1978-04-12

ROUTINE PROCEEDINGS


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, under the provisions of Standing Order 43 I rise on a matter of urgent and pressing necessity. In view of the unorthodox action taken by Air Canada in firing 84 employees in New York, Cleveland and Chicago on March 29 by telephoning each employee's home between ten o'clock and eleven o'clock at night and giving the message, "You're fired. Don't report to work tomorrow morning," and in view of the fact that the only subsequent face-to-face contact these employees had-many of whom had 20 years' service-was a video-tape message from Air Canada's vice-president for the U.S. region, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That this House urge the Minister of Transport to immediately investigate this action by Air Canada to ensure these moves which undermine employee morale and damage the reputation of Canada's national airline will be rectified and not repeated.


Mr. Speaker:: Presentation of such a motion for discussion is possible at this time only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


SEARCH AND RESCUE
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. In view of the fact that evidence given in St. John's, Newfoundland, before the Bartlett judicial inquiry into the disappearance of the trawler Cape Royal and her eight-man crew on August 9th, 1977, reveals that while there are three larger vessels, the 200-foot vessels Daring and
Alert and a 90-foot vessel Raleigh stationed at Halifax for search and rescue duties, neither of these ships were in Newfoundland waters at the time the Cape Royal vanished, and in view of the evidence that the only first-line rescue vessels in the Newfoundland region are four self-righting, 44-foot life boats that cannot go to sea in rough weather-that is, when winds are stronger than 35 or 40 miles per hour-and since the evidence reveals that coastguard radio stations in Sydney and St. Lawrence did not pass on to the Halifax search and rescue centre on August 9 distress messages received that evening, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the departments of Transport and of National Defence be censured for their neglect in failing to assign to Newfoundland at least two first-line rescue vessels of the same size and capability as those stationed in Halifax and that immediate steps be taken by the Ministers of National Defence and of Transport to have stationed in Newfoundland two such first-line rescue vessels with immediate steps taken to review and improve search and rescue capabilities in the Newfoundland and Labrador regions to ensure correction of weaknesses already revealed by evidence given before the Bartlett inquiry at St. John's.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


VETERANS AFFAIRS
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, under the provisions of Standing Order 43, and seconded by the hon. member for Timiskaming (Mr. Peters), I move:
That this House anticipates a bill respecting the basic rate of the war disability pension and urges the Minister of Veterans Affairs to introduce the said bill forthwith so that it can be passed before the present session is ended, it being clearly understood that the House will act quickly thereon.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

April 12, 1978


BILINGUALISM
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I rise under Standing Order 43 and request the unanimous consent of the House to discuss a motion relating to a matter of national interest and pressing necessity.
Given the fact that it is still difficult for the Francophone employees of the Department of Fisheries and the Environment to use French as their working language, owing to their low rate of representation of 13 per cent, and given the last report of the Commissioner of Official Languages in which he condemns the low rate of bilingualism of the English-speaking employees of that department and the excessive delays of the same departments in settling the many complaints relating to the Official Languages Act, I move, seconded by the hon. member for Roberval (Mr. Gauthier):
That the House direct the Minister of Fisheries and the Environment to take immediately all necessary steps to bring up the rate of representation of the Francophone employees of his department back to a level corresponding more closely to the proportion of Francophones in the country in order to ensure better services to French Canadians.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, I rise on a motion under the provisions of Standing Order 43. My motion concerns the collapse of the dollar, in response to Monday's budget, to a 45-year low of 87.12 cents at noon today. I would add that each cent of decline in the dollar's value adds at least $300 million to the debt burden borne by Canadians.
In view of the fact that the Minister of Industry, Trade and Commerce (Mr. Horner) stated yesterday that our dollar, now known as the "fuddle-buck", should be at 90 cents all the time, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House demands that the Minister of Finance make a statement on motions clarifying his colleague's position that the Canadian dollar should be

indeed pegged at 90 cents, or confirm that he is content to allow it to float, float, float, float, and sink.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. James A. McGrath (St. John's East):: Mr. Speaker, the Canadian dollar today took another sharp drop on the international money market. As of noon today it stood at 87.12 cents. It is now sinking like the proverbial millstone, showing beyond any doubt that the international financial community has no confidence whatsoever in the minister's budget.
Given the fact that the sharp decline in the dollar is driving up our rate of inflation, as indicated by Statistics Canada showing the annual rate of inflation now standing at 8.8 per cent-an increase, I might add, of 1.1 per cent over the month-and given the fact that this situation weighs heaviest on the poor, the unemployed and the low income earners of the country, I ask the minister why his budget does not address itself to the problems of low income earners. Why does he bring it in on the backs of the low income earners of the country?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, it is exactly because I was preoccupied with the effect of inflation on those people who work and pay sales tax that I chose to offer to the provinces a cut in sales tax. Sales tax is a tax that is paid by everybody, including those who do not pay any other taxes; for example, the low wage earner in society who does not pay income tax but pays sales tax. This is precisely the reason I decided to cut that particular tax.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: On top of that, the sales tax proposition which I made will reduce over the period the inflation rate by one point.


James Aloysius McGrath: Mr. Speaker, that will be good news for the purchasers of automobiles, especially Cadillacs. I would ask the minister, given the fact that the sales tax does not apply to food and the food component portion of the consumer price index today rose by 1.4 per cent-


Mr. Clark:: So much for that phony defence.
April 12, 1978


James Aloysius McGrath: -could he explain to the House, and more particularly to the country, the unemployed and the low income earners, why his budget leans so heavily on these people, and what relief can they expect from the rise in the price of food in this country?


Joseph Jacques Jean Chrétien: Mr. Speaker, the problem with the food index is one that varies substantially from one season or one month to the next. When you look at the components of inflation, non-food products are not increasing as fast. This month, unfortunately, the food component went up. If you look over a period of years, there is a very great variation in the food component, some of the food being imported and over which we have no control.


James Aloysius McGrath: If the minister knows what he is talking about, he knows that the rise in food prices is a direct response to the dollar crisis. Given this fact, and the fact that he talks about a free float in this House, does he subscribe to the view expressed by his colleague, the Minister of Industry, Trade and Commerce, on television last night that we should have a 90-cent dollar? In his view, 90 cents is par. Is that the position of the government, or does the minister agree with most of us that his colleague was talking through his ten-gallon hat?


Joseph Jacques Jean Chrétien: Mr. Speaker, in my budget I established very clearly the position of the government vis-a-vis the Canadian dollar. We let the market decide the level of the Canadian dollar. The interventions of the governor of the bank are designed to ensure there is an orderly market. The interventions are to make sure the dollar fluctuates in a normal way. However, the Canadian dollar is a floating dollar.


POST-CONTROLS MONITORING AGENCY
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, my question is to the Minister of Finance. I hope he will be able to give us an answer in this regard, because it is an extremely important matter. It concerns the post-controls period. I understand the Prime Minister indicated that he wants the Economic Council of Canada to become involved with the monitoring agency. As yet, I do not know whether Mrs. Ostry has accepted that responsibility. Accordingly, I think the people of Canada would like to know whether, in fact, the Economic Council of Canada is going to accept this very important responsibility.


Joseph Jacques Jean Chrétien: The answer is yes, Mr. Speaker.


Lincoln MacCauley Alexander: In light of the fact that the Economic Council of Canada has accepted it, can the minister indicate what the time-frame is in terms of seeing to it that they are proceeding with their mandate? Is this an immediate thing, or what kind of date can the minister indicate will be in place in due course?
Oral Questions


Joseph Jacques Jean Chrétien: Mr. Speaker, I understand the chairman of the Economic Council of Canada has accepted that role and is establishing the necessary mechanisms to play that role. I also understand she has made an agreement with the Anti-Inflation Board, which will remain in operation for the rest of the year to help her play that role for the first months. There has been a short term agreement between the Anti-Inflation Board and Dr. Ostry for exchange of services.


Lincoln MacCauley Alexander: Am I to understand that any agreement that she or the Economic Council of Canada has with the Anti-Inflation Board will expire at the end of this year? Is that what the minister has just indicated?


Joseph Jacques Jean Chrétien: Mr. Speaker, I would ask the hon. member to repeat his question. Unfortunately, I did not understand it.


Lincoln MacCauley Alexander: The minister indicated there is an agreement between the Economic Council of Canada and the Anti-Inflation Board. As I understand it, he has indicated that this is to be for the balance of the year. Is it the position that the agreement with the Anti-Inflation Board will expire at the end of this year?


Joseph Jacques Jean Chrétien: Mr. Speaker, I understand the agreement between the Anti-Inflation Board and the Economic Council of Canada is for a matter of two or three months. The Anti-Inflation Board will be phased out starting at the beginning of next year, as is provided in the law.


LOSS IN REAL INCOME DUE TO INFLATION
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I have a question for the Minister of Finance. In complete contrast to his forecasts, unemployment yesterday shot above the one million mark again. Today, the consumer price index increase mounted to almost 9 per cent. Statistics are making a complete liar of this government. I would ask the minister whether his officials have confirmed for him that the current rate of inflation will cost the typical Canadian this year some $700 loss in real income.


Joseph Jacques Jean Chrétien: Mr. Speaker, when we make a prediction of the inflation rate for the year, we always include the figure for the month of March. Of course, March is always a very difficult month in terms of inflation. Last year inflation was as high in March as it was in March of this year. We predicted that it would be high in March. Unfortunately, it is a little higher than we predicted, but we made provision for a substantial increase in March.


John Edward Broadbent: Mr. Speaker, I think the Minister of Finance has revealed his predictions about growth, inflation and unemployed three times in as many months. He has lost all credibility, certainly on this side of the House and certainly

April 12, 1978
Oral Questions
with the people of Canada. The minister referred to a year over year change. One item the price of which went up substantially year over year is fuel. The price of fuel went up some 13.3 per cent.
Considering that the government's policy, which is to permit oil in Canada to reach world price levels, will cost the typical Canadian family, with the increase which is coming in July, another $ 150 a year, I ask the minister if he would cancel the intended fuel price increase.


Joseph Jacques Jean Chrétien: Mr. Speaker, the oil price increase was expected because we have a policy whereby eventually the price of oil in Canada will be raised to the international level over a period of time. We agreed with the governments of Saskatchewan and Alberta that there should be a price increase in the month of January, but there was a postponement of 60 days. That is why there was an increase in the month of March, and we allowed for that in our predictions.
As far as the hypothetical question put by the hon. member about future price increases is concerned, we have a long-established policy, and I would like the hon. member to talk to the Premier of Saskatchewan to find out if he wants us again to postpone the increase which would bring the price closer to the international price.


John Edward Broadbent: Mr. Speaker, the minister knows full well that the Premier of the province of Saskatchewan wants revenues from that additional cost to go into research for future alternative energy sources. The minister knows that his Liberal government has given hundreds of millions of dollars, not to the people but to the oil companies. There is quite a difference.
Since the minister reiterated in his recent budget speech his policy of maintaining a dirty float, which entails increasing interest charges for consumers who want to make loans and for businessmen who want to expand-which will be harmful in its effects in terms of inflation and unemployment-will the minister now admit that he was wrong in his budget decision, and will he cancel his policy of increasing interest rates?


Joseph Jacques Jean Chrétien: Mr. Speaker, because of the liquidity of institutions at this moment, the increase of 1 per cent in the interest rate over last month will not result in an increase in all interest rates. For example, mortgage rates have increased by only one quarter of a point over a period of time because there is so much liquidity in the banking system and because people are saving so much money.
To go back to the previous question, I am pleased the hon. member recognizes that it is the policy of the government of Saskatchewan to let the international price apply to Canadian oil.


FINANCE
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I should like to direct a question to the Minister of Finance.
The minister and the Prime Minister have often stated that the federal government was prepared to discuss arrangements with the Quebec government which would allow Anglophone public servants to send their children to English schools. The Sherbrooke area is still awaiting its 2,000 direct and indirect jobs through the arrival of map draftsmen. The six years delay for officials does not work, and since the province of Quebec, and mostly the Sherbrooke area, has a high level of unemployment and a sluggish economy as well, I should like to know if the Quebec government has made new proposals in order to deal with this problem?


Joseph Jacques Jean Chrétien: Mr. Speaker, yesterday or the day before, the hon. member for Sherbrooke asked me a question along that line, and I said I was prepared to discuss an administrative arrangement with the Quebec government which would allow Anglophone public servants who will go to work for the Canadian government in Sherbrooke to send their children to English schools, just as there have been agreements with other provincial governments, when we proceed with decentralization, so that federal public servants' children could be educated in French.


Léonel Beaudoin: Mr. Speaker, on a supplementary.
Can the minister tell us whether it is true or a rumour that the Quebec government has said it would welcome new jobs in its territory as a result of decentralization?


Joseph Jacques Jean Chrétien: Mr. Speaker, I did not quite get the question.


Léonel Beaudoin: Can the minister tell us whether it is true or a rumour that the Quebec government has said it would welcome federal civil servants as a result of the decentralization program?


Joseph Jacques Jean Chrétien: The best way of proving they would be welcome is to ensure that the civil servants transferred to the province of Quebec through decentralization would have the right to have their children educated in their mother tongue.


Léonel Beaudoin: Mr. Speaker, on another supplementary.
The minister did not answer my question. I should like to know whether the Quebec government has expressed the wish to get federal civil servants in order to improve the financial situation in Quebec and especially to fight against unemployment.

April 12, 1978


Joseph Jacques Jean Chrétien: Mr. Speaker, this is what I mean: if they are really interested, let them make the same allowances as the other provinces with regard to the decentralization program.


THE CANADIAN ECONOMY
John Carnell Crosbie: Mr. Speaker, I address my question to the Prime Minister since I do not know who speaks for the government on financial policy. Last night, on a CTV program known as "Hourlong"-it seemed a lot longer-the Minister of Industry, Trade and Commerce said the Canadian dollar should be worth 90 cents all the time; that par is 90 cents. The Minister of Finance has been saying that government policy is for a floating dollar, while the Minister of Industry, Trade and Commerce last night indicated the government's policy is for the dollar to be 90 cents; that par is 90 cents, not even a dollar.
Would the Prime Minister tell us who speaks for the government on financial matters and who is stating the policy of the government, the Minister of Finance or the Minister of Industry, Trade Commerce? Does the Prime Minister agree with the prediction of the Minister of Industry, Trade and Commerce, made last night, that the dollar will not strengthen for another two months at least? These are important questions which I should like the Prime Minister to deal with.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker that question was asked of the Minister of Finance a few minutes ago and he made it quite clear our economic policy was that of the floating dollar.


John Carnell Crosbie: Then the Prime Minister is stating that the Minister of Industry, Trade and Commerce spoke out of turn and was not enunciating government policy; he was on a flurry of his own in this matter. The hon. "Loose Lips". He is well named.


Some hon. Members:: Oh, oh!


John Carnell Crosbie: The Minister of Industry, Trade and Commerce last night also stated, during the same program, when questioned about the government's deficit-he didn't like them at one time, but he likes them now to the tune of $11 billion worth-


An hon. Member:: He changed his tune.


Mr. Speaker:: Order, please. I am trying to be reasonable in allowing the hon. member to come to the end of his preamble, but I would ask him now to put his question.


John Carnell Crosbie: My question is this: When the Minister of Industry, Trade and Commerce said last night that we still might increase our revenue, was he speaking for the government when he stated that the government might bring in tax
Oral Questions
increases and revenue increases later this year? I quote him: "We still might increase our revenues", the minister said. Is that the government's position?


Pierre Elliott Trudeau: It is surprising to see the hon. member paying so much attention to the statements of the hon. member for Crowfoot.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: If members on that side had been more attentive to him a little sooner, he might still be sitting on their side.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


John Carnell Crosbie: My question is to the Prime Minister. He has said I am very attentive to his Minister of Industry, Trade and Commerce. What I want to know is, is he very attentive to him? He is doing you untold harm. Who speaks for the government on financial matters: is it the Minister of Industry, Trade and Commerce, or is it the Minister of Finance?


Mr. Speaker:: Order, please.


LEVEL OF INFLATION HAD CONTROLS NOT BEEN IMPOSED
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As it is the government's intention to commence phasing out the AIB program on April 14-this Friday-and as today's inflation figures give us an up to date account of the rate of inflation since the controls program began, and we find that we are 2 per cent higher at an 18 per cent rate of inflation than was anticipated for this time when the controls program was first instituted, would the minister indicate how much higher inflation would have been, in his opinion, had the controls not been imposed?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, this is really a hypothetical question which I cannot answer.


Sinclair McKnight Stevens: Mr. Speaker, my question is directed again to the Minister of Finance who, in rationalizing the inflation level in this country in his budget, referred to the impact of the falling dollar on prices in Canada. Would the minister indicate, with today's inflation levels as high as they are, what he would anticipate the inflation level to have been had the dollar not fallen so low, so fast?

April 12, 1978
Oral Questions EXTERNAL AFFAIRS


CANADIAN COMMITMENT OF TROOPS TO SOUTHERN LEBANON
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is to the Prime Minister. On March 22, the Globe and Mail carried a report concerning Canadian commitment of troops in Lebanon. The report quoted the Prime Minister as saying to a reporter in New York:
Canada, if asked, will send a battalion of combat troops into southern Lebanon.
Can the Prime Minister inform the House if the quotation represents government policy or position?


