1978-01-25

ROUTINE PROCEEDINGS


Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity, namely, to move, seconded by the hon. member for York-Sunbury (Mr. Howie):
That this House views with fear and alarm the course followed by President Castro and the Republic of Cuba, recently intensified, of using the armed forces of that country to operate in Africa and elsewhere to bring about the downfall of administrations that are not communist.
Furthermore, despite the fact that such conduct by Cuba is a continuing threat to peace, the high degree of public admiration and friendship shown to President Castro by the present government of Canada in the last three years is being interpreted in Africa and South America as approval by Canada.
Therefore, in the hope that it will contribute to removing any misunderstanding of Canada's position, this House declares that it is unalterably opposed to and condemns what is being done by Cuba in this regard.


Mr. Speaker:: Pursuant to Standing Order 43, such a motion can be presented for debate only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FAILURE OF U.S.S.R. TO WARN CANADA OF IMPENDING CRASH OF SATELLITE-MOTION UNDER S O. 43
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I rise under the provisions of Standing Order 43. In order that all members of the House of Commons can add support to the Canadian government's note of protest to the U.S.S.R. concerning that government's inexcusable failure to warn Canadian officials of the impending crash of a potentially dangerous satellite, I move, seconded by the hon. member for Northwest Territories (Mr. Firth):
That this House express its serious displeasure with the government of the U.S.S.R. for failing to warn Canada of the dangers posed to the Canadian people by the satellite which crashed on our territory.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CAPITAL PUNISHMENT
Mr. A. D. Alkenbrack (Frontenac-Lennox and Addington):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity. Recent legislation of the government regarding the abolition of capital punishment has obviously resulted in an increase in capital murder, particularly the murder of police officers. I move, seconded by the hon. member for Simcoe North (Mr. Rynard):
That this parliament immediately amend the Criminal Code and reinstate capital punishment as the ultimate, permanent and effective deterrent to capital crime.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


AGRICULTURE
Mr. Armand Caouette (Villeneuve):: Mr. Speaker, I seek the unanimous consent of the House, pursuant to Standing Order 43, to deal with a matter of urgent and pressing necessity.
In view of the financial difficulties industrial milk producers are faced with as a result of the government's inconsistent dairy policies, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That the House urge immediately the Minister of Agriculture to take the necessary steps so that dairy producers may obtain the quotas or, either through subsidies or otherwise, the incomes they need to maintain a decent standard of living.


Mr. Speaker:: Order, please. The House has heard the hon. member's motion. Pursuant to Standing Order 43, this motion
80027-71 Vi

January 25, 1978
5.0.	43
requires the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDIAN AFFAIRS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the urgency Yukon native people place on the settlement of their land claims and their desire to have these claims settled as soon as possible, before the construction of a northern pipeline, and in view of the Dean Lysyk inquiry recommendation that a second stage inquiry be conducted, since this has not taken place, I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That this House is of the opinion that the government should begin negotiations immediately with a view to settling the land claims of the Yukon native Indians in principle prior to the commencement of construction of the proposed northern pipeline.


Mr. Speaker:: Such a motion can be presented at this time, pursuant to the Standing Order, only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
[Stage Direction]
5.0.	43
Mr. Bill Kempling (Halton-Wentworth):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. As the December, 1977, Economic Outlook published by OECD has painted a particularly pessimistic picture for Canada in the coming year, including a rising unemployment level, soggy real growth, and contains the observation that "the Canadian economy seems likely to continue to face difficult problems" notwithstanding the budgetary measures announced in October, I move, seconded by the hon. member for York-Simcoe (Mr. Stevens):
That there be an immediate reference to the Standing Committee on Finance, Trade and Economic Affairs of the OECD report so that we may receive further explanation with respect to that body's pessimistic view of Canada, and an explanation from the Minister of Finance of his growth projection for the GNP when virtually all other economic commentators see problems and feel that the Minister of Finance is being irresponsible in his projection of growth.
[Mr. Speaker.)


