1978-03-02

HOUSE OF COMMONS DEBATES


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THIRD SESSION-THIRTIETH PARLIAMENT 27 Elizabeth II

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Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada Available from Canadian Government Publishing Centre, Supply and Services Canada, Hull, Quebec, Canada K1A 0S9, at 5 cents per copy or $3.00 per session
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Thursday, March 2, 1978


Mr. Douglas Roche (Edmonton-Strathcona):: Mr. Speaker, in light of the motion concerning Mr. Anatoly Shcharansky passed unanimously by the House on February 8, and in light of new information that the trial of Mr. Shcharansky on charges of treason may start imminently, I move, seconded by the hon. member for Vancouver South (Mr. Fraser):
That the Canadian government request the Soviet government for permission to appoint an official observer at the trial of Anatoly Shcharansky on charges of treason so that the wide international community of concerned people can be assured that justice is done in this very important human rights case and, further, that the Canadian government repeat its offer to give immediate landed immigrant status to Mr. Shcharansky.


Mr. Speaker:: The presentation of such a motion for discussion requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Mr. Speaker:: There being unanimous consent, is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


[Stage Direction]
Motion agreed to.

Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I hope the same spirit of agreement and wisdom will prevail on the motion which I wish to present under Standing Order 43.


Some hon. Members:: No.


John Edward Broadbent: In view of the fact that Statistics Canada just two hours ago released information showing that unemployment insurance payments in 1977 were almost $4 billion, an increase of 16 per cent over the previous year, and in view
of government and private forecasts showing that $4.5 billion is expected to be spent on unemployment insurance benefits this year, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House asserts that it is better to pay people to work than pay them not to work, and therefore urges the government to provide job-creation programs which would reduce the $4.5 billion the government will be paying out in unemployment insurance benefits in 1978.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


THE CANADIAN ECONOMY
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Mr. Ren£ Matte (Champlain): Mr. Speaker, I rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to discuss a motion relating to a matter of urgent and pressing necessity.
Given the critical economic situation of the country, given the fact that that situation is primarily due to the lack of control over the social credit and also given the fact that the large financial institutions have pitifully failed to maintain and of course to improve the stable and healthy economy we had, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That the Minister of Finance (Mr. Chretien) seriously consider the possibility of reforming our monetary system, more particularly as it relates to the control over credit issuance.
Mr. Speaker:: The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, this motion can be debated only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

March 2, 1978


SHIPBUILDING
Mr. Roch La Salle (Joliette):: Mr. Speaker, I rise under the provisions of Standing Order 43 and I ask for the unanimous consent of the House to move a motion dealing with a matter of urgent and pressing necessity. Considering that the number of workers of the Davie shipyard in Lauzon has been cut by about 200 three weeks ago and that it has dropped from 2,300 last April to 750 now; considering that the consecutive lay-offs have a disastrous effect on the economy of Levis, Quebec City and the outskirts; considering that the Davie shipyard, which is one of the best equipped in Canada, is virtually jeopardized in its very existence if it does not obtain an important contract in the short term; considering finally that union leaders came to Ottawa last week to draw the attention of federal authorities to this alarming situation, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House urge the Treasury Board to sign two years earlier than expected the contract for the renovation of the Canadian fleet in order to ensure that no new lay-offs will increase the already high level of unemployment in this area and jeopardize the survival of an industry which plays an important part in the economy of this area in Quebec.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


ESTIMATES
Mr. Harvie Andre (Calgary Centre):: Mr. Speaker, eight days ago, on February 22, the President of the Treasury Board (Mr. Andras), while tabling main estimates for fiscal year 1979, stated:
Total expenditures for the fiscal year 1977-78 were set at $44,450 million and ... we fully expect total spending to be at or below this ceiling.
Yesterday, Supplementary Estimates B were tabled indicating total spending for fiscal year 1977-78 of $47,600 million. Even using the dubious accounting practice of deducting loan payments and doubling the estimated lapses, spending will still be higher than the ceiling the minister gave the House just one week ago. I therefore move, seconded by the hon. member for Capilano (Mr. Huntington):
[Mr. Speaker.)
That this House ask the President of the Treasury Board to make a statement on motions correcting the erroneous information given the House on February 22, 1978.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, in view of the fact that yesterday this House dealt with an outstanding matter respecting veterans, I urge that it is now time to deal with another matter which is even more urgent. I therefore move, seconded by the hon. member for Oshawa-Whitby (Mr. Broadbent):
That this House calls on the Minister of Veterans Affairs to take back to cabinet forthwith the question of restoring the basic rate of the war disability pension to the level of the take-home pay of the five categories of federal public servants so designated in 1973, it being the view of this House that good faith calls for such restoration to take place without further delay.


Mr. Speaker:: Presentation of such a motion for debate, pursuant to this Standing Order, can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


BILINGUALISM
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FEDERATION DES FRANCOPHONES HORS-QUfiBEC-MOTION UNDER S O. 43
Mr.   Jean-R. Roy@Timmins: Mr. Speaker, pursuant to Standing Order 43, 1 ask for the unanimous consent of the House to present a motion on an important and urgent matter.
Since the release of a brief submitted to Minister Claude Morin in the province of Quebec by the Federation des Francophones hors-Quebec shows once again that this association does not faithfully reflect the aspirations and objectives of Francophone minorities throughout Canada by linking them to the deplorable separatism of the PQ government through artful plots which actually betray our minorities, I move, seconded by the hon. member for St. Catharines (Mr. Parent):
That the Secretary of State suspend immediately any grant program for the Federation des Francophones hors-Quebec so that this non-representative and
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deceitful organization be not supported with taxes paid by Canadians who are the victims of its plots and its betrayal.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, today's published figures show that with respect to our United States dollar reserves there has been an exodus of $715 million. If we couple that with the outflow in January of $200 million, it represents an outflow of over $900 million. Another $45 million has been lost in the last two days. Over 40 per cent of our United States reserves have gone out of this country in roughly two months. Would the Minister of Finance indicate whether this is usual? Is this the ordinary type of market behaviour the minister has been talking about?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, the month of February was particularly difficult; that is why we had to intervene. It is the reason we announced we will be borrowing on the United States market very soon in order to have more reserves on hand. I have nothing to add to that, Mr. Speaker.


Sinclair McKnight Stevens: A supplementary question, Mr. Speaker. We recall that last week the minister said they did not intend to intervene: now he has indicated they have been intervening. There is obviously a large exodus of U.S. dollar reserves, which indicates the government has been caught with an unexpected outgo of United States funds. Would the minister indicate the nature of this outgo and why it occurred during the month of February. Has the government made any assessment of what relatively short-term calls could be made on U.S. dollar reserves in Canada in March or the coming months?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have said-and I repeat-that the governor of the Bank of Canada intervened to make sure that there is an orderly market. It was in the course of that policy that we intervened last month. As I have already indicated, we have made use of the facility that was organized last fall, to the tune of $200 million, and we plan to borrow some U.S. dollars later on. The intervention of the governor is always to make sure that the market operates in an orderly
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fashion and to diminish speculation as much as possible. This is why he had to intervene last month.


Sinclair McKnight Stevens: A final supplementary question, Mr. Speaker; and I thank the minister for that answer. Speaking about an orderly market, with the Canadian interest rate now at 8 Vi per cent and the United States interest rate at 8 per cent, and likely to go to 9 per cent, would the minister indicate if he anticipates he will be able to hold the Canadian interest rate structure at 8'A per cent, bearing in mind the orderly market he is referring to with respect to our foreign exchange?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, the monetary policy is established by the governor of the Bank of Canada and I have no announcement to make in that regard. I would also like to point out that the interest rates set by the governor remains the same.
[ English]


AMOUNT OF FOREIGN EXCHANGE REQUIRED TO COUNTERACT OUTFLOW OF U.S. DOLLARS
Mr. James Gillies (Don Valley):: Mr. Speaker, my supplementary question is also for the Minister of Finance. Given the fact that we have lost 40 per cent of our United States reserves, could the minister tell the House the government's position with respect to the amount necessary in order to have adequate reserves in the foreign exchange stabilization account against U.S. dollars?


Joseph Jacques Jean Chrétien: Mr. Speaker, it is not useful to speculate on that sort of thing.


James McPhail Gillies: A further supplementary question, Mr. Speaker. I asked that question of the Minister of Finance because the reality of the situation is that the last time the reserves were down was 1967, when they were running about 12 per cent of the total volume of our trade. Today, our reserves are running about 4.5 per cent of the total volume of our trade. 1 wonder if the government has any position on what those reserves ought to be because if they go to the norm they will have to acquire something like $5 billion. What program does the government have in mind for acquiring that sort of support?


Joseph Jacques Jean Chrétien: Mr. Speaker, 1 have said many times that I do not want to speculate on these things in the House of Commons. It is not useful, because we operate in a marketplace. I said what I had to say. 1 estabished a policy last week with the governor of the bank, and I have made that public to the House of Commons. I do not intend to elaborate on these items.


James McPhail Gillies: A final supplementary question, Mr. Speaker. May I ask the minister why he believes that not giving very specific answers to questions such as we have put forth today eliminates speculation? I would suggest that by being so

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vague, by not putting forth the policies, by not suggesting what the governments' program is he contributes to speculations.


Some hon. Members:: Hear, hear!


James McPhail Gillies: I would ask the minister again in order to avoid speculation and eliminate uncertainty, if he would not tell the people of Canada and the people involved in foreign exchange transactions what reserve position the government of Canada believes appropriate, given the volume of trade we have and the sort of activity that is going on. That would eliminate speculation. It increases speculation when the minister does not answer these questions.


Joseph Jacques Jean Chrétien: Mr. Speaker, the Canadian dollar is floating on the market at present and it would be useless for me to make further comments. If we proceed with further operations on the market, we will advise the market by making a public statement. In addition I do not want to speculate on the matter because the reserves of all countries vary from month to month and such is the situation of Canada.


INDUSTRY
John Edward Broadbent: We now have it officially on the record that the Minister of Finance has no intention of discussing economics either in the House or outside. I am not sure it is assuring, Mr. Speaker.
I would like to ask the Minister of Industry, Trade and Commerce a question. It was announced in the press today that the Chrysler corporation has announced a lay-off of another 5,000 employees. This is the fifth lay-off in about the same number of weeks by that corporation. It highlights the unfair pattern of investment and job losses that we have experienced in Canada in this industry.
Considering that the minister's own department, in a report to the first ministers' conference, pointed out that the auto trade deficit would reach an annual average of $2.5 billion by 1985 if the present trend continues, I would like to ask if the minister has been able to obtain from the leaders in this industry specific and important investment commitments in Canada.


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, in Canada the auto industry has enjoyed something like four very good years. From time to time production does get ahead of demand and there have to be some cutbacks in order to allow the market to absorb that which has been produced. We have three or four prospective plants in the negotiating stage. We are competing, and we

have to compete very vigorously with lucrative offers from some of the southern states in the United States for these auto plants. That is the problem and that is what we are up against.


John Edward Broadbent: Mr. Speaker, I assume that by now the minister has had a chance to look at the Canada-U.S. automotive agreement. If he has, he will have seen that the first clause of that agreement states that both countries are to share, on a fair and equitable basis, in future growth in the industry. That is what both countries are committed to. The reality is that we have lost, according to the Canadian Automotive Parts Association and the UAW, on any reasonable standard of comparison, some 20,000 jobs since that pact came into being.
I would like to ask the minister, since the president of Ford of Canada said not long ago that he anticipates $58 billion of new investment in the industry between now and 1985, since that announcement was made has he been able to obtain commitments from the industry for us to get at least our share of the industry-not more, not less, but at least our share, which will come to about $750 million a year?


John (Jack) Henry Horner: Mr. Speaker, I think the hon. member should stick to philosophy: he may be a lot better on it than he is on figures.


Some hon. Members:: Hear, hear!


Mr. Hnatyshyn:: That is what you said about Trudeau.


John (Jack) Henry Horner: We have a net gain in vehicle manufacturers in Canada. The manufacture of vehicles is more work-intensive than the manufacture of parts, so one must do some subtraction in order to arrive at the total job loss. As I have said in this House, we are losing approximately 5,000 jobs a year because of the deficit in the manufacture of parts. We are striving and working very hard with Ford on two or three new automotive parts plants in Canada, but we have to compete with some lucrative offers being made by the southern states.
We have submitted bids to Ford, to Chrysler and to General Motors. The ball is in their court, and we are pressuring them as much as possible in order to obtain a decision as soon as possible. Nothing would give me more pleasure, Mr. Speaker, than to stand in this House in the next week and announce that three or four plants will be built in Canada. That is what I am aiming for.


John Edward Broadbent: Mr. Speaker, virtually every one of the Minister's predecessors has made the same kind of general statement of great expectations and hopes about the future. But the reality is that we still do not have what both Canada and the United States committed themselves to in the auto pact more than ten years ago when they signed it. When the auto agreement was brought into being in 1965, the then minister obtained a written commitment from the head of each of the Big Four companies in Canada about their investment plans. Why is he unable to get the same kind of commitment now, when there is such a massive deficit?
March 2, 1978


John (Jack) Henry Horner: Mr. Speaker, 1 am at a loss to understand the hon. member. Is he suggesting to this House and to me that we should break the auto pact? If that is what he is suggesting, I would like to know.
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THE CANADIAN ECONOMY
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, I wish to direct a question to the Minister of Finance.
In view of the fact that the Minister of Finance has announced that he has secured a loan of $200 million from Canadian banks, and that he is about to seek from foreign sources a loan of equal or greater magnitude, if he has not already done so, could the minister clearly indicate to the House what the interest rate on both these domestic and these foreign loans will be, and how much these loans to support the Canadian dollar will cost?


Joseph Jacques Jean Chrétien: The interest rate in the case of the loan secured following the agreement signed last fall with a number of Canadian banks will be three-eighths of 1 per cent above the inter-bank rate in London.


Gérard Laprise: Mr. Speaker, I should like to ask the minister a supplementary question.
The minister's answer is somewhat vague. In view of the fact that we lend money to foreign countries, mostly without charging interest, and that Britain itself has with Canada an account of nearly $1 billion at 2 per cent interest dating back to 1951, and in view of the fact that Canada is now experiencing great financial difficulties, can the minister tell the House if he has made arrangements to borrow on as good terms as Canada gives to foreign countries whenever it can?


Joseph Jacques Jean Chrétien: Mr. Speaker, I must say that we do not borrow from Britain. I indicated the interest rate which applies for inter-bank deposits in London, and I do not think I can make myself any clearer.
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ROUTINE PROCEEDINGS

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(English]

Mr. Speaker:: 1 ask hon. members to join with me in recognizing the presence in our gallery of a very distinguished visitor in the person of a former Prime Minister of Denmark and now United Nations High Commissioner for Refugees, Mr. Poul Hartling.


Some hon. Members:: Hear, hear!



ORAL QUESTION PERIOD


Harvie Andre: Mr. Speaker, my question is for the President of the Treasury Board. On February 16, 1977, the President of the Treasury Board indicated that for fiscal year 1977-78 the total appropriations for government spending, including a reserve for future supple-mentals, would be $46 billion. With the tabling of Supplementary Estimates B yesterday, we find that the total figure is $47,600 million. What transpired in the last year that precluded the President of the Treasury Board giving the House and the people of Canada an accurate, or at least a close approximation of government spending plans for fiscal year 1977-78?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the total spending of the federal government for fiscal year 1977-78 will be at or below $44,450 million. In saying that, I can point to the record of the previous year,
1976-	77, when we announced that expenditures would be $42,150 million and came in finally at $41,078 million. For
1977- 78 we will be at or below the figure which was announced, which was not $46 billion but $44,450 million.


Harvie Andre: Mr. Speaker, that is flimflam arrived at by doing dubious things with Crown corporation borrowings. Last year the President of the Treasury Board predicted future supplemental spending of $1,850 million, which turned out to be $3 billion, almost twice as much. What guarantee will the minister give the House and the people of Canada that this year's prediction of future supplemental of $1,550 million is not more flimflam of the type we got last year?


Robert Knight Andras: Mr. Speaker, it was not flimflam; I have given the accurate figures. We committed to $42,150 million in spending last year; the actual figure came in at $41 billion, $1 billion less than we committed. I say now that when the
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amounts are all tallied in about July or August, the hon. member will see for sure, as he did last year, that our expenditures will be within the public commitment we made.


Harvie Andre: Mr. Speaker, the minister did not answer the question I raised about the difference between his prediction and the actual fact of the supplementals. He also predicted that spending for the fiscal year just ending would show an increase of 7.7 per cent, though a glance at the figures will indicate that the real figure is 9.4 per cent or, actually, closer to 12 per cent or 13 per cent.
My question to the President of the Treasury Board is this: In order to clear up this question, would the hon. gentleman ask for an immediate reference to be made to the public accounts committee so that guidelines may be established to provide that in future, when spending estimates are presented, they will give a true and accurate picture and not the type of flimflam we have been getting in the past.


An hon. Member:: Hooray!


Robert Knight Andras: I think the needle has stuck on that broken record somewhere.


Some hon. Members:: Oh, oh!


Mr. Nielsen:: The broken record is on that side of the House.


Robert Knight Andras: The commitments and the figures which are given, and which are repeated today, will be met. 1 would be very glad to show the hon. member in the most simple form possible exactly what the record has been, using a little piece of paper and a pencil, before the public accounts committee, privately or in any other way which would make it clear to him what is already clear to so many other people.


MINISTER'S STATEMENT ON BALANCING TOURISM BUDGET
Mr. John C. Crosbie (St. John's West):: My question is for the Minister of Industry, Trade and Commerce, Mr. Speaker. Before asking it, I want to remind him that in the last nine years we have experienced a deficit on the travel account ranging from $202 million in 1971 to $1,700 million last year. In the light of this situation, and remembering that we are not as gullible as the Liberal convention delegates, what did the minister mean when he said last Saturday that Canada should come "awfully close" to balancing the tourism budget this year? Did the minister, by that statement, mean that we were going to eliminate the balance of payments deficit on the tourism account? Are we going to be within $1 billion of doing so, or $1.5 billion? What did he mean by "awfully close"? What does he mean by that revelation?


John (Jack) Henry Horner: If one person stands beside another, he is awfully close, but when he is as far away as the hon. member is from me, he is a long way away-and he will continue to be a long way away unless he can interpret the figures a lot better than he has.


John Carnell Crosbie: Obviously, the hon. gentleman thinks he is at an accountability session at the Liberal convention. Might I try another question? The minister has announced a $1 million promotion deal to advertise in Canadian magazines to encourage Canadians to stay at home, specifically Maclean's magazine in which the minister was featured recently. In connection with this effort by the government to encourage Canadians to holiday at home, has the hon. gentleman received a pledge from the Prime Minister and from his other cabinet colleagues that they will spend their vacations at home, or do they intend to continue scuba diving in the Bahamas, skiing in Colorado, vacationing in Cuba-


Mr. Speaker:: Order.


EXTERNAL AFFAIRS
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is directed to the Prime Minister. 1 have given the right hon. gentleman notice of its general nature. Earlier today, I had the opportunity to meet personally with the wife of Anatoly Shcharansky and to discuss directly with her and with some of her representatives the very serious situation of her husband. I understand that Mrs. Shcharansky has for some time now been seeking a direct personal meeting with the Secretary of State for External Affairs. Can the Prime Minister tell us whether the Secretary of State for External Affairs, or he himself, would be prepared to arrange a personal meeting immediately with Mrs. Shcharansky?


Right Hon. P. E. Trudeau (Prime Minister):: Just five minutes ago I received notice from the Leader of the Opposition that he would ask this question. I had time to communicate with the Parliamentary Secretary to the Secretary of State for External Affairs, who might have the answer.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, as the hon. gentleman knows, the motion put forward by the hon. member for Edmonton-Strathcona was given unanimous consent. We hope this will prove to be significant.


Charles Joseph Clark: 1 appreciate that fact, and I think it speaks well of the House that the motion put forward by one of the members on the opposition side should have received the unanimous support of this chamber. I think this is particularly important because it indicates the commitment of hon. members to stand up and defend human rights. That is why I asked
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my question directly, whether the Prime Minister or the Secretary of State for External Affairs personally would be prepared to underline that commitment to the case and cause of Mr. Shcharansky by arranging a personal meeting. Perhaps that matter could be taken as notice and answered later.
I should now like to address a question to the Prime Minister in relation to the motion which was moved by my hon. friend from Edmonton-Strathcona, in which the House of Commons indicated its view that the government should request from the Soviet government permission to appoint an official observer at the trial of Mr. Shcharansky. Since reports indicate that the trial is imminent-indeed, that it could start this week-can the Prime Minister tell us when the government of Canada intends to act on the instruction from the House of Commons and make that application to ensure as far as possible that there is a Canadian lawyer or Canadian presence involved in the trial, without any delay?


Pierre Elliott Trudeau: The Leader of the Opposition must understand that the case of Mr. Shcharansky has been dealt with by Mrs. Shcharansky, by other relatives of that gentleman and by the minister responsible for multiculturalism in discussion with other ministers. There have been meetings on the matter. Frankly, I do not recall that there has been a request for a meeting with me. I do not know whether there has been a meeting with the Secretary of State for External Affairs. On this side, ministers who meet on behalf of the government are all equal.
I would want Mrs. Shcharansky to understand that the meetings she sought with members of the government and with members of the Liberal caucus have been effective in ensuring that the government takes whatever action it considers best to ensure the eventual safe future of Mr. Shcharansky. The details would be much better given by the Secretary of State for External Affairs or by the Minister of State for Multiculturalism. f shall, of course, take the hon. gentleman's question as an indication of further interest by the opposition in this case and make sure that the government continues to deal with the matter expeditiously.


Charles Joseph Clark: So that the Prime Minister might understand the urgency of this matter-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -may I point out that it is entirely likely that at the trial of Mr. Shcharansky, as nearly as we can determine, his only lawyer will be one appointed by the KGB, and that the trial could begin today. This adds an element of real urgency to the motion which was endorsed so enthusiastically today by the House of Commons. The point is this: there has been a request for a meeting with the Secretary of State for External Affairs. There was a meeting, apparently, between that minister and the Soviet ambassador on December 12. Mrs. Shcharansky and her advisers have heard nothing from the government in the interim. Can the Prime Minister, or some other government spokesman, tell the House what did transpire at the meeting on December 12 between the Secretary of
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State for External Affairs and the Soviet ambassador, what action will ensue, and specifically what has been the response of the Soviet authorities to the offer of the Canadian government of landed immigrant status in Canada for Mr. Shcharansky?


Pierre Elliott Trudeau: The Leader of the Opposition indicates by his question that he knows of the effort which has already been made by the Canadian government in its acceptance, in advance, of Mr. Shcharansky. He also knows, as his question indicates, that meetings have taken place between the Secretary of State for External Affairs and the Soviet ambassador. If he wishes to know anything further about this matter, the Secretary of State for External Affairs, his parliamentary secretary or the minister for multiculturalism would be prepared to deal further with the matter.
I doubt whether Mrs. Shcharansky is interested in getting anything more than results from this process. I doubt whether it is necessarily productive of results that the Leader of the Opposition should ask the question in this way at this time. If that is his opinion, or if that is the opinion of Mrs. Shcharansky, they are of course perfectly free to follow it. But she knows, and the Leader of the Opposition knows, that ministers of the government have been acting as quickly as they can in this matter to get results for the benefit of Mr. Shcharansky; and this continues to be our course.


An hon. Member:: Nobody has heard anything.


Charles Joseph Clark: 1 very much regret that the Prime Minister would treat a very serious question of human rights in this way. The fact is that the family has not been advised of the result of that meeting between the Secretary of State for External Affairs and the Soviet ambassador.
If there is a minister in the House-and I am looking at the Minister of State for Multiculturalism who is pointing to himself-who has some information on that question, 1 hope he will take this opportunity to convey to the House of Commons and to Mr. Shcharansky the concrete results of the meeting between the minister and the Soviet ambassador, and make specific reference to the response of the offer by Canada to extend landed immigrant status.


Hon. Norman A. Cafik (Minister of State (Multiculturalism)):: Mr. Speaker, I indicated to the hon. Leader of the Opposition that Mrs. Avital Shcharansky, long before today and this question being raised in the House, was quite aware of the actions which were taken by myself, by other members of the government and the caucus.


Some hon. Members:: Hear, hear!


Norman Augustine Cafik: I have met with Mr. Shcharansky and I have met with members of the Shcharansky family. It was at our initiative that the offer of landed immigrant status was made for Anatoly Shcharansky to come to Canada. They have been kept posted on all developments which I have considered to be
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relevant. I have been prepared to meet with Mrs. Shcharansky, the Shcharansky family or any of the Jewish federations who wanted to meet with me or talk with me at any time. So no information has been withheld. In relation to the specific response from the Soviet Union to the offer of landed immigrant status, to my knowledge at this point in time there has not been an official response.


SHIPBUILDING
Mr. Raynald Guay (Levis):: Mr. Speaker, the first part of my question is directed to the right hon. Prime Minister and the second part to the Minister of Industry, Trade and Commerce.
In view of the alarming situation that has existed in the Lauzon shipyards since, about a year ago now, 2,000 workers were laid off, and in view of the many representations made to the caucus by the union, municipal councils, chambers of commerce and other organizations of the riding of Levis, does the government intend soon to meet the requests for new credits to be earmarked for new programs for repairing and renovating the ships of the Canadian navy, as previously announced by the Department of National Defence?
I should also like the Minister of Industry, Trade and Commerce to tell us why the decision is being delayed-


Mr. Speaker:: Order.


