1977-02-04

ROUTINE PROCEEDINGS


Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. I have been a member of this House for four years and have never risen under Standing Order 43 before now because in most cases I feel the motions do not accomplish very much. However, in this particular case I think this matter is very important.
On December 23 of last year a large oil tanker spill occurred covering some 50,000 plus miles of the shoreline of Georgian Bay, and the many islands there. In view of past representations to the Ministry of Transport and a recent petition to the Prime Minister containing over 2,000 names which he personally received, I move, seconded by the hon. member for Perth-Wilmot (Mr. Jarvis):
That this House direct the federal government to prohibit the winter passage of oil and gasoline tankers through Georgian Bay so that the potential environmental and economic disaster which would arise from a spill of greater magnitude may be prevented.


Mr. Speaker:: Order, please. Such a motion can be presented for debate in this House only with the unanimous consent of the House. Is there unanimous consent?
Some bon. Members: Agreed.


Some hon. Members:: No.


LOTO CANADA
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. In view of the fact that almost two months have elapsed since I brought certain difficulties to the attention of the government with respect to Loto Canada, and in view of the fact that investigations by the police into both Loto Canada and its predecessor have not yet
prompted any official response by the government, I move, seconded by the hon. member for Provencher (Mr. Epp):
That the minister responsible for the operations of Loto Canada make a formal statement on motions at the earliest opportunity outlining the difficulties which he knows, or ought to know, exist within the administration of Loto Canada, and measures to correct them, in order that public confidence will be maintained and this organization can function as was intended; in other words, that the government act soon before it has to react.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NORTHERN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I, too, rise on a matter of urgent and pressing necessity arising out of information on CBC news this morning that the drilling blowout last summer which occurred in the Beaufort Sea came about as a result of eased requirements on the drilling procedures granted to Dome Petroleum.
Given the risks involved in the project as proposed, given that the amended drilling procedures were authorized without reference to the minister responsible, that the accident caused the death of one man and serious injury to another and that this information was not available at the time of the inquest into the accident, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this matter be referred to the Standing Committee on Indian Affairs and Northern Development and that the committee be asked to investigate this serious accident.


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


Some hon. Members:: No.

February 4, 1977
Transport


MANPOWER
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise on a matter of urgent and pressing necessity pursuant to the provisions of Standing Order 43. Since Phase I of the Canada Works Program has a deadline of February 4, which is today, for applications to be postmarked, and since this program is directed at areas of high unemployment and many of these target groups live in remote areas of Canada and have not had an opportunity to be briefed on the program nor to submit applications, I move, seconded by the hon. member for Pro-vencher (Mr. Epp):
That this House give unanimous consent to extending the deadline for applications to February 18, 1977, in order that remote areas may have an equal opportunity to participate in the program.


Mr. Speaker:: The motion can be presented to the House for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


TRANSPORT
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, under Standing Order 43, I ask for the unanimous consent of the House to put a motion on a matter of urgent and pressing necessity.
Considering that the negotiations between Quebec City and Ottawa concerning the transfer of certain wharves to the jurisdiction of the Quebec government do not seem to be progressing, I move, seconded by the hon. member for Rober-val (Mr. Gauthier):
That the House urge the government to accelerate the negotiations to conclude an agreement before those wharves be hopelessly damaged.


Mr. Speaker:: Order, please. The House has heard the motion of the hon. member. Under Standing Order 43, such motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.
Some bon. Members: No.


Mr. Speaker:: There is no unanimous consent; therefore the motion cannot be put.


PENSION ACT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, under the provisions of Standing Order 43, I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That this House urges the government to introduce an amendment to the Pension Act to provide for pro-rata pensions to be paid as of right to widows of veterans whose disability pensions were less than 48 per cent, as recommended in the Woods Report, in the Hermann Report, and in several reports of the Standing Committee on Veterans Affairs and, as urged very strongly by the Royal Canadian Legion, the Army, Navy and Air Force Veterans in Canada, and other organizations representing the veterans of this country.


Mr. Speaker:: Such a motion pursuant to Standing Order 43 can be presented to the House only with its unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


COMMUNICATIONS
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, pursuant to Standing Order 43 I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity. The motion concerns the application made to CRTC by Mr. Colin Jamieson, of St. John's, in the name of Beothic Broadcasting, for a licence to operate a 25,000 watt AM radio station in St. John's on the 850 frequency, with the matter set down for hearing on March 1, with unusual speed.
In view of the fact that Colin Jamieson is a brother of the Secretary of State for External Affairs and manager of CJON radio and TV in Newfoundland for many years, and in view of the fact that the Secretary of State for External Affairs owns 49 per cent of the CJON radio and TV empire in Newfoundland with a total of 25 TV transmitters, six AM radio stations and with licences now issued for nine FM radio stations, I move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That this House direct the CRTC that the said application of Mr. Colin Jamieson be rejected because of the dangerous concentration of ownership and control of the telecommunications media in Newfoundland in one family and in one political affiliation and because of the obvious conflict of interest implications in connection with this application.


Mr. Speaker:: Order, please. Such a motion requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: No.
February 4, 1977



ORAL QUESTION PERIOD

['Mr. Speaker, applications are coming in very rapidly from all parts of the country and I am keeping a day to day telephone watch on the situation. I expect a large number of applications to arrive by or on Monday, February 7. I think I would prefer to look at the situation at that time. I think that in isolated areas of the country there is a problem. Program officials have been instructed to accept late applications in those circumstances. However, I think I will be in a better position on Monday, when I have seen how many applications we have, to make that announcement.']
Mr. Speaker:: The hon. member for Perth-Wilmot (Mr. Jarvis).


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my questions are for the Minister of Fisheries and the Environment. I believe he is on his way to the Chamber, so I wonder if Your Honour would recognize me later in the question period.



Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. Is the minister in a position to tell the House whether a decision has been made with regard to extending the deadline for the Canada Works Program and the Young Canada Works Program in areas of high unemployment where the rate of application has been unusually slow due to the fact that application forms were in the constituencies for less than three weeks? In my opinion, there has not been sufficient public relations.


Hon. Jack Cullen (Minister of Manpower and Immigration):: Mr. Speaker, applications are coming in very rapidly from all parts of the country and I am keeping a day to day telephone watch on the situation. I expect a large number of applications to arrive by or on Monday, February 7. I think I would prefer to look at the situation at that time. I think that in isolated areas of the country there is a problem. Program officials have been instructed to accept late applications in those circumstances. However, I think I will be in a better position on Monday, when I have seen how many applications we have, to make that announcement.



NORTHERN AFFAIRS


Walter (Wally) Firth: Mr. Speaker, may I direct some questions to the Minister of Indian Affairs and Northern Development arising out of the news report on CBC radio this morning concerning the accident which took place at the Dome Petroleum drilling site in the Beaufort Sea? Apparently some drilling authority had been changed or amended, and this eventually caused an explosion. I ask the minister to confirm if his department yielded to pressure from Dome Petroleum, one of the major oil companies involved in oil exploration in the north, as a result of which a blowout occurred, killing one man and injuring another.
Oral Questions


Hon. Warren Allmand (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I was only made aware just before the question period of the CBC radio broadcast in which these allegations were made. I will have to investigate to see whether those allegations are correct, and report in due course.


Walter (Wally) Firth: A supplementary question, Mr. Speaker. This matter raises serious questions regarding the chain of command and accountability within the department and, in addition, about the competence of Dome Petroleum and the general risks involved in drilling for oil in the Beaufort Sea. Will the minister refer this matter to the Standing Committee on Indian Affairs and Northern Development and not grant further permits for drilling in the Beaufort Sea until this matter has been resolved?


William Warren Allmand: Mr. Speaker, during the winter we are to undertake a complete review of the Dome Petroleum drilling in the Beaufort Sea, which review will include consultations with communities in the Beaufort Sea area. Once that review has been completed we will decide whether to tighten up procedures or control drilling to a greater extent than we did last year. The hon. member asked that this matter be referred to the committee. I would not be prepared to recommend that course now, because I should like to see the result of the review process which has been set up, a process which is public and open.


Walter (Wally) Firth: A final supplementary question, Mr. Speaker. After the risks involved in the process by which permits have been granted have been reassessed, will that assessment be made public, and if not, why not?


William Warren Allmand: Mr. Speaker, I think they will be made public. It is our intention to make them public.



POSSIBILITY OF RELAXATION OF REGULATIONS GOVERNING DRILLING IN BEAUFORT SEA-RESPONSIBILITY FOR AUTHORIZATION

Mr. Doug Neil (Moose Jaw):: Mr. Speaker, may I direct a supplementary question to the Minister of Indian Affairs and Northern Development? Am I correct in assuming that if there was a relaxation of regulations, the authorization for such relaxation did not come from the minister or his predecessor?


William Warren Allmand: Mr. Speaker, I cannot answer with respect to my predecessor until I look into the matter, but I did not give authority myself to relax the regulations.

February 4, 1977
Oral Questions



MANPOWER


Joseph Adrien Henri Lambert: Mr. Speaker, my question is directed to the Minister of Manpower and Immigration.
Today, February 4, is the deadline to apply for the "Canada Works Program" and several promoters have not yet completed the preparation of their projects. Considering these facts and the fact that, according to the information we received yesterday, the projects will not get under way before next April, would the minister be prepared to consider extending the limit by a few days to enable the promoters of projects to submit them within the prescribed time?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I shall have to study the Figures next Monday.



ABORTION


Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I wish to direct a question to the Minister of Justice along the lines of one I asked earlier in the week arising from the Badgley report on abortion. I point out that we have ten people in Statistics Canada working exclusively on abortion statistics, abortion laws and how they are working in various countries of the world as well as in Canada. Is the minister now prepared to tell the House why it was necessary to tell Dr. Badgley to report on abortion particularly when we have studies of this nature and the study of the Department of Health? What has been the cost of such a report and when will it finally be produced?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, the terms of reference of the Badgley committee will clearly demonstrate that their examination goes away beyond what is prepared and published by Statistics Canada. There is a budget for the Badgley committee. I will have to take note of that part of the question to see what the actual expenditures of the committee are as of now. I have not yet received the committee's report, but I understand that I am able to make arrangements for its publication and tabling within two weeks.


Eldon Mattison Woolliams: Is the minister really aware of the research being done along the lines he is talking about, the terms of reference of the Badgley report, by Statistics Canada. Is he aware of the studies going on in the Department of Health, something that I raised in the House before Dr. Badgley was asked to report on this matter? Would the cost to the taxpayer, at a time when the Minister of Finance is mentioning the word
(Mr. Allmand.]
restraint, be close to $2 million for something we already have on the record in various departments?


Stanley Ronald Basford: Mr. Speaker, the terms of reference of the committee were drawn up by a group of officials representing not only my own department, but the Department of National Health and Welfare and Statistics Canada, all of whom were familiar with work already done or under way in order to assure that there would be no overlap. The figure of over $2 million is a gross exaggeration. I do not know where the hon. member got that figure. As to the possible costs of the Badgley committee and the purpose of that committee, I have said many times it will hopefully provide a basis of analysis for a rational discussion on abortion law. The hon. member has asked many times about the abortion law and made a number of statements about it, all of which would be helped by a rational analysis.


Eldon Mattison Woolliams: In light of the fact the minister said the figure of $2 million might be some exaggeration, he must know the true figure. Maybe that figure includes the cost of material prepared by Statistics Canada, the costs of the Department of National Health and Welfare and the Badgley report. If the minister says the figure is wrong, he must have the true figure.


Stanley Ronald Basford: As I recall, Mr. Speaker, the original budget set aside for the Badgley committee, as an estimate, was $500,000. I will want to check as to what the actual expenditures are and report back to the House.



CONSUMER AFFAIRS


Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. The Minister of Agriculture said that we already have a national food policy and do not need a new one. The Minister of Consumer and Corporate Affairs has declared publicly that we do not have one and that we need to develop one. My question to the Minister of Consumer and Corporate Affairs is this: Has he been able to convince the Minister of Agriculture that we can have a national food policy that takes into account the necessity of orderly marketing of farm products vis-a-vis marketing boards and so on and at the same time protecting the Canadian consumer? In other words, in spite of opposition from the Minister of Agriculture, is the Minister of Consumer and Corporate Affairs going ahead with developing a national food policy for Canadians?


Hon. A. C. Abbott (Minister of Consumer and Corporate Affairs):: Mr. Speaker, I have not seen the quote attributed to the Minister of Agriculture. He and I have had several discussions, both of us perceiving the need for a national food policy. Probably the Minister of Agriculture, with a good deal of justification, believes that the sound, sensible policies of his
February 4, 1977

department are the basic platform on which any national food policy would be built.



AGRICULTURE


Mr. Ken Hurlburt (Lethbridge):: I will direct my supplementary to the Prime Minister. Due to the fact that the Minister of Agriculture's concept of marketing board supply-management for cattle has been rejected by the western stock growers, and again in my own towns of Milk River and Lethbridge, Alberta, on Wednesday of this week, would the Prime Minister assure the House that he will instruct the Minister of Agriculture upon his return from Lethbridge to cease forthwith the promotion of this scheme for cattle before he does any more damage to this important industry?


Right Hon. P. E. Trudeau (Prime Minister):: I will be glad to convey the representations made by the hon. member to the Minister of Agriculture.



APPLICABILITY OF GUIDELINES ON INTERNATIONAL TRANSACTIONS TO CROWN CORPORATIONS

Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the Prime Minister and it arises out of the guidelines issued on December 16 governing the activities of Crown corporations in their international transactions. Do these guidelines apply to all Crown corporations?


Pierre Elliott Trudeau: I would have to refresh my mind on it. I believe that in the statement there was a distinction made between the various Crown corporations under the Financial Administration Act. Some of them, like the CBC for instance, would not have occasion, I suppose, to fall under these guidelines. Certainly, the statement was meant to be general, though there may be some exceptions for Crown corporations in special sections.


James McPhail Gillies: I raise this question specifically in relation to testimony provided before a committee by the Minister of Finance concerning an area where they did not apply. Could the Prime Minister clarify this situation and perhaps make certain that all the Crown corporations which are operating in the international field, and involved in transactions similar to those engaged in by AECL, are brought under the guidelines?


Pierre Elliott Trudeau: Yes, Mr. Speaker, but I believe the hon. gentleman was suggesting that the guidelines of December could be applied retroactively which is not possible. However, the guidelines were meant to apply to corporations like AECL,
Oral Questions
and the Minister of Finance said that the question, as phrased, is a total distortion of what he said.


James McPhail Gillies: Again to the Prime Minister. The Minister of Finance said very specifically that the Prime Minister was not referring to all Crown corporations and it was totally in the context of the problems of AECL in its international transactions.


Mr. Macdonald (Rosedale):: That was pre-guidelines.


James McPhail Gillies: I want to know whether or not it is the government's policy that Crown corporations which are engaged in international transactions come under the guidelines as promulgated on December 16.


Pierre Elliott Trudeau: I find it difficult to discuss the hearings of a committee when I did not attend the committee or read the report on them. I do not know whether it is in order to discuss these committee proceedings in the House. The Minister of Finance insists that the hon. member is distorting the import of his testimony.



ADMINISTRATION OF JUSTICE


Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, my question is to the Minister of Justice and it has to do with the case against Brian Davies, the great pretender of the seals-


Some hon. Members:: Oh, oh!


Jack Marshall: -who was charged in a provincial court. The judge ruled the matter was outside his jurisdiction. Has the minister had an opportunity to review the findings of the court and can he tell us what action is to be taken to appeal, or take the matter to a higher level, so that it can be correctly dealt with in view of the fact that Mr. Davies deliberately contravened the Seal Protection Act.


Stanley Ronald Basford: A decision has been made by my department and the officials in the Department of the Environment to appeal the decision. I must admit I am not aware whether the notice of appeal has been filed.



FISHERIES


Jack Marshall: supplementary to the Minister of the Environment. Could the Minister tell us the nature of his reply to another humanitarian over in Sweden who offered $400,000 for the lives of the

February 4, 1977
Oral Questions
seals? Would he advise the House whether in his reply he told him to give the $400,000 to the starving children of the world?


Hon. Rom6o LeBlanc (Minister of Fisheries and the Environment):: There was a gentleman who communicated with me through the media. I responded in kind. I indicated this was obviously a decision which the fishermen themselves would have to make, but I thought the offer was low because it was $400,000 against an income of more than $2'A million. In fact, the gentleman in question has accepted my invitation to meet next Monday. I will meet with him, as I will meet with any group if I feel they are sincere. The problem is that in many cases they are misinformed. The seal is not an endangered species.
[DOT] (U30)
Ail hon. Member: You wouldn't say that if you were a seal.



INFORMATION


Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I should like to address my question to the right hon. Prime Minister. Was the Prime Minister accurately reported when he remarked that Canadians "don't need rights to governmental information enjoyed by U.S. citizens"?


Pierre Elliott Trudeau: Mr. Speaker, I understand there is some article or headline to that effect in the Globe and Mail. I am rather certain that that is a misquote. I did talk about the subject, but perhaps I will ensure that a transcript of what I said will be sent to the hon. member.


Francis Andrew Brewin: A supplementary question, Mr. Speaker. Is the Prime Minister aware that for some time a parliamentary committee has been looking at this question of freedom of information, has visited various European countries, has consulted with representatives of the United States government, but has not yet been able to report? Is the Prime Minister also aware that there is widespread concern in Canada as to why government information paid for by the people of Canada is so frequently kept secret?


Pierre Elliott Trudeau: Mr. Speaker, I do know of the work of this committee and I hope it will report to the House so we are able to study the matter in more depth. The government has stated that it is our intention to make submissions to that committee at an appropriate time.



ENVIRONMENTAL AFFAIRS


William Herbert Jarvis: Mr. Speaker, my question is for the Minister of Fisheries and the Environment and relates to a potential catastrophe caused by sub-standard oil tankers. In view of the fact that the new United States transportation secretary, Mr. Adams, announced on Tuesday stricter regulation of all tankers operating in U.S. waters, will the minister advise the House whether he plans to announce similar or identical regulations for tankers operating in Canadian waters; and what further concrete measures is he taking other than those announced by the Minister of Transport in the House on Tuesday last?


Hon. Romdo LeBlanc (Minister of Fisheries and the Environment):: Mr. Speaker, under the Shipping Act this is obviously the responsibility of my colleague the Minister of Transport. However, we have discussed this matter with our officials, especially those dealing with pollution matters at the Law of the Sea Conference, to see how international co-operation can advance faster than it has. Personally, I rejoice that the new United States Secretary of Transport is taking a more hawkish position on this issue.


William Herbert Jarvis: A supplementary question, Mr. Speaker. Bearing in mind that if our standards are lower than those in the United States we will inevitably find ill-equipped tankers diverted from U.S. ports to Canadian ports, is it the intention either of the minister of the environment or his colleague the Minister of Transport to engage in discussions with their U.S. counterparts in order that Canada and the United States can co-operate fully to ensure a common and comprehensive tanker regulation program? More preferably, would the minister, either directly or through his colleague the Minister of Transport, make representations to Mr. Adams and ask for Canadian participation in the newly formed marine safety task force in the United States to protect our common interests?


Roméo LeBlanc: Well, Mr. Speaker, it is obvious that in the matter of environmental protection our two countries have been working very closely together. In fact, as the hon. member knows, even within the previous administration there was a difference of opinion between the transportation interests and environmental interests in the United States. As I say, I rejoice that the new Secretary of Transport is taking a more hawkish view or more environmentalist view of this issue.
I tliink that international co-operation and agreement on tough standards is, in the long run, the only solution, as it has been in regulating transportation through the airways. For some reason this mystical freedom of the high seas, which was really a freedom or right of passage, has been extended to freedom to pollute, and I think every nation in the world must resist this movement.


Some hon. Members:: Hear, hear!
February 4, 1977


William Herbert Jarvis: A final supplementary question, Mr. Speaker. 1 welcome the minister's words, but I am trying to find out when he is going to turn from a dove into a hawk and whether the Minister of Transport is going to do something. If I may forget that non-answer, can I ask the minister, with respect to Canadian waters, whether he will advise what plans exist for the enforcement of present and future regulations in Canadian waters within the 200-mile limit so that accidents such as we have been experiencing lately will at least be minimized along our coastline?


Roméo LeBlanc: Mr. Speaker, the extension of the jurisdiction to 200 miles is an extension of fisheries jurisdiction. Whether or not eventually, as a result of the Law of the Sea Conference going one way or the other, nations will declare this type of jurisdiction for the protection of their coasts certainly remains open.



DATE OF INSTALLATION OF RADAR TO CONTROL MOVEMENT OF TANKERS THROUGH STRAITS OF JUAN DE FUCA- CO-ORDINATION WITH UNITED STATES

Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of Fisheries and the Environment. It is expected that supertankers carrying oil from Alaska will be travelling through the Straits of Juan de Fuca by next fall. Can the minister give the House any assurance that passage through the straits will be radar controlled by that time, and if the control system is not to be in place by next fall, when will it be in place?


Fabien Roy: Mr. Speaker, I would have to defer to my colleague the Minister of Transport because of the navigational aids involved. I understand that a fairly sophisticated system is envisaged if these tankers do sail through these waters.


Allan Bruce McKinnon: A supplementary question, Mr. Speaker. Due to the unusual treaty governing traffic in the Straits of Juan de Fuca wherein the U.S.-Canadian boundary is traversed freely by shipping, has the minister made any attempt to co-ordinate our traffic control regulations with the United States, bearing in mind their new and tougher regulations?


Roméo LeBlanc: Mr. Speaker, I would have to look at what has been done in terms of co-ordination, but I am convinced that we are working very closely with United States authorities. We realize, as they do, that an oil spill would not choose borders; it would go into our waters and their waters.



POSSIBILITY OF PROHIBITING TANKERS FROM ENTERING PARRY SOUND HARBOUR-GOVERNMENT POSITION

Stan Darling: Mr. Speaker, may I direct a question to the Minister of Fisheries and the Environment in the absence of the Minister of Transport? I am wondering whether the Minister of the Environment would inform me if a decision has yet been reached by the govern-
Oral Questions
ment to prohibit the shipping of oil by tanker to the harbour of Parry Sound and in Georgian Bay, taking into account the literally tens of thousands of miles of shoreline among the 30,000 islands which would suffer damage in the case of a major oil spill?


Fabien Roy: Mr. Speaker, I will have to take this question as notice. I am not informed whether the Department of Transport has made a decision.


Stan Darling: A supplementary question, Mr. Speaker. As the minister is aware, a petition was presented to the Prime Minister personally on January 25 and the Prime Minister has expressed very grave concern about this oil spill and what the possibilities of a future one will be. Imperial Oil has repaired that tanker and it is in Sarnia now loading up to head north through the Great Lakes, I believe today or tomorrow. We are hoping that it will be kept out of Georgian Bay.


Roméo LeBlanc: Mr. Speaker, I am certainly aware-I have been made fully aware-of a meeting which took place and which I believe the hon. member attended with my colleague the Postmaster General and my parliamentary secretary. I have also read the document that he sent. If he is asking me whether an answer is available right now, I have to tell him that I do not have an answer right now.



PROVISION FOR BOARDING OF TANKERS WITHIN 200-MILE ZONE-GOVERNMENT ACTION

Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I have a supplementary question for the Minister of Fisheries and the Environment. In light of the possible damage which could occur to fisheries resources, is it the minister's intention to impress upon his colleagues the need to amend the Canada Shipping Act in order to permit boarding of tankers that are within our 200-mile zone, in the same manner that the act was amended to permit us to board and examine tankers within the 12-mile limit?


Fabien Roy: Mr. Speaker, I am not an international law expert. I understand that we have that authority within the 12-mile limit. As I explained to one hon. member a little earlier, the provisions of the extension of jurisdiction deal with fisheries and fisheries matters only for the present time. Whether we will evolve to this type of regulation in the 200-mile zone will depend in large part on what happens at the Law of the Sea Conference in relation to pollution.



IMPACT OF POLLUTION ON FISHERIES-GOVERNMENT POSITION

Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is also for the Minister of the Environment. It refers to the twice expressed view that we are in a fisheries zone situation. Is the minister then denying that there is any relationship between pollution and the life of fisheries, and

February 4, 1977
Oral Questions
that therefore in the interest of Canada's fisheries we should not be dealing with pollution in terms of fisheries?


Fabien Roy: Mr. Speaker, I am obviously not denying that pollution has a great impact on fisheries, but I am telling the hon. member that the avenue of international co-operation is surely the route which must be followed at the beginning. It does not matter if you have jurisdiction over 200 miles and if at the 212th mile an oil tanker opens up and 6 million gallons of bunker oil pours out. It is obviously through international standards for tankers, their access to ports, etc., that we have to find a solution to this problem. If that does not happen, we will have to take other measures, as we did in fisheries.



AGRICULTURE


Mr. Bert Hargrave (Medicine Hat):: Mr. Speaker, I have a question for the Minister of Agriculture, but first I should like to welcome him back from sunny southern Alberta and in particular from the barnyards around Milk River. My question relates to the minister's three recent policy statements issued during the recess concerning the Canadian cattle industry, the first one on December 23 about off-shore beef import quotas, the second on January 4 when he announced his cow-calf policy for 1977, and of course, the recent federal cattle support price for 1976. Will the minister use his good office and his most persuasive manner to have these very important items referred to the Standing Committee on Agriculture for an adequate and very important debate?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I would welcome a debate on these items at any time. The hon. member should have been in Milk River and Lethbridge Alberta with me, where he would have heard the public debate there, as we did. I want to report through you, Mr. Speaker, to the hon. member that the farmers there were very receptive-


Some hon. Members:: Oh, oh!