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST THAT SUN LIFE STAY IN MONTREAL-MOTION UNDER
Mr. Leonel Beaudoin (Richmond):: Mr. Speaker, I rise under the provisions of Standing Order 43 to ask for the unanimous consent of the House to discuss a matter of pressing necessity.
Given the national crisis through which Canada is going at this moment, and this is especially true in Quebec, and given the possible danger inherent in the departure from Montreal of the Sun Life Assurance Company of Canada, I move, seconded by the hon. member for Villeneuve (Mr. Caouette):
That this House urge the Sun Life board of directors and shareholders to reconsider their decision and to remain in Montreal in the best interests of everyone.


Mr. Speaker:: Order. The House has heard the hon. member's motion. Under 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.


TRANSPORT CANADA
Mr. Les Benjamin (Regina-Lake Centre):: 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 the Department of Transport has identified November 7 as the date of the next election, and that according to the 1978 Department of Transport calendar, printed in the United States, not only will November 7 be the election day but it will be a statutory holiday as well, I move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House instruct the Minister of Transport to require Transport Canada to have its calendars printed in Canada and that they only designate Canadian holidays and anniversaries.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
January 25, 1978


FISHERIES
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, I rise under the provisions of Standing Order 43 to move a motion of urgent and pressing necessity. In view of the massive damage to the Weaver Creek spawning channel by logging and recreational activity in the mountains behind Weaver Creek, resulting in the loss of virtually the entire chum and sockeye run from the spawning beds-an estimated loss of some 700,000 salmon-and the serious effect this will have on the west coast salmon fishery, I move, seconded by the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas):
That appropriate charges be laid under the new fisheries legislation. Bill C-38, and that the Minister of Fisheries and the Environment be requested to rise in this House on motions to explain why charges have not been laid to date.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Minister of Finance. In light of the major crisis of unemployment that faces Canada and the fact that the only new economic legislation that this government has brought in is the employment tax credit program, which is three months later than it needed to be, can the minister tell the House whether the administrative arrangements are in place or are being put in place for the employment tax credit, and can he give the House a guarantee that the program will be in effect by February 15?
Hod. Jean Chretien (Minister of Finance): Mr. Speaker, I spoke with my colleague, the Minister of Employment and Immigration, who will be responsible for the administration of this program. The program will be in place by March 1. I hope it will be passed very quickly. I should like to say that on Monday the Leader of the Opposition told the House that I was very often away. I am not very often away-


Mr. Speaker:: Order, please.
Oral Questions


Some hon. Members:: Order.


Charles Joseph Clark: Mr. Speaker, I think it is clear that we would have more economic legislation brought more quickly before this House if the minister were paying attention to his responsibilities as Minister of Finance.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Order, please. I have just indicated that the hon. minister really cannot go back and explain his absence, and I do not think the hon. Leader of the Opposition should be permitted to make a comment on it.


Charles Joseph Clark: We are now told that the unemployed who might look to this employment tax credit legislation for some help will have to wait until March 1 before the only item on the government's agenda is ready to take effect. I ask the Minister of Finance whether or not he is prepared to go to work in his department, to give attention to that department, to bring in a budget before March, and to stop dragging his feet as he has done on the employment tax credit legislation.


Mr. Chretien:: Mr. Speaker, it took the opposition five weeks to pass a bill which was proposed to the House in the spring. In addition to that, I was fighting against separation yesterday, not like the Leader of the Opposition who is going to Quebec City on Friday to try to make a cosy deal with the separatists.


Some hon. Members:: Hear, hear!


Some hon. Members:: Shame.


Mr. Speaker:: Order. Perhaps it is appropriate that I take about two minutes now, which I will add on to the end of the question period, to remind the House of some of the difficulties we are getting into which relate to my relaxation of the requirements of the question period. In the first two days of our return here I thought it was not appropriate, after the recess, to be too stringent. However, as I permit longer questions with more extensive preambles, I find longer answers with more political input, and from both sides of the House that encourages a lot of barracking which probably would not take place if I were to take a harder line.
I felt things had started out today on a much more positive note, with a very brief question which was going to receive a very quick answer. However, we have begun to wander off the track a little. There is a natural temptation, in the atmosphere that exists in this fourth year of this parliament, to try to interject a few outside aspects in questions and answers. All of us realize that it is in our own best interests in the operation of this parliament if we again, through my guidance, return to a stricter line of short and precise questions, followed by short and precise answers.


