1977-11-14

ROUTINE PROCEEDINGS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, 1 rise under the provisions of Standing Order No. 43 on a matter of pressing and urgent necessity. I wish to move, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn), if given unanimity, the following motion arising from a judgment of His Lordship, the Chief Justice of Ontario, Mr. Evans, concerning a regulation passed by the Energy Control Board and approved by order in council by the cabinet on September 23, 1976, which made it an offence, among other things, to discuss an unlawful uranium cartel which was agreed to be set up with the consent and support of the government of Canada.
Against the legality of the said regulation an application was made to the courts by the Leader of the Opposition and other members of this House. The application for relief was denied by the court.
Although parts of the said regulations have been altered recently, the principle of the judgment remains, that this government clandestinely approved of a regulation that denies parliamentary privilege and as well the rights of the people to know what is going on and denies freedom of the press and media, and in fact under said judgment it is apparent that what was done was within the power of the government.
Therefore, 1 move:
As this House considers the said regulation and the order in council to be totally unjustifiable and dangerous it is necessary to inform the people of the unlawful action and wrongdoing of the government which constitutes an arbitrary and perilous denial of the democratic rights of the Canadian people, and, for members of this House, a derogation of parliamentary principle.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise on a matter of urgent and pressing necessity. In view of the serious allegations regarding the maintenance of a domestic security network of informants and agents by the Canadian Armed Forces, which has allegedly enabled them to supply detailed reports of the activities of unions, and of other legal groups, to the federal government, I would move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House urges the Minister of National Defence to make a statement on motions on whether domestic intelligence activities have been carried out by the Canadian Armed Forces and, if so, under whose authorization and for what purpose.


Mr. Speaker:: This motion can be presented pursuant to Standing Order 43, only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


ROYAL CANADIAN MOUNTED POLICE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, 1 rise on a matter of urgent and pressing necessity. In light of the disclosures in the media today clearly indicating interference and influence from the ministerial level in reference to the RCMP, which shows further ministerial irresponsibility and culpability; and in view of the undisputed fact that the conduct of security matters in Canada by the RCMP has been of the highest calibre before interventions by the Solicitor General's department and the setting up of the police and security planning and analysis branch of the same department, I move, seconded by the hon. member for Red Deer (Mr. Towers):
That the said security planning and analysis branch activities in every regard be referred to a special committee set up by this House with the right to call witnesses and obtain and subpoena documents.


Mr. Speaker:: Presentation of such a motion for debate can be done only with the unanimous consent of the House. Is there unanimous consent?
80025 -52V3

November 14, 1977
Oral Questions


Some hon. Members:: Agreed.


Some hon. Members:: No.


PROPOSAL THAT ALL SECURITY DECISIONS BE MADE BY COMMISSIONER-MOTION UNDER S.O. 43
Mr. Ken Hurlburt (Lethbridge):: Mr. Speaker, 1 rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In light of the fact that all Canadians have more faith in the RCMP than they do in the Prime Minister and this government-


Some hon. Members:: Hear, hear!


Kenneth Earl Hurlburt: -I move, seconded by the hon. member for Annapolis Valley (Mr. Nowlan):
That immediate action be taken to have all security decisions made by the commissioner of the RCMP until after the next federal election, at which time a new prime minister will take office in the name of Joe Clark.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please.


PRESENCE IN GALLERY OF SOVIET MINISTER OF FISH INDUSTRY, MR. A. A. ISHKOV
Mr. Speaker:: Before beginning the oral question period, I know that all hon. members will want to join with me in signalling the presence in our gallery of a very distinguished visitor, Mr. A. A. Ishkov, the Minister of the Fish Industry of the U.S.S.R.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is directed to the Solicitor General and it concerns the security planning and analysis group. As the minister will recall, when that group was originally announced by his predecessor twice removed, the minister made it clear at that time-


Mr. Knowles (Winnipeg North Centre):: All of them should have been removed.


Charles Joseph Clark: -that the functions of that group would be simply to analyse information and advise the minister. He went on to say: "The group has no operational duties". Will the Solicitor General tell the House whether the security planning and analysis group now carries out operational duties, or is involved in any way in the carrying out of the operations for anyone else?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, it has been explained time and time again, and as recently as last April or May, when members of that organization appeared before the Standing Committee on Justice and Legal Affairs in order to explain their estimates. The question was put a number of times by the hon. member for Yukon and the answer was given at that time. There has been no change. That group does not have any operational responsibilities.


Charles Joseph Clark: Mr. Speaker, in order to understand what the Solicitor General is saying, is he saying that this group is not involved in any way whatsoever with the operational activities of any other branch or agency of the government of Canada?


Francis Fox: Mr. Speaker, obviously the group receives information from other agencies which have operational capabilities, in particular from the RCMP security services for the purposes of analysis.


Charles Joseph Clark: Mr. Speaker, the Solicitor General has now said that this group receives information from operational groups. Is it involved in giving instructions or directions, which would be operational, to any other agency of the government of Canada, including the security services?


Francis Fox: Mr. Speaker, I have examined the matter in detail with the members of that group, and it is quite clear they are not involved in operations. They are on the receiving end of the information gathered by other agencies.


POSSIBILITY MINISTER MISLED BY SECURITY PLANNING GROUP
Charles Joseph Clark: Mr. Speaker, the function of that group, as we understand it from the minister and the terms of reference, has been an advisory role to keep the minister advised. Frequently in this House the minister has, to his own discomfort, admitted that he has been badly briefed presumably by the security and analysis group. Will he tell the House whether the group had information which it did not pass along to him resulting in his not knowing what he should have known, or did they not have that information and were they consequently not performing their functions effectively?


Francis Fox: Mr. Speaker, I do not believe I ever indicated that I had been mislead by that group. If the hon. member wishes to raise specific instances, I would be pleased to reply to him.


Charles Joseph Clark: Mr. Speaker-
November 14, 1977


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The hon. member for Central Nova.


ROLE PLAYED BY INSPECTOR BANNING IN SECURITY PLANNING GROUP
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, 1 have a question for the Solicitor General. Further to a conversation we had this morning I would like to ask him if he can now give the House any further information on the role played by the police and security planning and analysis branch with reference to any duties or activity involving Inspector Pat Banning. I understand this man was a career RCMP officer seconded to this group.


Francis Fox: Mr. Speaker, 1 thank the hon. member for getting in touch with me this morning. He asked me a specific question concerning superintendent Banning. I have made inquiries. Mr. Banning served within the police and security group from August, 1971 to the month of June, 1973. He occupied the position of director of security policy, which was exclusively involved with the question of policy formulation within that group during that period of time.


AVAILABILITY OF INCOME TAX INFORMATION TO SECURITY PLANNING GROUP
Elmer MacIntosh MacKay: Mr. Speaker, I want to thank the minister for his answer, and I would like to ask him a related question. As far as the principle of income tax confidentiality is concerned, a matter raised by the right hon. member for Prince Albert on October 26, can the Solicitor General indicate whether any police security services of government have in fact had a liaison with the Department of National Revenue-the information from which may be found, I am informed, in the "L" section files of the RCMP- so that this information has been in fact available to the security services from the Department of National Revenue for some period of time, in addition to the agreement which was referred to in this House not so long ago between the Department of National Revenue and the RCMP?


Francis Fox: Mr. Speaker, I have not been able to come across any indications of such a practice up to this moment. As 1 indicated in the House on Thursday, 1 asked the RCMP to provide complete briefs on all their investigative practices and procedures so that they may be brought to the attention of the royal commission of inquiry looking into the RCMP.
Oral Questions NATIONAL DEFENCE


ALLEGATION ARMED FORCES CONDUCTED DOMESTIC INTELLIGENCE ACTIVITIES-GOVERNMENT POSITION
John Edward Broadbent: Mr. Speaker, I have a question for the Minister of National Defence. Would the minister confirm that the army's intelligence branch has maintained a domestic service or a domestic operation which has been involved in the monitoring of Canadian trade unions? Related to that, would he confirm that the reports which were allegedly prepared were then submitted to the cabinet?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, there is no activity on the part of the security intelligence unit of the Department of National Defence which does any surveillance on trade unions at all. We have no agents or undercover people involved in such activity. We monitor a number of people and organizations across the country, and if indeed we are asked, we have a responsibility to respond to requests for aid by civil authorities, but we do not as a practice carry on any infiltration or monitoring of such organizations.


John Edward Broadbent: Mr. Speaker, I listened to the minister's answer with care, just as I am sure he chose his words with care, but I would like to ask him specifically with regard to the allegations which were made in a number of newspapers and in other forms of media in the past 48 hours whether there has been a branch of the armed services which has studied the financial operations of one or more trade unions in Canada, which has prepared comments on the likelihood of success in internal trade union elections and which has commented in any detailed way on the internal performance of one or more trade unions? Has there been any branch of the armed services involved in that kind of surveillance and submitting that kind of report?


Barnett Jerome Danson: Mr. Speaker, there are files on various organizations in the country which are kept. There is monitoring in that sense. Perhaps I was incorrect in using that word before. This applies to some political groups, to some business groups and to individuals across the country. We have a responsibility to respond to the attorneys general of the provinces in the event they need the assistance of the armed forces. The chief of the defence staff has the obligation to respond. The level of response and the nature thereof is a matter of his judgment, so he must have information available to him which will give him an indication of the type of response he should provide.


POSSIBILITY ARMED FORCES MONITORED INTERNAL OPERATIONS OF UNIONS
John Edward Broadbent: Mr. Speaker, the minister seemed to be much more forthcoming in his response the other day outside the House when he heard about these allegations. He just said in the second answer if I heard him correctly that there was indeed the monitoring of certain organizations, including business organizations. I thought his first answer denied that and implied they might be looking at the observance of certain individuals. I should like to ask him

November 14, 1977
Oral Questions
to clarify that because it is fundamentally important in terms of the preservation of civil liberties in the country. Most specifically, he did not answer the question about the observation of internal financial operations. A reference has been made to the Canadian Union of Public Employees. Has any branch of the armed services monitored the internal operations of that union, including an assessment of the possibility of the electoral success or the contrary of certain candidates for office? Has it studied the financial operations of that union?


Barnett Jerome Danson: Mr. Speaker, I have no information that such information has been kept.


An hon. Member:: Have you asked?


Barnett Jerome Danson: I have asked and I have rather comprehensive reports from my people as of today. There are still questions I am asking which I will be asking tomorrow and if we do not have all the information on that I will be asking the day after tomorrow. We are quite certain that we do not engage in such covert operations. We must have information to be available to respond to these civil authorities if we are called upon and the chief of the defence staff must have that information to measure the level of his responsibility.


INQUIRY WHETHER MCDONALD COMMISSION WILL INVESTIGATE ARMED FORCES
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, first I would like to say to the Minister of National Defence (Mr. Danson) on behalf of my constituents that I am most grateful to him for having authorized the Royal 22nd Regiment's band to be part of the celebrations on Remembrance Day.
On that subject, my question is indeed directed to the Solicitor General. Since on that occasion yesterday I had the opportunity to meet many military people and since news agencies have reported that the McDonald commission will probably inquire not only into the RCMP but also into the Canadian Armed Forces, could the minister tell the House if this news which has been spread among the population is true and if so could he justify such a decision?


Francis Fox: Mr. Speaker, there has not been any change so far in the terms of reference of the McDonald commission which was requested to examine procedures and practices within the Royal Canadian Mounted Police.


Joseph Adrien Henri Lambert: Since this piece of news has now been released, Mr. Speaker, could the minister advise the House whether he will ascertain where it came from and whether it is false, for it is of concern to some people and to the military, and the Canadian people have a right to know. If all our institutions are to be investigated and if as much time is spent discussing the possibility of investigating the Armed Forces as is spent now discussing the RCMP, I feel the

Canadian economy will suffer, because administrative matters are thus disregarded.


Francis Fox: Mr. Speaker, I want to thank the hon. member for his kind remarks concerning our democratic institutions and his suggestion that they are essential to the preservation of our present government system. I can assure the hon. member that 1 shall try to trace to their origin this piece of news and the findings he made yesterday during the Remembrance Day celebrations.


CONNECTION BETWEEN SECURITY PLANNING GROUP AND ARMED FORCES SECURITY GROUP
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. Would he be kind enough to tell the House what connection there is between the security and intelligence directorate of his department and the security and planning analysis group which is part of the Solicitor General's office? Which way do the intelligence reports flow or do they communicate with each other on a regular basis?


Barnett Jerome Danson: Mr. Speaker, we have a liaison officer in the police and security planning branch, a captain and an NCO clerk, I believe, who maintain liaison between the two branches. There is an interchange of information which we can pass on for assessment.


Allan Bruce McKinnon: Could the minister also tell the House whether the operational direction given to the armed forces security directorate originates with the security and planning analysis group or whether it originates with someone else, and, if it should be the latter case, with whom?


Barnett Jerome Danson: It originates within our own intelligence services through Brigadier-General Davros who reports to the CDS. Our work is confined to the armed forces and involves only the armed forces and direction is not taken from the security and planning analysis group.


NUMBER OF BRIEFINGS GIVEN MINISTER BY INTELLIGENCE UNIT
Allan Bruce McKinnon: Would the minister inform us approximately how often during his first year as Minister of National Defence he was personally briefed on security matters by his intelligence and security directorate?


Barnett Jerome Danson: As
far as major briefings are concerned, I was briefed shortly after I came to the department. 1 have had at least two briefings since then, and, in the last few days, several.


Stanley Howard Knowles: No doubt!

November 14, 1977


ROYAL CANADIAN MOUNTED POLICE
Mr. Erik Nielsen (Yukon):: My question, Mr. Speaker, is for the Solicitor General. The former solicitor general, now Minister of Consumer and Corporate Affairs, made three specific reports to parliament under section 16(5) of the Official Secrets Act in which he indicated that the only methods of interception utilized were wiretapping and eavesdropping by microphone. This amounts to misleading the House contrary to the former solicitor general's duties as prescribed by law. Will the Solicitor General explain why it was that his predecessor so seriously misled the House and why he was unable to obtain from his officials the details of the mail interceptions routinely carried out during the years he was solicitor general?


Francis Fox: As to the reporting requirement the hon. member mentioned, it is my understanding that it is a requirement under the provisions of section 16 of the Official Secrets Act which was added to the legislation in 1974 and my understanding is that it obliges the minister to make an annual report to parliament on interceptions of communications which had been made under that section of the Act.


Erik Nielsen: The minister has neglected to explain why reference to mail interceptions was omitted. The last report made under section 16(5) of the Official Secrets Act was signed by the present Solicitor General. Will the hon. gentleman tell us whether he asked for or received any advice from his predecessor who held the office of Solicitor General until September, 1976, concerning interception of communications other than by wiretaps or bugging, specifically the interception and copying of mail?


Francis Fox: My predecessor did say in that report which was tabled last year that there had been a request submitted to the Department of Justice for a legal opinion to ascertain whether an interception of the mail could be made legally under section 16(5) and the opinion received from the Department of Justice was that the opening of mail could not be legally carried out under section 16(5) of the Official Secrets Act and that section 43 of the Post Office Act took precedence over the Official Secrets Act.


Erik Nielsen: The minister failed to mention that in that report only one authorization was requested. Will the Prime Minister tell the House, in view of the massive failure of the former solicitor general to exercise his responsibility as clearly outlined in section 16(5) of the Official Secrets Act affecting one of the basic pillars of our constitution, whether the former solicitor general, now Minister of Consumer and Corporate Affairs, is prepared to tender his resignation for his part in allowing this sordid affair to develop?


Right Hon. P. E. Trudeau (Prime Minister):: The hon. member is making an argument and a suggestion. I think both are quite false.
Oral Questions


KNOWLEDGE OF DIRECTOR GENERAL OF SECURITY SERVICE OF INTERCEPTION OF MAIL
Mr. Allan Lawrence (Northumberland-Durham):: A supplementary question to the Solicitor General relating to mail interceptions. The hon. member will recall that on Thursday last I asked him who else in rank above the deputy director of the security service knew about the mail interceptions. His answer to me was: "We have not yet been able to determine whether any higher authority than the one I have mentioned was aware of these activities at the time." Four days having now elapsed since Thursday, I ask him whether he can tell me specifically whether the director general of the security service knew about mail interceptions in June of 1976 when they were terminated.


Francis Fox: Mr. Speaker, the answer is that the director general of the security service was not aware of any case where the mails had been opened contrary to Section 43 of the Post Office Act.


PRESENCE OF DEPUTY DIRECTOR OF SECURITY AT MEETING CONCERNING POSSIBLE FURTHER ILLEGAL ACTIVITIES
Allan Frederick Lawrence: That is not what I asked. I asked if the director general knew of any illegal mail interceptions at that time. If the answer to that is no, I would simply ask this. Was the deputy director general present at the conference a few weeks ago when the Solicitor General asked his advisers, and presumably they would be the security advisers, whether the security service at that time were engaged in any other illegal activity other than the APLQ break-in. The Solicitor General is looking puzzled. He will remember that when the whole matter of the APLQ break-in came to light, he told this House that he had been assured by his security advisers there was no other illegal activity carried on up to that time by the RCMP. Obviously the security service knew about the mail interceptions in June 1976. My question is whether the deputy director general of the security service was present at that conference the minister had with his advisers.


Francis Fox: No, Mr. Speaker. The deputy director general of operations was not present at that time. The question was put to the then Commissioner and the present deputy director general of the security service. They had no knowledge. I have spoken with the director general of the security service. I have not had the opportunity of speaking with the former Commissioner. It is quite clear the director general of the security service had no knowledge of mail interceptions which led to opening of the mail.


Allan Frederick Lawrence: Are we to assume that in June, 1976 the deputy director general of the secret service knew of the mail interceptions but at that time and since the director general did not know? Are we then to assume that there was a breakdown in communications at that level in the security

November 14, 1977
Oral Questions
service or that people simply did not tell the truth at the time of the conference with the minister?


Francis Fox: Mr. Speaker, I do not think there is any question of people not telling the truth. The people of whom the question was asked, namely the Commissioner and the director general of the security service, both replied there were no other illegalities to their knowledge. I have no doubt that that was the case. It seems quite clear that the director general of the security service was not advised of any illegal acts concerning the opening of the mail.


REGIONAL ECONOMIC EXPANSION
Mr. Maurice Foster (Algoma):: Mr. Speaker, my question is to the Minister of Regional Economic Expansion. In view of reports over the weekend in the press that the government has considered a reduction in the role of the Department of Regional Economic Expansion, can the minister assure the House there will be no reduction in the support and assistance by the government to expand and diversify the economy of slow growth areas of Canada?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, it is with pleasure that 1 thank the hon. member for giving me the opportunity to dispel the rumor that went around over the airwaves across Canada last weekend. Mr. Speaker, there is absolutely no question, and there will probably never be, of doing away with DREE because its role is much too important and if anything, people want it increased. I can therefore assure the hon. member that we shall also continue to look after the interests of his area.


ROYAL CANADIAN MOUNTED POLICE
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, my question is for the Solicitor General. In view of the fact that reports, allegedly from RCMP sources, indicate that the key operations branch of the RCMP have been carrying on surveillance over university groups, teachers' federations, legitimate political parties and trade unions, and finally that they have been securing without authorization confidential medical files for the purpose of using these files to disrupt what they consider to be radical organizations, I want to ask the minister if the confidentiality of medical files has been violated by any of the sections under his control. If so, what is the purpose of securing these medical files? Is it for the

purpose of blackmail? How can this possibly be used in any legitimate way by a democratic government?


Francis Fox: Mr. Speaker, I want to first point out that there is no systematic surveillance of groups, be they political parties, unions or any other group such as the hon. member has mentioned. There is, of course, surveillance of individuals who may constitute a security risk to the country. In the case of the medical files that have been referred to, preliminary investigations indicate that there was access obtained to medical files as a result of threats that had been made against prominent Canadians from time to time. In the pursuit of their duty to protect these Canadians, the security service did obtain some medical information. I am told there were no surreptitious means employed in obtaining that information. In any event, as is the case with all the other practices and procedures employed by the RCMP, they are being referred to the royal commission inquiry into the practices and procedures of the RCMP.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I am sure the House would be interested in knowing how these medical files were secured. If they were not secured surreptitiously, were they secured with the authorization of the health authorities of the province in which they were secured and were they secured with the knowledge and consent of the individuals concerned?


Francis Fox: Mr. Speaker, I would be very surprised if they were obtained with the knowledge and consent of the individuals concerned. If it is quite clear that a threat of violence has been made by an individual, I believe it is proper for the RCMP security service to check out the nature and possibility of that threat. In other cases the matter was indeed, if they were obtained, with the consent of the people who remitted the files to the RCMP. As I indicated before, this whole matter along with the other practices and procedures of the RCMP will be the subject of an in-depth examination by the royal commission which was set up by this government.


REASON FOR ALLEGED SURVEILLANCE OF TRADE UNION LEADERS
Thomas Clement (Tommy) Douglas: Mr. Speaker, I have never seen such a case of "there is nobody here but us chickens."


Some hon. Members:: Oh, oh!


Thomas Clement (Tommy) Douglas: Following the allegation that the intelligence unit of the Department of National Defence secured information by domestic surveillance and passed that information on to the security intelligence and analysis group under the minister's department, and this was disseminated to ministers of the Crown, I want to ask the minister about the statement which is quoted in this morning's paper with reference to the Minister of Labour who, when being informed of this alleged spying on trade unions, is quoted as having said "It doesn't surprise me. I do not think it

November 14, 1977

would surprise many union leaders that they have been under surveillance for some time." I want to ask the Solicitor General whether these many trade union leaders referred to by the Minister of Labour have been under surveillance for some time and, if so, why?


Francis Fox: Mr. Speaker, if the hon. member wants any "eclaircissement" as to what the Minister of Labour wanted to say, I think he should ask the Minister of Labour. Our position has always been quite clear. There is, of course, surveillance of individuals in this country who may constitute a threat to national security, but legitimate political parties or trade unions in this country are not the object of systematic surveillance. If the hon. member opposite believes you should set up a group of preferred Canadians such as those in trade unions and political parties who are not subject to any kind of surveillance even if they constitute a threat to national security, 1 do not believe that argument would stand.


Some hon. Members:: Hear, hear!


NATIONAL HEALTH
Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I have a question for the Minister of National Health and Welfare. It is in the public interest as well as in the interest of individual Canadians that their medical files be kept absolutely confidential. I interpreted the Solicitor General as saying that there was cooperation by the insurance plan authorities with the Security Service in providing these confidential documents to the Security Service. I would ask the Minister of National Health and Welfare whether this information was passed on by insurance plan authorities to the security services with her knowledge and consent. If it was not with her knowledge and consent-I realize she has not been in her portfolio for too long-was it with the knowledge and consent of her predecessor?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, 1 am just thinking of the expression "red herring" which describes exactly what the hon. member is now trying to do. Last week was spent making interpretations of interpretations. I think I am going to be forced to go back to Carleton University to give a conference to which 1 shall invite the hon. member.


Paul Yewchuk: 
PROPOSED CONSULTATION WITH PROVINCIAL AUTHORITIES TO ENSURE CONFIDENTIALITY OF MEDICAL FILES
Paul Yewchuk: A final supplementary question, Mr. Speaker. I am very much aware of the fact that medicare schemes are administered by the provinces. 1 am also aware of the fact that there is some federal participation and that the federal government has certain guidelines which the provinces must follow. I would ask the minister, on behalf of the people of Canada, to consult with the health ministers of each of the provinces to determine what security measures they take and to see whether they are adequate to ensure that confidential information on people's health is indeed kept confidential.


Monique Bégin: Mr. Speaker, I am prepared to ask my predecessor if the matter was raised during federal-provincial ministerial meetings and consider the relevancy of the suggestion.


ADMINISTRATION OF JUSTICE
John George Diefenbaker: Mr. Speaker, my question is directed to the Minister of Justice; I would not want him to feel that the Solicitor General has taken over the administration of justice. In the instructions which were given to counsel on behalf of the government in connection with the application or motion made by the Leader of the Opposition and other members of parliament, was it suggested that the Bill of Rights should not be permitted to be con-

November 14, 1977
Oral Questions
sidered, and that the Organization of Civil Liberties, which desired to present evidence and argument on behalf of the Bill of Rights in that case, should be denied that right?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I discussed our instructions with Mr. J. J. Robinette, who was acting for the Attorney General of Canada, and made it clear that there were two points with which we would agree with counsel for the applicants, namely that the regulation could not affect the privileges of members of the House in terms of debate here in the House-


John George Diefenbaker: That is not the question at all.


Stanley Ronald Basford: -and, secondly, that members had the right to consult counsel as to the legal effect of the regulations. It was also, however, our instruction that the validity of the regulation be upheld, and that the decision of Mr. Justice Robins in the Westinghouse case be argued in front of the more recent case.


John George Diefenbaker: A supplementary question, Mr. Speaker. That is an answer that answers nothing.


Some hon. Members:: Oh, oh!


John George Diefenbaker: I have been away for a few days, Mr. Speaker, and I watched the proceedings of this House on television. Across this country there is deep resentment at all the noise that goes on when questions are asked. I ask the minister whether or not, specifically or indirectly, counsel was advised to oppose representations being made by the Organization of Civil Liberties. That was the question I asked, and I asked it because, however difficult it may be for the minister to understand, this is the most damnable order in council ever passed in this country, denying individuals their rights, the minister saying that if members object we will hear what they have to say. 1 ask him specifically: Did he not realize that this order in council, which was brought about in secrecy and conceived in sin-


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order, please. The right hon. member has put his question to the minister.


John George Diefenbaker: I am not quite through, Mr. Speaker.


Mr. Speaker:: Order. The right hon. member has put his question. The Minister of Justice.


Stanley Ronald Basford: Mr. Speaker, I am not sure whether the right hon. gentleman had finished his question, but as I understand it it is: Were the regulations contrary to the Bill of Rights, and did counsel for the Attorney General so argue? The regulations are not contrary to the Bill of Rights, and counsel for the Attorney General argued that they are not contrary to the Bill of Rights both in the case before the Chief Justice of Ontario and in the case earlier in the spring before Mr. Justice Robins. Obviously, in passage of the regulations the procedures laid down in the Bill of Rights were followed and the regulations

were certified by officers of my department or the Privy Council office as being not contrary to the Bill of Rights.


John George Diefenbaker: A final supplementary question, Mr. Speaker. I should like to see the declaration of those officers regarding this order in council, which denies the rights of individuals and endeavours to bring about an agreement contrary to the law, and approved by the cabinet, an agreement which meant that a crime committed has to be covered up and concealed, as it was until subsequently revealed.


Stanley Ronald Basford: Mr. Speaker, as 1 made it clear in the House some time ago, the uranium information regulations were certified as being not contrary to the Bill of Rights.


POSSIBILITY OF PROGRAM TO CONSERVE NON-RENEWABLE ENERGY
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, 1 should like to put a question to the Minister of Energy, Mines and Resources. Does the government intend to carry out a project similar to the one in force for the insulation of Canadian homes to encourage Canadians to save non-renewable energy, a scheme recognizing the use of solar or wind energy to save oil supplies and money?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I am not sure whether I heard the first part of the question about using wind energy to supplement the home insulation program, but if the hon. member is concerned about renewable energy, let me tell him the federal government has taken the decision to increase very considerably our expenditures for renewable energy research and development.


SUGGESTION HOME INSULATION GRANTS NOT BE SUBJECT TO TAX
Mr. Walter Baker (Grenville-Carleton):: A supplementary question, Mr. Speaker, for the Minister of Energy, Mines and Resources. Has the minister considered that it is inadvisable to make the grants payable under the home insulation program taxable in the hands of the recipients, since this makes them less attractive and thereby impedes the program which the government announced some time ago? If he is considering it, would he advise the House whether he has held discussions with the Minister of Finance in order to change the authorization in respect of these grants so this very important program can go ahead on some reasonable basis?


Alastair William Gillespie: Mr. Speaker, we have not considered changing that to a non-taxable grant. Certainly, at the present time we
November 14, 1977

have been giving consideration to whether more information should be given to the public in respect of the program. There seems to be a good deal of misunderstanding, if not confusion in the minds of Ontarians in particular. This came up in a report over the weekend and indicated that many Ontarians believe that the federal government cancelled this most important program. What they were in fact confused about was their understanding of an announcement by the Ontario government which cancelled its particular program. The federal government's program has not been cancelled in any way.


HOME INSULATION PROGRAM-POSSIBILITY OF INCREASING FUNDING OF RESIDENTIAL REHABILITATION PROGRAM
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I would direct my question to the same minister. In view of the fact there have been so few applications approved under the home insulation program, would he not recognize that the program is not reaching those people who cannot afford any type of home repairs or rehabilitation in order to take advantage of the insulation program? Has he discussed with his colleague, the Minister of States for Urban Affairs, increasing the funding under the Residential Rehabilitation Assistance Program which would meet the requirements of those people who cannot now save in respect of fuel through insulation?


