1977-06-16

THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that the following communication has been received:
Government House Ottawa
June 16, 1977 Sir:
I have the honour to inform you that the Hon. Jean Beetz, Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate Chamber today, the 16th of June, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be, Sir,
Your obedient servant, Edmond Joly de Lotbintere Administrative Secretary to the Governor General



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, June 14, consideration of the motion of Mr. Marchand (for the Minister of Industry, Trade and Commerce) that Bill C-23, to facilitate conversion to the metric system of measurement, be read the third time and do pass; and the amendment thereto of Mr. Mazankowski.
[DOT] (mo)
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, I am pleased to make a few additional remarks to those I was making the other night when time ran out. Quite frankly, I have lost count of the number of times I have spoken on this bill at its various stages. It has been a big disappointment to me that the government has not listened to the people directly affected by this metric bill. The people have spoken and the minister is aware of the feelings of the farmers of western Canada.
I need not spend time reading into the record the letters which I have received on this bill; to do so would take a good part of the day. As I have said in previous speeches, of all the letters I have received, I believe only one expressed any acceptance of the metric system, and even that was conditional acceptance. As I say, the minister is aware of the feelings of the people, not only from letters which he has received but also from the newspapers of western Canada. I am sure that he or the members of his staff have read those papers and will be aware that over the past few months the editorial pages have been filled with letters to the editor, 95 per cent of which oppose the metric system.
As usual, this government has adopted an arrogant and despotic attitude toward the people directly affected by this piece of legislation. The government seems to have adopted the attitude that it knows what is best for the people. I thought we were living in a democratic country, that 1 came to Ottawa to express the views of the people in my constituency, and that government members would be doing the same on behalf of the people in their constituencies. I thought they would be representing the views not only of their constituents but of the people of Canada at large. However, I found I was wrong.
Looking back over the record of this government, Mr. Speaker, I recall the capital punishment bill which was put through the House despite the fact that probably 80 per cent or 85 per cent, maybe more, of the people of Canada were opposed to the abolition of capital punishment. I also recall the gun control legislation which was finally dropped as a result of the official opposition taking a stand and carrying on a lengthy debate.
This metric bill is a civil service bill; it is a bureaucrat's piece of legislation. The minister and his colleagues in cabinet, as well as members on the government side, have been prepared to listen to the civil servants and not to the representations of the people affected by this bill. 1 recall being in committee when the bill was being discussed and we were listening to the evidence given by some of the civil servants who had been involved with this bill. They adopted an attitude, not of belligerency, but they suggested that those who were opposed to the bill were fools. I recall that when the hon. member for Halton-Wentworth (Mr. Kempling) closed the meeting one evening he gave quite a dissertation on what he thought of the attitude of the civil servants involved, and he said quite frankly, "If this was a private company and I was the manager, I would fire the lot of you".
During the committee stage of this bill and at report stage we gave the government the opportunity, by way of amendment, to alter the legislation in such a manner as to make it acceptable to the people of western Canada. I say "to the
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June 16, 1977
Metric System
people of western Canada" because they are the ones directly affected, although the effects of the Bill will ultimately be felt throughout the length and breadth of the country as changes begin to take place in our land measurement system. I think we will end up with a situation where, instead of having one method of land measurement, we will have three-acres, hectares and arpents. Eventually people in other parts of the country who at the moment are not directly affected by the bill will begin to realize the effects of the bill.
As I have said, we gave the government the opportunity, through amendments, to bring in a dual system, one that would be satisfactory to older farmers as well as to younger farmers who are more familiar with the metric system, so that ultimately we would convert to the metric system. However, the government was not prepared to accept our amendments. The minister has been asked questions from time to time, and on May 3 the hon. member for Vegreville (Mr. Mazankowski) put a question to the minister, as reported at page 5526 of Hansard, which I should once again like to place on record. He asked:
Mr. Speaker, I should like to direct a question to the Minister of State (Small Business). In view of the acceleration of widespread protest emanating from the producers of western Canada against the conversion to metric in the grains industry, is the minister giving any consideration whatsoever to the various representations he and other members have received and has he now reached the conclusion that the producer organizations upon which he relied when considering this particular piece of legislation did not actually reflect the wishes of the producers in western Canada?
The minister replied:
Mr. Speaker, without accepting all the premises of the question, I want to say to the hon. member that I have been listening to the representations members made to me and the government, and particularly more recently to the representation made to me by the Minister without Portfolio from Crowfoot and-
Then there were some interruptions. The hon. minister continued:
-and other members of parliament on this side of the House from the prairie region. A decision has been made not to proclaim that section of the bill on metric conversion relating to the grains industry-
Then followed further interruptions, and he continued:
-until after further consultation-
A little later he went on to say that he would be pleased to have the views of members on this side as to the form that this consultation should take. We on this side of the House told the minister what form the consultations should take. In fact, we moved a motion a short time ago asking that certain sections of the bill be referred back to committee, with the idea that the committee could go out to western Canada and receive representations from the concerned people-the farmers and the grain producers. The hon. minister did not accept the amendment or the motion, neither has he accepted our recommendation.
[DOT] (U20)
I assume his intention is to send out representatives of the metric commission who have a vested interest in the bill and want to see it go through. It would not be an open-minded committee prepared to sit down with the farmers and listen to

their views. The committee would go out to western Canada and spend its time trying to do a selling job to the farmers and persuade them of the fine system contained in this bill. This is not the type of consultation we feel should take place. I should point out that this is our feeling as to what the minister might do.
He has asked for our recommendations. He has said that he wants to have consultation. Well, he has had plenty of opportunity to stand in this House and make a speech telling us what he plans to do. Despite the length of time this bill has been debated in the House, the minister has not been prepared to stand and tell the House and the western farmers about his plans. Because of the fact that he has been silent on the issue, we in the official opposition have proposed a referral back to committee of certain sections by way of the motion we are debating now, a six months' hoist.
I see my time is running out, but I would like to challenge the minister to stand in this House and tell us what he plans to do as far as the consultative process is concerned. He may have plans which we will find acceptable. If so, we will deal with the bill with dispatch. On the other hand, if he is not prepared to stand and tell us what his plans are, and if he says that he is sending a delegation of public servants out to the west, I can assure him this bill will not be dealt with quickly. The western members on this side feel so strongly about this bill that we are prepared to spend a good portion of the summer debating it in this House.


Mr. Paul Yewchuk (Athabasca):: Mr. Speaker, I want to make a few additional remarks in this debate because it is a matter of great importance to western Canada and to the farmers in my constituency. What we have here is an example of a Liberal government demonstrating mule-headed stubbornness in the face of widespread opposition to the proposal which it is putting before the people and it is not desired by the people who will be affected. We have a situation where this mule-headed stubbornness of the Liberal party is wasting the time of this institution by debating an issue for so long, the result of which should be obvious to the government.
The Liberal government refuses to pay any attention to the feelings and the representations which have been made by concerned farmers. As I have said, this governmnet is wasting the time of the House of Commons with this bill, which is a very serious breach of its duties to the people of Canada. Everybody in this country will accept and admit that we are faced with many serious and difficult problems which need to be dealt with by the parliament of Canada, yet these problems are not being discussed in this place because we are tied up with a bill which should not have been presented in the first place. The unity of the country is in severe jeopardy. This jeopardy arose during the tenure of this government, and they totally refuses to come to grips with it.
During previous hearings on this bill at committee stage, and indeed in this House, we were told by the minister that the bill was supported by farm organizations-the National Farmers Union, the Federation of Agriculture, and so on. In committee I found that the representatives of these organizations
June 16, 1977

supported the bill, much to my surprise because I have not found any farmers who support it. 1 see the minister woke up from his nap when I said that the farm organizations are supporting the bill. After consultation with the representatives of the National Farmers Union and other farm organizations, we found that they did not consult with farmers. What happened is that the government bamboozled these organizations into thinking that the content of the bill was actively in effect in this country and that any opposition to it would be totally futile. The government also indicated that it was just a matter of simple housekeeping.
Under' these circumstances, the farm organization representatives decided there was no need to consult with the producers and the constituents because the bill was a fait accompli and nothing would be gained by it. That is an example of the government being dishonest with these organizations by telling them there was no use in objecting. The organizations felt that if that was the case they might as well let the thing go and get used to it. Thus, they did not object.


Mr. Marchand:: You should tell the farm organizations that.


Paul Yewchuk: As a matter of fact, I did tell the farm organizations that. They indicated that in response to questions I put to them in committee. I do not think the minister was present at that time, so I would suggest he read the testimony which was put forth. On the same day, the National Federation of Agriculture was meeting in Ottawa and they refused to take a position, in consultation with the delegates there, because they did not want to go against the testimony which had already been given by their representatives. At the same time, they did not want to approve the legislation the minister was putting forward. On that occasion it was decided to simply table the issue and try to make a decision on another day.
If one reviews the correspondence which has been received directly from the producers, it is obvious they are not in favour of the measures in this bill. The producers are not in favour of metrication because there is nothing to be gained. They are not putting forward the argument that in general there might not be benefits for the manufacturing sector which is involved in export, for example. The producers are not necesarily arguing that certain mathematical calculations are not simple when they are carried out in the metric system. The fact is that these things are not all that important in so far as any advantages to the farmer are concerned.
Obviously, the farmers are objecting to this measure on the basis that changing acres to hectares, or bushels to tonnes, is a totally useless and unnecessary change. It will not in any way increase their productivity. It will simply add to the emotional pressure of farming under bad economic conditions which farmers are already facing. Indeed, it will add to the confusion and disorder in their lives which has resulted largely from actions of this government in the past on other issues. If one looks at this objectively and unemotionally, he will easily see
Metric System
that a change in weights and measures in so far as the agricultural producer is concerned is of no value at all.
There are some supporters of metrication. We hear the argument everywhere that it will simplify the life of Canadians. 1 have stated before that it might do that in some limited areas. However, when we consider the measurement of land and grain, and the fact that people involved in the agricultural industry have their minds and their brains trained and adjusted to thinking in the system used until now, it is almost impossible to justify the additional burden which will result from this change. The hon. member for Moose Jaw (Mr. Neil) described it well when he said it was simply a bureaucratic attempt to force everyone to conform for no other reason than to have conformity in the world. In my view, conformity is not always the best way to go.
We have a situation where the government has taken the position that it is the master, rather than the servant, of the people. That points out very clearly the difference between Progressive Conservative philosophy and Liberal philosophy. The Liberals always take the position that they know what is best for the people, that they are smartest and that they must impose their views on the people for their own good. The Conservatives believe that a democratically elected representative is sent to Ottawa to speak in the House of Commons on behalf of those who elected him. The Conservative party and Conservative governments in the past have always taken the position that government is the servant of the people and that the master is people themselves. We must always remember that, if democracy is to survive.
The position taken by the Liberal administration, that it is the master, is a grave distortion of a very important democratic principle. It brings into question whether democracy exists at all. When you ignore the views of the majority of people and impose your views upon them, it shows that you are a government too weak-kneed to withstand the bureaucratic pressure to change to conformity in the world. I have already said that conformity is not necessarily the best way.


Len Marchand: There are over 1,900 people in the private sector now working on metric conversion.


Paul Yewchuk: The minister made an interjection which I did not fully hear. I hope that when I resume my seat he will stand and explain why he takes the position that he is the master of the people and does not have to pay any attention to the representations being made to him. Perhaps he has a reason for that, although I doubt whether it would be a logical reason if he believes in democracy.
This is not the only bill wherein the government is intruding more and more into the daily lives of Canadians, creating greater and greater erosion of the democratic principle that government must serve the people. There are other examples where democracy has been severely eroded. One need only look at the rule changes in this House since the Prime Minister (Mr. Trudeau) came into power. When the right hon. member for Prince Albert (Mr. Diefenbaker) was prime minister, there were happy times in Canada. The economy of this country
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June 16, 1977
Metric System
boomed. Everyone in the country felt they had some sort of a goal toward which they were heading, as opposed to the present, rudderless ship floating in any direction the wind will take it. That is the policy of this government.
Democratic principles have been eroded in so far as the authority of parliament is concerned. During the government of the right hon. member for Prince Albert, question period was an occasion when government truly accounted to the representatives of the people in this House for their actions, policies and how they spent Canadians' tax dollars. Question period at that time was an accounting session which went on as long as anyone had any useful questions to ask.
The opposition of that day, which is now the government, used the question period to destroy the government of the day and throw it out of power. When they got into power, they realized what a valuable democratic tool the uncontrolled question period was. They immediately decided to put a limit on the length of the question period, thereby reducing the risk to themselves in so far as concerned being exposed to any meaningful attack in the House.
On the departure of the former prime minister, Mr. Pearson, and the arrival of the present Prime Minister, it was taken a step further. Ministers were removed from the House for two or three days a week, and the ability to call on ministers and the government to account for their actions and policies was curtailed even further. The people of Canada revolted against that and nearly threw them out in 1972. That was the time the Prime Minister decided to bring his ministers back into the House. However, they now follow a policy of not answering or accounting in a meaningful way to the representatives of the people who ask questions of them in this House during question period.
There is another example with regard to accounting to the people as to how their tax dollars are spent. Prior to the rule changes in 1969, parliament had the right to hold up the expenditures of the government if it did not provide proper answers with regard to how the tax money was being spent. That is no longer a right of parliament; that right has perhaps been lost forever. Now, on a certain date the expenditure items, the estimate.s, go through automatically.
The result of this change has been an accelerated rise in the federal budget and an accompanying rise in the taxation imposed upon the people of Canada. In the short period of eight or nine years there has been an increase from $10.8 billion to some $45 billion. That is one of the largest single contributing factors to the severe inflation in this country. As I said before, it is an erosion of the democratic right of the people to call on this government to account for its actions with regard to how it spends the tax money that it takes from people who work very hard.
This legislation affects the culture of the people of Canada. The system which a society uses to determine its weights and measures is, indeed, one aspect of its culture. If we look at it from that point of view, we have a situation in which this

government, through its legislation, is attempting to change the culture of Canada. We know from experiences in Europe and in other places that governments are not to be trusted with trying to change the culture of a country and controlling the development of culture. Culture, to be meaningful, must arise from the people themselves and must evolve and develop in accordance with the natural evolution that takes place in a country, given certain freedoms and rights to which individuals are entitled.
It seems to me that the House, if it is to be representative of the people of this nation, must consider the interests of the farmers in this case above the interests of the grain handling industry. It is much simpler for the conversion to be made by the grain handling industry than for the farmer to make the conversion, because it is only the grain handlers who are involved in international trade and export-so why not let them make the conversion? Why impose the conversion on the producer who is not directly involved in international trade and the exportation of his product?
The other point which I think is very important is that in the measurement of land the minister insists we change from acres to hectares. We will not be exporting land, so we cannot use the export argument to insist on changing land measurements.


Len Marchand: This will be done by the provinces.


Paul Yewchuk: Alberta and Saskatchewan have put forward legislation. The Ontario legislation is of a permissive type. The Alberta legislation was never proclaimed. It is only Saskatchewan, I understand, that has passed, by order in council, and proclaimed legislation which would conform to what the minister is proposing. Nevertheless, if it were not for this bill I doubt very much that the provinces would proceed on their own to make these changes. So if the minister is trying to blame the provinces for making these changes, he is being a little less than honest-and I expect more than that from him.


Len Marchand: It is a co-operative effort.


Paul Yewchuk: I have known the minister for some time. He came to the House at the same time as I did, and I have never known him to be dishonest in the past. Now he is putting the responsibility on the provinces. I am sure he is aware of the heat this legislation is creating. It is uncomfortable for him, so he is attempting to say that the provinces are making these changes. I think that if he wants to take that position there is no point at all in talking to him, because he is missing the whole point of what we are trying to say and is excusing himself completely from playing any serious role in what is happening here.


Mr. Fraser:: He has a very low conversion factor.


Paul Yewchuk: We are also beginning to wonder what the minister's position is in relation to the hon. member for Crowfoot (Mr. Horner) who indicated quite clearly and publicly that one of the things he was going to do was stop metrication in so far as the agricultural producer is concerned.


John Allen Fraser: He hectared the hon. member for Crowfoot.
June 16, 1977


Paul Yewchuk: Indeed, the minister himself, when the hon. member for Crowfoot crossed the floor, proclaimed very proudly that he was now consulting closely with the hon. member for Crowfoot in this matter and that his representations would be considered. If the minister is trying to tell us now that the hon. member for Crowfoot has changed his mind about metrication in so far as farmers are concerned, I would be very surprised if that were the case, because that hon. member spoke very vigorously against metrication when he was on this side of the House, and I believe he still feels the same way.
So the question arises as to whether the government will be using the hon. member for Crowfoot for its own purposes, or whether it will be using him for hearing representations from the people of Alberta. We know from past experiences with Bud Olson, for example, the former minister of agriculture who, while sitting in the cabinet of this government must have been a very frustrated man, what happened to him as a result of the fact that the government had used him. We know that he was aware of the views of the people of Alberta, of the views of farmers in Alberta and, perhaps, in western Canada. There is no doubt about that, because I talked to that hon. member on many occasions. But he was not able to convince the Liberal cabinet that the views of the western farmers in Alberta were worth considering. Instead, the Liberal cabinet chose to use the minister as their mouthpiece to impose their views, once again, on the people of the west, and indeed he had to try to explain away policies which were unexplainable and unacceptable to the people in that area. So the people decided to throw him out.
I predict that if this Liberal cabinet attempts to use the hon. member for Crowfoot as a tool for imposing their own views on the people of the west, rather than to use him as a resource person to hear representations from the west, the people will throw him out, too-and any other member who takes the position that he might be able to be effective within the Liberal ranks. So I think the minister should give that some thought. He should put it in his pipe and smoke it.


Len Marchand: My peace-pipe.


Paul Yewchuk: Yes, perhaps if he smoked his peace-pipe he would take a more peaceful approach to the western farmers and try to make peace with them. I suggest that is exactly what he should do during the six months' hoist of this bill. He should meet with the farmers, smoke his pipe with them, find out how they feel, and come back to tell us. I am sure that if he did that he would come back to the House and tell us that this bill is no good, that it should be changed, that it should reflect the desires of the people it will affect. Mind you, I am saying that on the assumption that the minister believes in democratic representation. If the minister believes in democracy and that the representations of people should be considered by the government, he should say that. He has not said it so far.


John Allen Fraser: It is pretty tough stuff to get them to agree to.
Metric System


Paul Yewchuk: This bill is being forced upon the western farmers in an attempt by a weak minister-I am not saying he is weak physically, but weak as a minister because he will not stand up for the farmers-to comply with the request of a bureaucracy dedicated to sameness, uniformity, conformity and control, as well as being the master of the people.


John Allen Fraser: How could a British Columbian do such a thing, Len?


Paul Yewchuk: It is inconceivable, because most British Columbians are dedicated to democratic principles. The minister seems to be the exception to the rule. The scientific superiority of metric weights and measures is not clear in so far as the producer is concerned. It may indeed be visible in so far as manufacturers are concerned, but when you consider the cost of the metrication bill, the financial cost of imposing metrication on the country-which is in the vicinity of $5 billion-you begin to wonder why this government is anxious to spend so much money on this conversion which is undesirable and which will not change anything so far as the producer is concerned.


John Allen Fraser: Things will be the same size, won't they?


Paul Yewchuk: That is right; the size of farms will not change.


John Allen Fraser: Five billion bucks not to change anything!


Paul Yewchuk: Which will result in no useful change. It is projected that it will take the manufacturing sector, which is involved in the export business, 15 years to recover these costs if it switches to the metric system.


Len Marchand: They will save $1 million a year.


Paul Yewchuk: Yes, perhaps after 15 years. However, I did some careful research on this subject. Perhaps the minister does not know about this, but reliable sources suggest that it will take 15 years for any manufacturer to recover the cost of his investment in the conversion process before he can even hope to start gaining any kind of economic benefit from the conversion. Even then, it is questionable whether there will be any economic benefit.


John Allen Fraser: The advantages could be measured in millimetres.


Paul Yewchuk: We are imposing a $5 billion price tag on the people of Canada who are already taxed to death. Everybody in a democratic society will accept the fact that some taxes are necessary because we need an army, highways, airports and services of that kind. But in this country we have a situation where 43 per cent of the gross national product is already in the public domain. Various governments take that percentage of the gross national product for their own purposes. That is already a dangerously high amount. It is much higher than is

June 16, 1977
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acceptable in a democratic system based upon private enterprise and individual initiative.
Imposing an additional $5 billion price tag will increase that 43 per cent to a substantially higher amount. We know we cannot go very much higher without stifling individual initiative. People are saying they have to give a lot to the government, anyway, and they are wondering why they should work any harder or increase their productivity or income. So we have inflation in this country. We have a situation in which productivity is already behind other countries. We have almost priced ourselves out of the international markets, and this will only be one step further in that direction. This measure will stifle initiative because increased taxation will be necessary to implement it.
The mental confusion which will result while people are trying to convert in their own minds is bound to result in decreased productivity. Productivity will decrease in two ways as a result of conversion. It will decrease because taxes will go up to pay the bill, and it will decrease because of the mental confusion there will be until conversion is made within the brains of the people of Canada.
I think the government is in a position now where it must rededicate itself to cutting down its own costs and to reducing taxes, rather than continuing to dedicate itself to finding ways of spending more and more money of Canadians, thereby raising taxes to a greater extent when we know that they are already too high. We must be looking for ways to increase productivity so that we can be competitive on international markets. We should not be trying further to reduce our competitiveness in international markets, because we know that if we are going to survive as an industrialized nation in a very competitive industrialized world, we must make ourselves more competitive.


Mr. Deputy Speaker:: Order, please. 1 have to interrupt the hon. member. I have already given him one extra minute. Unless he gets unanimous consent, I will recognize another hon. member. Does the hon. member have unanimous consent?


Some hon. Members:: No.


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, as I prepared for this debate on Bill C-23, I could not help wondering how the more than one million unemployed people in this country must feel about their parliamentarians debating this multi-billion dollar nonsense when we should be discussing ways to put people to work.


Some hon. Members:: Hear, hear!


Stan Darling: I certainly support the amendment of the hon. member for Vegreville (Mr. Mazankowski) to hoist this bill for six months. If it could be done, hoisting it for six years would be even better. It is irresponsible for us to be discussing how soon we will be forcing farmers to adopt a new way of describing an acre of ground or a ton of grain, but we in the opposition have been forced into this debate. We have to try to convince this government that there are many other topics

more worthy of our time and effort and we must try to prevent this bill from being passed into law by that passive group of members on the other side of this House.
My colleague, the hon. member for Moose Jaw (Mr. Neil), said recently that a great many communities would refuse to put up signs in the new metric language. Another colleague, the hon. member for Halton-Wentworth (Mr. Kempling), said that commissioner Jake Gaudaur of the Canadian Football League told a luncheon group not long ago that the football league would retain the present size and markings of Canadian football fields, whatever the Canadian government does with respect to forcing the metric system on the country.


Mr. MacFarlane:: Mr. Speaker, I rise on a point of order. I thought I heard the hon. member say that the commissioner of the Canadian Football League said he would not involve himself in the metric system. Having attended that dinner, I know he said that naturally he would take the option, if conversion is to be voluntary, not to convert; but that if the government instructed that it should be done, he certainly would do so. I thought that correction should be made.


Mr. Kempling:: Mr. Speaker, I was at the same dinner, and that is exactly the opposite of what commissioner Gaudaur said. He said he would not convert. He went into all the difficulties the league would face if it went to the metric system. He said the opposite of what the hon. member just said.


Mr. Deputy Speaker:: Order, please. The matter raised is not a point of order. It is not even a matter of clarification. These remarks could be made at another time. Therefore, I invite both hon. members to intervene in due course and perhaps enlighten the House with more clarification. However, in the meantime we will leave the floor with the hon. member for Parry Sound-Muskoka (Mr. Darling).


Stan Darling: Mr. Speaker, I was not at that dinner. I was merely quoting the very knowledgeable member for Halton-Wentworth.


Angus (Gus) MacFarlane: That is completely false, and I will get you a letter to prove it.


Stan Darling: I suggest that these two illustrious gentlemen get together and get this ironed out. These are not isolated opinions or remarks. These statements are merely a sampling of comments which show the contempt that an increasing number of Canadians feel for the legislative record of the government across the floor. There is a saying to the effect that if you want to generate disrespect for the law, bring in laws which people will not, and cannot, accept. Oppressive laws breed lawbreakers-and we have had enough crime in our country already.
The $4 billion to $10 billion it will cost to initiate the metric system in Canada would go a long way toward refurbishing and modernizing our outdated prison system. It would provide a great deal in the way of additional training for our prison officials and our police officers, and it would buy a great deal
June 16, 1977

of modern crime detection equipment. Some of that money could be put to better use in assisting the private sector to create new jobs for the million plus Canadians who could not care less whether the food they cannot afford is measured in pounds and ounces or in grams and litres.
This government is not governing for the people; it is governing for itself, and nowhere is this more evident than in the fact that it has done too little, too late, with respect to coping with unemployment; and too much, too soon, in trying to ram the metric system down our throats. If this government cared even a little about what the Canadian people really want, it would have gone to the people for a mandate by way of a national referendum. We asked for a referendum on whether the people of Canada want bilingualism, and we asked for a national referendum on the issue of capital punishment. Surely we are justified in expecting the government to ask the people of Canada whether they want to adopt a new system of measurement, something that will change the whole concept of conducting business and commerce and all other aspects of life in their country.
We cannot get a referendum, Mr. Speaker; but the Prime Minister (Mr. Trudeau) invites the government of Quebec to hold a referendum on the question of a province separating from confederation and jeopardizing the future of our entire nation. The Prime Minister plays into the hands of the Quebec separatists by holding our sovereign up to ridicule, at the same time that he is representing our country at the jubilee celebrations of our Queen and representing our country at the commonwealth conference in London.
There is no doubt that we will have to accept the government's whole package of metric, including the imposition of the metric scale on our agricultural community, because those members on the other side of the House close their eyes and vote however their leader orders them to vote. They would vote to instal Idi Amin as their deputy leader if the Prime Minister ordered them to do so. All we can hope for is to convince the government that there are segments of our economy that would suffer to such an extent that they would need government assistance and understanding in order to survive this latest onslaught on their capabilities.
I am thinking in particular of the small business community and of the financial burden being placed on them by the conversion to metric. Small businesses in Canada are caught in a web of circumstances, none of which are due to their actions or their lack of action. They are being subjected to harassment and hassling from various government agencies and bureaux, with growing demands for reports, fees and charges. The small business community depends on the Post Office to a greater extent than any other single segment of our society, and it is no secret that they are constantly being let down in that quarter. For some businesses, as 1 pointed out in this House last Monday, the Post Office is a lifeline. When that lifeline is cut, as it so often is these days, many of those businesses go under.
Metric System
We are losing too many small businesses in Canada today because of irregular and unreliable postal service. Those businesses which can afford to have already turned from the Post Office to private courier services. The Postmaster General (Mr. Blais) and the postal unions complain about the business they are losing to the private courier services-but it is their own fault. I can foresee an even greater use of the private courier systems in the future because the Canadian postal service continues to get worse.
Last Monday, when we were debating the amendments to the Farm Improvement Loans Act, the Small Businesses Loans Act and the Fisheries Improvement Loans Act, I pointed out that the imposition of the metric system would work a hardship on people involved in those types of activities. The government said at the outset of the metric debate that businesses and industries affected would have to absorb the costs involved in converting to the new system. Later we were told that some adjustments would be made so that small businesses, for example, would be assisted financially in making the conversion.
The fact remains, though, that the greater share of the cost of conversion will fall on the shoulders of small businessmen, fishermen and farmers. In Monday's debate I suggested that many small business people would be hard pressed to come up with the money to pay the cost of conversion, in view of all the other demands on their capital, the ravages of inflation, higher production and labour costs and a multitude of other demands on their resources. I urged the government to take this into consideration and to bring in a more flexible small businesses loans plan. I said that many of these small business people would have to borrow money to pay the cost of converting their equipment to the metric system. But on reflection I wonder whether they should have to borrow money at high rates of interest to pay the cost of something that they did not ask for, something about which they were not even consulted by the government or anyone else.
The small business community in Canada did not ask for the metric system; the fishermen did not ask for it; the farmers did not ask for it. In fact, the Canadian people did not ask for it, nor were they ever consulted about it. It has been imposed upon all of us, and the real reason why it was imposed upon us has never been told. I doubt that it will ever be told.
As far as the cost of converting small businesses is concerned, there are only two acceptable ways this can be dealt with. One is for the federal government to pick up the tab for the conversion costs. After all, it was the federal government's idea in the first place. If they want farmers, fishermen and small business people to play this expensive and ridiculous game, they should be prepared to pay their way into the ball-park.
The other way this might be accomplished at a minimum of direct cost and inconvenience to small businesses is to extend long-term, no-interest loans to defray conversion costs. If we can make long-term loans at little or no interest to countries like Cuba, and if we can make grants to countries on the far side of the earth to improve their farms and businesses, we can

June 16, 1977
Metric System
surely do as much for our own small businesses, especially when you consider that the government deliberately imposed this extra cost situation without consultation and without bothering about finding out if the Canadian people really wanted to convert our country to the metric system.
I understand that the metric commission has spent about $20 million to date. At first it was said that industry would pay for the conversion, but industry said in no uncertain terms that the consumer must pay. I think we are realistic enough to know that in the end the taxpayer, the consumer, will pay. Industry will make sure it does not lose money on the deal. Indeed, it would seem that big industry is pushing the metric system and is willing to accept it.
The night before last I listened to two eloquent speakers, the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton), and the "quiet and shy" hon. member for Calgary North (Mr. Woolliams). They both opposed this bill. I hope the House will accept the amendment offered by the hon. member for Vegreville and give the bill a six months' hoist.