Charles Joseph Clark: Mr. Speaker, the minister, in seeking the leadership of the Liberal party in Quebec, failed to answer my short and precise question. I asked whether the Minister of Finance

January 25, 1978
Oral Questions
is prepared to come to work in Ottawa and give his department the priority attention it and the unemployed in Canada require, so that we can have a budget brought in before the end of February.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Mr. Speaker, I was in Ottawa on Monday. I left at eleven o'clock and returned at three o'clock. I worked in my department all day outside of that time. 1 do not have to be given any lessons by the Leader of the Opposition as to how to work for my country.


Some hon. Members:: Hear, hear!


Joseph Jacques Jean Chrétien: Within a month after we returned in the fall, I had an economic statement and I changed the economic policies of the government somewhat. When I feel we need another budget, I will propose one. At this time, I think the best thing to do is to try to pass the legislation we have before the House. Of course, there is no miracle solution to this problem of the growth in unemployment. We are extremely preoccupied with it. Tomorrow I will meet with the ministers of finance. Next month the Prime Minister and the premiers of the provinces, with the ministers of finance, will have a meeting on all these matters. I am devoting all my time to that. However, I am not neglecting the other problems in Quebec. I believe I have to remain in Canada and fight for it. I will not make any cosy deal with Levesque.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, will this part-time minister-


Some hon. Members:: Oh, oh!


Charles Joseph Clark: -give us a commitment to bring in a budget before the end of February? Will he tell the House of Commons, now, whether he and his government have rejected completely the idea of accepting the advice of the OECD and most other economists to add more stimulus to the Canadian economy through tax cuts or some other means, so that we will not have even more Canadians out of work as a result of the policies of this government to date?


Joseph Jacques Jean Chrétien: Mr. Speaker, last week we had a meeting with the business people of this country, who stated that the economic policy of the government is the right one. The Conference Board said the same thing. Some people who are not known to be our friends, such as the president of the Royal Bank and the president of the Toronto Bank, agree with our policy. The only banker who does not agree with our economic policy is the former president of the Western Bank.


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


REQUEST FOR REASSESSMENT OF GOVERNMENT'S EMPLOYMENT PROGRAMS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my supplementary question is to the Minister of Employment and Immigration. Following the release by Statistics Canada earlier this month of the unemployment figure, showing 8.5 per cent-an all-time high rate of unemployment for the country-the minister is reported as having said, and I quote, "the system is probably working as well as it can, given the plight of the western world economy". While he was saying that, the OECD were issuing a report saying that Canada had the worst record of unemployment of any industrialized country in the western world.
I ask the minister, who I suspect is a little shaken up, having to bear this terrible burden of unemployment under this government, on behalf of the one million unemployed Canadians in this country, many of whom are facing hardship, whether he is prepared to reassess the government's employment programs in light of the failure of these programs to have any significant impact upon the terrible unemployment situation in the country.


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I will try to be precise. I suggest to the hon. member that he read more carefully the OECD report, which indicated that Canada ranked number three among the countries that faced better prospects for recovery. We were after Japan and the United States as the third country that would, in fact, recover. I have indicated to ministers at provincial conferences that I am quite prepared to look at the Canada Works program to see if we can build in the economic growth component and work toward a more permanent type of job creation. We have had a twelvefold expansion in our job experience training program. That has been successful. The work sharing program now comprises some 12 different projects, where people are working who would not be working if we had listened to the opposition parties and had taken it out of the recent legislation. Therefore, we are doing our bit.


FINANCE
James Aloysius McGrath: Mr. Speaker, I will direct my final supplementary to the Minister of Finance. The one million Canadians who are unemployed will draw little consolation from what we have just heard, given the fact that Italy's record is better than ours on this question. On the basis of information from the Unemployment Insurance Commission, during the month of December over 2,000 people per working day were coming off unemployment insurance and having to go through the humiliation of applying for welfare, thereby placing a terrible burden on the provinces as well as on the people concerned. Is the minister prepared to enter into discussions with the provinces to measure the additional eco-

nomic burden that this unemployment situation is placing on the provinces which have to pick up these welfare payments, especially the poorer provinces which can least afford it?
[ Translation]


Joseph Jacques Jean Chrétien: Mr. Speaker, first thing tomorrow morning I will be joining my colleagues the provincial finance ministers for a two-day meeting. Among the items under consideration will be the short term economic conditions. I intend to discuss this problem with them as I did last October and if solutions can be found and suggested quickly, we will do so. However, the situation is difficult and I must report to the House that last fall before making my statement in the House, I had obtained the agreement of all finance ministers. We will try once again tomorrow to develop a consensus to try to tackle all economic problems which are confronting us.