Alastair William Gillespie: Mr. Speaker, I believe the hon. member is confusing applications on the one hand with grants on the other. If he were to review the program he would see that the system set up under the Canadian home insulation program requires the individual to have put his insulation in place before he gets a grant for that expenditure. There have been something like 60,000 applications. There have been something in the order of just about 3,000 specific applications relating to insulation that has already been put in place. I would expect that will increase very considerably, because, as the hon. member might expect, there has been something of the order of a two-month lead time. You have to buy the insulation first before you can expect to get a cheque.


Jack Marshall: Mr. Speaker, I do not think the minister understands that there are people in a fixed income bracket who do not have proper walls, do not have proper windows or proper basements in their homes so that insulation would be of no benefit. Under RRAP, these conditions could be met and these people could obtain the full value of the insulation. Would the minister discuss with his colleague the introduction or the expansion of funding under RRAP, which is an excellent program, in order to provide help to those people who need this insulation, but who cannot afford it otherwise?


Alastair William Gillespie: Mr. Speaker, I am sure the hon. member understands that the Minister of State for Urban Affairs is fully aware of this particular option, and that this particular option has been used in the past.
Oral Questions MANPOWER


MEASURES TO AID THOSE UNEMPLOYED FOR MORE THAN THREE MONTHS
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, last Monday I asked the Minister of Employment and Immigration a question concerning his department and was accused of being fast and loose with figures and of spreading malicious and imprecise information.


An hon. Member:: That is true.


William Hillary (Bill) Clarke: However that may be, Mr. Speaker, I should like to ask the minister another serious question concerning his department. I hope he will try to answer it this time instead of giving us these statements.
With the failure of the government's economic policy to reduce unemployment, and with the growing number, now 36 per cent, of persons unemployed being out of work over three months, which would indicate that the number with expired benefits will be at record levels, what measures will the government be putting into place to provide relief for this disadvantaged group?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I did not know the hon. member was so sensitive to honest political criticism of some of the comments he made using words like "deficit" when he knew the word "deficit" was not applicable in that particular framework, Mr. Speaker.
I think it is incorrect to say we have failed in the creation of jobs. Since January, 1977, some 292,000 more Canadians are working than at the beginning of the year, and there are, 1 think, 116,000 who have received employment under Canada Works, to mention only two areas, Mr. Speaker, which indicates that some action has taken place. More has to be done and that is why we are looking at things like job experience training and the possibility of expanding that particular program as one of a series of programs.


William Hillary (Bill) Clarke: Mr. Speaker, I want to thank the minister for his non-answer again, because he completely ignores the plight of the people I mentioned, namely, those who have been unemployed for over three months and are in danger of losing their benefits. I should like to ask whether this is the beginning of the government's plan to transfer this burden to the provinces and avoid the federal government's responsibility?


Jack Sydney George (Bud) Cullen: Very definitely not, Mr. Speaker, and that is specifically one of the reasons I will be meeting with the ministers from the Atlantic provinces, to look into that particular program. When I indicated the jobs under Canada Works, I had in mind that it was those who are no longer able to draw unemployment insurance benefits who can take advantage of the Canada Works program and programs of that nature to help them with this particular problem. To suggest that nothing is being done, again is not exactly in accordance with the facts.

November 14, 1977
Oral Questions


ENVIRONMENTAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, in light of the news which appeared in the media to the effect that the Kitimat consortium has been revived in order to seek permission from the National Energy Board to pipeline Alaskan slope oil across Canadian territory to the United States, 1 should like to ask the Minister of State for the Environment whether steps are now being made to revive, in turn, after only three or four days demise, the Kitimat oil port inquiry which the minister seems to have contrived to have recessed last Wednesday?


Hon. Len Marchand (Minister of State (Environment)):: That is a hypothetical question, Mr. Speaker, I have no knowledge that there is to be a renewed application before the National Energy Board by the Kitimat oil consortium, and until a serious application is before the National Energy Board we will have nothing further to say about the Thompson inquiry.


Donald W. Munro: Mr. Speaker, we are obviously reading different newspapers. However, let us assume it to be a hypothetical question, and 1 do not believe it is on the basis of the information 1 have, why is the minister not taking advantage of this unscheduled opportunity to hold hearings in case there is a revival of the Kitimat consortium? There has been a great deal of dispute, as the minister knows, about the use of Kitimat as an oil off-loading port. This is an unusual opportunity. Why was the Kitimat oil port inquiry recessed at this unusual moment?


Len Marchand: Mr. Speaker, the inquiry was recessed at the request of Dr. Andrew Thompson on the basis of the fact that there was no application before the National Energy Board. That being the case, he had no serious basis on which to conduct the hearings he was holding, and when he made the request to us for adjournment we agreed with him.


Donald W. Munro: Mr. Speaker, again 1 suggest that the minister and I are not reading the same literature, because Dr. Thompson actually told me he could entertain representations about any oil port on the west coast. Therefore, 1 do not know where the minister is getting this idea. In fact, my information indicates to me that Dr. Thompson wanted to continue. Would the minister refer the whole question of this inquiry to the Standing Committee on Fisheries and Forestry which is empowered to study questions referring to the environment?


Len Marchand: Mr. Speaker, perhaps the hon. member should check with Dr. Thompson.


Donald W. Munro: I will.


Len Marchand: He should check about the meeting he had with us. I have no intention of referring this to the standing

committee on Fisheries and Forestry. 1 expect when the estimates are before the committee hon. members will want to ask appropriate questions at that time.


Donald W. Munro: We certainly will.


Len Marchand: Check your facts and you will find that Dr. Thompson made the request to us to postpone the hearings.


NATIONAL HARBOURS BOARD
Mr. Robert McCleave (Halifax-East Hants):: Mr. Speaker, would the Minister of Transport advise whether his department is now operating in respect of its personnel, and, indeed, in respect of all its activities, as though proposed Bill C-6 dealing with ports was an act of this parliament rather than being before the House very much in its embryonic stage and, if so, how can he justify his disregard for the present law of the land?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, no, the changes which will be required in the law cannot be acted upon until the legislation is in place. We are dealing with the interim situation to make sure that those who are employed in the National Harbours Board area have some certainty about what the future allows for them. Also, we are taking certain steps open to us under the administrative structure of the current legislation to do certain things in preparation for the future position. In those cases it is allowed under the current legislation and not predicting the effectiveness of the subsequent legislation.


ROYAL CANADIAN MOUNTED POLICE
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is addressed to the right hon. Prime Minister. He is reported to have said in Halifax that he agrees with the illegal RCMP tactics against terrorism, including the Quebec barn burning. Indeed, he is quoted as saying that he agrees entirely with a caller who said: "Let them tear down the barns". We have taken the trouble to check the accuracy of these reports, and we have every reason to believe they are accurate.
I ask the Prime Minister whether he thinks it is suitable for a person in his position, who should be the foremost upholder of law and order, to defend and perhaps even advocate illegal acts.


Pierre Elliott Trudeau: Mr. Speaker, I have made it clear in every public statement I have made that
November 14, 1977

the government does not condone any illegal act, and I have always said that the police and every other person in this country should act within the law.


Francis Andrew Brewin: Mr. Speaker, I do not think the Prime Minister denies that the burning down of barns, even if the people concerned had been in some way connected with terrorism, is an illegal act. How can he say he condones that, and at the same time say that he condemns illegal acts? The two are not consistent.


Pierre Elliott Trudeau: Mr. Speaker, this is a matter of being quoted by a third party.


Miss MacDonald:: It is on the tape.


Pierre Elliott Trudeau: I can tell the hon. member, after an interview I had in the studio of the Halifax radio station, that I was talking about an open line program which had taken place in Montreal. I said that I was informed that people there rather supported the police in this action. Whether it was illegal or not, they had the support of the people. That was the position which was reported to me, and I believe that was an accurate position.


PRIVILEGE
Mr. Speaker:: Order, please. On two outstanding matters I indicated to the House last week that I expected, in relation to the incident regarding the offices of the hon. Leader of the Opposition, to receive a report today from the Bell Canada people who were asked to examine this matter. I received that report this morning, but not in sufficient time to take action, that is to say, to discuss it with the hon. Leader of the Opposition. I hope that will take place later today; therefore, I should be in a position to report further to the House on that matter tomorrow.
The other matter which has been outstanding for some time is with respect to a question of privilege raised by the hon. member for Peace River. It concerns the question period of November 3, 1977, in which a question of privilege arose as a result of the following remarks by the right hon. Prime Minister:
They can stand in their places and challenge them, if they have the courage, but I would suggest the way to do it is not by hiring private detectives, as that party does, and not by having some phony bugs planted in their office, which is the way they do it.
That remark gave rise to a question of privilege. I heard arguments from both sides which related to a number of interpretations of what members can or are permitted to do, and not so very directly with what one particular member had done in this case. The precedents go back over many years. However, happily, there seem to me to be two rather helpful precedents which relate to our own experience in this very
Privilege-Mr. Baldwin
parliament. I will not refer to one specifically except to say that I am sure it will live well in the memories of hon. members. It concerns the question of privilege related to earlier remarks by the right hon. Prime Minister concerning the acquisition of land at Harrington Lake by the right hon. member for Prince Albert when he was prime minister. On that occasion I found there had been no allegation of illegality or wrongdoing with respect to the remarks at that time, and I therefore found that the matter did not come within the precedents of a remark which had to be withdrawn.
A more recent precedent came within our experience in March of 1976 when on March 18, 1976, the hon. member for York-Simcoe said the following:
"Do as I say, not as I do" appears to be the creed of the present administration. Surely, Mr. Speaker, this type of thinking is shown up so clearly in the judge's affair that is now before us. What administration at a senior level of government in Canada other than this administration would be allowing cabinet ministers who have acted illegally to carry on in their posts?
A question of privilege arose with respect to that. Argument was made whether or not that remark, in the context in which it was delivered, had an offensive or opprobrious quality to it such as to offend the practices and the rules of our House. In the context, under the format of the incidents which were before the House at that time, after argument that members ought to be entitled to hold opinions or voice opinions. It was my view, while those arguments expressed very well the theory-which I accepted completely-as to what members might or might not do and what they might or might not think, that it did not cover what in fact had taken place, and that was the expression of the statement that members opposite-and I stress the plural-in a group were condoning some sort of illegal act. The word "illegal" is significant there because it was central to the entire argument. The question was whether or not, by the use of the word "illegal", the hon. member for York-Simcoe had crossed the line on opprobrious remarks directed toward a group of members, and that was the decision made in those circumstances. I draw upon that because it seems to me the parallels are irresistible.
Later, on March 22, 1976,1 attempted to adjudicate on that problem. As reported at page 11999 of Hansard, I attempted to outline the considerations that ought to govern us in these circumstances by saying the following:
The basic rule of the House with respect to the procedure and practice in this regard can be found in citation 140 of Beauchesne's. It is probably familiar to all hon. members, and it reads as follows:
"The rule relating to personal reflections occurring in debate, may be stated thus, namely: that it is doubly disorderly for any member, in speaking, to digress from the question before the House, and to attack any other member, by means of opprobrious language, applied to his person and character, or to his conduct, either in general, or on some particular occasion, and tending to bring him into ridicule, contempt, or hatred, with his fellow-members, or to create ill blood in the House.
In addition, there is another precaution which the House has always observed. I would direct attention to Standing Order 35, again one which is no doubt familiar to all members and which, paraphrased, says basically that no member shall speak disrespectfully against any other member of the House. The rationale behind this, the practice which has grown up in this respect, has been set out in another citation of Beauchesne's, citation 136"-

November 14, 1977
Privilege-Mr. Baldwin
I will not belabour that citation before hon. members at this time. I give it to them simply for personal reference. My ruling at that time continued:
The House itself has developed a regime or practice which has grown up to protect members who feel themselves aggrieved by an allegation; it is a protection in the form of a challenge that the allegation either be substantiated, explained, qualified sufficiently or withdrawn.
The arguments which were made in defence at that time were similar to the ones made in defence on this particular occasion; that is, members are entitled to have certain opinions and to express them, whether or not evidence exists in support of them. In effect, that is exactly the privilege which members enjoy.
It seems to me that on that occasion the hon. member for York-Simcoe went beyond that practice by making a very direct statement that an illegal act had been committed by certain ministers and that the government in general was condoning that by keeping those ministers in their posts. The parallel here seems to be evident, because on this particular occasion the right hon. Prime Minister, both before and after the remarks complained of, had made argument in terms and in ways which were quite parliamentarily acceptable. That is to say, that it was his opinion without basis in comparison with opinions held by other members on suspicions about the events. That is quite acceptable and, indeed, to hold a point of view or express it, whether with or without evidence, once it is described in that way is the right of every member in debate.
However, the fact is that when that opinion expressed turns into a direct statement-as it did in the circumstances of the hon. member for York-Simcoe-that an illegality has occurred, it is on that precedent clear to me that it goes beyond the bounds of what is acceptable in a parliamentary sense or what is, in fact, in accordance with the precedents of opprobrious language directed as an accusation against a member or members of the House and ought to be either qualified or withdrawn. On this particular occasion, in the context in which it took place-which must be the necessary background in both cases, both this one and the precedent I have been citing so extensively-there can be no doubt that the remark referred to, reading the precedent back about half a page, referred in particular to members of this House who were members of Her Majesty's Loyal Opposition.
That takes out any ambiguity with respect to "they can stand in their places, but this is the way that they do it". There seems to be, in the context, no hope of any ambiguity with respect to a larger group than the persons who are here represented, any more than there was on the occasion of the allegation of the hon. member for York-Simcoe being directed against the government in general.
When the statement said, "not by having some phony bugs planted in their office, which is the way they do it", that seemed to me to transform it from an expression of opinion into an expression of statement that an illegality had in fact occurred because, as in both cases-in the previous one and in this one-it is an offence, by an act of this parliament recently

passed, either to have in possession or to use in any way the kind of device which was described by the hon. member for Central Nova and which was obviously the device that was being referred to here.
Therefore, comparing the two precedents, it would be in my opinion inconsistent for me to have held in the case of the previous member that he had offended the practices of this parliament and used opprobrious language against a group of members, and not to find the same thing with regard to what happened on November 3 when the Prime Minister made the remarks to which I have referred. Therefore, I say only one other thing, and that is that in all these cases the Chair is placed in great difficulty. It is always, I think, possible to search the precedents and find a technical ground upon which a decision could be based in difficult cases on either side of the question.
I confess that it is my disposition, in these circumstances, wherever the matter comes down to a serious doubt in my mind, to always, in the interest of protecting the dignity of parliament, exercise the benefit of that doubt in favour of asking the hon. member to withdraw any remarks that might, by a reasonable interpretation of the precedents, be offensive; because in doing so, rather than being relaxed about protecting the dignity of parliament, I am being diligent in that respect. Therefore, I say in conclusion that if I have any doubt-and certainly in this case, and all of them are difficult-in asking the Prime Minister either to qualify or withdraw his remarks, I am exercising that doubt in favour of the protection of the dignity of parliament.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, of course I accept your ruling. I think you have the difficult duty of maintaining order in this House. This particular ruling has obviously caused you some trouble in finding the proper course. I accept that you have judged in a proper way in this particular case, and to that extent I do take back what I believe you defined as the offensive words, that opposition members had themselves bugged. Perhaps Your Honour will not find it unparliamentary on my part when I say that our suspicion remains.


Some hon. Members:: Shame!


John Edward Broadbent: Never wrong!


Pierre Elliott Trudeau: That is why we asked Your Honour to conduct an investigation into the whole bugging operation, which still appears fishy to us.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: We await the results of your investigation, which concerns every member of this House, with great impatience. I want to make another point. In the future, general accusations of the kind I am guilty of will be seized upon by us on this side to raise questions of privilege.


Some hon. Members:: Hear, hear!
November 14, 1977


Pierre Elliott Trudeau: I will not go back to accusations of last week that this government interfered with the administration of justice, that we covered up, and so forth. These seem to me to be general accusations of illegality. But I want to raise a question of privilege with regard to something which was stated today by the right hon. member for Prince Albert.


Mr. Speaker:: Order, please. We had better take one at a time. The Prime Minister, it seems to me-as has been done on previous occasions-has indicated that that portion of his remarks which were made before and which I indicated were within parliamentary bounds, that is to say, the expression of any suspicions of a general nature, remains. That aspect of his remarks which contain an offensive or opprobrious quality, that is to say, a direct accusation against members of a particular party in this House, has now been withdrawn. That seems to me to close that matter. If there are other matters of privilege arising out of today's question period, 1 can hear them at this time.


MR. TRUDEAU-WORDS USED BY MR. DIEFENBAKER IN S.O. 43 MOTION
Pierre Elliott Trudeau: Mr. Speaker, I rise on question of privilege affecting all members of this House, and particularly the government, arising from words contained in a Standing Order 43 motion moved by the right hon. member for Prince Albert. I regret that he is not in the House-


An hon. Member:: He is here.


An hon. Member:: Put your glasses on.


Mr. Hees:: You are older than you think.


Pierre Elliott Trudeau: I was looking at the previous seating arrangement and I forgot that the right hon. gentleman has been promoted toward the leadership. However, the words Your Honour used in your ruling were that one could not accuse another party, another group, or the government of having committed an illegality. I believe the words "illegality" and "wrongdoing" were the words Your Honour used. They were the very words used by the right hon. gentleman in moving his motion today. He used the words "unlawful action and wrongdoing" with reference to the government.
1 submit that this affects the privileges of this House, because no illegality or wrongdoing has been proved. There have been some alleged. There are suspicions. Hon. members opposite are trying to find out. But there has been no proof of wrongdoing or illegality in this matter. Therefore, the right hon. gentleman is doing something which is clearly contrary to Your Honour's ruling when he says that this government is guilty of unlawful action and wrongdoing. Therefore, if Your Honour finds a prima facie case of privilege, I will be prepared to move a substantive motion.


Some hon. Members:: Hear, hear!
Privilege-Mr. Broadbent


Mr. Speaker:: Order, please. I am not unaware that the precedent to which I have referred and drawn upon so heavily in coming to the conclusion I came to earlier this day is one which may, in fact, give rise to a number of arguments about statements made by members of this House, and in fact hon. members are going to have to guard themselves carefully. In fact, what has taken place today-or, in fact, at any time with an application pursuant to Standing Order 43-is that a member asked the House for its unanimous consent to debate a particular motion, and that is quite different from an allegation or a statement.


Pierre Elliott Trudeau: If you move it, you believe it.


Mr. Speaker:: Hon. members will have to realize that a member seeks permission within the Standing Orders to put forward a motion for debate and discussion. It is not, in its basic nature, a statement but is in fact a motion which is proposed for debate. I express some concern about the contents of that and other motions, but the basic recognition that the Chair has to make in most cases pursuant to Standing Order 43 is that even if they do contain phrases which, if used as a statement, might be offensive to parliament, they are not in fact statements but are motions which are being put forward for debate.
In those circumstances the Chair is in a very difficult position to exercise any scrutiny in a parliamentary sense unless the motion itself seems to me to offend the provisions of the Standing Order or to go beyond the administrative jurisdiction or the responsibility of the House. I do not say that I fail to apply or recognize that there will be occasions upon which members will make accusations of dereliction of duty which may be entirely parliamentary. If they go beyond allegations of dereliction of duty and extend it to allegations of illegality, I will enforce the same precedent as I have today, whether it occurs on the left or on the right side of the House.


MR. BROADBENT-ALLEGED ILLEGAL ACTS OF RCMP- MINISTERIAL RESPONSIBILITY
John Edward Broadbent: Mr. Speaker, before I get on my question of privilege of which I gave Your Honour notice, I was glad to see that in accepting your ruling the Prime Minister lived up to his reputation of being a complete gentleman.
Mr. Speaker, my question of privilege pertains to certain statements made by ministers, including the Prime Minister, regarding the lack of a certain kind of required action by ministers which seriously impedes our ability, as members of this House of Commons, to do our job. Each of these arises from the ongoing issue of criminal wrongdoing and allegations of criminal wrongdoing involving the RCMP. The first pertains to the very important notion of ministerial responsibility, a notion as old as parliamentary democracy itself. In this instance I shall refer specifically to the Solicitor General.
The second aspect of my question of privilege-and fundamentally more serious, in my view-concerns the principle of

November 14, 1977
Privilege-Mr. Broadbent
the rule of law which goes to the heart of any democratic system whether parliamentary or not. Flagrant abuse of this principle undermines in a fundamental way our central reason for being elected to the House of Commons, namely, to pass laws which are to be obeyed by everyone.
First 1 shall deal with the question of ministerial responsibility and specifically as it pertains to a question of privilege. As most members of the House know, a minister is expected to be responsible to this House for the ongoing operations of his department. In case of flagrant wrongdoing in the past- whether here, in Great Britain or any other parliamentary system-where he is directly involved, his resignation has been expected and has been brought forward. In other cases, a minister must simply take prompt, corrective and, where required, punitive action.
I want to quote one of the most distinguished authorities outside the Government of Canada or outside the practices of the parliamentary system as seen in this country. I refer to Sir Ivor Jennings' book "Cabinet Government", pages 498-99, where, speaking of cabinet responsibility, he said:
The cabinet must leave to each minister a substantial discretion as to what matters he will bring before it. If he makes a mistake, then he must accept the personal responsibility. On the other hand, a minister cannot hide behind the error of a subordinate. Within a department there must be substantial delegation of power, but the most essential characteristic of the civil service is the responsibility of the minister for every act done in his department. In practice, the minister can hardly avoid saying that the mistake was that of a subordinate, but parliament censures the minister and not the subordinate.
That is at pages 498-99, the third edition of Jennings on "Cabinet Government."


Francis Fox: What year? What edition?


John Edward Broadbent: Mr. Speaker, 1 am impressed by this new interest in scholarly writing by the minister. It is the third edition. The minister seems concerned that Sir Ivor Jennings or others might have revised the argument in the way he has revised the practice. I want to switch immediately to a Canadian source. Following the minister's appropriate, if rather scholarly, concern, this is Dawson in "The Government of Canada" fourth edition. On the same issue, that of ministerial responsibility, he says, at page 190:
The members of cabinet are above everything else responsible to the House of Commons, not as individuals alone, but collectively as well. This responsibility has been the key to the control of the executive power in Canada as in Britain: the powers of the Crown have remained for the most part intact or have even been increased, but the exercise of those powers has come under the cabinet and this body in turn under the general scrutiny of parliament. This is the central fact of parliamentary democracy; for it is this practice which keeps the system both efficient and constantly amenable to popular control. The minister at the head of every department is responsible for everything that is done within that department-
On the same page there is a quotation from a former prime minister of Canada, Sir Robert Borden, with respect to ministerial responsibility. He said:
A minister of the Crown is responsible, under the system in Great Britain, for the minutest details of the administration in his department; he is politically responsible, but he does not know anything at all about them. When anything goes wrong in his department, he is responsible therefor to parliament; and if he comes to parliament and points out that he entrusted the duty to an official in 
the ordinary course and in good faith, that he had been selected for his capacity, and ability, and integrity, and the moment that man has gone wrong the minister had investigated the matter to the full and punished that man either by degradation or dismissal, he has done his duty to the public.
The point I want to underline is that when a minister discovers wrongdoing by anyone in his department, he has a responsibility to take immediate and corrective action. I could find a number of other sources in other works, but I will not belabour that point. The point 1 want to make now is to apply this concept to the recent behaviour of the Solicitor General. In so doing, I want to argue that he has clearly violated his most basic responsibility as a minister of the Crown, the result of which has been the continuance and appropriate preoccupation by members of parliament with criminal wrongdoing and allegations of wrongdoing by a variety of security services at the total expense, in terms of our time, of our capacity and responsibility to deal with other matters of pressing concern to the people of Canada.
I refer specifically, Mr. Speaker, to the statements made by the Solicitor General in this House last Wednesday and Thursday. On both days the minister discussed two categories of almost certain criminal wrongdoing by the RCMP about which he learned only last week. Both of these points are germane or central to the argument I want to make. Of "Operation Cathedral", that is, the illegal opening of mail, the minister said on November 10 in this House, in discussing the possibility of its being criminal, that it is "perhaps a more clear case than some of the others". That is, a more clear case of criminal wrongdoing. Being a lawyer, the minister knows-I am not, and I have a few other virtues as well-that he cannot come any closer to saying it was criminal wrongdoing than that. There has been no conviction. He went as far as he could in making that assertion.
In reference to "Operation 300" which had been specifically described in the news reports as by definition a kind of illegal activity, he said, "the allegations of course are substantially correct." That is to be found at page 784 of Hansard. We have, in the minister's own words, the judgment that these two kinds of activity by the RCMP are quite likely illegal in nature. That is very important. We also know, from what he said in the House on November 10 as well as earlier, that the Solicitor General had requested the RCMP to bring to the attention of Canadians that there have been possible illegalities. That is also to be found at page 784 of Hansard.
Mr. Speaker, the question of privilege on this matter is as follows: on June 17, in the House, the minister assured us that he was telling the House of all the illegal and prospective illegal acts of the RCMP. It turns out that last week-at least it turns out in terms of admitting to us last week-that he was clearly wrong on June 17. He had, therefore, misinformed the House of Commons-a very serious act on his part.
What did he do to correct the situation? What did he do to exercise his responsibility as a minister? According to all parliamentary practice of which I am aware, he should have taken corrective and punitive action immediately as far as the
November 14, 1977

officials responsible were concerned. The hon. member for Northumberland-Durham, in his questions today, was getting right to the root of an aspect of ministerial responsibility. He was trying to find out whether the minister, on his own initiative, had determined in his own department what level of official was responsible for misinforming him. Of course, we never did get an answer to that question.
The point 1 am making is that, having misinformed the House-at least on June 17, and I am sure, subsequent to that as well-he should have taken corrective action in his department. He should have come back to the House and said, "Yes, indeed, there is misinformation." We are assuming he did not lie to the House when he provided this information; it was presumably provided to him by others. His serious obligation as a Minister of the Crown was to have taken punitive and corrective action.
He should have been able to say to the House of Commons that "X" or "Y" individuals were responsible for misinforming him or not ensuring that he got the information he required as minister in order to exercise his responsibility. It was not done, and therefore that person was going to be subject to this kind of corrective action by him-dismissal, or what have you. He should have been able to say, "I, as minister, am now exercising control over this department." His failure to do so, Mr. Speaker, gives rise to my question of privilege as it pertains to its effect on the House.
It is more than two weeks ago since the hon. gentleman first got up in the House-two weeks ago Friday-and talked about the one new event, then, of criminal wrongdoing. We have been totally preoccupied in the House with allegations of criminal wrongdoing or actual instances of criminal wrongdoing by the RCMP. The responsibility for this, as members of the opposition parties have been saying day after day, does not rest primarily with the vast majority of members of the RCMP who are law-abiding; the responsibility lies on the other side of the House, with that minister.


An hon. Member:: Right on.


John Edward Broadbent: The minister's failure to take corrective action has entailed us day after day in having to deal with the mess in his own department, and therefore we are not able to exercise our functions in other-


Mr. Speaker:: Order. I am prepared to extend reasonable leniency to the development of any argument advanced by any hon. member, and I am prepared to hear the hon. member to determine whether or not there is some establishment of a question of privilege. But as for criticism that the conduct of a minister or, particularly, indication that any minister or any legislative program or any argument before the House which keeps the House occupied prevents it from doing other business, regardless of what can be said about the nature of that argument, one thing can certainly be said: it does not constitute a question of privilege.


John Edward Broadbent: I will leave that point and go on to another aspect of the question, leaving it to others, perhaps, to make
Privilege-Mr. Broadbent
the case that failure to accept responsibility, as practised in the Canadian Parliament and other parliaments where the system exists, has indeed resulted in our failure to perform our function as members of parliament, which entails an obligation to deal with other matters. 1 want to switch, now, to an even more basic consideration. Closely related to this sad affair of RCMP criminal wrongdoing or allegations of criminal wrongdoing is our responsibility as lawmakers and our related obligations to uphold the principle of the rule of law, which has been seriously impinged upon by a variety of ministers of the Crown, including the Prime Minister himself.
Last week and over the weekend the Solicitor General and the Minister of Justice each in his own irresponsible and rhetorical way have managed to convey to Canadians the idea that breaking the law is quite all right as long as you believe your purposes are worthy. This is precisely the perverse form of moral reasoning used by the very terrorist groups which the minister wants stamped out. These terrorist groups claim that their violence and illegal means are justified by the nobility of their final goal. That is the logic of a variety of arguments recently put forward by the Solicitor General, the Minister of Justice-ironically-and by the Prime Minister.
I say that a democracy which rejects illegal violence and terrorist groups cannot accept illegal terror in its police force. Nor can we respect a government which desires to convey to the public of Canada that a police force can do what it will as long as its objectives are good.
While the Solicitor General and the Minister of Justice have made statements which are disturbing, that made by the Prime Minister last Wednesday in Halifax is the most distressing of all. It was reported last Thursday morning that on Wednesday in Halifax the Prime Minister, when informed of a radio broadcast which was describing the current reaction in Quebec to information about the illegal burning of a barn-the information conveyed about the program was that the majority of the people who phoned in said they agreed with that act-the newscast I heard in my hotel room in Toronto was that the Prime Minister, when he was asked about that program, did not respond as he indicated he did today, but he said he agreed with that illegal act, and-


Mr. Speaker:: Order, please. The hon. member is criticizing the conduct of ministers. I do not want to short-circuit that course of conduct. However, he is doing so on the basis of a question of privilege.
The question of privilege is a very narrow vehicle, as we have seen many times in the past. It has very rigid limits. If I am to permit general criticism of the conduct of ministers under the guise of privilege, I am sure I shall be asked to hear five or six of them every day at three o'clock. I have to recognize the hon. member's right to the floor on a serious matter of which he has given me notice. But just last week argument was advanced, during the course of the question of privilege I have just dealt with, that the Prime Minister in his intervention was using quotations from remarks made by the hon. member for Central Nova outside the House.