Pierre Elliott Trudeau: I do not recall giving an interview to any person from the press in New York. The position of the government has been stated in the House by the Secretary of State for External Affairs. I think it is known now, although not publicly announced as yet, that the U.N. Secretary General has asked Canada, not for a combat battalion but for assistance with troops specialized in communications.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Someone is worrying over there. Mr. Speaker, I wish you would recognize him next for a supplementary, if they do not want to listen to the main answer.


An hon. Member:: Getting a little touchy, Pierre?


An hon. Member:: Horner is getting to you.


Some hon. Members:: Oh, oh!


Pierre Elliott Trudeau: Perhaps I could give the hon. member the answer later on. The rest of the members of his party are not interested.


Mr. Lambert (Edmonton West):: Don't be so fussy.


An hon. Member:: Touchy.


Allan Bruce McKinnon: The Prime Minister gets unusually sensitive at times.


NATIONAL DEFENCE
Allan Bruce McKinnon: My supplementary question is for the Minister of National Defence. CBC news reported today that Canada has been asked to provide an additional 120 troops for the UN force in southern Lebanon and the government has agreed to supply 80 of them. Will the minister inform us if this report is true and, if so, why was the House of Commons not given an opportunity to discuss this new commitment?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, the Secretary of State for External Affairs is in New York, at the United Nations, with some of my senior officers at this time to determine the precise nature of the requirement. It is for communicators, as the Prime Minister has said. We are in a position where we could, by calling out reserves and using some personnel trained for combat but with a signal capacity, make up a force of that size, if that is acceptable to the United Nations. It is being discussed this morning. The Secretary of State for External Affairs will be back this afternoon following his discussions at the UN and will be able to answer questions on that subject tomorrow.


THE CANADIAN ECONOMY
Mr. Gaston Isabelle (Hull):: Mr. Speaker, my question is for the Minister of Finance. Following the licentious and insulting statements made by the Quebec premier against the sales tax cut advocated in the federal budget, is the minister prepared to return the federal share directly to Quebec consumers who are ever more concerned, frustrated, irritated and deeply confused by the inconsistent attitude of their government which has become really bad?


Joseph Jacques Jean Chrétien: Mr. Speaker, we made an offer to the Quebec government as we did to every provincial government of Canada. The nine other provinces have accepted the federal proposal to cut a tax which deeply affects all Canadian consumers, even those who do not pay income tax. I do hope that Quebec will accept this proposal of the federal government as did the other nine provinces.


AIR CANADA
Mr. Dan McKenzie (Winnipeg South Centre):: Mr. Speaker, my question is for the Minister of Transport. On May 23, 1974, the Prime Minister made a special trip to Winnipeg to announce that a $15 million hangar would be built in Winnipeg. The hangar is now being built and it is virtually unused. Air Canada has recently conducted a study and has stated they would like to move their paint shop facilities from Dorval to Winnipeg so they could also paint their wide-bodied aircraft.
Will the decision to move the paint base from Dorval to Winnipeg be left to Air Canada, or is the minister or any of his colleagues in the cabinet involved in the decision-making of this move?

April 12, 1978


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, a question like this is ordinarily decided by Air Canada. However, I think the hon. member has some seriously incorrect information. As I understand it, Air Canada has no intention whatever to move its existing paint facilities from Dorval. There is the question of some new facilities to deal with some wide-bodied aircraft not presently handled at Dorval. The last report I had was that Air Canada was conducting a feasibility study in connection with the best location for those facilities. I have not heard that a decision has been reached by the management, but I will be glad to inform myself about that.


A. Daniel McKenzie: In a letter to me from the Canadian Aviation Fellowship, which is an organization made up of 2,200 Air Canada employees, they state:
Air Canada's planned transfer to Toronto of heavy maintenance "C" checks on wide-bodied L-1011 and B-747 aircraft has been blocked-
That is, by the Minister of Transport
-despite the fact that nearly all wide-bodied aircraft operations are centred in Toronto.
Is the minister involved in deciding whether the maintenance facilities should be removed from Dorval to Toronto for the maintenance of wide-bodied aircraft in Toronto, as most of them are there overnight, and could he give a clearcut decision on whether the final decision to put some type of operation in this hangar in Winnipeg will be left entirely with Air Canada officials?


Otto Emil Lang: That is the intention. I say again to the hon. member that if he believes the information from that group, which is always erroneous, he is making a serious mistake. No decision has been arrived at, and as usual-


Some hon. Members:: Oh, oh!


Otto Emil Lang: I think the Tories over there should realize they are dealing with a fairly extreme group which advises the hon. member for Winnipeg South Centre, and I hope he is the only one who believes them.


Some hon. Members:: Hear, hear!


NATIONAL DEFENCE
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I have a question for either the Acting Secretary of State for External Affairs or the Minister of National Defence. Is the minister aware of a company named Space Research Corporation operating at a site which transcends the Canada-U.S.A. border near Highwater, Quebec, and Troy, Vermont, and if so could one of the ministers confirm reports that this corporation is involved in the manufacture, development, testing, shipment and international sale of armaments which include guns, shells and types of missiles? There are reports that such armaments
Oral Questions
have from time to time been shipped from Saint John, New Brunswick, to Antigua in the West Indies.


Barnett Jerome Danson: No,
Mr. Speaker, I cannot confirm such allegations.


Elmer MacIntosh MacKay: Would the minister undertake to check into these reports and report to the House at his early convenience?


Barnett Jerome Danson: Yes, Mr. Speaker, I will speak to my colleague, the Secretary of State for External Affairs, on his return.


FINANCE
Hon. Robert L. Stanfield (Halifax):: Mr. Speaker, my question is directed to the President of the Treasury Board, who will no doubt recall that the Minister of Finance said on budget night that expenditure targets were being reduced by $350 million, without any specification. Could he indicate to the House where those cuts amounting to $350 million are being made?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the initial way in which we will do it will be to remove that from the reserve which was established in the expenditure plan totalling $48.8 billion. As I announced in the House on February 22, there will be a $350 million immediate reduction in the reserves available for new submissions for supplementaries. As to distributing that between the various departments, it will depend very much on what the submissions will be which will be rigidly restrained to the point where that money will not be spent.


Lincoln MacCauley Alexander: More flimflam.


Robert Lorne Stanfield: If I were to say to the minister that this means no cut at all, or that the money was not necessary in the first place, would he have any response to that?


Robert Knight Andras: No, I would not agree that that is the proper interpretation. May I remind the hon. member and the House that last year when the then minister of finance, in his March 31 budget, announced certain tax concessions that were to be made, it was then agreed, and publicly announced, that the previously stated spending total for the fiscal year 1977-78 would be reduced by $670 million; in fact, from $45.12 billion to the final target for spending of $44.45 billion. We accomplished that. In fact, the other day I was able-the Minister of Finance announced it the other night-to indicate to the House that we will in fact come in $200 million below that final target. So I think it is evident that when we say that cut will be made, it will be made.

April 12, 1978
Oral Questions


INDUSTRY
Mr. Derek Blackburn (Brant):: Mr. Speaker, my question is directed to the Minister of Industry, Trade and Commerce. In view of the fact that 1,000 workers at the AMC plant in Brampton will be laid off on an extended lay-off this summer and that 350 workers will lose their jobs entirely, I should like to ask the minister the following: Since American Motors has fallen short of the auto part requirements in terms of investment, production and jobs for several years running now, and in light of the fact that it has been given remissions on the duty payable on its car imports of some $80 million since 1974, can the minister indicate what discussions he has had with American Motors officials recently about these auto pact commitments, what effect these lay-offs will have on the auto pact requirements and about the efforts he expects American Motors to make to meet its job commitments under the pact?


Hon. Jack H. Horner (Minister of Industry, Trade and Commerce):: Mr. Speaker, in reply to that question I should like to inform the hon. member and the House that I will meet this afternoon with the union concerning the American Motors plant. We have had ongoing discussions with American Motors. They are transferring the production of that plant into jeeps, which is really their big seller. So on the long-term basis the move made by American Motors should help Canadian employment.


Derek Nigel Ernest Blackburn: Mr. Speaker, I should like to ask the same minister if he has had any discussions with AMC with respect to the amalgamation or joining together of AMC and Renault. If so, has the company assured him that this will result in an increase in the number of workers employed by AMC and/or Renault in Canada, instead of being simply of benefit to some of the dealers for Renault cars?


John (Jack) Henry Horner: Mr. Speaker, discussions are ongoing with American Motors and Renault. I do not think I can add anything now which would be beneficial to those discussions.


INCOME TAX
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is directed to the right hon. Prime Minister. In light of the fact that the Minister of National Revenue has accepted the other place in order to silence him, and that April 30 is the last day for filing income tax returns, I should like to ask the Prime Minister a question. I appreciate that there is a bill which will never see the light of day.
Is the Prime Minister prepared to stop the financial sharks who are discounting refunds as much as 50 per cent? Cannot some kind of banking arrangement be set up in each city

where there is an office of the Department of National Revenue so that low income people could receive their refunds without their being discounted by financial sharks?


Pierre Elliott Trudeau: Mr. Speaker, there will be a bill which the House can pass quite expeditiously, if it wants, to meet this very problem. I am sure the House leaders of the various parties will agree to get it through very quickly.


Some hon. Members:: Hear, hear!


Eldon Mattison Woolliams: Mr. Speaker, I have not made a thorough study of the bill, but I do not think it will stop the financial sharks from being able to discount. They will be set at a certain rate. Can the Prime Minister facilitate things for the taxpayers of the country by setting up a bank to which they could go with their income tax returns and receive 100 per cent on the dollar, in order to help the low wage earners of the country?


Pierre Elliott Trudeau: Mr. Speaker, I repeat that a proposal has been made to the House of Commons. It was made with the support of all the provinces.


Eldon Mattison Woolliams: Bring the bill on.


Pierre Elliott Trudeau: The hon. member will have to make up his mind. Does he want the bill or does he want something else? I understand there is support from the New Democratic Party. Perhaps all parties could agree to pass it through all stages in a matter of a couple of hours. This would help.


Some hon. Members:: Hear, hear!


UNEMPLOYMENT INSURANCE
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is directed to the President of the Treasury Board. It arises from an article which appeared in yesterday's edition of the Globe and Mail in which the former chief media relations officer for the Unemployment Insurance Commission in Toronto was quoted as being very critical of the government's spending of $1 million on unemployment insurance advertising to polish up its image. He pointed out that if the government had simply sent slips of paper along with the cheques to advise recipients, it would have saved $997,000. He concluded by saying: "The common assumption of the people I worked with was that it was geared more to a spring election campaign than to informing the public".


Mr. Speaker:: Does the hon. member have a question?


Henry Perrin Beatty: Yes, Mr. Speaker. Can the minister give some assurance to the House, with a budget deficit increasing by 35 per cent, that the government will put a stop to unnecessary,
April 12, 1978

senseless and wasteful advertising which is designed only to polish the government's tarnished image?


Robert Knight Andras: Mr. Speaker, obviously I could not agree with the ridiculous interpretation the hon. member places on that action, which I think was required and was responsible.


AIRPORTS
[Stage Direction]
INQUIRY WHETHER MINISTER CONSIDERING RUNWAY EXTENSION AT GASPfi-GOVERNMENT POSITION
Mr. Alexandre Cyr (Gaspe):: Mr. Speaker, I would like to put a question to the Minister of Transport.
The minister is back from a trip to the Atlantic provinces where he announced the spending of several million dollars on projects to improve the transportation system. Could the minister tell the House whether he is still interested in the construction of a 6,000-foot runway in Gaspe? Also, does he plan to announce shortly that he has authorized funds for the construction of an airport with all communication and navigational instruments so that Gaspesians might get better air service and receive from the minister as much attention as he gives to the Atlantic provinces?


Otto Emil Lang: Mr. Speaker, I am very concerned and interested in the question of air service in the Gaspe. We are now looking at a study on the question of the best location for such airport improvements. Also, we are in the final phase of examining the potential of a Dash-7 type of service in the region which would allow for a different form of airport operation. In addition, we are looking at the potential usefulness of the airport at Bonaventure for additional service. I hope to be able to develop proposals arising out of these studies in the very near future.


NATIONAL PARKS
Mr. Leonard C. Jones (Moncton):: Mr. Speaker, in the absence of the Minister of Indian Affairs and Northern Development, I should like to direct my question to his parliamentary secretary. I have here a copy of a recent issue of National magazine which appeared in Reader's Digest and Chatelaine. There is a tremendous ad in there which I should like to bring to the attention of the department. It is entitled "Fundy National Park", and underneath it reads: "Parks Canada, Hugh Faulkner, Minister. Live it, Learn it, Love it. Fundy's in Nova Scotia-"
Oral Questions
I should like to ask the minister, through his parliamentary secretary, if he would apologize to the province of New Brunswick, and New Brunswickers, for once again leaving out New Brunswick. The CBC did it on July 1. I hope the department will make a change and readvertise the park. It is a tremendous park. It is in the picture county of Albert, in the picture province of New Brunswick.


Mr. Ross Milne (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, there is no question about the beauty of the park. We are aware of where it is.


Some hon. Members:: Hear, hear!


FISHERIES
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, my question is directed to the Minister of Fisheries and the Environment. It has to do with the widely circulated indications that at some point during the campaign which is soon to be upon us, the minister and government officials will announce the relocation of the federal Department of Fisheries and the Environment from Ottawa to the Atlantic area, probably in Halifax as part of the cornerstone development of the Halifax waterfront.


An hon. Member:: Shediac?


J. Michael Forrestall: 
Charles Joseph Clark: What about Shediac?


Mr. LeBlanc (Westmorland-Kent):: If the hon. Leader of the Opposition would like to ask a question about Shediac, I will answer it quite willingly.


Charles Joseph Clark: That is about all you know.


Roméo LeBlanc: About all the opposition leader does is shoot from his seat.


Mr. Hees:: He can shoot better in his seat than you can standing up.


Some hon. Members:: Oh, oh!

April 12, 1978
Oral Questions


Roméo LeBlanc: Mr. Speaker, as the hon. member knows, our Department of Fisheries is already a very highly decentralized one. In fact, the headquarters in Ottawa is one of the smallest headquarters for what still is a very large department in the government, with over 6,000 employees.
I do not think it is realistic that we move all of the department to that region. For example, how would you choose between the west coast and the east coast? If I could have the headquarters in Vancouver for six months, and for six months on the east coast, I would have the perfect solution.


GOVERNMENT POLICY RESPECTING RENTAL OF OFFICE SPACE
J. Michael Forrestall: Mr. Speaker, my supplementary is for the Prime Minister or the Deputy Prime Minister. It is a very serious proposition because it arises out of the factual situation with respect to the rental by the government of office space and office requirements in the metropolitan Halifax-Dartmouth area. My question is, does it continue to be a matter of government policy that office space shall be leased only from such corporate citizens as Mr. Zeitzman, Mr. Medchuck, Mr. Fisk and some other high-ranking members of the Liberal party of the province of Nova Scotia?


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, I wish the hon. member had given me notice of this question and I could have inquired. I will take note of the question and give him an answer perhaps next week.


INDUSTRY
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, my question is for the Minister of Industry, Trade and Commerce. In light of the minister's boast yesterday regarding the supposedly healthy status of the Canadian electronic industry, can he explain why the government saw fit to purchase hundreds of electronic devices from Austria such as those found on members' desks here in the House of Commons, rather than purchasing them from Canadian manufacturers?


John (Jack) Henry Horner: Mr. Speaker, I said yesterday that the Canadian electronics industry is in keen competition and we are well aware of the problems of the industry. With regard to Canadian purchases, my department is going to launch an advertising campaign to familiarize Canadians with the advantages of buying Canadian-made products. In carrying out that program, naturally I would hope that we could also convince the government to purchase Canadian-made products.


William C. Scott: Mr. Speaker, my supplementary is to the same minister. If he will look on his desk,-desks which members use every day-he will see "Made in Austria" on all the mikes. This must be very discouraging to Canadian manufacturers who are trying to survive in this competitive world.


John (Jack) Henry Horner: Mr. Speaker, there is no doubt that the hon. member's point is well taken. As I said, we are going to launch an extensive advertising campaign to convince Canadians that there are advantages to buying in Canada. I would like to think, in launching that campaign, we will also convince the government to buy in Canada.


NATIONAL SECURITY
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is for the Minister of National Defence. I would like to ask him, in light of the revelations that came out at the McDonald inquiry and the revelations that were made in the House of Commons with respect to illegal activities of law enforcement agencies and intelligence services in our country, is the minister prepared to tell the House whether he has received reports from military intelligence agencies as to possible activities within our country which may have been, or were, as illegal as those perpetrated by the security services of the RCMP?


Barnett Jerome Danson: Mr. Speaker, I have had no such reports. I have investigated the matter and had discussions with the senior commanders and, particularly, those responsible for intelligence. No illegal acts have taken place. There was some electronic surveillance prior to 1972, but no more has taken place since that date, to the best of my knowledge.