Angus (Gus) MacFarlane: Mr. Speaker, my intervention in this debate will be fairly short, but I want to say something about metric conversion so there will be no question in anyone's mind about where I stand. As an elementary school teacher and as a high school teacher as far back as 1949-50, I and most of my colleagues were very concerned about the transposition of the existing system to the metric system. Those of us involved in chemistry and physics taught our students how to convert from one to the other. Even when I was a student, which was at the time of the Queen's coronation and earlier than that-at the time of the visit of Her Majesty's parents to this country-there was talk of conversion to the metric system. But we never got around to it. We never seemed to have the courage to make the move, but now we do have the courage. It is interesting to note that all the grains agreements are already in the metric system even without the government ordering it.


Mr. Mazankowski:: That is what we have said.


Angus (Gus) MacFarlane: Motor mechanics who invest as much as $5,000 in tools, even when they do not own their own business and cannot claim a decent income tax credit, buy metric tools because they need them for servicing foreign cars.
As one who has coached football for 30 years, I have been at times involved with Jake Gaudaur, and I can tell you, Mr. Speaker, that people concerned with football are very disciplined. Those involved with the CFL have been self-disciplined. The man said at the meeting I attended that he opposed the metric system and would avail himself of the option he would be given because the bill would provide for an option. He said he would not be ordered, and if the government made the metric system part of the law of the land, Canadian football fields could conform to at least 10 or 11 metric designs: the people in football would obey the law. Incidentally, I said something at the meeting which newspapers quoted. I said 1 did not think football should go to the

metric system. I said it, not Mr. Gaudaur. I still do not think football should go to the metric system and I want my attitude to be on the record. This bill will not force football to adopt the metric system.


Donald Frank Mazankowski: Isn't that interesting. What about the other parts of the metric bill?


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Hamilton Mountain (Mr. MacFarlane) has the floor. Perhaps hon. members would allow him to make his remarks.


Angus (Gus) MacFarlane: Mr. Speaker, let me put on record a reasoned argument which I think members of the House and the minister will accept. It is this: under the metric system, the football field would probably be marked every 10.9 yards instead of every ten yards. In Canadian football we only use three downs, instead of the four downs they use in American football.


An hon. Member:: What difference does it make? It could be ten downs.


Angus (Gus) MacFarlane: Mr. Speaker, I don't mind interruptions, but some of them remind me of the previous hon. member's speech. That hon. member tried to draw Idi Amin into the metric argument. I am shocked at the attempt to bring that man's name into a reasoned argument. I do not appreciate it. Let me continue. Because our football players would have to attain a greater distance on the football field, which could be measured in metres or centimetres, the Canadian game might have to resort to four downs and under present rules, with markings ten yards apart, we are having a difficult enough time achieving three downs. That is why we use the pass so much. But if we went to four downs we would find it relatively easy, under the metric system, to achieve the first down, because under the four downs system a player can usually achieve 11 yards.
If we played the four downs game, which involves some extra distance, it would be said we had too much offence and not enough defence. Therefore, we would have to rule out our motion in the backfield, a unique feature of the Canadian game. In other words, if we make our football game conform to the metric system, we shall need to adopt American rules to offset the disadvantage. That is why we would not go for it. Our Canadian game is unique. Remember, the Americans imported their game from the colony of Canada. They played the first organized game when our team from McGill played an American university team south of the border. Our team played under our rugby rule which allowed for the carrying of the ball. But that rule was not part of the game of rugby which came to their shores from England. The Americans adjusted to the Canadian game. I point out that the Canadian game has a unique history.
June 16, 1977

The metric system is designed for those with purely technical needs. If we adopt it, we are not going to change some of our idiomatic expressions. A foot will still be a foot, and our numerous remarks which relate to the old measurements will still be part of our culture. Similarly, it would be foolish to say that our great footballers of Edmonton, Calgary and other parts of Canada ran 1,560.78 metres, or some such figure. We would not do it.
I say, let us not be illogical in our opposition. If you have real complaints about the metric system, make them, because I do. 1 do not find the minister unreasonable. He listens to what I say. The Canadian football commissioner feels this, too. He knows the bill is not asking football to change to the metric system. I do not deny that some say, if the athletes accept the system, others will accept it, too. Mr. Speaker, I do not think athletics exist as a vehicle for doing the bidding of others Sports exist for themselves, and athletes participate. Sports are good vehicles for education and should not be used to sell the metric system. Therefore, I stand here and say the metric system should not be forced upon our game of football. I will not accept it.


Donald Frank Mazankowski: What about our farmers?


Angus (Gus) MacFarlane: Mind you, you can use 11 designs which will fit into our stadiums.


Donald Frank Mazankowski: What about the farmers?


Angus (Gus) MacFarlane: Mr. Speaker, I presume that the hon. member, with his great knowledge, can answer for them. I listened carefully to what hon. members said. I say this bill proposes to bring us into, not the twentieth century but perhaps the eighteenth century. It is not right to say all the time that the Europeans are the only ones out of step. We could well use some of the systems which come from the old country, so to speak, from the other side of the Atlantic, one of them being the metric system. I support that change. I supported it as a young boy, as a student, as an undergraduate in university and as a teacher. But I learned that someone always said, "We cannot do it. We cannot change. We must stop this change".
I stood up, really, to make my position clear on Canadian football, for I have great respect for the Canadian Football League. It is a Canadian enterprise, Canadian-owned, and I say our traditious entitle our game of football to be played on our traditional football fields. Therefore, I see no reason for change. Other members, perhaps with reason, spoke of business matters and great financial hardships the change would cause. But let us not confuse that issue with the issue of Canadian football.


Donald Frank Mazankowski: You have been talking on a very narrow issue.


Angus (Gus) MacFarlane: That is right. But I think other comments in this debate have been very narrow. I do not know how, in a debate on the metric system, one hon. member found it possible to link the Prime Minister's name with that of Idi
Metric System
Amin. It is almost like saying that when Idi Amin wears a kilt, he is in the Black Watch. But mind you, Idi Amin says that himself. He thinks he is going to become king of Scotland. But that has nothing to do with the metric system, surely.
The Canadian football commissioner invited members of parliament, of all parties, to have dinner with him. It was a fine dinner. Incidentally, the whip of the Conservative party handled the arrangements exceptionally well. I was present. I thought the commissioner was honest and frank. He is proud to be Canadian, and will do whatever parliament decides. He will obey the law. I want hon. members to be aware of this.


Mr. Gordon Towers (Red Deer):: Mr. Speaker, the hon. member for Hamilton Mountain (Mr. MacFarlane) told the House exactly where he stands, and his position is diametrically opposed to that of the hon. member for Halton-Wentworth (Mr. Kempling). One can understand why he rose to speak. However, it is fair to say that the remarks of the government side will alienate further the farmers of western Canada, for the western farmer does not want to be used as a football in this game.


Mr. Paproski:: Hear, hear!


Thomas Gordon Towers: It will be a sad day when the government gives any sport precedence over one of the basic ingredients underpinning our way of life-western grain. I say the government should not do it. This debate is of fundamental importance. If the government's approach were honest it would accept the amendment. If the minister honestly wished to meet with the producers of western Canada he would take the b:ll back and allow the producers to make their case.
This is where the government is very wrong. Many people in western Canada felt the metric system was already the law of the land until we on this side finally made it clear it was not. Since then the farmers are having their say. Members of the National Farmers Union are right in their disapproval of this measure. They are not requiring that the metric system should be applied to football. If the hon. member for Hamilton Mountain wants to be so dictatorial as to tell the commissioner of the CFL that metric measurements are not to be used on the playing fields, that is his affair. If they were, the western farmer would probably be somewhat disconcerted as he watched a game, but he is not going to fight it. The hon. member for Hamilton Mountain said, "If the government instructed the CFL . . ." and so on. What kind of dictatorship are we getting into here, Mr. Speaker, when the government uses such words. I wonder what kind of democracy we have left in Canada, or whether it has all gone down the drain.
If ever a project has been mishandled, it is the introduction of the metric system. Right from the beginning there was misrepresentation. The western producer believed he had no choice. But when we managed to dig out the legislation which gave rise to this debate, the producer began to present his thinking on the subject. I propose to read into the record an excerpt from Grain News. These are the views of locals of the

June 16, 1977
Metric System
United Grain Growers, one of the major grain companies in western Canada.
Not unexpectedly, a United Grain Growers local has come out solidly against conversion to metric in the grain business at the farm level. In a resolution to be placed before delegates at the annual meeting of the UGG in early November, members at Nobleport, Alberta, proposed the United Grain Growers press the government of Canada not to convert agriculture to the metric system. The thinking of the local was that the present system of converting to metric at the terminals works well and the farmers state that the change to metric at the farm level will accomplish nothing more than increased costs and confusion.
A similar resolution came from the UGG local at Fahler, Alberta, where members asked that the UGG strongly oppose any metrication at the farm level.
Letter after letter has been put on record in the House in opposition to this proposal, in opposition to what is implied by that phrase of the hon. member for Hamilton Mountain, "The government instructs . .The hon. member for Parry Sound-Muskoka (Mr. Darling) drew attention to the added burden of cost this measure will impose on small businessmen and farmers. What about the mechanics of this country? No provision whatsoever has been made for them in the income tax legislation. No thought has been given to the extra tools they will have to purchase.
This is where the government has been so wrong from the beginning. No provision has been made for the mechanics of the country; no provision has been made for the farmers; no provision has been made for small business. How can the government ever believe it will get the support of the public and retain respect for parliament? We have depreciated this institution to such an extent that soon no one will care one whit about it: it will have been depreciated to the point at which a great many Canadians will hope it will disappear. They will take this attitude for the very reason it is not reflecting the thinking of the individual or respecting the rights of Canadians.
I could go on and on, Mr. Speaker. I am very disappointed in the government, not only because of the way in which it is handling this business of metric conversion, but what it is doing to parliament. We have given the minister and members on the government side every opportunity to do something about this mistake as far as the producers are concerned. In the subcommittee of the Standing Committee on Finance, Trade and Economic Affairs we thought we had reached an arrangement we could go along with, namely, that the government would let us keep the "acres" and the "bushels" at the farm gate. As to the rest, we would go along with it.
If that understanding had held good, we would never have got ourselves into this long debate. That was my understanding of what took place in the subcommittee. But when the report came back to the standing committee, on which the government had a majority, they reverted to the old position. There was no give. We fought it. We put forward amendments, but they were not accepted. We brought amendments forward at the report stage, thinking that the government would perhaps agree to fracture the bill as suggested by the hon. member for Qu'Appelle-Moose Mountain (Mr. Hamilton). If the bill were split up, we could decide exactly what the government wanted, what the industry wanted and what the producers wanted, and satisfy their needs as far as possible. I do no think that was too

much to ask, if the government honestly wished to respect the views of Canadian producers. If members opposite had any idea about regaining a little support in western Canada, I would have thought this solution would have been acceptable to them. But they would not budge.
Last, but not least, Mr. Speaker, I wish to draw attention to exactly what the government has been doing in relation to this legislation. The minister told us he will go back to the people after the bill has been passed. Can you imagine anything so idiotic? If there is to be any dialogue, it ought to take place prior to the passage of the bill-and the time to begin that dialogue is right now, because our amendment would allow the producers to have their say before the committee. I hope the minister, on behalf of the government, will even at this stage repent and recognize he has made a mistake. It is not such a bad thing for a person to admit a mistake, to acknowledge that he has misunderstood a situation. I am sure his reputation would be enhanced if he were to do this.
I realize this is not the end of the debate and that we still have to deal with the motion for third reading. But inasmuch as the minister is present in the House, I hope he will accept the amendment at this point and put an end to the debate for the moment.


The Acting Speaker (Mr. Turner):: Is the House ready for the question? The question is on the amendment of the hon. member for Vegreville (Mr. Mazankowski).


Some hon. Members:: Question.


The Acting Speaker (Mr. Turner):: All those in favour of the amendment will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion the yeas have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I declare the amendment lost. It being one o'clock, I do now leave the chair until two o'clock this afternoon.
At 1.19 p.m. the Elouse took recess.


[Stage Direction]
AFTER RECESS

Administration of Justice


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, 1 rise to seek the unanimous consent of the House to move a motion under Standing Order 43 on a matter not only of urgent and pressing necessity but of some pride to all of us in the House of Commons. I move, seconded by the Acting Prime Minister, the hon. member for Rosedale (Mr. Macdonald):
That this House notes with pleasure the unveiling of a bronze reproduction of the Canadian Bill of Rights as an appropriate tribute to the efforts of the right hon. member for Prince Albert (Mr. Diefenbaker) to guarantee for all time the rights and freedoms of Canadians.


Mr. Speaker:: Order, please. Pursuant to Standing Order 43 the unanimous consent of the House is necessary for the presentation of such a motion. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I can think of no more appropriate forerunner to the motion I seek to move under Standing Order 43 than the motion to which the House just gave its unanimous consent. In view of the decision announced today by sessions Judge Roger Vincent granting an unconditional discharge to RCMP Chief Superintendent Donald Cobb, Montreal Police Inspector Roger Cormier and OPF Inspector Jean Coutellier, and in view of the necessity to encourage public respect for the rule of law to ensure that there is not one law for the police and another one for everyone else, I move, seconded by the hon. member for New Westminster (Mr. Leggatt):
That this House request the Minister of Justice to contact the Minister of Justice in Quebec to request that an immediate appeal be Filed with respect to the sentence imposed in this case.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
The House resumed at 2 p.m.

June 16, 1977
Public Service


INDUSTRY
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request the unanimous consent of the House to present a motion dealing with an urgent and very important matter. Mr. Speaker, I should like all hon. members to listen very closely to the text of the motion. I am sure, therefore, that the House will grant the attention required to the problems of the shoe industry, and that no hon. member, no matter what his political beliefs may be, will dare oppose the motion.
Whereas the Canadian industry has encountered tremendous problems in the last few months, whereas 21 plants have had to close down in the last ten months or so, and that in Quebec alone; whereas the problem is very complex and involves such matters as imports, the Canadian market, the rationalization of our industries and many other factors; and whereas the Anti-dumping Tribunal is now studying the matter and therefore its report will certainly not be published before the fall, 1 move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That the Minister of Trade, Industry and Commerce (Mr. Chretien), notwithstanding the inquiry now in progress, make a specific statement within the next eight days in the House on the particular means he intends to take to help the shoe industry in Canada and, at the same time, advise all workers in that industry in Canada of his determination not to allow them to become generally unemployed.


Mr. Speaker:: Order. Under the terms of Standing Order 43, the motion cannot be put without the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


PUBLIC SERVICE
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to Standing Order 43. In recent days two public servants have launched suits against the present Solicitor General and one of his predecessors, the present Minister of Supply and Services. In view of the cost of court proceedings necessitated by the imbecilic letter written by the Minister of Supply and Services in 1971, and in view of the number of other persons whose reputations were damaged by the Minister's paranoid delusions, I move, seconded by the hon. member for Central Nova (Mr. MacKay):

That the government establish a commission to allow those persons accused of participation in an "extra-parliamentary opposition" to hear the evidence, if any, against them and have an opportunity to publicly clear their names.


Mr. Speaker:: Before such a motion can be presented it requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN NATIONAL RAILWAYS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I, too, rise under the terms of Standing Order 43 to present a motion on an urgent matter of public importance. As a result of the sinking of the C.N. ferry, William Carson, Canadian National has had to cancel many thousands of reservations to and from Newfoundland at the peak of the tourist vacation period. Considering the impact this will have on the 1977 Canada Games to be held in St. John's from August 7-19, 1 ask leave to move, seconded by the hon. member for St. John's West (Mr. Crosbie):
That this House direct the government to take immediate steps to arrange for the chartering of a ship to replace the William Carson.


Mr. Speaker:: The motion can only be presented by unanimous consent. Is there such consent?


Some hon. Members:: No!



ORAL QUESTION PERIOD


Charles Joseph Clark: Mr. Speaker, my question is directed to the Solicitor General. Since a few weeks ago a situation arose in which the police of Metropolitan Toronto were conducting an inquiry into a matter involving, among other things, the role of the RCMP, and since today we hear that the minister of justice in Quebec has announced an inquiry whose terms of reference again involve very directly the role of the RCMP, would the minister, rather than leaving these investigations, which touch the federal force, to provincial and municipal governments, finally grant the request of members on this side that a federal inquiry be held not only into the activities of the RCMP in connection with these matters, but also, and more important, into the degree of
June 16, 1977

political direction under which the RCMP or other federal police agencies acted in these cases?


Hon. Francis Fox (Solicitor General):: As the Leader of the Opposition knows, I shall be making a statement in the House tomorrow concerning the matter which was settled before the courts in Montreal today. I shall be making what I consider to be a fairly complete statement and I shall, of course, take the hon. gentleman's representations into consideration.


Charles Joseph Clark: Would the Solicitor General advise us whether, if there is not to be a federal inquiry-


An hon. Member:: Hypothetical.


Charles Joseph Clark: Well, I will remove the hypothesis to satisfy the erudite corporal from Quebec. Let me ask the Solicitor General whether it is the intention of the government of Canada to have officials of the Department of the Solicitor General or officials of the Royal Canadian Mounted Police appear before the inquiry called today by the minister of justice of the province of Quebec.


Francis Fox: Mr. Speaker, the officials of the RCMP have always co-operated with the officials of the department of the attorney general of the province of Quebec in answering any questions which they wished to ask in connection with the break-in. It would, of course, be our intention to continue to co-operate with the officials of the province of Quebec, particularly the officials of the department of the attorney general who have charge of the administration of justice in that province and who are the proper authorities to lay criminal charges, as happened in the APLQ case.


BREAK-IN AT L'AGENCE DE PRESSE LIBRE-REQUEST FOR STATEMENT ON DIRECTIONS GIVEN TO FORCE BY MINISTERS
Charles Joseph Clark: Mr. Speaker, the Solicitor General has now advised us that he is prepared to allow the RCMP to be examined by a provincial inquiry, but he still left hanging the question whether or not he is going to have a federal inquiry into these matters which can look not only into the activities of the RCMP but also, most importantly, into the degree of political direction under which the RCMP acted in this case. Can the minister give us a guarantee that in one form or another, and preferably through a federal inquiry or through absolute and clear statements in this House, there will be a communication to the House of Commons of all of the elements of political direction given to the RCMP by himself, or by any of his predecessors as Solicitor General, or by any of his colleagues in the cabinet of Canada?
[ Translation]


Francis Fox: Mr. Speaker, the Leader of the Opposition has evidently raised a really important question. He is asking me whether 1 intend to let the RCMP officers testify before the inquiry now under way in Quebec and which will last, I think, till mid-August. I wonder, Mr. Speaker, whether he is suggesting that I would have some
Oral Questions
discretion to issue orders to the constables and officers of the RCMP enjoining them to refuse to answer the subpoenas issued by Quebec boards of inquiry. The opposition, Mr. Speaker, has been pestering us for two days with questions on inquiry boards but I would like to point out in that connection that we have co-operated with the provincial authorities responsible for the administration of justice and we also intend to continue to do so.
In addition, Mr. Speaker, the Leader of the Opposition is asking me to make my statement immediately, but I have the impression that he will have to wait till tomorrow.


Charles Joseph Clark: Mr. Speaker, perhaps 1 should repeat my question. Can the minister now give us a guarantee that there will be clear statements on all implications and all directives given by a cabinet minister, either himself or his predecessor or another minister recommending to members of the RCMP that they take the action they did in this case?


Francis Fox: Mr. Speaker, I am grateful to the hon. Leader of the Opposition for having been kind enough to repeat his question, although I had understood it in the other official language.

In that case I shall repeat-


Some hon. Members:: Oh, oh!


Mr. Baldwin:: You are stonewalling in French.
[ Translation]


Francis Fox: -the hon. member is telling me that I am stonewalling in French, which is obviously not the case, Mr. Speaker.

The hon. member repeated his question in French so I shall repeat my answer in English.


Mr. Hees:: He said that you were stonewalling in French.


Walter David Baker: It would be the same in Norwegian; it is still a stonewall.


Francis Fox: Mr. Speaker, the hon. Leader of the Opposition was courteous enough to repeat his question in French, so I am trying to respond in English at the moment. I will repeat my answer, and that is, he will have to wait until tomorrow to find out what is going to be in the statement.


CONSULTATION WITH QUEBEC OFFICIALS PRIOR TO ESTABLISHMENT OF INQUIRY-SCOPE OF MINISTER'S STATEMENT
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for the Solicitor General. We are very pleased on this side of the House to receive answers from the government in either one of our great official languages. The main thing is that we would like to get answers.


Some hon. Members:: Hear, hear!

June 16, 1977
Oral Questions


Elmer MacIntosh MacKay: Mr. Speaker, keeping in mind the Solicitor General will be making a statement tomorrow, I should like to ask him in view of this very interesting development of the Quebec inquiry, what meaningful consultations, if any, took place between him and his Quebec counterpart with respect to this inquiry before the appointment of the commissioner and so on was decided? Was there a dialogue before this occurred?


Francis Fox: Mr. Speaker, the answer to the question is no.


Elmer MacIntosh MacKay: Mr. Speaker, I have another brief question. In the statement tomorrow, I wonder if the Solicitor General, without divulging the contents of the statement, could indicate whether he will be confining it solely to the Quebec incident, which has been of such interest, or whether he will be dealing with other incidents which have been receiving publicity such as the one in Toronto-James, Lewis and Samuels and others? Will his statement be confined solely to L'Agence de Presse Libre du Quebec? Is there a possibility that either he or the government House leader can indicate whether his colleague, the former Solicitor General and now the Minister of Supply and Services, will also be making a statement about the time when he was solicitor general which some of these events encompass?


Steve Eugene Paproski: If he ever gets back.


Francis Fox: Mr. Speaker, I can only answer for myself as to what my intentions are. The statement I intend to make tomorrow will cover the incident which was before the courts and which was determined today. I do not have any intention, at the moment, of covering the other incidents mentioned by the hon. member, which have been raised in the House. I will be willing in the coming weeks to entertain further questions, if that is the desire of the hon. members opposite.


POSSIBILITY OF STATEMENT BY FORMER SOLICITOR GENERAL ON ALLEGED BREAK-INS BY MEMBERS OF FORCE
Elmer MacIntosh MacKay: Mr. Speaker, my question is directed to the government House leader. May we have an indication whether there is a possibility, or indeed a certainty, as to whether we might expect another statement from the present Minister of Supply and Services, assuming he is able to be here for it?


Hon.   J.-J. Blais@Acting President of the Privy Council: Mr. Speaker, there is no indication that that will be the case.


Some hon. Members:: Oh, oh!


ADMINISTRATION OF JUSTICE
John Edward Broadbent: Mr. Speaker, I can understand the Solicitor General putting off the answers

to certain questions until tommorrow, which pertain to the break-in in Montreal. I have a question I would like to direct to the Minister of Justice which concerns all Canadians who have an interest in civil liberties. Considering an unconditional discharge was granted this morning to the three police officers who were involved in the break-in in Quebec and openly admitted their guilt; and considering this break-in was a clear, flagrant violation of the Criminal Code of Canada, I should like to ask the Minister of Justice if in the interests of the rule of law, he will immediately request his counterpart in the province of Quebec to launch an appeal to this incredible sentence?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, I think it would be improper for me to do that. The administration and the prosecution of offences is clearly the responsibility of provincial attorneys general. In the case of Quebec, it is the responsibility of the provincial minister of justice. The Quebec authorities laid charges, conducted a prosecution and sentence has been given. If there is to be a decision to appeal that sentence, that would be a decision for the authorities in the province of Quebec.


John Edward Broadbent: Mr. Speaker, unfortunately I expected precisely that copout. The hon. Minister is the leading member of the cabinet responsible for the enforcement of Canada's criminal law. As a lawyer, he knows anyone can launch an appeal. Considering that in the United States the president was almost impeached when people who were not-


Some hon. Members:: Oh, oh!


Donald Frank Mazankowski: Listen to the question.


John Edward Broadbent: -members of the police force were involved in a break-in, I should like to ask the minister if he considers this to be a very serious question and will he ensure that the law for ordinary citizens holds equally well for the police forces in Canada? Does this not move him to launch such a protest in terms of concern for the rule of law?


Stanley Ronald Basford: Mr. Speaker, I think that any reference to what happened in Washington is purely gratuitous and silly.


Some hon. Members:: Hear, hear!


Stanley Ronald Basford: The hon. member makes reference to the rule of law. One of the essential foundations of the rule of law is that people usually be tried, convicted and sentenced by judges not by politicians.


Some hon. Members:: Hear, hear!


John Edward Broadbent: What an expert in banal platitudes.


Some hon. Members:: Oh, oh!


An hon. Member:: Resign like Lewis.


John Edward Broadbent: In view of the fact that the criminal law, which the minister is showing little interest in enforcing, also
June 16, 1977

provides for appeals of sentences, whether from the person prosecuted and convicted or from the Crown, does the minister not realize that the rule of law entails the right and indeed the obligation of the Crown to launch an appeal when the Crown feels the circumstances warrant it? Considering that three police officers who clearly violated the law have been given a sentence which almost amounts to a compliment for their activities, does the minister not think it is appropriate for him to launch an appeal into this totally inappropriate sentence?


Mr. Speaker:: With respect, that is a repetition of the original question.


INDUSTRY
Léonel Beaudoin: Mr. Speaker, with your permission, let us get out of court and return to earth. My question is directed to the Minister of Industry, Trade and Commerce. Could he indicate immediately to the House whether he is considering taking special steps to save the remains of the shoe industry. I would not want the Minister to hide behind the inquiry being conducted by the Anti-dumping Tribunal in answering my question, because there is a real urgency today since there is an increasing number of shoe plants closing their doors in Quebec.


Hon. Jean Chretien (Minister of Industry, Trade and Commerce):: Mr. Speaker, I have no intention of hiding behind this inquiry, but I must obey the laws of Parliament which say that the problem must be studied by the commission before the government may take a decision. 1 am following with interest the development of the shoe industry at the present time. I asked the commission to give me a report as soon as possible, and when it is received we will take the necessary steps.


Léonel Beaudoin: Mr. Speaker, that answer is the only one we got from former industry, trade and commerce minister Pepin prior to that day in November 1971. Can the minister tell us whether officials in his department are currently dealing with the problem in the shoe industry so that he could be ready to act as soon as he sees fit to do so, that is in the next few weeks, to avoid any delay in the implementation of actions after we get the decision of the investigation board?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are watching the situation very closely and hope to be able to act upon the recommendations of the board in the days or weeks following the tabling of the report.
Oral Questions


COMMUNICATIONS
Mr. J. P. Nowlan (Annapolis Valley):: Mr. Speaker, I have a question for the Minister of Communications. It concerns the increasingly confused state of this country's broadcasting system. We now have statements of mea culpa from the president of the CBC, recommendations which border on the extreme from the LaMarsh Commission, an inquisition sponsored by the Liberal party into Radio Canada, and other activities by various and sundry ministers and groups, both provincially and federally, let alone Bill C-43 which is presently in a state of suspended agitation, would the minister consider discussing with the Prime Minister and her cabinet colleagues, the advisability of establishing a royal commission to inquire into the whole area of broadcasting, since there has been no comprehensive study done of this issue since the Fowler Commission of 1955?


Hon. Jeanne Sauve (Minister of Communications):: Mr. Speaker, the hon. member is certainly not aware of what is going on in this House. He should remember that a few months ago the chairman of the CRTC was asked by the Prime Minister to give his opinion about the possibility of having an investigation on broadcasting. The chairman of the CRTC is going to table the report required by the Prime Minister on July 1 and he would probably take this opportunity to express his views on this matter. Following his recommendations, the cabinet will decide whether or not there would be some kind of investigation on broadcasting.


John Patrick (Pat) Nowlan: I thank the minister for part of the answer. I am fully aware of what is going on in the House and I am also fully aware of the invitation of the Prime Minister to the chairman of CRTC to become involved in a most invidious precedent of CRTC investigating the CBC, but would the minister, whenever the interim report of the chairman of CRTC is received-the report is due on July 1, which will be a happy Dominion Day present, I suppose-consider ensuring that a royal commission established to define the role of the CBC does attempt some definition of the regulation of the broadcasting system, some attention to paid television and other modern technology, federal-provincial relations, the cablevision problem, let alone the relationship between the government and independent regulatory agencies, which are not part of the letter from the Prime Minister to the chairman at CRTC? Would those matters be considered and will the minister be able to stand in the House on July 2 or 3, or whenever we might meet in the month of July, to tell us what she intends to do?
[Translation]	*


Jeanne Sauvé: Mr. Speaker, in the absence of the hon. member, the Prime Minister made a statement following a

June 16, 1977
Oral Questions
question he had been asked, whether he was prepared to consider the possibility of an investigation on broadcasting. He also said he could anticipate the need to consider the whole structure of broadcasting in this country, in view of the technological changes which can be expected. I totally agree with him on this point. I think we should have an investigation or a task force, well some kind of an investigation, intd all those broadcasting problems in order to consider the reorganization of the industry in the light of the technological changes which are going to take place. Concerning pay TV, the hon. member should know that public hearings are being held here in Ottawa following a request that the public and all involved people may express their points of view on this important technological innovation.


