1977-11-03

ROUTINE PROCEEDINGS


Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, 1 rise on a matter of urgent and pressing necessity pursuant to Standing Order 43. In view of the extreme importance of the administration of justice and in view of the provision in Section 5 of the Royal Canadian Mounted Police Act which clearly states that the Commissioner of the Royal Canadian Mounted Police under the direction of the minister has the "control and management" of the police while the "direction" of the force is under the minister whose jurisdiction is also defined in Section 4 of the Solicitor General's Act, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That the Prime Minister cease confusing the responsibility of himself and his ministers for direction of the force with the entirely different matter of the day to day operations so clearly invested in the commissioner under his mandate for control and management.


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


Some hon. Members:: No!


REQUEST FOR TABLING OF CABLES CONCERNING BREAK-IN AT L'AGENCE DE PRESSE LIBRE FROM MR. STARNES TO FORCE-MOTION UNDER S.O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That all the cables exchanged between the then Director General of Security Services Mr. John Starnes and the RCMP officials in Montreal concerning the break-in at the offices of L'Agence de Presse Libre in the fall of 1972 be tabled.


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


Some hon. Members:: No!


SUGGESTION MR. STARNES TESTIFY BEFORE COMMITTEE-MOTION UNDER S.O. 43
Mr. David MacDonald (Egmont):: Mr. Speaker, I rise under the provisions of Standing Order 43. Since the Solicitor General (Mr. Fox), on Monday of this week, indicated to this House that the illegal break-in had been "authorized by the most senior level of the RCMP, and that was by the person holding the rank of Director-General"-Mr. John Starnes, and since, in a telegram dated October 12, 1972, Mr. Starnes stated to RCMP Inspector J. L. Forrest that "He should be informed in advance of such action in this pre-election situation, and that he would want to know the extent of our involvement before giving advice to the Minister and Prime Minister", and since Mr. Starnes resigned on March 7, 1973, while the government claims not to be aware of any illegal security operations until 1976, even though further illegal acts are alleged to have occurred in early 1973, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the former Director-General of Security and Intelligence Services, Mr. John Starnes, be immediately invited to testify before the parliamentary Committee on Justice and Legal Affairs, in order that parliament and the people of Canada may have a complete understanding of ministerial awareness and responsibility for these illegal acts.


Mr. Speaker:: Standing Order 43 requires unanimous consent for the presentation of such a motion. Is there unanimous consent?


Some hon. Members:: No!


RECOMMENDATION THAT MCDONALD COMMISSION ACCELERATE ITS WORK-MOTION UNDER S.O. 43
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to Standing Order 43, I seek the unanimous consent of the House to move a motion on a matter of urgent and pressing necessity.
In view of the fact that the RCMP has now fallen into discredit following the disclosure of illegal acts for which it is responsible-I am saying responsible because I do not want to say guilty, because it must be deemed innocent until proven guilty-and that the Canadian public will naturally be distrustful of the RCMP because of all the publicity surrounding this debate in the House of Commons, I move, seconded by the hon. member for Richmond (Mr. Beaudoin):
That the House recommend to the Solicitor General to urge the McDonald Commission, which is currently investigating the RCMP, to accelerate its work in order to shed light on all the illegal break-ins which were dealt with in the House and reassure the Canadian public.

November 3, 1977
Electronic Devices


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


Some hon. Members:: Agreed.
That this House bring all of its resources to bear to discover what person or persons conspired to place that electronic device in the hon. member's office, and more specifically, whether any private detective agency was involved directly or indirectly in the placing and the discovery of such a device; if yes, who that agency was, how much money was involved and where that money came from;


Some hon. Members:: Yes, yes.


Some hon. Members:: No.


PROPOSED REFERENCE TO COMMITTEE OF AGREEMENT WITH UNITED STATES ON CONSTRUCTION OF NORTHERN PIPELINE-MOTION UNDER S.O. 43
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I rise under the provisions of Standing Order 43 to put a motion on a matter of urgent and pressing necessity dealing with the construction of the pipeline.
In the absence of any guarantees for Canadian producers and in light of the very serious statements made by United States Senators Durkin, Jackson and Stevens, members of the United States Senate Energy Committee to the effect that they oppose any favourable or preferential treatment for Canada and Canadian producers regarding the supply of pipe which now raises very serious questions about the agreement entered into by Canada and the United States of America, 1 move, seconded by the hon. member for Vegreville (Mr. Mazankowski):


Mr. Stollery:: My motion continues:
why the hon. member for Central Nova did not delay publicizing the bug in his office, which apparently had a time limit of only 72 hours, in order to permit adequate surveillance which would have surely trapped the person or persons involved in the bugging operation.


Some hon. Members:: Agreed.


Mr. Speaker:: Order, please. A motion presented at this time can be presented for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: The House has given its consent to the presentation of this motion. The motion having now been presented, is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.
Mr. Baker (Grenville-Carleton):: You will be in the back benches in the House forever.


Some hon. Members:: Oh, no!
That the agreement dated September 20, 1977 between Canada and the United States of America on principles applicable to a northern natural gas pipeline, be referred to the Standing Committee on External Affairs and that that Committee be instructed to report on the adequacy of the said agreement in terms of benefit to Canada and Canadian producers.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INQUIRY INTO RESPONSIBILITY FOR PLACING ELECTRONIC DEVICE IN OFFICE OF MEMBER FOR CENTRAL NOVA-MOTION UNDER S.O. 43
Peter A. Stollery: I rise under Standing Order 43 to move a motion of urgent and pressing necessity which arises out of recent events put before the House by the hon. member for Central Nova (Mr. MacKay). Mr. Speaker, I move, seconded by the hon. member for York East (Mr. Collenette):


An hon. Member:: You will be back there with Goodale forever.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I feel sure that the House will agree with the motion I shall present, and I hope that like the previous motion it will be supported. I therefore move, under the provisions of Standing Order 43, seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent):
That this House calls on the Minister of Veterans Affairs in preparing the statement he intends to make next Thursday, November 10, in recognition of Remembrance Day, to include therein not just words of praise for our veterans, but an announcement of legislation to raise the basic rate of the war disability pension, to improve the position of veteran's widows, and to grant the prisoner of war compensation to the fewer than two hundred surviving Canadian veterans who were prisoners of war during World War I.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Such a motion can be presented to the House for discussion pursuant to Standing Order 43 only with the unanimous consent of the House. Is there unanimous consent?
November 3, 1977


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is for the Prime Minister who demonstrated his capacity yesterday as an artful dodger.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: As the House knows, the fundamental question at issue here is ministerial responsibility.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: I want the Prime Minister to tell the House of Commons now who in his government accepts responsibility for ensuring that security services operate within the law and follow the mandate given to them by the government. In other words, who in cabinet polices the security service?


Right Hon. P. E. Trudeau (Prime Minister):: The Solicitor General and myself as Prime Minister.


Charles Joseph Clark: What specific or active actions other than simply passively listening to briefings did the Prime Minister and the solicitors general of the day take prior to the issuing of the mandate prior to March, 1975 and what active procedures are now taken by the Prime Minister and the Solicitor General to ensure that the security service operates within the law and to ensure that the mandate that was spelled out in March, 1975 is honoured and respected in practice by the security service? Will the Prime Minister spell out the actions he takes to ensure that the law and the mandate are respected?


Pierre Elliott Trudeau: Mr. Speaker, the Solicitor General in his answers to the House, and in his statement on Friday, indicated several actions which have been taken. Most of them originated with the first discovery by government that an illegal and what we thought at that time isolated act had been taken by the RCMP. Since all kinds of indications have been given to the RCMP, active searches of their files on specific incidents, whether spurious, imagined or real put forth by the opposition or other people have been followed up. Of course, each time an action was discovered which might have an aspect of illegality, reference was made to the McDonald Royal Commission of Inquiry which was set up last July I believe and to the attorney general of the province in which the
Oral Questions
suspected action had been taken with a view to that attorney general deciding under our laws whether a prosecution was warranted or not.


Some hon. Members:: Hear, hear!
PERSON RESPONSIBLE FOR SURVEILLANCE OF PARTI QUfiBECOIS


Charles Joseph Clark: Mr. Speaker, I assume in carrying out this responsibility, which he has now admitted is his and that of the Solicitor General, when the Prime Minister learns of something that he thinks is improper he makes an inquiry to determine how that wrong act got started. Specifically, since the Prime Minister has gone to such great pains claiming credit for stopping the security surveillance of the Parti Quebecois, will he now tell the House of Commons who started that surveillance of the Parti Quebecois? Under whose authority was the major policy decision taken to put a legal political party under what the Prime Minister calls systematic surveillance?


Pierre Elliott Trudeau: Mr. Speaker, the order was given by us not to pursue systematic surveillance. That order was given as a result of a discussion in cabinet committee and a report to the cabinet committee by the security service that they were trying to follow the mandate that we had earlier given to them following the October, 1970 crisis. They were trying to find out more about sources of violence within the ranks of the separatists. It came to light at one point, as I said, at the end of 1974 or early 1975 that in order to discharge this perfectly legitimate mandate, and I am sure even the Leader of the Opposition agrees with that, they had systematically begun a surveillance of a democratic party. It was a matter not without importance and consideration. We discussed it in the cabinet committee on security.
After due reflection, we found that this action was improper and asked them not to pursue it. This is indeed what happened. With regard to the extent to which it had been pursued previous to that direction being given and the results that had been obtained, that is the security or otherwise information they had gotten on this particular party, as I told an hon. member opposite yesterday, I did not find it legitimate for me as leader of another political party to ask what they had found out or to give me their files. I said whatever you have, we do not want to see it or hear about it and we do not want you to continue.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: We now have a partial answer as to who started it. The partial answer is, "They started it." We want to know who are "they". Who took the decision to start the systematic surveillance of the Parti Quebecois and under what direction from the cabinet? Under what general policy did those persons think they were acting when they took that initiative?

November 3, 1977
Oral Questions


Pierre Elliott Trudeau: I did give an answer. I will repeat it. They were acting under the mandate they had from this government-


An hon. Member:: They?


Pierre Elliott Trudeau: The RCMP security service were acting under the mandate they had from this government to try to discover terrorists or investigate suspected acts of subversion. That was the mandate they had under previous governments and which they still have under mine.
We discovered, as the House discovered, only in recent days and weeks, that the security service had entered into an act which might be deemed to be illegal. At that point we turned that matter over to the Attorney General of the province. I repeat, as was indicated in the House by myself and by the Solicitor General several times, that these initiatives were taken by the security service, by the Director-General and by the officers of that service at the highest level.


ACTION BY PRIME MINISTER TO ENSURE SECURITY SERVICE OPERATED WITHIN MANDATE
Charles Joseph Clark: The Prime Minister has said, he has admitted, they were operating under a general mandate from the government. Is he telling the House of Commons that he took no steps to ensure that the general mandate flowing out of the circumstances of 1970 was not being interpreted by the security services in a way which would lead to the surveillance of a legitimate political party? Did he simply sit back passively and not interest himself in the way in which that mandate was being carried out in practice?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I told the House yesterday that we were having periodic meetings with the security service and that they were informing us as to possible sources of subversion they were discovering. They were acquainting us with facts which they thought the cabinet or the Solicitor General or the Prime Minister should know. At one point it became clear that they were interpreting their mandate as the surveillance of a political party. They did it either in discussion or in asking us whether this was all right or in suggesting that this was what they wanted to do. They did not at any point tell us they had secret lists or that they had broken in anywhere to get secret lists.
When we discovered this was the way they were then interpreting the mandate-and, I repeat, we had had a series of briefings over the years-at the first point in the briefings at which it became apparent they were doing a certain thing that we thought objectionable, we asked them to stop.


Some hon. Members:: Hear, hear!
[Mr. Clark.)


INQUIRY WHETHER GUIDELINES FOR SECURITY SERVICE WERE INTERPRETED
Hon. Robert L. Stanfield (Halifax):: Yesterday, the Prime Minister told the House that following the events in Quebec in 1970 the government modified the mandate of the RCMP or the security forces. He said, and I quote, "I directed the RCMP to pay a little more attention to internal subversion caused by ideological sources in Canada." I should like to ask the Prime Minister whether, at the time those directions were given, the meaning of "internal subversion caused by ideological sources in Canada" was interpreted for the security service of the RCMP by the government, whether the directive was in writing and, if these were written directions, whether the Prime Minister would table them in the House.


Pierre Elliott Trudeau: I can easily answer the first part of the question. The House will remember that in October, 1970 we had come to a crisis because of actions of the FLQ. That had arrived after a series of bombings, train derailments, looting of arsenals and so on.


David Samuel Horne MacDonald: Apprehended insurrection.


Pierre Elliott Trudeau: As the hon. member from Prince Edward Island correctly says, apprehended insurrection.


David Samuel Horne MacDonald: That is not the way I voted.


Pierre Elliott Trudeau: If the hon. member now wants to leave his party, he can always leave his party. It has happened before, Mr. Speaker, and it might happen again.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: To get back to the question of the hon. member for Halifax, it is obvious that in that context we are telling the police, as I believe they felt themselves, that the information they had on terrorism in the name of separatism was not sufficient. We gave them in discussion directives to increase and accelerate their surveillance and the nature of their intelligence in that particular area.
The hon. member wants to know if I can table this. This is obviously a direction which was given in cabinet. Whether it was incorporated in the precise record of decision, I do not know. Certainly, we would not table cabinet discussions or decisions in parliament, but let me tell the hon. member that this is what we decided and the wording of any particular RD may be secondary.


Robert Lorne Stanfield: Mr. Speaker, I would hardly think it would be surprising to the Prime Minister anymore than to me if the RCM Police had some doubts as to what is meant by internal subversion caused by ideological sources. This might well lead to surveillance of a democratic party such as the Parti Quebe-cois. Having clearly said yesterday that the government of the day is certainly responsible for the scope and mandate of the operations of the security force, how can the Prime Minister possibly maintain that he discharged his responsibility as
November 3, 1977

Prime Minister at that time by giving what appears to be a rather vague direction to the security force which could very well have been interpreted by them in a very broad fashion? Unless the Prime Minister is prepared to show the House that the mandate was quite precise at that time, he will have to accept the interpretation which I am putting on this.


Pierre Elliott Trudeau: Well, Mr. Speaker, I would want to read the blues because the hon. member for Halifax said something which 1 may not have understood correctly. I understood him to say that my concept of internal subversion may well have led to the surveillance of the Parti Quebecois. If this is his feeling, then he has the explanation why the police decided to exercise surveillance of the Parti Quebecois. They had the same conclusions as the hon. member for Halifax. I have told him that this was not in our mind, and when we discovered that this was being done we, contrary presumably to the hon. member for Halifax, would say that this is not a form of internal subversion, this is a democratic party.


Robert Lorne Stanfield: Mr. Speaker, in view of the Prime Minister's acceptance yesterday of responsibility for the scope of security operations, how can the Prime Minister evade responsibility for his failure to define precisely the meaning of internal subversion, which not only I but many others would interpret, perhaps in the circumstances, as including the operations of the Parti Quebecois? How could he personally say that he discharged his responsibilities by making clear to the police that this does not include the operations of such a democratic party?


Pierre Elliott Trudeau: Obviously, Mr. Speaker, there is a difference of view, here.


Lincoln MacCauley Alexander: Yours is wrong.


Pierre Elliott Trudeau: The hon. member for Hamilton West says that mine is wrong. He disagrees with me and perhaps he agrees with the hon. member for Halifax, but let him hear my answer and then he will be able to decide what is right and what is wrong after he knows the facts. The hon. member for Halifax presumes it would follow, if one is going to look at internal subversion, that you would conduct a surveillance of a democratic party.


An hon. Member:: It could follow.


Pierre Elliott Trudeau: In our minds it did not. In my answer earlier I indicated that internal subversion was spelled out in the guidelines mentioned to the House by the Solicitor General on Friday. I have already indicated that it was the kind of subversion which might come from the use of violence or other illegal acts by any person. Obviously, if they were looking at separatists, it would make sense-and perhaps here I would agree with the hon. member for Halifax-that they would look at known separatists. I do not see anything objectionable to this. It is not objectionable that they would look at members of any party, whether it be the Conservative Party or a separa-
Oral Questions
tists party, who deserved surveillance for some reason. All I am saying is that it should not be systematic surveillance of the party as such, and I understand the hon. member for Hamilton West disagrees with this.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


PRIME MINISTER'S GUIDELINES TO MR. STARNES CONCERNING ILLEGAL ACTIVITIES
John Edward Broadbent: Mr. Speaker, I have a related question for the Prime Minister concerning the actions of Mr. John Starnes, a man whom I understand was appointed to his position at the personal recommendation of the Prime Minister. He said in a cable, which was sent to RCMP officials in Montreal some six days after the break-in of L'Agence de Presse Libre du Quebec, "In this pre-election situation", he would not recommend this kind of action, and he also said "pre-election times". That would seem to fit in with the Prime Minister's interpretation of the rule of law, fitting in with the sort of spirit of the times attitude. I should like to ask the Prime Minister, with specific reference to Mr. John Starnes and his responsibilities, did he ever indicate that such illicit operations would not be acceptable, or conversely, with regard to Mr. Starnes, did he personally ever make it clear that they would not be tolerated?