Pierre Elliott Trudeau: Mr. Speaker, 1 thank the hon. member for Levis for having brought up the matter yesterday at the caucus and having so allowed the government, as early as today-


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I know this matter does not interest the Progressive Conservative Party in the least, but I can give the hon. member the answer he seeks.
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EXTERNAL AFFAIRS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, 1 should like to direct a question to the Prime Minister. Some time ago representations were made to the Prime Minister and the Secretary of State for External Affairs by representatives of various ethnic groups, including Ukrainian, Polish, Latvian,
[Mr. Caftk.J
Estonian and Jewish groups, urging the government to make representations to the government of the Soviet Union to permit immigration of Soviet citizens who have committed no crime and wish to leave that country, especially citizens of the Soviet Union who have relatives in Canada.
Since whatever representations were made on this matter at the Belgrade conference have failed, would the Prime Minister now make public representations to the Soviet president, Mr. Brezhnev, urging him to facilitate the movement of such Soviet citizens to Canada?


Pierre Elliott Trudeau: Mr. Speaker, I am surprised that the hon. member asks the question in this way. He knows the government has made many representations to Soviet authorities to this effect. I have reported to the House that I have raised the question twice, personally, in meetings with the prime minister of the Soviet Union and again with the ambassador. I believe it is a matter of record that there has been substantial improvement in the movement of Jewish Soviet citizens out of the Soviet Union. Indeed, in the area of reunification of families, there has been substantial progress. I do not have the statistics at hand. I am surprised the hon. member implies by his question that we have not obtained results. We have, and so have other western countries.


David Orlikow: Mr. Speaker, my supplementary question is directed to the Prime Minister. No one questions that there has been some progress. At the same time, there are still many Jewish dissidents who have not been permitted to leave. The Ukrainian Immigrant Aid Society of Toronto has a list of some 400 families who are still attempting to get relatives out of the Soviet Union. Despite the progress which has been made, they are the ones who would like the Prime Minister to make another public appeal, and not just the usual diplomatic appeal; they feel that is not enough and what is required is an open, public appeal to the president of the Soviet Union. Will the Prime Minister give consideration to making the type of public appeal which these groups are requesting?


Pierre Elliott Trudeau: Mr. Speaker, I understand that a public appeal is all they can get out of the opposition parties. Out of the government, they have got results-which is preferable.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


INTENTIONS OF AECL RESPECTING EISENBERG CONTRACT
Mr. Ron Huntington (Capilano):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources: it concerns the statement of the chairman of Atomic Energy of Canada, Ltd. to the effect that there is no binding commitment that Mr. Eisenberg's firm would be used again. In view
March 2, 1978

of the fact that there is a memorandum of understanding between AECL and the Eisenberg-UDI group, signed by Mr. Campbell and approved by the minister, which clearly states that such a commitment exists, will the minister tell the House whether he approves the statement of Mr. Campbell which, in effect, is notice that AECL intends to break a written contract?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, obviously the chairman was expressing a personal opinion and perhaps providing a legal opinion in respect to the matter about which the hon. member has asked a question.


Arthur Ronald Huntington: Mr. Speaker, will the minister tell the House whether the chairman's statement still stands? If it does not, will he tell the House that he takes full responsibility for implementing the terms of the March 4, 1976, agreement which the minister authorized and the Standing Committee on Public Accounts condemned because it will raise the cost of getting Mr. Eisenberg's group off backs of Canadian taxpayers beyond the $20 million originally negotiated by Mr. Gray?


Alastair William Gillespie: Mr. Speaker, I can assure the hon. member that the recommendations of the committee, which have been incorporated in a document placed before the House recently, are being considered very seriously, i welcome the report. I think the hon. member should also welcome the fact that we have been able to move very substantially on almost all the recommendations of that report.


RECOVERY OF MONEYS PAID UNDER EISENBERG CONTRACT
Mr. Bill Clarke (Vancouver Quadra):: Mr. Speaker, my question is directed to the Minister of Energy, Mines and Resources. 1 should like to refer to an answer he gave yesterday in response to a question posed by the hon. member for Egmont. Perhaps inadvertence or ignorance may have caused him to mislead the House on the $2 million advance payment to Mr. Eisenberg. In his answer, the minister said:
-no payment has been made on the post-services contract. I do not know how many times I will have to repeat that for his benefit. If he likes, I will repeat it once more: the post-services contract could be as much as $5 million. No payment was made; the invoice was rejected.
It is clear from the Auditor General's report that the agreement provides for an advance payment of $2 million, which was paid to Mr. Eisenberg in April of 1976. Would the minister agree now that $2 million has been paid, and if no services are to be provided-as Mr. Campbell, the chairman, stated recently-what steps will the government take to recover the $2 million already paid?


Alastair William Gillespie: Mr. Speaker, it is quite clear from the documentation wh.ch I placed before the committee on December 14, 1976, I think, that part of one payment-that is to say, of $15.3 million-or some $2 million of that payment was an
Oral Questions
advance on post-contract services. There is no question about that; it is on the record. But the hon. member should reflect that the kinds of questions that have been put forward-and, indeed, this was one of the recommendations of the Standing Committee on Public Accounts-invited the interpetation that payments had been made subsequent to that one payment. 1 think that a careful reading of the recommendations of the public accounts committee could bring about that interpretation, because there is a suggestion that further payments should be suspended.
It was also made quite clear yesterday in the question of the hon. member for Egmont that he acknowledged that the first invoice had been rejected. He then went on to refer to further payments of $2 million. I am reading from page 3340 of Hansard. I was trying to make clear to the House, as I have in the past, that no payments were made to the agent subsequent to that one payment which was made early in 1976, some time before the public accounts committee was even seized of the question and before the committee started to hold its hearings.


William Hillary (Bill) Clarke: Mr. Speaker, 1 am glad we have that clarified. 1 agree with the minister that no quarterly payments have been made. On Tuesday, the minister had not had a chance to consider the report of the public accounts committee. I would like to ask him now whether he has had a chance to see the report tabled on Monday, and does he disagree with the unanimous opinion of the committee that the chairman failed to negotiate a better deal with Eisenberg?


Alastair William Gillespie: That is a matter of opinion. I would draw to the attention of the hon. member that the renegotiated agreement made by the chairman has saved, until now, Canadian taxpayers something in the order of $3 million. That seems to me to be the kind of comparison that should be made when weighing the advantages of the first contract, which was a legal contract, and those of the second one. The hon. member holds the view that it was not to the advantage of Canadians. I think most Canadians would believe that a $3 million saving is an advantage.


ELDORADO URANIUM DUMP AND REFINERY-GOVERNMENT INTENTIONS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources of which I gave him notice yesterday morning. On Tuesday morning, an environmental assessment panel under the jurisdiction of the Minister of State for the Environment published a recommendation that the Eldorado uranium dump and refinery proposal for Port Granby not be proceeded with. Even though that panel reports to the Minister of the Environment-this is the first time such a panel has come out with a negative recommendation respecting an important matter such as this-the licensing agency is under the jurisdiction of the Minister of Energy, Mines and Resources. As a matter of fact, the Crown agency of Eldorado Nuclear falls under his jurisdiction.

March 2, 1978
Oral Questions
My question is: What factor will this play in the decision by the minister and the government on whether or not to proceed with that refinery and dump project at Port Granby? Is this a binding recommendation on the government, or is it not? What is going to happen now to Eldorado's application to proceed?


Alastair William Gillespie: I think the hon. member has noted that the recommendation to which he referred was provided in the form of a press release, not a report, so I think it would be premature for me or anybody on this side to speculate about that particular report until it has been received. The hon. member asks whether or not it is binding. I think he knows that the environmental review process is one involving a recommendation on the part of the particular committee. I see the hon. member is making a recommendation that the government should overrule one of the significant recommendations of the environmental review panel.


Allan Frederick Lawrence: No, sir, in no way is the hon. member for Northumberland-Durham making that recommendation. I think the minister should read his mail again. The Minister of State for the Environment previously gave the people of Port Hope and the surrounding area to understand that any recommendation coming from that panel would be considered by him to be binding. That is a statement of general governmental policy, and I think it is a very important one because this is the first time such a panel has come out with a negative recommendation.
What is the sense of having these hearings and having panels do that type of work unless the government is going to pay strict attention to them? Is it a matter of government policy, and is this the major factor in the government's decision on whether to proceed, or is it not? That is a simple enough question.


Alastair William Gillespie: The hon. member for Northumberland-Durham issued a press release yesterday, dated March 1, in which he specifically recommended, if I understand him correctly from reading the press release, that the refinery should be built at Port Granby.


Allan Frederick Lawrence: No, in the Port Hope area. There is a difference.


Alastair William Gillespie: The environmental review process and the panel, as I understand it, have rejected that.


Allan Frederick Lawrence: Mr. Speaker, 1 am seriously misinterpreted. There is a difference between Port Granby and Port Hope. There is an existing agency in Port Hope which belongs to the minister's department. It is quite different from Port Granby. I hate to interpret the minister's own agencies to him, but the minister's panel was referring to Port Granby. It is a matter of government policy whether or not these matters are going to be decided. Can the minister tell us whether it is government policy, when these environmental panels make recommendations, to consider them seriously?


Alastair William Gillespie: That has been made very clear in the past by colleagues who are responsible for this area. But I would bring to the hon. member's attention and to the attention of the House that the only application before the environmental review panel was with respect to Port Granby. I have to acknowledge that that is in the Port Hope area, but there is no other application for the Port Hope area. So the hon. member is obviously playing with words when he says to me that he is prepared to go along with it, but he wants it right beside the place specified in the application.


BILINGUALISM
[Stage Direction]
federation des francophones hors-quEbec
Mr.   Jean-R. Roy@Timmins: Mr. Speaker, following the publication of the report dated October 20 and submitted to Quebec Minister Claude Morin by the Federation des Francophones hors-Quebec to invite the government of that province to take part in the underhand arrangement concerning the French-speaking minority groups of Canada, is the minister prepared to cut immediately all subsidies to this non-representative organization and, if not, what steps does he intend to take to protect the French-speaking minorities of Canada against the misleading proposals of the FFHQ that we, as the majority among these minorities, denounce and will keep denouncing?


Hon. John Roberts (Secretary of State):: No, Mr. Speaker. I am always ready to co-operate with every representative of French-speaking groups outside Quebec. We are open to cooperation and I sincerely hope that the Federation des Francophones will try to join us to discuss all possible ways to reach our common objectives. I understand the concern of the hon. member but if there are French-speaking people outside Quebec who do not agree with the strategy of the Federation, it is the responsibility of the members of the association themselves to settle this dispute in a democratic way in front of the Francophone federation.


ADMINISTRATION OF JUSTICE
[Stage Direction]
BUGGING OF MPs OFFICES-GOVERNMENT KNOWLEDGE OF WARREN HART CASE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, 1 have a question for the Solicitor General, but since he is with the Prime Minister I will direct it to the Prime Minister. Can the Prime Minister tell the House how many members of parliament, in addition to a former solicitor general and the hon. member for
March 2, 1978

Nickel Belt, have been subjected to electronic surveillance accidentally, coincidentally, intentionally, unintentionally or in any other way? If he does not know, will he be able to give us that information in the near future?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, unfortunately I was not in my seat and did not hear the full purport of the hon. gentleman's question.


Elmer MacIntosh MacKay: Is the Solicitor General, or is the Prime Minister, now in a position to say how many more members of parliament besides a former solicitor general and the hon. member for Nickel Belt have been subjected to electronic surveillance either accidentally, coincidentally or otherwise?


Mr. Blais:: Mr. Speaker, on that point, 1 had intended to rise on the question of privilege raised by the hon. member for Nickel Belt yesterday. 1 have indicated outside the House that not even incidentally do we have any record of the hon. member for Nickel Belt being subjected to taping or to any other surveillance. With reference to any other members of parliament, I would like to check the record and advise the hon. gentleman. Perhaps 1 can provide him with that information.


Elmer MacIntosh MacKay: Steps are being taken in the United States to ascertain information concerning the background of Mr. Warren Hart's activities and details of his recruitment from the FBI. We were advised-1 think last February-by the Prime Minister that there was no reason to suggest that the RCMP conducted itself like the FBI. We now have evidence that, in fact, the RCMP recruited someone from the FBI. Can the Solicitor General say whether this incident, if it is an isolated one, took place with the knowledge of the cabinet committee on security, the secretary of state for external affairs of the day, or at what level was this unusual arrangement allowed?


Jean-Jacques Blais: 1 would like to look at two aspects of the question; first, the nature of the investigations that are being conducted vis-a-vis the FBI and, second, I wish to indicate to the hon. gentleman that as 1 understand it Mr. Hart was not a member of the FBI. But I would like to provide the hon. member with information relating to that aspect of his question.


PRIVILEGE
Mr. Tom Cossitt (Leeds):: Mr. Speaker, 1 rise on a question of privilege. 1 believe this is one of the most serious questions of privilege a member could ever raise in the House of Commons. If hon. members on the government side will permit me to outline this question, I will do so as briefly, concisely, and accurately as possible.
Privilege
About noon today-I cannot state the time positively-I was visited by General Dare, head of the security service of the RCMP, and the Solicitor General (Mr. Blais), in my office.
It took some time, due to subsequent events, for me to realize that this is a question of privilege; otherwise, 1 would have given the required notice to the Chair.
General Dare and the Solicitor General discussed with me the fact that I have been raising in the House certain matters pertaining to national security. Hon. members are familiar with the matters 1 have been raising. The Solicitor General and General Dare asked me if I would turn over to them copies of any documents I have in my possession which came from the security service.
I was then shown a document which I was told was compiled by the RCMP, pertaining to myself. That document recommended various options the government had to deal with me if I did not comply with the request that I turn over copies of documents to the RCMP.
I remember three of four of those recommendations, which I will mention. One was that a search warrant be issued so that my office in the House of Commons could be searched. Another was that a search warrant could be issued with regard to my home and other premises. Another was that a warrant for my arrest could be issued by the Solicitor General. Presumably that would mean confinement in jail at some point. Another option was that the Leader of the Opposition (Mr. Clark) might be prevailed upon to exert some pressure on me to give up these documents. Another option-and I am paraphrasing-was that perhaps the RCMP or the Solicitor General could prevail upon me as a good Canadian to surrender copies of such documents. I was asked to surrender them.
I told the Solicitor General that 1 have never had any intention to interfere with the national security of this country.
I told him 1 would stick to that principle. The Solicitor General told me this morning that he felt that in some ways some of the things I have done perhaps interfered with such national security. Frankly, in the interest of national security I do not wish to repeat the points he raised, unless he wants me to do so. Nevertheless, 1 said to him that 1 would like time to consult counsel, to consider what 1 should do, and also to discuss this with the leader of my party. 1 said that as any Canadian I had the right to consult my lawyer, which I do. When someone is told he might be arrested or that his premises might be searched, he has the right to consult counsel.
The document 1 was shown had two columns. The column on the left contained what I have said in the House of Commons. The column on the right contained the actual facts according to the RCMP. I might say that in each case the facts, and what 1 have said, corresponded. General Dare and the Solicitor General therefore deduced that I had in my possession copies of two specific RCMP or security service documents.
I must mention another thing. 1 do not like to do this, but I think it is necessary. In that document there was included a

March 2, 1978
Privilege
statement by Superintendent Bentham of the RCMP in which he summarized a conversation he had with me a few days ago. ft is quite true that I had a conversation with him. The statement was accurate with the exception of one point. I think this is a very serious interference with the privileges of members of parliament. I am paraphrasing again. Superintendent Bentham reported to the Solicitor General and his superiors that I asked him whether he was recording or bugging our conversation, and that he replied yes. I must tell the House that that is an absolute falsehood. I did ask him whether he was bugging or recording our conversation, and he replied "no". He said, "If you mean am I making notes of what you are saying, yes I am. Do you mind?" I said, "No, of course not".
However, the report he handed to his superiors-which I saw with my own eyes because it was handed to me by the Solicitor General-said that Superintendent Bentham had said that my telephone call and the words 1 was using were being recorded, presumably by some form of recording device. 1 questioned General Dare about this, and he said it was a matter of terminology. I think it is much more than just a matter of terminology.
The main point I am trying to bring out is that I feel that any Canadian has the right to legal advice. I am saying that in effect this was denied to me. General Dare and the Solicitor General said they would retire to the corridor for a few moments, consult, and return, which they did.
We discussed what would happen to these documents. I said 1 would undertake absolutely not to show them to anyone between now and Monday, not to discuss them further, nor to raise them in the House of Commons. I told them that on Monday we could meet after I had time to think it over, to consult my solicitor and to consult the leader of my party. 1 said that I could then give an answer. When they left my office I was left with the distinct impression that that request was being granted. They more or less departed not saying absolutely "yes", but certainly not telling me that anything would be done to me.
At 1:15 p.m. in the dining room of the House of Commons today I was telephoned by the Solicitor General and advised in a very friendly way-but I am not sure just how friendly the motive of the person behind him was-that I had until four o'clock this afternoon and that he was sorry but it had to be four o'clock this afternoon, or he would have to exercise one of his options. 1 asked him which option he was going to exercise, and he said he would not go any further at that time. I had seen the options, of course, so I knew it had to be one of the three or four or five that I had seen.
Shortly before the House met at two o'clock I had an opportunity to discuss this matter with the Leader of the Progressive Conservative party. After I had outlined to him what had happened, he advised me that he had been telephoned or contacted, I am not sure which, by the Prime Minister (Mr. Trudeau) this morning and asked if he would

come to the Prime Minister's office. The Prime Minister in effect told him roughly what was going to happen which, of course, subsequently did happen.
I do not choose to go into further details of what the Prime Minister said to the Leader of the Opposition or what the Leader of the Opposition said to the Prime Minister. That perhaps has no bearing on my question of privilege, other than to say that the Prime Minister, in my opinion, was using his office as Prime Minister to put pressure on the Solicitor General to take care of me and deny my rights in this House.
1 think that is a fundamental breach of the privileges of any member of the House of Commons, Mr. Speaker. I am frankly surprised, very surprised, that the Prime Minister of this country should be so vindictive with a member of the opposition that he would go as far as contacting the leader of this party on a matter of this nature and, when that did not work, go to the Solicitor General and tell him to do what he did subsequently, namely, deny me the right to consult counsel.
Mr. Speaker, how could I, between the time 1 left the parliamentary dining room and came to this House at two o'clock, have any chance to contact my solicitor, who does not live in the city of Ottawa, have legal advice given to me, and then discuss the matter further with the Solicitor General at four o'clock this afternoon? How could 1 possibly do it?
So, Mr. Speaker, 1 ask you, as protector of the rights of members of this House, if I do not have the right to be given the time to consult my solicitor about what should be done in this case? Are my privileges being interfered with or denied by what this government has done?
I say to the Prime Minister of this country, who is probably far more responsible for what has happened today than the Solicitor General, that he has seen a chance, so he thinks, to "get" the member for Leeds. Believe me, sir, he will not get that chance because every person in this country has a right to counsel-me, yourself, sir, the Prime Minister, or anyone walking the streets of this country. Any government that tries to deny those rights, that tries to deny the privileges of a citizen of this country to consult his lawyer, I think is far more guilty than anyone who might be charged with anything. I think it is a very, very serious matter.
There is little I can add, Mr. Speaker. I think I have made it clear that the document shown to me proved beyond the shadow of a doubt that everything I have said in this House is true, because it said so. It also has proved as a result that the Prime Minister has attempted to use his position to put the- what would I call it-the muzzle on me as a member of parliament, through one of his cabinet ministers. It interferes with my privileges. I think it is one of the most serious things that could have occurred, and 1 ask that 1 be allowed to reserve the right to move a motion at some subsequent point to have this matter dealt with further.


Some hon. Members:: Hear, hear!


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, first of all I would indicate to the hon. gentleman and the House that
March 2, 1978

I did attend the meeting to which the hon. gentleman has referred and that, in all material particulars, the information he has provided is accurate. What he has not said is that on three occasions questions were raised in this House based upon information that evidently had been obtained from a source that dealt with top secret documents.
The hon. gentleman does not deny the fact that he had within his possession, and has had within his possession since at least the time when he commenced questioning in the House, documents that were deemed to be top secret documents and confidential documents.
As Solicitor General that was of great concern to me. 1 indicated to the hon. gentleman, on a number of occasions, that instead of making public declarations relative to documents of that nature, he ought to communicate with me and deal with the nature of those documents and provide me with such information as would enhance the security of the nation. Until I saw the hon. gentleman in his office this morning at close to twelve o'clock, I had received no communication from him.
I had been advised by the security service that the document could be in his possession. I had no indication that it was in his possession. There was an indication that those documents were detrimental, that the information within those documents, the release of which could be made by the hon. gentleman, was detrimental to the security of the state. Therefore-


An hon. Member:: That is your opinion.


Jean-Jacques Blais: Mr. Speaker, surely as the chief enforcement officer of the national security of this state I have to exercise my opinion on a number of occasions.
In this instance even the hon. member for Leeds (Mr. Cossitt) recognizes the sensitivity of the information that he was releasing. He knew of the sensitivity of the information that document contained. The document itself was not only essential in terms of its content but also essential in terms of the source of that particular document
The nature of the document brought into play the provisions of the Official Secrets Act with which, 1 am sure, the hon. member is familiar. If he is not, then he is derelict because he ought to have become familiar with them. He was dealing with a document which was strictly indicated as being top secret. He knew that the release of any information within that document had to be contrary to the Official Secrets Act. Undoubtedly he has certain privileges in this House, Mr. Speaker, but surely not to the detriment of the national security of this state.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: Therefore, Mr. Speaker, in order to take every precaution, I advised the Prime Minister, as I am obliged to do, of the nature of the information that presumably was in the hands of the hon. member for Leeds. 1 described to the hon. gentleman the options that were made available to the government in terms of what could happen.
Privilege
The document that I showed the hon. member for Leeds in complete confidentiality in order to solicit his co-operation, was a document prepared for me in terms of the options that could be taken. There was evidence indicating that there could very well be a breach of the Official Secrets Act, and it stated the remedies there were available in the event that the facts were proved. 1 did not choose to use any of those measures, Mr. Speaker, because 1 felt the hon. gentleman was a member of parliament, and my responsibility had to be to secure return of that document and to ascertain the source of the leak, if we might call if that, within the security service.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: In order to achieve that purpose, with the least publicity and the least inconvenience to any party, I approached the hon. member for Leeds after having asked the Prime Minister (Mr. Trudeau) to solicit the concurrence of the Leader of the Opposition (Mr. Clark) to encourage the hon. member for Leeds to provide me with that information for the purpose I have described. 1 was not successful. On three occasions when speaking to the hon. member for Leeds, I indicated to him that I was soliciting his co-operation. The information I was conveying to him was complete with the revelation of the information that had been made available for me in the hope that the hon. gentleman would see the folly of the resistance that he is engaging in that, to my mind, is detrimental to the operation and maintenance of the sovereignty of this country.
When 1 called the hon. gentleman from his office in the centre block, when 1 went there in order to confer with him further, 1 suggested to his secretary that she should locate him. She found him in the parliamentary restaurant. I would have preferred to have spoken to him in person because it was simply an extension of our previous conversation. The reason why I asked for a reply by four o'clock was because of the sensitivity of the information that was there and because of the initial reluctance which the hon. gentleman had indicated to me to return the document which he had received, so that I could ascertain the sources of the leak of that particular information.
I was preoccupied, Mr. Speaker, with the second purpose that 1 described, nameiy, to ascertain the nature of the leak and the origin of that leak. Surely the hon. gentleman recognizes that the source of that information is an essential ingredient of the corrective action that this government has to take in order to preserve our national security.


Some hon. Members:: Hear, hear!


Jean-Jacques Blais: 1 am fully aware of the preoccupation of the hon. gentleman. He asked me whether he could be put in jail. I said to him that there was no consideration of that. 1 assured him of that. There were alternatives described in the paper, for my purposes, in terms of information from legal sources. They were not, Mr. Speaker, meant for the hon. gentleman except

March 2, 1978
Privilege
indirectly as a result of my willingness to offer to him all of the information that had been made available to me.


Mr. Fraser:: Don't be so naive.


Jean-Jacques Blais: Mr. Speaker, there was no intention to intimidate the hon. gentleman at all. As a matter of fact, if indicating to an hon. gentleman his obligation under the law is intimidation, then 1 feel that the hon. gentleman is being misguided in that particular opinion.
Evidently the hon. gentleman is very perturbed by that, and I regret it. I regret that he has interpreted my actions as being motivated in any other way but to discharge my responsibilities, taking into account fully his sensitivities as well, his security as a member of parliament. I said to him quite openly, as he indicated to me, that I was speaking to him as one member of parliament to another and as one who has a great deal of respect for this House and all its members, and as one who would never take an action, Mr. Speaker, in order to deprive any member of this House of his liberty without the full process of the protections that are available to him.


