1978-03-09

ROUTINE PROCEEDINGS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise under the provisions of Standing Order 43, on a matter of urgent and pressing necessity, to move the following motion:
That this House views with alarm the conduct of President Castro of Cuba, the only communist leader in the Americas, for having recently increased the number of Cuban troops in Africa to 30,000 who are mobilized for action to remove existing governments and to substitute therefor communist administrations; and that this House calls on the government to inform Castro that his deplorable and shocking action is dangerous to world peace and must be discontinued and, if not, will cause Canada to consider terminating diplomatic relations with Cuba.


Mr. Speaker:: Presentation of such a motion for discussion, pursuant to the provisions of Standing Order 43, can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CENSORSHIP
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under the provisions of Standing Order 43 and ask for the unanimous consent of the House to present a motion relating to a matter of urgent and pressing necessity.
Considering that Swedish film producer J. J. Thorsen has made a pornographic film picturing Christ as a drunkard, a fornicator and a homosexual; considering that the film, which is entitled The Many Faces of Jesus, has been banned in Israel, in England and in France; and considering that the film will be shown in Canada as early as next fall, thanks to the
help of a Canadian financial backer, I move, seconded by the hon. member for Abitibi (Mr. Laprise):
That the House order the government to take as soon as possible all necessary steps to prohibit the circulation or distribution in Canada of that film or of any other of the same sort.


Mr. Speaker:: Order. Pursuant to the provisions of Standing Order 43, presentation of such a motion can only be made with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, cattle producers, as the House knows, are in the second week of a boycott of auction yards and packing plants in Manitoba and Saskatchewan, having experienced constant losses in the cattle business over the last four years. I would therefore move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House instruct the Minister of Agriculture to introduce legislation immediately, as he has promised, to establish a meat authority with the power to rationalize and plan the livestock industry so that farmers will receive a fair price for their product.


Mr. Speaker:: Unanimous consent is required before such a motion can be put forward under the terms of Standing Order 43. Is there such consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


LABOUR RELATIONS
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, under the provisions of Standing Order 43, I rise on a matter of urgent and pressing necessity which relates to yet another possible postal strike. In view of the fact that a number of essential services, particularly those supplied by the
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March 9, 1978
Post Office, are being jeopardized as a result of strikes and walk-outs, and since many of these work stoppages are a direct result of questionable practices and discrepancies surrounding the taking of strike votes-I refer, for example, to the atrocious and undemocratic way in which the CUPW staged its strike vote last fall-I seek to move, seconded by the hon. member for Calgary North (Mr. Woolliams):
That the Minister of Labour introduce legislation which would give federal government authorities the right to observe and scrutinize any or all union strike vote proceedings within the public service sector.


Mr. Speaker:: Such a motion, under the provisions of Standing Order 43, can be presented only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, I rise under the provisions of Standing Order 43. My motion concerns the fact that instead of coming before the Standing Committee on Agriculture to discuss the very important subject of estimates, the Minister of Agriculture chose instead to visit his predecessors, Senator Olson and Senator Hays, in the Senate of Canada. Since the minister was presumably trying out the furniture with a view to taking his place where he hopes to be after the next election, I would move, seconded by the hon. member for Swift Current-Maple Creek (Mr. Hamilton):
That this House respectfully requests that the Senate does not prepare for the addition of yet another Liberal minister of agriculture to its ranks, and further requests that the present Minister of Agriculture be present at all future meetings pertaining to agriculture estimates if he is serious about getting them passed.
 * *


NATIONAL SECURITY
Mr. Stan Darling (Parry Sound-Muskoka):: Mr. Speaker, I rise under the provisions of Standing Order 43. My motion concerns the outpourings of support reported in today's Ottawa Journal which the policies of the Prime Minister has received from the Soviet Union-outpourings which presumably represent the successful outcome of the government's policy of detente. Since the stated view of the Soviet government is, "We're very happy with Trudeau in power", and since the U.S.S.R. wants to do as little as possible to change the situation, I ask leave to move, seconded by the hon. member for Prince George-Peace River (Mr. Oberle):

That this House believes that there can be no distinction between the KGB and the government of the Soviet Union and, despite its praise for the Prime Minister, condemns the intrusion of the forces of Soviet imperialism into the national security of this nation.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


HEALTH AND WELFARE
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I rise under the provisions of Standing Order 43. In view of the fact that a ten year old child from Saint John, New Brunswick, was recently flown to Halifax for treatment of a confirmed case of Reye's syndrome, a disease that has been linked to the spruce budworm spraying program, especially through the clinical studies done by Dr. Crocker of the Izaak Walton Killam Hospital in Halifax, and since this is the thirteenth case of the disease since 1968, resulting in at least five deaths, I move, seconded by the hon. member for Sault Ste. Marie (Mr. Symes):
That the Minister of National Health and Welfare direct her department to undertake epidemiological and toxicological studies of the population living in the environs of the spray program to complement the clinical studies being done by Dr. Crocker.


Mr. Speaker:: Such a motion can be presented for discussion at this time only with 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, my question is directed to the bank rate increase announced yesterday by the Bank of Canada. Bearing in mind that it is over a year since the spring of 1977 when the bank started moving the bank rate down, and in January, 1977, the unemployment figure was approximately 100,000 less than it is
March 9, 1978

today, would the minister indicate why he has chosen to raise the bank rate at this time when so many Canadians are out of work?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, the bank rate was raised yesterday by the governor of the Bank of Canada. As is customary, he consulted with me and I agreed with the general thrust of the monetary policy of the governor of the Bank of Canada.


Sinclair McKnight Stevens: Mr. Speaker, again my question is directed to the Minister of Finance. As a former minister of finance twice removed from the present minister, in a similar situation in 1974, asked each of our Canadian chartered banks to give favoured treatment to the smaller businessmen in the country-farmers, fishermen and those in distressed areas-would the Minister of Finance indicate if he, likewise, has asked our chartered banks to save those sectors of our economy from the full impact of this interest rate increase which they have determined?


Joseph Jacques Jean Chrétien: Mr. Speaker, I can assure the hon. member that in my contacts with the banks and, as well, through my department, they are aware that the policy of this government is to make sure that the credit necessary in the low growth areas of Canada should be of sufficient proportions. I will be asking them to do whatever they can in the special circumstances.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is to the Minister of Finance. Bearing in mind that we now have a bank rate in Canada which is higher than that of any of the other seven main industrialized nations in the world-with the exception of France, which is fighting off communism, and with the exception of Italy, which really has no government- would the Minister of Finance indicate whether he has at least considered giving some relief to those who will be paying mortgage interest rates in future as a result of his policy, with a view to allowing them to charge at least a portion of their mortgage interest prior to paying their personal income tax.


Joseph Jacques Jean Chrétien: Mr. Speaker, as usual, the hon. member forgets to mention one aspect of the policy-that some time ago the spread between the interest rate in the United States and the interest rates in Canada was 4 per cent. It has come down half a point to a point, but it is still three points better than it was a few years ago, if you compare the two situations.


Sinclair McKnight Stevens: How about mortgage interest?


INCREASE IN BANK RATE-GOVERNMENT SUPPORT
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, my question is for the Minister of Finance. At the first ministers' conference on February 15, which the minister appears to have forgotten, part of the communique of the meeting stated that action was required now to speed up the economic recovery which has now begun. Since then, Statistics Canada surveys have shown that the real value of business investment is
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declining in 1978 by at least 2 per cent, and 4 per cent in manufacturing, the increase in the bank rate will make it more expensive to raise capital-it will be a disincentive to invest- and those businesses faced with a higher cost will pass the cost along in higher prices.
Will the minister explain to the House how, in view of the communique of the first ministers and the effect on business investment, he could support this increase in the bank rate and interest rates in Canada?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have just explained that the difference in interest rates between Canada and the United States was such that the governor of the Bank of Canada could really not accept it. He increased our rate by half a point. But I do want to point out that a year and a half ago, the difference in rates between Canada and the United States could reach up to 4 per cent. Now, there is a one-point difference but because there exists in Canada considerable need for foreign capital, of necessity there must always be a difference between the Canadian and the American rates of interest.


John Carnell Crosbie: Mr. Speaker, the minister should try to be consistent. It is the minister's position that Canada has a floating exchange rate and that he is not interfering with the exchange rate, so why does he now bring forward this story about interest rates and Mr. Bouey?
I want to ask the minister the following question. When the minister started interfering in the market a few weeks ago, he said that the provinces approved his policy. Were the ten provinces consulted by the minister before he approved the increase yesterday by the governor of the Bank of Canada in the interest rate of a half per cent, and did they approve what the minister says is his policy?


Joseph Jacques Jean Chrétien: Mr. Speaker, obviously the hon. member does not know how the monetary system operates in Canada. Monetary policies are established by the governor of the bank in consultation with the minister of finance. But it is the responsibility of the governor of the Bank of Canada to make those decisions, and he is a very responsible gentleman.


John Carnell Crosbie: Is the Minister of Finance now stating the government of Canada has no responsibility for the monetary policy and that only the governor of the Bank of Canada has that responsibility, and does he agree with the governor of the Bank of Canada in his statement yesterday, that too large an exchange rate adjustment over too short a period of time would not be helpful in restoring our international competitive position, and there would be a risk that we could not overcome inflation if we do that? I have two questions: Does he say that only the governor is responsible for monetary policy, and does he agree with the governor's statement on the inflationary danger?

March 9, 1978
Oral Questions


Joseph Jacques Jean Chrétien: I said that I agree with the general thrust of the monetary policies established by the governor of the Bank of Canada.


EFFECT OF BANK RATE INCREASE ON INVESTMENT
Mr. Max Saltsman (Waterloo-Cambridge):: Mr. Speaker, I should like to direct my question to the Minister of Finance. It also concerns the raising of the bank rate by half a percentage point, presumably to attract foreign capital into Canada and thus buoy up the Canadian dollar. Completely outside the question of what effect this change in the bank rate may have on our foreign exchange rate-there are many reasons to think that it will have little or no effect-I should like to ask the Minister of Finance some questions about the consequences of this policy on our domestic economy.
Assuming that this change in the bank rate will raise interest rates, it will have a depressing effect on new capital investment-particularly that of Canadian firms-and, while it might attract some foreign investment, it seems to me that it will kill investment by Canadian companies and will in many ways work contrary-


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


Max Saltsman: Mr. Speaker, in view of the perverse effects this will have, what measures does the minister intend to propose to the House to offset this attack on investment in Canada?


Joseph Jacques Jean Chrétien: Mr. Speaker, if the hon. member reads the statement of the governor of the Bank of Canada I am in complete agreement with him; that increase in the bank rate will have very little influence on the expansionary financial policy of the federal government.


Max Saltsman: Mr. Speaker, the announcement of the bank rate increase comes a day after Statistics Canada announced that sales of some key durables such as stoves and ranges are down about 26 per cent over last January. Assuming that this bank rate increase will further depress the sale of comsumer goods-which it might well do-what does the minister propose to do to offset the increase? To say that a .5 per cent increase in the prime rate in Canada will not have a depressing effect is really to ignore the experience of history.


Joseph Jacques Jean Chrétien: Mr. Speaker, I do not want to argue with the hon. member, but in reply to his question-if it was a question-I think it is very dangerous to pass judgment after one month's publication. We have to look at the question with a broader perspective. I think the governor of the Bank of Canada had all these factors in mind when he made his decision.


Max Saltsman: I appeal to the Minister of Finance to stop monkeying around with the machinery and let the economy recover without damaging it as he is doing now.


Some hon. Members:: Order.


Mr. Speaker:: Order, please. The hon. member for Rimouski.


CENSORSHIP
Eudore Allard: Mr. Speaker, my question is for the Secretary of State. Despite the fact that the province of Quebec has control over the censorship of films, can the minister tell the House whether he intends to oppose the entry in this country of the film Many Faces of Jesusl


Hon. John Roberts (Secretary of State):: Mr. Speaker, I am not aware of the film to which the hon. member is referring and I do not know of any basis on which I would oppose the showing of a film in Canada.


Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, since the minister does not seem to be aware of the propaganda now being spread in Canada about that horrible film which some would have shown in Canada and which was turned down in England and France, I should like to ask him to kindly confirm with the people or the companies that they want to show this film, and then take the necessary means to oppose the move because we have enough problems here in Canada without importing them from abroad to corrupt our youth even more.


John (Moody) Roberts: No, Mr. Speaker, it is not part of my responsibilities to censor films.


NATIONAL SECURITY
Mr. Bill Jarvis (Perth-Wilmot):: Mr. Speaker, my question is to the Solicitor General. I am sure the minister is aware of the situation, first revealed by the CBC yesterday and discussed on national television by ex-RCMP Commissioner Kelly today, wherein there apparently has been distributed among several government departments 58 copies of a report or a summary or precis of a report entitled "Canadian Related Activities of the Russian Intelligence Service".
This report, or its precis, allegedly contains information which has formed the subject matter of questions in the House

March 9, 1978

of Commons recently and the subject matter of a Toronto Sun story listing 16 subversive activities carried on in Canada. Is the Solicitor General now able to confirm that this classified material emanated, not from the RCMP but from one or more of the 58 government employees or offices who are recipients of this classified material?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, as the hon. gentleman perhaps noted from comments I made relating to this matter outside the House-and there were no questions relating to it yesterday in the House-it has not been our practice, and it is not my practice, to comment on the nature of such information.


An hon. Member:: Why?


William Herbert Jarvis: Mr. Speaker, because of his silence, the Solicitor General permits the festering of suspicion about a serious security leak in the RCMP. Is it accurate to say that the 58 copies of the report, or its precis, were distributed by or under the authority of the Intelligence Advisory Committee? This is not an RCMP committee, but is composed of representatives of various federal departments, including the Solicitor General's department, I believe the Department of Justice, National Defence, the Privy Council office, and there may be others. Was it that authority which authorized the distribution of the 58 copies?


Mr. Blais:: Mr. Speaker, obviously the hon. member's question is of the nature of the previous question. Therefore, my reply is the same.


William Herbert Jarvis: A final supplementary question, Mr. Speaker. The Prime Minister said clearly last Thursday that the security of this country was in peril and was vulnerable because contained in this report, allegedly, was the source of information, the names of informants, the methods of operation, and so on. I would like to ask the Solicitor General, if that report was such a challenge to our national security, why would 58 copies be produced and circulated among various government departments?


Jean-Jacques Blais: Again, Mr. Speaker, the hon. gentleman is making certain allegations and I am not going to comment on those allegations.


THE CANADIAN ECONOMY
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, would the Minister of Finance inform the House whether he has received from the Department of Justice the bill amending the Bank Act and, if not, when did he send that bill to the
Oral Questions
Department of Justice for the drafting of amendments as he indicated to us a few days ago?


Joseph Jacques Jean Chrétien: Mr. Speaker, the answer is no to the first part of the question. I have not yet received this bill. Concerning the second part of his question, I would say to the hon. member that communications between my department, the general director of banks and the Department of Justice began last fall and that I do not have the precise date of those discussions.


Marcel Joseph Aimé Lambert: Mr. Speaker, I want to ask a supplementary.
Could the minister tell the House when cabinet developed the principles on which the amendments would be based, when they were submitted to the Department of Justice and when they will be sent back?


Joseph Jacques Jean Chrétien: Mr. Speaker, I cannot discuss in the House the specific dates for those decisons. I can mferely tell the hon. member that the Department of Justice has been working for a very long time on that review of the Bank Act. There have been many consultations between my department and the Department of Justice in that regard. Many times, some items have been reexamined by cabinet, as it happens regularly. But the hon. gentleman being a former cabinet member, he should know very well that I am not at liberty to give any more details.


UNEMPLOYMENT INSURANCE
Stan Darling: Mr. Speaker, I direct my question to the Minister of Employment and Immigration. Is the minister prepared to overrule the decision of the U1C re the case of Robert Richardson, of North Bay, who was denied natural justice and labelled a fraud? This matter was raised by the CBC ombudsman last Sunday, who presented evidence to support the position that this man was denied the right to have witnesses testify on his behalf. If so, will the minister take steps to reimburse Mr. Richardson and compensate him for the damage done to his good reputation?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, it was determined by our officials that Mr. Richardson was working. While he took his appeal to the Board of Referees, which is comprised of labour, management and government representatives, the decision was unanimous that he was working at the time he was drawing unemployment insurance. He made application for an appeal and that was turned down by the chairman. The penalty for fraud was removed, however, as a result of the investigation, not because of the work by the ombudsman of the CBC but because of the work we did which indicated that, in my view and in the view

March 9, 1978
Oral Questions
of the department, there was no call for that particular penalty.


Stan Darling: Mr. Speaker, may I ask the minister if he would at least review the file personally at this time?


Jack Sydney George (Bud) Cullen: Mr. Speaker, not only did I personally review the file, but my predecessor reviewed the file. We checked out the facts. One of the witnesses the employee was going to bring was to attest to his character. We said that was not in question and, therefore, that individual would not be required. The one thing I want to check out in dealing with the three members of the Board of Referees who made that decision is whether they in fact refused to allow any evidence in support: the only information I have so far is that it was information in support of his character or reputation, not having to do with the facts. I want to check that out before I come to a final conclusion.


NATIONAL SECURITY
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, I wish to ask a question of the Solicitor General. Before 1 put the question, I remind him that he cannot hide behind the shield of security by not saying anything in the House and then talking outside the House.
Has the Solicitor General given any direction, order or suggestion with regard to the recovery of any of the 58 documents-whether classified or alleged highly classified-or copies, or any number? If so, how many have been recovered? I ask this question in light of the fact that he is now not only intimidating members of parliament but members of the media.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, evidently that question relates directly to the question previously asked by the hon. member for Perth-Wilmot. Therefore, the same reply is going to be provided: I am not going to comment on it.


Eldon Mattison Woolliams: Mr. Speaker, it is rather surprising that the Solicitor General will not answer these questions. Taking into consideration the fact that there are 58, or some other number of documents-they may be fractured, so we do not know how many are out-I ask the minister whether any charges are anticipated against any members of this House or any part of the media? Has he gone to the Attorney General of Canada to get consent to lay any charges? Has the consent been obtained with reference to any warrants issued and to proceeding with those warrants and searches of the media in this country?


Jean-Jacques Blais: As I indicated before, Mr. Speaker, the investigation is an ongoing one. The hon. member will be made aware, as will all hon. members, in the event that consent is sought from the Attorney General.
[Mr. Cullen.1


NATIONAL DEFENCE
Mr. Bob Kaplan (York Centre):: Mr. Speaker, my question is for the Minister of National Defence. It has been more than two years since the government, through the then minister of national defence, committed itself to establishing a medal for NATO service. When will the minister be making an announcement on that subject, for the armed forces and the people of this country?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I welcome the question. The matter has been under study for a long time. It raises some complex questions. The hon. member has expressed to me his concern about this matter. I am looking into it personally, as is the Chief of Defence Staff, to perhaps find some other method of accomplishing the same purpose.


NATIONAL SECURITY
Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Solicitor General: it relates very directly to the information sought by my colleague from Perth-Wilmot. I should point out that the government of Canada has recently been taking very extreme actions based upon the premise of a leak of security documents. There are now reports to the effect that the document in question has been circulated in large number.
Will the Solicitor General tell the House of Commons whether there is any accuracy in the reports that the document, or documents in question have been circulated in more than one copy, perhaps as many as 58 but in any event a number of copies?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, 1 welcome the hon. member's belated interest in this matter.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Jean-Jacques Blais: His co-operation would indeed have been appreciated last Thursday when it was sought. Under the circumstances, the hon. member's question touches on the questions of the hon. member for Perth-Wilmot and the hon. member for Calgary North. The same reply applies.


Charles Joseph Clark: Mr. Speaker, the Solicitor General well knows that the co-operation sought from me was a request from the Prime Minister that I use my office to ask the hon. member of parliament for Leeds to come to my office, without any advice as to why he was coming, where he would be surprised by the Solicitor General of Canada and General Dare.


Some hon. Members:: Hear, hear!
March 9, 1978


Charles Joseph Clark: That sort of request was, of course, going to be rejected. I want to know why the Solicitor General attaches "Top Secret" to information which is surely important for the House of Commons and the country to know, namely, whether this document which his colleagues claim was very tightly circulated was, in fact, circulated in some number. He told us he will not confirm or deny that fact. Consequently, we must accept that it is confirmed. Will he tell us why he refuses either categorically to confirm or categorically to deny reports that that document was circulated in some number?


Jean-Jacques Blais: Mr. Speaker, 1 am glad to hear the hon. member's explanation. It took him more than a week to compile that particular justification. With regard to the reply, should I give it, replies are motivated by parliamentary tradition, based upon the nature of the information sought.


Charles Joseph Clark: Will the Solicitor General advise whether a review is now under way as to the extent of the circulation of documents that are classified as "Secret" or "Top Secret" from the security service or any other agencies? I am speaking of a review of the procedures of circulation within the public service or, indeed, among ministers and staffs of ministers.


Jean-Jacques Blais: Mr. Speaker, I would expect the hon. member to ask me that question when we are dealing with estimates. I will take it as notice.


Charles Joseph Clark: I would ask the Solicitor General to stop being so chippy with the House of Commons.


Mr. Baker (Grenville-Carleton):: He is an under-achiever; he is over-reacting.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Since he has claimed that security would be in danger-that is the effect of his claim-will the Solicitor General tell the House of Commons how the security of Canada would be endangered by stating whether or not there was wide circulation of this supposedly secret document? How would it be endangered by giving that information to the Parliament of Canada to whom this government is responsible?


Jean-Jacques Blais: Mr.Speaker, in order to provide that judgment for the hon. member, I would have to refer to the information that the hon. member is seeking from me; and that is exactly what I am not doing today.


DISCLOSURE OF NUMBER OF SECRET DOCUMENTS DISTRIBUTED
John George Diefenbaker: Mr. Speaker, I have witnessed a number of examples of hypocrisy in this House, but nothing to equal that of the Solicitor General.


Some hon. Members:: Hear, hear!


John George Diefenbaker: With regard to his knowledge of parliamentary procedure, on what basis is he making the statement
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that it would not be parliamentary to give this information? Is it parliamentary to hide the truth in order to benefit the minister?


Some hon. Members:: Hear, hear!


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, the right hon. member is the only one on that side of the House who has had any experience in leading a government of this country. Surely he knows the nature of the information which is sought from me, and he knows that matters affecting national security are not the subject of comment if the information that is sought may be detrimental in relation to national security.


John George Diefenbaker: Why, then, has the minister been such a babblemouth outside the House of Commons? Has he been instructed by the Prime Minister to keep his mouth shut from now on and endeavour to delude parliament into reaching the conclusion that what he has been babbling about he must not explain because he knows he would be in difficulty?


Jean-Jacques Blais: Mr.Speaker, outside the House I have provided exactly the same sort of information as I have given in the House-


An hon. Member:: Blabbermouth!


Jean-Jacques Blais: -in discharging my role to communicate to the Canadian public the truth in respect of these matters and the position the government has taken, one which has been justified by the public reaction we are obtaining, a reaction causing so much preoccupation on the opposition benches.


Some hon. Members:: Hear, hear!


NATURAL RESOURCES
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, my question is addressed to the Minister of Energy, Mines and Resources. It has to do with the recent budget proposal by the Ontario government to allow Falconbridge and Inco to deduct from taxable profits the full costs of operating European refineries to process Ontario ore.
In view of the fact that recent lay-offs in Sudbury, Thompson and Port Colborne by Inco and Falconbridge are attributed to depressed nickel markets, not to lack of nickel resources, and since the Ontario proposal will continue to lock Canadians into the position of being hewers of wood and drawers of water, is the minister prepared to meet with Darcy McKeough, the Ontario Treasurer, to have him reverse this atrocious proposal? Further, is the minister prepared-if he is not successful-to initiate within his own level of government offsetting tax legislation to negate this blatant example of the selling-out of Canadian interests?
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Oral Questions
Hod. Alastair Gillespie (Minister of Energy, Mines and Resources): Mr. Speaker, I would, of course, be very pleased to meet with the Treasurer of Ontario with respect to the important subject of mining taxation. I hope such an opportunity will arise in the near future. As the hon. member will recognize, a decision was taken at the first ministers' conference that the finance ministers and resource ministers of the provinces and of Canada should meet with a view to examining fiscal arrangements and other questions which affect the important mining industry.
As to the specific question the hon. member asked with respect to offshore refining, particularly by Falconbridge, I believe he is fully aware of the importance of this matter to the Falconbridge operation.


John R. Rodriguez: Bearing in mind that the minister met with his provincial counterparts not so long ago with a view to developing a national mining strategy, can the hon. gentleman tell us whether this sort of tax concession has been discussed in general and, further, how it fits within the concept of a national mining strategy which, surely, ought to put long-term Canadian interests first?


Mr. Gillespie:: As I am sure the hon. member realizes, questions of precise tax policy fall within the purview of the Minister of Finance rather than within my own portfolio. From the point of view of the provincial governments, I might suggest that it is the mines ministers who can make recommendations, but it is the finance ministers who consider those recommendations.


John R. Rodriguez: One final supplementary. Can the minister tell the House whether he, personally, supports that sort of tax concession to multinational mining companies which sell out Canadian resources for ever and ever?


Mr. Speaker:: Order, please. The hon. member for Moncton.


POST OFFICE
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, my question is directed to the new Postmaster General, not to the minister who is presently Solicitor General. There are some serious answers I should like to get. When will the Postmaster General do the following: first, provide complete postal facilities for Riverview, New Brunswick, which has 16,000 inhabitants and is one of the fastest growing communities in the maritimes; second, when will he provide house to house delivery in all built-up areas-


Mr. Speaker:: Order. If every member were permitted to use the question period to make representations about constituency problems, I am sure we would have to deal with 265 different questions every day.


SHIPBUILDING
Mr. Raynald Guay (Levis):: Mr. Speaker, I should like to ask the Minister of National Defence a question which I put last week but which was not answered. In view of the alarming situation at Davie Shipbuilding Ltd., where there have been nearly 2,000 lay-offs and where the situation is growing progressively worse, I would like to ask the Minister of National Defence what he intends to do in view of the many pressures that have been exerted on me and on him by organizations and municipal councils in my region to make funds available for the refit and conversion of ships in the Canadian fleet of his department.


Barnett Jerome Danson: We
have tried to accelerate the ship refitting program to increase the flow into the dockyards, though we cannot accelerate it as fast as I would wish. However, I am able to say, in response to the hon. member's present and previous representations, that work on one of our ships, the Protector, could begin at an earlier date than has been suggested. The specifications are now ready, enabling the Department of Supply and Services to invite tenders as soon as possible. Hopefully, we can bring that ship into dock for refit in the latter part of May.


HEALTH AND WELFARE
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, my question is addressed to the Minister of National Health and Welfare. In view of the rapid aging of the Canadian population, resulting in increasing demands on health care, what steps is the hon. lady taking to encourage the establishment of geriatric chairs in medical schools so that a larger number of doctors may be trained in this field?


Hon.   Monique@: I did receive notice of the hon. member's question, but I am not yet ready to answer appropriately. I should like to give him an answer tomorrow or privately later this afternoon.


PENITENTIARIES
[Stage Direction]
ST. JFrOME-PROGRESS REPORT ON HOSTAGE-TAKING INCIDENT
Mr. Roch La Salle (Joliette):: Mr. Speaker, my question is also directed to the Solicitor General, and I hope that in this
March 9, 1978

case his answer will be more specific. In view of the current problem at the St. Jerome detention centre, and it seems that the conditions demanded by the mutineers come under federal jurisdiction, could the Solicitor General tell the House what progress has been made in the negotiations to free the hostages?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, as the hon. member is no doubt aware, this is a provincial institution, and the provincial authorities have assumed this responsibility and are in charge of the ongoing exchanges. Now, as I have already indicated, the government intends to lend its full co-operation as regards the information on file relating to individuals under jurisdiction of the federal penitentiary system.


Roch La Salle: Mr. Speaker, I should like to put a supplementary question.
Given the increased number of those hostage takings, is the Solicitor General considering more severe penalities to discourage those experts in hostage takings and to satisfy Canadians who are quite shocked by the deterioration of our system?


Jean-Jacques Blais: Well, I merely wish to indicate to the hon. member, Mr. Speaker, that it is a provincial responsibility. The specific event is a provincial responsibility. I wish to point out that during a recent debate in this House, the matter was raised and on Tuesday next I invite the hon. member to attend the sitting of the Committee on Justice and Legal Affairs to discuss that problem and learn about the progress made in connection with his concerns.