Eugene Whelan: -and responsive, and those people at Medicine Hat were not really laughing at me-they were laughing at someone else who was there the week before. I want to say that I think all the programs are very well accepted. Today my officials have meetings with officials of the provincial departments of agriculture concerned with the cow-calf program. The other program on quarterly payments for stabilizing beef has been very well accepted and easily understood. I believe there is no difficulty understanding the quotas. They were clearly explained in the press releases, and we thought it was most urgent that the beef producing population of this country be informed.


Herbert Thomas (Bert) Hargrave: Mr. Speaker, surely if the program is that good, the minister would refer the three specific items to the Standing Committee on Agriculture.


Eugene Whelan: Mr. Speaker, I will discuss it with the House leader, but I understand the committees of the House are being overworked at present.


Some hon. Members:: Oh, oh!


Eugene Whelan: But there is nothing I would like better than to get it on the record of the House because I am so proud of what we are doing.


Some hon. Members:: Oh, oh!


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I have a supplementary question. Since the Standing Committee on Agriculture is not meeting, will the Minister of Agriculture stop all this fudging around, whether here or in Milk River, and make a concrete commitment now to ask his colleagues to refer the three items mentioned by my colleague, the hon. member for Medicine Hat, to the Standing Committee on Agriculture so that there can be a public and detailed debate, free of the additives which are the specialty of the Minister of Agriculture?


Eugene Whelan: Mr. Speaker, I will not use the words that were used to describe what the Leader of the Official Opposition was doing out west before I arrived there.


Some hon. Members:: Hear, hear!


Eugene Whelan: I want to say this, that members of the Standing Committee on Agriculture are members of several other committees of the House of Commons.


Some hon. Members:: Oh, oh!


Eugene Whelan: As I said, I would like nothing better than to get it before the committee because the proceedings of House of Commons committees are sent all over Canada and I cannot think of a better propaganda medium for me to use.


Charles Joseph Clark: Mr. Speaker, I have one final supplementary question to which a yes or no answer will do. Will the minister ask his colleagues to make that reference to the standing committee, yes or no?


Eugene Whelan: Mr. Speaker, I am surprised at the Leader of the Official Opposition. I hope he does not do that to his own members. I hope he does not tell them what they are going to
say.


Some hon. Members:: Oh, oh!


Eugene Whelan: He is trying to tell me what to say. Even if he asked the Prime Minister, he would find out that it is difficult to tell this minister what to say or what to do. I already said I would discuss it with my colleagues.
(Mr. Munro (Esquimalt-Saanich).]
February 4, 1977



ATTITUDE OF GOVERNMENT TOWARDS MARKETING BOARD FOR BEEF CATTLE WITH SUPPLY-MANAGEMENT POWERS

Mr. Jake Epp (Provencher):: Mr. Speaker, in view of the furor in Manitoba resulting from the objections of beef producers at having to vote for full marketing board powers for any beef agency that might be established by the Manitoba government rather than a beef agency without marketing or supply-management powers, and in view of the fact that in Manitoba the Minister of Agriculture has indicated that the federal government is also interested in supply-management of beef, can the minister now indicate clearly whether the federal government favours a beef marketing board with supply-management powers on a national basis?


Eugene Whelan: Mr. Speaker, I have said that there must be a better system for marketing beef, but I have also said I would not impose a beef marketing system on beef producers in Canada as R. B. Bennett did when he imposed the Wheat Board on wheat producers without a vote.


Some hon. Members:: Oh, oh!


Eugene Whelan: It will be up to the producers to decide. I understand that what is taking place in Manitoba is very democratic. They will allow farmers to vote on a program if they want. I am not telling the province of Manitoba what to do and I would not even tell the province of Ontario what to do, even though the minister of agriculture for Ontario is sitting in the galleries.


Some hon. Members:: Oh, oh!


Arthur Jacob (Jake) Epp: I would like to indicate to the Minister of Agriculture that it is not democratic and that is why farmers in Manitoba are in such an uproar. I would like to ask the minister very clearly whether the National Farm Products Marketing Board, through the agencies of the Department of Agriculture, is promoting a national beef marketing board, yes or no?


Eugene Whelan: I make no bones about my opinion of people running marketing boards. The marketing boards that are successful in Canada receive no federal funds and cost the taxpayers no money. Some people still think that I have a bottomless bucket from which to hand out subsidies for other efficient or inefficient operators in our country. I do not intend to continue to do that and I will encourage properly run marketing boards. Even the hon. member's leader said-I saw a quote of what he said-that he was surprised at how many people in Ontario were in favour of the supply-management system for beef.
Oral Questions TRADE



GOVERNMENT ACTION TO PREVENT CANADIAN COMPANIES AND BANKS FROM ASSISTING ARAB BOYCOTT OF ISRAEL

Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to direct a question to the Prime Minister. Given the continuation of Canadian companies and firms complying with the Arab boycott, and furthermore Canadian banks aiding and assisting in the Arab boycott, can the Prime Minister indicate to the House whether his government will be bringing forward legislation prohibiting Canadian firms and banks from complying with the Arab boycott?


Pierre Elliott Trudeau: A statement was made on this subject a couple of months ago. The hon. member might want to refer to it.



BANK ACT


David Orlikow: I have a supplementary question for the Minister of Finance. In view of the fact that the statement contained no teeth, can the minister say whether he is seriously considering including in the Bank Act, which he will be bringing forward, a clause which would prohibit Canadian banks from aiding the Arab boycott which they presently do by certifying through clauses in letters of credit compliance with the boycott?


Donald Stovel Macdonald: Mr. Speaker, I am prepared to consider that.



THE CANADIAN ECONOMY


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As the chairman of the Montreal exchange indicated, Quebec is heading into a recession this year and the Conference Board has indicated that real growth in that province will be only 2.3 per cent, the lowest of any province in Canada. Would the minister indicate if his departmental figures confirm this bleak outlook for Quebec in 1977?


Donald Stovel Macdonald: No, Mr. Speaker.


Sinclair McKnight Stevens: As the chairman of the Montreal stock exchange predicts there will be an acceleration of departures of corporate head offices from Quebec or the establishment of

February 4, 1977
Oral Questions
dual offices elsewhere resulting in still higher unemployment levels in that province, would the minister confirm if to the knowledge of his department there is any such exodus of offices from Quebec? Is his department at least monitoring the situation, and if so, does the minister feel that there is in fact any danger of an acceleration of this trend?


Donald Stovel Macdonald: The situation has been monitored so far as it can be, but the corporations are under no obligation to report a decision of this kind, and therefore it would be very much on the basis of public announcement. I just have to regard Mr. Dlouhy's statement as being altogether too pessimistic.



COMMENTS OF MINISTER CONCERNING LACK OF STABLE CLIMATE FOR INVESTMENT IN QUEBEC

Sinclair McKnight Stevens: Considering the unsatisfactory growth position in Quebec, would the minister confirm or deny his reported statement of this week that he must inform foreign investors of certain insecurities in that province, and if the purport of his remarks is correct, would he indicate in what way such comments will restore confidence and encourage needed investment in that province?


Donald Stovel Macdonald: I pointed out what I think is obvious to most hon. members of the House, and that is that there is some uncertainty in Quebec because of the political situation.



MULTICULTURALISM


Mr. Steven E. Paproski (Edmonton Centre):: Mr. Speaker, my question is to the minister in charge of multiculturalism. In view of the magnitude of staging a multicultural festival of choirs, which I must add was an excellent production and a success, and in view of the misunderstanding and irritation caused by the lack of funds to pay back the bank loan obtained by the worthy Dnipro Ensemble, the Ukrainian choir from the great metropolis of Edmonton, to travel to Ottawa from Edmonton to perform, is the minister prepared to announce assistance to fulfill the department's obligation?


Hon. John C. Munro (Minister of Labour):: Yes, Mr. Speaker. The Ukrainian choir, about which the hon. member is very concerned, is indeed very highly thought of by everyone who is aware of it and aware of the tremendous performance it put on when it was here. The choir was very helpful in terms of national unity and understanding, and also in terms of their participation in Hull.


Steve Eugene Paproski: Our sister city.


John Carr Munro: In view of that we are prepared to take care of the deficit.


Some hon. Members:: Hear, hear!



AGRICULTURE


Mr. John Wise (Elgin):: Mr. Speaker, my question is directed to the Minister of Agriculture. World prices of skim milk powder have fallen to a level of 10 cents a pound for feed purposes and to a low of 16 cents a pound for food purposes. In view of the fact that the present export levy of $1.35 per hundredweight has meant a sharp cut in the incomes of producers and has created in addition a debt in excess of $100 million against the industry and, unless the present policy is changed, could easily create an increase in the present levy of $1.35 to $2.00, is the minister giving serious consideration to policy changes which would substantially reduce the present export levy?


Eugene Whelan: Mr. Speaker, the dairy farmers of Canada have made that representation to us, as have some of the provincial governments through their provincial marketing boards. They are concerned about this problem. We are considering it, but we feel that there will be less need for a large levy because of the co-operation we have received from the provinces and from the dairy processing industry as a whole. More milk is being directed to specialty products, of which consumption is continually rising. So we are looking at that, but we do not feel that we will have the surplus of skim milk powder we had last year. In fact, we know we will not. For instance, at the end of the dairy year last year we had over 330 million pounds of surplus skim milk powder; at the end of this dairy year we will have approximately 110 million pounds. That is still not desirable, but it enables us to continue our food-aid programs, etc. None of this unsold powder which we have on hand is very old, so we look forward to a much better dairy year, and all these things will be considered in the new program for this year.


John Wise: Since a large percentage of the $150 million debt was caused by over-production as a result of intent and design, errors in planning, mismanagement, over-reaction and miscalculations by this government, has the minister made recommendations to the government with regard to assuming the responsibility of at least a portion, if not all, of this debt?


Mr. Speaker:: Order, please. That question has a slightly argumentative tone to it. The hon. member for Lambton-Kent.
February 4, 1977



REQUEST FOR CAREFUL CONSIDERATION OF BERGER REPORT

Mr. J. R. Holmes (Lambton-Kent):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. It is related to a CBC news story and interview this morning. 1 suggest to the minister that his use of the word "blackmail" during that particular interview was most unfortunate and a misrepresentation of a very complex problem.
However, I would like to ask the minister if he supports the position of his colleague, the Minister of Indian Affairs and Northern Development, who indicated when he was speaking to the Territorial Council on January 22 of this year that the Berger report will be very carefully considered not only by the Territorial government but also by the federal government when it is introduced in this House somewhat later this year.


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Yes, Mr. Speaker. I made that very clear in the interview, and perhaps if the hon. member would listen to the whole interview, which he will have an opportunity of doing on Sunday, he will find some of the answers.


Mr. Stanfield:: He'll have something better to do on Sunday.



NORTHERN AFFAIRS


John Robert Holmes: Mr. Speaker, my supplementary question is to the Minister of Indian Affairs and Northern Development. Having due regard to the minister's comments with respect to the importance he placed on the assessment which will be made by the Territorial government and the various departments in the federal government, will the minister indicate at this time if he has given careful consideration to referring that very important report to a standing or special committee of the House of Commons as soon as it is available.


William Warren Allmand: Mr. Speaker, that question has not come up before. As the hon. member knows, the Berger report will be made public when it is produced by Judge Berger, and it will be available to all hon. members. However, no consideration has been given to the suggestion made.
Oral Questions POST OFFICE



ISSUANCE OF STAMPS COMMEMORATING TWENTY-FIFTH ANNIVERSARY OF ACCESSION OF QUEEN ELIZABETH TO THRONE

Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Postmaster General. I congratulate him for issuing a commemorative stamp honouring the Queen-


Some hon. Members:: Hear, hear!


Walter Gilbert Dinsdale: -and also for the ceremony which was held this morning at which the minister upheld the reputation of the Post Office by arriving slightly late.


Some hon. Members:: Oh, oh!


Walter Gilbert Dinsdale: In view of the high denominational value of the stamp and the popularity of the monarch, is the Postmaster General planning to use this stamp to retire the deficit of the Post Office?


Hon.   J.-J. Blais@Postmaster General: Well, Mr. Speaker, that would be desirable, and I appreciate the remarks of the hon. gentleman. I would like to add that if there was a slight delay, it had nothing at all to do with the Post Office. I was relying on the Ministry of Transport to bring me there.


Some hon. Members:: Oh, oh!


Mr. Blais:: However, with reference to the high value of the stamp, we felt that a 25 cent issue would coincide with Her Majesty's twenty-fifth anniversary very well. I would like to indicate also that the silver foil which was used in that stamp was not the result of any melting of silver coins left over from the coin program, in case the hon. gentleman might ask.


William Herbert Jarvis: Is that going to be the postal rate next year?



APPOINTMENT OF JAMES CORKERY AS DEPUTY POSTMASTER GENERAL

Walter Gilbert Dinsdale: Mr. Speaker, arising from the comments of the minister concerning delays, could he inform the House when he will be appointing a new deputy postmaster general, so that the work of improving labour-management relations in the Post Office, which has been going on during recent months, will not be interrupted?


Hon.   J.-J. Blais@Postmaster General: Mr. Speaker, by some strange coincidence I can advise the hon. gentleman that the governor in council has appointed Mr. James Corkery, who is presently the regional general manager for the Ontario region, as the new deputy postmaster general. I am sure that the new deputy postmaster general and I will have a very prolonged relationship.

Anti-Inflation Act



VETERANS AFFAIRS


Stanley Howard Knowles: Mr. Speaker, in the absence of the Minister of Veterans Affairs due to illness may I direct a question to his parliamentary secretary? Will the parliamentary secretary convey to the minister the regret of all of us that he has been ill and our pleasure in learning that he will soon be back with us?


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: When the parliamentary secretary does that will he also inform the minister that many of us in this House hope that when he gets back to his office he will activate the consideration of amendments to the Pension Act, particularly with respect to the granting of pensions of widows where the veteran's pension was less than 48 per cent?


Mr. S. Victor Railton (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I am very pleased to answer the hon. member by saying that I am going to see the Minister of Veterans Affairs at 12.30 p. m. today and will convey his message and the best wishes of the House. He is recovering beautifully and will be out of hospital this weekend and back in his usual place about a week from next Monday, we hope. I will also convey to the minister the hon. member's request which I will take as notice, that he do something about the widows of veterans whose pensions were less than 48 per cent.


Stanley Ronald Basford: Mr. Speaker, during the question period the hon. member for Humber-St. George's-St. Barbe asked me whether an appeal had been taken and I indicated that one had been decided upon. I can now advise him that the appeal has been filed.



ROUTINE PROCEEDINGS


Donald Stovel Macdonald: Mr. Speaker, I should like to table a reference from the Anti-Inflation Board to the administrator on the propane gas industry in British Columbia under the Anti-Inflation Act.
{Mr. Blais.]


TABLING OF REPORT OF ADVISORY COMMITTEE ON IMMUNIZING AGENTS
Hon. Marc Lalonde (Minister of National Health and Welfare):: Mr. Speaker, I would like to table, in both official languages, a copy of the latest report of the Advisory Committee on Immunizing Agents.


PUBLIC SERVICE
Mr. MacEachen:: Mr. Speaker, I should like to inform the House of recent developments respecting appointments and employment practices in the public service. You may recall our discussions here on December 9 and 10, 1976, concerning allegations of improper staffing action. I have been advised that the Public Service Commission has taken the matter in hand and that the chairman of the commission has made a public statement. I should like to table his response and, on behalf of the Prime Minister, indicate his support of it. I firmly believe our federal public service ranks high on the list of federal public services in western democratic countries.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: We have been fortunate, indeed, to attract the large number of qualified public servants we have in the service today and their dedication and loyalty is to be commended.
As members of this House know, it has been nearly ten years since the Public Service Employment Act, the Public Service Staff Relations Act and the revised Financial Administration Act were passed by the House. In recognition of the need for a review of this situation, the government asked Dr. Finkelman to undertake an examination of the Public Service Staff Relations Act and its administration and to make recommendations having regard to the experience gained since that act came into force, and how it should be amended or revised adequately to meet the needs of the employer and employee in the public service and the employee organizations that represent them and to serve the interests of the public. That report was the subject of consideration at a Special Joint Committee of the Senate and the House of Commons on Employer and Employee Relations.
The government intends to introduce amendments to the Public Service Staff Relations Act based on the recommendations of the Finkelman and parliamentary reports. In this context it would also introduce amendments to the Public Service Employment Act and the Financial Administration Act.
As announced by my predecessor in May, 1976, the government will establish a review body to examine staffing, appoint-
February 4, 1977

merits and training in the public service. I am pleased to announce that following consultation with the parties concerned, the terms of reference of a special committee on the review of personnel management and the merit principle has been agreed to.
This committee will examine all matters pertaining to the Public Service Employment Act with particular reference to (a) the merit principle and its application as it relates to initial appointment, internal appointment and promotion and eligibility of public servants to participate in competitions; (b) access to employment with respect to training; (c) process of appeal and redress relating to appointment problems and demotion; (d) scope of collective bargaining as it applies to (a), (b) and (c); (e) operation and assistance in the operation of training and development programs; (f) fostering of improved employee-employer relations; and (g) more efficient personnel management systems taking into account operational needs of departments and the need to provide an efficient and effective service to the public.
At the request of the unions, and upon mutual agreement by all affected parties, the first phase of the review will involve a separate examination by each side of the above-mentioned issues. Following a suitable period for these two exercises, the special committee, composed of a chairman and a representative of the government and a representative chosen by the unions, will begin meeting, leading to the preparation of a public report.
An announcement of the membership of the special committee will be made at a later date. Where it is possible to reach agreement, recommendations will be made to the government. In areas where no agreement is possible, the chairman will identify the different points of view and will be free to make his opinion known as to what options should be considered. During the deliberations of the committee there will be consultation between the government and the unions and between other interested individuals and organizations, particularly the Public Service Commission. While the committee will be examining roles and relationships, it will not be asked to make recommendations concerning organizational structures.


Donald W. Munro: Mr. Speaker, in the traditional way I wish to thank the President of the Privy Council for forwarding an advance copy of the statement to me. I also wish to join the minister in paying tribute to the public service of Canada which I have reason to believe, from experience and for other reasons, ranks high among public services in the western world. It is a fine service, but I am afraid the admission today that a special committee is to be set up to examine some very important matters suggests that, fine as it is, it is in a state of some uncertainty as to its general acceptance by the government.
One of the matters raised in this statement is the proposed amendment to the Public Service Staff Relations Act. We heard about this from the former president of the privy council, so this is the second time we have heard of it. It sounds as though we are putting up the banns for marriage.
Public Service
Will there be a third statement before the amendments are introduced, or are they to be brought before us soon?
Speaking as a member of the committee which studied the Finkelman report and looked into employer-employee relations in the public service, I feel it is high time to bring that legislation before the House. I hope that this is not another stalling tactic on the part of the government, another delay in bringing forward the legislation. In general, we welcome the statement, although with reservations.
Unfortunately, the statement does not mention something else which also stemmed from the work of the joint committee on employer-employee relations in the public service. It says nothing about the need to examine the operation of the Public Service Commission within the ambit of the Public Service Staff Relations Act. If that question is to be the subject of further legislation or study remains to be seen. Regrettably, it was not raised in the statement.
The list of matters set out on page 2 of the statement which the committee is to examine is of prime importance to the public service and shows the degree to which the public service has fallen on evil days. As has been said more than once, public servants are uncertain about their future. Regrettably, there is a drop in the morale of the public service. The establishment of a special committee which is to study certain questions fundamental to the public service suggests to us that the government recognizes the demoralization of the public service. When I say this, I am thinking particularly of the merit principle, and promotion.
There are procedures for appealing decisions concerning promotion. One can take one's appeal to the federal court, if necessary. I have correspondence from the chairman of the Public Service Commission saying that few appeals have been taken to the federal court. But that fact, I suggest, is not an indication of the amount of discontent in the public service or the way in which appeals are being handled. I hope the committee that is to be established will look into these matters carefully.
I notice that subparagraph (0 on page 2 of the statement speaks of the "fostering of improved employer-employee relations." That language shows, I suggest, that the government recognizes something is wrong. I wonder if that "something wrong" is not spotlighted by the expression in the last paragraph on page 2 which reads in part, "the first phase of the review will involve a separate examination by each side-" Why by each side? Are we not all on the same side? When the public service was known as the civil service, it was on the same side; we were all on one side.


Some hon. Members:: Hear, hear!


Donald W. Munro: It worked hand in glove with the government. Then there was no mention of the parties being on each side. That we have come to such a pass is regrettable. It is high time for the matters listed in the statement to be examined.

February 4, 1977
Public Service
Certain other questions ought to be taken into account. For example, the public service is demoralized partly because there are no standard conditions of work throughout the service. In one department the employees are entitled, say, to three weeks annual leave, whereas in other departments they could be entitled to more. Also, provision for sick leave is not standard across the board. I think all such questions should be treated in a standard way, so that each department will know it is being treated as all other departments are being treated.
Finally, I shall comment on the expression on page 3 of the statement reading, "Where it is possible to reach agreement, recommendations will be made to the government..." Since the statement speaks of the two sides in this matter, I suggest that if one side feels aggrieved, it should be able to make recommendations and have them considered. Any decision, including a rejection, if that is necessary, ought to be handed down with reasons. Although we welcome this particular statement as an indication that the government intends to improve the morale of the public service, we have some reservations about it.


Stanley Howard Knowles: Mr. Speaker, I was particularly pleased to hear the President of the Privy Council in the early part of his remarks use these words: "We have been fortunate indeed to attract the large number of qualified public servants we have in the service today and their dedication and loyalty is to be commended."
I was also pleased to note that at that point the House applauded. It was interesting to hear a comment like that, following some of the other things which have been said in this House in recent weeks about the loyalty and reliability of some of our public servants. We have also heard members in this House, even on the government side, indulging in the pastime of sniping at public servants and blaming them for the faults of the government. I think that once in a while it is good for the sort of thing the statement says to be expressed in the House, and for the House to applaud it.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: The fact is that we have a very good public service.


Mr. Baker (Grenville-Carleton):: Well said, Stanley.


Stanley Howard Knowles: It is inevitable that when very large numbers of people are involved, some mistakes will be made. However, in the main, we are well served. I am also interested to note that Mr. Gallant's statement, which the minister tabled at the same time, emphasizes the importance of protecting the merit principle. Mr. Gallant recognized in his statement that the delegation of hiring powers to the departments had created problems, but he affirmed in the statement that the Public Service Commission regards it as its job to make sure that the merit system is observed. Because there have been some questions about that point, this review is important.

Today in his statement the minister said that two things are to be done. First, as the minister announced, the government intends to introduce amendments to the Public Service Staff Relations Act, the Public Service Employment Act and the Financial Administration Act. All those acts have to do with the public service. Like the hon. member for Esquimalt-Saanich I hope those amendments will be forthcoming soon.
The second proposal concerns the establishment of the special three-person committee which is to study the matters the minister listed this morning. I am not horrified, as was my friend for Esquimalt-Saanich, at the suggestion that the representatives for either side in these discussions would have the chance before they meet to line up all the issues with which they are to deal. After all, it is a management-labour situation.


Donald W. Munro: But it should not be; it
ought to be a service relationship.


Stanley Howard Knowles: One should be realistic in arrangements of this kind. The things to which special attention need to be given in the attempt to improve the work of the public service in the main fall under three headings. First, we must do everything possible to enhance and protect the merit system and see to it that all the changes which have been made have not chipped it away. Second, we must underline, confirm and widen the collective bargaining process. It is still my view that it should include such things as classifications, promotions, and so on. I believe that is in the review which is to be made.
In the third place it seems to me that more ought to be said and done about the pensions of our public servants. That I believe those pensions should be improved is well known. But I think the government should take a more aggressive stand in defence of our public servants and their pensions. I deplore, with everything within me, the sniping and attacking that is going on, based largely upon hypothetical situations and a few individual cases. Many public servants, retired and working, wish the government's voice would be heard with regard to this matter. If the government were a little more outspoken in defence of its public servants both working and retired, it would help to improve the morale in the service.
I am a little amazed at the suggestion that this committee will make no recommendations. I suppose if it has the right to express its opinions, that is really the same thing under another name. In any case, we welcome this display of interest in the good job being done by our public service and also the display of interest in improving it. We wish this committee well. We hope that before long we will see the legislation that has again been promised.