SUGGESTED SUSPENSION OF PROCEEDINGS ON BILL C-43 PENDING RECEIPT OF REPORT OF CHAIRMAN OF CRTC
John Patrick (Pat) Nowlan: In view of the minister's answer, which I appreciate, can she assure the House that there will be no further progress on Bill C-43 until there is a determination of what the government intends to do with the interim report of the chairman of CRTC and what else the government decides to add to extend the report?
[ Translation]


Jeanne Sauvé: These are two different things altogether. Bill C-43 which has been brought forward in the House is going to be dealt with according to the order paper of the House. There is nothing in common between these two things. This legislation has been due for a long time. It is important and even necessary to meet our present problems.


TRANSPORT
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question for the Minister of Transport. Since the minister has indicated that he wishes to place his government's position on rail passenger transportation, particularly in the Atlantic region, before the CTC, and he has done this by tabling the Atlantic regional intermodal transportation study, will the minister heed the advice of the chairman of the rail transport committee of the CTC, who urged the federal Department of Transport to extend the study since there are "gaps" in it, particularly the study's use of outdated rail patronage figures which had been refuted by the CNR in their presentation to the committee?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, we will certainly be taking that under consideration. Of course we are all delighted that while the study dealt with figures which were recently available, there are now some indications
[Mrs. Sauve.J
of very good upturns in the figures on the patronage of passengers rail services throughout the country, and that will certainly be taken into account.


J. Michael Forrestall: Do I interpret properly what the Minister of Transport has said just now to be a refutation of his position taken earlier in this chamber that the Atlantic regional intermodal transportation study represented the present position he and the four Atlantic premiers take?


Otto Emil Lang: No, I think the study has a great deal of valid analysis, and the fact that some current figures changed certain of the factors does not in any way remove its value.


COMMUNICATIONS
James Aloysius McGrath: Mr. Speaker, my question is supplementary to that put by the hon. member for Annapolis Valley to the Minister of Communications. In view of the conclusive findings of the LaMarsh Commission that there is a direct causal relationship between violence on television and violence on the streets and the increased rate of crime as well as the effect that this has on children and certain other elements in society, and in view of the findings of the Solicitor General and the U.S. Surgeon General, may I ask the minister what steps she intends to take as the minister responsible for broadcasting to eliminate this serious social threat from television, especially bearing in mind the fact that 95 per cent of it comes from the United States, either by way of the cable system or in canned programs?


Jeanne Sauvé: The
hon. member knows how preoccupied I am with that problem.
I made a speech about a year ago in which I indicated that I felt that broadcasters should look into the question of the kind of programming they were offering their audiences. I never suggested that there should be any kind of censorship of the programming they are offering the population because, of course, such a radical measure would be repugnant to the population, as it would be to the hon. member and myself, despite the fact that I personally feel there is too much violence on television.
Although one cannot establish a direct relationship of cause to effect between what is shown on television and the behaviour of people, one must conclude that violent programs are not one of the most positive aspects of television with regard to the population and especially with regard to children. That is a very important problem. We will have to try to determine for ourselves what kinds of measures we can introduce in order to deal with it. It would not be censorship, but it might be a classification of programs, and certainly, above all, broadcasters should exercise responsibility in programming in view of this situation which has been brought to light in Miss LaMarsh's report.
June 16, 1977


ADMINISTRATION OF JUSTICE
Walter David Baker: Mr. Speaker, I want to direct a question to the Minister of Justice, and in doing so 1 want to remind him of something he said a few moments ago when he said that a man should be tried, convicted and sentenced by judges, not by politicians. That was in answer to the hon. member for Oshawa-Whitby. If the minister really believes that, as Minister of Justice and as Attorney General, as he tells us from time to time he is, would the minister give consideration to setting up a commission or a tribunal to allow those on the infamous extra parliamentary opposition list to publicly clear their names before judges, if no evidence exists, to support the charges made against them by the former solicitor general who, after all, is a man and a politician? Would he give some substance to the words that he uttered a few moments ago to bring justice to those public servants who have been maligned until there is evidence to support the charges made by the former solicitor general?


Some hon. Members:: Hear, hear!


Stanley Ronald Basford: Mr. Speaker, I do not think the case is analogous at all. We were discussing people charged under the Criminal Code in the process of being prosecuted, charged and sentenced. With regard to the other part of the hon. member's question, the letter to which he refers is not a charge. As has been made clear, some on that list have risen to positions of very considerable prominence within the Public Service of Canada.


Walter David Baker: Mr. Speaker, if the people on that list were guilty of what they are said to have been guilty of by the then solicitor general, they ought to have been charged under appropriate sections of the Criminal Code. They were not, and that is the problem. Would the minister reconsider his position with respect to the provision of a tribunal so that they can clear their names? If he will not do that, would he consider establishing a fund so that these people can be funded by the government which maligned them for the expensive legal proceedings through which they are now being put as a result of that maligning by the government? If the minister will not do either of those things, would he at least make a statement on motions absolving those accused of treasonable intentions, explain how the Goyer letter came to be written in the first place and assure the House that such internal smear attacks will not again be launched by any minister without precise information or charges? That is the least the minister can do in view of the dreadful situation into which his colleague put those public servants.


Stanley Ronald Basford: The circumstances surrounding that letter have been explained.
Oral Questions


FINANCE
Mr. Claude Tessier (Compton):: Mr. Speaker, my question is for the Minister of Finance.
Since most Canadians rely upon life insurance as a major means of financial security in the case of the death of one of the spouses, can the minister tell the House about the reason or reasons justifying provisions 62 and 63 of the new budget, which provide among other things for a tax on widows and children?
If this is the case, does that mean that Loto-Canada winners are exempt while a tax will be levied from those who made their own lottery and paid it completely, not for their own benefit but for that of their families?


Hon. Donald S. Macdonald (Minister of Finance):: Mr. Speaker, I gave such an explanation the night of the budget and I am prepared to give it again when we get to the bill I introduced yesterday for first reading.


NORTHERN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development, and it is about the drinking water supply at Pine Point, Northwest Territories. To say the least, the water supply there is very bad. A recent analysis by the government of Alberta found a sample of water from that supply to be chemically unfit for human consumption. This situation has been very serious, especially for newborn babies. The minister is aware that the proposed new source of drinking water for the town will not be available this year unless some $400,000 is made available for this purpose by July 1. Is the minister in a position now to say if his department will commit itself to this expenditure?


Hon. Warren Allmand (Minister of Indian Affairs and Northern Development):: Mr. Speaker, 1 am aware of this serious problem. I know that the department is looking at it, but I cannot tell the hon. member today what decision has been made on this matter.


Walter (Wally) Firth: Mr. Speaker, I would like to ask the minister if he can indicate to the House how soon we will be able to get an answer to that question. If this funding is not made available, will the minister indicate to the residents of Pine Point what source of drinking water he believes they should use over the winter, and will he indicate whether he is willing to fund this alternate source of water supply?

June 16, 1977
Oral Questions


William Warren Allmand: Mr. Speaker, as a result of the hon. member's question I will check into this right after the question period and report to him.


THE CANADIAN ECONOMY
George Harris Hees: Mr. Speaker, I have a question for the Minister of Finance. As the consumer price index rose at an annual rate of 9.6 per cent during May and at an annual rate of 10.4 per cent during the last three months, would the minister take the first opportunity on motions or briefly now to outline to the House what steps he intends to take to bring the rise in the consumer price index, the cost of living, more in line with the government's target of 6 per cent this year? When he is answering, would he also advise the House, in view of the very poor start in the first five months of this year, what chances he thinks this country has of achieving a 6 per cent increase this year?


Donald Stovel Macdonald: Mr. Speaker, I will have a chance to talk about this matter later this day.


George Harris Hees: Mr. Speaker, the minister gave a very evasive answer. He said he would have a chance to talk about this later. He has had chances time and time again, but he never answers questions we ask, and he obviously does not intend to answer this very difficult question when he speaks in the debate today.


TRANSPORT
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, 1 wish to direct my question to the Minister of Transport. In light of the decline in Nova Scotia's tourist industry during 1976 and the continuing decline in secondary industry along the South Shore where in Brooklyn, Nova Scotia Standard Brands has now closed down its yeast plant while industry in Lockeport and Shelburne is seriously affected due to a lack of municipal water supplies, will the minister consider the carrying out by his officials of a survey in this area in the hope that a ferry service could be established between New England and Shelburne, thereby making use of one of the outstanding harbours we have in Nova Scotia and giving the tourist and secondary industry in this area a much needed boost?


Otto Emil Lang: Mr. Speaker, I receive that as a representation, and I will be glad to have a look at the question.
[Mr. Firth.)


CANADIAN NATIONAL RAILWAYS
Donald Frank Mazankowski: Mr. Speaker, I would like to direct my question to the Minister of Transport. It arises from the motion under Standing Order 43 which 1 presented to the House yesterday in connection with the miscalculation of revenues under the provisions of the Railway Act by the CNR. I wonder if the minister is in a position to give an explanation to the House regarding CNR's overstatement of revenues to the extent of an amount in excess of $20 million as a result of a miscalculation in the determination of subsidies received from the Canadian Transport Commission under the provisions of the Railway Act. If so, could he also indicate to the House what impact this would have on the profit and loss picture for 1976 and the profit and loss position and the revenue position in the current fiscal year, 1977?


Otto Emil Lang: Mr. Speaker, the revenues stated by the CNR did reflect the payments which were received from the CTC. What has now been determined and reported is that the CN and the CTC joined in an error or made a common error in calculations in arriving at those figures. Subsequent to determining that, the CTC began to take action to recover the amounts out of moneys currently flowing to the CN, and I understand it has now been totally recovered.
I will be glad to get a more detailed analysis of the impact upon the financial statements if the correct figures had been used throughout the period. I understand that the impact would have been most negative in relation to years prior to
1976	rather than to that year. The over-all impact in 1977 may depend upon the action which may logically flow from the fact that in those earlier years what should have shown up as a larger deficit did not do so, and the government will have to take this into consideration.


Donald Frank Mazankowski: I wonder if, when the minister is looking into this matter and when he is preparing his statement, he could outline to the House precisely when the error occurred and what the amount of the error was. In light of the reference in the Hall report to the effect that there have been a number of unresolved issues between the railways and the CTC, in light of the fact that the Hall report recommends that the CTC report to the Minister of Transport on or before July 31,
1977	in connection with this whole issue and in light of events involving CN will the minister look at that recommendation and act upon it?


Otto Emil Lang: Yes, Mr. Speaker, I am doing so. I understand that the error was an error in calculation and that some items were included twice in the over-all approach, which was not detected by the CTC. As I say, the amount has now been recovered, and I will be glad to get a more detailed statement after we have made an analysis.
June 16, 1977


GOVERNMENT ADMINISTRATION
Mr. Craig Stewart (Marquette):: Mr. Speaker, my question is directed to the Acting Prime Minister. In view of the fact that the Minister without Portfolio is in Portage la Prairie today, having travelled by government jet for the purpose of attending a political meeting on behalf of the Manitoba Liberal Party, could the Acting Prime Minister tell the House if it is still government policy to allow ministers to attend political rallies at the taxpayers' expense and is it their intention that government aircraft shall now fly under the name Air Horner instead of Air Lang?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am very pleased to see that my hon. friends opposite do not like to see the Minister without Portfolio in western Canada. This is an indication that he made a fine move when he joined the government, and I am quite certain that the minister follows all government guidelines concerning the use of aircraft.


Donald Craig Stewart: A supplementary question, Mr. Speaker, directed to the government House leader. Is it the intention of the government to hold the third reading vote on the metric conversion bill at a time that will allow the Minister without Portfolio to be present so that we will know where he stands on this bill?


Some hon. Members:: Hear, hear!


LABOUR RELATIONS
Mr. Jacques Lavoie (Hochelaga):: Mr. Speaker, as the Minister of Labour is not in the House, I shall direct my question to the Acting Prime Minister.
Some time ago I asked a question of the Minister of Labour about the situation in the port of Montreal which faces difficulties, including the possible transfer of Cast North America with all the related problems. Can the Acting Prime Minister tell the House whether he was informed on the negotiations with the mediator by the Minister of Labour and can he make a progress report on the negotiations on the future of the port of Montreal?


Joseph Jacques Jean Chrétien: Mr. Speaker, I thank the hon. member for his interest in the port of Montreal. Unfortunately, I could not communicate with the Minister of Labour to get the necessary informa-
Oral Questions
tion. As soon as I see him, I shall inform him of the hon. member's representations, and I am sure he will be extremely pleased to answer him when he is back in the House.


TELEGLOBE CANADA
John Allen Fraser: Mr. Speaker, I have a question for the Minister of Communications. On Thursday, June 9, my colleague the hon. member for Annapolis Valley asked certain questions relating to the industrial dispute between Teleglobe and the Canadian Overseas Telecommunications Union. Can the minister advise the House why it is, in view of the fact that the union asked for arbitration of this unfortunate dispute, that Teleglobe, which I understand reports directly to the minister, has refused to accept that procedure?


Jeanne Sauvé: Mr. Speaker, I am not sure that the hon. member's information is correct in that Teleglobe has refused to see a conciliator. The union came to Ottawa yesterday and they were seen by members of my staff and the department. Before that they had seen officials of the Department of Labour who had suggested that a conciliator be brought into the dispute. Teleglobe has not indicated acceptance but I am not sure they have refused as the hon. member suggested. I will inquire about this, but I just now got the information about the meeting.


John Allen Fraser: A supplementary question, Mr. Speaker. I wonder if the minister could clarify the matter for the House. My information is that a request has been made by the union for arbitration, not for a conciliation officer. Could the minister confirm whether that is so and if it is, what the response of Teleglobe has been?


Jeanne Sauvé: Mr. Speaker, my information is that a conciliator has been suggested, not an arbitrator, but I will inquire.


NATIONAL DEFENCE
Mr. Gilbert Rondeau (Shefford):: Mr. Speaker, my question is for the Minister of National Defence.
Can he tell us whether he was personally consulted before his department gave Cuban authorities permission to use the airport in Gander, Newfoundland, so that Fidel Castro's troops could be carried to Angola to fight as communist guerrillas?

June 16, 1977
Oral Questions


Hon. Barney Danson (Minister of National Defence):: No,
Mr. Speaker, I was not personally consulted, nor am I aware, nor do we have a guard of honour.
[ Translation]


Gilbert F. Rondeau: I want to ask a supplementary question, Mr. Speaker.


REASON FOR ALLEGED REFUSAL TO BUY LEOPARD II TANK-CO-ORDINATION WITH ARMED FORCES OF WEST GERMANY AND OTHER NATO ALLIES
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is also for the Minister of National Defence. In view of the rather surprising revelation on Saturday by Mr. Leber, the West German defence minister that he had tried to sell the Leopard II to Canada and as the publication "NATO'S Fifteen Nations" indicates that the Leopard II will be ready for delivery by late 1979 and since the Leopard I's that the minister has bought will not be completely delivered until at least mid-1979, could the minister explain why he refused to buy the new advanced tank which will have a new engine, new armour and a 120 mm. gun?


Barnett Jerome Danson: Mr. Speaker, he did not try to sell me the Leopard II, he wanted to sell us the Leopard also.


Some hon. Members:: Oh oh!


An hon. Member:: Who?


Barnett Jerome Danson: He seems to be very pleased that we have purchased these tanks which are available now and with which our troops are pleased. I am surprised at the delivery dates given because it is my understanding that not only will the Leopard II not be ready until perhaps the early 1980's but that their place on the delivery system would be at least the mid-1980's. Certainly there was no attempt by Herr Leber to change my mind on this issue.


Allan Bruce McKinnon: A supplementary question, Mr. Speaker. There are a lot of marks on the Leopard tank but that is the first time I have heard of the "Leopard also". Has the minister read the report which appeared in the press last month that Mr. Leber said Canada and West Germany would be establishing a committee to study ways of further co-ordinating their armed forces and that a report could be expected in August? Apart from expressing regret that it was Mr. Leber and not our own minister who broke this important piece of news to the Canadian people, I should like to ask the minister what kind of coordination is involved and whether similar co-ordination is being planned with the forces of our other NATO allies?


Barnett Jerome Danson: Mr. Speaker, there are two aspects to that. One is the coordination of troops working together which has been a continuing policy not only with the troops of the

Federal Republic of Germany but with United States troops and other NATO allies, so that there is inter-operability in the field. The new and significant part of our discussions related to the research, development and procurement programs so that we can organize our efforts in these fields, trying to analyze areas in advance of need so that we could have more consistent policies regarding procurement, research and development.


Mr. Speaker:: Order, please. I did not see the hon. member for Shefford, who wants to ask a supplementary question to the Minister of National Defence. I now recognize him.


Gilbert F. Rondeau: Mr. Speaker, I thank you for your kindness. I would rather keep my question for ten o'clock tonight.


An hon. Member:: At six o'clock!


BILINGUALISM
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker,
I have a question for the Secretary of State in his capacity as the responsible spokesman in this government for matters affecting its bilingual policy. Is the minister prepared today to give a firm, ironclad and unequivocal undertaking here and now to depart from recent government practice in so far as it relates to announcements on important matters of .national interest and concern and, instead of making his widely publicized statement believed to be due next week, on the government's revised bilingual policy outside the House, to do so as a statement on motions in this Chamber thereby permitting members the opportunity to seek clarification of that policy through questioning?


Hon. John Roberts (Secretary of State):: Yes, Mr. Speaker. As the hon. member knows, in the past when I have had something to say of importance I have made a statement in the House.

*.. and next Tuesday, Mr. Speaker, I will table in the House a paper on the official languages. I also think I will hold a press conference Tuesday afternoon. Afterwards, I will make a statement in the House.


TRANSPORT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, my question is for the Minister of Transport regarding the Hall Report only in this instance it is the report of Dr. Noel
June 16, 1977

Hall on railway pension plans in Canada. Since referring that report to management and the unions does not do a solitary thing for railway workers already retired, both CNR and CPR, will the government take action to make sure those old timers are not forgotten?


Otto Emil Lang: Mr. Speaker, my colleague the Minister of Labour is putting what analysis the question may require before the government. In the meantime a good number of matters referred to in the report are, by Dr. Hall's own definition, suitable for negotiation.


Stanley Howard Knowles: A supplementary question, Mr. Speaker. Since every reference the Minister of Labour has made to this matter has been to the effect that it is up to management and the unions, when can we have a statement as to what the government itself will do to improve the pensions of those railway workers who are already retired?


Otto Emil Lang: Mr. Speaker, as I said, the whole question of the report is being considered. Obviously, decisions taken as a result of that consideration will be announced.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on my usual Thursday point of order, to ask the deputy government House leader what will be the business for the balance of this week and next week?


Mr. Blais:: Mr. Speaker, under government orders next week on Monday, between 11 and one o'clock, and Tuesday as well, we shall consider Bill C-27, the unemployment insurance bill, to be followed by the Auditor General's bill, C-20. That ought to carry us through until next Wednesday, or even Thursday, when we might finish, if we have not already done so by then, consideration of the metric bill which hon. members opposite seem reluctant to pass.


John Patrick (Pat) Nowlan: Bring Jack Horner back, and we will vote on it quickly.


Jean-Jacques Blais: Mr. Speaker, the Minister without Portfolio (Mr. Horner) is being helpful to us in Manitoba today.


Walter David Baker: Mr. Speaker, I thank the deputy House leader for that information. 1 am sure he will tell the hon. member for Crowfoot (Mr. Horner) when we shall deal with the metric bill next week, and we look forward to seeing him in the House.


An hon. Member:: Do not reflect on a vote.


Walter David Baker: Mr. Speaker, hon. members know I never reflect on a vote but the fact is, the hon.
Clothing and Textiles
member for Crowfoot ducked the vote. Also, could the deputy House leader designate an opposition day next week? That is to say, has he been informed of arrangements in this regard by the government House leader?


Jean-Jacques Blais: Mr. Speaker, there is no indication that there will be an opposition day next week. Usually, opposition days are announced for the following week. They are announced on this day of the week, in the usual way.



ROUTINE PROCEEDINGS


Hon. Jean Chr6tien (Minister of Industry, Trade and Commerce):: Mr. Speaker, in accordance with the provisions of Standing Order 41(2), I have the honour to table in both official languages the inquiry report on clothing carried out by the Textile and Clothing Board.


ELECTORAL READJUSTMENT
[Stage Direction]
On the Order: Introduction of bills:
The President of the Treasury Board-Bill intituled: 'An Act to readjust the representation of Ontario in the House of Commons and to readjust the electoral districts in Ontario.'
Stanley Howard Knowles: Mr. Speaker, I rise on a point of order with respect to this bill. Actually, my point of order does not concern the bill so much as the name of the person who is introducing it. I do not oppose the bill. My colleagues and I are prepared to support it, if it is along the lines indicated. My point of order is this: The responsibility for electoral boundaries belongs to the President of the Privy Council (Mr. MacEachen). Why, then, is this bill being introduced in the name of the President of the Treasury Board (Mr. Andras)? I realize he comes from the part of the country affected, but ministers do not have responsibility on a geographic basis. Indeed, if this is a private member's bill it should not have the status of a government bill. It ought to be in the name of the member of cabinet who is responsible for this area of public business.


Mr. Speaker:: Order, please. The point of order the hon. member for Winnipeg North Centre (Mr. Knowles) raised is noted. Seeing the President of the Treasury Board present in the House I rose, after calling introduction of bills, to announce the bill which stands in his name and is ready for first reading, I think. As the House has just seen, the President of the Treasury Board does not intend to introduce the bill at this time. The hon. member's point of order is well noted, and

June 16, 1977
Order Paper Questions
will give the Chair time, before the bill is introduced, to determine if this is an aberration or a fatal flaw in terms of administrative responsibilities.


QUESTION ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Ralph E. Goodale (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following question will be answered today: 1956.


CBC'S EXPENDITURES FOR TRAVEL IN 1975 AND 1976
Mr. Huntington: 1.	What was CBC's total expenditure for travel in (a) 1975 (b) 1976?
2.	For the same years, what was the total expenditure for travel with (a) Air Canada (b) Canadian Pacific Airlines (c) Canadian National Railways (d) Canadian Pacific Railway (e) other modes of transportation and, in each case, what was the total amount placed (a) directly (b) through a travel agent?
3.	For the same years, what are the names of travel agencies used and, in each case, what was the gross amount?


John (Moody) Roberts: I am informed by the Canadian Broadcasting Corporation as follows: 1. CBC records have not been maintained in a manner which would enable the Corporation to extract from travel records readily and without an inordinate amount of work, time and expense, the cost of transportation for CBC employees who travel on Corporation business.
2.	(a), (b), (c), (d) As for the total expenditure for travel with individual transportation companies, either directly or through travel agents, it has not been customary to require the CBC to supply such details of its internal management and administration as the amounts paid to individual firms with which it has business relationships. The background to this custom is explained in detail in the reply to question No. 2,530, May 22, 1975. However, the total amounts paid directly to the transportation companies listed in the question were $948,000 in 1975 and $1,453,000 in 1976. The total amounts spent with the same companies through travel agents were $752,000 in 1975 and $1,043,000 in 1976. (e) Total amounts paid in connection with other modes of transportation were (a) $352,000 (1975), $309,000 (1976), and (b) $34,000 (1975), $71,000 (1976).
3.	Montreal: Lawson Travel, N.D.G. Travel, Holiday Travel, Voyages Carina, Dorette Entreprise, Drake Travel, Planet Air, Voyages Mission, BB Travel, Globensky Inc.; Toronto: P. Lawson Travel; Ottawa: Universal Travel; St. John's: Legrows Travel, Mike Martin Travel; Quebec City: Club Automobile; Matane: Agence de Voyages Logan; Winnipeg: Atlas Lance Travel Ltd.; Windsor: Clark Travel; Vancouver: Thos. Cook, Kokanee Travel, TPY Travel Service, Bayshore Travel, Wright's Travel, B.C.A.A., Sky Trail; Frobisher Bay, N.W.T.: Holiday Travel; Yellowknife, N.W.T.: Yel-

lowknife Travel. Regarding gross amounts paid to individual travel agencies, see the answer to part 2 above.


QUESTIONS PASSED AS ORDERS FOR RETURNS
Ralph Goodale: Mr. Speaker, if questions No. 1728 and 1846 could be made orders for return, these returns would be tabled immediately.


CROWN CORPORATIONS EMPLOYEES
Mr. Herbert: How many Crown corporation employees are in each province and territory, excluding the National Capital Region?
Return tabled.


DRUG SUNDRIES CONTAINING CHLOROFORM
Mr. Yewchuk: By brand, which toothpastes, cough medicines and cosmetics on sale in Canada contain chloroform?
Return tabled.


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


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Speaker:: Order. It is my duty, pursuant to our revised proceedings, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn)-Conflict of Interest-Knowledge of Minister of Agriculture of Senator Davey's interest in Blue Water Racing Associates Ltd.; the hon. member for Central Nova (Mr. MacKay)- Conflict of Interest-Activities of Senator Davey respecting certain companies.
I might remind hon. members that as was announced earlier there will be royal assent at 5.45 and therefore the proceedings at six o'clock will be delayed a few minutes. It was felt that it was appropriate to go ahead with them even if they were delayed; hence, only two questions are listed.
June 16, 1977



GOVERNMENT ORDERS


Mr. Sinclair Stevens (York-Simcoe) moved:: That the Anti-Inflation Act being chapter 75, Statutes of Canada 1974-75-76, as amended by chapter 98, Statutes of Canada 1974-75-76 shall expire on the 30th day of June, 1977,
He said: Mr. Speaker, our motion today is prompted by the increasing evidence that the Canadian economy continues to deteriorate at an alarming pace. Real growth is below expectations, inflation and unemployment are above expectations and our competitive position in the world has fallen, as evidenced by a $10 billion end-products trade deficit in each of the last two years, almost triple the 1971 level.


An hon. Member:: Shame!


Sinclair McKnight Stevens: We have been lulled into believing that debt is a substitute for real wealth. With our foreign borrowings now at $50 billion, or approximately $5,000 for each of our workers, we have become the world's greatest debtor. Unfortunately, much of this current international borrowing has been to pay for consumer goods and services, creating the illusion we are wealthier than we really are. As a nation we are not on the right course.
This government's budgetary thrusts have misfired. Forecasts have not materialized. In his May 25 budget last year the Minister of Finance (Mr. Macdonald) said, "The Canadian economy will generate more than 250,000 new jobs this year." He was referring to 1976. Yet from December, 1975 to December, 1976 only 67,000 jobs were created, a 73 per cent shortfall.
The minister stated further that "Unemployment will gradually decline as cyclical expansion takes hold." Instead, unemployment rose to a 37-year high, while United States unemployment is at a 30-month low.


Mr. Clarke:: And the government will not stay to listen.


Sinclair McKnight Stevens: A factor contributing to this economic malaise is the government's reluctance to drop its wage and price controls which are not only working poorly but which are deterring the formation of investment capital and the creation of jobs. I would say this to whoever might be inclined to vote against our motion and, in effect, for a continuation of controls: He or she should go down to the local unemployment offices and look squarely in the eye the people who are being condemned to further unemployment.
It is no accident that we are now experiencing the highest unemployment rate of any industrialized nation. It is not just happenstance that in each of our five eastern provinces the level of unemployment is higher than that of any state south of the border. It is due to poor economic direction on the part of
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this administration and its officials, including those at the Bank of Canada. It is time to stop using Canada as a test tube or guinea pig for Galbraithian theories. It is time we put an end to wage and price controls in their present form.
Against this background and with mounting evidence that wage and price controls are not working, the onus is upon the administration, and in particular upon the Prime Minister (Mr. Trudeau), today, tomorrow and Monday, to justify the continuation of controls. Oddly enough, we have already heard a great deal of evidence from the Prime Minister and his ministers that in today's economic environment controls should be terminated. And there is very little evidence from the same sources that they should be continued. I intend to present some of this evidence and refer to some of those statements later in my remarks. When we compare statements made by the Prime Minister on the subject of controls with those made by the Minister of Finance (Mr. Macdonald) we find that over the years the Prime Minister has tended to say whatever he feels would further his own political interests, irrespective of the facts. Sometimes he has been in favour of controls, sometimes against them. But through it all he has been consistently inconsistent. The Minister of Finance has showed more candour, consistently maintaining that we should be out of controls as soon as possible.
Mr. Speaker, the government's wage and price program has been nothing more than a cruel hoax on the Canadian public. Three years ago in the 1974 election, hon. members will recall that the Prime Minister was peddling a beautiful potion called "Trudeau Liberalism". On that occasion, this patent medicineman described controls as "a disaster looking for a place to happen". Today there can be no confusion as to what controls, as instituted by the government, have and have not done. They have failed effectively to contain inflation which after 20 months is now running at an annual rate of 10.4 per cent, only 2/10ths of one per cent lower than the 10.6 per cent annual rate when controls were first applied. Even the administration admits that this year's target for inflation will not be met and has given up completely on next year's target of 4 per cent. It is becoming just another embarrassing memory.
Controls have, however, been effective in deterring real economic growth and they have stifled the creation of jobs for hundreds of thousands who are out of work. I could read into the record opinions expressed by many of our nation's leading figures, all calling for an end to controls-people like former deputy finance minister Simon Reisman or labour's Ron Lang. "Think tanks" like the Fraser Institute and the C.B. Howe Institute all believe, as we do, that the process of decontrol should begin immediately. But the most appropriate source from which to quote today is the Prime Minister. I do not believe anybody could say it any better than he did when he told a Nova Scotia audience that controls "create far more problems than they solve" or when he said "the economies which have been subjected to this straitjacket of freeze and controls have not performed better on inflation and have themselves been turning in very poor performances".

