital gains by contrast on comparable nonfarm business amounted to 25 per cent. The point I am making is, if a distinction can be drawn between unincorporated farm operations and other businesses, and this is so, the same distinction can be drawn between incorporated family farms and farm partnerships on the one hand, and other incorporated businesses on the other hand.
Surely, we now have a travesty of justice as a result of the critical impact of capital gains under extreme inflationary conditions, wherein efficient farmers and ranchers are being taxed out of existence. There can be no real long term gain for government or the nation in taxing our best farmers in a manner to drive them out of their successful business, preventing a logical transfer to the next generation.
I want to associate myself with the remarks made this afternoon by my colleague from Qu'Appelle-Moose Mountain (Mr. Hamilton) on roll-over in the corporate structure. His approach to this same subject was most appropriate. 1 also want to associate myself with his appropriate reference to today's lead story in the Toronto Globe and Mail with the headline-it is a catchy headline and an excellent story-"PM Lost Fiscal Gamble-Canada pays with Ailing Economy". I suggest this should be required reading, not only by members of this House but any Canadian who is concerned about our critical economic situation today.
In closing, Mr. Speaker, as I indicated in the committee of the whole in reference to this capital gains roll-over item, there has been no change in the Department of Finance's views for almost three years, yet there has been an incredible increase in the impact of capital gains tax on family and incorporated farms due to our continuing and increasing inflation. Surely a new look now is absolutely essential. I would like to remind the Minister of Finance (Mr. Chretien) of his closing statement to me in the committee when he said:
I should, however, like to find a date which might be suitable, and I will ask my staff to get in touch with the honorable member. If this cannot be arranged, I shall certainly make sure there is a meeting with my officials on this subject.
This, of course, was a reference to my suggestion that Canadian cattle producers would like and deserve the chance to meet with the Minister of Finance and his senior staff on this very important subject. 1 take this opportunity to remind him of that statement and hope that something will come of it. 1 did not mean to imply at that time, nor do 1 now, that it should take place in the heat of this long debate with which we are still involved. I hope, however, that such a meeting, when it comes, is more productive than the last meeting three years ago, at that time with a former minister of finance, Mr. Turner. In spite of two closure motions to get this tax amendment bill to this third reading stage, it is still not too late to call upon the minister to recognize the genuine sincerity of at least some suggestions coming out of this debate. I suggest he implement at least some of them. If not now, then certainly he
Adjournment Debate
should make appropriate plans to incorporate them in the next budget.


William Herbert Jarvis: I am not going to take much of the House's time, Mr. Speaker, but this debate does provide me with an opportunity to tell the parliamentary secretary, and through him the minister, just what I think of the economic policy of this government. I welcome the few minutes available to me before ten o'clock.
I would like to say to the parliamentary secretary, in the minister's absence, that while there has been much political hay about the economic mess, for which the government is responsible, we must try to make the best of what we have. We have heard about the delays, the stone-walling and the holding back of this important measure, but I wonder if the government knows what it has done to Canadians since last March, even a small group of Canadians, some of whom may be represented in the Liberal caucus. There may even be one or two in ours and elsewhere. Chartered accountants have been sitting behind their desks since March with clients flooding in their doors on the basis of the original budget, which was allowed to die an ignominious death. But no CA has been able to file a return with any degree of certainty whatsoever on the basis of that budget statement.
What has transpired has been this. A client will come in during this last fiscal year and the chartered accountant will say to that client: "I have no idea whether to file under the March budget statement; that was the previous law, I will find out for you". First of all he phones the regional tax office, and they reply: "We do not really know, but you may have an option to file under both; send us an accompanying letter".
Put yourself in the position, not only of the chartered accountant, but of the client to whom he must have given advice since March of this year, almost nine, ten months ago. It is simply inexcusable. If the opposition, according to government spokesmen, lacks integrity for delaying this bill, that lack of integrity is minuscule compared to the lack of fiscal integrity that this government has exhibited since March of this year. Not only has the government been callously indifferent to the economy of the country, but it failed to implement the so-called budget of last March. Then they come roaring in after the throne speech debate and, I suppose, expect passage of the bill within hours. This is simply indefensible.


Mr. Deputy Speaker:: I regret that I have to interrupt the hon. member because in accordance with Standing Order No. 40, a motion to adjourn the House is deemed to have been moved and seconded at this time.