Joseph Adrien Henri Lambert: Mr. Speaker, first I would like to express my appreciation to the President of the Privy Council (Mr. MacEachen) for having had the courtesy of sending me his statement in French. One might say, Mr. Speaker, that it complies with the procedure-and I agree-
February 4, 1977

but still one must accept to do one's duty. That is why I congratulate him.
The president's statement deals first with appointment and hiring practices in the public service. Those practices are not widely known but I presume that every candidate for a position within the public service is fairly treated. Otherwise the President of the Privy Council is fully justified to consider amendments to the public service legislation. The President of the Privy Council has informed the House that he will set up a review body to examine staffing, appointments and training practices in the public service. In paragraph (g), page 2 of his statement, the minister said the committee will examine, and I quote:
(g) more efficient personnel management systems taking into account operational needs of departments and the need to provide an efficient and effective service to the public.
Mr. Speaker, I would not apply that criticism to civil servants generally because, on the whole, I agree with the President of the Privy Council that standards are quite good in the public service. Still, the fact remains that some civil servants should be reminded of their duties in the performance of their work if they are to lose their illusions of grandeur and quit behaving as if they owned the country.
I should like to draw the attention of the President of the Privy Council to the delays in some of the negotiations between the various levels of government, and to the fact that in some cases those delays can be blamed on the officials to whom the negotiations were entrusted. The public is becoming increasingly aware that officials are responsible for big policies and big decisions and that some of them could not care less about the authority of their minister. Such a behaviour encroaches upon the principles of administrative hierarchy.
I therefore hope that the nature of the measures mentioned in the statement of the President of the Privy Council are such that they will improve relations between employers and employees, and that every civil servant will be treated on merit without political considerations entering the picture. I know, on the other hand, that it is not easy to serve the public. Still, those who chose that vocation, the civil service or the political arena, should expect to be the target of some criticism. However, if in the space of two months the government has felt that it should draw the attention of the House to this matter, obviously there is some unrest. If creating that committee, and changing the public service legislation as the government suggests, can improve the situation, I am sure that is what everyone of us wishes.
So, under the circumstances, I feel that the government is making an effort to act; but, if there are complaints about administrative delays in the case of some officials, then the government will have to set the example by going ahead as soon as possible, since it has introduced those measures.


Walter David Baker: Mr. Speaker, I wish to put a question to the President of the Privy Council. I will preface my question by saying that I share the sentiments expressed by
Public Service
the members of the House who have spoken in welcoming the statement. The statement did not make it clear, but in the course of the matters before the examiners, will it be within the purview of the examination to be conducted of various items listed in the minister's statement to examine the effect of the implementation of the official languages program in the public service as part of discussing the general field of employer-employee relations? The reason I ask this is that during the course of the Finkelman committee that matter was not discussed. It was said at that stage that it would be left to a later time. Is this the time when that kind of examination will take place? Is it the type of examination that would be within the purview of this committee?


Allan Joseph MacEachen: Mr. Speaker, first may I thank hon. members opposite for the generally positive response to this step which results from a recommendation of a joint parliamentary commission. It is not the intention to have this committee directly enter into an investigation of the operation of the bilingualism program. As I look at the terms of reference which have been agreed to, it appears to me that it may be brought in indirectly, but as I understand it, it is not the intention to have this as a frontal approach or frontal project of study.


Walter David Baker: That is as I suspected, Mr. Speaker. The minister has answered my question with regard to this matter. The other aspect I want to raise refers to that part of the statement where the minister indicated there would not be an examination of structures. Does that preclude the committee from dealing with the pay research bureau, for example, and the part it plays in assisting the bargaining process and in assisting the public to understand the considerations that come into play with regard to public services salaries, how they are established, and pension matters, particularly the question of indexing. Will it be beyond the purview of this committee to deal with, and perhaps answer, many questions that are being asked, thereby allaying many fears that are being expressed? Does the reference to the inability of the committee to deal with the structural problem exclude that kind of consideration from the work of the committee proposed in the minister's statement?


Allan Joseph MacEachen: This is a new question for me and I will answer it as I appreciate the situation as it ought to be, that the committee would not in any way be obligated or entrusted with examining the reorganization of government departments or the creation of new departments or matters of that kind. But it would seem to me that under (f), for example, improved employer-employee relations might involve consideration of an institution like the pay research bureau in so far as it assists and could assist more in the fostering of better employer-employee relations. That is how I appreciate the situation.


Stanley Howard Knowles: Two short questions. First, will the report of this new tripartite committee be made public? Second, does the government intend to bring in
80008-3S

February 4, 1977
Public Service
its legislation amending the Public Service Staff Relations Act, the Public Service Employment Act and the Financial Administration Act before, or after, it receives the report of this new committee?


Allan Joseph MacEachen: In answer to the first question, the intention is that the committee's deliberations will lead to the making of a public report. As I indicated in my statement, where possible the committee will make recommendations where they agree, but if they are unable to agree, the chairman, carrying out his functions, will identify differences of opinion and outline possible options in areas of disagreement. It is not the intention to hold up the amendments to the measure the hon. member mentioned pending the receipt of this report, because I do not know how long the special committee will take. I would hope we would have the amendments to these statutes before the House well before the report is made.


ELECTORAL BOUNDARIES READJUSTMENT ACT
Mr. Ross Milne (Peel-DufTerin-Simcoe) moved: for leave to introduce Bill C-392, respecting the Electoral Boundaries Readjustment Act (Brampton-Georgetown).


Stanley Howard Knowles: Explain.


William Ross Milne: I should like briefly to explain my reason for introducing this bill. The commissioners recommended that the redistributed riding be known as Brampton-Halton Hills. I propose, by this bill, to change that and name the new riding Brampton-Georgetown. This would bring the name into line with the wishes of the people of Georgetown and prevent a good deal of confusion which would exist if Halton Hills were left in the name, because the majority of the area covered in the town of Halton Hills will remain with the riding of Halton.
I think the traditional relationship between Halton Hills and the riding of Halton, which my good friend and colleague, the hon. member for Halton (Mr. Philbrook) represents, should remain. It would clear up this confusion to have the constituency known as Brampton-Georgetown.


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

William Ross Milne: for leave to introduce Bill C-393, respecting the Electoral Boundaries Readjustment Act (Wellington-Dufferin-Simcoe).


Stanley Howard Knowles: Explain.


William Ross Milne: Again, Mr. Speaker, very briefly, the commissioners propose to call this new riding Dufferin-Wellington. I propose, under this bill, to have that name changed to Welling-

ton-Dufferin-Simcoe. This is primarily in recognition of the fact that a substantial number of people from Simcoe, some 11,000, will be included in this riding, two townships and one municipality by the name of Alliston, which is a substantial town in Simcoe and which will be one of the larger centres in this new riding. I think, therefore, that part of the riding from Simcoe should have recognition by being included in the name of the new riding.


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

[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 questions will be answered today: 132, 345, 356, 502, 504, 670, 796, 934, 971, 1,000, 1,003, 1,064, 1,071, 1,074, 1,078, 1,083, 1,089, 1,099 to 1,122 inch, 1,134, 1,162, 1,167, 1,183, 1,186, 1,203, 1,205, 1,220, 1,227, 1,260, 1,278, 1,313, 1,327, 1,328, 1,374, 1,387 and 1,390.


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


Hon. John Roberts (Secretary of State):: 1. (a) Arnal, M. E. $2,500; Beaudoin, A. $10,865; Bociurkiw, B. $5,000; Burpee, N. $4,500; Canadian Human Rights Foundation $4,860; Can-tryn, M. $7,500; Conistat Consulting Services $72,000; Con-seillers thermatiques enregistres $2,500; Cotten, J. $4,800; Ceyes, R. $10,000; Dahlie, J. $10,000; Day, A. G. $4,800; Dixon Bailey Associates Ltd. $12,145; MacDonald, J. $11,720; Eberts, M. $2,600; Kerk, F. $4,978; Fox, R. J. $9,300; Hawrylyshyn, A. $8,000; Hudak, Dr. L. $4,800; Insti-tut canadien d'education des adultes $35,000; Institute for Behavioural Studies $24,871; Memorial University of Newfoundland $24,900; Menendez, A. $4,875; McMaster University $3,769; Morrison, W. O. $4,875; Moses, K. $5,000; Myrick, T.V. $5,000; Multi-Reso Incorporated $15,000; Pass Management Consultants Ltd. $3,500; Perconsult Ltd. $5,000; Provision Ltd. $4,000; P.S. Ross and Partners $13,500; Rivet, M. $2,200; Rosenstock, J. D. $15,750; Social Science Research Council $4,891; Square One Management Ltd. $18,700; Stewart, C. $12,200; Storey, F. $16,000; Yalden, J. $4,500; Yeas, A. M. $12,625; York University $26,985; Queens University $78,974. (b): Federal Systems of Canada
February 4, 1977

$10,760; Price Waterhouse Associates $10,000; Systems Dimensions Ltd. (S.D.L.) $10,317; Thorne Riddel Associates Ltd. $11,900; Total: $577,960.00.
2.	See 1 above.
3.	(a) $813,019.00. (b) Nil.


Mr. Nystrom: 1.	What proportion of total sales did the four largest wholesalers of farm machinery and equipment in the industry earn in (a) 1960 (b) 1965 (c) 1970 (d) 1975 (or the most recent year statistics are available)?
2.	What proportion of total sales did the eight largest firms in the industry earn in (a) 1960 (b) 1965 (c) 1970 (d) 1975 (or the most recent year statistics are available)?


Mr. Hugh Poulin (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Statistics Canada reports: 1. The proportion of total wholesale sales of farm machinery made by the four largest firms in the wholesale farm machinery industry in 1971 was 19.2 per cent and in 1973 was 22.2 per cent.
2.	The proportion of total wholesale sales of farm machinery made by the eight largest firms in the wholesale farm machinery industry in 1971 was 24.8 per cent and in 1973 was 26.5 per cent.
Note: Data for 1960 and 1965 are not available.


Mr. Nystrom: 1.	What proportion of total sales were the sales of the four largest firms in the fish products industry in (a) 1960 (b) 1965 (c) 1970 (d) 1975 (or the most recent year statistics are available)?
2.	What proportion of total sales did the eight largest firms in the industry earn in (a) 1960 (b) 1965 (c) 1970 (d) 1975 (or the most recent year statistics are available)?


Fabian Hugh Poulin: Statistics Canada reports: 1. The proportion of total sales earned by the four largest firms in the fish products industry was 41.2 per cent in 1958*, 35.6 per cent in 1965, 39.1 per cent in 1970 and 42.5 per cent in 1972.
2.	The proportion of total sales earned by the eight largest firms in the fish products industry was 51.9 per cent in 1958* 50.6 per cent in 1965, 52.4 per cent in 1970 and 54.4 per cent in 1972. * Data are not available for 1960. For certain industries data are available for 1958 as the result of a recent historical study of selected industries.


Mr. Herbert: Is the government aware of a reported statement by an official of the Export Development Bank that "Canada must establish trading relations with the Third
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World and is in a good position to do so because Canada is not thought to have ulterior motives" and, if so, does the government support a policy of investment in Third World countries that is not subject to conditions or understandings of at least partial reciprocal benefit for Canada?


Fabian Hugh Poulin: In so far as Export Development Corporation is concerned: The government is aware of a reported statement by an official of the Export Development Corporation that "Canada must establish trading relations with the Third World and is in a good position to do so because Canada is not thought to have ulterior motives". The government supports Canadian investment in Third World countries through Section 34 of the Export Development Act. The Export Development Corporation has an established policy which specifies that only investors who can demonstrate economic benefits for both Canada and the host country are eligible for foreign investment insurance under the Act.


Mr. Lambert (Bellechasse): From September 1, 1975 to August 31, 1976, did Canada import pork and, if so (a) in what quantity (b) at what price (c) from which countries?


Fabian Hugh Poulin: Statistics Canada reports as follows: In the period September 1975 to August 1976 inclusive, Canada imported 146,149,900 pounds of pork for a value of $129,868,312, at an average cost of $.89 per pound. A breakdown of this total by supplying country appears on the table below:
Price per
Country	Qty (cwt.)	Value ($)	* *	
Cwt. (100 lbs.)United Kingdom	3,928	407,733	103.80Ireland	1,869	277,207	148.32Denmark	43	6,715	156.16Netherlands	2,716	421,215	155.09Poland	21,693	2,193,339	101.11United States	1,431,250	126,562,103	88.43Total	1,461,499	129,868,312	88.86


Mr. Lachance: Between the date of the presentation of the last budget May 25, 1976 and October 12, 1976, did the Department of Supply and Services, Canadian Arsenals Limited, Canadian Commercial Corporation, Crown Assets Disposal Corporation and Royal Canadian Mint hire, dismiss or transfer employees to other departments and, if so, how many?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Department of Supply and Services:
	Term	Permanent
Hired	449	131Dismissed	14	2Transferred	19	103
2730

February 4, 1977
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Canadian Arsenals Limited: Hired: 22 Dismissed: 78 Transferred: Nil Canadian Commercial Corporation: The human resources required to operate the Corporation are provided by the Department of Supply and Services. Crown Assets Disposal Corporation: Hired: 10 Dismissed: Nil Transferred: 2 Royal Canadian Mint: Hired: 16 Dismissed: 53 Transferred: 1


Mr. Herbert: What are the terms of reference and what is the objective of the study of the health care products sector being undertaken by the Department of Industry, Trade and Commerce?


Fabian Hugh Poulin: In so far as the Department of Industry, Trade and Commerce is concerned: The health care product sector is one of growing importance to Canada, having the capacity to make a significant contribution to the government's objective of improving the quality of life for all Canadians. Canadian consumption of health care products, which include medical supplies, equipment and devices as well as pharmaceuticals, is now well in excess of one billion dollars, nearly half of which is imported. Growth in consumption of health care products has been above the average of that of manufactured products and it is expected to continue this way. The objective of the study now being undertaken is to determine how the health care manufacturing sector in Canada can capitalize on domestic growth prospects and maximize its contribution to the Canadian economy through sound industrial development. The study outline has not yet been finalized but it is expected that the study will include, inter alia, the development of a profile of the Canadian industry, a determination of market trends by major product groups, an analysis of the international structure of the industry and how it exerts an influence on Canadian industrial development, an evaluation of the effects of the existing government policy environment on the industry and its development, and an identification of potential research, development and manufacturing opportunities. An in-depth study such as this will require very close cooperation from a number of federal departments, provincial governments and associations representing the private sector's participation in all phases of the study, including its definition, detailed analysis and identification of possible policy options and their impacts will be essential if the desired results are to be obtained.


Mr. Reynolds: 1.	How many copies of the final report of the Airport Planning Committee in British Columbia were produced?
2.	Have any copies been distributed and, if so (a) in what manner (b) how many were free and to whom were they sent (c) how many were sold and by whom?

3.	How many copies are still in inventory and where are they located?
4.	Has the government received any requests from community associations or persons involved in the airport planning process for free copies that it is not able to fulfill?


Hon. Otto E. Lang (Minister of Transport):: 1. There have been 3,000 copies of the Airport Planning Committee final report ordered and 3,015 delivered by the printer.
2. There have been 1,957 copies of the report distributed. It was agreed in the APC that Transport Canada would carry out the distribution: 2,000 were allocated for free distribution: 1,943 of the copies were distributed free by mail and vehicle delivery to the following:
Number of
	copies	
Staff members of the Tri-Level Committee	22	
Senators and MP's from British Columbia	26	
APC Member Agencies		
Air Carriers	31	
B.C. Aviation Council	50	
City of Vancouver	150	
Community Forum	400	
Department of Environment	50	
Department of Public Works	10	
Government of B.C.	100	
Greater Vancouver Regional District	400	
Ministry of State for Urban Affairs	25	
Municipality of Richmond	100	
Transport Canada	400	1,'
Media	36	
Libraries	90	
Associations	10	
Universities	43	
Sold by Transport Canada on behalf of APC	14	1,!
Total distributed	1,957	
3.	Of the 1,000 copies allocated for sale, 986 copies remain in inventory at Transport Canada planning offices at Vancouver International Airport. Of the 2,000 copies which were allocated for free distribution there are approximately 75 left and these have been reserved to meet requests from members of parliament, libraries, universities, colleges, associations and the media.
4.	The Community Forum requested 100 additional free copies but the request was not granted because they had previously been given 400 free copies consistent with their membership. We have stressed that there are some 90 copies available for reference in lower mainland public libraries and
February 4, 1977

that copies are available both for reference and sale at our offices.


Mr. Forrestall: 1.	Is the government considering increases in the tolls charged by the St. Lawrence Seaway Authority and (a) if not, for what reason (b) if so, to what extent and on what date?
2.	When the proposed higher tolls come into effect, will they, in the best estimate of the government, be sufficient to (a) enable the St. Lawrence Seaway Authority to operate without incurring operating losses (b) to fully recover capital costs and, if not, to what extent, in the best estimate of the government, will the proposed toll increases fall short of achieving these goals in the first full year of operation?


Otto Emil Lang: The St. Lawrence Seaway Authority advises as follows: 1 and 2. The whole question of Seaway tolls is presently under consideration and discussion.


Mr. Herbert: 1.	What was the percentage of payroll costs go in fringe benefits in 1975 for (a) manufacturing industries (b) non- manufacturing industries?
2.	How were these benefits divided between (a) pension plans (b) unemployment insurance payments (c) other insurance payments (d) paid vacations (e) paid holidays (0 paid sick leave (g) workman's compensation (h) other benefits?


Fabian Hugh Poulin: Statistics Canada reports: 1 and 2. The information requested is not available in the form required.


Mr. Herbert: What is the estimated amount of direct investment (a) in actual dollars (b) in constant dollars by US companies in Canadian industry for the years (i) 1950 (ii) 1955 (iii) 1965 (iv) 1970 (v) each year since 1970?


Fabian Hugh Poulin: Statistics Canada reports that: Estimates of United States direct investment in Canada are prepared on the basis of the current cost of the investments at the time they are made. The net inflow of United States direct investment during each of the following years is estimated at:
(millions of dollars)
1950	1955	1965	1970	1971	1972	1973	1974	1975202	317	421	628	599	457	423	615	535
Each year statistical reports are obtained showing the updated book value of direct investment as recorded in the accounts of companies in Canada in which there is direct investment. These statistical reports are based on the normal financial reporting system of the companies, compiled in
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accordance with accepted accounting principles. The year to year change in the book value of direct investment is affected not only by net direct investment inflows but also by net increases in undistributed earnings of the companies and other factors. The book value of United States direct investment in Canada at the end of the following years is estimated to be:
(millions of dollars)
1950	1955	1965	1970	1971	1972	1973	1974
3,426 6,513 14,059 21,100 22,443 23,679 26,113 28,996
An estimate on this basis is not yet available for 1975. Estimates of direct investment at constant prices are not prepared because the information that would be required in order to make such estimates is not available.


Mr. Howie: 1.	Has any request for financial assistance for the construction of a highway bridge across the St. John River at Fredericton, New Brunswick been received from the Province since January 1, 1975 and, if so, what was the response?
2.	How much was requested and how much, if any, was committed?


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Regional Economic Expansion: The reply for the Department of Regional Economic Expansion is as follows: 1. The Fredericton bridge was included as part of a package, submitted to DREE on April 30, 1976, and intended to open program discussion on a proposed 5 year Highways Agreement. This project was not considered a high priority item within the context of the General Development Agreement objectives and was therefore not included in subsequent discussion documents.
2.	(a) The project cost estimate contained in the submitted package totals $43 million over four years, (b) No commitment was made.


Mr. Herbert: 1.	Does the Department of Public Works intend to transfer accommodation costs to the user departments and, if so, on what date?
2.	(a) Of the $434,355,000 allowed for accommodation in the 1974-75 budgetary expenditures, what amount, by department, can be reallocated (b) apart from the cost of accommodation for the Department of Public Works, what are the reasons that any remaining balance cannot be similarly charged out?


Hon. Judd Buchanan (Minister of Public Works):: 1. As
this question relates to a change in present government policy, it cannot be properly answered by Department of Public Works. Public Works, over the past few years, has recommended that accommodation costs be carried in the programs of the user departments. However, this recommendation has not been accepted and for 1976/77, generally only those departments/agencies operating from a revolving fund or otherwise required to pay for their services, are being charged

February 4, 1977
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by Department of Public Works for the space they occupy. All departments/agencies, however, presently pay for "tenant service" work carried out during their occupancy. In 1976/77, it is estimated that only approximately 10 per cent of Department of Public Works' Accommodation (Operating) program costs of $355 million will be recovered from other departments/agencies.
2.	(a) and (b) The 1974/75 budgetary expenditures of $434,355,000 referred to in the question, represents the actual net expenditures for the Department of Public Works' Accommodation program:
	($000)	($000)
Operating expenditures	267,486	
Less: Revenues	41,845	
Net operating		225,641
Capital Expenditures		208,714
Total Accommodation (net)		434,355
Departmental records do not provide for a breakdown of these costs by department/agency. In the case of the Capital expenditures, it would not be proper to allocate costs incurred in one year for facilities that are designed to provide services for 25 years or more. The Department does have available however, a register showing the amount of space assigned to each department/agency, together with the cost of that space as calculated by the Department of Public Works. For example, the department on April 1, 1975 controlled a total of 75 million square feet for which we had established a rental valuation of $344 million.


Mr. Halliday: What was the production of (a) cheese (b) butter (c) powdered milk in (i) Ontario (ii) Quebec for each year 1971 to date?


Fabian Hugh Poulin: Statistics Canada reports:
Production of Specified Dairy Products-1971-1975 '000 lb
Cheddar Cheese	100,152
Other Cheese1	21,397
Cottage Cheese	4,464
Creamery Butter	136,593
Whey Butter	3,279
Skim Milk Powder	203,725
Whole Milk Powder	2,142
1 All varieties made from whole milk cheese.
Quebec
1972	1973	197492,172	99,688	104,42220,399	20,128	45,4874,681	4,547	4,330138,259	120,821	110,4253,128	2,209	2,909230,390	217,257	210,6382,966	2,522	2,167
and cream except cheddar and process
1975	1971	197273,578	74,626	78,84043,868	34,025	34,6814,786	22,833	23,050144,685	80,003	87,2044,196	3,635	4,356281,320	78,758	92,5462,218	157	84
Ontario
1973	1974	197567,051	66,036	74,66635,982	41,053	39,85325,349	23,727	23,31773,677	74,118	85,4804,764	5,112	4,77669,417	70,834	95,744726	424	494


Mr. Howie: 1.	On what date was the last public hearing of the Air Traffic Committee of the Canadian Transport Commission held in New Brunswick concerning air carriers supplying a service exclusively in the Maritime provinces and what applicants were before the Committee?
2.	Has a decision been taken on the matter and (a) if so, on what date (b) if not, have any of the applicants discontinued service while awaiting the decision?
3.	Is an interim financial assistance available to any such applicants who discontinued service while awaiting the decision?
4.	What assistance is available to such air carriers?


Otto Emil Lang: The Canadian Transport Commission advises as follows: 1. The last public hearing of the Air Traffic Committee of the Canadian Transport Commission was held on June 11, 1976, on applications by Atlantic Central Airlines, Eastern Flying Service and Eastern Provincial Airways. (The hearing subsequently adjourned to Halifax and was completed there July 10.)
2. Yes. (a) Decisions were issued December 21, 1976. (b) There was no discontinuance of licensed service.
[Mr. Buchanan.1
3.	No.
4.	Not applicable.
1974-75 ESTIMATES-EMPLOYEE PENSION AND MEDICAL PLANS


Mr. Herbert: 1.	What was the total amount contributed in the 1974-75 estimates to employee pension and medical plans?
2.	What amount of this sum was not allocated to the user department and for what reason?


Hon. Robert K. Andras (President of the Treasury Board):: 1. $375,351,000. This amount comprises $256,206,000 shown in those Departments and Agencies whose employees come under the Public Service Staff Relations Act and $119,145,000 in the Estimates of the Treasury Board. There is in addition: (a) $318,915,000 contributions to the Defence Forces Pension Account; and (b) $32,698,000 contributions to the members of the Royal Canadian Mounted Police Pension Account.
February 4, 1977

2. $119,145,000 made up as follows: Public Service Pensions: (a) Public Service Death Benefit Account, $2,350,000; (b) Canada and Quebec Pension Plans, $32,000,000; (c) 'Locally Engaged (Outside Canada) Pensions, $433,000; Public Service Insurance: (d) 'Surgical-Medical and Other Insurance Premiums, $55,000,000; (e) Contributions to Unemployment Insurance Account, $36,000,000; (f) 'Hospital Insurance (Outside Canada) Plan, $900,000; (g) 'Health Insurance Plans for Employees Engaged Locally (Outside Canada), $55,000; Total: $126,738,000; Less Revolving Fund Recoveries, $7,593,000; Net total: $119,145,000. In 1973-74 Superannuation and Supplementary Retirement Benefits amounts were allocated to user departments. In 1975-76 a further distribution of Canada Pension Plan/Quebec Pension Plan and Death Benefit charges was made. It is planned in 1977-78 to allocate Unemployment Insurance employer contributions; this being made possible by amendment to the Unemployment Insurance Act which authorized the charges as a statutory payment. After 1977-78, the only undistributed items will be those shown above marked with an asterisk. These items will remain in Treasury Board Estimates as the authorizing legislation is provided in Treasury Board Vote 20. To allocate these to departments would require extended Vote wordings in each such department.


Mr. Howie: Since January 1, 1975, how many persons were added to the personnel of Air Canada?


Otto Emil Lang: The Management of Air Canada advises as follows: Between January 1, 1975, and November 1976, the total number of employees decreased by 281.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Ministry of State for Urban Affairs for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: The only programs whose costs are indexed are: Old Age Security Pensions and the Guaranteed Income Supplement- The payments are indexed quarterly based on the increase in the Consumer Price Index for a previous quarter (i.e. July to September for January; October to December for April; January to March for July; and April to June for October.) Family Allowances-These payments are indexed January each year and are based on the increase in the Consumer Price Index for the 12 month period ending in September of the previous year. War Veterans Allowances-These payments are indexed quarterly using the same formula as the OAS-GIS payments. Was Veterans Disability Pensions-These payments are indexed January each year using the same formula as Family Allowances. Training Allowances under the Occupational Training
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Program-These payments are indexed yearly in July using the increase in the average hourly earning in manufacturing for the previous year ending in June. Bill C-19, the Government Expenditure Restraint Act, would eliminate the indexing provision. Unemployment Insurance Benefits-The maximum payments are indexed yearly in January using the increase in the average earnings index. The actual increase in government costs depends on the unemployment experience. The costs for each of these items will be shown in the 1977-78 Main Estimates which are expected to be tabled in February, 1977.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Consumer and Corporate Affairs for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of the Solicitor General for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Post Office Department for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of the Secretary of State for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Manpower and Immigration for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Regional Economic Expansion for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.