Erik Nielsen: Mr. Speaker, I speak as one who has been through this process before, and I have some experience in the circumstance giving rise to the question raised by the hon. member for Leeds (Mr. Cossitt). What the Solicitor General's (Mr. Blais) rhetoric cannot avoid is the time frame within which he has denied the hon. member for Leeds the fundamental right to the rules of natural justice, the right to consult and obtain advice from counsel. It is all very well for him to use phrases such as "presumably", "perhaps"-those were his words-that there were security documents in the possession of the hon. member for Leeds, and then leave the member's office with the clear impression that he would have that opportunity and the time to consult with counsel until Monday. But then he discovered the hon. member an hour and 15 minutes later in the parliamentary restaurant and issued an ultimatum to him that he, the Solicitor General, had to have a reply by four o'clock otherwise he would exercise his options, which were explained by the hon. member for Leeds. Those options concerned a search warrant of his offices, his home and other premises and perhaps a suggestion of jail. It has been denied by the Solicitor General that that term was used, but the hon. member for Leeds has used it.
It is not up to the minister to instruct the hon. member for Leeds that there has been an alleged offence committed under the Official Secrets Act. It is not up to any other member of the government either to interfere to that extent with the right of a member of parliament without the concurrent right of that member to seek legal advice and have the time to do so. That is inexcusable. That was the pressure put on the hon. member for Leeds. It was not only being done by the Solicitor General but it was apparently being done with at least the knowledge of the Prime Minister (Mr. Trudeau).
I prefer to believe that the Prime Minister made that call to the Leader of the Opposition (Mr. Clark) as a courtesy. I prefer to believe it did not go beyond that. But for the Solicitor

General attending as he did with the director of his security services, the RCMP, at the office of the member for Leeds, or to attend on any other member of this parliament in that fashion and under those circumstances, and as well to compress the time frame to a point where he is denied access to and advice from counsel, is completely repugnant to my understanding of the rules of natural justice which are followed under our system.
He based his case on the fact that he was advised by his security services that documents and, I use his words, "could be" in the possession of the member for Leeds. If that was his position then he has his recourse and that recourse is not to bring the pressures that he brought to bear with respect to the circumstances as he has outlined. What he did in effect to the hon. member for Leeds, and 1 have experienced this myself, was to give him an ultimatum at 1.15, when he spoke to him in the parliamentary restaurant. That ultimatum was that at four o'clock this afternoon he either had to come up with an answer that he would be willing to produce whatever he "perhaps" or "presumably", to use the Solicitor General's words, had in his possession, or he would be confronted with a search warrant for his home or his office, or with whatever other alternatives were described by the hon. member for Leeds as being available.
To my mind that is the grossest form-I will not use the term blackmail-of intimidation. If that is not interfering with the rights and privileges of a member of this House, I do not know what is.
There have been over the course of weeks in this House, sir, various revelations made not only by the hon. member for Leeds but by the hon. member for Central Nova (Mr. MacKay). I have been involved in those questions myself in the past and currently. We have a right to expose those questions. I agree on the one hand that that right has to be exercised with discretion. But when we are confronted with an announcement by the Secretary of State for External Affairs (Mr. Jamieson) of the extent to which subversion is extant by the expulsion of 13 subversives, then surely it is incumbent upon the opposition to be even more vigilant to expose these matters. That is exactly what the member for Leeds was doing when he was bringing these matters up. All we have had is non-answers, evasion, ducking or weaving from the government, and no voluntary conduct on the part of the Solicitor General to visit the hon. member for Leeds to head this off. It is only when they think they have the goods on him, that they confront him in his office in the presence of one of the highest officers of the RCMP, the assistant commissioner.
If I heard the minister correctly, and I cannot with the sound system which exists here now-I could have in the past-I take it that he is saying the hon. member for Leeds never came to him. Surely the Solicitor General has the obligation when these questions are raised by the member for Leeds, or by my friend from Central Nova, or myself, to contact us.
Surely that obligation exists. It happened in the past with me and 1 co-operated with members of the force when I was
March 2, 1978

visited. However, that option was not exercised. It is only when they thought they had the goods on the hon. member for Leeds that they decided to screw the screws, to put the old screw-boot on and muzzle him. That is wrong. That is a deep interference with the rights and privileges of the members of this House.
Members have a responsibility to be discreet when they raise these matters. We all have that responsibility. I think we have exercised it. However, for the Solicitor General to have brought in this matter in the fashion in which he has, is completely repugnant to everything I understand about the rules of natural justice in this country.
The ultimatum is unforgivable. To give the hon. member for Leeds between 1:16 and four o'clock to seek counsel about the options with which he is confronted, is unforgivable.
The options are all very serious because, from the remarks of the Solicitor General, they obviously involve the possibility of charges being laid under the Official Secrets Act against the hon. member for Leeds. Surely he has the right to expect an adequate time to consult with and obtain advice from counsel.
I do not think this is within your jurisdiction, Mr. Speaker, but the events, and the solution to the problem that has been caused by these events, are within the jurisdiction of the Solicitor General or the Prime Minister. I would like to gain the Prime Minister's attention because 1 want him to hear my suggestion. I see he has been consulting with the Solicitor General.
The least the Prime Minister can do is allow the hon. member for Leeds an adequate, reasonable time within which he will be able to afford the opportunity to consult with and obtain the advice of counsel before he succumbs to any intimidation brought upon him this afternoon.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I rise to comment on the extraordinary things which have been said about the breach of privilege and the lack of either courtesy or of honouring a privilege in relation to the right to counsel. Surely what we are involved in here is an extending of unusual courtesy to the hon. member for Leeds (Mr. Cossitt) which would not have been extended to an ordinary citizen.


Some hon. Members:: Hear, hear!


Otto Emil Lang: We are not involved here in a question of the whims of the government but of the rule of law of this land as enacted by parliament, the Official Secrets Act. It is to protect the security of this country. In most circles it is seen as being as important to the preservation of the state as any branch of law. In any case, it is the law of the land as enacted by this parliament. Accompanying the law of this land often go rights to lay charges and perform searches in order to obtain evidence without any notice, because the very point of the action taken is that it may be necessary to have that evidence obtained.
Privilege


Some hon. Members:: Hear, hear!


Otto Emil Lang: Of course there is no doubt about the right of such a citizen, in our law, to obtain advice of counsel. However, for an ordinary citizen that often comes after the time the charge has been laid and the search has been performed.


Some hon. Members:: Hear, hear!


Otto Emil Lang: The Solicitor General (Mr. Blais), as I understood his remarks, indicated that he had first personally asked the hon. member for the evidence and the material which are at the root of this offence against the law, which is alleged. Indeed, he was counting on the co-operation of the hon. member of which, however, the hon. member's past conduct has not given much evidence.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Otto Emil Lang: Notwithstanding that and with presumably, as the Solicitor General has indicated, legal advice about courses of action which were possible, he thought it appropriate, because of the traditions of members of parliament, traditions which I hope all members here, including the hon. member for Leeds, will honour, in the circumstances to allow him to come forward with the information requested in order that the law of this land not continue to be flouted.
The giving of notice about the possible courses of action is now cited as a breach of the privileges of a member, when in fact it is evidence of the extension by the Solicitor General of significant privileges to this member which would not be extended in relation to such a case to any other citizen in this land.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Mr. Speaker, 1 would like to pick up the debate on this very important question of privilege precisely where the Minister of Justice left off.


An hon. Member:: Minister of Transport.


John Edward Broadbent: Excuse me, the Minister of Transport (Mr. Lang), trying to act as the Minister of Justice.


Some hon. Members:: Oh, oh!


John Edward Broadbent: The matter is serious. I am not trying to be facetious about it. The Minister of Transport just said that what was involved in the logic of the hon. member for Leeds (Mr. Cossitt) indicates that he was calling for something that would not be granted to any other ordinary citizen of Canada. With respect, Mr. Speaker, in terms of being a privilege of a member of parliament, that is precisely what privilege is all about.


Some hon. Members:: Hear, hear!


John Edward Broadbent: Once a citizen becomes a member of parliament, the supreme legislative body of this land, he or she

March 2, 1978
Privilege
acquires certain privileges by virtue of being a member of this assembly.


An hon. Member:: And responsibilities!


John Edward Broadbent: And certain responsibilities. 1 agree entirely with the hon. member. What we are talking about cannot be reduced, either in morality or law, to something that is equivalent to the notice of moral or legal rights of other citizens of Canada. It is a comparison of apples and oranges. It is not the same situation.
I wish to deal very briefly with the substance of what I see to be at stake here. As the Solicitor General (Mr. Blais) has indicated, it is very important if a security document which is labelled "top secret" finds its way into the hands of a member of parliament or any other citizen who is not authorized to have such a document. That is a serious situation. I think all members will fully agree with the Solicitor General that it is not something one can simply laugh off. The Solicitor General and the Prime Minister (Mr. Trudeau) have to be concerned about it.
What I understand, both from what the hon. member for Leeds and the Solicitor General have said today, is the following. There is good reason to believe that documents of this kind are in the hands of the hon. member for Leeds. There are good grounds for that belief. However, from what the Solicitor General has said, there have been three or four earlier discussions in the House about these documents. This is not something that just came to the attention of the Solicitor General this morning. These documents have remained in the hands of the hon. member for Leeds for some time, presumably, if they are the alleged documents we are talking about.
Earlier in the conversation before noon today, there was discussion about certain courses of action that would be open to the hon. member for Leeds. In one sense that is an entirely reasonable set of proposals for the Solicitor General to present to an hon. member of this House, whether on this side or the other side.
In the presentation of those choices, I do not necessarily see intimidation. It depends in part what use is made after that of those options as to whether you can reach a conclusion of intimidation having taken place, or other inappropriate action. It seems there is an infringement here of the rights of a member in one sense of that term, namely, that there has to be basic trust and acceptance of the honesty and integrity of members of this House. That is why we cannot say that members on either side deliberately mislead the House.
What seems to be disturbing about what has been outlined today is this: the Solicitor General has had a conversation with the hon. member for Leeds, and among the options which he himself proposed was a situation in which consultation with the hon. member's lawyer would play a crucial role, and whether he would go for that option-


An hon. Member:: No.


John Edward Broadbent: The Solicitor General is shaking his head. But it seems to me if you are talking about the possibility of arrest to a member you are raising the appropriate option of consultation with a lawyer, among other options. This was presented to the hon. member for Leeds around noon hour, and the hon. member for Leeds gave his word as a member of the House-I forget the precise wording, but this was certainly the sense of his comments-that he would not destroy the documents, that he would not take any other course of action between now and Monday, but that he just wanted time between now and Monday to think about the situation.
I am not attributing blame. I am appealing for a reasonable and amicable solution. If there was a sense of trust-the Solicitor General says he has had three or four conversations in the past with the hon. member for Leeds-


Jean-Jacques Blais: In the House. I answered questions. He has never talked to me and I have never talked to him.


John Edward Broadbent: Well, the point I want to make, Mr. Speaker, is that the Solicitor General has had reason to believe for a number of days that these documents were with the hon. member for Leeds. Then he presented him with a set of options. I agree that at some point, as Solicitor General, he should act in terms of exercising his responsibility. The hon. member for Leeds has said "Give me until Monday morning". If a sense of trust and integrity is to be maintained, it seems to me the appropriate course of action would have been for the Solicitor General to have said, "Yes, let us wait until Monday morning." Instead, he has closed off the options. This is so, because one of the options discussed was the possibility of legal action involving consultation with a lawyer. He has foreclosed the hon. member's opportunity to consult with a lawyer.
This is an important matter of privilege, Mr. Speaker, because we all get documents. They come to us involuntarily, sometimes in little brown envelopes or in other ways; people recognize that we are members of parliament and they send these documents. The future is at stake here. I appeal to you, Mr. Speaker, or through you to the Prime Minister perhaps, to extricate us from this unpleasantness by undertaking to give the hon. member for Leeds until Monday morning to reach his decision.


Charles Joseph Clark: Mr. Speaker, it had not been my intention to enter into this debate and I do not intend to discuss the matter now at any great length. I will say, though, that the subject under discussion seems to have changed its nature as the debate has proceeded.
As was stated by the hon. member for Leeds (Mr. Cossitt) and the hon. member for Yukon (Mr. Nielsen), I did receive a call from the Prime Minister's office and had a brief conversation with him in his office at his request. I should make it very clear that at that time I very much had the idea that the invitation from the Prime Minister (Mr. Trudeau) was extended to me as a matter of courtesy by him to notify me of events
March 2, 1978

which related, or might relate, to a member of parliament sitting with the Progressive Conservative opposition.
Naturally, I do not intend to disclose the nature of the conversation between the right hon. gentleman and myself except to say that 1 did not contact the hon. member for Leeds in relation to that conversation. This was for two reasons. One was that I did not wish to appear to be interfering in any way with appropriate legal procedures which might be brought into play, and to which allusion has been made, and, second, because I did not want to appear to be placing any pressure upon the hon. member for Leeds to take action which might limit his right and privilege to act as he believes he ought to act here on the floor of the House of Commons.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: What has changed, as 1 became aware when the hon. member for Leeds spoke to me briefly before the beginning of this day's sitting, is that the hon. member for Leeds indicated to me that the Solicitor General (Mr. Blais) and General Dare presented to the hon. member a range of different actions which might be taken in relation to the hon. member for Leeds. 1 do not propose to go further into that argument, one which has already been made in the House, except to say that 1 think the spelling out, the deliberate communication to a member of parliament of those alternatives, which might have involved the laying of a criminal charge, coupled with the compression of time, a requirement that a member of parliament reply to the Solicitor General within a matter of four hours, are circumstances which reek of intimidation.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: There is one other matter to which I must refer. There is a reason why members of the House of Commons enjoy special protection relative to access of information. We are, after all, the elected representatives of the people of Canada. Though this is too often forgotten, perhaps, in some corners of this chamber, we are collectively the body to which the government is responsible for all its activities. It is therefore highly important that members of parliament retain intact their ability to use information which relates to the national business and which might come into their possession. This is a most important principle.
None of us should be intimidated in relation to the use, in what is seen to be in the national interest, of information which comes to us. Such information might very well affect the conduct of the government or the protection of the Canadian national interest. We have a right in this House to use that kind of information responsibly and we have the right to be free from any odour of intimidation with respect to its use.
It seems to me there has been evidence here of action which the hon. member for Leeds can only interpret as an attempt to intimidate, an attempt to force him to do something he might not otherwise have chosen to do. What underlined and emphasized that action was the very narrow time frame imposed by telephone by the Solicitor General when he, in effect, declined
Privilege
to extend to the hon. member for Leeds the opportunity to carry out the fullest possible consultation whether with his counsel, which is one important right available to the hon. member as a private citizen, or with others who might be able to advise him fully as to the parliamentary implications. This would include the opportunity to discuss the matter with Your Honour and with other members of the House of Commons.
That being the case, 1 believe the actions which were taken by the Solicitor General in going to a member of parliament, taking with him the chief security officer of the country and setting forth a range of alternatives which might be followed if the hon. member did not do as the Solicitor General wanted him to do, and then imposing a time frame within which the hon. member for Leeds was expected to react, constituted a major threat to the privileges of members of parliament. I hope it will be possible for the hon. member for Leeds to consider this matter without a threat of any kind directed toward him, in order that he might assess his position under the law and in relation to his rights and privileges as a member of the House of Commons.


Elmer MacIntosh MacKay: Mr. Speaker, I think it is obvious that a great deal of this difficulty comes down in the final analysis to what is, or what is not, a question of national security. It is odd that this matter has not received more attention from the government in the past.
At this very time when the McDonald Commission is looking into this whole subject, it has been necessary for the Commission to appoint counsel in Toronto to provide a definition of what really constitutes national security. This is the logical culmination of events which have been building up for a long time. It is simply this: in matters of police and security affairs, members of parliament and members of the government have not been given true and accurate information. The present Solicitor General (Mr. Blais) was as surprised as anyone else when he found out mail was being opened, or so he said. 1 could mention many matters which have come out in the last few months and have caused the government, and those responsible for national security, to modify or change their positions.
This particular situation has caused members of parliament to be very nervous and to seek the truth. The fact that they are doing this, and obviously are being assisted sometimes by persons in security roles, is a very good reason for the government to take a hard look at what it has allowed to develop over the years. That is simply this: our security is out of control and operating without the knowledge of those responsible by law or by statute for its direction.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, as the hon. member for Leeds (Mr. Cossitt) said, this is perhaps one of the most important questions which have been raised in a little while. I hope the House will bear with me if 1 speak for a few minutes on it.

March 2, 1978
Privilege
In a matter of national security, I hope neither this side, nor the other side, would have to act in a spirit of political contention. After all, when the security of the country is at stake, we are first and foremost Canadians. We should try to see our duty and discharge that duty. That has been the inspiration of the government's motives, and I am willing to believe that it is also the inspiration for the responses we have heard.
In this particular instance, it is so important for parliament and the country to understand what is implied here that 1 feel I must go into some detail on the nature and the consequences of the particular document which is in the hands of the hon. member for Leeds.
I understand he showed the document to the press. The press reported that he had a top secret document marked, "For Canadian Eyes Only". Also I understand he told the Solicitor General (Mr. Blais) that he had that document, or two documents, in a conversation which took place this morning. Thus, the fact that he has a top secret "For Canadian Eyes Only" document has been established and is recognized. At any rate, the analysis of the Royal Canadian Mounted Police is that there is sufficient and probable grounds to believe that he has such a document.
Last night after the House had adjourned, the RCMP through the Solicitor General, informed me of this. Also they informed me that they had a document from the law officers of the Crown, the Crown Attorney, the Department of Justice, to the effect that, in their opinion, what the hon. member for Leeds has done provides reasonable grounds to justify the issue of a search warrant under the Official Secrets Act. That is the information the Solicitor General and 1 received from the RCMP and from the Department of Justice.
Two courses would have been possible. The first was to say "let the police do their duty, let us not interfere, let them lay an information and have a search warrant issued, and let them make a search." That course might have raised the same kind of opposition from the Tory party as we heard today, that courtesies were not extended; that we should have considered he is a member of parliament; that he should have been asked to hand over the document, rather than seek a search warrant; and so on. The Solicitor General and I made the decision, in effect, that in this case we would not have the search warrant issued immediately, at the risk of being accused by other people of interfering in the normal course of justice and preventing the police from searching. We decided not to do that. We decided to follow the course which hon. members seem to agree was the right one, that is, to try to do it by agreement; to let the hon. member for Leeds know the grave consequences of his acts; to permit him to hand over the document; and hopefully help the police as to the source of that document and how such a secret document could come to him.
I believe the Minister of Transport (Mr. Lang) has dealt with the legal aspect. It has been claimed by several hon. members of the opposition, and indeed by the hon. Leader of the New Democratic Party (Mr. Broadbent), that he should

have until Monday morning to think it over. It seems to me the Minister of Transport gave the basic legal reality of this. If anything, we were in default in not letting the police do their duty last night or this morning.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: I wish hon. members of the opposition would listen. I have a great deal to say.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: There have been other instances in recent months of members of parliament having been objects of search warrants. The opposition knows that two members of my party were searched under a search warrant. I was told in advance, as I let the hon. Leader of the Official Opposition (Mr. Clark) know in advance when it concerned a member of his party, that there would be a search conducted against some members of my party. 1 shied away, and I said, "Do your duty. 1 don't want to interfere in any way". It was not a different type of situation, but the act under which they were acting was not the same.


Mr. Baker (Grenville-Carleton):: Was it not the Criminal Code?


Pierre Elliott Trudeau: One reaction was to tell the police to do their duty, and not interfere. That is what I have done when it concerned members of my party. When it concerned members of the opposition, we did them the courtesy, as is demanded by the opposition and by the hon. Leader of the New Democratic Party, of saying, "Please co-operate. You may not know the seriousness of the crime. You may not have understood the consequences of making public this document. Please co-operate". We do not like to have search warrants issued against members of parliament. We sought for co-operation.
As I understand it, the reproach is for not having given the hon. member until Monday morning to think it over. When someone is in possession of a stolen document-and I do not say the hon. member stole it; but it is a stolen document, it belongs to the security services of this country-he is not told by the police, "We are going to search you tomorrow or perhaps Monday morning. If we find it on you, then we may lay some charge". He is not given that kind of advance notice. As the Minister of Transport correctly said, if reasonable and probable cause exists, and if an affidavit is made, the person who is suspected is searched, and he is given no courtesies. In this particular case we did give warning, and we did seek co-operation.
1 believe the Solicitor General and the police, in due course, will be able to argue more thoroughly why time is of the essence here. It is because more damage can be done if more aspects of that document are leaked. Already enough damage has been done. The member of parliament could either hand over the document and settle the matter, or he could have it seized and then consult his lawyers as to what his rights are.
March 2, 1978

When I spoke to the Leader of the Official Opposition this monrning 1 realized 1 was putting a dilemma before him: should he ask his member to co-operate, or should he stand off and say, "Let the police do their duty"? Somehow this has been turned against me.
The hon. member for Leeds said I told the Leader of the Opposition what was going to happen. 1 did not, Mr. Speaker,
I informed him of the information 1 had received from the police. I asked him to accept his responsibilities. 1 am aware of the difficult problem I placed before him, but quite honestly 1 thought that the correct course would have been for the leader of a party to go to one of his members and to say to him; "Look, I know from the Prime Minister that the law officers of the Crown are advising the issuance of a search warrant. For God's sake, why don't you hand this over to the police and we will not hear about it any more".


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Mr. Speaker, 1 think members of the House would perhaps be enlightened if 1 spoke a little about the nature of the document in the hands of the hon. member for Leeds. 1 think it is very important to know-and I think it was obvious from what the hon. member said to the press-that that document pertains to the activities of foreign agents in Canada. I do not think that the handling of that document and what the hon. member has said up to now has added substantially to the debate which is going on in Canada regarding national security. 1 do not think it has permitted us to seek a more enlightened course of action in the future when some subversive agents are detected in Canada. But 1 do know that it greatly undermines the efforts of the Canadian security service to protect Canada's national security, and I will tell the House why.
Any foreign security service is interested in knowing how our security service operates-that is the first thing they try to do. To a certain extent that was what occurred a couple of weeks ago in this country. A foreign security service will pay a lot of money to break Canada's security service so that the system of operation of our security service becomes known to the enemy, to the opponents of this country. They bribe, they pay large sums of money, they attempt to penetrate our operations, they try to suborn Canadians, they use all kinds of techniques, and we had the evidence of that a couple of weeks ago. By courtesy of the hon. member for Leeds, they can get this now for free. They know from this document that our security service operates in certain ways, and they get this through the courtesy of the hon. member for Leeds-perhaps with no ill intention on his part-but it is the type of thing that unfriendly intelligent services want.
That is not the end of the damage. What is perhaps more important is that if loyal Canadians who have information on possible subversives in Canada see it as their duty to talk to the RCMP and give them the information they have, they are not guaranteed now that their names will be withheld. Perhaps
Privilege
their names will come out in headlines, courtesy of someone in the opposition or of someone else.
In Canada we do not have a system of forcing Canadians to co-operate with the police; we rely on their sense of patriotism, we count on Canadians to come forward and give police the information they have about subversives. Are they likely to be encouraged in this? If they now find out that they have a leaky security service, that entire documents on unfriendly operations against Canada will become known in some way and that the member of parliament who has them, when apprised of the seriousness of his knowledge, refuses to hand them back, will they be likely to give the police the information they have?
The hon. member wants to ask advice on whether a stolen document should be given back to the Government of Canada.
1 do not think we should have to wait until Monday morning to find the answer to that. Let me say once again: the consequences are too severe.
There is yet a third consequence, that much of the information in the document which is in the hands of the hon. member for Leeds came to us through the intelligence services of friendly countries, members of NATO and other countries which co-operate with Canada in giving us information about subversives operating against us.
We do not have the capacity in this country to gather all the information nor do we have security services in many foreign countries. We rely on information received from our allies. The document which the hon. member has in his possession contains much of that information, and the more he leaks it, and the more he has leaked it, the less willing will foreign countries be to co-operate with Canada, and the more in danger will be Canada's national security.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: That is why the dollar has gone down. You always find someone else to blame.


Pierre Elliott Trudeau: We hear jokes from the Leader of the Opposition about the dollar going down. Let me say I think his stock has gone down pretty badly.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I will not continue in that vein any longer.


Charles Joseph Clark: Because you have gone as far as you can go.


An hon. Member:: Just watch him.


Pierre Elliott Trudeau: I think it is a sorry day when a top secret document in the possession of the security services in this country is in the possession of a member of the opposition-


An hon. Member:: Prove it.


Pierre Elliott Trudeau: -and when that member of the opposition does not want to co-operate with the police and return that document but wants to think it over until Monday morning, and when his leader does not have the sense of responsibility to

March 2, 1978
Privilege
talk to this member, not to put pressure on him but to look at this problem with him and say, "Is this not a case where we should co-operate with the police, or is this a case where we want to continue to play games with the government?"


Charles Joseph Clark: I acted as you acted with Rooney.


Pierre Elliott Trudeau: I am told by the Leader of the Opposition that he acted as I had acted with a member of my party. I said at the beginning of my statement that in the case of a member of my party against whom it was alleged that he had committed a criminal act, I did not tell him he would be searched by the police, nor did I tell him to hand over all his files to the police. I was not asking the Leader of the Opposition to do that. I was not asking him to help one of his members defend himself against a charge of criminal action.
Here is a case of national security. Here is a case of the Leader of the Opposition himself complaining that perhaps he should be kept better informed on national security issues. Here is a case where he had a chance to show, in a non-partisan way perhaps, that he could solve this problem without making a great fuss in parliament by simply handing over the document, and I think it would have been to his credit and to that of the hon. member for Leeds. But they chose not to take that course.