Frank Oberle: Mr. Speaker, I ask the minister whether the new military head of intelligence, Walter Dabros, reported to the minister with respect to his involvement in some of these illegal acts and his involvement with the security analysis group before he assumed his new position. Is the minister prepared to state categorically that there are no skeletons in the closet, and he is perfectly satisfied that military intelligence did not commit any illegal acts within our country in their domestic activities?


Barnett Jerome Danson: Mr. Speaker, General Dabros is, indeed, the director-general of intelligence service. He has briefed me on those situations. I have every confidence in him.
April 12, 1978


SOCIAL SECURITY
Stanley Howard Knowles: Mr. Speaker, may I direct a question to the Minister of National Health and Welfare? In view of the fact that a substantial increase in the cost of living such as we had in March will not reflect itself in an increase in the old age pension for several months, and in view of the difficulties that older people-particularly those who live alone-are experiencing, will she make every effort to find some way to provide for an increase in old age pensions before this session ends?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, I have to disagree with the hon. member who is usually not mistaken regarding the social programs of the government. Old age security pension and the income supplement that goes with it are the only Canadian government pensions that are indexed every three months to reflect as much as possible the unforeseeable rises in the cost of living.
Accordingly, on June 1 all old age security pensions will reflect the rise as determined by Statistics Canada.


Stanley Howard Knowles: Mr. Speaker, does the minister not realize that the increase that will come July 1-not June 1-will be based on a period of five months back compared with three months behind that, so that the current increases in the cost of living will not be reflected in that increase; and is she not aware of the fact that promises have been made before to reconsider the formula on the cost of living index for older people? Will she take another look at this matter?


Monique Bégin: Mr. Speaker, I will take another look, but I am a little disappointed. The hon. member is correct when he says it is three months' time on July 1, because the old age pensions have just been indexed. Both programs are indexed every three months. This is the mechanism which was passed by this House. Except for a few cents, the increase in the cost of living will be reflected on July 1.
When I was a witness last week at the committee hearings, not one member-including the hon. gentleman-made reference to this problem of refining the tool, which is already very effective, in indexing pensions every three months. However, I will check with the officials to determine if there is a better way of attacking this problem. But that means there will have to be a legislative amendment. I do not understand why it was not brought to my attention by the hon. member last week.


Stanley Howard Knowles: Because we have been at it for years.
Oral Questions


ADMINISTRATION OF JUSTICE
Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, my question is for the Minister of Justice: it is supplementary to one asked by the hon. member for New Westminster yesterday.

Considering the astonishingly easy access to data banks at every level of government and since it is difficult to assure the imperviousness of those banks owing to the numerous points of entry into computers, is the minister considering the possibility of increasing penalties for unauthorized use of information robbed or pinched from data banks, whether they are public or private?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, yesterday the Solicitor General answered the hon. member for New Westminster with regard to questions relating to the CPIC index. In so far as other data banks are concerned, they are covered by various rules relating to confidentiality. I am not aware of any instances of abuse, but I will have my officers review the situation and determine whether it would be appropriate to increase the penalties for breaking such confidentiality.


ANTI-INFLATION BOARD INQUIRY WHETHER PHASING-OUT DATE WILL BE EXTENDED
Charles Joseph Clark: Mr. Speaker, my question is for the Minister of Finance. If I heard the minister correctly earlier today, he said that it was the government's plan to begin to phase-out the Anti-Inflation Board in January of next year. As the minister knows, under the law that parliament has passed, the termination date of the Anti-Inflation Board is December 31 of this year.
Can the minister tell the House whether it is the present policy of the government to have the Anti-Inflation Board stay in place after December 31, the termination date set out in the law?


Joseph Jacques Jean Chrétien: Mr. Speaker, the phasing-out of the program is starting this week. There will be many people who will get out gradually. By the end of the year, the law will still apply for the corporations because their year will not have been completed. We have to make sure that during the year 1978 the books were kept in proper fashion and that they followed the law.
Members of the Anti-Inflation Board will have to monitor that for some months to make sure everything was done properly during 1978. After December 31, 1978, there will be
4428

April 12, 1978
Committee Report
no more control, but there will have to be an operation to make sure the program was followed during all of 1978.


Charles Joseph Clark: A supplementary question, Mr. Speaker. Can the minister indicate to us how far into 1979 it is the present intention of the government to have the Anti-Inflation Board stay in place?


Joseph Jacques Jean Chrétien: Mr. Speaker, the personnel will diminish according to the workload, but it will have to stay in operation until the books of the corporations are closed. Some have a year that starts, say, in March of this year and finishes in March of next year, so it will take some time before the board receives all the reports, analyses them, and so on. It will phase out during the year 1979 in terms of personnel, but there will be no more control after December 31 for anybody.



THE ROYAL ASSENT

Mr. Speaker:: I have the honour to inform the House that the following communication has been received:
Government House Ottawa
April 12, 1978 Sir,
I have the honour to inform you that the Honourable Wishart F. Spence,
O.B.E., Puisne Judge of the Supreme Court of Canada, in his capacity as Deputy Governor General, will proceed to the Senate chamber today, the twelfth day of April, at 5.45 p.m., for the purpose of giving Royal Assent to certain bills.
I have the honour to be,
Sir,
Your obedient servant, Edmond Joly de Lotbiniere Administrative Secretary to the Governor General



ROUTINE PROCEEDINGS


[Stage Direction]
Second report of the Standing Committee on Public Accounts-Mr. Huntington.
[Editor's note: For text of above report, see today's Votes and Proceedings.]

Mr. Stuart Leggatt (New Westminster) moved: for leave to introduce Bill C-441, to amend the Criminal Code (commercial use of lie detectors).


Some hon. Members:: Explain.


Stuart Malcolm Leggatt: Mr. Speaker, the purpose of this bill is to amend the Criminal Code so that the use of lie detectors and similar tests by private businesses in the evaluation of their employees and in the investigation of their employees' conduct be outlawed. It is intended to restrict the use of the lie detector to the criminal investigation process and eliminate it from the private sector, for the protection of the civil liberties of the individual.


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

[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the following questions will be answered today: 131, 480, 778, 1,201, 1,207, 1,263 and 1,435.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Munro (Esquimalt-Saanich): 1.	For each department, which units in Ottawa are designated (a) unilingual English (b) unilingual French (c) bilingual?
2.	On what criteria were the designations made?


Yvon Pinard: 1. (a) Not applicable. Official Languages policies do not involve the formal or informal designation of units as "unilingual English", (b) While no units within the government have been "designated" or formally recognized as "unilingual French" there are several units where the majority of their positions have been informally identified as "Unit working in French" according to the criteria set forth in the Treasury Board circular 1975-111. The following departments and agencies have informally identified "Units working in French" during the exercise in November, 1975. The formal designation has been deferred by Treasury Board and will be reconsidered upon completion of the bilingualism plan in the year of 1978. Agriculture Canada: 11; Forms Services Section, Management Consulting Services, Finance and Administration Branch; Property and Buildings Management Section, Administration Division, Finance and Administration Branch;
April 12, 1978

Operation Section, Staffing and Development Division, Personnel Administration Branch; Public Services Section, Information Services; Education Section, Education and Development Division, Health of Animals Branch; Biological Products Section, Animal Diseases Research Institute, Health of Animals Branch; Research and Diagnostic Unit, Animal Diseases Research Institute, Health of Animals Branch; Food and Fertilizer Laboratory, Plant Products Division, Food Production and Marketing Branch; Statistics Unit, Poultry Division, Food Production and Marketing Branch; Section of Food Advisory Division, Food Production and Marketing Branch; Bilingualism Programmes, Personnel Administration Branch. Canadian International Development Agency: 2; Francophone Africa Division, Latin America Division. Energy, Mines and Resources: 2; French Editorial Section of Information, Drafting Unit of Surveys and Mapping Branch.
Indian Affairs and Northern Development: 13 Administration Program
Branch	Unit
Office of Native Claims
Personnel
Public and Parliamentary Affairs
Public and Parliamentary Affairs
Departmental Administrative Services
Departmental Administrative Services
Departmental Administrative Services
Departmental Administrative Services
Engineering and Architecture Branch
Claims Analysis Program Personnel Adviser Audio-Visual Section
Parliamentary Relations Division
Departmental Security
Manuals and Directive Division
Records Management
Stenographic and Typing Services
Policy and Planning Division
Indian and Eskimo Affairs Program Branch
Program Personnel Adviser
Northern Affairs Program Branch
Northern Economic Planning Branch
Parks Canada Branch
National Historic Parks and Sites Branch Program Financial Management Advisory Services
Unit
Human Resources Management Section
Unit
Data Management Division Unit
Policy and Planning Division Contract Administration
Industry, Trade and Commerce: 1 Branch
Unit
Information Service
French Editorial Division
Justice: 1; Civil law. Privy Council and Federal-Provincial Relations Offices: 6; Privy Council Office: Operations; Coordination and Scheduling, External Policy and Defence,
Order Paper Questions
Science, Culture and Information; Personnel: Staff Planning, Development and Employment Section; Plans: Priorities and Planning; Federal-Provincial Relations Office: Policy and Program Review Section; Finance, Economy and Resources: Secretary of State: 2; Multilingual Services Division, English Translation Division. Public Service Commission: 9; Personnel Division (Unit A). Computer Services (System Maintenance). Financial Management Advisor (SDB), Information Services (Special Projects), Research and Development (Studies Division), Learning Support Division (SDB), Staffing (5 Units within the Operation Directorate), Appeals (Appeal Officers working in French), Cap (Assignment Division), The Language Training Branch of the Public Service Commission (Language Bureau) and the Official Languages Directorate were excluded for the purpose of that particular exercise in accordance with the above noted circular. However, the Official Languages Directorate did identify two units working in French. They are the Administration and Co-ordination and the Operation Divisions.
Remarks: The major changes in the Public Service Commission organization that took place in the summer of 1977 have, in some cases, modified the proposed structure of the units working in French. Furthermore, the commission is undertaking an analysis of its present situation and such initiatives as the units working in French will have to be re-assessed and considered in light of the new policy on official languages.
Solicitor General: 3; Ministry Secretariat; Policy Planning and Program Evaluation Branch, Police and Security Planning and Analysis Branch, Research Programs Division of the Research and Systems Development Branch. Veterans Affairs: 1; Personnel Management Division-Employee Participation Group; Other departments have no information on this matter, (c) Not applicable. Official languages policies do not involve the formal or informal designation of units as bilingual.
2. The informal designation of units working in French was based on the following criteria: To help ensure that the French language will increasingly take its place with English as a language of work in the federal administration; To facilitate the recruitment and participation of unilingual Francophones on a more equal footing with unilingual Anglophones; To provide a milieu in which Anglophone public servants who have acquired second language skills will have the opportunity of becoming more fluent in the French language; To make possible a greater degree of individual bilingualism at senior levels in the public service.


Mr. Yewchuk: 1.	What was the total cost of the tour conducted through Europe by the Minister of Fitness and Amateur Sport, Dr. Roger Jackson, Director of Sport Canada and Mr. Geoff Gowan, Technical Director of the Coaching Association of Canada from April 24 to May 12, 1977?
2.	What was the total cost for each individual involved?


Hon. Bud Cullen (Minister of Employment and Immigration):: In so far as the Minister of State for Fitness and
80033-67*A

April 12, 1978
Order Paper Questions
Amateur Sport is concerned; 1 and 2. See reply to question 147 answered March 2, 1978.


Mr. Cossitt: 1.	With reference to the answer to Question No. 2,765 of the Second Session of the 30th Parliament which stated in part that no internal fraud squad or anything similar existed in the Toronto area within the Unemployment Insurance Commission, has further investigation on the part of the government shown that such a squad or group does indeed exist?
2.	(a) Is Mr. Hi Pong No a member of the group (b) what is a complete history of his employment or association with UIC (c) what are the qualifications he possesses for his job and what work has he been doing since his appointment?
3.	Is the government aware if Mr. Hi Pong No is a former South Korean internal intelligence agent and (a) if so, what details does the government possess in this regard (b) if not, will the government investigate in this regard and furnish details?


Jack Sydney George (Bud) Cullen: 1. No.
2.	(a) Not applicable, (b) Mr. No was hired on February 11, 1974, as a benefit control officer and was continuously employed in that capacity until October 3, 1977. (c) Mr. No met the following qualifications for a benefit control officer position: university graduation combined with evidence of definite aptitude for general administration or demonstrated capacity for administrative work combined with the ability normally required to complete secondary school education. Evidence through work history of achieving good results, or of showing potential in, the following areas: the interpretation and application of the Unemployment Insurance Act and Regulations and in-person interviewing or investigation (either civil or criminal). Mr. No was performing the duties as per 2(b) above until October 3, 1977, at which time he was loaned on a training assignment to the immigration division in Toronto.
3.	(a) and (b) Information pertaining to an employee's past employment history when supplied to the public service by the individual concerned is given in confidence. Therefore, we are unable to provide information relating to Mr. No's past employment.


Mr. Cossitt: 1.	Is the government aware of a statement made to the news media by Mr. Hugh Riopelle of Air Canada to the effect that certain of the Airline's public affairs officers, managers, salesmen and other senior representatives were given folders of free tickets "to dispense the passes as we see fit" and, if so, how many such passes were issued in the past four years and what is the breakdown, by year, of first-class and economy class tickets issued?
2.	What loss of revenue to the Airline is represented by the dispensing of such passes?


Otto Emil Lang: The Management of Air Canada advises as follows: 1. Yes. See answers to questions 1,523, 1,559, 2,316, and 5,266 of the first session, 30th parliament.

2. Blackout periods during heavy travel peaks apply to passes issued for commercial promotional purposes, with the result that such passes are normally used when there are empty seats on flights and loss of revenue would be minimal.


Mr. Epp: 1.	What is the cost per letter of door-to-door mail delivery in Canada?
2.	What is the cost per letter of mail delivered in rural Canada pertaining to (a) rural post boxes (b) general delivery?


Hon. J.-Gilles Lamontagne (Postmaster General):: 1. The
letter carrier portion of the cost per letter of door-to-door mail delivery in Canada is 7.890. This does not include the other costs of handling such as collection, processing, transportation, etc.
2. (a) This information is not available due to lack of volume data, (b) The cost per letter of mail delivery in rural Canada pertaining to general delivery is 4.220. As indicated in 1 above, this does not include the other costs of handling such as collection, processing, transportation, etc.


Mrs. Pigott: What is the number of women holding SX positions in the Public Service and, in each case, what is her (a) name (b) official title and on what date was she appointed (c) education level?


Robert Knight Andras: As of January 31, 1978, 31 women held SX positions. Five other women were classified as SX, and seven held positions equivalent to SX. The names, official titles and dates of appointments of these employees are as follows:
Name	Title	Date of AppointmentJ. R. Smith	Director, Food and Agriculture	September 2, 1977C. F. Robertshaw	Division, AIB Director, Research and Internal	March 14, 1977M. E. Hynna	Affairs, CCA Secretary General, CHRC	November 1, 1977M. R. Prentis	Director General,	April 12, 1976E. Cooper Stein	Telecommunications Economics, COM. Director, Adjudication, EIC	September 7, 1977I. E. Johnson	Associate Executive Director,	March 1, 1976V. A. Sims	EIC Director General, Priorities and	May 1, 1976M. Johnson	Program Co-ordination, EIC Regional Director General,	April 1, 1976J. A. K. MacDonnell	Fisheries, ENV Executive Director, Deer	May 14, 1973M. Chartier-Gauvin	Lodge, DVA Director, Social Development	July 5, 1977B. A. Mercer	and Manpower Programs Development, FIN Assistant Director, Economic	December 16, 1974K. B. Cooke	Development, FIN Director, Research Division,	August 3, 1976E. Kriegler	IAN Director, Public and	April 1, 1977Parliamentary Affairs, IAN	
April 12, 1978

Name	Title	Date of AppointmentM. H. Labelle	Director General, Policy	October 12, 1976G. St. Marie	Research and Evaluation, IAN Departmental Secretary, ITC	September 6, 1977A. Desjardins	Director, Advisory and	April 17, 1974E. I. MacDonald	Research Services, JUS Consultant, Status of Women	April 17, 1974B. A. Darling	and the Family, JUS Project Director. Industry	December 1, 1975R. Swann	Projects Division, MOS Project Director, Industry	August 26, 1976S. Blais Grenier	Projects Division, MOS Director, Welfare Grants,	November 17, 1975S. M. F. Brazeau	NHW Director, Family Planning,	April 1, 1976M. J. Flaherty	NHW Principal Nursing Officer,	August 29, 1977M. M. Law	NHW Director General, Health	September 1, 1976A. K. Liljefors	Consultation Directorate, NHW Director, Program Planning and	August 15, 1975M. P. O'Neil	Evaluation, NHW Director, Social Assistance and	August 1, 1976M. Savoie	Services Analysis, NHW Regional Director, Quebec,	January 1, 1972C. P. Scott	NHW Director, Bureau of Drugs,	January 1,1976J. R. McQueen	NHW Assistant Secretary General,	February 17, 1975C. Roy	Programs, NMC Senior Scientist, NMC	June 1, 1977S. Popham	Assistant Secretary to Cabinet,	April 1, 1977M. G. Y. Fraser	Public Information, PCO Director, Administrative	January 4, 1977J. W. Edmonds	Staffing Program, PSC Director General, Manitoba,	January 2, 1977C. A. Racine	REE Director, Public Information,	September 1, 1976L. Ouimet	REE Secretary General to CRTC	March 14, 1977J. Dobell	Director, Languages	January 2, 1975D. Moncion	Administration Branch, SEC Assistant Under Secretary of	June 6, 1977F. E. Goodspeed	State Citizenship, SEC Director, Operations, PSSRB	May 27, 1976G. Oja	Director, Consumer Income and	June 28, 1976J. R. Podoluk	Expenditure, STC Director General, Household	February 1, 1973N. Gendreau	Statistics, STC Director, Evaluation, Analysis	September 1, 1977A. Lefebvre-Anglin	and Data Services, TBD Group Chief, Programs Branch,	March 31, 1977W. E. Porteous	TBD Tap Policy Advisor, TBD	October 17, 1977R. Hubbard	Group Chief Industry and	March 31, 1977Natural Resources, TBD	The educational level	of this group of employees is as follows:	Level of Education	No. of Women	High School	1	Bachelor's Degree	10	Master's Degree	16	Doctorate	7	Other (including medical doctors,	lawyers, etc.)	9	
The Budget-Mr. Stevens THE WAY AHEAD FOR CANADA


Mr. Whiteway: Were responses received by the Prime Minister's Office to the Questionnaire for a Paperback Referendum printed in The Way Ahead for Canada, edited by Robert K. Logan and printed by Lester and Orpen Ltd., Toronto, 1977 and, if so, how many?