Pierre Elliott Trudeau: Mr. Speaker, the hon. Leader of the New Democratic Party is referring to a telegram which was tabled before the Keabie Commission in Quebec. That telegram related to a specific event. In order to find out how that event had come about, the break-in at APLQ, Mr. Starnes was, with some indignation as the telegram indicates, saying: "What did you do this for? I want to find out more". His words were: "I needed, in order to decide how best to deal with the matter in terms of the Prime Minister and the minister, both of whom have received representations from the APLQ and their associates"-


An hon. Member:: You are reading it. Table it.


Pierre Elliott Trudeau: The answer is contained in these words themselves. Mr. Starnes wanted to know how to deal with this subject because the Solicitor General at the time had been asking how he would answer the telegram sent to him by the members of the APLQ. Mr. Starnes was asking his subordinates for information about it in order that he would be able to direct how to answer it. How that was answered was stated some time ago when I believe the present Solicitor General dealt with those matters last spring.


BREAK-IN AT L'AGENCE DE PRESSE LIBRE-REPLY TO MR. STARNES' CABLE OF OCTOBER 12
John Edward Broadbent: Mr. Speaker, I am prepared in this instance to accept that the Prime Minister did not understand the question as I put it. The question I

November 3, 1977
Oral Questions
asked him was: Did the Prime Minister ever convey to Mr. Starnes, after he got the position which he got, that illicit operations of the kind which took place at L'Agence de Presse Libre would be absolutely unacceptable to the government? Did he say or indicate in manner or attitude that it is quite possible the government would accept such illicit operations for some noble purpose?
The question I would like the Prime Minister to answer in relation to that is: considering that he sent the telegram which I referred to in order to get information so that he could brief the Prime Minister, can the Prime Minister tell us if that information he got back, as a result of that cable sent on October 12, is on file; what was done with it; was it ever sent to the Prime Minister's office; did anyone in his office ever see it at that time?


Pierre Elliott Trudeau: Mr. Speaker, the first part of the question was: what did we do with it when we heard about illicit acts? This has been repeated in the House and answered many, many times. As soon as we heard that there had been an illicit act in relation to the APLQ, we referred it to the attorney general of the province of Quebec. Later on when it appeared that this was not an isolated incident, we set up a royal commission. That is a very clear answer: as soon as we learned about it, we took action on it. The hon. Leader of the New Democratic Party is apparently trying to find out, in a very subtle way, whether we had heard about it before we acted. The answer is no. As soon as we heard about it, we acted.


Some hon. Members:: Hear, hear!


REASON FOR RESIGNATION OF MR. STARNES
John Edward Broadbent: Mr. Speaker, I now assume the Prime Minister's hearing is going with his age. The hon. member for Halifax was smiling because he knew that the Prime Minister was asked a rather explicit question twice in a row and refused to answer. We are talking about before the act occurred. Before the act occurred, did the Prime Minister indicate to Mr. John Starnes that illicit, under-cover, illegal operations to obtain information of any kind would not be tolerated? Did he make that very explicit in his mandate? 1 have a third question-


Pierre Elliott Trudeau: Let me answer the first one.


John Edward Broadbent: Since Mr. John Starnes retired prematurely at the age of 54, within two months after the illegal break-in to obtain information on the Parti Quebecois, does the government have reasons for the resignation? Can they be produced? Did he resign on his own volition, or was his resignation requested?


Pierre Elliott Trudeau: Mr. Speaker, 1 believe just a couple of years ago the House was making a great event out of the fact that we had several deputy ministers resigning when they were reaching the age of 55.


An hon. Member:: Answer the question.


Walter David Baker: You look phony today, Pierre.


Pierre Elliott Trudeau: The House knows the reason why that took place. If hon. members want to find out with greater certainty, they can pick up the phone and ask these various deputy ministers who resigned at that time.


An hon. Member:: What are you hiding, Pierre?


Walter David Baker: Is he 65 or 52?


AGRICULTURE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, the way things are going in the House these days, one would think that we are more concerned about saving the Parti Quebecois than that party is concerned about saving itself. If I may, Mr. Speaker, I would like to direct a question on economics to the Minister of Agriculture. Considering that industrial milk producers must spend $120 million a year to help the federal government export its milk powder surplus and keep in storage its butter surplus, considering that the Granby agricultural cooperative imports through one of its subsidiaries, namely, Quebec Lait, some powdered buttermilk from New Zealand, could the minister inform the House whether or not he is aware of this and, if so, what he intends to do to remedy this serious problem?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, the dairy farmers of Quebec, the industrial milk producers, are no different from the industrial milk producers of any other province. They all make contributions to the export fund to compete in the world market with the surplus product they have in Canada.
I am not sure exactly what the hon. member is talking about; but if he is talking about the skim milk powder from buttermilk, which comes in from New Zealand, that is a long standing arrangement with a fellow Commonwealth country. It is something I do not intend to break at this time. We have had discussions with the dairy farmers about this in the past. There has been a long standing arrangement with that country.
[ Translation]


Léonel Beaudoin: Mr. Speaker, I want to ask a supplementary. The Minister of Agriculture said last year that the Minister of Industry, Trade and Commerce had agreed to import $50 million worth of cheese because those types of cheese were not made in Canada, and this mostly to protect the consumer, on which I agree. Since he just said that we have milk powder surpluses and since because of those surpluses the manufacturing milk producers now cannot produce any more, would it not
November 3, 1977

be possible to cancel or go around that agreement with New Zealand on milk powder imports?


Eugene Whelan: Mr. Speaker, the hon. member talks about production of skim milk powder. I am sure he knows that skim milk powder is a result of the production of butter. For every pound of butter there are two pounds of skim milk powder produced. There is a world surplus problem. The European Community has compounded this problem. When we are talking about directing milk to cheese factories, that is solely a provincial distribution problem. The provinces are the ones which issue the directives. Sometimes through subsidies and so forth we try to discourage the production of butter and skim milk powder so that people will go into cheese production. We think that is a good idea. Cheese consumption has gone up in Canada. Of all the cheese consumed in Canada 85 per cent is produced in Canada. I am sure the hon. member is aware that there is going to be a specialty cheese plant built in Quebec, if it is not already under construction. We probably will have one in Ontario also to produce specialty cheeses, which have not been produced in Canada before.


ROYAL CANADIAN MOUNTED POLICE
David Samuel Horne MacDonald: Mr. Speaker, my question is for the Prime Minister. Now that he has had a chance to refresh his memory by talking with the former solicitor general, I would like to come back to an answer given by the present Solicitor General on Monday. On Monday the Solicitor General indicated that the illegal break-in had been authorized by the most senior level of the security service of the RCMP, that is, the Director-General, Mr. John Starnes, who had been appointed to that office in October of 1969 by the Prime Minister. In as much as Mr. Starnes resigned on March 7, 1973 after the illegal break-ins, arson and theft had occurred, and given the Solicitor General's answer to me that everyone within the security service at that time, including the Director-General of the security service, did not consider its operations to be illegal, was there any aspect of Mr. Starnes' resignation in 1973 that was connected to any aspect of illegality with respect to the security and intelligence service?


Pierre Elliott Trudeau: None whatsoever, Mr. Speaker.


REASON FOR DELAY IN ASCERTAINING ILLEGAL ACTIVITIES TOOK PLACE
David Samuel Horne MacDonald: Mr. Speaker, I wonder then if the Prime Minister can indicate why it has taken so long for the government to ascertain that the various events that did occur during that period were illegal. Why has there
Oral Questions
been to date no responsibility either on the part of himself or the subsequent solicitors general with respect to this act and with respect particularly to the surveillance by the RCMP of the Parti Quebecois which he indicated yesterday had occurred for a short period of time and was stopped as soon as it was found out? Can the Prime Minister indicate whether he found out how long the surveillance had taken place and when it was initiated?


Pierre Elliott Trudeau: Mr. Speaker, on the first part of the question, as to why it took so long, and on the second part of the question the answer is the same: because we were not involved in monitoring the day-to-day operations of the RCMP. That was not our practice. It was not the practice of the previous government, and it is not a practice we intend to follow in the future. We had periodic briefings in which the findings they thought important to put before us were reported to us. At no time did they ever say that "in order to make this report we have had to engage in an illegal act", and at no time did we suspect or have cause to suspect that they would have to engage in illegal acts to supply the government with information on security matters.
This matter came to light, 1 believe, in the spring of 1976 when the present Minister of Consumer and Corporate Affairs was solicitor general. It came to light that there had been an illegal act perpetrated some three and a half or four years before. I repeat that that was the beginning of a series of events which led up to the setting up by the federal government of a royal commission of inquiry.


David Samuel Horne MacDonald: Mr. Speaker, does the Prime Minister expect us to believe that since that first information became available a year and a half ago with respect to the first of the illegal acts there was no examination of any of the communications that took place or any of the directives which were given with respect either to the appointment of Mr. Starnes in 1969, the appointment of the Bourne Group in 1971 or with respect to any of the acts which subsequently took place? Does the Prime Minister expect us to believe that the government does not yet know whether there is any responsibility lodged with any of the ministry or senior echelons of the government for a misunderstanding to occur which would have encouraged the kind of illegal acts and counter subversion which have in fact been reported in recent days?


Pierre Elliott Trudeau: The hon. member asks if I expect him to believe certain things we have in terms of information from the RCMP. I do not expect the Tories to believe that kind of thing. They have more faith in their own private detectives than in the RCMP.


Some hon. Members:: Hear, hear!


LETTER FROM GENERAL DARE MENTIONED IN MINISTER'S AFFIDAVIT
Mr. James A. McGrath (St. John's East):: Mr. Speaker, yesterday in reply to the Leader of the New Democratic Party

November 3, 1977
Oral Questions
the Solicitor General, referring to the affidavit he filed with the Quebec Commission, drew the attention of the House to a mistake in his sworn affidavit dealing with the APLQ break-in. The minister also told the House that the letter in question was from General Dare and in no way referred to the break-in at the APLQ. My question to the minister is what, then, did the letter refer to and why was it filed with the commission in the first place?


Hon. Francis Fox (Solicitor General):: Mr. Speaker, I received a subpoena from the commission asking me to file with it a file which had the code name "Bricole", which was the code name for the operation relating to the break-in at the APLQ headquarters on October 6 or 7 of 1972. I believe one of those dates is the correct date.
When I went through the file with the code name "Bricole" there were in that file three pieces of paper. There was one memorandum, and there was a letter from General Dare to the present Minister of Consumer and Corporate Affairs. They were obviously not in the proper file. They should have been filed in another file because they had absolutely nothing to do with the Bricole file. However, instead of taking those documents out of the Bricole file and having them filed properly, I thought it would be more honest on my part to indicate that there were other documents in that file which had nothing to do with the Bricole operation and to indicate that to the commission and to the House, as I am doing today.


Some hon. Members:: Hear, hear!


SUBJECT MATTER OF LETTER FROM GENERAL DARE TO FORMER SOLICITOR GENERAL
James Aloysius McGrath: Mr. Speaker, now we are told that another mistake was made in the affidavit which was sworn by the Solicitor General.


Some hon. Members:: No!


James Aloysius McGrath: Since we are dealing here with an obvious attempt to obstruct justice with regard to the commission of illegal acts which were not reported to the authorities for more than five years and since we are obviously concerned here with the culpabilities of ministers in this obstruction of justice and in this cover-up, I will now ask the minister if he is prepared to tell the House what was the subject matter of that letter from General Dare to the former solicitor general, now the Minister of Consumer and Corporate Affairs. Furthermore, since the minister is prepared to file the letter with the McDonald Commission and since this matter is properly before the House as a result of the minister's statement to the House last week, will he now grant the House the courtesy of producing the letter to the House right now?


Francis Fox: The proposition, of course, is astounding. What the hon. member is saying is that from now on I should table in this House matters relating to current operational files relating to the national security of this country.

As far as this particular document is concerned, I indicated to the House yesterday-and I will reiterate it today-that document is available to the royal commission of inquiry, and I would be willing to forward the whole of the documents for which I have signed an affidavit to the royal commission, which was set up by me and the government in July of this year. I am ready to instruct my counsel to forward all those documents to the royal commission of inquiry at the first opportunity.


ADMINISTRATION OF JUSTICE
James Aloysius McGrath: Mr. Speaker, my final supplementary is to the Minister of Justice and Attorney General of Canada. Has the minister satisfied himself, as the minister responsible for law enforcement in this country and for the Criminal Code, that there was not in fact an offence committed under the Criminal Code, namely, obstruction of justice and an attempt to conceal an offence by virtue of the fact that we are dealing here with at least three or four criminal acts which were not reported to the authorities for a period of five years? Has the minister, in his capacity as Attorney General of Canada, satisfied himself that there was not a crime committed in the office of the Solicitor General or in the offices of the government of Canada with regard to obstructing justice?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, in co-operation with the Deputy Solicitor General, my officers have reviewed all the files in these matters, and any which they considered relevant to the commission of criminal offences they have recommended be passed to the minister of justice of Quebec.


ROYAL CANADIAN MOUNTED POLICE
Mr. Roch La Salle (Joliette):: that affair-the incredible incompetence of the then Solicitor General-


Mr. Speaker:: Order. If the hon. member wants to ask a question, he should put it now.


Roch La Salle: If so, why has the right hon. Prime Minister refused until now to take action against those who were responsible in the Solicitor General's office at that time?


Pierre Elliott Trudeau: Well, Mr. Speaker, the feigned or assumed indignation of the hon. member for Joliette seems to be based on ignorance, wilful or not, of the facts. When he asks why we did not take specific steps, I say we did as soon as we learned that, in fact, there had been illegal acts. We have repeated that perhaps a hundred times to the House in the last few days. Is it that the hon. member was not in the House? One thing must be remembered, however, and I shall sum up the debate in a few sentences for the benefit of the hon. member. As soon as the government learned that a legitimate and democratic Canadian political party was under systematic surveillance, we asked immediately that a stop be put to it. And as soon as we learned that the surveillance was being conducted by what may have been illegal means, we referred the matter to the department of justice of the province of Quebec leaving it to them to decide whether they should take legal action or not.


REQUEST FOR STATEMENT BY PRIME MINISTER ON L'AGENCE DE PRESSE LIBRE BREAK-IN
Roch La Salle: Mr. Speaker, I know that the Prime Minister goes on repeating the government were not aware of what was going on. I put the question because the Canadian people have reservations about that. Therefore, and since the current Solicitor General is forced to take the blame for his predecessor's incompetence, I put the question to the Prime Minister in the public's interest, because it is important in my view that the Canadian people be reassured. I ask the right hon. Prime Minister whether he is prepared to make a statement as early as next week, giving the Canadian people the real reasons for that break-in in the context of circumstances then prevailing, or whether he prefers attempting to save the Solicitor General's predecessors?


Pierre Elliott Trudeau: Mr. Speaker, once again that answer has been given a number of times, but I will repeat it for the hon. member's benefit. This government's policy is that there should be no intervention in the day-to-day operations of the RCMP as far as security is concerned. That is our policy. We, certain ministers and myself, are briefed on a regular basis on certain security matters involving Canada's security or possible terrorist or subversive action, in a general manner, but we have never felt it our duty-and I think this was also true of the former Prime Minister-Mr. Diefenbaker, to my knowledge no Prime Minister ever asked to intervene in the management of the RCMP's day-to-day operations, because in so doing we, as a government, as politicians, would get information on people
OraI Questions
investigated by the RCMP. We have no wish to so intervene in police operations, because we feel that civil liberties as we understand them would be harmed if the government of the day asked the police to open all their files to politicians in government.
REASON FOR INVESTIGATION OF PARTI QUt.BECOIS


Roch La Salle: I wish to ask another supplementary question.
I understand that the arguments put forth by the right hon. Prime Minister are interesting, that in the context of 1973, I think the Prime Minister must grasp the full scope of this question, in the political climate which existed then. Could the Prime Minister undertake to tell the House, given the type of information he must have been getting from the security service, what were the true reasons which led that service to investigate the membership list of the Parti Quebecois? And the Prime Minister knows quite well what I mean, when one just looks at the situation in which the provincial Liberal government of the time found itself.


Pierre Elliott Trudeau: Mr. Speaker, I already gave those reasons to the hon. member for Halifax a moment ago. I am quite prepared to repeat them for the benefit of the hon. member for Joliette. The hon. member will perhaps remember that before the October crisis of 1970, there had been various acts of violence, subversion, banditry and explosions. There was an assassination and various actions committed in the name of Quebec separatism by an organization calling itself the FLQ.


Roch La Salle: The FLQ members were not separatists!


Pierre Elliott Trudeau: We are now learning from the member for Joliette that the FLQ members were not separatists. Of course I may not be an expert in the FLQ, I may not have the expertise of the hon. member in such matters-


Roch La Salle: You know it too well.