February 4, 1977
Order Paper Questions


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Fisheries and of the Environment for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Public Works for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of National Defence for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Communications for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of National Health and Welfare for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Veterans Affairs for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Ministry of State for Science and Technology for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Agriculture for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Indian Affairs and Northern Development for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Energy, Mines and Resources for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Supply and Services for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Transport for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of External Affairs for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Justice for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Labour for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Finance for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.
February 4, 1977


Mr. Herbert: What are the projected additional costs for the next fiscal year for all programmes that are indexed in the Department of Industry, Trade and Commerce for (a) anticipated normal growth (b) indexing at 8 per cent?


Robert Knight Andras: See answer to Question 1,099 today.


Mr. Forrestall: Does CNR intend to increase the container rates between Halifax and Montreal-Toronto before March 6, 1977 and, if so, by how much?


Otto Emil Lang: The Management of Canadian National Railways advises as follows: no.


Mr. Lambert (Bellechasse): On September 30, 1976, what was the percentage of unemployment in the region of (a) Montreal (b) Quebec (c) the Eastern Townships (d) the South Coast (e) the lower St. Lawrence (f) the North Coast (g) Lac St-Jean (h) Northwestern Quebec?


Fabian Hugh Poulin: Statistics Canada reports as follows: Estimates of the percentage of unemployment as of September 30, 1976, are not available for the regions specified. For the week ending September 18, 1976, Statistics Canada estimates of the percentage of unemployment for various regions of Quebec are as follows: Bas-St. Laurent-Gaspesie, 14.3; Saguenay-Lac St. Jean, 14.6; Quebec, 9.0; Trois-Rivi&res, 11.9; Cantons de l'Est, 10.5; Montreal, 7.6; Outaouais, 9.4; Nouveau-Quebec, Nord-Ouest, Cote-Nord, 10.5.


Mr. Forrestall: 1.	Is the government aware of the announced intention of Seatrain Lines Inc., of New York, to file new tariffs with the Federal Maritime Commission in the U.S., specifically designed to cause losses to the ports of Halifax, Saint John and Montreal, in respect of their handling of containerized cargo destined for or originating in the Midwestern United States and, if not, for what reason?
2.	If the government is aware of Seatrain's intention, has it assessed the impact such a move would have on Canadian ports particularly if followed by other lines and has it prepared plans to offset any such losses and, if so, what (a) is the government's assessment (b) are the government's plans?
3.	Has the government raised this matter with United States authorities?


Otto Emil Lang: 1. Yes.
2.	The government is monitoring the movements of containerized cargo between Canada and the United States. The full impact of such possible development is not known yet.
3.	No.
Order Paper Questions


Mr. Lambert (Bellechasse): As of March 31, 1976, how many (a) male (b) female persons were there residing in Canada between the ages of (i) 0 to 18 years (ii) 19 to 25 years (iii) 26 to 40 years (iv) 41 to 50 years (v) 51 to 59 years?


Fabian Hugh Poulin: Statistics Canada reports as follows: The approximate number of persons residing in Canada on April 1, 1976, by sex and by the requested age groups are set out below:
		(a) Males	(b) Females
(0	0-18	4,072,300	3,887,200(ii)	19-25	1,512,700	1,488,100(iii)	26-40	2,397,700	2,343,800(iv)	41-50	1,287,300	1,259,400(v)	51-59	957,000	1,003,900
These figures have been arrived at by applying to the total Canadian population estimate on April 1, 1976, the same proportions as obtained in the estimate by age and sex on June 1, 1975.


Mr. Loiselle: Are any products dehydrated by atomization imported and, if so, which products?


Fabian Hugh Poulin: Statistics Canada reports that: The commodity classification used by Statistics Canada to compile foreign trade statistics does not make a separate provision for imports of products dehydrated by atomization. Because of the relatively low volume of shipments, such products are included with other similar materials in general categories; consequently, they are not identifiable from the published totals.


Mr. Forrestall: What was the amount of cargo, in tons, shipped through the Gros Cacouna Harbour each year since 1972?


Otto Emil Lang: As there are presently no marine terminal facilities at Gros Cacouna, no cargo has been shipped through this harbour.


TRANSPORT-RENEWAL OF PILOTS PRIVILEGE
Mr. Johnston: 1.	Have any pilots over 40 years of age been discouraged from renewing their pilot's privilege because of the added expense and greatly increased inconven-
2736

February 4, 1977
Order Paper Questions
ience of having the electrocardiogram and subsequent tests and, if so, how many?
2.	Have any pilots over 40 years of age, since the inception of these requirements, been assessed unfit to fly and, if so (a) how many (b) how many have successfully appealed the assessment?
3.	Were any pilots over 40 years of age assessed unfit to fly in the two year period prior to the new ruling and, if so, how many?
4.	What is the ratio of English/French speaking pilots (a) who have been assessed unfit to fly (b) presently under training for flight in Canada?
5.	In the period 1972 to 1974, how many accidents involving aircraft (a) have been caused by the pilot suffering a "heart attack" (b) have involved pilots over 40 years of age (c) have been the result of the pilot suddenly being taken ill?


Otto Emil Lang: 1. We have no way of knowing if any pilots over 40 years of age have been discouraged from renewing their pilot's privilege because of the added expense and greatly increased inconvenience of having the electrocardiogram and subsequent tests.
2.	Yes. (a) statistics are not kept with respect to the number assessed unfit, or (b) the number of successful appeals.
3.	Yes, but statistics in this regard are not kept.
4.	Statistics are not kept of the ratio of English/French speaking pilots.
5.	During the period 1972 to 1974 inclusive there were: (a) three accidents caused by a pilot suffering a heart attack; (b) 667 accidents involving pilots over 40 years of age; and (c) four accidents as a result of a pilot suddenly taken ill.


AEROSOL SPRAYS STUDIES
Mr. Howie: Are any studies underway or authorized by any government department, agency or consultant, into the effects of propellant gases used in aerosol sprays on the ozone layer of the atmosphere and, if so, which departments, agencies or firms are conducting such studies?


Mr. Jim Fleming (Parliamentary Secretary to Minister of Fisheries and the Environment):: Yes, the Department of the Environment, Atmospheric Environment Service is the lead agency in Canada with a significant research effort in this area. Since 1974 Project STRATOPROBE utilizes high altitude balloon platforms to obtain comprehensive measurements of key stratospheric constituents involved in the chemistry of the ozone layer in order to test stratospheric pollution models. A latitude-dependent, computer model to simulate the effects of freons on the ozone layer has been developed. Additional modelling and experimental research in Canadian universities is presently being supported. BOMEN Inc. of Ste Foy, P.Q. also take part in the experimentation and SED Systems Ltd of Saskatoon, Sask. provide payload engineering and field support.


VANCOUVER INTERNATIONAL AIRPORT-SECOND PARALLEL RUNWAY
Mr. Leggatt: 1. Since the January 1976 summary report by the Ecological Sub-Committee for the Vancouver International Airport Planning Committee, did the Department of Transport suggest that a second parallel airport runway might be

possible as an alternative and, if so, are any studies, environmental assessments or evaluations now under way regarding concepts for a second parallel runway?
2. Has the Department of the Environment received any referrals from the Department of Transport for the consideration of any new development concepts for a second parallel runway at Vancouver International Airport and, if so, what specific concepts have been referred?


Otto Emil Lang: 1. I announced on August 12, 1976 that there would be a two year delay in making a decision on this proposal. During this period the proposal will be subjected to the Federal Environmental Assessment and Review Process.
2. The proposal that the parallel runway be constructed within the dyke at Vancouver International Airport has been referred to the Department of the Environment. Drawings and other information related to the runway proposal have been forwarded to the Chairman of the Environmental Panel.


TRANSPORT-CHARTERS TO RIVTOW STRAITS FOR PROVISION OF PASSENGERS AND FREIGHT SERVICE
Mr. Leggatt: 1.	Are there guidelines and service requirements under the Department of Transport charters to Rivtow Straits for the provision of passenger and freight service on the British Columbia coast and, if so, what are they?
2.	What commitment, if any, did federal authorities receive from Rivtow Straits in regard to tariff charges for freight and passenger service or the granting of their charters?
3.	What subsidy, if any, is paid by the (a) federal (b) provincial authorities to (i) Rivtow Straits (ii) Coast Ferries Limited?
4.	What was the date of the last inspection by the Department of Transport of the vessel Malibu Princess now serving Prince Rupert to Masset?
5.	What are the names and addresses of the Directors and shareholders of Rivtow Straits Limited?


Otto Emil Lang: 1. A service contract in respect of passenger service between Prince Rupert and Queen Charlotte Islands is being developed by the Canadian Transport Commission.
2.	No committments were given other than Rivtow Straits public announcement that it would offer freight service to any port of call abandoned by Northland and not already served by Rivtow Straits, at Northland's published tariff whilst experience was gained in traffic quantity and mix.
3.	(a) (i) None yet. CTC negotiating in respect of passenger movements to Queen Charlotte Islands, (ii) None, (b) (i) Not known, (ii) Not known.
4.	November 25, 1976.
5.	Not known.


SULPHUR EMISSIONS
Mr. Leggatt: 1.	Are there regulations currently in effect to control sulfur emissions into the atmosphere (under the Clean Air Act) by oil and coal burning*electric generating plants?
2.	Does the government in any way finance or subsidize the development and installation of flue-gas desulfurization units designed for thermal-electric generating plants?
February 4, 1977


James Sydney Clark Fleming: 1. There are no regulations currently in effect under the Clean Air Act to control emissions of sulphur oxides from oil and coal burning electric generating plants. The Clean Air Act does not give the federal government direct control over emissions of an air pollutant unless it is a significant danger to health. The Department of National Health and Welfare has not, at this time, declared sulphur dioxide to be an air pollutant presenting a significant danger to the health of persons. However, current consideration is being given to a regulation limiting the sulphur content in fuels, under Fuel Provisions of the Clean Air Act. This would have the effect of controlling sulphur emissions from electric generating plants in the same way as direct emission control limit. Also under preparation is a National Emission Guideline for the Thermal Power Generating Industry with stated limits on sulphur dioxide emissions.
2. There is no direct subsidy program for pollution control equipment such as flue gas desulphurization units for thermal-electric power plants. However, the government does have a funding program for the Demonstration of Pollution Abatement Technology (DPAT). This program could be used to cost share under contract with an industry, the demonstration of new flue gas desulphurization technology. These funds, however would normally be restricted to one installation of a type. Under the program, the technology then becomes available for use by all similar plants in Canada. Flue gas desulphurization units would also qualify for the Accelerated Capital Cost Allowance program that allows fast write-off of money spent on pollution control equipment.
Order Paper Questions


TAXABLE INCOMES IN EXCESS OF $100,000 FOR 1975
Mr. Herbert: 
Fabian Hugh Poulin: The projects specified are a part of the annual trade fair program carried out by the Department of Industry, Trade and Commerce. This program permits Canadian companies to promote their products and services in foreign markets; appoint representatives and distributors; become aware of the technological progress in their spheres of industrial activity; seek joint ventures abroad; and to assess the competition. The specific purpose and cost of the projects which have been identified in the European Region are as follows:
Project
Number
76/676
76/975
76/689
76/690
76/680
76/640
76/710
76/729
80008 - 36V2
Description
Information Booth-International Fur Fair, Frankfurt, W. Germany, April 7-11, 1976
Children's Book Fair, Bologne, Italy, April 8-11, 1976
Information Booth-Milan Intern. Trade Fair, Milan, Italy, April 14-25, 1976
Information Booth-International Treffpunkt, Hanover, W. Germany, April 28-May, 6, 1976
International Household Electronics and Domestic Appliances Exhibition (HEDA), Birmingham, May, 23-27, 1976
Information Booth-World Railways Engineering Exhibition, Basle, Switzerland, June 1-5, 1976
Poznan International Trade Fair, Poznan, Poland, June 6-17, 1976
Information Booth-International Trade Fair, Plovdiv, Bulgaria September 3-10, 1976
Purpose
To provide a presence for the natural fur suppliers of Canada at the World's foremost fur salon
To expose European Publishers and distributors to a cross-section of Canadian Children's Books.
To provide a commercial presence for the Milan Post at this important regional show.
To establish a meeting area within which various Provincial and industry representatives could discuss industry development and investment opportunities with their European counterparts.
To exhibit electrical appliances from Canadian manufacturers at the new National Exhibition Center as a means of establishing export markets for these commodities.
To provide an institutional representation of Canadian railway equipment and planning capabilities for the leading railway authorities around the world.
To assist Canadian manufacturers in exposing their products to the Eastern European Market.
To provide a commercial presence for Canada at the most important trade event in this region.
Cost

$9,200*

Order Paper Questions
Project
Number	Description	Purpose	Cost76/976	Frankfurt Book Fair, Frankfurt, W. Germany, September 16-21, 1976	To exhibit Canadian books from 60 suppliers at the most important book fair in the world with a view to direct sales and the establishment of co-edition rights.	$28,20076/623	Offshore Technology, North Sea Stavanger, Norway, September	To assist Canadian suppliers in exhibiting their products to the North	21-24, 1976	Sea Oil Community	$75,826*76/634	International Automotive Spare Parts and Accessories Exhibition (AUTOMECHANIKA), Frankfurt,	To provide an exhibit of Canadian automotive parts and accessories as a means of penetrating the West	W. Germany, September 25-29, 1976	European Market.	$87,051*76/685	In-store promotion C & A Brenninkmeyer Company, Stores, U.K. and Europe, October 1976	To promote the sale of Canadian winter clothing from 122 Canadian suppliers in stores throughout the U.K., Belgium, Holland and West Germany,	$400,00076/667	International Trade Fair for Components and Production facilities (ELECTRONICA), Munich, Switzerland November 25-December 1, 1976	To assist Canadian electronic components suppliers in establishing agents and promoting their products in Europe	$89,434*76/726	Mini-Solo Fisheries Products Shows in Stockholm, Copenhagen, Paris and London March 1977	To provide samples of Canadian Fish Foods for a specially, invited group of buyers in each of 4 West European Cities.	$10,000*
Division of the Office of Export Programs and Services and, in each case, what was its purpose?
It should be noted that the costs marked with an asterisk (*) represent the current estimate for invoices which have not all been received.
1976-77 PROMOTIONAL PROJECT-PACIFIC, ASIA AND AFRICA REGION


Mr. McKenzie: What was the cost of project number (a) 76/633 (May 1976) (b) 76/627 (May 1976) (c) 76/716 (August 1976) (d) 76/697 (September 1976) (e) 76/699 (September 1976) (f) 76/714 (September 1976) (g) 76/981 (September 1976) (h) 76/696 (October 1976) (i) 76/694 (October 1976) 0) 76/695 (October 1976) (k) 76/732 (November 1976) of the Pacific, Asia and Africa


Fabian Hugh Poulin: In so far as the Department of Industry, Trade and Commerce is concerned: The projects specified are a part of the annual trade fair program carried out by the Department of Industry, Trade and Commerce. This program permits Canadian companies to promote their products and services in foreign markets; appoint representatives and distributors; become aware of the technological progress in their spheres of industrial activity; seek out joint ventures abroad; and to assess the competition. The specific purpose and cost of the projects which have been identified in the Pacific, Asia and Africa Region are as follows:
Project No.	Description	Purpose76/633	Tokyo Auto Services & Equipment Show, May 4-7, 1976	To develop sales of Canadian Automotive Parts and Service Equipment in Japan.76/716	International Trade Fair, Izmir, Turkey, August 20-September 20, 1976	To obtain import quotas for Canadian exporters whose distributors exhibited at the Fair. Turkish Government policy provides a special quota for foreign suppliers who exhibit at the Fair.76/697	Commodity Sample Shows, Sydney and Australia, September 14-16 and 28-30, 1976	To introduce a variety of Canadian manufactured consumer goods to the Australian Market by holding inexpensive shows for specially-invited distributors and agents in the Consulate facilities.76/696	Algiers International Trade Fair, Algiers, Algeria, October 1-17, 1976	To introduce new Canadian suppliers to this market and to reinforce the impact of previous exhibits at this Fair.76/694	Baghdad International Trade Fair, Baghdad, Iraq	To provide the Iraqi State Trading Companies with an opportunity to examine Canadian Products and introduce Canadian Companies to this new market.76/695	Tehran International Trade Fair, Tehran, Iran, October 19- November 1, 1976	To promote a wide variety of Canadian manufactured goods and engineering services from various companies. This was the second consecutive exhibit by Canada in this important Middle-Eastern market.
Cost

$5,470*
$106,893*
$122,892*
$147,698*
[Mr. Poulin.)

The following projects have been rescheduled for a later date and have not yet been completed. 76/699 Catalogue Show-Electronics Equipment, Manila, Philippines; 76/714 Catalogue Show-Forestry Equipment and Machinery, Indonesia; 76/732 Catalogue Show-Electrical Equipment., Manila, Philippines. The following projects were cancelled: 76/627 International Food and Fibre Exposition, Pretoria, South Africa; 76/981 Catalogue Show-Automotive Aftermarket Parts, Philippines, Malaysia and Singapore.
It should be noted that the costs marked with an asterisk (*) represent the current estimate for invoices which have not all been received.
1976-77 PROMOTIONAL PROJECTS^WESTERN HEMISPHERE REGION


Mr. McKenzie: What was the cost of project number (a) 76-980 A (April 1976) (b) 76-628
Project
Number	Description
76/980	Southern Furniture Mart, High Point,
A & B	North Carolina, April 22-30, 1976,
October 14-22, 1976
76/628	3-1 Farm Equipment Show, Kansas,
April 22-25, 1976
76/641	Society Petroleum Engineering (AIME)
Offshore Technology Conference, Houston, Texas, May 3-6, 1976
76/629	International Petroleum Exhibition,
Tulsa, Oklahoma, May 17-21, 1976
76/674	National Fancy Food & Confection
Show, New York, June 23-27, 1976
161914	American Library Association
Exhibition, Chicago, Illinois, July 18-21, 1976
76/655	International Livestock Fair, Porto
Alegre, Brazil, August 22-30, 1976
76/673	Food Sales Meeting, Philadelphia,
September 15, 1976
76/929	International Woodworking Machinery
Show, Louisville, Kentucky, September 18-22, 1976
76/630	Marine Trades Exhibit & Conference,
Chicago, Illinois, September 30-October 3, 1976
Order Paper Questions
(April 1976) (c) 76-641 (May 1976 (d) 76-629 (May 1976) (e) 76-674 (May 1976) (f) 76-974 (July 1976) (g) 76-655 (August 1976) (h) 76-673 (September 1976) (i) 76-929 (September 1976) (j) 76-630 (September 1976) (k) 76-722 (September 1976) (1) 76-730 (October 1976) (m) 76-701 (October 1976) (n) 76-645 (October 1976) (o) 76-980 B (October 1976) (p) 76-978 (October 1976) (q) 76-892 (October 1976) (r) 76-652 (December 1976) of the Western Hemisphere Division of the Office of Export Programmes and Services and, in each case, what was its purpose?


Fabian Hugh Poulin: In so far as the Department of Industry, Trade and Commerce is concerned: The projects specified are a part of the annual trade fair program carried out by the Department of Industry, Trade and Commerce. This program permits Canadian companies to promote their products and services in foreign markets; appoint representatives and distributors; become aware of the technological progress in their spheres of industrial activity; seek out joint ventures abroad; and to assess the competition. The specific purpose and cost of the projects which have been identified in the Western Hemisphere Region are as follows:
Purpose	Cost
To exhibit Canadian manufactured furniture at the major home furniture buyers' market in the U.S.	$47,814
To increase Canadian sales of short-line agricultural machinery by making U.S. agents and buyers aware of Canadian capability.	$61,511
To increase Canadian penetration of offshore markets around the world by exhibiting Canadian products to the international oil community and the US-based oil Field developers.	$115,150
To assist Canadian suppliers of oil field equipment and services in showing their capability to the international oil developers.	$94,173
To show the products of Canadian suppliers with a view to increasing Canada's share of the U.S. market for specialty foods.	$43,417
To provide Canadian authors, publishers, and librarians with an opportunity to make contacts and promote Canadian books in the U.S.	$23,000
To promote Canadian beef and dairy cattle in Brazil and other Latin American countries	$62,000*
To expose a specially invited group of U.S. buyers to samples of Canadian Food Products and to give Canadian suppliers an opportunity to establish business relations in the U.S.	$5,000*
To exhibit the products of Canadian manufacturers as a means of increasing woodworking machinery and furniture components sales to the U.S.	$99,033*
To present a comprehensive cross-section of Canadian manufactured sail boats, cabin cruisers, houseboats, canoes, pedal boats and related equipment to U.S. marine dealers, distributors and importers.	$110,492*

February 4, 1977
Order Paper Questions	
Project Number	Description
76/722	Contract Furniture Solo Shows, Minneapolis and St. Louis, September 1976
76/701	Food Sales Meeting, Chicago, October 15, 1976
76/645	Automotive Parts & Accessories Association Exhibition, Las Vegas, October 19-21, 1976
76/892	Information Booth-Santiago International Fair-Chile
76/652	American Vocational Association Show, Houston, December 3-8, 1976
76/730	Mino-Solo Fisheries Products, Atlanta, October 12, 1976
Cancelled 76/978	Mini-Solo Apparel Shows, Los Angeles
and San Francisco
* It should be noted that the costs marked with an asterisk (*) represent the current estimate for invoices which have not all been received.


INDUSTRIAL RESEARCH AND DEVELOPMENT INCENTIVES ACT
Mr. Clarke (Vancouver Quadra): 1.	Since the implementation of the Industrial Research and Development Incentives Act, how many grants have been provided by the Department of Industry, Trade and Commerce in (a) Ontario (b) Quebec (c) the Maritime provinces (d) the Western provinces?
2.	In each area, what was the total amount of the grants?
3.	In each area, how many of these grants have been (a) under $10,000 (b) $10,000 to $50,000 (c) $100,000 to $1,000,000 (d) over $ 1,000,000 and over?
4.	What percentage of applicants for the grants were rejected in (a) Ontario (b) Quebec (c) the Maritime provinces (d) the Western provinces?
5.	What efforts has the government made to inform the business and industrial sectors of Western Canada of the availability of grants under the Industrial Research and Development Incentives Act?
6.	How many of the grants provided by the Department of Industry, Trade and Commerce since the beginning of the programme have been advance payments in (a) the Western provinces (b) Ontario (c) Quebec?
7.	What is the total amount of the advance payment grants provided in each area?


Fabian Hugh Poulin: 
APPLICATION BY BRITISH AMERICAN TOBACCO COMPANY RELATING TO PURCHASE OF THE GRISSOL COMPANY
Mr. Lambert (Bellechasse): Was an application filed under the Foreign Investment Review Act with the Department of Industry, Trade and Commerce by the British-American Tobacco Company with regard to the purchase by the company of the Grissol

Company, which manufactures Viau biscuits and candies and, if so (a) have the provisions of the Act been applied or will they be applied (b) if the application was accepted, on what date did the Minister approve the transaction?


Fabian Hugh Poulin: In so far as the Foreign Investment Review Agency is concerned: Imasco Limited, a subsidiary of British American Tobacco Company, acquired control of Grissol Foods Limited in May 1972. As the provisions of the Foreign Investment Review Act pertaining to the acquisition of control of Canadian business enterprises by non-residents did not come into force until April 9, 1974, and as they did not apply retroactively, the above noted acquisition was not subject to review under the Foreign Investment Review Act.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Thursday, February 3, consideration in committee of Bill C-22, to amend the statute law relating to income tax-Mr. Macdonald (Rosedale)-Mr. Turner in the chair.
The Deputy Chairman:: Order, please. When the committee rose last evening, clause 24 was under consideration. Shall the clause carry?


Donald Stovel Macdonald: There have been some discussions about five amendments which the government would like to put forward to take account of representations received with regard to the bill. I believe there was agreement that we might for the moment stand clause 24 and the intervening clauses so that I might have an opportunity of moving those amendments. After that, we would come back to clause 24 and continue the debate.


Charles Robert Turner: Is it agreed?


Some hon. Members:: Agreed.


Donald Stovel Macdonald: The first of the amendments has to do with clause 31(1). My colleague, the Minister of Regional Economic Expansion, has been kind enough to offer to move it on my behalf.
Income Tax


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Chairman, I move:
That Bill C-22 be amended by adding thereto immediately after line 12 on page 33 the following clause:
31.1 (1) Paragraph 82(1 )(b) of the said Act is repealed and the following substituted therefor:
"(b) where the taxpayer is an individual, other than a trust which is a registered charity, x/i of the aggregate of all amounts described in paragraph (a) received by him in the year from taxable Canadian corporations".
(2) This section is applicable to the 1977 and subsequent taxation years.
Mr. Chairman, the amendment is in both official languages.


Donald Stovel Macdonald: Perhaps we might move on, pursuant to the special agreement, to clause 71. The Minister of Regional Economic Expansion has been showing equal enthusiasm about this amendment, and he would like to move it as well.