Yvon Pinard: (a) Yes. (b) Fifteen.


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


Some hon. Members:: Agreed.


Yvon Pinard: Mr. Speaker, I ask that all notices of motions be allowed to stand.


Mr. Speaker:: Is that agreed?


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, April 10, consideration of the motion of Mr. Chretien that this House approves in general the budgetary policy of the government.
Sinclair McKnight Stevens: Mr. Speaker, as we continue our debate on what has become known as the threepenny budget, I should like to deal with three or four separate matters which are interrelated.
I should like to deal first with the unfortunate unemployment situation in this country, to spend some time reviewing the effect of Canada's falling dollar on Canada generally, our inflation level, our unemployment level, and the deficit that this government revealed only two nights ago. I should also like to touch on the general question of inflation in Canada but, most important, I wish to tell this House and the Canadian public what we in the official opposition, what we in the Progressive Conservative Party of Canada, would have wished to see in the budget that was brought in on Monday night.

April 12, 1978
The Budget-Mr. Stevens
I am sure all hon. members have noticed the references made by the Minister of Finance (Mr. Chretien) with respect to unemployment. Surely two of the most startling statements he made were when he stated, "An important reason for the growth of our labour force has been the growing number of Canadian women who are working" and, secondly, "There has also been a surge of young people coming into the labour market." If we put those two comments into proper context, what the Minister of Finance, on behalf of this government, is saying is that we should not fault them for unemployment, we should fault the women of this country for unemployment because they are looking for work, and fault their children because they are also looking for work.
Can we tolerate much longer an administration that takes perhaps one of the greatest assets we have in this country, namely, our labour force, and treats it in such an utterly disdainful way?


Some hon. Members:: No!


Sinclair McKnight Stevens: Surely it is the main challenge of any government in power in any country to ensure that those who wish to work in that country become gainfully employed at the occupation of their choice.
With a budget so short of proper fiscal stimulus to ensure we will have less unemployment in this country, with a budget that virtually assures us that, if no changes are made, unemployment will not only stand at the current level of 1,040,000 but it will be higher next winter, surely there can be absolutely no confidence left in this House in an administration which, through its Minister of Finance, says "Do not blame us, blame the women of this country, and blame their children who happen to be looking for work." They happen to be looking for work, Mr. Speaker, because many families are finding it so tough to make ends meet in Canada today that more than one breadwinner must go out to work, simply to get bread on the table for those families.


Some hon. Members:: Hear, hear!


An hon. Member:: Women and children first.


Sinclair McKnight Stevens: To deal with this question of unemployment, Mr. Speaker, we must also deal with the inter-related problems.
I would like to make a few comments concerning our falling dollar. First of all there is the great uncertainty this administration has brought into the entire picture of where it feels the dollar should be properly trading at the present time. It has been reliably estimated by those in the financial community that the handling of the falling dollar by this Minister of Finance has been inept. It has cost us three to four cents more than normally would have been expected if the dollar had been left to find its own level as far as international currencies are concerned.
Can there be much doubt left why the international world is confused as to where a dollar in Canada should trade? For example, we have a Minister of Finance who says that a floating dollar is a floating dollar, and presumably they do not intend to intervene. And yet it has been revealed that they have lost in United States dollar reserves $1.5 billion of precious reserves in defending what they said was only a floating dollar.
We know the government has borrowed $750 million in the U.S. market in an attempt to replenish some of those funds. We understand it intends to borrow further. There can be no doubt that one of the most pressing reasons why we have this budget before us today is that this administration was told it could not go back to the trough in the American money markets without showing the current fiscal 1979 figures, including the budgetary Figures, for its administration. It was a Securities and Exchange Commission requirement in the United States which helped produce the budget we are now debating in this House.
Can there be any doubt left why the international community is disturbed and concerned when we have a Minister of Finance who speaks about a floating dollar and presumably is almost indifferent as to where that dollar will settle, and we have a Minister of Industry, Trade and Commerce (Mr. Horner) who says that he kind of likes a 90-cent dollar, for some reason?
On the other hand when my colleague, the hon. member for St. John's West (Mr. Crosbie), put a very telling question, I thought, to the Minister of Industry, Trade and Commerce in a finance committee meeting, asking:
-would the Minister be concerned if the Canadian dollar went down to 85 or 80 cents?
Here is what a minister of the Crown, speaking on behalf of this administration, replied:
I would be concerned if the dollar went down to zero. I would be mightily concerned, because that would prove to me that nobody would want it.


An hon. Member:: What a bright fellow.


Sinclair McKnight Stevens: That is not a newspaper account of what this minister said. That is the transcript from a finance committee meeting of this parliament, where a minister of the Crown said that about the only time he would really be disturbed was if our dollar went down to zero.
I know it has been jokingly stated that the government at the present time is not too disturbed about the dollar because it thinks it has 87 cents left to go, but until I heard the comment from the Minister of Industry, Trade and Commerce in that finance committee meeting, I did not realize how totally indifferent it is to the plight of our dollar.
Let us put it into perspective. It is sometimes stated that a lower valued dollar is good because it makes our exports more competitive.


An hon. Member:: Right on.

April 12, 1978


Sinclair McKnight Stevens: Here is one of the loyal backbenchers who would support this government through thick and thin. In fact if they were led into hell that backbencher would say, "Let's move a little faster, if that is where you want to go, Mr. Leader."


An hon. Member:: Do not interfere with the apple I am polishing.


Sinclair McKnight Stevens: As far as that member is concerned, let me assure him that when he gets to hell, if that is where he is going, he will have so many friends he will spend most of his time greeting them.


An hon. Member:: They will all be Liberals.


Sinclair McKnight Stevens: Most of us will accept, at least temporarily, that a lower priced dollar gives a country an artificial competitive edge over other countries-


An hon. Member:: Not artificial.


Sinclair McKnight Stevens: -in the sense it lowers its prices in relation to the currency of other nations. This consequently results in a country being more competitive, as I say, at least for a temporary period. If a nation that chooses that route of discounting its dollar does not get a hand on its own productivity, and does not control inflation in its own country, whatever temporary advantage it gains by a falling dollar is quickly eroded, and it finds that it must devalue its currency still lower to get the shot in the arm needed to continue with its export trade. This is demonstrated by the unfortunate position the United Kingdom got into when it attempted to devalue its currency two or three times, with disastrous results.
Let me come back to the Canadian situation with respect to the falling dollar. Sometimes this government gets so trapped with its policies because it picks them up second hand from something stated in the United States. It follows the Brookings Institution type of thinking almost religiously. What has happened is that somebody in the United States has said that it might be wise for the Americans to lower their dollar, or have other currencies go up in relation to the American dollar. Quickly this government said that "if it is good for the Americans, it must be good for Canada; let us have our dollar fall even faster."
When they set us on this course they totally ignored the fact that a fall in the American dollar has approximately one third the effect on the U.S. inflation level on imports that it would have in Canada. Let me be specific. Our dollar in relation to the American dollar has fallen 16 cents since the plunge began. As far as our imports are concerned, the Minister of Finance's own department clarified for us in committee that the fall will mean, built in to our inflation level, a further 4.5 per cent inflation level in Canada. That is 4.5 per cent more inflation in Canada than what we are already destined to have.
However, if the United States allowed their currency to go down in relation to other currencies by a comparable 16 cents, the total effect in the United States would be 1.5 per cent on
The Budget-Mr. Stevens
their inflation level. First, I would suggest that it is totally wrong for this government to have blindly led us into the psychology of accepting a falling dollar without realizing the consequence of inflation on Canada compared to the American position.
It is as simple as this. We in Canada have roughly 25 per cent of our total gross national product in trade. The Americans have 7 per cent. That is why it has only about a third of the effect in the United States that a falling dollar has in this country.
Let me touch the second, almost more important ingredient this government forgot when it played with a falling dollar. It forgets that in Canada, unlike in the United States, if our dollar falls, it causes various commodities in this country, domestically produced and domestically consumed, to go up in price because they are priced in accordance with the American dollar pricing. Let me be specific. Our lumber, zinc, natural resources, energy resources, cattle, and now even the fish, know about our falling dollar. Fish produce is also priced in accordance with the American dollar pricing.
What this has caused in Canada is dramatic. This is not due directly to import increases, but because so many commodities are priced in relation to an American dollar price. It is estimated that the effect of the falling dollar will cost us 3 per cent more inflation in the country. Through its inept handling of the situation, this government has triggered the falling Canadian dollar to the point where it will result in IV2 per cent additional inflation for the Canadian public to bear, a Canadian public that is already bearing an unacceptably high level of inflation as a result of the policies of this government.
Earlier today in the question period various questions were put to the Minister of Finance and certain other ministers concerning the unfortunate inflation figures that were revealed today, the fact that we had 1.1 per cent inflation in the last reported month alone, 8.8 per cent year over the year. It was also mentioned that the government's anti-inflation program as announced in October, 1975, was going to be phased out beginning this Friday. In that context, it is only fair when we are debating this budget to take a fresh look at what in fact has happened with regard to inflation in this country, certainly since this administration has been in full saddle.
In my constituency, as I am sure other members have done in their constituencies, we have maintained what we call our own grocery basket. We kept track of 15 specific grocery items just to see what in fact is the impact of inflation for the typical resident and housekeeper. My constituency is on the outskirts of Toronto. They say that Toronto is a suburb of where we live.
It is unfortunate that something is sometimes lost in statistics. When we speak about 1,045,000 out of work, I do not think it conveys the true tragedy that means for those who are out of work and looking for work. When we quote figures about 8.8 per cent inflation, or whatever figure you like, I do not think it gets through as to what that means to people who

April 12, 1978
The Budget-Mr. Stevens
are trying to put various products that they need to eat, on the table.
Let me come down to some specifics. As I say, in my constituency, we deliberately chose 15 items that are among the most usual items for the average family. I chose November, 1970, because that was when we were assured by the Prime Minister (Mr. Trudeau) that he had licked inflation. Presumably we had nothing more to worry about with regard to inflation. In november, 1970, those 15 items would have cost a Canadian family $9.97. We shopped the same items last week. The cost today is $23.83.


Some hon. Members:: Shame!


Sinclair McKnight Stevens: In case some think we have selected unusual items, I hasten to add that this is a list we have maintained every six months to see what has been the progress, or lack of progress, with regard to inflation as it affects in a meaningful way the housewife trying to put groceries on the family table.
Let me give some examples of what has happened in that period since November, 1970. A 12-ounce jar of Billy Bee honey has gone from 31 cents to 83 cents. Kraft Canadian cheese slices, eight in number, weighing eight ounces, have gone from 37 cents to 93 cents. A 48-ounce tin of Mitchell apple juice has gone from 34 cents to 77 cents. Six ten-ounce cans of Coca Cola were 66 cents in 1970. Now the same number of cans sell for $1.62.
A ten-pound bag of sugar cost 96 cents then. Today it is $1.87. Two cans of Campbell's tomato soup, ten-ounce, each tin cost 24 cents in November, 1970; now they are 40 cents. Libby's pork and beans, two 19-ounce tins, 54 cents then; now $1.18. Maxwell House coffee, one-pound tin, $1.19 then; now $4.45. Sirloin steak, 99 cents a pound then; now $2.58. Special K, 15-ounce box, 56 cents in November, 1970; now $1.08. I could go on and give the whole list of those 15 items. However, the point I want to make is that those items are only typical of the effect that inflation has had on the consumer in Canada.
When this government is cornered with the facts, it loves to start looking for an escape. We used to have a minister of finance, I have forgotten how many back he was, who blamed anchovies off the coast of South America for inflation. He really turned it around two or three ways. Either they could not find them and that was a problem, or they could find them and that was a problem. In any event, when we start quoting prices, the government often blames the farmer. Let me assure you, Mr. Speaker, you cannot blame the farmer for the prices to which I am referring.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: You cannot blame the farmer, because his costs in relation to his production have gone up even faster than the prices I have been putting on the record. The reason I wish to get on record some of the impact of inflation we are living with is that I believe the time has come when this government must be called to task.

We could go through budget after budget and, in the terms of data processing, if they had a new word processing apparatus such as are now available I would recommend that they put every budget into that word processing machine, which would save them a lot of time when they bring in another budget, because they repeat time after time the rhetoric which did not work in the preceding budget.
Now that the controls program has been in place for 30 months we should take an objective look to find out whether it has produced the result the government said it would produce. Did it bring inflation down to a lower level than might otherwise have been expected? The answer is, no. I give the figures as of February, because that is the latest date in respect of which I can make a comparison with the situation in the United States. Since then, inflation has risen by 18.3 per cent in Canada, whereas in the United States, where there are no controls, it went up by 14.3 per cent. In short, inflation here is 4 per cent worse than the level in the United States, yet we share the same continent and basically the same problems. So there is no reason to believe that anything other than the inept handling of the situation by the government has caused us this extra 4 per cent inflation as compared with the United States.
Even worse is what happened during that period. Not only was inflation in Canada 4 per cent worse, but our real growth was 3 per cent less than real growth in the United States. In the current year, the total gross national product in Canada is running approximately $6 billion below where it should be if we had simply achieved as much growth as the United States was able to achieve since October, 1975. We are talking about big money. This represents $600 of lost revenue for every Canadian taxpayer during a period of so-called government restraint, income which has been lost because of the absence of an imaginative approach by the government to ensure that our economy reaches its proper growth levels so that we can share, if you like, in the prosperity which would be the heritage of Canadians, not just for us but for our children and their children.
In short, the government does not care. It does not care what has been happening to Canadians. I understand they are polishing up a slogan for the coming election. The slogan is supposed to be "Show You Care".


Mr. Darling:: Get rid of Pierre!


Sinclair McKnight Stevens: As my hon. friend from Parry Sound-Muskoka says, "Show You Care; Get Rid of Pierre".


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: Mr. Speaker, if they go to the country with that slogan I think it is only fair to remind them that they have not cared much about Canada or the Canadian people. All that possibility of real growth has been lost by the government. If we were able to get the Canadian work force back to work there would be no deficit-there would not be the $10.9 billion deficit which the Minister of Finance disclosed Monday night.
April 12, 1978

That deficit he is talking about represents $500 for every man, woman and child in Canada. That is the extent to which the government has gone into the hole.
I have compared inflation and real growth in Canada with that in the United States. I could go on and make comparisons with the situation in other industrialized nations. Perhaps it would be only fair for me to say that, compared with the countries of the OECD, we have the highest unemployment level of any, our inflation level is running higher than average inflation in those countries, our real growth is below that in any of those countries, our current account trade deficit, worsened by such things as our imbalanced tourist account, is higher than that in any of the OECD countries. And all this results in our being the only industrialized nation which has run a current account deficit consistently for the past four years.


Robert Lorne Stanfield: But they are keeping cool.