INDIAN AFFAIRS
John Edward Broadbent: I would remind the Minister of Finance that in the fall of 1929 Mr. Herbert Hoover also had the support of all the bankers in the United States. My question is directed to the Deputy Prime Minister. No, Mr. Speaker, I will change my mind and address it to the Minister of Indian Affairs and Northern Development.
Considering that the hon. gentleman's predecessor said on April 19, "If the Alaska Highway application should receive approval, the government will establish a further inquiry to assist in developing terms and conditions for the construction and operation of the line", and considering that representatives of the Council of Yukon Indians have charged that the government has completely failed to implement this commitment to hold a follow-up public inquiry, can the minister clarify the situation, and will he take immediate steps to implement the commitment to which I have referred?


Hon. Janies Hugh Faulkner (Minister of Indian Affairs and Northern Development):: No, I will not, Mr. Speaker. No decision has been taken on a further inquiry. In consultation with the Council of Yukon Indians and others I have raised the question of whether a further inquiry is really needed. The Lysyk inquiry went to some lengths in defining what would be contained in the terms and conditions, and I have made the point, both publicly and in private meetings, that in my view we really need to define the terms and conditions and make them available to the agency that will eventually flow from legislation and have them available for public discussion. In other words what I am saying, Mr. Speaker, is what we need now are precise proposals, rather than further inquiries. I say this while repeating that no decision has been taken; I am just telling the House what my thinking is now.
Oral Questions


John Edward Broadbent: I take it that the minister's refusal to guarantee-


James Hugh Faulkner: No decision has been made.


John Edward Broadbent: Saying there has been no decision implies a reversal of the previous decision. The previous decision was that there would be an inquiry. The position now taken is contrary to the commitment which was made.


INDUSTRY
John Edward Broadbent: I should like to address a question to the Deputy Prime Minister. Is the hon. gentleman aware that the U.S. Alyeska Pipeline Disposal Company has for sale pipeline construction equipment worth between $1 billion and $1.5 billion which could service the entire Canadian section of the Alcan pipeline, and that this equipment is scheduled to go on sale not in Canada but in the United States? In this regard I ask the minister what specific guarantees have been provided to ensure that Canadian companies and Canadian workers will be used in the construction of the Canadian portion of the pipeline?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: I appreciate the hon. member providing this interesting information. Undoubtedly, he has gleaned it from the Wall Street Journal, which I have not had an opportunity to peruse recently. However, I will follow the hon. member as he leads me through the pages of the Wall Street Journal from day to day.
As to the second part of the question, which relates to the over-all opportunity for Canadian participation both in employment and in the provision of goods and services for the construction of the line, I repeat what has already been stated by the Prime Minister, that Canadian business and Canadian producers will have a full opportunity to participate-effectively, we believe-in the construction of this line. The estimated number of jobs to which the hon. member referred yesterday or the day before is still valid. It is our view that 100,000 man-years can be expected in Canada during the construction of this line. There is no withdrawal from the estimate put forward last September when the terms of the agreement were made public.


John Edward Broadbent: Mr. Speaker, whatever one might say about the reliability of the Wall Street Journal, by standards of comparison of reliability it is 100 per cent better than the minister. I have a final supplementary for the minister since he did not answer my second question after attempting to do so for two minutes.
Are there any specific guarantees respecting the construction aspect of the job? I am not referring to steel, because we

January 25, 1978
Oral Questions
realize the government sold out the steel producers in Canada some time ago. Is the government making any guarantees that Canadian jobs and firms will be used on the construction? I put that question in the context of this very expensive construction equipment which is necessary and which is going on sale in the United States and not in Canada, and in light of the fact that a number of Canadians already have been denied the right to purchase that equipment.