June 16, 1977
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It is precisely those two effects produced by controls- marginal success in fighting inflation and stifled economic performance-which are the basis of my party's challenge to the government to begin the decontrol process, not next month, not next year, but now. I believe we should take the Prime Minister at his word when he told a St. Catharines audience that "the real way to fight inflation is not to put a straitjacket on the economy; not to throttle the worker or farmer, or the producer or the storekeeper; not to bring in a system of hocus-pocus magical solutions." 1 hope the Prime Minister will remember his words when he said: "If a government cannot cope with self-induced inflation it deserves to be thrown out."
The plain truth is that whatever marginal success we have had in the battle against soaring costs has been due to the competitive process in the private sector. The Minister of Finance himself made this clear in committee recently. He said, and I quote: "Indeed, prices have been held down as much by the competitive factor as by the anti-inflation program." To make the situation doubly clear, he added: "May I correct that? It was more by competitive factors than by anti-inflation programs."
In the light of the minister's admission that it is the private sector, not the Anti-Inflation Board, which is containing prices, why are we still rigidly locked into wage and price controls? Why is the government not moving quickly to dismantle a system which has created very serious distortions in our economy, distortions which are evident from the flight of investment capital to the United States and our miserable record in job creation? We on this side suspect that the Trudeau administration is playing politics with our nation's economy-that it is abdicating its responsibility for leadership and is once again fashioning another of its great misrepresentations. The government knows that now is the time to get out of controls. The Minister of Finance said in February that the economic situation "would appear to give us the green light for decontrol" and he reaffirmed this view in committee two weeks ago. The government knows this. Yet it is stalling because the Prime Minister does not know how it should be played politically. Such lack of leadership is dangerous. The government realizes that controls should be lifted. The Minister of Finance said he hopes they are lifted sooner rather than later because of the concern he feels might exist regarding distortions which could arise. In short, the government seems to be torn between economic realities and sheer political expediency.
In suggesting today that the decontrol period should commence on June 30, let me make one thing clear. We are not as hard on controls as the Prime Minister was when he chose to be against controls in 1974. We believe that controls can be used for a limited period in connection with proper fiscal restraint, monetary restraint, and above all if there is a disposition on the part of government to deregulate the economy. Such imposition of controls, however, I would emphasize, should be temporary and they must be administered in an equitable fashion. To this end, the controls must have a

certainty so that they will be clear to all who wish to abide by them. They must never appear to favour one group or one sector or one person over another group, sector or person.
So far today, Mr. Speaker, I have attempted to establish that Canada's economic realities dictate that decontrol should begin on June 30. Over and above that, it is important to remember that this administration's wage and price controls program has not met the essential ingredients of an effective wage and price controls program. When the administration announced their current wage and price controls, they referred to fiscal restraint and monetary restraint. They said that there was a need to deregulate the economy. This has, in fact, not happened. There has been little restraint on the part of this government, and what restraint we have had has been unintentional.
In recent months the government has had no alternative but to be restrained, because frankly it has run out of revenue. The government's own planning is so far off course that it simply has nothing left to spend. The record budgetary deficit of $7.1 billion this year is a response not to today's problems but to yesterday's mistakes, and the restraint the government talks about is really the result of running out of revenue.
When the minister talks of breaking the inflationary psychology, I suspect he really means that he has at long last discovered the bottom of the taxpayer's pocket. No less than Gerald Bouey, governor of the Bank of Canada, has spelled out the significant role of government in causing inflation in this country. In the November 1975 Bank of Canada Review, Governor Bouey had this to say: "There is no great mystery about the nature and origins of our current economic difficulties." They are, he said, the result of the pursuit of "very expansionary monetary and fiscal policies". "The current wave of inflation", he added, "was not initiated by a marked acceleration of wage and salary increases". Nevertheless the Governor supported wage and price controls provided they were applied in tandem with a policy of monetary and fiscal restraint.
Have we had such restraint? We all know that government spending plans have jumped 28 per cent since the middle of 1975. Such government spending increases are, of course, not reflected in the consumer price index but in the nation's broader index, known as the deflator. There we find that between the third quarter of 1975 and the end of last year, government prices jumped 15.2 per cent in Canada, or about one per cent a month. Some fiscal restraint!
So far as monetary restraint is concerned, perhaps the simplest way to put it is that in September, 1975 just before controls began our banks had total Canadian assets, including Canadian deposits, of $73 billion. By March of this year those assets had exploded to $92 billion, or 25 per cent more than they were 18 months previously. That represents roughly an increase of 1.4 per cent per month. To suggest that that is monetary restraint, with real growth in this country running in the same period at something between 5 and 6 per cent, is ludicrous.
June 16, 1977

Now let me deal with government rhetoric about deregulating the economy. On October 14, 1975 the minister, when presenting the anti-inflation package, said:
We propose to scrutinize a wide variety of government policies and programs in an effort to find ways of reducing rigidities and costs that may impose unnecessarily on various sectors of the economy.
In the 20 months which have ensued there has been no meaningful review of government spending programs or of their effect on the regulation of business. Rather than deregulate the government is in fact proposing still greater regulation of industry. In this connection I refer hon. members to two bills both coming out of the Department of Consumer and Corporate Affairs. Bill C-16, which is now before a committee of this House, proposes to regulate the finance industry in certain ways. Obviously, it has been drafted by a person who does not understand the financial world, so much so that to date the minister has offered 75 amendments to the bill in committee. Yet notwithstanding that bungling, the minister admits that should the bill be passed it will require 25 additional civil servants, at a cost of $500,000, to administer this program of regulation.
The same minister has Bill C-42 before another committee, the so-called competition bill. There we find it is proposed to appoint an "economic czar" to rule on various business matters in this country. We find this project will require the hiring of 80 civil servants further to regulate the industry, at a total cost of $2 million.
I cite those two examples of further proposed regulation because it is of interest to note that when the Department of Consumer and Corporate Affairs was established by the former minister of the department, John Turner, in 1968, he pointed out that the net cost of the department was $2 million and that he did not anticipate this expenditure would rise. Today, we find it has blossomed into a department employing 3,027 civil servants and has a net budget of $61 million. In those few years, Mr. Speaker, the budget has grown from a net of $2 million to $61 million. Where is the deregulation which the government has said is part of its anti-inflation program?
I have cited the example of one department, the Department of Consumer and Corporate Affairs; I could cite many others. I could go through department by department and show the constant intrusion into the business affairs of Canadians which this governent insists upon. This can be seen in the growth of the Anti-Inflation Board itself. It has grown four and a half times from its original size and now costs the taxpayers of Canada $12 million in salaries alone.
Ending the Anti-Inflation Board would be one step, in our opinion, in restoring competition in our economy, in restoring meaningful collective bargaining, in restoring the proper balance between the public and the private sectors. Incidentally, the private sector is the source of wealth and the wellhead of jobs for most people in Canada. The ending of the AIB would also be one step in the deregulation of our economy and the restoring of confidence in the business community of Canada today.
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Having said that, I emphasize that our position with respect to the motion today has been consistent. In October, 1975 when the government first proposed the anti-inflation legislation which we are now considering we made it clear that we felt its timing was wrong but that we would go along with the government if it would assure us that the program would be for a relatively short period of time, and in any event for not longer than 18 months. They refused to give us that assurance which caused us to vote against the legislation at every stage. We were frightened they were proposing to bring in controls for a relatively lengthy period of time in Canada. We originally supported 18 months, and now it is 20 months. All the evidence suggests that the country would be better off without the controls in their present form. The experiment is over, if you like, and it is time for the government to retreat from their intervention in the marketplace. The experiment has failed.
As I have said, if you have controls, then the essence of the program must be one which the people feel is equitable. They must feel it applies to the rich, the poor, businessmen, the worker, the farmer and the processor. This program has never had that general confidence which is needed to make a wage and price control program work properly. This program is not a control program. If you analyse it, it is rather like a loose-fitting lid which tends to perpetuate inflation, as much as it tends to control inflation.
In the United States, which has no controls, inflation is currently running at 6.8 per cent. We in Canada face inflation of 7.8 per cent. How could it be otherwise? Once the government suggests that everybody is entitled to an 8 per cent or a 6 per cent increase, plus 2 per cent for productivity and 2 per cent for catch-up-a total increase of 10 per cent or 12 per cent-you have given the negotiators an excuse to say they will accept the 10 per cent or 12 per cent, and then the haggling begins as to how much over those two levels the negotiators can extract from the others. Rather than settling a ceiling, the guidelines have become the floor for such settlements. In this context it may be more appropriate to say that the initials AIB stand for assured inflation base.
Not only is the controls program indefinite in its application, but there are glaring exceptions to the rules. The minister's own economic review, on page 30, vividly outlines the distortions which can be institutionalized in a program of this type. For example, we find that dentists received fees and incomes more than 19 per cent higher than their base periods. Despite the AIB guidelines limiting the increases to $2,400 a year, these and other professionals earned as much as $6,940 more in the reporting period than they did in the year before, almost three times the stated guidelines which others are asked to abide by. On the whole, professional incomes in all categories increased by 12 per cent or $4,890 which was twice the permitted level. The government says that this excessive income is due to the overlap in reporting periods, fiscal year ends and they may have worked harder. It may be, but the minister should tell that to the labourer who has been denied a 50 cent hourly raise on a $4 wage base. Tell that to the man
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June 16, 1977
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who knows instinctively that AIB can put a much stronger bite on his salary than on the salaries of his dentist, lawyer or doctor. Try to explain to him why he has been singled out to bear the brunt of the fight against inflation when he reads in the papers that the salary of the vice-president of one aluminium company jumped from $147,000 to $162,000 in the first year of the wage and price control program, or that an oil company executive received a $30,000 salary increase in the first year of the program.


John Edward Broadbent: You are going to make me cry.


Sinclair McKnight Stevens: Try to explain to that man that the pensions of several top executives have risen from $40,000 to $60,000 a year, contrary to the whole spirit of the anti-inflation program.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Tell that to a man who is making an hourly wage of $4 and is being denied a 50 cent an hour increase.


John Edward Broadbent: Shame on you for voting for it.


Sinclair McKnight Stevens: I believe those are some of the inequities which call for this program to be ended soon, namely June 30.
Another point I should like to touch on is the approach of government to their own spending increases. I have referred to salary increases, but it is also important to note what has happened to postal rates which went up 50 per cent. People have written to me, and I presume to other members of this House, concerning the 50 per cent postal rate and how it is justified. They have been told by the government that it is because we are losing too much money and our expenditures have gone up. What businessman could not say his expenditures have gone up if he was guaranteed a price hike of 50 per cent, if he felt that is all it would take to get that new price increase? The reasons for these astronomical increases may be justified, but I ask the government to consider the unmeasured cost of such disillusionment in our entire system. Think of the bitterness which will continue to grow when people sense the distortions being created by this AIB program. Whatever reasons or elaborate justifications the government can give for their own spending hikes or executive salary hikes, the man denied the 50 cent hourly increase will remember that the salaries of 29 top officers of Bell Canada will average $102,000 in 1977, an increase of $13,000 each over 1976.
There are distortions in the government's own spending programs. An example of that is user-pay. I see the Minister of Transport (Mr. Lang) is present in the House. This is a favourite concept which he likes to espouse with respect to covering the deficits which have been run up mainly at Mirabel and in the Toronto airport situation.
I should like to cite one perhaps vivid example of the government practising anything but restraint, in spite of talking about restraint. I refer to the Bank of Canada's own Hall of Mirrors. How can we have faith in the federal government's so-called restraint when the Bank of Canada continues to build
the most luxurious central head office that there will be anywhere in the world.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: The cost of this new Palace of Versailles, this new temple to the bureaucracy-


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. The hon. member for Grenville-Carleton (Mr. Baker) on a point of order.


Walter David Baker: Mr. Speaker, I realize there is a difficulty with respect to the rules; but if it would be *agreeable to the House, I would ask that the hon. member for York-Simcoe (Mr. Stevens) be allowed 40 minutes and that the other lead speakers in each of the parties also be allowed to proceed for a period of 40 minutes, and perhaps thereafter the speakers be limited to 30 minute speeches. In advancing this proposition, I hope it will be acceptable to the leader of the government on this occasion and the other leaders of the House.


Donald Stovel Macdonald: That certainly suits me, Mr. Speaker. I take it the hon. member means the three opposition parties and the government spokesman.


Walter David Baker: That is right, Mr. Speaker.


Stanley Howard Knowles: Mr. Speaker, this makes sense and we hope the House will agree to it. [Translation]


Mr. Gauthier (Roberval):: We agree to the proposal, Mr. Speaker.


The Acting Speaker (Mr. Turner):: Is there unanimous consent that the first speaker for each party will speak for 40 minutes and all other speakers 30 minutes? .


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Turner):: It is so ordered.


Sinclair McKnight Stevens: Mr. Speaker, I thank the members of the House for their co-operation. I will attempt to be reasonably brief. I was referring to what I feel is a rather lavish demonstration of lack of restraint in the continuing construction of the Bank of Canada building on Wellington Street. The last estimate of the cost of that building which we had about a year ago was $55 million. We are currently trying to get new estimates. Apparently spending increases have been so unexpected that we cannot get a current accurate estimate of the total cost of that building.
I am simply saying that in the name of restraint, if nothing else is a symbol of restraint, I would have expected the government to have pulled back on the building of such a lavish financial building as is being built on Wellington Street. In fact, even at $55 million it means that the balance sheet value of the total real estate holdings of the Bank of Canada all across Canada is almost doubled by the cost of that one building.

June 16, 1977

Before coming to our proposals as to what should happen on June 30, 1 wish to briefly comment on what we fear may happen if the government continues with their present plan. We have been told by the Minister of Finance that he will announce before August a decontrol date. If you read the green paper, it is fairly clear that the program the government favours as far as decontrols are concerned is the so-called first-in first-out approach. In effect, that means corporations will be decontrolled in accordance with their fiscal year ends and labour contracts will be decontrolled at the date of their expiration.
I believe that if the government were pressed today, we would find that it was their current intention to announce a decontrol date as of January 1. When you think of it, that is a rather clever approach. Seventy per cent of the corporations have their year-end on December 31. This means that 70 per cent of the corporations in Canada will remain controlled until December 31, 1978. Fifty per cent of the labour contracts mature in the final quarter of the year. That means that 50 per cent of those contracts would be caught until virtually the end of 1978. That is one reason why we are pressing this motion today. We believe it is too long a period of time to be tying up the corporate side and the labour side of this country with the disjointed controls program that we now have.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: We realize that there is apprehension among some, that when the present control program is ended and when decontrols become effective, there could be a flare-up with respect to either prices or wage settlements. We do not believe that will happen. However, we believe some mechanism should be put in place to ensure that there will be a minimum risk of that type of bubble flare-up or call it what you wish. To that end, we suggest with the dismantling of the present controls program on June 30 it should be understood that the rulings of the AIB or the administrator will continue to have effect for the term to which they apply. That is the first thing.
Second, we believe that price and wage developments from then on could be monitored by the Department of Consumer and Corporate Affairs. 1 have already indicated that they have a staff of some 3,000. Surely they would not have to add to their staff. That monitoring should ensure that if there are excessive price increases or wage settlements, public attention will be drawn to them.
We would suggest also that for the first six to 12 month period following decontrol day the largest corporations, the top 200 which represent approximately 54 per cent of the total production in this country, should be monitored by the Department of Consumer and Corporate Affairs. In addition, there should be a 30 day advance notice given with respect to any price increase by those companies.
Likewise for the six to 12 months following decontrol day, June 30, we feel that unions representing workers in those largest corporations should be subject to a 30 day delay after settlement before the contract becomes effective. We feel this would allow for a public review of whatever the price or wage
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settlement might be. The Minister of Consumer and Corporate Affairs (Mr. Ouellet) would then be able to draw public attention to anything he thought was excessive. If necessary, we suggest he should make a reference to the cabinet and, if necessary, the cabinet should accept the responsibility of rolling back either the price or wage settlement if they thought it was unduly excessive.
We emphasize that we believe this mechanism will at least ensure that there will not be the explosion in prices or wages that some fear, but which we do not fear, will occur after decontrols begin. However, should there be some kind of explosion, I believe it is right for the government to reserve the ultimate weapon of wage and price controls.
If for some reason the marketplace that has worked well in this country, certainly for decades, does not in the future work as well, government can reserve the right to impose wage and price controls at least for a temporary period. However, we believe that period is long gone as far as existing controls are concerned and they should be ended. We are stating the caution, if you like, that such a wage and price control program could be reimposed. That is the ultimate weapon the government should hold in order to ensure that there will not be unfair price or wage increases during the decontrol period.
That is our position. We urge hon. members to support the motion now before the House. We believe that with such a decontrol program, with meaningful fiscal restraint, monetary restraint and more deregulation rather than further regulation of Canadian industry that we can restore this country to a real growth of five or six per cent per year with a minimum of inflation and a minimum of unemployment. Canadians deserve it.
This can be one of the wealthiest nations in the world on a per capita basis. We as a nation, a government and a parliament must accept the challenge of delivering the real wealth that Canadians should have, not detracting from it as has happened to date.


John Edward Broadbent: I cannot resist beginning my remarks today without commenting-


Some hon. Members:: Try.


John Edward Broadbent: My friends to my right have guessed the preamble. As I said, I cannot resist beginning my remarks without commenting on the virtual Alice in Wonderland atmosphere that has set the stage for this afternoon's debate. Notwithstanding the remarkable dialectical processes of the mind that we just saw displayed by the hon. member for York-Simcoe (Mr. Stevens), the financial spokesman for the Conservative Party, the very system of wage and price controls we are now questioning as a result of the motion brought before the House by the Official Opposition was first introduced by the Conservative Party during the 1974 election.


John Allen Fraser: That is not intellectually honest.
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June 16, 1977
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John Edward Broadbent: The hon. member for Halifax (Mr. Stanfield), an esteemed-and I mean that most sincerely-and honourable leader, as leader of his party at that time lost the election to the Liberals in 1974 on precisely this issue when the Prime Minister (Mr. Trudeau) stumped the country swearing to the heavens that his government would never introduce so perverse a piece of legislation. My party, the only party I would suggest by its very nature committed to a planned and controlled economy, opposed this Conservative aberration because we saw it, in our judgment in any case, as being both unfair and unworkable.


An hon. Member:: What controls would you have?


John Edward Broadbent: I will come to that.


The Acting Speaker (Mr. Turner):: Order, please. The hon. member for Oshawa-Whitby has the floor. We have three days in which to complete this debate and everyone will get his turn.


John Edward Broadbent: My colleagues, literally and figuratively to the right, are a little sensitive on the issue. As I was saying, this program was first advocated by the Conservatives in 1974 and attacked by the Liberals in the same election campaign. After that election, as we all know, with the deftness and shiftiness worthy of Mackenzie King, the present Prime Minister introduced the Tory set of wage and price controls which he had so successfully campaigned against. The NDP continued its opposition because the Conservative system as proposed remained equally unfair and unworkable when implemented by the Liberals.
I was interested to hear the speech of the hon. member who preceded me. Like the hon. member for Crowfoot (Mr. Horner), the Tories, whether in the House or out of it, are never quite sure in what corner they belong. At one stage they voted for these controls, and at another they opposed them. 1 take it that the position just outlined by the Conservative Party will last at least 48 hours. They are now opposed to the controls. However, having said that, the plum for sheer and utter political opportunism, the credit for reaching new heights in this kind of political activity, has to go the Prime Minister and the Liberal Party.


Mr. Stanfield:: No question about that.


John Edward Broadbent: As the hon. member for Halifax (Mr. Stanfield) said, there is no question about that. When it comes to duplicity, no political party in the country, living or dead, can compete with the Liberal Party.


An hon. Member:: Some dead ones can.


John Edward Broadbent: Having said that as a polite preamble, I think it is important to underline that the majority of Canadians, both among organized and unorganized workers, despite the present inequity and distortions of the anti-inflation program, are prepared to support some form of incomes policy. I do not think there is any doubt about that at all. But they want a fair program, not one which largely ignores prices and profits while permitting executives to get a $60,000 a year increase.
Surely it must now be evident, even to the present government, that in the Canadian case-and that is the one we are talking about-salaries and wages were not the cause of the rampant inflation which led to the imposition of these controls in the fall of 1975. The evidence before 1975 clearly demonstrates this, and since that time inflation continues, while wages are the only element or our economy that is effectively controlled.
The A1B states that inflation will average over 7 per cent this year. Indeed, for the last four months inflation has increased at a rate exceeding 10 per cent. Who knows if it is going to stay at the 7 per cent level. There is very good reason to believe that the 10 per cent experience of the past few months can remain the common experience throughout the rest of this year. Food, oil and mortgage prices either remain high or continue to rocket upward. The real purchasing power of Canadian farmers is lower today than it was five years ago. These are the affects of the controls. Through the entire control period, when food is excluded from the consumer price index, the rate of inflation for every other element than food has continued to rise between 9 per cent and 11 per cent. In short, the program has simply not worked in terms of curtailing price increases. Canadian workers, I add immediately, have paid the price not once but twice over with this set of controls. Their incomes have been held down while the prices they pay increase. Any way you work the equation, ordinary Canadians, whether they are in the east or in the west or in southern Ontario, have been unfairly treated by this program.
Without spending much time today enumerating the many obvious inequities that are so evident in the program currently in place, I simply remind the House of the example I raised with the Minister of Finance (Mr. Macdonald) in the question period yesterday. I refer, of course, to the executive salary increases which, as I just indicated, are permitted to rise at the rate of $60,000 a year while ordinary Canadians, more than two million of whom live at the poverty level, are restricted to increases that cannot exceed $2,400. Such is the rough justice bestowed on the people of Canada by the Minister of Finance. Indeed, Canadians would have been unaware of the increases had I not drawn them to the attention of the Minister of Finance yesterday-our House leader referred a similar batch to the government's attention not long ago. Also, the Canadian people would not be aware of these horrendous increases had it not been for the American Securities and Exchange Commission which files reports on their firms' operations here in our country. Incredible? While incredible for normal people, it is not at all incredible in terms of the way the Liberal Party has governed this country.
The other example of unfairness, besides the obvious one in terms of salaries and wages, is the added penalty that Canadian women in particular have had to pay with this program, despite the platitudinous statements and provisions in the AIB regulations which permit increases designated to eliminate discriminatory pay practices. The board, in its first test on this question, shamelessly rolled back just such an award for Canadian women in the case of the Winnipeg Health Sciences Centre-surely a disgusting example of unfairness. The board

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not only ignores workers and women's rights, but has also ignored its own published regulations.
As 1 said, I see no great need this afternoon to detail the program of obvious inequities. Rather we in the NDP feel it a responsibility upon us, in opposing this set of controls, this unfair AIB program, to provide some counter suggestions as to what should be put in its place. Despite the collective desire of the majority of Canadians to support government action in implementing an effective and fair form of incomes policy, this government in its green paper has clearly chosen to return to the status quo, to return to the same so-called free market system which has repeatedly led to either rampant inflation or unacceptable unemployment or, as the present situation sadly illustrates, to both high unemployment and high inflation.
When this government says, and 1 quote, "The market system is an efficient mechanism for allocating resources and it has great advantages in terms of the freedom of choice and scope for initiative that it offers," it is either being dishonest or, probably, hopelessly foolish. To claim that a forum for consultative action is going to change Canada s economic system one iota-as does the green paper-has the same truth value as the claim that inflation has been wrestled to the ground, or that separatism as a political movement in Quebec is dead. These are two equally "profound" observations which have been made by this government in the past.
It is important to note at this point in my argument that our economic system, in its essentials-I want to stress that-has remained unaltered by the controls. This controls program simply made a bad economic situation worse. It is clear both from the reiterated faith in the free market of the Prime Minister (Mr. Trudeau) and the green paper that the government plans simply to return to that status quo, as I said. But what is that status quo which in its essentials before the controls program, and after, has remained the same? Under controls, investment and pricing decisions are still made by the same people and largely in the same manner.
Under controls, unemployment continues to worsen and our national income remains grossly maldistributed. The situation has become marginally worse. Under controls, regional disparities still tear at the fabric of the nation and many of our natural resources continue to be misallocated, if they are not exported out of the country entirely. In short, Canadians find themselves in basically the same unfair economic circumstances today with these controls as they did without them. The prime difference is that with the controls the rhetoric justifying inequality has become even more hypocritical and offensive. My guess is that Canadians, at long last, have acquired a very healthy skepticism concerning the Prime Minister's shifting concepts of society. In 1968, we all remember with chagrin the "just society". Then we were launched on the search for the Prime Minister's new society. Before we could locate that, we were reintroduced to Mackenzie King's middle society in the throne speech. With the green paper, we will
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now return to the status quo. Such is the dialectical process of Canadian liberalism.


John Allen Fraser: Why did you support them? Why did you keep them alive for two years?


John Edward Broadbent: I remind the hon. member that it was his party, not ours, which supported controls.


John Allen Fraser: You supported the Liberal party. You could have destroyed it.


John Edward Broadbent: Perceiving business unrest, and talk of a new society by the Prime Minister, the government sounded a thorough-going retreat from government planning by asserting its intention to allow free market forces to once again guide our economic destiny. Whether the Liberals can reassure the business community by retreating from suggestions of economic decision-making by the government remains to be seen. What is clear, however, is that the majority of Canadians want positive economic reform and positive economic leadership on the part of their governments. They want solutions, particularly to rampant inflation and to disturbing and sad unemployment. Our history clearly demonstrates that the so-called free market forces-contrary to what the Prime Minister has said, and contrary to what has been argued in the House this afternoon-have not, and cannot, solve Canada's economic difficulties. This wisdom has been learned even by middle-of-the-road parties all over the western world, except by such parties here in Canada.
Such forces, the so-called free market forces, will continue to fail in the future as they have failed in the past, and the Conservative promise of returning trust and confidence to a government where leadership will replace controls should be seen for what it is, a political assertion that a Conservative government would have precisely the same faith in free market forces as do the Liberals. The Conservative rhetoric differs; the substance, however, remains the same. The speech we heard from the Conservative party this afternoon confirms that in every detail.
Having made those observations, I want now to outline the New Democratic Party alternatives to our economic condition. In doing so, I want to make a couple of preliminary, straightforward and honest comments about the nature of inflation in Canada. First, because of the deep intermingling of our economy with that of the United States, much of our inflation in this country-I am tempted to say, most of it-is beyond our control. We trade in it by necessity, import it by proximity, and pay for it as the price of maintaining throughout our years a branch plant 17'conomy. Pretending to control inflation of this sort is to deny our existence, to deny our geography and to deny our past entrepreneurial inadequacies. It is simply to be dishonest to claim we can control that kind of inflation which we import.
The second point I want to make is that if we are to contend seriously and honestly with the effects of inflation, our government can, and should, provide some cushioning by ensuring that those unable to cope with inflation can at least be

June 16, 1977
Anti-Inflation Act compensated. In this connection I think particularly of those unfortunate Canadians living on welfare, and our pensioners. Most important of all are the steps the government can take to ensure that the Canadian economy is strong, resilient and able to continue functioning at full capacity without reflecting every twitch of the Dow Jones index on the New York stock exchange.
It is the position of the New Democratic Party that we should be looking to the establishment of a national incomes policy in the very near future. I want to stress in this context that a consciously pursued national incomes policy is inextricably linked with economic planning, as virtually every government in western Europe has discovered and, indeed, as the government of Japan has discovered. We cannot isolate ourselves from the rest of the world; but we can insulate our economy and make it more equitable with permanent economic planning at the national level. The national debate we should be having here this afternoon is one that should focus upon requesting the government of the day to take the lead in establishing the means by which Canadians can consciously seek to establish national planning and implement an effective incomes policy.
The fact is that we already have planning, we already have a controls system in the country, and they both work in a most haphazard and inequitable fashion shaped by a corporate dominated market economy. That is not simply left-wing political rhetoric; it is an economic description of the facts.


John Allen Fraser: It is simple left-wing rhetoric.


John Edward Broadbent: I wish the hon. member would read a few elementary economics textbooks. Even right-wing textbooks acknowledge these elementary facts. They draw different conclusions, but they acknowledge the facts. The Conservatives obviously are not even up to the task of recognizing facts. The purpose of a national incomes policy, in our view, should'be to determine consciously how large the national income will be, at what rate it will increase and how, and in what proportion, it should be shared out to the various sectors of the economy. That is what it should all be about. That is what has been done in other countries.


John Allen Fraser: Have you ever been to Poland?


John Edward Broadbent: The Polish joke which was just made does not even merit comment. As I said, Mr. Speaker, no elaborate bureaucracy is required to implement the program. The mechanisms by which such a policy could be determined already exist in many government institutions. Every tax change or tax concession, each new tariff, a major subsidy or new transfer payment, every government decision affecting a commodity like oil, is part of an incomes policy. Change any of these elements and you change the size of the income, the rate of growth and the way it is shared among the people of Canada.
As I have said, the question before us, then, is not whether we should have planning and an incomes policy, but what kind

of planning and incomes policy we should have, and who should do the planning. The NDP, from its inception, has believed in the necessity of national planning in the economy. To assume that market forces would inherently achieve the common good is to believe that in a stampede mice need have no fear of elephants. It is as simple as that.
For the New Democratic Party there are three main ingredients in determining such a long-term policy in Canada. The first is the subject of investment allocation. Investment allocation obviously affects inflation and unemployment, as well as the rate and kinds of incomes growth in regions and for individuals. It is essential, therefore, that the national government play a leading role in investment policy. I reject the approach taken by the Conservative spokesman who categorically rejected government involvement in this regard.
I want to stress and to make clear that we do not want a cumbersome, inefficient, stultifying, centralized bureaucracy making all of our economic decisions. That is not how it works. While recognizing the authority and propriety of the national government to take decisive action in the economy for the public good, what is required is simply a planning authority in the Department of Finance. Such an authority, under government control, would interact with the private sector to ensure entrepreneurial efficiency and decentralized decision-making. Simply stated, what we require in Canada is a new national instrument to effect investment timing and priorities of the kind which have worked with great success for a number of years in Sweden. It would work in the following manner-


An hon. Member:: You sound like Ed Schreyer.