Sinclair McKnight Stevens: Yes, they are keeping cool, as my hon. friend says. They are indifferent. They do not care. They care about one thing. They care about their political hides.
Consider the decade which has passed, one which began after the first hundred years of Confederation, at a time when we had reached one of the highest peaks of prosperity ever reached by any country in the world. As that decade began, the philosophy guiding this administration was one of government expediency. That was the order of the day. Economic realities came second.
Let me go back to the subject of the Anti-Inflation Board. The Board was set up in October, 1975, when we were told that along with this program the government would introduce other measures of financial restraint

which it did not. At that time we were promised additional monetary restraint. Once again we were deceived.
They said there would be a general regulation of the economy-which there wasn't-plus the AIB program. They were to get us down to an 8 per cent level of inflation the first year, to a 6 per cent level the next year, and to 4 per cent in the year which is now current. But we find, Mr. Speaker, that today we are at about the same estimated level of inflation we were told we would be seeing at the end of the first year. One thing the government has excelled in, Mr. Speaker, is the ability to create inflation in this country.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: When I say they know how to create inflation in this country I think every member of this House is under an obligation to remind the Canadian public that inflation is literally manufactured by this government by the excess printing of money in relation to the real growth of our economy. Last year, for example, with a real growth of 2.6 per cent, is it any wonder that we ended up with 9.5 per cent inflation? Consider this: they printed 12 per cent more money last year. Less 2.6 per cent, the difference is almost exactly the 9.5 per
The Budget-Mr. Stevens
cent inflation which plagued this nation as of December, 1977. But that is not only the impact of the controls program.
The fact is that the approach of the government has been counter-productive. That approach has killed business initiative. It has contributed to the unemployment we are living with, and let me give figures. In March, 1975, which was the March before the controls program was imposed, there were 739,000 Canadians out of work. On a non-adjusted basis that was 7.6 per cent of the work force. On an adjusted basis it was 6.8 per cent of the work force. This March unemployment is up 300,000 compared to what it was in March, 1975. There are 1,045,000 out of work today compared with 739,000 prior to the beginning of the controls program. Expressed on an adjusted basis there is now 8.6 per cent of the work force out of work compared with the 6.8 per cent to which I referred as of March, 1975.
I think the Canadian public is aware of the inadequacies. It is aware that there must be a better way to get the Canadian economy achieving the potential which most feel-and certainly that includes members of this party-can be achieved in Canada.
In the few moments I have available I would like to touch on what this party would have liked to have seen, or would have put into the budget Monday night if we had been given that opportunity. There are three essential things which must be accomplished if we are to reach a new prosperity. First, we must once again restore consumer confidence. We must take the consumer willing to buy more because, the more he buys, the more our factories will produce, the more people they will employ, and the more prosperity there will be for all. If we had been writing a budget on Monday night, we would have put into it stimulative fiscal measures in order to ensure that the consumer would start to get back his confidence and would start to do the buying which is so sorely needed in the country.
Second, if we had had the opportunity, we would have proposed certain infrastructure investments which are sorely needed to aid fishermen on the Atlantic and Pacific coasts, to aid those who handle grain in the Canadian west, to aid commuters in Toronto and other urban areas of Canada, and to help with sewage treatment plants in areas such as Montreal which need that kind of help.
The third thing we would have suggested is that it is time to put some meaningful productivity incentives into our system so that people at work benches, in factories, or wherever they produce, will produce still more to ensure that our competitiveness is restored. To that end we would have suggested on Monday night that there should be personal income tax cuts. Consumers need a break, and by reducing the tax burden on Canadians, in our view the economy would be set firmly on the path to recovery.
I know people often ask how there can be a tax cut without running up the deficit. The unique thing is that both problems can be solved at the same time. If a tax cut is stimulative, it will produce the gross national wealth which is needed to
4436

April 12, 1978
The Budget-Mr. Stevens
increase tax revenues, and the net effect is a deficit which is smaller that it would have been if the situation had been allowed to continue, and it is in a lethargic state now. That proposal was not just pulled out of the air. Before we enunciated our program with respect to a minimum $2 billion tax cut, we asked economic consultants to program their computers in order to tell us what a $2 billion personal income tax cut would do for Canada.
Two computer programs came back. They both suggested the same results. I would like to put on the record the net effect of such a measure. We were told that the rise in the level of gross national product would be 3.9 times the initial tax reduction. In relation to a $2 billion permanent personal tax cut, if such were implemented in 1978, the gross national product in 1980 would be $7.5 billion to $8 billion higher than it would be without the tax cut. That is why we would have announced a tax cut if we had brought down a budget on Monday night. The economy needs it. The economy needs that type of stimulant to get us producing, to bring our unemployment down and, at the same time, to bring our inflation level down.
Let me be more specific. As consumer spending accounts for more than 60 per cent of our national output, sustained weakness in this sector aborts any economic recovery. Revived consumer spending can lead the way to reduced unemployment, higher disposal incomes, and that most desirable of all things, real growth.
Increased consumer spending would allow Canadian industry to produce more goods. More production means more jobs. As industry produces more, business investment increases, thus creating more jobs. If we had had the opportunity to write that budget, we would have proposed personal income tax cuts generally, but we believe they should be oriented to help where it counts, that is, to put more spending money into the pocket of the consumer. For many Canadians the tax cut we propose would be $300, not on a temporary basis but on a permanent basis, so that people can count on more money in the coming weeks, months, and years ahead. To be most meaningful we believe that a tax should be oriented to low and middle income Canadians, who are the greatest spenders or consumers because they need every nickel they can get to make ends meet.
It is very important that a tax cut be permanent. When the government instituted its $100 tax cut, $50 in January of this year and another $50 in February of this year, it missed the point. In allowing that tax cut the government lost revenue totalling $700 million. The government said that tax cut would have a stimulative effect, but as far as I know very few wage earners in Canada even know their taxes were ever cut.
In fact most people are left with the impression that somehow their taxes went up $50 in March, and they do not understand why. I believe that fiscal measure was perhaps one of the most stupid things ever done by a department of finance. If the government wanted to produce the maximum benefit from a tax cut, that was not the way to do it. We say a tax cut must be on a permanent basis so that Canadians can

count on it and so that, if they want to buy something, they know what their take home pay will be for the next 12 months. Canadians do not want gimmicks of the kind the government introduced in January and February.
We have in this budget a proposal to institute a 3 per cent provincial sales tax reduction. Here again the government has what could be a good idea, but from an administrative standpoint the effects of this proposal will be minimal. The government says provincial sales taxes should be cut for only six months, and possibly nine months in certain provinces. That would tend to cause people, if they are going to buy as a result of this tax concession, to telescope their buying into the period of the tax concession, which would result in a bigger problem in getting factories to produce in the winter months ahead. That is the time when jobs are needed, because traditionally unemployment in this country increases in the winter months over its level during the summer months.
Again, by putting it on a temporary basis, somehow or other they do not give any certainty to the would-be buyer or consumer in this country. Again they clouded the issue, and it may be that while it will cost them $800 million in loss of revenue, they will get a minimum benefit from their approach as compared with the benefit they could have had if they had taken the $700 million which they spent in January and February, and the $800 million they are now proposing to spend, and lumped them together with a permanent personal income tax reduction of $2 billion plus which we are suggesting.
I could go on to demonstrate why those half measures do not work so far as fiscal policy is concerned. I have suggested that our approach would tend to lower inflation, but I want to stress that it is conditional upon having a proper cutback in government spending. We believe that the government, in budget after budget, has talked about restraint, but we do not think it is sincere. In fact, it is rather startling to find in the budget which is now before us an admission, a confession, if you like, by the Minister of Finance that the government has made mistakes in the past concerning spending.
At the beginning of his budget speech the minister stated:
It is now clear that many of our current difficulties have their roots in the period of extraordinary growth Canada experienced between the mid-1960's and the mid-1970's.
He went on to say:
Governments increased their spending too quickly. The money supply was increased too fast.
Surely the Minister of Finance does not need to be told who was in power when that mistake was made. To come in now on April 10 and say it was a mistake, and to create the impression somehow that his predecessor or he himself should not be blamed, is absolutely ludicrous.
If we had had the opportunity to bring in the budget on Monday night, we would have been proposing a three-year program to cut $2 billion plus from federal spending. We feel that this can be done without reducing transfer payments to
April 12, 1978

Canadians, without cutting back on federal capital expenditures, and without disrupting essential services in this country.


Mr. Blais:: How?


Sinclair McKnight Stevens: Is it not truly remarkable that the Solicitor General (Mr. Blais), who is freshly out of the absolute shambles in his Post Office portfolio, now asks me "how"? For anybody who is a member of an administration which has allowed the Post Office Department, which was profitable in 1970-


Jean-Jacques Blais: Come on.


Sinclair McKnight Stevens: -to run into a position where it now has a deficit of $500 million to $600 million, in spite of repeated postage rate increases, to ask that shows lack of depth.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: It also shows the lack of control which the government has of financing and of the Canadian economy.


Henry Perrin Beatty: Go steam open some letters, J.-J.


An hon. Member:: Go lick a stamp.


Sinclair McKnight Stevens: I hear the former postmaster general say he does not agree with my figures. I would be very pleased to take him down and show him the national financing figures and show him, year by year, where the deficit has occurred and how the expenses have risen much faster than the revenues. I think that even he, if I spend enough time, will understand exactly what I mean.


Robert Lorne Stanfield: I would not count on that.


George Harris Hees: It would be a waste of time.


Sinclair McKnight Stevens: Even he would understand how the Post Office got into trouble.
I have said that if we had had the opportunity to present a budget on Monday night, we would have proposed trimmings in federal spending which would have resulted in the federal spending being reduced by $2 billion within a three-year period. First of all let us note that operating costs account for more than 32 per cent of government spending, and it is in the area of operating costs that the government has allowed a growth of 56 per cent in the last three years. The government has allowed those costs to jump by 56 per cent during a period when it has implored the private sector to be more restrained in its own spending. If operating costs had increased only at the rate that workers' wages were allowed to increase during the time when the anti-inflation program was in effect, federal spending today would be $3.3 billion lower than at present.
I heard one of the faithful backbenchers on the government side ask where we are going to get these savings. My leader is on record concerning certain areas where we intend to make savings when we have the opportunity to write a budget. The hon. member is asking for details. We believe that a program
The Budget-Mr. Stevens
could have been instituted on Monday night providing for a public service hiring freeze. That is the first thing we would have done.


Jean-Jacques Blais: We have had one for three years.


Sinclair McKnight Stevens: The former postmaster general says they have had a hiring freeze. Surely even he could count up to 25,000, which is the number of extra employees his Post Office has hired since the 1970 period to which I have referred. When they talk about a public service freeze, what they mean is that the number of public servants has increased less quickly than it did the year before. What we are saying is that the number should not go up at all, and that there should be no replacement of the attrition that is normal in any public service. For example, there would be no replacement of the people who retire or of the people who choose to leave.
In short, over a one-year period there are approximately 20,000 employees who, for one reason or another, leave the Public Service. We simply propose that those positions not be filled. That would result, over a three-year period, in a reduction of 50,000 to 60,000 employees at the federal government level. That is what we mean by a freeze.
I think I should make clear that it would not be our intention to make any reductions in our military personnel, in our prison guards, or in our Mounties.


Joseph Jacques Jean Chrétien: That is already half of all the government employees.


Sinclair McKnight Stevens: Not including those fields, the figures I have given are figures which the Minister of Finance could have mentioned in his budget on Monday night had he had the courage to be a responsible minister rather than the part-time minister he has been.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: We would also propose that the personnel supports which go with the Public Service also be reduced. That is another cost saving which we would have proposed on Monday night. For example, it means there would be lower accommodation and equipment charges, lower transportation and communication expenditures. One must recall that taxi cab fares in Ottawa run up by the government are over $1 million a year.


An hon. Member:: Shame!


Sinclair McKnight Stevens: Additional reductions in spending can be achieved through sharply reduced advertising and consulting expenditures. If we are given an opportunity by the Canadian public to take over the reins of government in this country, there will be a great many Liberal advertising hacks, friends, and consultants who will lose their contracts pretty fast.
Significant savings can be made from the $50 million spending spree this government is on by implementing the concept of having sunset laws instituted, with zero based budgeting.
80033-68V4

April 12, 1978
The Budget-Mr. Stevens
Basically that means, rather than accepting last year's spending figures without question, we would propose that every new spending estimate be assessed as to why it is needed in the coming year. Unless it can be justified and shown to have significant value for the Canadian public, we would say it should be dropped and the saving should be passed back to the Canadian public.
The sunset law concept works the same way. No law should be regarded as so sacred that it cannot be reviewed. It is as natural to discontinue programs as it is to create them. Surely the government of the day should be assessing constantly the impact of the programs available, thus discerning if they are an advantage or a disadvantage, if they should be continued or dropped. That is what my party would have included Monday night, if we had had the opportunity of presenting the budget.
Many of the 400 Crown corporations were created under this administration. We believe some of them can be dismantled, integrated within departments, or sold to the private sector. Non-budgetary borrowings of Crown corporations must be curtailed, especially where the interest rate does not reflect market conditions.
The economic stimulus given by the tax cut, to which I referred coupled with reductions in federal spending, would combine to hold the budgetary deficit steady at first, and then to reduce it. New consumer spending would increase. Incidentally, it would increase sales tax revenue, excise tax revenue, and customs duty revenue. The newly created jobs would produce new taxpayers. As the business climate because more healty in response to increased consumer demands, there would be more revenues from federal corporation taxes. In addition to the savings of the expenditure reductions which I have outlined, federal spending on unemployment benefits would also drop the more we were able to get Canadians back to work in gainful jobs.
Perhaps I could simply sum up by saying: if we had the opportunity of presenting the budget Monday night, we would have made federal spending restraint a way of life in Ottawa.


Some hon. Members:: Hear, hear!


Sinclair McKnight Stevens: In our minds, the three-year program to which I have referred would be just the start. It would be the start of a comprehensive effort to reduce the federal presence in our economy, to reduce the dead hand of government which is stifling individual initiative and which is stifling people from achieving Canada's dream that has disappeared so much under this government.
We have referred to the rather small provincial sales tax reduction. There is room to reduce the federal manufacturing tax as well. For example, that tax is very inflationary, because at its 12 per cent level it goes on to the manufacturing level, simply to be magnified as the goods eventually go through to the consumer. When the wholesaler takes his add-on, when the retailer takes his add-on, and the province adds its provincial sales tax to that 12 per cent, in short it means that a 12 per cent tax at the federal government level results in a 28 per cent higher price for most Canadian consumers. There is room to

remove and reduce that type of tax to ensure that it is not as regressive as it is at the present time. That is our reason for proposing to reduce it. By reducing federal tax, it would be stimulative but non-inflationary, as far as the economy is concerned.
There is room for more imaginative corporate tax measures than the government has proposed. In that category, it is important that tax measures designed to encourage productivity within corporations should have a hooker on them to ensure those corporations respond in a manner which the government of the day feels is advantageous to Canadians. This has been advanced repeatedly in the House by the hon. member for Prince Edward-Hastings (Mr. Hees). Certainly the government is aware of it. Because he was a former minister of industry, trade and commerce, the hon. member knows how important it is to design a package of tax stimulants to receive the impact and the benefit we are looking for, and not take anything for granted.
I should like to touch upon a more meaningful manner of implementing incentives to encourage research and development. We are pleased the government went part of the way on Monday night to encourage research and development, but we feel much more can be done. There is room to allow for inflatioft in corporate accounting before paying taxation. This is long overdue. There should be meaningful ways to get Canadians investing, especially in Canadian small business. On Monday night we would have introduced some concrete measures to accomplish that end.
Perhaps what is most missing in the government's approach is a longer range perspective. On Monday night the Minister of Finance should have given the nation a five-year performance projection. Why must we always be dealing in fiscal and monetary positions over the next few months, without realizing that it is the two-year, three-year, and five-year positions which should be concentrated on, to ensure that today's severe problems will not be worse in three to five years down the road? That is why, Mr. Speaker, I feel it is most unfortunate that we do not have the five-year targets written into the budgetary papers presented Monday night. Let the country know the real growth targets of the government. What are the employment targets, the inflation levels? What does the government foresee in its own expenditure plans in the next five-year period?
Every industrialized nation is starting to set up such plans. Presumably this government would do it if it knew what to show over the next five years in those forecasts. The hard fact is that it literally does not know what to do tomorrow to help the Canadian economy, let alone what should be done five years down the road. In that context, Mr. Speaker, I would like to move:
That all the words after the word "That" be struck out and the following substituted therefor: "-in the opinion of this House the failure of the budget to curtail federal spending constitutes an admission by the government that it has lost control of the economy, and the temporary sales tax cut, to end before next winter, will not reduce unemployment and inflation, stimulate real growth,
April 12, 1978

reduce the budgetary deficit or stabilize the dollar, as would a minimum S2 billion permanent tax cut for Canadians."
My motion is seconded by my colleague, the hon. member for Prince Edward-Hastings.