November 14, 1977
Privilege-Mr. Broadbenl
The argument was very clear: one cannot attempt to substantiate a question of privilege on the basis of quotes hon. members have said or are reported to have said outside the House. I know that such an argument cannot be sustained in particular instances because the Prime Minister was not attempting to establish a question of privilege. He was attempting to defend one-and that is different-and his argument was relative. I am not saying it was relevant, but it was being used in a relative way to say: If an hon. member can do this, I can do that.
In this particular instance, the hon. member for Oshawa-Whitby is going on to say that the basis of his question of privilege is what the Prime Minister was quoted as saying in response to some other quote which was put to him on a radio program. It seems to me that if the hon. member does, in fact, have a question of privilege-which so far has not been demonstrated-it will have to be supported, first in principle, and second by some evidence other than quotes from a radio program in which the Prime Minister had been confronted with a quote of some other sort from a source outside the House.


John Edward Broadbent: Mr. Speaker, to conclude the argument on my question of privilege, I must say, of course, that I do not intend to challenge your ruling on this matter. If anything, there is ignorance of the rule on my part as it pertains to evidence permitted in the House about what kind of testimony is germane to an argument. It is certainly not my impression that if, for example, a minister or several ministers-says something outside the House which is clearly illegal, we could not use that in the House in an argument having to do with a question of privilege. I will leave that in passing, because I am not clear about your ruling in that regard. But I want to say this with all the certitude and conviction I can muster on the point. According to testimony subsequently confirmed to my office-


Stanley Ronald Basford: And denied in the House today.


John Edward Broadbent: -two reporters were present and heard the Prime Minister answer. Mr. James Nunn, who was in the gallery a few moments ago, asserted he was only a few feet away from the Prime Minister and heard the answer, that the Prime Minister agreed specifically with this illegal act.
The question of privilege I have is that ministers of the Crown, particularly the Prime Minister, in our system of government have a fundamental obligation to enforce what we are doing on a day to day basis here in the House of Commons, that is, to pass the laws of Canada. That is the fundamental purpose of our being elected. We have other purposes, other tasks, the ombudsman role-we can list them all- however, the basic purpose of members of the House of Commons is to take part in the legislative process; to take part in this direct way with the principle of the rule of law.
This concerns me very much. That is why I telephoned right away to have it confirmed that the Prime Minister, in his

cavalier and authoritarian way, should be able, outside the House of Commons, to say that breaking the law is quite all right. This is now the logic of the argument. The rest, I contend, on the basis of people who were there, is factual information. The logic of that is that people can do what they want as long as their purposes are worthy. That flatly contradicts what the House of Commons is all about.
We should not have a minister of the Crown, particularly the Prime Minister, going around the country vitiating the whole lawmaking process and calling into question the legitimacy of what we are doing. And that is exactly what he is doing; he is saying that on certain grounds the laws passed here in the House of Commons ought to be ignored by the people of Canada. My understanding of the obligation of the House of Commons, particularly the Prime Minister, is that it goes to the root of what we are all about in this system. If Your Honour rules that I have a prima facie case, I will move a motion that the question be referred to the Standing Committee on Privileges and Elections.


Stanley Ronald Basford: Mr. Speaker, I will be very brief. The leader of the New Democratic Party, quite clearly, has been rather unfair, with the greatest respect, in rising on a question of privilege relating to the rights of members of parliament. He has thereby, under that guise, been dragging into the House statements made outside the House, statements which were asked about and dealt with in the question period today, and then saying that somehow his privileges as a member of parliament are thereby affected. I take it his suggestion is that because someone is purported to have made statements that people are not governed by the law, his privileges and the privileges of this institution are affected. There is no basis for such a question of privilege.
The members of the government, the Prime Minister, the Solicitor General and myself, have repeatedly said within this House and without that the mandate provided to the security service and to the RCMP is that they operate within the law. That is the statement that is being made by all of us and other members of the government in and out of the House.
The leader of the New Democratic Party cited some examples. He did not cite very many. He mentioned my name and that of the Solicitor General. He mentioned something said by the Prime Minister in Halifax which was dealt with in question period today. The Prime Minister said there must obviously have been some confusion, and that he was commenting on some comment, third-hand, made in Montreal rather than Halifax. Because I think the raising of the question of privilege has been somewhat unfair, and because we have been dragged into it in the way the leader of the NDP has done, I want to put on record a very short statement of what I said on the weekend which apparently has disturbed the leader of the NDP and his privileges.


Some hon. Members:: Oh, oh!
November 14, 1977


Stanley Ronald Basford: I quote:
It is fundamental to the operation of the rule of law and the protection of our civil liberties that all people in a country, whether they hold public office or not, whether they be civilians or be policemen, that they operate under and within the law. And if there are any changes that are needed in the law to accomplish that first purpose of effective police protection of our society and of ourselves-if there are any changes in the law required, they should only be undertaken after the most careful and deliberate discussion and debate in parliament and they should only be undertaken after the most careful and deliberate designing of the proper safeguards and checks to assure that our individual liberties and freedoms are in fact protected.
That is the position of this government in and out of the House. That statement in no way affects the position of the privileges of this House or of the House itself. Surely, it is a statement of faith in the rule of law and a statement of faith in this institution to write the law properly.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. The hon. member for Oshawa-Whitby gave me notice of a question of privilege. 1 indicated to him earlier in his remarks that 1 had some very serious doubts as to his ability to relate the remarks he was beginning with to the classic definition of privilege upon which we have operated in this House for many, many years. As the hon. member went on, he endeavoured to develop that some failure to respect the political science precepts with regard to responsible cabinet parliamentary government related to a question of privilege because it kept members otherwise occupied for several days when their attention could be on other matters.
That has no resemblance to the question of privilege within the definition as we know it. It is not an argument that has ever been held to be valid. To do so, surely, would be to call into a question of privilege every debate that takes place extensively on any piece of legislation that keeps the attention of the House on one matter obviously to the exclusion of other matters. To accept that argument would be to destroy that very basis of operation of this House.
The second argument put forward by the hon. member for Oshawa-Whitby related to some alleged statements made outside the House by the right hon. Prime Minister. He indicated that if his statements were properly quoted, his disrespect for the law thereby undermined the very operation of the House and therefore affected the privileges of members of the House. I will not go on to determine whether there is any merit, in theory, in that respect.
The counter-argument put forward by the Minister of Justice seems to be substantiated-in my memory, in any case- in that when the Prime Minister was questioned today about this incident he reaffirmed, on every occasion that he could, respect for the rule of law. These are the difficulties we face in attempting to use this kind of evidence. The Prime Minister indicated that what had been put to him on the radio program was a quote by someone else which he agreed with as an assessment of the accuracy of current opinion but not as the accuracy of his position. How do I know that from the indirect way it has been put forward here today? I say that is simply
Privilege-Mr. Cafik
the danger of attempting to establish privilege on the basis of something that members do outside the House.
I want to clarify the ruling. It does not indicate that actions or words by members outside this House are not the subject of consideration in respect of privilege on certain occasions. I only say that as an indication of the difficulty which we face if we are attempting to establish something of this important nature on the basis of indirect evidence. In any case, on neither ground do I recognize an argument in principle.


MR. WALTER BAKER-JUDGMENT OF SUPREME COURT OF ONTARIO RESPECTING PRIVILEGES OF MEMBERS
Walter David Baker: Mr. Speaker, I rise on a question of privilege. It is very short. It is really to reserve a question of privilege. It arises out of the judgment of Mr. Justice Evans of the Supreme Court of Ontario. Quite frankly, we have not yet had an opportunity to see the reasons for judgment in the case and how the judgment of His Lordship might affect the privileges of members of the House with respect to public comment and the things that flow therefrom. I wonder if I might for the moment reserve the right to peruse the judgment and perhaps raise a question of privilege with Your Honour at some other time.


Stanley Ronald Basford: Mr. Speaker, 1 would agree with the House leader of the opposition because we, too, have not had a chance to review the judgment in any detail. Very careful perusal is required before there are any questions of privilege in connection with it.


Mr. Speaker:: 1 always accept without hesitation the action by any member to reserve the right about any question of privilege in this way; that is to say, simply to avoid being disqualified on the basis of raising the matter at the earliest possible time. However, I do recognize that it has been raised and needs further examination.


MR. CAFIK-PRESS REPORTS ON ALLEGED ILLEGAL ACTIVITIES BY RCMP
Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: Mr. Speaker, 1 rise on a question of privilege. During the weekend I was in Vancouver, Thunder Bay and Windsor, and during the course of speaking engagements made some comments relating to the RCMP affair, if I may use that term. I note from press reports covering some of my comments that it is quite possible for members of the House to be misled or even to feel aggrieved. There is one particular headline in the Toronto Daily Star on the 13th of this month which reads: "Mounties are Right to Break the Law, Norm Cafik says".
I raise this question of privilege because, first of all, this is a very misleading headline. I always made clear in my speeches, not only this weekend but prior thereto, that in fact no authority ought really to violate the law, and certainly no police authority. However, having stated that, 1 made one other point which I think is self-evident, namely, that there is

November 14, 1977
Privilege-Mr. Cafik
also a rule of reason as well as a rule of law. When the law prohibits someone from doing something that they must do for the protection of themselves, their property, their family, their loved ones, or whatever, the rule of reason has to come into play. In this particular case-and I am not talking about the RCMP but about the illustration I gave-if someone had a loved one whose life was in danger and he was impeded from doing something by the law in order to save that life, the rule of reason would have to come into play and the courts would understand this on a consistent basis.


Mr. Speaker:: Order, please. I have respected many times in the past the right of any member who has been seriously aggrieved by any kind of journalistic mistreatment to raise the matter by way of privilege in the House and to put some explanation on the record. However, I think we have to be very careful not to extend this practice unduly. I respect the right of the hon. member if he has been misquoted. On several occasions in the past, the Chair has given members who feel they have been misquoted by the press an opportunity to set the record straight, particularly if there might be some misleading of the House, some grievance or contempt of the House contained therein. I think the deputy House leader ought to put the matter on the record, but it should be very limited.


Norman Augustine Cafik: Mr. Speaker, 1 rose, not to correct the press-I have given up on that a long time ago-but as a result of the question of privilege raised earlier by the hon. member for Oshawa-Whitby. Had it not been for that, I would not have raised the question. But I do not want it put on the record publicly or in the House of Commons that I in any way indicated that the RCMP really ought to be above the law. That is not my position and never has been my position. In light of the comments made by the hon. member for Oshawa-Whitby, I simply wanted the record to show that.


Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, may I make a brief comment with respect to the matter raised by the deputy House leader on the government side. While he may be aggrieved by what is written about him, the fact of the matter is that the Minister of Justice, for example, has been widely quoted over the course of the last weekend as well as being of similar sentiment to that of the deputy House leader. In fact, I suppose it might be said he was quoted as taking a position similar to that of the Prime Minister, in which there seems to be an implicit tolerance toward lawbreaking on the part of some police authorities whether federal or otherwise. While the deputy House leader wants to bring to the attention of the House the fact that he does not hold that point of view, the reasonable interpretation can be put on the statements made by the Prime Minister, the Solicitor General and the Minister of Justice that this will in fact be tolerated by the government.
I would simply bring to the attention of Your Honour, and put on the record of the House, a statement made by the Minister of Justice who took that position in February of this year. I am curious to know whether he will maintain that position. He said in this House-


Mr. Speaker:: Order. Is the hon. member for Saskatoon-Biggar referring the Minister of Justice to a quotation made in February of this year?


Ramon John Hnatyshyn: I am simply pointing out that the Minister of Justice has made a number of speeches in which he made certain statements and allegations respecting police forces being able to break the law. I want to point out to Your Honour that there has been a change in the attitude of this government to this issue, made more obvious by statements made in the House, as opposed to statements appearing in the press as alleged by the deputy House leader.
At an earlier time in this House, when protection of privilege was more appropriately brought to your attention rather than through press reports, the Minister of Justice indicated that he had great concern over the extent of the powers held by investigative agencies, and that he would look into ways in which these powers should be brought under control by legislation. I simply want the deputy House leader to know, in the course of his point of privilege, that his position in this House as enunciated is diametrically opposed to that taken by the Minister of Justice.


Mr. Speaker:: Order, please. This is the difficulty we face whenever we attempt to stretch the rules of the House to fit a situation they were never intended to fit. The question of privilege raised here today was a very interesting, substantive argument for a motion which can be put before the House in several ways. However, no part of it at any time had any real connection to the question of privilege. Once we extend any one of our procedures to accommodate an argument that seems to lie at the periphery of these procedures, we invite just what is happening now-namely, one member commenting on what a previous member has said. In my opinion, the matter has been contributed to equally by members on both sides of the House. It does not in any way constitute a question of privilege, and the matter should stop right here.


Stanley Ronald Basford: Mr. Speaker, having been dragged into the last question of privilege, I think I should be allowed to indicate that I agree with the Chair. I am just grateful to the opposition for indicating that we on this side have had a successful and active weekend.


Mr. Speaker:: The hon. member for Victoria on a point of order.


Allan Bruce McKinnon: Mr. Speaker, I wish to raise a point of order which concerns the Minister of Finance. Since he is not in the chamber at this time, I will raise it later.


Mr. Speaker:: Order. The hon. member for Nanaimo-Cowi-chan-The Islands on a point of order.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I rise on a point of order arising out of the question of privilege introduced by the deputy House leader. Under the guise of correcting a statement which appeared in the press,
November 14, 1977

the deputy Elouse leader has taken the occasion to advance a whole theory of law in this country which seems to me to be completely out of order. While claiming to correct a headline in the paper, Mr. Speaker, the deputy House leader went on to say that the rule of reason should override the rule of law. Surely that is a new concept in this country.
All I want to say is that that is exactly the argument which has been advanced by every government which wanted to erode human liberty in the name of protecting human liberty. This is exactly what Richard Nixon said and, long before him, what Adolf Hitler said. 1 think this sort of intervention under the guise of a question of privilege ought not to be permitted.


Mr. Speaker:: Order. In the case of two questions of privilege raised this afternoon, the Chair exercised greater leniency than perhaps it should, and this was not all in respect of the matters which were referred to. However, perhaps the experience this afternoon is an indication that the Chair will have to take a much harder line on questions of privilege in the future.



ROUTINE PROCEEDINGS


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, pursuant to subsection 17(2) of the Anti-Inflation Act, I wish to table, in both official languages, copies of a report sent to the minister by the Anti-Inflation Board.
[ Translation]


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. 174, 175, 183, 212 and 266 will be answered today. I ask, Mr. Speaker, that the other questions be allowed to stand.


Mr. Speaker:: Are the other questions allowed to stand?


Some hon. Members:: Agreed.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Anti-Dumping Tribunal and how many are retired public servants?
Order Paper Questions
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: 1. Nil.
2. Non-applicable.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Army Benevolent Fund and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Daniel Joseph MacDonald: The Army Benevolent Fund Board has reported to me as follows: 1. None.
2. None.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Canada Labour Relations Board and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Hon. John C. Munro (Minister of Labour):: 1. Currently the Board has one person under contract and that person is a retired public servant.
2. Total amount paid to persons under contract: (a) 1975/ 76, $1,315; (b) 1976/77, $1,509. Amount paid to retired public servants: (a) 1975/76, $1,315; (b) 1976/77, $490.


Mr. McKenzie: 1.	What is the total number of persons under contract to the Defence Research Board and how many are retired public servants?
2.	What was the total amount in (a) 1975 (b) 1976 paid to those under contract and how much of this was to retired public servants?


Barnett Jerome Danson: 1.
Nil.
2. Not applicable.


Mr. McKenzie: 1. Has the Army Benevolent Fund obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?

November 14, 1977
Income Tax
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Army Benevolent Fund in (i) 1975 (ii) 1976?


Daniel Joseph MacDonald: The Army Benevolent Fund Board has advised me as follows: 1. (a) 1975, None; 1976, One part-time employee in Ontario, (b) None.
2.	Paid out of general Fund as per authority ABF Act 1947, Sec. 8(2).
3.	(a) Ontario only, $6.40 per hour; (b) Not available; (c) 1975, Nil. 1976, $636.80.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Perhaps I should indicate to the House that, pursuant to our revised practices, at two o'clock this afternoon the matters to be raised pursuant to Standing Order 40 are as follows: the hon. member for Saskatoon-Biggar (Mr. Hnaty-shyn)-Post Office- Request for assurance surveillance of mail not permitted; the hon. member for Halifax-East Hants (Mr. McCleave)-External Affairs-Measures to aid employees affected by change in value of Canadian dollar; the hon. member for York-Simcoe (Mr. Stevens)-Finance- Request for estimate of level of unemployment next year.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Thursday, November 10, consideration of the motion of Mr. Chretien 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 second time and referred to committee of the whole.
William Hillary (Bill) Clarke: Mr. Speaker, when the debate was adjourned last Thursday I was in the midst of saying something about the policies the government introduced in this bill dealing with life insurance policies owned by Canadians. I believe it to be worth while to repeat the inconsistencies in this proposal, particularly those which state that some loan interest shall be deductible but not interest on a loan before a certain date. In other words, the government is saying

that the general rule of income tax which states that interest paid out on loans obtained for the purpose of earning income is deductible, is not in effect in respect of interest on loans on life insurance policies.
The reason for this, given by the former minister of finance, is that some loans are repayable and some are not. The minister seems to have come up with the equation that if you borrow from a bank, the loan must be repaid; but if you borrow from your life insurance company by way of a loan on your policy, that is not a repayable loan- ignoring the fact, of course, that the insurance company will certainly collect the loan at some time or another, even if it waits until the borrower dies. After all, insurance companies have a responsibility to their policyholders and their shareholders.
In addition, all loans on policies are deemed to give rise to a capital gain, so we have another inconsistency because the government now says, as a final concession, that when you die, it should not reach into the grave and take money away from your family: there is no application of the capital gains tax. However, if there is a cashing-in of a very small policy, or if a loan is taken out on a policy, this gives rise to capital gains tax.
I just wanted to repeat those inconsistencies as I was in the midst of dealing with them on Thursday.
Let me point out the final anomalies of these provisions. Anyone who now wishes to borrow on his life insurance and has a built-in rate of 6 per cent or 8 per cent-whatever it happens to be-will find that he has to take his equity in that life insurance policy to the bank or other lending institution and will end up paying in excess of 10 per cent or 11 per cent, probably about 14 per cent, in interest. That should not be too surprising to us because we have seen an example of this in other policies of this government where by some magic it thinks that even though the inflation rate is growing at 8 per cent and plus, the wages and dividends of shareholders, including the dividends of retired people who rely on that kind of income as a major source, is keeping pace when in fact it is sometimes under 6 per cent. Everyone knows that inflation is taking place at the rate of 8 per cent or plus, and the average individual cannot get along with a 6 per cent increase in income.
I think this situation is not surprising, for another reason. We have heard the distortions made in the current debate, and I think particularly of the Minister of Industry, Trade and Commerce (Mr. Horner) who in his speech was critical of those on this side. Although statements to the contrary have been made, the minister criticized hon. members on this side for riding to power on the backs of the RCMP. I think that was the way he put it. We have seen other ministers in the country, being quoted and misquoted as a result of statements, taking that same point of view. I suggest that the people will not be fooled very much longer. They will understand that the policies this government is instigating will not work, and I suggest that this government and this kind of policy will no longer be tolerated.


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, on October 20 my colleague, the Minister of
November 14, 1977

Finance (Mr. Chretien), reiterated to members of the House the steps announced in the budget of March 31 and also described certain subsequent measures the government intended to take vis-a-vis the economy. He referred to-and indeed there has been in recent years-the considerable public attention and discussion devoted to questions of government expenditures and their relationship to the economy. Since this, as the House knows, is precisely the area of my particular responsibilities, I thought 1 would take the opportunity to share with hon. members some of my thinking on the matter.
In late 1975, the government adopted a very clear policy of expenditure restraint. The policy is that over time federal expenditures will grow in line with-will not exceed-the trend of growth in the gross national product. In effect, this means that, depending upon the response the government deems necessary to deal with particular prevailing economic circumstances, government spending may grow at a rate somewhat less or somewhat greater than the g.n.p. in any given year, but growth trends of federal spending and g.n.p. over any period of time will remain similar.
Since that policy was adopted, each year we have set an expenditure ceiling and growth target very close to the forecast of the growth in gross national product. In 1976-77, the first full fiscal year in which that policy was in effect, the forecast gross national product growth was 13.4 per cent and we set a spending growth ceiling of 14 per cent. We managed to hold actual final expenditure growth that year to only 10 per cent, well below the forecasted g.n.p. growth and the expenditure ceiling. In dollar terms, we said for that year we would contain spending to $42.15 billion. We completed the year at $41.1 billion, which was over $1 billion less than our commitment, a fact that went by relatively unnoticed by most members, and certainly by the media.
At the beginning of the current fiscal year, 1977-78, the g.n.p. growth rate was forecast to be about 11 per cent. Accordingly, we set our expenditure growth rate ceiling at the same figure. Subsequently-March 31, to be precise-we reduced the target to make room for some tax cuts which were committed in the March 31 budget. There have been changing economic circumstances since which have led to very large new demands for funds. I am referring to such things as transfers to the provinces for medicare, for hospital services, hospital insurance, post-secondary education; all under the formula dictated by the established programs financing act which, as hon. members will recall, was renegotiated last fall.
We have had some very heavy demands to meet our commitments in that regard. In spite of such very large and, in some cases, unforeseen requirements, the government is still confident that it can hold total spending growth in 1977-78 to about 8.2 per cent. We expect to hold to our committed ceiling, that ceiling committed last March for this fiscal year, of $44.45 million. Taking inflation into account, that will represent an almost zero real growth in expenditures for this fiscal year 1977-78.
Income Tax
At the same time that the government has been taking steps to try to bring our expenditures into line, we have been taking steps to severely restrain expansion of the public service. For the 1976-77 fiscal year, the total growth of authorized man-years within the public service, subject to control by Treasury Board, was held to 1.3 per cent, which was considerably less than the growth rate experienced in prior years. For the fiscal year 1977-78 the growth rate has been reduced to only .6 per cent, or six-tenths of one per cent. In order to maintain such low growth levels in light of many new and important government initiatives requiring new or more staff, thousands of man-years had to be reallocated from other programs.
Two consecutive years of low growth in the public service have resulted in some strains. I firmly believe it is still possible, and certainly still necessary, to accommodate new demands by drawing man-years from other areas which have a lower priority. Therefore, we intend to continue this program of constraint of growth in the federal public service.
Back in 1967, the federal government's total outlays, including transfers to other levels of government, amounted to 16.3 per cent of our gross national product. In 1976 this was slightly more than 20 per cent. Our total expenditure as a federal government was slightly more than 20 per cent of the g.n.p. Ten years ago, the purchase of goods and services, including the salaries of public servants and the cost of materials and supplies-the cost of running the government, as it were-plus the government's capital expenditures, plus the servicing of the public debt, accounted for approximately 50 per cent of our total federal government outlays. In 1976, the comparable figure for the same purposes was only 40 per cent of much greater potential outlays.
The point I am trying to make here is: the cost of running the federal government, including the cost of defence, external affairs, tax collections, the delivery of the various social programs, the operation of the criminal justice system, consumer protection, the servicing of the public debt, and so on, has stayed almost unchanged relative to the capacity of the economy. Moreover, the proportion of spending by the federal government for its own salaries and offices is less than ten years ago. The remaining outlays, which consist of transfers to provincial and local governments and transfers to persons and other subsidies, accounted for about half of the total government outlays in 1967 and grew to approximately 60 per cent of the total outlays in 1976.
The really large growth in federal spending has taken place in those programs which are redistributing income through transfer payments by the federal government, either directly to individuals or indirectly to them through the provincial governments. The policy of the government, and the practice it has worked out, has been to reduce spending for its own operations while simultaneously meeting its commitments to the aged, the unemployed, the sick and the less advantaged regions of the country. We have maintained that policy despite the increasing gap between rising indexed expenditures and much slower growing tax revenues that are indexed to protect taxpayers to some degree against inflation.

November 14, 1977
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I should like to illustrate the immense impact such programs have had on the growth pattern of federal spending over the past several years. For example, I should like to place before the Elouse three functional areas which have accounted for over 60 per cent of the increases in spending in the last seven years. Between fiscal year 1970-71 and the fiscal year we will complete on March 31, 1978, roughly 33 per cent of the total increase in government spending has come from health and welfare functions of the government. I want to stress that encompasses more than the programs administered by the Department of National Health and Welfare and includes programs for our native people, the Indians, the Eskimos, as well as some urban programs. That objective absorbed approximately one-third, or 33 per cent, of the increase during that time. About 13.5 per cent of the increase over those years has come from the increased cost of the servicing of the public debt.
Economic development and support programs through the Department of Agriculture, the Department of Fisheries and the Environment, the Department of Energy, Mines and Resources, the Department of Industry, Trade and Commerce and DREE accounted for some 12.5 per cent of our increase in spending.
When you consider that there are literally hundreds of programs competing for very limited resources, several things, in my opinion, become very clear. First, the government has apportioned the largest single amount of new resources over recent years to those programs which benefit the individual. Second, the cost of meeting many of our programs has been greater than the growth rate of government revenues. As a result, the government has had to borrow relatively large sums of money and consequently apportion more of its annual income to interest payments.
Third, the growth of investment in economic development, while it is significant, is as low as we can go if we want to maintain a competitive position and play the part of an advanced industrial nation, and if we want to live like citizens of a major world economic power which befits the sixth largest economy in the western world.
To find the course of action of government expenditures, which simultaneously funds the established social requirements and meets the complex economic needs, is not an easy task. First, we must reassess each and every program expenditure to determine how effectively it meets its objective. Second, we must ask ourselves quite candidly if the objective still has a high enough relative priority to justify the resources we have allocated to it. In each of the past few years, such reviews have been undertaken.
Many projects have been modified or cut back. Some have been eliminated to free resources to meet greater needs. Within the area of my own responsibilities, the officials of the Treasury Board secretariat have aided and advised the departments on what is, admittedly, a very difficult exercise; but I will say that without the co-operation of my cabinet colleagues

and their deputy heads, this restraint would still not have been possible. They are recognizing the need to re-examine programs and to take the steps necessary to ensure that expenditures, both in quantity and in purpose, are only those which will best serve the needs of the country over the next few years. That re-examination of programs and that evaluation of policies is a continuing requirement.
There are not, and there never will be, enough resources to meet all the demands, even legitimate, meritorious demands, even in this still rich and affluent country. We simply have to balance the continuing needs of all sectors of our society with the achievement of stable economic growth very carefully, because in the final analysis our ability to bear the costs of all our programs is dependent upon our economic health.
One way to achieve this balance-and I presume this will be a subject of stimulating debate over the next month and year-would be to fine-tune the delivery of programs in order to channel income redistribution more precisely to those in need and to ensure that redistribution does not conflict with the objective of increasing the productivity and output of the nation. Indeed, an expenditure pattern and a growth rate which is sustainable, while meeting the needs of the country and all its people, has to be chosen. In my view, this means that we must always seek to rationalize existing programs which are directed to target populations-the sick, the aged, the unemployed and the needy-to ensure that within the limited resources available the most important needs are adequately being met.
I have no illusions that the actions I am proposing for the future will be simple. I think we are all aware that the programs responsible for the largest government expenditure growth are those which affect individual Canadians in the most direct and obvious manner, and everyone is naturally reluctant to support reductions in programs from which he or she benefits directly, no matter how justifiable such reductions may be. Obviously, most of these same programs will require discussion and legislative amendments over the years before any expenditure savings can be realized. With our present pattern of spending-brought about by legislated statutory programs, contractual arrangements with the provinces and other firm commitments-there is a minimum of discretionary room for the government to meet the changing social and economic needs of the country.
The future requirements of the economy in the fields of energy, transportation, primary industry and many other sectors may require the assistance and co-operation of the government and the private sector. Indeed, I do not think those potentially large expenditures by the government in these areas can be met by simply increasing the rate of growth of federal government expenditures, unless we are prepared to accept a burden of taxation which I think would be intolerable. Among other things, for the government to respond in the future to anticipated changes in the national and international scene without unacceptable levels of spending, we are obviously going to require much more flexibility in our spending patterns than we now have.
November 14, 1977

We have been working hard reviewing spending patterns, particularly over the last two or three years. Much more remains to be done, and when more specific approaches have been developed I look forward to the co-operation of the House of Commons in dealing wisely with them in the future.
Before concluding my remarks I would like to turn for a few minutes to the broader aspects of our economic condition in Canada. I suppose one would be blind and unrealistic not to recognize that most of the world today is facing economic stress and tension. There have been incredibly dramatic shifts in real wealth between the different parts of this world.
I suppose the single, most significant example is that of energy cost increases. We are seeing the developing nations seeking their rightful share of the world's riches, becoming industrialized, competing at, for the moment, much lower wages, wage costs and other costs; and with increasing productivity. They are becoming a new factor in the competitive world. Canada has not-nor could we ever have-escaped this competition, particularly since we are such a high-volume trading nation with regard to both exports and imports.
For most of this century, particularly since World War II, Canada and its people have had an ever-onward and ever-upward gain in wealth and in material standards. That progress, although somewhat slower, continues today. Yes, we do have real problems. We share most of them with the rest of the world, but a few are particular and peculiar to this country. However, by almost every economic, social and political indicator in comparison to almost every other country in the world we are still the most favoured today and for the future.
Our unemployment rate is far too high. We worry about that, and we must respond wisely. But our employment growth rate-the other side of that coin-remains one of the highest in the world. Our over-all economic growth has slowed, but the forecast g.n.p. growth this year of 2 per cent or 3 per cent will still put us amongst the top performances in the world on that score. Our g.n.p. per capita-$8,090 U.S. per person-exceeds that of the United States, Japan, West Germany, France, Britain or Italy. As a country, we list thirty-first in the size of our population, but we have the world's sixth largest economy. While our inflation rate is still too high, it is lower than that of most industrialized countries.
I could go on documenting our better performance. My purpose is not to obscure or to patch over our weaknesses, but to present to Canadians a better balance and therefore to justify, in my view, a more optimistic and confident picture. It seems to me that that is what is needed in this country.