John Edward Broadbent: Mr. Speaker, Conservatives have difficulty learning not only from books, but from other countries. Under such a proposal, each major firm would be required to deposit a portion of its profits in special firm-specific accounts with the government. Firms could spend the moneys in these accounts only at the times and for the purposes approved by the government. Thus, the government would not assume direct control over these funds. What is important is that it would have a significant means to directly influence the timing and direction of private sector investments. This is essential if we are to deal seriously with the inflation and unemployment which flow automatically from a market economy. I am talking about direct intervention in a mixed economy to reach the goals that the majority of the people desire-minimum levels of inflation and maximum levels of employment. That is how it can work.
Funds would be accumulated in periods of full employment and excess demand. They would be released in recessionary periods, to state the obvious. Thus, the cyclical nature and impact of the market economy could be significantly changed. Investment in regions of high unemployment would be given preference. Investment in housing would be encouraged. Investment in inventories could also be allowed in periods of slack demand. The business sector would accept that. In short, inflation and unemployment could be dealt with from within the framework of a set of national priorities established by the
June 16, 1977

national government. I repeat, in countries like Sweden we have seen this investment system work, and work well, both for the majority of the people and for the industry in the country. To a considerable degree, the private sector in Sweden supports and maintains precisely this kind of economic planning because they know it leads to an efficient, productive economy.
It is time we tried it here.
The other two elements for the NDP in determining a Canadian planning and incomes policy are to be found in employment and taxation programs. Today, both are high among the pressing issues of Canadian politics. We have a tragic unemployment problem and, with our existing tax laws, a hidden welfare system for the rich. I want to show how both are relevant to an incomes policy and to dealing in a serious way with a post-control society. By dealing with the unemployment problem, and by replacing the welfare system for the rich with a policy of taxation reform, we would be taking the necessary first steps toward a national incomes policy. The human consequence of unemployment is clear to all who want to look at the problem. I have no intention of repeating in today's debate the points 1 have made on other occasions about the human degradation that is involved when we have a system that allows 1 'h million Canadians to remain unemployed.
Apart from the human condition, the government has deflected our attention from the serious economic consequences of the unemployment problem in part by creating the economic myth that high rates of unemployment are inevitable and, therefore, the loss must be written off. The West Germans have not written them off, and the Japanese have not written them off. Only according to the Canadian government is high unemployment inevitable. We have been ignoring the fact that more than one million Canadians are not producing goods and services, nor are they receiving adequate incomes, and we have been ignoring the economic implications of this. Canada's unemployed are poorer for lack of work, poorer for lack of dignity that comes from work; so are we economically poorer as a nation because of this high level of unemployment.
The Liberals took from social democracy the idea and philosophy that our unemployed needed care; and I give the government credit for establishing a good unemployment insurance scheme. But, Mr. Speaker, they have ignored the even more basic social democratic requirement, namely, that we need an economic program of full employment. Social democrats in this country and elsewhere have always maintained that a fully employed, fully productive economy is a prerequisite of social and economic justice as a whole. You cannot have one without the other, in our view.
After 19 months of unemployment at rates over 7 per cent, the government can no longer hide the terrible drain on the economy-$6 billion annually in lost production of goods and services, $2 billion annually in unemployment insurance and welfare costs, and at least $1 billion in lost tax revenue. This level of unemployment and this lost production of goods and services has a direct and negative effect on levels of inflation. That is the point I want to make this afternoon. 1 have already put before parliament in this session detailed proposals for
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setting targets and timetables to achieve full employment over a three-year or four-year period. It cannot be done in a month.
It cannot be done in a year or two. To achieve full employment would take three or four years. We have made serious suggestions on how to achieve this objective.
The point I am making now is that there is a connection between increased production of goods and services, and inflation. The higher the production, the greater the likelihood of prices going down. More jobs, in short, with planning and other measures lead to less inflation. The other important element in sensible national planning that I want to talk about this afternoon is tax policy. Central to any incomes policy is a country's tax law. Our income tax system is in greater need of overhaul today than it was ten years ago when the Carter commission called for major reforms. The tax reform called for at that time has not only been ignored but has been reversed in application.
Corporate tax concessions unrelated to any specific economic benefit have continued in recent years in spite of criticism not only from those who believe in fairness but from those who believe in economic efficiency. I remind the Minister of Finance (Mr. Macdonald) this his predecessor commissioned his department to do a study. It concluded that special corporate tax concessions this government had introduced had not led to any positive net economic benefit for Canada. Social democratic governments of western Europe believe in a private sector, as does the New Democratic Party. But those governments do not give away billions of dollars to corporations as do the Canadian Liberals. A corporate tax concession in Sweden or West Germany depends on specific economic benefits. We need that system in Canada today.
The even more disturbing tax development of recent years is the extension of unjustified loopholes to personal income. This development has directly affected our ability to obtain support for an incomes policy. Every loophole, dodge or deferral accountants can think of has been written into the personal tax system, with the result that more than $6.4 billion is lost to the federal treasury every year, according to the National Welfare Council whose report published not long ago spells out in horrible detail how this system works. The report noted some 17 varieties of tax exemption open to and used by the rich in Canada.


Mr. Breau:: They are not loopholes.


John Edward Broadbent: Our tax system is regressive, not progressive. I urge the hon. member opposite to read the report.


Herb Breau: I have read it.


John Edward Broadbent: I want to stress something in this debate. I am talking about tax reform, not simply because we need to end inequities in our system which have been with us for a long time, but because we must make our tax system fair and so make it an important foundation for an incomes policy. In my view, major tax reform is the first essential step to effecting

June 16, 1977
Anti-Inflation Act
improvements in collective bargaining in Canada. There is not a trade union in this country which would not welcome a reduction of the pressure-cooker atmosphere in which every round of bargaining is conducted at present. Union members would demand less wages if we had a fair and progressive tax system and the prospect of real growth in their income. The evidence in other countries shows that the idea works there. I am sure it would work here.
Canada can look forward to a stronger, more just economy in future only if we are prepared to acknowledge the need for the government to set national priorities which the majority of Canadians consider fair. If Canadian workers see fair taxes, lower mortgage rates and controlled energy prices, as they have them in other countries, they will co-operate with the government on an incomes policy. Unless the government embarks on the kind of planning I have suggested, in principle if not in detail, after our present controls come off we shall see a return in this country of the free market system which created precisely the difficulties from which we are trying to extricate ourselves.
Unless the government plans as I suggest, we shall revert to the boom and bust cycle which has plagued not only our market economy but that of every other developed country of the world. It will happen if the Liberals want to go back to those conditions. Let them not think they can deal with unemployment for a couple of years, drop that issue, deal with inflation for another couple of years, and so on, ad infinitum, ad nauseam; for I tell the Minister of Finance the people of Canada are tired of it. I say, on behalf of my party, a mixed economy can be made to work. We can deal with both unemployment and inflation simultaneously, as other countries have. But we cannot do it by burying our heads in the outdated thinking of the past, by allowing an unregulated economy to create problems for us in the future as it has in the past. We need sensible, tough-minded government planning. That is precisely what we say should take the place of the present controls.


Léonel Beaudoin: Mr. Speaker, I welcome the added opportunity to rise this afternoon, on behalf of my constituents in Richmond, to comment on the motion before us and the current government's anti-inflation program. Since the government launched that program, the economic situation of Canadians has remained on the same general course, that is on a steady decline. We will be told today, tomorrow and Monday that such unencouraging results are due to global economic conditions, that things are not so bad as the opposition would have it, that a five, ten or fifteen per cent increase in food costs is not too much because things would be worse had we not the Anti-Inflation Act.
The government side certainly will use the same statistics we have on this subject, but both sides will be making totally opposite points. We suggest that those figures, including those referred to by the sponsor of the motion, clearly point to the dangerous path Canada has been following. The government in turn will use the same figures to indicate how lucky we are to

get away at such little cost. Inflation certainly is bad in itself, but we must be weary of the opposite pitfall, letting things worsen by importing or letting big or multinational corporations import cheaper products from abroad, which would be importing unemployment. This would not abate inflation because the importing monopoly that buys cheaper abroad increases its profits rather than passing the saving on to the Canadian consumer.
So the one making the profit is the importer who can do as he pleases. I think the controls that were set up under the Anti-Inflation Act did not entirely manage to control importations. Here, I am placing myself in the boots of a guy in Richmond, for example, who will be asking himself when he reads about us-because we will be read tomorrow or this afternoon-if we really thought about him. I am wondering what the guy who was just laid off at Duchesse Shoe in Richmond, for example, is thinking, what the guy who was just laid off or is about to be laid off at Brown Shoe Co. (Canada) Ltd. in Richmond is thinking? I am wondering also what the copper mine worker in Stratford thinks of the effect of that anti-inflation law when there was an attempt to control the price of the metal. It was so much controlled that over 360 miners were laid off in the past year and a half. What was done to help them? Absolutely nothing, apart from giving a little bit of money to those who went to Canada Manpower Centres so they could move where there is another mine. Those 40 years of age and over were allowed to have a little unemployment under certain conditions, namely, that they report to two or three employers a week and be always asked the same question-are you looking for work?
Mr. Speaker, I think that all those questions are negative and do not lead anywhere. If the Anti-Inflation Act as set up by this government did not give better results, then it must absolutely be abolished. That Anti-Inflation Act must be repealed as soon as possible. In any case, we did not apply it to those who lend money, such as banks, to those who are already too rich. Banks are now richer than they ever were. They are making more money than they ever did. Money lenders before 1969 were getting 5 Vi per cent interest on first mortgages. That is the ordinary money lender. Last year, the same lender was getting \2lh per cent on first mortages for 75 per cent assessment, meaning he was lending 75 per cent of the actual value at 12'/2 per cent. That Anti-Inflation Act did not affect him at all. It affected the worker, of course, but it did not affect trusts at all.
Here I want to be direct, but not too harsh, because there is no point in it. I think suggestions must be constructive. I find that perhaps the Anti-Inflation Act affected dividends, perhaps certain areas of the stock market but did not go far enough as far as those who profit from little people, particularly little people who are exploited in an extraordinary way by any inflation, as the hon. member who spoke before me, the leader of the NDP (Mr. Broadbent), suggested earlier. I think the hon. member for York-Simcoe (Mr. Stevens) also said the same thing. I think there is an attempt to extend the market to form some sort of common import-export market without
June 16, 1977

being too sharp on those controls. So they say that if we let footwear from Taiwan or elsewhere into Canada it is because that imported footwear costs 32, 33, 35 per cent less than the same footwear manufactured in this country. We are going to get it cheaper. That is wrong, wrong! As consumers we just have to go in any store-which 1 refrain from naming not to give them free advertising-in big anonymous chain stores which are the prime importers of footwear import in Canada and we will realize that shoes are becoming ever more expensive. Let us see what we were paying three years ago. For a pair of shoes manufactured outside this country and which comes from Taiwan, Japan, Czechoslovakia or elsewhere, and I have bills to prove it, we had to pay $33 and a few cents. Today that same pair of shoes imported from the very same places costs $54 in big chain stores. The government lets footwear enter the country in a flood as if there were no controls at all. It controls inflation because it is risky but it does not control the profits of the guy of the anonymous trust which makes a place for himself and against everybody. We dare not touch him.


An hon. Member:: That one is not in the boat!


Léonel Beaudoin: He is not in the boat of course! He is being controlled in a strange manner; perhaps he can be controlled by taxing profits. If it is a multinational corporation, it is very well controlled because one area of its activities is controlled, mostly if it goes through two or three countries before getting there; I will prove it to you in a few moments.
I should like to point out that subject to the House because that legislation affected everybody. Above all, there is one area which was not affected. The government made a large contribution to help the textile industry through that Anti-dumping Act and others-and it gets my admiration for that-because that was not an act but a regulation; that was a dumping measure.
The government took positive action, and again today one minister stood up to talk about that matter. I think that in textiles, in Quebec at least, things are improving and I commend the government for it. But in the shoe industry things have been going very badly for the last six or seven years. More specifically, June 4, 1970, as reported on page 7711 of Hansard, I was asking for the adjournment of the House precisely because the shoe industry was in dire straits. Mr. Speaker refused that motion because, though the matter was very important, it was not that urgent, and I quote:
The problem brought up by the hon. member for Richmond is certainly of national importance and worries several of his colleagues as well who have already shown, by means of repeated representations during the last weeks and months, that they are equally interested in this matter.
However, it seems to me that this very important problem drawn to our attention by the hon. member for Richmond does not have the urgency and immediacy required under Standing Order 26.
With the hon. member for Richmond and his colleagues, we must admit it is a problem national in scope, but it is important that a matter brought up under the provisions of Standing Order 26...
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.. .and so on, be of a new, urgent and sudden nature. The Chair was perfectly right, it was not a matter of sudden urgency, the footwear manufacturing industry had been in a poor situation for such a long time.
Under the circumstances, while acknowledging again the immediate and national importance of the problem raised by the hon. member, I respectfully suggest to him that it is not possible today to propose a motion asking for the adjournment of the House to discuss the problem which he pointed out.
Therefore, I followed the advice of the Chair and brought this matter up again and again during the next days and months.
On June 16, 1970, I asked under Standing Order 43 that a debate be held on the matter, but it was not allowed by a few members of the House. If I may I would like to quote an excerpt of my intervention as reported on page 8154 of Hansard:
Mr. Speaker, I feel that the study of the question justifies an emergency debate considering that since January 1, 1970 shoe factories have been closing down at the fantastic rate of nearly one a week and, considering that between 1956 and 1969, Canada's footwear production has decreased by 1 per cent whereas imports have jumped by 568 per cent, considering that the industry now employs 3,260 fewer workers than in 1966 and considering also that the government seems to have lost control of footwear imports into Canada.
And I added:
On June 2, the Minister of Industry, Trade and Commerce (Mr. Pepin) announced to the House that talks were under way about restrictions of footwear imports and I believe the same measure is urgently needed regarding the footwear industry.
As can be found at page 9009 of Hansard for November 13, 1975, I continued in that sense. Mr. Speaker, I do not wish to take up the time of the House with this, but I find that we have to repeat the same things over and over again in here, without any benefit for the producers or the workers in the shoe industry; that is unbelievable. That is why 1 want to say to hon. members that I know they are in good faith. But, again, this good faith should be continued and stressed in this matter. As recorded in Hansard at page 9009, I moved another motion requesting the Minister of Industry, Trade and Commerce (Mr. Jamieson), to do something urgently before it was too late, and as can be expected, my motion was once again rejected.
On November 24, 1975, I outlined once more the real situation in that industry in Canada. As usual the government answered that it was taking the matter into serious consideration. And I want to quote the words used by the then parliamentary secretary to the minister of industry, trade and commerce, a Liberal member sitting opposite me, and I quote:
In closing, Mr. Speaker, I would like to note that while this sectorial strategy applied only to the leather footwear and tanning industries in the beginning, the Minister of Industry, Trade and Commerce is now considering extending its advantages to the rubber footwear subsector. This action follows the annulment, on August 28 of this year, of the general preferential tariff for rubber footwear and the reinstatement of the most favoured nation 20 per cent tariff.
As the Minister of Industry, Trade and Commerce stated on November 20 of this year, the government will continue to examine periodically the status of the footwear industry and to determine if other action is required in the future.
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June 16, 1977
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I therefore congratulate the hon. member for the interest that he has shown in this important industry. Moreover, as other members also said during the Liberal party caucus, we should continue to review regularly the situation of the footwear industry in Canada.
And I quite agree with those remarks, as I said earlier. I believe that if the Liberal caucus enforced more strictly the anti-inflation legislation which was introduced at the beginning of the anti-inflation program, we should have gone further and therefore should have been more efficient. Considering the situation is getting worse, I suggest we should precisely repeal this Anti-Inflation Act.
An inquiry was set up, and special reports on footwear are now before the House, dated February 24, 1972, June 29, 1973, December 21, 1973 respectively and so on. In 1971, the Anti-dumping tribunal set up an inquiry on footwear and when the report was made public in 1973, special measures were taken. What has happened? Let us look at today's situation. Between 1968 and 1975, the share of the Canadian market held by imports has increased from 38.3 to 50 per cent. If we compare the figures of 1976 and 1977 for the month of January, imports have increased by 47 per cent in these areas.
From 1975 to 1976 alone South Korea raised its shoe exports to Canada by 119.2 per cent. These are official figures recently released by the Department of Industry, Trade and Commerce. For Greece, the raise was 137.6 per cent, for Taiwan, 84.9 per cent. The share of the Canadian market in 1977 was 32 per cent. We started with 58 per cent in 1970 and we went down to 32 per cent in 1977. And then we would like to protect the jobs of people who work and try to be more efficient in the shoe manufacturing industry. Many industries operate now at 65 and 70 per cent of their capacity. I have consulted with great care the briefs which have been presented recently to the Anti-dumping Tribunal by the Shoe Manufacturers' Association and other briefs from companies of my riding. The unions involved have presented a very consistent and very well structured memorandum to the Minister of Labour (Mr. Munro) in January this year about this question. And now, Mr. Speaker, a well established company which has worked for 60 years in our area, Duchesse Shoe, closed its plant ten days ago. H. H. Brown Shoe Co. (Canada) Ltd., from Richmond, which had nearly 800 employees now employs about 650. Since its inception in 1953 this company was a very sound business until 1974. Since then, its sales are constantly going down, with 225,000 fewer pairs of shoes each year, a situation which brings more unemployment. Orders are at their lowest level for a seven-day cutting period while at the same time last year this period was of 27 days and so on.
In Acton Vale for example Acton Shoe Co. Limited reduced the number of its employees from 240 to 190 these last few months. In Sherbrooke, in the riding of my hon. friend and colleague, the member for Sherbrooke (Mr. Pelletier), who spoke to the House not long ago-and I commend him for trying to smarten up the government-Igloo Felt closed its doors at the beginning of May and locked out, very unwillingly, 80 of its employees. I could carry on like this for hours, Mr. Speaker. What can I say to these people? Things are bad, it is true, no questions about that. I can not even tell them that

everything is going wrong, everybody knows it. But what can we do to improve things? I do not believe we should accept being swamped under imports in Canada just to maintain good business relations with other countries. Mr. Speaker, what those people in the shoe industry want is a decent job that would allow them to consider the future with serenity. I am speaking about workers who want to succeed in their business and who want to live with optimism.
Things were a little better in 1973 because the government was more attentive, it was a minority government and at that time the situation was better. It was not ideal but we could live with it. We had a minority government and it was very effective. I think it was the only time where they had a specific action program about that issue. The results were not all good but they were encouraging nonetheless. In 1974 we dropped back to the same point, especially since the anti-dumping legislation was adopted, and in the last six or twelve months it has been horrible, it is simply discouraging.
I believe the government should consider a more effective and immediate control on imports, not next year or in two years but right now.
The government should consider that issue so essential in my riding and in the surrounding area.
The government does not seem to see it that way, but I still believe is is better to feed our own children rather than the others and it is better to provide work for Canadians and help them keep their jobs rather than for friends we do not know; I mean the "anonymous importers" who are making money by the bagful-they do not even know what to do with it- through exploitation of the Canadian workers.
I do not have anything against developing countries like Taiwan, Korea or China, I do not have anything against those developing countries, but I think we should think more positively, think about our own people first. We must, as soon as possible, start an intensive campaign in Canada to provide incentives for Canadians to buy in the country. I know Canadians, especially Quebecers. They will do so, Mr. Speaker, and Canadian industries will have a better market and future in Canada.
In concluding, with your permission I would like to quote the evidence submitted by H. H. Brown Shoe Canada Ltd., from Richmond, to the anti-dumping tribunal, which is a good summary of the thinking of all the shoe industry, of all the workers in this industry and which illustrates my opinion on this situation. I hope you will excuse my English, I am not all that bilingual. The report is in English. It was submitted by H. H. Brown Shoe Canada Ltd. where everybody is perfectly bilingual. But since it was submitted in Toronto, it was drafted in English and I respect the other official language of the country.
My name is Claude Brouillette, executive vice-president of the H. H. Brown Shoe Co. (Canada) Ltd., of Richmond, Quebec.

We are a manufacturer of men's shoes, work boots, dress shoes, cowboy boots and skates.
Our daily production which was 7,000 pairs in 1973 and 1974, has presently dropped to 5,500 pairs, a drop of 22 per cent.
In 1973, we had 769 employees, whereas in 1977 we now have 656 employees, a drop of 113 employees.
A lot of these employees had been loyal employees working for our company for many years.
We are the principal employer in Richmond and have always had peaceful, pleasant labour relations.
Our company has enjoyed a successful operation, since it started in 1953 up until 1974. Since then we have lost 225,000 pairs a year.
There is no doubt that the sales we lost are due to imports coming mainly from South Korea, Taiwan, Poland, United States, Czechoslovakia, Romania and Brazil. These goods are the exact copy of our shoes, as I will demonstrate later on and are offered to our customers at prices 30 per cent below our quotations.
The situation is one of urgency and action must be taken at once. A submission that was presented to your tribunal, suggests that a committee be formed. I am afraid, Mr. Chairman, that by the time the committee is formed, there will not be enough manufacturers left to form a committee.
Our designer has just spent three weeks in Europe to collect new ideas on styling, lasts, colours, etc. He also attends most of the shoe shows in Europe and America.
Our equipment and buildings are as up to date, if not better, as any of our overseas competitors.
Even if we consider the many styles and mixed sizes that we have to deal with every day, the constant loss of production during the last years, the loss to the imports in volume numbers creating a large increase in short runs, having to operate at 65 per cent of our capacity, our productivity is better than any of our operations in U.S.A. and also of any men's shoe manufacturer in America that I know.
What else can we do?
Our company is 25 years old and it is an established, respected member of the shoe industry of Canada.
We believe we have made every effort to compete with imports but without a market we cannot survive.
We want to keep supplying our customers with merchandise backed up with quality, comfort and delivery.
Mr. Chairman, we can survive only if we are provided with a decent share of the market.

Mr. Speaker, I say it again, it is urgent. One needs only read carefully the submissions I read, these and others, to know it is urgent. The fate of thousands of families and workers is in the hands of the present government. Will it deceive them once again? 1 hope, like one government member said the other night in answer to a question I asked on the shoe situation, that the Liberal caucus will consider that question. For me, I shall return to it later so that something can be done and that shoe workers can be satisfied with an economy and a trade that expand instead of shrinking. That trade must expand above all for the benefit of Canadian workers and manufacturers. To conclude, I would ask the government to abolish as soon as possible, if it is still possible in a reasonable delay so as not to create too many problems, this Anti-Inflation Act which, in my opinion, has not got to the core of the problem, that is those who really profit by inflation in the country.


Donald Stovel Macdonald: Mr. Speaker, the debate today provides us with an opportunity not
Bell Canada
only to discuss the impact and the progress under the present program, but also some opportunities to review the choices for the future when the program will be at an end. It poses for members a number of questions upon which I think it would be reasonable for the government, and indeed the country, to expect some responses. For example, how do members propose to deal with the challenges of an economic nature in the future, particularly in regard to inflation? How are we to avoid, for example, the threat of a renewed spiral of inflation in Canada? The government has set out its analysis on these particular questions in the green paper "Agenda for Co-operation" and has elaborated a course of action for the post-control period. These three days of debate will have been usefully spent if they can provide a full canvas of possible approaches for the future and we can have a clear statement on the part of each of the parties in the House as to where they stand.
I would intend to focus in my participation on four points: first, to review the experience under the program comparing the situation in October, 1975, to the one in which we find ourselves at the present time; second, to set out the government's approach to decontrol; third, to talk about post-control environment as we see it, and also to talk about some the proposals which we have set out in the document entitled "Agenda for Co-operation"; and fourth, to take the opportunity to comment on some of the opposition arguments which we have heard this afternoon.
As well as my own participation in the debate, several of our ministerial colleagues will be speaking on some of the structural changes which are set out in the "Agenda for Co-operation". A number of my colleagues will be commenting on their own particular perspectives on the inflation problem and the anti-inflation program as we have experienced it.
I am not clear on the procedure this evening as to whether or not there is a private members' hour at this point.


Walter David Baker: Yes, there is.


Donald Stovel Macdonald: In that case, I would like to call it five o'clock.


The Acting Speaker (Mr. Ethier):: Order, please. It being five o'clock p.m., the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, private bills, notices of motions, and public bills.


PRIVATE BILLS
[Stage Direction]
The House resumed, from Thursday, June 2, consideration of the motion of Mr. O'Connell that Bill S-2, respecting Bell
8001 8-26)4
[Stage Direction]
June 16, 1977
Bell Canada
Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, there is an objection by a number of members to the passage of this bill. The parliament of Canada is being asked to water down the stock by increasing the number of shares. This company deals primarily in the public utilities field. It has a monopoly. It should be paying attention to the needs of its subscribers and the Canadian public, as well as giving some protection to the shareholders who are now involved in the ownership of Bell Canada.
Bell Canada operates in a vacuum. This may now be changing slightly. For many years the Canadian Transport Commission was the only regulatory body, other than parliament, that had any control over that company. It has recently been controlled to some degree by the CRTC. The CRTC is asking a number of questions that were never asked before on behalf of subscribers.
It is interesting to read in various articles the two different aspects of the problem we face. The CRTC had a hearing in northern Canada in March of this year, as reported in the Citizen. It was indicated at those hearings that Bell was applying for a general rate increase, the fourth in four years. They apply for one every year. This increase would have added $172 million to its annual revenue. Last year Bell took in $1.9 billion. The article states that the Inuit Association in northern Quebec has been frustrated waiting for approval from Bell to set up Taquamiut Napingat, their telephone exchange, for two years in order to provide telephone service to the residents in that area.
The CRTC has given some consideration to the public. No longer are they satisfied with the 20 cent pay telephone charge. They have given Bell six months to revert to providing ten-cent service to the public. The employees are unhappy, as are the subscribers. This government gives that company immense assistance in the satellite program.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but his allotted time has expired. He may continue with unanimous consent. Is there consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


Walter David Baker: Mr. Speaker, I have followed this debate as it has meandered through the pages of Hansard. It is an interesting debate, indeed. I read with some interest the speech made by the hon. member for Scarborough East (Mr. O'Connell) when introducing the bill for debate in this House. He moved that the bill be read a second time and referred to the Standing Committee on Transport and Communications. Like that hon. member, I wish to make a declaration with regard to shareholders.
At one time I owned some shares in Bell Canada. They treated me reasonably well during the period I held them. Because of the policies of this government the whole market
[The Acting Speaker (Mr. Ethier).]
was affected somehow or another. Those shares suffered just a wee bit in terms of value. Last November, because I am a member of the House of Commons, I sold all the shares that 1 own. I decided to invest in Canada, and I invested in Canada Savings Bonds. I wanted to make that declaration because the hon. member for Scarborough East made a similar declaration. The hon. member for Annapolis Valley (Mr. Nowlan) also made a declaration when he spoke.
There has been a rather interesting course of events. The debate began on May 27, 1977, when the hon. member for Scarborough East outlined the general provisions of the bill. His outline of the bill was satisfactory. The hon. member for Sault Ste. Marie (Mr. Symes) also spoke in the debate on May 27 and advanced his point of view. The debate carried on. It seems to have gone on and on.
It is interesting to note that in a debate like this on March 10, 1977, the hon. member for Nickel Belt (Mr. Rodriguez), the hon. member for Broadview (Mr. Gilbert), and the hon. member for Timiskaming (Mr. Peters) made a speech. I think that was on the main motion. On June 2 the hon. member for Timiskaming began a speech on the motion for a six months' hoist. That is the second speech which he finished just a few minutes ago when Your Honour called him to order because his time had expired. We have had in this House a long list of NDP speeches attacking Bell Canada. As far as I am concerned, the NDP can attack whomever they like-and I do not stand particularly as an advocate for Bell Canada.
The problem with this bill is that it is highly technical. It involves an expansion of the capital stock of the company. It involves some changes in the financial provisions of the company's charter. The changes would not affect the regulatory aspects of the company. I understand the company would continue to be regulated in the same way as the British Columbia Telephone Company. This bill would give them similar powers to those granted to the British Columbia Telephone Company about two years ago.
The company says they need some improvements in terms of their financial flexibility, their powers to issue capital stock without CRTC approval. That is something that exercises my friends to the left because they are very much concerned about any move in this country to do away with the regulation of anything. If you turn over a stone somewhere and you find a member of the New Democratic Party, you will find him clutching to his breast a package of orders in council. They love orders in council. They think regulations are marvellous. Their philosophical bent is regulation of everything. However, we are all subject to redemption, and the Good Lord is prepared to forgive almost everything in all of us, even members of the NDP from time to time. I do not deny them their philosophy. Regulation by an extension of the tentacles of government into business is part of their philosophy. We respect them for that, even though from time to time we may disagree with them. They are entitled to it, and we are entitled to make a judgment on it. I know they would not deny us that privilege.
June 16, 1977