Marcel Lessard: My hon. friend knows I am always happy to support him when he is presenting proposals which are in the interests of this country.

Mr. Chairman, I move that Bill C-22 be amended as follows:
(a)	by adding thereto immediately after line 13 on page 94, the following subsection:
"7.1) Paragraph 212( 14)(c) of the said Act is repealed and the following substituted therefor:
"(c) he is
(i)	a person who is or would be, if he were resident in Canada, exempt from tax under section 149,
(ii)	a trust or corporation established or incorporated principally in connection with, or the principal purposes of which is to administer or provided benefits under, one or more superannuation, pension or retirement funds or plans or any funds or plans established to provide employee benefits, or
(iii)	a trust, corporation or other organization constituted and operated exclusively for charitable purposes, no part of the income of which is payable to, or is otherwise available for, the personal benefit of any proprietor, member, shareholder, trustee or settler thereof.";
and
(b)	by adding thereto immediately after line 26 on page 94, the following subsection:
"(13) Subsection (7.1) is applicable to the 1977 and subsequent taxation years."
Mr. Chairman, I move that Bill C-22 be amended by striking out lines 45 and 46 on page 97 and lines 1 to 15 on page 98 and substituting the following:
"(4) Clauses 219(7)(c)(iii)(A) and (B) of the said Act are repealed and the following substituted therefor:
"(A) where the owner is a life insurer resident in Canada, the maximum value thereof as determined for the purposes of the relevant authority, and (B) in any other case, the maximum value thereof as it would be determined for the purposes of the relevant authority if the owner had been a life insurer resident in Canada and registered under the Canadian and British Insurance Companies Act to carry on an insurance business in Canada."
(a) by striking out line 1 on page 101 and substituting the following:

February 4, 1977
Income Tax
"80. (1) Section 26 of the said Rules is amended by adding thereto,
immediately after subsection (8.2) thereof, the following subsection:
"(8.3) Where a corporation resident in Canada has, after 1971, received a stock dividend in respect of a share owned by it on December 31, 1971 of the capital stock of a foreign affiliate of that corporation and the share or shares received as the stock dividend are identical to the share in respect of which the stock dividend was received, the share or shares received as such stock dividend may, at the option of the corporation, be deemed for the purposes of paragraph (3)(c) and subsection (8) to be capital property owned by it on December 31, 1971 and not to be property acquired by the corporation after 1971 for the purposes of paragraph (8)(c)."
(1.1) Paragraph 26(12)(d) of the "	; and
(b) by striking out lines 35 and 36 on page 101 and substituting the following:
"(4) Subsections (1) and (3) are applicable to the 1972 and subsequent
taxation years."


Charles Robert Turner: If I may suggest to members of the committee, shall we adopt these amendments as we go along?


Stanley Howard Knowles: No, just put them on the record.


Marcel Lessard: Mr. Chairman, I move that Bill C-22 be amended by striking out Item 2, on page 111 and substituting the following:
The expression "registered charity" shall be substituted for the expression "registered Canadian charitable organization" wherever the latter expression appears in subclause 56(l)(a)(i)(C)(I), subparagraph 81(1 )(j)(i), paragraphs 104(15)(b) and (c), paragraph 110(1 )(a), subsections 110(3), 168(1) and (2), paragraphs 172(3)(a), 172(4)(a) and 180(l)(b) and subsection 230(2)."

That makes it more clear, more precise.


Mr. Lambert (Edmonton West):: Mr. Chairman, I rise on a point of order. Would the minister advise whether he has withdrawn what had been suggested as an amendment to clause 40 in a group of amendments given to me late in November?


Donald Stovel Macdonald: Yes, Mr. Chairman. My understanding is that the clause 40 amendment is of such a character that it could be amended by the table in the course of reprinting the bill. On the basis of that advice, I have withdrawn the amendment.


Marcel Joseph Aimé Lambert: Secondly, Mr. Chairman, I am subject to correction here, but I think the minister's colleague may have inadvertently left out a whole line in his reading of the French version of the clause 80 amendment at page 101. So whilst the amendment was noted, I think there may be a difference between the manuscript copy of the amendment and that which might appear in Hansard. It refers to subsection 1.1, paragraph 26(12)(d), which is the final line of the amendment, and I do not think it was read.


Marcel Lessard: Mr. Chairman, I suggest I would have read that amendment if I had seen it. I think I did read it.


Mr. Saltsman:: Mr. Chairman, in view of the agreement of the House to take a look at these amendments, which might not have reached your attention because of the imposition of closure, I should like to bring a matter to the minister's attention in the line of an amendment. We may not reach the section because of closure, but it seems to me to be a very important matter. The minister may have been considering an amendment along this line, in which case I should like to bring the matter to his attention now and find out what his plans are.
What I am referring to is a practice that seems to be a racket which has developed with registered retirement savings plans. A spouse goes to a financial institution and deposits an amount of money, which could be $1,000, $2,000 or, when the bill passes, a larger amount. The spouse for whom the money is deposited has no taxable income. Then the next day the spouse who does have taxable income withdraws the amount of money that was placed in the financial institution, pays a nominal administration fee for having taken out a registered retirement savings plan, which can be with a trust company or other financial institution, and then is able to use it to lessen their income tax liability.
I understand this matter has been brought to the attention of the finance department and is being reviewed. Therefore, I ask the minister whether the matter has been brought to his attention and whether it is possible under the act for someone to behave in this way. If so, does he intend to move an amendment to close this loophole and prevent this kind of rip-off from taking place? If I have not made myself clear, I would be very happy to repeat this procedure which has been brought to my attention.


Donald Stovel Macdonald: Mr. Chairman, I can advise the hon. member that the matter is under consideration. I am not sure that the consideration is mature enough that we have an amendment to move at this point, but it is a question we are taking into consideration for the next budget in several months' time.


Charles Robert Turner: Order. We understand at the table that clauses 24 to 30 were stood. Is that correct?


Marcel Joseph Aimé Lambert: Only for the purpose of putting amendments.


Donald Stovel Macdonald: As I understood it, Mr. Chairman, the intervening clauses were stood for the purpose of my putting the amendments. We have now returned to clause 24.
On clause 24.


Max Saltsman: Mr. Chairman, may I continue with this matter? I beg your indulgence and the indulgence of the committee in this regard for the same reason we accorded the courtesy to the minister to allow him to place his amendments.
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I think this is a terribly important matter which needs to be cleared up, and since it relates to amendments generally the committee has been disposed to standing certain things in order to deal with possible amendments before it. I would like to take up this matter until we can get some kind of answer from the minister, because it seems to me that this is an incredible kind of loophole and that people will be able to indulge in an incredible racket if in fact it is so.
It seems that the minister has implied in his statements that in fact some people can work a racket under the income tax law because of the way it is written now. This is what I want to know from the minister. Is it taking place, and, if so, I think the House needs some assurance that this will not be dealt with in the next budget but will be dealt with right now. I raise it today because we still have an hour or so to debate this matter on Monday. Over the weekend the minister and his officials could glance at the appropriate clauses and draft an amendment.
We could stand the debate at a certain point on Monday and have this amendment introduced. Since the House has been disposed to go along with this procedure, we could close this loophole. Aside from the general objections we have been raising to the disproportionate benefits that the wealthy are getting from this bill, to allow them this kind of loophole and to allow them to work this kind of racket compounds the injustice. I think we really need some kind of answer from the minister.


Donald Stovel Macdonald: Mr. Chairman, the assessment that I have received of the situation is that if such a procedure is possible-and I gather from conversations with Revenue Canada that they are not totally satisfied that it can be done from a legal standpoint-the possible exposure of the fiscal authorities in this particular situation is quite limited. So there are really two elements to be considered: the first is that some question has been raised as to whether this can be done legally, and the second is the more practical consideration that if it can, how much is involved in terms of the tax laws? On the other hand, the problem which has arisen is to resolve the kind of question the hon. member raised, that is, to find some effective means of dealing with the situation if there is any loophole in that regard. The judgment in this regard has not yet matured, but the feeling is that the risk involved is not substantial.


Max Saltsman: Mr. Chairman, certainly the minister's answer cannot be acceptable. His argument is that they are not quite sure whether or not it is legal. In fact, people are doing it and are assuming it is legal. They are getting advice to do it, and trust companies are going along with it. Obviously, they have had a look at the legal implications. The fact that relatively few people are doing it and, therefore, because there is not that much of a loss to the treasury, it should be overlooked, seems a pretty shaky argument for the Minister of Finance to make.
As to the remedy, I do not pose as an expert in drafting legislation. Certainly, one of the things that could be done to
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close this loophole is to say that these registered retirement savings plans have to be held for a specific period of time in order to avoid this one day in, the next day out, practice to get the benefit. Who is going to do it? It certainly will not be my steelworker who will do it. The guy who will do it is one who can get good tax lawyers and accountants to give him advice on how it can be worked. People in the highest income tax brackets will take advantage of the situation.


Marcel Joseph Aimé Lambert: Don't kid yourself; it is practised by others, too.


Max Saltsman: I am glad it is now being confirmed by the hon. member for Edmonton West. I do not really pay too much attention to what the minister's advisers tell me, competent as they are, but when the hon. member for Edmonton West intervenes to tell me that it is so, 1 take it as being so.


Marcel Joseph Aimé Lambert: Loopholes are not only for the wealthiest taxpayers. If there is one, it is used by others.


Max Saltsman: If a poor man had $11,000 worth of savings with which he could move through these loopholes, I would accept it. But I do not care whether it is the poor or the rich who use it: it is wrong to have this kind of loophole; and to say it does not cost the treasury a great deal is wrong. This is a racket, and I think it is our obligation to make sure that a loophole that permits this kind of racket is stopped before this bill goes through. I think the minister should give the House some assurance that he will do something about it.


Donald Stovel Macdonald: The comment I just made is that I think the hon. gentleman is exaggerating the problem. He says he knows lots of people who are doing it. There are lots of people who may be going ahead and doing other things under the tax law, but they wind up having themselves reassessed. So the fact that someone makes a mistake in his judgment of the tax law may involve him in due course in the payment of more tax. As I have said, the question has been recognized. There has been some discussion as to whether or not the advice which private parties have been taking is well given. The hon. gentleman suggests there would be a massive leak from Revenue Canada in this regard. Certainly that is not the feeling held by my advisers.


Max Saltsman: I rise on another point of order, Mr. Chairman. I did not suggest for one moment that there is a massive attack on the treasury. I accepted the minister's statement that while this may not constitute a very large loss to the treasury, that was not my point. My point was that it was dishonest and a loophole. Despite the assurance of the minister that it would not cost the treasury very much, it is a bad thing for the government to allow. This was the point I was making. I would like a statement from the minister at least to that extent. He says that they are liable to find themselves in trouble if they take this advice. Is there anything in this legislation which makes illegal the kind of practice I brought to the attention of the minister?

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Donald Stovel Macdonald: That is the question I asked of Revenue Canada, and it is apparently their opinion that it is illegal.


Mr. Roy (Timmins):: In view of the short time that is left, Mr. Chairman, I wonder if I may call it one o'clock?


Charles Robert Turner: It being 1 p.m., I do now leave the chair until 2 p.m.
At one o'clock the committee took recess.


[Stage Direction]
AFTER RECESS

The committee resumed at 2 p.m.
The Chairman:: Order, please. When the committee rose at one o'clock, clause 24 was under consideration, and the hon. member for Timmins had the floor.
On clause 24.


Jean Robert Roy: Mr. Chairman, after I read clause 24 of Bill C-22 I requested some explanations from the minister's officials with regard to the meaning of the clause and its implications. I wonder if the minister could enlarge on those explanations today so that the matter can be clear in my mind. The officials of the minister's department indicated to me that this clause is to allow all taxpayers to deduct in the year in which they are incurred 100 per cent of their exploration expenses.
In a subsequent paragraph in the letter I received from the officials the only thing that is mentioned with regard to the Canadian development expense account is the acquisition of Canadian resource property. I would like the minister to confirm that both the acquisition of a property and the additional exploration expenses which are added to that acquisition go to what is called the Canadian development expense account in order to establish the value of that property or the cost of that property to the investor.
Second, I would like the minister to confirm that the exploration expenses are treated as an income allowance rather than as a revenue allowance and therefore are not recoverable on the disposal of the property, like depreciation or capital cost allowances. In other words, normally when a piece of equipment or property is sold, the capital cost allowance is recoverable by the government or the tax system. I would like to confirm that this is not so with regard to the exploration expenses which are added to the acquisition of a property.
Finally, at the time of disposal of a property, I would like to know whether the difference between the income from the property and the cost which has been entered in the Canadian development expense account is the profit, and I would like to have the minister confirm whether that profit is considered as a capital gain or as normal income. I hope it would be a capital gain, because I think there is justification for it. If it is normal income, I would like the minister to confirm whether there is

not justification for differentiating between the source of that income, whether it is a normal development corporation, whether the main business of the corporation involved is exploration and development, or what have you. I think there should be a difference if the investment is simply an incidental one, if it involves just a small individual or a small corporation which has invested in the acquisition and development of such a property, and if it is not its normal business and it is just to help in the development of resources in Canada.
The law as it presently stands indicates that if payment for a mineral property, for instance, is made in shares, that is considered a capital gain; but if payment is made in cash, it is considered normal income. I suggest that there is some confusion there. I placed this matter before the former minister. It was my view that the designation of revenues as capital gains or normal income should not be determined by the source or the kind of payment-whether it be shares or cash-but rather by the type of transaction. I put this to the former minister. I should now like to put it to the hon. minister opposite and urge him to consider that the revenue derived from the sale of property should not be determined by whether it is shares or cash but, rather, by the type of transaction.
[DOT] (MIO)


Donald Stovel Macdonald: Mr. Chairman, on the first question raised by the hon. member, I can confirm that in our judgment both the acquisition cost of additional exploration and development expenses would be deductible for the purpose of this exemption. On the third question, my understanding is-and this is from the application of the law under the principal business exception-that this in the normal course will be treated as normal income rather than capital gain. On the second question, I just cannot remember offiiand whether there is a recapture upon disposal or not. I am afraid the best I can do is undertake tp make an inquiry and respond further. I cannot give a tax opinion this afternoon, but if the hon. member wants to make a representation on the point I shall be glad to hear it.


Jean Robert Roy: Mr. Chairman, if I may, I again make a small plea to the minister with regard to capital gains. If the property registered in the Canadian development expense account is sold, under the present laws the revenue derived therefrom, if paid in shares, would become capital gains, so there is a difference there that presents some confusion. Maybe the minister could look into this matter at the same time and see if the confusion could be cleared up.


Donald Stovel Macdonald: I am quite prepared to do so, Mr. Speaker.


Marcel Joseph Aimé Lambert: Mr. Chairman, I should like to say that I am glad, generally, to see clauses 24, 25 and 26 because they are aiming at removal of the principal occupation rule. It was rather interesting yesterday evening to hear the hon. member for Sault Ste. Marie engage in a full-scale attack upon Imperial Oil. As it is a principal occupation business corporation, I suggest the whole exercise of his speech
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was totally irrelevant and had no application whatsoever to this proposal in the Income Tax Act.
It is rather interesting that we are celebrating this month the thirtieth anniversary of the discovery of LeDuc No. 1 which opened up the Alberta oil development industry. It is unfortunate that at that time and up to now the principal occupation rule had any place in the Income Tax Act. I recall a period of ten years when there was still room for the small-time operators and people who were in the oil development business to acquire freehold leases or overrides on the royalties, that it was always guaranteed that in about 80 per cent of the cases Canadians were outbid by Americans. Lease-hounds and agents of American investors were in on the oil patch like flies around a honey-pot. That was to be expected. After all, there was no expertise in Canada for the development of oil fields. The drillers, equipment dealers and those with any knowledge of developing oil came from the United States in the same way they moved from Canada elsewhere when the oil play was over in the prairies.
One of the difficulties was that, say, a Canadian syndicate wanted to drill a D-2 well which would require $70,000 to $85,000: it could be made up of a couple of farmers, a garage owner, a druggist, a doctor, or whoever wanted to get together in a partnership and put up $10,000 or $15,000. Unfortunately, oil well drilling is a highly speculative business. Three holes out of four holes drilled could be dry. Up to a few years ago the law has consistently been that the recovery of drilling expenses could only be made against the revenue of any producing wells. If there were no producing wells, the money was gone.
Of course, dry wells took up as much money as producing wells. Our American friends, under American law, could offset their lost drilling expenses against ordinary income and therefore recover and recycle into what you might call exploratory working capital the allowances that they could make against ordinary income. Many persons, including myself, tried to convince the Canadian government to do this through ministers of finance and their advisers who unfortunately had a "made in central Canada" bent of mind and did not understand the oil business and rejected these proposals year in and year out.
A few years ago, in a two-step operation, up to 30 per cent was allowed and now the minister proposes to increase that to 100 per cent. I want to congratulate the minister and his officials on this. Maybe the fact that there is now a deputy minister who worked a long time in Saskatchewan helped in this regard. In any case, I commend the government even though it is pretty well locking the stable door after all but the last horse has been stolen.
I should now like to hear from the minister whether clauses 24 and 25 will effectively allow an individual or corporation who is not in the petroleum development business to write off 100 per cent of its contributions to exploration and development against income other than that arising out of the production of oil and gas. Or is there some residual formula which would phase it out over a number of years?
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Donald Stovel Macdonald: Mr. Chairman, the amendment is only applicable for a trial period. That is, it will apply to investments made during the trial period. Otherwise, a taxpayer in that situation will be treated in exactly the same way as a principal business taxpayer in the sense that he can apply this expenditure entirely to income.


Marcel Joseph Aimé Lambert: Mr. Chairman, am I correct in assuming that the trial period is to run for three years?


Donald Stovel Macdonald: Mr. Chairman, yes, up to July, 1979. It started last May.


Marcel Joseph Aimé Lambert: May I ask another question about the trial period, Mr. Chairman? Does the minister envisage a continuing review, because once we reach the last year of the trial period there could be great uncertainty as to whether it will be continued, and that uncertainty, quite naturally, would inhibit future development plans?


Donald Stovel Macdonald: Mr. Chairman, I recognize that. The trial period has been instituted really for the purpose of seeing how effective we shall be in attracting exploration. We are having some early success and there is some indication already that funds are being used in this way. We shall want to overcome the potential hiatus which could occur as we approach the anniversary date.


Marcel Joseph Aimé Lambert: Thank you, sir.


Mr. Ritchie:: Mr. Chairman, the present measure is an about-face on the part of the government. Over the years, at least ever since I have been a member of this House, the government has been most reluctant to make available to the oil, gas and mining industries the benefit of the principal income clause. I remember many years ago being asked to invest in an oil well. At that time I did not have any money, but two or three years later I asked if I could invest because I was interested in an investment which I considered about as safe as a horse race. The person who had earlier asked me to invest had drilled some oil wells himself. He said that there was no money in oil, that the government had enacted a certain law with regard to principal income, and there was not much point in investing in an Alberta oil well. Actually, I was interested in an oil well in the Lloydminster field. A few years ago the then minister of finance-Mr. Benson I think- amended the tax act and allowed deductions of up to 30 per cent. At least that was a good start. But you had to wait for about five years before you got your money back if you invested in certain resource industries.
Without doubt, the existence of the particular section of the act we are now discussing is largely responsible for the predominant American ownership of the oil industry in western Canada. Unless that law is changed, the outlook for oil and gas drilling in this country will not be good. At least it will not be easy for individuals to become part owners of oil wells. Unfortunately, Canadian oil, gas and mining industries are not doing as well as they should. I understand that for the first

February 4, 1977
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time in many years, this year no new mine has been opened in Ontario. In northern Manitoba a good many mines have closed or are closing, and activity is at a low level. I understand that only one diamond drilling outfit is operating in northern Manitoba, whereas normally you would see between 30 and 40 operating there. Companies in this field seem to have moved their operations across the border. One cannot blame the federal government entirely for this, although to some extent the controversy between the provincial and federal governments has led to the slowdown in investment in our oil, gas and mining industries.
We have often been told that we must spend a great deal of money if we are to be self-reliant in energy. One hears talk of self-reliance in the mining field by 1985 or some time in the future. I shall make two or three points and then sit down. I was much taken by something the Canada West Foundation in Calgary said recently. It had some things to say about the implementation of guidelines for national resource policies which should be established for the country's long-term interest. For example, it was proposed that the general structure and basic level of taxes imposed on the non-renewable resource sector should be reassessed by provincial and federal governments acting together. It was also proposed that a single definition of resource income directly related to ability to pay and mutually acceptable to federal and provincial governments should serve as a basis for all income-related taxes.
Mr. Chairman, federal and provincial people are still not sitting down with a clearcut policy in mind. They are still confronting one another, and confrontation is hardly in the national interest. Although certain amendments to the tax act are welcome, I suggest that until the federal and provincial governments decide on a single, reasonable, uniform taxation policy with regard to our resources, we shall not advance much.


Max Saltsman: Mr. Chairman, I listened to the hon. member for Edmonton West and was struck by how we can look at the same set of facts and come to different conclusions about them. The act we are discussing has been in existence for a long time. I suspect that it would not be quite the same as it now is if the hon. member for Edmonton West and I had not served in this House at the same time.
I want to talk about the oil industry and raise some questions. The government is introducing measures similar to those which were discredited in the past. Essentially, the government's measures are designed to encourage, by the provision of depletion allowances and write-offs of various kinds, excessive exploration and overinvestment in the oil industry. We are going to wind up being back in our old position, although under somewhat different circumstances.
The hon. member for Edmonton West drew on his profound experience and knowledge of the oil industry and said that the United States has offered many advantages to its investors which our country has not offered our investors. That is only half the story. At one time we offered as many advantages to investors within the industry as the United States has been offering.


Marcel Joseph Aimé Lambert: Not at all.


Max Saltsman: The truth is that the advantages the United States has offered its investors has been an ongoing scandal in that country and members of Congress and the United States Senate have continually risen to denounce the concessions made over the years to the oil industry.
Let us consider what has happened to the oil industry in Canada. What has been the result of concessions which the Alberta government and other governments have given to the oil industry in order to encourage it to look for oil? The conclusion we must come to from an examination of the figures is that we so stimulated the oil industry to produce that we had oil coming out of our ears. We literally gave it away because we could not do anything else with it. We had to give it away. Then, when we needed the oil, we did not have it.
Let us consider how we have encouraged exploration in Canada. What has been the history of exploration? We encouraged exploration and drilling so much, particularly in Alberta, that we produced a glut of oil. We could not use for ourselves all our own oil coming out of our wells; ultimately, we prorated the production of those wells. Wells were forced to operate at between 30 per cent and 35 per cent of capacity because we could not use all our own oil. There was no market for it. What did we do? We said we must export our oil. We pleaded with the United States to take it. Our National Energy Board, acting under our national oil policy, allowed us to sell oil to the United States at between $1.50 and $2 per barrel. Nobody had any conception that this is a finite resource, that there is just so much oil in the ground and when it is gone it is gone. We did that for about ten years, only to discover to our horror that all the information on proven and potential resources that had been given to us by the oil companies was just a pack of lies. It was not true. We found ourselves in a crisis.
When the OPEC countries decided to raise their price and put the squeeze on Canada, we were vulnerable. That is what stimulation through taxation in the oil industry did for us. It left us exposed. It encouraged an overproduction of a commodity that would have been better left in the ground until needed in the future. We need it today and we will need it in the future.
I see the same situation with regard to this method. There is no future. We cannot solve future energy problems by pulling the oil out as rapidly as possible. As a matter of fact, it would probably be most useful if we left the oil in the ground and used it for petrochemicals in the future, rather than burning it now in our furnaces and refineries.
We are kidding ourselves. How long will the oil last? Supposing we do find some-how much will it be? We have already taken most of it out of the ground. It is very difficult to find, and what we do find is in small amounts. However, we go ahead with the same kind of pattern that created disaster for us in the past and will lead to disaster in the future. When
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the time comes when it will be needed for the petrochemical industry in Alberta, it will not be there. Alberta is doing very well today. I am pleased that it is doing well. However, the people of Alberta know they are dealing with a finite resource. They know they have to husband that resource in a particular way in order to have a prolonged and ongoing industry, particularly in petrochemicals.
What do we do? We tell the oil companies to go there, find the oil, use it and get rid of it as quickly as they can. What shortsightedness; what foolishness! Rather than encouraging the finding and production of this resource, we should be discouraging it in order to save it for the future. Future generations will look upon us as having been the most stupid people on the face of the earth because of what we are doing with our resources. It took billions and billions of years for that small amount of oil to be produced and settle itself in pools in the ground. We have taken only one generation, two at the most, to deplete that resource of billions of years, leaving virtually nothing for future generations. It is tax measures of this kind which have assisted this despoiling of our resources.
Going back to the situation in Alberta, I ask the hon. member for Edmonton West whether, in retrospect, it would not have been better to provide less encouragement to production in those early years. The production was going to take place anyway. Suppose we had not produced that oil as quickly as we did. We would not have had to export it. We would not have had to look for markets outside our own country. We would have had a supply of oil for the future infinitely greater and more valuable today, instead of giving it away for what we did. It was a foolish policy.
How did the hon. member for Edmonton West view that kind of approach? I am sure there are many people in his province of Alberta who see the folly of that kind of policy. I am sure they would have preferred a gradual development based on Canada's needs, rather than based on investors pulling out as much as they could in order to make a fast buck. I see the hon. member for Edmonton West shakes his head. After that lesson, has he not learned anything about the use of resources? I see he wants to rise and reply. I am quite prepared to yield the floor to the hon. member for Edmonton West, if he wishes.