PRESENCE IN GALLERY OF UNITED STATES FINANCIAL OFFICERS
Mr. Speaker:: Order, please. Before continuing with the question period, I know hon. members would wish to join me in signalling the presence in our gallery of two very distinguished visitors representing our closest friend and neighbour, the United States of America, in the persons of Mr. Charles Schultze, Chairman of the Council of Economic Advisers to the President, and the Secretary of the United States Treasury, Mr. Blumenthal.


Some hon. Members:: Hear, hear!
Oral Questions


THE CANADIAN ECONOMY
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I wish to direct a question to the Minister of Finance. What steps does the minister propose to take to offset the disastrous consequences of an increase in interest rates on slow growth regions? I think specifically of the five eastern provinces which enjoy the distinction of having half of the total unemployment in the country.


Joseph Jacques Jean Chrétien: Mr. Speaker, the hon. member should know that the interest rate, even with the increase of yesterday, is still a point and a half lower than it was a year ago.
While I am on my feet, Mr. Speaker, I would like to reply to the question put to me today by the Leader of the Opposition.


Some hon. Members:: No.


Joseph Jacques Jean Chrétien: This morning-


Some hon. Members:: No.


James Aloysius McGrath: Mr. Speaker, I would like to ask the minister, who seems to be blind to the fact that we have a serious problem of regional disparity in this country which will be even more exacerbated by the action he took yesterday in increasing interest rates, whether he has consulted his colleague, the Minister of Regional Economic Expansion, and if he will undertake specific measures now to offset the disastrous consequences that this move will have on investment in the Atlantic provinces and Quebec, which will seriously aggravate the already critically high unemployment situation. Let him answer that question.


Joseph Jacques Jean Chrétien: Mr. Speaker, it is obvious that the opposition do not want to know the truth. They like to spread doom and gloom rumours, just as the Leader of the Opposition did when he said, when putting two questions to me-


Some hon. Members:: Oh, oh!


An hon. Member:: Answer the question.


Joseph Jacques Jean Chrétien: Mr. Speaker, I reply to the hon. member by telling him that the interest rate as set yesterday by the governor of the Bank of Canada is 1V2 points less than it was a year and a half ago. The hon. member does not want to recognize that. When the governor of the Bank of Canada administers the monetary policies of the government, the governor has to vary the interest rate from time to time; and I have great confidence in the governor of the Bank of Canada.
3606

March 9, 1978
Oral Questions


REGIONAL ECONOMIC EXPANSION
James Aloysius McGrath: Mr. Speaker, it is one thing for the minister to make a fool of himself in this House, but to do so before his colleagues from the United States is something else again. I ask the Minister of Regional Economic Expansion if he has consulted the Minister of Finance and has he satisfied himself that this move of increasing interest rates will not seriously undermine regional development policies in this country, especially in the four Atlantic provinces?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, I can say to the hon. gentleman that right now we are not receiving that many applications, and this situation will not change very much. I can refer the hon. gentleman to a point when the interest rate was quite high, even higher that it is with the present increase. We have a substantial investment in his province of Nova Scotia-


Some hon. Members:: Oh, oh!


An hon. Member:: Newfoundland.


Marcel Lessard: -and this will not have the impact of, nor will it be a major factor in, preventing investment in Canada.


NORTHERN AFFAIRS
Mr. Bob Brisco (Kootenay West):: Mr. Speaker, my question is directed to the Minister of Indian Affairs and Northern Development. I would like to thank the minister for providing me with copies of correspondence to the provincial ministers of forestry and the environment of British Columbia dealing with the Akamina-Kishinena Valley. Has the minister received responses from the provincial authorities to his intervention?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I will have to check. I will do so this afternoon and report back to the hon. member.


ENVIRONMENTAL AFFAIRS
Robert Hylton Brisco: My question is to the minister responsible for the Canadian Wildlife Service, the Minister of State for the Environment. I ask the hon. minister if he has had occasion to make representations, on behalf of the Canadian Wildlife Service, to provincial authorities in British Columbia with reference to the concern for certain wildlife elements in the Akamina-Kishinena Valley area?
[Mr. Chr6tien.l


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, I have looked into the matter. All the species involved in this particular area come under provincial jurisdiction. I have not yet made any representations, because whatever goes on there is dictated by provincial jurisdiction.


GULF OIL REPAYMENTS TO SHAREHOLDERS-PROPOSAL AECL TAKE SIMILAR ACTION
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, my question is to the Minister of Energy, Mines and Resources: it relates to a very interesting decision by a federal appeals court in the United States, released Tuesday afternoon. Officers and former officers of Gulf Oil Corporation were required to pay back to their shareholders the sum of $18.8 million illegally paid out by Gulf Oil. Coincidentally, some of that money may have been paid to one, Shaul Eisenberg, for a transaction in South Korea.
My question to the minister is this. Has the minister or the government given any consideration, as the shareholder on behalf of the people of this country in Atomic Energy of Canada Limited, to looking at the possibility of attempting' to recover a similar amount paid out by the officers and former officers of that corporation for what has obviously been concluded by a committee of this House to be for corrupt or illegal purposes?


Alastair William Gillespie: Mr. Speaker, I know nothing about the allegations in the preamble of the hon. member's question. I am sure he realizes-I believe this was put before the committee of which he was the chairman-that the contract entered into by AECL and Mr. Eisenberg or his company is regarded as a legal contract.


Allan Frederick Lawrence: Mr. Speaker, I was not aware of that. If the minister is correcting me, I am glad to have that correction. For instance, in respect of the Argentinian transaction there was no reference whatsoever to the $2.5 million, or a total of $5 million, U.S., that was paid out by AECL on behalf of the minister and on behalf of me to an unknown agent, for unknown purposes, using very suspicious means of payment. Is the minister now indicating to the House that that transaction was included in the contract between AECL and the Argentinian authorities? If so, this is the first time we have had that information provided to us.


Alastair William Gillespie: Mr. Speaker, the hon. member seems to be very confused. If he casts his mind back, he will realize that the arrangement made with Mr. Eisenberg and his companies was with respect to the Korean contract and not to the Argentinian one.
March 9, 1978


CONSUMER AFFAIRS
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, my question is directed to the Minister of Consumer and Corporate Affairs. Will the minister advise when he intends to table the royal commission report on corporate concentration, or the Bryce report?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Mr. Speaker, that matter does not fall within my jurisdiction.


Charles Joseph Clark: What does?


Mr. Paproski:: What is your job?


CONSTRUCTION OF GAS PIPELINE FROM ALBERTA TO QUEBEC AND MARIT1MES
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Will the government be announcing shortly the construction of a gas pipeline from Alberta to Quebec and the maritimes?


Alastair William Gillespie: Mr. Speaker, no announcement can be made of such a construction until an application is before the National Energy Board. I very much hope there will be one, or more than one application to extend the TransCanada system right to the Atlantic Ocean.


William Gordon Ritchie: Mr. Speaker, are studies going on by the government as to the financing implications, in view of polar gas and LNG tankers, and will these be published before a decision is taken?


Alastair William Gillespie: Mr. Speaker, studies are going on in my department with respect to some of these questions. Studies are also being undertaken by Petro-Canada in conjunction and co-operation with Alberta Gas Trunk Line on possible applications with respect to Quebec and the maritimes. There are also, of course, studies going on by Petro-Canada with respect to liquefied natural gas and bringing that gas down from the High Arctic. With regard to Petro-Canada-which is a very important agent; one which your party does not seem to recognize-it is because of their initiative there may well be a pipeline.
Privilege-Mr. Rodriguez NATIONAL SECURITY


SEARCH WARRANTS ISSUED RESPECTING TELEVISION NETWORKS
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, my question is directed to the Solicitor General. It is on the question of warrants issued with regard to the Global and CTV television networks. Would the Solicitor General advise whether those warrants were issued under the Official Secrets Act, and would he also advise whether his office inspired or initiated that action respecting the issuance of the warrants?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I cannot inform the hon. gentleman of the specific nature of the warrants which were obtained. I am advised that they were obtained from a justice of the peace. I have not seen them, nor have I received a report today relating to the events that followed, except those that have come to me through the press.


Stuart Malcolm Leggatt: The question dealt with whether they were initiated in the Solicitor General's office. Perhaps the Solicitor General would deal with that specifically in his reply. I would also like to ask whether he has now received a researched opinion from the law officers of the Crown as to the duties and responsibilities of members of parliament vis-a-vis the Official Secrets Act. Does he now have a legal opinion upon which to act, in terms of his investigation of any member of the House?


Jean-Jacques Blais: The two questions are really intertwined and they relate to an ongoing investigation. As the hon. gentleman knows, the investigation, being ongoing, is not subject to comment at this time.


PRIVILEGE
Mr. Speaker:: Order, please. Yesterday the hon. member for Nickel Belt (Mr. Rodriguez) again raised the question of privilege which he had raised on two previous occasions, the first time about a week and a half ago, and the second time a few days ago, relating to the possibility, as has been alleged publicly, of electronic surveillance against himself.
First of all I want to reiterate the importance with which this matter must be viewed, I am sure, by all members of the House, because the classic definition of privilege has been based upon precedents which predate even the possibility of electronic surveillance, and therefore electronic intervention in the freedom of communication and movement of a member of the House of Commons is a new question as it relates to privilege.
I am sure all hon. members would agree with me that any possibility of electronic surveillance of a member raises a very serious problem and should be given utmost priority by the

March 9, 1978
Privilege-Mr. Rodriguez
House. However, the contents of the motion which has been put to me raise at least two, and perhaps more, serious problems of both a procedural and a substantive nature.
The first is that the terms of the motion seek a referral to the Standing Committee on Privileges and Elections, not just of the possibility of electronic surveillance and of the statements made by Mr. Hart, who is alleged to have carried out the electronic surveillance, but also of the statements of the Solicitor General (Mr. Blais). That calls into play, it seems to me, not only a procedural but a substantive problem, because indeed in the course of his remarks the hon. member for Nickel Belt indicated that he accepts the statements of the Solicitor General as a member of the House and a minister of the Crown, and yesterday the Solicitor General in his intervention reiterated that those statements were made by him after a careful investigation.
Based on the precedent of the recent and very thorough analysis which was done of the procedure by which any misleading statement of a minister would have to be questioned but clearly not by way of a question of privilege, to permit a question of privilege on statements of a minister, at least calls them into question.
It seems to me totally inconsistent to say, on the one hand, that statements have been accepted and, on the other hand, that they should be referred to the Standing Committee on Privileges and Elections. Furthermore, it would be a dangerous precedent to accept, as part of a question of privilege, the referral of a minister's statement to the committee because it would go directly contrary to the ruling which I just made in respect of recent attempts to deal with any suggested misleading of the House by any minister. That would have to be done by a substantive motion, or it may be the subject matter of a debate.
Therefore, it seems to me that it would be contrary to our practices and precedents to permit the inclusion of the reference to a minister's statement. I do not say for one minute that if the matter does go to a committee ultimately, the minister would not want to make some contribution, but I think the formal reference of the minister's statement seems to call into question those very statements which have not been called into question but have been accepted by the hon. member. If there was any doubt about that reasoning on my part, one would have to examine the arguments presented yesterday because a good many of those who participated in the discussion yesterday-although the hon. member for Nickel Belt and others accepted the Solicitor General's statements-have called those very statements into question. I think we would have to guard that procedure very carefully.
May I say that I am also concerned about the assumption which seems to be made in the motion about the confidentiality of sources and of communications to members. That is a very important aspect of the life of members of the House of Commons, but the fact that it is contained in the motion seems to me to presume upon something which is not supported by our precedents and, at the very least, is presently under review in some ways in our courts and in other legislatures, and is far

from an established right or privilege of members. That seems to be under question. I do not consider that as fatal a defect as I do the inclusion of the statements of a minister, but I do have that concern.
May I also add that there is other language in the motion which may be simply superfluous, although it might not be procedurally out of order. I refer to expressions such as "the whole truth" and "the matter being publicized" as a direction to the committee, and "this breach of privilege" in the motion. It seems to me that the latter expression "this breach of privilege" prejudges entirely the question which is to be put to the House. Again I say that this might simply be superfluous language.
The basic procedural difficulty I have is the inclusion of the reference of the minister's statement, and I hope the hon. member will examine the reasons I have given today and rethink his motion, because I want to stress that this decision today should not be taken as a final decision in respect of a matter of this sort. It is entirely without prejudice to the hon. member to endeavour, after examining precedents and the reasons I have endeavoured to put forward today, to rephrase his motion in such a way as may-I have to say "may" because I cannot prejudge the issue-receive the favourable decision of the Chair. But I do not want it to be taken that by setting this matter aside, because it is a contest of fact or an argument between a member and the minister, that is not a question of privilege and should not be dealt with in this way. Therefore, it has to be accepted that the minister has made a statement to the House and, that statement having been accepted, it does not remain in contest, and even if it did, it could not be part of a question of privilege. That is a very substantial part of our procedure, not simply a matter of form.
However, some questions remain that are of fundamental importance to the House, because I think it is possible to visualize events which have taken place which, although entirely consistent with the assurances given by the Solicitor General to the House, and entirely consistent with the investigation which he undertook and with the results of the RCMP investigation, may still leave questions to which the House may want to address itself.
I think I should stress here that the role of the Chair, if there are questions about the surveillance of a member, is very difficult. Perhaps the surveillance did take place in the orbit which is classically the privilege of a member, but the possibility of some connection with official surveillance of any sort seems to me to be very close to questions with which the House would want to come to grips, and it is not the function of the Chair to prevent the House from attempting to deliberate on matters which come reasonably close to being questions of substance.
Having explained the procedural difficulties and, in some ways, the substantive difficulties for which I have to set aside this motion, let me say that I do so without prejudicing the right of the hon. member to consult on the motion, to rethink it, and to try to rephrase it in such a way that may-again I say "may"-receive the favourable decision of the Chair and
March 9, 1978

ultimately the consideration of the House. In the final analysis, and this has to be stressed as well, the decision is not up to the Chair in the final sense but up to the House.
I leave the matter with the hon. member on that basis but, on the grounds which I have stated, for the moment I must set aside the question of privilege.


John R. Rodriguez: Mr. Speaker, first of all I want to express my thanks to Your Honour for the way in which you elucidated the problem with which we are faced. I will look at your comments in Hansard, and I reserve the right to bring another motion which is more in line with the explanation you gave to the House this afternoon.


MR. JARVIS-NATIONAL SECURITY-REFUSAL BY SOLICITOR GENERAL TO ANSWER QUESTIONS
William Herbert Jarvis: Mr. Speaker, I rise on a question of privilege. Your Honour will be well aware that over the past few days questions have been put to the Solicitor General (Mr. Blais) which he has refused to answer. Up until today most of those questions related to specific events of alleged subversive activity. Today, however, I and others put questions not about specific events but about certain procedures for which the Solicitor General and his department are responsible. Today I put a question as to whether copies of a certain report were printed and distributed. The question related in no wav to the contents of that report, nor did it refer to any individual incidents of alleged subversive activity.
Last Thursday on a question of privilege the Prime Minister (Mr. Trudeau) contributed to a rather lengthy debate on this issue. In his intervention he referred to the contents of a particular document. With relation to that document he raised three matters which, in his view, were matters seriously affecting national security. The first of those was that foreign security services now know how our security service operates. The second was that the contents of the document involved would indicate sources of information and thus cause a situation whereby loyal Canadians would be reluctant to offer information in aid of our security service. Finally, the Prime Minister alleged that we were being judged by intelligence services of friendly countries, some of which we are closely associated with, such as our NATO allies.
In each of the three points raised by the Prime Minister the Prime Minister alleged that a particular security document would imperil our national security. By refusing to answer questions the Solicitor General has given support to all three points raised by the Prime Minister, but for the very opposite reason.
What the Solicitor General fails to realize is that it is not our security service which is being judged. The government and the department are responsible for the security service, and the government and the department are being judged.
The point I raise today-and I gave the Solicitor General an opportunity to negate this-is that reportedly 58 copies of a document are floating around Ottawa. We also gave the
Privilege-Mr. Jarvis
Solicitor General the opportunity to advise how many had been recovered. What has happened as a result of the refusal of the Solicitor General to answer questions? Why would foreign security services not know about our operations if there are 58 copies around? That has to do do with the Prime Minister's first point.
Second, loyal Canadians want to give information but might be discouraged from doing so if they thought their names would be revealed. Why would they think their names would not be revealed if there are 58 copies around?
Finally, with regard to friendly countries judging our intelligence services and having a negative reaction, why would they not have a negative reaction if there are 58 copies floating around, unless the Solicitor General can assure the House that they have been recovered or that they never existed? The importance of all three of the Prime Minister's points is this: I gave the Solicitor General an opportunity today to state that the leak was not within our security service but within the Government of Canada or one of its departments. The minister refused to assure the House in that regard.
Your Honour will recall the events leading up to last February 6. The Solicitor General refused to answer questions on the ground that the matter being inquired about was before the McDonald Commission. That resulted in a very lengthy debate on questions of privilege, and on February 6, as recorded at page 2567 of Hansard, Your Honour said this:
I think I have exposed the difficulty and I hope I have made my thinking as clear as possible on decisions on which I really do not need any help from the standing committee. Therefore, I think the appropriate action for me to take would be to reserve my judgment on both these motions, not for one day but for several days, because I think I can be aided in my deliberations by determining, in the manner in which I described, exactly what the intentions of the minister are and what will be the reality. Therefore, I propose to set these motions aside for a few days and see what happens.
Those motions were proposed by the Leader of the Opposition (Mr. Clark) and the hon. member for Winnipeg North Centre (Mr. Knowles). In my view what happened on February 6 was that the Solicitor General was put on probation. I believe he has breached that probation, patently and obviously, today. In the interest of national security I therefore ask Your Honour to reconsider the events which led up to that decision on February 6.


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, I will be very brief. One needs only to have been here since last Thursday to know that a certain number of events have come to the fore and that certain allegations have been made. I have indicated to this House today that certain allegations are still under very active investigation. I did not comment on the questions asked of me today for the reason 1 set forward, namely, that the matters involved were under investigation, that they involved national security and that, in accordance with the traditions of this House, no comment is forthcoming. That is exactly the position I still maintain.


Walter David Baker: Mr. Speaker, the question is not quite as simple as the Solicitor General (Mr. Blais) puts it. Let me put it into perspective. As this matter

March 9, 1978
Privilege-Mr. Jarvis
first unfolded we found out that there was alleged to have been a leak of some kind which caused the Solicitor General, in the company of the head of the security service of the country, to take the unprecedented step of visiting a member of parliament. I leave to Your Honour's imagination the atmosphere of that visit.


Jean-Jacques Blais: A very friendly atmosphere. Ask the hon. member for Leeds (Mr. Cossitt).


Walter David Baker: The next step was a debate in this House. It was a crisis debate. That is how one would have to describe it if one were not a member here. Yesterday there were raids, with warrants, on two television stations in this city, involving a leaked document. Surely if the government is to be believed at all, this matter must be extremely serious and, of course, secret. I do not have to mention the fact that a whole host of allegations have been published in newspapers, and all the rest of it. As a result there is a threat of prosecution in the courts of a member of this House for a violation of the Official Secrets Act. I think that is a pretty serious thing.
Now, sir, we have a report that the Solicitor General refuses to confirm or deny in the House of Commons today that there are 58 copies of that document on the loose somewhere, a monstrous leak if the document is an important one. Mr. Speaker, I think we are beginning to doubt the extent and the nature, and the depth of concern there ought to be in terms of the security leak in view of the fact that in this city there are 58 of these copies. The question that was put by the hon. member for Perth-Wilmot (Mr. Jarvis) was not on the merits, not on the contents, of any documents. The question was put as to whether or not there was this broad distribution. It was a very simple question. That is all there was. It did not elicit an answer that could damage national security, but if the answer to the question were yes, the answer would damage the security of the government and its credibility in this whole issue. I have the suspicion that that is the reason the refusal was given. I am sorry to have to say that, but it is just beyond belief that all of these investigations could occur when there is alleged to be 58 documents loose in this city. I cannot believe that the Royal Canadian Mounted Police would do that. I cannot believe that the security service of the country could be so negligent, but I can believe that the Government of Canada could be so negligent and the Solicitor General be so negligent-


Some hon. Members:: Hear, hear!


Walter David Baker: -if, indeed, the document is as important as has been stated.
Now, sir, getting to the heart of the motion and dealing with the obligation of the minister-


Mr. Speaker:: Are the motions earlier referred to, the motions to which the hon. member is referring?


Walter David Baker: Yes, sir. It is the motion referred to again by the hon. member for Perth-Wilmot (Mr. Jarvis).
Your Honour said some very important things on that day about the obligation of a minister, and I want to recite them for the record. 1 am looking at page 2567 of Hansard. You said this, and I quote:
In the final analysis, the most serious practical difficulty we have to face is the matter of the executive accountability to parliament. We are dealing with a matter which is fundamental to the whole question period, and the question period, as I have said publicly many times, is a source of great pride to the Canadian parliament. In my opinion the question period here is a session of daily accountability, which is an absolutely paramount feature of the Canadian parliamentary life.
I would be the first to say, sir, that if a question is put as to content of a document of the nature that it is alleged this document is, the minister is justified in saying no. That is one thing. It is quite another thing, sir, to refuse to answer a question not relating to the content, but relating to whether or not 58 copies of that document exist somewhere in the city. You went on to say, sir:
Therefore, in the final analysis, the Chair is not in a position to compel an answer-
That is true. Then you went on to say:
However, that does not diminish the importance of this exercise and the importance of the theory of ministerial responsibility, which makes the question period work on a daily basis in the Canadian parliament. Therefore, we are dealing with something which is fundamental to the most important aspect of our Canadian parliamentary system.
And further on you said:
The way for the House to find out what the Solicitor General is going to do in response to questions is to proceed to the question period and ask him questions.
We have done that, sir. You put him on probation, and today we found that he breached his probation. You went on to say:
On the other hand, I think it would be disrespectful of a very serious argument and of the very serious position put forward by the opposition which is fundamental, simply to push these motions aside.
You then went on to propose that the motion stand aside to see what happens over the next few days.
Sir, a member of parliament is in danger of being charged. If he is charged, there is a matter before the court. It is germane and important to the consideration in this House of the propriety of the minister's actions as a minister here in the House in answering questions, and of the minister's actions outside the House, for us to have the answer to the question of whether or not this document is so unimportant that it could be photostated and distributed through government departments, and re-photostated and distributed again. That is the question we have to ask ourselves. Or did the Solicitor General overreact in the circumstances, and is there a necessity for the raids on television stations, for subjecting a member of parliament to a possible charge, in this specific case, to interrogating newsmen, and all of the other things that have gone on? Sir, you put the minister on probation. I think the time has come now to answer the very simple and direct question put by the
March 9, 1978

member for Perth-Wilmot, and that the minister should come into this House and answer that question.


Some hon. Members:: Hear, hear!


Mr. Speaker:: I will hear other members in a moment, but I think it may also be time to put an end to the phrase of the Chair "putting a minister on probation." I think we ought to keep in context, first of all, the nature of the motion that was put forward on that day. Both motions really called into play, or proposed to call into play, statements of the minister of his intention in how to deal with questions. The action that the Chair took at that time was to indicate that there was no feasible way, in my opinion, that a committee could be asked to make judgment upon the intentions of a minister, and how he was going to deal with questions, because the way to determine that was to get on with the question period and put the questions. I did not put the minister on probation by doing that, but I did, I think, give respect to the importance of the motions and indicated the way to find out the answers to the motions was not to send them to a committee to examine what a minister was going to do, but to get on to the question period to find out how he was going to deal with it.
I also think, in fairness, that if one wants to quote all of that judgment, one will verify that I made it quite clear the Chair could not compel an answer, and that under no circumstances could our precedents or practices be taken ever to impose upon a minister an obligation other than a political sanction to make answers.
I think it is always the right of a minister to refuse to answer any question or, in fact, to take no action at all on that question. That remains fundamental.
In so far as the hon. member for Perth-Wilmot raising the question today about the refusal of the minister to answer questions today is concerned, it may relate in some way to these motions that remain outstanding, which I will finalize, but in so far as it relates to the refusal of the minister or any other minister to answer questions, of course it has no basis in privilege at any time.


Eldon Mattison Woolliams: Mr. Speaker, 1 want to associate myself with the hon. member for Perth-Wilmot (Mr. Jarvis) and also with our House leader in reference to the question of privilege.
I asked two very simple questions. In those questions there was no request to disclose anything which would affect the security of the nation. The first question I asked was whether the minister had given any direction or order to cover 58 documents. If those documents are copies of the document we have been talking about, and which is worrying the government and giving it some anxiety as to the security of the nation, and there are 58 copies in different agencies and departments of the government-that can be multiplied by four or five because they are probably copied, and there are helpers, executives, and directors, so there are probably a great number.
Privilege-Mr. Jarvis
A finger is being pointed at a particular member of parliament when the leak took place elsewhere. The leak probably took place in an agency of the government through the government's own negligence. That is why I wanted to find out whether there had been an attempt or direction to recover the 58 plus-and a big plus-documents in question.
The second question I raised was that we heard today that a warrant had been issued for the search of various offices of the media, television, and possibly radio stations, and the press. As we all know, the Fourth Estate has a very important function. It has been stated in this House on many occasions.
We try to get information. We do that by interrogating the government during question period. The answers we elicit are carried by the media across the country so that the public are properly informed. Without that Fourth Estate, this parliament, our democratic system, and this process could not operate effectively or efficiently.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: The second question I put to the minister was not anything in reference to being harmful to the security of the nation.
The 264 members of this House realize their responsibility with regard to the security of the nation. We have a pretty severe act, the Official Secrets Act, which deals with that. I want to place on record Section 12 of that act. I quote:
A prosecution for an offence under this Act shall not be instituted except by or with the consent of the Attorney General;
Except for when I flushed him out the other day, the Attorney General (Mr. Basford) has been very quiet about this whole affair. We do not know what part he is playing. We do not know whether the Solicitor General (Mr. Blais), to use the term of the right hon. member for Prince Albert (Mr. Diefen-baker), is babbling outside the House but dries up like a dry brook when he gets into the House. He babbles outside, and dries up inside. We cannot get the information.
The section continues:
-except that a person charged with such an offence may be arrested, or a warrant for his arrest may be issued and executed and any such person may be remanded in custody or on bail, notwithstanding that the consent of the Attorney General to the institution of a prosecution for the offence has not been obtained, but no further or other proceedings shall be taken until that consent has been obtained.
That means the consent of the Minister of Justice and Attorney General of Canada, the highest law officer of this land.
We heard that warrants were issued. I might as well say it, because I have been thinking about it for a long time. I have the feeling that this government is not concerned with the security of the nation, but concerned with the security of the government. They are worried because they have been so soft on security for the past ten years, and now they have something to hide. It is time somebody in this House said that.


Some hon. Members:: Hear, hear!

March 9, 1978
Privilege-Mr. Jarvis


Eldon Mattison Woolliams: They cannot get any action by intimidating members of parliament, so now they are going to start to intimidate the Fourth Estate. If ever there was a question of privilege, it is surely high time that this whole matter was discussed in committee. Possibly we should reserve our right to move a special motion in that regard.
We then come to the point made by Your Honour. Throughout the time I have been in this House, I have always accepted the fact that a minister does not have to answer. I have always known that you can draw inferences just as you can draw inferences in law. When a minister dries up like a dry brook he has something to hide. I want to know what the minister and the government are hiding.
The Deputy Prime Minister (Mr. MacEachen): is today replacing the Prime Minister (Mr. Trudeau) who has gone to western Canada, with or without the Minister of Transport (Mr. Lang). I say to him it is time that we got some answers and clarification. It is time for intimidation to be shelved. Is this merely an election gimmick to scare the opposition and frighten public opinion into thinking that maybe the opposition is doing something to the security of this nation? If there is anyone who should be concerned about security in this nation, it is the Liberal party and the Liberal government headed by the man who heads the party now as Prime Minister of this country.


Some hon. Members:: Hear, hear!