REASON FOR FAILURE TO REQUEST MINISTER'S RESIGNATION IN VIEW OF ILLEGAL ACTIVITIES OF FORCE
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is directed to the Prime Minister. Given the fact that the fundamental foundation of our parliamentary system is Cabinet responsibility-probably there is no more heinous crime against the state than illegal activity on the part of a state police force-why did the Prime Minister not ask for the resignation from the ministry of the responsible Cabinet minister at the time the illegal acts were brought to their attention?


An hon. Member:: A friend of the Prime Minister's, that is why.

November 3, 1977
Oral Questions


Pierre Elliott Trudeau: Mr. Speaker, I would ask the hon. member to seek his answer in the Report of the Royal Commission on Security published in June 1969, a commission on security chaired by a very able and well-known former civil servant, by a present Justice of the Supreme Court and by a former leader of the New Democratic Party.


An hon. Member:: Which you ignored.


Pierre Elliott Trudeau: This Royal Commission on Security stated at page 21 of the report:
A security service will inevitably be involved in actions that may contravene the spirit if not the letter of the law and with clandestine and other activities which may sometimes seem to infringe on individuals' rights;
Mr. Speaker, this is from a group of outside experts who realize, apparently more than the opposition of both parties wish to realize, that matters of subversion call for a very, very fine line to be drawn between respect for civil liberties on one side and the protection of the security of the state on the other.


James McPhail Gillies: A supplementary question, Mr. Speaker. Surely the right hon. Prime Minister will recognize in this, probably the most important problem to face this country in many, many years-


Some hon. Members:: Oh, oh!


James McPhail Gillies: -that the responsibility that was being drawn in that report to the Cabinet and Prime Minister of this country was to always be certain that there was a difference between subversion and other activities that might not be agreeable to the government or that the government might agree were not appropriate and it is the responsibility of the government to make sure that this line is never transgressed. Surely, the Prime Minister must know that nothing is so threatening to the survival of democracy and in any situation or any country where democracy has fallen, it has fallen when this line has been transgressed. A government has to be responsible for making sure it is never transgressed.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I agree completely with the hon. member in the preamble to his question. Not only do I agree with him in theory but I can point out that in fact we made sure that this very fine line between subversion and dissent was not crossed by the RCMP.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


An hon. Member:: You did not.


Pierre Elliott Trudeau: How did we make sure that this line was not crossed?


An hon. Member:: According to Pierre.
[Mr. Gillies.)


Charles Joseph Clark: You authorized the activities which led to the surveillance of the PQ.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, the Leader of the Opposition, without seeking the floor, is stating something which is absolutely, unequivocally, false, and I wish he would have the courage to stand up and say it.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, we made sure this fine line was not crossed.


An hon. Member:: You did not.


An hon. Member:: That is precisely the point-you never have.


An hon. Member:: You did not do anything.


An hon. Member:: You better see what your Solicitor General said last Friday.


Mr. Munro (Hamilton East):: Is this democracy? You don't let a man speak.


Pierre Elliott Trudeau: We have a fine example of respect for civil liberties from this howling mob sitting across the aisles.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: They do not have to take my answers as the absolute truth.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: They can stand in their places and challenge them, if they have the courage, but I would suggest that the way to do it is not by hiring private detectives, as that party does, and not by having some phony bugs planted in their office, which is the way they do it.


Some hon. Members:: Oh, oh!


An hon. Member:: Fraud.


An hon. Member:: Prove it.


Walter David Baker: You blew it this time, baby.


An hon. Member:: Why don't you lay a charge?


Some hon. Members:: Oh, oh!


An hon. Member:: Stand up and say it.


James Aloysius McGrath: Stand up and make a charge.


Mr. Speaker:: Order, please. The hon. member for Greenwood.
November 3, 1977


ALLEGED DISMISSAL OF MEMBER OF SECURITY UNIT FOR REFUSING TO DESTROY PROPERTY
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, I particularly want to thank you because we have heard a whole series of speeches under the guise of questions and even lengthier answers, and this is not the way, in my humble opinion, to conduct the question period.


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


An hon. Member:: He will, like the Tories.


Francis Andrew Brewin: My question is fairly brief and it is addressed to the Solicitor General. Has the Solicitor General inquired into the evidence given to the Keable inquiry in Montreal to the effect that members of an anti-terrorist squad, unit or group, or whatever you call it, attached, I presume, to the security forces, were ordered to smash a summer cottage owned by someone suspected-1 emphasize the word suspected-of being a terrorist, and that a member of the unit was dismissed for refusing to carry out this order. I would like to ask the minister, if he has looked into that case and knows about the fact, what he intends to do about this grave injustice.


Francis Fox: If the hon. member is referring to some of the evidence that came out in Montreal, I believe it was yesterday, I have inquired into the matter and 1 have seen the response from the RCMP which is to the effect that the member of the force who left that unit was transferred to Paris in 1972 at his own request.


Some hon. Members:: Oh, oh!


PRIVILEGE
Charles Joseph Clark: Mr. Speaker, 1 rise on a question of privilege concerning a matter which I believe affects the privileges of all members of the House. I should say, sir, that 1 take the first available opportunity to raise this matter, as did my colleague, the hon. member for Central Nova, on Monday and as the traditions of the House of Commons, as the hon. member for Spadina will know, require.
I should say that the question of privilege I will raise relates, or may well relate, to the charge or allegation that has just been made by the Prime Minister of Canada that electronic devices were planted by members of this party in offices of members of this party. That is a clear allegation that the Prime Minister has just made, and if he is a man of honour I am sure he will either stand in his place when 1 finish my remarks and cite the evidence which supports that allegation, or else he will stand up and withdraw it.


Some hon. Members:: Oh, oh!
Privilege-Mr. Clark


An hon. Member:: Resign.


Mr. Allmand:: Let us hear the evidence for all the nonsense you have been spreading around.


An hon. Member:: Why don't you listen?


Charles Joseph Clark: If the former solicitor general wants to speak, we will be delighted to hear him.


An hon. Member:: Rise.


Charles Joseph Clark: He had an opportunity all Monday night during the long debate, and he sat there silent.


An hon. Member:: You are a fraud, Allmand.


Charles Joseph Clark: Immediately following the revelations of the hon. member for Central Nova on Monday of this week, officials of my office authorized an examination of the offices of the Leader of Her Majesty's Loyal Opposition. We received this morning a report of the professional firm undertaking that examination. They report the discovery of a device within a telephone in the conference room of the Leader of the Opposition. The firm advises that-
The conference room telephone was capable of being used as an eavesdropping device and, in fact, still was capable of being an eavesdropping device until 8.10 p.m. on Monday, October 31, 1977.
That is the time the device was dismantled. As Your Honour knows, 1 submitted that full report today to you, as the responsible officer for the security of these buildings, for any further action that Your Honour might deem necessary or appropriate, which action may well include the reference of the whole matter to the appropriate committee of the House. Of course, in awaiting Your Honour's decision in this regard and your review of this matter, I would like to reserve my rights under privilege in the House.


Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on the same question of privilege, or on a different one with respect to myself, whichever you prefer. First, I want to say that I think the motion by my friend, the hon. member for Spadina, was entirely legitimate. 1 thank him for it and, although it might have been more carefully drawn up, I trust that it will assist the House in getting to the bottom of the affair.
I want to say to the Prime Minister that I can understand his consternation. I have noted from time to time, in reading Hansard, that he has expressed, usually in the form of heckling, great reservations about private detectives, which I deplore because I think private detectives, like everyone else including politicians, include some good ones and some bad ones, so I do not know why he is so paranoiac about them. In any event, I simply want to say, for the record, that I have no idea, under what circumstances or anything else concerning this listening device, where it came from. Certainly, I had no knowledge of it, nor anyone connected with me, that I know of.
I want to say, as well, that I trust that the Prime Minister, if he is really serious in his allegation that I had anything to do

November 3, 1977
Privilege-Mr. Clark
with it, will be honest enough to say so and make a charge, as he so often calls upon us to do when we are trying to elicit information.


Stanley Ronald Basford: Mr. Speaker, I just want to say a few words with regard to the question of privilege in the earlier motion that was passed, calling upon the House to use its full authority to investigate the matter and, I hope, the matter which Your Honour will investigate, raised by the Leader of the Opposition, and any other matters regarding bugging in this chamber and in the parliamentary precincts which might come to your attention, as requested by the Acting Prime Minister the other day, because I wish to put on the record very clearly, in case anyone is in doubt, that it is an immensely serious offence under the Criminal Code for people who are not authorized to have in their possession electronic surveillance devices, amounting to an indictable offence with a penalty of up to two years.
I hope, Mr. Speaker, in order to assist you and your officers in that investigation, that those finding or suspecting bugs will call upon Your Honour and leave them in place until such time as a proper investigation, with fingerprinting and otherwise, can be conducted so that any investigation you and your officers undertake will in no way be compromised.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, on the matter raised by the Leader of the Opposition, and on the particular comments of the hon. member for Central Nova who said that he was absolutely not involved in the placing of any bugging device in his office, of course I accept unequivocally his word on that. 1 have not, of course said that he had been involved. I said the inference might be that members of the other party, no one particular person, but the party itself-


Some hon. Members:: Cheap.


Stanley Ronald Basford: No cheaper than saying the RCMP did it.


Pierre Elliott Trudeau: -the members of the other party, the Tory party, because they did resort to the hiring of private detectives, not only in this instance but in others, gives me some cause for suspicion. I would add that I have no evidence, any more than the hon. member for Central Nova had any evidence when he suspected this was done by the RCMP.


Some hon. Members:: Hear, hear!


Mr. Speaker:: The Leader of the Opposition has raised, by way of a question of privilege, the discovery of a device which he has described as that which would lend to a telephone in his office the capability of being used as a listening apparatus. Contributions have been made by the hon. member for Central Nova, the Attorney General, and the Prime Minister.
The responsibility for the security of these premises, the offices of members and the buildings, and the privileges that

we enjoy here is my own responsibility. Of course, several times in the past we have had occasion to re-examine our concept of security of the buildings and our approach to security. It has to be balanced, on the one hand, with the interest of the safety and privacy of members who occupy these buildings and attempt to do the very important work they have been assigned by their constituents. On the other hand is the desire to have free access to these buildings by the citizens of Canada and, of course, by the very many visitors we invite here. That balance is a delicate one indeed, one which we constantly try to adjust in order to achieve the maximum of both objectives.
The responsibility in this particular instance, the event raised and referred to by the hon. member for Central Nova on Monday, is mine. It was subsequently referred to by the Acting Prime Minister, the Minister of Finance, in the hope that I would pursue that investigation.
The House should know that in pursuance of that obligation we asked for a preliminary investigation by my own security staff, the security staff of the House of Commons. That report arrived on my desk late yesterday. I turned it over to the hon. member for Central Nova as a preliminary analysis of the circumstances. I indicated that if we were to carry the matter further, to attempt to trace not only the circumstances of the finding or the location of this device but go beyond that to locate the source of it or to fix responsibility, that would be an investigative chore which is beyond the designed capability of the security staff of this House, and therefore 1 would await further advice from the hon. member.
Similarly, with respect to the point raised by the Leader of the Opposition, we have been carrying out sweeps or electronic examinations of other offices and have as yet made no discovery in any other office. We indicated we would carry out this examination of all offices requested by hon. members. It will probably take another two or three days to do that. We will likely want to assess that part of the investigation before going any further. However, with respect to the point raised by the Leader of the Opposition, we will certainly carry forward today a further examination of the nature of the device and see whether there is anything else we should do.
In the final analysis, we will come to a point that tests the limit of our capabilities, and surely it should be as an investigative job for our responsibility is really confined to these buildings. If we are going to go beyond that, we will have to call in the assistance of other security forces, and I think properly we ought to do that only at the request of members involved in a very direct way. This is simply by way of a preliminary or interim report on the progress of the investigations we are carrying out at this time.


Stanley Ronald Basford: On the question of privilege, Mr. Speaker-


Mr. Speaker:: The Attorney General on a fresh question of privilege.


Stanley Ronald Basford: No, Mr. Speaker, it is relative to the question of privilege we have been dealing with. I in no way want to
November 3, 1977

reflect upon Your Honour's remarks. The purpose of my intervention was to make it very clear that if there are private persons and unauthorized persons operating within the precincts of parliament and placing bugs, that is a criminal offence. It is not up to any particular member to complain about it, it is an offence under the Criminal Code, which involves far more than the individual member of parliament.
Some hon. [Members: Hear, hear!


Stanley Ronald Basford: It clearly involves the privileges of all members of parliament. It clearly involves breaches of the criminal law away beyond the right of any particular member of parliament. I urge upon Your Honour that time is of the essence in these matters, that they do involve breaches of the law, and that it is in the interests of members of parliament and of this institution that we be protected against those violations of the law.


Some hon. Members:: Hear, hear!


Mr. Speaker:: With respect, I do not think we need further elaboration on this point. In the case of both members whose offices or equipment have been involved, I suppose we could project ahead to the point where they might say, "There has been some allegation that we have brought to your attention as Speaker, but we do not want it pursued any further."


Some hon. Members:: Oh, oh!


Mr. Speaker:: I do not know if that is about to happen. I only know we are ahead of ourselves. If that were to happen, I am simply projecting that the rest of the House, or the administration of justice, may have some rights in the matter. At the moment, 1 think it is only courtesy to the members involved to conduct a preliminary investigation and say to them that further investigation should probably go forward with their request, assistance and co-operation. If that were not to take place, I would advise the House; but surely we must come to that point first.
[ Translation]


MR. BEAUDOIN-REMARKS IN NEWSPAPER ARTICLE
Léonel Beaudoin: Mr. Speaker, I rise on a question of privilege over a very important matter concerning an article published in the newspaper Le Devoir on October 29.
Mr. Speaker, I believe that reporter Pierre O'Neil has harmed my reputation. He has told lies about me in an article entitled:
From One Caucus to Another without Scruples
I would like to quote Mr. O'Neil:
Mr. Beaudoin attended the regional caucus of Liberal members of Parliament convened by Urban Affairs Minister Andre Ouellet to study the housing problem in the Montreal area.
Mr. Speaker, the reporter should have listened, read or learned about the matter before writing such things. This
Privilege-Mr. Baldwin
meeting was held in Montreal on Monday, October 24, and was aimed at informing all members from the Montreal area and the Eastern Townships about the new Urban Affairs programs. The mayors of all municipalities involved were invited and-


Mr. Speaker:: Order. It is nearly impossible to hear the question of privilege raised by the hon. member for Richmond.


Léonel Beaudoin: Thank you, Mr. Speaker. The mayors of all the municipalities concerned were invited, and as far as I know they are not all Liberals. I am a federal member of parliament and when the time comes to work for my constituents, whenever possible I attend all meetings which could improve the lot of the people of my riding. Since most members from the province of Quebec are Liberals I am sure we are working together on these specific projects. That does not change in any way my personal political affiliation, that is my being a member of the Social Credit Party of Canada. Reporters who make up stories to destroy the reputation of federal members of parliament should be reproved by all federal members, whatever their party. To please certain reporters and prove them right we are soon all going to have to sit in separate places. I think that during an election we should fight for our own ideologies and principles and outside election campaigns we should all, without exception and whatever our allegiance, work together for the better-being of our ridings, provinces and country.
I think the newspaper Le Devoir should correct that falsehood about me, and I urge all media to get informed before they publish stupid stories like that. We are always available to answer their questions and they could then write articles based on facts, not wishes or dreams.


Mr. Speaker:: Order. The hon. member for Richmond (Mr. Beaudoin) raised a question of privilege relating to the newspaper Le Devoir and one of its employees, Mr. Pierre O'Neil. It does not relate to a member of parliament or things relating to this House. So this does not constitute a question of privilege as such but rather a very important and significant grievance.
[ English ]


MR. BALDWIN-REMARKS OF PRIME MINISTER AND MINISTER OF JUSTICE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question of privilege which relates to what was said by the Prime Minister a little while ago, and by the Minister of Justice. Before the Prime Minister left-as he said, to meet the press-the leader of our party gave him formal notice that I intended to raise this question, as did the House leader.
The Prime Minister, making an intervention following what was said by my hon. friend from Central Nova, made it clear that in his mind the device might well have been planted by members of Her Majesty's Loyal Opposition. The Minister of Justice, in his contribution, went on to aggravate the situation

November 3, 1977
Privilege-Mr. Baldwin
by suggesting-and 1 think he is right in his interpretation of the law-that anyone engaged in such conduct is in breach of the criminal law of this country. As matters now stand, every member of the opposition is now suspected of having committed an offence against the Criminal Code in the planting of this device.
If this were simply said in the heat of debate, we understand what happens in this House, and if the Prime Minister wants to come back and withdraw that charge, that is fine. But it is a charge of such considerable consequence that I would be inclined, if Your Honour decides there is a prima facie case, to make a motion referring it to a committee. The Prime Minister is not here now, and he may want to deal with it. We shall not be sitting tonight. Your Honour may wish to take it under advisement. But I cannot leave it as it stands without making it quite plain that I do not intend to sit here quietly and be charged by the right hon. gentleman with the commission of a criminal offence, unless he is prepared to make a formal charge. If not, he must be prepared to withdraw.