Charles Joseph Clark: I chose to act as you acted.


An hon. Member:: Ce n'est pas la meme chose.


Charles Joseph Clark: C'est la meme chose.


Pierre Elliott Trudeau: I rely on the people of Canada to make the distinction the Leader of the Opposition has not made.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Not only are the subject matters extremely different, as I just pointed out, but I fail to see how every speaker from the party led by the Leader of the Opposition can stand up and say that, as a matter of courtesy, we should let the hon. member know and that he should be given until Monday morning. We heard the same tune from the Leader of the New Democratic Party-he should be given due notice. Now the Leader of the Opposition is somehow reproaching me for having gone this route. Somehow he is saying that he himself did the right thing in not consulting a member of his party when on this side everyone says we were obliged to go the courteous route.
The Leader of the Opposition is the only one in this House who has dispensed with showing courtesy to his own member and telling him something was amiss. 1 find some logical difficulty in the position of the Leader of the Opposition.
I think I have made a case as to the very great danger which results from breaking our security services in this manner. I too will reserve the right to move a motion if this matter cannot be otherwise resolved. I still appeal to the opposition to think this over and not to make it an opposition-government

debate. 1 hope hon. members oposite will ask themselves how, in this particular case, the security of this country and the efficiency of our security services can be best served. I hope they will answer that question as the rest of the country would.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, I think the record should be made completely clear on a couple of items. It should be made clear, in fairness to the hon. member for Leeds (Mr. Cossitt), to the whole House and, indeed, to the people of Canada.
There has not been a refusal by the hon. member for Leeds to hand over documents. It must also be made clear that there is now only an allegation-not a finding-that the documents were stolen. Despite the rhetoric of the Prime Minister (Mr. Trudeau), I think it is extremely important that that point be made. Whether documents were stolen and whether the hon. member for Leeds is in possession of stolen documents will not be decided in this tribunal, and I would like to say to the Prime Minister that the rights of the hon. member for Leeds ought not to be prejudiced by the Prime Minister in this tribunal.


Some hon. Members:: Hear, hear!


Walter David Baker: The Prime Minister has made a statement about the difficulties of the security service as a result of this information. The allegation-and that is all it is-out of the mouth of the Prime Minister does not make that true. As I listened to the Prime Minister 1 began to worry somewhat about what state the Prime Minister's mind might be in-


Some hon. Members:: Oh, oh!


Walter David Baker: -with respect not only to the right of a member of parliament to carry out his duties but also the rights of a citizen in a free society not to have his case or the cases of other citizens judged or prejudged in the House of Commons. I hope it has not been lost by any member of this House that under the Official Secrets Act any person, whether he be a member of parliament, the Prime Minister or otherwise, is innocent under the law until he is proved guilty by a duly constituted court.
The problem is that the hon. member for Leeds raised in this House a matter, not which affects him as a litigant before a court-he will have to live with that if a charge is laid-but as a member of this House who believed, whether we agree with him or not, that he was exercising his duty as a member of parliament to bring to the attention of parliament, and hopefully the government, a matter which he, in a free parliament, considers of some importance to a society which we sometimes say is free and open. This Chamber is supposed to be the epitome of that freedom and openness, but unfortunately it has not been that.
I want to deal with something else the Prime Minister said. The Prime Minister alluded to a meeting he had with the Leader of the Opposition (Mr. Clark). It was entirely appro-
March 2, 1978

priate for the Prime Minister to call the Leader of the Opposition. 1 really wonder whether we would be dealing with matters of security in this House at all if heretofore there had been this kind of discussion between the Prime Minister and the Leader of the Opposition. However, that is speculation for another place.
In any event, the Prime Minister did the proper thing today in calling the Leader of the Opposition to his office. The Leader of the Opposition answered the summons of the Prime Minister and discussed the matter with him. To any person not legally trained, and even to one who is, that would be an indication that there was something very serious afoot, at least in the mind of the Prime Minister, involving a member of this party.
The Prime Minister calls into question the judgment and, indeed, the integrity of the Leader of the Opposition in not going to the hon. member for Leeds and informing him of this conversation. However, I submit that if the Leader of the Opposition had gone to the hon. member for Leeds with this matter-and if there was something wrong afoot-that would have given the hon. member for Leeds the opportunity to obliterate that wrong or at least to muddy it. I think the Leader of the Opposition did something which was quite important. He kept the confidence of the Prime Minister. He ought not to be chastised for that. He kept the confidence of the Prime Minister so that the Solicitor General (Mr. Blais), General Dare, General Bourne and others would be free and unfettered to chat with the hon. member for Leeds.
That was the act of an honourable man, and I commend the Leader of the Opposition.


Some hon. Members:: Hear, hear!


Walter David Baker: What happened, however, in the course of that chat is now quite important because we all know-and I hope hon. members opposite will allow me to finish; I know they have always disagreed with the hon. member for Leeds, but he is still a member of this House, and he is entitled to the courtesy of every hon. member-


Some hon. Members:: Hear, hear!


Walter David Baker: He will not be judged as to what is right or wrong here but in another place, if the government chooses to move.
The hon. member for Leeds has stated categorically in this House what happened. He was intimidated.
Given the greatest licence with either of the official languages, given the compression of time from one o'clock and over the week end to consult counsel to "you must do something by four o'clock or something is going to happen," and given the alternatives, no one could argue honestly or reasonably that any person faced with that situation and with the people the hon. member was facing-the top security people in the country, not the RCMP-could fail to feel that there would be intimidation. 1 think the hon. member could be held not to have hold of his senses if he said that.
Privilege
The other side of the question is whether a member of parliament, a person who is supposed to have special privileges over the public and has them by the traditions of this House, should thereby be denied the right of counsel, is a proper thing-and that seemed to be what the Prime Minister was saying. If that is the argument, then the Prime Minister has suggested that the rights of a member of parliament are to be denied.
All the hon. member for Leeds has is a statement by the Solicitor General made in the presence of two security officers of the Crown, followed by a compression of time and a change of ground rules which led the hon. member to the conclusion that he was being intimidated. The issue before this parliament is whether the privileges of that hon. member have been contravened.
There is another aspect, Mr. Speaker, and that is the question of the bugging of the telephone. That is a very important aspect because there has been an undertaking given by the Prime Minister to the Leader of the New Democratic Party (Mr. Broadbent) and the leader of this party that during his tenure as Prime Minister no telephones of members of parliament have been bugged. 1 hate to say it, and perhaps the Prime Minister has been misled, but that evidence now is contravened.


Pierre Elliott Trudeau: By whom?


Mr. Speaker:: Order, please. 1 want to be clear on this point.
1 understood the hon. member for Leeds (Mr. Cossitt) to say he had an indication that a telephone conversation was being recorded at the other end, which is a separate thing from a wire tap on a telephone. 1 do not necessarily regard it as any less serious. I simply say it is a different thing. 1 think we should be fair.


Walter David Baker: 1 am glad you regard it that way, sir, because I regard it the same way in terms of the kind of investigation that is being carried on of a member of parliament. If this is being done to members of parliament, then one wonders about matters elsewhere. But that is a side issue.


Pierre Elliott Trudeau: It sure is!


Walter David Baker: The issue is whether or not it is appropriate in the circumstances for any citizen who is told, in terms that a person with half an ear could understand, that he faces criminal charges or charges under the Official Secrets Act, to be allowed to consult his counsel, and faced with the compression of time that does not allow it to happen, as the hon. member for Leeds has said, whether his privileges as a member of this House have been breached. That is the issue for you, sir, as Speaker. The question of whether there has been a breach of the Official Secrets Act is not going to be decided here. It will be decided in some other place. It is on that narrow and important ground of the privileges of a member of parliament that I ask you to decide the issue.

March 2, 1978
Privilege


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I was not in the House when this matter arose originally. I came in when the Leader of the New Democratic Party (Mr. Broadbent) was speaking and, of course, I listened with interest to what the Prime Minister (Mr. Trudeau) had to say.
I have been here a long time, Mr. Speaker, but I have never heard a more hypocritical statement made by anyone than when the Prime Minister this afternoon wrapped himself in the garments of purity and spoke as though it were the Sermon on the Mount that this House was to receive.


Some hon. Members:: Hear, hear!


John George Diefenbaker: Do I hear an interruption?


Pierre Elliott Trudeau: No, no.


John George Diefenbaker: I would be very glad to have assistance at any time when I say this-the whole situation goes back several weeks. No one has caused the government more worry and concern than the hon. member for Leeds (Mr. Cossitt). He has revealed things that have caused them difficulties, so he must be obliterated, it seems. That was apparent today in the speech of the Prime Minister. To think that any member of parliament dared speak out against this government impressed him as dangerous to the safety of the state. 1 said it was hypocritical-it is Machiavellian as well.
His whole attitude this afternoon-and 1 admire a good debate and he explained himself and revealed himself with unusual clarity-was "we must get rid of the hon. member for Leeds because he dares to speak out." Only in the last few days the Prime Minister was reported as having said, "I never speak to him". I heard him say it. If the Prime Minister were to stand up when he interrupts I would be only too glad. The Prime Minister said that he would have nothing to do with the hon. member for Leeds. He said, "I just do not acknowledge his presence."
Today was the culmination of events. What a wonderful opportunity for the government to get rid of this person who has proved to them that he does things they do not like. The Prime Minister spoke of patriotism in quivering terms. I could deal with that, going back to the days of war.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John George Diefenbaker: The right hon. gentleman has full appreciation of what I have in mind. He speaks of the terrible risk to security in this document. 1 do not know what it contains. Does the Prime Minister know? He does. That convinces me it must be very bad. After all, in the last couple of weeks when revelations were made concerning the operations of the USSR in Ottawa the Prime Minister said, "I did not pay much attention to that-after all, we all spy."
Above everything else in this House a measure of respect must be shown, whether by the government or by the opposition, without which this House would not operate.

I go further and say that, in my opinion, under the law a search cannot be made of the office of a member of parliament in this House of Commons without the permission of parliament.


Some hon. Members:: Hear, hear!


John George Diefenbaker: You cannot do that. It has never been done. It cannot be done without the permission of this House. Are members of parliament going to vote to permit an act of that kind? I remember well when a member of this House, Mr. Rose, was ultimately charged with a variety of treason. He had all the rights of parliament. Mackenzie King was the Prime Minister and he insisted that parliament, above everything else, was important in the preservation of the rights of individuals represented here.
What is behind all this? The government is afraid of the hon. member for Leeds. It is frightened of the revelations he can make. It decides to intimidate him, and every other member of this House, by a pretence that a search can be made. All that is asked for is a reasonable course of action- "Give me an opportunity. Monday 1 will be available and whatever orders have been determined I shall submit to."
The Prime Minister admitted a moment ago that he knows the contents of this document. Well, if he does, why the rush? He knows what the document is. It cannot be hidden between now and Monday because he knows what is in it. I did not expect that admission from him. But that clarifies the situation for me that what is happening here, Mr. Speaker, is something similar to what happened in the United Kingdom in the 1630's to 1640's when members were intimidated. He knows what the contents are. There is going to be no revelation by this search. If the member for Leeds were to hide it, the Prime Minister could produce the copy he has because he knows the particular document.
Surely it becomes more apparent than ever that what he has in mind is vindictive in every sense of the word. How dare anybody criticize him in any way or do anything that might be revealing of something he does not want seen or heard. That is the position. It is as simple as that. I suggest to the Prime Minister, while he made a very valuable and very effective speech, because I always admire that type of debating, that he give his conscience an opportunity at this moment and say, "I will give him four days. I am not going to suffer, the Government of Canada is not going to suffer, and security is not going to suffer." On the other hand, if he does not agree to that, what he is endeavouring to do is close the mouths of the members of the House of Commons because criticism has become quite general of this government today.
1 remember the days when I was Prime Minister and we had a deficit of $750,000, how they howled over there. This year it is $10,000 million. They want to cover up, they want to conceal, they want to delude. Mr. Speaker, if you permit the Prime Minister and the Minister of Transport (Mr. Lang) to dictate to this House of Commons the right of search without
March 2, 1978

a decision of this House, then our rights as parliamentarians will cease.
I do not say we are above the law; we are not. This institution is based on the independence of the individual; the right to speak; the right to say what one will even though it may be wrong; the right to be free from the laws of libel and slander, not the right to commit offences. But before proceedings can take place against a member of parliament such as is threatened by the Prime Minister, then have a vote. I know how the vote will go because they will line up like so many sheep on the government side.
I make this appeal, to you, sir. Never have you had a problem more significant to the preservation of the independence of this institution, and it now rests upon you. I ask you to preserve that independence. To that end 1 ask you to accept the suggestion of the Leader of the Opposition (Mr. Clark) who, in a particularly telling speech, dealt with the situation objectively, thoroughly, fairly, and effectively. Grant the right of the hon. member for Leeds to have a few days grace during which time he determines, on the basis of legal opinion, what course he shall follow.
This question has been fought out in the United Kingdom. I cannot think of the name of the son-in-law of Winston Churchill-


An hon. Member:: Soames.


John George Diefenbaker: It was 1938 or 1939. He was before the House for revealing information that would be beneficial to the enemy. It is an interesting case. But there parliament acted. It did not have behind it, in the determination that was made, the vindictiveness that was shown this afternoon by the Prime Minister and by the Minister of Transport-at least until the hon. Minister of Industry, Trade and Commerce (Mr. Horner) came in the House.


Some hon. Members:: Oh, oh!


John George Diefenbaker: Provide three or four days. Nothing can be lost. He cannot conceal. The Prime Minister knows the contents; the government has the document. Why then not allow, not the quality of mercy, but the quality of preserving for this House and its membership protection against threats based in large measure on political vindictiveness?


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, 1 rise for just a few minutes because there is one point of detail that concerns me in this whole situation. It is because the detail I have in mind is an important one that I take the time of the House to raise it.
A few weeks ago the Royal Canadian Mounted Police wanted to search the office of a member of this House who was suspected of having violated the Criminal Code of Canada. The police officers in that case were a few levels below the Solicitor General (Mr. Blais), and General Dare, but they approached Your Honour first. It so happened that
Privilege
Your Honour called some of us in to your chamber to discuss the matter with you. You made it clear that it was your decision whether the matter at issue outweighed the privilege of the member and whether permission should be granted to the police to execute such a warrant. In that particular case you had asked the police to be more particular, to have a more solid case than they seemed to have at first. When they did finally get a search warrant from a judge, they came to you again. You had to make the decision. I speak of that matter as one concerning which I have some knowledge because, as one of the House leaders, I was called in to your office on those two occasions.
You told us, sir, on one of those occasions, that when a search warrant was executed against Senator Giguere in the other place, in that instance the consent of the Speaker of the Senate had to be obtained before it was executed. To me this is very important. I am not revealing any secrets when I say that I admitted in the meetings in your office that our privileges did not give us the right to break the law and get away with it. On the other hand, our privileges have to be considered. It was our view then, as it has been my view for a long time, that in a case like this it is the Speaker, as the protector of the members of this House, who has to weigh the evidence and decide whether the privileges of the member entitle him not to have a search warrant issued, or whether the right to execute that warrant should be granted.
What bothers me in this case, unless Your Honour interrupts me and tells me that you were informed, is that that course seems not to have been followed. In the case of the hon. member for the other side, the police officers dealing with it were up the ladder, but they were not as high as General Dare and the Solicitor General. These two seem to have taken it unto themselves to inform the hon. member for Leeds (Mr. Cossitt) that under certain circumstances a warrant would be issued.


Mr. Speaker:: In fairness, I have to interrupt the hon. member. I thank him for his references to the other experiences. I have to indicate that I was advised sometime this morning, at about the time mentioned, of the risk that in some circumstances a warrant would be applied for. There was nothing more than the advice of that. 1 took it as courteous advance notice that some points on these matters may be raised. There was no indication of any position. It did not go that far. It was simply courteous advice in advance that the matter might come up later.


Stanley Howard Knowles: I thank Your Honour for that interruption and for filling in that part of the information. Your Honour has underlined the point that I am making. You were advised, but you were not consulted.


Pierre Elliott Trudeau: Come on, Stanley. There was no writ issued.


Stanley Howard Knowles: The Prime Minister (Mr. Trudeau) says, "Come on Stanley." Well, Stanley is here

March 2, 1978
Privilege
and he is concerned. He is concerned about the rights and privileges of members of parliament. I made it very clear that I do not think those rights give us unlimited licence to do anything, to break the law and get away with it.
Not only have we information that the Solicitor General and General Dare in a sense intimidated the hon. member for Leeds, but the Prime Minister in his speech this afternoon said that the government considered last night and this morning the various choices open to it. One of those choices was telling the police to go ahead and get a search warrant against the hon. member for Leeds.
Apart from the fact it seemed to me to be an element of intimidation, in the way the Prime Minister spoke this afternoon, I am concerned about the rights of parliament. 1 do not think we have unlimited licence. I do not think we can expect never to have search warrants or warrants for arrest issued, but surely it is a well established principle that before that takes place, Mr. Speaker has to be brought into the picture, not just in terms of being courteously advised but being given the opportunity to weigh the evidence and to make the decision.
In the two cases to which I referred, the case of a member of this House who was suspected of violating the Criminal Code and the case of Senator Giguere, in both cases Mr. Speaker consented. I suspect in this case, if Your Honour had been asked and you had called in the House leaders, that consent probably would have been given. However, for a government to ride roughshod over that tradition and for it, just because it is the government-


Mr. Speaker:: Order, please. In fairness, I do not think I can divulge anything more, but I must say that is not really a fair interpretation of what took place. It seems to me that the tone and the content of the advance notice this morning were an acknowledgement, in the very terms of the notice that it was my authority that would have to be invoked if a search warrant was going to be executed in these premises.


Stanley Howard Knowles: 1 am glad Your Honour has interpreted it that way and that if the government is going to ask for a search warrant Your Honour will be consulted. However, added to all of this is the suggestion of intimidation. The Prime Minister and his colleagues seem to think because they have responsibility, and 1 recognize that they have it, they also have the control of the police and they can do what they want. This should be resisted. The privileges and rights of parliament should be maintained.


Hon. Marc Lalonde (Minister of State for Federal-Provincial Relations):: Mr. Speaker, I think the number of interventions in the debate this afternoon gives an indication of the seriousness of both the matter and the documents involved. Many interventions were made, and the Minister of Transport (Mr. Lang) as well as the right hon. Prime Minister (Mr. Trudeau) indicated very clearly what the legal position is, in

this regard, and what the position is from the national security point of view, which is clearly involved in the matter.
What the Minister of Transport indicated very clearly is that when the police get a search warrant, they do not usually consult ahead of time the person whose place is going to be searched, nor do they say to him: Please, would you be so kind as to give us the documents or objects you have in your possession, because otherwise we will have to get a search warrant and will get hold of them forcibly?
On the contrary, generally speaking, one goes to the trouble of getting a search warrant to make sure that the objects or documents wanted by the police are not destroyed, even though the courts may subsequently be asked to decide who their rightful owner is. In this instance, the Solicitor General (Mr. Blais) took extraordinary steps to accommodate the hon. member for Leeds (Mr. Cossitt) by asking him to kindly hand over voluntarily the documents in his possession, which he recognizes do not belong to him, and which he recognizes bear the mention "Top Secret" and which documents pertain to national security.
No other citizen is entitled to comparable treatment and, once again, there was no question of making any accusation against the hon. member at that point. The only matter at hand, at that time, was that he was asked to hand over the documents which obviously were stolen documents. As the Prime Minister pointed out, no one says the hon. member for Leeds stole them, but the very fact that they are in his possession proves very clearly that they were stolen from the security service.

I am glad the hon. member for Winnipeg North Centre (Mr. Knowles) has raised the point in opposition to the right hon. member for Prince Albert (Mr. Diefenbaker) that before a search warrant is issued and put into operation in the House of Commons, Your Honour has authority, and your consent is required. In the present case, when Your Honour was approached today it was not to ask for authorization to serve a search warrant but simply to apprise you of the situation and the potential difficulties that may arise and that eventually a search warrant may be issued. At that time Your Honour would have been approached formally and the appropriate steps would be taken by Your Honour in whichever way you may want to achieve it.
1 find some difficulty with the argument put forward by the hon. member for Grenville-Carleton (Mr. Baker). He argued that his leader was correct in not informing the hon. member for Leeds (Mr. Cossitt), and I think I quote him correctly, in order to prevent the possibility of the document being tampered with or destroyed. How can the hon. member argue that his leader is right to act in that way, and then turn around and ask the government to give the hon. member for Leeds four days to think about what he is going to do with the document? The situation is very clear.
March 2, 1978

The hon. member has in his possession documents of a top secret nature relating to the security of the state, affecting our relations with other countries, and he has already used those documents inside the House and outside the House. And the only thing which has been asked of him as a responsible member and as a good Canadian is to hand over those documents to the people to whom they belong, that is, to the RCMP.


Sinclair McKnight Stevens: Because they are embarrassing to you.


Marc Lalonde: I will not comment upon the rather lighthearted way in which the right hon. member for Prince Albert (Mr. Diefenbaker) dealt with this issue except to say this: as the hon. member for Winnipeg North Centre has indicated, what is required is not the consent of parliament, as such, but the consent of the Speaker before a search warrant can be enforced here. Since the right hon. gentleman was wrong on that point, I suspect the rest of his argument falls into the same category.


Some hon. Members:: Oh, oh!


Marc Lalonde: 1 will give the right hon. gentleman one assurance, however. He says we want to get rid of the hon. member for Leeds. I can tell the right hon. gentleman that we do not need to try to get rid of the hon. member for Leeds or to try to get rid of any of the hon. members in the opposition. They seem to be doing very well themselves.


Some hon. Members:: Hear, hear!


Marc Lalonde: This is a very serious issue indeed, and we on this side take it very seriously. It seems to me that since the hon. member claims he needs time to consult with a legal adviser, and since he claims that the time limit which has been given to him is too close in that respect, 1 would suggest for your consideration, Mr. Speaker, that the House might give thought to the following possibility-what is of concern, here, is the security of Canada-


John Carnell Crosbie: Nonsense! The security of the government!


Marc Lalonde: Some members across the way do not even seem to realize that those documents are extremely relevant to the security of Canada. If they do not see that-


Charles Joseph Clark: We just have your word for that.


Marc Lalonde: -they don't know what is relevant to the interests of this country. What are involved here are extremely important documents having to do with the security of the state. It is important that there be no destruction, no tampering, and no revelation of those documents to anyone not authorized to have access to them.


Charles Joseph Clark: You have that guarantee from the hon. member for Leeds (Mr. Cossitt). You had it earlier.
Privilege


Marc Lalonde: I suggest that, while reserving our right to move a motion on this important issue, we should ask the hon. member for Leeds to hand over immediately to you, sir, as a guardian of the rights of this House, all the documents relating to this question that he has in his possession.


Mr. Dick:: If he has any.


Marc Lalonde: He said himself he had documents. The hon. member who sits next to the hon. member for Leeds does not seem to realize what the hon. member himself has said. I suggest he give those documents to you, sir, with a commitment that no copies are to be made and that the contents will not be revealed to anybody until the House has disposed of this issue.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I must say I had myself intended to interpose just a few moments ago to make a similar suggestion. We are now approaching a practical solution to an interesting problem. I would remind the House we might very well find ourselves talking the subject through until Monday morning in which case the problem would be resolved after a fashion-I do not make this comment in an entirely facetious way.
1 am disposed to try to find a solution. We have now reached a point at which five or six questions, each of them important from a parliamentary point of view, have been raised, and a great deal of study will be required before I can resolve any of those questions. It will certainly be difficult to do so by tomorrow at noon. It might very well take until Monday to come up with answers to some of the problems which have been raised. I do not want to gainsay the argument, but I believe the minister has put forward a proposal which meets the difficulty.
1 assume, as did the minister, that there is an admission that some documents are in the hon. member's possession; I do not know whether that is in dispute. What I am saying is that I would prefer to have until Monday to consider these matters and reach conclusions about them. In the circumstances perhaps the hon. member for Leeds (Mr. Cossitt) might consider that he was well served and that the House was well served if I were to keep any documents he might have in his posssession, over the week end. We might as well find out now whether that is the situation and, if it is, we can stop this discussion now and get on with the opposition motion. That would give me an opportunity to examine those questions which have been raised.
I might also say that while the arguments put forward are very interesting and complex, the position of the Speaker has not yet been fully tested in a way which would allow me to come down with a definitive decision. The hon. member for Leeds has been advised that certain steps might be taken. If they were taken, that would raise certain very interesting questions which have been dealt with in the past as questions of privilege. However, the fact that certains steps my be taken is not enough to consitutute a basis for a ruling. The more serious question is: what happens if and when the moment

March 2, 1978
Privilege
arises? At that point some decision has to be made. It would be helpful if some solution were reached which could enable the matter to stand until Monday and we ought to find out whether that can be done.


Mr. G. W. Baldwin (Peace River):: Mr. Speaker, you have raised a very important issue, but in the light of the statements which have been made, and knowing this government, what may we expect unless Your Honour is able to give the House some advice in case we have to deal with a repetition of these events?
We are not looking at one simple event. We are looking at a government which has shown its willingness to continue practices of this kind. We have heard an inflammatory speech by the Prime Minister (Mr. Trudeau), which is bound to prejudice any trial which might take place at some time in the future if a decision is made to lay a charge. The hon. member for Leeds (Mr. Cossitt) has been prejudiced deliberately by the Prime Minister in his speech today.