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, I regret the necessity of participating in a series of questions of privilege that have been raised almost every day. I had been planning today, yesterday, and earlier to raise points of order, because it is obvious that, through the guise of questions of privilege, debates are being held on subjects that are not before the House. However, I did not raise a point of order because if that were done, even though I regard this practice as being a very bad one, it would obviously draw the charge that we were attempting to close off debate.
I want to make it clear that in my view there is not a valid question of privilege before the House. There has not been. The Speaker has consistently ruled that these are not prima facie questions of privilege. Almost every day he is obliged to make a new ruling, restating his same decision. That is the historical fact.
I just wonder whether members are going to continue using this vehicle of privilege. If they do, when a true question of privilege arises, and that is a rare event, it will be of not much use.
Today the Solicitor General (Mr. Blais) declined to answer specifically certain questions which had been asked by the opposition relating to security. It is very obvious that if the Solicitor General had provided to the House of Commons the information requested with regard to the number of copies of sensitive security documents that were in circulation, where they were to be found, either in government departments or in the security service, that information would be of some value

to persons and agents who may have an interest in penetrating the security service of Canada.
It seemed to be a very obvious refusal, to decline to add to the information that other countries might want to have about our security system. I thought it was a legitimate approach to have been taken by the Solicitor General. I think it would be
of very great use to other countries to have this kind of information made available in the way that has been requested.
Quite apart from the security situation, the Solicitor General was entitled to answer, and I believe he would have answered as ministers generally do, except when there is some good reason. In this case it is a matter of judgment. There is a good explanation for the way the Solicitor General exercised his judgment.
References have been made in this debate by the hon. member for Grenville-Carleton (Mr. Baker) and the hon. member for Calgary North (Mr. Woolliams) to the fact that investigatory steps have been taken and possibly they were in the direction of a member of parliament, I think that both raised that point, and directed against the members of the media in the way of search warrants.
I remind the House that not so long ago allegations were made in the Globe and Mail with respect to the hon. member for Bonavista-Trinity-Conception (Mr. Rooney). The privileges of that member are as great as those of the hon. member for Leeds (Mr. Cossitt). It was alleged that the hon. member had violated a statute. The Speaker ordered an investigation. Subsequently a search warrant was issued, and the hon. member was charged. It was a regrettable occurrence, as any one of us regrets when any other hon. member finds himself in any difficulty of any kind. I apply that same view to the hon. member for Leeds.
The treatment given to the hon. member for Bonavista-Trinity-Conception, however regrettable, demonstrated a very valid principle, that no member of parliament is above the law.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: There has been a great deal said in this debate and in earlier debates about privilege. I agree there are privileges inherent in the office of member of parliament, some of which, as has been said, are outdated. Anyone who wishes to examine the Sandys case, as I have attempted to do, will find there were privileges asserted in that report which have fallen, and properly so, into disuse.
There is privilege. It ought not to be exaggerated, though, and members of parliament ought not to be giving the impression that in some way they can breach the law in a fashion which is not open to the ordinary citizen of this country.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: The people of Canada are watching to see how the hon. member for Leeds is going to be treated. Many of them are saying, "If I were suspected of having breached
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the law, or of having in my possession in an unauthorized manner certain documents, or having in my possession stolen documents-"


Walter David Baker: Allegedly stolen.


Allan Joseph MacEachen: -they are saying that in such circumstances they would be pressed to the limit. The citizens of Canada are watching the House of Commons. They are watching the government, and they are asking the government to deal with this matter in a just way.
Some hon. members are suggesting that the government is acting in order to persecute the hon. member for Leeds. That is a canard, a disreputable argument. I assure you, Mr. Speaker, and members opposite, that we do not regard the hon. member for Leeds as being any formidable threat to the government or to the Liberal party. But we do believe that the fact he is in possession-


Mr. Hnatyshyn:: It is an allegation and you know it!


Allan Joseph MacEachen: The hon. member concerned has made it clear in this Chamber that he has. The hon. member for Saskatoon-Biggar (Mr. Hnatyshyn) has only to look at what has been said by the hon. member for Leeds. He will find he has made it very clear that he has in his possession material which the security service of Canada has advised the government has been taken from, or is sourced in, security documents. No one has contested that, not even the hon. member for Leeds.


Some hon. Members:: Oh!


Allan Joseph MacEachen: Let me put the argument in another way. If hon. members opposite find that line of argument unappealing, may I draw attention to the fact that it was the assistant commissioner of the RCMP, not the government, who went to the office of the hon. member for Leeds and asked him to co-operate with the police and return the documents in his possession.


Ramon John Hnatyshyn: And he answered that request in this House.


Allan Joseph MacEachen: It was not the government. Hon. members may say this was a political move. It should be apparent to the opposition that the reason the assistant commissioner accompanied the Solicitor General was to underline that this was not a political matter but a security matter.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: That is abundantly clear. Why was it important to secure that document? Obviously it was important to the police, to the security service, to trace the source of the leak. Obviously somebody with access to a highly sensitive document had broken his obligation to Canada and has made it available in an unauthorized way. Surely it was reasonable that the Solicitor General and the assistant commissioner should go to the hon. member for Leeds and say, "Will you
Privilege-Mr. Jarvis
please co-operate with the police in a matter affecting the security of Canada and give us that document so that we may preserve its contents and, if possible, find out who is the bad apple who is giving out this measure of comfort to the enemies of Canada?"


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Let us talk about privilege, but let us also talk about responsibility.


Mr. Nowlan:: Hogwash!


Allan Joseph MacEachen: I suggest that the responsibility of a member of parliament with respect to security is absolute. It is nothing short of that. Do not think for a moment that this matter is ended. This matter will be of great interest to the people of Canada. It will be of great interest to them as they adjudicate the attitude not only of the hon. member for Leeds but of the Leader of the Opposition (Mr. Clark).


John Patrick (Pat) Nowlan: You are a great actor. Allan. You should have gone on the stage!


Mr. Speaker:: Order. I should like to be permitted to hear the argument which is being put forward as I have heard the other arguments which were put forward.


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: 1 have not very much more to say except that this is a matter which will not end today. It is one which will be of great interest to members of parliament and to the public because they will ask: what are the obligations of a citizen? What are the obligations of a member of parliament when asked by the police to co-operate in a security matter and to return a document? What is the responsibility of even the lowest among us, let alone a member of parliament? They will ask these questions. They will ask: what is the responsibility of the Leader of the Opposition in a situation of this kind when he was appealed to for assistance by the Prime Minister of Canada (Mr. Trudeau), who is the man primarily responsible for the security of this country?
Hon. members opposite may say: we are doing this because, you know, we are afraid; we are doing this because of the security of the Liberal Party. That is what the hon. member for Calgary North says. He knows, deep down, that that view is very foolish. I have a great deal of respect for the hon. member for Calgary North. He knows that that is just a debating point. He knows that the assistant commissioner of the RCMP could not be moved to take the action he did unless he was convinced this was a serious security matter. He knows that if the RCMP deserve the commendation they receive from the right hon. member for Prince Albert (Mr. Diefen-baker), as I believe they do, then surely, when they obtain a search warrant and put it into effect, they are not doing so for frivolous reasons but because they believe there is a matter which must be investigated, a matter which cannot be allowed to peter out without some conclusion.

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Privilege-Mr. Jarvis
I would appeal to hon. members opposite not to try to make politics on security and to attack the government every day on a question of privilege. I have resisted getting into this question of privilege earlier. Today I want to remind hon. members opposite that no matter how much smoke they put forward in these debates there is still one question that they must answer within their heart of hearts and that is what is the responsibility of a member of parliament when he is asked to co-operate with the chief of the security service of Canada, the assistant commissioner of the Royal Canadian Mounted Police? Has he any obligation to co-operate?


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: Mr. Speaker, I too have resisted getting involved in this particular debate. I believe, sir, that there are some legitimate questions raised by my colleagues with respect to points of privilege concerning the Solicitor General's approach to answering questions in the question period. It amazes me greatly to see the Deputy Prime Minister (Mr. MacEachen) get up and, under the guise of discussing this whole matter, deal in a political and most shameful way with respect to a very serious matter. It is a grave dereliction in the carrying out of the responsibilities of one of his colleagues in cabinet, namely, the Solicitor General (Mr. Blais).
The point which was raised initially was whether or not the Solicitor General can come into this House and adopt a position with respect to his refusal absolutely to answer any questions and to give notice to this House that he will not answer any questions respecting matters under his specific jurisdiction. I believe that is the point originally raised and it is the one to which I wish to address myself.
We have had some developments, and the genesis of this is rather interesting. We have had the complete and absolute ineptitude on the part of the Solicitor General by bringing in a senior law officer on the premises of parliament without the consent of the Speaker of this House, who is after all the person to whom all these requests should be made. Whether it is a request for co-operation or an attempt to intimidate a member of parliament there are a number of alternatives that can be taken by the police, including incarceration, charges, and search warrants. That particular tactic and the ineptitude shown indicated to me a "jackboot mentality" on the part of the Solicitor General and members of this government.
I want to say one other thing in support of the position taken because it is important to understand the background of the situation. The Prime Minister (Mr. Trudeau) rose in the House and delivered a long, prepared speech. It was typed because I saw it across the aisle. He appeared to be dealing extemporaneously with this matter as if he had come in to the House and taken copious notes. Mr. Speaker, the Prime Minister in the course of that long dissertation put a certain member of parliament not only on trial but he convicted and sentenced that member of parliament by his speech. The Prime Minister has offended every principle of civil liberty by that

outrageous speech which he made where there have not been any particular charges laid, just simply allegations stated under the aegis of the Official Secrets Act in this House.
Any of us who have looked at that particular piece of legislation know that definition of national security is a discretionary matter subject to considerable judicial review. The Prime Minister made a presentation to this House which tended to cast innuendo and slurs upon a man who represents a constituency, and thus constitutes a threat to the Prime Minister. With the Prime Minister setting that kind of background, the Solicitor General comes into this House and, after he indicated the first time around that he was not going to answer any questions on the topic of the investigation now under consideration by Mr. Justice McDonald, he has now in effect done the same thing with respect to this aspect of his responsibilities. What he is doing is giving notice to you, sir, and to the rest of the hon. members of this House that as far as any aspect of any investigation which can be remotely termed, in his opinion, national security, he is simply not going to answer. Rather he will stand in his place, as he did today in a rather contemptible position of snickering and taking rather cheap shots.
In this particular case we have serious allegations made against a member of parliament which are continuing to be carried on by the Deputy Prime Minister. An answer has been given in this House by that member to the specific request made by the Solicitor General apparently in consultation with his chief law enforcement officer in that area. Now we have the spectacle of him trying to perpetuate the allegation after an answer has been made in this House without the basis of any charge having been laid, just merely on the basis of allegations such as have been made by the Deputy Prime Minister today.
The reason I support the position taken by the hon. member for Perth-Wilmot (Mr. Jarvis) is that initially the Solicitor General gave notice to you, Mr. Speaker, that he would refuse to answer any questions, and it seems to me the basis of your decision and observation when the matter was first brought up was that one would have to consider the answers given from time to time in response to specific questions. But I suggest to you, sir, that the Solicitor General has indeed indicated that he is refusing to come into this House to answer any questions. He has given us a blanket assurance time and time again. This bears on the whole concept of ministerial responsibility; it bears on the whole basis of your observations, as pointed out by the House leader on this side, the hon. member for Gren-ville-Carleton (Mr. Baker).
We have the continuing threat and intimidation by the Deputy Prime Minister who says, "This is not going to end". We have the intimidation that has been practiced on a member of this House, an answer given, yet the continuation of intimidation by the fact that the Solicitor General continues to refuse to answer any questions in dereliction of the responsibility of that portfolio.


Mr. Speaker:: I see two other hon. members who want to join in the debate. We began with the proposition that it was a
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question of privilege that the hon. Solicitor General (Mr. Blais) today refused to answer questions on the grounds of national security. The argument has been interesting, but it really has not addressed itself to that fundamental point. No one has alleged that the Solicitor General does not enjoy that right, and I would be most surprised if anyone did. I am prepared to hear from the hon. member for St. John's West (Mr. Crosbie) and the hon. member for New Westminster (Mr. Leggatt), but I would ask them to confine themselves to the merits of that particular point.


John Carnell Crosbie: Mr. Speaker, I believe that the Deputy Prime Minister (Mr. MacEachen) in his comments certainly raised some questions here which you are going to have to ultimately decide, one of which he says is: what is the obligation of a member of parliament? Well, you are considering the question about what is an obligation of a member of parliament who is a minister.
There is a minister who says that on national security grounds and grounds that he deems to be national security- no other impartial body is yet to be asked to decide whether they are national security grounds or not-he does not have to answer any questions. That is what the minister says. The Deputy Prime Minister wants to know what is the obligation of an MP. As I see our obligation, the obligation of an MP is to do what he considers to be right for the country, based on the best advice he can get. It is not to bow down to the government.
When the government says, "This is a national security matter and therefore you are doing the wrong thing and we want to know the source of your information, you must give it to us because we, the government, say this is national security". I say "Who are you the government? You are the executive which, down through the centuries, has tyrannized the rest of the population whenever you have had the chance to do it. Your power is only fettered by the rights of members of parliament, and therefore I do not trust you. Whether it is you, an NDP executive, a PC executive or a Liberal executive, I do not trust you." I do not trust the executive, and I am never going to trust them. When a member of the executive says that a matter is a matter of national security, I say, prove it, go to some third party, go to a joint committee of the House which is seized of these matters. If that joint committee with members of both parties on it, says this is a matter of national security and that member X should do so and so, then I will be glad to do it. But I do not agree that I should do something because the Prime Minister (Mr. Trudeau), or the Deputy Prime Minister (Mr. MacEachen), or the Solicitor General (Mr. Blais) says it is a security matter.
Today we heard a remarkable proposition from the Deputy Prime Minister-one of the longest serving members in this House-that the right of national security is absolute with respect to members of parliament. He used the word "absolute". In effect, the Deputy Prime Minister says that when he decides it is a security matter, I have no rights vis-a-vis him.
Privilege-Mr. Jarvis
This is at least a dubious proposition that the Deputy Prime Minister has put forward. I say, if that is correct, we can wind up this parliament and forget it because, if that is the case, executive has an untrammeled power and authority based on national security.
The Deputy Prime Minister compared the case of the hon. member for Leeds (Mr. Cossitt) to that of the hon. member for Bonavista-Trinity-Conception (Mr. Rooney). They are in no way similar. The hon. member for Bonavista-Trinity-Con-ception has been charged with certain breaches of the Criminal Code in relation to his responsibilities as a member of the House, and the matter was handled quite properly. We all regret that it had to happen and that it did happen. But the cases are not the same. No charge is laid against the hon. member for Leeds and, if there are charges, they will not be laid under the Criminal Code because of some personal dereliction of his but because of a disagreement about what is in the interests of this country and what is a genuine breach of national security. So the cases are not similar.
In the case of the hon. member for Bonavista-Trinity-Con-ception, was the CTV network raided by the RCMP, was the Global network raided, and were newsmen dragooned to interrogate them throughout the week end? Nothing like that was done, so we are not dealing with a similar case. What we are dealing with now is an organized attempt by the government to put fear into the media and into the opposition parties as an election looms on the horizon.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: That is all it is. If another proposition of the Deputy Prime Minister is correct that we only have the same rights and responsibilities as an ordinary citizen, why were we elected in the first place? If my rights and responsibilities are exactly the same as those of anyone else in Canada, why am I a member? This is a new doctrine. We are supposed to have certain rights and duties that are different from those of the ordinary citizens.
The Deputy Prime Minister said that the public is watching the hon. member for Leeds to see if he is prosecuted. That is what in effect he said. I say, yes, you are a good one to give us that example. They were watching also to see if the former solicitor general was prosecuted, but he was not, and for the most part everybody is agreed that in the circumstances he should not have been. But let it not be said that the former solicitor general was treated exactly the same as any member of the general public would have been treated. We all know that is not the case.


Mr. Andras:: He co-operated with the police.


John Carnell Crosbie: Do not give us that applesauce that everyone is watching the hon. member for Leeds and that he is somehow different. Do not try to bluff us with your talk of national security.
Is it not peculiar, Mr. Speaker, that the government have been saying for 18 months that they know nothing about

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Privilege-Mr. Jarvis
national security, the Prime Minister said that they should know nothing about security, they do not know about barn burnings, they do not know about breaking and entering, they do not know what the security services are doing, but in the case of the hon. member for Leeds, they know every small detail? The Prime Minister is not staying out of this one, nor is the Solicitor General. Because it affects the hon. member for Leeds, they both have their snouts right into the trough.
Ever since October we have been told, "No, we are not going to have anything to do with security. We are the cabinet, we do not muck around with that, we might be accused of interfering with the police". But I say, yes, I accuse them of interfering with the police and security forces. That is what they are doing now in the case of the hon. member for Leeds. After the statements the Prime Minister made in the House telling us that we are breaching national security if we do not do what they are telling us to do, and after the Deputy Prime Minister ended with a threat to all members of the House of Commons, I say he will not influence me one whit, one jot, or one tittle.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: If the hon. member for Leeds is persecuted by the bunch opposite, I will be right there with him if he ever goes to jail, and so will everybody on this side.
The Deputy Prime Minister had the gall today to glare at us and say this matter will not end today. In other words he meant that they have not finished yet with their writs and searches, and with the media. "We are not finished with you yet," he said. I tell him what he can kiss. I will not say it in the House, Mr. Speaker, but I for one do not agree with the version of the Deputy Prime Minister of what are our rights.


Some hon. Members:: Hear, hear!


Stuart Malcolm Leggatt: Mr. Speaker, I will be brief, I would like to deal with the specific question of privilege because it is similar to the question of privilege which was raised when the Solicitor General (Mr. Blais) was initially appointed to his present role. At that time the questions that were asked, which dealt with the Keable inquiry or the McDonald inquiry, met with silence. There was a blanket refusal to deal with the subject, and the ground that was given by the Solicitor General at the time was that it was a matter which was before another body or another inquiry. That decision was subsequently reversed by the Solicitor General himself. What I say is that today the Solicitor General has made exactly the same kind of decision. He will now refuse to answer any questions dealing with the subject related to the hon. member for Leeds (Mr. Cossitt), or to deal with anything surrounding that.
It is vital and important that there be a response to questions by this government where a warrant is issued that is as serious as the one which affects the out-tapes, not merely the videotapes, of Global and CTV. The principle of freedom of speech is so intimately involved in this question that surely it is incumbent on the Solicitor General to respond without uncon-

sciously misleading the House. Where I say the House is being unconsciously misled is in the excuse for not answering the question, that it is a matter which deals with national security.
The questions I asked today were, first, who initiated the issuance of those warrants, was it the Solicitor General's office? On the surface of it, it is not a question which would be a matter affecting national security. My second question was whether a legal opinion had been given by the law officers of the Crown in respect of the rights and privileges of members of parliament vis-a-vis the Official Secrets Act. Again that met with a refusal to answer. The minister would not say that he has even received appropriate legal advice with regard to the actions that had been taken.
What we have before us in another example of a blanket refusal to deal with the subject. The government cannot get away with that. It can refuse to answer a question, but there is a political ramification when a government refuses to answer such questions day by day because it says it does not like them. That is a violation of my privileges, Mr. Speaker, a violation of the privileges of every member of the House when there is a refusal, not to answer a single question, but to answer any questions on the general subject. That is exactly what the Solicitor General did when matters were before the McDonald and Keable inquiries, and that is exactly what he did again in the House today. He has simply refused to answer questions on the total subject.
Will we now be in the position to ask any more questions concerning a fellow member of the House? That appears to be the position of the Solicitor General. He will take the political consequences of his refusal to answer these questions. In terms of privileges, I submit it is a violation of our privileges when any minister gives a blanket refusal and says in effect, "I will not answer any questions on that subject." This is a complete dereliction of his duty to members of the House and of his responsibility as a cabinet minister.


John George Diefenbaker: Mr. Speaker, there remains but little to say except to analyse some of the reasons that have activated the government in this attack on the hon. member for Leeds (Mr. Cossitt).
I recall very well that very recently some mention was made to the Prime Minister (Mr. Trudeau) about the hon. member for Leeds, and the answer the Prime Minister gave bore a relationship to an expression he used one time in this House which, interpreted, was quite different from the words which had been used. "Fuddle duddle" is approximately the expression of the Prime Minister in its original form concerning the hon. member for Leeds.
I am sorry hon. members opposite have all gone. The Solicitor General (Mr. Blais) has disappeared. The Deputy Prime Minister (Mr. MacEachen) has disappeared. Where have they gone? Have they gone to western Canada? After all, there is a pilgrimage going on there. As a member for Saskatchewan I am deeply concerned to find that the minister
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from Saskatchewan is among those left behind. That is an attack on my own province which I resent very greatly. Where are they? Have they gone with the birds?
The Deputy Prime Minister wrapped himself in the garments of legal righteousness in his references to the Royal Canadian Mounted Police. Not many months ago members of the RCMP were regarded as the enemies of the nation by the Prime Minister of Canada.


An hon. Member:: Hogwash.


John George Diefenbaker: The Prime Minister had reasons. If he was here, I would take him back to 1944, but he is absent. If he reads Hansard, he will know what I have in mind. All over the city of Montreal the mounted police were chasing after one who, in those dark days, was doing everything he could to undermine the authority of the mounted police. I could go into details. I did on one occasion, and I gave the Prime Minister an opportunity to answer. He disappeared right after I started to speak, and he did not come back.
I will proceed to recent days. Three years ago the Prime Minister decided to change the name of the RCMP from the Royal Canadian Mounted Police. I could understand his antipathy with regard to "Royal". He has shown that over and over again. However, the "RC" was knocked out, and what was left was "Mounted Police". I raised the matter in the House, and the Prime Minister said there was no foundation for my raising it. All over western Canada the "RC" was removed from detachments and the like. When western Canada rose in its might and told the Prime Minister its views about him-and it is going to tell him again when the next election comes-


Some hon. Members:: Hear, hear!


John George Diefenbaker: -he said he did not quite understand, and the initials "RC" were restored. Before they were restored the explanation of the Prime Minister was that the reason for removing them was that if a robbery was taking place across the street and there was a car with "RCMP" on it, Canadians would not know what that meant, and the robbery would go undetected. Well, the "RCMP" was restored because the Prime Minister did not dare continue the course he had been following. In the present instance the RCMP is being used in a way which cannot be justified.
Why was the hon. member for Leeds approached? Why was the hon. member for Leeds interrogated-there was at least the expectation of interrogation-by General Dare and the Solicitor General (Mr. Blais)? They had no business whatsoever coming into the precincts of the House of Commons. What were they trying to do? That is what is called the badger game.
The Deputy Prime Minister says this will be an issue in the election. It will, and it will leave fewer Liberal members from western Canada than ever before. All over this nation there is a realization of what is happening. There is intimidation, and there are threats. I defend no one who breaks the law, but I
Privilege-Mr. Jarvis
defend the right of a member of parliament to speak without intimidation and without threats. The Liberals have a big majority. The opposition is small, but there is one custodian of our rights, the Speaker of Parliament, who represents all members of parliament, and I want to suggest to Your Honour-you might have certain views concerning what has been happening over the last few days-that the freedom of parliament is at issue, and if there has been wrongdoing, let it be punished.
However, what has happened? There has been intimidation of the press because the press has dared to publish something the Prime Minister did not like. Are there 58 different varieties-one more than Heinz-or documents spread all over this country? Today the minister refused to answer. I can understand that, if he had answered, the truth would have been out, and it would have been recognized that this document, which is presumed by the Liberal party to involve the safety and future of the nation, is in the hands of 57 different people besides, allegedly, the hon. member for Leeds. Are we to be intimidated the way Charles I endeavoured to intimidate parliament and the way Cromwell later tried to do so? Not as long as there are members who believe in the British tradition.


Some hon. Members:: Hear, hear!


Mrs. Simma Holt (Vancouver-Kingsway):: Mr. Speaker, I feel compelled again to intervene. I listened with absolute horror to the hon. member for St. John's West (Mr. Crosbie). Some of these gentlemen have total contempt for certain aspects of parliament and the democratic system. I have been told by them that parliament and the democratic system are valuable and precious. But now they are contemptuous of it. I rise, however on another point.
Privilege does not allow any citizen of Canada, member of parliament or corner grocery man, to break the law. It does not protect a member from prosecution. If the government erred, it erred in not immediately laying charges and prosecuting that man who committed so terrible a crime against the state. The hon. member for Leeds (Mr. Cossitt) has committed a crime that is beyond all-


Some hon. Members:: Order!


Mr. Andre:: That is privilege. Withdraw! Withdraw now! You can't make a charge like that.


Ramon John Hnatyshyn: That is against the rules.


An hon. Member:: Learn something about parliament.


Mr. Speaker:: Order, please.


Simma Holt: I will listen to Mr. Speaker.


Mr. Speaker:: I trust that the hon. member for Vancouver-Kingsway (Mrs. Holt) used that expression in a metaphorical sense.


An hon. Member:: No, she did not. She must withdraw.

March 9, 1978
Privilege-Mr. Jarvis


Mr. Speaker:: If that is not the case, perhaps upon reflection there is some explanation for her choice of language, and the hon. member might want to withdraw that.


Simma Holt: Mr. Speaker, I would rather listen to your instructions than those of hon. members opposite. I apologize. I withdraw that statement.
I do say this, Mr. Speaker, that if it was the corner grocery man who had been involved in an incident of possession of something that did not belong to him, he might have suffered different consequences than a member of parliament.
I would like to say too that I am concerned with what has been happening in this House, with the backdrop of long experience as an observer of crime and the extent of crime in society. We are in a third world war, gentlemen. You have no ladies over there. We are in a third world war of terror. I have done research in terror and because of that happen to know things that I do not bring into the House of Commons that are secret and to which I am privy. I know certain things have been happening in the last year. International terrorists today have billions of dollars, more than any state or nation has. The thin blue line between the police-you cannot take it, you men opposite, can you?
It is a tragedy that the members of parliament over there cannot stand a little bit of other information besides their rhetoric. I tell you that I know that terrorism was a possibility and the thin blue line of protection by the police between the public and the terrorists entering Canada-


An hon. Member:: You are embarrassing your colleagues.


Simma Holt: I would not have embarrassed my colleagues if you people could stop howling. I notice that the Leader of the Opposition (Mr. Clark) called in the gentleman from Crowfoot when they disagreed with him publicly. He called in the hon. member for Saint Hyacinthe (Mr. Wagner) when he insulted him. He called in the former member from Burnaby-Richmond-Delta. But when something as serious as this happened, he did not have the strength, the intestinal fortitude to call in the hon. member for Leeds (Mr. Cossitt).
I am deeply concerned, Mr. Speaker, with one thing in this House. I know the importance of the place of the police in society. I know the right hon. member for Prince Albert (Mr. Diefenbaker) and how he respects the police and the law; I know that the hon. member for Calgary North (Mr. Wool-liams) has great respect for the police and the law. I am not sure of one or two others who have spoken, because I do not know them as well, but I do know, Mr. Speaker, that the thin blue line is so fragile-that line provided by the police for the safety of our society is fragile.
Contempt for the protection of the people, Mr. Speaker, is just frightening to anyone who cares. I just ask, and I plead in this House for the safety of the people of Canada, I ask members not to play with the information, the secret information the police may have. I have often investigated cases where

my information, if published, would have destroyed the investigation. I see it happening here on the largest possible scale. I beg you, Mr. Speaker, and I beg the responsible members opposite to please think of our country and our people, and the safety that the police provide for this country. Perhaps there is sensitive information, and perhaps the way the Solicitor General (Mr. Blais) handled this crucial situation has not satisfied some people, but let us not be ready to destroy our police force unless we have a substitute.


Mr. Speaker:: Order, please. The hon. member for Perth-Wilmot (Mr. Jarvis) initiated this discussion by referring to a question of privilege on the refusal today of the Solicitor General (Mr. Blais), to answer questions on the grounds of security. He referred back, as did other hon. members, to the motions that remain outstanding as a result of earlier discussions.
I want to reiterate that my intention in dealing with those earlier motions on that occasion was to stand them out of respect for the substantive nature and the importance of the motions. I feel I made it clear at that time that no obligation exists. I think it is well understood that it is impossible to enforce an obligation to give answers during the course of a question period. However, it was a separate question at that time which related to the declared intention on the part of the hon. minister in terms of certain kinds of questions and, therefore, I felt that the most effective way to get at the answer to that question was not to send the matter to the committee, but really to see what would happen in the question period.
I have heard all of the argument today. I will give the matter further consideration and attempt to finalize those motions as soon as possible.