Some hon. Members:: Hear, hear!


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I should like to say a few words on this question of privilege, because our privileges are affected every day in the House. In the last four days we have been repeatedly charged with cover-up, meddling and using the police for political purposes. This was the daily bread of members on the other side of the House. They have made all sorts of accusations against us and against other people who are serving the country.
The Prime Minister said that this bugging of the office of one of the MPs looks phony. There are a lot of people who think like that; 1 think like that, too, Mr. Speaker. If, as members of the government, we were to get up every time a member of the opposition imputes motives and bad actions to members of the administration, we would have no time to spend on other matters but would be occupied all the time with questions of privilege. If hon. members over there cannot stand the heat, they should not be in the House of Commons.


Charles Joseph Clark: One brief intervention. The Minister of Finance has done his best to evade the issue. The issue is that the Prime Minister has today charged members of this party with an illegal act.


Some hon. Members:: No.


Charles Joseph Clark: If the Prime Minister believes that, let him come to the House of Commons and either submit his evidence, or withdraw. Let him not make such a charge and then run away to a press conference.


Some hon. Members:: Hear, hear!


Elmer MacIntosh MacKay: Mr. Speaker, in the interest of bringing a little reason into this, I just want to go on record as saying that I fully agree with the interpretation which the chief law enforcement officer of Canada has given us in the House this afternoon. As far as I am concerned, this

situation does, after Your Honour has dealt with it fully according to your own dispositions and feelings as the man most qualified to protect the rights of all of us, go beyond the rights and privileges of members of parliament. It is a serious act, as the Minister of Justice has said, and I want it on the record that I agree with the way he has put it forward up to this point.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, on the same question of privilege, since the hon. member for Peace River has invited you to examine the record and think about this, may I express the hope that you will do, at the same time, what was implicit in the suggestion of the Minister of Finance, that is, iook back over the blues of perhaps the last several weeks and determine the number of occasions on which the official opposition, particularly,-the Conservative party- has, without any evidence at all, impugned people on this side of the House, impugned people outside the House and impugned the RCMP, totally on the basis of hearsay, and sometimes not even on that.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, it has long been a tradition of this House-I know the Minister of Transport is ever aware of it and alert, on a daily basis, as is the Minister of Finance-that when members feel their honour has been impugned, or that a false accusation has been made, they rise then and there-


An hon. Member:: Or they sue.


Walter David Baker: Or they sue, as the Minister of Transport has done, or they say, "Put your seat on the line". We haven't heard that for the last week or so in the House of Commons, so it seems to me we are coming awfully close to the truth.
The one thing that does worry me, however, about this whole thing is the irresponsible way in which the government has dallied and bandied with the good name of the RCMP.


Some hon. Members:: Oh, oh!


Walter David Baker: There are a lot of officers in Canada who walk the streets and do police work.


Mr. Blais:: And you are destroying them.


Walter David Baker: The government has failed to distinguish between the very small number in the security and intelligence group and the balance of the RCMP. I would think that, as a former dean of law and as a former minister of justice-


James McPhail Gillies: Make a charge. Put your seat on the line. Stand up.


Mr. Speaker:: Order, please. On application of the Leader of the Opposition, supported by the leader of the New Democrat-
November 3, 1977

ic Party, the House set itself into session, pursuant to Standing Order 26, at eight o'clock on Monday night of this week to debate the allegations against the RCMP as a general subject. That was ordered, and it gave the House the opportunity to have a full expose of all points of view on both sides of the House with respect to that matter. This is not the time to rehash that or to carry the debate further forward.
The question before the House is a narrow question of privilege which was raised by the hon. member for Peace River and relates to the remarks today of the Prime Minister. I will examine those remarks in their full context; firstly, the remarks made during the question period, and secondly the subsequent remarks made by the Prime Minister in response to a later question as to whether or not the Prime Minister had any evidence in support of the allegation, or whatever, which he made during the question period. I will then see whether or not he has transgressed any of the privileges or practices of the House, and I will deal with the matter when the House resumes on Monday.
[ Translation]


MR. OUELLET-ALLEGATIONS MADE BY MR. LAWRENCE
Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, I rise on a question of privilege. 1 must tell you that I take the first opportunity to raise this matter. It relates to some comments which have been made on two occasions earlier this week by the hon. member for Northumberland-Durham (Mr. Lawrence). 1 tried to contact the office of the hon. member to let him know that I would raise this matter but he had already left.


Mr. Speaker:: Order, please. Surely hon. members in the centre of the House realize that it is impossible for the Chair to hear the question of privilege raised by the Minister of State for Urban Affairs unless there is quiet in the House.


André Ouellet: I am pleased, Mr. Speaker, that you asked opposition members to keep quiet, because they seem to believe that only what they have to say is important and they refuse to listen to answers the government is prepared to give them. 1 quote the hon. member for Northumberland-Durham:
The Minister of State for Urban Affairs in the House late last spring indicated that as the chief political organizer for the Liberal party in Quebec he had in his possession a list of all known separatist sympathizers in the province of Quebec.
Now, this remark made by the hon. member for Northumberland-Durham, as recorded on page 515 of Hansard, is totally unjustified. I have checked into the index of the House of Commons debates for the period from October 12, 1976 to August 9, 1977. 1 scrutinized all the official reports of the debates to check if it slipped my memory and if 1 really made that remark, but nowhere in the index in the House of Commons debates is there a reference to the remarks attributed to me by the hon. member for Northumberland-Durham (Mr. Lawrence). I find this allegation completely unacceptable
Privilege-Mr. Ouellet
and incorrect and I hope the hon. member will withdraw his inappropriate comments when he returns to the House.
1 think, Mr. Speaker, that this matter affects me particularly in my privileges as a member of this House. This is again an attempt at sending trial balloons and reflects the allegations made these last few days by members opposite who have become past masters at brewing storms in tea cups. Mr. Speaker, they remind me of a colony of termites ferociously attacking the rotten beam of a bridge while workers are busy installing a new one. I find their remarks bewildering, be they the incorrect allegations of the hon. member from Northumberland-Durham or the false allegations which were made in this House concerning the brazen and faulty speculation of the members of the opposition who are trying to make people believe that they are the victims of electronic surveillance when there is no evidence of it. I hope, Mr. Speaker, that all these matters will be cleared up.


Mr. Speaker:: Is the hon. member for Grenville-Carleton rising on the question of privilege?


Walter David Baker: Yes, Mr. Speaker, on the question of privilege raised by the hon. Minister of "Balloons"-I mean, Urban Affairs.


Joseph Jacques Jean Chrétien: You look like a big one yourself.


Walter David Baker: 1 am very happy to learn that the minister has searched the record of the House of Commons. I seem to recall a statement which was recorded in the press in which 1 thought he had said, in the city of Montreal, relative to Radio-Canada, that he had a list of separatists.


James Aloysius McGrath: Yes, it was in the press.


Walter David Baker: My hon. friend from Newfoundland confirms that it was, indeed, reported, so probably the minister would not find it in the record of the House of Commons. However, he might find it if he checks his press clippings in the parliamentary library or some other place. It had reference to Radio-Canada; my memory has now been refreshed.
In any event, I am sorry that the minister has decided that the ordinary and reasonable use of the question period by the opposition to probe the abominations of this government is an inconvenience to him. 1 just want to assure him that we intend to use the legitimate and ordinary rules of this House on every occasion, whether the responsibility is that of the Prime Minister, the Solicitor General, or even the Minister of State for Urban Affairs-who is known in other places as the "corporal from Quebec"-so we can deal with things which we think are wrong with this government.


Mr. Speaker:: Order, please.


Walter David Baker: So far as the question of privilege is concerned-
606

November 3, 1977
Privilege-Mr. Broadbent


Mr. Speaker:: Order. The minister has raised a rather narrow question of privilege which relates to some allegations made earlier by the hon. member for Northumberland-Dur-ham. If there is to be further elaboration, perhaps it ought to be done by the hon. member for Northumberland-Durham who is directly involved. For the moment, the matter should stand over. The hon. member for Oshawa-Whitby.


Charles Joseph Clark: Sit down, Ouellet.


André Ouellet: The opposition is afraid to listen to the truth.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order. The hon. member for Oshawa-Whitby has the floor.


André Ouellet: You are talking about bugging by the RCMP.


Walter David Baker: You wouldn't know a bug if you fell over it.


Mr. Speaker:: Order. If I am not able to hear the hon. member for Oshawa-Whitby, I will have no choice but to adjourn the Elouse.


MR. BROADBENT-ANSWERS GIVEN BY PRIME MINISTER DURING QUESTION PERIOD
John Edward Broadbent: Mr. Speaker, I rise on a different question of privilege concerning the answers given by the Prime Minister earlier in the question period. If I heard accurately-and I have checked with others-and if the Prime Minister did not make a slip of the tongue, we have a potentially serious contradiction of certain information which has been given to the House.


James McPhail Gillies: What's new?


John Edward Broadbent: I was asking the Prime Minister about the request for information sent to Montreal by the then director general of security services, Mr. John Starnes, at the time of the break-in at L'Agence de Presse Libre, and the Prime Minister said-these are the words I recall-"Well, that request came in response to inquiries that had been made in the minister's office and in my office for a response to the break-in".
Now, if the Prime Minister said that-and I recall that he said that, and others beside me do-then that is new. In previous discussions we have had on this matter, very serious discussions indeed, late last spring, as Your Honour recalls we were informed that a request for information went to the then solicitor general, to the Montreal police and to the Quebec police.
Up to this point, if I recall correctly, it was assumed that the Prime Minister's office heard nothing about this break-in for many months; indeed, many years. I hope the Prime Minister will clear the record on this. Did he say that his office had
[Mr. Baker (Grenville-Carleton).J
been informed and was aware of the break-in shortly after it occurred? Did his office make a request of Mr. John Starnes to produce some kind of a written report on the break-in? If that is so, certainly it contradicts what I understood was the Prime Minister's previously stated position on this matter.


Mr. Speaker:: The hon. member for Oshawa-Whitby raises a question of privilege which 1 presume will be contributed to by the Prime Minister at the first opportunity.


MR. POULIN-REMARKS OF PRIME MINISTER AND MINISTER OF JUSTICE
Mr. Hugh Poulin (Ottawa Centre):: Mr. Speaker, I know it has been a trying day for you and I do not intend to cause any more aggravation to you. 1 will try to be of some assistance on one of the matters referred to in the questions of privilege raised today.
The Leader of the Opposition has advised us of a second very serious criminal offence alleged to have been committed in the House of Commons. On Monday, the hon. member for Central Nova advised us of a very serious criminal offence which was committed here. 1 am referring to the bugging or the planting of listening devices in the offices of these two members. As the Minister of Justice stated, this involves far more than just the rights and privileges of the members of the House of Commons. It is a very serious allegation of a criminal offence having been committed. In the event that the culprit is found-and 1 hope he or she is-the style of cause would read: "Regina versus" whoever the accused person is. It would be the state against the individual.
The motion brought on earlier today by the hon. member for Spadina indicated that we all want to get to the bottom of this matter. It is my grave concern that this alleged criminal offence should not be dealt with any differently than any other criminal offence. For example, if there had been an assault in the office of an hon. minister or an hon. member which resulted in a homicide, none of us would be saying that we should wait until members decided whether it should be proceeded with; with dispatch, law enforcement officers would be asked to come in and conduct an investigation.
From Monday until now the trail has got cold. Perhaps some fingerprints have been lost and this type of thing. Because of the serious allegation made today by the Leader of the Opposition of another criminal offence, it is my suggestion that without further delay the Ottawa city police be called in to assist in this investigation, to ensure that all the evidence is uncovered in a most expeditious and professional way in relation to both these cases. It may well be that the Ottawa city police would request the assistance of the Ontario provincial police and its criminal investigation division and crime labs. Also, it may well be that they would request the most excellent assistance and advice of the Royal Canadian Mounted Police.


Mr. Hnatyshyn:: Most of your constituents do not have converters.
November 3, 1977


Fabian Hugh Poulin: These alleged criminal offences should be investigated by professionals in a most thorough way, and as soon as possible.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, 1 rise on a question of privilege. I thought the hon. member for the Central Nova made it quite clear that we would have no objection to this, but in the event he did not, 1 want Your Honour to know that we would have no objection to the Chair carrying out its function in any way it can. 1 concur completely with the point of view expressed by the Minister of Justice.


Joseph Jacques Jean Chrétien: Call in the police.


Walter David Baker: However, the House has bound itself by the motion under Standing Order 43 which was moved by the hon. member for Spadina. It may well be that we will have to have some consultation with respect to what we do, because of the fact that our hands are tied.


An hon. Member:: Cover-up.


Walter David Baker: If we can be of assistance to the Minister of Justice or to Your Honour with respect to the difficult position in which these revelations have placed this chamber. 1 assure Your Honour of the co-operation of Her Majesty's Loyal Opposition.


Some hon. Members:: Hear, hear!


Peter A. Stollery: Mr. Speaker, this question affects my privileges as a member of this House, as it does the privileges of all members who adopted unanimously the motion made earlier today, which Your Honour will have a chance to look at more carefully later on. In view of Your Honour's comments on the limitations of the House to investigate these matters, I should like to bring to your attention at this time that the House has unanimously adopted three specific recommendations. 1 do not see any limitations put on those specific proposals which were adopted unanimously by all members of the House of Commons. Therefore, 1 should like to bring to Your Honour's attention, as mover of a motion adopted by all members of the House, that there are three very specific elements which in my view must be looked into very, very thoroughly.


Ramon John Hnatyshyn: Are you the chairman of the Liberal caucus?


Mr. Speaker:: Order, please. 1 am aware of the motion passed by the House earlier this day, and 1 am aware of the concern of all members for a proper investigation of the events raised first on Monday by the hon. member for Central Nova and today by the hon. Leader of the Opposition.
These events ought to be pursued very vigorously. However, the matter of an investigation by any outside police force of any of these premises, and especially of the private premises of members' offices, has always been one of very clear privilege.
Point of Order-Mr. McGrath
The entry into these premises, particularly into the offices of members, without permission and without consent would be regarded, on a very fundamental basis, as a breach of the privileges of any member of the House.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Therefore, to suggest now that I ought to take upon myself unilaterally the authority to invite other police forces in here is really an extension, it seems to me, of a privilege which has long been respected by this House.
1 think we have to keep these two events separate. In the first place, we have an order by the House today which, surely, can relate to the events described by the hon. member for Central Nova but can hardly relate to the events disclosed only this afternoon by the hon. Leader of the Opposition. Both are of equal importance and both deserve equal vigor in investigation. I have no hesitation in saying that I will receive the undivided co-operation of both members in respect to the carrying out of the investigation.


Some hon. Members:: Hear, hear!


Mr. Speaker:: To repeat what I said earlier, if I did not, perhaps I would feel obligated to report that matter to the House, because the privileges of all members are affected. If I were to find that I could not go forward with the investigation, indeed I would report that to the House. However, the indications at this point are that that will not be the difficulty.
I have reported the preliminary findings to the hon. member for Central Nova and 1 have indicated to him that we are prepared to go forward with assistance from outside forces if that is what he wants. 1 will indicate the same thing as soon as we have had a chance to check in a preliminary way the matters raised by the hon. Leader of the Opposition. If I have any hesitation about the response and co-operation of any of the members involved, and if I think it involves the privileges of members, I will report that to the House before taking any further action.


James Aloysius McGrath: Mr. Speaker, 1 rise on a procedural point of order. I hesitate to bring it up at this time; however, I think Your Honour should consider it. My point of order stems from a new revelation made in the House today by the Prime Minister. It was referred to by the hon. member for Oshawa-Whitby during the course of his question of privilege. 1 refer to the quotation which the Prime Minister made from a document which he has in his possession today, from Mr. John Starnes.
On the face of it, it seems to shed new light on a question which has been seizing the attention of the House for the last number of days. According to our rules, once it has been quoted from it should be laid on the table of the House. In support of my argument 1 draw the attention of the Chair to Beauchesne's Fourth Edition, citation 159 (2) which states:
80025-39%

November 3, 1977
Point of Order-Mr. McGrath
A minister of the Crown is not at liberty to read or quote from a despatch or other state paper not before the House, unless he be prepared to lay it upon the table. This restraint is similar to the rule of evidence in courts of law, which prevent counsel from citing documents which have not been produced in evidence. The principle is so reasonable that it has not been contested; and when the objection has been made in time, it has been generally acquiesced in.
That document may very well shed new light on the matter which is before the House which has seized the attention of the House and was officially brought to the attention of the House by the Solicitor General on Friday last.
At the same time, Your Honour, 1 would refer you to references which have been made, in answers to questions in the House by the Solicitor General, to a letter which appears in the affidavit referred to in the question period today and yesterday. The affidavit was filed with the Quebec commission of inquiry. The affidavit refers to a letter between the then director general of the security services and the Solicitor General. Numerous references have been made, as Your Honour will learn upon examination of the record, to that letter.
The letter has been the subject of questions, and I submit that it clearly falls within the interpretation placed upon these matters by Beauchesne and by our Standing Orders. I respectfully submit that the Solicitor General, who has already agreed to lay this letter before the federal commission of inquiry, the McDonald commission, should be obliged under the rules, traditions and practices of the House to lay the letter on the table of the House.