Mr. Max Saltsman (Waterloo-Cambridge):: It has been my pleasure, Mr. Speaker, over the years to follow the hon. member for York-Simcoe (Mr. Stevens), and I must confess that at times I have had a twinge of conscience about doing so because it has offered me the opportunity of rebuttal and to take exception to some of his remarks, without giving him the same opportunity when I speak. I must admit, however, that I have no qualms today after listening to the hon. member for an hour and a half in his oration. As erudite and wise as the hon. member is, and as interesting as the things he says may be, since we are on live television I suspect it is a Conservative plot to make sure that the NDP do not have an audience.
It was my original intention to deal with the government's budget in my remarks; however, I think I must comment on some of the matters raised by the hon. member for York-Simcoe since they are being put forward as alternatives to the government's proposals.
In this day and age it is fashionable to talk about cutting back on government expenditures and such things. The first issue I would like to raise, and I think it is important, is the one and a half million people unemployed, most of whom are young men and women. Most of these young men and women have had some expectation of finding jobs for which they have been trained. But the private sector is not hiring at all. There are virtually no opportunities for our young men and women to find employment. Yet the proposal put forward by the Conservative party through the hon. member for York-Simcoe is that we put a freeze on public service hiring.
Let us look at the ramifications of such a proposal. What it means is that there is not going to be an opportunity at all for young people who are coming out of our school system. Is that what we want? We are not going to let them starve, so will unemployment insurance, Opportunities for Youth, or some similar organization make work projects for them? It sounds great when they say, "Freeze hiring in the Public Service," but translate that into what it means to the people coming into the labour market.
The government's budget is a prescription for disaster, but the kinds of suggestions that we are getting from the Conservative party are a double subscription to total disaster and are completely thoughtless. As the hon. member for York-Simcoe and everyone in this House knows, the mood of the public is against public expenditures. But standing up to this mood and saying, "Look, there are limits to public expenditures, we agree that there has to be efficiency in the public sector," is not enough. Instead, they pander to the worst kind of prejudice regarding this kind of situation and say, "We are going to freeze all hiring in the public sector." Think about what that really means.
I am sorry, Mr. Speaker, to have to disrupt my talk on the budget in order to deal with this, but I think it has to be dealt
The Budget-Mr. Saltsman
with because, again, it is this pandering to fears that exist in our society that is worrisome, and it should not happen. We talk about a permanent tax cut of $2 billion. That sounds great, but what happens if you have a tax cut of $2 billion? If you lock a government into saying, "We will not raise taxes regardless of what happens to the cost of living", it means the government's revenues are locked in. If I thought for one moment that the prescription of the Conservative party, the Liberal party or any party in the western world really had an answer to inflation-some of us have better answers than others-that would be fine. However, we all know that in the western world inflation is a very troublesome issue and nobody has a total answer.
If you have an adjustment because of indexing and you say there is not going to be a raise in taxes, what happens? The cost of living goes up; old age pensioners have to be told the government revenue is not there, so we cut back the old age pension; there is no money to give to the hospitals, so we will throw the patients out; we cannot deal with medicare; we cannot deal with people who need social services-throw it out; and we cut back on veterans' pensions. It sounds great when they say permanent tax cuts, but I would not like to have a permanent tax cut because it is dishonest. It cannot be done. If it is done, it is done at the expense of those people who look to the government to provide them with some of the services they are entitled to expect because of their own contributions to society. This is a great danger.
We all know there is somewhat of a right wing swing in the country and, therefore, there are certain kinds of prejudices. Instead of dealing with some of the prejudices and saying, "Look, while there is some truth, there is always some truth to these things, let us look at the whole picture", we have a situation where the Conservative party goes out and irresponsibly inflames these prejudices. It is irresponsible for that party to do such a thing, particularly when they are standing here today trying to criticize the government on the measures in the budget. There was hardly a word of criticism about the specifics of the budget.
For an hour and one-half I listened very carefully to the hon. member for York Simcoe, and he had hardly anything to say about the proposals in the budget. Although this is supposed to be the budget debate, he scarcely dealt with any of those issues. Particularly, he did not deal with the issue we thought he would have welcomed, the cutback in the sales tax at the provincial level in conjunction with the provincial governments. After all, this was a Tory idea that the Liberals stole. It is rather rude when you deny your paternity. I think you can make a great case out of it. It is quite obvious why the Conservative party had to deal with the other measures-they did not want to acknowledge the Liberal party was becoming as right-wing as they are.
Looking at the budget there can be no doubt that we are going into an election. In his opening remarks the Minister of

April 12, 1978
The Budget-Mr. Saltsman
Finance (Mr. Chretien), when he was being very sanctimonious, said:
Many of the suggestions made to me for this budget would be popular politically but unwise economically. I will not follow such suggestions. I believe this is time for Canada to face our problems critically and realistically.
I wish he had done that. I would have applauded him myself. He did not do it, however, but did just the opposite. He took a whole bunch of short-term, short-sighted ideas, put them into a package that he thought would have the maximum appeal for an election, and brought that forward as a budget. I want to examine each of those proposals he has put before us, Mr. Speaker, and that he has asked us to consider as some sort of answer to the deep problems facing the country.
When I first read the budget I had doubts about the authorship. I suspected that, rather than being written by officials in the Department of Finance, it had the hallmarks of the fine hand of Keith Davey and "Boots" Coutts. It was written in the marble halls of the Senate and the Prime Minister's office. It was a political document designed for political purposes. I think there should be resentment that, facing the kind of problems we face in this country, the government would stoop so low as to try to put this piece of cosmetics before us as a budget and as a way of suggesting it is going to do the job.
I suspect there would have been a great deal more criticism with a different Minister of Finance. Most people like and admire the minister. He looks very honest, and sometimes even manages to be one of the few on that side of the House who look somewhat humble.
On budget night we had a picture of self flagellation by the minister in admitting that the government in the past might not have done everything it should have done, but claiming they are now very contrite and humble and are asking forgiveness. We even had some pictures in the newspapers showing the minister as a human being with his lovely family. It was all part of an attempt to say that "what is past, is past, and now we are on the right road." I am sorry that the respect most of us have for the minister cannot be translated into any kind of respect for the budget he has put before us.
The old villains have been trotted out. It is the fault of everybody except "us chickens on the government side." There is a nice phrase where the minister said the money supply was increased too fast. I think he has been listening to too many of the speeches of the hon. member for York-Simcoe and has picked up his wisdom there. Sometimes it is hard to know them apart without a road map.
I am glad to see the hon. member for York-Simcoe in the House. I want to say something in connection with a remark he made during his intervention when he talked about the money supply and, in ominous terms, pointed out that the growth of the money supply was around 12 per cent.


Sinclair McKnight Stevens: Real growth, 2.6 per cent.


Max Saltsman: A real growth of 2.6 per cent, and that the rate of inflation was the difference between 2.6 per cent and

the money supply. What he was saying was that if the money supply had not been increased to 12 per cent we would not have had any inflation-that the entire inflation came about because the money supply was increased. That was certainly the impression he meant to leave.


Jean-Jacques Blais: It is what he said.


Max Saltsman: I ask the hon. member for York-Simcoe, as a reasonable man, is it not possible that if prices go up by 12 per cent, you have to increase the money supply by 12 per cent in order to get identical circulation in a society?


Sinclair McKnight Stevens: No.


Max Saltsman: Is that not a reasonable assumption? Why would you assume, if you saw an ostrich with its head in the sand, that what was poking out was its face?


Sinclair McKnight Stevens: You missed the whole point.


Max Saltsman: I am sorry. I shall have to take a private lesson on this because that is certainly the impression I got- that if only you could control the money supply that would be the end of inflation. This simple little manoeuvre does not occur to that stupid government over there. I am not saying the government has the greatest brain or greatest genius in the world, but if it were that simple the problem would have been solved a long time ago. After all, the opposition must have something to say. The minister did not stop with the money supply but pointed out the other people involved-too many young people coming on the labour market, too many women coming on the labour market, and too much appropriation in Canada. All these things are apparently the fault of the economy.
I am not prepared to say that everything that goes wrong is the government's fault, but a lot of it is. We know the world is facing serious economic problems, not just Canada, and not just the United States. I am not going to make the kind of comparison made by the hon. member for York-Simcoe, who pointed out that the rate of inflation in Canada over an 18-month period was 16 per cent, while it was only 14 per cent in the United States, and that therefore the AIB program is a failure.
The government is to blame for this. It has been wrong in virtually every one of its forecasts. It has learned nothing from the past, and does not seem to be willing to learn from the experience it is presently going through. It still pursues the same course.
In the election I hope the government or those others here do not win a majority, both for the sake of the country and of my own party. If they do, we will have a perpetuation of the disastrous social and economic policies we have seen over the years.


Joseph Jacques Jean Chrétien: Why did you chicken out last time?


Max Saltsman: I am sure they could teach us. They could teach us to be more successful as a political party, but I doubt
April 12, 1978

whether they could teach us to be more honest, more straightforward, or have better ideas.


Some hon. Members:: Hear, hear!


Max Saltsman: When you are not the winner, success is not everything.
I would like to look at some of the specifics in the budget just to show how effective some of the measures will be. The first one is research and development, and we will start with motherhood as it is always a good place to start. Everyone is in favour of research and development. After all, who can be opposed to extra grants and special benefits to encourage research and development? We are all in favour of it.
What has been the experience in Canada? Canada, over the years, has had one of the most generous policies of research and development of any country. Over the years we have allocated sums of money in the budget for research and development. It was one of the few items in federal budgets which was never spent because it was never picked up. It will not be picked up this time either. The problem is quite clear. You will get some research and development, and to the extent that it will create some jobs for Canadian scientists I am happy for that and I will not knock that, but to expect that there will be any kind of significant improvement in research and development is nonsense.
The reason research and development are not carried out in Canada is not because we have not tried to give encouragement; it is because most of our firms which are in a position to do this are foreign owned. And because of this they will not get into research and development in Canada, and they have not done any. Even where they have carried out research and development in Canada, we still do not benefit. We might get a few jobs for engineers and scientists, but the real benefits from research and development come with the creation of the mass production jobs. When the technology is applied to the plant, it will go back to the head office. There is no provision which says that technology must stay here.
There are fewer patents registered in Canada than anywhere else in the world. Even if something is invented in Canada and we pay for it through tax dollars, we do not receive the benefits from that sort of thing. Research and development are very valuable. Who will argue against research and development? But it is not true that we have done anything effective in that area, and we cannot do anything effective in that area until the government develops an industrial strategy which deals with the question of foreign ownership.
With respect to energy development incentives, it is remarkable that we are living in an age where, in less than 100 years, we have virtually consumed all the fossil energy which has taken nature billions of years to create. In one generation we have consumed it. Where do the incentives go for that small dwindling resource that is still left of fossil fuels? How much is left? No matter what we do or how we reduce our consumption, do we have more than 50 years or 100 years left? Is that
The Budget-Mr. Saltsman
where the incentives should go to reduce it even further than it is at the moment? My friend, the hon. member for the Northwest Territories (Mr. Firth) says, "Let it stay there, it will not go bad". It has been there a long time.
I think we need to give incentives in the field of energy. If we are going to do that, surely it should be in the area of renewable energy. There are lots of areas in which incentives are required. There are lots of jobs which could be created in the area of nuclear energy, tidal power, and solar energy, and work could be done in those areas. But we do not do that. Instead, incentives are given to the oil companies which really do not need it all that badly. If in fact it turns out these companies become very profitable, the province of Alberta will take it away from them, and the province of Saskatchewan as well, to a smaller degree; Saskatchewan is a little more sensitive. Those are two of the great items in the budget.
Let me demonstrate, Mr. Speaker, the difference and the attitude which our party would take on a certain item as compared to what the government has proposed. I am speaking particularly of railway investment. We know, and I think all of us acknowledge, that rail beds must be improved, the rolling stock must be improved. In an era of tight energy, rail transportation is an important development which we should be looking at, especially passenger services.
Our party proposes that one of the fastest and most useful ways to invest in the future is by putting people to work fixing up roadbeds, and getting the work done on the roadbeds now while the unemployment level is high. This is in preference to paying them unemployment insurance. We have suggested this before as a government program. I am not talking about doing it out of current taxation. The money could be borrowed, special bonds could be issued; after all, it is a capital investment. It would solve two problems. It would give us the type of infrastructure we need for the future, and it would correct this horror of unemployment of the present. But no, the government will not touch it. However, it has to deal with it in some way. It does this by giving the railroads a special concession of 6 per cent depreciation allowance, an extra allowance, if they will make some of these improvements.
What is the difference? If it is done on a national basis, it is done for the national interest. If it is done on a business basis through depreciation allowances, for example the CPR and the CNR later on, because they say they will operate just like the CPR-Gresham's law the bad drives out the good, it is not the good that reforms the bad-when will they do it? They will do it when it suits their corporate interest, when it suits their balance sheets, not when it suits the national interest. I am not critical of the way the CPR is doing it; this is the way the world is. It is the government which must be condemned.
In effect the government is saying if companies feel like going along with improvements when it suits their interests, then it could be done. We in this party think it is of critical importance to this country that these programs should be commenced immediately. That is an example of the difference in policies. Even if you take an idea which has some merit, by the time the government gets through twisting and distorting it

April 12, 1978
The Budget-Mr. Saltsman
and trying to find some way to make it fit into its precious free enterprise system, there is not much left of it for the nation.
Let us go on to another matter, that of the retail sales tax. I think this is not a bad measure, either as a temporary or a long-term measure. I want to say there is some benefit to this. If one is to give a fast stimulus to the economy, the most effective way to give that stimulus is to cut the retail sales tax. What is the consequence? Six months, nine months, depending on which option is taken. In the six months now when employment generally is a little better than average, the stimulus will occur.
This stimulus will work, but not to the extent the government thinks. This six-months period will end just before the winter. People will have made their large purchases. There will be ads in the last month saying "Quickly, Quickly, Quickly; Buy, Buy, Buy Now. Do Not Wait, The Tax Is Going Back On". Instead of the seven years of the pharaohs, the seven good years or the seven lean years, we will have six good months, and then six disastrous months in the middle of the winter when we need employment the most. That is irresponsible. That is short-term, and it is designed for no other reason than to make the government look better in the middle of an election period. I think it is wrong, and it must be said that the budget should not be used for this purpose.
I understand, to the credit of the minister, that he did not want a budget. That is the rumour. I do not know; I have not asked him. He has not volunteered the information. But I assume he did not want the budget because he knew the kind of budget for which he would have to be responsible. I guess the politicians and the boys in the finance department could have told him that there is not much that you can do with short-term stuff; longer term measures have to be undertaken if they are to succeed. But my good friend in the other place, Senator Davey, probably said, "We have to have a budget. We may not gain any points from this budget because it will be a little transparent, people will see through it, but if you go into an election and the Tories are screaming at you "How dare you go into an election without a budget" then it might cost us some votes. If you break even on the budget, you have done well.
They certainly are not going to win any kudos from this budget, but they may break even. People will say there is a lot of truth in what you say, and criticism is valid. They will say they can get a car for a couple of hundred dollars less. A break is a break. People are not ungrateful.
The budget was designed, and I greet this with some approval, to stimulate consumption. That is one of the chief problems as far as unemployment is concerned. Our society is suffering from an inadequacy of consumption. Our subamendment will try to deal with that in a somewhat better way than the amendment.
We have been suffering from under consumption. Consumption has to be stimulated. We do not object to the kind of stimulus such as the sales tax measure, but to the short-term

nature of it and the problems it will create. However, the problems will be created after the election. If they have a majority, they do not need to worry about it for four years.


Mr. Hnatyshyn:: God help us!


Max Saltsman: As my friend says, God help us! They are trying to stimulate the economy, trying to create consumer demand. Then they turn around and find here is another groups of disaffected people whom they think they can buy off very cheaply. The way to buy them off is to sweeten the provisions of the Registered Retirement Savings Plans. After all, it is mostly the rich who use them, not the poor.
By sweetening the benefits, they increase the amount of savings. On the left hand, they are trying to encourage consumption by cutting taxes. They do not know their left hand from their right. With their right hand, they are encouraging savings. What kind of a policy is that, with one offsetting the other? If the minister did not understand it or was not aware of the problem, you could say it was pure stupidity. It was not that, because the minister understands. For six months he has been going around the country, and he made reference to it in the question period today, saying that we in this country are saving too much money, that we should be spending the money, not saving it.
Saving is a private virtue, but if everybody starts to save, it becomes a public disaster. That created the depression in the thirties to some extent. We may in fact be saving ourselves into a depression right now. One reason we cannot recover as quickly as we could is because the level of savings is just too high.


Joseph Jacques Jean Chrétien: Hear, hear!


Max Saltsman: The minister applauds. I thank him for that. I know he understands. However, why perpetuate programs like the Registered Retirement Savings Program, and then sweeten it to encourage more savings at a time when the problem is consumption? This is the difficulty. How can anyone be asked to look at this budget with credibility and without suspicion, seeing these two contradictory items side by side? This is what makes the whole thing so difficult.
I want to conclude, not because there is not a great deal more to say, but I am not in the fortunate position of the spokesman for the official opposition in having unlimited time.
I do not have unlimited time. I also have a subamendment that I want to move.


Stanley Howard Knowles: You have another ten minutes.