PROCEEDINGS ON ADJOURNMENT MOTION

[Stage Direction]
A motion to adjourn the House under Standing Order 40 deemed to have been moved.
[Stage Direction]
December 12, 1977
Adjournment Debate

Elmer MacIntosh MacKay: Mr. Speaker, the minister, on December 6, when asked to define the term "national security" put in the context of the BNA Act or in jurisdictional or legal sense, replied that he took a great deal of guidance from section 16 of the Official Secrets Act. He stated, sir, that the mandate of the security service was derived, almost totally, from that definition-which talks about subversive activities, not national security per se.
What I would like to say to the Solicitor General (Mr. Fox) tonight, in an attempt to be a little provocative, is that he is bandying about the term "national security" as little more than a parliamentary buzz word. He has not, so far, related it in a definitive, constructive way to justify the tactics, legal or political, that he is using vis-a-vis provincial inquiries that are attempts to gather information.
in a recent report dealing with governmental operations with respect to intelligence activities, Mr. Commager noted that in the United States-
-The emergence of intelligence over the past quarter-century as an almost independent branch of the executive, largely immune from either political limitations or legal controls, poses constitutional questions graver than any since the civil war and reconstruction.
Mr. Commager goes on to say that:
The metamorphosis of the two concepts of national security and secrecy are extremely ominous.
He decries the audacity with which the claim of national security is used as a cover for almost anything the executive wishes to do, and notes the casualness with which the term national security has been accepted, a term or phrase unknown to the constitution. He describes it, not as a substantive power, but as a principle in search of a definition, a definition which the Solicitor General, in Canadian parliamentary terms, is unable to provide.
Recently in a Toronto newspaper the Solicitor General was quoted as saying that national security was clearly a federal responsibility under the constitutional provision to provide peace, order, and good government. Of course, he was quoting section 91 of the British North America Act which outlines not only the power of parliament but the restrictions as well. Section 91 reads:
It shall be lawful for the Queen, by and with the consent of the Senate and House of Commons to make laws for the Peace, Order and Good Government of Canada in relation to all matters not coming within the Classes or Subjects by this Act assigned exclusively to the Legislatures of the Provinces.
In my opinion, the term "provide" used by the minister cannot be construed to mean "make" in the act. The latter term means to "legislate"; the former to do a service. To "provide" peace and order can only mean to "administrate and enforce". Thus the government in this case cannot with certainty say that it is responsible constitutionally to provide peace and order in the provinces. That exclusive power is contained in section 92 of the BNA Act, and it relates solely to

the provinces. The 1871 addition to the BNA Act in which it gave temporary authority to parliament to "administer peace and order" in the Territories is support for that opinion.
If an attempt is made to determine just what national security involves, we must refer to law in its present context. There seems to be no statute or definition of national security. The term has been pulled out of thin air. We can therefore only surmise what it may mean.
Section 46 of the Criminal Code deals with treason, et cetera. It also deals with offences such as spying. The Official Secrets Act and War Measures Act are both likely being used to uphold the term "national security". Yet these acts, including the Criminal Code, are, within the meaning of the administration of justice, a provincial responsibility. The Protection of Privacy Act reveals that subversive activity as defined comes within the same meaning.
In an attempt to strengthen or provide legality for federal responsibility, the Solicitor General is in fact saying that the administration of justice in the field of national security is its responsibility. This pseudo axiom is supported by him in the Commons debate of November 15, 1977, page 885 of Hansard:
By convention, the responsibility for national security devolves upon the Prime Minister and is shared with those ministers charged with specific responsibility for the police, external relations and the administration of justice.
It would appear that the present government is on the one hand running the country by convention, but, finding that hat does not fit, is falling back on section 91. The term "administration of justice", as used by the Solicitor General, clearly reveals his government is under the illusion it is responsible for that function. He has yet to face section 92 and the forbidding clauses in section 91.
The divisions of powers between parliament and the provinces are explicitly set out in sections 91 and 92. No matter how the present government attempts to circumvent these sections in justifying its role in national security, it cannot be certain to do so without violating the constitution.
The next step of the government can easily be anticipated. In order that they may constitutionally provide legality for the RCMP Act, they will once again refer to "provide peace and order" under section 91. They might be better advised to look at section 91(27), but that is a variation of a theme. To repeat myself and bring this into context, I am of the firm opinion that the legislating of a police act, excepting in the Territories, can only be done under the authority of section 92 which reads:
In each Province the Legislature may exclusively make Laws in relation to Matters coming within the Classes of Subject next hereafter enumerated, that is to say:
14: The Administration of Justice in the Province . ..
The administration of justice requires laws to be enforced, one of which is a police act. Each province has therefore legislated its own police act. Now if we return to section 91, we find that parliament is expressly forbidden to pass laws coming within the classes of subjects by this act assigned exclusively to the legislatures of the provinces. It, therefore, has absolutely
December 12, 1977

no constitutional authority to pass a police act involving provincial jurisdiction. To me, it is as clear as that.
To continue to fiddle and fuddle around "peace and order", "administration of justice", "conventions" or whatever, is to only further compound those sins of omission and commission which have brought about the present controversy.