Marcel Joseph Aimé Lambert: Mr. Chairman, I will make a short comment. This is not a debate on oil development policy. As a quick observation, I will say that hindsight sometimes is a very cheap commodity and the conclusions based upon it are just as valuable.


Max Saltsman: I agree that it is very easy to have hindsight and to come to some conclusion about hindsight. The point 1 am trying to make to the hon. member for Edmonton West and, hopefully, to the hon. minister is, let us not repeat the same mistake. In those days, the same sense of urgency arose and the same speeches were made. We had to bonus the investor to explore and produce oil, thinking that today was the only framework in which we were to operate, that there was not going to be a tomorrow. That is the point I am trying
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to make. Let us not repeat the same stupid error we committed in the oil industry in the past.
This is a bad piece of legislation, one that I personally am not prepared to vote for. What would we accomplish doing this? We would probably make some people very rich. We would allow them to shelter a lot of their tax through exploration. I could perhaps even go along with that, if it were the only way of doing it. I do not say that I would like it, but if there was a compelling need, we had to have the oil immediately, and something would happen if we did not, and that the oil today would be more important now than in the future, we would have to cut some corners. If we had to drop some equity in our tax system to accomplish that, I could understand it. I may not like it, but I could understand it.
However, when we drop equity and provide an enormous bonus to the wealthy of Canada to find a tax shelter through exploration, damaging the country at the same time by their activities, that is an outstanding example of insanity. Let me read to the committee what has been said about this situation. I quote from the Financial Times of November 8, 1976. The article talks about units sold by Midland Doherty Limited acting as agent for Ranchmens:
Minimum subscription is $10,000 with increments of $5,000. The issue and its pricing is deliberately designed to appeal to investors in 50 per cent and up tax brackets.
That is who it is designed for. I am sure the hon. member for Edmonton West will not repeat his speech of the other day and say that this is something for the little man. It is obvious that those who stand to benefit most from this kind of investment are those who have tax liabilities and cannot find loopholes. Therefore, the government has opened up a new one for them. They can invest in the oil exploration industry and write off the total cost of their investment in oil exploration and production against their tax liability. Later they will come back here to us or other legislators who may be around and use what they got for nothing from tax money as a cost basis for determining what they should get for oil. In other words, the oil companies will do as they are doing now. They will say they need more money because it costs so much to produce oil. They will not say that what they are claiming as costs were in fact depreciation and depletion allowances which were bonuses from the various levels of government. They do not pay for them. It is money saved in the tax system.
At some point I should like to ask the minister whether these benefits which are being given to investors in the oil industry will some day form a cost basis for them, whether that will be recognized as a cost basis despite the fact that the money really came through a savings in the tax system-not all the money, but a substantial part of it: for instance, if taxpayers are in the 50 per cent tax bracket and they invest $100 in the oil industry, then they have invested $50 and the government has invested $50 and it is an investment on the part of the government, because it is not as though the government had no alternative, the government could collect the tax from people in the 50 per cent bracket and divert it to

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Petro-Can. We can do our own financing. We can do our own exploration. After all, 1 presume that was what Petro-Can was set up for. Petro-Can is capable of doing it. If it is not capable of doing so, it can certainly be the entrepreneur. It can hire drillers in the same way as somebody in Texas can hire drillers, or somebody from Bay Street, Toronto.
So it is really being done with our money, and later on they will not come back and say the cost basis upon which we think the oil should be priced is 50-cent dollars. They will say it is $1 dollars and they will want a return on that amount even though half the risk and half the investment came from the people of Canada.
The point to make about depriving the federal treasury of revenue at this level is that there is no such thing as income tax avoidance. The extent to which one group of people does not pay the tax it should means that another group of Canadians has to make up for it. So the oil investment bonanza becomes a burden to the small taxpayers.
Hon. members in the Conservative party will say," It doesn't have to be that way; we can reduce government expenditures instead." Well, of course, we could reduce old age pensions and family allowances and achieve the same result, but I am sure that is not what we want to do, and that is not going to happen because the people are not going to let it happen. But this kind of thing does happen because it is not highly visible, it is not obvious; it gets buried in the tax system, this great subsidy to the rich of Canada, and the subsidy which is paid to them has to be made up by the smaller taxpayers.
Let me continue by quoting from an article by Jack McArthur which appeared in the Toronto Star of December 16, 1976:
When you fear for Canada's future and wish you had less money tied up in Quebec ... when profits have gone flat in the manufacturing of cigarettes, booze, beer and a dozen other products... when big Government and its confusing controls seem to make life hardly worth living . .. when those worries are jabbing at the old ulcer, you go looking for oil and natural gas in Western Canada.
This article was written with reference to the amendment before us now. The writer concludes by saying:
Some of the enthusiasm in Canada stems from last May's federal budget.
Finance minister Donald Macdonald had a carrot for those whose main businesses are not in natural resources. For three years, they would be able to write off immediately for tax purposes the costs of looking for resources. This deduction reduces taxes on their other activities. Ottawa's idea was clear. It wanted more money looking for oil and gas and was prepared to give tax-breaks to get it.
With so many reasons for investing in exploration and production, it's no wonder the Toronto Stock Exchange index of prices of western oil shares has jumped almost 10 per cent since mid-November.
I don't know what it would take to arouse this committee, to make it see that we are repeating a mistake of the past by providing tax benefits of this kind in connection with exploration for oil. If there were a possibility that exploration for oil would enable us to meet the projected energy needs of the future for any substantial period in the future, it could be understood, but all we are looking at is, at best, a short period of relief. The real solution for the future is conservation, as the minister himself pointed out when he was minister of energy,

mines and resources. The logic he displayed as minister of energy, mines and resources is being confounded by what he is doing today as Minister of Finance.


Gérald Laniel: Shall the clause carry?


Max Saltsman: I should like to put to the minister the questions to which I alluded in my remarks. Would he give us an explanation of the clause which states that the various benefits received from governments, forgivable loans, deductions from royalties, investment allowance, and so on, will not reduce the amount people will be able to deduct under this clause? That is how I read it; they can receive all those other benefits without having this kind of allowance reduced.


Donald Stovel Macdonald: Yes, Mr. Chairman, in the situation in which a provincial government has taken steps to provide that kind of incentive, it would seem to be perverse to treat it adversely from a federal taxation standpoint.


Max Saltsman: So this particular arrangement, if a person is in the 50 per cent tax bracket, means that 50 per cent of the money he is investing comes from the federal government, and if provincial governments allow them another set of money it is theoretically possible that if a person plays very cagily and gets different concessions he could be working almost totally with government money in terms of the development of this industry. I see the minister does not want to deal with that aspect as a theoretical proposition.


Donald Stovel Macdonald: One way or other, the fellow will incur expenses. Since he is not paying a 100 per cent tax rate it is not clear to me how he can get all those expenses back. It certainly will reduce his tax liability, but I do not quite follow the mathematics.


Max Saltsman: Well, you are providing him basically with free capital, 50 per cent under this provision. If he is in the 50 per cent tax bracket, for every $ 100 he invests he only puts up $50 of his own money; the extra $50 is money he has saved in terms of his tax liability. In other words, his own capital is only half of what it would otherwise be for investment purposes. What would be his cost base later on? Let us suppose the AIB continues. Will it be the money he put in? I do not see how it can be. So will it be the total amount put in?


Donald Stovel Macdonald: His cost base will be his expenditure, but for ultimate purposes the amount of his expenses will be deducted.


Cecil Morris Smith: Mr. Chairman, I should like to direct the minister's attention to what has happened in northern Manitoba as far as exploration goes. At the present time, mining is our main industry but there is literally no exploration going on in northern Manitoba. I can remember a time when there were up to 28 diamond drilling rigs engaged in exploration work in the north. It seems to me that as the federal government and provincial governments try to get more and more tax dollars out of the industry, the industry becomes increasingly less inclined to undertake the risk of
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engaging in exploration work. They question whether it will bring sufficient return to their investors or shareholders.
The province of Manitoba is paying 50 per cent of the cost of exploration. However, it does not have many takers at this time, for the simple reason that the industry, knowing very well how governments operate, realizes that there is going to be nothing left for the industry if any finds are made. In the province of Manitoba $1 million has been spent on exploration so far, and 1 do not think that even the crews have gone out into the bush to this point. So I think we have to be very careful, if we do want to encourage development, that we do not tax industry to death before it ever gets started.
The Minister of Energy, Mines and Resources said when he went to the United States last week that our future is in the untapped resources of the north. Unless government is prepared to take the same kind of risk that industry takes in the field of exploration, then the government had better take over all the exploration work in the area. This is what the province is trying to do and it is just not working out.
Industry itself is not expanding in the north but is simply mining what it has found to date. Exploration is moth-balled for the time being until there is some realization that it is a costly business to explore, to diamond drill, and so on, in the north where costs are prohibitive. The government does not seem to take these things into consideration. The cost of exploration has skyrocketed. Companies like International Nickel have moved their exploration crews completely out of the north and are operating out of Ontario at the present time. A company like Hudson Bay Mining and Smelting has absolutely curtailed all exploration in northern Manitoba and the north in general, for the simple reason that they cannot show a decent return to their shareholders in view of the tax that is required by the federal and provincial governments. Sherrit Gordon at the present time are closing down parts of their operation; they are also faced with the same situation, with no exploration work going on whatsoever.
So far as this bill is concerned, we should be thinking very seriously of encouraging industry to go into the north. To do this we have also to provide incentive through having a less firm hand on the tax side of it in order to encourage development. I am not for giving everything away, Mr. Chairman, but I still think that private industry can do a far better job of exploration than the government.


Eldon Mattison Woolliams: Mr. Chairman, I should like to ask one question of the minister. It is some time now since the budget; I think I understood it on budget night and I did look into it. Is the clause of the bill that we are dealing with now the one dealing with the encouragement of exploration and development? Is it the clause that provides for individuals and corporations taking so much money off their taxable income provided that, within a certain period of time, they invest the money in exploration and development?
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Donald Stovel Macdonald: Yes, Mr. Chairman. It is dealing specifically with individuals and corporations whose principal business is not resource exploration and development. As the hon. member will recall, somebody whose principal business was of this character previously had that advantage, and we have now extended it to others in the community.


Eldon Mattison Woolliams: Then may I just say a few words on that for a moment. I want to congratulate the government on this clause. I hope that members in all parties in the House, including the socialists, might appreciate that we are now reaching the stage where probably the greatest problem we have to face, not only on this continent but throughout the world, is the cost of energy. The cost of energy is one of the main factors creating inflation. If there is sufficient exploration and development to make sure that we are self-sufficient in this country in gas and oil, then we have gone a long way; and the government has gone a long way if it offers encouragement of this sort in order to control inflation other than by way of wage and price controls.
As I have said before, when we are dealing with this subject there is one thing that is always overlooked. I see the hon. member for Calgary South here; he has had a lot of experience in this field. When you are looking for investment for exploration and development purposes in the gas and oil field, you are not competing in Canada, you are competing throughout the world. Unless we give the industry incentives and let the industry benefit under this provision, then drilling equipment and other items of equipment will be sent to the North Sea and elsewhere in the world. We will be the losers. We will be paying $12, $13, $15 or $20 a barrel for crude petroleum if we do not develop our own supplies.
I hope this is a matter to which hon. members will direct their attention. I agree with the last speaker that, whatever the industry, there is ample evidence that private enterprise, particularly when risk capital is involved, certainly in my opinion can do a much better job than state control. Even communist countries are making deals with free enterprise and entrepreneurs in the United States and Canada to drill for gas and oil, because they realize that communist countries have complete state control and that there will be greater efficiency with free enterprise or in partnership with free enterprise. Surely that is ample evidence of the direction in which this country should be going, rather than in a socialist direction. If the United Kingdom's reserves are proven, as now appears is the case in the North Sea, then they may be able to pull themselves out of the economic collapse they have suffered during the last few years. I do not want to repeat what I said last evening about where some of the blame might lie.
This is one clause of the bill to which I think the government and the minister's department have given a lot of thought. I want to congratulate the government on being realistic enough to realize that exploration and development of gas and oil today must continue at an accelerated pace; otherwise we will no longer be self-sufficient in this field.

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Max Saltsman: Mr. Chairman, I wonder whether the hon. member would permit me to direct a number of questions to him with regard to some of the remarks he has just made?


Walter David Baker: Let us get on with the bill.


Max Saltsman: This has to do directly with the bill.


Walter David Baker: All kinds of people are waiting for a refund. Let us get on with the bill.


Max Saltsman: It is directly on this particular clause. The hon. member for Calgary North was talking about free enterprise in the oil industry. In fact, Mr. Chairman, the oil industry is hardly free enterprise any more in terms of who gets the benefits. Let me ask the hon. member for Calgary North, who is very knowledgeable about these things, this question. Of the present price of a barrel of oil, how much goes to the oil industry, how much to the federal government and how much to the government of Alberta? The reason I ask this question is pretty obvious: I think something like 60 per cent to 70 per cent of the price of a barrel of oil does not go to private enterprise at all; it goes to public enterprise, the government of Alberta.


Eldon Mattison Woolliams: Well, my hon. friend has already answered the question. I like to be helped, and when a member asks me a question I like to help him. Now the hon. member has given me the answer. What he is trying to say, Mr. Chairman, is that the industry is sort of split between government enterprise and private enterprise. But I think he has missed the point, and I will clear it up for him quickly. Certainly, the greater share of the revenue today is going to government, and this will discourage exploration and development in the oil and gas field. This is what the government is trying to relieve.
The point I am making is that when you invest risk capital you should do it efficiently. To put a hole in the ground, drill it and organize the whole operation technically, is done more efficiently under the free enterprise system than by the government. It is true that these corporations and individuals pay large taxes. That has been the great complaint. I think my good friend, perhaps unintentionally because I know what his business was before he came to the House, missed the point.


Max Saltsman: I will make another point, Mr. Chairman. The hon. member for Calgary North has an argument for supporting the government very strongly on this measure. He said that this is one way of significantly lowering the price of energy in Canada.


Eldon Mattison Woolliams: I did not say that at all.


Max Saltsman: It seems to me that the province he comes from is taking the position that when the OPEC countries raise the price of energy by 400 per cent, as they did a few years ago, the province of Alberta is entitled to the same amount, and the reason it has not done so is because of the confrontation between the federal and provincial governments on this

matter, with the province of Alberta kicking and screaming about not being allowed to raise its price. Therefore I would like to ask the hon. member for Calgary North how the price of energy can be lowered if it is the policy of the oil producing provinces to raise it to world levels.


Eldon Mattison Woolliams: I will answer that question, Mr. Chairman, but I am not the Minister of Finance as yet. It is his job to answer these questions. But let me say this to him. He talks in his preamble about Alberta. The reason there is no development or exploration going on in Saskatchewan is that whatever Alberta might have done, they pay twice as much in taxes. You only have to talk to the top men in Calgary and they will tell you that it really costs them money now to produce a barrel of crude petroleum in Saskatchewan, so they pump it so slowly that none will come out. If that is the kind of development under a socialist government which my friend likes, it is not the kind I would accept.
Certainly if we explore and develop resources and find certain quantities of oil, perhaps cheaper energy will be provided. I know that if my friend were minister of finance, like his governments in Saskatchewan and Manitoba which have their two hands in the till all the time, the price of oil would not go down. But the way to lower the price of energy-and I say this to him in terms of sound economics-is to cut down taxes, not increase them. His philosophy is to increase them and to discourage exploration and development.
I do not mind answering his questions, but I realize there is a time limit on this debate. I am not really wasting any time because finally their filibuster will have to end.


Walter David Baker: Let us get on with the bill.


Gérald Laniel: Order, please. I wonder if I should allow this exchange between hon. members to continue. The hon. member for Waterloo-Cambridge asked questions of another hon. member, not of the minister, then yielded the floor, regardless of whether the Chairman agreed or not, and regardless of another hon. member who might be interested in seeking the floor. To allow the committee time to reach a decision and to re-examine this procedure, I call upon the hon. member for Calgary South.


Mr. Bawden:: Mr. Chairman, I would like to ask the minister a question. Do I understand correctly that on development expenses rather than exploration expenses the write-off is 30 per cent a year on a diminishing balance?


Donald Stovel Macdonald: Yes, that is right, Mr. Chairman.


Peter Colwell Bawden: I would like to ask the minister how he arrived at this in view of the fact that exploration is a key factor in finding additional reserves. One of the great problems we will face in this country is the development of reserves and production in the high cost frontier areas. I recall reading recently that a fully developed production platform in the North Sea will cost in the order of $1 billion.
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One of the problems we are facing in this country is not only Finding the reserves but justifying the investment to put these reserves on production, thus making them viable. Has the minister given any thought to making development expenses fully deductible in view of the fact that this would be an important factor in making certain that off-shore fields which would be uneconomical today would become economical to develop? Perhaps Sable Island or the area surrounding it is a good example of a very high cost area. I recall, for instance, the construction of a pipeline there costing in excess of $1 million a mile. I wonder therefore if the minister is prepared to reconsider making development expenses fully deductible, thus making off-shore reserves an economical production.


Donald Stovel Macdonald: Mr. Chairman, the real purpose was to provide an incentive at the highest risk end of the operation, namely, the exploration cost which would be involved potentially, such as if you are going to drill two or three holes and might Find nothing but dry holes. Naturally when you move to the development phase, you have assessed for yourself that there are good chances of finding something. At that point the development can be more easily financed than can the highly speculative effect of capital involved in exploration. I do not take issue with the point the hon. member makes about the cost of development. I know it is high, and will be particularly high in the frontier areas. The thought we had in mind in this change was to encourage risk money to explore for additional oil and gas.


Max Saltsman: Mr. Chairman, I was hoping to direct my question to the hon. member for Calgary North, but I will have to put it to the Minister of Finance. Can the minister tell me what study has been carried out on the effect of this concession with regard to what sort of reserves or potential reserves we might get by increasing the benefits to investors in this Field? Surely when the Department of Finance allows people to do this instead of paying the federal treasury in taxes, they have some idea of the benefits to be derived. How many more years' reserve can we expect to have, and how much more secure will our future be as a result of the concessions the minister is offering to investors in the oil industry?


Donald Stovel Macdonald: In this regard you can only talk about the potential of the hydrocarbon bearing zone in Canada. This is a measure of judgment by experts in the field, founded among other things on the drilling experience or, in some cases, the seismic information. On the basis of this and other experience in comparable areas in Canada one can make an estimate of the potential production that can be gained from a particular area. What you cannot estimate is at what time exploration will be successful in tapping that potential, as a succession of Firms have found out. Shell Canada in the late 1930's and 1940's, having the drilling rights to the Leduc field, found it very hard to develop the field there and gave it up to another company, only to suffer the chagrin of seeing another company bring in a wild-cat at that point. Even with all the
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scientific assistance one can have, ultimately there is a very high measure of chance involved in putting a drill down.
In response to how many drill holes will be successful as a result of this kind of tax arrangement in the next three years, I cannot really give a speciFic figure. I could seek from my colleague the current estimates of the geological survey of Canada as to the hydro carbon potential of the various areas of Canada, but one can draw the general conclusion that on the whole the more drill holes which are put down, the better chance there is of Finding the resource.
I do not know anyone at this point who can say with any precision how successful we are going to be in a short period of time in bringing on additional oil and natural gas. Certainly we can expect to bring some on, but how much can be expected has to be a matter of chance as much as anything. Unless we take that chance and drill the holes, however, we are definitely not going to get it.


Max Saltsman: That is the same as playing Russian roulette with taxpayers' money. The reason I asked that question was really to elicit the response I got from the minister. The point is he does not know; nobody knows. We could in fact be pouring this money down the sink hole. We may just be spending this money to Find out how much oil we do not have because, even under the most optimistic examination of our future for hydro carbons, we do not have very much.


Eldon Mattison Woolliams: How do you know?


Max Saltsman: Well, that is what they say, and to make a comparison, at Leduc in the early days of oil exploration people did not know very much about it. Scientific ways of discovering oil really had not been worked out very carefully, but today a great deal of work is being done in this country in terms of Finding out what the potential is. We can always strike it lucky on some field, but from everything I have read there do not seem to be any Leducs around any more waiting to be discovered.
At the very best there are small pockets around which may be found; therefore, to provide this kind of stimulus in this game of Russian roulette does not seem to be a terribly wise proposal to put before this committee.


Donald Stovel Macdonald: In the first place I take exception to that kind of reasoning. Let us divide the potential up into the more conventional hydro carbon provinces which we have in the western Canada sedimentary basin and then talk about the frontier. It is known and it is clear that there has been some success during the course of the current year, and that there are additional deposits, particularly of natural gas, which can be identified by drilling and brought into the system, so there is something very substantial to be gained with regard to our natural gas supply by additional drilling of this kind.
However, what is even more significant is the fact that seismic indications in the high Arctic and in the Arctic off-

February 4, 1977
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shore show that there are very major structures which could be even larger than Leduc in terms of production if these structures are filled with hydro carbons, and I go back to my point: we are not going to identify whether we have a supply of oil and gas unless we drill holes, and we are going to have difficulty raising the funds to drill holes without the kinds of incentives we have right here.
In a perverse way it is even desirable to know that the hydro carbon provinces, for whatever reasons, over geological time may no longer contain hydro carbons. In an economy very substantially based on oil and natural gas, if indeed we do not have any more potential, we should be working very hard at developing alternative sources. If we do have natural gas and oil, I think it is important for the decision making level to find this out as soon as possible by drilling.


Max Saltsman: On that last statement of the minister I find that I can agree with him completely, and that is one of the things I am getting at. We do in fact know a fair amount now. We do not know as much as we would like to know or should know, but I think it is pretty obvious that we cannot predicate the future on hydro carbons, gas and oil. We must move to other forms of energy.
While I do not have before me the speeches the minister made when he was minister of energy, mines and resources, it seems to me that he said very much the same thing, that if we are to be spending money we should be spending money on new forms of energy instead of just wasting our time and providing tax benefits in a field which is not really very good for the future, even at the most optimistic estimates. Even if more oil and gas were found than expected, how much oil and gas could be found in terms of future supplies? Will there be enough for 25 years or 50 years?
Then we go through the same thing again. The point is that we have to move to new forms of energy, and these things can be marginal until we do find them-they can hold us until we get there-but we should not be placing a heavy reliance on this kind of energy for the future.


Donald Stovel Macdonald: I would be glad to deal with that as well. We have in my lifetime found an additional new source of energy in the form of the nuclear power reactor. It has taken very nearly 25 years to move from the theoretical technology involved to the effective commercial exploitation of it. There is a common practice on the part of some observers of energy policy to talk about solar energy, biomass, wind or tidal energy, and to assume that to think about it is to install it with the present technology. However, that has not been our experience in technology. We in this country are going to be dependent-as indeed the world is going to be dependent-on fossil fuel sources, probably for the balance of my lifetime, and I think it is therefore important for Canadians to identify our sources if we can, rather than pay somebody else for them.
In due course I think we are going to evolve effective alternative sources of energy, and that is desirable, but I do not think it is adequate to say that we will stay cold for 20

years and that by then we should have some effective solar technology to take care of us.


Peter Colwell Bawden: Mr. Chairman, further to the question I asked the minister about the 30 per cent diminishing balance writeoff on development expenditures, I am wondering if the minister is aware that any sophisticated company which looks at its exploration program in any off-shore and high risk area at the same time has to run through the economics of producing, before it even gets involved in the early exploration. Does he realize that they examine on a very careful basis whether the land regulations and the tax rules which are in place permit them to develop if there is a discovery of a certain size?
I believe this is an alteration to the rules as they were in the past. In other words, development expenditures were fully deductible, and I suggest to the minister that this is a retrograde step which would make it less attractive to develop. It would discourage explorers from going in in the first place because they recognize the probabilities. They recognize that they have certain chances, but if they fall somewhat short of the reserves they hope to find, then under certain tax rules they could not proceed to develop. I suggest to the minister that this is a discouragement to exploration in the first place. I think this has been evidenced in the North Sea where a great many small companies, particularly Canadian companies, were forced to sell out to bigger companies, simply because they were unable to raise the very large amounts of capital required. I think the minister recognizes that if there is a problem in the energy producing industries of our country today, it is the availability of capital not only for exploration but also for development.
Everybody is short of capital. In fact even the very large companies are, as evidenced by their activities in the recent past. They simply cannot find the sources of capital which are going to be required.
I would like to ask the minister whether he would give consideration to changing this write-off provision and increasing it to 100 per cent, in view of the fact that this government has for a number of years been stingy with regard to everything it has done. It has always been treading the narrow line of being too tough. The minister is well aware of the cutbacks in exploration which have taken place. That is one of the reasons why we have a serious energy outlook in this country at the present time.
I am wondering whether the minister is going to err on the side of being too tough, bearing in mind particularly that there are no rules in place today relating to off-shore areas. We have so many uncertainties, so many unknowns, and so many rules that we err on the side of being too stingy and we have created a very great uncertainty, particularly as it relates to the frontier areas under the control of the government.
I wonder if the minister would consider this question of the 30 per cent write-off for development, recognizing that it would give further stimulus to exploration and would bring less
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economic fields into the realm of economic fields. Presumably in the slightly longer term it would improve the energy outlook in Canada. It would at least nail down one area as a certainty rather than the basically negative things that have prevailed in recent years, notwithstanding the fact that the basic thrust of this clause, which permits Canadians to invest in exploration, is a good one.