ROUTINE PROCEEDINGS


[Stage Direction]
Second Report of the Standing Committee on Transport and Communications-Mr. Campbell (LaSalle-femard-Cote Saint-Paul).
Second Report of the Standing Committee on Fisheries and Forestry-Mr. Mclsaac.
Third Report of the Standing Committee on Management and Members' Services-Mr. Coates.
[Editor's Note: For texts of above reports see today's Votes and Proceedings.]
March 9, 1978

[Stage Direction]
Order Paper Questions HOUSE OF COMMONS

Robert Knight Andras: Mr. Speaker, pursuant to Standing Order 41(2) I wish to table in both official languages a study of public service pensions conducted by Tomenson-Alexander and Associates.


Mr. Mclsaac:: Mr. Speaker, I rise on a point of order. There have been discussions through the usual channels about the fact that the statement that is about to be made by the hon. minister, and perhaps the comments, responses and questions will certainly run us into the private members' hour. I believe it is generally understood that we would agree to that, and perhaps approaching six o'clock we could deal with Bill C-1001. We could proceed with that following the statement of the President of the Treasury Board.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.


Robert Knight Andras: That a Special Committee of the House, to consist of Mr. Speaker and seven other Members, be appointed to review the rights and immunities of Members of the House of Commons, to examine the procedures by which such matters are dealt with by the House, and to report on any changes it may be desirable to make;
That the Committee have power to appoint, from among its members, sub-committees, as it may deem advisable or necessary;
That the Committee have power to sit during sittings and adjournments of the House of Commons;
That the Committee have power to report from time to time, to send for persons, papers and records, and to print such papers and evidence from day to day as may be ordered by the Committee;
That the papers and evidence received and taken on the subject in the First and Second Sessions of the Thirtieth Parliament be referred to the Committee; and
That the Members to act with Mr. Speaker on the said Special Committee be Messrs. Baker (Grenville-Carleton), Baldwin, Beaudoin, Gray, Knowles (Winnipeg North Centre), Prud'homme and Reid.


[Stage Direction]
Motion agreed to.
Walter David Baker: Mr. Speaker, so that we could clear up some of the other matters, would it be possible for us to change our proceedings a bit? I know that my friend wants to put two motions standing on the order paper in the name of the Deputy Prime Minister, and we are prepared to deal with those very quickly. Perhaps we could get them out of the way and then we can deal with the minister's statement.


Mr. Speaker:: Order. The sensible solution might very well be, in the circumstances, to try to finalize routine proceedings and leave outstanding the statement on motions and orders of the day only. That would enable us to do that, and I hope we can move to do that with dispatch in a few minutes. We could then get to the minister's statement, and that would leave only his statement and the responses and questions, and then orders of the day later. Whatever is left of the private members' hour before six o'clock could be used, of course, in the way described. Is it agreed?


EASTER RECESS
Robert Knight Andras: That when the House adjourns on Wednesday, March 22, 1978, it shall stand adjourned until Monday, April 3, 1978, provided that at any time prior to that date, if it appears to the satisfaction of Mr. Speaker, after consultation with the Government, that the public interest requires that the House should meet at an earlier time during the adjournment, Mr. Speaker may give notice that he is so satisfied, and thereupon the House shall meet at the time stated in such notice, and shall transact its business as if it had been duly adjourned to that time; and That, in the event of Mr. Speaker's being unable to act owing to illness or other cause, the Deputy Speaker or the Deputy Chairman of Committees shall act in his stead for all purposes of this order.


[Stage Direction]
Motion agreed to.

Some hon. Members:: 
Robert Knight Andras: the first reading of Bill S-9 (from the Senate), to implement an agreement between Canada and Malaysia and conventions between Canada and Spain, Canada and Liberia, Canada and Austria and Canada and Italy for the avoidance of double taxation with respect to income tax.
Motion agreed to and bill read the first time.


Mr. Herbert: 1.	What are the terms of reference of the Director of Evaluation in the Department of the Secretary of State?
2.	How many personnel are employed in the offices under his control and what are their categories?

March 9, 1978
Order Paper Questions


John (Moody) Roberts: 1. Under the general direction of the director general, planning, systems and services, develops the departmental framework within which program evaluation is to be accomplished; coordinates, insofar as necessary, departmental evaluation work; recommends to senior management policy changes, based on evaluation results which will improve the effectiveness of the department; encourages the establishment of criteria of effectiveness and performance indicators for departmental objectives; guides program managers in the conduct of evaluations; conducts evaluations where more than one program area is involved.
2.	Three people-all ES 5's. The director of evaluation is an AS 7. In addition, there are a small number of officers in the policy and planning units of certain program directorates in the department who, among other duties, plan, develop and direct evaluation of the effectiveness of their respective programs in meeting program objectives.
Note: The under secretary of state recently authorized the establishment of an evaluation and audit branch which will become the senior departmental coordinating body for program evaluation and financial and operational audit. Responsibility for organizing the new branch has been assigned to an assistant under secretary who will be assisted by a small task force with the following mandate: 1. To define the objectives and features of an evaluation policy for the department's programs. 2. To determine the methods required to make objective, quantifiable evaluations as far as possible, and share responsibilities. 3. To draw up a plan for evaluation and audit activities. 4. To determine the structure of the new evaluation and audit branch and make it operational.


Mr. Marshall: What are the details of the programme known as the Community Services Equalization Programme which is to replace the Neighbourhood Improvement Programme?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: There is not a program known as the Community Services Equalization Program to replace the Neighbourhood Improvement Program. Rather, in discussions which I have had with my provincial colleagues over the past year, I have expressed my concern with ensuring that federal urban related programs are both flexible and equally accessible to all potential users. In this regard, I have outlined three broad alternatives for discussion purposes. The three broad options which have been identified and which have been discussed in general terms with many of my provincial counterparts at various tri-level meetings are: (i) increasing federal assistance programs for such projects as home rehabilitation, neighbourhood improvement and sewerage treatment; (ii) providing funds to the provinces under the condition that the money be passed along to municipalities; and (iii) establishing a direct tax rebate system to reimburse Canadians for some of the heavy tax load they now bear. These matters are continuously being reviewed and

reflect a concern with ensuring that programs are achieving their objectives in an effective, efficient and equitable manner.


Mr. Rodriguez: For each Fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by the Department of the Secretary of State and those agencies that report to it?


John (Moody) Roberts: In so far as the
Department of the Secretary of State is concerned: records are not kept in such a way as to permit the ready provision of accurate information on grants by electoral districts without inordinate time and expense.
In so far as the Public Service Commission is concerned: the Public Service Commission does not maintain details of expenditure by constituency and is therefore unable to provide the information requested.
In so far as the National Film Board is concerned: Nil.
In so far as the Public Archives are concerned: Nil.
In so far as the National Library is concerned: Nil.


Mr. Andre: 1.	What is the Crown's precise financial interest in Canadian Commercial Corporation as administered by the Department of Supply and Services and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: 1.	The financial interest of the Crown in Canadian Commercial Corporation based on unaudited quarterly financial statements at December 31, 1977 is as follows: Interest on loans, $156,234; Loan payable to Canada (CCC Act S.8(2)), $3,300,000; Equity of Canada: Working Capital provided under authority of CCC Act S.8(l), $10,000,000; Unrealized gain on U.S. Exchange, $360,873; Surplus, $320,993; Total financial interest, $14,138,000. The Canadian Commercial Corporation was established as of May 1, 1946, by act of parliament, for the following purposes: (a) To assist in the development of trade between Canada and other nations, and (b) To assist persons in Canada: 1. To obtain goods and commodities from outside Canada, and 2. To dispose of goods and commodities that are available for export from Canada. By the terms of the act the corporation took over the whole of the undertaking of the Canadian Export Board (established by Order in Council P.C. 70 of January 31, 1944), which agency was at that time carrying out procurement functions in Canada on behalf of foreign governments, United Nations
March 9, 1978

Relief and Rehabilitation Administration, and the Canadian Mutual Aid Board. As a result, the corporation continued without interruption all procurement action being taken on April 30, 1946, by the Canadian Export Board, and continued to render similar services to foreign governments. In addition, for some time, the corporation was able to give assistance to Canadians in the procurement of goods from other countries where, by reason of regulations in those countries, it was necessary that transactions be handled in whole or in part through a government agency. From February 5, 1947 to March 31, 1951, the corporation also acted in effect as agent for the Minister of Trade and Commerce in procurement for the Department of National Defence. On March 31, 1947 the Crown's equity was $2,500,000 in the form of an advance for working capital, there being no fixed assets acquired.
2.	From the figures aforementioned the book value of the Crown's equity is as follows: at incorporation, $2,500,000; at December 31, 1977, $10,681,866.
3.	To December 31, 1977, the net amount "invested" by the Crown in CCC was $81,312,651, not including $10,241,953 recovered from the Canadian International Development Agency for grant aid procurement services. Since 1962, CCC has not charged any handling fee for its services due to statutes in various defence related agreements and also in a desire to encourage exports. Most expenses have been covered by annual appropriations so that the corporation operates on a break even basis. Therefore the concept of realized profit in dollar terms is inapplicable. These costs must be taken in the context of an over-all business volume of about $6.8 billion to date.
4.	(a) The board of directors and the president of the corporation are appointed by the Governor-in-Council pursuant to S.3(l) of the act. It has been the policy of the corporation that all directors be public servants with the exception of appointment of a president from the private sector from 1961 to 1965. (b) Since April 1, 1964, all staff have been employees of the Department of Supply and Services and its predecessor the Department of Defence Production.
5.	It is not intended at the present time to make any change in the current relationship between the government and CCC.


Mr. Andre: 1.	What is the Crown's precise financial interest in Canadair Limited as administered by the Department of Industry, Trade and Commerce and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?
4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?
Order Paper Questions


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: 1. (a) Financial interest: $46,618,715. (b)(i) At date of acquisition, January 5, 1975: 251,700 Preferred Shares, $25,170,165; 1,408,463 Common Shares, 12,979,835. (ii) At December 31, 1976: 1,693,743 Common Shares, 8,468,715; Total interest, $46,618,715. (c)(i) In exercise of the option agreement to purchase; (ii) additional subscription, consequent on the repayment by Canadair of a $6 million loan, plus accrued interest, to the Defence Production Revolving Fund.
2.	(a) At date of acquisition, $30,919 million; (b) At end of 1977 (estimated), $40,929 million.
3.	Equity Costs, $46,618,715. Contributions to Operating Funds, Refundable inventory financing, during period since Crown took ownership of Canadair, resulting from agreements standing at the time of purchase, $16,006,996. Debt Forgiveness, Nil. Crown's Realized Profit, Canadair has operated profitably since the purchase. Net earnings have been retained.
4.	(a) The Canadair board of directors is appointed by the Minister of Industry, Trade and Commerce. Mr. A. M. Guerin, assistant deputy minister, Industry and Commerce Development, Department of Industry, Trade and Commerce, directly represents the minister on the board. With the exception of one other government representative, Mr. Guy Lavi-gueur, vice president, Federal Development Bank, the other board members are drawn from the Canadian private sector, (b) Canadair is constituted as a business entity under the Canada Corporations Act. The appointment of the senior management of the company is the prerogative of the board of directors.
5.	Not yet. Mr. D. A. Golden, president Telesat, is currently assessing for the Minister of Industry, Trade and Commerce, the restructuring options open to the government in respect of its ownerhip of Canadair Limited and of de Havilland. Mr. Golden plans to submit his report at the end of March, 1978.


Mr. Epp: 1.	Is Mr. Lionel Orlikow employed by the Department of the Secretary of State and, if so (a) what is his job designation (b) upon what basis and on what criteria was he hired (c) for how long has he been hired (d) what salary and what expense account per year is he receiving?
2.	Will he be submitting an annual report of his findings and will the report be Tabled in the House of Commons?


John (Moody) Roberts: 1. No.
2. Not applicable.


Mr. Beatty: 1.	Since the first report of the Russian satellite that crash landed in Northern Canada was broadcasted up to and including January 31, 1978, how many minutes of footage concerning the incident was made available to local stations by CBC?
2.	Of the total footage, how many minutes were produced by CBC?

March 9, 1978
Pensions
3.	In the case of footage supplied by other networks, what were the networks in question and how many minutes produced by each were made available to CBC affiliates?
Hoo. John Roberts (Secretary of State): I am informed by the Canadian Broadcasting Corporation as follows: 1. By Evening News Service and syndication, 24 minutes 59 seconds. This total does not include The National, which is carried on all CBC-owned and affiliated stations.
2.	CBC produced 21 minutes 54 seconds of the above total.
3.	One minute 36 seconds produced by NBC, and one minute 29 seconds by CBS.


Mr. Young:: I ask, Mr. Speaker, that the remaining questions be allowed to stand.


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


Some hon. Members:: Agreed.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I have one brief question. Today is Thursday. I understand the President of the Treasury Board (Mr. Andras) has it within his care to give us the order of business as we look ahead into next week.


Robert Knight Andras: Yes, Mr. Speaker. My colleague has indicated it is the intention to proceed after the immediate events with Bill C-10. After the disposition of second reading of that, it is intended to proceed with Bill C-26, followed by Bill C-4, and then Bill C-21. Of course March 15 is an allotted day.


PUBLIC SERVICE
Robert Knight Andras: Mr. Speaker, I want to take this occasion to announce the government's intention to introduce legislation to amend several features of the public service pension program with respect to the indexing of pensions to changes in the cost of living.
The amendments that will be proposed will apply to members of parliament, public servants, military and RCMP personnel, and all other individuals who are subject to the Supplementary Retirement Benefits Act.
Over the past two years, Mr. Speaker, the government has been carrying out a special examination of public service pension arrangements in conjunction with its expenditure restraint program, its total compensation analyses, and the comprehensive review the government is carrying out of the retirement income situation facing all Canadians. This examination has not been completed, but it has reached a sufficient-

ly advanced state to indicate that some changes can be introduced to the program at this time without compromising the conclusions of the other reviews.
The objectives of the changes that will be introduced, briefly stated, will be to place a curb on some undesirable practices that have crept into the program; to close off some loopholes in the program; and to fortify the financial viability of the program against unexpected financial setbacks that could conceivably arise in the relatively distant future.
To achieve those objectives, the amendments will propose: first, that indexing payments be deferred to age 60 for individuals who, in future, retire before age 60.
To ensure that this change is applied equitably to those who are presently close to early retirement ages, the bill will propose that it be introduced on a gradual basis so that those who retire during the balance of this year will be unaffected by the change, but for those retiring with unreduced pensions next year, indexing would be deferred to their 56th birthday, and for those retiring in 1980, indexing would be deferred to their 57th birthday, and so on.
Another way of putting this is that those who will be 54 at the end of this year would, if they take early retirement, have their indexing payments deferred by one year; those who will be 53 would face a two-year deferral; and those who will be 52 would face a three-year deferral.
As a result of this transitional feature, therefore, full implementation of this change would not occur until 1983. I have been informed in the last few minutes that in the press release on some of these points I am making here, which was set out in French, there is an error on that particular point. That correction will be made. I think it is important.
Second, that the first indexing adjustment received by pensioners be pro-rated monthly so that it only reflects the inflation that occurs after retirement.
Third, that the current continuing commitment to index pensions fully with changes in the consumer price index be replaced by an arrangement under which cost of living adjustments would be determined on an ad hoc basis, three years at a time.
Fourth, that the first ad hoc arrangement would apply for the three years commencing January 1, 1979.
Fifth, that each triennial arrangement would be determined no later than the end of October preceding the commencement of each three-year period, and would be determined by a statutory formula which would provide that (a) full indexing for any three-year period could be set aside if it can be established that the costs of full indexing for the period are likely to exceed the amount of extra interest it is expected will be earned on the pensioners' share of the accounts of the program for the period, plus the 1 per cent employer and 1 per cent employee contributions that have been made to the indexing account by and on behalf of pensioners, and (b) when full indexing is set aside, the ad hoc arrangement authorized for the period shall provide for the maximum adjustments that can be financed by expected pensioners' extra interest earnings
March 9, 1978

for the period and the indexing contributions that have been made by and on behalf of pensioners.
The first two proposals to defer cost-of-living adjustment payments to age 60, and to reduce the size of the first adjustment received by public servants who retire toward the end of the year are basically designed to curb the incidence of artificial early retirements that appears to have cropped up in recent years. I think hon. members have increasingly had their attention drawn to a practice that is followed by some public servants who leave the public service with early retirement pensions, but do not leave the labour market. In my view it is a misnomer to say that such individuals have retired. And second, to plug the loophole which now allows public servants to get the best of all worlds by retiring toward the end of the year.
At present, public servants who time their retirements toward the end of the year can build up their basic pensions, and then in a matter of a few days, weeks, or months receive an adjustment on the highest possible basic pension. I am confident that most public servants will share my view that this arrangement is an unfair one.
The other changes, Mr. Speaker, are designed to firm up the financial underpinnings of the program to ensure that we are not storing up future trouble for taxpayers and public service [tensioners. I want to say, Mr. Speaker, that the decision to propose that public service pensions be adjusted for changes in the cost of living on an ad hoc basis was only reached after considerable thought and soul searching on my part and that of the government.
The source of the dilemma-and that is what it is, a dilemma-centres around the responsibility the government has to both pensioners and taxpayers. On the one hand, it is the government's view that the measures that have been adopted to protect the purchasing value of public service pensions are based on a sound principle. In the government's view, it is unjust and unfair to allow the rate of inflation to determine arbitrarily the real value of pensions, and that is exactly what happens when pensions are not adjusted for changes in the cost of living.
In short, the principle of maintaining the purchasing value of pensions so that pensioners can maintain their access to the same basket of goods and services is a principle to which the government is committed, and remains committed.
The government, however, is also committed to the principle that public service pension arrangements must also be just and fair in terms of their impact on taxpayers.
These two principles are not necessarily incompatible with each other.
There are experts who feel we can count on seeing a long-term situation in which interest rates, on average, will be 3 per cent to 4 per cent ahead of the rate of inflation, and 1 per cent ahead of salary increases.
If this were to occur, and it would not be a new experience by any means, a fully indexed public service pension program could be carried by government employer contributions that
Pensions
would not exceed the level of those that were met by taxpayers prior to the introduction of indexation.
In recent years, of course, interest rates have not maintained a 3 per cent to 4 per cent margin over inflation and a 1 per cent margin over salary increases.
Some experts feel that this is not a temporary situation, but is a state of affairs that can be expected to prevail over the next 50 years or so. What these experts, in essence, are saying is that while interest earnings may rise in the future as a result of inflation, they will not keep pace with faster rising inflation. If that were to occur, it would mean that a fully indexed public service program while experiencing rising revenues would face indexing costs which were increasing at a faster rate. Eventually, then, something would have to give. That is, if the situation continued long enough, pension benefits would have to be cut back drastically or taxpayer payments to the program would have to be increased substantially.
Faced with such a gulf in the views of these two camps of experts, I think we have but two basic choices. One approach would be to adopt a "wait-and-see" attitude, that is, to wait and see who is right. The other approach would be to say "a plague on both your Houses" and then take a practical, down to earth attitude to the matter. Adopting a wait-and-see approach means that if we eventually discover that those with a bullish attitude about future interest rates are right, then there is no problem and there will be no problem.


Some hon. Members:: Hear, hear!


Robert Knight Andras: If, on the other hand, the "bears", those who take a more pessimistic view about future interest rates, are right, the result could be a wrenching experience for future taxpayers and/or pensioners. In my view the stakes, namely, the welfare of future taxpayers and pensioners, are just too high for such a gamble. Given the current state of uncertainty and the division of expert opinion on these economic issues, the sensible thing to do, in my view, is to adopt a shorter time frame for looking at these issues. In this way, if difficulties are encountered, it will be possible to take the needed stitch in time so as to avoid a future unravelling of the whole program. At the same time, it would avoid creating a situation in which current employees and taxpayers might be required to make large sacrifices today in order to cover contingencies which may never arise.
To achieve this goal, the legislation which will be introduced will require the President of the Treasury Board to carry out a triennial review of Public Service pension arrangements with advice from the chief actuary and in consultation with representatives of interested parties. These reviews will be directed at determining, the amount of money which will become available for pension adjustments for the coming three years from, first, the interest earnings which will be realized from the pensioners' investment in the program and which are over and above the interest earnings required to finance basic pensions, and, second, from the special contributions for indexing which have been made by and on behalf of pensioners. The

March 9, 1978
Pensions
reviews will also seek to determine the fairest and most reasonable way of allocating the money becoming available for cost of living adjustments to pensioners, including those in receipt of survival and disability benefits.
I may say that in making these proposals I have been very much influenced by advice I have received from my advisory committee on the Public Service Superannuation Act and by consultations which have been held with bargaining agents. I want to acknowledge publicly that this advice and consultation resulted in a number of constructive suggestions being advanced and, in fact, accepted. However, I also wish to say that the proposals I have described, and particularly my decision to announce them today, have also been influenced by the study carried out by the actuarial consulting firm of Tomenson-Alexander Associates which I tabled in the House today.
This study, hon. members may recall, is one which I commissioned last spring to give me an independent view on a variety of Public Service pension issues. I believe that when hon. members have had an opportunity to examine that report they will find that much of the evidence and data amassed by the consultants corroborates the central financial projections contained in the paper "Basic Facts About Pensions in the Public Service of Canada" which I tabled in the House on October 18, 1976.
Many parts of the report, however, are quite critical of the Public Service program. Here, Mr. Speaker, I am referring to the findings of the consultants that if the Public Service program were placed on a fully funded basis, the program would require a continuing government employer contribution of 15.3 per cent of payroll and would face an initial unfunded actuarial liability of $5.9 billion.
In analysing this finding I think it is important to realize that these projections are in many ways a product of the assumptions made by the consultants, particularly their assumption with respect to interest earnings. I should also like to point out that $5.6 billion of the $5.9 billion unfunded actuarial liability estimated by the consultants is attributed to the indexing part of the program. According to the consultants, the argument for fully funding this part of the program rests on the fact that the indexing commitment is, at present, a continuing and automatic legislative commitment. These features, in the view of the consultants, are the true conditions which necessitate advance full-funding for the indexing part of the program. And these are the precise features of the program which I shall be proposing be changed.
Hon. members will find that the news release I am issuing on the consultants' report deals with these complex technical matters in a much more comprehensive manner than I am able to do this afternoon. What I have tried to do is describe the broad principles and policies which will be advanced in the legislation. The bill itself will spell out the day-to-day details with respect to the manner in which these principles and policies would operate in individual and special situations and ensure that the changeover to the new rules will be carried out in a smooth and equitable manner.

In developing the proposals which would be included in the proposed legislation I shall be consulting with my colleague, the Minister of National Defence (Mr. Danson)-because of the Armed Forces pension program-with the Solicitor General, (Mr. Blais) having the pension interest of the RCMP in mind, and with my own Public Service Superannuation Advisory Committee as well as with other interested parties.
Finally, I should like to assure hon. members that the whole Public Service pension program will be up for review upon the completion of the current actuarial evaluation of the program now being carried out by the department of insurance and upon the completion of the government's comprehensive review of the retirement income situation of all Canadians. The review will also take into account all the findings of the consultants, as tabled today, and the detailed analysis of the Treasury Board secretariat.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Turner):: It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Timmins (Mr. Roy)-Bilingualism-Suggestion government cease subsidizing La Federation des Francophones hors-Quebec; the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn)-Transport-Inland terminal at Yorkton, Saskatchewan-Government intentions regarding construction; the hon. member for Elgin (Mr. Wise)-Agriculture-Amount spent in promoting skim milk powder.



ROUTINE PROCEEDINGS


Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, we have all been awaiting most eagerly the report of the Tomenson-Alexander investigation as it relates to pensions. First of all I must say "thank you" to the President of the Treasury Board (Mr. Andras) for giving this side of the House, and I think I can speak for all members on this side of the House, the opportunity of seeing not only the statement but the press release together with the actual actuarial report. I believe I can speak for all members on this side.
I must say we have had an opportunity of reading the minister's statement and the press release but we have only had an opportunity of having a cursory glance at the report
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itself. In the event you do not know it, Mr. Speaker, this report is extremely complex, with many ramifications, implications, and complications. Half of the report, in about 154 pages, is an analysis, and we have at least 75 pages of charts, tables and schedules. On behalf of my party on this side of the House I might say that it would be quite difficult in three hours to analyse material which the minister has had for three months.
I am not making light of this; I am not trying to be too severe, but I want the minister to know that because this is an important document we cannot have it for three hours and reach a conclusion as to the several analyses, charts, graphs, and schedules related thereto. I say we are now faced with a debate that will continue within the public sector and private sector relating to pensions.
I refer to the minister's statement regarding an important matter found on page 5. He says that "the union representation in these sessions made it quite clear to me that they would not be prepared to endorse it in its entirety, the package I have just announced." I will not dwell on this too long. I wonder what kind of consultations we have with the bargaining agents for the public service. It is my understanding and, of course, the minister will correct me eventually so I do not want to take too much time on it, that there was very little. If there was it was not too meaningful.
I believe the minister has an escape clause in the end. I refer again to the speech on page 6 where it says that the bill itself will spell out all of the day-to-day details on how these principles and policies will operate in individual and special situations and ensure that the changeover to the new rules will be carried out in a smooth and equitable manner. That is extremely important. The minister has indicated without any hesitation that he is in favour of indexing pensions; that they should be actuarily sound, and they should not paid for out of the public purse.
This is our policy, sir. There is no question about it. I hear the good doctor on the other side saying "hmm". I am trying to be as responsible as I can. This is extremely important. We listened to the minister without any catcalls because we realize that it is a very sensitive subject. I do not want any undue intervention from members on the other side who have not read the minister's statement or who have no*, read the press release and have no idea as to what is contained in the Tomenson-Alexander report.
Without getting waylaid with inconsequential facts, let me say that this is an important statement which the minister has made. As I said, it is an approach which does endorse indexation even though the minister likes to play games with words and leaves them out at times, but then he brings them back again. This is a form of indexing, Mr. Speaker. All he has stated now is that we cannot afford the type of indexing we have had in the past because it is mortgaging our future. Therefore, we have to have another look. We will have indexing but it has to be actuarially sound. This is what my leader has been stating over the past few months.
The minister's statement raises many questions as to what is happening around here respecting old age security. In terms of the guaranteed income-I see the minister is shaking his head
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but I just want to put it on the record-it will raise questions by those not affected by this bill but who are curious. It is my humble submission that you cannot trust this government. And I did not say the minister. I have shadowed him for a number of years and I have to watch him very carefully. He is slick and slippery, but basically he tries to be honest.
I want to put in a plea for the old age security recipients, the recipients of guaranteed income supplements, of veterans pension, and of CPP. This legislation does not affect those things, and I see the minister nodding his head in the affirmative that we do not have to worry. He will stand up later on in the question period and reply to that and say "Yes, the hon. member is quite right, they do not have to worry". You remember, Mr. Speaker, when the government said they were not going to affect the old age security payments, the minister said, "We cannot afford to have the social services we have right now and we are going to take a long hard look at them".
I may be paraphrasing. But just as long as the minister lets me know now that today he is not playing around with our senior citizens, those who, because of the ineptness and mismanagement of the economy, cannot afford to exist. He gives me that assurance, but I want to make sure that this is a statement that can follow my remarks and others because the wage and price controls are still in my head.
I remember when the government said that wage and price controls never worked in Great Britain or the United States and that government would never bring them in. What do we have now? I do not have to tell you. I notice that the Prime Minister (Mr. Trudeau) sent a letter dated October 12, and I will not say that he deliberately misled the Canadian people because that is unparliamentary, but I will say that he was less than honest. He was talking about people and in that letter he said:
Protecting pensions from inflation by indexing them to increases in the cost of living should be an integral part of our pension schemes. .. They are not the cause of inflation; they are its victim. We have an obligation to help protect them.


Robert Knight Andras: What has changed?