Allan Joseph MacEachen: Mr. Speaker, the hon. member has suggested that the Canadian steel industry has been sold out. I prefer to listen to the president of Stelco as a spokesman for the steel industry, rather than the hon. member. Mr. Gordon has stated that he is fully confident he will be able to compete successfully for this business in Canada. It amounts to a very substantial amount of business for Canadian companies and workers. Also, he believes they will be able to compete effectively in the United States against American competition. Thus, there is no question of selling out. I believe the hon. member is selling out any sense of honesty when he continues to repeat what is nothing but unsubstantiated rumour.

[ Translation]


THE CANADIAN CONSTITUTION
Léonel Beaudoin: Mr. Speaker, I should like to put a question to the Prime Minister.
On January 14 last, the Prime Minister granted an interview to the newspaper La Tribune of Sherbrooke. I noted that the comments of the Prime Minister were rather vague on one issue. He said among other things that his government would be willing to grant some powers to the provinces but in return, it would ask and I quote: But in return, the federal government would demand an increased role in the management of the economy.
I would like to ask the Prime Minister what he meant by an increased role in the management of the economy in that context?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I was speaking during a debate on the constitution where I specified that the throne speech in October referred to proposals which would be made during this session. Those proposals would not deal with the sharing of powers as such, but if the provinces wanted to discuss the sharing of powers - and between 1968 and 1971 we made several suggestions concerning the transfer of powers to the provinces - we might also suggest that some powers would be better exercised by the federal government than by the provinces which have done quite poorly.


Léonel Beaudoin: Mr. Speaker, I should like to put a supplementary. Can the right hon. Prime Minister tell the House
[Mr. Broadbent.l
whether the provinces have asked to discuss with the federal government the matter of this sharing of powers?


Pierre Elliott Trudeau: No, Mr. Speaker, but I would remind the hon. member that during the two years prior to October 1975, when the federal government announced price and wage controls, the provincial premiers, meeting among themselves, had begged the federal government to do something about inflation, explaining that the provinces had no powers in the field of inflation, that they may have had some powers but that even if all the provinces exercised them individually they could not achieve the results expected. They asked us to do something, which we did in October 1975 after consulting the premiers on the very same day. That, then, is an example of the transfer of temporary powers made at the request and with the support of the provinces.


FINANCE
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is directed to the Minister of Finance. Undoubtedly, the minister has reviewed table 8 which is contained in the OECD's Economic Outlook. Unfortunately, it shows that Canada has the highest level of unemployment of any of the 12 industrialized nations which it reviewed-higher than the average by almost 3 percentage points. Has the minister discussed with his staff or representatives of OECD why Canada should have had during 1977 the highest unemployment level of any of the industrialized nations?


Joseph Jacques Jean Chrétien: Mr. Speaker, in the Department of Finance, the economic policy of the government is under constant review. We are, of course, very much concerned by the rate of unemployment in Canada and know that one of the problems is the fact that the rate of entry into the labour force is the highest in the world; last year, Canada was, of all the countries in the world, the one where the largest number of new jobs were created. Unfortunately, the rate of new entries is such that, though we managed to get 290,000 new jobs from the Canadian economy last year, the rate of unemployment did not go down. Yet, the growth of employment in Canada is the highest in the world.


Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Referring to the same Economic Outlook report, it is anticipated that in the current year, 1978, unemployment will exceed 8.5 per cent, and there is some danger that it could go even higher. Also, it is anticipated that job creation in Canada will start to decline. Has the minister discussed with his staff what can be done
January 25, 1978

effectively to reverse this OECD prediction, bearing in mind that Canada has bountiful resources which are second to none compared with the other industrialized nations which OECD reviewed?


Joseph Jacques Jean Chrétien: Mr. Speaker, we do not agree with the OECD prediction. Most of the forecasters in the Canadian private and public sectors are predicting a growth of approximately 5 per cent for next year.


Charles Joseph Clark: You are the only one.


Joseph Jacques Jean Chrétien: No, sir.


Charles Joseph Clark: Name one.


Joseph Jacques Jean Chrétien: The Conference Board of Canada, and the Conference Board of the United States. The other day, in Toronto, the question was put to Mr. Rockefeller and he said-


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: Well, I did not know him. I did not ask the question. He is not a pal of mine.