Otto Emil Lang: Mr. Speaker, on the point of order, I think it is obvious that the Prime Minister, to whom reference was made, would have to be here for there to be a final disposition of this question. However, I would just like to say at this time that it did not seem to me that he was indicating specifically that he was quoting from a document.


An hon. Member:: Yes, he did.


Otto Emil Lang: Hon. members, as I have, probably read the words referred to this morning in a newspaper, and perhaps that is the document which was being quoted from.


Mr. Speaker:: As I have always attempted to do in the past,
1 think 1 should follow the practice of inviting representatives of the government, as I will, to examine the transcript of today's proceedings in order to see what the Prime Minister in fact said, and then to pursue arguments as to whether that technically constitutes the citation of a document.
The conditions which require a document to be produced are quite clear and capable of very precise definition, and if those conditions exist, I am sure they will be immediately recognizable. Therefore, 1 invite hon. members on both sides who are interested in this argument to examine today's transcript and to renew the argument on Monday, as 1 will, to see whether the circumstances are such as to warrant production of the document pursuant to our practices.


Mr. Paproski:: Mr. Speaker, you could check the video-tape also.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, 1 must say that the hon. member for Edmonton Centre is fairly close to the mark, now that we also have an electronic Hansard. However, that is not the reason I rose.
I want to ask the Parliamentary Secretary to the President of the Privy Council whether he can advise us of the business of the House for the balance of today, and what the intentions of the government are with respect to Monday and next week as far as he can see.
[ Translation]


Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, during the time we have left this afternoon we shall continue consideration on third reading of Bill C-3 concerning the reorganization of Air Canada. If we conclude the third reading today we shall continue with Bill C-8 entitled an Act to amend the Canada Labour Code. Monday morning we should proceed with consideration of Bill C-5 entitled an Act amending the Canada Elections Act and Monday night with Bill C-ll of the Minister of Finance amending the fiscal legislation. Mr. Speaker, as concerns our business for the following days and the rest of the week it will depend on the duration of the debate on Bill C-ll. We should be able to inform the House leaders of the opposition on this subject next Monday.



ROUTINE PROCEEDINGS


Hon. John Roberts (Secretary of State):: Mr. Speaker, in accordance with the provisions of Standing Order 41(2), 1 should like to table in the House copies, in both official languages, of "People in Action", a very important report of the National Advisory Council on voluntary action, to the Government of Canada.


ANTI-INFLATION BOARD TABLING OF REPORTS MADE TO ADMINISTRATOR
Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, pursuant to section 17(2) of the Anti-Inflation Act, I wish to table, in both official languages, copies of reports sent to the administrator by the Anti-Inflation Board.

November 3, 1977


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: 149, 195, 205 and 295.


Mr. MacKay: 1.	Does the Department of Supply and Services award vending machine franchises in government owned buildings and, if so, what procedures are followed?
2.	Have any companies been awarded contracts in (a) Halifax (b) Moncton (c) Montreal (d) Quebec City (e) Toronto (0 St. Catharines (g) Hamilton (h) Sault Ste. Marie (i) Winnipeg (j) Regina (k) Calgary (1) Edmonton (m) Vancouver and, if so, what is the name of the company and the details of the contract?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	No.
2.	Not applicable.


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


Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: In so far as
Canadian Patents and Development Limited is concerned: 1.
Total
Retired public servants
2. (a) $24,727 (b)	4,082
16,000
Nil


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


Yvon Pinard: 1. One-not retired public servant.
2. (a) $4,150; (b) $12,000. None of the persons involved were retired public servants.
Order Paper Questions
ant to the provisions of subsection 70(4.1) of the Canada Elections Act.


Mr. McKenzie: 1.	Has the Office of the Chief Electoral Officer obtained (a) part-time (b) full-time employees from private employment agencies in (i) British Columbia (ii) Alberta (iii) Saskatchewan (iv) Manitoba (v) Ontario (vi) Quebec (vii) New Brunswick (viii) Nova Scotia (ix) Prince Edward Island (x) Newfoundland and, if so, in each case, how many?
2.	Are such employees paid from supplementary estimates and, if not, from what estimates are they paid?
3.	By province, what was the (a) average hourly rate paid to employment agencies (b) average hourly rate paid to employees (c) total amount paid by the Office of the Chief Electoral Officer in (i) 1975 (ii) 1976?


Yvon Pinard: 1. (a) (i) Nil; (ii) Nil; (iii) Nil; (iv) Nil; (v) 2-1975; 9-1976; (vi) 2-1976; (vii) Nil; (viii) Nil; (ix) Nil; (x) Nil. (b) N/A.
2.	Main estimates.
3.	(a) 1975 Ontario $6.89-1976-$5.87; 1976-Quebec $6.70. (b) Information not available, (c) (i) Ontario, $4,234.04; (ii) Ontario, $9,242.21; Quebec, $2,790.41.


Steve Eugene Paproski: Mr. Speaker, 1 rise on a point of order. We usually get in advance a list of the questions to be answered. I think the parliamentary secretary should have let us know about half an hour or so prior to this time.


Ramon John Hnatyshyn: We are just now getting them delivered.


Yvon Pinard: Mr. Speaker, I wish to say that we have taken the good habit of giving the answers to those questions on the same day. It was probably by inadvertence that today the hon. member did not receive his-


Steve Eugene Paproski: There is no translation.


Yvon Pinard: Mr. Speaker, all I am saying is that the hon. member is now in possession of those answers. Usually we give the list of questions to be answered in advance. It was inadvertent that today this came late. We are sorry for that. I assure the hon. member that in future we will have the list in advance.


Some hon. Members:: Hear, hear!


Walter David Baker: You are an honourable man.
Note: The answers to 1 and 2 (b) relate to the Commissioner Mr. Pinard: I ask, Mr. Speaker, that the remaining ques-required to be appointed by the Chief Electoral Officer pursu- tions be allowed to stand.

November 3, 1977
Air Canada



GOVERNMENT ORDERS


[Stage Direction]
The Elouse resumed, from Wednesday, November 2, consideration of the motion of Mr. Lang that Bill C-3, respecting the reorganization of Air Canada, be read the third time and do pass.
Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, 1 do not think you will find my comments as provocative as those we have already heard this afternoon. But that is not to say they are without some importance, especially for the people 1 have the honour to represent in this chamber. I want to assure the House that it is not my intention to delay unnecessarily the progress of Bill C-3, but I intend to make a short intervention.
I think it is necessary to support and emphasize the remarks made by the hon. member for Edmonton West (Mr. Lambert) last night when he began the debate on third reading of the Air Canada bill by speaking of the very real need to improve the services at the Edmonton international airport as a way of carrying out the services this bill is intended to provide. After all, if we are to be concerned about improved management of Air Canada and improved service in the air, it makes little sense to be concerned about those things without, at the same time, being concerned about improving service for travellers when they are on the ground and, particularly in Edmonton, to be concerned about breaking the logjams which occur there.
I recognize that the reorganization of Air Canada will be of major importance to the travelling public in our country. As one who has, as I am sure have so many of my colleagues in this House, flown half a million miles in my parliamentary career, I think it necessary to emphasize that without the improvement of ground services relative to the increasing speed with which air passengers are transported, the air transportation policy, particularly as it affects western Canada, makes little sense.
I want to assure you, Mr. Speaker, it is not only the present I am concerned about, but the future as well. It is clear that the west is emerging as the pre-eminent economic force in the life of Canada. We see the balance of economic power shifting westward. It is the west, and particularly northern Alberta because of its position as the gateway to the north, that will provide the cutting edge to a strong and stable economic future for Canada. As Mr. Justice Hall recently noted:
It would not be too much to say that the Alberta gateway to the north provides a setting for the national dream in a contemporary context.
If this is true of rail service, which Mr. Justice Hall has been studying so deeply, how much more true it is of air service, in the new era we have entered. The cut in the allocations by Treasury Board for certain alterations and expansions will have profound implications for air travellers,
(Mr. Pinard.]
particularly those using the international terminal in Edmonton. These things are of great concern, not only to myself and members from the Edmonton area but to members representing constituents who in increasing numbers use the airport serving northern Alberta. As a matter of fact, we are assured by no less an authority than the general manager of the Edmonton area air service commission, Mr. Allan Bleiken, that 1.2 million passengers per year now use the Edmonton airport and that very shortly the number will be in excess of 2 million.
The cut from $28 million to $5.6 million will mean that the minimum required improvements to the Edmonton airport will take place, since the $5.6 million has been applied to secondary improvements such as parking and baggage facilities. While these are important by themselves, they do not address themselves to the central question in that airport, which has to do with needed structural changes to enlarge the gateways and, secondly, the necessity for preclearance for passengers travelling to the United States. In a letter written to me recently, Mr. Bleiken writes:
The decision by the Treasury Board will result in serious air service problems for the citizens of Edmonton and for visitors to our city.
The way in which the cutback has been announced, following repeated assurances that Edmonton would be in line for increased facilities precisely because of the growth of passenger traffic in the area, was peremptory and ill reflects the need to strengthen the development of transportation services as a means of enhancing the economic development of the west, particularly Alberta.
The structural expansion of the airport would enable Edmonton to handle the large sized 747s and 10-1 Is that are now becoming part of the service in the province of Alberta as part of the over-all transportation system moving westward. The conditions which result from larger-sized planes now using an airport designed for smaller jet craft with services planned in the 1950s, although the airport was opened in the early 1960s, demonstrate that the facilities are now outmoded. I think it is time we put this question to the minister: Will he not give consideration to reopening the matter with Treasury Board? The argument of restraint, or that there is expansion at other airports, particularly Calgary and Mirabel which have taken the money that would otherwise have been available to Edmonton, needs to be re-examined.
I think it would be helpful, Mr. Speaker, if I read a passage from a letter I received from a distinguished Edmonton citizen, Mr. Robert Matheson, a former councillor of that city. He chose not to run in the recent municipal election, so speaks now as a private citizen, but out of his experience and study of transportation questions affecting Edmonton. He writes:
I have been one of the greatest advocates of restraints in all government spending whether municipal, provincial or federal, but the federal Ministry of Transport action in rejecting the completion of the minimum requirements to provide Edmonton with a transportation facility which is absolutely essential, having regard to our position as the gateway to the north, the seat and centre of a vast industrial expansion and the site of the Commonwealth Games to be carried out in 1978, is, without qualification, uncalled for, unfair and completely discriminatory.
November 3, 1977

When we realize that the province of Alberta is pouring billions of dollars of additional revenue into the federal treasury from the production of our natural resource, and no natural resource production from any other province in this Dominion has been taxed in the same manner and to this extent, it makes one realize why there is so much anti-federal government feeling growing up throughout the entire country.
The vast and unwise expenditures by the Ministry of Transport in such projects as Mirabel and the proposed new Toronto airport should be no justification for completely ignoring the legitimate and reasonable request and requirements of the capital of Alberta.
I wanted to share that letter with the House, Mr. Speaker.


Otto Emil Lang: Mr. Speaker, 1 rise on a point of order. 1 wonder if the hon. member would permit a question?


Douglas Roche: When I have finished my speech, Mr. Speaker.


Robert Lorne Stanfield: Stop terrorizing us, Otto.


Douglas Roche: Mr. Speaker, 1 turn from the primary question of structural enlargement of the Edmonton international airport in order to better serve the travelling public of western Canada. The second argument I wish to present to the House concerns the facilities for preclearance. That is a subject which has been repeatedly drawn to the attention of the minister and to that of his colleague, the Minister of National Revenue (Mr. Guay). 1 wish to pay tribute to the former minister of national revenue, now Minister of National Health and Welfare (Miss Begin). In her capacity as minister of national revenue she made some marginal improvements in having overtime facilities provided for customs officials servicing Edmonton-bound passengers travelling back from pacific destinations. That is an improvement which 1 wish to acknowledge. I must add, parenthetically, that it was an improvement brought about as a result of a tremendous wave of pressure from the Edmonton travelling public.


Steve Eugene Paproski: And from Edmonton members.


Douglas Roche: We now turn to the question of the preclearance facilities put in on a regular basis to serve passengers travelling to the United States who do not wish to be inconvenienced, especially now with the opening of the Calgary airport with preclearance facilities, by having to get off the plane in Alberta for preclearance, once having got on in Edmonton, and then going on to the United States. The argument that has been presented, namely, that structural changes in order to permit preclearance facilities put in at the Edmonton airport, demand a great expenditure of money, is one that is open to question.
I call as my witness in this question of how much needs to be spent in order to put in preclearance facilities, Mr. H. L. Morrison, consulting engineer, who has already written to the minister. 1 am not sure that the minister has had an opportunity to examine Mr. Morrison's argument, but I will reduce it to one or two sentences. Mr. Morrison is saying that smaller projects in the Edmonton airport could well be undertaken by the government, consistent with its general policy of expendi-
Air Canada
ture restraint, to provide the kind of service that the travelling public has the right to expect. Mr. Morrison writes:
I simply cannot believe that preclearance service cannot be provided to everyone's satisfaction without a major modification to the terminal.
In other words, it would be possible and consistent with the government's restraint policies to honour its commitment for preclearance soon, and not repeat the argument that we cannot have preclearance in Edmonton until the restraint has been lifted and more money can be spent.


Steve Eugene Paproski: Before the next election.


Douglas Roche: I believe we should take into consideration the 1974 bilateral agreement between Canada and the U.S. which provided for the establishment of preclearance facilities in Edmonton and in Calgary, and note that these facilties are not in place in the manner provided in the agreement.
Mr. John Barry, president of the Edmonton Chamber of Commerce, pointed out as follows:
Passengers travelling to the United States from Edmonton and Calgary are severely inconvenienced by the lack of preclearance facilities.
My argument now is that if the permanent structural facilities cannot be installed, then consideration should be given to the installation of temporary preclearance facilities, in order that the public attending the Commonwealth Games in Edmonton in 1978 can be served more expeditiously, and the movement of traffic to the Edmonton airport expedited. My argument for an improvement soon at the international airport at Edmonton is not based only on the convenience of travellers. It is centred on the economic imperative-if the minister wishes to pursue this matter, I hope he will listen to my concluding argument as to why I am making this representation on behalf of the Edmonton airport-of improving transportation services as an essential component of development that will be of benefit to the entire west, and hence to Canada.
My approach is not chauvinistic, but national. If we are to save Canada in a renewed confederation, there must be stronger regional development, and this cannot be done, in such a far-flung country as ours, without better transportation facilities. Improvements at the Edmonton international airport are part of the institutional changes that will accommodate this new economic era for Canada, led by the west. I would, therefore, like to suggest in conclusion that proposals to improve Air Canada should include not only reorganization, which we have been discussing in our debate on this bill, but consideration of the physical needs of air travellers and the role that Air Canada can play in keeping Canada together.
Finally, if we must avoid a commitment to large expenditures now, then I suggest that certain structural changes at the Edmonton airport, and the immediate implementation of preclearance facilities, can be done with expenditures that are consistent with restraint in the government and will also be of service to the travelling public in the manner I have described.


Otto Emil Lang: I rise on a point of order, Mr. Speaker. 1 understood the hon. member was willing to answer a question. I refer back to the point at which I wanted to ask the question.

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I do so as a member from western Canada who has fought long and hard for many things in the west, and who has a proud record of achievement in that regard, even with regard to measures which I myself have sought, particularly in the grain area, such as hopper cars, two-price wheat, and the like.
I refer to the quote from the hon. member's correspondent about facilities for other places. 1 hope the hon. member will tell me that he was not quoting with approval this kind of reference from one region to other regions as though that were a ground for complaint of a separatist nature. I also hope he will tell me that when he replies to the correspondent he will draw his attention to the recent opening of the Calgary airport, at a cost of about $130 million, and point out that on a per capita basis per province that is a larger investment in that province than the Mirabel airport was in the province of Quebec.


Douglas Roche: The minister has drawn a rather excessive interpretation from the quotation and, I may say, an unfortunate interpretation of my correspondent's letter. He pointed out, very properly, that the commitment, having been given some time ago for structural expansion of the Edmonton airport, it is now delayed because of increased expenses at other airports as a result of inflation because this government has not been able to stop inflation in this country, which is hardly a reasonable policy for the strengthening of confederation which is at the heart of so many questions in the House. I will be responding to my correspondent very fully and indicating to him the response of the minister.


Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, there is a certain plausibility to this bill and to some of the changes that the bill proposes which, I think, obscures the basic irrationality of the bill and why it is very bad legislation going in the wrong direction. Over the years I have seen many ministers of transport, and 1 think each of them, in his own way, turned out to be a greater failure than his predecessor. It is not that the ministers of transport whom I have known over the years intentionally wanted to be failures, intentionally did not seek to do good, or felt that the kind of things they were doing would give them some kind of immortal gloss in that office which history would remember with gratitude; they get going in the wrong direction, forgetting the fundamental thing about the nature of transportation in a country like Canada. Transportation in Canada is not just another service to be looked at in terms of profitability and efficiency. That is not to say these things are not important, because they are important. What tends to be forgotten, and I regret that it is something the old Tories knew but the new Tories do not seem to know, is that transportation in this country, more so than any other country in the western world, was an instrument of binding and holding the nation together.
We hear talk of doing this, that or the other, lopping off this line, saying this one is not paying, and so on. What that does is tear apart the cement that holds confederation together. Many say it was 100 or 110 years ago that the railroad was promised

to British Columbia, that it was a long time ago that the Crowsnest rates were put into place, and we had to subsidize the maritimes in order to bring them in. However, that is an on-going debate. No issue in Canadian history has remained so much to the fore as has the issue of transportation.
I make these remarks in the way of a preamble. I do not do this in a way critical of the Minister of Transport (Mr. Lang). Some people accuse him of being a rather cold man. I do not think he goes out of his way to change that impression. He is an intelligent man, one who wants to do what is right in his portfolio. 1 am not saying that what I am going to suggest is necessarily right in all its detail; 1 am suggesting to the minister that he must get off the kind of track he has been pushed on to by the conservative element in this country.


Benno Friesen: Small "c".


Max Saltsman: Small "c" and big "C". I will be quoting some big "C". It is the great irony of our time that the Liberals, who did so well for a long time in terms of public policies when they were picking up ideas from the NDP, suddenly reversed and are taking them from an area which will not be as productive for this country. I say this with some degree of seriousness, because transportation is important. In the time available to me, I will not be able to discuss fully this subject; however, I want to discuss such matters as competition, monopoly, public ownership, efficiency, profit and those kinds of concepts.
1 want to state my basic premise. I have already stated one, that transportation is not just another service; it is the cement of this nation and must be viewed in that light. I will point out later that even the argument about efficiency and profitability does not change that. If we are to have a transportation system that unites this nation, it can only be done by a monopoly; it cannot be done through competition. Competition may be very useful with Mac's Milk stores; however, it is not useful for railroads, aircraft and buses. What this country needs more than anything else in the transportation system is co-ordination, planning and conservation, rather than the wasteful inefficiency of the kind of competitive structure that has grown up.
Whether we are talking about railroads or airlines, competition simply means that the private carriers pick up the profitable end of the deal and the public carriers get the other end of the stick. They are saddled with something called public responsibility. The problem is, it just does not work. There is competition in transportation without this crazy kind of civil war between different modes of transportation. There is international competition as a result of the international carriers. This country is too small for domestic cut-throat competition. At a time when we talk about saving energy, it is ridiculous to have planes flying half empty, and airlines competing with each other to see who can make the most smoke from one end of Canada to the other. I agree that a monopoly will not give everything the people want; there will be some inconvenience.
Someone might say that if we have competition, the stewardesses will be prettier and more polite and we will be able to
November 3, 1977

get a little more gin while flying. That is a lousy argument for a national transportation system. If you look at the sad history of transportation in this country, you will see that the whole air transportation system has been sabotaged into inefficiency by those kinds of demands.
Trans-Canada Air Lines, Air Canada's predecessor, was a fine airline. It had one of the best records in the air. It was efficient and profitable at a time when nobody wanted to touch it. However, we in Canada are not satisfied with that kind of thing. Businessmen could not stand having a government enterprise work, so they systematically set out to destroy it. I level the charge at the business community in Canada for destroying air transport in Canada. They are the ones who use the airlines and who made the ridiculous complaints about service. They said they must have a choice. What do they care? They just write it off under income tax. They talked about efficiency and profitability, yet they destroyed air transport in Canada with their silly arguments about the canapes being too dry, and the gin not strong enough. That is why we have competitive airlines in this country.
We had an airline that was a model of its kind, and we set up an enemy for it. We could not stand our own prosperity, and destroyed our own child. On this issue of public ownership, Liberal and Conservative governments see eye to eye. It is very convenient.


Some hon. Members:: Oh, oh!


Max Saltsman: When it comes to private enterprise, they put their hands over their hearts and say, "That is the answer". The Liberals have always done that. The Tories should know better. Sir John A. Macdonald would be ashamed of them. I say this with some degree of feeling. Why did they create competition for Air Canada? To begin with, the government starved TCA. It was only after there was competition that they allowed them to expand and obtain proper aircraft. We had the makings of a fine air transportation system. The consequence was that with competition came increased costs and reduced service. The businessman was happy because he could threaten to go from one airline to the other. What a terrible cost to this country in order to satisfy that kind of silly carping demand! How long is a person on an airplane? It is usually only about an hour. If the coffee is not quite as good as it should be, big deal! I do not fly on airlines in order to drink coffee.
I know the minister will see this bill pass through the House. That is his responsibility. I do not know how he feels about it personally. It is a government bill, and the minister accepts the responsibility to put it through the House. I ask the minister to think about what I am saying. What is the virtue of public ownership? I do not see any particular virtue. 1 have never been hung-up on ownership one way or the other. I am not making an ideological argument that public ownership is better than private ownership, or vice versa. The argument I make is that the nature of transportation, the need to conserve energy, the need for forward planning, and the large amounts
Air Canada
the government spends to build airports and the infrastructure, calls for a monopoly situation.
Competition in internal air transport is ridiculous. International competition is sufficient. You cannot have an efficient airline by cutting its throat. It is not an efficient use of resources to have planes flying with half loads. You need a monopoly in order to have efficiency and, as some of my friends say, profitability. The question of public ownership does not arise because of an inherent virtue in public ownership, but because of the question: To whom do you give the monopoly? A case can be made that monopoly in transportation is the way to go. If you make that kind of case, to whom will you give it? You could give it to a private company. I guess that would work. We do that in the case of Bell Telephone. Or you could give it to the government because the government has to underwrite the private company, anyway. If the company fails to do certain things which are in the public interest, the government is asked to pay for it.
1 listened with great interest to the intervention of the hon. member for York-Simcoe (Mr. Stevens) yesterday. When he had finished, 1 directed a question to him. He wanted to place the airline on a basis of some sort of profitability, and I asked him, "What do you do about the small places where it is not profitable to go, places where it doesn't pay?" "Oh," he said, "you subsidize". Surely, that is the worst kind of illusion, whether you subsidize externally or internally. External subsidization may in the end be more expensive, because you run into a situation where the ones who are paying the subsidy-in this case the government-try to make a case that the subsidy is not needed, where as the ones applying for the subsidy certainly have a tendency-I will not say they cook their books; they are not dishonest people-to present the best possible case for their need of assistance and call attention to their poverty. So you end up with two bureaucracies tearing away at each other, each trying to prove the other wrong. Before the matter can be decided, both of them must appear before a third bureaucracy which is called the Transport Commission.
Some day we shall get public ownership, not because anybody is going to listen to the arguments of the socialists but because people will get tired of this whole mess, people arguing with each other back and forth, as is the case with the Bell Telephone, one side wanting to raise the rates and the other side wanting to lower the rates, politicians getting in the middle and a board trying to decide the whole thing.
People will throw up their hands in despair and say, "For God's sake place it under public ownership and be done with these lawyers, these accountants, these bureaucrats, these computers, these inputs and outputs and the regressive analyses that no one can understand". They will say, "Let us run it on that basis". So socialism will come in with a whimper, rather than with a bang, and for different kinds of reasons.
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An hon. Member:: Yes, and they will nationalize the dry cleaners, too.


Max Saltsman: Well, there are times when I wish they would nationalize the dry cleaners and take me off the hook. A lot of this illusion about profitability is an illusion for purely ideological purposes because I think it suits the ideological needs of some people, some nice people for that matter, who say that if you have profitability as a test, it always works even though you have to add, as a rider, that to serve the public interest you have to provide very large subsidies and then you have a problem about how those subsidies should be allocated.
I should like to recall the experience 1 have had with the CNR and the CP railways. The Parliament of Canada, very properly, felt that passenger services were in danger and that we should do more to restore them. In parliament after parliament, committees have urged both the CP and the CNR to do this. It is interesting to note what the consequences have been. If you go to the Union Station in Toronto, a very good example, and you look at the board showing passenger services, you will find that the CPR has three passenger train runs out of Toronto. All the rest-and there are dozens of them-are run by CNR. What is the reason? The CPR is, of course, privately owned. People say the CPR is a marvellous example of how private ownership works, and public ownership of the CNR is a disaster.
Of course the CPR works; they get out of their responsibility for carrying passengers. Their tracks are free to run freight like mad. But the CNR, the one we are supporting, gets stuck with "social purposes". The people say, "See, I told you. Everything the government touches is no good". The CNR has to go to places where CP will not go because it is not profitable to do so. Someone says the CN does not go to some of those places either. Well, the CNR is picking up the same bad habits of profitability. It is natural. It is an example of Gresham's law on currency.


Mr. Whittaker:: That's going rather far.


Max Saltsman: I am glad to see there is somebody in the House who understands Gresham's law. Perhaps if I explain it the hon. member will find he does not understand it after all. Gresham's law is very simple. It says that bad currency drives out good currency. If you put bad and good currency together-


The Acting Speaker (Mr. Turner):: Order. I suggest that the hon. member get back on the rails.


Some hon. Members:: Oh, oh!


Max Saltsman: Well, 1 listened to that advice. When I hear "back on the track" from the distinguished occupant of the chair, I listen with great attention and respect, both from a procedural and from a practical point of view.


An hon. Member:: And he can blow the whistle, too.
[Mr. Saltsman.)


Max Saltsman: Yes, and he has the advantage of being in a position to blow the whistle in addition to all the other power he possesses as one who occupies such an exalted position.
This is a very serious discussion, and while levity is always of some help in breaking the tension of a serious discussion, I think we have to go back to the argument I am trying to make to the House.
We went through an examination of the Telesat Corporation when it was first set up at the time the Hon. Eric Kierans was minister of communications. The original proposal brought before a committee of the House of Commons was that Telesat be a troika. Troika was a very popular conception in those days, being three horses running off in different directions with a Russian carriage behind them. Nobody ever figures out what happens to the carriage, whether it goes in three parts or stays in one piece. The troika was supposed to consist of the government as the third partner holding one-third of the shares, the communications corporations holding another third of the shares, and the public holding the remaining third.
Here was a case of the government taking all the risks. The government was virtually putting up the capital, the government was making the decisions as to the rates-it was not a public enterprise-but was only getting one-third of the shares. I said at the time that those shares would never be put on the market, because why in the world would private shareholders be needed in connection with something like that? There was some argument for bringing in the common carriers because they were going to be the users of it, and there was the argument that they would have some technology which they could make available to the corporation. So some kind of a case could be made along that line. Now we have nothing but trouble with this concept.
They are coming to parliament. Some people don't want Bell Telephone in it. They say that having Bell associated with Telesat creates a conflict of interest-and it does create a conflict of interest. There was never any reason for having the common carriers in there. If they have good advice to offer, hire them. If you were willing to pay their consulting fees, they would be very glad to consult with you. If they were not willing to do it, there would be other communications companies that would. So why cut them into the deal, and why complicate things by having mixed objectives?
The foolishness of the whole thing is simply this: they said the thing might not make money. How could it avoid making money, because if it loses money the government simply authorizes a rate increase? So it would always make money. It is the next best thing to Lord Thomson's television station. It is a licence to print money. The government has to make sure it does not go broke, and they are responsible for the rate. It is like Bell Telephone. How can Bell Telephone not make money? What telephone company would you go to, if you did not use Bell Telephone? If Bell Telephone is not making money, it simply goes to the Transport Commission and opens up its books, to the extent that they have their books organized, and says, "Look, we are not making enough money. Increase the rates". That would be a very risky type of private
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enterprise. For example, people might stop using the telephone.
I overstate the case, Mr. Speaker, and I do so because 1 want to point out what I think is the ridiculousness of having all these things which are natural monopolies, which are there for the service of the public, things which tie a country together and regarding which you do not apply the ordinary test of market profitability and competition.


Benno Friesen: I have a point of order, Mr. Speaker.


The Acting Speaker (Mr. Turner):: The hon. member for Surrey-White Rock (Mr. Friesen) is rising on a point of order.


Benno Friesen: Would the hon. member for Waterloo-Cam-bridge (Mr. Saltsman) permit a question?


Max Saltsman: I will always permit a question from such a distinguished member.


Benno Friesen: The hon. member used the term "natural monopoly". In the extension of his philosophy, does not everything soon become a natural monopoly?


Max Saltsman: I had hoped, Mr. Speaker, that I had made my position clear. There are not that many natural monopolies, nor are there are many things which benefit from a monopoly. But I say seriously to the hon. member who has asked this question that when we are worried about running out of gas and oil, when we are worried about flying planes which are half empty from Vancouver to Toronto or Montreal, does it make sense? Does it make any sense at all to have two planes flying the same route, using twice the amount of fuel that would be required if one plane were to do that job?


Benno Friesen: That is only Otto and Jack.


Max Saltsman: No, it is not only Otto and Jack. You can blame him for that so long as it is in Canada. If you want to blame the Minister of Transport for your wife's carbuncles, if she has carbuncles, or for my children's buck teeth, if they have buck teeth, fine, so long as they are living in Canada. The same kind of silliness is going on in the United States, but as powerful as the Minister of Transport may be, I do not think that he is so omnipotent that he is able to affect events in the United States.
I have heard the hon. member and other hon. members talk about the need to conserve energy because we are running out of fossil fuels. What could be more wasteful than the stupid kind of duplication which we have where several aircrafts fly the same routes, none with full loads, and all competing with each other for businessmen who are going deduct the cost of their fares from their income tax, so that the government is going to pay half anyway? Of course, politicians use the airlines, but we are no revenue producers. Although there are people who use the airlines to visit mothers, sons and daugh-
Air Canada
ters, the airlines really exist, like the Post Office, as a service to the businessmen of this country.
It is the businessmen of this country, with their shortsightedness and their talk of profitability, who have destroyed the transportation system, as they have destroyed the Post Office. They are always talking about the Post Office. As far as most people are concerned, Mr. Speaker, you could shut the Post Office down permanently, for all the effect it would have. But all our businessmen would never be able to collect their bills. The Post Office exists so it can distribute all these stupid circulars and bills. It is the businessmen who are the first to be critical of the Post Office. Heaven help the government if the Post Office raises the cost of postage by two cents. Businessmen will give $2 to a private courier, but they will not give the government 14 cents to post their mail.


Benno Friesen: You are giving us the hyperbole.


Max Saltsman: Yes, I am, because sometimes the hyperbole is the reality. This is the kind of silliness that goes on when talking about public effort versus private effort. As all hon. members know, I am an advocate of public ownership. I am not afraid of it. I think public ownership very useful in many ways. But neither am I an ideologist who says that public ownership is always better than private ownership, that profit is no good. I simply ask that on things like transportation, which is vital to this country, the conservation of energy and use of our resources, you keep an open mind.
In conclusion, Mr. Speaker, I have far from exhausted what I wanted to say, and I make no pretence that I have covered everything, but we in Canada who have really pioneered public transportation, the concept of public responsibility and public involvement as a way of nation-building, are moving backwards now at a time when our neighbours to the south are realizing that we were right in the first place. They have introduced Amtrak now. They are consolidating their airlines and co-ordinating them to eliminate the wastefulness of the competitive system which exists among American airlines. But we are being regressive. We are going backwards. It is difficult to know why, except for this kind of prevailing mythology.
It seems to me, Mr. Speaker, that if I want to do something substantial to improve the profitability of our airlines' system for the nation, we should get rid of this phony kind of competition that exists between the railroad system and the airlines. Both should be co-ordinated. A person should be able to stop off at a train station and make, not a direct connection at that point but at least a better connection to an airline or a bus than is now the case. We have a disjointed, disorganized, inefficient, unprofitable transportation system, and all because of this misguided notion that transportation is like selling soap.