Some hon. Members:: Hear, hear!


Robert Knight Andras: We need a balanced view of where we are, because I am afraid we Canadians have a great tendency toward introspection. Our media certainly seem to dwell and live on negatives. They pour the gloom upon us in a veritable flood. Our unemployment increase is on page 1 of the newspapers or on the 11 o'clock news. On the other hand, if our
Income Tax
employment growth is mentioned at all, it is mentioned on page 89 or on some obscure broadcast.
We have some particular and peculiar Canadian problems, some not shared by others, affecting our ability to overcome employment and combat inflation. We have the very serious and worrisome situation vis-a-vis Quebec, unquestionably affecting not only the economy of that province but of the whole country. We have the continuing problem of our apparent inability as a nation to reconcile any reasonable co-operation for the good of all, the relations between our labour force and management which result in serious and growing productivity and cost problems. We have a vast and diverse country with additional built-in costs in some areas, making for great variance in economic opportunity. These are some of the particular challenges we face. But if we compare our situation today with most of the rest of the world, I think probably the government of almost every other nation would gladly change places with us, even under the economic stresses and strains we think we have.
We cannot patch over our weaknesses, but let us make a constructive beginning in this House of Commons. If we do not, we will psyche ourselves into far more difficulty than the real situation warrants. We must work together on our weaknesses. Certainly, we cannot go around with three solitudes- government, business and labour-each blaming the other. We, as a government, have to accept our responsibility. I am prepared to say that we have made some errors. I think governments of this country over the last several years have allowed their expenditures to grow too rapidly and too much. We are trying to reverse that. I think it is fair to say that the provinces are trying to reverse that as well. We are trying to find some constructive ways to direct the scarce resources that even this country can generate.
I believe that labour and business have to pull up their socks. We have to do our job in a co-operative fashion. Productivity is a great worry. The cost per hour in manufacturing and some export activities is too high compared with that of our neighbours and competitors. There is no use waving a magic wand, carrying banners or creating slogans: there is only one way to change, and that is for government, labour and business to face economic reality.
Let us not psyche ourselves into depression attitudes. Let us not psyche ourselves into a situation not warranted by the facts. Let us start thinking positively. I suggest the best place to begin is right here in this House of Commons, Mr. Speaker.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, the debate today is fairly wide-ranging. Even the Minister of Finance (Mr. Chretien) called it a mini-budget debate on several occasions. I should like to outline what I see as some of the problems with the mini-budget. In many ways it has been a reintroduction of measures brought down on March 31 by the hon. member for Rosedale (Mr. Macdonald), the former minister of finance. His was a very conservative budget and tended to follow the "trickle down" theory, as we call it: you
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prime the pump and hope some of the stimulation at the top will help people at the bottom.
Mr. Speaker, we do not believe that is the best way to stimulate the economy. This view was endorsed by many people. On April 1, 1977, Geoff Stevens, writing in the Globe and Mail, said it was no mean feat that the then minister of finance had managed to out-Tory the Tories. Perhaps that is how he got the hon. member for Crowfoot (Mr. Horner) to join the Liberal party shortly after that budget.
The president of Shell Oil, William Daniel, said that it is a business-oriented budget, and Sam Hughes, executive director of the Canadian Chamber of Commerce, said they were grinning from ear to ear. A wide section of Canadians in the business community seem to think that the budget presented last March and the recent mini-budget are both business-oriented and very conservative indeed.
We must consider whether this type of budget will be good for the economy, Mr. Speaker. I think all of us can agree, despite the remarks of the President of the Treasury Board (Mr. Andras), that the economy is in desperate shape. We have over one million unemployed, all kinds of regional inequities, all kinds of alienation about the way the country is organized-and not just in Quebec but in the Atlantic provinces, Newfoundland and western Canada. We must try to find out how this budget is going to help the Canadian economy. Many Liberal ministers will argue that we must have more incentives in the country. Perhaps they are picking up a Tory argument with that when they say there has to be more stimulation in order to create jobs.
I should like to examine the government's record. Many of the corporations which have received stimulus have not created jobs but, rather, have laid off hundreds and thousands of workers even while getting grants from the federal government. It is not a case of laying off workers once Santa Claus has gone away-they lay them off while he is still there reaching into his pack-sack and handing out gifts to the corporations. Alcan, for instance, started up in 1928 in its present form. By 1970 it had accumulated assets of $2,215 million. In 1977 it had increased its wealth by 46 per cent, to $3,251 million. But Alcan, which has been making handsome profits-its most recent profits increased 560 per cent from $21 million in 1976 to $138.8 million in 1977-laid off 400 workers in their fluorspar mining operation in St. Lawrence, Newfoundland.
That company made quite a lot of money very rapidly, and one would think it did not need incentives to expand. The profit was not made just on the initiative of the company. By June 1977 it had received $180 million in concessions from the government, and under the mini-budget of October this year it will receive another $11 million in grants and tax concessions.
The second case I come to is Inco. I think everyone has heard that they propose to lay off about 4,000 workers in Ontario and Manitoba. Their assets have grown from $1.8 billion in 1970 to nearly $4 billion in 1977. Yet workers are being laid off notwithstanding the fact that the federal government has given that company many gifts over the years.

According to the most recent statistics, they have received a gift of $378 million in deferred income taxes. These are taxes which have been deferred by the government and are not paid by the company. There is an estimated additional figure of some $10 million which will go to Inco because of the latest budget brought down by the Minister of Finance during the last month.
If that is not enough, we find that the Export Development Corporation, which is the subject of debate from time to time here in the House, has again indirectly helped Inco to the tune of another $75 million for the development of mines in places like Indonesia and Guatemala. Here is a large company with a lot of assets, a great deal of skill, much experience in world and Canadian markets, which has been given literally hundreds of millions of dollars of taxpayers' money, which has been given roughly $10 million more in the latest budget of the Minister of Finance, and which almost simultaneously has laid off some 4,000 Canadian workers.
Now I turn to the third of the four examples I wish to use. I refer to Northern Telecom, a subsidiary of Bell Canada, which received some $3 million in economic gifts very recently as outlined in the statement read by the Minister of Finance. At approximately the same time it laid off some 1,000 workers in plants throughout Ontario and Quebec. But poor Northern Telecom, Mr. Speaker, increased its assets in Canada from $363 million in 1970 to $705 million in 1976. It received this additional $3 million in gifts from the Minister of Finance and has been laying off some 1,000 workers in the provinces of Quebec and Ontario.
Then we come to Noranda, my fourth and final example, in this debate. Noranda started off in its present form in 1922. By 1970 it had accumulated assets of more than $870 million. Again, we see more than a doubling of its wealth to some $1.9 billion in 1975, reaching over $2 billion by 1976. But Noranda, which has received some $86 million in deferred income taxes, a gift from the Canadian government, received an additional $5 million in the budget announced by the Minister of Finance last month. Shortly thereafter, the company laid off some 500 workers in four mining communities in Canada and is presently threatening to lay off another 1,700 workers in the Gaspe region of Quebec.
The four examples I have given are those companies which have received huge tax concessions and numerous gifts in the past from the government of Canada in order to promote an economic climate in which they would hire workers and improve the economies of the areas in which they are located.
In all cases we have seen these companies not only failing to expand their operations but, indeed, laying off workers. In all cases we have seen these four companies receive, as a result of the budget we are discussing today, additional gifts and tax concessions from the government of Canada. I suggest that this type of hand-out to large companies is not the way to increase employment in our country; it is not the way to stimulate the economy. In fact, these hand-outs have had very
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little bearing on the decisions of companies as to where they will operate a mine or where they will construct a plant.
In the case of Inco, the profits they have made in Canada are being used to develop mines in Indonesia and in Guatemala. The policy followed by this government had in my opinion been wrong. It is not helping the ordinary Canadian citizen in any way.
I have only offered four examples, Mr. Speaker, but there are literally hundreds of instances of the government providing aid to the corporate sector over the last number of years though any benefit to the people of this country has been questionable, if helpful at all. I believe the government probably gives more aid to the corporate sector than any other government in any industrialized country anywhere in the world.
What does this policy do for us? We have the highest unemployment rate of any industrialized country. I do not think any nation in the industrialized world has a higher rate of unemployment. While I was preparing to make my comments, I happened to read some statistics on unemployment around the world. I found some figures concerning unemployment rates between 1960 and 1974 which are very interesting. The United States, Japan, Canada, France, West Germany, Italy, United Kingdom and Sweden are listed. Just by reading that list of countries we find that Canada, an industrialized society with people who are educated and technically skilled is blessed with more resources than many of the others.
Which of those countries I mentioned, Mr. Speaker, do you think, over the average of those 15 years, has had the highest unemployment rate of all? It is Canada. Our unemployment rate was 5.4 per cent, on average, over that 15-year period. That is a very high unemployment rate. If one takes our latest figures into consideration, the average rate would of course be higher. The highest rate of unemployment during that 15-year period was 7.1 per cent. The lowest rate of unemployment experienced during those years was 3.9 per cent.
Let us take a couple of countries at the other extreme. West Germany, although devastated in two world wars and divided in two just about 30 years ago, had the lowest unemployment rate of all. Its average unemployment rate was .8 per cent, indicating a country which obviously knows how to manage its economy and its resources so that its citizens are working and producing. The highest unemployment rate in West Germany during those 15 years was 2.1 per cent, and the lowest was .3 per cent.
In Canada, on the other hand, if the unemployment rate is 3 per cent we say that really it amounts to zero unemployment- it means we are really fully employed, with just a few people unemployed as they go from one job to another. But the highest rate in Germany in 15 years has been only 2.1 per cent. I suggest that with statistics like that, our country, given the resources at its disposal, has indeed been governed in a very bad and sad fashion. While 1 have the figures, let me cite a few other countries. Japan, for example, had an average unemployment rate of 1.3 per cent. The highest unemployment rate there in 15 years was 1.7 per cent; the lowest, some 1.1
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per cent. In France the average was 2.3 per cent; their highest was 3 per cent and their lowest 1.6 per cent. Every country has Canada beat when it comes to the unemployment rate. In Sweden the average rate was 1.9 per cent. The highest unemployment rate they suffered was 2.7 per cent, and the lowest some 1.9 per cent.
Not all the countries I have referred to have elected social democrat or democrat socialist governments. A number of them have had Conservative or Liberal administrations throughout the years, countries such as West Germany, Japan and France. Despite that, they realized the importance of good planning and the proper allocation of their resources. They realized in those countries that full employment was not gained by just priming the pump at the top and hoping that some of the stuff you prime the pump with-namely money- would trickle down to the bottom, creating jobs and stimulating the economy. They realized other things need to be done if there is to be a buoyant and strong economy.
I referred earlier to four large companies which over the years have received huge hand-outs and grants, and which in this latest budget received more stimulus from the Minister of Finance. I noted that in all cases those companies had laid off workers or were in the process of doing so. Taking the companies in our country as a whole, about $10 billion is owed by them at the present time in corporate taxes. About $10 billion in deferred taxes is also owed by those companies; that is about $10 billion of interest-free, deferred taxes is owed by those companies. Just think of what we could do with the interest on that $10 billion in terms of creating jobs in places like the Gaspe and Newfoundland. We could create a lot of jobs. The largest 1,000 corporations in this country owe some $9 billion. Therefore, it is not just the small companies that owe this great amount of money.
What would happen if an ordinary taxpayer tried to defer his taxes for a number of years? He would receive a very abrupt notice from the Minister of National Revenue telling him to pay his taxes quickly or face the penalty for not doing so. However, the large corporations do not operate in that way. If, by deferring taxes, the corporations created jobs, that would be a different argument. But look at Inco and the other companies I have mentioned. They have all received large grants, but in every case they are laying off workers. The employees have been put in the position of having to accept hand-outs rather than jobs. That is wrong.
It is not just the companies 1 have referred to which received grants under the last few budgets. There are a number of others as well. As a result of this budget, the gift to Imperial Oil will be about $3.9 million. Shell Oil will receive, from "Santa Claus Chretien," some $4 million; Gulf Oil, $3.3 million; BP, $ 1.3 million; and Texaco, $ 1.2 million-for a total of $13.7 million in additional gifts.
If any sector does not need stimulus and tax concessions, it is that of the gas and oil companies. They have made immense profits in this country and around the world in the past few
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November 14, 1977
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years. These companies do not employ many people. They are capital-intensive, not labour-intensive. They do not supply tens of thousands of jobs. Therefore, the policies followed by the Minister of Finance are very bad indeed. In some ways they have become repulsive, looking at some of the public statements that have been made on programs to the effect that they will help people.
I spoke to someone who had called a radio show on Remembrance Day to speak to the Minister of Veterans Affairs (Mr. MacDonald). The caller asked why disability pensions had not been increased. Over the past five-years, veterans' disability pensions have fallen off by approximately $6 million a year, for a total of $30 million. The minister replied that pensions had not been increased because the government had to tighten its belt. He said the government was not a money machine and could not go on increasing spending forever.


Mr. Lalonde:: You are misleading the House.


Stanley Howard Knowles: Tell that to the veterans.


Lorne Edmund Nystrom: In the same budget, the government saw fit to give the corporations of this country some $1.2 billion.


Mr. Lumley:: To create jobs.


Lorne Edmund Nystrom: Like Inco creating jobs with all the gifts they have received from this government! They are laying off some 4,000 employees. I spent a great deal of time putting the statistics on the record. What about Alcan and the other companies that have been given gifts and are laying off people? If the government is going to subsidize a private corporation to create jobs, and the corportion does not create jobs, it should refund the money to the government with interest, so that it can be used elsewhere to create jobs for the ordinary people of Canada. However, that is not being done by this government.
Look at the unemployment situation. The President of the Treasury Board said that our economy is really good but there are too many gloom and doom people in the opposition and in the press gallery who are not telling Canadians the truth. I referred to unemployment in other parts of the world. Canada is the worst of all countries, despite our vast resources. A lot must be done to clear up this situation. I referred briefly to some of the statistics which are a disgrace. We now have a seasonally adjusted unemployment rate in Canada of 8.3 per cent. Our average over the past 15 years has been 5.4 per cent. It has become a lot worse in the past few years.
We have a very high rate of unemployment: 13.5 per cent in the Atlantic provinces, 11.4 per cent in Quebec, 8.5 per cent in British Columbia, 6.8 per cent in Ontario, and 4.8 per cent on the prairies. What is the government going to do about that? What is it going to do to get these people back to work, rather than give them hand-outs? Is the government just going to go on in the same old conservative fashion of stimulating the large corporations which only operate at 80 per cent capacity? If they wished, they could easily expand that rate of production.

I suggest the government should be doing almost the opposite of what it is doing. Instead of stimulating the top, they should be stimulating the bottom, giving a major tax break to low and middle income people. If you increase their purchasing power it will stimulate demand. Perhaps some of the unused capacity of the corporations could then be utilized. More jobs would be created as a result of the increased purchasing power. These people could then buy the necessities of life for themselves and their families. This is what must be done if we want to get people back to work and have an economy that is strong and buoyant.
May I call it five o'clock, Mr. Speaker.


PRIVATE MEMBERS' MOTIONS
Mr. Deputy Speaker:: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely notices of motions, public bills. Before calling the order for today I wish to bring to the attention of hon. members that last week the hon. member for Vaudreuil (Mr. Herbert) raised a point of order as to the procedure in bringing a motion before the House and standing other motions. The hon. member questioned the procedure that has been followed in the past.
Upon an interpretation of the Chair of Standing Orders 19(1) and 49(1) and their application, the Chair left the way open for the hon. member to request reconsideration of the decision at a later date. In his remarks at that time the hon. member requested that the Chair re-examine the whole question of programming of private members' hour as far as notices of motions are concerned. Further to that, the hon. member for Vaudreuil wrote a letter to Mr. Speaker of which I have just received a copy. That letter raised points that go beyond the question of standing motions under Standing Orders 19(1) and 49(1). It goes as far as questioning the right of the government to plan the work of private members' hour.
In light of this point in particular, as well as the other point, I think I should take this whole question under advisement. I would invite comment from hon. members the next time notices of motions are taken during private members' hour. At that time I hope the Chair can render a decision on this whole question.


Mr. Paproski:: On a point of order, Mr. Speaker, I believe there is a disposition to allow the hon. member for Winnipeg North Centre (Mr. Knowles) to proceed with motion No. 14 and to allow the preceding motions to stand at the request of the government.


Yvon Pinard: Mr. Speaker, pursuant to Standing Order 19(1), I ask, on behalf of the government, that all motions
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preceding that in the name of the hon. member for Winnipeg North Centre (Mr. Knowles) on the order paper be allowed to stand.
Incidentally, Mr. Speaker, with reference to the remarks you have just made, I might add that the solution is very simple. One merely needs to consider carefully the provisions of Standing Order 19(1) which reads as follows:
Questions put by members and notices of motions, not taken up when called may (upon the request of the government) be allowed to stand and retain their precedence; otherwise they will disappear from the order paper.
Under these circumstances, if I have to rise each time at five p.m. to ask that notices of motions and public bills in the name of hon. members on the order paper be allowed to stand, because some hon. members are not ready to proceed, I shall certainly do so to by-pass the difficulty, but I feel that practices exist in the House, and that the activities of the House are not governed solely by our standing orders, but also by the practice of the House. May I therefore bring to Your Honour's attention the fact that, when you consider this issue and before rendering your decision, you take into account that sometimes the practice of the House may prevent useless procedural nightmares.


Mr. Herbert:: Mr. Speaker, is it my understanding from the remarks which have just been made that the ten members who have motions on the order paper prior to the motion which is now to be called have declined to proceed today, those ten members having put their motions on the order paper on October 27 of this year?


Mr. Deputy Speaker:: Order. I am not in a position to answer the question of the hon. member.

Perhaps I might point out to the parliamentary secretary that indeed one of the reasons why the decision cannot be given today is that the precedents are not clear, at least the past practices of the House in that respect are not clear. The procedure now followed by the government to organize the working schedule for the member's hour is a new procedure dating from the last session. It must be considered not only in the light of the last session but also in the light of past experiences and this leads us to inconsistent practices which can be challenged by hon. members, including the hon. member for Vaudreuil (Mr. Herbert), and if the parliamentary secretary would allow me to complete my comments in the other language for the benefit of the hon. member for Vaudreuil-

I would want to reserve the matter particularly since there are contradictions in past experience and practices and this is a new procedure which commenced in the last session, based not on previous usage of the two Standing Orders or past practices. This is why the Chair wants to take a deeper look at the question, especially since the hon. member for Vaudreuil is questioning the right of the government to intervene more or
Old Age Security
less on a permanent basis in organizing the work of private members' hour.
It is a question of opinion perhaps, but I think it is a worth-while point and should be taken seriously. It would also be useful for hon. members to do some thinking on the matter and even to discuss it with the Chair, so there can be a good contribution to the procedural debate which will be invited the next time the House reaches notices of motions in private members' hour.
Motions Nos. 2 to 13 having been stood at the request of the government, the House will proceed to the consideration of motion No. 14 appearing in the name of the hon. member for Winnipeg North Centre (Mr. Knowles).


OLD AGE SECURITY
Stanley Howard Knowles: That, in the opinion of this House, the government should give consideration to the advisability of amending the Old Age Security Act and the Canada Pension Plan to provide for the pensions payable under these two acts to be available at age 60 to all persons who meet the other requirements of the said acts and who are not in or are prepared to withdraw for the labour market, and also to provide for the basic amount of the pension payable under the Old Age Security Act, at age 60 for those not in the labour market and to everyone at age 65, to be increased to $300 per month, for this basic amount to be escalated each year by an amount that will enable pensioners not only to keep up with rising living costs but to share in rising living standards, and also to provide for the elimination of any means or income test from the Old Age Security Act, so that the full pension thereunder will be recognized as the established right of all our people.
He said: Mr. Speaker, my colleagues are telling me that just about everything I need to say has already been said from the Chair in the reading of the motion. Perhaps I should just say that those are my sentiments and then sit down, hoping that my motion might come to a vote. My experience in this House leads me to believe that this would not be the result if I were to sit down. Even though the likelihood is that this private member's motion will get the usual treatment in that it will be talked out, I hope that the discussing of this subject today and the contributions that will be made to it by those who get the floor will help emphasize the point that the time has come to make some real improvements in our legislation respecting our senior citizens.
This afternoon when the President of the Treasury Board (Mr. Andras) was speaking to another matter before the House, he drew attention to the large amount of money out of the federal treasury which goes into our various social programs. So what is wrong with that? As a matter of fact, a moment later he said that there was reluctance to cut back any of those programs because they affect individuals, persons whom we know, and so on. Well, Mr. Speaker, that very statement underlines my point that there is no better purpose for a government to have than to improve the life of the people who make up this country. When I say "people," I include all our people both young and old. But surely one of the things which we can do with all the great wealth which we produce in this country-I agree with the President of the Treasury

November 14, 1977
Board that we do not need to spread gloom and doom and to say the future is hopeless-is to provide the best possible retirement for our senior citizens.
This is why I invite the House today to indicate its support for the two main proposals which are in my motion: first, that the eligible pension age should be lowered, certainly for those who are out of the labour market; second, that the amount payable as old age security should be increased. 1 am prepared to admit, Mr. Speaker-in fact, I am prepared to go further than that and to assert-that the life of senior Canadians today is a lot better, a lot more civilized, than it was when some of us first came to this parliament-certainly a lot better than it was in the days of my predecessor as hon. member for Winnipeg North Centre, the late J. S. Woodsworth.
But when one speaks of the kinds of pensions which were paid in the 1920s, the 1930s and right into the 1940s, and compares them with pensions and other benefits that are available for our senior citizens today, there is no argument: we have made tremendous improvements, and parliament is to be congratulated for that. I think we have the right to say that our movement has been worth everything, even if we had done nothing else than to provoke parliament into passing good legislation for our senior citizens. The proper thing to do is not to compare what is available today with what was available 40 or 50 years ago. The proper thing to do is to ask whether our senior citizens are getting their fair and proper share of the wealth the country is now producing.
I spoke on this matter during the debate on the address in reply to the Speech from the Throne, I believe on October 25, and I pointed out then a statistic I think is relevant, that the gross national product of Canada today is a little over $200 billion. The President of the Treasury Board gave a per capita figure today which confirms that figure of over $200 billion. According to the statistics that are readily available, out of the federal treasury, about $5 billion is today being paid for benefits to our senior citizens.
I would estimate, and I think about all one can do in this area is some guessing, looking and trying to figure it all out, that probably our senior citizens, persons 65 years of age and over, receive from other sources, such as provincial treasuries, private pension plans, and so on, something of the order of another $3 billion. I make it clear that this is a guess, but I believe it is an informed one. I think I can say without being proved wrong too far one way or the other, that our Canadians 65 years of age and over are living on a total income of about $8 billion. In my view, the comparison that has to be made is not with what other things cost the federal treasury, but between what our senior citizens are getting, and what is being produced by the population as a whole. The amount of $8 billion is one twenty-fifth of the $200 billion we are now producing, but our senior citizens, about 2 million, represent about one-twelfth of the population. I suggest that is a relevant and important statistic. About one-twelfth of our people are getting about one twenty-fifth of the wealth that is produced.

If you want to put this comparison in percentages rather than in fractions, you arrive at a comparable statement that 8 per cent of our people are getting only 4 per cent of the wealth we are producing.
I contend that there should be increases in pensions even at a time when the government is shouting for restraint, and I say shouting for it but not necessarily practising it in other areas. I am merely asking for what is fair, and if in a country like Canada we cannot be fair, especially to our older people, we do not deserve to be regarded as a civilized society. I press very strongly, in spite of all one can say, and I could say it as well as anyone else, that in view of the progress we have made in the last 40 or 50 years, compared with what we are able to produce in Canada today we are not giving our senior citizens a fair share.
I am not standing here suggesting there should be absolute equality or that retired people should have the same amount of wealth as those working, raising families, and so on-we are talking about this in comparative terms-but certainly the differences should not be as great as they are. We should not have 8 per cent of our people receiving only 4 per cent of the gross national product. I would emphasize that it is these people who helped bring the country to where it is today in terms of its capacity and in terms of its ability to produce, and I say we should be doing a lot better for them.
I express this desire that something better should be done for our older people in two main ways. On the one hand, as my motion indicates, we should be lowering the eligible age, certainly for those who are out of or are prepared to leave the labour market. In other words, I think both old age security and Canada Pension Plan retirement benefits should be available at age 60. Please note that I use the word "available". I am not suggesting that they be paid universally or automatically as they are now at age 65. I am suggesting that between ages 60 and 65 those who are out of the labour market, or are prepared to leave the labour market, should be entitled to draw the full old age security and the full Canada Pension Plan benefits they have earned. I will not take the time now to compare what we are doing with spouses' allowances, which is a grossly unfair way of providing pensions to some persons in that age bracket; I simply emphasize the fact that this would be a much more fair way of doing it.
Let me also argue, as other members have from time to time, if we did that, gave a large number of people between 60 and 65 the opportunity to retire, this would open jobs which are sorely needed by the younger people in the population. I am aware of the arguments we hear these days about the right to keep on working. We heard them in respect of a motion last week. I do not mind that, but I also want our senior citizens to have the right to retire, and there is not much use talking about the right to retire if you have to retire on nothing. Accordingly, I urge that consideration be given to lowering the eligible age under those two main pieces of legislation for those who are out of the labour market.
I could mention again some of the things that are said in response to this. We heard many statements by the former
November 14, 1977	_____________ COMMONS
minister of national health and welfare to the effect that there are other groups who need consideration, that we should not talk only about those between age 60 and 65. The difficulty is that, while he talked about those other groups which needed to be helped, he never did anything for them. There was introduced last year the social services act which was to be of some help, but it was dropped from the order paper and we see no sign of it in this session.
The new Minister of National Health and Welfare (Miss Begin) has made noises about a guaranteed income plan. She has talked about the possibility of doing something in three selected categories. One was in respect of persons unemployed between ages 50 and 65. She has also talked about a negative income tax. I am interested in all these things she says, but when previous ministers went through these exercises year after year without doing anything, what hope is there that this minister will get anywhere in this area, especially when she is surrounded by cabinet colleagues whose main task these days seems to be to preach restraint?
I am all for the new minister and her suggestions that we should do something for the unemployed, the single parents and the others who are in need, but at least this move could, and should, be taken right away. We should move the eligible age down to 60. There are many people who do not want to retire at 60 or 65. Some may not want to retire at ages much older than that, but for a great many Canadian workers, especially the kind of workers I have in my constituency, mainly in industry, heavy, dirty, rough and tough, the thing that appeals to them is the possibility of being able to retire at age 60. So I press for that part of my motion.
The other part of my motion calls for an increase in the amount of the pension. I suggest the figure of $300. It is running a little over $150 right now. That is the basic pension and, of course, there is the guaranteed income supplement on top of that. That still involves the use of what the government calls, euphemistically, an income test. In my view it is still a means test. If we get a negative income tax we will start to get away from that. The guaranteed income supplement is fine for those who have nothing else, and 30 per cent of our senior citizens are in that position, but it is a very unsatisfactory proposition for many Canadians who are just above the cut-off line. Those are the people who, because they have a little something else, do not qualify for the supplement, yet find it extremely difficult to keep up with today's cost of living.
Please remember, Mr. Speaker, that what we owe to our senior citizens is not just the right to keep up with the cost of living as it was at their point of retirement, but what we owe to them is the right to keep up with the rising standard of living and the rising gross national product. I return to the plea made this afternoon by the President of the Treasury Board, that we do not need to spread gloom and doom but that we have hope for the future of this country. I share in his view, provided we can get rid of the government.