Some hon. Members:: Oh, oh!


Joseph Jacques Jean Chrétien: I met him after his statement. He said that their private study concluded there would be more growth next year in Canada than in the United States.


Sinclair McKnight Stevens: Mr. Speaker, my final supplementary question is directed also to the Minister of Finance. I should like to point out that the bankers he has been talking to are not among the unemployed of this country.


Some hon. Members:: Hear, hear!


Some hon. Members:: Oh, oh!


Sinclair McKnight Stevens: As an estimated $1.2 billion is being paid out currently in various tax credits by this government and incentives to promote employment, and according to the government's own estimate there is another $1 billion going out for various make-work projects, government training projects, etc., will the Minister of Finance indicate whether his department or any department has undertaken the monitoring of those various programs to determine if we are actually getting the results we should from over $2 billion worth of incentives to try to correct the unemployment situation in this country?


Joseph Jacques Jean Chrétien: Mr. Speaker, I am very glad the hon. member is at least recognizing now that we have put into the Canadian economy $2 billion of incentives. Of course we are monitoring this on a daily basis. A study is being conducted by the Department of Finance and the Department of Employment and Immigration. We are following that position very closely. If something has to be changed, we will be happy to do it.
Oral Questions EXTERNAL AFFAIRS


PRIME MINISTER'S KNOWLEDGE THAT SOVIET SATELLITE CONTAINED NUCLEAR PACKAGE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is directed to the Prime Minister. When the Prime Minister visited the NORAD headquarters at Colorado Springs in late December, was he advised that the Russian Cosmos satellite carried a nuclear package, that it was in difficulty and likely to crash?


Pierre Elliott Trudeau: Mr. Speaker, when I finished my visit at NORAD in Colorado Springs, I gave a press conference indicating that I had been briefed not only on the problem of air defence, which is the subject of NORAD-air defence essentially against bombers-but that the officials at NORAD had gone further and had gone into a great deal of briefing concerning space and problems of space. At the time I indicated that Canada was fortunate, indeed, to be able to share a lot of the information regarding space because it was in NORAD, but which under NORAD-


An hon. Member:: Now answer the question.


Pierre Elliott Trudeau: I am answering the question. If the hon. gentleman could follow the reasoning, he would see that I am answering the question, but it calls for a little bit of attention. In indicating that they had briefed me on space, I would only go as far as saying that they did tell me they were monitoring all the man-made garbage up there and they knew exactly what it was doing. They knew that some of it had already fallen and some would fall again. They went into some detail which I do not think is appropriate for me to go into.


NATIONAL DEFENCE
Allan Bruce McKinnon: Mr. Speaker, it seems rather clear that the briefing the Prime Minister received was the garbage. I should like to direct a supplementary question to the Minister of National Defence. Considering that the Prime Minister claims the briefing he got at Colorado Springs, as referred to in Hansard yesterday, would indicate they were extremely forthcoming in talking to him about space garbage, when did the Minister of National Defence know there was a nuclear package aboard the Cosmos satellite, and when did he know it was going to crash?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I knew at the end of last week that there was a nuclear package aboard, and I knew that it was disoriented in orbit and was likely to come down somewhere on earth, possibly in Canada and possibly in the South Atlantic, last
2228

January 25, 1978
Oral Questions
Friday. I knew specifically when it did re-enter, on Tuesday morning, I believe it was.


Allan Bruce McKinnon: What the Minister of National Defence has just said, Mr. Speaker, confirms that the Prime Minister was not given a full briefing at NORAD when he made his visit in late December. I would now like to ask the Minister of National Defence, who told us yesterday the operation was Canadian-controlled, whether he will inform us if the United States U-2 which is checking for radiation at high altitudes has reported to us on its findings so far, and whether the American technicians manning American radiation detection pods in the low-level search have reported anything to us on their findings so far.