Mr. Arnold Malone (Battle River):: Mr. Speaker, the first thing I should like to do is to compliment you, sir, as Speaker, on staying in your chair during the last speech. I think it shows a degree of bravery on your part that I would commend you for. I listened to the hon. member for Waterloo-Cambridge (Mr. Saltsman) putting forward some of his-I was going to
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say "reasons", but I will backtrack on that and say "some of his whatever that was". For example, he said that he believes in public ownership in areas which are vital, without giving any further definition, believing that that meant transportation.
I put to him a challenge: if he assumes that transportation is vital, and that therefore it ought to be publicly-owned, what does he say about the oil industry, about timber, about housing, about clothing, textiles and food? In other words, simply to say that because something is vital to a human being, it ought to be under public ownership is not enough; this covers far more than just the field of transportation. I think the hon. member would have to give that particular argument more substance than he has today.
As you know, Mr. Speaker, I come from farming and ranching country, and we are not very happy when we see our beef filled with cereal. We call that filler, and I think that is what the last speech was. Instead of using cereal grains as filler, though, it was dandelion fuzz. The hon. member for Waterloo-Cambridge said that competition will not work. He said that in the essential services you need to have public ownership for reasons of efficiency. I should like to see him use that example in my riding, or indeed anywhere in Canada, and to say that the Post Office is the institution which is the epitome of efficiency in this country. I submit that virtually everywhere in Canada today the view is held that the Post Office, with its monopoly, does not demonstrate in any way the concept of efficiency.
The hon. member also said that we needed a monopoly in air transport because it is the government that builds the airports and the runways. To follow that argument through to its logical conclusion, we would have, as is the case in the Soviet Union, little cars with no style at all going across this country because the government builds the highways. In other words, he is saying that because the government builds part of a system, it ought to be owned by the government and there should be no private carriers. This would mean, in this country, that no individual could own a private car.
Then the hon. member said public ownership would avoid proliferation of the bureaucracy. That, Mr. Speaker, is when I noticed that you did up your safety belt. If he suggests to us that we should have public ownership in order to get rid of bureaucracy, it is evident he has done no reading at all about the last few years, what has happened to this government and what has happened to the bureaucracy within government agencies.
As the hon. member for Edmonton-Strathcona (Mr. Roche) indicated, I should like to refer to some of the problems relating to the Edmonton international airport and the tremendous need to resolve the problems in that area. I noticed the Minister of Transport (Mr. Lang) rose today in an attempt to take some credit for the fact that a $130 million airport terminal was built in Calgary and, therefore, presumably he had done something great for western Canada. It is interesting

that the Minister of Transport and the Minister of Industry, Trade and Commerce (Mr. Horner) could not ride in the same plane to the same city. They took two Jetstars out there, which is one example of inefficiency.
Mr. Max Ward, the president of Wardair, indicated that it was a pretty enough airport to look at, but they cannot afford the landing fees at that airport. There is a need for getting a system into place in order for the people of this country to have basic, efficient transportation, yet they build a marble hall for the Minister of Transport in order for him to be in a position to say, "I built this for the people of western Canada", regardless of the fact that it does not do justice or provide a service to the whole, integrated network of air transportation in this country.
Surely, Edmonton is one of the major cities of the prairies. As the gateway to the north, it should not have to suffer through the situation of two Jetstars sitting at the airport in Calgary, when paraplegics and invalids are required to go down two sets of steps in order to board an aeroplane in Edmonton, Alberta. If you come to Edmonton from other countries, you are literally herded into rooms which are as insufficient as cattle pens, while you are cleared through customs. The reason is that there are no facilities at that airport to handle people in a humane way. I do not say that in jest; I say it in all seriousness. The fact that when someone arrives in Edmonton and is required to take an invalid down two sets of stairs is simply an insult. As the president of Wardair said, it is a case of overbuilding in places like Mirabel and the Calgary international airport, while short-changing some other part of our country. That is unacceptable to us.


Some hon. Members:: Hear, hear!


Mr. Mclsaac:: Mr. Speaker, I rise on a point or order. It seems to me we are wandering quite far from the bill beford us. Unless the House order was changed in my absence earlier this afternoon, we are debating whether to incorporate Air Canada on a different basis. As I understand it, we are not examining the estimates of the Department of Transport.
The hon. member for Battle River (Mr. Malone) was critical of the remarks of the preceding speaker, who was at least on the theme or the principle of the bill. The preceding speaker was dealing with the bill before us more adequately than the hon. member for Battle River and the hon. member for Edmonton-Strathcona (Mr. Roche). I share some of their concerns with respect to that airport, but surely they are completely out of order in making purely local representations on a bill which does not deal with that question. Surely it would be better dealt with in committee.


Arnold John Malone: Mr. Speaker, I appreciate the intervention of the hon. member for Battieford-Kindersley (Mr. Mclsaac). This intervention demonstrated that we touched a sore point. As he mentioned, he is aware of the inadequate facilities at the Edmonton international airport. Therefore, he did not want us bringing up that subject in the House of Commons, because he thought we should not embarrass the government about it. It is
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time to recognize that there was a precedent in the third reading debate on this bill last night. It was set by the hon. member for Edmonton West (Mr. Lambert) who spoke upon that issue. It has been referred to in the House today, as well. The precedent has been established that this is part of the issue we are talking about when dealing with third reading of this bill related to Air Canada.
It has been stated that the economic power of Canada is being shifted from central Canada to a centre of gravity somewhere to the west. As that happens, the prairies and British Columbia will become a more important economic and integral part of confederation. We need to recognize that in part we are talking about the concept of national unity.
When we talk about national unity, it is important to note that in a nation such as Canada there can be no such preview to the notion of national unity, if there is no method of national communications or national transportation. Instead of those types of objectives, we have a sense of favouring some areas over others. That is exemplified by the freight rates in this country, which are discriminatory to certain regions, the fact that we have air corridors which are discriminatory to some regions, and that the infrastructure in the whole mode of transportation across this country holds biases against certain areas.
When we talk about the Edmonton international airport, we are not talking about the citizens of the city of Edmonton; we are referring to the entire Northwest Territories, which comprise more than a third of Canada, and we are talking about the northern parts of Alberta, Saskatchewan and British Columbia. The hon. member should be reminded that my riding extends 200 miles from the city of Edmonton, and that airport is not serving a local constituency need; it is serving a major, potential economic thrust in this country.
If people had vision as to the future of the nation, they would recognize that Edmonton international airport, if developed properly, would open up enormous economic potential. As much as we would like to underline and underscore the fact that the Commonwealth Games will be held in Edmonton, it means nothing in relation to the potential development of the Northwest Territories, the Yukon and northern Alberta, all of which are relying heavily upon a national air policy that will give adequate service to the Edmonton international airport.
If we look at Air Canada's statistics, we will note that in 1974 the airline lost $18.7 million.


The Acting Speaker (Mr. Turner):: Order, please. It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions (papers), private bills and public bills. As there are no notices of motions (papers), the House will proceed to the consideration of private bills.
Bell Canada


PRIVATE BILLS
Hon. Martin O'Connell (Scarborough East) moved: that Bill C-1001, respecting Bell Canada, be read the second time and referred to the Standing Committee on Transport and Communications.
He said: Mr. Speaker, this private bill, Bill C-1001, is a measure respecting Bell Canada. It is identical to Bill S-2 which was passed by the Senate of Canada some 11 months ago, in December, 1976. As the House will recall. Bill S-2 was subsequently given first reading in this House in December of last year. Second reading debate began on January 27, 1977, some nine months ago, but did not conclude before the House prorogued on October 17, just a few weeks ago. In reintroducing this bill under its new number, Bill C-1001, I would like to review briefly its four main objectives. Then I want to conclude with an appeal or a plea that the House send the bill to committee as early as possible so that a detailed examination of its objectives and clauses can be made.
Perhaps it would be worth while to remind ourselves of certain basic facts about Bell Canada. One of the least known facts is that this company has a charter which, in effect, is a special act of parliament and the charter can be changed. Many companies seek changes to their basic constitutions as conditions in the economy change, but the charter of this company can be changed only in a special way, that is, by a private bill introduced into this House by a private member, and not by the government. That means that in respect of this major Canadian corporation, some obligation is imposed upon us, as members of this House-not in this instance being led by the government, not in this instance having a party majority behind the government, but simply acting as private members-to proceed as quickly as we can to detailed examination, and the only place where that can be done is in the Standing Committee on Transport and Communications.
Bell Canada is almost 100 years old; it was incorporated in 1880. As we know, it provides telecommunications services and facilities in Ontario, Quebec and the Northwest Territories. In addition, through affiliated companies it supplies telephone and telecommunications services in the four Atlantic provinces. Bell Canada is a Canadian-owned company and it is operated by Canadians. The company has more shareholders throughout Canada than any other Canadian corporation; some 209,000 registered shareholders alone own over 97 per cent of Bell Canada's issued shares.
This, of course, not only reflects the confidence Canadians have in the company as a major Canadian utility, but it also indicates the on-going practice of Bell Canada of raising large sums of money in capital markets by way of issuing common shares. One of the objectives of this bill is to authorize the company to go into capital markets to raise more common shares, to sell more common shares and to raise more capital,

November 3, 1977
Bell Canada
after its present authorization has run out, than the present charter will permit.
The Bell Canada group of companies employs some 80,000 people. Among these are 48,000 employees who operate the Bell system proper, the telephone system, in virtually all the communities of central Canada. A further 24,000 employees work for Northern Telecom, a subsidiary of Bell Canada. This company is the largest manufacturer of telecommunications equipment in Canada; it is a manufacturing company. A further 1,800 highly trained, skilled and scientific personnel work for a combination of Bell and Northern Telecom, a company known as Bell Northern Research Limited, which is Canada's largest industrial research and development organization.
These two companies which combine in the research and development organization have taken Canada to the forefront of the world in telecommunications technology. The integration of research with the manufacturing and the operational service section of the Bell family makes this an industrial organization which is one of the strongest in Canada. It is a model of industrial organization, and in turn it helps the telephone company to provide its telephone subscribers with economical and high-quality services.
Bell Canada's special act, which we are now proposing to amend by the bill before us, has been amended 12 times in almost 100 years by private bills not unlike that which is before us. These amendments have authorized additional share capital for the company's operations, and have kept the company's powers up to date. This bill is another in that series. In addition to those purposes, the bill proposes an alternative method for altering the company's powers, objects and share capital in the future.
As hon. members know, Bell Canada is subject to regulation by a regulatory commission which we know as the CRTC, with respect to the rates it charges its subscribers and the issuance of its capital stock.
The first objective of the bill-and there are four to which I would like to refer-is to increase the present ceiling on share capital, a ceiling provided by specific, special legislation of parliament. The ceiling was set at $1.75 billion share capital. This bill would increase that level to $5 billion. The request for an increase is prompted by the need to finance part of the huge capital expenditures program facing Bell. This program is expected to cost $15 billion over the next decade in order to expand services and facilities. The company provides its capital expenditures through three basic sources: internally-generated revenues, borrowings on the debt market through bonds and, finally, the method that is subject to approval by this House, namely, issuing common shares to tens of thousands of Canadians who invest in the company.
The second principal objective of the bill is to provide greater financial flexibility to this company in keeping with changes in the economy and in capital markets. I will not spend much time on those changes, but I might just say that presently, through this special act-which is subject to our decisions-the company can issue common shares at the par

value of only $25. It cannot split its shares-splitting shares is a common practice as the value of shares rises, in order to enable companies to reach more shareholders with smaller amounts to invest-nor can it borrow under the authority of a general borrowing by-law. I do not think these are controversial provisions, but I am bold enough to suggest that they will not be in the charter unless we put them there. I simply will draw them to the attention of my colleagues and suggest they are in there for greater flexibility. Among the amendments included in the flexibility ones is a set to which 1 would draw your attention, for provision to enable Bell Canada in the future, if we approve, to issue stock without the prior approval of the CRTC, the regulatory commission. Currently we authorize the ceiling of, say, $5 billion in shares and then when the company wishes a share issue of $100 million, say, it must go to the CRTC and it must do this with respect to each issue. There is a certain irrelevance in respect of that today, as I outlined in my speech to the House on January 27 this year.
There is also the question of timing of a share issue and the difficulties faced by underwriters if they are going to make a commitment to underwrite the shares and then be delayed by a hearing.
The third aim of the bill is to modernize the corporate powers of the company. This is an important section, incorporating into its charter Section 16 of the Canada Corporations Act. The amendment, as proposed, would achieve the object of clarifying the existing, ancillary and incidental powers of Bell Canada and of broadening the existing, ancillary and incidental powers. For example, if adopted it would allow the company to invest in other companies having objectives in whole or in part similar to those of Bell Canada. It would also enable Bell Canada to implement government policy regarding provision of computer services by communication carriers through separate, arm's length affiliates.
The application of Section 16 to the company would place it on the same level as most other companies which can carry out their objectives in the most appropriate manner without being hampered by the constraints which presently preclude Bell Canada, except in limited instances, from incorporating or acquiring subsidiaries to perform activities it could undertake itself.
The last purpose of the bill is to authorize the company to alter its objectives, its power and its share capital in the future by applying for letters patent, that is to say, by making an application to the Minister of Consumer and Corporate Affairs (Mr. Allmand), who is the registrar general for patent purposes. Such a request would be holding the company still in parliament through a different technique than a private bill, in that the letters patent, if granted by the registrar general, would be subject to being nullified by either House of parliament during a period of 30 sitting days following their tabling in parliament. This is known as the negative resolution procedure found in the Telesat Canada Act and found in another version in the income tax conventions legislation.

November 3, 1977
1 think this is a request for a change of considerable significance to all of us. I suggest we should get the bill as quickly as we can to the committee where we can examine the officers of the company and consider this matter in greater detail.
1 will shorten my remarks, Mr. Speaker, as 1 know other members want to speak. In the debate that took place last session some members drew attention to the advisability of developing and improving the rural service provided by Bell Canada. In respect to the request for authority for new capital let me say that on January 1, 1977, the company started to implement a five-year non-urban service improvement program which, as a result of the regulatory commission's decision, was accelerated by one year. Under this program some 256,000 multi-party line subscribers will have their service improved to no more than four subscribers per line, some less than four but none more than four, over the next four years. This program alone will require approximately $600 million of capital expenditures during the four years ending 1980.
There is only one further point I should like to make, and that is to draw attention again to the parliamentary process in which we, as private members, are engaged with a private bill like this. A special act company like Bell, although regulated by a regulatory commission, the CRTC, is still required to come back to us to seek changes in its charter by a private bill without the normal legislative process of being backed as a government measure. No other way is provided for changes.
Surely in these circumstances, with a corporation of this significance employing so many people, we have an obligation to work this parliamentary process in such a manner as to move the bill to committee. It is only in committee that the merits of the proposed changes can be fully explored and debated. It is only in committee, not in this chamber on second reading, that the desirable changes, if any, can be made. Is this not the real object of the exercise of a private bill dealing with an established company like this-to examine it ourselves as members on that committee, to follow the implications of its clauses as far as we can, to question the officers of the company on their operations and the objects proposed in this new bill, including the proposal to alter the procedure for the future of amending their charter?
I submit these procedures cannot be done in this House. We dealt with the bill throughout the last session. We have had it before us in these very limited occasions of private members' hour. We are possibly in a short session. In a few months the estimates will go to committee. I appeal, as I did at the beginning, that we use this process of the private bill in private members' hour to move this bill as quickly as we can to committee where we can examine it in the detail it deserves.


Some hon. Members:: Hear, hear!


Benno Friesen: Mr. Speaker, 1 appreciate the privilege of speaking on this particular bill. 1 view it with some interest, because about 15 minutes ago we listened to the hon. member for Waterloo-Cambridge (Mr. Saltsman) speak on Bill C-3 and say that some of the indus-
Bell Canada
tries, certainly the service industries, must have a monopoly because the nature of our country demands monopolies. I spoke briefly to the hon. member for Sault Ste. Marie (Mr. Symes) and I appreciate the enlightenment he provided on this bill. He pointed out that essentially the bill would make some fundamental changes to the charter of Bell Canada.
I note with interest that the hon. member for Scarborough East (Mr. O'Connell) said that the bill would give more borrowing power and greater flexibility to the Company. I really have no objections to that. I think that we are living in inflationary times and inflationary pressures are on large companies such as this, so they need that extended flexibility. But 1 really have great concern about a bill that would materially alter the charter of the company in such a way as to eliminate-at least it would appear so-the checks and balances that parliament would exercise over that monopoly.
I believe in free enterprise and I like to see it encouraged. Because I believe in free enterprise I recognize that large companies which become monopolies pose a danger to our entire free enterprise system, and therefore there must be a check and a balance imposed on such an enterprise. For that reason I question the advisability of a bill that would allow changes to be brought in which would alter the nature of the charter and eliminate one of the checks against that monopoly on behalf of the Canadian public.
I notice that the hon. member for Scarborough East said that one of the checks would be that Bell Canada would still have to come before the CRTC for approval of rates, and so forth. That does not give me great comfort because I have made representations before the CRTC on behalf of my constituents and constituents from the lower mainland of British Columbia, and 1 have cause for concern about the effectiveness of those representations. I am not referring primarily to the representations I made before that body in relation to the CBC in Vancouver but, more immediately and more to the point, in relation to the brief I presented to the CRTC a few months ago when B.C. Telephone Company asked for an increase in rates in our province.
The CRTC went to great lengths to provide an opportunity for the people of the lower mainland in particular to have some input into those meetings and hearings. B.C. Telephone had corporate representatives at each of those meetings and there was an interchange between the private citizens making representations and presenting briefs and the vice chairman of CRTC and officials of the company, and in terms of the operations of those hearings they were beautiful. But when I saw the conclusions of CRTC as a result of those representations-and I remember specifically those made on behalf of, for example, senior citizens who could not afford the increase in rates, and on behalf of all citizens who were not getting the kind of service in terms of the kind of equipment being used there, and break-downs in equipment-I could not derive great comfort from them, nor was I reassured that the CRTC is providing an adequate check on a monopoly.