Some hon. Members:: Hear, hear!


Gerald William Baldwin: "Upon what meat doth this our Caesar feed, that he is grown so great" to be able to make speeches like that?
I listened to the hon. minister with interest when he spoke about search warrants. He is a member of a government which has made a careful study of dispensing search warrants. However, 1 forgo dealing with that matter at this time. The Minister of Transport (Mr. Lang) and the Prime Minister are members of a government which, on a question of a breach of law, deliberately broke the law and kept breaking it for several months. The Prime Minister was aware of that, as was the Minister of Transport. They are experts at that as well.
There are two issues before the House. One is not really an issue with which we can deal. That is the question of whether there has been a breach of the Official Secrets Act, whether the hon. member for Leeds and/or some other people are in breach of that act. Abominable an act as it is in some respects, it is still the law of this land. Perhaps that is something which will have to be dealt with. Pushing that off to one side, the question is: what are the rights of hon. members of the House?
The Solicitor General (Mr. Blais) indicated that he went to see the hon. member for Leeds in a friendly and amiable spirit to discuss this just as another member of the House. If that is the case, why did he take the chief of security with him? If the Solicitor General went there in a spirit of reason, why was he accompanied by the chief of security? I see the Prime Minister is laughing.


Marc Lalonde: He is not.


Gerald William Baldwin: If it was not the Prime Minister, then it was one of his followers who were expecting him to laugh.


Some hon. Members:: Oh, oh!


Gerald William Baldwin: The Solicitor General has known about this for some time. He was asked questions in the House which indicated beyond any doubt that he realized or suspected that the hon. member for Leeds had a certain document in his possession. Whether the possession of that document, and the continued possession of it, constitutes an offence against the Official Secrets Act is not for the House to decide. I think we are all agreed on that. Under those conditions, the Solicitor General went there with a law officer. There is no question that he went there with more on his mind than merely to make a reasonable suggestion to turn the document back. That is the question Your Honour has to consider. That is the basis upon which we approach this whole question of privilege.
As the hon. member for Grenville-Carleton (Mr. Baker) indicated, the fact that the Solicitor General was accompanied by an officer of the law can be construed only as a method of intimidation. If Your Honour read the section of the Criminal Code which deals with intimidation you would realize there is no doubt that what the Solicitor General did was an offence against that section. There is no question about that. Why did he not go there privately as another member of parliament and say to the hon. member for Leeds, "I am here to discuss this with you privately and in a personal way"?


Jean-Jacques Blais: That is exactly what 1 did.


Gerald William Baldwin: Why was the Solicitor General accompanied by an officer of the law? The Solicitor General should know something about law. So far in his capacity as the Solicitor General he has not displayed that he does. If he knew anything about law, he would have known that he should have given the hon. member for Leeds a warning before going there with a law officer. Anything said without a warning is not-


Some hon. Members:: Oh, oh!


Gerald William Baldwin: The Solicitor General wants it both ways. He wants to be able to stand up in the House and say, "I went there without any intention of laying a charge. I went there as a friend and as a fellow member". But he took with him the chief law enforcement officer of the-


Some hon. Members:: No, no!


Gerald William Baldwin: That is exactly what happened. That is a completely new and unique situation about which we have to worry. 1 know the hon. member for Leeds. He has taken into account what has been suggested. He has no intention or desire to do any damage to the security of this country. As 1 understand the situation, it was because the government was refusing to act, or not prepared to act, with regard to security matters that the hon. member for Leeds, with courage, rose in the House and asked those questions.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: That is the truth.


Gerald William Baldwin: They stand convicted by their own words of very improper and indecorous conduct. Irrespective of what
March 2, 1978

happens on the issue regarding the Official Secrets Act, we cannot leave uncontested and unchallenged the conduct of the Solicitor General and his minion whom he took with him in an attempt to intimidate and coerce the hon. member for Leeds into making statements and confessions, under the pretence and guise of being his friend. That is conduct which cannot be forgiven.


Some hon. Members:: Hear, hear!


Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, I will attempt to be as brief as I can. I should like to make two points arising out of the contribution of the Prime Minister (Mr. Trudeau) to this very important question of privilege, one of which 1 believe was important and well taken; the second of which I believe is specious and offensive. I will deal with the first one in a moment. The second one concerns the right hon. Prime Minister sitting in judgment on the patriotism of his colleagues in the House of Commons. That is completely offensive to any hon. member. I do not want to attribute to him any qualities of judgment which might put him in that exalted position.
The history giving rise to this debate started at least 10 or 11 days ago, I believe on February 21. If the assurances given to us today are true-and I doubt that-a vigilant and diligent Solicitor General (Mr. Blais) would have been warned that a very important document had apparently left the control of the security services at that time. The questions which were put in the House by the hon. member for Leeds (Mr. Cossitt) over a period of days and weeks were not such as to embarrass the government because of a leaked document. They were such as to embarrass the government because, in the opinion of the hon. member for Leeds-and that opinion is shared by many-it was not diligent enough in enforcing security matters in this country.


Some hon. Members:: Hear, hear!


William Herbert Jarvis: There was no suggestion that the hon. member for Leeds, or any other member who was asking questions at that time, was embarrassing the government because there was a leak in the security services. The thrust of the questions was: get with it and do something, because assurances have been given in the House since last November, which the government has had to back up on time and time again.
When the minister responsible for inter-governmental affairs asks us to accept his assurance of the importance of this document, I will not accept it, because we have received assurances since last November which the government has backed down on.


Some hon. Members:: Hear, hear!


Marc Lalonde: Don't you believe the RCMP?


William Herbert Jarvis: I am not going to deal with the hon. minister any more. He is not worth it.


Some hon. Members:: Oh, oh!
Privilege


Some hon. Members:: Right on!


William Herbert Jarvis: The Prime Minister indicated quite well the choices that were available to the government. One choice was search and seizure or arrest. If anyone reads the act, he will see that choice was open to the government. The Prime Minister laid out that choice very well, and 1 accept that. The other choice was to solicit the co-operation of a member of the House. The Prime Minister's telephone call to the hon. Leader of the Official Opposition (Mr. Clark) was well taken. It was incumbent upon him to do that, and I compliment him for it. With respect to the role of the hon. Leader of the Official Opposition having received that call, the Prime Minister pointed out the alternative. 1 believe the hon. leader of my party operated honourably in terms of discharging that responsibility-
1 thought there was an alternative of going to Mr. Speaker and saying, "This is the problem. Will you act as arbitrator?". That was alluded to by the hon. member for Winnipeg North Centre (Mr. Knowles). That can be forgotten, and we can return to the other two alternatives: search and seizure or arrest on one hand, co-operation on the other. Where I quarrel with the Prime Minister is that he did not do either. He embarked on a fumbling, stupid expedition to the member's office, heavy handed, bullying intimidation.


Some hon. Members:: Hear, hear!


William Herbert Jarvis: It was completely incompetent. Clearly he should have followed either of two choices. It may have given rise to a question of privilege, but not of the seriousness of the matter with which we are dealing today, nothing compared with it. A search warrant, of which Mr. Speaker may have been apprised, could have given rise to a question of privilege, and an effort to enlist co-operation in the ordinary manner could have-although it is not likely-given rise to a question of privilege. But that is not what happened, as the hon. member for Peace River (Mr. Baldwin) pointed out.
Into the hon. member's office came, first, the Solicitor General, second, the chief security officer of the Crown, and third, a document was brought showing what would happen in terms of choices available to the government if the hon. member did not co-operate. I use the word co-operate very loosely because that is not co-operation but, as was pointed out by the hon. member for Yukon (Mr. Neilsen), it was intimidation of the clearest form. When the Minister of Transport (Mr. Lang) starts talking about the law, let me tell you that he now knows less about the law than he knows about transport, and that is rather remarkable because he knows nothing about transport.
Surely the Prime Minister must acknowledge, with respect to those two clear alternatives, that the mess in which we are now-and it is a serious one-is because he took neither choice. He did not take advantage of the right under the Official Secrets Act for search and seizure, nor did he solicit in

March 2, 1978
Privilege
any ordinary, acceptable way, the co-operation of a member of the Elouse, and he has to pay the price for it.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. Much has been said this afternoon about the position of the Chair in respect of search warrants. The hon. member for Winnipeg North Centre (Mr. Knowles) made some reference to the practice that had taken place in an earlier case. That was a situation in which the circumstances were somewhat different from this, and I want to outline to the House the procedure that I followed on that occasion.
In that situation we were dealing with an investigation that had been ordered by me into allegations of misconduct on the part of a member. It was evident that, certainly if the Chair was not about to take action in that respect in the face of public allegations of misconduct, the matter would have been raised in the House in some way and some resolution or decision of the House would have been sought to take the same step. Therefore the action was seen to be one that was warranted on behalf of the House in the circumstances. In the face of public allegations of that sort an investigation was immediately ordered. Therefore, when the conclusion of that investigation was that a search of a member's office seemed to be in full keeping with the proper course of the investigation, and since it was at our request that the investigation had been made, it seemed to me to be rather untoward to suggest that the investigation should be thorough to that point only but should not be thorough enough to complete the search, if that was sought.
However, as the hon. member for Winnipeg North Centre indicated, I did require, if it was the intention to proceed with a formal charge, that a formal charge be laid and that, in conjunction with that charge, a search warrant be obtained and that I then be presented with those two things as a fait accompli. Having done that, after the first request I consulted the House leaders to advise them that the request had been made and of the step I had taken in telling the investigators to complete their work, and if they felt a search was necessary in the circumstances, to come back. They completed their work and came back with the information, and a search warrant accompanied the sworn information or the charge. Again 1 called the House leaders into consultation and asked them. "We are faced with this as a fait accompli, what do we do now?" 1 think I am being fair in saying there was a consensus that it would be improper to prevent in any way the execution of that search in the given circumstances. I say that as an indication that in a situation in which an investigation was ordered by the Chair, that was the attitude 1 took.
I would certainly think that my attitude, in attempting to safeguard the rights of members in the same way, would at least be the same, in the face of the situation where a warrant was being sought under circumstances in which it was contested, or in a controversial situation. May 1 therefore say for the benefit of the House that the procedure I would follow, if the option is pursued, would be precisely the same.

It is not for the Chair to decide, as has been suggested, nor indeed for the House to decide, if matters of national security are at issue, because we have no mechanism for making that decision, and it is not for the Chair to decide if an offence is suspected or being committed. It is not a decision that the Chair can make. However, if I am advised by the Prime Minister (Mr. Trudeau), upon his best advice, that a matter of security is at issue and that, in conjunction with that matter of security, an offence of some sort is suspected, and also that a search of premises in these buildings is indicated, 1 would certainly immediately call the House leaders together to indicate to them that 1 have been advised by the Prime Minister of the circumstances and that, unless somebody could persuade me otherwise, it would be very difficult for me to indicate that the matter should be turned back.
However, we are in a hypothesis because the step has not been taken. Having taken that step and followed that course in the past, I would insist on that kind of assurance in the first place before I called the House leaders together. What would happen then remains to be seen. This is for the guidance of the House, and it is by no means a definitive decision or a precedent by way of laying down practice for other Speakers. It is the way I would proceed in the circumstances.
As I indicated earlier, many of these questions remain unresolved. They will have to be researched further to determine whether or not there is authority for any of the several other propositions that were advanced here today or whether in fact 1 am acting properly if I follow those steps. Precedents tells me that I have acted properly in the last instance. I would want to be quite sure, because of the controversial nature of this matter, that I am acting according to precedents, were I to follow the same course. Certainly that course would be the minimum that I would want to follow in endeavouring to safeguard the long-standing right that no member's premises are subject to search in this building without the permission of the Speaker. Whether or not an order of the House is required is a new proposition which will have to be investigated. However, it will take some research and some time.
On the arguments that have been put forward by both sides today, obviously the Chair will have to take some time to come to a resolution. Again 1 come back to the fact that, so far as the Chair is concerned, we are in a hypothetical situation. However, the hon. member for Leeds (Mr. Cossitt) raised a question today and said he was visited by the Solicitor General (Mr. Blais) in his office. I suppose that theoretically it is possible to suggest that an uninvited visit by anybody, including another member of the House of Commons, might be a matter of privilege. I do not know that; 1 suppose that argument can be put forward. There is no motion attached to the hon. member's question of privilege at this time and no matter is before me at this time for a definitive decision.
What the hon. member for Leeds asked today was for permission to raise the matter, which indeed has been well contributed to on all sides of the House, and the reservation of his right, which of course is unquestioned, to carry the matter further depending on what circumstances take place. There-
March 2, 1978

fore, in that sense the matter remains in a hypothetical state as well. I would only hope, because of the contributions that have been made, that between now and when the House resumes tomorrow at eleven o'clock some enlightened wisdom will visit both sides which may lead to some resolution which will prevent a confrontation. If there continues to be a state of confrontation tomorrow, the argument will have to be finalized in some way so that the Chair can deal with it.


Thomas Charles Cossitt: Mr. Speaker, I was absent from the House for a few moments, but I understand that the suggestion was made that I consider turning over anything I have to Mr. Speaker. I feel that your suggestion may have some merit. I do not mean to be critical of the Chair, and perhaps that is the wrong phrase to use, but I would like time to consider the matter.
I regret to report to the House, Mr. Speaker, that I have evidence that since the House met at two o'clock this afternoon my office was entered by persons unknown. I do not know who they are, but my office was entered. 1 would like to ask if permission was received from Your Honour, the Sergeant-at-Arms or any person responsible for giving such permission.


Mr. Speaker:: Order, please. The hon. member has been able to watch me since two o'clock this afternoon, so I think the answer to the question about permission from the Chair is clear.
However, I have indicated that the matter remains in a state of reservation at least until tomorrow when the House sits at eleven o'clock. I think the matter ought to stay under reservation to see if it resolves itself. If it is still a matter of contention at eleven o'clock tomorrow, at twelve o'clock after the question period I hope the matter will be put into some form so that the Chair can deal with it in a definitive way.


Erik Nielsen: One further point, Mr. Speaker-


Mr. Speaker:: Order, please. I do not know under what authority the hon. member for Yukon (Mr. Nielsen) is seeking the floor at this time. The discussion on the question of privilege has been contributed to by him. There cannot be further discussion by him on the same question. Does the hon. member have a separate matter to raise now?


Erik Nielsen: Mr. Speaker, if need be, it will be a separate matter because it is far too important to let lie. This matter arises out of Your Honour's remarks with respect to the suggestion that if the hon. member for Leeds (Mr. Cossitt) had any documents, he might leave them in Your Honour's possession over the week end.


An hon. Member:: That is not separate.


Erik Nielsen: Yes, it is separate. There are two points which lead me to suggest that the suggestion is ill-conceived. In the first instance, in my view it would compromise the Chair, if there are such documents in existence, to place them in Your Honour's possession. Second, it would certainly compromise
Privilege
any possible future charges which might be laid, if that be the intention of the government, with respect to the hon. member for Leeds. With the greatest of respect I say that Your Honour should not be requesting any disclosures by the hon. member for Leeds at this stage. Those are two very sound positions.


Mr. Speaker:: I do not understand the suggestion to be that any disclosure be made about the nature of documents. There was a suggestion made only in the sense that the Chair might be asked to reserve for some time or the hon. member might want some time to seek advice. The possible suggestion was that one way to facilitate matters or to eliminate any risk of security, if one exists, would be to follow a course of that kind. However, the idea was certainly not perfected, and it would have to be worthy of serious consideration in great detail before it could be perfected because it is fraught with difficulties.


Allan Frederick Lawrence: Mr. Speaker, I would like to raise a matter on the same point. In the research that might be done on behalf of the Chair over the next little while, I suggest that two further points are very important and that they should be considered. The first is whether this is within Your Honour's jurisdiction.
I fully appreciate that what Your Honour may possibly be doing is extending something far beyond the Criminal Code in relation to permission for the execution of a search warrant in this building. I do not think there is any question that the precedents, both in this country and in the Mother of Parliaments, are such that they permit the Chair to do just exactly that in relation to the Criminal Code. 1 emphasize that in this matter we are not dealing with the Criminal Code.
Linder the criminal law of this jurisdiction there are very specific instances-hoary with tradition and age-which deal with the integrity of people, the morality of people, and physical violence. Those matters are specifically included in the Criminal Code. The Official Secrets Act of this country is not by any stretch of the imagination part of the Criminal Code. It cannot be, simply because there are no standards laid down.
Linder the Official Secrets Act the Attorney General of Canada has to consent before any prosecution can take place. The statutory enactments contained in the Criminal Code are not contained in the Official Secrets Act. I suggest that it is possible that there are people within govenment who believe quite sincerely that the interests of the government are tantamount to the interests of the state. That may not be the case, and I suggest that we may well be treading on very dangerous ground as far as the basic security of freedom of speech is concerned, not only in this country but even more important- because we are the symbols of freedom of speech-in parliament. There has never yet been a Speaker under the British parliamentary system who has extended those rights which are normally in the Criminal Code to a statute the type of which we have in Canada in the Official Secrets Act. This is an extremely important matter.
3404

March 2, 1978
Finance
The second point I would like to make is with regard to research and the reporting of it to the House. I may not have understood Your Honour's words in this regard, but it seems to me that Your Honour is saying that because you have not been informed that any prosecution has been started, or that the Attorney General has given his approval for a prosecution, or that a writ of search and seizure under the Official Secrets Act has even been issued, therefore this is all hypothetical and may not even be a question of privilege. I would like to suggest that Your Honour's research should include the very basic question that a threat to a member of this House, in this building and in his office-not necessarily an act but the threat of an act-does not constitute a breach of the privileges of a member of this House and does not fall within Your Honour's jurisdiction. Sir, I think-


Mr. Speaker:: Order, please. The latter point raised by the hon. member relates to my last remarks. At the moment the matter has not perfected itself as to form in terms of a question of privilege, so I do not have before me the ingredients of a question of privilege in a definite form which enables me to deal with it. If that is what is included in any motion which is ultimately put by the hon. member for Leeds (Mr. Cossitt), that is what we will research.


POINT OF ORDER
Sinclair McKnight Stevens: Mr. Speaker, I rise on a point of order. In the question period the hon. member for Abitibi (Mr. Laprise) put a question to the Minister of Finance (Mr. Chretien) concerning the rate of interest payable on the $200 million which will be taken down pursuant to the $1.5 billion line of credit. The English translation-and I checked this with the French side of Hansard-heard the minister state that it was three eighths of 1 per cent over the LIBOR rate in London. I believe that was an incorrect representation. I believe the figure should be five eighths of 1 per cent over the LIBOR rate, and I would like the minister, if he so wishes, to correct the record.


Joseph Jacques Jean Chrétien: Mr. Speaker, on the same point of order, I sent Your Honour a note during the question period telling you that I meant to say five eighths. 1 said three eighths; my staff verifies that. I have seen the blue. I was so sure that I said five eighths that I checked the blue, but in fact I did say three eighths. The rate is five eighths above the London rate for the first three years and, to be more precise, three quarters after three years.


John Carnell Crosbie: Mr. Speaker, I would like to have a correction made in Hansard for Tuesday, February 28, at page 3331. I was speaking in the late night adjournment debate. 1 have written to the Hansard office about this. 1 compared what is recorded in Hansard against the television recording, and there are a great many differences. Lines have been left out, there are gaps, sentences have been changed around and sentences have been left out. I realize that Hansard has a very difficult job and that I do not speak from a text. 1 speak quickly. I have great sympathy for the Hansard reporters, and I recognize the great job they do, but I must make a complaint about this.
1 would like to correct the third paragraph on page 3331. It now states:
On February 15 during a television program the Secretary of State for External Affairs (Mr. Jamieson) pretended the Gull Island program is now going ahead just because there is an election coming.
I did not say that in relation on the Secretary of State for External Affairs. I referred to the first ministers conference and said it was televised and that on February 15 the Minister of Energy, Mines and Resources (Mr. Gillespie) pretended the Gull Island program was now going ahead, not the Secretary of State for External Affairs. Further down in the same paragraph the report reads:
This was the most dishonest television program ever seen in the history of television. The Secretary of State for External Affairs should have been given an enema award instead of an Emmy award.
1 meant to say that the Minister of Energy, Mines and Resources should have been given an enema award instead of an Emmy award. I should like to have that corrected because I want to make sure the right minister is identified as getting that award.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, because of the matters that took place earlier and as you are aware by looking at the clock, the allotted day which was designated for the New Democratic Party has virtually been used up. There has been some discussion among House leaders about the way in which the right to use the day by an opposition party might be protected. That discussion has led all of us to the conclusion that perhaps if this day was designated as an opposition day or an allotted day, it ought to be now undesignated and we ought to use the balance of this day for government business. That would be on the understanding that an allotted day would be reserved to the New Democratic Party at a time we might discuss. To be fair it would have to be a long day.
The other side of this question and the quid pro quo, not unreasonable in the circumstances, is that we would deal with the bill affectionately known as COLURA and the CNR
March 2, 1978

financing bill through the balance of the day to complete the stage at which those bills are now, that is, second reading in both cases, by the time the House rises on Friday. 1 have consulted with my colleagues and we are prepared to go ahead on that basis. I think that would be the most fair way to deal with the matter, preserving the allotted day and giving the balance of time to the government.
As well, in the event that a vote was called with respect to either of those matters of government business, those votes would be deferred until a time to be discussed by house leaders. I think that is a reasonable way to settle the use of the balance of the day.


Norman Augustine Cafik: Mr. Speaker, the proposition put forward is one that has been negotiated among the house leaders. If I could restate it, our condition would be that there be a house order that all questions relative to Bill C-17 and Bill C-7 would be disposed of by the time the House has completed its normal sitting tomorrow, and in the event of a vote, the vote would be deferred to a time determined by House leaders.
If that is agreed by all members we could proceed with Bill C-17, starting now, which is the CNR recapitalization bill, and then move on to COLURA.


Stanley Howard Knowles: Mr. Speaker, the House leader for the official opposition and the deputy House leader for the government have correctly stated the agreements we reached during the last hour or so. If I might just restate the matter as we understand it, it is that today, which was to have been our allotted day, will be undesignated and another day given to us, the exact date to be determined after consultation. It is understood that just as we had the right to a vote on the motion at the end of today we will have that vote- it may be one day next week-on the same subject matter.
The other part of the arrangement is that we will deal with government business for the rest of today and tomorrow. We are prepared to agree to a House order that the second reading stages of Bill C-7 and Bill C-17 be concluded by four o'clock tomorrow.
As a contribution toward making that possible, and because Bill C-7 is so technical that it ought to be dealt with in committee, we are prepared to let that bill have second reading without debate. So far as we are concerned any time available could go to Bill C-17. We are not asking others to give up the right to debate Bill C-7 but we think this arrangement can be carried through.


Mr. Speaker:: Order, please. The House would then require, by unanimous consent, an order that, by motion of the deputy House leader, seconded by the Minister of Transport, today's designation as an allotted day be annulled with the preservation of the right to the New Democratic Party to enjoy a same day to be designated which will lead to a vote as it would have done today; and that the House will then revert to government business upon orders of the day later this day and proceed to deal with Bill C-7 and Bill C-17; and that it is understood that both matters will finalize second reading by the ordinary hour
Official Report
of adjournment tomorrow. If any vote is necessary at second reading, that vote will be deferred until a time to be specified.
The House has heard the terms of the motion. Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed and so ordered.


Walter David Baker: I think it was understood by the hon. member for Winnipeg North Centre (Mr. Knowles) that the very important subject of the status of women would be the subject on that full opposition day when it occurs.


Stanley Howard Knowles: It will be the same motion moved by the hon. member for Oshawa-Whitby (Mr. Broadbent) put down under Standing Order 58(9), which means there will be a vote.


Walter David Baker: Mr. Speaker, with respect to the business of the House, and since we have disposed of business for the balance of the week, I wonder if the acting government House leader could confirm government business for next week. There is the question of designation of certain other allotted days. Would he rather designate now or wait until there is full discussion?


Norman Augustine Cafik: Mr. Speaker, in so far as business for next week is concerned, it had been agreed by House leaders that next Tuesday, March 7, would be designated as an opposition day; I do not mean that as being the replacement day in the motion we have just dealt with. Next week we will also be dealing with the bill appointing the comptroller general, Bill C-12, and Bill C-26, an act to amend the Criminal Code, the Crown Liability Act and the Post Office Act.
In light of the events that have taken place today there may be need for further adjustment in the orders I have laid down, and as the House leader is not here I should like the opportunity to discuss this matter. There may be some flexibility in the points I have made today.
While I am on my feet, Mr. Speaker, I wonder whether I properly detected a feeling that Bill C-7, COLURA, could be disposed of without debate. If that is the case we could call it in advance of the CNR bill; but if that is not the case we would proceed with the CNR bill and then go to COLURA later this day or tomorrow.