Some hon. Members:: Hear, hear!
DEBATES__________________________________________________835
Old Age Security


Stanley Howard Knowles: If we have that hope, and if we believe that our productive capacity is such that we can go on producing greater quantities of goods and services than we now produce, the decision must be made that we are going to share that equally and evenly amongst the various sectors of our population.
As I have said before, I am proud of what Canada has done in the social security field, especially in terms of old age security. I think we have made some tremendous steps. I am proud to have been part of that process over quite a few decades. But that is no excuse for us to stop where we are. We can make things still better for our senior citizens, for those over 65 and for those who want to come in on the program between 60 and 65. That is the reason I present this motion today, and I hope the House will treat it favourably.


Some hon. Members:: Hear, hear!


Joseph Adrien Henri Lambert: Mr. Speaker, the Good Lord said one day that we must always pray steadfastly. 1 think that the motion of the hon. member for Winnipeg North Centre (Mr. Knowles) is a practical application of that advice and I am very pleased to support that motion, more especially since I also had the opportunity to present similar motions. Indeed, I consider that Canada is in a position today to meet the needs of senior citizens aged 60 to 65 whose work throughout the years has earned them the gratitude of their country to allow them to live peacefully, enjoying security and freedom.
According to the statistics we have, 896,000 Canadians of both sexes are in the 60-to-65 year age bracket. It is therefore easy for Department of Finance or Treasury Board civil servants to figure out how much it would cost Canada to meet their needs.
We are talking here of voluntary retirement, of course, and I agree with that because many persons who have steady employment and are in good health want to continue working; the motion is not intended to prevent them from doing so, but God knows there are many people who work very hard and barely get by. I know hundreds of them. Representations are often made to me. I had some again over the weekend, and those people are eager to have the right to retire while being assured security. That is totally logical. Studies have been made over the years. The former Minister of National Health and Welfare (Mr. Lalonde) tabled some on the subject; he often told us that the federal government, through its officials, had discussed the matter with the provincial governments, with their provincial counterparts, with a view to reaching an agreement on how to amend the social acts providing help to the needy. I hope the matter will be studied so that, at long last, a bill can be introduced some time during this Parliament which will meet the needs of those people who are entitled to security and the gratitude of their country.
A serious look at the situation reveals that thousands of young people, young men and women alike, of 18 to 30, are without work. They are qualified, have had good schooling and are capable of serving their country well, but they cannot find

November 14, 1977
Old Age Security
work. That comes as no surprise to the government. It is well aware of it. I am also convinced that it is not indefferent to that unfortunate state of affairs. I think it would be in the interest of the country to allow the people of 60 to 65, who want to retire, to do so and make way for the young people so that they, in turn, can give their full measure in order to deserve, when they reach a certain age, and have grown older, that right to security in old age. They must be given that opportunity. I am sure that if the government would agree to this motion, we would see a great improvement. There is no need hiding the fact, we are going through hard times and many homes are near poverty.
I would not want to dramatize the situation, but as an example, on Saturday last, November 12, at eight o'clock in the morning, someone rang my doorbell. There was this man in his thirties who introduced himself and asked if it was the home of the member of parliament. Yes, I said, and you are speaking to him now. You want to see me? He said: Yes, indeed. So I asked him in but he added: Wait until I go and fetch my "gang". I did not know what he meant. He came back with his wife and four kids, from 2 to 11 years old. There, he briefed me on his situation. He was not begging, he just wanted me to help him find a job. This man wants to earn a decent living for his family. While listening, I realized he was in a depressed mood, but he was in fact in good spirit. He wants to work to earn his living, but there is no job where he lives. As for unemployment insurance benefits, he does not like them because he knows very well that this is not a good way of providing himself with a regular income. As for welfare, he says he is too young to consider that.
Mr. Speaker, there are thousands of poor people. Parliament should decide to urge the government to amend the legislation referred to in the motion. Things cannot get worse than they are now. Will that cost more? I do not think so. Some reliable calculations have been made. If we could get back to work those we allow to live on welfare and who can work, we would not have to pay any more for them. They would pay taxes which would bring revenues into the national treasury, and 60 year old people would be able to get old age security benefits. That would be an exchange, even though that might cost a few million dollars more. In my opinion, Canada would benefit from this experience.
Recently I read a statement from the Minister of Finance (Mr. Chretien) which has been reported in the newspapers; in any event, I believe it is true and until I get proof to the contrary I must believe what is published in newspapers where he was quoted as having said that "Canadians are too thrifty, they save too much. They do not spend enough". And he added: "They spend their money in Florida".
Mr. Speaker, those who spend their money in Florida earn enough income to get there. But they are not the ones who should be helped. No, we must help those who do not have enough revenues, such as middle and small income workers, those who do not have enough. They will spend their money in

Canada, not elsewhere. It is obvious that if we increase their income, we will allow them to spend more, we will stimulate the economy because those people usually buy the things they need every day.
That is precisely the problem today. We have a number of industries which do not operate to their full capacity, others are closing their doors. There are dramatic bankruptcies because they cannot sell their production and, at the same time, there are people who cannot afford the strict minimum. We are struggling in a vicious circle, like a dog trying to catch its tail and running around and around. This is the situation we are coping with.
For these people, inflation is a very serious problem. It means ever soaring prices which prevent those who do not get wage increases from meeting their every day needs. Inflation affects particularly these individuals and these families and the situation is getting worse from week to week, from month to month.
With regard to electricity in the province of Quebec-I prefer taking examples in my own province-in 1962 the Quebec government decided to nationalize electricity because this would help us become masters in our own house.
We could see in the papers the key of the "Masters in our own house". It was so long that it could not be put on the same photo from bottom to top. It had to be put across the page to make the Masters in our own house" more precise. Let us consider the increase in hydro rates today. I shall probably be told that it is because of the James Bay development which is so costly. It has cost $6 billion so far and the total outlay is estimated now at $24 billion. I read in a report that it is going to cost $18 billion in interest alone. Herein lies the disorder, Mr. Speaker. Clearly, if money is to be remunerated more and more, once, twice, three times, four times, five times, a lot of money will go there and we will be unable to meet our obligations and ensure a decent living to the aged. It is also clear we will be unable to develop our economy, and our industries, and unemployment will increase. By the way, predictions are that unemployment will reach enormous proportions next winter.
When I hear such things I get depressed. Recently 1 heard somebody, someone highly learned, suggest that a war was the only thing to correct the situation, who said that? I will not name him, out of respect. A war was needed, some other people would have to be killed but not ourselves. Such is war, someone killing others. I have known two wars in my lifetime^ the first and second world wars. What did they solve? They were supposed to end all problems. Well this has created temporary jobs but also resulted in huge indebtedness. And once the war was over, what could we do? We went back to that old habit-depression. Was the depression experienced between 1930 and 1940 caused by some scholarly crisis in the economic system? Not at all. The crisis was in the system itself. The proof is that history is repeating itself. After World War I, there was a period of inflation, short lived prosperity From 1929 to 1939, there was real depression, systematic misery. At that time some people said a war was needed to
November 14, 1977

solve the situation. Well, we had World War II. What did it solve? We are now in the same situation, at the same point we were after world war II.
I am very seriously convinced we should follow the suggestion in the throne speech, that we should be looking for new ways. It would be a new way if we allowed our aged to live decently. This would give work to a number of young people, a positive, productive contribution toward prosperity. We could not do worse than we are now doing. For all these reasons, Mr. Speaker, I very seriously support the motion now before us and I wish the House would have the maturity to adopt it unanimously.


Mr. F. A. Philbrook (Halton):: Mr. Speaker, I shall not go to the trouble this time of congratulating the hon. member for Winnipeg North Centre (Mr. Knowles) on his motion No. 14. We have done that many times before. If ever this House was entitled to have a feeling of deja vu, it is now, with the hon. member's usual motion, well meaning as it is, to increase retirement pensions, to index them in this case, and to start them at an earlier age. However, there are some concerns about this proposal which the government side has to take very seriously. I hope the hon. member will listen to them very carefully and consider them sincerely.
The very sweeping changes in pensions suggested by this motion would clearly have an enormous immediate impact in terms of total government expenditures and of the taxes which would be required to pay for these benefits. In the long term the economic and social effects could be even more dramatic.
We should look very closely, then, at the costs these proposals would entail and the benefits to be derived by the Canadian population, and weigh them against the burden which that very same Canadian population would have to bear.
Let us first consider the proposed increase in Old Age Security benefits. The OAS program will expend about $4.5 billion in 1977, roughly $3.4 billion of which is spent on the basic OAS benefit payment, $1 billion on the Guaranteed Income Supplement, and $1 million on the spouse's allowance. Since there are at present almost exactly two million Old Age Security recipients in Canada, a $1 increase in the OAS pension implies a cost increase of $24 million annually.
The hon. member's motion proposes that the Old Age Security basic benefit be raised to $300 per month from its present rate of $150.43, virtually doubling the current rate. It is easily calculated that two million pensioners each receiving $300 per month, or $3,600 per year, would be paid $7.2 billion per year altogether. This would represent a rise in total program expenditures of roughly $3.8 billion, or 84 per cent greater than the present cost.
In addition, the hon. member proposes that the income test currently applied to the Guaranteed Income Supplement be removed, but when this same suggestion was debated in the last session he stated that the benefit itself should be retained. In other words, all OAS pensioners over 65 would be entitled
Old Age Security
to the full GIS benefit. If we assume that the ratio of single to married persons remains the same as for current GIS recipients, we can estimate that roughly 1.1 million persons over 65 would receive the GIS at the single rate and 900,000 at the married rate. This works out to a total expenditure of roughly $2.4 billion at present rates, or $1.4 billion more than current GIS expenditures.
The total Old Age Security program expenditures would therefore rise by about $5.2 billion per year at current rates if the benefit increases suggested by the member for Winnipeg North Centre are applied to the over 65 population, bringing the total program cost to $9.7 billion.
The hon. member suggests also that benefits under both the Old Age Security program and the Canada Pension Plan should be made available at age 60 to those not in the labour market. This is, in effect, the reinstatement of the retirement test which the Canada Pension Plan formerly applied at age 65. Now, however, it would apply at age 60, without an earnings test to mitigate costs.
As to how we could achieve any kind of fairness with a retirement test but no earnings test, I am not sure. Certainly there are many questions to be answered about this concept. It appears that a person with $ 100,000 per year of income from investment could state that he is not in the labour market, whereas a person who works part-time for a few dollars to eke out his or her income could be said to be still in the labour market. Persons such as housewives who are not in the labour force might be able to collect a full OAS benefit even though their spouse is working and making $20,000 per year.
What would happen if someone in receipt of benefits found work and wished to re-enter the labour force? Would the benefits be suspended and overpayments recovered? What would be done for people who are unemployed but continuing to seek work, even though the prospects of finding employment may be slim? Would we force them to give up all hope of employment and permanently withdraw from the labour market before they could obtain benefits? Since Unemployment Insurance benefits are currently payable up to age 65, would double benefits be permitted, or would we perhaps lower the age limit on UIC eligibility to age 60?
I might note that one of the reasons that the CPP retirement test, for persons over age 65, was abolished was to avoid some of the inequities which I have described above, as well as to remove the disincentive to work which such a restriction implied for persons aged 65 to 69. The hon. member suggests such a retirement test be applied at age 60 for both the Canada Pension Plan and the Old Age Security Act. With such measures, the Government of Canada would be very strongly encouraging people to retire at an earlier age, and almost penalizing them if they did not. If past experience is any indication, the Government of Canada would also be encouraging employers to lower compulsory retirement ages, as happened when the eligible age was lowered from 70 to 65.
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Old Age Security
Because of the possible changes in retirement patterns that such an incentive to early retirement might have, it is not possible to estimate accurately the total cost of permitting voluntary retirement on full pension at age 60 under the Canada Pension Plan and the Old Age Security program. We can, however, make some observations and approximations which might prove useful in considering the possible effects of such a decision.
First, I might note that at present 13.3 per cent of the population of Canada over age 20 is over 65 years of age, whereas 19.3 per cent is over 60 years of age. If we were to imagine for the moment that the entire population between 60 and 65 years of age were to retire, then clearly the cost of retirement programs would increase by at least 45 per cent. This would increase Old Age Security costs which, as you will recall, would already have risen to $9.7 billion, by another $4 billions, making the total cost 13.7 billion per year, or nearly 3 times the present total annual cost of the OAS program.
This speculation of mass retirement is not very far-fetched in the long view, if we consider the possibility that lowering the retirement age to 60 for the federal government programs might eventually lead to its being adopted as the normal retirement age in Canada. If we suppose, however, that only the approximately one half of the population between 60 and 65 who are not now in the labour force were to take advantage of this early retirement proposal, the cost of OAS would still rise by about $1 billion annually at the current benefit rate, or $2 billion at the proposed $300 rate. This in itself is more than ten times the estimated amount currently spent on social assistance for persons aged 60 to 64, excluding the spouse's allowance.
If this proposal also suggests that these people in the 60 to 64 age category receive full GIS as well, this would make the total annual program cost of Old Age Security nearly $12.2 billion, almost $7.7 billion more than the cost of the current OAS program.
In the Canada Pension Plan, we find a similar pattern. If all eligible persons were to retire at age 60 instead of 65, then the CPP beneficiary population would jump by almost one half. In the long run, the contribution rate would also have to rise by almost one half to pay for these benefits. Since it is r.ow projected that the CPP contribution rate will have to more than double in the next fifty years, we might wish to reflect whether we have the right to commit succeeding generations to such an additional burden.
If legislation were introduced to allow CPP retirement pensions to be payable at age 60 in 1979, and if we assume that only half the eligible population takes advantage of early CPP retirement, we find that benefit payments would rise by $40 million in 1979 and would cost an extra $640 million by 1985.
The tale of financial woe does not end, however, with increases in numbers of pensioners and the dollar amount of benefits paid. We must remember also that, by increasing the number of pensioners, we decrease the number of people in the labour force who must pay the taxes and make the contribu-

tions to support the larger population of pensioners. In other words, we are not simply increasing by five the number of years for which the eventual pension must be paid, we are also lowering by five the number of years in which the individual contributes towards the benefits of others.
The effect might be made clearer if we think of the individual as "earning" his or her own eventual retirement through active participation in the economy and in Canadian society prior to retirement. A person who works from, say, age 20 to age 65, a total of 45 years, and then retires and lives a further 15 years to age 80, has, in effect, worked three years for every year of retirement. If we lower the retirement age by just five years in this example, we find that the individual has worked only two years for every year of retirement. Clearly the amount that is set aside in respect of every working year to pay for the eventual benefit must be considerably increased.
One final and vital factor must also be considered and that is the changing population profile in Canada. Our birthrate is dropping and is now well below the replacement rate. This means that the average age of our population is rising. If present trends continue, some demographers estimate that the ratio of retired persons to workers in the labour force will nearly double in the next fifty years, even with the normal retirement age still set at 65. This means that the tax burden required of each worker to pay benefits for the retired population will increase over the next fifty years. It is said that if we lower the normal retirement age to 60, the ratio will be three times what it is now and the eventual tax burden therefore three times as great.
There are other, hidden costs associated with lowering retirement ages and increasing benefits, on which we can only speculate. If income security benefits such as Old Age Security are drastically increased, will this encourage people to become more dependent on public pensions and to decrease their personal retirement savings? Certainly, the average private pension benefit will have to be smaller, or the contribution rate much higher, if we lower the average working career by five years, and increase the average payment period by the same amount.
There is one final point in the member's proposal with considerable financial implications, that is, the suggestion that the indexation of old age security benefits should relate not to the cost of living, but to the "standard of living". While this term may be fairly hard to define, we could take as an example the indexation of benefits in accordance with the average industrial wage, which traditionally has risen more rapidly than the consumer price index by a margin of 2 per cent to 2'h per cent.
If we were to index benefits by 2 per cent more than the cost of living, we would raise the cost of the Old Age Security program by more than $90 million in the next year alone. If the 2 per cent were calculated on top of the other additional expenditures implied by this motion, the additional cost would be $310 million.
If we wish to sum up the costs of the member's suggestions as far as they can be estimated we can say that the changes in
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CPP and OAS benefits which he advocates could cost at least $7.7 billion extra in the first year after implementation. The annual amount to be expended would increase and not decrease in the long run. At the same time the alterations to our social and economic structures which are implicit in the motion might very well lessen our ability to pay the cost.
If time permitted it would certainly be worth-while reviewing the extent to which these programs have been improved in our lifetime, particularly in the last several years, but I shall not deal with that aspect, since I believe the facts are well known. I shall conclude by saying that, having regard to the progress which has been achieved and the concerns so often expressed about the necessity for restrained public expenditure, we might ask ourselves whether we ought really to be prepared to consider the enormous expenditure which is required to provide the increased benefit proposed in the motion. However laudable the motion of the hon. member who made this proposal, this is an aspect which cannot be ignored.
I realize there are other points which need to be brought out, but I wish to give an opportunity for some of my hon. friends, for example, the hon. member for Welland (Mr. Railton) and the hon. member for Algoma (Mr. Foster), to make their contributions.


Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, the motion before us calls for the pension to be payable at the age of 60 in the case of people not in the work force and for retirement at 65, pensioners to receive $300 a month. We have just heard from the Civil Service why they cannot go along with this proposal. It is unfortunate we cannot hear some of the Liberal members explain why they cannot support it.
The hon. member for Halton (Mr. Philbrook) says that if the motion were accepted taxes would have to be increased. We did not hear one word from him about the possibility of cutting out wasteful federal expenditure, such as spending money on unnecessary airports, spending $1 billion a year on consultants' fees to no purpose-I have the figures for 29 departments-or contracting out work to retired civil servants and others at a loss of $130 million a year. There are many such areas which could be reviewed. We might not be able to find all the money that is involved here, but there are a lot of places where we could find money for increasing pensions and lowering the retirement age.
We in the Conservative party proposed $200 at age 60 during the last federal election, and we knew where the money was coming from. I shall not be the one to talk out this bill. I hope the Liberal who talks it out will speak from the heart and not stand up to read a statement from some civil servant telling us why this motion cannot be accepted.


Mr. S. Victor Railton (Welland):: Mr. Speaker, I was interested to hear the hon. member for Winnipeg South Centre (Mr. McKenzie) say that if the Conservatives were in power they would find the money-that they knew where it was coming from. That is a bold assertion, given the present state
Old Age Security
of the world economy. I doubt very much they would know where the money would come from, whether they were in power or not.
First I should like to congratulate the hon. member for Winnipeg North Centre (Mr. Knowles), who has always been a great advocate of increased pensions not only for senior citizens but for veterans and widows. I praise him for his efforts. However, somebody has to sit in final judgment and be responsible for taking decisions. It is all very well to talk about giving things away, but unless the money is there first, you cannot do it. I am a great believer in Utopia, or I used to be-I believe it to be an unlikely prospect, now. It would be nice to provide everyone with the same standard of living on retirement. But we have heard the remarks of the hon. member for Halton (Mr. Philbrook); I think he made it perfectly clear that much as we would like to do many of these things we are finding it financially impossible.
In the July issue of International Realities there is an article showing that the British government has just come through a crisis brought on by excessive rises in wages, heavy social security payments, and free health services. It was generally thought that high unemployment was due to all the taxation and the undue reduction of legitimate business profits. Canada and the United States have been following the U.K. downward slide because the number of jobs in the private sector has been decreasing while the number of employees in all areas of government at all levels has been steadily increasing. The number of people working at productive jobs is too small to provide for all the government employees, for government make-work programs, and for a generous social security system. In other words, we are faced with the need to reduce government expenditures and the ratio of government employees to those in the market place. We shall have to improve the profitability of the private sector in order to pay for even the measure of social security we presently enjoy.


Mr. Deputy Speaker:: Order. The hour for the consideration of private members' business has now expired.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Ramon John Hnatyshyn: Mr. Speaker, one of the most impressive sights I have had the opportunity of observing in the question period took place on November 9 when 1 raised the question of the surveillance of mail by agencies of the federal government. We were given the specta-
80025-54 'h

November 14, 1977
Adjournment Debate
cle of the Postmaster General (Mr. Blais) rising in his place and telling us there had been no interception of mail; he had talked the matter out with officials of his department and, as the protector of the mail of Canada, he could give an assurance, or, at any rate, leave the distinct impression that there had been no interceptions.
Well, to use a current expression, he was blown out of the water by his colleague, the Solicitor General (Mr. Fox), who acknowledged that the security service had in fact been involved in the opening and copying of the mail-information which has now been passed over to the McDonald Commission.
It appears that the Postmaster General has been very negligent in his duties to the extent that he had not asked his colleague in the same row whether or not any of the allegations which had appeared in the press and in national news reports had any substance.
The question was not whether someone within the Post Office was intercepting mail. It was an allegation that the security service under the aegis of the Solicitor General had in fact opened the mail and, in fact, had gone to the Post Office and intercepted mail. The Postmaster General stood up in his place and had to be told by the Solicitor General during the question period that this was the case.
I want to bring some basic facts about this whole matter to the attention of the House. First, there is no question about the fact that intercepting mail is illegal under Section 43. The Postmaster General understands that. He indicated that in the House.
We want to know the attitude of the government with regard to the interception and opening of the mail. Does the minister of a given department have any given obligation to know whether his officials are obeying the law? Apparently the Prime Minister (Mr. Trudeau) does not hold there is a responsibility upon ministers to inquire whether they are obeying the law within the department. He said on November 2, as reported at page 568 of Hansard:
I am a little dubious of the context in which the hon. member says that the operations should be an open book-
That is referring to the minister responsible. Is he saying that in the case of the Solicitor General he should not have a detailed knowledge of what mechanisms are being used by people under his responsibility? Furthermore, the Official Secrets Act places upon the Solicitor General the responsibility of ensuring that the Security Services do in fact obey the law as it applies to surveillance.
Part IV. 1 of the Criminal Code applies to any person who intercepts a communication without a warrant. Only the Solicitor General can issue a warrant for an intercept to take place. Under the provisions of Section 16(5) of the Official Secrets Act, which was referred to in the House today, the Solicitor General makes an annual report respecting occurrences of surveillance and intercepts employed. This can only be construed as parliament putting a clear obligation upon the

Solicitor General to keep himself informed as to the method of surveillance used by the security force.
The predecessor to the Solicitor General was guilty of gross neglect in his fundamental ministerial responsibility. In three successive reports the present Minister of Consumer and Corporate Affairs (Mr. Allmand) neglected to mention the use of postal intercepts which, considering the frequency with which they were used, shows a complete failure to exercise his responsibility to determine what was taking place in his department.
Today the Solicitor General said in the House that his predecessor, the Minister of Consumer and Corporate Affairs, had authorized a postal intercept which, because of Section 43 of the Post Office Act, was illegal. It stretches credibility to the breaking point to believe that the Minister of Consumer and Corporate Affairs did not ask a question of his security service advisers, "Are you conducting mail intercepts at the present time?"
Even the Minister of Supply and Services (Mr. Goyer) stood up in the House to try and defend himself, although not very successfully. The present Minister of Consumer and Corporate Affairs does not have the guts to make a statement on motions with respect to his involvement or neglect in this area. He sits mute, and allows another minister to try to answer for him. I suggest he is without any fortitude at all if he does not come forward and state his case with respect to this matter.
The present Solicitor General is not fulfilling his function with respect to mail interceptions. To use the Prime Minister's now infamous words in the House, it is very suspicious that although the deputy director of the security service knew all about the mail intercepts over a year ago, the Solicitor General can contend that his officials did not mislead him nor did he mislead the House as to the degree of his ministerial knowledge or responsibility.
In June, 1977, the Solicitor General told the House that he had met with his officials who had told him that the APLQ break-in was an isolated incident. Now we are asked to believe that the officials he met to discuss the question of illegalities did not include the deputy director of the security service who knew of the mail intercepts. Not only that, but we are asked to believe that the director of the security service did not know of the interceptions even though his immediate subordinate did. How far does the arm of coincidence stretch? I suggest that it does not stretch far enough to cover all the ifs, perhaps, and wherefores of the Solicitor General and spokesmen for the government, including the Postmaster General.
I make one parting reference to the Minister of Supply and Services (Mr. Goyer) who was involved in all of this and who, you will recall, Mr. Speaker, promised to make the security services accountable to the government. He hired Mr. Starnes, a man who is now held out as scapegoat for the government's failure in the field of security. Mr. Starnes said on Friday that he would be very surprised if he had neglected to brief the present Minister of Supply and Services on the APLQ break-
November 14, 1977

in. Well, Mr. Speaker, we would not be surprised in view of all the circumstances and the way this matter has been handled by the government.


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, 1 was somewhat worried when I saw that the hon. member's remarks were aimed at me. He had seven minutes to talk about one point. Naturally he tried to touch all bases and consequently he scored no point at all.
If he were to refer to Hansard, the hon. member would see that the statements he has made are totally inaccurate. Mr. Speaker, I have never given the House any assurance that there had been no implications. I did indicate that I had made a preliminary investigation within my department and that, by so doing, I had made sure that so far, to the knowledge of the officials of my department, there had not been any co-operation with the RCMP.

I should like to indicate to the hon. gentleman that that particular information has indeed been corroborated by the information which has been provided by the Solicitor General (Mr. Fox). I have indicated to the hon. member's colleague, the hon. member for Brandon-Souris (Mr. Dinsdale), that if he has any evidence of collaboration or any instance of cooperation between postal authorities and members of the RCMP, then I would be pleased to receive it. I have also said, and indeed have so undertaken to the hon. gentleman and to the House, that I would pursue my investigations, and these are continuing now. It is my responsibility under Section 43 of the Post Office Act to ascertain that there has not been any illegal conduct by any postal official. This I have done and am continuously doing so. It is my responsibility to ascertain all the facts and to take such measures as are available to me under the Post Office Act.
The hon. member also knows that Section 48(3) permits me to conduct an inquiry. To date 1 have not commissioned such an inquiry because I am still conducting my preliminary investigation. On ascertaining the facts which are available to me, I will then decide whether such inquiry ought to be conducted.
There is another comment that the hon. gentleman made in connection with reports which were filed in this House by the Solicitor General. If he had paid any attention during question period today to the reply of the Solicitor General, he would know that there is no need at all to file any information relating to any interception except as required under the amendments to the Official Secrets Act dealing with communications. The Solicitor General said he had obtained a legal opinion from the Department of Justice to the effect that that would not include mail interceptions. There the matter lies.
The Solicitor General also said that although he had received information from the RCMP that there were mail interceptions, he did not know whether any postal officials were involved. Until such time as I am assured-
Adjournment Debate


Mr. Deputy Speaker:: Order, please. I regret that the three minutes allotted to the minister are well past.