Lincoln MacCauley Alexander: Mr. Speaker, the minister now says, "What has changed?" My point is that the implication was that the indexing would stay as it is. So there is a change because we are not having the same form of indexing. We have the Prime Minister's letter, however, of October 12. I believe this is the same position he put to the defence employee association, that they should have comfort in saying, "We do not have to worry because the Prime Minister is speaking."
With respect to total compensation, this seems to be a new theme. The Treasury Board, on introducing the Public Service Staff Relations Act, indicated that civil servants' benefits which include indexing add about 30 per cent to base wages. I want to emphasize that. We have to examine the impact this new scheme will have. Does this reduce the 30 per cent and, if so, by how much? The Public Service Staff Relations Act refers to an advisory committee on pay research. In other words, this whole question of total compensation, as it applies to the public service, as it relates to the private sector, is under

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question. We need passage not only of the bill in which he is going to talk about total compensation but as well passage of the bill which will bring in amendments to the supplementary benefits.
It is important, Mr. Speaker, that we mesh all these bills together. We cannot deal with one bill prior to another bill when they are involved with the same principle; that is, total compensation. It is noted that the amendments with respect to the public services pension program will apply to MP's as well. I do not want to dwell on that too long, but I know that many people will say "hear, hear" with respect to that, so I will just leave the matter alone.
A very important principle is placed before the House and the people of Canada which the minister has explained well enough. There is a deferral of indexing to the age of 60 if you retire before, and the minister has explained it.


Mr. Francis:: The indexing does not apply to MPs.


Lincoln MacCauley Alexander: I am not talking about MPs. My comments with respect to MPs are finished and I am not getting into that one.


Mr. Knowles (Winnipeg North Centre):: Why not?


Lincoln MacCauley Alexander: Because the minister will be involved with it, so why should I? I made my point. The minister recognizes that there is a problem and he has indicated it will be dealt with.
As I said, the deferral is an interesting point. The third point is that if you retire before the end of the year, the indexing would be fairly decent. We know what the minister is talking about in this respect, and I do not want to mention any civil servant by name. Let me simply say that his name starts with R. In this regard he did all right.


Stanley Howard Knowles: And his first name is Simon.


Lincoln MacCauley Alexander: We will have no more of that nonsense. You cannot put your hands into the public trough to that extent. That was a significant abuse, and I am pleased to know the minister has seen to it that there will be no more unwarranted dipping of big, greasy hands into the public trough.
The most important point in the minister's statement is that he has brought about a new formula. If I understand it, it is a cost of living formula based on CPI which is now to be applied on an ad hoc basis, determined three years in advance. This is still indexing. Let no one in this House or outside the House think that we do not have indexing. We do, and I have already explained what form it will take. But I am concerned, and so is the government, about those who are on fixed incomes, those who are not able to buy bread and milk. In short, we are concerned about the poor and those who can least afford to be caught by inflation but who are most burdened by it.

The minister understands that we must have some form of indexing so as to deal with inflation which is the result, to be kind to him, not of his incompetence but of the incompetence of the government. The government has spent money like mad and has printed money like mad. The hon. member for Calgary Centre (Mr. Andre), when the minister tabled his estimates for 1978-79, took the minister over the pole because there did not seem to be any restraint whatsoever. As a matter of fact, the hon. member for Calgary Centre indicated that the operating cost of the federal government will rise by 13.6 per cent in 1979, whereas the minister referred to some 9 per cent. We have to watch the minister.


Stanley Howard Knowles: He called it flim-flam.


Lincoln MacCauley Alexander: That is what I call it, too. The first thing we are concerned about is that there be recognition that not everybody in this place receives a $35,000 pension. That is something on which the minister should have dwelt because it concerns many of us. Many people outside this place think that everybody here will get a $35,000 pension. The vast majority of pensions here will be in the neighbourhood of $5,000 or $6,000, and that is nothing great in this day when the cost of living is accelerating madly.
Even though the minister recognizes the problem and is moving in the right direction, I do not know whether this is the right approach in terms of the minister's answer to the problem, because there are questions. I want to know who pays for those who are already retired and who have never contributed. This is the problem we are facing now. Are they included in the plan? I think the minister in due course will give me an answer to that. Are we looking beyond the three year period when indexing takes place in January of 1979?
Even though I appreciate what the minister is doing, I do not know in particular whether this is the right program. As I said, we want comments from the public service bargaining units, from the private sector, and from all other interested parties after they have had an opportunity to read the mninis-ter's statement and, what is more important, to read the bill.
If we are only talking about a three year period, what will happen in the fourth year? The minister is smiling, but this is a complex matter and I have only limited time. We will be involved in this in the standing committee, so we have plenty of time for that. Suppose we have high inflation in that fourth year, will the contributions be raised or will there be no indexing?
I raise these questions to let the minister know that we are aware of what is happening here, and we are concerned. We are concerned about one thing in particular. The minister has said that the plan must be implemented on January 1, 1979. This means that the Supplementary Retirement Benefits Act must be amended. In view of the fact that there is an election climate right now, everyone is talking about the forthcoming election, is this not an election gimmick? I am reluctant to suggest this, but the minister knows he will be involved with actuaries, he will have to introduce legislation which will have to be given first and second reading, then go to committee, come back here for report stage and be given third reading,
March 9, 1978

and yet I hear we might be going to the people. All I am saying is that I hope the minister is not flim flamming the Canadian people.
When we are finished, I will have a few questions to ask the minister with respect to this extremely important matter. Will all the actuarial evaluations be completed and available with regard to this new three year thrust? Will they be available when the bill is given first reading? The minister nods his head in the affirmative, and I am pleased to see that.
I see you rising, Mr. Speaker, but this is important-


Mr. Deputy Speaker:: Order, please. 1 might be able to give the hon. member an extra minute or so, but I wish to refer him to Standing Order 9. He himself said that this question will be debated, but the Standing Order provides that, after a statement by a minister, spokesmen from each party are authorized to make brief comments. I know that representatives of other parties want to speak and that other hon. members want to ask questions. There has been an agreement not to see the clock, but if I were to allow the hon. member another four or five minutes, I would be abusing the rule as well as the rights of other members.


Lincoln MacCauley Alexander: I am finished now, Mr. Speaker, so I can close. I think I have made all my points. I just want to say that we appreciate the direction in which the minister is going. We do not know whether this is the method by which the problem can be solved, so therefore we are waiting anxiously for the minister to introduce legislation so that we can deal with this matter properly and hopefully come up with a solution whereby we can have peace with the public service and the private sector and so that we will not have a continuous harangue about who is paying for what and dipping into the public purse.


Stanley Howard Knowles: Mr. Speaker, although I may not go along with everything which has been said by my friend, the hon. member for Hamilton West (Mr. Alexander), I am delighted that he recognized that the statement made today by the President of the Treasury Board (Mr. Andras) is a reaffirmation of the government's commitment to the principle of the indexation of pensions.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: As one who has
been involved with this issue from, I think, the time it was first talked about-in fact, 1 think I was the one who started the talking more than 30 years ago-I was glad in particular to hear the minister say:
In short, the principle of maintaining the purchasing value of pensions so that pensioners can maintain their access to the same basket of goods and services is a principle to which the government is committed-and remains committed.
That applies to all public servants and to many others who come under the aegis of government pension plans. Just to get one point clear, we are not in today's discussion dealing at all with old age security, the guaranteed income supplement,
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family allowances, veterans disability pensions or war veterans allowances. Those benefits are all indexed to the full cost of living. They are not being touched.


Walter David Baker: Or the CPP.


Stanley Howard Knowles: Or the Canada Pension Plan. I thank my friend for reminding me of that one. I hope the fact that the government has come down, with respect to public service pensions, for maintaining the principle of indexation means that there will be no more nonsense in the cabinet about cutting out the indexation of those other social programs.
If we were really on television and the country out there was hearing us right now, I would like to say to the retired public servants of Canada who are on their pensions and who are wondering whether all this talk means they are going to lose their indexation that, even if this program is implemented in full, for the vast majority of them there will be no change.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: They will continue to have their pensions indexed to the full amount of the cost of living. I will go into that in detail in a moment. There will be some at the top who have got increases by abusing the possibilities in the system who may suffer. Even those who have already got it by abuse may not suffer, but the same abuse is something others will not be able to practice. However, before I get into details about the announcement of the minister, I want to say-and I think there have been some interjections along the same line-that the answer to the Colin Browns and all those characters around the country carrying on a campaign against these pensions being indexed because public servants have it and those with private pensions do not, is that it should not be curbed or taken away from those who have it but that the principle of indexing pensions should be extended to all pensions both in the public and in the private sector.
1 was happy to note that within the last day or two at least one prominent firm in the private field, the Mercer Company, has indicated that it believes that the day will come when private pensions will have to be put on an indexed basis as well. Even if that means a contribution from federal funds toward the indexing of pensions for people in private plans as well as in public plans, I agree, but with costs going up all the time a pension which stays fixed, or a pension which does not rise at least to the extent of the rise in the cost of living simply is not a pension. It is just something to keep a person off welfare for a little while. If pensions are going to be meaningful, they have to be indexed. As I say, that has to apply across the board. In my view a good deal of harm is done and a good deal of distortion takes place by the talk that the insurance people and the people in this report I have in my hand indulge in with regard to accounts, funding, interest rates and all that.
When people are living on pensions, they are not living on food, clothing and shelter that they have saved. They are living on food, clothing and shelter which are being produced at that
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time. No matter how you bookkeep it and no matter how you theorize about it, pensions are in reality on a pay-as-you-go basis. What we have decided by our pension programs like old age security, Canada Pension Plan, Public Service pensions and all the rest is that in an economy such as we have in Canada it is perfectly possible, with the wealth that we produce, to decide that some of that wealth should go for the care and maintenance of children, some for the care and maintenance of those who are ill, and a portion of it for the continued security of those who are in retirement, and it does not render any aid to the cause to talk about what pensions have got to be in the year 2000.
In the year 2000 it will be the goods and services produced in that year which will determine the standard of living of those who are working and the standard of living of those who are on pensions. I am sure that when Mackenzie King was here and saw to it for a while that our pay was only $4,000 a year, he would have been shocked at the thought of what we are getting today.
The Colin Browns like to talk about what these pensions might be 10 or 20 years from now, but what about wages and salaries 10 or 20 years from now? I say that a good deal of distortion comes into this picture when all these figures are used. What counts is current production, and out of current production we can afford to do it.
One of the things which has happened recently and which shows the need for a better scale of indexing, and also which shows that even indexing does not put pensioners in a preferred position, is what we have done with respect to the veterans disability pension. In 1973 we brought it up to the average take home pay of five categories in the public service. Some of us wanted-and there were reports in our favour-to let that formula apply year by year and to let the rate of that pension also be equal to the average take home pay of those five categories. The government would not buy that. The government set the rate at that level in 1973 and then let the consumer price index govern it from there on.
Now we have reached the point where the veterans on full disability pensions are several hundred dollars a year behind the formula we accepted in 1973. In other words, full indexation of that group has not put them in a preferred position. It merely enables them to buy the basket of goods and services they bought in 1973, but it gives them no opportunity to share in increased production or the increased standard of living. So I say that those who are arguing against pension indexing ought also to argue against wage increases and against higher salaries for those who run the insurance companies.
The fact of the matter is that indexing is a sound principle. It is good that it is here, and I am glad the minister has confirmed again today that it is government policy. I am glad the hon. member for Hamilton West, whether he thought he was complimenting the minister or finding something wrong, at least underlined that this statement is not a case of backing away from indexation but a case of endorsing it.
As to the proposals which are in the statement, in a couple of cases the minister intends to correct some abuses. One of
these proposals certainly has to be supported. The other I want to comment on briefly.
The proposal that the indexing that anyone on pension for the first time gets in January should be related to the length of time he was working in the previous year, his last year of work, is absolutely sound. This idea that a person can retire on December 29 or 30 on full pension, and then get a year's indexation two or three days later, just does not wash, and I accept completely the proposal that indexation of that first cheque should be prorated.
The proposal about pensions being indexed for those who retire at age 55 after 30 years service, is one that I guess I have to go along with, because those who have profited by that rule have been persons away at the top. We had the initials of one here a while ago. They have been people who abused the system. It bothers me a bit that that indexing at age 55 has been taken away because for a long time I have been arguing that it should also apply to those who are retired from the Canadian Armed Forces and those who are retired from the Royal Canadian Mounted Police.
In most cases those individuals are not off in some other employment, they are retired. They have done their tour of service, and I think they should have had that benefit, but if the government is not going to give it to them, then I think the government is quite right in not giving it to the preferred group in the Public Service who can apply the age 55 with the 30 years of service rule. That rule has not been abused in all cases, let that be clear. The publicity is because of a few.
At any rate I buy completely the pro-rata provision I was talking about a moment ago, and I will accept this one.
Now, as to the main provisions in this proposal of the three-year review, this means that in October of this year the government will review the situation and then make a decision on the basis of what is in the accounts, as to what it can afford for the next three years. That will determine the indexing for the years 1979-80-1981, and then in the year 1981, by October, there will be another review for what can happen in 1982, 1983 and 1984.
Mr. Speaker, my fear is that the kinds of stories that the newspapers write about this will scare all the pensioners. They will hear that the pensions are being curbed-something is being done-there is a cut-back. They will hear about this in scare terms and they will say, "Fine, I am all right for three years, but what happens after that?" The minister's press release which he gave outside the House, which is in addition to what he gave us in the House, said that the extra interest being earned-just on the employees' portion in the main fund, the public service superannuation account, not the inflationary account on the side, but the extra interest-is nearly $500 million a year.
There is plenty of money there so that as the minister sees it now, when October of this year comes and they review the situation, there is not any question but that indexing for the next three years will stay where it is. He does not make that

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statement flat out, but he says it in the guarded language that he has to use.
I gather that all he is telling us is that the only change that will take place in the years 1979, 1980 and 1981 is that the abuses that a few have practised, will be corrected. Despite the fact he talks about fifty years and some danger of interest rates going up, he goes on to say that with the credits being applied for this purpose, the extra interest earned on the employees' portion in the pension fund, the 1 per cent put in by employers and employees, that there will be enough there to stay at that level.
When I first got this statement about noon today I read it with some apprehension. The stories I have been reading in the newspapers in the last few days gave me some concern. But as I read the statement through I realized that really what the minister is doing, and I am not going to say he is trying to have it both ways-I think he did fairly well on this-is saying to the critics of pension indexing, "All right, boys, we will look at this every three years, and we will make the decision on the basis of how the account shapes up, but we are of the opinion from the experience we have had thus far that the account will be big enough that, even though we cut out the abuses of some of those at the top, the main indexing will continue." 1 do not mind it being done that way. I am so convinced about the rightness of indexing and the soundness of it, on the basis of our economy, that I think it will stand up. I do not mind him saying to the insurance people who are concerned that there will be this required look at the problem every three years.
Even so, Mr. Speaker, I had hoped that if the minister was going to talk about the possibility of something other than full indexing for any one of these triennial periods, that he would have told us in the statement,-and maybe he will do it in answer to questions-what kind of formula he had in mind. I do not like to press him too hard on this because I rather believe that there will not have to be any cutting back, but if there is any cutting back I hope it will not be a decision that the percentage rate across the board will be less than the CPI. If the CPI has gone up 6 per cent I do not want the government to put on a 4 per cent ceiling, or a 2 per cent ceiling which we had a number of years ago.
If he has in mind picking a level of pensions of, say $10,000, $12,000, $15,000 and saying that if we are in trouble we will give full indexing only up to those levels and a lesser or no indexation above, I think we would have to agree with it if the economy of the times called for it.
I think, as I say, it would have been useful if the minister had made that kind of a finding. I note that he has emphasized the fact that the credit into this account is to be based on the extra interest earned by the pensioners' portion in the fund. Why not the extra interest earned by the government's portion in the fund?
I see, Mr. Speaker, that you are getting to the edge of your chair, and I can finish most of this when we get to questions. I hope we will get some of these questions answered, but the main thing I hope comes out of this today is not scare headlines about indexing being cut back but rather that index-
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ing is going to stay and all that is going to happen is that there will be this review every three years, along with the correction of a few abuses.
The hon. member for Hamilton West chided me about my introduction of MP's pensions. Time does not permit me to say all that I would like to say, but I point out that, critical as I am of the generosity of members' pensions and the fact that they start too early, I am not critical of indexing. The same thing should apply to both groups, so I say to the minister who promised in his statement that somewhere along the line there will be a complete review of the Public Service Superannuation Act itself, that I hope that will come forward soon, and that with it will also come a review of some of the abuses that are in the Members of Parliament Retiring Allowances Act.
With respect to the Public Service Superannuation Act, I hope the minister will give some concern to the position of widows, and to their lesser rate of pension. I hope he will give some concern to the position of those widows where the marriage took place later in life, rather than earlier. There are a number of things that need to be sorted out.
Mr. Speaker, I am this time going to end, and hope that the message that will get out today is that after all this study, the wild proposals made in this big book did not carry the weight that some people might have hoped, but that instead the principle of indexation is being retained and the public servants who are out on pension need not have the fears that tonight's headlines might give them.
[ Translation]


Mr. Gerard Laprise (Abitibi):: Mr. Speaker, while listening to the minister's statement and the answers of the representative of the official opposition and that of the New Democratic Party, it was easy to understand that the minister raised a very important point that has been expected for a very long time and I think that an election year is appropriate for such statements, such amendment proposals to a legislation affecting such a large number of employees in Canada as the government is, to my knowledge, the main employer in Canada.
The hon. member for Hamilton West (Mr. Alexander) complained a moment ago that he had a chance to study the report and the statement of the minister only three hours in advance while it has been in the hands of government members for three months. I can tell him he should consider himself lucky as I did not even have three minutes to read it before the minister made his statement. But I did listen carefully and I realize how important and at the same time how difficult it was. To fully appreciate a proposal like the one we just heard, we must quote some figures, if not all of them, concerning the people that will be affected by the proposals included in the bill that will be presented in the near future by the minister. We should have some figures to appreciate exactly the effects of those changes.
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Some people worry, following the rumours that have been circulating concerning the amendments that have been proposed today or that will be proposed some time in the future, that indexation could be affected. I for one, Mr. Speaker, think that the indexation of other programs like old age security, family allowances and others is there to stay because the inflation that brought it seems also to be there to stay. Obviously, this government is unable to stop this inflationary trend, and it is absolutely necessary, if salaries, retirement plans and savings are to keep some value and keep their purchasing power, to maintain and apply this indexation.
That kind of overfaced amendments are often proposed but after careful examination we realize that we may win on some aspects and lose on others but eventually we are not better off. I had the feeling when listening to the minister's statement that we are following the trend and keeping several years behind the cost of living index, as this has been the case in about every other area.
Whatever their level, increases in salaries or pensions always lag behind price increases.
This statement, this proposal was long overdue, however if be appreciated by all involved. The legislation that will be put forward will no doubt receive close scrutiny, because we will be looking at the report in very fine detail. We will study it in depth, and every clause of the bill will also receive close attention and, if needed, valuable amendments that may be suggested by officials at whatever level would be introduced.


Cyril Lloyd Francis: Mr. Speaker, I have a question for the President of the Treasury Board (Mr. Andras). In listening to his statements today and the projections which the Tomenson-Alexander report made, I understood him to indicate there was on a fully funded basis a deficit of $5.9 billion of which $5.6 billion was on the indexation account. In making this kind of projection, I would like to ask what assumptions were made for future rates of interest, future rates of inflation and future rates of salary increases. I would like to know what the President of the Treasury Board thinks of these assumptions, because I heard him give a scenario about the pessimists and the optimists. I think we got a truly pessimistic projection in the Tomenson-Alexander report. That is my view. I would like to hear the view of the President of the Treasury Board.


Robert Knight Andras: Mr. Speaker, I do not think 1 can give the hon. member the precise interest rate, inflation rate and basic salary increase rate assumptions of Tomenson-Alexander except to say that they were unquestionably lower and more pessimistic than any assumptions that we would permit in the application by law to private sector pension plans. They certainly are assumptions considerably below those now applied to the Canada Pension Plan and that sort of thing.
Apart from that, I consider the issue to be resolved with regard to any argument toward full funding by the three-year
ad hoc arrangement. One could theoretically accept, I suppose, that full funding might be necessary if the commitment were to be there permanently under any circumstances of inflation, but I think the argument is dissolved. The Tomenson-Alexander report says that if this were moved to a more frequent examination and ad hoc adjustment, as we are proposing, the demand for, or insistence upon, full funding would be somewhat diffused. They are in the Tomenson-Alexander report, but I will get the precise equations that were used.
[ Translation]


Mr. Clermont:: Mr. Speaker, the President of the Treasury Board (Mr. Andras) suggested in his comments that cost-of-living adjustments will be computed over three year periods starting from January 1, 1979.
My question is this: Will the President of the Treasury Board be in a position to indicate as soon as possible the relevant date to the people entitled to indexing I ask this because I understand from his report to the House that every triennial computation will be made, not on October 31, but in the month of October before the start of each period, at the latest.
Will the President of Treasury Board be in a position to indicate as soon as possible, for the coming three years, the escalation rate for retired civil servants and also other pen-sionee groups, referred to. I have no fear for myself, because the retired member of parliament is not entitled to escalation before age 60.


Robert Knight Andras: Mr. Speaker, when the full phasing out of the early retirement access to fully indexed pensions is completed in 1983, everyone involved in the public service will be on the same basis. That is, indexation will commence from age 60 on.
As to the first part of the question, this is subject to parliament's will in terms of amending the basic act, and if that were to take place, we would be in a position to confirm by October of this year. This is not a very complex actuarial calculation. Really the cost of living is rather secondary in this sense to the calculation of the availability of funds legitimately applicable to indexation.
I can tell the hon. member now basically what the formula might be in that sense. It is the calculation of actuaries, confirmed by more than one actuary, that about 30 per cent of the basic fund which now stands at approximately $8.6 billion and is going up at the rate of approximately $1.3 billion a year, is owned by the pensioners, those people now on retirement. That includes the interest that has been paid on their portion of the fund up until now. Their portion of the fund is the contribution made by them and on behalf of them by the employer up to that date of retirement, plus that earned interest.
What this means is that the basic pension fund, not the indexing portion, based upon the actuarial calculation, together with continuing contributions and 4 per cent interest

March 9, 1978

basically assigned to that fund, is sound actuarially, fully funded, with certain adjustments from time to time as the five-year actuarial review takes place, mainly on salary increases. We are now paying on that, by act of parliament- and it is only fair that we should pay-the weighted average interest of 20 year bond issues which at the moment is 7.6 per cent, a rate which inevitably will go up over the next few years as low interest bond issues of the past mature and as the higher bond rates of the past years and of the immediate future weight the average upward.
What we are proposing at the moment is that on the 30 per cent of the fund which is owned by the pensioner, the excess in interest, the difference to which I have referred, should be the difference between that basic 4 per cent payable to the basic fund for the basic pension and the 7.6 per cent; in other words, 3.6 per cent. That is of the current 20 year bond weighted average. That, in my opinion, is legitimately applicable to the indexation to its mathematical limit of the pensioners already out there. It is their money.


Some hon. Members:: Hear, hear!


Robert Knight Andras: In addition, we are saying, of course, that the contribution made on their behalf, the one-and-one, is also available for that calculation. We think it is sufficient for the next three years at the present rate of indexation, but I will not be pinned down right now because we want to get all these formalities completed, but it is approximately from those sources $525 million, without any taxpayers' money other than the fact that it is made up from that employer-employee matching contribution.
So I think the situation we have reached is eminently fair. The indexing will be switched from full indexation at any rate of inflation with regard to interest, extra money to be found from the taxpayer, to the available funds in accordance with the formula I have described as applied to the supplementation of the basic benefits. We think this fund is over the hump now. After those first few years of retirement benefits, with the one-to-one contribution, it is not in trouble now, and as the situation matures over the years, we get away from any inter-generational transfer, the point the hon. member for Hamilton West (Mr. Alexander) was talking about.
I think that without any subsidy from the taxpayers this plan is sound. Let us not forget that it has been in existence for 60 years with very few changes over the years. We are assuring everybody that it is going to be actuarially sound. We are answering the critics and fundamentally making sure that, if interest rates change and if the inflation rate changes, if that very important equation down the pike somewhere does get out of line, we are not facing our pensioners with some shock they do not know about. But I think it is "easy as you go".


Walter David Baker: I have two relatively short questions to ask, Mr. Speaker. Let me say by way of preamble that I share the views expressed by the hon. member for Hamilton West and the hon. member for Winnipeg North
Pensions
Centre. I am happy to see that the principle of indexation is being preserved. I made a speech in the House about this matter when it was first dealt with in this parliament during my period here. I take the view that nothing else could have been done which was reasonable, fair and just.
May I direct this question to the minister; it relates, I suppose, to the business of the House. Has the legislation been drafted?
The minister indicates that it has not. If that is the case, when does he intend to introduce it? What is the period of time he has in mind? Would he consult the government House leader with a view to referring the Tomenson-Alexander report, as well as the other reports available, to a committee of the House so that they might be dealt with even in advance of legislation, perhaps? In this way we might be able to deal with a number of questions and fears in the minds of public servants.


Robert Knight Andras: No, the legislation has not been drafted. We have certainly had consultation with the Public Service Advisory Committee on Pensions which includes representatives of the senior bargaining units and other officials, all public servants incidentally. We have discussed this subject with the bargaining agents formally. I may say they are not jumping with joy at the prospect of any change whatsoever. We still have to work out some complexities, so the bill is not ready. Quite honestly, I am not sure it can be ready until the next session of parliament-


An hon. Member:: And when is that going to be?


Robert Knight Andras: Probably in the fall. As to the other suggestion, I am intrigued by it and I will definitely give consideration to the suggestion that a more formal examination of the report be undertaken. I will discuss it with my colleague and see what can be done.


Walter David Baker: My other question concerns the minister's statement on page four in which he deals with the introduction of the legislation and talks in terms of consultation when three year adjustments are being considered. In view of the uncertainty which discussions of this kind cause in the public service, whether they take place today or three years hence, and since it is not unreasonable to suggest that these matters ought to be considered by those who are affected, that is to say, the public service pensioners, would the minister consider, when he is drafting the bill, changing his arrangements so that the body which meets will include, in a structural way, representatives of the public service unions? Thus, the minister would not merely be consulting them; they would be included as a structural part of the decision-making process.


Robert Knight Andras: I will give that suggestion my consideration. Again, without making any final commitment, I repeat that the Public Service Advisory Committee is to be part of the development of this program, and that committee does, of course, include representatives of the Public Service Alliance,

March 9, 1978
Pensions
the very senior and large bargaining units. I am conscious of the desirability of what has been suggested. One of the reasons I need more time is so that I can consider the precise structure and mechanism to be set up.


Mr. Gauthier (Ottawa-Vanier):: Mr. Speaker, I would like to thank the President of the Treasury Board who has corrected in his remarks to the House the French version of the text, which, I am afraid, contained some inaccuracies in paragraph A(l), that may have been confusing.
My question, Mr. Speaker, relates mainly to the figures given a short while ago by the President of the Treasury Board. If I am not mistaken, he said that the basic fund amounted to $8.6 billion, at an anticipated interest rate of 7.6 per cent. I wonder if he could tell the House how much money is provided for the next three years, because these figures are calculated on a three-year basis. I think he has mentioned that $525 million would derive from indexation, what would then be the amount required to maintain the present rate of indexation for the next three years?


Robert Knight Andras: Mr. Speaker, this gets into forecasting of certain things which one has to be careful about. I think that $525 million to $535 million would be sufficient to maintain the indexation the way it is now which is, of course, sufficient to meet the inflationary trends. 1 can confirm also at least $525 million is available from the sources which I described earlier, subject to final check.


Mr. Howie:: Mr. Speaker, I would like to direct my question to the minister. I refer to the three-year term that he has mentioned with respect to the triennial review. If I understood him correctly the minister indicated that at the beginning of each three-year term a rate would be struck in relation to the indexing, and that rate would prevail throughout the whole term. For example, how does this relate to the consumer price index which could fluctuate up and down quite rapidly during that three-year term? Would the indexing still be at the flat rate?


Robert Knight Andras: Probably it would, Mr. Speaker. Those are final details we would want to work out. I am saying that indexing will be up to the maximum of the fund available unless, of course, the consumer price index were lower than that, in which case there might be a surplus. That is not impossible to forecast in the future if the present equations hold.


Mr. Hopkins:: Mr. Speaker, the minister has very capably explained the actuarial soundness of the pensions fund and how he intends to keep it sound. To add to some of the constructive remarks made by the hon. member for Winnipeg North Centre about the fears that might appear in headlines, I would like to add another statement to his. I have a statistic

here which says that 85 per cent of the retire public servants in Canada today are receiving less than $7,000 per year. That is a figure that should be emphasized, not the bigger ones.


Stanley Howard Knowles: Not all of them will be hurt.