November 3, 1977
Bell Canada
So I am really concerned about a private member's bill of this nature which includes a radical change of the charter, if I understand the bill correctly. The hon. member for Sault Ste. Marie will correct me if I am wrong, and again 1 am indebted to him for his help. If this is an essential change in the charter, then I have cause to fear the passage of this bill, because I think that whenever we are in a monopoly situation, people who are serviced by a company deserve as much protection from that monopoly as they can possibly get. As the structure now permits it, the best check and balance that we have is that Bell Canada has to come back to parliament for approval of its services and the changes that it wants to make. Again I say I have no quarrel with making it more flexible and expanding the borrowing powers in relation to the inflationary pressures which exist in today's economy, but I think we need to continue the provision whereby the monopoly must come before parliament and gain approval for the major changes it is seeking.


Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, Bill C-1001 relating to Bell Canada is an important bill the import of which, I fear, many members of the House do not understand fully.
It is not just the innocuous bill that the hon. member for Scarborough East (Mr. O'Connell) would like us to believe, that is, just a bill to update the borrowing powers of the company. If that were all it were in terms of having parliament authorize an increase in the capitalization of Bell, we would not find objection to it. But this bill is an exact replica of Bill S-2 passed by the Senate last year, to which we raised objections when it came to the House for approval. Our objections still stand.
What in reality this bill attempts to do besides allowing for an increase in the capitalization of Bell is to try to subvert and lessen public and regulatory scrutiny of this large and powerful monopoly. Under the act of parliament which now governs Bell, it must come back to parliament to get an authorization for an increase in its capitalization. That is not an accident. Parliament in its wisdom decided that if it were to give this private company, Bell Canada, a monopoly over the telephone system over much of this country, then it better do so only on condition that members of parliament who granted that power to the company would have, in the future, some kind of continuing supervisory power over how that company operated with reference to the very important area of capitalization.
If this bill passes unamended, we, as members of parliament, will never again have the opportunity to examine this procedure that Bell has to observe in its desire to increase its capitalization in the form that we now have before us. In the future we will not be faced with another bill of a similar nature because, if this bill passes, we will find that debate and votes will have been skirted or avoided, because the bill will get around the procedure that we have at this point. Therefore it seems to me that we will be doing a disservice to our constituents who are telephone subscribers who, over the years, have legitimate complaints against the way in which the company is operating, who have not received satisfaction from the CRTC

and who, in the end, rely on members of parliament to speak up about the way in which the company is operating and to try to influence the company.
I maintain that the bill is a very dangerous one because it ends parliamentary scrutiny of the company in that sense. How will it be done? I ask hon. members to examine Clause 2 of the bill carefully because it permits Bell Canada to alter its objects, powers and capital stock by a method of letters patent. In the future it will not have to come before parliament with a special bill. By the letters patent procedure, Bell will simply apply to the Minister of Consumer and Corporate Affairs (Mr. Allmand) for the change. Letters patent will be tabled in the House of Commons. There will be no debate, no amendments possible, and no votes possible under that procedure. After 30 days of the tabling of these letters patent, they have the power to change the objects and powers of the corporation. It becomes law in terms of the way the company can operate.
As well, in Clause 2 in various subclauses we see that if this bill as it is now before us is passed, Bell will come under the Canada Corporations Act. If that happens, Bell will be allowed powers it does not have at the present time. It will be allowed to be treated as any other corporation in this country.
I submit to hon. members that Bell in no way can be conceived as just any other corporation. It is a monopoly. Because it is a monopoly, we in the New Democratic Party maintain we have to strengthen, not lessen, public regulation of the company. If Bell comes under Section 16 of the Canada Corporations Act, as is intended by this bill, it will allow the company to invest in any field it wants, not just telecommunications as the company is presently limited to investing in under the terms of its act of incorportion passed by the Parliament of Canada. We could conceivably have Bell investing in motels or any other kind of business, or getting into sub-banking activities which are totally unrelated to the telecommunications field.


Walter David Baker: Mr. Speaker, I rise on a point of order. I have been following very closely the speech of the hon. member for Sault Ste. Marie (Mr. Symes). With regard to the letters patent, he said they would be tabled and lay there for 30 days-


Stanley Howard Knowles: Lie there, I hope.


Walter David Baker: -and they would be approved and parliament is virtually powerless to deal with it.
I cannot conceive that that would be the case. I wonder if my friend has inadvertently misled the House, because it states at page 7 of the draft bill that the letters patent, and 1 quote:
become effective on the thirtieth sitting day of either House of Parliament after they have been laid before Parliament unless before that day either House of Parliament resolves that the letters patent shall be annulled whereupon the letters patent are annulled and of no effect.
Does that not preserve the right of parliamentary action with regard to those letters patent, or have I misread the clause?
November 3, 1977


Mr. Deputy Speaker:: 1 am not sure the hon. member is using the right procedure to intervene. He is not intervening in the form of a question but clarifying the bill on a point of order, which could be done when making a speech. In any case, we will assume it is a question and perhaps the hon. member can reply to it. The hon. member should have asked for consent of the hon. member who had the floor.


Reginald Cyril Symes: 1 thank the hon. member for Grenville-Carleton (Mr. Baker) for rising on that point of order. He knows as well as I the difficulty in parliament ever deciding that issue he has described. 1 think back to the tabling of letters patent under the Telesat Canada Act, which received absolutely no scrutiny by the House. The hon. member knows that things that are tabled often go by without the general knowledge of members of the House.
Even if it were drawn to the knowledge of members of the House, the procedure whereby the business of the House can be interrupted for debate is very complicated and difficult. It requires a certain number of members to petition for that. There is the difficulty of whether it can be done at the government's pleasure or at the time it is required, as well as the difficulty in the sense that it is an either/or proposition. You cannot make amendments. It can only be negated.
For these reasons I make the claim from the point of view of historical practice. In effect, that provision is meaningless. Technically I can see the point of the hon. member for Grenville-Carleton, but the experience here is that that procedure is not fail-safe in terms of the kind of scrutiny I would expect members of parliament to give to it.
Our fear is that if we move into the letters patent procedure it will lessen the power the House has over Bell Canada. If Bell can move into these non-telecommunications fields, it will mean, as has often happened in the past, that basic telephone service will be neglected. For example, instead of Bell putting money into improved rural service, it will begin to move its profits and investments into other companies and other areas. I maintain that would be to the detriment of basic telephone service.
I argue that we must maintain parliamentary scrutiny of the monopoly because in the past, the regulatory process has been deficient. I can speak from experience because I have intervened before the Canadian Transport Commission against rate increases for which Bell has applied. In the past the CTC has not fully examined the argument. Indeed, the CRTC, which has taken over from the CTC, has reacted to the lack of scrutiny that the CTC had and has improved some of the procedures. But in my opinion, it is still far from adequate.
Let me give the House an example of what I mean by a weak regulatory process. Bell goes before the CRTC and argues that it needs a rate increase in order to have sufficient funds to carry out its business. Bell always pleads poverty to a degree. It has always been successful in the past in getting a rate increase before the regulatory commission.
I think of one exception in recent years. That was during the minority parliament when my party held the balance of power.
Bell Canada
We were able to put pressure on the cabinet to roll back a rate increase that had been granted.
The point is that if Bell does not get its way before the regulatory group, it usually begins to threaten consumers. We have seen this. Bell says, "Because we did not get our rate increase, we are not going to be able to put in any telephone." It tries to panic its subscribers into saying the government or the CRTC was wrong in not allowing some of its demands.
Bell is not a poor company. It had a net income in 1976 of $289,712,000. It also had deferred taxes, as of 1976, of $719 million. That in effect is an interest free loan to Bell, but it has never been taken into account by the regulatory agency when determining Bell's profitability. For that reason Bell's profitability is under-estimated. It allows the company to argue for a rate increase that the ordinary subscriber has to pay.
Nor do the regulatory agencies take into account Bell's subsidiaries when assessing its profitability. I think, for example, of Northern Telecom, a company that manufactures telephones and telephone equipment, which is 69 per cent owned by Bell. Indeed that relationship is now under investigation by the Restrictive Trade Practices Commission.
Last year Northern Telecom had total sales of $1,112 billion. It had a net profit after taxes of $77.1 million. It is a very profitable company, which is owned by Bell to a large degree. But the CRTC, when it assesses Bell's profitability, does not take into account the profitability of the subsidiaries which Bell owns. If it did, it would lessen the weight of the argument that Bell always makes in favour of a rate increase and subscribers would, of course, benefit from lower rates. Northern Telecommunications is so profitable and strong that 1 find it hard to believe they have laid off a thousand workers in the past few months despite the $3 million in tax concessions announced in the last budget. We are arguing that its profitability be assessed.
I believe the bill as it is now ought not to be accepted. As members of parliament we have the right to scrutinize this monopoly and I want the right to be able to raise the issues I have described. Bill C-1001 would deny me that right. I want Bell to be held accountable for the fact that it has supplied over 21,000 of its employees with free telephones at a cost of some $2.7 million while telling me, as a member of parliament, that it cannot afford to provide basic telephone service to 13 families along the Searchmount road to Sault Ste. Marie.
I want Bell to explain to me why its 32 executive officers received, in 1975, an average salary of $102,000 at a cost of $2.5 million, and that in 1976, under the anti-inflation program, they were able to get an average salary increase of $20,000, while at the same time the company used the AIB to roll back the wage settlements of its ordinary workers by some $28 million.
Goings-on of that kind need scrutiny and explanation because they relate to the telephone service and the rates which are charged. Those issues will not be raised by members

November 3, 1977
Bell Canada
of parliament if this bill passes because they will not have an opportunity to do so.
I want to know why Bell can spend $1.5 million annually on charter aircraft flights for its executives and still charge people living in Searchmount, 25 miles from Sault Ste. Marie, long distance rates. There are too many inconsistencies in the arguments put up by Bell when it goes before the CRTC and claims it cannot afford to improve services. The regulatory process does not afford an opportunity for close scrutiny. It is only in parliament that we have an opportunity to raise these issues, and we want to have the right to continue to discuss these matters and to hold the company accountable.
1 do not object to Bell coming to parliament to get its capitalization increased. In fact, had it brought a bill before us containing a clause to that effect, I am sure such a bill would go through. But the corporation has not been content with that. It has added these other clauses which restrict our ability to scrutinize the company's affairs and restrict the ability of the regulatory agency to do so. For these reasons the bill, as presently drawn up, is unacceptable to members of the New Democratic Party, and we shall continue to oppose it until there is some indication that Bell is willing to modify its stand and serve the people of Canada in accordance with the directives issued to it.


Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, the number of this bill used to be S-2. I notice it has been changed. The first thing which caught my eye is the new number, a very significant number-1001. That is an historic number, one which will forever remind us of "The Arabian Nights". It would seem to me that Bell has learned a lot from Schehere-zade, a most resourceful and intelligent young woman, one who was able to deliver the womenfolk of her community from the designs of a very cruel sultan. She certainly showed a lot of courage. It seems to me Bell is now bringing forward a Scheherezade of some kind to get its capitalization increased and to escape criticism by the CRTC. Some of the stories we associate with "The Arabian Nights" are capable, perhaps, of being incorporated in this bill. For example, "Ali Baba and the Forty Thieves" could become "Bell Canada and its Forty Subsidiaries"; "Aladdin and the Wonderful Lamp" could become "Ma Bell and the Wonderful telephone"; "The Merchant and the Genie" could become "The Company and the Minister of Consumer and Corporate Affairs".


An hon. Member:: Ay, there's the rub!


John R. Rodriguez: One can find a lot of history in these things.
I have often commented on the history of Bell Canada. Some time ago the government agreed to give Bell Canada a monopoly over telephone communications. There was one proviso-that the company should come before parliament each time it needed to increase capitalization and that it should be subject to regulatory provisions within the scope of the program laid down at that time. My hon. friend from Sault Ste. Marie has correctly stated that, if this bill were to carry in its present form, the company would escape proper scrutiny by parliament. Individual members of parliament would be pre-

vented from playing a meaningful role in examining requests for increased capitalization. I know there are members across the way who agree with us, and I hope they will get up and speak on this bill, too.
I have been here since 1972, and I have gone before the CTC, and, latterly, the CRTC, to make interventions with regard to applications by Bell Canada for rate increases. Mr. Speaker, you never saw such a charade. The process is absolutely meaningless. You go and make your presentation. You ask questions. The question I have been asking for some time was simple. All I wanted was an answer to a simple question. The question was: what does it cost to produce a black plastic telephone, and how much does Bell Canada pay for it? That is all I needed to know. That is a very crucial question. It puts into question the whole Bell Canada multinational corporate structure. It puts the whole matter in focus.
At these hearings I was also concerned about rural service. I was presented with a schedule a couple of days ago showing what they call non-urban telephone service. They listed communities, these non-urban communities, which were going to receive telephone service in 1978. I looked for the exchanges for communities in my riding and I was amazed to see that Burlington, Grimsby, and Beamsville have now suddenly become non-urban communities. I looked for my own community, but it was not there. The controller was a very knowledgeable chap and I asked him where my exchanges were. He said, "Oh, I think you must be scheduled into 1982."
1 think that this bill is going to be scheduled into 1982, Mr. Speaker, or until 1 see some improvement in rural service in northern Ontario as a whole, and in my riding of Nickel Belt in particular. I am opposed to this bill and I will do everything in my power to block its passage.


Mr. Douglas (Bruce-Grey):: Like what? Talk it out?


John R. Rodriguez: That is exactly correct. I will talk and talk until this bill is defeated. I am here to serve the particular concerns of my constituents, and I would be absolutely stupid to let this bill through. The hon. member in the Liberal party across the aisle can make smart remarks, but he is laughing at the people in my constituency where there are 10 families on one line. Hon. members opposite would not know that; they probably come from big cities and don't know about the inconveniences of the rural telephone service. The hon. member's constituency representatives went to the hearings in Sudbury and complained about rural service in Owen Sound.
Bell Canada has suddenly discovered the need to improve non-urban telephone service. Magically this has been discovered in 1977. I have been here since 1972 and I, along I am sure with other members in the House, have been telling Bell it has to improve its service.
Some of the exotic equipment which Bell Canada is developing for the business community includes dataroute and memory banking. The rentals paid by families who share 10 to a line are going to pay for all kinds of exotic equipment. These
November 3, 1977

families know they are going to be stuck 10 on a line. Sometimes when they need a doctor the line is busy and they cannot get through.
When people in my community want telephone service and they ask Bell to instal it, Bell says it will cost $7,000. 1 know this is not a lot of money to Liberals on the other side, but to people in my constituency $7,000 is a heck of a lot of money to instal a telephone. Yet I am asked to accept Bell's good will when they say that in 1982, or at some other time in the future, rural service in my constituency, as well as across northern Ontario and northern Quebec, will be improved.


Stanley Howard Knowles: Where are all the
Conservatives?


John R. Rodriguez: The Tories are so interested in this bill that not one of them is here.
Nothing that Bell Canada has done in the past has convinced me that I should place any trust in their breast beating and their promises that they will put in improved rural service in northern Ontario and Quebec by 1982 onwards.
I am also opposed to the bill because Bell Canada is interested only in one thing. The controller I met the other day told me that it was extremely important that they have a three star rating. He says they have to have three stars, two stars or one star, but they are trying for three stars.
When 1 was a teacher we used to give the best readers in the class three stars; they had to read two pages without a mistake. If someone could read two pages with one mistake, they would get two stars. If they could read two pages with three mistakes, they got one star. But they all got stars, Mr. Speaker; that was a great pat on the back and it certainly gave them some encouragement. So I asked this controller from Bell Canada, "If you have not got a three star rating, surely one star will get you some money on the market? Perhaps it will not get you a lot of money, but you might be able to borrow $150 million instead of $300 million". He replied: "Yes, Mr. Rodriguez, but
Bell Canada
then we might have to reschedule the non-urban telephone service if we do not have the money". That is the kind of threat to which they resort, Mr. Speaker.
As my colleague from Sault Ste. Marie pointed out, instead of all this flying around in jets and spending millions of dollars on highfaluting living, we should spend the money on improving rural telephone service. Nothing which Bell has said to me in meetings with my colleague and with the hon. member for Scarborough East (Mr. O'Connell) with respect to its credit rating, has convinced me otherwise. 1 think it now has a two star credit rating, and with that I think it can borrow a heck of a lot of money.
I am very concerned about the lack of input by parliament, by the elected people of this country, in terms of directing the growth and development of large corporations. Are these large corporations growing only for themselves? Are they saying to us, "Our aims are your aims? What is good enough for Bell must also be good enough for the people of Canada. What is good enough for INCO has to be good enough for the people of Canada"? I do not subscribe to that philosophy, Mr. Speaker. I think Liberals and Tories subscribe to that. They call it staying out of the market place. I believe that government has the responsibility to be slap in the middle of the market place. It must be there to direct investment. If we give Bell permission to increase its capitalization, in effect we have given it holus-bolus free rein to wheel and deal in the market place, instead of telling Bell that it should put in this kind of service by such and such a date.
I see it is six o'clock, Mr. Speaker. I should like to call it six o'clock so I can take this up again next week.


Mr. Deputy Speaker:: Order, please. It being six o'clock, pursuant to order made Thursday, October 27, 1977, this House stands adjourned until Monday, November 7, 1977, at two o'clock p.m.
At six o'clock the House adjourned, without question put, pursuant to Special Order.

Monday, November 7, 1977