EXTERNAL AFFAIRS-MEASURES TO AID EMPLOYEES AFFECTED BY CHANGE IN VALUE OF CANADIAN DOLLAR
Robert Jardine McCleave: Mr. Speaker, my message concerns the several thousands of Canadians who serve this country abroad on behalf of the Government of Canada and its various departments, and on behalf of the Armed Forces. Before getting into that message, perhaps I might be permitted to say that once a late show, always a late show. The fact that we have moved it up a couple of hours does not seem to have changed the numbers of people who are clamouring as they did when it was ten o'clock at night to get in to see what was going on, as compared to now when they are still clamouring.
The reason I brought us here at this hour, instead of later on, is due to the fact that the vagaries of inflation and the changing fortunes of the Canadian dollar have affected the lives of those who serve us abroad. Therefore on Wednesday, November 9, 1977, as reported at page 742 of Hansard, I asked the Secretary of State for External Affairs (Mr. Jamieson) what steps the government was taking to help Canadians serving abroad in the employment of Canada who are affected by the changes in the fortunes of the Canadian dollar. I think the parliamentary secretary has a recent reply. I will not use my seven minutes in pressing the question, and I hope he will have all the time in the world to spell forth the Canadian policy.
Aside from the Secretary of State for External Affairs, 1 could have posed that question to the Minister of Employment and Immigration (Mr. Cullen) because that department has officials abroad. In fact I could have asked that question of several other departments. I could have asked the Minister of Industry, Trade and Commerce (Mr. Horner), but I would be afraid that gentleman would offer us what he did to a learned gathering in Toronto a while back. He said that he had no pancreas for the problems at the moment. When the minister said that, it left so many people on the floor trying to stop laughing and attempting to get up that I assume it would be useless to ask a similar question of him in this particular Chamber.
In any event, I could have turned to the Minister of Employment and Immigration or the Secretary of State for External Affairs, because they have some milk of human kindness flowing in their veins. Whenever the dollar plunges, the Minister of Industry, Trade and Commerce thinks that this is one of the better things that has happened to Canada. When we go bust, I imagine he will write something which will make Milton, Dante and a few other authors turn over in their graves and admire him.
Be that as it may, I am asking specifically about the fate of those who work abroad for Canada, whether they be in the Armed Forces, External Affairs, Industry, Trade and Commerce, Manpower and Immigration or any other body, and

November 14, 1977
Adjournment Debate
who are affected by the changing fortunes of the Canadian dollar. Particularly I am thinking of the cases in Washington where the change of the Canadian dollar in relation to the American dollar has created problems. People have written me about that particular situation. When the parliamentary secretary replies, I hope he will be able to spell out, not only the general problem, but specifically what is being done for the people in Washington affected by the late happenings.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, I shall attempt to give some explanation as to the policy of the government in regard to these problems.
In recognition that the costs of goods and services vary between Ottawa and those places where career public servants are working abroad, a part of the employee's income is adjusted when he is overseas to provide him with purchasing power comparable to that which he would have had in Ottawa. This adjustment ensures that the employee is protected in countries where costs are greater than Ottawa, without giving him windfall gains in places where his cost of living is lower than found at home. This price differential between posts and Ottawa is computed and expressed numerically by Statistics Canada, and is called the "Post Index". It represents the retail price relationship of a sample range of consumer goods and services at a location overseas with the prices of a similar range of goods and services in Ottawa.
The Post Index encompasses price comparisons for such consumer expenditures categories as food consumed in the home, meals taken in restaurants, household supplies and maintenance, communications, transportation, health and personal care and clothing, some 225 priceable items being included. Shelter, fuel and utilities and education expenses are excluded from the comparison because separate provisions provide reimbursement for any such excess costs while abroad. Since Canadian public servants pay full Canadian rates of income tax regardless of their place of duty, income tax differentials are excluded.
The Post Index is one part of a system of emoluments and conditions of employment abroad called the "Foreign Service Directives". The mandate to adjust the index is given to Statistics Canada by the various foreign service departments and staff associations acting within the forum of the National Joint Council.
The Post Index is established by carrying out a full-scale retail price and cost of living survey at the location overseas. These surveys are repeated regularly at least every 30 months, and often more frequently if there are sudden changes and the post concerned requests a review. As well, Statistics Canada representatives conduct on the spot visits to judge the price and market supply situation. In between, the Post Index is subject to a monthly review to assess its continuing validity in the light of average monthly exchange rate movements, Ottawa price movements and information on post price movements gathered from as many sources as possible. From Janu-

ary to the end of October this year there have been 223 index recommendations: 191 increases, and 32 decreases. At the end of October 48 upward revisions were made, largely because of the weakening of the Canadian dollar.
Washington's post index of 110 dates back to April, 1977, when it was raised from 105. As Ottawa price levels are always expressed as 100, this means that prices in Washington are presently estimated to be 10 per cent above prices in Ottawa. While the Washington index was closely monitored during October, the comparative difference with Ottawa did not warrant an increase to the higher level of 115 because the Canadian dollar's reduced value was partially offset by a lower inflation rate in the U.S.A. In the month of November Washington's index, along with all other post indices, will be closely monitored by Statistics Canada which will make a recommendation for change, should such be warranted.
That is the way these problems are monitored, surveyed, followed, and eliminated.


FINANCE-REQUEST FOR ESTIMATE OF LEVEL OF UNEMPLOYMENT NEXT YEAR
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, the debate this evening arises from a question I put to the Minister of Finance (Mr. Chretien) on November 7, at which time I asked him what I thought was a very simple question. I asked him to inform the House what level of unemployment he anticipates for the next year in Canada. I am sorry the minister is not here tonight to join in this debate because I feel that one of the most significant deficiencies of the government has been its tendency not to want to indicate what it plans for this nation not only with respect to unemployment but also with respect to many other things.
The OECD has virtually insisted that member states start setting out quotas, and not just for the next year. The OECD wants member states to set out clearly their targets for unemployment and other related matters for the next year, three years, and five years. This government has consistently refused to do so. It is particularly unfortunate that the government will not set out these goals. It systematically attempts to cloud the issues.
Every time certain negative points are raised with respect to Canada's economic activity the government hastens to say it is as a result of some factor beyond its control. Hon. members will recall that at one time the climate was the favourite excuse of the government. At another time I believe it was the poor crop of anchovies off the coast of South America. At another time the government claimed it was the oil embargo; that somehow the OPEC states caused our trouble, totally forgetting that we were an energy sufficient country.
I notice that the current Minister of Finance chooses to reverse things a little and is saying that somehow the situation in Quebec is causing the economic problems of this country. Presumably what he hopes is that the Canadian public will take their eye off this government in the earnest hope that the government will not be called to account.
November 14, 1977

1 have referred to this Quebec decoy because around noon yesterday, when speaking in Quebec City, the Minister of Finance spent most of his time trying to point out that economic conditions in Quebec were basically due to this question of separatism and that, somehow or other, the federal government should not be called to task. In effect he was trying to indicate that if there is a slow transportation problem at the present time we should not look to him with respect to the train wreck-they created the train wreck but, somehow or other, the minister thinks that is a convenient excuse to take people's minds from the real hard fact that it is the government's economic policies that got us into trouble in the first place.
Yesterday the Minister of Finance stated that we cannot let the question of national unity hang unanswered without serious economic consequences that will persist and mount. I challenge that, Mr. Speaker. For the last seven years, at least, the government has been told by reputable economic forecasters that there is a problem in this country which will be heightened if action is not taken.
For example, in September, 1970, the report of the Economic Council of Canada stated as follows:
Unemployment has risen rapidly in 1970 to about 6'A per cent by mid-year, from the already relatively high average level of close to 5 per cent in the two preceding years.
It also stated:
We regard recent and current rates of unemployment as unacceptably high. Canada probably now has the highest rate of unemployment among the more industrially advanced nations, even after allowance for the differences in the bases for unemployment estimates. The current rate is about double the medium-term target for Canada suggested in our Sixth Annual Review.
In its conclusions appears the following:
A major concern of this report is that the Canadian economy has fallen significantly below its potential.
They take a paragraph to point out that if the economy is not restored to its potential-something over a 5 per cent growth rate-unemployment will grow. The fact is, this government has failed in those very crucial seven years which have elapsed since September, 1970. In September, 1970, inflation was 2.8 per cent, and even then the Economic Council said it was unduly high. In September this year it was 8.4 per cent. Unemployment was 6 per cent in September, 1970, while in September this year it was 8.3 per cent. We actually had a cash trade surplus as far as our current account was concerned in trade in 1970 of $1.1 billion, and this year it is estimated at about $5.3 billion.
It is time the government gave us the targets it is shooting for. It is time it took some action to relieve the unemployment situation that has become so chronic and, I would suggest, is helping to trigger separatist feelings in Quebec. It has not taken those steps so far, Mr. Speaker. To that end I would point out once again that in their most recent report issued last month the Economic Council of Canada said:
If our projections are correct, the extra $ 150-million federal winter works projects and the new $ 100-million employment credit program-two measures
Adjournment Debate
announced by the Minister of Finance in October-will not be sufficient to bring about the reduction in either youth or adult unemployment that is needed. Additional measures, at both levels of government, are likely to be necessary in both 1978 and 1979.
The question that faces us this evening is just that. What measures does the government propose over and above anything that has been suggested to date? What, in fact, does it see for the unemployment level in 1978? It is time we had those answers. I am disappointed that the Minister of Finance is not here tonight to give us his version of what he sees for unemployment in this country next year.


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, in the first place, contrary to what the hon. member states, the OECD does not request that member countries specify a certain unemployment rate target. Our target for unemployment is quite clear. It is the reduction of the unemployment rate to a level at which anyone who really wants to work will be able to do so.
The hon. member said the minister had placed most of the blame for unemployment on the uncertainty of the political climate in Quebec. Though I am sure that while most hon. members will agree that this is an important factor, the minister enunciated a number of other important factors in the unemployment situation. In a statement made to the House of Commons on October 20, the Minister of Finance (Mr. Chretien) pledged himself to doing whatever could reasonably be done to ensure that everyone who really wants to work can find a job. He also agreed that the current unemployment rate of 8.3 per cent is too high. But everyone must realize that there are simply no quick and easy answers to the solving of our unemployment problem.


Sinclair McKnight Stevens: You have had ten years!


Edward C. Lumley: In his use of selective statistics the hon. member consistently draws attention to all the negative aspects. He has forgotten that Canada has one of the finest records of any of the industrialized nations of the world. For example, I refer to job creation. This government has created twice as many jobs as the second leading nation.


Sinclair McKnight Stevens: We are talking about unemployment.


Edward C. Lumley: The hon. member persists in concentrating on the negative aspects. He will not acknowledge the positive achievements.
Given the uncertainty of the future, it should be clear it is not reasonable to forecast any precise numerical value of the unemployment rate. There are too many unknowns. The economy is large and complex, with the final outcome depending upon all our actions, as well as upon those taken by our trading partners and others. For its part, the government believes it has gone to the limits of its financial resources in order to do as much as it can toward creating an economic environment where it will be possible to achieve some improvement in our present unemployment situation over the course of

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next year. However, the attainment of its goal depends not only on the government but on the co-operative hard work of all Canadians.
Motion withdrawn.


Mr. Deputy Speaker:: 1 do now leave the chair until eight o'clock tonight.
At 6.30 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien 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 second time and referred to committee of the whole.
Lorne Edmund Nystrom: Mr. Speaker, at five o'clock I was talking about the endeavours of the government to stimulate the economy by subsidizing huge corporations. I made the point that several large companies in Canada had received hundreds of millions of dollars from the government over the past few years, including millions of dollars in what is called the mini-budget of the Minister of Finance (Mr. Chretien) a couple of weeks ago in this House. I pointed out how that had failed.
Despite all the so-called stimulation of the economy, we have the highest rate of unemployment in the industrialized world. That unemployment rate has not just been with us for the past year or two but for the past 15 or 20 years.
I suggested that instead of stimulating the wealthy in our economy, the large corporations such as INCO, the government should give a substantial tax cut to the low and middle income people. I notice that the Economic Council of Canada, a very reputable group, and others have been suggesting the same thing in terms of stimulating the economy.
If we did that, it would stimulate demand. People would buy more of the necessities of life. That demand would in turn stimulate the industries of this country to produce more, fulfilling that unused capacity in our economy.
Something else that concerns me is the whole farm economy and what is now happening in western Canada. If you look at the farm income statistics, you find that in almost all areas of the country farm incomes, both gross and net, have dropped over the past few years. The price of a bushel of wheat has

November 14, 1977
gone away down this year over what it was a couple of years ago. The immediate prospects for the price of grain in this country, despite a pretty good selling effort for the most part by the Canadian Wheat Board to sell grain abroad, leave a great number of things to be done on the agricultural front.
Many members, particularly from urban Canada, say this affects only the rural economy and will not do much in terms of providing jobs. I remind hon. members that the farm industry employs a lot of people. It could employ a lot more if we produced more of our own food in Canada and processed and packaged that food at home.
One need only look at the statistics for the past few years to see that Canada is rapidly becoming an importer of more and more food products. Last year, if one were to take away grain and oilseeds, we have a net deficit in this country of about 1.5 million. If this continues, projected through the year 2000 as the Science Council has done, even with grain and oilseeds Canada will become a net importer of food. That is tragic for a country with the vast acreage we have and our relatively small population.
One of the government's priorities should be to ensure that we become self-sufficient in food production. In addition to producing enough food to feed ourselves, we should be able to make a good contribution to foreign aid.
There are many food products in which we were at one time self-sufficient, but no longer. That type of situation must cease. If we had self-sufficiency, not only would more people be employed in farming but more people would be employed in southern Ontario in the fruit industry in terms of packaging, processing, transporting, and selling the fruit.
Something has to be done about the price of wheat. About four years ago the government set the floor price for wheat sold domestically at $3.25 a bushel. That price has not been adjusted in the past four years despite the fact that production costs and the cost of living have gone up very rapidly. The minister in charge of the Canadian Wheat Board, and the Minister of Agriculture (Mr. Whelan) said recently that the cabinet is considering an upward revision in the price of domestic wheat.
I suggest that the price of domestic wheat should be around $5 a bushel. That would enable the farmer to meet his ends. It now costs over $3 a bushel to produce wheat. Some estimates are as high as $3.86 a bushel. Grain today is selling at around $2.50 a bushel. At least the grains sold in Canada should be priced at $5 a bushel. That would be of some help to the farmer.
When we talk about farm income, we should consider the need to ensure that orderly marketing is supported to the fullest possible extent right across Canada for all farm commodities. If commodities are put on the open market, the farmer is not guaranteed a price for the commodity he is selling.
One trend now developing across the country which I find worrisome is that more and more organizations are attacking orderly marketing. The Cattleman's Association does not want
November 14, 1977

a marketing board. Cargill Grain is trying to take away some of the power and authority of the Canadian Wheat Board.
In 1974 the minister in charge of the Wheat Board took the marketing of feed grains for domestic purposes out of the authority of the Canadian Wheat Board. Recently, and this made me very angry because he is a westerner, the Leader of the Opposition (Mr. Clark) suggested at a meeting in Manitoba that perhaps the Wheat Board needs some competition in the selling of grain.
I have before me a copy of an article written by a very reputable journalist, Fred Harrison, in the Regina Leader-Post of October 19. He quoted the Leader of the Opposition, who spoke in Manitoba. Fie wrote, and I quote:
The meeting was in Morden, not far from Elm Creek, site of a controversial new high-throughput grain elevator built by the Cargill Grain Co. Ltd. Many farmers in the area are sufficiently impressed by the Cargill operation that they believe competition is needed in the selling, not just the storage, of grain.
Murta-
That is the hon. member for Lisgar.
-was accompanying Clark on the trip.
It continued:
The Valley Leader, a weekly newspaper based in Carman, reported August 24 that Clark had said a Conservative government would seek "expansion of the Wheat Board's selling efforts, but permission (would be) given to private organizations to sell grain in competition with the Wheat Board".
So we have the Leader of the Opposition saying in Manitoba that if a Conservative government is elected, permission would be given private organizations to sell grain in competition with the Canadian Wheat Board. Even the hon. member for Sas-katoon-Biggar (Mr. Hnatyshyn) shakes his head in disgust that the leader of his own party would suggest that the Cargill Grain Company should be allowed to sell wheat in competition with the Canadian Wheat Board.


Ramon John Hnatyshyn: On a point of order, Mr. Speaker-


The Acting Speaker (Mr. Turner):: Order. The hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) is rising on a point of order.


Ramon John Hnatyshyn: Mr. Speaker, I am normally a very quiet member and do not like interjecting with points of order, but the hon. member for Yorkton-Melville said I was shaking my head in disgust. I just want to place on record that shaking my head had nothing to do at all with his own specious argument; rather it was directed toward him.


The Acting Speaker (Mr. Turner):: Order. I suggest to the hon. member for Saskatoon-Biggar that that is not a point of order but a point of dispute.


Lorne Edmund Nystrom: I suppose the truth hurts, Mr. Speaker. It appears that the hon. member for Saskatoon-Biggar does not believe the Saskatoon Star-Phoenix or the Manitoba Valley Leader. Perhaps I should quote another weekly Manitoba newspaper, the Pembina Times which is based in Morden.
Income Tax
According to that newspaper the Leader of the Opposition had this to say:
-Conservatives favour supplementing the selling activities of the Board by allowing Canadian grain trading companies to enter into the international market to improve our grain sales.
It is not I who says these things, Mr. Speaker; I am just reading my prairie newspapers like all good prairie members should; but when one sees the Leader of the Opposition quoted in newspapers, I tend to believe them, especially when I see two or three quotations. I know the hon. member for Gren-ville-Carleton (Mr. Baker) and other members do as well. However, the press did not simply interview the Leader of the Opposition but other members too. For example:
Frank Hamilton, Conservative MP for Swift Current-Maple Creek and PC wheat board critic, registered surprise over Clark's statement.
Another quotation:
Alvin Hamilton, MP for Qu'Appelle-Moose Mountain and a former agriculture minister, was equally surprised.
The Leader of the Opposition is a very important person. It is only fair that western farmers and the people of western Canada in general know where he stands with the Wheat Board, since the Wheat Board is so important to development of the west and to the financial integrity of the farmers. Again I see the hon. member for Saskatoon-Biggar nodding his head in agreement with me that it is important that people of the west know where the Leader of the Opposition stands. He does not stand behind the Wheat Board at all. I think it is very important to let the people know that.
We are discussing today a tax bill and talking about the economy. One thing which is imperative in a strong economy is a strong farm economy. To have a strong farm economy we need a strong Wheat Board and orderly marketing, which means as much support as possible for the Wheat Board. Our party clearly stands behind the Wheat Board and orderly marketing.
There are a number of other matters which one can mention in a debate of this sort, but the most important of all is that we believe the Government of Canada should have a planned economy. We want to allocate the resources which we have in a planned way for the benefit of people, not necessarily for the benefit of large corporations and profits. We must process more of our raw materials. We are importing more manufactured goods on a per capita basis than any other industrialized country, and this is one reason why we have so much unemployment in Canada today. If we started to process goods and materials, to build our own fridges, stoves, and deep freezes and so on, we would create many more jobs in Canada for our people. This is something the government could do, along with revising the tax system so there is fair taxation for everyone.
If the government does not start to take action of this sort, we will continue to have high unemployment, very high inflation, and regional inequities. But instead of going in the direction I suggest, the government talks of going in the other direction.
Today in the House a Liberal backbencher from northern Ontario pleaded with the government not to abolish the

November 14, 1977
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Department of Regional Economic Expansion. There are rumours in the press that the government is considering the possibility of abolishing DREE, a department which was established in 1968 in order to try to rectify some of the basic inequities which we have in Canada. The government is talking about the possibility of disbanding FIRA, the Foreign Investment Review Agency, since it may be scaring off foreign investment.
These two bodies were set up to provide some kind of positive direction for this country, but even these timid steps are an embarrassment to the cabinet and to many MPs opposite. Instead of abolishing them, the government should have the courage to tackle the economic problems facing Canada today, and to do things for ordinary people, not for large corporations such as INCO, Imperial Oil, the big money men, and other companies that are controlled and owned outside Canada.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, it is not my purpose to protect the government from what might be said by the hon. member for Yorkton-Melville (Mr. Nystrom), but I should like to elaborate for a moment on the statement he made that money should not be going into business but should be used for labour. Perhaps the best example I can give of putting money into business would be if the Farm Credit Corporation lent a farmer $45,000 to buy a combine. If he wanted to use labour instead he would probably have to employ about 500 people. I suppose that is what the hon. member for Yorkton-Melville was talking about.
If you assume that it would cost in the vicinity of $10,000 to $10,500 a year to operate that combine, if you divide that sum by 500 people with a flail to do the same work this would give about $21 per person for a season's work. About 75 years ago that is what was happening in this country, so perhaps the hon. member for Yorkton-Melville should bring himself up to date and, instead of talking about the Leader of the Opposition (Mr. Clark) so much, put his own position in perspective.
With regard to the comments made today by the President of the Treasury Board (Mr. Andras), there is not doubt he was comparing apples with oranges. He stated that there would be approximately an 8 per cent increase in expenditure this year, but he did not say that he was using estimates and expenditures. He was not going from estimate to estimate from one fiscal year to the next. It is a trifle misleading for the minister to use this figure of 8 per cent, when it runs close to 10 per cent in actual fact.
Also the minister stated that it was not his purpose to obscure and patch over the government's weakness, yet it was quite evident that he was not prepared to give a balanced view of what the government was doing at the present time. In fact, it was a very, very foxy presentation which he made today.
He had to admit that the over-all growth of Canada is down, because there is no way around it, even though he said that there was a pessimistic view being promoted by people

throughout Canada today. Also he indicated that it was on page one of newspapers and on the 11 o'clock news. I do not think the minister is being exactly fair when he makes comments like that and does not tell the exact truth. He did not tell us that approximately ten years ago the federal government was borrowing from pension funds in Canada approximately $500 million. This year, 1977-78, the government will probably borrow in the area of $1.8 billion or $2 billion from pension funds. If this were treated as a debt, that is, the figures the minister was presenting to the House of Commons, then it would be more realisitic and it would not be so misleading. This is why I said his presentation today was foxy.
In the last five years the federal government has borrowed from pension funds approximately $7.5 billion. This is just a paper figure. The same thing is happening with the money which is going into the grain stabilization fund. The government should be putting in there $2 for every dollar that the producer is putting in, and it is not doing that. It is just treating that as a paper figure. It will calculate the interest. It will be there. I am not saying the government will try to beat either the farmers or those who have paid into the pension fund, but we have to recognize this is happening. Somewhere down the road there will be a day of reckoning and the government of the day will have to come up with the financing. I am referring to that which the government is obligated to pay out of those funds.
The minister stated today that there is a comparative expenditure related to what it would have been ten years ago in relation to the gross national product. The significant thing the minister missed was the fact that the over-all debt today is accelerating at a greater rate than it ever has in Canadian history.
Last year the government borrowed approximately $19 for every $100 it spent. This year the government borrows $23 of every $100 it spends. When you consider the government in the last ten years has doubled the Canadian debt, the debt which was accumulated over the first 100 years, then certainly we have to consider the direction in which we are going.
The minister also referred to his inability to go to businesses and unions and tell them how to correct the problem. I realize he cannot do that, because the government should be setting a proper example. There is no way unions or businesses will co-operate with the government until such time as the government sets an example. Certainly a 10 per cent increase is not setting a proper example of the manner in which inflation can be controlled. He also indicated that we were psyching ourselves into a depression. I must impress upon this House that there is a tremendous difference between psyching ourselves into a depression and facing up to the facts. This is one of the things the government has failed to do, and thus it is misleading Canadians.
This afternoon in the House there were motions made by the hon. member for Calgary North (Mr. Woolliams) and the hon. member for Lethbridge (Mr. Hurlburt). I would identify myself with both of those, because we come from RCMP country and all recognize that the force is held in high regard
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in most parts of Canada. We recognize the tremendous contribution the members of the force have given, which forms the roots of the very foundation of justice and security in our Canadian heritage.
We cannot divorce ourselves from what is happening in Canada today. We are debating a bill which is a glaring example of a government out of control, a government which never knew or has forgotten the meaning of the word "restraint". The 1978 spending forecast of $45.1 billion is rising to approximately $46.5 billion with the tabling of supplementary estimates. The 1978 authorized spending to date is 10.3 per cent over the total of last year, or 3 per cent higher than the 7.1 per cent forecast by the President of the Treasury Board. We must remember that we still have five months to go to the end of the fiscal year. If that is restraint, what would the government do in the period without any promise? How can the minister request any Canadian to restrain his or her spending when proper leadership is not given?
An excellent example of how the government can cut costs without depriving Canadians of important services would be the disbanding of the security and analysis group of civilians, political appointments of the Prime Minister (Mr. Trudeau). Canadians would like to know why such a branch was established when the RCMP always carried out those important tasks without interference from the outside. The cost of that group runs approximately $500,000. People in this country want to know what are the rules and regulations of that civilian group. I am sure the RCMP would appreciate being informed of that group's mandate, as well as its duties and responsibilities. The group consists of approximately 200 employees, employees duplicating the services of the RCMP. What amount would be saved by the removal of that branch within the Department of the Solicitor General if it is not $500,000?
The main culprit in today's inflation and the resultant necessity of borrowing an additional $9 billion, as provided in this legislation, is the government itself. Perhaps the best example of bungling funds and administration is the situation in which the government has placed the RCMP. The government created this mess. Time and time again the Prime Minister was warned of the grave danger of using a police force for political gain. Now that admirable and dedicated force is expected to shoulder the blame for orders issued by a civilian director general of security within that force, another personal appointee of the Prime Minister. Who pays the salary of this person and those under him? None other than the Canadian taxpayer.
While the Prime Minister seeks to give the impression that he is the only saviour of unity in this country, never has an individual done so much to destroy unity under the guise of a great protector. Many taxpayers are of the opinion that he is even using our national police force as a guinea pig.
There is no better way to undermine confidence and strength than to place an outsider in charge of a sensitive arm of the service, that of security. To add to the dilemma, instead of reporting directly to the RCMP Commissioner, that civilian
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appointee of the Prime Minister reports to the Prime Minister without the necessity of first communicating with the Commissioner. Let us not stop there. The politically appointed security and analysis group communicates to the Clerk of the Privy Council, who also happens to be chairman of the interdepartmental committee on security and intelligence.


Edward C. Lumley: Mr. Speaker, I rise on a point of order. We are discussing Bill C-Il, a tax bill; we are not discussing the security force of the RCMP.


Walter David Baker: We are talking about the expenditure of money.


The Acting Speaker (Mr. Turner):: I was listening very carefully. The hon. member was coming back to the expenditure of money, so I will continue to listen, and if he strays off the path again, I will warn him.


Ramon John Hnatyshyn: Let Mr. Speaker do his job.


Thomas Gordon Towers: Thank you, Mr. Speaker. I can certainly understand that a government which cannot control its expenditures cannot stoop to the lowest aspect of dealing with individual expenditures. I was dealing with the politically appointed security and analysis group. I was trying to explain, for the benefit of the hon. member, that this group costs approximately $500,000, and I am sure that there are a great many Canadians who would appreciate it if their income taxes could be reduced accordingly. I pointed out that the politically appointed security and analysis group communicates to the Clerk of the Privy Council, who also happens to be chairman of the interdepartmental committee on security and intelligence, and whose superior is none other than the Prime Minister who is also chairman of the cabinet committee on security and intelligence. One cannot help but note how cozy is that arrangement.
Who pays for all this? The Canadian taxpayer. Perhaps that answers the question for the hon. gentleman. How would any of us, as representatives of constituencies at the federal level, like to have someone appointed by the government of the day to investigate and do research in our areas and residences, and then submit the findings to the Prime Minister and not to us? Could we operate under that kind of manoeuvring? How can we expect the RCMP to perform vital and dangerous operations with a non-force group duplicating its services and authorizing orders unknown to the RCMP Commissioner?
I feel very sad indeed that officers and members of the RCMP are now being personally investigated, and perhaps even jailed for misdemeanours carried out under orders allegedly given by a civilian director general of its security services. While we do not know that to be factual until a complete investigation has been completed, our national police force is experiencing frustration, humiliation, and accusation, due to instructions which have been given by senior personnel.
We all know that anyone who has unlimited funds reaches a point when he spends for the joy of spending, eventually

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squandering without reason simply because he can always go back to the bottomless purse supplied by taxpayers. Would a head of a government be able to set up a group of employees comprising 200, more or less, if he had restricted funds? What has the establishment of the civilian group within the Solicitor General's department to do with the Solicitor General as minister responsible for that portfolio? Did he know such a group was being appointed, and did he sanction that action?
Since the RCMP director general of security and the branch within his department both report directly to the Prime Minister, is it fair to ask the Solicitor General to shoulder the responsibility for his position? Not only has the Prime Minister undermined the operations of the RCMP, but I think the authority of his Solicitor General has also been degraded and left in question. Certainly the funding of the Department of the Solicitor General is considerable, and it all falls on the Canadian taxpayer.
The RCMP Commissioner, who supposedly is responsible for the police force under his guidance, reports to the Solicitor General, and rightly so. Why then should the director general of security within that force be able to bypass the Commissioner, and thereby the Solicitor General, and communicate directly to the Prime Minister? What type of co-operation is this? It seems to be the same type of co-operation the government is giving to business and labour. It seems that most Canadians now know what the 1968 "just society" meant: a country dictated to and run into the ground by a one-man show.
There is no possible way that the RCMP Commissioner should be answerable for acts, illegal or otherwise, performed by members of his force who are under orders of a director general of security operating outside his jurisdiction. We will continue to have chaos within the RCMP and in this country until the Commissioner is the only person who can be held responsible-


Mr. Blais:: Mr. Speaker, I rise on a point of order. The hon. member for Stormont-Dundas (Mr. Lumley) indicated that the hon. member for Red Deer (Mr. Towers) was not at all addressing himself to the bill at issue, and evidently he is continuing to deal with matters which are completely irrelevant to this bill. He ought to be called to order.


Eldon Mattison Woolliams: Mr. Speaker, I would like to speak on the point of order. I think the hon. member for Red Deer (Mr. Towers) is right on, because this government has been using the police force to obtain files surreptitiously, and those files have been obtained illegally by the RCMP.


Edward C. Lumley: What has that got to do with the tax bill?


The Acting Speaker (Mr. Turner):: I suggest that the hon. member does stray off the path every once in a while, and I suggest that he come back to the terms of Bill C-l 1.


Jean-Jacques Blais: Mr. Speaker, I rise on a new point of order on the basis of what has been advanced by the hon. member for Calgary North (Mr. Woolliams). I might indicate to him that

he ought to refer to Mr. Speaker's ruling of this day relating to unfounded allegations.