Barnett Jerome Danson: Let me answer the first allegation, Mr. Speaker. I was going to use a word that is unparliamentary. Briefings at NORAD are very thorough and very intense. My hon. friend has had briefings there. I do not know if they allowed him a full briefing; they may have had doubts, considering the questions he is raising, for the sake of western security


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: Certainly, there are those that are out of orbit, those that are not, and those that are disoriented. They are under observation. We cannot take precise readings that far in advance. Having regard to the second question the hon. gentleman asked-which is a legitimate question-there are Canadian crews on board the Hercules surveillance pods. They are reporting and working jointly as a team, and we do not make a clear distinction as to who is Canadian and who is American. When they are working together there, everybody is informed. The commander of the search, of RCC in Edmonton, is fully informed and fully aware. We have continuing co-operation with our American allies through NORAD and through the space program.


OFFICIAL LANGUAGES
Mr. Marcel Prud'homme (Saint-Denis):: Mr. Speaker, my question is addressed to the right hon. Prime Minister.


An hon. Member:: "When am 1 going to get a cabinet post?"


Some hon. Members:: Oh, oh!
[ Translation]


Marcel Prud'homme: Following the ruling by Quebec Superior Court Chief Justice Deschesnes that all clauses of Bill 101 related to legislation and justice language are invalid, would the Prime Minister offer his own comments to this House?


Mr. Speaker:: Order, please. If the Prime Minister wanted to make his own comments on a matter of that sort, during the question period would hardly be the time to do so.


CONSUMER AFFAIRS
Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I have a question for the Minister of Consumer and Corporate Affairs. As the new Canadian anti-corrosion code for automobiles can only be effective if it is obeyed by all Canadian automobile manufacturers, and in view of the fact that so far only one of these companies has agreed to comply with the code, I ask the minister how long the companies are to be given to make the decision to come aboard before the government decides it will pass legislation to back up the code?


Hon. Warren Allmand (Minister of Consumer and Corporate Affairs):: Of the so-called Big Three, Mr. Speaker, one of the companies has said very clearly it will follow the code. Another has said its 1978 vehicles actually go beyond the code, although it did not say it would follow the code exactly as written. We have not heard from one of the major three. Several of the importer companies have indicated they will go along with the code. While no time limit was set down, we are awaiting the results of competition and consumer pressures to see whether others will come along. If legislation is necessary-and we have said we will proceed with legislation if that is the case-it will be carried out in full consultation with the provinces.


George Harris Hees: Mr. Speaker, the government obviously intends to rely on voluntary compliance with the code, and this government in particular has had very sad experiences in trying to get people to obey guidelines on a voluntary basis. I ask the minister why the government does not now introduce legislation to back up the code, and thereby guarantee to Canadian automobile owners the kind of protection they have so long been denied.


William Warren Allmand: Mr. Speaker, we believe in doing things in co-operation with industry and the private sector. This code was developed in close co-operation with the domestic manufacturers and importers. I must say that it received the strong support of all provincial governments as well as the Consumers' Association of Canada and the Automotive Protection Association.


ENVIRONMENTAL AFFAIRS
Mr. T. C. Douglas (Nanaimo-Cowichan-The Islands):: Mr. Speaker, in the absence of the Minister of the Environment, I should like to direct a question to the Minister of Energy, Mines and Resources relating to the decision by the Kitimat Pipeline Company to reactivate its application for the construction of a pipeline from Kitimat, British Columbia, to Edmonton, requesting that the capacity of the pipeline be doubled to one million barrels per day. The west coast oil ports inquiry hearings headed by Dr. Andrew Thompson were postponed. Are they now to be resumed? If so, when will they be resumed? Also, will the minister assure the House that no decision will be made by the National Energy Board, or approval given by the government, until such time as the phase two hearings have been completed by Dr. Thompson?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, when the inquiry was interrupted it was noted that the proceedings might have to be brought forward again at a time when a live Kitimat application came forward. This matter will now be considered with Dr. Thompson and a decision on how to proceed will then be made as soon as possible. As to the other part of the hon. member's question, I think perhaps the Minister of Energy, Mines and Resources should respond.


Thomas Clement (Tommy) Douglas: Mr. Speaker, I would be glad to hear the response of the Minister of Energy, Mines and Resources, but I would like the Minister of Transport to answer this question. In view of the fact that when the inquiry started, the government quite properly decided that public interest groups should have the opportunity to present their views and funded some of those groups, will this funding be carried on during the additional inquiry by Dr. Thompson and his group, and for what period of time?