Leonard Donald Hopkins: The minister said he will be consulting with the Minister of National Defence. Several questions have been asked about the public servants and I would like to ask him what the status will be of a former member of the Canadian armed forces who is now on retirement at age 50. Can he give me this information in advance? Does it mean that with the five year prorated plan that he will find himself 60 years old before he gets any indexing? If he qualifies under the magic "85 formula" and by virtue of his being on pension now, even though it be a different system from the public service, will he or she receive indexing at age 55 or will that pension have to wait until age 60 also?
Along the same lines, what will happen to a member of the armed forces who has presently only one, two, three, four or five years to go for a pension; will he or she be prorated in the same way? In addition, what about the members of the armed forces who are presently retired between the ages of 51 and 55; what will happen to their prorating? Can the minister give me any information at this time?


Robert Knight Andras: Mr. Speaker, the plan is to bring all our pensioners, the Royal Canadian Mounted Police, the armed forces and public servants to the 60 year old access for indexed pensions. Those who are in the ages which the hon. member has referred to will move into that access in the same manner as I have described in my statement. If they are indexed now or are 55 years of age now, they will be all right. But one year at a time we will phase this out until everybody will be indexed at age 60.
As for the final question concerning the 51 to 55 age group, they would have to wait. They would be caught in that sense, I believe, and phased in the same way as I have described for public servants' indexation.


Leonard Donald Hopkins: On a prorated basis?


Robert Knight Andras: Yes.


Mr. Elzinga:: Mr. Speaker, first of all I would like to ask this question of the minister. In the event an individual does retire down the road at age 55 and the indexation does not take place until the age of 60 as the minister has announced, during that five year period when the cost of living may increase, is it completely done away with, or at age 60 is it accounted for, or is it completely lost?
Secondly, when the actuarial evaluation is made at the beginning of each three year period, is there any provision to look beyond that three years? In other words, is the decision based simply on what is expected to occur in the next three year period? If so, could this not lead to a situation where four years down the road a person might be faced with high
March 9, 1978

inflation and insufficient funds to provide adequate protection?


Robert Knight Andras: Mr. Speaker, to answer the first question, at age 55 when this program is phased in a person could still take early retirement on the 85 rule, or even a discounted pension but he would get no indexation until age 60, as is the case now for members of parliament. The pension rate is adjusted for the inflation that has taken place in the meantime, but there is no retroactive cash payment. That actual adjustment is lost to the person but the rate is adjusted upwards to catch up.
The answer to the second question is no. If the hon. member thinks through the intent of our proposal of the three year actuarial review, we are really pinning the indexation or supplementation to what is available in the fund. Of course, the paramount consideration is to set the rate for the next three years-every three years. I think the hon. member's concerns would be met by this mechanism.


Mr. Isabelle:: Mr. Speaker, my question is quite simple. I would like to say, however, that I thought the hon. member for Hamilton West (Mr. Alexander) made a comment about me when he spoke. I merely heaved a sigh of relief because it is not that often these days that the opposition seems to approve principles put forward by this government. So, it is the only remark I wanted to make.
My question to the President of the Treasury Board (Mr. Andras) is the following. It is obvious that statements such as the one we heard today are going to create much uncertainty among retired officials. As the hon. member for Winnipeg North Centre (Mr. Knowles) and my hon. friend from Renfrew North-Nipissing East (Mr. Hopkins), many have said that it would be as if there were not any change. I would like the minister to tell me the number of retired officials whose indexing provision will be directly affected? Will it be 90 per cent, 95 per cent or 85 per cent? I heard that at least 85 per cent to 90 per cent of all retired officials will not have to undergo any change with regard to indexing. Would the minister confirm that allegation. Are they accurate figures? I am sure in doing so he would reassure thousands of retired officials.


Robert Knight Andras: Mr. Speaker, I want to hold to the principle of the three year actuarial review which I have proposed here. I will go on record as saying that it is my personal opinion that a very small percentage of public servants, perhaps 2 or 3 per cent, might be affected if those calculations down the road six years from now face up, unlike the adjustment between the ratio of interest, inflation and wages, and that sort of thing. So I think that the hon. member's 95 per cent figure is probably quite right. However, I want to make the final reservation that the actuarial review is just that, an actuarial review. So on that basis I am quite sure it will make very little difference.
Pensions
[ Translation]


Eudore Allard: Mr. Speaker, first of all I shall congratulate the minister for his good intentions. I thought I heard him say, a few moments ago, that the bill had not yet been printed. Can he tell us whether he intends to implement his good intentions through a bill, and when he will introduce it to the House? Will it be in the spring, before the next elections? I wish the minister would advise the House in this regard.


Robert Knight Andras: I will repeat the answer I gave the hon. member for Grenville-Carleton. It is our intention to have it available for the next session of parliament.


Mr. Clarke:: Mr. Speaker, I understood the minister to say that no government funds would be used to supplement the indexing in the future, such as the $100 million that was needed to shore up the indexed portion of the fund last year. If that is correct, I have a two part question.
That deficit was caused by payments to pensioners who had not paid any indexing premiums because they retired before indexing came into effect and they are now indexed; also, the earnings in the fund were not adequate. The actuaries have said that even the excess earnings from the regular pension fund will not be adequate to cover indexed pensions in the future. It would seem to me, therefore, that the indexing is doomed to be cut back because of the inadequacy of the earnings. That is one part of the question.
Second, going back to pensioners who are already getting indexed pensions but have never paid into the indexing fund, where are their pensions going to be carried?


Robert Knight Andras: The injections of funds from the consolidated revenue fund really came because parliament had not yet authorized my proposal, which is the recognition, as the actuaries have said, that 30 per cent of the basic fund, or some $9 billion by the end of this year, belongs to the pensioners, retired people now. The excess interest over and above the basic 4 per cent, which is part of the actuarial calculations to protect their basic pension, has been credited back to the main fund, so that they have no access to it. It is our view that it is legitimately available for supplementing their benefits. Otherwise, how the devil will they ever have access to that additional interest which is being earned on the portion of the fund which they built up over their years of service? Granted that the 1 per cent they put in and the 1 per cent the government put in as the employer has only been in these last few years, but they would not have a sizeable nest egg from that, and that is the first that is used up.
I am satisfied, subject to correction, that this adjustment which I am proposing, which will be, at the present rate of interest, an additional 3.6 per cent on 30 per cent of $9 billion, will be sufficient to meet the index funding. I think the actuarial claim that it was not fully funded on the indexation is based on the more pessimistic projections of that all important ratio between interest rates, inflation and wage rate

March 9, 1978
Pensions
increases for the future, and also, of course, was projected on a demographic retirement age which they felt was being forced down by the somewhat generous access to fully indexed pensions at the age of 55, which of course is an aspect we are changing.
So between all these measures I am on safe ground in saying that there will be no need for fully funding, which was their argument. That is an actuarial theory. I think that the moves we are taking here will remove the theoritical necessity, as well as the practical necessity, to frontload it by $5.6 billion, and the money will be there to meet the indexation problem. If there is some inter-generational transfer, I can tell hon. members that the bargaining agent and the advisory committee with whom I have discussed it have said that, for the sake of the few years involved here and the few people involved, it will not bother them and, as I said, it is their fund.


Mr. Deputy Speaker:: Order, please. The hon. member for York Centre has requested the floor. He will be completing the first round of questioning. Following him, I will recognize the hon. member for Winnipeg North Centre, who will be the second questioner for his party.


Stanley Howard Knowles: There has not been one from our party yet.


Lincoln MacCauley Alexander: The hon. member for Winnipeg North Centre (Mr. Knowles) is the first speaker for his party.


Mr. Deputy Speaker:: Order, please. I am to decide. The hon. member for York Centre.


Robert Phillip Kaplan: Mr. Speaker, I have been concerned about this matter of indexed pensions for public servants and I am reassured, from what I have heard about the actuarial aspect of the problem, that, with the adjustment the minister has made, it appears clear that the taxpayers will not be called upon to make up large deficits because there can be none with the three year review that is to take place.
Another of my concerns about this fringe benefit for public servants was the exemplary effect that offering indexing to public servants had. There is a question about whether or not it is possible for the private sector to be able to match the same kind of benefit. I know that the minister has organized an investigation of pensions which is being conducted by officials of the Department of National Health and Welfare and of the Department of Finance. Does he have anything to say at this time about this other great concern with respect to indexed pensions, namely, the exemplary effect they might have on the private sector?


Robert Knight Andras: I would make two comments, Mr. Speaker. First of all, the federal public service pension plan will still be one of the best for employees in the country. We cannot deny it; that is the fact. Of course, it will be considered in our concept of total compensation when we compare it to plans in the private sector. On the other hand, there is no doubt about it in my mind that even the confirmation that this is actuarially sound will probably bring greater pressure on the private

sector to do something, and as the hon. member opposite has indicated, there are movements within the private sector, even among the actuarial groups, to look at this with a more open mind.
I say quite candidly that they will have difficulties. It is one thing to say it is fair and just and should be done, but there is the other reality of the availability of funds and the method of paying for it. I cannot indicate to the hon. member yet what the findings of the Department of Finance and the Department of National Health and Welfare are, except that I hope they will be available very soon and will give some stimulation to the private sector. Because in my view, there will have to be an improvement in the private sector plans. Forty-seven per cent of plans in the private sector are non-contributory, and the Tomenson-Alexander report indicates that 80 per cent of the admittedly relatively small sample of the private sector that they took to determine what they were doing about adjustments in pensions to meet the cost of living have been adjusting. That is somewhat different from the propaganda we were hearing. Eighty per cent of them have adjusted on an ad hoc basis to sixty-six and two-thirds per cent of the cost of living. Let me make the point that the total cost of that adjustment was borne by corporations themselves out of their own revenue, whereas our indexation is borne partly from the contribution of our employees and partly from the contributions of the employer.


Stanley Howard Knowles: I thank the minister for clearing up the point about the extra interest to be earned on the money of the pensioners which is declared to be theirs. I confess that earlier I was thinking of it as the employees' contribution, but when the minister explains it, this is the money of the pensioners after they have gone on retirement. It is their money. I think the minister puts it in its proper light and does answer a number of questions.
I also thank him, if I may say so, for helping me to make it clear to the retired public servants out there that if there are scare headlines, they need not worry about them and that about 85 per cent or 95 per cent simply are not going to be touched. I think that is good news.
I also thank the minister for the answer he just gave to the hon. member for York Centre. I have many questions, but I shall narrow them down to one. The minister was answering the hon. member for Gatineau about the situation whereby everyone gets his indexation only at age 60. He put it in those terms. The point would be reached, when the whole thing has been phased in, when nobody would get indexation until age 60.
I think his earlier statement provided a couple of exceptions, and because of what he has said now, I hope he will confirm those exceptions. In other words, is it not a fact that persons who are on pension because of disability or persons who are on pension because they are survivors get indexation without having to wait until age 60? I hope that will continue.
March 9, 1978


Robert Knight Andras: I am very glad the hon. member brought that up; I do want to clear that up. It is not our intention to tamper with those kinds of involuntary situations, so disability or early retirement for health reasons and that sort of thing will get the same treatment as in the past. That will be an exception from this change.


Stanley Howard Knowles: Is the same not true for widows and other survivors?


Robert Knight Andras: Whatever the present practice is.


Stanley Howard Knowles: That is what the minister said in his press release.


Robert Knight Andras: Yes.


Mr. Pinard:: Mr. Speaker, I rise on a point of order. There have been consultations among the House leaders concerning eight private members' public bills on the order paper, all having as their object the changing of names of electoral districts. As a result of discussions among House leaders I believe there is agreement to pass these bills through all stages this afternoon without debate in order to effect the changes which hon. members from both sides of the House deem desirable. However, I understand that there is one bill in the name of the hon. member for Compton which has not as yet been introduced, so I ask the Chair to call that public bill.


Mr. Deputy Speaker:: Because there has been some agreement not to see the clock perhaps we can get into private members' hour as we normally do and consider that the House has reached the point where we can now proceed to private members' business as listed on today's order paper, but by agreement the House will consider some private members' bills concerning changes of names of electoral districts. In particular, we will deal with the proposal of the parliamentary secretary to introduce a bill proposed by the hon. member for Compton and consider it together with the six or seven other bills.



PRIVATE MEMBERS' PUBLIC BILLS


Yvon Pinard: for leave to introduce Bill C-423, respecting the Electoral Boundaries Readjustment Act (Megantic-Comp-ton-Stanstead).


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the motion?


Some hon. Members:: Agreed.
Electoral Boundaries Readjustment Act


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Deputy Speaker:: With the unanimous consent of the House, second reading will follow with that of the other bills enumerated by the hon. member. Does the House agree?


Some hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, 1 am pleased, on behalf of the hon. member for Compton (Mr. Tessier) to move this bill, which will now bear number 423. In consequence, I move, seconded by the hon. member for Grenville-Carleton (Mr. Baker): That Bills C-267, C-358, C-412, C-414, C-415, C-417, C-418 and C-423 be read the second time and referred to the committee of the whole House.


[Stage Direction]
Motion agreed to, bills read the second time, considered in committee, reported, read the third time and passed.
An hon. Member:: Six o'clock.


Walter David Baker: Mr. Speaker, as I understood the order of business for today, Bill C-1001 in the name of the hon. member for Scarborough East was to have been brought forward. However, because of the events of the day and the important statement which has been made, that has proved impossible. I understand that there have been some arrangements with respect to that bill which may facilitate its passage. Can I assume that that bill will be called next Thursday? Is there agreement to that effect, or can it be called now? If it is to be called now, I would indicate on behalf of my own party that we would be prepared to have that matter cleared away immediately. It was to be the first item of business today. It has been forced out by events, the member is here, and there may be more members who wish to speak; but I think it is appropriate, because of the sense of unanimity that there is in the House, that we might deal with the bill at the moment. I would say to you, sir, that my contribution to the bill would be approximately three lines, and I would think it would be most fair if we allowed the member to proceed now.


Yvon Pinard: Mr. Speaker, if we do not immediately dispose of that bill as mentioned by the hon. member for Grenville-Carleton (Mr. Baker), as far as we are concerned we will see that it is allowed to stand, in accordance with the standing orders.


Stanley Howard Knowles: Mr. Speaker, it is true that there was a hope that we would have 15 or 20 minutes in the private member's hour to deal with Bill C-1001 but events beyond our control have changed that situation. We do not feel that the House should be asked to put it through in
3636

March 9, 1978
Electoral Boundaries Readjustment Act
a minute or two, but rather that there should be consultations to make sure that it is dealt with at some other appropriate time.


Mr. O'Connell:: Mr. Speaker, I appreciate the problem that the House finds itself in and also its willingness earlier in the day to have considered the bill at this time if we could.
The nature of the statement which I would make at this time would be to refer to some amendments which I am prepared to move at committee stage. They are important and it would take perhaps five or six minutes to inform the House of their nature. That is all the time that I would require but, of course, I am in the hands of the House.


Mr. Deputy Speaker:: The Chair is at the service of the House if hon. members wish to consent.


Mr. Symes:: Mr. Speaker, we in the New Democratic party originally intended to see this bill move to committee after private members' hour today, assuming that we had had the hour, or a large portion thereof, to comment on the significant amendments that the member for Scarborough East was going to announce on behalf of Bell Canada. I feel these amendments are too important to devote only one or two minutes to comment on them. I would hope that we could arrange that the Bill C-1001 be brought forward next Thursday at private members' hour, but I am not prepared to proceed at this time.


Mr. Deputy Speaker:: Order, please. There being no unanimous consent I assume that this completes the consideration of private members' business. It being after six o'clock, I do now leave the chair until eight o'clock.
At 6:25 p.m. the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed, from Wednesday, March 8, consideration of the motion of Mr. Buchanan (for the President of the Treasury Board) that Bill C-10, to amend the Financial Administration Act, be read the second time and referred to the Standing Committee on Miscellaneous Estimates.
Mr. Derek Blackburn (Brant):: Mr. Speaker, I had just begun my remarks late yesterday afternoon when six o'clock came. I should like to proceed now with my remarks with respect to Bill C-10.
While it is true this particular piece of legislation has not received a great deal of attention from the media-we are certainly not in the headlines of the major papers across the country-it is probably one of the most important bills to have been introduced in the House in some time. Indeed, my first question is: Why has it taken the government so long to bring the measure forward? This is a bill which, if properly implemented, could save the Canadian taxpayer a heck of a lot of money. We know this from experience. I was a member of the public accounts committee for some three years. We heard some horror stories there with respect to government expenditure and management-the AECL and Polysar were outstanding examples to which I shall refer later in my remarks.
In all responsible households across the country people budget. They do everything they can to control expenditure on a weekly or monthly basis. Even though we have a House which seats 264 members at the present time and will be accommodating up to 282, let us not forget that what we are doing here in Ottawa is essentially what families are trying to do at home, whether in my riding of Brant or in Regina, Windsor or elsewhere. Today people are desperately trying to make ends meet. If they cannot do so, they go into debt. In some cases they go into debt through lack of knowledge or knowhow. Here in Ottawa we have gone into tremendous debt, perhaps not deliberately in some cases but because of a lack of knowhow.
Bill C-10 provides for the appointment of a Comptroller General who will be able to keep a check on government spending. We must certainly get a tighter grip on the handle of government spending. The same can be said about small businesses. Today more than ever before they are desperately trying to control expenditures in rough times. We can relate households, small business, and even large corporations with what we are attempting to do here and, through legislation hopefully our objective will be reached.
I have considerable reservations, though, about the form of the bill. I am not opposed to the measure. Looking at this piece of legislation, I find the following in clause 1:
The governor in council may appoint an officer called the Comptroller General of Canada to hold office during pleasure and to perform such duties and functions as may be assigned to him by the Treasury Board and the Comptroller General of Canada shall rank as and have all the powers of a deputy head of a department.
That is all it says. I do not want to sound like a prophet of doom and gloom but frankly I have a lot of sympathy with Mr. Harry Rogers, whom I do not know. When he took a look at the bill he probably sat back-I am hypothesizing-and wondered what he was going to be able to do. Hopefully, when the bill goes to committee, something more positive will be proposed by way of amendment.

March 9, 1978

The Auditor General, Mr. Macdonell, first recommended the establishment of the post of Comptroller General in his report for the year ended March 31, 1976. In that report he stated:
Parliament, and indeed the government, has lost, or is close to losing, effective control of the public purse.
This was not the first time Auditor General had expressed his concern about mismanagement of the government's finances. In his 1975 report he had stated:
The present state of the financial management and control systems of the departments and agencies of the government of Canada is significantly below acceptable standards of quality and effectiveness.
A massive two-year study on financial management and control in the government was launched in 1974. When it concluded in 1976, the results led the Auditor General to the opinion that:
Based on the study of the systems of departments, agencies and Crown corporations audited by the Auditor General, financial management and control in the government of Canada is grossly inadequate. Furthermore, it is likely to remain so until the government takes strong, appropriate and effective measures to rectify this critically serious situation.
Since the situation was recognized as being critically serious almost two years ago, why has no action been taken before now? Last April, the President of the Treasury Board (Mr. Andras) announced in the House that he had decided to establish the post and that a search for the right man was beginning. This was a welcome change of attitude. Until then the President of the Treasury Board and the Prime Minister (Mr. Trudeau) had originally rejected the proposal out of hand. I understand there was considerable Cabinet opposition as well as opposition from senior civil servants to the appointment of a Comptroller General. Is this the reason it has taken a year to find one? Given the government's original reluctance to accept the recommendation for a Comptroller General, we must do all we can to ensure that the position carries with it the power to exact the co-operation it will need to carry out the tasks envisaged by the Auditor General.
On April 2, 1978 Mr. Harry Rogers, former vice-president of Xerox Canada, will become Ottawa's first Comptroller General, a job which can make him one of the most powerful figures in the federal bureaucracy. This will be the case only if the position has all the power the Auditor General originally intended. It is at least encouraging, Mr. Speaker, that the government chose to look outside the civil service for a person to fulfil this position. It will require a fresh and objective approach to counter many years of government mismanagement. Mr. Rogers will face the prospect of controlling the finances of ministries which will be spending $48.8 billion of taxpayers' money in the coming year, according to Treasury Board's blue book estimates for the coming year, and running an annual deficit of more than $9 billion.
Federal government spending will go up 9.8 per cent in the next fiscal year. These increases must be closely scrutinized to ensure Canadians are getting top value for their tax dollar.
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According to the President of the Treasury Board, to quote a statement made by him:
The comptroller general will be responsible for the quality, the integrity of the financial administrative policies, systems and practices of the federal public service.
However, the full responsibility for the control and direction of resource allocation and control processes will remain with the secretary of the Treasury Board. How effective will the Comptroller General be in view of the fact that the government has put us into this sorry state because of its weak management and control of ministerial programs, the lack of strong central direction by Treasury Board and, just as important, the lack of accountability to parliament? The really important point is the accountability to parliament, to the people's representatives who have been democratically elected from coast to coast.
Bill C-10 does not specify the exact powers the Comptroller General will have. It says only, and I quote:
-perform such duties and functions as may be assigned to him by the Treasury Board-
Parliament will still not have an opportunity to fully examine the Comptroller General's activities or effectiveness. That is significant. There is the possibility that this bill could merely expand the bureaucracy and create yet another deputy minister. The bill makes no provision to ensure exactly what responsibilities the Comptroller General will have. This bill is no guarantee of improved financial management and control. The government would have us believe this legislation is an adequate response to the Auditor General's recommendations in 1976, recommendations that were repeated again in 1977.
This bill does not define the powers, responsibilities or obligations that will rest with the Comptroller General. Without legislative authority defining his responsibilities, what assurance is there that the Comptroller General will operate any more effectively or have wider powers than another deputy minister? Mr. Harry Rogers could conceivably be arriving in Ottawa with a very impressive title and very little authority. Without legislative authority to address the problems of financial mismanagement so clearly illustrated in the Auditor General's reports, Mr. Rogers will be operating under a considerable handicap.
In his report of 1976, the Auditor General defined clearly what the duties and responsibilities of the Comptroller General should be. He would have a status comparable to that of the design, development, implementation and monitoring of adequate systems and procedures.
There are six important points which the Auditor General made perfectly clear to the public accounts committee and to the members of the House of Commons in his report. They are as follows. First, that the form of the estimates provides a sound basis for the government's budgetary control system; second, that public moneys and assets are under his effective custody and control at all times; third, that accounting procedures and financial reports throughout government-including the public accounts-should conform to acceptable accounting principles and standards; fourth, that expenditures of public
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moneys are made with due regard for economy and efficiency; fifth, that satisfactory procedures measure the effectiveness of programs where they could reasonably be expected to apply; and finally, that he should be maintaining the central accounts of Canada, a job which is presently being carried out by the Department of Supply and Services.
Those were the recommendations which the Auditor General made with respect to the responsibilities, power, and duties of the Comptroller General if and when a Comptroller General was appointed. However, there is no such job definition included in this legislation. The cabinet and senior civil servants originally resisted the recommendation for a Comptroller General. That is obvious. They knew they had a dirty house, they knew it had to be cleaned up. They did not want somebody coming in from the outside and pointing it out to them directly.


An hon. Member:: Sure they did.


Derek Nigel Ernest Blackburn: I heard somebody from the Liberal side saying "sure they did." Why has it taken two years to get a Comptroller General appointed? Obviously top civil servants, department heads, were fighting this and have been fighting it for two years. Do not talk nonsense to me. So I ask, "Are they to be trusted to set the powers and responsibilities for the position?" Can hon. members see senior civil servants who are trying to cover up their past mistakes defining the powers and responsibilities of the newly appointed Comptroller General? That is the major question in my mind right now and that is why I said our party would support this bill but with very grave reservations. We have to have a lot more information on this bill before it gets past third reading.
The Comptroller General will face a massive task. The fact that this legislation has been introduced recognizes the well known fact that something is seriously wrong with the government's management of our finances and the pressing necessity that something be done about it. Government spending is seriously out of control. Its rate of increase has far exceeded the rate of inflation. We do not need to look at the Auditor General's report to see it. We just need to look at the government's financial record over the last 10 years.
Projected total spending for 1977-78, according to the Minister of Finance (Mr. Chretien) in the 1978-79 edition of "How your Tax Dollar is Spent", which is somewhat of a joke, will be $44.45 billion. This is an 8.2 per cent increase over 1976-77 expenditures. Our total deficit will be 39.7 billion. For 1978-79, according to Treasury Board blue book estimates, the target ceiling for total spending is $48.8 billion. This will be an increase of 9.8 per cent over the previous year.
It might be instructive to look at government spending now in relation to what it was in 1968, when the Prime Minister first came into office. In that year, total government spending was $9.8 billion. Our national deficit almost totals that amount. Our national deficit this fiscal year will equal total government expenditures of 10 years ago.
The matter at issue is not so much this increase in government spending, but how the spending has been managed or, rather, mismanaged. In view of the government's past financial track record the question arises: Can the Comptroller General's office be used as another means of hiding financial mismanagement? Without a more clear definition this is a risk we run when expanding the powers of the bureaucracy. Every effort must be made to increase the accountability of the government. There has been a remarkable lack of efficiency and effectiveness in much of government spending, as has been documented in past Auditors' General reports.
During the time I sat as a member of the public accounts committee, Polysar and AECL were the most notorious examples of mismanagement. The government is still dragging its feet on the investigation into what happened to millions of dollars spent by AECL on commissions to foreign agents. The latest revelation has been that AECL may not get full value for the $2 million it paid out for post-contract service on a nuclear reactor sale to South Korea. This money was part of $15.4 million paid in advance to Mr. Shaul Eisenberg, I believe from Tel Aviv-or that is where his head office is-for future services. This is still less than the ill-advised fiat $20 million fee AECL originally negotiated with Mr. Eisenberg. Still to be accounted for is some $2.4 million paid by Atomic Energy as an agent's fee for the sale of a nuclear reactor to Argentina. The money was deposited to a numbered Swiss bank account, but Atomic Energy says it does not know who got it or what the money was used for.
The government has been incredibly careless in maintaining its agencies and in discharging its financial responsibilities. I could go into the AECL and Polysar fiasco or mess, whatever one wishes to call it, but I suppose I would be out of order at that point. However, I think the AECL and Polysar situation in Sarnia is important and does relate to this bill. I feel it does relate to what the Comptroller General can do, hopefully, if we get the proper regulations and if he has the power to intervene.
When we are talking in terms of Atomic Energy, for example, we go back to the 1940s. It was always clouded in secrecy and was something you did not talk about. If business was transacted it was transacted under the table. When I say that I mean it was done in a sort of surreptitious manner, in almost an espionage type situation. I am not referring to Canada but to any other country that had atomic power.
This situation carried on over the 1950s and dragged into the 1960s. Then the government decided, after it had spent all this money, it had to build a reactor and sell it. I charge the
Canadian government for sinking to the lowest possible commercial denominator in attempting to sell our CANDU reactors. In doing so it entered into the worst kind of business practices with rather questionable individuals around the world, and without ever asking them what they were doing or how they were doing it. These foreign agents set the fees. They said: "Give us millions of dollars and we will sell the CANDU reactor for you."