Walter David Baker: Mr. Speaker, I think we had better proceed with the CNR financing. I do not believe debate on COLURA will be long but 1 do not think 1 could say there would be no debate at all.
80033 - 314

March 2, 1978
Order Paper Questions



ROUTINE PROCEEDINGS

[Stage Direction]
[ Translation]

[Stage Direction]
of State for Fitness and Amateur Sport while in Europe, calculated on a 24 hour per day basis for a total of $378,504 and, if not, what calculations were used?
2.	What was the total cost to the public of Falcon flight 3013, which left Canada, Uplands Airport on April 20, 1977, until the time when the Minister of State for Fitness and Amateur Sport finished using the plane and returned to Canada?

Mr. Gerard Loiselle (Saint-Henri):: Mr. Speaker, I have the honour to table, in both official languages, the First and Second Reports of the Standing Committee on Miscellaneous Private Bills and Standing Orders.
[Editor's Note: For text of above reports see today's Votes and Proceedings.]


QUESTIONS ON THE ORDER PAPER
Hon. Barney Danson (Minister of National Defence):: 1 and
2.	The Falcon aircraft in support of the Minister of State for Fitness and Amateur Sport in accordance with the schedule listed in question No. 2,538 of the second session of the thirtieth parliament flew a total of 27 hours, thirty minutes. For further details see question No. 2,881 of the second session of the thirtieth parliament.
(Questions answered orally are indicated by an asterisk.)


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 147, 721, 761, 783, 789, 1,094, 1,168, 1,217, 1,220, 1,248, 1,249, 1,252, 1,253 and 1,255.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. McKinnon: 1.	With reference to the answer to Question Nos. 2,538 and 2,881 of the Second Session of the 30th Parliament, was the cost for the trip of the Minister

Question No. 721-Mr. Marshall:
1.	What is the number of employees on staff at the CMHC Montreal office on the Canadian Home Insulation Programme?
2.	(a) What was the number of calls received by the office in (i) September 1977 (ii) October 1977 (b) what is the breakdown, by province (c) how many of the callers were eligible?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: am advised as follows by Central Mortgage and Housing Corporation: 1. At November 30, 1977 the Canadian Home Insulation Program had 64 employees on staff at its Montreal office, 48 of whom were regular and 16 contract.
2. See table below.
Province	Calls Received
Newfoundland	315
New Brunswick	1,143
Quebec	650
Ontario	10,282
Manitoba	937
Saskatchewan	431
Alberta	17
British Columbia	2,259
Yukon and Northwest Territories	6
Canada	16,040
Canadian Home Insulation Program
September-November 1977
September			October
Kits	Applications	Calls	KitsRequested	Received	Received	Requested554	8	359	4992,530	14	695	1,76953	-	364	6519,119	65	7,259	16,5091,881	11	648	1,5001,068	2	448	1,0712	-	11	74,620	13	2,017	3,7236	-	4	1229,833	113	11,805	25,155
November
Applications	Calls	Kits	ApplicationsReceived	Received	Requested	Received54	199	369	34173	410	695	337-	387	82	-1,236	4,625	7,028	2,271161	484	715	20367	495	918	125-	24	7	-380	1,254	2,078	5261	6	5	-2,072	7,884	11,897	3,496


Mr. Howie: Since January 1, 1977, what amount was paid, and to whom, by Atomic Energy of Canada Limited for agent's fees, sales commissions or expenses in respect of sales of Candu reactors?


Alastair William Gillespie: Atomic Energy of Canada Limited reports as follows: Nil. However, retainer fees of $4,000 were paid on June 15, 1977 and November 23, 1977 to Gebhart Y Associados, Consultores, Apartado postal 5-901, Mexico, D.F. for representational services rendered in marketing Candu power stations.

March 2, 1978


Mr. Herbert: 1.	Is a claimant for unemployment insurance, who is registered at a union hiring hall, obliged to be registered also at an office of the Department of Employment and Immigration?
2.	When an office of the Department of Employment and Immigration receives a request for labour for which union hiring halls have been established, what action is taken?


Hon. Bud Cullen (Minister of Employment and Immigration):: 1. No. Registration at a Canada Employment Centre is not obligatory for a member of a union hiring hall who is claiming unemployment insurance. However, following a reasonable period of time, the member of the union hiring hall is required to carry out an active job search if there are job opportunities in his occupation in the area in which he resides. He may be referred for registration at a Canada Employment Centre when suitable employment opportunities appear to exist in alternate or related occupations.
2. Normally, the Canada Employment Centre receives such requests only when the union has been unable to supply the required labour in accordance with the terms of its contract with the employer. The CEC will search for suitable workers in the normal manner and refer them to the employer or the union local according to the request. All actions taken in these cases are carried out in co-operation with the employer and the local union and are governed by the terms of the collective bargaining agreement.


Mr. Herbert: 1.	Is the government aware of the recent statements that many doctors are now operating abortion clinics similar to that operated by Dr. Morgentaler?
2.	Has the government conducted an investigation into the allegations and, if so (a) with what results (b) is legislative action contemplated?


Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: In so far as the Department of Justice is concerned:
1.	No. See answer to question No. 2.
2.	Not applicable. Any allegations of this kind would be within the jurisdiction of the provincial attorneys general.


Mr. Schellenberger: 1.	What was the total number of CBC employees involved with the production of the film "The Tar Sands"?
2.	What is the name of each person involved with (a) research (b) editing during any stage of the film?
3.	What is the name of the producer of the film?
4.	What was the total number of working hours of CBC employees spent on the production of the film, including preparation, editing and public presentation?
5.	What was the total number of persons interviewed during any stage of the production of the film and what is the name and address of each such person?
6.	What is the name of each location in Canada visited during any stage of the production of the film?
Order Paper Questions
7.	What is the name and location of each television station which has included the film in its programming to date?
8.	What percentage of Canada's population will have been covered by the television stations which have included the film in their programming to date?
9.	Was the film presented to the public, other than through the television media, inside or outside of Canada at any time and, if so (a) in what locations (b) to whom (c) on how many occasions?
10.	Will the film be presented to the public, other than through the television media, inside or outside Canada in the future and, if so (a) in what locations (b) to whom (c) on what dates?
11.	What was the salary of each person employed by CBC while involved with any stage of the production of the film and what was the total salary cost to CBC?
12.	What was the total cost to CBC for (a) travel (b) food (c) lodging (d) related expenses (e) the use of any stage facilities, during the production of the film?
13.	What was the total cost to CBC for network time required for the public presentation of the film and on what basis was it calculated?
14.	What was the total cost for the production and presentation of the film?


John (Moody) Roberts: I am informed by the Canadian Broadcasting Corporation as follows: since a legal action has been commenced against the corporation in respect of "The Tar Sands", it would not be appropriate to reply to this question. See Beauchesne, fourth edition, section 171(p).


Mr. Cossitt: 1.	Did the Canada Council make grants to the Factory Theatre Lab of Toronto and, if so (a) in what amounts (b) on what dates (c) what was the total amount of such grants (d) in each case, for what reason and what were the merits that were considered to make it suitable?
2.	In any one year, did the Council give the Factory Theatre Lab a grant in the amount of $55,000 and, if so, on what date?
3.	To the knowledge of the Canada Council or the government, did the Factory Theatre Lab produce a play entitled "Winter Offensive" and, if so, does the play include (a) references to the insatiable sexual urges and sadistic drives of Mrs. Adolf Eichmann (b) characters Albert Speer, Joseph Goebbels, Adolf Hitler and Adolf Eichmann (c) a simulated sight of a wounded man whose insides were spilling outside on the floor (d) a scene in which a Jewish manservant and maidservant are forced to strip with their hands bound behind them and engage in a battle to the death with their teeth (e) a scene of one of the characters smearing his face with human excrement?
4.	To the knowledge of the Canada Council or the government, did a critic refer to the play as "repellent garbage" and another "reminiscent of a piggery at rutting time"?
5.	Is it government policy to allow the Canada Council to supply public funds to theatre companies producing plays of this nature and, if so, on what date was the policy introduced, who introduced it and will steps be taken to change it?


John (Moody) Roberts: I am informed by the Canada Council as follows: During the current fiscal year the Canada Council made 2 grants to the Factory Theatre Lab. (a) $55,000; $5,000 (b) June 20, 1977; November 16, 1977 (c) $60,000 (d) The first was an operations grant awarded to support the overall activities of the Factory Theatre Lab for the 1977-1978 season. These include: developing a body of original Canadian plays through workshops and major productions; script-reading and dramaturgical services; the exploration of experimental theatre concepts; teaching and other community and services. The second amount was awarded for

March 2, 1978
Order Paper Questions
special workshops where playwrights can see their work produced on stage.
2.	See answer to 1.
3.	Yes.
4.	Yes.
5.	In the case of operations grants, the Canada Council's policy is to provide theatre companies of proven artistic merit and accomplishment with awards that apply to the overall activities planned for a given season. Although companies are required to submit plans and budgets, Council members or officers do not read the scripts of proposed plays nor interfere with the policy or choices of the artistic director.


Mr. Marshall: 1.	Of the amount of $71,539,796 spent on training for the disadvantaged or special needs clients, what is the breakdown of the number of persons taking courses in the Province of Newfoundland under (a) BTSD (b) BJRT (c) WAT (d) Industrial Training Special Needs?
2.	At what centres in Newfoundland are such courses being held?
3.	Of the amount expended, what is the breakdown, by province?


Jack Sydney George (Bud) Cullen: 1. Of the $71,539,796 spent on training for the disadvantaged or special needs clients in 1976-77, the breakdown for Newfoundland of trainees who commenced training in the following courses is: (a) BTSD: 574; (b) BJRT: 38; (c) WAT: 33; (d) Industrial Training Special Needs: 68.
2.	The above types of courses are being offered in the following Newfoundland centres: Corner Brook, Stephenville, Port aux Basques, Grand Falls, Gander, Springdale, Happy Valley, Labrador City, St. John's, St. John's East, Memorial University, College of Trades and Technology, Newfoundland College of Fisheries, Harbour Grace, Marystown, Placentia, St. Anthony, Clarenville, Rocky Harbour.
3.	Of the total amount expended for Canada for disadvantaged or special needs clients, the breakdown by province is as follows: Newfoundland: $3,345,333; Prince Edward Island: $1,362,396; Nova Scotia: $4,956,837; New Brunswick: $3,182,815; Quebec: $25,048,542; Ontario: $14,452,890; Manitoba: $4,882,258; Saskatchewan: $3,990,587; Alberta: $3,354,056; Northwest Territories:	$872,876; BritishColumbia:	$5,893,608; Yukon:	$197,598; CANADA:


Mr. Marshall: What are the details of the Department of Manpower and Immigration's discussions interdepartmentally and with the provinces on the economic growth component of the Canada Works Programme?


Jack Sydney George (Bud) Cullen: Discussions with federal departments and agencies on the Economic Growth Component of Canada Works have been

ongoing since September, 1977. Initial proposals under the Economic Growth Component have been reviewed by the interdepartmental committee on employment development. Discussions with provincial ministers responsible for manpower matters on the Economic Growth Component occurred during the recent joint meeting of ministers of education and manpower in Victoria.


Mr. Cossitt: How many orders-in-council have been passed in each of the past five years for which records are available and (a) what is the total number for the period of time involved (b) in each total how many were classified as top secret, secret, etc.?


Yvon Pinard: (a) 1977, 3,746; 1976, 3,326; 1975, 3,070; 1974, 2,895; 1973, 4,128; Total: 17,165. (b) None were classified.


Mr. Epp: 1.	Did the government contribute to the rice plant at the Fort Alexander Indian Reserve and, if so, in what amount?
2.	Has the plant been placed under receivership and, if so, by whom?
3.	Who are the directors of the plant and what is their present capacity with relation to the Fort Alexander Indian Reserve?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: 1. Yes, as follows: Loans, $496,000.00; Contributions, $83,400,00; Guarantees, $354,000.00; Total: $933,400.00.
2.	Yes, the Department of Indian Affairs and Northern Development accepted a band council resolution from the chiefs of the 17 Indian Bands mentioned in part 3, consenting to voluntary dissolution of the co-op and appointing a receiver.
3.	The co-op has not operated since 1974. The board of directors consisted of elected chiefs of the seventeen Manitoba Indian Bands listed below: Hollow Water, Fort Alexander, Fisher River, Peguis, Lake Manitoba, Brokenhead, Fairford, Lake St. Martin, Little Saskatchewan, Little Black River, Waterhen, Little Grand Rapids, Berens River, Bioodvein, Poplar River, Buffalo Point, Jackhead. All of the directors resigned from the board in 1976.


Mr. Robinson: Is the government aware of the West German government's exploration of the advantages of a salt bed disposal system for radioactive wastes and, if so, is the government studying the feasibility of such a system for Canada?


Alastair William Gillespie: Atomic Energy Control Board reports as follows: the Canadian government is well aware of the work that is being carried out internationally, to study the various geological land formations, with respect to their suitability for use as
March 2, 1978

media for deep disposal of radioactive waste. This includes the work being done in West Germany on the use of "salt domes", and not salt beds as suggested in the question. The Canadian radioactive waste disposal program presently includes the study of rock-salt as a disposal medium, but the main thrust of the program involves the detailed study of hard crystalline, non-plastic rock such as stable granite structures which are found along the Canadian shield in great abundance.


Mr. Cossitt: 1.	With reference to the Prime Minister's reply to a question by the Honourable Member for Leeds on May 31, 1977, page 6109 of Hansard, in part, to the effect that the Liberal Party would reimburse the government for public funds expended in the use of government aircraft flying the Prime Minister to certain points while campaigning in certain by-elections (a) on what date was the Liberal Party billed and what was the amount (b) has the account been paid by the Liberal Party to the government and (i) if so, in what amount and on what date (ii) if not, what steps are or will be taken to collect it?
2.	(a) What type of aircraft was used for each flight involved (b) what were the points of departure and destination (c) what was the cost per flying hour and waiting time and what was the total cost of all flights concerned?
3.	Did the bill to the Liberal Party include anything other than flying time such as accommodations, food and drink, etc., and, if not, for what reason?


Pierre Elliott Trudeau: 1. (a) December 15, 1977, $2,251; (b) Yes. (i) January 17, 1978, $2,251.
2.	(a) May 19, 1977, JetStar; May 21, 1977, JetStar; May 21, 1977, Helicopter, (b) May 19, 1977, Quebec to Summer-side; Summerside to Montreal. May 21, 1977, Ottawa to Rouyn; Rouyn to Ottawa. May 21, 1977, Harrington Lake to Ottawa; Ottawa to Harrington Lake, (c) May 19, 1977, JetStar, $550 per hour x 2.20 hours: $1,284; May 21, 1977, JetStar, $550 per hour x 1.40 hours: $917; May 21, 1977, Helicopter, $100 per hour x 0.30 hour: $50.
3.	No. Expenses were not incurred in this regard.


Mr. McKinnon: What is the target date for the publication of the new white paper on defence?


Barnett Jerome Danson: Work is proceeding on the development of a new white paper on defence, but no target date has as yet been set for publication.


Mr. Speaker:: The questions enumerated by the parliamentary secretary have been answered. Shall the remaining questions be allowed to stand?


Some hon. Members:: Agreed.


Mr. Speaker:: Order, please. I will have to take some direction from the House. Having now reverted to a goverment day do we find ourselves calling it six o'clock, or do we now endeavour to revert to government orders and call orders of the day? It is simpler to call it six o'clock.
Railway Act


Some hon. Members:: Six o'clock.


Mr. Speaker:: It now being five o'clock the House will proceed to the consideration of private members' business. However, it being six o'clock I do now leave the chair until eight o'clock this evening.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed from Thursday, February 9, consideration of the motion of Mr. Lang that Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be read the second time and referred to the Standing Committee on Transport and Communications.
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, I welcome the opportunity to participate in the debate on Bill C-17, the CNR Capital Revision Act. The purpose of the bill is to cancel as of December 31, 1977 $808 million of debt owed by CNR to the government. According to the minister's press release of December 19, 1977, acceptance of the bill will give the CNR a capital structure appropriate to a mature corporation and provide it with a realistic debt/equity ratio.
After the 1952 CNR recapitalization act, CNR had a debt/equity ratio of 32.71/67.3 per cent, compared to Canadian Pacific's 31.91/68.1 per cent. Since 1952 CN has been carrying a huge debt burden despite the fact that CP Rail has earned a profit every year and never missed a dividend.
1 wish to state this party's position on this bill. Bill C-17 was first introduced on December 19 last year. The Prime Minister (Mr. Trudeau) urged the opposition to pass the bill immediately. We cannot pass it immediately, but we will not delay it unduly. We will allow the bill to go to committee where witnesses can be called to explain the implications of Bill C-17.
Since this is the third time CNR has come to parliament asking to be relieved of debt, since the CNR rail passenger service will be paid by the government through VIA rail on 100 per cent of its losses instead of its original 80 per cent, since Mr. Justice Emmett Hall recommended that the government pay the railways the difference between Crowsnest pass rates and the actual cost of moving grain and recommended the rehabilitation of the railways through PRA, both of which have yet to be implemented by the Minister of Transport (Mr. Lang), the Conservative party wants to strengthen the bill and

March 2, 1978
Railway Act
place safeguards in it to ensure that CNR will not again come to parliament to have its deficits picked up.
An amendment will be introduced to the effect that, should the CNR experience a deficit, the matter will be referred to the Standing Committee on Transport and Communications, whereupon the committee will be charged with a show cause hearing as to whether the CNR executive officer and board of directors should be removed for incompetence.
There is one very serious area, and that is with regard to the CNR pension fund. Very serious charges have been laid by the Canadian railways employees pension branch, the national headquarters, and by the British Columbia branch which is located in Vancouver. They have done an extensive study into the CNR pension fund and the manipulation of the fund over the last number of years. The government had Dr. Noel Hall conduct a study into the pension funds of the two railroads. He came up with a number of recommendations which have been completely ignored by the government. They have taken no decisive action after this extensive and costly report.
In the letter addressed to me by the association under date of February 15, 1978, the national president makes some serious charges in connection with the operation of the pension fund. The letter states:
The Railway Companies from the beginning of the present pension plans (CNR on January 1, 1935 and CPR on January 1, 1937) have avoided playing to a very large extent into the plans. Each railway company owes many hundreds of millions of dollars to the plan or plans for its employees and pensioners.
We know that last year the CNR stated it had registered a profit. I hope the pension fund is not being mismanaged with a view to showing a profit. The reason I am raising this matter tonight is so that the government can investigate these charges and have answers ready for us when the bill is under consideration in committee. The letter goes on:
In the last 10 to 15 years both railways have invested over a period of many years more than 60 per cent of the assets for which each is a trustee in common shares, real estate and high interest rate short-term mortgages. The result of this investment policy is that today, while inflation impoverishes pensioners, inflation is enriching the railway companies in their capacity as trustees. The pension trust funds are separate and apart from the funds of CNR and CPR. Each company owes tremendously large debts to these funds.
I do not know what the railways are doing with these funds but we shall certainly require answers in committee on this subject. The letter goes on:
As a general rule inflation increases the income and values of common shares and real estate. The interest income on short-term mortgages, in inflationary times, is exceedingly high. To pay the fixed pensions guaranteed by the Railway Companies, earnings of 4% on the trust funds are required. Earnings above the rate of 4% result in large surpluses in the pension funds. The above large surpluses apply to the trust funds for those persons on pension.
The Railway Companies in their capacity as trustees are holding pension trust funds for tens of thousands of employees. Wages and salaries are increasing rapidly, mainly due to inflation. The reserves for such pensions are increasing steadily as payments are deducted from pay cheques. CNR and CP Limited do not match the employees' payments on a current basis. Instead their actuaries calculate what the liability is of the Railway Companies. Inflation plus the failure of the Railway Companies to match the payments of the employees, is causing the liabilities of the Railway Companies to escalate at a rapid rate to very large amounts.
[Mr. McKenzie.)
The increase each year in liability for employees exceeds the decrease each year in liability in respect to those who are now pensioners, beneficiaries or survivors. Therefore, on the whole operation the Railway Companies are able to present statements showing large net increases in liability to these funds. On that basis CNR and CP Limited plead poverty and inability to increase pensions to a figure that nearly approaches the increase in the cost-of-living.
In ten years or maybe sooner inflation should wipe out the liability of the Railway Companies to that part of the funds established to pay those who are now pensioners, beneficiaries and survivors. Death of those now receiving such income will also be a major factor in reducing Railway Company liabilities.
These are serious charges, Mr. Speaker. The Railway Pensioners Association is to be publicly commended for the research it has done into the handling of these large pension funds which, it claims, have been manipulated by both railway companies. The letter continues:
The railway companies plead poverty and inability to pay any of the cost of indexing pensions, yet if inflation continues for six to ten years it should be enough to wipe out the enormous pension liabilities presently owned by CN and CP.
The philosophical differences concerning the role and function on pension plans is, in our opinion, very simply as follows:
The Railway Companies have since the inception of these plans in 1935 and 1937 avoided the payment of their share of pension costs as long as possible, so as to be able to benefit from inflation,-if it should ever occur. (CNR and CP Limited each accumulated hundreds of millions of dollars in debts at an interest rate of 4 per cent per annum when interest rates were higher or much higher. Today, CP Limited pays 7 per cent per annum and CNR pays 7'/2 per cent per annum on their pension debts, while current interest rates are very much higher).
Canadian Railways Employees' Pension Association advocates that all pension plans should be fully funded from the day the plan commences. When pension plans are fully funded and when an appreciable part of the assets are invested in common shares and real estate as they are today, increased income and increased values will become available to pay an appreciable part of the costs for indexing of pensions,-or they will revert to the employer, if the employer has "generously" guaranteed a "fixed" pension and, thereby, acquired the legal but not the moral right to skim off all the benefits of inflation, while pensioners, beneficiaries and survivors suffer all the bad effects of inflation.
If the railways are not fully funding these plans as called for in the original formula, I hope the parliamentary secretary will relay through the minister what I have said tonight in order that we may be given some answers at the committee stage. If the railways, and the CNR in particular-because it is a Crown corporation-have been manipulating pension funds, it is not a matter which can be taken lightly. The association goes on to say:
Canadian National is making tens of millions of dollars per annum because of inflation. The company wrote off $371 million in 1968. Interest on that amount should be $37 million annually. The CN is paying Vk per cent interest on one billion dollars whereas the company should be paying 10 per cent per annum. The increases approved by the CN board of directors on March 29, 1976, amounting to $2.3 million, are truly just a few crumbs from the banquet table. This banquet for CNR has been going on for many years but pensioners who are kept in the dark really appreciate those few crumbs.
If these large amounts of money are not being handled properly, the pensioners certainly have a legitimate complaint. They go on to say in this document:
The preposterous guarantee (of fixed pensions for life based on earnings for a fixed period of time) made by CN and CP many long years ago is the means by which those pensioners are methodically deprived of purchasing power to an increasing extent as the years go by.
The document goes on to comment on the Noel Hall report. It states:
March 2, 1978

The Government of Canada has paid an appreciable sum of money for the Noel Hall Inquiry. The recommendations were sound and would be of great value to our society if implemented. The failure to implement these recommendations may properly be attributed to a failure by the Government of Canada to use its influence with CNR and CP Limited to whatever extent would have been necessary to put Dr. Hall's recommendations into effect.
The letter concludes:
The certified bargaining agents for both CNR and CP Limited have co-operated fully with the Railway Companies in their dealings in respect to pensions and have acted contrary to the best interests of all railway pensioners. To the extent that these so-called labour union leaders are associated with the New Democratic Party, that party is culpable.
This document is signed by J. Earl White who is the national president. I spoke to Mr. White today to let him know that I would be drawing attention to his document tonight. 1 asked him whether he would stand behind his statements. He assured me that he would, and that I could use anything I liked from the document I have quoted.
The Pensioners Association wrote a second time, on February 20, with regard to pension plans, drawing attention to another of its concerns, as follows:
We ask only that retired railway employees be treated on the same basis as such union employees. Why should retired railway employees be discriminated against? When improvements are made in the rate of pension payable for each year of service they are for those who are still active employees. Commonly such improvements also apply to those who are already retired. This is fair and reasonable. After all if a new formula is now deemed to be appropriate surely such formula was always deemed appropriate! Except for those who retired on and after January 1, 1975 this practice has not been applied to railway employees.
Again, why is discrimination practised against the recipients of railway pensions?
They go on to say, Mr. Speaker:
The discrimination against those retired for 20 years and more is disgraceful!
All railway pensions should be based on 2 per cent for each year of service.
All railway pensions should be indexed to the cost of living.
They go on further to say:
The Trustees receive all the benefits of inflation on these large trust funds. The Railway Companies and the Certified Bargaining Agents negotiate improved pension benefits for active employees. By doing so they are using financial gains on retired employees to finance increased benefits to active employees.
These are serious charges, Mr. Speaker. They go on to state in this letter:
The profits being made on pensioners are being used to finance costs for active employees' pensions. The railway companies, with the concurrence of the certified bargaining agents, are discriminating against their own pensioners, beneficiaries and survivors.
They also point out:
CNR is a creature of the government. CP Limited is subsidized and regulated to the extent that it is treated in many respects like CNR is treated. One of those respects is the manner in which CP Limited act as a trustee for the CP Limited pension trust funds.
They then ask:
How can the government rationalize treating railway pensioners, beneficiaries and survivors as second class citizens? Why should these persons who do not have adequate incomes be compelled to subsidize active employees?
Railway Act
What possible reasoning have CNR and CP Limited for not extending the current formula to persons who retired previously? There is no logical justification.
Fair treatment for senior citizens can be legislated. Such action is clearly indicated, and, it is respectfully suggested, should now be considered-
This document is also signed by their president, Mr. J. Earl White.
I hope the parliamentary secretary will bring these matters to the attention of the minister and Dr. Bandeen, and, if necessary, he might consult with the CPR about the serious charges that pension funds are being manipulated. One statement or claim is that the only reason the CNR is able to suggest it made a profit last year is because of the manipulation of pension funds. If the CNR is manipulating these pension funds instead of investing them properly so that these thousands of railway employees might receive proper pensions, for which the plan was originally set up, then we are entitled to some answers, as is the government.
We have a few more speakers regarding this bill, Mr. Speaker, but they do not intend to speak at great length. We are looking forward to having the entire bill, as well as those charges made by pensioned employees regarding the manipulation of their funds, discussed in committee.