Max Saltsman: My unofficial leader, the hon. member for Winnipeg North Centre has just checked the clock. He tells me I have another ten minutes. Now I want to talk about what we need to do.
We need to start thinking about what is happening to our society. We must stop kidding ourselves. The government kids us by saying "everything is all right, it is the money supply,
April 12, 1978

there are too many young people, too many people are getting into bed with each other and having too many children and we have to do something about that." They say that is creating all the problems. The opposition state we have too many public servants, we have to get rid of the public servants and we have to freeze taxes, without really thinking out the consequences about what they are saying. I know it is a difficult time we live in, difficult in the sense that a lot of the old rules just do not apply.
I am supporting a tax cut in my subamendment. A tax cut will do some good, particularly if it is as suggested in our subamendment, at the very lowest end of the income scale, and if it is coupled with a tax credit so that those who do not have the income to pay tax will get some benefit and do some spending.
We, in effect, have two societies side by side. Every time you cut the tax of one, you increase their savings. They have reached that kind of satiation point. They do not need things that badly. The other group needs things very badly, but does not have the money.
What we are seeing in our society is the old, old problem, except now it has become an economic rather than a social problem. It is a problem of income distribution. Those who have it do not need to spend, and those who would spend and get the economy rolling again do not have it. We need something similar to an internal Marshall Plan. We see no signs of it in anything the government proposes.
In fairness to the government, I must say one of the reasons I like the sales tax proposal, in contrast to some of the other proposals, is that it has a leveller effect. It tends to help people at the lowest end of the income scale as much as it helps the others. Of the options, that is the preferred one.
We need to have income redistribution in some way. That does not mean more incentives for people with money. We have to be prepared to tax those who have money, for their own sake. This is the great irony of our times. People do not want to pay taxes to help the unemployed. They do not want their money to go to some of the depressed areas of Canada. But it must go whether they like it or not, unless they are prepared to see people starving in the streets.
Those who are working complain about the taxes they are paying. They are paying unemployment insurance and other things. With better income redistribution, the consequence would be to put more people back to work. A lot of what they are now paying for would not be necessary. Even though taxes might seem to be a little higher, Canadians would be infinitely better off than now. The work would be shared. More people would be happy. The burden of maintaining society would be borne by everyone instead of a few.
There is no escape from this dilemma in a modern society. Either everyone works and everyone carries some of the burden, or those who are working carry the burden for those who are not. That is the choice. It is not a matter of saying "I am going to work, and the hell with the other guy." Fortunate-
The Budget-Mr. C. A. Gauthier ly our society has gone past that stage. We are much too civilized and decent to do that sort of thing.
When taxes were cut previously, it turned out to be a very powerful stimulus. Now, depending on whose taxes are cut, it can either be a stimulus or it can result in more savings. Much of the tax cuts of the past have not gone into consumption, but into savings. This has compounded the problem. For tax cuts to be effective, they must take place in areas where the benefits or the returns for those tax cuts are going to be spent. That is what must be done if you want to stimulate the economy and stimulate consumer purchasing power.
In many ways what I am saying is that income redistribution is no longer just a question of morality. It is no longer what the socialist believes in, that income redistribution is good, that one person should not be very rich while another is very poor. It is more than just morality more than just political ideology. Either it will be done or our society will not survive. It is an economic necessity. Therefore, when we look at these measures, we must look at them with great care to ensure that the tax cuts do not go into those areas which will compound the problem but go to those areas which will improve the situation.
Therefore, in the light of what I have said, I move, seconded by the hon. member for Winnipeg North Centre:
That the amendment be amended by changing the period at the end thereof to a comma, and by adding immediately thereafter the following words:
"and this House calls for such an income tax cut to be directed mainly to those in the lower income brackets, including the provision of tax credits to those who are below the exemption levels, to stimulate production and provide jobs for unemployed Canadians."
[ Translation]


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, every time I have had the opportunity of commenting on a budget, I always did take time to think of the minister who had introduced it. I have witnessed a succession of finance ministers in this House during nearly 16 years and I have noticed that they never lasted long in this office. This is why I am more inclined to sympathize with these men who have at least the courage to face up to a department which is perhaps fatal for any minister, since most of them lose their hides and those who do not succumb are disabled or sent to rest in the Senate, which is not a better fate. I do not wish that to happen to the present minister who is still young but I simply want to tell him before starting my remarks that I sympathize with him because he has been compelled by circumstances to present this budget. Some weeks ago people were wondering if a budget was actually going to be presented and the government did not seem to have the capacity or the will to do so. There was a change of mind every week on the subject and finally we end up with a semblance of a budget.
While reading over the financial statement of the Minister of Finance (Mr. Chretien) I acknowledge with him that we are living in very troubled times and that our problems are as

April 12, 1978
The Budget-Mr. C. A. Gauthier complex as they are difficult. With an unprecedented unemployment level that is a total of 1,045,000 workers seeking jobs and collecting benefits as long as they are eligible, not to mention all those who cannot draw any unemployment insurance benefits because their entitlement period has expired; with a still threatening inflation which will not slow down as long as the government does not have the courage to reduce the interest rates to allow consumers no longer to have to pay from 30 to 40 per cent extra for the goods they purchase, with export prices which have doubled on account of the excessive tariffs set by the government, with the quotas imposed on consumer goods regulating the distribution of the production to ensure the highest possible price, with this stubbornness on the part of the government not to grant milk and food products the necessary quotas so that the producer may match his production costs rather than having to curtail his production or even destroy it, these are all the reasons why we are going through a time when our economy is very weak and the problems we are facing today so complex and difficult. They have become even more serious because of the chronic incapacity of the minister to try and cure the evil at its roots namely, the excessive interest rates which are the prime cause for this whole economic disarray. I still remember the debate I had some ten years ago before the Standing Committee on Finance, Trade and Economic Affairs when the Bank Act was last revised. When it was suggested to remove any existing ceiling on the interest charged by the chartered banks, I told them at the time that Canada would face a rate of inflation higher than ever because of their mistake. That is what is happening today. The government did nothing to correct its mistake. I would even say that it made the situation worse by allowing the floating dollar. Our dollar is not the only thing that is floating now. Our entire economy is adrift while our Canadian dollar sinks and drowns. Our businessmen are sinking with it while our new Minister of Finance is fooling around on the deck of the ship claiming that everything is just fine and dandy. Except of course that our dollar is worth only 87 cents, our foreign markets are no longer competitive, the deficit of our balance of payments is enormous, our industries too poor to modernize their facilities. Other than that, no problem.
His mini-budget gives us some reason for hope. The only measure which, I think, could or would attract the attention of Canadians. In his speech the minister said
Any further stimulus should obviously be fast-acting. It should encourage consumer spending, not more spending by government...
That is what he said, but we shall see later on.
A reduction of retail sales taxes fits these requirements best.
However, everybody knows that the retail tax is under the exclusive jurisdiction of the provinces. The minister intrudes without hesitation in the exclusive jurisdiction of the provinces and tells them: Here I am the big federal chief. And he lays it

on thick. As elections are coming I want to give the impression that I relieve the burden of tax-payers by asking the provinces to reduce their retail sales taxes by 3 per cent. I shall repay part of it but the provinces will have to make up the difference. What a magnificient gift. Not only he intrudes in the jurisdiction of the provinces but he asks them to pay for it. Listen to what the minister says to the province:
I have offered to compensate them for a reduction of two percentage point in their retail sales tax for a period of six months.
Do you realize how long the long-term policies of the government are for; six months!
In return, I have asked them to bear the cost of either a further one percentage point for the same period, or an extension of the two-point cut for a further three-month period.
And the minister seemed surprised by the refusal of the province of Quebec faced with such an intrusion. Have we lost all the common sense of the Canadian confederation concept because of our federalist mind? Do we know at least that we have today a real Confederation made up of autonomous provinces that want to keep their autonomy? If we want Canada to survive we shall set aside our strong federal state to truly live a Confederation that commands the integrity and respect of both government levels. Why did the Federal Government not reduce the excise tax which is hidden in the price of goods so that nobody notices it?
Why not remove the tax on building materials? Why not even reduce the tax on gasoline when it is levied by both levels of government? They take their own share of the tax on gasoline, considering that we are paying today more taxes for a gallon of gasoline than for the gasoline itself. Mr. Speaker, one of these days one might suggest designing an engine which would run on taxes rather than on gasoline and that might prove to be more economical. At least the government would stop invading provincial fields of jurisdiction since they are partly or totally under federal jurisdiction. The government is even more ridiculous. It reduces the retail sales tax by 3 per cent for six to nine months after allowing the Bank of Canada to raise its interest rate to 8.5 per cent. In other words, Mr. Speaker, the consumer who wants to save 3 per cent tax during this period of six months will be forced to pay an additional 1.5 to 2 per cent in interest for five, ten, or 20 years to obtain the goods available during those six months.
That is how the government takes Canadians to the cleaners by giving them a mouse and having them pay for an elephant. And the minister goes on to say that the consumers have to be the ones who, by spending more, will stimulate the economy during the next six months. The minister sets at $1.1 billion the revenues he will draw from these operations. I doubt it very much. Even if it were true, the provinces will still have to pay $300 million and the federal government will pay only $800 million, including $350 million off the estimates of Treasury Board. The most tragic part of it all is that consumers are asked to go deeper in debt. And the example is set in
April 12, 1978

high places, Mr. Speaker, since in 1977-78 Canada was going into debt to the tune of $25 million every day, whereas in 1978-79 we will be up to a daily rate of $31 million. As we see, everything is fine, thank you. We are progressing, Mr. Speaker, we are getting closer to the day when we are totally broke.
When we know that the interest on our debt accrues at a rate of $18 million every day, it makes one wonder, Mr. Speaker. In 1978, we will pay every day $18 million in interest on our debts. In 1975, Canada's debt was $19 billion while it was $39.8 billion as of March 31, 1978. On the same day next year, it will be $51.3 billion. When will we see the end of it, Mr. Speaker?
Did you know that in this day and age debts are considered as assets? People have laughed a lot about "Caouette's buck", but "Chretien's floating buck" will make them laugh to death, because it is worth even less. With 1,045,000 unemployed, the minister has no solution other than to ask people to spend more. Increase your consumption, increase your debts, your children will pay the interest for you if they are still able to do so! The minister blames workers for not spending enough and those who have savings for not trying to invest. For my part, Mr. Speaker, I say that before the minister makes his calculations, he should meet the families who want to concentrate their savings to be able to use them for members of the family and who have a family deposit or account so that if one member of the family needs to buy a car or furniture, he can take what he needs from the family deposit and then later repay this amount, without interest charges, of course. The family deposit is part of the family and does not call for interest charges.
Many people already do this, Mr. Speaker, and I know of some people who have built a house for their son with their family deposit because it had become large enough-this can happen when 15 or 20 people make a deposit each month. This young man paid $30,000 for his house, and otherwise it would have taken him 30 years to pay for it. At the current interest rate, he would have paid $90,000 in 30 years. This young man built his house with the family credit. He will pay exactly $30,000 for it by making a monthly deposit of $200, and in seven and a half years, he will own his house. If he had gone to a finance company, he would have finished paying for his house in 30 years just before his death and he would still not be a homeowner. Indeed, this is what happened to a friend of mine who died recently. He had worked hard all his life and raised nine or ten children before dying suddenly and his wife's only consolation when I saw her was that at least his death benefits had cleared the debt on their home. This man worked all his life and he had to die to leave something to his children.
I say that we must educate people about this and if we can convince them to reduce their expenses for five years to accumulate some capital, this would kill off all the little
The Budget-Mr. C. A. Gauthier financial plans under which money is available at interest rates of 20 and 24 per cent. We would eliminate them if we could convince the population to do this. Mr. Speaker, this is social credit and it is applied very successfully in certain areas. In this way, there is no perpetual debt. In this regard, I have here a newspaper article written by Richard Johnson which states the following:
The debt of every Canadian worker amounts to $10,600.
According to the latest Statistics Canada figures, the Canadian debt on the international market has just reached $106 billion, which is an increase of 10.4 per cent over last year.
An increase of 10.4 per cent over last year is rather high, Mr. Speaker.
This simply means that every one of the ten million Canadian workers now owes $10,600 compared with $9,600 last year. A lot of good that's doing us! And then one wonders why the Canadian dollar is losing more and more value!
That amount of $106 billion represents the total debts of governments (federal, local, provincial), corporations and individuals to foreign lenders.
All we are trying to get abroad is money, because we are too cowardly to do so at home.
Canada's debt abroad has increased very fast in recent years because corporations and various governments in particular have borrowed heavily on international markets and on the New York market. Our debt has increased by more than $18 billion in the last three years alone whereas it took 15 years to reach such an amount.
The reimbursement cost for those loans in U.S. dollars, Swiss franks, German marks and Japanese yens will get increasingly higher as our dollar loses value. For example, last year Canadians paid about $9 billion in interests alone on borrowings abroad. No doubt you will be happy to learn that this interest is paid out of our taxes, our income tax and the goods we buy. The more our dollar gives down, the more we will have to pay in interest on our debt.
And so, servicing the debt costs every worker about $900.
Everyone is convinced today that shockingly high interest rates are the first cause of inflation and the ruination of our economy. What does this government suggest to fight against inflation? It increases interest rates even further. Today, a young man who wants a house will have to pay three interests to big business and one to the builder. Everyone is aware of that. Everyone understands it. The figures prove it and people recognize it. That is a fact. Everyone agrees that it is senseless, that the government should lower or freeze interest rates. Those infamous interest rates, and what's more, they are capitalized, are the ruination of our people.
The minister says that in 1974-75 he reduced the growth in expenditures by 26 per cent. That sounds good. But let us have a closer look. He reduced the growth of expenditures by 26 per cent; in 1975-76, by 18 per cent and by 10 per cent in following years. But it all depends on the rate of growth he had foreseen. Was it 20, 30 or 40 per cent? It would be interesting to know, but he does not say.
If the minister wanted to be honest with the people, he would use language they understand and tell them what the annual rate of increase in expenditures is, since, after all, they go up every year. So why speak of a decrease? Always a word to please. Why speak of a decrease when in fact it is an

April 12, 1978
The Budget-Mr. Jamieson
increase? In many services anyway. Of course, our friends must be protected, that is the civil service. All the former hon. members are there now, of course. We are well managed by a bureaucracy that has but one purpose in mind: that of doubling, if at all possible, the number of civil servants. The officials who prepared the minister's statement have thought of everything so as to make our economy look as if it was progressing whereas in fact it is seriously regressing.
A few years ago, we had one public servant for five people, today the ratio is one to three, and tomorrow it will be one to one. Meanwhile, the minister is trying to convince the public that he is controlling expenses. Expenses cannot go down if the number of public servants double. When the federal administration alone costs $2,000 per capita, we cannot be made to believe that this is normal. Mr. Speaker, as time is getting short, I would like to touch upon my last item, concerning the grants offered to research. Public servants certainly will not get any grey hair thinking about the incentives announced by the minister for research and development. Whereas there were numerous reports of the frustration encountered by university researchers because of the 20 per cent and over cut in medical research by the Canadian Medical Research Council, the minister purported to be the good Samaritan of research and development in industry, usually the larger, rather than the small or medium. While it may seem that we are giving with one hand, we are taking money away from our most productive researchers, which ends up costing millions of dollars to the taxpayers. Indeed, after the government has spent considerable sums of money on training and on the purchase of laboratory equipment, it cannot earmark the amounts necessary for the actual research once all the arsenal is there.
In that regard, Mr. Speaker, the Social Credit Party of Canada shares the view of the Canadian Federation of Biological Societies which repeatedly asked government to increase R & D funds to 2.5 per cent of the GNP by 1985, which would eliminate the unforeseen changes of the Minister of Finance, which scientists end up paying for in the wake of an election. I reiterate to the minister that he must recognize that his first budget can only disappoint the Canadian population and possibly make it reject his government.


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, my first words today must be ones of compliment and congratulations to the Minister of Finance (Mr. Chretien) who has shown the courage, under very difficult conditions, to be what he describes himself as being-a thoroughly responsible Minister of Finance.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Donald Campbell Jamieson: Hon. members opposite have a choice this afternoon. Either they can listen to a very serious discussion on the international situation as it relates to the economy or, if they want to mix it up a little, I would be very glad to do that too. Since I understand we are a little on the short side for time, I hope they will bear with me and give me an opportunity to resist the tendency to point out in much detail some of the errors in their ways.
In any event, this afternoon I wanted to talk primarily about the context of the international situation as it relates to the Canadian economy. Before I do that, and in adding to my congratulations to the Minister of Finance, I want to speak as a Newfoundlander. In that capacity, it is with gratitude that the people of my province thank him for a reduction in the highest sale tax in the whole of Canada by a full 3 percentage points, without any payment by them for that particular gesture.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: I find it rather odd that hon. members on the other side of the House would wish to dismiss a very significant reduction of that magnitude, from the highest in Canada at 11 per cent down to 8 per cent, when they were singularly silent a few weeks ago, when hon. members from Newfoundland on this side of the House were complaining that the Tory provincial government of Newfoundland had increased its sales tax by 1 percentage point. Not only have we rolled back a Tory increase of 1 per cent which occurred two weeks ago, but we have taken it down a full additional 2 percentage points.


Mr. Munro (Esquimalt-Saanich):: For how long?


Donald Campbell Jamieson: Having been in Newfoundland only a few days ago-


Donald W. Munro: For how long?


Donald Campbell Jamieson: I will come to the hon. member's question in just a moment. I suspect if that gentleman were given a roomful of ponies, he would pass them up for the manure.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: The hon. member should listen to what is being said.


Donald W. Munro: That is what is being spread over there.