As I understand these highly technical provisions, an attempt is being made to incorporate some sections into the statute law affecting Bell Canada that are involved in other Canadian corporations. As I understand it, the intention of the bill is to authorize the company to alter its objectives, powers and share capital by applying to the Minister of Consumer and Corporate Affairs (Mr. Abbott), and there is some attempt-1 do not know whether it is a good attempt or not, and I do not know how we could find that out on second reading-to provide, by way of a negative resolution, the cancellation of the powers by either House of parliament. That, by the way, is provided, I understand, in the Telesat Canada Act. It is not a new procedure.
The reason I rose to take part in the debate is that I have followed it since the outset. I do not agree with all the arguments that have been advanced by those who oppose the bill. I do not think Bell Canada is saintly, by any means. I do not stand as an advocate of Bell Canada, but I am very much concerned that the affairs of the company, which says it has problems, be tested in the House of Commons in a debate on second reading. There is now an amendment for a six months' hoist. I do not know how any member of the House can examine the officials of Bell Canada to see whether or not they need those powers, whether they need the changes that they ask for, unless this bill goes to committee.
Because of its nature, Bell Canada, being incorporated by public act, comes to this parliament to ask for a change in certain things. Once that has happened with a company providing a public service, whether that service is good or bad- that can be examined, too, in context of the bill-I think this parliament owes that company some attention, whether it is Bell Canada or any other public utility that is incorporated, or any company or organization providing a service subject to the jurisdiction of parliament. We owe it not just attention in a repetitive way-and unfortunately that has been the thrust of the debate, a repetition of the same old arguments-but a minute examination of the officers of the company, the requirements of the company, the changes they propose, their effect upon shareholders and subscribers, and a whole host of other things. In other words, this is not an ordinary private bill, it is a bill involving a company that, for better or worse, provides a service to a number of Canadians.
I think we ought to move reasonably quickly to send this bill to the committee. I am satisfied that if Bell Canada were found wanting in the ways that have been described with eloquence by the hon. member for Timiskaming and other members who spoke in the debate, there is no member of the House who would be prepared to grant them those powers. Bell Canada may not get them anyway because of some of the provisions which, upon examination, may be found wanting in terms of the ability of Bell Canada to make a case when they come before the committee.
However, I think it is fair and reasonable for some assumptions to be made. One of those assumptions is that Bell
Bell Canada
Canada's presently authorized maximum capital of $1.7 billion is expected to be exhausted in 1978. That is an assertion by the company. If that assertion is wrong, if the company has misled parliament with respect to the bill, then they ought to be pitched out of court. But I say to you that they have to get to the courtroom before we can know. That is the real issue, and that is the reason I was moved to take part in the debate.
I have sat here through all but one of the speeches that have been made, and I would not say it is an unreasonable use of the rules of the House to carry on the debate. But I think there comes a time in matters of such a technical nature when the debate should end and we should get the issue into the commitee where witnesses can be called, technical people from within government can be called, perhaps people from CRTC, and a host of others can be called and the question looked at. I base that on the assertion that has been made by the company that they require it. They would be fools to come to parliamnt if they didn't require it. Let us find out if they are fools or not, and let us find out in the committee what the facts are. We cannot do so on second reading; we can merely assert certain things. That is one of the difficulties with second reading debate.
Therefore, I hope that for the purposes of that examination, the NDP will reconsider its motion to hoist the bill for six months and will allow the officials of the company and parliamentarians to examine the bill to see if the case can be made but if parliament does not give them a chance to present it, we would be denying the company their day in court. They cannot get their day in court on second reading debate. They get their day in court in a committee of the House. I will conclude by saying that I think we should allow them to get to the committee where this parliament should take this bill apart and demand all the information. It has more power than any other group to demand information, because it can deny ultimate approval if the information is not forthcoming. We should make the company prove their case and we should not use this amendment procedure, having regard to the purposes of the company which were established by statute of parliament and should be regulated reasonably by parliament.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, I am convinced that not one of my colleagues was shocked by the fact that I supported a motion of an NDP member to postpone the study of this important bill for six months. I did so quite freely and with a full awareness of my responsibilities because I consider communications an extremely important area. I have no animosity towards Bell Canada, but I would not want it to become a monopoly in the field of communications in our country. First, Mr. Speaker, I would like to say a few words about a famous Canadian who gave man this great invention that we call the telephone.
Mr. Speaker, I believe we do not say as often as we should all that Canada has given man through its citizens. When we travel throughout the world, when we are in European or

June 16, 1977
Bell Canada
Asian countries, we have to place our calls 24, 48 and even 60 hours in advance to communicate with our families in Canada, while in our own country, we have the advantage of being able to place our calls very quickly. This is a great service, but it is also very costly.
If Graham Bell had waited, as certain people want us to do today when we suggest something new in any area, in the area of finance, for instance, as I have done very often, he would have been told, like certain members tell us: Has this been done elsewhere?
Mr. Speaker, if Graham Bell had waited to invent the telephone, if he had wondered if it had been done elsewhere, if the Chinese had done it or if the Russians had done it, today, in 1977, man could still be waiting for this great means of communication. Mr. Speaker, as I have said already, we must not ape others, we must not wait for others to try something so that we may imitate them. Canadians can innovate in any area. Graham Bell understood this. I want to recall his memory because he was a great Canadian who rendered a great service, not only to Canada, but to the whole world. Today, we are studying Bill S-2 which concerns communications.
And in the communications field in Canada we almost have a monopoly in the hands of Bell Canada. We have cooperatives throughout the country who operate and offer services in areas where Bell Canada is not able to make profits. I know what I am talking about, Mr. Speaker. I have spent 20 years in the communication field. I was living in a settlement area where there was no telephone service. When we asked the Bell Company which was located 30 miles from our place in the city of Quebec to give us communication and telephone services they answered they could not do it because it was not profitable for them.
However, we had in the vicinity a company called Quebec Telephone owned by a great Liberal senator who has been in the Senate for several years, Mr. Jules Brillant, who made every effort to develop in the area a telephone service to meet the needs of the population. At that time, Quebec Telephone had jurisdiction over the area but it did not have the financial means to meet the needs of the population. So we called upon Bell Telephone, but they did not agree to give us a service for which we were ready to pay saying it would not be profitable.
Then, Mr. Speaker, we decided to organize with the cooperation of people of goodwill what we called a cooperative network. We founded telephone cooperatives based on the Cooperative unions legislation of the province of Quebec and we succeeded in offering to the people of the areas not served by Bell Telephone the communications means they needed. We had, in the circumstances, to buy all the equipment needed from the Northern Electric Company, a subsidiary of Bell Telephone, and to accept the price set by them as they had no competition. Then, the only company that could supply the equipment for those new communication services to those Cooperative unions was the Northern Electric, a subsidiary of Bell Telephone. Mr. Speaker, later when it became profitable we saw that monopoly establish itself in those areas and today,

like in the rest of the country, the telephone service there is very costly because of the lack of competition.
I am a member of the Standing Committee on Management and Members' Services and I am sometimes shocked by the fact that the Canadian Parliament has to give in to the will of Bell Canada to ensure the members of the House of Commons are granted a vital service that enables them to serve the Canadian people, be it from Ottawa, or from the office that each of them maintains in his riding. We feel as if we were caught in a vise. We have become the slaves of a monopoly in communications. And today, through Bill S-2 the House is again being asked to make more concessions and grant Bell Canada additional powers.
Mr. Speaker, we cannot do this inconsiderately. We must come to a halt and consider objectively whether the demands contained in Bill S-2 are really grounded. This is one of the reasons that compelled me to back the motion presented by the member for Timiskaming (Mr. Peters), without considering which party we respectively belong to. For me, it does not matter, Mr. Speaker. What matters are our duties as members of this House. I would have done the very same thing for a Liberal member such as the one sitting in front of me, the member for Riviere-du-Loup-Temiscouata (Mr. Gendron), or even the one who represents the official opposition as parliamentary leader in the House. I would have done it the same way. Why so? Because I look at our responsibilities not from a partisan's angle, but from the viewpoint of the interests that have to be served by this Parliament which is accountable to the Canadian people for a service given to this very people and to prevent a further growth of this monopoly in communications.
Mr. Speaker, let us read the explanatory notes to that bill:
The said Company shall have power to manufacture telephones and other apparatus connected therewith, and their appurtenances and other instruments, used in connection with the business of a telegraph or telephone company, and also such other electrical instruments and plant as the said Company may deem advisable, and to purchase, sell or lease the same and rights relating thereto, and to build, establish, construct, purchase, acquire or lease, and maintain and operate, or sell or let any line or lines for the transmission of messages by telephone, in Canada or elsewhere, and to make connection, for the purpose of telephone business, with the line or lines of any telegraph or telephone company in Canada or elsewhere, and to aid or advance money to build or work any such line to be used for telephone purposes:
This occurred in 1949, Mr. Speaker. We are now in 1977. Parliament has been unable to progress in this respect. I know it, Mr. Speaker, and I can say so very strongly, although at a certain time Mr. Louis-Philippe Lacroix, the former member for Iles-de-la-Madeleine in the Quebec National Assembly, made false statements against yours truly while he was acting as the manager of a telephone co-operative.
Mr. Speaker, 1 can prove on the basis of my past experience that the area of communications is highly profitable. Because I should like to prove it, I suggest that we should not, without serious reason, grant new privileges to a company which is something of a monopoly, judging from official data. I still have all these documents. They were given to me as a gift by a grateful board of directors as a reward for the great services I have rendered the Canadian people. Not only do I have them,
June 16, 1977

but I have them here, in my Ottawa office, where I keep them as a precious heirloom.
Mr. Speaker, I will give an example to the House to show that the field of communications is profitable and that we must not extend to Bell Canada new privileges which will enable it to create an even more powerful monopoly.


Some hon. Members:: Hear, hear!


Joseph Adrien Henri Lambert: On January 28, 1949, the closest doctor lived nine miles from my home, and we could reach him only with snow shoes, or on foot, or with a carriage pulled by a horse or an ox, or else with an old 1929 Ford like the one I had at that time. However, I was often called to help my fellow citizens, I had to make three trips in one night to get a doctor whose care was required by mothers. At that time, they accepted maternity without condition, and that is why French Canada still remains the same today. But I worry about the future. So one day I said to myself: "It is ridiculous not to have communication means in 1949, not to be able to call a doctor to attend a mother who had the courage to give a child to her nation."
So I studied about telephone service, and at that time, in Canada, it was not possible to find any textbook in French. All the textbooks dealing with the telephone were written only in English. Although I was not very well versed in English, I managed as best 1 could and understood what communications by telephone are all about. It's very simple, it's only a matter of two wires, and all you have to do is to arrange them so that they connect with the homes ...


The Acting Speaker (Mr. Ethier):: Order. I regret to interrupt the hon. member, but the time allotted to him has expired.


Mr. O'Connell:: Mr. Speaker, I rise on a point of order with respect not only to Bill S-2, which is a private bill, but with respect to the procedures of this House regarding private bills.
This is a major Canadian corporation supplying important public services as a public utility, and parliament obliges it to come to this House to seek changes in its charter and its capitalization. The only way this corporation, in contrast to others, can make these changes is to come here. Therefore the procedures we put it through should have relevance to the public interest of the company.
This is the point I am trying to raise because I am going to ask you, as guardian of our interests as private members, if there is a way we could seek a change in the rules. This company must come through a private member. I sponsored the bill in the House. It must be a private bill debated in private members' hour, which in the normal course arises on Thursdays every two weeks. If there is another private bill it arises once every four weeks, and if there are three, it is every six weeks, and many of those occasions do not take place for reasons with which we are all familiar.
Bell Canada
That means we oblige the corporation to enter into a procedure which may have no result, with no decision, and in fact there may well be no decision in this session or in the next session. Indeed, there may be no decision at all because this bill may not proceed beyond second reading stage. The company may never get its day in court. I would therefore like to ask whether we are not making a farce of our own institution by the way we proceed.
I should like to suggest that we make some proceeding available through either Standing Order 75A or 75B to cover circumstances such as these.
This whole procedure is divorced from the government; it is divorced from the minister. Are we to be helpless and make a farce of our own institution because we can be held up, session after session after session, when a major corporation is told to come here and we can offer it no result? Mr. Speaker, I think you are the guardian of our interests as private members. We cannot turn to the House leader or to the government; we turn to ourselves. I ask if you, Mr. Speaker, as our guardian, could refer this matter of private bills, and the procedure for dealing with them, to the Standing Committee on Procedure and Organization. I suggest specifically that the chairman of the committee should have the right to seek the kind of all-party, or majority party agreement, which will enable us to consider this kind of bill under a time allocation.
Let us give ourselves some rules which will prevent our running into these impasses, which surely are an affront to the nearly quarter of a million Canadians who own this company, and to the millions of Canadians served by it. We shall deny those Canadians proper service if we deny this company the financing and corporate strength it needs to do its job. We make a farce of ourselves and I appeal to you, Mr. Speaker, to do something about it.


Mr. Nystrom:: Mr. Speaker, on a point of order-


Mr. Rodriguez:: Mr. Speaker, I rise on a point of order.


Mr. Gilbert:: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Ethier):: Order, please. The Chair recognizes the hon. member for Yorkton-Melville (Mr. Nystrom).


Lorne Edmund Nystrom: Mr. Speaker, I think the point of order the hon. member for Scarborough East (Mr. O'Connell) raised is but another stalling tactic in this debate.


Mr. Douglas (Bruce-Grey):: Don't be ridiculous.


Lorne Edmund Nystrom: Mr. Speaker, we respect the rules of the House and are doing as we should as members of parliament: examining the merits of the case brought forward. The hon. member for Scarborough East suggests we are not getting results. So far as we are concerned we are getting good results, for we are stopping Bell Canada-one of my purposes for participating in the debate. I want to smarten up that large

June 16, 1977
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corporation which is milking the ordinary people of this country. 1 think the hon. member for Scarborough East does not like the rules because they do not favour his big business colleagues. 1 think he raised a facetious point of order, a non-point of order. I remember, when we dealt with IAC some months ago, hon. members used similar arguments. They alleged we were stopping that poor little corporation which needed our help in the House. That bill was eventually sent to committee, there to be considered, and this bill will probably end up in the same place, although not until 1978, I hope. Eventually it will reach the committee.
I have no sympathy for the viewpoint of the hon. member for Scarborough East who is an apologist for this huge corporation which is inflicting a great deal of harm on the ordinary Canadian citizen. I hope you ignore his point of order.


John R. Rodriguez: Mr. Speaker, I rise on the same point of order. The private members' hour is set aside for the consideration of bills private members bring forward. We are doing exactly that with regard to this particular bill which was brought forward by the hon. member for Scarborough East. When you consider that the Senate considered this bill in one day, one can hardly say the bill was properly examined in principle in the other place. I am not suspicious by nature, but I suspect any bill which originates in the other place. I took the opportunity to read in Senate Hansard what was said in the debate on bill S-2.
I suggest the government is always prepared to use Standing Order 75A and B. That is always its answer to a proper examination of legislation.


Some hon. Members:: Oh, oh!


John R. Rodriguez: Look, you are caught on the horns of your own dilemma and blaming the opposition for doing what it ought to do. There is no reason to look at the private members' hour, with respect to the hon. member's private bill to do with Bell Canada. We have tried consistently to deal with that corporation before the CTC and CRTC. It provides no proper rural service in northern Ontario and I, as a member from northern Ontario, am going to sit in my seat and not do anything at all until it accounts for its actions in northern Ontario with respect to service. I tell you, Mr. Speaker, the private members' hour is the best check and balance we have with respect to private members' bills.


Joseph Adrien Henri Lambert: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Ethier):: The hon. member for Bellechasse, on a point of order.


Joseph Adrien Henri Lambert: Mr. Speaker, I should like to express, very calmly and objectively my opinion on the matter.
I am convinced that my good friend, the hon. member for Scarborough East (Mr. O'Connell), when he said that Parliament looks ridiculous to the people, did not mean to tell the

House that what I have just said was ridiculous. If that is what the hon. member meant, then I fail to see what we are doing here.


Martin Patrick O'Connell: Not at all.


Joseph Adrien Henri Lambert: Thank you. Mr. Speaker, I wanted to take part in the debate, very objectively, and so fulfil my duty as a parliamentarian and consider very objectively the purpose of the bill. Even though the Senate passed it in the space of a single day, that does not mean that we are sheep here in the House of Commons and that we have to do the same. I don't agree with that at all. We have responsibility. We, in this House, were elected by the people. We were not appointed. We are answerable to the Canadian people, to Bell Canada's subscribers, to those of Quebec Telephone and every other company in Canada. We have a responsibility which we must discharge. We are dutybound to study all the clauses of this bill; that is why a motion for a six months' hoist was put. I feel that in six months we shall have had time to think things over; by then, we will be ablef English ]


The Acting Speaker (Mr. Ethier):: The Chair has heard the comments of hon. members on the point of order the hon. member for Scarborough East raised. That hon. member asked the Chair to intervene and proposed a certain course of action, but we have no Standing Orders allowing such a thing. Hon. members expressed their viewpoints. One of them is in favour of changing some of our rules; other hon. members are not in favour. However, I do not think the hon. member raised a point of order; therefore the hon. member for Yorkton-Mel-ville (Mr. Nystrom) has the floor.


Lorne Edmund Nystrom: Mr. Speaker, first I must congratulate the member for Bellechasse (Mr. Lambert) for his fine speech which was very much to the point this afternoon. He said the truth about Bell Canada.

Perhaps I could call it six o'clock.



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod as follows:
Mr. Speaker, the Honourable Deputy Governor General desires the immediate
attendance of this honourable House in the chamber of the honourable the
Senate.
Accordingly, Mr. Speaker with the House went up to the
Senate chamber.
And being returned:
June 16, 1977
[Stage Direction]
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the Royal Assent to the following bills:
Bill C-55, An Act to amend the Customs Tariff (No. 2).-Chapter No. 14.
Bill C-54, An Act to amend the Excise Tax Act (No. 2).-Chapter No. 15.
Bill C-39, An Act to amend the Bank Act and the Quebec Savings Banks Act.-Chapter No. 16.
Bill C-47, An Act to amend the Export Development Act.-Chapter No. 17. Bill C-8, An Act to amend the Financial Administration Act and to repeal the Satisfied Securities Act.-Chapter No. 18.
Bill C-36, An Act to amend the Motor Vehicle Safety Act.-Chapter No. 19. Bill C-13, An Act to amend the Historic Sites and Monuments Act.-Chapter No. 20.
Bill C-207, An Act to amend the Railway Act.-Chapter No. 21.

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

Elmer MacIntosh MacKay: Mr. Speaker, I want to pursue the question I took up with the government House leader in his capacity as Actisig Prime Minister last Monday, when I questioned the role of Senator Keith Davey, if in fact he had any role, in other enterprises in addition to the one which received so much prominence in the Toronto Sun, for which he used to be an eminent correspondent, that is to say, Blue Water Racing Associates Ltd.
I am interested in this matter for several reasons, Mr. Speaker. I was less than impressed with the government House leader's response which he made on the subject of conflict of interest a few days earlier, I think on June 10, when he referred to a green paper and made mention of a bill which was coming along on the subject of conflict of interest.
Over the years there has been a gradual improvement, 1 suggest, in the general atmosphere. One of the most important steps was taken by a former prime minister, the right hon. member for Prince Albert (Mr. Diefenbaker), when he discouraged, if not outrightly prohibited, as I recall, cabinet ministers from holding directorships or taking part in business while they were members of cabinet.
To some extent the Canadian people are now convinced that the Senate is nothing more than a repository for people using their substantial Senate salaries to provide themselves with a secure income which allows them to participate in commercial ventures for their own benefit. When they are not doing that, they are perceived to be paid organizers, in effect, for their parties. This is not being fair to most of the Senators, but even if only a few of them are actually carrying on this type of
Adjournment Debate
lifestyle, it does reflect badly on the many conscientious Senators who are doing the best they can to discharge their responsibilities.
I became very interested in a company called Hydroculture Luwasa Limited which participates in the esoteric business of growing plants by the addition of nutrients, a very interesting process. When I noted that this particular company, which was incorporated on July 12, 1975, under the corporate name of Hydoculture Luwasa Limited, had as a director none other than Senator Keith Davey, I asked myself what in the world would he be doing, involved in an enterprise like this? Then I began to think: "Well, there is enough greenery and foliage around some of these government offices to make a Tarzan movie", and one almost expect to see a cheetah peeking through some of the foliage in some government buildings. So I obtained a list of the directors and officers. 1 should like the government Efouse leader to take it as notice to supplement some of the information which I have.
I am interested to know, for example, whether the Senator is still a director in this company. Is he now a shareholder? I want to know to what extent the company does business with the federal government or Crown agencies. 1 should like to know some other information to supplement my own. I should like to know, if it is relevant, why this company was negotiating to sell itself to another company in a highly regulated but unrelated field, Canadian Cable Systems, Ltd. Senator Davey has been mentioned in other matters, for example, Blue Water Racing Associates Ltd.
The whole situation seems to be something which is not in the best interests of the parliamentary system. I do not want to sound sanctimonious about this, but at this particular point in time it seems unfortunate that a man such as Senator Davey, who is a key campaign adviser, a political strategist in government and a man of prominence, is perceived to be in a position such as was indicated by the Toronto Sun. That newspaper said that his assistance in licensing involves setting up meetings with federal and provincial officials in charge of licensing. That is worrisome. It is very interesting why he would receive a 50 per cent equity in a company in which he did not invest any cash, if there was not some valuable emphasis placed on the type of assistance he would be providing in this regard.
When we take this and equate it with the rather interesting situation involved in this other company, there may or may not be a pattern emerging here. I would like the government, in connection with its study of conflicts of interest, green papers, and proposed legislation, to consider this particular item. In due course 1 would appreciate having a bit more information on Senator Davey's equity, his present position in Hydroculture Luwasa Canada, Ltd., and also whether there may be other shareholders, who are in a prominent position in the government service or elsewhere, who ought to reconsider their positions with respect to the type of business this company is doing or proposes to do with the Government of Canada.


Mr. Rod Blaker (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I am answering on behalf of the minister and of the Parliamentary Secretary to the

June 16, 1977
Adjournment Debate
Minister of Agriculture (Mr. Pelletier). 1 must apologize to you, Mr. Speaker, and to members for arriving late; but I understood that there was Royal Assent involved and there might be a couple of extra minutes.
I should like to begin by noting to the hon. member for Central Nova (Mr. MacKay), that I am not familiar with the company whose name seems to be Hydroculture, if 1 understood him correctly. Because no reference was made to that particular corporate name, 1 am not prepared to give him any details. However, I am prepared to answer a question posed on June 10 by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn), which was pursued on June 13 by the hon. member for Central Nova. I see a nod from the hon. member opposite, so I will give him the details I have from the Department of Agriculture. They relate to the press reports of Senator Davey's interest in Blue Water Racing Associates Ltd.
While the hon. member did not identify any particular press article, Blue Water Racing Associates is a properly incorporated private company, established under the Canada Corporations Act. That company applied for 23 racing dates in 1974 and the application was denied because incorporation documents were not complete at that time and the facilities were not suitable for winter racing. At that time there was no indication that Senator Davey was involved with the company.
In 1975 Blue Water Racing Associates Ltd. applied for 91 racing dates. Nineteen days were approved. The first racing date was held on May 20, 1975. On or about May 15, 1975, the company submitted a standard departmental form disclosing that Senator Davey and York Sports Investments owned more than 10 per cent of the voting rights attached to all equity shares of the associates. The department understands that Senator Davey actually has 50 of 100 shares of Blue Water Racing Associates Ltd. that were issued at that time, which appeared to meet an Ontario Racing Commission requirement that Senator Davey own 50 per cent of the company before they would issue a license.
Senator Davey has had discussion with Mr. S. B. Pratt, the former chief supervisor, who retired in June of 1975, and the present chief supervisor, Mr. B. Toews, and Senator Davey made no representation to them in his capacity of a Senator. Discussions were on the operational aspects of race tracks, which is a normal occurrence. Discussions respecting dates were also held with Mr. L. J. Cassina, president of the company.


CONFLICT OF INTEREST-KNOWLEDGE OF MINISTER OF AGRICULTURE OF SENATOR DAVEY'S INTEREST IN BLUE WATER RACING ASSOCIATION
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: dime-he is an honest man; but if a man robs a bank and takes a lot of money, this is considered to be a dishonest act.
The other point is that in terms of a man of substantial means, I suggest that the tax laws might be of some benefit to him. It is not enough that the Senate of Canada now contains, by virtue of the appointments of the Prime Minister, enough Liberal campaign organizers paid from the public purse, but we now have another instance of Senators involved in companies doing business with the Government of Canada. What are the government's guidelines on this? Will the government allow this to carry on without any restriction?
We already have the case brought to the attention of the House by the hon. member for Central Nova (Mr. MacKay) with respect to the Sky Shops situation. The first appointment the Prime Minister made to the Senate of Canada was that of Senator Giguere, and where is he now? I ask you, Sir, is this a pattern that is unfolding? Are we finding that friends of the Liberal party are now in the Senate at public expense and receiving that free ride, while they go out and campaign for the Liberal party, and are also involved in companies doing business with government departments? I think that is a conflict of interest situation to which 1 referred in my question to the Minister of Agriculture when I raised it on June 10.
I'think the government owes us, as members of parliament, some explanation of the guidelines that it proposes to recommend to parliament on the kinds of activities the government feels Liberal Senators should engage in with respect to companies that do business with the Government of Canada. This raises the whole question of possible conflict of interest, and I think the minister does not do us any service by trying to slough off this question or joke it off. No one is laughing about this matter. According to the minister, it is not what you know but who you know that counts, because you lose a little money in one year.
We expect the fullest possible explanation of the number of occasions on which representations were made by Senator Davey. 1 have asked for this information; it is not yet forthcoming. I and my colleague, the hon. member for Central Nova, would like to know what other involvements Senator Davey has in other companies, who of the confidants and friends of the Prime Minister is involved in these companies, what exactly is happening so far as government contacts are concerned and government connections with companies in which Senators appointed by the Prime Minister are involved.


Roderick Blaker: Mr. Speaker, the hon. member asked at least a dozen different questions and I do not know if I can answer them all in the time I am given.
First, he intimated that the Senator did not disclose his interests, which is not correct at all. Senator Davey did disclose his interests in a most official way on May 15 when that company made application for racing dates. He has contacted the Department of Agriculture, but the senior people whom I named in my earlier answer indicated that no
Adjournment Debate
representations were made as to the Senator's role in the Senate.
With respect to York Sports, the hon. member suggests that the Senator's name did not appear. That is not correct. It appeared on the application form; it was quite open. As to the price paid for the senator's interest in that company, perhaps that is a matter for further questions if the hon. member wishes to pursue this. It is getting a little deep for this type of questioning.
I happened to be in the House when the question was asked of the Minister of Agriculture (Mr. Whelan) and I can say that he did not slough it off. He gave the answer in which he indicated that the information he had was that the company had lost $70,000, and he undertook to give an answer, which I am giving tonight.
As to doing business with the government, this is becoming a massive problem. It is almost impossible these days to avoid running into regulations, federal, provincial or municipal. The question becomes whether, in the face of various regulations of Crown agencies and departments, members of parliament and Senators are expected to have no business interests whatsoever.
I am not making any comment on the validity or otherwise of that. I am simply saying that our regulated lifestyle is becoming such that it is hard to avoid bumping into some level of government somewhere.
1 remember very recently in the case of the department of which 1 was parliamentary secretary that that department purchased an airplane for the use of the RCMP from a member of parliament. That can be said to be doing business with the Government of Canada. I think we could get to the stage where we could find some fault or issue of morality in that type of transaction, and then all of us will have to live in some kind of state that is not natural to the human being.
Again, I do not indicate that the greatest of care is not necessary. It certainly is, and I am not commenting on the issue raised by the hon. member. I am simply trying to answer some of the observations made with respect to conflicts of interest, in some measure because I used to be the chairman of the committee responsible for the green paper. I have given the hon. member as much information as I can. If he wants to pursue his questions, I would be glad to co-operate in every way.


The Acting Speaker (Mr. Ethier):: The motion to adjourn the House is now deemed to have been withdrawn.
Motion withdrawn.


The Acting Speaker (Mr. Ethier):: I do now leave the chair until eight o'clock tonight.
At 6.23 p.m. the House took recess.

June 16, 1977
Anti-Inflation Act AFTER RECESS The House resumed at 8 p.m.