Eldon Mattison Woolliams: Are we going to be babies?


Thomas Gordon Towers: Mr. Speaker, I recognize that this is a sore spot with the government, but the only way to heal a sore spot is to have it cleansed, and that is exactly what I wish the Postmaster General (Mr. Blais) would recognize I am doing. Certainly there are enough problems in the Post Office-


The Acting Speaker (Mr. Turner):: Order, please. I suggest the hon. member get back to Bill C-l 1.


Some hon. Members:: Hear, hear!


Thomas Gordon Towers: Thank you, Mr. Speaker.
While on the subject of unnecessary spending and flagrant disregard by this government for taxpayers' dollars and their rights, I must impress upon this House the fact that the inquiries which are taking place throughout Canada cost taxpayers one way or another. On top of that-


An hon. Member:: He is back on the topic now.


Thomas Gordon Towers: -the security of this country at the present time is in jeopardy. What guarantee do Canadians have that Michael Pitfield, for instance, is qualified to be chairman of the interdepartmental committee on security and intelligence? I presume he is being paid, and that his salary is paid by the taxpayers of Canada. Is he better suited to wield almost unlimited authority than a seasoned and capable officer with the RCMP or at least a person on the staff of the Department of the Solicitor General?
Where does political interference cease and common sense begin? What better way to destroy our wonderful country than to demoralize its national police force and ruin its economy, at the same time-


The Acting Speaker (Mr. Turner):: Order, please. I suggest the hon. member get back to the terms of Bill C-l 1.


Ramon John Hnatyshyn: Value for our money, sir.


An hon. Member:: Who wrote that lousy speech anyhow?


Thomas Gordon Towers: We cannot separate ourselves from security and its cost to the Canadian taxpayer.
We have had four years of inflation in excess of 7 per cent. Many of us here can remember that we were told by economists that we could not live with inflation beyond 4 per cent. We have had an unemployment rate of over 7 per cent for the last three years, and unemployment is causing many problems for the RCMP. We must also consider that we have had four years of economic growth below 5 per cent, and three years of trade deficits of over $4 billion. It will probably be $5 billion this year. Somebody has to pay the piper, yet the government apparently is not prepared to wake up to exactly what is happening. I know the truth hurts. We have to recognize that in five years the federal deficit has increased each year. For
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ten years we have had the fastest growing national debt in Canada's history, even including the period of two major world conflicts.
When the President of the Treasury Board spoke about taxation today, he did not mention that there will have to be an increase in revenue this year for the funding of our international debt due to the devaluation of the dollar. When it is considered that this will be in the sum of half a billion dollars, then it is time that somebody faced the facts.
I am glad to see the Minister of Finance (Mr. Chretien) in the House, Mr. Speaker. I am sure he is aware of all the problems Canada is facing today because business confidence is being destroyed. Priming the pump does not put more water in the well.
There are many issues the government should face up to. Canada is in a very, very serious economic condition at the present time. 1 hope the government will accept some of the opinions expressed on this side. Canadians have been reprimanded for living too high on the hog, and I do not have to tell the House who said that. They have been instructed several times to tighten their belts. These same people are forced to witness their country speeding down the road to economic disaster, with its well-being and security undermined by a government which only exercises control where it can do the most harm-by manipulating the regular and vital actions of the RCMP and by creating unexplained and unnecessary ways to squander their taxes.
In my opinion, Mr. Speaker, the Prime Minister has muddied the waters of law enforcement through his personal appointments at incalculable cost, financially and on the security front. I believe, in the best interests of the security force and of Canadians generally, that the Prime Minister should revoke all these appointments he made within the RCMP security and analysis branch, excluding the present Commissioner, and give sole jurisdiction for control, management, appointments and advancement of that force to the Commissioner. This should cut down on the cost of operation.
The Commissioner should be responsible only to the Solicitor General as head of that department, with parliament setting out guidelines on the "rules of the game" within that force. The government has been lax in not giving the RCMP adequate protection and guidelines that could be provided by legislation so that members of the force would not be subjected to criticism, investigation or innuendo in the performance of one of its main duties, the protection of the security of this country and the maintenance of the rights of Canadian citizens.
Mr. Speaker, 1 am 100 per cent behind the RCMP. Every Canadian has known that force to be dedicated and loyal for almost 100 years.


Some hon. Members:: Hear, hear!
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Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, it is very amusing to see hon. members from the opposition parties make a lot of criticism against the government while not being able to put forward any valuable suggestions. Mr. Speaker, because of its past, particularly its recent past, Canada is a very rich country. Canada could benefit from tremendous natural resources as it continues to do. Canada could rely on its subsoil and its food products without having to face real competition from foreign countries. However, some time ago there was a change which is not particular to Canada but which is worldwide, namely the emergence of Third World countries among the productive countries. Let us just look at the mines which made Canada an exporter of natural resources, and which are now forced to face foreign competition. This abundance of natural resources must be used much better, and with different means, if it is going to go on supporting our balance as a country. Of course, Mr. Speaker, in a country such as ours, labour costs more than in some countries of the Third World. Taking into account the present situation, we will therefore, over the long term, have to consider a policy for the complete transformation of our industrial organization in Canada.
As a Quebecer, I am that much more concerned about the matter, because we find in our province the traditional industries; neither the provincial nor federal government willed that we find in Quebec mainly the shoe and textile industries, and others, we call soft. Mr. Speaker, 1 think of the St. Lawrence River going through Quebec before reaching Ontario; Canada developed historically first of all in Lower Canada, the Quebec of today; in that area we find the first industries ever built up in Canada and consequently those that run up against the most difficulties today.
Mr. Speaker, on the other hand, we have had the good luck of benefitting from a country that is vast and has enormous potential. We need but think of the field of energy; contrary to almost all other industrialized countries in the world, we can enjoy so many things. And time is on our side because we have enormous natural resources. On the other hand, we, in the east, depend on the west for energy supplies; but because we will have construction of the pipeline, exploration projects and, naturally, the building of the infrastructure needed to develop the resources of western Canada, we, of the federal government, will have to see to it that eastern regions can benefit from those developments and thus be assured of some economic fall-out.
Mr. Speaker, let us examine the economic structure of Canada. 1 believe we should recognize the fact that the western provinces can no longer be considered as a means of supplying the rest of the country with food or energy products. We must accept the aspirations of western Canadians to industrialize. I believe this is legitimate and normal. Moreover, because of the enormous projects that this will require in that part of the country, we shall have a unique opportunity to change the economic structure of Quebec, the Maritime provinces, and partly of Ontario.

November 14, 1977
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Mr. Speaker, even though in its textile policy our government has confirmed without a shadow of a doubt that it wants to save and maintain the employment level in the textile sector, we should honestly ask ourselves if Canada will have to maintain 200,000 jobs in the Canadian textile sector until the year 2000. Should we not ask ourselves how we could on the long term, when the situation allows it and if there is such a need in the future, orient part of the manpower now employed in the textile sector towards other sectors where we are more competitive on an international level and at the same time orient not only our human resources, but our capital resources-our investments and equipment-towards more productive sectors. In my opinion, these issues should not be the subject of petty politics and we should instead meet with the trade unions and the heads of businesses to study how in the long term and through re-orientation we can direct our workers to sectors where they will also be better paid.
Mr. Speaker, the former Minister of Industry, Trade and Commerce (Mr. Chretien), who is now Minister of Finance, has taken a step in that direction. Moreover, the Department of Industry, Trade and Commerce is now making a detailed analysis of each industrial sector in Canada to determine the competitive position of our industrial sectors compared with identical sectors in other countries and to identify the strong areas where we could concentrate our manpower and our capital and where Canada has certain technological advantages.
Mr. Speaker, I think that in the long run this is the kind of question that has to be asked. When we see a plant closing down, we can of course look for all the past causes. There are many and I think the opposition should be able to list more of them than they did in the past, but one must wonder how each of these industrial sectors can manage to be competitive and if it cannot be, we must have the honesty to consider the situation and find out where we should direct our manpower.
Mr. Speaker, I believe the fiscal and monetary policies were the tools which were used by provincial and federal governments in the past, but given the present world and domestic situation, there is no way we can continue as we now do to rely only on these two working tools, namely tax rebates from time to time and interventions in our monetary policy at other times. Those interventions, however worthwhile they may be in the short run, will surely not bring to this country the anticipated prosperity in view of all the resources we have at home. If the devaluation of the Canadian dollar can temporarily benefit our exports, one must also realize that it will surely have an adverse effect on the inflation index. I believe we cannot rely only on this sector to restore stability in future.
Mr. Speaker, the Department of Finance, like the department in which I have the opportunity and honour to work, tackles the real problems, going at their very roots and trying to work in conjunction with all partners, unions and employers, with a view to rationalizing and concentrating our production in those sectors in which we are strongest, in which we can be more efficient not only on the domestic but on the international market.
Mr. Speaker, another thing which is essential when considering a long range industrial re-organization and short range fiscal and monetary policies-and it has the same importance in any country-is confidence, that of workers in the future of our industry and that of investors; such confidence, unfortunately, has been partly lost for some time in this country.
I do not want to go on a witch hunt and identify some groups or individuals rather than others. I think, Mr. Speaker, that if we do not want to find who is responsible we should at least try to restore that confidence climate in Canada, that confidence climate which is essential. I think that the first thing to do is to offer to those working in that field some long term political guarantees.
It is obvious, Mr. Speaker, that we can accuse a politician of being demagogic when he says that political instability results in investment losses. Multinationals do invest in certain countries of South America. And some people often use that example to demonstrate that political instability is not a factor. But they invest in some countries which I shall not name, provided the risk capital represents about 20 per cent of the capital invested in a project, and they will invest that 20 per cent if they can recover it within three years, when in Ontario the average period for recovering risk capital is 33 years. So there are much fewer projects for which the capital invested can be recovered within three years instead of 33 years, which is why such projects are very scarce.
Mr. Speaker, I think that Canadians, with their natural resources, their human potential and also their will to succeed together in spite of their differences, should take advantage of those factors to restore the confidence that we all need to believe in the future of our country. For those who say that the situation is critical, yes, it is. But as Canadians we can ensure our energy supplies for many years. The province of Quebec produces now only 27 per cent of the energy it uses. For the rest of our supplies, that is oil for 54 per cent of our energy consumption and natural gas for 24 per cent, and the rest being coal, or coke, we can at least rely on supplies from our own country, from the west.
Mr. Speaker, that in my view is an extraordinary advantage. Let us think of all the still unknown resources we have there, in our Northwest Territories or Arctic areas, to boast about. We can use them as a promotional feature to tell other countries that they can still have confidence in the Canadian economy and our future. More often than not price is not the only consideration, because there is also the question of a reliable source of supplies. And this country's supplies are reliable, what with the assurance this government will be able to give that the price of oil will always be competitive with that in the United States. We believe we can honestly compete with our neighbour down South.
Mr. Speaker, opposition members have been crying for the $100 personal tax reduction. But for some in the opposition it is not enough, and for others too much. This is overstressing matters of detail. The measures recently announced by the Minister of Finance (Mr. Chretien) are worthwhile, just and fair at this point in time. But the same minister had started

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working on something the new Minister of Industry, Trade and Commerce (Mr. Horner) will pursue. In my view, this is not simply a short-term, six-month affair, but rather a long term enterprise that will today and tomorrow give every Canadian confidence and a better future.
Mr. Speaker, the best thing that could happen to us is that the opposition stop criticizing, sometimes rightly but more often wrongly, that they stop making rather weak points that are only a repetition of old tricks or ill-conceived and badly written editorials. If they did so the opposition certainly could bring a more valuable contribution by putting forward more useful, more positive points and proposals.
[DOT]	(2052)


Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I appreciate the opportunity of taking part in the debate on Bill C-11, entitled an act to amend the Income Tax Act and to provide other authority for the raising of funds. It is more than that. It is a minibudget-at least that is what it was called by the Minister of Finance (Mr. Chretien) in the question period about a week ago. The bill is both complicated and lengthy. It consists of 225 pages of material and would take weeks, indeed, months of study to comprehend its contents fully.
I agree with the hon. member for Edmonton West (Mr. Lambert) who, on November 7, said in this House that 99.9 per cent of the people in the country don't understand it. It is only a handful of tax lawyers, tax accountants and people in National Revenue who do. Can you imagine legislation so complex that provision has to be made by the government for a taxpayer to make a submission to the department for a decision, and then the department makes a charge for that decision? I think it is time for the Minister of Finance to instruct his legal officers to revise the Income Tax Act with a view to producing a piece of legislation in language that can be understood and which leaves little doubt in the minds of the tax lawyers, chartered accountants, business people, and the public generally.
The Minister of Finance, when speaking in the House on November 2 on second reading, urged that the bill be passed without any unnecessary delay. He indicated that the passage of the bill before us is extremely important in securing the confidence of the business community. If one looks at the present state of the economy, namely, high unemployment, low productivity, our balance of trade deficit, and our faltering dollar, one will realize it will take something more than amendments to the Income Tax Act to restore that confidence.
[DOT]	(2102)
I suggest that what makes the country strong is strong leadership. That is what this country has lacked for the past ten or 15 years. There has been no sense of direction since the Prime Minister (Mr. Trudeau) has taken power. People in business and people in all walks of life are confused as to the direction our country is going, both from the economic point of view and from the political point of view. Perhaps in the Prime
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Minister's mind the universe is unfolding as it should. This is what frightens me and many other Canadians.
The government's policies have divided the country and have caused its citizens to lose that sense of pride and enthusiasm which we had shortly after the last world war and through the years in office of the right hon. member for Prince Albert (Mr. Diefenbaker) and of the right hon. member who followed him as Prime Minister. At that time this great country was looked upon with respect and envy by leaders throughout the world. We have lost all this. If one sits down and analyses the reasons, it can only be seen as being the result of the policies and attitudes of the present government over the past ten or 15 years.
During the course of the summer I had calls from chartered accountants, members of the business community and others who expressed concern over the fact that, while the then Minister of Finance had made certain proposals in his March 31 budget, no serious steps had been taken by the government to pass legislation to implement these proposals. These people were planning their affairs based on the March 31 budget proposals and in anticipation they would be passed, only to find that the House had adjourned and the proposed amendments to the Income Tax Act had died on the order paper. They asked me what they could do. Should they proceed with their plans or would they have to scrap them? Mr. Speaker, how can a businessmen operate if there is uncertainty as to the rules under which he must operate?
I pointed out to them that the budget proposals of May 25, 1976, were not finally passed until late February of 1977, and I had to admit that there was no way that I could give any guarantee that they could proceed with their plans because the government could easily bring in a new budget or, in the alternative, modify some of the provisions of the March 31 budget.
More and more people across this great country are asking, "Where are we going? What direction is this government taking us, or in fact does it know what direction it is leading us?"
I would like to now turn to some of the specifics of the legislation. First I would like to say a few words regarding the provisions affecting the proceeds from life insurance policies. The original proposals came as a shock to a majority of Canadians who had purchased insurance coverage over the years in order to build up an estate for their wives and families on their death, or alternatively as a retirement fund for their golden years.
The proposals created a great deal of concern, with the result that many representations were made to members of this House and to the Minister, resulting in some changes being made in the original proposals. The changes, as I understand the bill, are to the effect that the earnings on a life insurance policy will not be taxable as income on death. The provisions still remain, however, which provide that the earnings will be taxable if a policy is cashed in during the lifetime of the policy holder, or if he or she borrows on the policy.

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I appreciate that, on each instance, it is only the earnings that are taxed and not the amount of the premium contributions of the policy holder, but is this fair in either case? A policy holder only cashes a policy in or borrows on it if he needs the money for some purpose. In addition, the bill provides that if one borrows on the policy, the interest that is paid to the company will not be allowed as an expense for income tax purposes.
There are many small businessmen throughout the country and many farmers who make use of this borrowing feature in their businesses, and I fail to understand how the government can refuse to allow the interest to be claimed as a business expense, because actually that is what it is. Is this an attempt on the part of the government to assist the banks and other lending institutions? If it is not, I would like to know what it is. As I read the present legislation, an individual can take an insurance policy into the bank, use that insurance policy as collateral to borrow money at relatively higher rates than he could borrow from his insurer, and claim that interest as a business expense. Yet if he borrows directly from his insurer, the interest cannot be claimed.
Small business and farming are the backbone of this country. Government should help rather than hinder, yet here is yet another example of the government failing to appreciate the problems facing small businessmen and farmers, and attempting to gouge a few extra dollars of income tax out of them. I ask the minister through you, Mr. Speaker, to give serious consideration to withdrawing these particular clauses in order to permit small businessmen and farmers to deduct the interest they pay to an insurance company as an expense for income tax purposes.
I now turn to the question of Registered Home Ownership Plans. I have had many calls with respect to the changes in the rules respecting this program. 1 will not go into the details of the changes but it is sufficient to say that when a program is brought in, whether it is a RHOS Plan or otherwise, that is widely advertised by the government, the public should be able to participate in the program with the assurance that the rules will not be changed during the course of the program.
Can you imagine, Mr. Speaker, what the game between the Toronto Argonauts and the Ottawa Roughriders would have been like yesterday if, suddenly in the course of the game, the officials had announced that the rules of the game were being changed? This is what happened with the RHOS Plan. Surely the bureaucrats, or whoever it was who developed the plan, should have had the foresight or the ability to see what ramifications the introduction of the program would have, and prepare the rules and regulations accordingly. Perhaps it was simply a case of a government hungry for power, Mr. Speaker, instituting a program with the intention of buying some votes.
I am sure that the public from now on will be very cautious about participating in government programs of this nature unless there is some assurance that the rules will continue throughout the whole programs.
I was pleased to see that there is a provision in the bill to provide, and I am quoting from the Income Tax motion, that:

Where a taxpayer disposes of a capital property after March 31, 1977, that is real property (other than a rental property), or eligible capital property used by the taxpayer primarily for the purpose of gaining or producing income from a business, any recapture or capital gain be permitted to be deferred provided that by the end of the taxation year following that in which the property was disposed of, the taxpayer acquired a replacement property.
This amendment was a long time coming and should have been brought in at the time the government brought in a capital gains tax. It is particularly important to farmers who, from time to time, dispose of certain of their farmlands, not to make a capital gain but to consolidate their holdings in order that their farm units be more of an economically viable nature. In the past they were penalized, and in many instances this created hardship. This change was proposed by our party for years, and it is interesting to note that the hon. member for Wetaskiwin (Mr. Schellenberger) moved a private member's motion to that effect last session. Here again, I think it was a case of bureaucrats in the minister's department not understanding the economic situation in western Canada, particularly as it relates to farmers and farmlands.
It is disappointing to me to note that there is no amendment in the bill to provide for a tax free rollover of farmland from father to son where they have operated as a corporation. I will make no further comment on this because the hon. member for Wetaskiwin spoke at length on this subject when he participated in this debate on November 7 last. I hope, however, that the minister will instruct his officials to give consideration to bringing in an amendment to allow such a rollover, because there are a great many family farming corporations in western Canada which are being penalized under the present provisions of the act.
I have read the remarks of the Minister of Industry, Trade and Commerce (Mr. Horner) as reported in Hansard of Wednesday, November 9, and quite frankly, I was disappointed. He has become an apologist for this government and its policies which over the years he attacked so vigorously. He stated, to quote from page 756 of Hansard:
I was rather shocked during the debate this afternoon on the question of privilege that arose, as I have been shocked by the debate that has taken place in the House of Commons this week and last. The only conclusion I can draw is that in the absence of that right hon. gentleman, the hon. member for Prince Albert (Mr. Diefenbaker), the Conservative party has attempted to ride to power on the backs of the Mounties.
The hon. minister, I am sure, knows perfectly well from his long-time association with members on this side of the House that all of us hold the Royal Canadian Mounted Police in the highest esteem.


Some hon. Members:: Hear, hear!


Douglas Charles Neil: We are proud of that force, which is one of the finest police forces in the world.
If the minister will review Hansard, he will note that the thrust of questioning has been directed to ministerial responsibility. The government has attempted, supported by some of the media, to make it appear that our motives are otherwise. I am disappointed that the minister, who, I know, holds the
November 14, 1977

RCMP in the same high regard as I, would make such a charge, which can only create more confusion in the minds of the public as to parliament's attitude toward the RCMP.
As critic for northern development for the official opposition, 1 had hoped that the Minister of Industry, Trade and Commerce would have made some comment with respect to what plans his department has to ease economic problems in the Northwest Territories. I know he is aware of the problems that are facing the small businessman and the labour force in that area because, according to news reports that I read of his trip to the north, he seemed to indicate a certain feeling for the north, and certainly he expressed concern for their problems.
Assistance could be by way of tax incentives or programs which may be instituted by his department, and I am sorry the minister is not here this evening. I hope, Mr. Speaker, that the minister will hold discussions with the new Minister of Indian Affairs and Northern Development (Mr. Faulkner) as well as with the Minister of Finance to see what steps can be taken to alleviate the severe economic depression that is facing business in the Mackenzie valley.
In concluding my remarks, I would like to say that Canada has possibly the greatest potential of any country in the world. Elowever, potential, whether it be resources, manpower or otherwise, is of no value if we do not have leadership- leadership that would instil a sense of pride of country in Canadians from coast to coast; leadership that will create an economic climate that will give businessmen, both large and small, the confidence to invest in this great country and to create jobs, not only for the vast number of unemployed, but for the many youth who graduate each year from school and who, at the present time, face the future without much hope. We do not have that type of leadership at the present time and there is no indication that there will be any change in the foreseeable future. Canada has the potential. This bill, which has been called a mini-budget by the Minister of Finance, will do very little, if anything, I am afraid, to improve the situation.


Mr. Bob Brisco (Kootenay West):: Mr. Speaker, at the outset may I say that if in the context of my remarks I should wander from the subject, or in some way say something to which the Chair takes exception, I hope that Your Honour will draw it to my attention. I would also hope that in drawing it to my attention I would apologize with better grace than that which was demonstrated this afternoon by the Prime Minister (Mr. Trudeau) when he was found to be out of order, when he was found to have made a statement which was not founded on fact. I expect that kind of bad grace and ill form from the Prime Minister, but not, Sir, from any other member of the House, and I want that on the record.


Some hon. Members:: Hear, hear!


Robert Hylton Brisco: Having witnessed that astounding performance I should now like to participate in the debate on Bill C-l 1.
In my view, Bill C-l 1 is a reflection of the tax policies of the government as it confronts industry and the provinces. One
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area of confrontation, which goes back to the era of 1974, has been in the area of mining taxation, where clearly the provinces have a basic right to tax. But with the federal government putting in its oar, and with the former minister of finance, John Turner, being bloody minded and determined to confront the provinces, we are witnessing taxation of the mining industry of both British Columbia and Ontario to the tune of 110 per cent. Now we hear complaints from the government side that that industry is not doing its fair share, is not carrying the load and is not being a good citizen. In terms of INCO, we have heard that they have not been good citizens, but that is in another framework and another context.
The mining industry, by its very nature, is of a type and kind which requires a great deal of time in order to gear up and get that locomotive of industry rolling. It takes time to develop prospects. It takes money to prospect, and it takes a great deal of skill. Canadians have withdrawn from confidence in the mining community, as a result of the tax burden this government inflicted on the mining industry. Canadians can see little profit in supporting their home grown industries through the purchase of stocks when the mining industry is being taxed up to a level of 110 per cent in some cases, that is, on the basis of the tax policies by this government.
Mining is not the only industry to be singled out by the government. This afternoon I listened to the President of the Treasury Board (Mr. Andras) talking about our gross national product. I was a little disappointed that he did not touch on the forest industry, a massive industry in terms of GNP contributions, more so than the mining industry and the agricultural industry combined. This industry is massive because of the enormous amount of timber available across this land. By far the majority of our square miles is comprised of timber. Here we have an industry which has the support of the government in the form of regressive taxation and also in the form of a total lack of a national forest policy! There is absolutely no forest policy for Canada's first industry.
The other day I read the remarks of the senator who at one time was the minister responsible for fisheries, forestry and the environment, Senator Marchand. He stated in an address to a standing committee that the Economic Council of Canada had expressed concern over the fact that Canada did not have a forest policy. He felt it should address itself to that. He hoped that the incoming minister responsible for the environment would adopt and have an opportunity to introduce a national forest policy.
We have had four ministers of the environment, and we now have a Minister of State for the Environment (Mr. Marchand), who has gone on record as saying that he thinks we should be doing something for the forest industry. Sir, that is sheer arrant rhetoric of the most shallow nature, because he knows that this government reduced the budget for the forest service of Canada by $2 million last year. He knows that the minister responsible for the environment, for fisheries and forestry, said to the standing committee last year that we do

November 14, 1977
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not have a national forest policy. That was the minister's statement. We have been hearing the same statements from ministers ad nauseam and ad infinitum since 1974.
How is the forest industry affected by the tax policies or the failure of this government to have any policies? For one thing we see the Department of Regional Economic Expansion getting into the ball game and periodically funding the forest industry in one place or another. For example, not too long ago it funded a firm in my own riding, Salmo Forest Products, Salmo. It is reported that DREE provided some $300,000 in order to provide more job opportunities for Canadians, the residents of that small community of Salmo. What have we seen as a result? We have seen that same American owned saw mill sending its lumber across the line to the United States to be finished, laying off some 20 or 30 Canadian employees in order to hire on 20 or 30 United States employees, not to mention the 12 or so truck drivers they will require to haul the lumber down to the United States. Where is the policy of this government in regard to that type of rip-off? Is there any value in an American owned operation demonstrating this type of irresponsibility? I do not care whether it is American, Canadian, or German owned. Can anyone here convince me that 42 American employees are the equivalent of some 20 or 30 Canadians who will be laid off?
This government, with its tax policies and its lack of a forest policy, inflicts this kind of problem on the small average worker in Canadian society. The saw mills may be excused in part. I am not referring to this one, but some of them may be excused for the shipment of their goods by CP or CN rail because the charges that are levied are on the basis of a full box car. In the United States that kind of shipment does not apply. Frankly, the entrepreneurs in the forest industry in the western United States, for example in Washington, Oregon, Montana and Idaho, have everything going for them in terms of transportation benefits to move their goods to U.S. and foreign markets. It is not so in Canada.
Every effort is made to make it tougher for Canadians to do business in Canada in terms of the forest industry. The plywood industry is in the same position. The pulp and paper industry is in the same position. So, I say to you, Mr. Speaker, that this government, by demonstrating its irresponsibility by funding a U.S. firm-and I do not care whether it is lumber, mining or what it is-is denying jobs to Canadians and is not living up to the role it is supposed to play in terms of DREE.
Further, in terms of DREE, we heard the rumour today, vehemently denied by the minister, that the government and the cabinet are concerned about the fate of DREE because it is not getting enough PR Assistance to an industry or to a particular project from DREE is not getting enough mileage in terms of public relations for the federal government. The reported source comes from within DREE itself. 1 suppose where there is smoke, there is fire. I would say the government has cause for concern in terms of its PR with DREE because much has been a failure, much has been mismanaged and has been in the wrong direction, without the right ideas.