Donald Campbell Jamieson: I must confess the hon. member is not contributing much to the calibre of the debate by his interruptions. He was asking how long the tax cut will last. I will get to that in a moment. However, I was in Newfoundland as recently as this past weekend, and the general level of concern about the sales tax was the biggest single item on most people's minds-that it had been escalating so steadily over the past three years. In one fell swoop, the Minister of Finance has rolled back that rate to where it was three, four or even five

April 12, 1978

years ago. That is a very profound change in the cost of living of a large number of Newfoundland people.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: The hon. member asked: "For how long?" It seems to me the Minister of Finance deserves commendation and not criticism for being very specific in what he wished to say about the sales tax and the duration of this particular cut. It could have been done in a way in which there would have been an implicit arrangement between himself and the provinces, but no specific declaration as to when it was going to expire. In other words, we could have played hanky-panky between the public and ourselves. At least we could have let them think that it was going to continue interminably. That would have had two effects. In the first place, it would not have been the appropriate course to take. In the second place, as the Minister of Finance said yesterday, surely it is the proper response, in terms of the requests and demands that we stimulate the economy and consumer spending, to indicate that there is a period over the next six months when consumers can take advantage of a very significant saving. The more significant it becomes, the larger the items that are purchased. Therefore, really it makes good sense to say that this measure is going to be in effect for a fixed period of time; that "here is your opportunity to take advantage of this."
Furthermore, to suggest the end of the six-month period will be the end of federal-provincial co-operation is to give the lie to the tremendous progress we have made as a result of, for example, the first ministers' conference and other discussions over the last several months. This consultative process will proceed. There is nothing to suggest, at the end of the six-month period, that there will not be other new, imaginative and creative ideas flowing from this unique process, which was introduced by the Prime Minister (Mr. Trudeau), and reinforced in these last few days by the Minister of Finance.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: I should like to say something else in reply to hon. members who say: "For how long?" Let them also ask the provincial governments: "For how long?" Let them remind themselves and the public that these are provincial sales taxes which are being reduced. There is nothing in this law, or in any other piece of legislation which is likely to be introduced, that will compel any province, including Newfoundland, to restore the 3 per cent at the end of six months or not to take any other kinds of measures.
In my judgment, as well as the judgment of many provincial ministers of Finance, the vast majority of the economists who have commented upon it, and the editorial writers who have commented upon it, this was a creative, new approach which reflected not only the wisest and best means of getting additional funds into the hands of consumers, but at the same time ensured that this government meant it and that the provincial governments meant it, when several weeks ago they said that they were prepared to embark upon a new era of co-operation.
The Budget-Mr. Jamieson
This is a prize example, and I predict that it is the first of many which will flow from it.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: When I rose, I indicated that I intended to talk primarily about the international situation as it affects the Canadian economy. Unfortunately, and perhaps inevitably in this kind of debate and atmosphere, there is an unreasonable tendency to assume that in some way or other Canada exists in a vacuum; that we are totally immune to the forces at play in an unprecedented way in all parts of the world; and that it is possible for us, through our own actions within Canada, to turn a situation around that is bedevilling societies and economies in every developed country of the world, and which in fact in some of those countries is actually threatening their democratic stability. One has only to look at the recent developments in many countries of the European Economic Community to see that they are in very serious difficulties, that there is a frankness in admitting this, and that in fact, as long as that situation continues, it is going to be impossible for any single country such as Canada to extract itself totally from this situation. Now, this is not to say that we cannot take measures within this parliament and the provinces to improve our position.
I suggest, Mr. Speaker, that not only this Minister of Finance but his predecessors also have taken a whole series of measures which, though ridiculed on the other side of the House, have, in the eyes of any objective assessment that you wish to make, produced an economic performance for Canada over these last number of years that the OECD and all the other international indicators show is better than that of all of the countries in the European Community and in the OECD membership itself. These are facts, and I ask the hon. members to look at them.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: Only this morning when I was in New York at the United Nations, on entirely different government business, I had an opportunity to discuss this matter with a number of people and to learn what is happening in the international community. I want to say to hon. members, and I put this to them, that despite the seriousness of our problems in Canada, if you were to measure them against those, for example, of the United States-where only yesterday the President had to make a further appeal to his countrymen to curb their inflationary tendencies and to take the measures necessary to curb rising prices in that country-we have done very well.
In the European community just last week when the nine leaders met in Copenhagen, they resolved that during the next 12 months they would have an increase of growth in their productivity of something in the order of 41/2 per cent. Taking that yardstick-a sober assessment by those leaders of what they are going to be able to achieve-surely it is not unreason-

April 12, 1978
The Budget-Mr. Jamieson
able to commend the Minister of Finance for saying that he is not only going to meet the world average in terms of growth, but also he is anticipating that our situation will be modestly better than that of the average of the countries in the OECD.
I realize that it is not as exciting to talk about the world situation as it is to hammer away at this or that matter which has a purely domestic application, but the truth of the matter is that until members of this House and the people of Canada realize it, we are not going to be able really to undertake the kind of concerted policies which have widespread support and that will bring us out of this extremely difficult world-wide situation.
I see next to me the Minister of Energy, Mines and Resources (Mr. Gillespie), and I am sure that he would confirm that the energy problems that we are facing in Canada-whether they are of tremendous magnitude or not-by world standards are much less onerous upon the Canadian consumer than those, for example, in many of the countries that I have mentioned. It is pointless for us to confuse the public or delude the public-as is often done by members opposite, and perhaps, in fairness, by all members of this House-into assuming that in a world in which there has been a quadrupling of oil prices in the last three to five years it is possible to shield consumers in this country from the effect of something which occurred in the Middle East and which is very much wrapped up in the international situation.
Surely we can pass on to the Canadian public the message that there have been fundamental changes in the world's international economic structure. Unless we have the willingness and determination in Canada, first of all, to recognize this, and then to take the steps that are necessary to counteract the problem, then not only within Canada but in the western world in general we are not going to achieve the kind of progress that all of us are anxious to have. It will not be solved by some of the measures which have been proposed by members opposite which, surely, must open them up to the accusation that they are, in fact, speaking out of both sides of their mouths at the same time.
To suggest-as has been done in this House, I understand, as recently as today-that you can introduce a $2 billion permanent tax cut and at the same time not affect the level of transfer payments, the level of service to the Canadian public, or in any other way affect the public in Canada is at the very least hypocrisy. At the very worst, it is deception of the worst possible kind, because I say it cannot be done. Hon. members by their actions daily demonstrate the inconsistency of their position. On the one hand you have this insistence or this pledge for significant across-the-board tax cuts of a permanent nature, and on the other hand they say that all of these are going to be achieved without any of the reductions that I have suggested. They say in a very general way that they would curb government spending, one after the other, day after day, week in and week out.
It would be an interesting exercise to total the value of the new demands which continue to be made by hon. members opposite on the public purse. Again, it is fair to say that you

cannot have it both ways. You either have to understand that there must be limitation, or you must be prepared to recognize the larger realities to which I have been referring. The opposition has consistently refused to do that.
What is going to happen in terms of the international community, and what hope is there if, as has been said,-not only by me but many others-that at least part of the answer, a significant part, lies outside of Canada's direct control? What are the prospects that those actions will be undertaken by the world community? I think those actions are very good. I think the prospects are very good. Canada has been recognized internationally by all countries, both developed and developing, as a country which has an excellent record in terms of economic management and the perspective that we are bringing to world problems.
If hon. members want to look askance at that kind of remark, they do not have to rely on me for the answer. They can look at the comments made by world leaders at the summit meeting which was held in London last May or June, at the OECD, and most recently, right here in Ottawa, by the vice-president of the United States when he made some most complimentary and highly deserved comments with regard to the competence and respect with which the Prime Minister of this country is held in the international community.


Some hon. Members:: Hear, hear!


Donald Campbell Jamieson: I must say, Mr. Speaker, I have had a kind of nightmare-if 400 could describe it as such-but, certainly, it is a very disturbing prospect that comes to me when I think of the next summit meeting which is going to be held in Bonn. Just imagine the situation where the world leaders of the developed countries sit down-Giscard d'Estaing of France, James Callaghan of Britain, Mr. Fukuda of Japan, President Carter of the United States, Mr. Schmidt of West Germany, Roy Jenkins of the European community-and then they pull out the Canadian chair, and the representative speaking for this country and holding up our end of the plank is-Joe Who?


Some hon. Members:: Oh, oh!


Ramon John Hnatyshyn: You are going to lose your job.


Donald Campbell Jamieson: I can say that the hon. member opposite is not going to have that kind of nightmare visited upon him. The hon. member sounds like a stick rattling around in a half empty bucket of swill.


Ramon John Hnatyshyn: Get on with it.


Donald Campbell Jamieson: We are trying to have a reasonable debate on this subject.


Ramon John Hnatyshyn: Why don't you sit down then.


Donald Campbell Jamieson: Let us try, at least for the few minutes that are left-


An hon. Member:: You are on national television; carry on.


Donald Campbell Jamieson: I have not even thought about it.
April 12, 1978


The Acting Speaker (Mr. Turner):: Order, please. The hon. Minister has the floor for the purpose of making a speech, and I suggest we all listen to him.


Donald Campbell Jamieson: What I wanted to say is that the international negotiations presently under way do provide some grounds for the hope that we will emerge from this situation starting this year. It is going to call for a tremendous amount of cooperation by all of us. Canada cannot do this on its own. If we are going to get a solution to the balance of payments problem, one has to recognize that it must be done in concert, particularly, with the European community and with Japan.
I am not sure if the statistic is familiar to all hon. members opposite or, indeed, to members on this side of the House, but it we look at Canada as an exporting country which, of course, is what we are, 87 per cent of everything that we export from Canada-everything-goes to either the United States, the European Economic Community, or Japan. That is a simple, straightforward statistic which we must recognize, and as long as there is slack in the European Community, as there is at the present time, as long as many of their basic industries are functioning at as low as 60-65 per cent capacity, as long as there are the difficulties which Japan is experiencing and, incidentally, as long as there is the confrontation between many of those countries as to how this extreme balance of payments problem is going to be resolved, then it is not going to be possible to get the kind of solutions and the kind of answers we want. I think, happily for all concerned, that this is now more in the minds of the world leaders to whom I have made reference, than at any time previously.
The decisions made in Copenhagen a few days ago may not be ones that will capture the headlines in Canada, but they are at least as important as many that are made within this country. Similarly, that summit meeting to which I referred will, as the indication in the press release said a few days ago, direct itself very clearly to the establishment of goals for increases in productivity, among other things. May I say parenthetically here, Mr. Speaker, that when members opposite talk about the low productivity in Canada, they should look at the most recent figures that have been provided, which show that not only in the last few months, or even in the last year or two, has our productivity record been better, but, in fact, over the last seven or eight years, with a couple of relatively short aberrations, there has been nothing particularly wrong with the general productivity levels in Canada in relation to those of the other developed countries.
What I am saying here is that I do not believe that it is valid to argue that in some way or other this country has lost its dynamism in terms of export markets and the like, but that in fact it is going to turn around as these markets continue to be more receptive and as their own economies improve. I do not particularly care what kind of proposal is put forward for stimulation of productivity and the like; it is not going to bite
The Budget-Mr. Jamieson
as firmly as it should in our traditional markets until cooperatively we manage to bring the whole world economy along with us.
That has been the policy of this government and it is the policy of the Minister of Finance. I think it is certainly showing results. I repeat some of the statistics I referred to earlier. With regard to any measurement you wish to apply, obviously the Canadian performance has been as good as or better than most of the other countries in the developed world.


Sinclair McKnight Stevens: Over what period?


Donald Campbell Jamieson: I would think if you took the last ten-year period there have been very few times when the Canadian performance has not been at least as good as, and in some cases better than, other countries, even including the United States.


Sinclair McKnight Stevens: What about the last two years?


Donald Campbell Jamieson: The hon. member talks about the last two years. Had he been in the House earlier he would have heard me acknowledge that for the last two years there had been even more acute and special problems. If the hon. member looks at these problems objectively-which I admit is not an easy thing for him to do-he would see that in that period also, not only have we had our difficulties but they have been matched in all countries of the world, including, if he wishes to look at today's newspapers, the United States. President Carter made a very important statement yesterday with regard to the concerns in that country about what has been happening on the economic front because of a general failure-I believe these are conclusions one can draw from his remarks: everybody is to be concerned and conscious of the energy crisis and the necessity to control-not to curb or to wipe out aspirations-but to limit the demands everybody is making on the economy.
We have been doing and saying the same thing for many years. I repeat that many of the things now being proposed and introduced in other countries, and upon which consultations are taking place with Canada virtually all the time, are measures which we introduced in this country many years ago. They have come to be highly regarded, and other countries are proposing to employ them.
I believe we are going to be summoned to the other place in just a moment-


Sinclair McKnight Stevens: Permanently?


Donald Campbell Jamieson: I can assure the hon. member I would not enjoy being in the other place-unless he is talking about being with him somewhere down below-not over there.
In all seriousness, Mr. Speaker, the message that I wanted to leave with hon. members, and I suppose it is an unreasonable expectation that it will be very receptively greeted by the other side, is that if you look at the circumstances of world economies today, you cannot fail to conclude, as we have been saying consistently on this side, that while we have problems in

April 12, 1978
The Budget-Mr. Jamieson
Canada, the Minister of Finance is seeking to diminish them. While we have those problems, we have been coming through this extremely difficult international period in a manner which is consistently better than most other societies.
I end with an invitation to hon. members to analyze the problems of the 30-odd member states of the OECD. Take each of them individually, starting with the United States and going through all the countries of Europe. Put down their record of performance and their present economic position, and then put the Canadian performance alongside. I ask hon. members under these circumstances to suppose they have the opportunity to switch Canada's problems for those of any of the other developed countries-


Sinclair McKnight Stevens: What about Switzerland?


Donald Campbell Jamieson: I said the OECD. The hon. member asked what about Switzerland, but I am not sure he would even want Switzerland. I should like him to make that comparison. If we had the opportunity to switch Canada's problems with those of another country, I think the vast majority of Canadians would decide, without qualification, to take our own problems, because we continue to be one of the most fortunate countries in the world.


Some hon. Members:: Hear, hear!


Mr. Friesen:: I rise on a point of order, Mr. Speaker. I think the House deserves the opportunity to thank the minister for all those detailed and concrete statistics he gave to support his broad generalizations.


Donald Campbell Jamieson: Mr. Speaker, on that point, I agree. I should have given the statistics. They are not very comprehensive and will be on the hon. member's desk within the hour. If any other member opposite would like to see the supporting data for anything I have said, I will be glad to provide it.


Joseph Jacques Jean Chrétien: On a point of order, Mr. Speaker, perhaps we can consider it six o'clock, because I understand there is a problem at this time-


Mr. Speaker:: I understand it is unfair to any person participating in the debate to expect him to commence his remarks at this moment, knowing that a message will arrive summoning us to the Senate for the purpose of Royal Assent. For the benefit of members attempting to organize their time, I think there is some merit in the suggestion of calling it six o'clock. The difficulty is that we must wait for the message to arrive.


Joseph Jacques Jean Chrétien: Mr. Speaker, I want to say to the opposition that we want to collaborate. I understand it is the opposition leader who wants to speak tomorrow and we want to be sure
that he does not lose his position. We would love to see a presentation of his fiscal policies because that will provide us with a great deal of ammunition.


Stanley Howard Knowles: Mr. Speaker, there is a verse in the Book of Revelation which says that there was silence in heaven for the space of half an hour. I do not think it would hurt us to be silent for two or three minutes.


Mr. Speaker:: Order, please. I do not think it will hurt a bit, but I do not think it is possible.


Ramon John Hnatyshyn: Mr. Speaker, I simply rise on the point of order by the Minister of Finance (Mr.Chretien). I will convey to the Leader of the Opposition (Mr. Clark) his comments. At last he is prepared to listen to some advice which has been long overdue to him in view of what he has said in his budget. To what the member for Winnipeg North Centre (Mr. Knowles) has just said, I say "Amen".



THE ROYAL ASSENT

[Stage Direction]
A message was delivered by the Gentleman Usher of the Black Rod, as follows:
Mr. Speaker, the Honourable Deputy Governor General desires the immediate attendance of this honourable House in the Chamber of the honourable the Senate.
Accordingly, Mr. Speaker with the House went up to the Senate chamber.
And being returned:
Mr. Speaker informed the House that the Deputy Governor General had been pleased to give, in Her Majesty's name, the Royal Assent to the following bills:
Bill C-25, an Act to establish the Northern Pipeline Agency, to facilitate the planning and construction of a pipeline for the transmission of natural gas from Alaska and Northern Canada and to give effect to an Agreement between Canada and the United States of America on principles applicable to such a pipeline and to amend certain Acts in relation thereto-Chapter No. 20.
Bill C-38, an Act to amend the Cape Breton Development Corporation Act- Chapter No. 21.
Bill C-41, an Act to correct certain anomalies, inconsistencies, archaisms, errors and other matters of a non-controversial and uncomplicated nature in the Revised Statutes of Canada, 1970, and other Acts subsequent to 1970-Chapter No. 22.
Bill C-1001, an Act respecting Bell Canada.
Bill S-10, an Act respecting the Royal Canadian Legion.
Mr. Speaker:: It being six o'clock, this House stands adjourned until 2 p.m. tomorrow.
At 6.08 p.m. the House adjourned, without question put, pursuant to Standing Order.

Thursday, April 13, 1978