ROUTINE PROCEEDINGS


[Stage Direction]
The House resumed consideration of the motion of Mr. Stevens:
That the Anti-Inflation Act being chapter 75, Statutes of Canada 1974-75-76, as amended by chapter 98, Statutes of Canada 1974-75-76 shall expire on the 30th day of June, 1977.
Donald Stovel Macdonald: Mr. Speaker, I mentioned that I should like to talk about the resolution in four perspectives, the first with regard to the program itself.
Obviously the best way to consider the program is to cast it against the backdrop of the experience that Canada was going through in the late summer and fall of 1975 when it was first put into effect. While at that time some of the costs, which over the previous two years we and other world economies had been absorbing, had peaked and we had seen some reductions, the atmosphere in Canada was one of expectation of ever-increasing inflation. There were those who were seeking price or income increases not just to recover the percentage increase in the consumer price index in the previous period but in many cases to anticipate even further rates of inflation which they expected to come. It was an atmosphere of a certain kind of envy, of competitive claims based as much on comparison with the percentage increases of others as on actual need.
The inflation rate at that time was 10.6 per cent, the rate of settlements in the first year was an annual rate of 20 per cent, and unit labour costs were at 15.2 per cent. The initial claims of collective bargaining in the last weeks of September and in early October were in the skyrocketing 50 to 60 per cent range. The consensus discussions which had been carried on in the previous winter and spring by my predecessor and other colleagues with some of the major economic decision makers in Canada had disclosed the difficulty of obtaining voluntary agreements to restrain against inflationary increases.
The major groups which had been consulted evidenced a substantial distrust of voluntary restraint and, in particular, a certain suspicion that even if they restrained themselves some of the other major groups might not agree.
Under the circumstances it was clear that only a mandatory program imposing legal restraints on the great economic powers-large firms, major union groups, the public sector, professionals-could bring about a restraint on the frenzy of the inflationary spiral then under way.
I think it is fair to say that the program has succeeded in reducing the spiral of expectation. Early in the program it was
[The Acting Speaker (Mr. Ethier).]
clear that certain commodities such as food, energy or imported goods could not be effectively controlled. The United States had attempted to control food in their program and it only brought about higher prices and diminution of supply.
It was recognized that certain economic factors, such as the change in the external value of the Canadian dollar, or interest rates, could not be controlled. Subject to these limitations we set out to restrain the powerful in the community, and it can be said that the program succeeded in doing that. The rate of inflation has come down from 10.6 per cent to 6.2 per cent in October, 1976. Using the same index-not switching the index as the hon. member might-it came down to a current rate of 7.6 per cent. Aided by reductions in food prices at first, and the food price reduction was important and significant, the rate of price increase has come down.
It is fair to point out in connection with food prices that 60 per cent of the cost of the food going through to the consumer at the retail level is made up of the cost of processing, packaging, transporting and retailing, and the anti-inflation program was effective in restraining those cost increases so that the real cuts in prices were passed along to consumers. Food prices have risen again, principally because of shortages arising from crop conditions abroad, but we have some reason to hope that, with favourable conditions in Canada, some of these increases will be reversed.
The critical element to be understood, both in relation to the program and in relation to inflation generally in the years to come, is that not all elements of the cost-price chain can be subjected to control. Real cost increases in some commodities are unavoidable, commodities such as energy, or food when it is in short supply, or, as the hon. member for Oshawa-Whitby (Mr. Broadbent) mentioned this afternoon, imports, these being all cases in which the community has no choice but to meet the higher costs. But we can modify our own wage and salary increases, or modify, in the case of the business sector, the additional claims for profit.


William Hillary (Bill) Clarke: But that does not apply to the government.


Donald Stovel Macdonald: The program has not meant hardship for the working man; I think this is an important element to underline. For example, average wage rates increased in 1976 at the rate of 10 per cent, and the consumer price index through that year increased at a rate of 6.5 per cent; therefore, there were real increases for the average working man of between 3 per cent and 4 per cent in the year. Hence the moderation in the cost of living has yielded real benefits for the community as a whole. But it must be understood at the same time that some factors, for example the increase in food prices, will mean additional costs for the community. I do not think we can undertake to assure the community that they can enjoy all the benefits of a drop in costs, for example the drop in food prices to a certain extent, and at the same time be cushioned against any increases which might take place. There are going to be flows and ebbs in
June 16, 1977

take-home pay. But the critical thing is to maintain a reasonable balance over a period of time with respect to costs people will have to meet.
I now come to the question of prices. There has been a significant drop in the rate of increase, particularly on the non-food side of price increases. For many firms market conditions have operated to hold down price increases, but for other firms the restraint on profits and profit margins has provided a check.
Close to 300 firms must notify the Anti-Inflation Board in advance of their intention to increase prices, and the results of this process give one indication of future consumer price performance. In 1976, for example, pre-notified price increases averaged 6.8 per cent. In the first four months of this year the rate was 4.1 per cent, and in April alone it was down to 3 per cent. The fact is, we are bringing costs under control in Canada.
Unit labour costs, as I mentioned before, increased in 1975 at an annual rate of 15.2 per cent. First year wage settlements, after increasing by 20 per cent in 1975, had dropped progressively, to 9.9 per cent by the fourth quarter of last year, and to 8.8 per cent by the first quarter of 1977. Month by month the compensation plans filed with the Anti-Inflation Board have moved closer to the anti-inflation guidelines, an indication of acceptance and compliance by workers and employers.
The strike record in Canada now is vastly better than it has been in recent years. In January and February of this current year, the number of man-days lost nationally through labour disputes was 70 per cent below the number lost in the same months of 1976. More agreements are being signed by employers and unions without the need of arbitration or mediation. I think some credit is due to both sides of the bargaining table for the sense of responsibility which has activated the trends I indicated in those figures.
One industry in particular deserves credit, the construction industry. I refer now to an article which appeared in the Financial Times under the byline of Mr. Clayton Sinclair, who refers to the fact that in the construction industry there has been a dramatic drop in wage increases. Fie wrote, and I quote:
Construction industry wage settlements, for years the bane of inflation fighters, are rolling in this spring at levels so low management and even some government officials find them hard to believe ...
This year, instead of getting 17 per cent pay increases as they did back in 1975, 200,000 tradesmen and labourers who have been negotiating in Ontario and farther west since early April will wind up, according to reports from the Anti-Inflation Board, with something closer to 7 per cent-fringe benefits included.
More than 250 contracts covering the bulk of organized construction workers in British Columbia, Ontario and on the Prairies opened this spring. By last week close to 85 per cent had either been renewed or were awaiting ratification.
He gave some examples, and perhaps I may be forgiven for being parochial in quoting the following example:
Ontario's workforce is now settling for increases worth 90 cents an hour or close to 7 per cent after signing two years ago for raises worth $3.50 an hour. In Toronto, plumbers who were getting $13.66 hourly settled for $14.56 when their agreement was signed last month.
Anti-Inflation Act
Clearly, there is evidence of a new sense of responsibility on both sides of the bargaining table, a responsibility which has been effective as well at the national leadership level, both on the business and labour side.
I have mentioned some of the immediate benefits of a lower rate of inflation in Canada and the impact on our industrial costs.
One of the points which has been made, validly I think, is this: while controls have provided a temporary relief, if they are to be of long-lasting value they have to bring about some substantial change, perhaps of a structural nature, perhaps of a psychological nature. In any event, there must be some change in the approach which all those involved in economic decision-making bring to bear on the decisions they have to take.
I suppose the question is, what was changed as a result of the 20-month experience? I think the leaders of the big battalions at least have learned something from the experience.
I think they have learned, for example, that notwithstanding their claims as economic decision-makers to be able to make some decisions and pass them freely on to the public, the public remains very skeptical. Indeed, the fact that many ordinary Canadians have a great deal of hesitation about the government taking off controls reflects their skepticism. Nor do they have enormous confidence that their leaders decisions will necessarily be in the best interests of all.
We have had in Canada the phenomenon of rising popularity of the controls program, especially on the part of those who do not now have collective power. This fact shows up in the polls, it shows up in the personal contacts I have, and 1 know it is showing up in the contacts my colleagues have had as well in their own constituencies and throughout the country.


William Hillary (Bill) Clarke: Not many of you are back there. Is that not correct?


Donald Stovel Macdonald: I never made any secret of the fact that I, for one, never greatly favoured the controls program from the start. Therefore one of the difficulties is that of persuading this particular constituency within Canada, which is a substantial one, that in the long-run interests of the economy controls do have to come off, that we cannot cling to the protective blanket of the anti-inflation program, but that we must find some way to bring the controls program to an end in a way which will not bring about a fresh outburst of inflation.


Sinclair McKnight Stevens: Let's do it.


Donald Stovel Macdonald: Mr. Speaker, who wants an early end to controls?


Sinclair McKnight Stevens: Everybody.


Donald Stovel Macdonald: I think one can say, from one's experience of talking to the public, that there is scarcely a general demand for that. For example, among provincial governments-

June 16, 1977
Anti-Inflation Act


John Allen Fraser: What is the right thing to do-do what the mob wants, or what should be done?


Donald Stovel Macdonald: If the hon. member for Vancouver South (Mr. Fraser) has anything to say, perhaps he will take part in the debate. I listened attentively to his colleague and I trust he will do the same while 1 speak.
What of the provinces? Where do they stand? Of the ten, seven favour continuation for most of 1977, and one of these, the province of British Columbia from which the hon. member for Vancouver South comes, wants us to keep the program on until the expiry of the legislation in 1978. Take a look at my own province of Ontario.


Walter David Baker: That is three.


Donald Stovel Macdonald: Seven. Take a look at Ontario under a Conservative government where there was recently an opportunity to test the feelings of the community at the polls. One would think that if there were a widespread demand for removal of the controls this would have been a primary issue for either the government or for the opposition parties. For example, I am confident that had Mr. Stephen Lewis felt that continuation of controls was a great social injustice this would have been one of the cannons in his campaign and we would have heard a great deal about it. But this was not the case. None of the party leaders raised this as a campaign issue- recognition on their part that the public was very wary about any proposal to end the controls program. While all three leaders addressed themselves firmly to the questions of job creation and economic expansion in the province, and talked a good deal about obstacles in the way of expansion of employment opportunities, not one of them suggested, as was done in the House this afternoon, that the removal of the controls program would in any way enhance job opportunities in Ontario. Obviously, it was not an issue in the campaign, because studies have shown-


John Allen Fraser: Your job is not to do what the polls say but to decide what is the best thing to be done.


Donald Stovel Macdonald: Oh, that empty head is rattling again.
Indeed, widespread acceptance and support are something of an embarrassment. The political problem is not to take them off but rather to persuade constituents that it is in their interests in the long run that they be removed. Of all the possible arguments for ending controls, that of popular demand is not one.


An hon. Member:: What about a federal election?


Donald Stovel Macdonald: I would point out to the hon. member that he had one and he was wiped out.
Let us turn, now, to the next question, the question of decontrol itself. There are really two principal choices involved. The first is the immediate and simultaneous with-

drawal of controls, the so-called "lights out" method set out in the green paper. The second choice is the phased withdrawal of controls. That choice, called the third option, is outlined in some detail in the green paper.
The government favours the second approach, for two reasons. First, it avoids the risk of a sudden and simultaneous outburst of price and income increases, or at least it minimizes that risk to the extent it can be minimized-what the hon. member for Edmonton West (Mr. Lambert) called the "springback"-when controls are lifted as people seek to recover some part of their loss of income. Second, it would make for increased fairness as between different bargaining groups. If the House were to accept this motion on Monday evening, the situation would be that controls would have been applied to those who had voluntarily complied with the guidelines and stayed within them, while those who had held out against controls, those who had not supported the program, those who had delayed collective bargaining or failed to enter into an agreement, would benefit by the fact that controls had come off.
One thing is clear. Whatever method is chosen for decontrol, we would invite both unfairness and a wage-price explosion unless we deal with the problem of unamended agreements under the anti-inflation program. Let me explain. In the course of the program many collective agreements have been reached at rates of interest substantially higher than the anti-inflation guidelines. Some of these increases have been rolled back by recommendation of the Anti-Inflation Board. Others have been reduced by order of the Administrator. As long as the controls are in force, compensation is being paid to employees at the rates established by the Board or by the Administrator. However, many of the contracts have not actually been rewritten to reflect rulings by the Anti-Inflation Board or by the Administrator, and still provide for the rates originally negotiated.
There is some uncertainty about the legal situation once the controls are removed and the agreements cease to be subject to mandatory restraint. Employees might be able to demand as a matter of right that their compensation be increased to the levels provided by the letter of unamended contracts. Employers might be legally obliged to pay the negotiated rates, in addition, employees might be able to make up their so-called past losses, that is, the difference between the negotiated rates and the allowable rates for the period during which their agreements were under controls. Obviously this situation would be highly unfair to those who have complied with the program by negotiating agreements within the guidelines in the first place or who amended their contracts to conform with the rulings. Furthermore, if these agreements were allowed to stand and if the negotiated rates were paid, the consequences for the economy could be serious.
With lights out decontrol there could be a large, immediate jump in wages, combined with big lump-sum payments immediately following the decontrols date. This could at once place severe pressure on prices and drive up inflationary expectations as other groups sought instant catch-up. Down
June 16, 1977

the road, it would cost the economy a lot of jobs. Even if a phased decontrol were adopted, pressure would mount steadily and much of the benefit of the program would be seen to be thrown away. A substantial number of large increases over time would still provide a powerful demonstration effect to other groups.
To provide for greater certainty with the approach of decontrol, the government has therefore decided to propose amendments to the Anti-Inflation Act to deem these agreements to be amended in line with the AIB recommendation or order of the Administrator. An amending bill would be introduced to deal with this. In the same way, the law will make sure that profit restraints imposed, for example, by excess revenue orders, will be effective.


Mr. Gillies:: Would the hon. member permit a question?


Donald Stovel Macdonald: No, Mr. Speaker. I do not have unlimited time. I think I should be able to make my speech without interruption.


Some hon. Members:: Oh!


Donald Stovel Macdonald: One important question which has been put to me and to other members of the government is this: what are we seeking in our discussions with representatives of the various interest groups in this country? While the leaders of the Canadian Labour Congress and of employer groups in Canada have said they will advocate restraint


John Allen Fraser: They have not!


Donald Stovel Macdonald: -can we be sure that their counsel will be followed? There are obvious limitations existing on both sides. The leaders of the CLC, for example, speak only for their own membership, and the congress does not purport to represent the whole of Canadian labour. Representatives of business are quick to point out that they can speak only for their own companies and that, while they are prepared to advocate restraint, they cannot be sure that others will follow. We shall be seeking further assurance as to the active advocacy of policies of restraint we can expect from these groups.
As well we are seeking from these groups a commitment to their participation in the two institutional changes we have proposed in the white paper, in the Agenda for Co-operation. We have proposed these two institutions, a consultative forum and a monitoring agency, and it is critical that they both have the support of business and labour in Canada.
Will they participate? In light of the experience with the Economic Council, will they even attend? 1 do not think we know yet. Although we have made the green paper available for their examination and study of these particular questions, we have no clear indication at the moment that they are prepared to participate in these organizations. We have put the questions to them and, if they are not prepared to participate in this kind of consultation as such, what changes or what
Anti-Inflation Act
methods would they propose to try to achieve better restraint in the post-controls period? This is obviously a role to be defined 1n consultation with the group. We have been seeking a meeting just as soon as they are ready for the purpose of talking on this question, and once we have had their reaction it will fall back on the government to make a final decision as to the date and the method of decontrol.
On the question of the forum, I should like to turn for a moment from purely Canadian sources to an international report, one that I can recommend to hon. members. It is the recent report of the secretary of the OECD entitled "Toward Full Employment and Price Stability". It is a penetrating examination of the problems of economic management in a modern economy and is prepared by a group of independent experts under the leadership of Mr. Paul McCracken, former chairman of the United States council of economic advisers. I should just like to quote briefly a section from the heart of that report:
We support the idea that governments should discuss regularly with the organizations representing business and labour the general evolution of prices and wages which should be aimed at over the coming year or so, consistant with achieving or maintaining high employment levels.
The report goes on:
Five years ago, it was understandable that representatives of business and labour might take it for granted that governments had it in their power to ensure high levels of sales and employment. They may well have felt that the warnings against the dire consequences of irresponsible behaviour on their part need not be taken seriously. All this has now changed.
I have spoken of the consultative forum. 1 will make reference only to the monitoring agency briefly because the agency and its function are fully described in the Agenda for CoOperation. Its function is to follow economic developments, to comment on specific price or wage changes which could have an adverse impact on inflation in Canada, and to comment as well on trends in the economy which would have the same direction. It would be an agency which is consistent with the free choice option which we have taken in the post-controls period. Its responsibility would be limited to requiring information from the major economic decision makers and to public reporting. It would not have responsibility for mandatory control of either prices or wages.
This is a concept that has been not unknown to us in this country in the last several years. I refer by way of comparison to the Estey commission which examined the steel industry and steel prices in Canada, or to the better known work of the food prices review commission which examined the food industry in the same context.
With respect to the consultative forum, 1 stress two of the underlying objectives. There are really two elements involved in it. There is the concept of responsibility and that of co-operation.
Responsibility assumes that the private sector will have freedom to come to decisions, but that in doing so there is the expectation that it will take into account the wider impact in the community and the longer term impact on either the union or the company in question if a reasonable balance is upset in economic decision making.

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Co-operation assumes a substantial departure from the atmosphere of adversary negotiation in the private sector or from arm's length dealing between the parties. It assumes that there will be a meeting at which the economic aspirations of each particular group can be represented, the group being either union members or shareholders. It will also be assumed that it is not inconsistent with looking after the interests of a particular group that it should meet with others in the community, and that the wider objectives of the community should be taken into account.
Both institutions which are proposed are intended to provide better information in regard to trends in the economy and an understanding of those trends, and also better communication between the major decision makers.
Finally, I turn to comments made by other members in this debate. In addition to the remarks of the hon. member for York-Simcoe we have the advantage of the speech made by the Leader of the Opposition (Mr. Clark) in Montreal last week end. I think it is fair to characterize their approach to this particular motion as being that we should bring about an end to controls in the form in which they exist at the present time, but that they should be re-established, albeit for a brief period, in some other form.
I think the shortcomings that 1 find with that proposal would be both administrative and legal. There is also some question whether the proposed reinstallation of controls, as set out by the Leader of the Opposition last weekend, could be effective.
One of the elements that I did find rather puzzling was the notion in both statements that the Department of Consumer and Corporate Affairs should become the recipient of these activities. Indeed, the hon. member for York-Simcoe said this afternoon that some of the activities of that department would have to be discontinued so that the staff in the department could attend to the monitoring procedures which are now carried out by the Anti-Inflation Board.


Sinclair McKnight Stevens: Not true.


Donald Stovel Macdonald: Well, that is what the hon. gentleman said.


Sinclair McKnight Stevens: No; you were not listening.


Donald Stovel Macdonald: One would have to ask which of the activities of the Department of Consumer and Corporate Affairs would the hon. member cut out. Would it be surveillance over false advertising? Or would it be better and safer labelling on consumer products? Or it could be-and perhaps this is not too far away-easing up on competition and combines investigation. We do not know exactly what activities in consumer and corporate affairs would be eased off; but what we do know is that the task being undertaken by the AntiInflation Board would be discontinued suddenly, that the data that the board has and the experience that the board staff have would not be available, or would only be available over time, to

the new group, and that there would not be an effective carry-over of administration.
One interesting comment made by the hon. member for York-Simcoe was that the cabinet was to have responsibility in certain cases for rolling back either settlements or wage increases which, after monitoring by the Department of Consumer and Corporate Affairs, are found to be beyond acceptable limits, though we do not know from the hon. member what the acceptable limits are.
I think one would have to ask the question: by what law would cabinet roll back wages or price arrangements which were beyond those standards? Not by this law. As a result of adopting this motion, this law would cease to be effective in restraining price and income increases in Canada. One can even raise the question: if you wanted to get back into this parliament under those particular circumstances, how would you get back jurisdiction over the private sector which, in normal circumstances, is a provincial responsibility?


John Allen Fraser: Amend the bill.


Donald Stovel Macdonald: The hon. member has obviously forgotten that the Supreme Court of Canada has set very narrow limits on Parliament to-


John Allen Fraser: That is your problem. You did not put in a declaration which was effective.


Donald Stovel Macdonald: The hon. member says that that is my problem if their proposal is not workable. I must say that that is not a very bright comment, but nevertheless it was the comment of the hon. member for Vancouver South (Mr. Fraser).


John Allen Fraser: I practised law longer than you did.


Donald Stovel Macdonald: The hon. member for York-Simcoe, however, introduced a very interesting concept. He said that controls will just be in the background, that the ultimate weapon would be held just in behind, and that we could expect controls to come again. That is a very interesting suggestion. The gentlemen who at this moment are inviting us to take off the controls program are saying that it should be kept back as the ultimate weapon. We know what that is like. President Carter had some experience with that during the election campaign. The prospect of having an ultimate weapon in the background is that there are anticipatory wage and price increases. There was a very kind suggestion from the hon. member for York-Simcoe in that regard.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: There was a very, very interesting suggestion from the hon. members, who were so indignant at the suggestions of the Prime Minister (Mr. Trudeau) from time to time, that we may have to look at controls continuing beyond the beginning of this coming year.
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The hon. member for Oshawa-Whitby provided a broader philosophical base as far as approach is concerned. He will not be surprised if I say that I do not share common ground with him with respect to that philosophical background.


Sinclair McKnight Stevens: You are both socialists.


Donald Stovel Macdonald: I do not share common ground with him with respect to the comment that the free market is an inferior mechanism for effectively allocating benefits in our community and that some kind of a national incomes policy is a more effective method for improving the affairs of Canadians. I respect the fact he may have those different views, but I do not share them with him. This is the hon. member who has been insisting, since the beginning of the program, on free collective bargaining. He told us this afternoon that he and his party would favour a centralized bureaucracy in Ottawa setting a national incomes policy for Canadians. Whatever happened to free collective bargaining which he talked about so much? Whatever happened to the free choice of individual unions and locals for people to negotiate the levels of their incomes?
The hon. member said that there should be a substantial central planning mechanism in Canada. This is not a new concept for him and his colleagues. 1 disagree with that. It is all very well for him to cite the example of Sweden; but in a federal state what role do provincial governments have in a national planning mechanism founded here in Ottawa and run by the federal bureaucracy? I disagreed with this particular approach to the post-control period. It is a socialist approach, but I have to disagree.
I also have to disagree with the stand taken by the hon. Leader of the Opposition and his colleagues to take off this particular program of controls. This program has substantially public support in Canada. From the figures which I have cited, the program has had a substantial effect in reducing inflation. They want to put in place some kind of vague, ill-defined system of controls for six or 12 months for which there may not be any legislative base. May I suggest to hon. members that that kind of invitation should be turned down, and I look forward to your support in voting with me on Monday night against the proposition which has been put forward.


The Acting Speaker (Mr. Ethier):: The hon. member for Halifax (Mr. Stanfield).


Some hon. Members:: Hear, hear!


Mr. McKenzie:: Now we will hear the truth.


Robert Lorne Stanfield: Part of it, anyway.
Mr. Speaker, when I listened to the minister defending income and price controls this afternoon and this evening, and when I contrast what he has been saying with the sorts of things he said through 1973 and 1974, as well as the things which his leader said, a rather rough old saying came to mind which I will not use.


Stanley Howard Knowles: Please do.
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Robert Lorne Stanfield: Let me simply say that it has often been said that nobody is as fervent as the converted. The minister and all his gang were bitterly opposed to even a short term control. After hearing him tonight, it is quite apparent that he may be in favour of even quite long term controls.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Before interrupting the conversation of the minister and his parliamentary secretary, I should like to refer briefly to some comments made this afternoon by the Leader of the New Democratic Party (Mr. Broadbent). He said the Prime Minister (Mr. Trudeau) had introduced the program I had advocated in 1974. I should just like to make it very clear that that is not so.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: That is not so, particularly in terms of the duration of the program. The Leader of the New Democratic Party referred to the rough justice involved in even a shortterm program of controls, and I agree. A program of 18 to 20 months does involve a lot of injustice. I felt strongly that the inevitable injustice involved in that kind of a program was a much better choice than the kind of injustice being perpetrated on millions of Canadians every day by rapid inflation.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: In other words, the inflation, and the theft which was taking place through inflation back in 1974, were rougher justice than a short-term program of controls.
The Leader of the New Democratic Party also spoke of planning. I do not share his confidence in the wisdom of government planners.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: He spoke of Sweden and West Germany. There may well be things to be learned from them. When comparing what has been going on in those countries with what has been going on and might go on here, it is important to bear in mind something which the Leader of the New Democratic Party did not mention, and that is the vast difference which exists in the organization of labour and the organization of business in Sweden and West Germany as compared to Canada. In those countries it is possible to have indicative planning indicating what the economy is likely to do during the year and what is most appropriate. You have every available structure, and they are structures to make decisions involving commitments by labour and by business. The Minister of Finance (Mr. Macdonald) has been skating around that here tonight, and that is the root of the problem. He is very busy carrying on a conversation right now.


Walter David Baker: He does not care.


Robert Lorne Stanfield: I am sure he is involved in a very interesting conversation and a very urgent conversation.


Ramon John Hnatyshyn: He does not have any royal jelly.

June 16, 1977
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Robert Lorne Stanfield: However, that is his problem and that is the problem of anyone talking about a post-control policy. The minister can read Hansard if he does not want to listen to me tonight, but I should like to indicate to him that it is very difficult to take him and the government seriously on this question of controls or post-controls in view of the contradictory positions and comments made by the Prime Minister over a period of years.
It is generally accepted by everyone that price and income controls can work at best for only a short time. Some deny that they work even for a short time. The minister mentioned the McCracken Committee. As I understand it, that committee, working in connection with the Organization for Economic Co-operation and Development, recommended that controls should be used only in emergencies, for short terms and not for long terms. What the minister really believes about the duration of controls was not apparent in what he said tonight. What the Prime Minister believes, nobody knows if he even knows himself. Prior to 1975, especially during the election campaign of 1974, he insisted time after time, as did the present Minister of Finance and his colleagues, that controls, even for a short term, had been proven everywhere to be failures. Indeed the Prime Minister, for some reason best known to himself, went to my native town of Truro where he described, and I quote, "controls as a disaster looking for a place to happen".
I do not know why prominent Liberals choose Truro to make silly, categorical, unqualified declarations-


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: -which they dishonour within a matter of a few months. The former minister of finance made a pilgrimage to that town and said some very categorical things which he disavowed very quickly. Is there something about my home town that drives Grits like the Prime Minister and Mr. Turner berserk? As far as I know, the present Minister of Finance has not made a fool of himself in Truro. He seems to prefer Toronto.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It is pretty well agreed by virtually everybody, except the Prime Minister and possibly the Minister of Finance, that the longer controls remain in place, the greater distortions they create, the more they interfere with the evolution of our economy, the more they get in the way of the natural development of our economy, the rougher becomes the justice, and the greater become the injustices these controls create. During the last election campaign and before that I thought this was the Prime Minister's view. I thought it was the view of the Minister of Finance as well.
I know I do not have too much time to take hon. members back through history. However, they will remember that period during the last election, the epoch of the anti-profiteer-

ing bill. That was to be the solution to the problems of inflation.


An hon. Member:: Where is it now?


Robert Lorne Stanfield: It is not only proper to ask where it is, but where is the minister responsible.	.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Judging from what the Prime Minister is saying and the answers he is giving to questions, he believes that controls are not only appropriate but possible for quite a long period of time. Obviously he believes in them very strongly. He is a very strong convert to controls. For a while the Prime Minister seemed so enamoured with controls that he favoured some permanent apparatus, some permanent intervention in the economy. I am thinking in terms of Christmas, 1975. He got such a reaction from that that he backed away from it, at least verbally.
Who knows what the Prime Minister really believes on this subject? I do not mean any disrespect to the Minister of Finance, but even if I knew his views on this question I would not pay too much attention to them because the views of the Prime Minister will prevail. The former minister of consumer and corporate affairs had some views and we know what happened to him. The immediate predecessor to the Minister of Finance had some views, and we know whose views ultimately prevailed.
I ask myself again, what does the Prime Minister now believe about the role of controls? He said in an interview with Le Monde recently, a very distinguished daily in France, that it would be foolish to remove controls until after an election. The right hon. member has never explained the significance of this mysterious new economic doctrine. I am sure he did not get that idea from Galbraith. You would have to describe it as some kind of post-Galbraithian school.
When the Prime Minister was asked in the House by the hon. member for York-Simcoe (Mr. Stevens) what he meant by that, he chose not to answer the question. Instead he chose to say it would be foolish to remove controls until there is agreement among the principal decision makers to exercise restraint. He said he wanted the firmest possible agreement from these people to exercise voluntary restraint. That answer shows the height of the Prime Minister's cynicism on that subject.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: It might be possible to develop a more ludicrous concept than agreement to exercise voluntary restraint, but one would have to work pretty hard to do it.
A few days later the Minister of Finance, in response to questioning, admitted that it might not be possible to reach such an agreement with the principal decision makers, whoever they are, and a decision to lift controls might have to be made without a firm commitment from the principal decision makers. We all heard the minister tonight. Where do we stand
June 16, 1977

now? Are we really waiting for such an agreement, or is it possible the Minister of Finance or the government will go ahead with decontrol in the absence of such an agreement if they cannot get it? The Minister of Finance certainly did not clarify that tonight.
Did you hear the nature of the commitment the Minister of Finance is demanding from these principal decision makers? If they cannot commit themselves to restraint, whatever that may happen to mean, they will at least commit themselves to urge other people to be restrained.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I want to be fair to the hon. gentleman. 1 do not blame him for trying to fudge this thing, sending up as much fog as he can, because I do not think that he knows the views of the Prime Minister. I suspect that if the Minister of Finance had his own way these controls would come off, and come off quickly. He probably has some conception of the complexity of this economy and the damage controls are starting to do in Canada.
The Prime Minister, and I say this without offence, has a very strong authoritarian streak. He gives me the impression that he is damn well going to push capital, management and labour in line. He is going to make them behave the way he thinks they ought to behave. That is his position, really tough; unless of course it turns out to be politically expedient to do otherwise.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: Hence all the twisting, turning, and doubletalk. I might as well be frank. I distrust the Prime Minister very fundamentally, particularly on this subject. He was dishonest in imposing controls. I expected him to be dishonest about removing controls, and 1 find that is exactly what is happening. Who can have any confidence in what this government will do on this subject?
Then there is the question of the timing of the decontrols. The Prime Minister emphasized this a couple of weeks ago when he was explaining his election stand back in 1974. There is no perfect time for decontrol. This time is as good as any time that the government is likely to have for the purposes of decontrol. There is a slack in the economy, and if the government sits back for reasons of its own and waits until the economic pick up comes along, as the government hopes it will, decontrol will become more and more difficult to achieve because of the prospect of a post-control inflationary bulge. In the meantime, of course, the existence of the controls will deter the pick up in the economy.
Lifting controls now with the safeguards of the sort described by my leader and by the hon. member for York-Simcoe will lead to little significant bulging. That would occur anyway and, as the minister admits, it will be probably in the area of food and certainly in the area of energy and contracts
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which were rolled back for the period of controls, but not modified, or it is not certain they were modified. The hon. member for York-Simcoe suggested this afternoon how they can be handled, and I judge from what the minister said this evening that he is about to introduce an amendment to do exactly that. So they will not constitute a problem. That problem can be dealt with and there is no need to keep the economy under control for a substantial period to deal with that problem.
In my judgment, price and income controls should be preserved only for those situations in which they are useful, such as emergencies. We had one back in 1973 and 1974 and if, as a general system of controls, even the much less perfect one which I had proposed had been adopted in that period, it would have headed off much of the trouble which our economy has experienced and much of the difficulty that the Minister of Finance and the Canadian people are so concerned about today.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The government would not act then for purely political reasons, just as it introduced controls in 1975 for purely political reasons. The government introduced controls in 1975 when the horse was just about all the way out of the door. The only thing they were able to catch was his tail.
The minister talks about the success of the program to date.
1 can argue about that. Some of my colleagues will argue about that. In my opinion that is not the issue in this motion. To me the issue is whether the controls should stay on or come off. However, I cannot help quoting the minister. There are a couple of things he said in the Committee on Finance, Trade and Economic Affairs on May 26, 1977. He said:
... indeed prices have been held down as much by the competitive factor as by the anti-inflation program.