I cannot see the Maritimes accepting the proposal that DREE should go down the tube so that this government and its cabinet can pork barrel in the Maritimes or where else it pleases. I would think that that proposal would be totally unacceptable to any hon. member from the maritimes, be he Liberal, Conservative or NDP.
One of the other concerns I have with reference to the tax legislation the government is introducing has to do with the lack of an industrial strategy that this government demonstrates. We talk about a billion dollars which it has been proposed will be spent on industry in some fashion. The guidelines have not been spelled out. We really do not know in what way that money that money is going to be handed out. Would it not have been much more acceptable to Canadians and to thinking members of parliament if such a proposed expenditure were wrapped around a clear and distinct policy and strategy of industrial development? Clearly that type of thing does not exist.
I draw the attention of the House to page seven of the bill, and I note that reference is made there to a proposed amendment which reads:
That for the 1977 and subsequent taxation years, a grant received under the Canadian Home Insulation Program be included in the income of the recipient or, in the case of a married individual residing with his spouse, in the income of the spouse with the higher income.
We have heard the eloquent speeches of the Minister of Energy, Mines and Resources (Mr. Gillespie), of the Minister of State for Urban Affairs (Mr. Ouellet), and of the Minister of National Health and Welfare (Miss Begin) who, on October 26 in response to a question by the hon. member for Halton (Mr. Philbrook) said, and I quote from page 290 of Hansard:
Mr. Speaker, I can assure the hon. member and the House that the grants for insulating homes will not be considered additional income or assets to old age pensioners and will therefore not interfere with the receipt of supplementary benefits.
I can recall that that announcement was greeted with desk thumping responses on both sides of the House, but now we see this little clause on page 7 sneaked into Bill C-ll, a massive bill of some 250 pages, in the fond hope that nobody will pick it up. What kind of shell game is the government playing with the senior citizens of Canada?
The insulation program is a good program, but its management has to be the most inept, bungling mess I have ever had the misfortune to come across. When a member of parliament cannot get from the department responsible for the management of this program, located in the city of Montreal, more than one copy of the program unless he writes a second letter for a second copy, or a third letter for a third copy, there has to be something wrong. My constituency office was assailed with phone calls from people who wanted to participate in what they thought and I thought-and still believe-is a good program, but in terms of efficiency and organization, what a bloody disaster!
November 14, 1977

Strangely enough, the government must have recognized that I was incensed about this because just on Friday of last week some 50 copies of this home insulation, information package arrived at my door, but it took an editorial in the newspapers, and on open letter to every business firm in my riding dealing with insulation to explain the program that this government has failed to explain to Canadians, in spite of its three quarter page ads. Wrong numbers have been listed in the newspapers. People have been calling Montreal and getting Halifax or some other place. There has been no notice taken of the time differential.
With all respect to my Francophone brothers, there are those in British Columbia who have difficulty with the French language, including this member, and it is rather difficult to communicate in French when you do not speak the French language. That was another problem. I realize that every program the government introduces has its problems. It takes time to put programs into gear, but many of these things could have been thought out beforehand.
Perhaps I am deviating from the point, but the point is that after the Minister of National Health and Welfare assured this House that the senior citizens of Canada would not be taxed on the benefits of this program, we now see it introduced by this government on page seven of this bill. I say shame! That is the very least I can say, and I ask the Minister of National Health and Welfare to withdraw her statement, or apologize.
1 note that the government has withdrawn its hand from the graves of those who had life insurance policies. However, as one of my colleagues recently remarked, the government has not gone to the extent of demonstrating assistance to small business.
It seems to me that it was about October 28 that the Minister of State (Environment) (Mr. Marchand) spoke in Trail to an assembly of people attending a Chamber of Commerce luncheon. At that time the minister, formerly responsible for small business, described not his new responsibilities for the environment but those with which perhaps he was more familiar, his former responsibilities for small business. I admired his frankness when he said that for too long the government has imposed too much red tape on small business, and that it could see that the small businessman was being drowned in red tape and in forms of little or no consequence.
Yet after a frank speech of that nature indicating how dedicated this government is to the support of small business we find that it is moving in this bill to frustrate further the advance of small business. What does the government want? Does it want the small businessman to go to that court of last resort with the highest interest rates? Does the government want the small businessman to run to the FBDB? Does the government really want to cultivate and encourage small business? It certainly has not demonstrated that inclination with the provisions contained in this bill as they affect insurance policies.
This weekend I called on a small businessman, Mike Band-eroff. He operates a small store in the city of Castlegar, and he
Income Tax
is tearing out his hair. He has a small bakery attached to his general store. He has three bakery employees supporting three families. He will have to let those employees go because, as he said, the Department of Consumer and Corporate Affairs has told him that he must label all his bakery products. He says he has no difficulty with bread, and his bakery bakes buns every day. That is easy enough. But then he says, "Today because I make a dozen apple pies-I may not make another dozen for six weeks-I must have 2,000 labels on hand telling the public what the shelf life is, what the labels are-"


Eldon Mattison Woolliams: Ask Basford. He got one in the face.


Robert Hylton Brisco: That is right. I understand the Minister of Justice (Mr. Basford) is an authority on pie. These ridiculous little labels are supposed to be for the protection of the public. Anyone who has been in the business of serving the public knows that when you cease providing quality, you lose business. A mouldy apple pie on the shelf is not going to attract customers. Anyone who buys it will never buy again.
Why is the Department of Consumer and Corporate Affairs hassling this small businessman with such nonsense? If he has a dozen danish rolls that happen to have jam in them he must have a label for that, and then a label for his peach turnovers, and one for his apple turnovers. It will take him about 25 years to use up the labels.
The ultimate insult to this small businessman is not only that ridiculous regulation but the fact that he received a letter headed "Consumer Fraud Protection", not the official letterhead of the department. It could have been a fraud. That letterhead could imply to the businessman that he was already pulling a fast one on the public. He could accept a letter from the Department of Consumer and Corporate Affairs, but when it comes under the heading of "Consumer Fraud Protection" does it mean he is regarded as a gangster?
A little while ago I listened to the Parliamentary Secretary to the Minister of Industry, Trade and Commerce (Mr. Loi-selle) talk about the failure of the opposition to do anything but criticize. When he said that I thought he had failed to recognize the role of parliament and the role of the opposition. It is the role of the opposition to criticize, and I suppose from time to time we are guilty of not criticizing constructively, perhaps because we are frustrated at the government's policies. I should like to draw to the attention of the hon. member that it is the role of the opposition to oppose, to criticize constructively. That has been demonstrated many times in the past through amendments introduced by the opposition that have helped improve legislation.
The tax policies of the government as set out in this bill give me some concern. I do not understand their priorities. The city of Castlegar is unable to expand industrially, commercially, or socially in terms of housing, for want of water which could be supplied with $3 million of this government's money. Yet every day in the newspapers and through parliamentary reports the residents of Castlegar learn about the government spending

November 14, 1977
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$100 million on an office building in Montreal-although it would not matter whether the building was in Vancouver, Regina, or Halifax. In this so-called period of restraint the government spends money for an office building in Montreal where we are told there is a surplus of office space. It looks as if the government is bending over backwards to buy votes in Quebec.
If Castlegar were to receive assistance from the federal and provincial government it could triple its employment opportunities in the next five years but, instead, it may have to halt the expansion of existing industry. All the applications made to the Minister of Regional Economic Expansion (Mr. Lessard) fell on deaf ears. The government has tunnel vision. It shafts the small businessman while it introduces a program to assist Canadians to reduce the cost of energy and an insulation program, which I have already said is a good one; then it turns around and, with the other hand, grabs dollars from the pockets of senior citizens.
The government takes and the government gives, but it always takes more than it gives. On the one hand the minister assures us that something will not be done, while on the other hand somebody else introduces it through a provision in this bill. It just demonstrates the government's failure to recognize priorities. It would rather spend $100 million on erecting a tower to reflect-


An hon. Member:: That is not right.


Robert Hylton Brisco: Mr. Speaker, the hon. member opposite will have his turn to speak when I finish, unless he has a question, which I doubt.
The government has failed to set its priorities, it has demonstrated tunnel vision and decided that a community the size of Castlegar does not need to expand and increase job opportunities. Rather, the government proposes to erect a tower to its policies in the city of Montreal.
That is the kind of policy, the kind of tunnel vision, the kind of "emphysema" of rhetoric from which this government suffers.
[Translation)


Mr. Roch La Salle (Joliette):: Mr. Speaker, it is with a great deal of interest that I should like to make some comments about this legislation. I notice that the minister has already mentioned misuse of freedom of speech. However, Mr. Speaker, I think that he indicated in his presentation how important this legislation was and, on that basis, I think that we have serious reasons to make comments about it. I wish to say right now to the minister that there are some good provisions in this legislation that we wish to support at once. Unfortunately there are also some which are debatable not to say questionable. Once more, we think that it is a strategy of this government to present a legislation containing several provisions deserving our support because we should not hesitate of course to support, for instance, a tax reduction. We have been asking for it in the last two years. It is only last week that the minister

decided to introduce this legislation. I hope that our friends opposite will not try to take credit for such a brilliant idea.
For two years, Mr. Speaker, the leader of my party and several of my colleagues have been asking-and they believe that it was urgent two years ago-that the Canadian people be given additional purchasing power. And they come up with this legislation in which once more, there are provisions that we consider inadequate for the time being. And we think that those measures should not all be included in the same legislation. If in the minister's view it is urgent to act, then let him suggest a proposal to select measures that are urgent, valuable and interesting and we shall certainly give them our support.
But it looks very much like the omnibus bill of long ago in which totally different measures were being proposed. Four or five of the seven measures were valid and we were supposed to accept the whole package without question. This is where the problem lies, and we ask for the insurance that, at least at the committee stage, the minister be ready to make some concessions and present in third reading a legislation more acceptable than it is now, in which case he will certainly get the cooperation he wishes from the opposition. But I somewhat regret to see that my hon. friends opposite are maintaining a stubborn silence about debatable and debated measures with which a majority of the people probably do not agree.
We believe that it is normal, or at least that we are doing our duty in telling the government members that once again some provisions are unacceptable for the moment, that we are greatly pleased with some others and that what would make Canadians most happy is a tax reduction, but as I said earlier, my party has been asking for these reductions for three years in order to increase our purchasing power. Last week, previous speakers talked in particular about the clauses dealing with insurance companies, the holders of insurance policies and, of course, capital gains, especially as concerns farmers, and we certainly have serious reservations about those provisions. Mr. Speaker, I would like to say that we are very much in favour of the good clauses and that we intend to do our duty with regard to those that we find unacceptable for the moment.
Of course, Mr. Speaker, I represent a riding with problems as well, and neither the Speech from the Throne nor the estimates that the minister would like to propose and which, in his opinion, the people would find most interesting can truly solve these problems. Some people in my constituency are greatly worried about the economic situation, and this legislation is not likely to solve certain important problems.
I was listening to the hon. member for Chambly (Mr. Loiselle) who is, I believe, Parliamentary Secretary to the Minister of Industry, Trade and Commerce, and he mentioned the opportunity that we have to correct the situation. He made an excellent speech which I greatly appreciated, and he touched on almost everything, Mr. Speaker, except for a minor matter. He forgot or tried to forget the past. But that is our problem, our responsibility. According to what he said, he would have liked us, members of the opposition, to forget all the failures of the government in so many areas, he would have liked us not to talk about what has happened and as the
November 14, 1977

Minister of Finance (Mr. Chretien) did in his statement, he of course asked us to help this government and to recognize how important it is for the government to regain the confidence of the people. He therefore admitted that the government has already lost much of the confidence of Canadian voters.
The economy, stated the minister, depends in large part on a climate of confidence in business circles and it is essential to pass the bill now under consideration to ensure that climate of confidence. Mr. Speaker, I will deal with this matter for a few minutes.
How is it possible for the opposition to accept readily to support this government when it recognizes the importance and the necessity of gaining the people's confidence, as I said earlier, after so many failures. We would be less than honest if we asked the people to forget what happened and merely say: I think this government is well-disposed now. This government has been running the country for 12 years and for as many years the Canadian people have been expecting measures when they only got promises since 1965, and I am thinking of the just society which was promised to us.
I am also thinking of that great and noble purpose, the reconciliation of all Canadians, but dissension occurred. I am thinking of the undertaking to reduce unemployment in 1968 by almost 168,000 if I remember correctly, while the number of unemployed now exceeds a million; to restore agriculture, while degradation is witnessed in that area, to increase the number of farmers when we know that they are fewer; to increase the net revenues of producers when we know quite well that they have dropped. Excess revenues, gross and net revenues will be mentioned, but the opposite is the truth. To curb inflation! Never before have we known such a serious inflationary trend. We heard about close co-operation with the provinces and it was rather confrontation than consultation. There was confrontation as well with businessmen, the business community and unions. I shall not deal with the security service, since I may have the opportunity to come back to this later on. The behavior of some federal ministers as regards some Quebec members before November 15, Mr. Speaker. 1 am not referring to that day but to the period before November 15. 1 recall very well all the arguments we had and the recommendations of their cousins of the provincial legislature which all resulted in negative answers on extremely important matters. Then, one wonders how this famous November 15 ever happened? And the carelessness of our industries! Last week, the Minister of Regional Economic Expansion (Mr. Lessard) referred to federal handouts. There were quite a few, that is true. There were very interesting grants, particularly in Quebec, but there was also in the riding of Berthier-
An hon. Member; In the riding of Joliette.


Roch La Salle: Who is speaking of Joliette?


An hon. Member:: I am!
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Roch La Salle: Ah! That is another story, excuse me. I say several industries disappeared, but we are not told why it happened. Efforts were made to set up new industries, but unfortunately, the Canadian production in several industries disappeared or declined. Now, how could we forget, how could we trust this government which comes to us and says: There now, this time we are prepared to act properly. Therefore, a lack of estimates for research equals a lack of a long-term policy. And for the past 12 years, they have been wondering what was going on or they have just not cared. And recently, in a joint committee, Senator Lamontagne, who is not a Progressive Conservative, blamed the government in direct and strong terms for allowing a decrease in research funding. Therefore, how can this government ask us to have confidence in them, how can they be serious when they introduce a few more budgetary measures, fully aware of the fact that the predecessors of the present Minister of Finance sadly failed in all their projections, and as far as I know, unless some changes occurred, the same analysts or economists are probably preparing the background papers for the present Minister of Finance. Once again, we are being asked to trust this government which gave us abundant proof of its failures.
Mr. Speaker, you can understand why we are not prepared to comply with the request the hon. member for Chambly (Mr. Loiselle) made a moment ago, to forget the past and look forward to the future. If the past is the guarantor of the future, we must remind Canadians that the coming months and years are going to be difficult ones. Therefore, in these circumstances, Mr. Speaker, we really intend to remind the people of this government's tremendous failures.
I would also like to make some comments about an industry which affects my riding in particular and greatly concerns the province of Quebec, I am referring to the dairy industry. I do not think any reference has been made to this, nor any special funds earmarked for this purpose. But, Mr. Speaker, this is important in our economy; besides, it is considered a very important part of our agricultural industry. I wish to remind the minister of the importance and urgency of providing financial aid for this industry. As far as agriculture in general is concerned, promises have been made. The Minister of State for Federal-Provincial Relations (Mr. Lalonde) indicated that meetings would be held with the Quebec Minister of Agriculture to discuss Federal government grants to the dairy industry. But, as far as a dairy policy is concerned, Mr. Speaker, great hopes and tremendous expectations have been raised among the people concerned. Enormous hopes have been raised and milk producers have known miseries and problems two or three years ago. They are still refusing-1 mean the government-to introduce a program on a five year scale. They have talked about restrictions on cheese imports but let them reach 50 million pounds before making any move and now we are told that we are probably going to reduce those imports. At the same time the production capacity of milk producers has been reduced.
We did not even protest against powdered milk competition from the European Economic Community under the pretext

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that we could not challenge and compete on equal terms with them. And yet we knew very well, Mr. Speaker, that at the same time the Prime Minister (Mr. Trudeau) was negotiating small economic agreements with the EEC on the back of milk producers. The fact is not known. That was the problem. I think the member for Longueuil (Mr. Olivier) is not much aware of that. The member for Berthier-Maskinonge (Mr. Yanakis) is surely aware of it. I know that the member for Compton (Mr. Tessier) dealt with it. His colleagues did not listen to him carefully, but the papers reported recently that the member for Compton was not satisfied with the government's behaviour. As it turned out, the government chose to let the EEC compete with us, no matter again who was going to pay the price of such a decision.
Again, the government refused to assume its responsibilities and help the milk producers in allocating supplementary estimates and to face that competition in order to protect a Canadian industry. And this is a further example of a lack of courage as in so many other fields. The member for Beauce (Mr. Caron) is aware of that. There are milk producers in his riding who are not happy, Mr. Speaker.
I am anxious to see the member for Beauce rise in his place and have the courage to condemn the lack of adequate measures in order to save the milk industry not only in Quebec but throughout the country.
There is again some talk about importing butter. Mr. Speaker, such things compel us to take the floor and ask the government to show some understanding. At the very moment I am speaking to you, I am quite convinced that in the riding of Beauce as in other ridings, the situation is the same for milk producers. The member for Beauce, Mr. Speaker, prefers to promise a federal penitentiary in his riding by 1979, but it will apparently only take place in 1989. Anyway, due to the present economic situation, there are many milk producers in my riding who have reached their quota and who don't know what to do until the month of April, yet the government refuses to listen to them. Indeed, it is going to let them down. From 5,000 to 6,000 of them have already given up a couple of years ago. Many more will give up as well, Mr. Speaker, but that does not bother the government in the least.
I had an opportunity to speak with the chairman of the Canadian Milk Board and to the Minister of Agriculture (Mr. Whelan). Next April, the government will see what it will do, but until then, no doubt some milk producers from Ontario will be forced out of business. There are not enough unemployed as it is. That is the position: one of denial. Some people find the situation amusing. The member for Montreal-Bourassa (Mr. Trudel) may find that funny, but when the Liberals run out of milk or food, and when their stomachs ache from hunger, Mr. Speaker, maybe they will understand how important it is to give the producers a decent income.


Jean-Jacques Blais: I rise on a point of order, Mr. Speaker.

November 14, 1977


Mr. Deputy Speaker:: Order. The Postmaster General on a point of order.


Jean-Jacques Blais: I am quite aware that the hon. gentleman has not much expertise in the field of agriculture and that he likes to deal with it in a rather general way, but could he tell us, since we are studying Bill C-l 1, if any clause of this bill allows him to refer to all those matters?


Roch La Salle: Mr. Speaker, this bill contains some provisions aimed at re-stabilizing or restoring Canada's economy. I am referring to a deficiency in this bill-


An hon. Member:: Ah!


Roch La Salle: No, they don't care. I would have to accept the funds offered by the Minister of Finance (Mr. Chretien) and completely disregard a very important area from an economic point of view for my riding and for the Canadian agriculture.
The Postmaster General (Mr. Blais) is not interested in that. But that is not possible, for I know the Postmaster General too well to believe he is not interested in such an important sector for the agricultural economy of our country. I denounce, I deplore and I regret this absence of sufficient funds that the Minister of Finance could have presented to the House, as I am speaking of the urgency of the present situation for our milk producers. I wish our members from Quebec would say as much about it, that they would say a little more. Mr. Speaker, in my riding, for example, we had trouble in a textile manufacture. There have been small problems in the riding of Berthier as well.
The Minister of Finance has mentioned it quite often, and recently he was applauded because he presented a proposition last fall which could perhaps save the 200,000 people left. However, the 600,000 workers who had to leave this industry in the last few years are not to be mentioned. That is not mentioned. The 200, 000 workers left may be saved, but that is not sure by any means.


Mr. Olivier:: Mr. Speaker-


Mr. Deputy Speaker:: Order, please. The hon. member for Longueuil on a point of order.


Joseph Mario Jacques Olivier: Mr. Speaker, I am sorry for interrupting the hon. member for Joliette but I think the House should not be misled. First he just said that about 600,000 people left their farms. Second, he says the government has never done anything, but if he considers what has been proposed by the government, he will see we are talking about something like $600 million.
But the people from Montreal, as the member mentioned it, are paying for the people whom he defends now. He should not ignore it-
November 14, 1977


Mr. Deputy Speaker:: Order, please. I must bring to the attention of the parliamentary secretary that he is making a very interesting point but he may have the floor after the hon. member for Joliette and bring these points before the House.


Roch La Salle: Thank you, Mr. Speaker. The hon. member for Longueuil wants to contribute and it seems that there is enough time for him to do so. It would be very interesting to listen to him and I am ready and indeed 1 would be very pleased to hear him. Nevertheless my time has not expired yet. As I said, the absence of proper energetic measures in both our textile industry and our industry in general has forced several industries in Canada to close their plants. The absence of research is responsible as well for the research subsidies for industries which had to close. We are told that the government makes incredible efforts and people are highly indignant because one deplores now the lack of courage shown in these past 10 years.
Mr. Speaker, earlier I acknowledged the comments of the hon. member for Chambly. All I said is that it is not easy to accept an invitation saying we are going to look at the other side and try to make Canadians believe that we are right to trust the government. Mr. Speaker, I repeat it over and over and I say it everywhere. We have no reason to trust a government which has failed in its responsibilities for too long and which has respectfully lied to us for too long on god knows how many issues and has constantly tried to mislead us. All the projections of the previous Minister of Finance and of the present Minister of Finance were wrong. The hon. member for Longueuil knows that.
Mr. Speaker, there were a series of statements about the economic situation of the province of Quebec which were equally false. Many extremely important recommendations, which I am sure would have curbed the rise of separatism in Quebec, have been rejected. But in Ottawa, nobody cares. And now we are in a difficult situation which is described here tonight but we are told we should not talk about it. Mr. Speaker, I agree with the responsible ministers who try to find new funds so that when one talks about restoring the economic climate in Canada and within my province of Quebec, there is not one single member of the House who is against it. Still 1 cannot applaud the efforts which have been made these last 12 years. This is wrong. But this is a different situation altogether and it seems that something is going to be done.
As 1 said earlier, in my constituency people refer to false projections. Must I remind this House that when there was question of the Mirabel project-


Mr. Deputy Speaker:: The Parliamentary Secretary to the President of the Privy Council on a point of order.


Yvon Pinard: Mr. Speaker, I rise on a point of order. Would the hon. member allow a question? Would he specify the areas where the government allegedly lied to the opposition, before I rise on a question of privilege?
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Roch La Salle: When I am finished, Mr. Speaker, if the hon. member wants to rise on a question of privilege, he will be able to do so.


Mr. Deputy Speaker:: The hon. member for Joliette alone can allow a question. He may conclude. The Parliamentary Secretary on a point of order.


Yvon Pinard: I wish to reserve my right to rise on a question of privilege, because the hon. member just blamed illegal action on the government, by suggesting the government lied to the opposition. I reserve the right to rise on that question tomorrow, if I am so allowed by the Chair.


Mr. Deputy Speaker:: I would like to point out to the hon. member that there is nothing in our rules to preclude the hon. member from accusing the government or a political party as a group in this House, or even from suggesting that a party or the government uttered falsehoods. It is in cases where the character of an individual member is involved that his rights may be infringed upon and he may rise on a point of order. Anyway, the hon. member in the opinion of the Chair is simply raising a matter of opinion and I do not feel at this point that he has a proper point of order.


Roch La Salle: Mr. Speaker, I repeat that this government has been misleading, if the term "lying" is too harsh for the hon. member to hear, this government has been misleading the Canadian people for ten years. In all its projections, as I said, not to mention the 1968 commitment to reduce unemployment, if this be not sufficient proof in the current context, is this not misleading the people?


Yvon Pinard: I rise on a point of order.


Mr. Deputy Speaker:: I hope the parliamentary secretary is rising again on a question of privilege.


Yvon Pinard: Mr. Speaker, since the hon. member for Joliette has used another word and that instead of using the word "to lie", he has elected to use the word "to mislead", you will no doubt allow me to rise again on a question of privilege and to call the attention of the Chair on the ruling which was given today by Mr. Speaker around 3 p.m., when he ruled that to accuse a party or a group of an illegal act is deemed at this time to be a breach of privilege and that the hon. member should withdraw his accusation if he is not in a position to * substantiate it. In this case, Mr. Speaker, the hon. member for Joliette does not only make statements without substantiating them, without supporting them with specific facts. He accuses government members of telling lies. He accuses government members of misleading the opposition and, under these circumstances, I ask permission to raise a question of privilege as early as tomorrow, which is an allotted day.


Roch La Salle: Having heard the remarks of the hon. member, I shall try to provide additional evidence. In 1974, we went to the people on a very clear platform of wage and price controls. The government kept repeating throughout the country that they would never take such an approach. They called

November 14, 1977
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us prophets of doom and gloom. They tried to have us believe that the leader of the Progessive Conservative party was retrograde. But what happened only a few months later? After winning the confidence of the majority of the Canadian people, the government came to power under false pretences. Only a few months later, the government made a complete turnabout: they imposed wage and price controls and mislead the Canadian people-


Mr. Deputy Speaker:: The hon. member for Chambly (Mr. Loiselle) on a point of order.


Bernard Pierre Loiselle: I beg your pardon, Mr. Speaker, but anyone who has any knowledge of the economy knows that between the wage and price freeze suggested by the opposition and what we proposed to the Canadian people in 1976, there is as much difference as between day and night. Of course, you have to be a little knowledgeable.


Mr. Deputy Speaker:: The hon. member will agree with me that he just expressed a matter of opinion on which the Chair does not have to rule. He already had the opportunity to make his own speech and put forward his arguments. Therefore I think he should allow other members to listen closely to the hon. member for Joliette (Mr. La Salle).


Roch La Salle: Thank you, Mr. Speaker. Moreover, the government has even more misled the people because with those measures they promised to curb inflation, and that is not what happened. Inflation has increased. It had promised to restore the business world, to make agreements with the unions, but we saw a continuous confrontation, and not later than today he was suggesting dates for decontrol, but we are still waiting for it. Mr. Speaker, how can my hon. friends opposite honestly accuse me of foul play? It is not possible, Mr. Speaker, and they know it. We saw this in how many measures where some hon. members felt like denouncing their own government, I am sure, on these projections which proved erroneous. Then do not tell me that the government did not mislead the people when they promised to maintain national unity, to reduce unemployment, to slow down inflation, to spur the Canadian industry, to reduce annual deficits; it was a complete failure all along the line, Mr. Speaker. And they try to have me retract my words when 1 say that the government took in the Canadian electorate. I am flabbergasted, Mr. Speaker. I thought my hon. friends opposite could be more honest and sincere with me. Well, I am being asked too much, Mr. Speaker. That cannot be!
Mr. Speaker, in my riding as well as in my province, 1 repeat that a cynical hypocrisy is obvious. They try to make us accept certain provisions that cannot be added to the same act.
I will venture further. I had forgotten my good friend, the Minister of Industry, Trade and Commerce (Mr. Horner). Some people say that we have been taken in. It is funny to see how things turn out to be. How can we expect the public to have confidence?

A few months ago, the Minister of Industry, Trade and Commerce was on our side and my friends opposite wanted his hide. They had been dreaming of that for years. The Minister of Industry, Trade and Commerce has been on our side for 19 years. He has fustigated, condemned and repudiated this government. Then a transfer occurred for reasons everybody' knows. Mr. Speaker, the Minister of Industry, Trade and Commerce dared attempt with great seriousness to convince us that he was truly motivated by the desire to advocate measures he had been denouncing for 19 years.
But, Mr. Speaker, the most sickening thing in all this is when I saw my friends opposite applaud him. They actually applauded the one they wanted to crucify merely six months ago. But the Canadian people are not blind. When they learn of things like that, when they realize what has happened, they say: No, it cannot be. It is just not possible that this government changes its mind so quickly and that members of parliament support and applaud the very one they would have gladly nailed to the barn six months ago.
That is what we see, Mr. Speaker, and the Minister of Finance as well as a number of members of this House, with all the respect I owe them, are asking me to trust this government. I cannot honestly tell my constituents that there is no problem, no reason to be afraid. Nor can I ask the people of Canada to trust this government. If I say that this government has betrayed us on too many occasions, Mr. Speaker, am I going to be called to order? Maybe. But like thousands of other Canadians, I suggest that this government has failed in its duty and that several of its ministers have failed in their responsibilities.
In such circumstances, it is impossible to trust this government and to give an unreserved support to this bill. If the government would agree to split this bill in order to keep only the best and most pressing part of it, we would be ready to support it. We would support it indeed! But there are a number of proposals in this piece of legislation which are too important and too questionable, with regard to capital gains and insurance policies, to be approved without reservation. Besides, we would be blamed for doing so, which we are not going to be, because we will stick up for the rights of Canadian electors in this regard.
I should like to point out, in passing, the statement the Minister of Regional Economic Expansion made last week. He said, and I quote:
What I mean is that it is not the responsibility of the federal government and the Department of Regional Economic Expansion alone to fight against disparities. In my meetings with the premiers and the provincial ministers with whom I have regular consultations and negotiations-
When the minister speaks to us of fighting against those infamous regional disparities, I have no doubt whatsoever that he is sincere, Mr. Speaker, because I know the Minister of Regional Economic Expansion very well; but we have been talking about that for ten years now, and what results do we have?
November 14, 1977

Last Tuesday, I asked the Minister of Finance to convene immediately the ministers of the Maritime provinces and Quebec, in view of this growing economic imbalance. He said that if the ministers wanted to discuss things with him, they could always come to see him. A few days ago I suggested to the Minister of Energy, Mines and Resources (Mr. Gillespie) that he meet with his provincial counterparts, business and labour. He replied that it may be a good way of setting up a long term policy but we did not hear about that yet. What are we waiting for? Businessmen are waiting to see what government intends to do. The government is waiting for an answer from businessmen. Maybe the government is waiting until business and labour get along better.
However, it is the responsibility of this government to get all those people to sit down at the same table and devise long term and firm policies. This government is not doing its job in this respect. Apparently they seem prepared to meet business and labour but they have demonstrated, Mr. Speaker, their inability to set long term policies and their lack of leadership, and the
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recent cabinet shuffle is definitely not enough to reassure Canadians.
It is impossible, Mr. Speaker. No new idea can come out of that Cabinet. There has been no new blood injected in the Cabinet. As I already mentioned there are young backbenchers, Mr. Speaker, who might have some good ideas. I am sure that the hon. member for Chambly could come up with something new. I remember the promise which was made to the hon. member for Louis-Hebert (Mr. Lamontagne), the hon. mayor of Quebec City, but he must wait for his turn. They have chosen to play musical chairs for the last ten years with the same ministers and the same inadequate ideas. This is why it is impossible to trust this government that has disappointed us too much.


Mr. Deputy Speaker:: Order, please. It being 10:30 p.m., this House stands adjourned until tomorrow afternoon at two o'clock.
At 10:30 p.m. the House adjourned, without question put, pursuant to special order.
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Tuesday, November 15, 1977