March 9, 1978

We are not living back in the days of the cold war or the late 1940s. We still have a problem in respect of national security as every country does, but we have come a long way from those dark days of the 1940s and early 1950s. Surely the government of Canada should set an example for all businesses in this country or anywhere in the world in order to establish good, above-board commercial relations. We do not have to hire unknown agents to sell something that is made in Canada by a Crown corporation, and the obvious evidence is before us. We have misspent millions of dollars because we dealt under the table, not above with good business practices.
It is my hope that the new Comptroller General, Mr. Rogers, will have the power on day-to-day and week-to-week basis to keep the government, departments and ministers informed as to what is going on, and what is right and what is wrong, because that is what this bill is all about. If he is just to be another deputy minister sending reports, not to parliament and not to the public accounts committee, but to the secretary of the Treasury Board, and from him to the President of the Treasury Board, who is sitting across from us now, and then on to the Cabinet, where will this lead? Where is the democracy in that situation and where will it lead us?
Is this office to be another cover-up? Will it hide facts that are embarrassing to the government? What disturbs me about this bill is the lack of regulations. We do not even know what we are voting for. We do not know what will be the powers of the Comptroller General. I hope all members on both sides of the House will address themselves to this matter. I hope that members of the Liberal party who speak later this evening will indicate their concern about the accountability of the Comptroller General.
I visualize accountability in two ways. There is financial, technical accountability, and that is important. That is one thing we are talking about here. We are also talking about another kind of accountability. To whom is the Comptroller General to be accountable in his reports? Will we as members of parliament and as members of the public accounts committee-I am not presently a member but I was-get this information second, third, fourth or fifth-hand after reports from the Comptroller General have gone through the bureaucracy, through the minister's office and through the Cabinet and been watered down? Are we going to get the reports just as quickly as possible so we can raise these issues in the House and ask the various ministers responsible if in fact there has been malpractice as far as financial accountability is concerned in their respective departments or ministries?
We spent a very good afternoon today, although I did not participate in the debate, discussing the question period and whether ministers should or must answer questions. Of course, we know that according to the rules a minister does not have to answer a question if he so desires. If under this bill the Comptroller General is allowed to publicize his facts, figures and statistics and give them to members of the House of Commons, this will enable members on both sides of this House to ask questions and put ministers on the spot so they will have to come up with substantive answers instead of
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evasive ones such as those we have been getting for the last, heaven knows how long.
There is an old saying, Mr. Speaker, that "I want value for my money". I suggest that has a very special meaning in relation to this bill. This matter has come up in the Ontario legislature as well as in two or three other legislative assemblies across the country. When the government spends money for the purchase of anything, how do we as members of parliament, who are supposed to have some control over the purse strings of government spending, know whether the government is getting the best deal? When the government orders desks, chairs, rugs, typewriters-I do not care what it is, even pencils for that matter-how do we know we are getting the best value for the taxpayers' dollar? Are there any other members of the House who can actually go to a department head in the Department of Supply and Services and grill him at length? Surely, we can ask a few questions of a minister a couple of times a year, and that is what it amounts to in most cases.
The problem is that we are keepers of the public Treasury. We are all keepers of the public Treasury, not just the government, the cabinet, the Minister of Finance (Mr. Chretien) or the President of the Treasury Board. We are all responsible to our constituents as keepers of the Treasury to make sure that we get value for our money. This is what an intelligent individual Canadian attempts to do when she or he goes out and buys food, furniture or clothing. They want to get value for their money and yet, because of lack of control over our economy, we do not have that information; we do not know whether we are getting value for our money.
Let me go back to where I started out in my address this evening. Even though it is a huge bureaucracy, we should instill in the minds of the senior bureaucrats and all the way down the line that it is the individual taxpayers' money that the government are spending and they should be as careful in spending that money as they themselves would be when buying their groceries. That is the way it should be. We have the taxpayers' money in trust. It is not our money to throw around as members of parliament or as members of the government.
I do not intend to speak much longer, Mr. Speaker, but there is one point I would like to raise which I raised before in another debate, and that is a problem with the public accounts committee. No doubt this relates to other committees as well. I think we have a committee system in this country-I hope that some members on the government side will agree with me on this because I think they feel just as frustrated as we do on this side-that is a sham in many respects, a system that really does not function. We cannot subpoena witnesses. Whenever something happens that is important, or perhaps even catastrophic, something that is significant to the House, how does a member of the opposition, or indeed a backbencher on the government side, go about getting a reference to subpoena witnesses, to have counsel, to have adequate research staff; in other words, to have everything a committee should have? We

March 9, 1978
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have to go to the government House leader, who is a politician, who is a member of parliament and who is a member of the cabinet-who in other words is a member of the government. If he does not want to give us that reference, he does not have to. Is that democracy? I see a Liberal over there nodding his head in the affirmative. We have to go to one man in one party in one government to get a reference to subpoena witnesses before a committee.
I maintain that the committee system is an absolute sham. Why do we not democratize committees in this House? Why do we not make ourselves democratic in our committees? Why do we have to act according to party lines in committee? In some of my statements in committees I have disagreed with my party, and I know there are some Liberals and some Conservatives who have done the same. Why can we not stand up in committee and express what we really want to express without fear that we will be stepped on and kicked around by the House leader, regardless of what party is in office?
This relates directly to the changing times, and while one or two members may be laughing at present, there is one thing of which they may not be aware, and that is that the government is moving toward a congressional or republican system. If the government is moving in that direction, it only stands to reason that our committees should go the same way. We cannot have it both ways. We cannot have a sham of the parliamentary system-in fact, it is going republican; it is becoming an administration, not a parliament-and on the other hand try to hold on to the old, strict party line approach in committees. We must have more power.
I will conclude by saying that unless Mr. Rogers, the newly appointed Comptroller General, is permitted to report directly to a committee of the House before his information is hidden somewhere over there on the Treasury benches, this legislation is just a piece of nonsense. All we are doing is adding another bureaucrat at a high salary. Because what will happen is what happens with public accounts. In committee we come up and debate problems, inaccuracies, gross negligence, irresponsibility and non-accountability on the part of the government a year later, instead of having a handle on it when the problem is facing us and the country.
Unless the government is prepared to make the Comptroller General responsible to the House-


Robert Knight Andras: No way.


Derek Nigel Ernest Blackburn: -I see no reason why this legislation should even proceed. However, I am prepared to support it, hoping- probably hoping against hope-that when it comes to committee changes will be made, that the government will introduce regulations which will make the Comptroller General responsible to parliament, not just to a few cabinet ministers. We have had enough of executive governing in this country. If we do not stop it now, we will end up without a democracy in this House. It will become only a little debating society. In fact, that is what it has been for almost all the time I have been here. So I hope that substantive changes will be made in the legislation before it becomes a statute.


Mr. Alan Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, I am very pleased to be entering this debate tonight on this very important 15 line bill which seems to be drawing so much fire from the opposition side, based on the comments of the two official spokesmen for each of the parties. This is a bill that establishes what is probably one of the most significant positions in our federal government public service of recent years.
There are a number of points that I would like to mention during the course of my remarks tonight, but first I would like to refer back to a few points that have been raised by the two official spokesmen from the opposition parties who-and I know them to be people of high repute-amazingly enough are taking this 15 line bill, a very simple bill doing a very important thing, and attacking it in such a hard way.
We have been in business in this country for almost 111 years. For the first time we are now officially establishing a position of Comptroller General which may be equated in most people's minds to a position of chief financial officer in the private sector.
The hon. member for Calgary Centre (Mr. Andre) commenced his remarks by being very vindictive toward this bill and this appointment. In my view, that does nothing to help the man who will be the first incumbent of this position. We all agree that he will have a very difficult task. It will be exceedingly difficult for this man to walk into a 300,000 plus organization in terms of people having an expenditure budget of somewhere in the neighbourhood of $45 billion. The new Comptroller General will be asked to ensure that there are adequate financial controls and systems in place throughout the entire system. That will be a very delicate and tricky task, and the new Comptroller General will need all the support that we as parliamentarians can muster for him.
The hon. member for Calgary Centre suggested that we are simply "purporting" to establish the position. He went on to say that, in his view, the bill would do nothing more than simply create another deputy minister. The hon. member played down the appointment to the extent that if he and his party had their way the Comptroller General would not be able to function in the manner intended by the government and by those of us who have been involved with the public accounts committee. The members of this committee fully supported this concept of a chief financial officer and urged the government to make the appointment. The hon. member for Calgary Centre spoke in a manner that would make it extremely difficult for the Comptroller General to accomplish the job that has been established for him.
The hon. member for Brant (Mr. Blackburn), who is the official spokesman of the New Democratic Party on this Bill, has taken a very active part in our public accounts committee both during my time as vice-chairman and my other three years of active involvement with that committee. I know the hon. member's concerns. We have shared some of these con-
March 9, 1978

cerns over the years-concerns about the state of financial control within the over-all government service.
While I am certain the hon. member is endeavouring to be as sincere as possible, I feel that he is significantly off base in suggesting that the legislation establishing this position, unlike legislation governing the establishment of other departments, should be defined in such specific language that it would tie down the Comptroller General, who after all will be a very senior civil servant. The hon. member indicates that the bill should define the role of the Comptroller General to the extent that he would have inadequate freedom of movement and inadequate ability to fill out his responsibilities and to make himself the effective official he must be in order to accomplish the tasks which are set before him.
Rather than condemning the fact that the bill contains only 15 lines, I think this is a most positive aspect. Mr. Harry Rogers-the appointee designate-himself has said in the few public comments he has made since his appointment that he will need at least six months to sort his way through and to determine an approviate course of action. As one who has been involved in financial administration in the private sector I understand exactly what Mr. Rogers is saying. His job will probably be the most difficult financial administration job anyone in this country could be asked to do.
I understand that Mr. Rogers will be taking a very significant cut in his own remuneration in order to devote himself to this task. He obviously thinks it is important or he would not accept it. I think it is essential that we give him all the leeway we can so that he can be as effective as possible. He will have to determine his detailed responsibilities and work in close collaboration with senior civil servants in all departments, and hopefully in Crown corporations as well. He will have to establish his credibility.
There is no question that any large organization looks upon a person coming into the area of financial control with a certain degree of concern. They wonder what this individual will do and what effect he will have on their operations. They wonder how they should respond to and interact with him. This is natural and understandable. Senior bureaucrats on the Ottawa scene will be looking at this new position with a great deal of interest and concern. I think it is important that we give the new Comptroller General all the leeway necessary to establish himself and to make himself as effective as the Auditor General and President of the Treasury Board intends he should be.
In my view, the simpler this bill is, the better. In its present form it is simple. It contains only 15 lines, and I suggest to the hon. member for Brant, the hon. member for Calgary Centre and others who will be on the committee examining the details of the bill that we should leave it that way. We should let the new Comptroller General do his job and help him by leaving the bill in this existing form.
The hon. member for Brant raised many other points regarding committees and so forth. I would like to touch upon those points in the course of my remarks, but I want to come back for a moment to the bill itself. There is no question in the
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minds of most members of parliament that it is high time this kind of position was established. The annual expenditures of the government are now between $40 billion and $50 billion. Ten or 11 years ago expenditures were $8 billion to $10 billion. The Glassco commission recommended a great deal of decentralization in its report back in the early sixties when expenditures were around $5 billion. Decentralization was accomplished to such a degree of success that the control features which existed after decentralization was put into place were so thin and tenuous that decentralization tended to take over.
In the meantime budgets were growing at a rapid rate, and the controls which should have been in place were never put into place. On the one hand, decentralization was taking place. We were moving away from the old green eye-shade, centralized accounting, which was an extremely good move. But at the same time budgets were increasing substantially, which had the over-all effect of loosening control from the central area to such an extent that in many cases it almost ceased to exist.
The Auditor General brought his own expertise which he had developed in the private sector. Many corporations had gone through this same scenario in years gone by. Over the last 25 or 30 years hardly a major corporation in North America has not gone through this same business of moving from the old centralized, detailed type of accounting control to a decentralization phase, but with the establishment, in most cases at the same time, of a more modern concept of financial management which ensured that sufficient controls were indeed in place to meet the needs of the growing and modernizing phase that most corporations were going through. The only difference here is that we are seeing the process happening in government some 25 years later.
I suggest that the response which has been made by the former president of the treasury board, now the Minister of Finance (Mr. Chretien) and by the present President of the Treasury Board (Mr. Andras) to the suggestions made by the Auditor General, members of parliament and active members of the public accounts committee is an example for other levels of government across the country. In my view they are likely to copy that example in the not too distant future.
I think, Mr. Speaker, generally this augurs well for the ordinary Canadian taxpayer because if there is one thing that concerns people today it is to be sure that moneys spent in their interests by the various levels of governments at least are spent in a manner that ensures that the normal types of financial controls are in place similar to those that they expect to find in large companies with whom they are familiar-oil companies, department stores, etc.-in endeavouring to ensure they run successful businesses.
So, Mr. Speaker, the fact that the bill is before us at this time I think is indeed another encouraging sign of the way in which this government is prepared to respond to the real needs of the day. I want to make that point and again emphasize that I think it would be a mistake to try and tie the new

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appointee's position down to such an extent that he would virtually prove ineffective. He must not be restrained in any artificial way.
The discussion on this bill gives me an opportunity to make one other point, as a member of parliament in my first term here in Ottawa, that I think is important at this time. A week or so ago there was a lead editorial in one of the major newspapers in this country, the Toronto Star, to the effect that there is no incentive whatsoever to be a member of parliament; that indeed, unless you are a cabinet minister you might as well forget it. You might as well not even go to Ottawa. This was the thrust of the article. It is the kind of argument that influences a good number of people who might otherwise be prepared to stand for election in their various ridings for whatever party they might be interested in. The editorial commented on the inability of members of parliament to have any input, the inability of the committee system to be meaningful, and made various other general comments demeaning to the role of an MP. These comments could be extremely discouraging, not to myself, Mr. Speaker, and I am sure not to members who are here and participating, but to people from the private sector who might want to join this forum and become involved in the national democratic process.
I want to take a few minutes in connection with this bill to indicate one small example of how that editorial is so very wrong-extremely wrong. I cite my own experience, Mr. Speaker, and I am sure I speak for other members of the public accounts committee in connection with this. Two years ago, Mr. Speaker, the whole matter of the chief financial officer or comptroller general was discussed at great length in the public accounts committee. I, among others from that committee, made the point on March 18, 1976, that in my view it would be most gratifying just to know that there was a chief financial officer among the 300,000 odd people employed by the federal government.
We discussed the matter with the Auditor General. We even tried to pin him down in committee as to whether or not he was recommending that appointment. At one time he was suggesting it might be a good thing but he did not have a firm recommendation. Later, Mr. Speaker, when he published his report for 1976, he did indeed make a very clear point. He referred, I might say, in his report to a question I had raised in the House of Commons and in committee regarding the establishment of just this type of position. By this time he had determined his own point of view firmly as supporting the concept of a comptroller general.
I only raise this, Mr. Speaker, because it seems to me a clear example of how members of parliament can indeed make a most useful contribution to the governing process here in Ottawa. This comment should be noted-but in all likelihood it probably will not-by this editorial writer of this leading Canadian newspaper. He should realize that he is quite wrong in his concept of what does and what can go on in the parliamentary process.
I would like to come back to the comment of the hon. member for Brant about committees. Mr. Speaker, committees

in our system can be most useful. Not only has the public accounts committee had a great deal to do with support for this particular appointment, and support for Bill C-10 that we now have before us, but it has been useful in many other ways. What is needed is the input of individual members on committees. Too often, Mr. Speaker, we go to committees and for one reason or another the party representation is very low. Often we will be discussing an important piece of legislation, and for one reason or another members may wish to raise matters that are peripheral but which particularly interest them in the over-all subject, whether it be energy or some other area. Mr. Speaker, it seems to me that before we criticize, before we as members of parliament-I do not care on what side of this House-try and take the existing committee system apart, before we try and dismantle it or try and change it for something else, we should do our utmost to make the existing system work. And work it can.
It is possible to get general references made to committees. It does happen. We have noted this in a number of committees in the past four years. The people participating in committees can be fully satisfied with their participation. Certainly we had some problems in the public accounts committee when trying to get a man like Mr. Eisenberg from Israel to come before us. But I am not sure that any number of subpoenas would have done any good. Never in my experience, Mr. Speaker, have we had to resort to that sort of thing to get a witness before a committee.
It seems to me that before we give committees a lot of new powers, we should make sure they are using the powers and the abilities they have to the fullest extent. Staff is available to us from the research department of the Library of Parliament. We have all kinds of help available to us, Mr. Speaker. I have not been on one committee of this House where members have wanted some help, whether it is of a financial nature, the need for outside counsel or whatever, and have been turned down.
Now, Mr. Speaker, until we have used the existing committee system to its fullest, I do not believe we have any point to make to you, Mr. Speaker, to the government or to anybody else as to its ineffectiveness. We have the ability to make those committees effective. It is up to us, to each one of us in this House to do so.
I would like to conclude my comments tonight by again coming back to this particular bill and expressing, I am sure on behalf of most members of the House, the great confidence that we have and will place in Mr. Rogers when he assumes his most difficult and delicate task. I exhort members on the other side of the House not to rush to define the job description in the form of legislation. It would be a big mistake. We do not do that for other deputy minister positions in the government service but, rather, give them a great deal of leeway. We should also give this appointee an opportunity to "get his feet wet" in the job and interact with his senior public service colleagues-to have an opportunity to establish his own credibility, which will be very important. His background certainly indicates his ability to do just that. He must be given adequate time, Mr. Speaker, to become installed in the job and to obtain
March 9, 1978

the kind of background that he will need in order to perform in a meaningful way. Again I say a great deal of understanding will have to be shown him by his colleagues in the senior bureaucratic service.
It concerns me a little, Mr. Speaker, to have heard a comment recently that one department was feeling that perhaps there was a need now to hire some people who would be able to interact with the new Comptroller General. I think that, of course, is simply unnecessary and really ridiculous. If individual departments have the kind of financial controls in place that they should have, then they do not need any new people to interact with the Comptroller General. Hopefully he himself will establish only a small staff. He indicated it is his desire to have just a small nucleus of people. They will interact with the existing staffs in the departments and seek out those areas where financial controls may need improving. Many of the departments may have already had weaknesses pointed out for them by internal audit systems in their own department, yet they may not have adequately addressed the matter for one reason or another.
I hope the President of the Treasury Board will take steps to ensure that departments are indeed not permitted to go out and hire people, simply to interact with the new Comptroller General, if, indeed, there is some consideration in the departments of doing that.
This new appointee is not going to be some sort of ogre, seeking out all the wrong things in departments. That is not his task. We have an Auditor General who will continue to examine accounts after the fact. This man's job will be to interact with the senior people in other departments to ensure they have the kinds of systems in place that will help them to render a more effective performance. Any senior bureaucrat in our system should be proud that he is able to produce the kind of results that may be sought from his department, at the best price possible and in the most efficient way. The Comptroller General will indeed be helping these people in achieving that goal.
If in some departments there are inadequate controls in place at the present time, obviously corrective measures are needed. Before hiring extra people to do that, however, such departments should look at their potential to put appropriate measures in place by making some basic decisions and possibly adjustments in allocation of existing staff.
A good deal more could be said about this bill. I hope as it moves into committee and is passed into law that the opposition parties will take a fresh look at their concern about the need to have much more definitive legislation. I hope they think about it and come to the conclusion that the leeway we grant to this position, as indeed is granted with all deputy minister appointments, is not curtailed by imposing in the legislation inappropriate detailed restrictions. Such an approach would do far more harm than good.
The basic guidelines are there for the job. They are currently in the bill. Any further definition of the role of this new
Financial Administration Act
appointee must be worked out with the President of the Treasury Board and his colleagues over the course of time.
In conclusion, I commend the President of the Treasury Board and his predecessor, the present Minister of Finance, for having moved this item to the point where today, for the first time in 111 years in our Canadian history, we are going to have in place a chief financial position that any major corporation in our modern economy would simply accept as a basic organizational function in the course of carrying on its business. Government should never consider that it has less need for up to date financial control concepts than is the case in the private sector.
I wish Mr. Rogers the very best as he commences in this challenging new position in the near future. I hope he will receive the kind of support from members of this House of Commons that he will so obviously require, particularly in the initial term of his appointment, in order that he may render the effective job that is intended by the government and is certainly sought by all members of parliament.
[ Translation]


Eudore Allard: Mr. Speaker, I would like to say a few words on this matter even though I did not have any time to prepare a speech since I received the minister's statement late this afternoon. Mr. Speaker, the decision to create the position of comptroller general was made in accordance with the general purpose of the main recommendations contained in the 1976 report of the Auditor General.
According to the President of the Treasury Board, the position of comptroller general can be defined as that of chief financial officer of the federal public service. The comptroller general will be directly responsible to the President of the Treasury Board and will have the rank of a deputy minister. In general, he will be responsible for the quality and harmony of the financial administration policy and practices within the entire federal public service. He will be responsible for developing expenditure control systems as well as related administrative mechanisms so that the expenditures stay within the limits authorized by the government. In fact, the responsibilities of this new position will include the majority of those given to the financial administration branch of the Treasury Board on its establishment in March 1976.
According to the President of the Treasury Board, there will be special functional relationships between the comptroller general and the senior financial officers of departments and Crown corporations to enable him to give the necessary instructions while maintaining the concept of decentralized management.
It has been noted that the entire responsibility for the control and orientation fo resource allocation and control processes will remain unchanged and come under the secretary of the Treasury Board. Mr. Speaker, the President of the Treasury Board added that the creation of this position will entail a reorganization of the secretariate of the Treasury

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Financial Administration Act
Board and that the details of this change will be announced after the appointment of the comptroller general.
Mr. Speaker, the idea is good in itself but we shall make sure that we are not going to create another administrative position that will only add to the burden of bureaucracy. The so-called functional reports will have to be efficient. On that respect I wonder what the term "functional" means.
The financial control of various departments is a heavy responsibility and all senior civil servants will have to co-operate if that office is to serve its purpose. Lastly we may wonder if the responsibilities of that position are not going to overlap those of the financial administration branch of the Treasury Board. If it is the case, why a new office?
However, l hope that Bill C-10 will eliminate the abuses made by various departments and of which we are all aware and I think particularly of the Department of National Defence and the excessive commission allegedly paid an individual whose name has not been released. I refer to the Candu reactors sold by the National Energy Board of Canada to South Korea and Chile. In fact this bill is not perfect but it deserves our attention and this is why we give it our support.


Peter Elzinga: Mr. Speaker, I wish to share a few thoughts on Bill C-10, to amend the Financial Administration Act. Prior to doing that, I wish to commend the critics in this party in this area, in particular the hon. member for Vegreville (Mr. Mazankowski). When the Auditor General suggested that we have a position of comptroller general, this party immediately came out in support of that position.
We want to ensure that this appointment is more than just a political puppet for the Liberal administration. That is why our critic, the hon. member for Calgary Centre (Mr. Andre), will propose amendments to the effect that we have terms of reference defined in legislation as to what the responsibility of this gentleman will be.
I wish to underscore the comments made by the hon. member for Brant (Mr. Blackburn) on behalf of the NDP. It is obvious he was aligning himself with the position taken by the hon. member for Calgary Centre. It was clear from the comments made by the hon. member for Rimouski (Mr. Allard) that all the opposition parties are in agreement with regard to this legislation. We feel there is a need for it but that there should be a more precise definition of the responsibilities of the Comptroller General. It is important he should be accountable to parliament and that his report should come before committees of the House. It is important he should be more than simply another deputy minister.
When we review the career of Mr. Harry Rogers, who has been designated for this post, it becomes obvious he is a very competent individual. We would not want to see him restricted in any way. On the basis of past actions of the government it is clear that suitable terms of reference with regard to this new

position are needed. We do not want to see any cover-up in the area of financial management, especially in times when expenditures are soaring.
The Auditor General stressed the need for greater accountability. In November, 1976 he tabled an annual report in which he indicated the government for losing control over its spending. He considered the situation so serious that, he said, if it continued he would be unable to approve the accounts of Canada. He found the government had overstated its financial position by more than $7 billion through a series of unacceptable accounting practices. An inquiry was instituted, and before the week was out one of the members of the four-man commission appointed by the government was forced to resign after a conflict of interest charge.
The President of the Treasury Board (Mr. Andras) is an extremely intelligent individual with a good business background. It must break his heart at times to watch the government's financial mismanagement, to see the Minister of Finance (Mr. Chretien) bowing to political expediency rather than considering the economic needs of Canada as a whole. Even the budget will be dictated by the campaign managers and by the senior organizer of the Liberal party, Senator Davey, rather than the Minister of Finance.
I hope that when this bill becomes a reality such things as the wasting of $750,000 by the Minister of Transport (Mr. Lang) on his own flying escapades will be curbed. It is all very well for members opposite to talk about restraint and claim they are good stewards of the public purse, but that is not the case. I intend to put forward many examples of ways in which the government has misused large sums of money provided by the Canadian taxpayers, but before doing so it is appropriate to review some of the so-called major accomplishments of the present administration. Just the other day they voted against a motion by the NDP, with an amendment from our own party, to offer equality of rights to women. I hope they are very proud of what they did. We intend to bring this issue up during the election.
It is obvious, when one reviews the entire four year period during which I have been in this chamber, that the government has wasted a golden opportunity to realign its economic thinking. Unemployment levels are breaking records, we are experiencing record inflation, record mortgage rates, record interest rates and record government spending, all because of the actions and omissions of the present administration. Of the last ten budgets, nine were deficit budgets and this year the deficit will amount to close to $10 billion.


Robert Knight Andras: His figures are jumbled up.


Peter Elzinga: It is obvious we are dealing with a scandal within government. A bit of research I have put together shows 25 specific areas of incompetence, corruption and deceit which have been permitted by people across the aisle. There is the affair of the AECL reactor sale. We are not getting the accountability that people have a right to expect. We recall such things as the Sky Shops affair and the affair of the Statistics Canada employees. All these things bring to mind
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the statement made by the Canadian Chamber of Commerce in its pre-budget submission to the Minister of Finance and the Minister of National Revenue (Mr. Guay), in which it stated:
Loss of business confidence stems in large part from the contradiction between the government's stated intention of decreasing its involvement in private sector decision-making, on the one hand, and legislation creating excessive surveillance and "fine tuning" of private business decisions, on the other.
Not only the chambers of commerce but the majority of the Canadian people find they can no longer place any faith in the government. When the Prime Minister (Mr. Trudeau) first took office he stated emphatically that he intended to lead this country more to the left of the spectrum. I think it was 18 months ago that he said in a television conversation that the free enterprise system was not working and that we would have to change the system accordingly. Nowadays the government is saying exactly the opposite; it is saying we must involve the private sector to a greater degree.
To deal specifically with Bill C-10, it is my hope that abuses and shortcomings such as those to which I have referred will be remedied, to some extent at least, by its provisions and that the waste of public funds will be reduced.
I should like to refer at this point to a booklet put out by Edward Murphy of Vancouver entitled; "A Legacy of Spending". On the first page there is a clipping which states that it is the Prime Minister's intention to cut the civil service by 10 per cent. He also plans to curb government spending. The booklet is dated August 14, 1969.
If we look at what happened in reality as compared to what was stated in this article, we find that since 1969 government spending has increased by some 201 per cent. We find that the civil service has increased by some 45 per cent. Mr. Speaker, it is any wonder why the Canadian people have no faith in this administration? The government's own backbenchers are condemning it for mismanagement. A short time ago the hon. member for Vancouver East (Mr. Lee) stated that government spending was out of control. The story was carried in an article by the Vancouver Province dated September 29, 1975.
One can go through an entire list of waste and government mismanagement of public funds. I refer to an article in this booklet which states that CIDA's president spent some $20,000 to have a speech prepared for himself. We then come to a study which was commissioned by the International Development Research Centre which announced a grant to conduct an infertility study. They received $84,000. I find it humorous too to go through some of the Canada Council grants. Canada Council in total has spent in excess of $400 million. When one reviews, where some of this funding has gone, it makes one sick. It has gone to support filth.
Everything is illustrated in this book and I dare not put it in the record because it is such filth. We have members opposite and in this party who are debating legislation before the justice committee dealing with pornography. If members on the opposite side were sincere in the application of what they are stating, they would start to clean up their own house first.
Financial Administration Act
When we see the smut that is being supported by the Liberal administration, it is simply appalling.
There are a few other illustrations I wish to share with hon. members covered under Canada Council grants. In 1971 a grant of close to $40,000 was made so that a study could be made of the Alberta electorate. I am puzzled why $40,000 would be allocated to study the electorate in Alberta, because they have done a fine job over the last three years in sending representatives to this House of Commons. I do not feel Alberta needs any studying.
We find too that some $48,000 was granted to study the fertility of families in Quebec. Why would $48,000 be granted to study fertility of families in Quebec? That is the second such grant; there was another one for $50,000.


Miss B6gin:: What is wrong with it?


Peter Elzinga: Why should we spend Canadian taxpayers' money on studies like this?


Monique Bégin: We need population in this country. You are against babies?


Peter Elzinga: No.


Monique Bégin: Explain!


Peter Elzinga: I am curious as to why the government would want to know the fertility rate in Quebec and spend some $50,000 of the taxpayers' money.


An hon. Member:: How many babies does she have?


Peter Elzinga: Maybe I could ask the hon. minister how many babies she has.


An hon. Member:: Shame!