Mr. Jack Murta (Lisgar):: Mr. Speaker, I would like to begin my remarks by noting that I have been very intrigued by the rather free-wheeling debate that has developed in respect of this very important piece of legislation. In some circles this bill has been characterized as "housekeeping" legislation. That word makes the bill appear to be minor or really insignificant. The apparent simplicity of the bill tends to lend support to this viewpoint, but I am pleased to note that hon. members on all sides have not taken this attitude to heart.
As my colleague the hon. member for Vegreville (Mr. Mazankowski) has observed, as well as others, it is never an insignificant matter for the House to consider writing off a $808 million debt which is owed to the government of Canada. It becomes even more important for this bill to receive the full consideration of the House when one considers that the Canadian National Railways have requested debt relief of this kind no less than four times in the company's history, and that the total value of the company's debt that has been written off during this time is in excess of $6.7 billion. That certainly is a lot of money. Clearly this bill is not housekeeping, nor is it an insignificant piece of legislation. It is one of the more important pieces of legislation that we have been called upon to deal with in the area of transportation during this session of parliament.
In his speech when introducing the bill the Minister of Transport (Mr. Lang) stated that the government's purpose was to improve the efficiency and effectiveness of the CNR. Among the benefits which would result from this bill is a reduction in the company's equity debt ratio, about 62 per cent to some 42 per cent, which would make the CNR more competitive when compared to other North American railway companies. According to a ministry of transport press release of December 19, 1977, the CNR will then be in a position to,
3412

March 2, 1978
Railway Act
"finance all its capital requirements without payment from the federal treasury."
As further compensation for overturning this debt it was suggested that the government will no longer be required to underwrite the CNR's deficits and that "an annual payment of 20 per cent of net earnings, or such higher amount as the government may determine, will be forthcoming as a return on the government's equity."
I note that all hon. members who have participated in this debate agree with the principles underlying the legislation. I think that is important. It is agreed on all sides that the CNR's debt equity ratio is unrealistic and that it is a worthwhile goal to improve the corporation's efficiency and effectiveness. Certainly it is one of the truly great corporations we have in this country. As usual, however, there is disagreement as to the means that should be employed in achieving this goal.
In both his press release and his introductory remarks the minister suggested that the means to be employed should be ones adopted simply to improve the competitive position of the CNR and thereby encourage it to become "financially viable and self-supporting." Mr. Bandeen, the president of the CNR, puts it slightly different in his year-end statement. After listing the advantages which will result from the passage of this legislation, Mr. Bandeen makes the following observation in his concluding remarks:
The challenge to CN will be to perform its duties efficiently and profitably while improving the quality of its services for all Canadians.
I emphasize the word "profitably", because it is the introduction of that one little word which has raised the hackles of some members of the House of Commons, notably those members to my extreme left in the NDP.
In that context, and in view of the nature of the debate which has developed on this matter, I should like to refer briefly to the contribution made by my colleague on the transport committee, the hon. member for Regina-Lake Centre (Mr. Benjamin). Although it was some time ago, I can recall clearly the interesting contribution which was made by that hon. member from that part of Saskatchewan to this debate. A careful reading of his speech demonstrates the length to which members of his party must go and the ideological juggling which is more often than not required by that party in debates of this kind, especially when words like "profitable" are introduced into the debate.
In essence, the hon. member for Regina-Lake Centre states that he supports the bill but that he does not like the idea that the CNR will be encouraged to make a profit. It is beyond many of us in the House of Commons how the hon. member justifies that position when, in the words of the ministry of transport press release, the whole purpose of this bill is to "impose on the CNR the responsibility and accountability to manage a financially viable and self-supporting institution."

The hon. member for Regina-Lake Centre recognizes the difficulty in this respect. I should like to refer to his speech, as reported at page 2637 of Hansard, which reads as follows:
1 would be just as happy voting against this bill as voting for it.
Elsewhere in his speech, as reported at page 2636 of Hansard, the hon. member said:
We in the New Democratic Party are in something of a catch 22 situation. We agree with the principle of refinancing and the recapitalizing of the CN debt.
This appears to be a clear statement of that party's position, but it is not long before the "but" emerges. There is always a "but" with that particular party. Be that as it may, this particular "but" can be found also at page 2636 of Hansard, which reads as follows:
The essential motive behind this bill is to make Canadian national more attractive for private investment.
Of course increased private investment will tend to make the CNR more accountable and more profitable. It is that which sticks in the craws of hon. members to my left.
The dilemma which the hon. member finds himself in is in fact significant. It is a traditional dilemma for members of that party. Also it is the reason that they currently find themselves in the position of having only a tenuous hold on the legislature of one province out of ten, and suffering from ever-dwindling numbers in the House of Commons. Until members of that party can overcome their psychotic aversion to the word "profit", they will never be a significant force in the affairs of this country. However, with the possible exception of hon. members to my left, I believe I speak for the majority of members when I say that the intentions of this bill are in keeping with public interest and the honourable traditions of this Chamber. Nevertheless, the government's stated intentions, and those we find in the bill, are not always completely consistent.
In introducing the bill, the hon. Minister of Transport referred repeatedly to the government's policy of encouraging efficient and sound financial management on the part of Crown corporations. I stress the word "encouraging". I point out to the minister that this policy of encouragement represents a significant retreat from the position stated in his department's press release of December 19. Although I have already quoted the relevant section of this document, it is worth repeating for the benefit of hon. members. Paragraph 5 of the document reads as follows:
.. . imposes on the CNR the responsibility and accountability to manage a financially viable and self-supporting institution.
I have read with great care and attention all seven clauses of Bill C-17. Nowhere in this legislation is there a provision which imposes any requirements of this nature on the management of the CNR. Clause 1 of the bill deals with the conversion of CNR stock and forgives the corporation's $808 million worth of debt. Clause 2 provides that the company can retain its yearly earnings after taxes and interest on its public and private debts. Clause 3 repeals section 37(4) of the CNR Act. Clause 4 substitutes therefor a provision allowing the Cabinet
March 2, 1978

to appoint the company's auditors, and a provision which requires submission of an annual report. Clause 5 repeals subsection 72(5) of the Railway Act, which places a 6 per cent ceiling on interest rates on securities of railway companies. Clauses 6 and 7 repeal the CNR Financing and Guarantee Acts of 1941 and 1942. At no point is there a provision which even hints at imposing a requirement that the CNR operate in an efficient and profitable manner. In fact, the bill does not contain any general statement of intent at all but simply forgives an $808 million debt which is owing to the people of Canada through the Government of Canada.
I cannot help but marvel at the fertile imagination of the Minister of Transport, who has manufactured a requirement when one clearly does not exist in the legislation. We might ask ourselves what has prompted this particular ministerial flight of fancy. The debate on this matter provides us with an answer to this question.
Members opposite have suggested that the requirement for an accountable and profitable operation arises from agreements reached between the government and the management of CNR. In fact, no such agreements have been reached. Rather, we have only statements of intent from the management of the CNR to the effect that the purpose of this request for debt forgiveness is to make the corporation more efficient and cost-effective in the future.
During this debate my colleagues have outlined the history of debt forgiveness as it relates to the CNR. On each of the four previous occasions that the CNR has requested forgiveness of government debt, the arguments have been the same. On each occasion the corporation has stated that it would be more competitive with respect to the CPR and other rail transportation companies in North America.
On each occasion in the past the company has argued that it would be able to provide high levels of service more efficiently and at a profit, yet we have undertaken this process four times at a total cost to the taxpayer in excess of $6.7 billion and we are once again considering it today. History has proven that all the good intentions in the world are not sufficient guarantee against the possibility that we will again be debating this proposal in 10 or 20 years.
We on this side of the House have no quarrel with the intentions of CNR's management. In fact, if there is anyone capable of reversing the recent trends of the CNR, it is the current dynamic management team in Montreal headed by Dr. Bandeen. However, we do not quarrel with the government's attempt to create the impression that this bill provides for a guarantee of future profitability in the corporation. I strongly suspect that this particular sleight of hand being perpetrated by the government is politically motivated.
Hon. members opposite realize that they are in trouble for the coming election and are attempting to do a little pre-election bridge building. By not including a requirement of future efficiency in the bill and at the same time attempting to create the impression that such a thing exists, the government is hoping to pave the way for NDP support following the elec-
Railway Act
tion. Let me assure hon. members opposite that this is an exercise in futility.
On the same issue, we are pleased that the importance of this total piece of legislation has not been lost. We are also pleased that Bill C-17 is going to committee where we intend to introduce amendments to strengthen the legislation, and we hope to propose safeguards to ensure that the CNR will not come again to parliament to ask that its deficit be picked up by the people of Canada. We hope that members on all sides of the House will see fit to support the amendments introduced in committee, and we hope to be given a reasonable length of time to go over the legislation in detail at the committee stage.
I would be remiss if in a debate of this kind involving a major railway 1 did not make a few short comments on the whole question of railway rehabilitation in western Canada and the Hall commission report, of which a major part deals with the subject.
In relation to the whole question of the Hall commission report as it relates to the CNR-and I think the two are certainly linked-two points are uppermost in importance. First, I think it should be kept in mind when dealing with the legislation that the railways-now we are talking about CNR and CPR-are receiving far too much taxpayers' money in western Canada without having to account for the way in which that money is being spent.
The second point which should be kept in mind and which we hope will be brought out at the committee stage is that the railways have had until now the best of both worlds. The railroads-and CNR is certainly included-have had a subsidy plus grants to spend as they wish. It is interesting to note, when we are talking about rail line abandonment by railways which are so vital in the transport of grain in western Canada, that not one cent of the branch line subsidy has been spent on the upgrading of rail lines in western Canada in the past years. I think that certainly demonstrates that the railways have really had a free hand and that the moneys they have received from the taxpayers have not been spent on keeping up that basic and very important aspect of western agriculture.
I should like to conclude by reiterating that we will certainly discuss this piece of legislation in committee, and we hope that when it is passed the CNR, under its present capable management, will not come back to parliament asking the Canadian taxpayer to help it out once again.


Otto Emil Lang: Would the hon. member permit a question?


Jack Burnett Murta: Yes, Mr. Speaker.


Otto Emil Lang: Mr. Speaker, in connection with the second to the last set of remarks made by the hon. member, I wonder if he is aware, as I presume he is, of the Hall recommendation that the railways be made whole, that is to say, that the Treasury pay the difference to the railway between the cost of moving grain and what they receive for it? That, in the view of both Hall and Snavely, is the reason why the railways did not do the
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upgrading. 1 presume he approves of that, but I would like confirmation of it.
Second, I should like to ask him if he is aware of the fact that we have committed SI00 million for rebuilding the rail system, that during 1977 that program began in a very important way and that in 1978 it is continuing. This is money to be spent on the grain dependent lines on which there was a subsidy.


Mr. Benjamin:: On the basic network.


Otto Emil Lang: Of course, the basic network was created by action of this government after the Hall Commission report. 1 should like to ask the hon. member whether he is aware that in that case too the government had very carefully signed an agreement with the railways whereby they have committed exactly what they are doing for the $100 million so that every penny is spent on rebuilding the rail lines.


Jack Burnett Murta: We are certainly aware of that. It is an amount of money which we believe is badly needed in western Canada. We believe also that the money is being spent on what we call the soft areas. The government has really not grappled with some of the more difficult questions that arise from the Hall commission report. When I mentioned the branch line subsidy I was referring to up to the present time. We in this party agree with the Hall recommendation regarding the difference in the amount between the Crowsnest pass rate and the rate for which the railways haul grain, which has been documented, we think correctly, by both Snavely and Hall.


Stanley Howard Knowles: Mr. Speaker, every time we get into any kind of discussion about railway matters-and it is happening again on this occasion-the subject of the pensions of railway workers comes to the fore. This happens not only when we discuss railway matters in the House but also whenever there are negotiations between the railway management and the railway unions. It took many years, in fact many decades, to come to the point where there was any discussion at the bargaining table about pension matters, and even since the time when such matters do get discussed very little progress is made on pension questions.
I believe it was during a special session which we had in the House of Commons late in August or early in September, 1972, just before the Prime Minister (Mr. Trudeau) asked for the dissolution of parliament and we headed into the election of October 30 of that year, that in the dispute that took place here in the House we again raised the question of pensions and got nowhere, except that we got out of the Minister of Labour (Mr. Munro) a promise that there would be a full scale inquiry and examination into the whole matter of railway pensions.
On came the election, so nothing happened in that vein during the next few months. When we were back here in parliament in 1973, the issue of railway matters came up again and we kept on pressing the Minister of Labour to implement his promise to institute a full scale inquiry into railway pension matters. He finally did so in July of 1974. In fact, it was on July 9, 1974, that the Minister of Labour appointed Dr. Noel
[Mr. Lang.l
Hall as a commissioner to go into the whole question of Canadian railway pension plans.
I interject to say that when we discuss railway matters we frequently find ourselves referring to the Hall report. It has to be noted that there are two Hall reports-the two or three reports of Mr. Justice Emmett Hall and the report of Dr. Noel Hall on railway pensions.
I had the feeling at the time, out of a fair amount of experience around here, that referring pension matters to a commission of inquiry was a way of getting rid of the issue. Yet somehow I felt there was a measure of sincerity on the part of the Minister of Labour and that he wanted to see the issue resolved. I dared to hope that the appointment of Dr. Noel Hall to study the question would result in some real progress being made in this area. As I say, it took from 1972 to 1974 to get Dr. Hall appointed. It was September 8, 1976, before he submitted his report to the Minister of Labour. It was some time later, I believe in 1977, before we got copies of the report. Now we are into 1978 and very little has been done to implement even the meagre provisions of the Dr. Noel Hall report.
I say that those recommendations were meagre but at least there were some proposals in the report. As a matter of fact, Dr. Hall made one set of proposals covering railways in general and a special set of proposals with respect to the CPR. He pointed out that in the case of the CPR the situation is much less favourable than for the CNR, and he felt that as a first step the CPR should be required to bring its pensions provisions at least up to the level of pensions provided by the Canadian National Railways.
The report does not mean to say that things are perfect with respect to the CNR because Dr. Hall suggested what he called a heritage fund in the hope that ways and means might be found to improve the pensions of railway workers down the line.
I think it is fair to say that during the months and years the Hall commission was sitting, railway workers and retired railway workers were hopeful something would be done. With all the time that has gone by with very little being done, railway workers and railway pensioners are beginning to feel that once again they have been sold down the river by means of a commission of inquiry.
When we got the Hall report and started asking questions about it in this House-and when I say "we", I mean members of this party and members of the official opposition-we were given the usual run-around-that these were matters to be dealt with by negotiation between management and the employees. We were told that these matters were being studied in the department but there was nothing the minister could do by way of giving any direction to the railways.
It always astounds me that the government can exercise its authority in so many ways, yet when it comes to telling railway management that it should give a better break to its employees or pensioners, the answer is always that this cannot be done.
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The CPR seems to have more clout or weight around this country than the government itself. Now that we are dealing with a bill that has to do with the reconstructing of the finances of the Canadian National Railways, I think we should make the point again that the government should get into the picture and insist that the railways have to give their workers a better break, particularly when they become pensioners.
I have already said that the problem applies to both the Canadian National Railways and the Canadian Pacific Railway. It is true that in the terms of this bill we are dealing with the Canadian National and most of what I have to say applies to it. Because the Minister of Transport (Mr. Lang) has to deal with both companies, however, I think it is only fair to remind him that he has some responsibility with respect to Canadian Pacific as well.
A few days ago, not by any action of the Canadian government and not because of anything voluntary on the part of CPR, certain secrets came out in the United States to the effect that the 1977 salary of the president of Canadian Pacific, Mr. Ian Sinclair, was $330,450.


Leslie Gordon Benjamin: Poor fellow.


Stanley Howard Knowles: He is not poor at all. It is the next two who have to get along on much less. The next two senior officers of Canadian Pacific earned in 1977- $193,950 and $146,550. For a company to be able to pay salaries like that to its senior officers and plead that it cannot give its pensioners a better break, does not go down.
One of the things that Dr. Hall included in his report that was given to the minister in September, 1976, was a letter that he had received from a gentleman named Mr. B. H. Emerson. At that point he was 92 years of age so I do not know whether he is still alive, although I have no reason to suspect he is not. This Mr. B. H. Emerson wrote Dr. Hall about the experiences and record of his family as workers for the Canadian Pacific Railway. He gave Dr. Hall the basic facts in a letter to which he attached a rather lengthy memorandum telling the whole story.
Summarized, the story is of five generations of Emersons working for the Canadian Pacific Railway. Mr. B. H. Emerson retired in 1947 at age 65, and in 1974, at the age of 92, his pension was only $83.53 per month. The story is of Mr. Emerson's father working for the CPR, Mr. B. H. Emerson himself working for the CPR as did his son and two more generations. It so happens that Mr. B. H. Emerson had a son who later became president of the CPR. He succeeded Mr. Crump. Unfortunately Mr. Emerson was president of CPR only a few months before he died of a heart attack.
Several years later Dr. Hall got this letter from the father of the late president of the CPR saying here is a family of five generations working for the CPR and at 92 years of age his pension is only $83.53 per month. But President Emerson's successor, Ian Sinclair, receives a salary of more than $330,000 per year while that company cannot do better for the father of the previous president than to pay him a pension of only $83.53 per month. Dr. Noel Hall said he had not sought
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Mr. Emerson's permission to include this letter in his report and hoped he was not embarrassing him by making it public. But he put it in his report because he thought it indicated the human problems that are associated with small pensions in the face of rapidly escalating wages and prices.
I make the point, Mr. Speaker, that these railways could do a lot better. And although I heard one of my friends to the right the other day speaking with some disdain about the fact that we were complaining about a salary of $330,000 a year for one man, I still say it is not human, it is not decent, it is not civilized, to have a society, a country, in which some people can have great wealth of that kind and so many others have to live on the edge of poverty. If we claim to be a civilized society, if we claim to be building a society of which we can be proud, if we claim to be building a Canada which is a leading country in the world, surely the problem that we ought to address ourselves to is some equalization in the living standards and the incomes of our people.
If you want a glaring example of gross inequality which is seriously unfair, it is there in the story of the CPR paying a $330,000 a year salary to Mr. Ian Sinclair but paying only $83.53 a month to Mr. Emerson, the aged father of Mr. Sinclair's predecessor as president of the CPR. We do not have corresponding statistics for those who are in the top positions of the Canadian National Railways. I am quite satisfied they are not as extreme, that those at the top of the government owned railway are not getting salaries of that kind. But it is still true that there is a wide gap between the positions of those at the top and those at the bottom. I just do not buy it. Criticize me if you will for believing in an egalitarian kind of society or of pushing in that direction, but if we are going to be civilized, that is the direction in which we ought to move.
It is my contention that there are certain improvements that ought to be made in the pension plans of both railways. It has become very clear that the government will have to get into the picture. Appointing Dr. Noel Hall and giving three or four years for the holding of inquiries, and the making, printing and translating of reports, does not do the job. Leaving it to the companies to negotiate with the employees does not seem to do the job. The government does not mind providing all sorts of funds to these railways. Even the privately owned company has been able to milk the government and the country for all of this century, and more than that. If that is the position, surely we have a right to ask the government to intervene and say to companies like the CNR and the CPR that they should be giving their pensioners a better break.
Among the things that still ought to be done is to put the pensions on a basis of 2 per cent credit per year for each year of service no matter when that service was. This business of still paying some pensions based on 1 per cent, VA per cent or 1 'h per cent per year back in the earlier years does not stand up in this day of higher prices, higher wages and higher pensions. That is a minimum requirement that ought to apply to all railway pensions. If we are going to put the CNR in a

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new financial position and if we are going to continue to subsidize the CPR and give them anything they want, the time has come for us to say to them that their pensions should be at least equal to the 2 per cent per year credit that applies in the public service.
Something else that should apply to railway pensions is the matter of guaranteed escalation of indexation of their pensions after retirement, they should be told this should come into effect. With prices going up and living standards rising it is not putting a person on a pension if you put him on an amount that is fixed for life. If a fixed amount is all one gets as a pension, it is just a ticket to welfare somewhere down the road. If a pension is to be meaningful it must enable the pensioner to keep up with the rising cost of living. However, I think it should do more than that. I should enable a pensioner to keep up with the rising standard of living.
I know there are the Colin Browns and others around the country who are worried about what we can afford down the road apiece. If Mackenzie King had known that in 1978 members of parliament would be earning the salaries and allowances that we are receiving today, he would have said that it cannot happen, that the country would go broke, that it is impossible, that is going too far. I submit that 10 to 20 years from now salaries around here will probably be higher and wages will be higher. Can the country afford it? What really counts is the current production in any year. When we are asking for the indexing of pensions all we are saying is that as the production of a country goes up year by year, decade by decade, not only those who are working get the advantage of that increased production, but those who are retired should receive a share of the increased production which has been made possible by them in building society to that point. 1 say guaranteed escalation of pensions should be the rule with both the Canadian National and the Canadian Pacific.
Dr. Hall recognizes that. He accepts it is a principle through his book. He seems a little uncertain just how to go about it. He is worried about the finances of the railways and so on. He does come up with his idea of a heritage fund. But there it sits, a very nice recommendation, a very nice principle stated. He thinks that the case of Mr. B. H. Emerson emphasizes the point that it is a human tragedy to have to live on small pensions in the face of rapidly escalating wages and prices. These books spread around the country, a few more of them, do not do the trick. What is necessary is for the government to get into the picture and say to the railways, whether they are publicly owned or privately owned, that they are instruments of serving the needs of this country. They live on the basis of the country's economy and they owe to the workers the certainty and the guarantee of pensions that will maintain their value.
We have had some indexing. For a while the CNR came through with 2 per cent per year. Then there was a year when it was 4 per cent. Then they skipped a year and they came in with an ad hoc or a fixed amount. The CPR had done far less and Dr. Hall points that out. One of his firm recommendations

is that the CPR should do at least as much as the CNR has done.
This story is a sorry one. The railway workers have not been put in a position to be sure that their pensions would enable them to keep up with the rising cost of living, let alone the rising standard of living. There was a day 30, 40 or 50 years ago when morale was high amongst the railway workers. They felt they were in almost a privileged or preferred position. They had good jobs and they were helping to build the country. When that sense of morale was there their productivity, I suggest, was higher than it has been in some other years. One of the ways to destroy morale is to create the feeling of insecurity about the future. The reverse is also true. One of the ways to improve morale is to give some guarantee about the future. I feel very strongly about escalation and indexing being guaranteed to all pensions-railway, public, private, the whole works.
But what we are dealing with tonight is the finances of one of our railways. This is the time that the government should get into this and tell the railways that it is a matter of government policy that indexing must continue. I am glad to hear the Prime Minister say when questioned about the indexing of pensions of public servants that maybe there are some abuses, maybe some adjustments need to be made, especially in the cases of the Simon Reismans and so on, but nevertheless the principle has to say. If it is the principle of government policy that pensions should be paid to federal public servants to enable them to keep up with the cost of living, that same principle should apply to organizations such as the CNR and CPR which in one way or another, both public and private, are part of the whole picture of the economy of this country.
I am arguing for something in which many in this place believe. The point is how to get there. One way of how not to get there is to just put out a report. Another way is for the government to pass the buck to the CNR and the CPR. What is important is for the government to sit down with the railways and say that this principle has got to be accepted.
Another matter that has to be raised with regard to railway pensions-and when we are discussing the finances of the CNR is the time to raise it-is the question of pensions of widows of railway workers. At the best, the pensions of widows of railway workers are 50 per cent of the pension the worker was getting or would have got in the case where the husband dies before he goes on pension.
I would have said this today in the debate on equality for women had we got into it, but I can do that when we get to it next week. I do not know why a society of men and women who are equal still accept the idea that if a man and wife together establish a home, earn a livelihood, build up a bit of an estate and reach the stage where they go on pension, when the man dies the widow's pension is only 50 per cent, but if she dies first, his pension is 100 per cent.
I hope some day people will look back on history and say who was ever so crazy as to think up that idea? However, that
March 2, 1978