Donald Stovel Macdonald: I said that again here.


Robert Lorne Stanfield: I listened very carefully to the minister and he did not say that.
At the same meeting of the committee he said:
May I correct that? It was more by competitive factors than by the anti-inflation program.


Some hon. Members:: Oh, oh!


Robert Lorne Stanfield: I have limited time and I am not interested in arguing to what extent the policy and the program have been successful thus far. 1 am concerned about the future. What I do insist on is what I insisted on in 1973, 1974 and 1975, that is, that a policy of controls play a role for only a short time. 1 think I have been consistent and, if I may say so with my usual modesty, I think I have been consistently right on this issue.


Some hon. Members:: Hear, hear!


Donald Stovel Macdonald: It must be very comforting personally.


Donald Frank Mazankowski: A lot more comfortable than you are.

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Robert Lorne Stanfield: The minister objects to interruptions on his side. Let him heed his own advice.


Donald Stovel Macdonald: Quite right.


Robert Lorne Stanfield: Again we have a double standard being applied.


Stanley Howard Knowles: He is listening to you now.


Robert Lorne Stanfield: Throughout 1973, 1974, 1975, 1976 and 1977 the government has been playing games with the people of Canada on this subject, and it is still doing so.
I think controls should be held in reserve to meet future emergencies. I do not object to the government, my own party or some other party, coming back to the House at some point and saying that we need short term controls to deal with a runaway inflationary psychology in this country. I am concerned about other things, that is, that by keeping these controls on the whole approach will become discredited and we will lose a valuable weapon for dealing with emergency inflationary situations.
Canada has serious economic problems today, but they are not problems that price and incomes controls can solve, or aid in solving. There are certain vested interests in the continuation of controls. It is pretty inevitable that this sort of thing will develop. I dare say there are some provincial governments that find it easy to deal with problems of their public servants, for example, or their pay problems, under a national program of controls. It may suit certain captains of industry to have this kind of program continue. It may be more convenient for them in terms of solving some of what they consider to be their labour problems. On the other hand, it may very well be that there are a good many small businessmen who are not controlled and who quite enjoy seeing some other people under controls. That is a pretty common attitude. It is often pleasant to see other people controlled when you are quite free yourself to act according to your own free judgment.
I do not think I am exaggerating when I quote the minister as having said that the real problem with getting rid of controls is to persuade the Canadian people that they should be taken off. I would be quite prepared to admit that if you have controls for a substantial period of time, they are difficult to get rid of. For example, you get more and more people with a vested interest in their continuance. But for the minister to suggest that there is any real problem in getting rid of controls because of the views of the Canadian people is pretty ridiculous.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: I would think also that the minister might like to expunge some of the guilt on his conscience for his past behaviour, that of his leader and his colleagues, by proposing for once something that they would consider to be in the interests of the people of Canada rather than to their own political advantage.


Some hon. Members:: Hear, hear!


Robert Lorne Stanfield: The minister is smiling. He does not mind losing debates; it is only elections he minds losing.


Donald Stovel Macdonald: I haven't had any experience at that.


Walter David Baker: That is coming for you.


Robert Lorne Stanfield: May I just close on this note: this economy is very complex. I do not think anybody understands how complex it is until he finds himself in the position of dealing with something like general tax reform, or in the position Jean-Luc Pepin has been in. I am sure Jean-Luc Pepin fully understands the complexity of this economy. I think perhaps he does have sufficient experience, but I do not think I have heard him advocate the continuance of the controls since he left his position.
We ought not to hobble our economy to make it a little easier for a relatively few people to discharge their responsibilities. It does not impress me very much that some provincial governments, for example, may be advocating the continuation of controls, because I think they have special interests in this situation. It does not impress me that certain captains of industry may be advocating it because they may have special interests too. We ought not to hobble our economy to make it easier, as I said, for a relatively few people to discharge their responsibilities or to permit the Prime Minister to force the economy of this country into a mold of his making. The controls should come off on the terms outlined by my leader and by the hon. member for York-Simcoe.


Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, so far this has been a fascinating debate. It is indeed an honour to be able to participate in it. In a way it could be said that the prophet from Halifax may always have been right, but it can also be said, after listening carefully to his disciple from York-Simcoe, that his disciple is pretty weak. I will explain later.
I recall very clearly in the question periods and in other circumstances in early 1974 when the hon. member for Don Valley (Mr. Gillies) and the prophet from Halifax were asking this government whether it had any emergency plans vis-a-vis inflation. They asked what the government woukl do if inflation got out of hand. All that is in Hansard, and it can be found in many press reports. The answer from the government was to the effect that, if inflation became an emergency, this government did have plans and would introduce them.


John Allen Fraser: You denied that during the election, Charles.


Mr. Caccia:: We never denied that, even during the election.


John Allen Fraser: Basford did in Vancouver.


Charles L. Caccia: We did say that if there was an emergency, we would put our plans into effect. The difference between the

June 16, 1977

Tories and the Liberals was a matter of judgment as to when to bring in controls and as to when they were necessary.
In 1974 we said that we would not fight inflation on the backs of wage and salary earners. That is what the Tories were prepared to do. In 1975 we saw rents and prices getting out of hand. We saw wage settlements of up to 60 per cent and 70 per cent. At that time it was evident that there was an emergency. For the very reasons mentioned by the hon. member for Halifax (Mr. Stanfield) earlier we were reluctant in bringing in controls because we knew, as-the hon. member quite rightly said-that once we were into controls it would be very difficult to come out. 1 agree with the hon. member on that.


John Allen Fraser: Remember "Zap, you're frozen"?


Charles L. Caccia: Let me deal for a moment with the disciple from York-Simcoe and the policy he put to us this afternoon. He said in essence that controls are not working and wondered what would happen after June 30, and so do 1.1 listened to the hon. member very carefully, and the essence of his speech centered around the typical Tory philosophy that the market place will take care of inflation: on this he is hinging his policy. That is his answer as to what would happen if we were to vote for the motion before us tonight. However, did he tell us what the inflation rate might be if we had not introduced the controls? None of the opposition speakers have addressed themselves to that.
What kind of inflation rate would we have had during the past 20 months or so if controls had not been introduced, despite the distortions in the economy? If we were to remove controls on June 30, what kinds of institutions would the Progressive Conservative party bring in to replace what we have now?


Sinclair McKnight Stevens: Read the speech.


Charles L. Caccia: The Minister of Finance (Mr. Macdonald) has already dealt with this. How many jobs would be created by the removal of controls?


Sinclair McKnight Stevens: More than you are creating.


Charles L. Caccia: We have not heard anything. All we have heard is that so many jobs were created in the past so many months under the controls, but we don't know what the alternative would be if controls were removed. If controls were to be removed, what levels of inflation would we be heading for? It was staggering to me to hear the hon. member for York-Simcoe (Mr. Stevens) suggest that a good reason for removing controls is the explosion in the growth of bank assets. He told us how much they have been growing in the past so many months or so many years, and he told us that this is one of the reasons we should remove controls. The logic of that baffles me.
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Charles L. Caccia: Before analyzing other recommendations made by Tory spokesmen let me say that I agree with one thing which was said this afternoon, namely, that professional and executive incomes have not been controlled adequately. On that he was dead on, and I share his view.
However, the first recommendation put forward by the hon. member for York-Simcoe was that the orders of the AntiInflation Board should last for the period for which they were proclaimed, beyond June 30. The logic of the hon. member is that we should remove the law but retain the orders. Well, it does not take a legislative genius to realize that once you remove a law, the orders which were proclaimed under that law also go by the wayside.


Sinclair McKnight Stevens: What do you think the minister is proposing to do?


Charles L. Caccia: Certain Anti-Inflation Board orders cannot exist in a vacuum. We cannot have those orders if we remove the legislative powers from which they flow.


Sinclair McKnight Stevens: You didn't listen to your own minister.


Charles L. Caccia: I listened to the hon. member for York-Simcoe, and I am replying to him. If that was not the case, we would not have so many so-called bubble clauses which have been agreed upon in various collective agreements which exist right now. Those clauses would come into force immediately upon the removal of this legislation and the dismantling of the board. That is point number one.
As his second point he would have the Department of Consumer and Corporate Affairs do some kind of monitoring. Unfortunately the department would not have the legislative power to do that if the controls are removed by June 30. Then, the hon. member for York-Simcoe would subject union contracts and collective agreements to a 30-day delay and have cabinet consider them and roll back excessive settlements. If he had wanted to devise a system to tie up cabinet and make it totally impotent he could not have found a better scheme.
The ultimate weapon would be that, having started with a measure enforcing orders by the Anti-Inflation Board, the legislative carpet would then be pulled from under them.
And finally with point number four he offers a return to wage and price controls. He indeed demonstrates how to go around in circles without even trying hard. That is the only way I can describe the effort of the disciple, the hon. member for York-Simcoe. That is the essence of his exercise in policy making in the late 1970's-economics of perhaps 20 or 30 or 50 years ago. What a disaster, Mr. Speaker! I could not believe my ears. The Conservative party missed an opportunity to offer alternatives when, as persons interested in the wellbeing of this economy, we were looking forward to hearing their alternatives.


Sinclair McKnight Stevens: We'll explain it to you sometime.


Sinclair McKnight Stevens: Let us hear yours.

June 16, 1977
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Charles L. Caccia: Ours may not be perfect and we admit that, but at least it works and has been accepted by Canadians. At least the NDP offered a basic definition of principles typical of that party, although we do not share them. 1 was puzzled by the idea of a national incomes policy because, as I understand the meaning of the phrase, it would mean interfering with the collective bargaining process and then having to come back to something similar to what is already in place now. In essence it would mean that by June 30 we should do away with something that has proven itself and which we are trying to improve-and replace it with something that requires a fundamental change in our economic and social structures, structures that we are far from having reached, as the hon. member for Halifax said. The alternative put forward by the NDP was a nice exercise in theoretical analysis of what could be done in outer space, but it is something that cannot be done in Canada in 1977 A.D.
I am tempted to think that if the NDP were not so strongly supported by strong organizations they would freely and happily support the policy we now have through the Anti-Inflation Board. This is really a form of economic controls and economic planning that they would otherwise be quite happy to endorse, but which they apparently cannot for reasons of their own.
I have already outlined briefly why we adopted controls and what we said in 1974. It can be claimed that controls have served Canadians well, otherwise they would not have the support of the population which the hon. member for Halifax referred to when he spoke of political convenience on our part. Instead, from our point of view, from the rough beginnings in October and November of 1975 we have come a long way in developing a consensus and acceptance of these measures across the country, when at that time it almost seemed as if we were reaching for the impossible and when we were very unpopular for doing so.
The opposition seems to forget that this government had the courage and determination needed to introduce a measure which it knew would be highly unpopular in the beginning. It was very hot in the kitchen at that time, being criticized here everyday and every weekend in the riding, but 20 months later we are reaping the benefits of that approach.
It seems to me that we should not end controls at this point. They were introduced because we had an emergency in inflation. When inflation hovers around 6 per cent or 7 per cent and is accompanied by high levels of unemployment, the emergency continues to exist as long as we have high levels of unemployment. There is therefore good reason for continuing the controls, not only until the end of 1978 but beyond that if unemployment remains high.
It begins to be quite clear that inflation at the rate we know it is standing in the way of the creation of new jobs and the reduction of unemployment. There is a link between the two- a necessity to bring down inflation in order to bring down unemployment. Anyone in this House who urges the government to do something about unemployment but who does not support its policies to bring down inflation is forgetting this
essential link in the economic conditions of the seventies which are different from the economic conditions and symptoms of previous years.
I would urge the Anti-Inflation Board to be more conscious of fees and executive salaries, however. This is an area in which we seem to have failed, at least partially, to exert the controls that have been exerted on other sectors of the population. The Anti-Inflation Board must do a better job in this area.
I also think we must have a program of income support for the low income earners. They get the short end of the stick and are more intensely affected in inflationary times. There are the groups that suffer during a prolonged period of inflation both in rural Canada and the industrial areas. An income support program would help them make ends meet.
Controls are a measure that result from a new set of economic conditions in the world, not only in Canada. We see the controls as a bridge to a new approach to the solution of economic problems. We are searching for the answers and, in doing so, have put in place this policy which will provide us with breathing space and permit us to devise the new levers we shall need to deal with a new economic order.
The Conservatives will continue to speak of our free market place, and God bless them for it! That is the kind of dinosaur approach we shall gladly leave with them. I say to them, have a good trip. So long as the Conservatives believe in the free market place they will remain in opposition.
As for the NDP, it continues to speak of a fully planned economy. We, as Liberals, believe in a flexible approach. We like to find an answer which comes between those two extremes. Though it may be difficult to find, I am confident that, given time and the opportunity, we shall find it.
The emergency which existed in late 1975 led to the introduction of this program, which has'had an impact on inflation. The emergency exists so long as we have high unemployment. How are we to bring down unemployment? We can do it, I suggest, by introducing policies which will lead to a disciplined economy, to confidence in the economy, to a stable economy, and therefore to a climate of confidence which will induce investment in the economy. That is where we differ from the Progressive Conservatives.
We believe that if we have a smoothly working system of controls we will have discipline in the economy, and that entrepreneurs will be ready to expand their operations. They will have confidence in the future of our economy and so will provide the investment we need in order to create new jobs. If we do as the Conservatives say, our future will be uncertain, for no one will know what the inflation rate will be in three months, or six months. If we adopt the kind of scheme the hon. member for York-Simcoe (Mr. Stevens) proposes, we would give the private sector the excuse not to invest and to expand this economy, an expansion we need to create new employment.

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We all know the effects of inflation. They make us less competitive with other countries. Therefore inflation endangers our jobs at home and makes us less able to sell our products at home and abroad. Second, inflation shifts purchasing power from low to high income groups. That is why I spoke earlier about the necessity of income support programs, or a guaranteed income for lower income groups such as the Minister of National Health and Welfare (Mr. Lalonde) has advocated in recent years.
If we adopted the proposal of the hon. member for York-Simcoe, within a short time the official opposition would scream about high wage settlements. They would raise hell about it. They would be the first to complain of high wage settlements. As for the NDP, if we do what they suggest, what would happen? They would scream about high profits and high prices. Mr. Speaker, the reaction would come from the other side of the House. The opposition would criticize, and within a short time would ask the government to enact corrective measures.	.
We Liberals will stand up and vote against this proposal because we want to protect unorganized workers, to protect pensioners and all those not represented by strong groups in society, those who are hardest hit and most devastatingly affected by the evils of inflation. We believe that the government's policy and program, imperfect though they may be because of shortcomings, are by far the better approach, and serve the interests of Canadians better than would the adoption of the proposal the Conservatives have put forward today for debate.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, 1 am glad the hon. member who just resumed his seat intends to vote against the motion. I would not want to be on his side, for 1 do not agree with his arguments on this important subject.
I wish to lend my support to this motion because I do not believe there is a legitimate reason for retaining controls, with the possible exception of standby controls which may be needed if something unusual happens in the economy. Any value the controls may have had initially is now exhausted. 1 myself did not feel controls should ever have been instituted, and certainly not in the present situation. We were not at war, as we were in the 1940's. In the war years controls were necessary, I feel, though experience then indicated that disparities and inequities were the result.
There are many reasons for lifting these controls. Some suspect the Prime Minister (Mr. Trudeau) and the government of wanting ever-increasing controls to remain part of our economic and social future. The Prime Minister's statement, in his now famous speech delivered before Christmas, 1975, to the effect that the free market is no longer operating and could not be allowed to function has been received unfavourably almost by everyone. It must have been a severe blow to the Prime Minister when the federal green paper on decontrol said, "It is the wish of most Canadians to maintain and strengthen this mixed economy with the great preponderance of economic decisions taking place within the private sector. That statement was supposed to reassure those who were
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afraid controls would be made permanent. Nevertheless, many in this country are growing increasingly afraid that the government will so like controls it will keep them in place indefinitely.
Again, the green paper on decontrols had this to say: "The challenges of operating a healthy and stable economy without mandatory controls must be met."
Canada is not only in serious economic difficulty but in serious political difficulty. Yesterday I noticed a newspaper report saying that Mr. Laurin, the Quebec minister in charge of Bill C-l, suggested that even if 23,000 jobs are lost in the province of Quebec, it is the risk the province may just have to take if it is to realize the broader social goals of its language bill. It shows how sincere is the desire for political independence in Quebec, and how sincerely the present government of that province is willing to pursue it.
Once more we confront the serious problem of unemployment. The headlines in yesterday's Montreal Gazette note that the jobless gap is growing wider between Quebec and the rest of the nation. One article said 274,000 people in Quebec are without a job now, as compared to 215,000 one year ago. There are in Canada, according to the last statistics published in May, 824,000 Canadians out of work, something like 116,000 more than one year ago-and this despite the substantial numbers of people who have dropped out of the labour force and are not even counted.
According to yesterday's newspaper, Mr. Parizeau, the Quebec minister of finance, said his government will seek a simple and elementary economic association with the rest of Canada if Quebec secedes. He told a group of economists at Fredericton that the Quebec and federal governments are like two boxers dancing round each other in the ring without striking any blow. He is quoted as saying, We do not know how long this circling will continue but at some point confrontation will appear and, Mr. Speaker, it will not just be politics or your political institutions that will be affected. It will also be our economy and our whole ability to carry on the economic base on which the money services of our country is set." He went on to list some of the great problems at the federal-provincial level which Ottawa causes, because of a lack of consultation. He remarked on the problem of Hydro Quebec trying to set income projections for that utility, and he noted that Ottawa's regional development policies in Quebec have left a general impression of failures. So much for the DREE efforts of Mr. Marchand, who boasted of the many millions of dollars his department had put into areas around his riding.
Then there are the pronouncements of senior civil servants who are getting into the act on what is good for the country. We find Mr. Johnson of the CBC stating that only massive expenditures through the CBC can keep the country together. He wants to make it the principal cultural force in the battle for Canadianism. He is quoted as saying: "I am going to be as fighting, aggressive, bold, loud and as honestly nationalistic as I am capable of being." But his main contentions, if followed,

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would mean an enormous increase in the amount of money that the taxpayers spend on their CBC. If anything can be called a failure in Canadian institutions, surely it is the CBC. Are we going to follow this route and further enormously expand a government body that is obviously a failure?
Senior civil servants also seem to be getting into the act in an unprecedented way. Mr. Gordon Robertson, in a memorable speech in Halifax on Canadian unity, has been fashioning a hair shirt for the Anglophones in this country and accusing them of being the cause of Canadian disunity, and Mr. Shoya-ma has taken to the public media to denounce politicians in Alberta and Quebec for speaking out on the oil issue. These are statements from powerful civil servants such as we have never heard before in our country.
Now for the Minister of Finance (Mr. Macdonald). I do feel a little sorry for him. Mr. McGillivray, writing in the Gazette of June 3, said that if the minister quits this year he will have made less of a mark on Canadian fiscal history than any other finance minister since Mr. Nowlan, who didn't even have time to present a budget. Why has he been destined to get a footnote instead of a chapter in the history of Canada? Well, he has had his problems. There is a mood of public pessimism and a loss of confidence in the government. There is a demand for restraint in government spending and we are faced with a huge budget deficit. With unemployment at about 8 per cent and with a huge balance of payments deficit the minister does have his problems. But he seems to have been only a caretaker finance minister, a reluctant dragon acting as a temporary incumbent who has not had the time or opportunity to launch new policies or initiate new strategies. Certainly his role has seemed to be to defend policies rather than make them.
The wage and price controls program has been the policy of the Prime Minister yet it is for this that the time spent by the minister in the finance department will be remembered. It was the Prime Minister who said that controls should stay on until the next election, and the minister stated he was just a simple soldier, implying that he took orders rather than gave them. When the minister goes this year his successor will inherit a $7.2 billion budget deficit, a dismal combination of high unemployment, high inflation, and a bureaucracy which has run out of ideas. It is obvious there are severe constraints on the government's ability to manage the economy and that it is time for changes and for bold action.
And what about the record of inflation? The primary cause of a reduction in inflation has been the reduction in the price of food at the farm gate brought about by bountiful harvests and a readjustment of the commodities markets around the world. The government can take no credit for this and, furthermore, prices of imported goods receded.
There is growing up a widespread feeling that anti-inflation measures tend to favour one group over another. The idea that some can receive much more than others does not sit well with the public. The fact is that more capital investment is leaving Canada than is entering after decades the other way around. Wage and price controls can only be a short term thing, supplementary at best. John K. Galbraith, for example, makes

it clear that an income and price policy does not replace a monetary and fiscal policy. He states:
It supplements it in that part of the modern economy where market control of prices and incomes has given way to private administration and where restraint on aggregate demand brings not lower prices but brings unemployment.
Our own Simon Reisman has stated:
Controls can provide time in which to re-establish sound monetary and fiscal policies. They establish a political framework in which governments can constrain wage pressures from their own large and growing public service unions.
Milton Friedman states:
There is no problem about how to stop inflation. We know how to do it. Every economist knows how to do it. I can specify it very simply. The only way to cure inflation is for the government to spend less and print less. The only way to cure inflation is to hold down the growth in the quantity of money. There is no other way to do it. There is no other device which will enable us to slow down inflation. The problem, however, is not how to stop inflation. The problem is to have the political will to do so.
We are faced with a sluggish economy. We are faced with the fact that we can become addicted to controls and use them as a convenient crutch, as an excuse in handling tough business decisions. We have become uncompetitive in world markets in fields in which we have traditionally been effective participants. A continuing control program can only heighten ineffi-cencies and make them even less competitive.
It is now agreed by all, even by those who support controls, that in the long run the retention of controls will seriously reduce the investment necessary to produce the new jobs down the road.
The stock market has not responded to the budget as it should have done, partly because profit margins are being contained by the AIB investment rules. There are many disadvantages to the AIB operations. It has to use rollback power. It has to give the impression that it is controlling wages. But it is very difficult to be fair in all aspects. The long Thompson dispute showed the difficulty of equating increases in wages in the historic wage pattern enjoyed by workers in Thompson as compared to those in Sudbury. The longer the anti-inflation controls remain, the more distorted our economy will become. Mr. Earle McLaughlin, ex president of the Royal Bank of Canada, said in January: "Let the government declare the war won and jettison the entire AIB apparatus, and, the sooner the better."
There is little convincing evidence that prices and costs are very much different now than they would have been in the absence of the control program. Government policy may have helped to sustain economic activity in Canada during the past two or three years but the United States far outpaced Canadian growth in 1976 and probably will have a considerably better economic performance this year. The United States does not have a control program at this time but the recession was much more effective in reducing inflationary expectations than was Canada's anti-inflation program. Consumer prices, including food, rose in 1976 by 9.5 per cent in Canada compared with 6.6 per cent in the United States. Wage settlements rose by about half of the Canadian increases in the past four years. So there is -grave doubt as to whether the action of the
June 16, 1977

government has materially helped to reduce inflation in Canada.
Mr. Speaker, it was our party only which voted against the government on third reading of both Bill C-73 and Bill C-89 and I am happy it has taken advantage of the procedure which provides for this motion to be debated. There has been a significant deterioration in the inflation picture. The consumer price index is rising at a higher rate now than at Christmas, and other price indices show that controls no longer contain inflation. Mr. Turner, the previous finance minister, announced that there was a restraint program in effect since June of 1975, but the main federal spending estimates have increased by 28 per cent. Since that time the narrow measures of money supply increased by 16 per cent while wider measures record increases of 31 per cent; that is Ml and M2. Controls no longer work, and federal restraint is non-existent.
If the federal government and the provincial governments control the money supply in a reasonable way, increases in the public sector will be dampened by the high degree of slack in the economy. This should result in a slowing of wage and price demands and accordingly a lower risk of a renewed wage and price problem. Certainly we need business recovery and business investment, and to ensure this the administration must adopt a proper fiscal stance. There is no doubt about it that the AIB must be regarded as of importance in assessing one's business decisions.
As a professional myself who has had to report to the Anti-Inflation Board, I can vouch for the complexity of the forms that have to be filled out to meet even minimum compliance. They were so complicated I could not even begin to fill them out. It cost $1,000 to fill them out to comply with the so-called protected category. The professionals and selfemployed have a so-called ceiling of $2,400 which may be exceeded if there is more productivity-again something very difficult to prove but one which annoys very hard working people who find themselves held to a much smaller rate of increase. This ceiling has created a great deal of unhappiness and a feeling of frustration among working people.
My colleague, the hon. member for York-Simcoe (Mr. Stevens), has put forward suggestions by which our party might establish a reasonable decontrol program and which would, I think, be an improvement on what the green paper has suggested. The Prime Minister has mentioned the need for business and labour to meet and to reach decisions that will decrease the inflation process and deal with price problems. But this consultation process should be much larger than just large labour and large business. It must include consumers and producers and more junior governments, both provincial and municipal. I will not dwell on these suggestions which I think bear merit and might well be incorporated into government measures. But, Mr. Speaker, all will come to naught unless the governments make fundamental changes as compared to what they have done in the past.
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Someone has said that since the era of Alexander the Great wars always created inflation. The one thing they have in common is massive intervention in the economy by the government. Up until recent years, inflation occurred in western nations whenever wars existed and it was necessary for governments to take into the economy many hundreds of thousands of soldiers and those who worked in the munitions factories, whether they made guns or swords.
But in recent years in western democracy there has grown up a new phenomenon-the massive transfer of funds to government agencies for our many welfare and socially oriented programs. These programs are obviously very acceptable and do a great deal to alleviate harsh social conditions, but they also seem, when carried to extreme, to be a potent factor for increasing the inflation rate in the economy. The last ten years have seen a massive increase in these social programs as they rush toward maturity. It is probably safe to say that many of these programs were not seen to be expensive when they were put into effect. Introduction of the old age pension and Canada pension along with the rapid increase in inflation made the value of savings extremely doubtful, at least for bonds, trusts, and the usual form of savings instruments.
The government has just recently brought into the House a measure to tax savings in insurance companies. Although the tax may not be retroactive, it already shows how government action can interfere with the long term plans of the individual and erase much of the savings that he might have expected to accrue. On strictly ethical grounds it probably can be justified but it makes reliance on long term savings more doubtful. It becomes obvious to the individual that he cannot plan ahead. If he does, almost certainly the government will change the rules of the game and he will find he is quite severely penalized. The inflation rate increases the doubtful value of savings and hence makes us a consumer group of citizens- better to take a foreign trip than to save money which steadily loses its value. This probably is one of the reasons why our foreign trade deficit in tourism is so high. Therefore the percentage of the GNP which the government takes must be carefully regulated. Obviously, if it takes too much, productivity will decrease because the worker will work less and less.
Recent figures indicate that the government's share of the GNP may have stabilized. It is to be hoped that this is so. I think one of the most important weapons in the fight against inflation is that governments not take more than they have from the GNP. Otherwise we will be in trouble.
There are a good many obvious causes of inflation, but the prime one is government policy and government practices, either directly by spending, borrowing or control of the money supply. There are also myriad government rules on business operations and the cost of complying, as well as indirectly by nudging up pay scales, such as minimum wages, and finally if wages rise faster than the value of goods and services produced.
While I have said that in the past wars took most of our money, today our welfare and social programs are taking up the slack. We are enjoying many of the things we have
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promised ourselves such as medicare. These social programs are very good, but when their cost exceeds production it can only aggravate inflation. The most important factor in controlling inflation is obviously control of government expenditure, and it must be controlled at a reasonable rate or the GNP will be exceeded and inflation will result.


Stanley Howard Knowles: Ten o'clock.


Walter David Baker: Mr. Speaker, I rise on a point of order. Earlier there were discussions with the government House leader and the House leader of the New Democratic Party, and again tonight with the hon. member opposite, with respect to the hours of sitting during the course of this debate on the statutory order, and it has been agreed that on days when the House sits in the evening the debate will end at ten o'clock. I think my colleagues will confirm that.


Stanley Howard Knowles: Yes, Mr. Speaker, that is the understanding we reached, namely, that we would adjourn tonight at ten o'clock and that we will do the same on Monday night.


Crawford Douglas: Mr. Speaker, that is the situation as explained to me by the parliamentary secretary to the House leader, and I am in agreement.


The Acting Speaker (Mr. Ethier):: Is it agreed that the House adjourn this debate at ten o'clock?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: It is agreed and so ordered.
It being ten o'clock this House stands adjourned until tomorrow at 11 o'clock a.m., pursuant to Standing Order 2(1).
At 10.01 p.m. the House adjourned, without question put, pursuant to Special Order.

Friday, June 17, 1977