Peter Elzinga: I think she is a very responsible minister who is doing a great job. She is doing a much better job than those who are taking care of the Canadian taxpayers' money, and that is exemplified by the way it has been spent over the last 10 years.
In conclusion, I wish to underscore a few things that have been brought forward by the hon. member for Calgary Centre, who is our critic in this area. He did a great job in putting forward our position when he opened the debate after the Parliamentary Secretary to the President of Treasury Board (Mr. Lefebvre) spoke. The hon. member for Calgary Centre stated that it was vital there be a Comptroller General in place in the government apparatus, to use the words of the Auditor General, "to bring this serious situation under control". It is absolutely essential that we do have legislative authority to perform that function. We intend to propose amendments along those lines to ensure this responsible position is accountable to the parliament of Canada rather than just the government itself.


Stan Darling: Mr. Speaker, having been a member of the public accounts committee for a

March 9, 1978
Financial Administration Act
few years I am certainly pleased to have the opportunity to say a few words on Bill C-10, an act to establish the office of Comptroller General. The person who has been appointed, Mr. Rogers, I understand is a highly qualified and capable man and he certainly will be assuming an important position. No one will deny this, Mr. Speaker. Indeed, in light of past government mismanagement, his will be no small task and we on this side of the House would like to offer him every encouragement in his most difficult task. He will be responsible for assuring proper financial management and control procedures for the various government departments.
I am sure that when the Auditor General uttered his ominous words about the significantly low standard of the quality and effectiveness of the financial management and control systems of departments and agencies of the government of Canada, he was worried about the direction the government was taking in financial management. One year later when he stated that financial conditions had deteriorated to the point of being "grossly inadequate", it was clearly time to institute another check on government accounting that would somehow improve the way the government was managing the Canadian people's money.
The idea of a Comptroller General is a good one. Indeed, it is absolutely necessary if we are ever to regain some control of government spending. But to appoint someone and then deny him responsibilities at the same time is once more the typical government response to problems and solutions. The problem exists. There are solutions to the problem. Yet the government chooses to tackle the problem only half-heartedly. They take the cosmetic approach. They give the appearance of solving the problem. They take the first step and that is all.
Obviously the government agrees to the concept of the role of the Comptroller General. But why are his duties and responsibilities not spelled out in the legislation as well? This matter has been brought to the attention of the House by three or four speakers already. It will certainly be brought up and amendments presented in committee in an attempt to correct this. It appears that the government wants someone to do the job on the one hand, and yet on the other hand it looks as if they do not. It is indeed regrettable that the government chooses not to include his responsibilities in the legislation.
It is also lamentable that parliament will have no control over the role the Comptroller General will play. This is too bad, particularly in light of what the Auditor General had to say in his 1976-77 report. He said:
Small wonder that parliament has lost control of government spending. The MPs scarcely had a fighting chance to get adequate information on the spending they have to approve.
To give parliament some form of control over the role of the Comptroller General would have been an excellent opportunity to improve the position of parliament, especially when it comes to government spending which has deteriorated steadily over recent years. Why is it that the government will only go part way in following up what the Auditor General is recommend-

ing? The government first hesitated to make the appointment, and then when it did, it did not do it completely or fully.
In light of this I cannot help but wonder about the actual impact the Comptroller General will have. One would have to be very foolish to believe that suddenly the financial woes of the government will be turned around. I am afraid it will take more than one new face to achieve that. It will take a great number of new faces, and probably a whole new government.
In the last ten years we have seen a phenomenal growth in government spending and deficits. Indeed, the budget deficit for this year will be as great as our entire budget when the Prime Minister (Mr. Trudeau) came to power. The cost of government has risen by 400 per cent over that ten-year period. I believe it was in the vicinity of S10 billion and now, as was mentioned earlier, the estimate for this year is $45 billion; and in all probability when the supplementary estimates are brought in it will be closer to $48 billion.
The whole depressing saga of government spending is a situation getting worse and worse year by year. Was it only ten years ago that the Prime Minister said that we would be on the way to financial disaster if nothing were done to bring spending under control? These are enlightening words considering the present financial circumstances of the government.
If this government has one philosophy, it is to spend, spend and spend some more. Government in the past ten years has grown too quickly and by too much. The implementation of some form of control mechanism is long overdue. The government philosophy of better late than never has prevailed once more. A better philosophy would be better never late. In other words, it should have been introduced some while back.
I suggest it is too late to implement the effective control Canadians all over the country would like to see regarding how their tax dollars are being spent and will be spent in the future. It is too late because the pattern has been established. The people of Canada have watched their taxes go up and up to support the government in its ten-year spending spree. The tax burden of the average Canadian family has increased by 239 per cent over the 1961-75 period. What has happened in the last ten years or so could rightly be called the great Canadian tax tradegy.
The phenomenal amount of waste that has been occurring in the last ten years will not be stopped overnight. It is to be hoped that the Comptroller General will be able to operate with as much responsibility and as smoothly as is humanly possible within the bureaucracy. The plain unadulterated truth is that we have been spending and spending.
I have served on several committees, and I have heard it mentioned that committees are not working as well as they should. Perhaps the members themselves could help the committees work a little better, and I say that with all due respect. I attended a committee meeting which was called for 9.30 this morning, but proceedings did not get under way until about 20 minutes to 11. That was an absolute disgrace. When members of parliament do get an opportunity to debate the estimates, two hours in many cases is not sufficient. By the time you
March 9, 1978

complete the niceties at the start a great deal of time has passed. After two or three committee meetings on the estimates of one department the minister and his cohorts are home free for another year. This makes it rather difficult for members of parliament to be able to hone in on these expenditures, getting the proper answers from the ministers responsible or their officials. I have seen this happen time and time again, and I guess I will see it happen in the future.
Let us hope the Comptroller General will have a free hand and will be able to go into any department, possibly with the advice of members of the opposition, and members of the government the odd time when they are not too enthusiastic about how a department is acting or spending money. If that is the case then the Comptroller General will be doing a good job. I understand he will have the rank and salary of a deputy minister. Let me suggest to the President of the Treasury Board (Mr. Andras) that it might be a good idea if he paid him on commission in reverse; the more money he saved the more he would be paid. I would like to see the day when he was receiving $10 million in salary, because he would be earning every cent of it. That may be a thought worthy of consideration.
In conclusion, I should like to say that I certainly support the appointment of a Comptroller General. I add that any measure which will put some sort of check on the government's spending habits is more than welcome. Let me say once more to the President of the Treasury Board that I commend him for finally getting this bill before the House and putting the Comptroller General to work; I understand he will be starting next Monday.


Miss Aideen Nicholson (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, I am pleased to have the opportunity of speaking in favour of this amendment. The Financial Administration Act dates from 1951 when government programs were much more simple. Since then there have been different views at different times in the country on how best to manage public programs and to ensure accountability in public spending.
In the 1960s, following the Glassco commission, the central controls which previously existed within the Treasury Board were relaxed and the cry was, "let the managers manage". This was very much the attitude of even provincial civil servants in the 1960s when central controls from Treasury Board were certainly very much resisted.
In the expansive mood of the 60s, the emphasis not only in the federal government but in provincial governments too was on creativity. The civil servant who was considered bright, able and promotable was a person who developed exciting new programs which, in a sense, meant spending more money. In the course of all this somewhat visionary activity the fact that the Glassco commission, in addition to saying that the deputy ministers should manage their own departments, had also recommended some financial mechanisms to replace former central control by Treasury Board was somehow overlooked.
Financial Administration Act
When one looks at the United States and Europe during the 1960s, one sees the same emphasis on creating exciting, progressive programs which, of course, cost money, and insufficient emphasis on accounting for this money. At the present time, the pendulum seems to be swinging the other way. We sometimes hear that government spending is bad, and that civil servants are empire builders who must be restrained and supervised. That attitude carried to extremes can be at least as expensive and unintelligent as a laissez-faire attitude toward expenditures from the public purse.
The measure before us is to create the new position of Comptroller General and is based on the recommendation of the Auditor General. The recommendations of the present Auditor General, who not only pinpoints problems but also offers solutions, naturally carry considerable weight. However, the Auditor General has also addressed himself to the question of the need for Canadians to get value for money in auditing.
At the meeting of the public accounts committee on February 2, the Auditor General estimated that at least $50 million is spent on government auditing services. The Auditor General's staff has been greatly increased. Treasury Board and the Department of Supply and Services have audit services, and then, of course, there are the various pre-audits within the departments. In this context, the appointment of another financial control office naturally raises the questions of need and effectiveness. Do we need more effective financial control or do we need more effective program audits? Canadians do not like waste in government spending, but neither do we like bureaucratic red tape, and sometimes an over-concern with auditing can strangle programs.
The hon. member for Scarborough East (Mr. Martin) expressed surprise that a 15-line bill should occasion so much debate. I do not find it surprising because I think the underlying issue is the size and scope of government spending, an issue on which people have strong and often conflicting opinions. People talk of the need to cut down on government bureaucracy, but the same people also want stronger government action to deal with unemployment.
People talk about the need to free the private sector from control or interference by government, but business also wants government organization, spending and incentives for research and development to help in penetrating foreign markets and so on. Education, manpower planning, pensions, medical care, defence and transportation are all essential areas for government activity if there is to be equality of opportunity, social justice and economic prosperity.
A strong central government is essential for solving the country's problems, and that means big, universal programs and therefore the need for modern and effective financial controls. It is no longer enough that a program be imaginative and idealistic. It must also be carried out in the most effective and economic fashion to achieve national goals. In times of slow economic growth, government must help to take up the

March 9, 1978
Financial Administration Act
slack while giving private enterprise incentives and the confidence to expand.
Canadians' justified criticism of government spending, whether at the federal, provincial or municipal level, is against the multiplication of the bureaucracy without an apparent concomitant increase in productivity. The revolt is not against government programs; indeed there are continuing requests for programs. Canadians want to be assured that the programs are really efficient, effective and needed.
The appointment of a Comptroller General has been considered carefully by the President of the Treasury Board (Mr. Andras) to ensure that the office will serve and meet our contemporary needs. Attitudes change in response to changing times.
The hon. member for Parry Sound-Muskoka (Mr. Darling) spoke of the increase in government spending of recent years as though it were a solely Canadian phenomenon. I have here an article from the Economist which traces the large growth in government spending over the past 40 years in all the rich countries of the world. It reads:
The 40 years during which the active pressure ... created many muddles: a tendency in domestic affairs to try to resolve every problem by throwing taxpayers' money at it, a vague pacifism in international affairs so that the peace pledge union and its successors hampered prompt resistance to Nazi and then Soviet domination of too much of the world. Those 40 years... also brought some great human and technical advances, which are in danger of being too much disparaged now: A Keynesianism that has helped to multiply real gross world product five times over since the 1930s in history's greatest economic expansion, the building of decent and compassionate welfare states, the end of colonialism.
In our times we do not have this kind of very rapidly growing economy. We are more cautious about our expenditures on social programs. I am convinced the idealism, the commitment to social betterment, is as strong in Canadians as it ever was; but in order to pay for the progressive programs, we want our economy handled in an extremely efficient manner. For this reason the new appointment makes sense today and receives general support in a way it would not have ten or 15 years ago.
I think the government is to be complimented on making this new appointment and on the care with which the President of the Treasury Board has attempted to see this position slotted in with the other controls. I am sure that all members of the House will join me in wishing the gentleman who has been appointed all the best as he takes on this new and important appointment in our contemporary world.


Some hon. Members:: Hear, hear!


Mr. Patterson:: Mr. Speaker, in view of the fact that we have had a long day and it is now close to ten o'clock, may I call it ten o'clock?


The Acting Speaker (Mr. Ethier):: Is it agreed that we call it ten o'clock?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

[Stage Direction]
hors-quEbec
Mr.   Jean-R. Roy@Timmins: Mr. Speaker, pursuant to my contribution reported in Hansard on page 3384, I have been wondering for quite some time why La Federation des Francophones hors-Quebec is using such verbal violence and confrontation with the federal government. I wonder why that non-representative and undemocratic body insists on attacking the Prime Minister (Mr. Trudeau) and the federal government. After all, there has been really remarkable progress among French-speaking minorities since 1968, and certainly it is not the work of the PQ government, which was elected in 1976 only, nor the FFHQ. If progress has been made, it is thanks to Prime Minister Trudeau and his government. Confusing the federal government with provincial governments under the same criticisms is dishonest, it attempts at creating the impression that since 1968 the federal government has been doing nothing more for French rights than the provinces of Alberta or British Columbia for instance. This is most dishonest.
That the first ministers conveniently fell into the trap laid by Mr. Levesque during the provincial conference in Montreal is one thing. Rather than risking their political skins, rather than showing the necessary courage and leadership, they preferred to fall for that. But equating Prime Minister Trudeau and his government with them is another, malicious story. Certainly, the PQ government do not have the responsibility, thank God, nor the capability to protect Francophone minorities, and I would remind the FFHQ that we are not Francophones outside Quebec, but rather French Canadians at home here in Ontario and Canada. The rights we enjoy are Canadian rights rather than extended Quebec rights. I would remind them it is the government of the province of Quebec that turned down the constitutional formula, and the national government that proposed to enshrine language rights into the Constitution. And this was not vetoed by other provinces, but Quebec. Therefore, I wonder why the FFHQ is launching that malicious campaign against the Prime Minister and this government.
Mr. Speaker, we had the answer last week. The FFHQ's hidden and dishonest objectives are aimed, not at protecting French-speaking minorities, but supporting the independenceseeking views of the PQ government and, through that, to sell out French-speaking minorities they claim to protect. Because once Quebec had separated, how could we justify the rights of French-speaking minorities? That hidden, devious and subver-
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sive support has become apparent in light of the brief submitted by the FFHQ to minister Claude Morin and Premier Levesque.
I would like to quote the following excerpts from that brief, to show the FFHQ's subversive tactics:
The brief says that the FFHQ considers the PQ government as a natural ally in its offensive against the federal government and the other provinces; that same organization is offering propaganda ammunition and strategic plans to help uncover scandals in return for the support of the PQ government. The FFHQ claims that it does not trust the federal government but feels sympathetic toward the PQ government. The brief spreads the myth and the lie that French-speaking minorities feel respect for the PQ government and Find inspiration in its actions, which is a complete falsehood. The brief states that the federal government is trying to compel the FFHQ to oppose Quebecers and that the FFHQ does not intend to be drawn into the game of the Canadian unity. Do you realize, Mr. Speaker, that they are saying they refuse to get involved in theoretical discussions over national unity? It is then obvious that they actually favour Quebec's independence. They talk about traps and lack of goodwill on the part of the federal government. There is a request for help from the PQ government to unmask and denounce the bad faith of the federal government.
Mr. Speaker, yesterday the people from the FFHQ sent me a telegram asking me not to make any further intervention before I had met them. I agreed to meet them this morning and they handed me the document in question. Nothing has changed, Mr. Speaker, except that I am even more convinced of the dishonesty of these people. First they told me it was simply a working paper dated October 20, but the title clearly states that it has been submitted, not that it would be submitted, but that it had actually been submitted to minister Claude Morin on October 20. They may call it a draft paper if they want, the press release of November issued by the government of Quebec confirms there was a meeting with Mr. Levesque and Mr. Morin which in a way answers the brief of October 20.
Then there is the Globe and Mail's report of March 2. Two days later, Mr. Speaker, the FFHQ hurried to produce two other documents dated March 4 and 5 to cover up what has happened, but, Mr. Speaker, it is too late to conceal the fact: they have got themselves caught in their own trap. In view of such fraud, such dishonesty, I am again asking this: that the FFHQ, if it still dares pretend that it represents French-speaking minorities, make that brief public so that the minorities may see how they are being abused by the FFHQ and its provincial affiliates; let the minister cancel all subsidies to the FFHQ till further notice so that Canadian taxpayers no longer have to financially support an organization which favours the
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destruction of this country; let our colleagues of goodwill, good faith and sound judgment join me to denounce this organization and its subversive activities which are undermining our Francophone minorities.
Mr. Robert Daudlin (Parliamentary Secretary to Secretary
of State): Mr. Speaker, may I remind the House that on December 20 last, the Secretary of State reiterated his intention to co-operate with the representatives of French-speaking groups outside Quebec and announced that for the next five years he would substantially raise the help which will be given by the federal government to the official language minority groups.
For a few years now La Federation des Francophones hors-Quebec has been receiving help from the Secretary of State. In 1977-78 it has been given $200,000. In any application for funds which the Federation will deem necessary to file with the Secretary of State for 1978-79, we will consider every facet of the situation of French-speaking minorities outside Quebec as well as the services that the Federation can give to its members.
I repeat that the federal government, in any form of help it gives to the official language minority groups, intends to stick to the same principle namely to ensure the survival, the development and the well-being of these various groups. As we do with a good many national associations, we support financially La Federation des Francophones hors-Quebec, we consult it and we work openly with its members. Our attitude is one of mutual confidence. We feel it is necessary if we are to continue to co-operate with the Federation as well as with other national associations. This confidence, this good faith, this frankness are essential to the pursuit of our common goals. If all the hearsays reported in the press were founded, this would mean that our will to co-operate honestly and openly is not shared.


TRANSPORT-INLAND TERMINAL AT YORKTON, SASK.- GOVERNMENT INTENTIONS REGARDING CONSTRUCTION
Ramon John Hnatyshyn: Mr. Speaker, my participation this evening arises by virtue of an answer given to me by the Minister of Transport (Mr. Lang) to a question I raised last Monday about the development of an inland terminal in the city of Yorkton, Saskatchewan, and one of the recommendations of the Hall commission on the grain handlers. Mr. Justice Hall recommended that there be an inland terminal built at Yorkton to augment the shipment of preclean grain to the port of Churchill.
The point of my question to the minister last Monday was to ascertain why this particular firm of consultants, headed by Mr. Rod Bryden, was engaged with respect to this whole development when firstly the firm of consultants had established a well known bias against expansion of the port of Churchill. Mr. Speaker, the minister seemed to try to deny

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that but there is no question that Mr. Bryden had in fact acted as a consultant for the Dominion Marine Association on a previous occasion. At that time it had made a recommendation against the expansion of facilities for the port of Churchill.
The minister tried to explain on Monday by saying that a consultant was something like an advocate or a lawyer and that somehow, depending on the brief the consultant was given, he could change his opinion. Mr. Speaker, I found it rather peculiar, that the minister would suggest in this Elouse, in apparent seriousness, that a consultant could somehow come to a different conclusion with respect to one particular fact situation. I find it an appalling demonstration by the minister of some sort of concept of flexibility on the part of consultants, when we are trying to establish the facts which determine the necessity of developing a particular facility, or the expansion of a facility, for the port of Churchill.
Now, Mr. Speaker, I want to bring something to the attention of members of the House this evening by pointing out that, notwithstanding what the minister said on Monday, there is very clear indication that Mr. Bryden, in his report to the minister, in fact recommended against the development of this inland terminal at Yorkton because he is convinced there would be no purpose served in expanding the port of Churchill and the facilities at the port of Churchill. Mr. Bryden indicated in his report that, in the course of the study and during discussions with various sectors of the industry, it became apparent that there were serious reservations to be raised with respect to additional exports through the port of Churchill. It has been admitted by the minister that the consultant shares his views. This has been admitted in interviews with one correspondent in particular.
As I pointed out to the minister on Monday, the recommendations of the Bryden commission fly in the face of the recommendations of the Hall commission. I cannot understand the minister's attitude. Coming from the west as he does, he should understand that the development and expansion of the port of Churchill is a longstanding western dream. How he could engage a consultant whom he knew would come down with recommendations against that point of view is difficult for me to understand. This minister purports to represent western interests of the country.
Other things have happened. When Mr. Justice Hall was asked about this particular study, he pointed out that the Bryden consultants did not consult the researchers of the Hall commission. Mr. Justice Hall stated he was at a loss to understand why the Bryden consultants did not use the research done by the Hall commission to come up with a recommendation to the minister. He did not contact any of these researchers with regard to his final conclusion. There has been very substantial criticism of this report.
In this regard and with regard to other aspects important to western interests, particularly the statutory Crowsnest rates, he has indicated he is interested in abolishing the statutory Crowsnest rates and replacing them with another system. He
[Mr. Hnatyshyn.l
is against the extension of the port of Churchill. This makes me wonder about his ability to speak on behalf of western interests. He takes positions diametrically opposed to the hopes and aspirations of western Canada.
An appropriate observation was made by Don Griffin, the president of the Hudson Bay Route Association, to the effect that these consultants went well beyond their terms of reference. He had asked the minister to engage a firm of consultants who would work in tune with western interests. In this case the consultants fell very short of the request of Mr. Griffin and the Hudson Bay Route Association.
The parliamentary secretary is here this evening. I hope he will indicate that the minister is interested in obtaining new information and will take a positive attitude with regard to the port of Churchill. I hope he takes a positive attitude toward the recommendations of the Hall commission and will not support any attempt to undercut the Hall commission recommendations in this and other aspects so important to western Canada.
[ Translation]


Mr. Charles Lapointe (Parliamentary Secretary to Minister of Transport):: Mr. Speaker, I wondered for some time whether I should answer that question tonight because the Department of Transport gave me the required information only in one official language of Canada which is not mine. Even though I regret that, in all respect for my colleague and friend from Saskatoon-Biggar (Mr. Hnatyshyn) and considering the importance of the issue he raised, Mr. Speaker, I will try to express myself in Shakespeare's language to answer some of the statements made by the hon. member.

The hon. member stated that the port of Churchill is a longstanding western dream and that we should have a positive attitude toward it. May I point out that in 1978 significant sums were allocated by the government of Canada to improve port facilities in Churchill. Capital expenditures of $5.5 million have been allocated to Churchill in 1978 for such work as scale automation and metrication, port lighting, winter berthing facilities, repairs and dredging. These actions in support of the development of the port of Churchill speak for themselves.
The consultant was engaged for the express purpose of evaluating the economic feasibility of an inland terminal elevator in the Yorkton area, or alternatively a number of strategically located high throughput elevators, originating grain for the port of Churchill. The construction of any elevators is, of course, dependent upon the prospect of a favorable return on investment. The purpose of hiring a consultant, as the opposition may be aware, is to obtain a professional opinion as to probable future costs and revenues accruing to a particular prospective investment. In order to get the best possible opinion, we hired a consultant who had had experience with Canadian grain terminal elevator construction.
March 9, 1978

Consultants, if they wish to stay in business, must of necessity guard their professional credibility. They must, therefore, attempt to maintain an unbiased approach. However, if one were intent upon finding a bias in this particular case, one would tend to believe that it would be in favour of a terminal considering that the consultant in question recommended the construction of the Weyburn terminal in the face of considerable opposition.
It is rather obvious that if the consultant's report had come out in favour of a terminal, then the opponents of a terminal could have argued that the consultant was biased, with about as much justification as the argument we are hearing tonight.
In the case of the Yorkton terminal, it was concluded that the economics were not attractive. This study took into consideration the volumes of grain normally produced in the area, the presence of other grain handling facilities as well as the special requirements of the port of Churchill. This latter factor recognizes that most of the movement of grain to Churchill must occur during the three months that the port is open. This means the Yorkton terminal would only be devoted to servicing Churchill for a quarter of the year.


The Acting Speaker (Mr. Ethier):: Order. I regret to interrupt the hon. parliamentary secretary but his allotted time has expired.


AGRICULTURE-AMOUNT SPENT IN PROMOTING SKIM MILK POWDER
Mr. John Wise (Elgin):: Mr. Speaker, my reason for entering the adjournment debate tonight stems from answers, or more accurately non-answers and excuses, given by the Minister of Agriculture (Mr. Whelan) concerning not only the decision to cancel the $13.5 million consumer subsidy on skim milk powder but also the effects such a decision can produce.
First of all, Mr. Speaker, let me deal with the method followed. The decision demonstrates once again that the government pretends to consult but in actual fact does nothing of the kind. This decision follows immediately on the heels of the conference on national food policy at a time when the government has just renewed its commitment to co-operation and consultation with groups affected by major policy decisions. In this case, no consultations were held with producers, processors or consumers though these groups are all affected in a major and detrimental way.
There can be no difficulty in explaining why individuals and groups in our society have lost trust in the government. There is no mystery about it. The government, seemingly by design, provides the framework for this loss of faith and trust. It should be noted that the program involves a domestic consumption of some 34 million pounds of product. Present retail prices average approximately 75 cents per pound. Thus, the removal of the subsidy increases the cost of the product by 41 per cent to $1.19 a pound.
It is estimated that this price increase will reduce domestic sales by about one-third, or approximately 12 million pounds.
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The government presently supports skim milk powder to the level of 72 cents a pound, yet the world market price is approximately 20 cents a pound. This means that the Treasury and the dairy farmers through their export levy share losses of about 52 cents per pound. The cost, or losses, in disposing of 12 million pounds could be expected to be in the neighbourhood of $6.25 million. Consequently, the cancellation of this program will not mean a saving of $13.5 million but rather a sum closer to about half that amount.
The Minister of Agriculture has taken the position that the program was dropped because a Statistics Canada survey showed low utilization of the products by lower income families. One wonders whether regions of the country where the only available source of milk supply is skim milk powder were included in the survey.
I do not wish to leave the impression, Mr. Speaker, that I am placing into serious question the actual findings or the accuracy of that study. Obviously it does provide reason to pose the question to the minister as 1 did yesterday, regarding what portion, if any, of the $4 million advertising budget to be spent on the promotion and sale of dairy products was spent on the promotion of skim milk powder. The minister said he was not in the position to answer that particular question.
My suspicions were confirmed late yesterday in committee when I found out that not one dollar of that $4 million budget was spent to promote the sale and use of skim milk powder. If the government had no intention of advertising this product, I suggest some commitment should have been made with the supermarkets to perform that function. No doubt they could do a much more effective job anyway.
This decision, taken without a word of consultation, slaps the producer, the consumer and the processor square in the face. If this program has to be cancelled I suggest it should be phased out over a period of three to five years. But it must continue in areas which have no available supply of fluid milk without limitation. It should continue in areas of high unemployment and areas where the wage rates are less than the national average. The government has signalled its desire to develop an over-all food strategy or food policy; it has even taken the first step. It is only by working in concert, not in conflict, that such a policy will ever be achieved. That policy will have to be workable, acceptable and practical. Unilateral actions in the complete absence of consultation will prevent such a policy developing.
I hope when the parliamentary secretary responds to me in a moment he will shed some light on the survey which the minister spoke about yesterday. I hope he will give some indication that the department will reconsider its decision, and that he has the good sense to accept some of the suggestions that I have put forth tonight.

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Mr. Yves Caron (Parliamentary Secretary to Minister of Agriculture):: Mr. Speaker, I am pleased to answer the hon. member for Elgin (Mr. Wise) concerning the question he asked in the House of Commons. So I refer to the questions that were asked yesterday and the answers the minister gave at that time. It is evident the minister gave very good explanations for cancelling the advertising budget for skim milk powder. However, I would like to answer the hon. member when he says there was no government publicity or advertising campaign for skim milk. Mr, Speaker, the Department of Agriculture is well aware of the need to inform and promote the use and the consumption of agricultural products, particularly skim milk powder. The Department of Agriculture has already published a brochure entitled "Skim Milk Powder", of which I have a copy in hand. It is a publication of Agriculture Canada and is available at no cost. Anyone interested can obtain a copy by writing to the Division of Information, Agriculture Canada. The department has also prepared a publication, number 1106, which clearly illustrates how powder milk is produced, what categories exist, how to preserve it and how to use it in recipes. This publication was also advertised on radio and in press releases. So we have done many things to publicize and boost the use of powder milk in Canada. There is also another Agriculture Canada publication
bearing number 1549 and entitled "Frugal Recipes", which contains several recipes using powder milk.
The two publications I want to mention have been recommended for use by Canadians who wish to maintain their food budget at an average level.
These publications have been recommended and distributed by several health centres. Also, the government is well aware of the need to inform the public on the use of skim milk powder.
There is also another $4 million program of the Canadian Dairy Commission for research and publicity to promote the use of non-fat milk solids, since the consumption of skim milk powder has declined over the past few years. It was decided to put the major thrust of the program on the promotion of Canadian cheese.
Recently, the hon. member noted that a study was mentioned in the House by the Minister of Agriculture (Mr. Whelan), and I can repeat that this study was conducted by Statistics Canada and dealt with the expenses of urban families in 1976. The study has not yet been published.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but his time has expired. I therefore cannot allow him to continue.
The motion to adjourn is now deemed to have been adopted. Accordingly the House stands adjourned until tomorrow at eleven o'clock.
Motion agreed to and the House adjourned at 10.28 p.m.

Friday, March 10, 1978