is what we have. That is what applies at best in the case of railway pensions as far as widows are concerned. 1 say at best because there are provisions, particularly with regard to a widow who married the worker after he went on pension, where there is no pension at all.
There are all sorts of little angles of that sort that put many widows in an even worse position. 1 contend that the survivor's pension ought to be the same in both cases. I would even say let it be 90 per cent for the husband if he lives on and 90 per cent for the wife if she lives on. Make an adjustment in the contributions to the fund if necessary, but try to achieve equality.
If that is too much to ask for right off the bat, at least the percentage of pension that is payable to a widow ought to be increased. This business of its being 100 per cent for the husband but only 50 per cent for the wife just does not meet modern standards of fairness and decency. 1 know this is the rule for a lot of other plans. It is the rule in the public service that the survivor gets a pension of only 50 per cent of that of the original pensioner.
In the case of the members of parliament retirement allowances plan, if an MP is on pension and dies, his widow gets 60 per cent. Even that is not good enough. That is not equality, 100 per cent for him and only 60 per cent for her. But having voted 60 per cent for our widows, we should not settle for 50 per cent for the widows of public servants or the widows of railways workers. The railway people through their unions, pensioners associations and so on are asking for 75 per cent for the widow. That is a step in the right direction and probably something that should be sought. I hope that is a move that will be considered down the line.
The pensions of widows certainly ought to be increased. Even without any actuarial change, I see no reason why there should not be some provision for the widow to stay at 100 per cent for a year or two until the adjustment has been made. We are talking about a country where women are to have equal rights. Saturday of this week is International Women's Day. It calls for more than just nice things to be said about the dear ladies. It calls for more equality and fair play. The place I would like to see that is in pensions. The railways have not been fair to the widows of their employees. That is one of the improvements that ought to be made.
That is my view about this. It is not new. I have presented it a good many times. It is highlighted by the fact that we are in the process of restructuring the finances of the CNR. It is also highlighted by the fact that within the last week or so we learned that the CPR is able to pay its president over $330,000 a year while it pays only $83 a month as a retirement allowance to the father of the preceding president, a man who gave his life to that company. This story is repeated time and again through the ranks of the railway workers of this country. They deserve a better break. Parliament ought to say that to the railway companies at the time that we are dealing with this bill.
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Mr. Peter P. Masniuk (Portage):: Mr. Speaker, I am pleased to take part in this debate today on Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act. This bill is perhaps not as contentious as others we have debated here, but I do not believe that we should rush it through this House and pass it merely for that reason. This is the third time that Canadian National Railways has come to parliament requesting a cancellation of its debt, and while we in this party are certainly prepared to give CN a hearing, I think that reservations about this bill need to be voiced.
Bill C-17 cancels $808 million of debt which is owed by CN to government. It also cancels the 4 per cent of preferred stock which the government has until now owned in CN. The Prime Minister (Mr. Trudeau) has stated that this will save the Canadian taxpayers $100 million. This is the total of what is left owing for the remainder of the fiscal year, that is until March 31, as well as that which the government would be required to purchase in fiscal year 1978-79. This sounds impressive, Mr. Speaker, but it must be balanced against the $65 million of interest which will be lost as a result of the write-off.
This bill is, of course, essentially a financial reorganizing bill for the CN. The $1.5 billion of preferred stock which the government now has are to be converted into common shares and provision is made for the payment of an annual dividend by the CN. This dividend is 20 per cent of the net income, but whether any of us will ever see it is doubtful, since it is not payable until after the CN's depreciation, interest and taxes are met.
The major thing which this bill does is relieve the CN from having constantly to come to parliament for appropriations to cover its deficits and forgive its debts. This was done in 1933, just ten years after the CNR first appeared as a single unified railroad system. The legislative effort for that, however, was done by a former member for Portage constituency, the Right Hon. Arthur Meighen, in 1919.
Just a few years after that first occasion in 1933, the CNR appeared before parliament in 1937, again to be forgiven its debt. The first time it was $1.2 billion. The second time it was $1.8 billion. Even today those figures are very large amounts; forty years ago they were astronomical. Now, in 1978, the debt is for the better part of $1 billion-$808 million. I personally do not find this situation acceptable at all.
It is our intention to propose in committee amendments, the purpose of which will be to make the company, through its chief executive officer and board of directors, more accountable to parliament. I suggest the government has not been at all accountable or responsible so far as the railways are concerned, particularly in the west. On May 16, 1973, Chief Justice Emmett Hall released the first volume of his report "Grain and Rail in Western Canada". One of the important recommendations in that report was that 1,813 miles of prairie branch lines found to be of proven traffic potential and regional importance should be reallocated to the basic rail network, which is guaranteed until the year 2000, and that

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2,165 miles of prairie branch lines be abandoned over the period 1977-81. The commission also "recommended that the remaining 2,344 miles of line whose future is uncertain be placed under the jurisdiction of a new body to be called the Prairie Rail Authority. Need would determine how many of these 2,344 miles would continue in existence, with the useful elevators on those lines determining the new rail configuration. The PRA was to co-ordinate this readjustment.
The Prairie Rail Authority would be a three-member body based in western Canada. Its function would be to provide a continuing assessment of branchfline needs and of the administration, operation and financial arrangements necessary to best serve the public interest. In other words, it would remove the authority over prairie branch lines, which are so important and critical to the west, from Ottawa and place it in local hands in western Canada.
This seems logical and sensible but in reality it is the last thing this government wants to see happen, despite its professed desire to decentralize. To this government, decentralization is fine if it means moving a government department which should be in Ottawa to a remote part of the country; but it is not acceptable when it means establishing a regional authority to look after a regional concern like railway branch lines on the prairies. I cannot understand the government's logic, Mr. Speaker.
The Hall commission further recommended that the railways be compensated for the maintenance and upgrading of lines in the basic network, or lines subsequently added to it, and that branch line subsidies be discontinued. The Prairie Rail Authority is to assume responsibility for costs and contracting for the maintenance and operation of these branch lines.
It is important for us to remember that the commission did not recommend that the prairie rail system be refurbished to a "like new" condition. It simply recommended that it be upgraded so that it would be no more than adequate for the movement of grain. The fact that much of it is by no means adequate at the present time is only a measure of the extent to which it has been allowed to deteriorate over the years. The commission estimated that this upgrading would put costs up to $445 million.
The commission found that there are areas in western Canada in which the volume of grain handled warrants the retention of elevator services but rail service is too costly to maintain. In such cases the commission recommended that the elevator on the abandoned line be retained and that commercial trucking be employed to transfer grain to the nearest railhead, the additional trucking cost being paid by the federal government through the Prairie Rail Authority.
The one place where the commission recommended that such an off-line loading facility be established immediately, as a demonstration of how this could be done elsewhere on the prairies, was at Fisher Branch in my constituency of Portage, on the CNR's Inwood subdivision which will probably be
[Mr. Masniuk.1
abandoned. The railways have neglected to upgrade these prairie branch lines. They have not run trains along them. I should like to read into the record a letter which I have received from a constituent of mine who is greatly concerned about what is happening. It is dated February 2 and it comes from Broad Valley, Manitoba. It is signed by Mr. Walter KJimchuk, who writes:
We have not had any train service on the Hodgson-Grosse Isle line since December. As a result, some 40 grain permits were taken away from our elevators and consequently approximately 65 to 70 thousand bushels of grain were hauled to Moosehorn, Warren, and Arborg. Many farmers have not delivered a bushel yet. Evidently, CP supplies box cars to Moosehorn and Arborg, and, just as evidently, CN is conditioning us to learn to haul grain longer distances in an attempt to show that our Hodgson rail line could be abandoned.
This situation is very serious, with the stockpile of grain we have. This grain is stored in all available farm buildings and a lot of it is out in the open. The piles out on the open must be hauled out before spring thaw. The resulting financial strain is very great.
Mr. Masniuk, please use the influence of your office and get some action on this! Thank you.
I am sorry the Minister of Transport (Mr. Lang) is not in the House but I hope his parliamentary secretary will bring this matter to his attention. These farmers are desperate and with the coming of spring a lot of this grain will rot.
The commission estimated that trucking grain from Fisher Branch to the CP Arborg railhead 19 miles away would be the cheapest alternative, costing about 12 cents a bushel as compared with anything from 50 cents to 90 cents a bushel if a rail link were built from Arborg to Fisher Branch, which was the other alternative under consideration. The farmers of the Interlake area are very anxious that this experiment be put into operation as soon as possible, but so far nothing has been forthcoming from the Department of Transport.
Speaking to a group of farm leaders in Regina on May 27 last year, the Minister of Transport said:
With the unanimous urging of Westerners for prompt, decisive responses to the Hall Report, I am determined to act as expeditiously as possible to deal with the Commission's proposals ... it is our intention to act in a swift and positive manner.
The minister added that on the previous day an order in council has been passed implementing the first of the commission's recommendations: the 1,813 miles of branch lines which the commission had found to be of proven traffic potential and importance were transferred to the basic rail network. The minister also stated that the 2,344 miles which the commission had recommended be transferred to the jurisdiction of the Prairie Rail Authority had been "frozen" by a similar order in council and thus protected from abandonment until at least January 1, 1979. That, Mr. Speaker, was the end of the government's "swift and positive response" to the Hall report.
On the subject of the Prairie Rail Authority whose establishment was the crucial recommendation of the report if the other recommendations are to be carried out, the minister was extremely equivocal. The two years of study by Mr. Justice Hall and his fellow commissioners notwithstanding, the minister declared at his Regina meeting with the farmers that the concept "would require further concentrated study to flesh it
March 2, 1978

out in its entirety and assess all its ramifications." To use the minister's own words, to do this he planned to set up a prairie rail action committee to further examine the prairie rail authority concept. This government's fondness for study committees is well known. Its unfortunate reluctance to do anything about the recommendations of all these study groups is also very well known, Mr. Speaker.
With all due respect to the Minister of Transport, Mr. Speaker, I just do not think the Prairie Rail Authority concept requires any further study, certainly not a study which might take another year and a half. Why did Mr. Justice Hall and the other commissioners study this whole question of prairie railways and branch lines for almost two years? Surely after that length of time the Prairie Rail Authority concept is not so hasty and ill-conceived that it will now require another year and a half of study before it can be set up. The PRA should be established now. Its practicality and viability can only really be determined by having it operate, and not by any further study, however useful that may be at the time.
The minister's prairie rail action committee is really precisely the opposite of any action; it is the same stalling technique we have so often witnessed from this government in the past; that is, the appearance of taking action on a report or recommendation while actually avoiding doing so.
On May 27, at a meeting with the farmers' representatives in Regina, the Minister of Transport revealed that he wanted certain actions by the railways, the CN and the CP, on the Hall report. Specifically what he wanted was their agreement to transfer certain rail lines between themselves, as recommended in the report; concrete undertakings from the railways that they would immediately begin rebuilding and upgrading the lines involved in the basic network, in return for any cash payments which they might receive from the federal government; and, most important of all, that where any line is abandoned, the roadbed property should revert to the federal government, which, after consultation with the provinces, and only after consultation, might then be offered to the provinces involved.
This is directly contrary to the recommendations of the Hall report, namely that all abandoned lines be given to the provinces in which they are located to be disposed of as agreed between the provinces and the municipalities. The commission recommended that the federal government only should assist the provinces and municipalities in covering the higher road costs they will face as a result of branch line abandonment, and that the federal government compensate municipalities for this loss in tax revenues resulting from abandonment.
To me the establishment of another committee by the Minister of Transport to stall further the establishment of the Prairie Rail Authority, plus his recent offer of $100 million directly to the western railways for upgrading which will be overseen by the Canadian Transport Commission in Ottawa, demonstrates that this government has in fact rejected the Hall commission report. The extreme central Canada bias of
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this government on the issue of rail transport in western Canada is evident once again. This government just does not want authority over transportation anywhere in Canada to be controlled by a body outside the CTC.
The present head of the CTC is a former Liberal member from Kingston and the Islands, and a former federal finance minister whose partiality and political bias has been all too evident in the past. 1 just do not believe that this government is interested in letting regulatory authority over rail transportation in western Canada be given to a western authority, not even when it involves an issue as fundamental and as important to the west as the rail transportation of grain.
Unless there is a change of attitude on the part of this government soon, I am afraid that we are heading toward a tremendous future federal-provincial confrontation over the issues of railways, the sharing of resources, provincial property rights and, ultimately, the very division of powers under the constitution.


Mr. Peter Elzinga (Pembina):: Mr. Speaker, 1 too appreciate the opportunity to participate in the debate on Bill C-17, an act to amend the Canadian National Railways Capital Revision Act, the Railway Act and to amend and repeal certain other statutes in consequence thereof.
This bill in reality, in general terms, broadens the financial aspect of the Canadian National Railways. Just prior to expressing my own thoughts on this matter may 1 take the opportunity to commend the hon. member for Portage (Mr. Masniuk), who has just concluded his remarks. Since coming here in 1974 it has been obvious to me and other members of this chamber that he has done a very competent and thorough job of representing his constituency, and the people in that area have been well served by his contribution in the House of Commons.
Let me take this opportunity when speaking on Bill C-17 to make some representation in respect of an area in my constituency, specifically the town of Fort Saskatchewan. Just this evening I spoke with the Minister of Transport (Mr. Lang) when he was in the House. We discussed the possibility of the town receiving some funds for rail relocation, perhaps under the urban transportation assistance program. It is the responsibility of the Minister of Transport and the Minister of State for Urban Affairs (Mr. Ouellet) to disburse funds under this program in accordance with the recommendations of ministers from various provinces. As a result, we would also have to deal with the Minister of Industry, Trade and Commerce (Mr. Horner) from Alberta.
Under this program $2 per capita per year is granted for projects such as rail relocation. I should like to make representations to the effect that Fort Saskatchewan receive funding under the urban transportation assistance program to move the railway out of the town. This town has a population of about 10,000 people. On speaking this evening to Muriel Abdurahman, one of the town councillors, she suggested that we have the three levels of government and the Canadian National Railways participate in the funding of this relocation. This

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would be the case in respect of the urban transportation assistance program because the province also has to be consulted about funding.
The town of Fort Saskatchewan has this railway line going directly through the centre of town. The town has a substantial industrial base, including a Sherritt Gordon plant, a Dow Chemical establishment and an inland chemical industrial site. The residents in this area are very concerned that at some time a chemical car might be derailed in the town itself. It is obvious that tragedies can and do occur when railway chemical cars are derailed. One can see this as evidenced by two articles which appeared in the Edmonton Journal on Saturday, February 25 and Monday, February 27. The article on Monday, February 27 appeared under the headline "2,500 in U.S. flee deadly gas". This is a story about a chemical car derailment and it states in part:
A deadly cloud of chlorine gas that escaped from a derailed freight train and has already killed eight people floated north today, triggering a string of evacuations in its path.
"We don't know how far we're going to have to go with the evacuation," a spokesman for the Bay County sheriffs department said. "The chemists are telling us when we have an unsafe area."
At least 2,500 people within a five-mile radius of Sunday's derailment were evacuated. Civil Defense Director Ron Johnson said propane leaking from one of the tank cars could mix with the billowing chlorine and explode, turning the 115-car freight train into a chain of fire.
This is exactly what the residents of Fort Saskatchewan are concerned about and fear. Let me turn to the other article which appeared in the Edmonton Journal on Saturday, February 25 under the heading "Rail 'bomb' ravages town", and again this is why the residents of Fort Saskatchewan are concerned. They fear that if a derailment occurred on this track within the town limits it would ravage the town of Fort Saskatchewan. I should like to quote from the Edmonton Journal article, dated February 25, 1978, which reads as follows:
An earth-shaking flash of flame erupted Friday from a railway tank car carrying liquid propane, hurling burning bodies into the air, showering debris and setting fires.
Six persons were reported dead in the path of destruction through a two-block area and 100 others were injured,...
When the first tank car exploded, 14 businesses and dwellings burned down and other, smaller fires erupted as the intense heat ignited structures up to 300 metres away ...
The tank cars were among 24 of a Louisville and Nashville Railroad freight train that was derailed . . .
This is exactly the concern expressed by many residents in the Fort Saskatchewan area. I commend Mr. Ken Hodgins of the Fort Saskatchewan chamber of commerce for attempting to counteract this serious problem. A member of the chamber of commerce, Dr. Ralph Galvin, indicated that a public meeting will take place in Fort Saskatchewan on Tuesday. At that time an actual film of one of the explosions will be shown. This explosion occurred when a chemical car derailed. The track runs through the residential centre of Fort Saskatchewan. It passes through the downtown area, which is the main shopping centre. It is well within 1000 yards of the senior, junior and

elementary schools. Mr. Hodgins indicated that they are concerned because a good many of the chemical cars coming out of Fort Saskatchewan are more potent than the ones referred to in the articles of the Edmonton Journal.
In making these representations, I am hopeful to have the participation of all levels of government in having the track moved from within the town limits of Fort Saskatchewan. This sentiment was expressed by the town council of Fort Saskatchewan on many occasions, by the mayor, Mr. Hank Powell, and councillor Bob Fraser. This area was discussed at the executive level within the Progressive Conservative party. Also it was brought forth by Mr. Mart Philbin, who lives within a 1000-yard radius of the line. Because of the railroad tracks going through the town, our concern is that the town could very easily become a chemical bomb. We hope to have the track moved in order to alleviate the possibility of a derailment and a chemical explosion, especially in light of the fact that Dow Chemical is presently following an expansion program.
I hope to follow this up with representations, both written and verbal, to the Minister of Industry, Trade and Commerce, the Minister of Transport and the Minister of State for Urban Affairs when I receive more communications from the town council and the chamber of commerce of Fort Saskatchewan.
In dealing with Bill C-17 and the broader aspects of the Canadian National Railways, one cannot help but refer back to a few comments which were made by the hon. member for Portage. 1 will keep my remarks brief because there are other hon. members in the chamber who wish to participate in this debate, such as the hon. member for Dauphin (Mr. Ritchie). We do not wish to slow the legislative process at all.
On Monday, February 27, members of my party had occasion to visit with Mr. Justice Hall in Saskatoon. 1 mention that because in Saskatoon there was a recent rail relocation program which resulted in the removal of the railway lines from the downtown core area. I commend the residents of that area for the lovely city they now have. Returning to the visit of February 27, 15 western Progressive Conservative members of parliament met with Mr. Justice Hall to review some of the recommendations contained in the Hall report. It is noteworthy that only six of some 92 recommendations by Mr. Hall have been fully implemented, and five have been partially acted upon. No action has been taken on the rest. The Conservative party finds that very disturbing. Neither the government nor the Minister of Transport has seen fit to sit down and discuss the royal commission report. The government went to the great expense of commissioning a report and having individuals travel in order to gain input from Canadians, yet they pay little heed to these worthwhile recommendations.
I could be critical of the government in many areas regarding this report. It is a shame that the railways are receiving far too much of taxpayers' money without having to account for the way it is being spent. It disturbs me that the government is paying no attention to the recommendation of the report which indicates that there is no government policy to assist the prairie livestock feeding industry or the oilseed crushers by
March 2, 1978

offsetting the low statutory freight rates on grain. In his report Mr. Justice Hall suggested that the government should offer some type of assistance to these industries. There is much in the report which should be implemented.
I could say a great deal as far as government policies are concerned. Rather than attempt to carry on with the report of Mr. Justice Hall, I will turn the floor over to the hon. member for Dauphin in order to conclude consideration of this legislation.


Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, 1 rise with considerable interest to speak on this bill. It is supposed to put the CNR into a profitable position. It is really only a matter of juggling figures. The government is wiping out S808 million in debt, so that the company will not have to pay the $65 million in interest charges that it is now paying. In any case the government will have to find $65 million somewhere else. Also it is indicated that the CNR will be rid of passenger service in 1980, which will provide them with another windfall of $50 million. VIA Rail is only another arm of the government. Surely the net effect remains the same. It merely aids in comparing the CNR with some other company. In Canada there is only one other comparable company, which is the CPR. Furthermore, all modes of transportation are so closely regulated by government decree that, whether managed by the government or managed by a large corporation, they are not all that different.
Dr. Bandeen, the president of the CNR, voiced the opinion that the revamping of CN will bring about a boost in the morale of its employees by removing the chronic negative image of being a loser. He suggested that the right to retain 80 per cent of the earnings will help reduce the amount of future borrowings. The remaining 20 per cent of the earnings will be earmarked as dividends for the government, which is the only shareholder in the corporation.
The CN president has suggested that a major obstacle facing CN has been a high ratio of debt, about 60 per cent to equity, which has been developing over some years. In effect, the CN is not retiring its debt, as would a private company, by selling off some of its assets but is merely asking the government to assume the debt so that the books of the CN show better balance. No doubt in the future there will be further recapitalization as CN management struggles to deal with its capital structure.
Dr. Bandeen has suggested that morale in the CN is low because of its image of a chronic loser, but in my community where there are many CN employees the morale is low because of the rapid shifting and changing policies of the company which have left the employees bewildered, downhearted and in despair. Major changes occur from month to month and from year to year, from centralization to decentralization. Indeed, most employees express the view that the CN is actively trying to get out of railroading, and the aim of the employees, or many of them, is to stay only as long as
Railway Act
necessary to procure their pensions and to get out as soon as they can.
The so-called boost for morale may be good for the Montreal office but it is disastrous on the prairies. I have had occasion to realize that CN employees have advised clients that we would be much better served if we shipped things by other methods. The influence of railroading in western Canada is great because the western division has over half the car loadings in this country. The railways have taken to cancelling out of less than car load lots and they turn the business over to the trucking industry. In any case railways are now shipping only a few commodities and at times are not anxious to ship even those.
In the magazine the Manitoba Highway News of last month, the chief of the Manitoba Transport Board, Mr. A1 Mackling, had something interesting to say. He said:
For a long time there was no question about transportation-rails were supreme.
Now, as shocking as it sounds, rails are playing a secondary role to truck transportation in total dollar value of goods being moved . ..
Through rail abandonment the railways are giving up a segment of the transportation industry which they dominated, almost monopolized, for decades.
Meanwhile, trucking is moving in, picking up in the grain industry where rails claim it is no longer viable to operate and moving the goods economically and efficiently.
The article goes on to read:
Mr. Mackling said that with the policy of rail abandonment in western Canada, he can see no other alternative to long distance grain hauling than by highway.
'Already we've seen some long distance experimentation of bulk grain hauling,' he said, 'and that trend will continue'.
In the United States grain hauling of up to 1,000 miles by truck is quite common. The article continues:
Just recently, for example, there have been a number of applications dealing with specialty grains and grain by-products-the meals produced from the crushing of particular oilseeds: rape, mustard, sunflower and soyabeans .. .
A big reason for this is trucking's adaptation to 'time sensitive' situations.
"There's more and more reliance on trucking because of the time factor,' explained Mr. Mackling, 'that is, instead of a shipper having to have a fairly large warehouse, heavily stocked with inventory at either end of his transportation movement, he's now cutting back on inventory and relying on the ready access of trucking to satisfy his customers quickly.
I think that this is a significant event in the delivery of grain to country elevator points and will make considerable changes in western Canada which I do not think the railways will appreciate. They will find they have lost out in the game of transportation. For instance, 1 was told of a town in my riding, where I was yesterday, where there was a line-up of trucks carrying grain all the way from 20 miles to 60 miles, and in one case 175 miles, so that grain was brought to a central point, by-passing many elevators and moving the grain into a consolidated position. This is the consolidation of grain handling system in western Canada, and if it continues, what will happen is that the railways will find that their services are no longer needed to as great an extent as they have in the past.
One of the things that the Hall commission was to do was to prepare a blueprint for the railway system in the west but until now it has not done very much except to close down rail lines, which the commission had suggested should be abandoned. It

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is very important to note that the Prairie Rail Authority, the establishment of which was suggested by Mr. Justice Hall, has not been set up. It was considered that it would be a western based organization because, in any case, the Canadian Transport Commission is not interested in the west. The Prairie Rail Authority, it was hoped, would be a body which would have an influence on the CTC but would be based in western Canada, be sensitive to our needs and would make suggestions for the welfare of the transportation industry.
In fact, the Minister of Transport (Mr. Lang) has set up the prairie rail action committee. It has the same initials but it is an entirely different body. Whereas the Prairie Rail Authority was to report on the 2,500 miles of rails-it was doubtful whether they should be included or abandoned-it was to be an ongoing committee which would take care of things for the five to ten years in the 1980's while the consolidation process went on. In fact the prairie rail action committee was set up to make a report by the end of September, 1978.
Obviously it is far too soon for the rail companies and the grain handling companies to decide where they want to have their grain elevators, which branch lines should be closed down and which should be kept open. The action of the railways and of the Minister of Transport, with the bill now before the Standing Committee on Labour, Manpower and Immigration regarding hours of work and dust collection, will result in the
closing down of many of the smaller elevators and in practice consolidating them in a much larger area.
For instance, there is a branch line in my riding which is closed down for almost eight months in the year. As soon as the first snow comes, the line is shut down. There may occasionally be some hauling when the spring break-up comes, but in general for two or three months after the snow disappears the line is considered to be soft and no grain is hauled out of there. So in effect the farmers are gradually learning to haul grain by truck to elevators located on the main line. This means that we will lose many lines in western Canada through lack of use because the railways are not providing an alternative or a reasonable service on these lines.
One of the tragedies of railroading in western Canada is that it is controlled in the east. Management of the CNR, which used to be in Winnipeg, at least so far as the western regions are concerned, has been consolidated in Montreal. It shows in the actions it has taken that it has very little knowledge of our situation.
May I call it ten o'clock, Mr. Speaker?


Mr. Deputy Speaker:: It being ten o'clock, this House stands adjourned until tomorrow at 11 a.m. pursuant to Standing Order 2(1).
At ten o'clock the House adjourned, without question put, pursuant to Standing Order.

Friday, March 3, 1978