Mr. Roger Young (Parliamentary Secretary to Minister of Justice and Attorney General of Canada):: Mr. Speaker, the royal commission on security in 1969 made it clear that it was the duty of the state to protect its secrets from espionage, its institutions from subversion and its policies from clandestine influence.
The national security of Canada, understood in its domestic context, includes all of these responsibilities.
The maintenance of such national internal security is the responsibility of the government of Canada. This responsibility is derived not only from statutes and regulations such as those relating to the RCM Police but also from the provisions of the constitutional framework requiring the federal government to maintain peace, order and good government in Canada.
In its operational context, the maintenance of national security is upheld by the RCM Police, specifically the security service. The scope of the mandate of this group is found in law at section 16(3) of the Official Secrets Act. In this section, subversive activity means: (a) espionage or sabotage; (b) foreign intelligence activities directed toward gathering intelligence information relating to Canada; (c) activities directed toward accomplishing governmental change within Canada or elsewhere by force or violence or any criminal means; (d) activities by a foreign power directed toward actual or potential attack or other hostile acts against Canada; or (e) activities of a foreign terrorist group directed toward the commission of terrorist acts in or against Canada.


NORTHERN AFFAIRS-PROPOSED CONSTRUCTION OF HIGHWAY BETWEEN FORT McMURRAY AND FORT SMITH-INQUIRY AS TO FEDERAL AID
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, 1 am taking this opportunity to raise an important matter, one which I have brought to the attention of the House previously on November 9 of this year. It concerns the development of a transportation system which would serve the Northwest Territories, specifically, the construction of two highways directly affecting the economy of the north and more particularly the western part of the Northwest Territories.
The first of these proposed developments is the construction of a gravel highway to link Fort McMurray, Alberta with Fort Smith in the Northwest Territories. I recently met with the deputy premier of Alberta, Dr. Hugh Horner, to discuss this project. Dr. Horner, who is also the Alberta minister of transport, expressed serious and favourable interest in this proposal on behalf of the provincial government. He and 1 both agree that a highway along this route would provide long
Adjournment Debate
term benefits for the province of Alberta and more immediate benefits for the Northwest Territories.
It is clear, however, that a massive project such as this should not be financed solely by a provincial government. I am therefore seeking support from the federal government to enable this development to take place. I am urging that representatives of the government meet with me and with representatives of the Alberta government to discuss the possibility of proceeding with this project. I hope the government of Canada will see to it that a satisfactory financial agreement can be reached in order that work may begin as soon as possible.
The second proposal concerns the construction of the Liard highway to link Fort Nelson, B.C., with Fort Simpson in the Northwest Territories. Construction of such a highway would bring about important benefits for the Northwest Territories, for the Yukon and for British Columbia. In addition, it would open up the agricultural possibilities of the Liard area. I do not think many people are aware of those possibilities but I am firmly of the opinion that there is great agricultural potential in that area.
At present, the British Columbia government has paid for a 20-mile section out of Fort Nelson and a 50-mile stretch which exists in the Northwest Territories from Fort Simpson to Fort William. However, there have not been any serious efforts made to complete the project. I would like to know why the federal government has dragged its feet on this project. I would also like to know when the Treasury Board and the Department of Indian Affairs and Northern Development are going to make a decision on the construction of the Liard highway. I raised this issue with the President of Treasury Board (Mr. Andras) recently in the House, and was informed that I should have directed my question to the Minister of Indian Affairs and Northern Development (Mr. Faulkner). I would like some indication from the government whether or not they will proceed with the construction of this highway; I do not care where the answer comes from.
1 am not alone in urging the completion of the Liard highway. The Northwest Territories' finance committee is also urging the federal government to complete the Liard highway. In view of the high unemployment rate at the present time, a project such as the Liard highway and the highway which is to be built from Fort McMurray to Fort Smith in the Northwest Territories would provide much needed work. I hope a favourable decision will be reached shortly. I also hope the government will look seriously at the policy recommended by the previous minister of Indian affairs and northern development, and that the policy of northern preference will be adhered to.


Roger Carl Young: Mr. Speaker, as the Minister of Indian Affairs and Northern Development (Mr. Faulkner) indicated on Friday, the department would be prepared to look into the matter raised by the hon. member. Up to this time, however, the

December 12, 1977
Adjournment Debate
department has not been involved. The study referred to by the hon. member has been undertaken by the Alberta government and refers to a road in Alberta included in the DREE-MOT-Alberta northlands area. This road has not been included in the current three year western northlands agreement which ends this year. Depending on Alberta's priorities regarding road construction, it is possible that a highway to Fort Smith could be included in future western northlands agreements.
Should such a highway be considered for construction, naturally Parks Canada would be concerned over the proposed route in light of the ecological impacts on Wood Buffalo National Park. Parks Canada would seek preference for a route along the east side of the Athabasca river lying outside the park which would have minimum impacts on the important animal and waterfowl habitats inside the park.
The department, through the northern program, would also take an interest in any portion of the proposed road which would lie in the Northwest Territories. However, the department's participation in the construction of such a road would be subject to departmental priorities for road construction in the Northwest Territories. As the minister himself stated on Friday, at the present time we are in a period of restraint and will have to decide among the different priorities. As the hon. member will recall, the minister expressed his view that his priorities lie with the construction of the Liard highway which he has been discussing recently with Treasury Board and from whom he is expecting a decision early in the new year.


Mr. Deputy Speaker:: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 2 p.m.
Motion agreed to and the House adjourned at 10.16 p.m.

Tuesday, December 13, 1977