Donald Stovel Macdonald: The difficulty, of course, is just how much of the public purse you are going to make available for any of these operations. One could say in a single minded way that you should make all conceivable funds available for this purpose. We have said that as a matter of priority in terms of forming a Canadian energy policy it is important to identify the potential of an area, which is to be done primarily by exploratory drilling. It may well be because of the high capital costs involved in development we would want to look again at the rate of write off for those who at the moment do the exploration drilling we are most concerned to stimulate.


Charles Robert Turner: The hon. member for Waterloo-Cambridge.


Max Saltsman: I see the chairman is becoming somewhat familiar with the name of my constituency.
I should like to direct this question to the minister. It will be quite obvious why I am asking, but before I do I wish the minister would not drag out his red herrings about how we are going to be freezing in the dark unless we pass this kind of legislation. There is energy available. There are other forms of energy that can be purchased at this particular time. I want to ask the minister to make a comparison between the kind of tax benefit and loss to the treasury that is going to take place through this measure as against what Canada is spending in trying to develop new forms of energy.
The reason I ask this question is quite obvious. In other words, what is this measure going to cost? How much are we spending in exploring for or examining new forms of energy?


Donald Stovel Macdonald: On the second part of the question, Mr. Chairman, I would have to inquire of my colleague as to the expenditure in the private and public area on new forms of energy. On the first part of the question, there is going to be some cost certainly, but it will depend on the extent to which it is seen as an attractive investment by many people. In other words, one of the reasons for having a trial period is so that the government's liability in this area may be limited for the purpose of determining the efficacy of these means of stimulating investment or whether, on the other hand, we may be giving too much away at this point.
I cannot give a precise figure now but I can say that since the matter has come up there have been a number of funds put together for the purpose of engaging in this kind of exploration.


Max Saltsman: Is the minister telling the House that he cannot tell this committee what the cost to the treasury will be as a result of the passage of this particular clause?
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Donald Stovel Macdonald: Not any final definitive figure, Mr. Chairman. No.


Charles Robert Turner: Shall clause 24 carry?


Some hon. Members:: On division.
Clause agreed to on division.
Clauses 25 to 30 agreed to.


Charles Robert Turner: Shall clause 31, as amended, carry?


Donald Stovel Macdonald: On a point of order, Mr. Chairman, it is not an amendment to clause 31. It is an addition to the bill of clause 31.1.


Charles Robert Turner: Shall clause 31 carry?


Some hon. Members:: Agreed.


[Stage Direction]
Clause agreed to.
Marcel Lessard: That Bill C-22 be amended by adding thereto immediately after line 12 on page 33 the following clause:
31.1 (1) Paragraph 82(1 )(b) of the said Act is repealed and the following
substituted therefor:
'(b) where the taxpayer is an individual, other than a trust which is a
registered charity, Vi of the aggregate of all amounts described in paragraph
(a) received by him in the year from taxable Canadian corporations'.
(2) This section is applicable to the 1977 and subsequent taxation years.


Charles Robert Turner: Shall the amendment carry?


Some hon. Members:: Agreed.
Clause 31.1 agreed to.
Clauses 32 to 42 inclusive agreed to.
On clause 43.


Max Saltsman: May I first of all say that in principle I am very pleased to see that the question of assistance to dependent children or other persons confined to wheelchairs is being provided. I think this is something long overdue. All of us have personal experience of people who have children who require very close attention, and we are familiar with the costs associated with that care. I am therefore happy to see this particular measure included in the bill. My happiness is somewhat soured-


Donald Stovel Macdonald: Tempered.


Max Saltsman: -tempered, by knowing that I have to say the same thing on this as I have said on some of the other reasonably good measures which are put into the tax bill and then distorted because of the disproportionate benefits they give to the rich as against what they give to people on working incomes.
It must be obvious that the cost of looking after a child in a wheelchair bears as heavily on the poor as it does on the rich; in fact, perhaps more heavily on the poor than on the rich.

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This allowance is really not going to cover totally the cost of supporting a child of that kind, yet if we look at the effect that this has we can see quite clearly that the better off are going to benefit more from the dependent child disability deduction. Someone with an income of $10,000 a year receives a benefit of $275; someone fortunate enough to have an income of $50,000 a year receives a tax benefit of $563. The higher income receives more than twice as much, and of course it is proportional all the way through.
It seems to me that to distort a humanitarian measure like this is the wrong way of going about things, and I have to object to it. I do not think anything points more significantly to the kinds of things that happen in our society, the kinds of distortions that take place, and the positions in which members of this House are often placed. The government brings in a measure which is humanitarian on the surface and has the support of all people, then deliberately distorts it to maintain the bias between rich and poor in which the rich do better and the poor do worse. The government says, "The poor will get something, so why should they complain if the rich get twice as much? If the poor complain and this bill does not pass, they will get nothing at all."


Eldon Mattison Woolliams: We should get our handkerchiefs out.


Max Saltsman: It is easy for my friends on my right to jeer, but let them stand up and tell me on what sense of morality is a measure like this based, a measure designed to assist crippled or disabled children but under which the rich are to be compensated twice as much as the poor. What is worse, if you do not earn any taxable income, you will get nothing. If you are very poor, you get nothing at all. What is the moral basis of this measure?


Eldon Mattison Woolliams: If you have no taxable income, you do not pay any tax.


Max Saltsman: Because you do not pay tax, your crippled child will not get benefits.


Eldon Mattison Woolliams: But there are other programs, you know.


Max Saltsman: What benefit do you get if you do not pay tax? Mr. Chairman, we are not speaking of a kind of universal demogrant. We are speaking about a deduction from taxable income. If you do not earn taxable income you do not get any benefit. Perhaps we should leave that point. After all, judging from the comments one hears, some hon. members feel that the poor are not deserving and perhaps should not get any benefit.
Let us assume that you earn less income than some other people. Why should you get only half as much of a benefit to assist your disabled child?


Eldon Mattison Woolliams: Why do you pay more than twice as much tax if you make twice as much money?


Max Saltsman: I know that this whole business is very symmetrical. Hon. members will repeat the argument of the Minister of Finance, that the tax system is proportionately based and since we are talking about tax reduction, why, this is the way it works. Mr. Chairman, that is a lovely piece of symmetry. But what kind of morality is it? That is what I am asking the committee.
The benefit need not be given in the form of a tax deduction. It could be given as a tax credit. If it were instituted as a tax credit, each person would benefit equally, including the person who does not earn taxable income. That, it seems to me, is the way it ought to be done. It should not be instituted in the form of a tax deduction, because under the present system the more you earn, the greater is the benefit you can obtain.
We object to that sort of thing not only in the clause under discussion but in other clauses of the bill which provide uneven benefits to taxpayers. My remarks apply even to the clause about which we talked previously, which one cannot mention at this time. That has been the pattern of this entire bill. Under this bill, the more you have got, the more you "gets", and the less you have got, the less you "gets". We object to that.


Marcel Joseph Aimé Lambert: Mr. Chairman, generally I commend the changes being made. May I raise a question about the meaning of "prescribed information"? I am referring to those words appearing on line 27 of page 46 of the bill. A student attending an approved educational institution had to prove his attendance by filing with the minister a certificate of attendance from that educational institution. What does the minister intend in this regard? Why have the words "prescribed information" been included in subparagraph (g)?


Donald Stovel Macdonald: As I understand the situation, Revenue Canada felt that a mere certificate of enrolment was not adequate. They wanted additional information as to the nature of courses, the period of time attended, and so on, for the purpose of making a judgment as to whether the individual person fitted within that category. That is my information.


Marcel Joseph Aimé Lambert: Mr. Chairman, could I please have some information with regard to the new definition of "registered charity"? I am referring to page 47, subparagraph (4)(c). The amending paragraph reads in part, " ... and was either created or established in Canada." That provision did not exist in prior legislation.
There is, as a schedule to the Income Tax Act, a list of some 268 educational institutions, I think, known as universities outside Canada. They appear under Schedule I. Many Canadians have the advantage of an education at a university outside Canada, and from time to time they are asked to contribute to a foundation or scholarship program. Usually they are well disposed to make that contribution. After all, they have attended these institutions of learning, often at no expense to themselves, because they went on a scholarship. Frankly, I consider myself as one of them. We derived great benefit from our stay in those universities. Naturally, from time to time we

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are called on to make contributions, either to a building fund or to a scholarship program.
In future, how will a Canadian resident or citizen who has attended one of these schools approved under Schedule I make a contribution, as a gift, to a charitable organization? In other words, the gift is truly to be considered as being made to a charitable organization. Does the present provision mean that we shall need to establish some foundation or what have you in Canada, which will collect these funds and then transmit them to the institution in question, whether in the United States or abroad?


Donald Stovel Macdonald: I suppose the question is whether the hon. gentleman would make his contribution to Oxford University; I would make mine to Cambridge.


Marcel Joseph Aimé Lambert: I would even allow you to do that.


Donald Stovel Macdonald: In either case, the contribution is made directly to the institution, for example, to the trustees of Trinity Hall, Cambridge. The university itself will give me a receipt for that contribution. That, as I understand it, is not changed by the present provision. By way of comparison let me add that I believe that the Friends of Harvard University in Canada have a Canadian foundation to which funds are contributed; as a result of the contribution you get a receipt. As I understand it, under the new arrangement my hon. friend and I will still be able to make a trans-Atlantic contribution to an institution of learning. We will not have to make the contribution to a foundation in this country; but this provision has been introduced in case there is a foundation here.


Marcel Joseph Aimé Lambert: Mr. Chairman, speaking about contributions to Oxford, it seems to me that there was an establishment in Toronto to which one sent contributions. That organization issued a receipt under the registered charities section. Unless one filed a receipt which had a registered number on it, the Minister of National Revenue would not recognize it. Therefore I could have sent thousands of pounds, if I had them, to my old college in the United Kingdom, but the Minister of National Revenue would not have recognized them.


Donald Stovel Macdonald: Mr. Chairman, I could talk from other experience. I have sent contributions, not thousand of pounds, directly to my institution and received a receipt which has been allowed for tax purposes.


Marcel Joseph Aimé Lambert: May I quote you?


Donald Stovel Macdonald: By all means. I have to say that as one of those of my college in Canada interested in this question, I took the precaution of seeking advice from National Revenue in advance before I dunned everybody else to make a contribution. I believe that is in accordance with the law.


Marcel Joseph Aimé Lambert: I will quote you.
Income Tax


[Stage Direction]
Clause agreed to.
Clauses 44 and 45 agreed to.
On Clause 46.
Marcel Joseph Aimé Lambert: As I recall it, Mr. Chairman, this has to do with the unused portion of the interest and dividends deduction that is allowed to taxpayers. This allows the transfer of unused portions from one spouse to another, both of them being taxpayers. Am I correct? Also, what is the net effect of the amendment that is proposed at this time?


Donald Stovel Macdonald: Mr. Chairman, the purpose is to simplify the procedure here, the income tax form. The purpose of this technical amendment, which adds new section 110.3 to the act, is to lay down uniform rules to govern the transfer of transferable deductions between spouses. Presently the student living allowance deduction and disability deduction are transferred on one basis, and the pension income deduction, interest and dividend income deduction, and old age deduction are transferred between spouses on another basis. As a result the taxpayer has to make a separate computation in respect of each deduction he may transfer. This amendment will permit the taxpayer to make one computation in respect of all of his transferable deductions.


Max Saltsman: Mr. Chairman, I have a question for the minister. We are going through all the shenanigans of transferring from one spouse to another, and going through the kinds of things I pointed out earlier today about what one spouse can do on behalf of another. Why does the minister not in fact move toward a system of joint filings? It would get rid of half of this mess in the income tax system. Instead of all the loopholes that are opened and closed, providing a social security system for lawyers and accountants in this country, why not simply move in the direction of a joint filing system rather than what we are dealing with here all the time? If you are going to need a lawyer, you might as well be a joint filer.


Donald Stovel Macdonald: Mr. Chairman, this question has received extensive consideration. In observing internationally, we have found that the trend appears to have been away from the joint returns. I think there is probably something to be learned from the experience of others in that regard.


[Stage Direction]
Clause agreed to.
On clause 47.
Marcel Joseph Aimé Lambert: What is the explanation of this?


Donald Stovel Macdonald: Mr. Chairman, subsection 113(2) of the act provides that a taxpayer may offset the taxable portion of a dividend received from a foreign affiliate after the end of the taxpayer's 1975 taxation year against the adjusted cost base to him of the share on which the dividend was paid at the end of this 1975 taxation year. This amendment to the act provides that the amount available for offset in this manner must be reduced by any repayments of capital on

February 4, 1977
Income Tax
that share subsequent to the end of the taxpayer's 1975 taxation year.


Marcel Joseph Aimé Lambert: I hope the minister is further ahead after having read that than I am.


Donald Stovel Macdonald: I will not concede that. This is the first time I have read it.


[Stage Direction]
Clause agreed to.
Clause 48 agreed to.
On clause 49.
Max Saltsman: Mr. Chairman, this clause is presently under the guise of existing small business. The benefits being provided to small business are very substantial. The question is whether they are really going to small business rather than to the upper echelon, maybe a very small percentage of small business that in fact is not small business at all but verges on what I call much larger business, and these benefits are being provided under the guise that they will be of assistance to small business.
Rather than engage in an argument on this sort of thing, I would ask the minister for some figures that we could examine. The kinds of figures I would like from the minister include how many small businessmen there are in this country, how many of those small business companies pay any tax and, of that group of small businessmen, how many does the department anticipate would benefit from this kind of measure? Also, what is the cost to the federal treasury of this provision?


Donald Stovel Macdonald: Mr. Chairman, I have to confess that I do not have instant responses to those four questions. I can seek them for the hon. member, but I do not have them at hand at the moment.


Max Saltsman: If we are being asked to pass a measure of this kind, that kind of information should be before the committee. As I started to say, it seems that the benefits really are not going to small business.
Just drawing on my memory of very old statistics, which are going to be approximate, and I put this before the committee with no more authority than to try to make a general point, the last time I looked at the figures, there were approximately 400,000 small businesses in Canada. Of that 400,000, over half paid no tax. They were not even in a taxable bracket, let alone being assisted by a measure of this kind. Of the other half, very few earned enough money to benefit from the provisions in any substantive way. The real beneficiaries of a clause of this kind are not small businessmen but some very substantial businesses which can well afford to pay the tax and do not need this kind of assistance.


Donald Stovel Macdonald: On the final questions, Mr. Chairman, I can make an approximation. It is estimated that Canadian small business, however that may be defined, whether to the satisfaction of the hon. member or not, will save about $30 million in taxes in the first whole year.
(Mr. Macdonald (Rosedale).]
On the question raised by the hon. member as to how small is small, or when does small become medium or even large, to a degree the limits are set on the size by definitions already in the Income Tax Act. Without being precise in that regard, the hon. member and others can identify in their experience Canadian firms in particular which are in that middle ground without being able to carry on business with the contributed part of partners or subscribed capital of shareholders, and the very large businesses which are in the position to finance by a large public issue of shares.
There is a substantial number of companies in the centre, many of them Canadian owned, which are faced with the choice of either going out of business or selling the business to a going concern, primarily to a foreign party. One might argue that many of the takeovers which occurred in Canada in the past have had this transition difficulty, this financial difficulty which firms have run into. I do not pretend for a moment that this income measure is the complete answer to that problem, but it does seem to respond to a great deal of the concern Canadians have and, it seems to me, to a concern I have heard the hon. member himself mention from time to time, that Canadian controlled enterprises should have an opportunity to grow, and if that be our objective, as I take it to be, then some relief, at least from the standpoint of the corporate income tax burden, is one way of assisting in this respect.


Max Saltsman: It is the concern of this party that small business should grow to the extent possible, and it certainly is a concern of this party that as much of our business as possible be Canadian controlled. Nevertheless, I often think that many of the measures the government introduces in the guise of moving in this direction are perverse and misleading. It seems to me that the years in which we experienced the highest degree of foreign ownership were the years in which we had one of the most favourable tax systems in the western world. The favourableness of the tax system rather than the burden of taxation is what induced many businesses to sell out. We were the last country in the world to impose a capital gains tax, and when we did bring in such a measure it was only at half rates.
What was the consequence of not having a capital gains tax in Canada? The consequence, in my view, and I believe in the view of others who studied this question, was to encourage Canadian owners to sell their businesses, usually to American buyers rather than to Canadian buyers. The system works in that way. If you had a business and were working hard, you had to pay the regular rate of taxation. If you sold your business, without being liable for capital gains tax, you got a whopping sum of money which was totally exempt from taxation. The temptation to do so was incredible. Somebody would go to a businessman and say "Why are you working so hard? You are doing well and making money, but if you sell out you would do twice as well, because instead of having to pay tax on your earnings you would receive a capital amount and would not have to pay anything at all." That is one reason why so much of our industry sold out. It was not because the tax system was too harsh. It was because the tax system was
February 4, 1977

too biased in favour of selling out as against running at a profit.
To some extent the same situation prevails today with a 50 per cent capital gains tax in operation. The temptation is not so great but it still exists. It is still attractive to sell a business rather than run it, and this is really the problem. I believe a lot of things are wrong with our present system and that we have to assist Canadian business. But I do not think this provision will make any difference whatsoever.
What is interesting in observing the decisions which have come from FIRA is that this institution is in a box. It wants Canadian business to be bought out by Canadians, but there are very few Canadian buyers around to buy it out.


Marcel Joseph Aimé Lambert: No wonder. They have no money. They are taxed to death.


Max Saltsman: That is the problem. There has been a failure to create institutions which can assist small business financially. One of the difficulties is the attitude of small businessmen themselves. They do not want to take in partners or put shares on the market; they want to own the whole thing themselves.
We have spoken in the House on a number of other occasions in favour of the Canada Development Corporation. We hoped we would have an instrument which would help Canadian business. Our argument was that instead of all these give-away programs through the tax system, the hidden welfare system, it would be better to take this money and turn it over to a venture company which would assist small business, go into partnership with small business, and help them with management, financing, merchandising on so on. This would do far more for Canadian business than these little bits and pieces, this shotgun approach by means of the tax system.
I am sure these measures do some good at some point. They are not totally lost. What I am suggesting is that so much is shot into the system that you do not know what does good and what does not do any good. The scatter gun approach is adopted simply because, after all, you have to do something. The government cannot be accused of not trying to help small business, of not being on the side of the little man, so it approves these measures which essentially help the bigger operator more than the smaller companies. The smaller operator really needs money not when he is making money; when you are making money you can usually get money. You have got credit by that time. You can get money from a bank or from investors. The problem for small businesses arises when they are not making money and when they do not benefit from measures of the kind proposed.
If the government really wants to assist small business it must provide assistance where it really counts. One way is by creating a venture capital company to help small business in every way possible. The other way is to help them when they are not paying tax rather than when they are paying tax. The worst possible way, and the least effective way of helping small business which is really small business, is through the measure which has been put before us this afternoon. I say this because the benefits of tax measures of this kind do not, in my
Pensions
experience, go to small businesses but to much larger businesses which are quite capable of looking after themselves.


Marcel Joseph Aimé Lambert: My only comment is that it is high time that this provision was introduced. Notwithstanding what the hon. member for Waterloo-Cambridge has said, it represents a belated recognition by the government that we have experienced inflation for a number of years and that it is nonsense to keep things down at absolute figure maxima as they were in the act.


[Stage Direction]
Clause agreed to.
Clauses 50 and 51 agreed to.
On Clause 52.
Marcel Joseph Aimé Lambert: On clause 52, Mr. Chairman, I see that in proposed subsection 127(3) there is a change in definition, from "candidate" to "an officially nominated candidate." What was the rationale behind that change? Is an officially nominated candidate one who has been certified by the party leader to the chief electoral officer?


Donald Stovel Macdonald: The explanation is this. Theoretically any individual might call himself or herself a candidate and commence issuing receipts to his or her supporters in return for political contributions. This is an attempt to bring the section a little closer within the framework of a formal political campaign.


Charles Robert Turner: Order. It being four o'clock it is my duty to rise, report progress and request leave to sit again at the next sitting of the House.
Progress reported.


PRIVATE MEMBERS' MOTIONS
The Acting Speaker (Mr. Ethier):: It being four o'clock the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions.
Notice of motion No. 4, the hon. member for Ottawa-Vani-er (Mr. Gauthier). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 7, the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.

February 4, 1977
Pensions
Notice of motion No. 10, the hon. member for Egmont (Mr. MacDonald). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 14, the hon. member for Wetaskiwin (Mr. Schellenberger). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Motion No. 15, the hon. member for High Park-Humber Valley (Mr. Jelinek). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 16, the hon. member for Scarborough West (Mr. Martin). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 17, the hon. member for Hamilton West (Mr. Alexander). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 20, the hon. member for Bellechasse (Mr. Lambert). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
Notice of motion No. 22, the hon. member for Edmonton-Strathcona (Mr. Roche). Shall the motion stand?


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: Stand at the request of the government.
[The Acting Speaker (Mr. Ethier).]


PENSIONS
Stanley Howard Knowles: That, in the opinion of this House, the government should give consideration to the advisability of amending the Old Age Security Act and the Canada Pension Plan to provide for the pensions payable under these two acts to be available at age 60 to all persons who meet the other requirements of the said acts and who are not in or are prepared to withdraw from the labour market, and also to provide for the basic amount of the pension payable under the Old Age Security Act, at age 60 for those not in the labour market and to everyone at age 65, to be increased to $250 per month, for this basic amount to be escalated each year by an amount that will enable pensioners not only to keep up with rising living costs but to share in rising living standards, and also to provide for the elimination of any means or income test from the Old Age Security Act, so that the full pension thereunder will be recognized as the established right of all our people.
He said: Mr. Speaker, I find it an interesting coincidence that this motion has been called for debate this afternoon. It so happens that yesterday when the government House leader was announcing the business for next week he indicated that one of the items to be called for second reading would be the government's bill, C-35, which is, in effect, an overhaul of the Old Age Security Act.
If I may underline what I mean about its being a coincidence, it arises from the fact that I shall be speaking in support of Bill C-35 when it comes before us. But I shall be indicating that there are two major shortcomings in Bill C-35. My motion deals with those two shortcomings. I hope the discussion we have this afternoon, and the discussion we will have on Bill C-35, might prompt the government, either at the second reading stage or in committee, to do something about these two shortcomings. One of these shortcomings has to do with the age at which pensions are available; the other has to do with the adequacy of the basic amount of old age security.
The first subject I wish to raise is that of the eligible age for pensions. I want to emphasize, even before I make my argument for lowering the age of eligibility, that what I am advocating-and advocating very strongly-is voluntaryism so far as early retirement is concerned.
I am not arguing that age 60 be the compulsory retirement age. However, I am arguing that the possibility of retiring at age 60 be available. If we are going to make that possibility real, I suggest we have to amend both the Old Age Security Act and the Canada Pension Plan.
The minimum age for payments under these two pensions is still age 65 and in my experience there are a great many Canadians, particularly Canadians in industry, who find the "rat race" very hard these days, and who feel that they ought to have the opportunity of retiring at age 60 instead age 65.
If we could persuade the government to make old age security available at age 60 that would be a good step, a partial step. If we were to make both old age security and Canada Pension Plan benefits available at age 60 many persons would be able to take advantage of that. However, as my motion suggests, that in itself would not be everybody.
February 4, 1977

The fact that I am emphasizing voluntaryism is underlined by the words in my motion that state pensions should be available under the two acts to persons at age 60 who are out of the labour market. I propose that there be no means test between ages 60 and 65. I wish also to emphasize there should be no marital test as there is with respect to the spouses' allowances that are now available.
A pension to those between the ages of 60 and 65 who are out of the labour market would take care of the spouses of pensioners, or of those at home whose spouses are working. It would also take care of spinsters and widows, bachelors and widowers who are not now covered by the spouse's allowance.
In the 1974 election campaign when the Prime Minister (Mr. Trudeau) first announced that the government would bring in a spouse's allowance I distinctly remember hearing him say that this would create problems. It has created problems. The main problem is that it does not cover a great many individuals. There is the horrible problem that arises where a spouse between the ages of 60 and 65 may get the spouse's allowance because he or she is living with a spouse who is of pensionable age, then a year or so later the older spouse dies when the younger spouse has not yet reached the age of 65, therefore, the younger spouse loses the allowance.
The figures we have from the department indicate that this is affecting approximately 200 individual Canadians every month. The Prime Minister was right during the 1974 election campaign when he said this would create problems as well as solve problems. I think the problems should now be solved by extending pensions to persons between the ages of 60 and 65 who are out of the labour market. I use that phrase to cover both those who are already out of the labour market because they are at home, or whatever, and those who voluntarily leave the labour market.
I am quite sympathetic to the arguments made by some about the difficulties of a fixed pension age. Speeches to that effect have been made in this House, and may again be made today. Studies made on this issue, particularly one under the aegis of the Canadian Council on Social Development raise this whole question of whether or not we should have a fixed age at which people must retire, and I go along with the proposition, that it should not be fixed, it should not be compulsory. My motion does not ask for compulsory retirement. My motion asks for the possibility of retirement at age 60. That would be possible if the old age security pension and the retirement benefits under the Canada Pension Plan were made available at that age.
I know what happens to private members' resolutions in private members' hours. I do not see any reason to hope that the same thing will not happen to mine this afternoon, but I hope that the discussion we will have today will have some bearing on the debate next week and on the debate when we get into committee on the government's Bill C-35.
The other phase of the motion that is now before the House is to the effect that the basic amount of old age security should
Pensions
be increased to at least S250 a month. There are organizations and persons in Canada who will say that that figure is not high enough. I have seen resolutions for a much higher figure and I go along with them, but in this House one has to move a step at a time, and since the basic amount of old age security is at present $141.34 a month, perhaps I am asking for all I dare ask for, namely, that it be increased by about $109 to $250 a month. I am still opposed to the means test concept that attaches to the guaranteed income supplement. We have been over that battle many a time and I do not wish to take time on it this afternoon, but at the moment at any rate there are amounts available on top of the present basic pension which bring the total that an individual and a married couple can reach up to a certain figure. But these figures are still very inadequate, and even though it is a time of restraint, a time when some persons will say we have done enough for pensioners, let us leave that subject alone, I insist that our older people have the right to have their plight considered.
I hold in my hand a clipping from the Ottawa Citizen of Tuesday, January 4, 1977, with a Canadian Press dispatch from Toronto under the heading, "Elderly Need Up to $695 Each Month". This story is based on a report put out by the Social Planning Council of Metropolitan Toronto, funded by the Department of National Health and Welfare. The figures in this report suggest that a couple in Toronto today, if that couple owns its own home, needs at least $654 to get by. On the other hand, if that couple has to rent accommodation, it needs at least $695 a month to get by. I have looked at the details making up those figures and in a number of cases it seems to me that the figures are very conservative. These totals of $654 a month for a couple owning their own home and $695 for a couple having to rent are certainly minimal.
In defence of the proposal I make which would add about $109 a month to the basic pension now being paid, may I say that even if my motion were passed and everyone received the full $250 a month which my motion proposes and, on top of that, the full amount that is now being paid as a supplement, the totals would still be a little below these minimal amounts that have been given to us by the Social Planning Council of Metropolitan Toronto.
I urge that this matter be given serious consideration. I know that there have been times in this parliament when the mood and the climate were such that one could push for better benefits for senior citizens and make more headway than one could at other times. I know that at the moment it is a rather hostile time, with all the preaching about restraint and all the rest of it. But the fact of the matter is that the nearly 2 million Canadians who are 65 years of age or over have a right to have their conditions improved, and I think it is little enough to ask that the basic pension for these persons be fixed at not less than $250 a month plus the additions that are provided in the legislation.
Now, Sir, there are many aspects to this. There is the whole question of escalation, the question of universality, taxation, and other things in which senior citizens are interested.
2760

February 4, 1977
Pensions
We have moved a long way since I first started talking about old age pensions in this place. We have moved into the field of housing, of medicare, and so on. but it is still true that at least half of the Canadian people who are 65 years of age and over are having a tough time to get along, and we should do a lot better for them.
Time is limited in this hour and I want to use less than the full 20 minutes allotted to me, so I simply present this motion once again, perhaps the thousandth time or more that I have made an old age pension suggestion in this Chamber. I plead that the time has come to increase the basic amount to at least $250 a month plus the extras, and certainly the time has come to make pensions available both under the Old Age Security Act and under the Canada Pension Plan to all our people on a voluntary basis at the age of 60, provided only that they are out of the labour market. I present the motion, hoping that this time the House will consider it favourably.


Joseph Adrien Henri Lambert: Mr. Speaker, my contribution to the debate on this motion will be as brief as possible; however, first of all I want to congratulate the hon. member for Winnipeg North Centre (Mr. Knowles) for the motion he has placed before the House. We must recognize that the dean of the House is demonstrating considerable perseverance while taking advantage of every means offered by the procedure to urge the government to improve the lot of each and every Canadian 60 years old and over, something for which the House should commend him.
On the other hand, the platform of the Social Credit Party of Canada, to which I belong, has always included a provision for lowering the optional retirement age limit to 60. Therefore, not only do we advocate lowering retirement age, but we urge the government to increase the amounts paid under the Old Age Security Pension and the Canada Pension Plan so that all retired Canadians may have enough to support themselves.
Is Canada economically and financially able to meet the requirements of this motion? The gross national product is kept at a reasonable rate, in spite of the increase in the number of unemployed Canadians. They could help increase the GNP if they could use their energies to make the production greater, thus allowing us to reach quite easily the aim of the motion.
Financially, we also can wonder whether Canada can face such expenditures. As far as I am concerned, I think so, but budgetary cuts should obviously be made, especially with respect to the interest paid by Canada on the national debt. In the current fiscal year, the federal treasury will have to pay $4 billion; interest on the national debt alone and it is impossible to know from the Minister of Finance (Mr. Macdonald) to whom that interest is paid. Let me refer to the answer reported in Hansard for February 1, 1977 in reply to a question I raised, No. 1,389. I was asking for some information every Canadian should know, namely the total amount of the national debt, to whom is this debt owing and who are our creditors. Is this a long term or a short term debt? Efforts will be made

to try to find answers which are not available. Interests are paid, but we cannot know to whom? We owe money and we do not know to whom?
I believe the Minister of Finance should consider the answer that has been given, and I imagine it was prepared by a public servant who did not want to take the trouble of going to the bottom of things. I do not know the public servant who prepared the answer, but I know the Minister of Finance well, and this is why I ask him to do everything possible to provide us with information on this matter because we are entitled to it. We should know the true financial situation of our country.
From the reply it has given, the government is obviously not prepared, as I have just said, to give us this information, but once again, I demand it. The government is able to tell us to whom we have paid $2,975,787,998 for the old age security pension of people 65 and over. It is able to provide us with names and addresses and it is also able to tell the House that an amount of $34,936,432 was paid out in allocations to the spouses 60 and over from October 1975 to March 31, 1976. It can also tell the House that the amount of $923,251,220 was paid out in income supplement, which makes a total of $3,933,975,630. The government is able to provide all this information to the House. I congratulate the government because those are clear answers that have been read into the official report.
Mr. Speaker, as of April 1, 1976, there were 855,600 males and 1,101,300 females aged 65 and over, or a total of 1,956,900 people who received old age security pensions. I am putting all those Figures on the record in answer to those who suggest that it is impossible, that the expense is beyond our means. And when I am finished with those figures, I believe it will be recognized that the motion now before us is reasonable and Canada can afford it.
At the same date, there were 896,900 people between 60 and 64 years, 434,900 males and 462,000 females. We would have to know how many are now receiving spouse allowances, in order to know how many would be entitled to OAS pensions and to determine the actual cost to the federal treasury. That could be computed. Of the total cost, deduction should be made of the current cost to the federal treasury of social welfare benefits paid to people in that category under agreements with the provinces. The actual cost would be known only after such computations were made.
There is another factor to consider. A number of those people will retire voluntarily from the labour force, to be replaced mainly by people currently unemployed who now receive government assistance in the form of unemployment insurance or social welfare benefits. This involves a significant amount of money. If those unemployed were to take the jobs vacated by people retiring, this would mean so much UIC and welfare benefits we would not have to pay. Moreover, these new wage earners will be paying taxes that will replete the federal treasury and help pay the OAS benefits referred to in this motion.
February 4, 1977

For all these reasons it is high time in my view that the government introduce legislation to amend existing acts, to give such persons the benefits referred to in the motion.
1 suggest this country must secure a well deserved income security for elderly people. If we consider all achievements in Canada over the past 40 years, one can see they are largely due to people who are 60 years or over, keeping in mind nevertheless that younger ones have also contributed.
One must also take into account that people of 60 and over have worked in very difficult and sometimes inhuman conditions and that without their courage and strength, today's generation would not have the facilities and opportunities now at their disposal. By the way, Mr. Speaker, I would like to ask young people and adults who are or would like to be on the labour market to talk to elderly people and draw comparisons between opportunities today and at that time. At present, one can load a van while sitting on a heavy machine and handling levers, whereas people of 60 years and over had to do it with small shovels with handles three feet long. It was much more exhausting and much less profitable. Young people, who crit-ize easily, should absolutely consider all the advantages of which they can avail themselves. I am convinced they can reason and take all these matters into consideration. They would surely be willing to pay more taxes to ensure old age security pensions at a reasonable rate and enable elderly people to enjoy for a few more years the opportunities Canada may offer them.
In conclusion, Mr. Speaker, we must be grateful to the hon. member and we should adopt this motion as soon as possible. We would then show much understanding and would at the same time carry out our duty as parliamentarians and administrators.


Mr. F. A. Philbrook (Halton):: Mr. Speaker, with pensions being So prominent in the news, particularly with regard to indexing, I am very pleased to be able to speak today on motion No. 23. The reputation of the hon. member for Winnipeg North Centre (Mr. Knowles) is well known and respected, particularly in the area of pension plans, and for that reason I should like to be able to assure him of my support for this motion.


Stanley Howard Knowles: At least the hon. member's heart is in the right place.


Frank A. Philbrook: However, that is not possible because, far from improving the situation with regard to pension plans in Canada, this motion might in some ways and in some cases make the situation even worse.
The hon. member for Winnipeg North Centre has made a number of suggestions in his motion which would represent a radical change in the Canadian pension system and in the costs paid by the Canadian taxpayer. Before looking at these proposals in detail, I think it might be useful to look at the present system of pensions in Canada, to consider the many changes and improvements which have been made in the old age
Pensions
security program and the Canada Pension Plan, and to examine the benefits retired Canadians can expect under the current provisions of these programs. Such an examination appears to be in order if an objective assessment is to be made of the sweeping alterations proposed by the hon. member for Winnipeg North Centre.
Just 12 years ago, in 1965, the income guaranteed to a retired Canadian by the government of Canada was only $75 per month, payable at age 70 under the Old Age Security Act. In other words, a married couple both 70 years of age or over could expect a total of $ 1,800 per year only, in public pensions. If they wished to retire at an earlier age or live at a higher standard it was expected they would have private resources to do so. Since then some dramatic improvements have been made in retirement benefits for the elderly.
In 1966 the retirement age for old age security began to be reduced, a year at a time, until it reached the present old age security retirement age of 65 in 1970. This fact should be borne clearly in mind when looking at suggestions to reduce retirement age to 60. The payment of OAS benefits as early as age 65 has been available for only seven years.
Also in 1966 the Canada Pension Plan came into effect. This compulsory and contributory pension plan, which covers virtually every Canadian wage earner, has grown increasingly important as a source of present and future retirement income. The maximum new CPP retirement benefit payable in 1977 is $173.61 per month, and consequently exceeds the current Old Age Security benefit of $141.34 per month.
Two points underlying the introduction of the Canada Pension Plan and most relevant to this motion should perhaps be made at this juncture. The first is that the Canada Pension Plan was designed as a pension scheme whose ultimate retirement benefit would be related to the contributor's lifetime earnings, and which would be funded by the contributions of its membership. It was realized that living costs vary greatly between urban and rural areas as well as between different regions in Canada. The income which Canadian people needed, if either retirement, death or disability of the head of the family were to remove the regular source of income, was related in part to the level of earnings to which they had become accustomed. Thus, what underlay the creation of the Canada Pension Plan was an understanding that adequate levels of pension could not realistically be achieved in a country like Canada simply by increasing the flat rate OAS pension indefinitely. That understanding is equally applicable today in considering this motion.
The second point that should be made about the Canada Pension Plan is that it was not intended to provide all the retirement income which Canadians might wish to have, even in conjunction with the Old Age Security pension. Rather, the Canada Pension Plan and the Old Age Security Act were seen as providing the first two layers in a three-tiered retirement system. The first tier, the fiat rate Old Age Security pension, provides a base on which the second tier, the earnings related
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February 4, 1977
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Canada and Quebec Pension Plan benefits, is built. Together with the guaranteed income supplement, these benefits ensure a minimum amount of income which adequately provides for the basic needs of the individual on retirement. The third level of the system is the additional income available through private pension plans, registered retirement savings plans, investments or other sources, which can be seen as providing whatever supplementary margin of comfort the individual might require.
The suggestion that Old Age Security benefits be raised to $250 should therefore not be looked on as a recommendation that Canadian pensioners should be provided with a retirement income of $250 per month. Rather, it is a recommendation that the over-all benefits for pensioners from a three-tiered system of retirement income should be increased, by an amount which would vary between about only $10 and $110. This variation, by the way, comes as a result of the suggestion in the motion that the other income support programs embodied in the OAS program be dropped. These income support programs are the guaranteed income supplement and the spouses' allowance.
The guaranteed income supplement, or GIS, was introduced in 1967 very shortly after the Canada Pension Plan came into being. The maximum benefit under this program was originally set at $30 per month during the first year of the program and 40 per cent of the OAS pension for subsequent years. An income test was applied to the benefits, and provided for reductions of $1 for every $2 of extra income, excluding Old Age Security benefits for a single person. For a married couple the reduction was $1 for every $4 of family income.
GIS was originally intended to be a transitional program which would gradually be phased out as the Canada Pension Plan took effect. The supplement was therefore made available only to persons born before December 31, 1910, that is, to persons who were over 55 years of age at the inception of the CPP and who would therefore not have an opportunity to build a full ten-year CPP benefit before reaching age 65.
It was felt that those who did have an opportunity to build a full CPP retirement pension would have less need for such a supplementation program. However, in practice this has not proved to be entirely the case. Some persons, housewives, for example, are not directly covered by the Canada Pension Plan or only become entitled to a small CPP pension on retirement. The guaranteed income supplement proved to be of great value in providing income only for those retired Canadians who were most in need, without placing an inordinate burden on the Canadian taxpayer. Consequently the supplement was made permanent in 1970, and since then has been expanded and improved. The maximum GIS benefit is now $99.13 per month, which is more than 70 per cent of the current Old Age Pension.
I should emphasize the value of this program, since it is implicit in the motion which we are discussing that the guaranteed income supplement would be eradicated and, in effect, replaced by a very large increase in the flat rate OAS benefit. The replacement will cost vastly more, and will mainly benefit
[Mr. Philbrook.j
those whose income is already large enough that they do not qualify for a substantial amount of supplementation. I would note that the suggested benefit level would raise the income of a single person now receiving the full supplement, by less than $10. Such a pensioner already receives $240.47 per month as of January 1, 1977. With the pension being indexed, this may well go over $250 in the near future.
It is clear that the member's proposal fails to bridge the income gap between those who depend on OAS benefits and those who have other means. On the contrary, a retired Canadian who formerly received the guaranteed income supplement would suddenly find that his income, relative to that of other pensioners with large CPP or private pensions, has dropped sharply. The existence of GIS has, in effect, been a recognition that those who had no opportunity to contribute to CPP have made a contribution, perhaps in other ways. We should not be overly hasty in removing this recognition simply in order to provide some pensioners with more money.


Stanley Howard Knowles: Mr. Speaker, would the hon. member permit a question?


The Acting Speaker (Mr. Ethier):: Does the hon. member have permission to put a question to the hon. member for Halton (Mr. Philbrook)?


Frank A. Philbrook: Mr. Speaker, I would prefer to leave it to the end, if I may. I have only a few more remarks to finish off.
These remarks would apply equally to the spouse's allowance, which is also an income tested benefit, and which was made a part of the old age security program in 1975. The spouse's allowance provides a benefit for spouses, between the ages of 60 and 65, of persons in receipt of old age security benefits. The maximum amount of the spouse's allowance is equal to the basic old age security benefit plus the maximum guaranteed income supplement at the married rate.
This program, like the guaranteed income supplement, was introduced in recognition of the special needs of a particularly vulnerable segment of the retired population. Married couples are more often than not several years apart in age. Consequently, it will often happen that the major or only wage earner in the family will reach age 65 and retire, or be forced to retire, but the spouse, being several years younger, is not yet entitled to OAS or GIS benefits. This situation meant that many retired couples were having to struggle along for several years on a single old age security pension and a single guaranteed income supplement payment before the other spouse finally became eligible for OAS and GIS benefits.
On the other hand, many couples are not placed in financial difficulty through differences in their ages. We can imagine, for instance, a family with a single wage-earner where the spouse who works at home has reached age 65, while the wage-earner is several years younger and is still working. This couple has not retired in any sense of the word and should not be given any special benefits. It is for reasons such as this that benefits like the spouse's allowance are income-tested.
February 4, 1977

To show what can happen with an inflexible and monolithic approach we could imagine for the moment that the suggestions made by the hon. member for Winnipeg North Centre have been adopted in full. Suppose now that the major wage-earner in the family reaches age 60 and retires. Again this may very well be a compulsory retirement, if past experience with lowering retirement ages is any indication. If the spouse at home is a few years younger, we have recreated the same problem five years earlier. The government of the day would have the alternatives of ignoring the same very serious problem which this government felt it could not disregard, or of reintroducing the income-tested spouse's allowance, payable now at age 55. Therefore you are back to square one.
With the introduction of the spouse's allowance, the current spectrum of public retirement pension programs is virtually complete. However, there are a number of major benefit improvements which have also occurred in the past few years which are relevant to this motion.
May I mention them briefly, without going into detail? I am thinking of measures for indexing OAS and CPP introduced in 1967. These programs have been indexed quarterly since 1973. I think also of the periodic quantum jumps in these benefits which took place in 1970, 1972 and 1973 and of the elimination of qualifying tests with regard to CPP in 1975. As the minister has announced, the government plans to introduce a new bill providing for reciprocal agreements with other countries for pension plans and payments.
As a result of the many improvements in benefits for the aged in recent years, some of which I have described, the elderly are now guaranteed income levels which often exceed those guaranteed to other deserving groups such as the disabled, the retarded, certain single parent families, and the working poor. Could we in all conscience direct the very large amounts of additional funds which these proposals would entail entirely toward increasing benefits to the elderly, without considering whether, with the limited resources available for income security, we should not be directing our attention to the needs of these other groups?
In closing, may I congratulate the hon. member on introducing this motion for debate.


Stanley Howard Knowles: Mr. Speaker, may I ask my question now?


Frank A. Philbrook: Yes, Mr. Speaker.


Stanley Howard Knowles: Mr. Speaker, does the hon. member not realize that in my motion I did not ask for the eradication of the supplement? I asked for the removal of the means test on it. Since that is the basis of my motion, would it not make quite a difference to the hon. member's argument?


Frank A. Philbrook: I am not sure, Mr. Speaker, if that point was clearly defined in the motion. It is valuable to have it noted. I can only say that the hon. member's suggestion would raise total payments under our pension program to higher levels and
Pensions
impose an increasingly difficult tax burden. I think it is worth making that point clear.


Walter David Baker: Mr. Speaker, I listened with great interest to the hon. member who resumed his seat a moment ago, because I wanted to know if, in regurgitating ministerial speeches as reported for many years in Hansard, he would address himself to the thrust of the motion proposed by the hon. member for Winnipeg North Centre (Mr. Knowles) and tell the House why the basic pension figure mentioned by the hon. member for Winnipeg North Centre is not attainable in present day circumstances. He did not do that. Therefore the case made by the hon. member for Winnipeg North Centre has not been rebutted. If the hon. member made a case with respect to the figure mentioned, that case has not been answered.
Conversely, I listened carefully to my friend and neighbour, the hon. member for Winnipeg North Centre, to hear him justify the particular figure chosen, because we must all admit that it would entail a considerable increase. Unfortunately, I heard no figures relating to national economic expenditures of government and a whole host of other criteria which must be considered, which would justify and establish the figure the hon. member suggested.


Stanley Howard Knowles: My purpose was to establish the need.


Walter David Baker: Mr. Speaker, I would not deny for a moment the figures brought forward relating to need. I am not arguing that point, but I am glad he raised it. That is why it was doubly incumbent for some spokesman on the government side to indicate why the hon. member's proposal cannot be adopted. But this has not happened.
I suggest that not one member of this House would say that if the figures proposed by the hon. member for Winnipeg North Centre are reasonably attainable, those amounts ought not to be paid to senior citizens of this country. But some members skirt round the issue. Some regurgitate ministerial speeches; some read answers to questions on the order paper. But I suggest that not one member of this House would say that we ought not to pay that amount if it could be established that, as a country, we can afford to pay it.
The hon. member's case must be made or rejected, otherwise this kind of debate degenerates to an auction, to a tendering contest.
Some further considerations deserve mentioning. I do not know if the $250 figure is right, if it ought to be $300, or more, or less. I do not know that; that is why I listened carefully to the debate in this House. I wanted to hear someone say that that figure is wrong. Yet nobody on the government side said that. I suggest that, in the face of the need demonstrated by the hon. member for Winnipeg North Centre, if the figure he mentioned is attainable, it ought to be paid. But it is important not to let this kind of debate degenerate into an auction.
We ought to address ourselves to the problems of this country's senior citizens, because there are problems. I talked

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on the telephone yesterday to a senior citizen who says that the pension base is too low. Our older people say, "We like indexing; it is fine, but the figure upon which indexing is based is too low." Senior citizens are in favour of indexing. Some think it is wonderful. Although some of them deny it, I suggest that indexing is a great benefit for senior citizens. Yet, as I say, the base is low. They come to me and say, "Mr. Baker, I cannot pay my rent; I cannot pay the fuel bill; I am a proud person; I do not want to go on welfare." They say this to all of us in this House. I am sure that hon. members who represent senior citizens know that this is the case, that I am correct in saying these things.
All in this House applauded when we recently increased the Canada Pension Plan pay out. What happened when we increased that pay out? That increase was necessary by virtue of the ravages of inflation. I do not intend to sound partisan, because our inflation was out of control. No sooner had we granted an increase in the Canada Pension Plan than the provincial governments lopped off from their contributions an amount equal to the increase we had brought forward. Provincial departments responsible for social affairs put people back into positions they had previously occupied when they had suffered from the ravages of inflation running at 10 per cent, or more per annum. That is something we in parliament must attack if we are to walk out of this place with our heads high. We should be able to tell our constituents that we are doing something for the disadvantaged.
Why are we in politics? All of us, regardless of what side of the House we sit on, are here because we are concerned one way or another. Everyone of us wants this country to be a place where a senior citizen or a person approaching that age can have a sense of security. They do not now have a sense of security. It is better than it was, but they do not have it. Anyone who goes among senior citizens knows this.
We want this country to be for senior citizens just as we want it to be the land of opportunity for young people. We do not want our young people to be satisfied with the lowest common denominator. Surely we ought not to allow our senior citizens to be satisfied with the lowest common denominator either. There are some real challenges to us in social services legislation, not only in dollar terms but in the integration of that legislation. There is not a member of this House who does not support the spirit in which this has been advanced.
I want to say something else to the hon. member. I know he emphasized at the beginning of his speech the aspect of voluntariness in terms of retiring. He knows and I know, because we have discussed it, that there is bound to be in any system, even based on a voluntary acceptance of it, an encouragement to people to opt out of their professions and jobs because there is an opportunity for them to do so. I would not deny them that opportunity, but I think there can be a denial of their expertise, training and wisdom to the country. The country needs them.
My father, who died a year ago on March 5, was a druggist in a small town. My mother, my brother and I tried to

persuade him to stop working because he was getting old. He said to me, "What would I do? I could work in my garden for a while. I could look after my wife, but how am I going to stay in the mainstream of life? Who is it that can face me and encourage me to leave the mainstream of life?" That is what we may be doing with this motion. We finally talked him into selling his small business. The only term and condition upon which he would sell was if his nephew, who bought it, would allow him to work in it. He worked out his days until he was stricken and died, but he contributed.
In many ways we are looking at the wrong end of this spectrum. We ought to be encouraging people to work. We let judges sit until they are 75, and very few of them retire before that time. Why? Because they have something to contribute.
I went to a senior citizen's meeting at the Nepean Sport-splex. Good friends of the hon. member for Winnipeg North Centre were there. We discussed the problem of how to involve them in the community in a big way. The hon. member's good friends, and he knows who I am talking about, came to me and said that they want to be involved.
I looked over that group. There were retired statisticians, businessmen, professional men, teachers, nurses, all people who want to contribute. We have come to the point where we look for people going out of the work force instead of working and searching for policies that will widen the opportunities for people to go into the work force. We sometimes see the wrong end of the problem.
I do not want the hon. member for Winnipeg North Centre to feel that I oppose his motion, because I do not.


Stanley Howard Knowles: Do you support it?


Walter David Baker: I would be quite prepared to sit down and allow this matter to come to a vote. I hope that happens. At least this matter would get to a committee where we could study it in depth, rather than in the bowels of the bureaucracy, and then be presented with a bill, white paper or orange paper. It could be discussed openly. People could come before a committee of this House to discuss their problems in terms of retirement and pensions. We who are younger and try to impose things on older people could have the benefit of advice from those upon whom we might wish to impose programs. That is the problem with this place.
I am going to sit down in the hope that this matter can and will be resolved in this House today.


Some hon. Members:: Question.


Miss Aideen Nicholson (Trinity):: Mr. Speaker, the hon. member for Grenville-Carleton (Mr. Baker) has asked for costs. Well, I have some costs. Unhappily, in the two minutes remaining there will not be much time to put them on the record. I reckon that at a minimum in the first year of operation the program proposed by the hon. member for Winnipeg North Centre (Mr. Knowles) would cost $1.5 billion.
The recommendation is for a program without a means test. That means there is no guarantee that the increase in benefits
February 4, 1977

would go to those who need them most. The people whose plight the hon. member-
[ Translation]


The Acting Speaker (Mr. Ethier):: Order, please. The hour appointed for the consideration of private members' business
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has expired. It being five o'clock, this House stands adjourned until 2 p.m. on Monday next, pursuant to Standing Order 2(1).
At 5 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, February 7, 1977