Otto Emil Lang: Mr. Speaker, the question of funding public interest groups, and other questions relating to cost and the time of the inquiry, are among those things we will want to discuss with Dr. Thompson to ensure that all proper steps are taken in connection with any possible pipeline.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, my question is for the Minister of Manpower and Immigration. It has reference to the tentative agreement between the government of Canada and the province of Quebec which would enable Quebec to establish its own points system for the selection of immigrants to that province. In view of the fact that the selection criteria would not be the same as for immigrants to other Canadian provinces, will immigrants qualifying under Quebec selection criteria have the right to interprovincial
Oral Questions
mobility? If so, has the government received the concurrence of the other provinces to accept immigrants who have qualified under Quebec's criteria?


Jack Sydney George (Bud) Cullen: Mr. Speaker, we have an agreement in principle with the province of Quebec, at least at the ministerial level. It remains for the Quebec minister to obtain the concurrence of his cabinet colleagues. The details of the program which I have seen so far were mutually beneficial, so that not only Quebec but all the provinces will be able to accept responsibility under the BNA Act for co-determination and the participation they should have in the immigration field.


Arthur Jacob (Jake) Epp: Mr. Speaker, the minister chooses not to answer my question but to bypass it. In view of the far-reaching implications that this agreement has in principle, and in view of the assurances which the minister gave to the Standing Committee on Labour, Manpower and Immigration that the committee would have an opportunity to study the regulations flowing out of the new Immigration Act, would the minister now fulfil his obligation and refer both the immigration regulations and the tentative agreement on immigrant selection to the standing committee for study and report back to the House?


Mr. Alexander:: That is a good idea.


Jack Sydney George (Bud) Cullen: Under the agreement there will be full mobility in the country: that is absolutely essential. Also, the agreement will be subject to the immigration laws. I have done more than a second mile, I think, by sending out to members of the committee the regulations as they are drafted, and I have asked for their comments. I have done that, also, in so far as provincial cabinet ministers who have this responsibility are concerned, so that they will note the message. I have also sent my provincial colleagues, in draft form, the kind of immigration agreement that I would like to see us enter into with Alberta, Saskatchewan, British Columbia or Quebec. However, full mobility will be there.


NORTHERN PIPELINE-PREBUILDING OF SOUTHERN SECTION-GOVERNMENT POSITION
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the President of the Privy Council. As I noted yesterday, the U.S. President's decision and report to Congress on the Alaska natural gas transportation system states repeatedly that there is a possibility of prebuilding the southern section of the line. I find it difficult to believe that the President of the United States would rely solely on the musings of the NEB for the statement. Therefore, I ask the President of the Privy Council for clarification. Was the prebuilding of the southern
80027-72%

January 25, 1978
Oral Questions
portion of the pipeline discussed at all in the September negotiations?


Allan Joseph MacEachen: Mr. Speaker, I have no recollection whatsoever that the matter was even discussed. Certainly, no provision was made in the agreement or in the negotiations leading up to the agreement regarding the prebuilding of the pipeline. In the legislation which is under preparation at present, which I hope to introduce reasonably soon to the House, there is no provision for the prebuilding of the pipeline. So it is a matter which has to be dealt with on different grounds from the general plan under which we are presently operating and the assumptions contained in the negotiations.


NORTHERN PIPELINE-ECONOMIC IMPACT OF PREBUILDING SOUTHERN SECTION
Erik Nielsen: I direct my question to the Minister of Energy, Mines and Resources and ask whether he can explain the comments that he made outside the House yesterday which were reported on the CTV eleven o'clock news, namely, that the prebuilding of the southern portion of the pipeline could jeopardize the timing of the northern construction and delay completion of the pipeline until 1984-85, at a cost of perhaps $1 billion and thousands of jobs for Canadians. Does this mean that the government is not yet convinced of the benefits of preconstruction and is dragging its feet? Also, why is the government considering further delays in the building of the pipeline, when a short while ago they rejected a similar request by the Council of Yukon Indians?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, that report is quite erroneous.


NORTHERN PIPELINE-PROJECTED DATE OF COMPLETION
Erik Nielsen: Mr. Speaker, I direct a further supplementary to the President of the Privy Council who may wish to answer this question instead of the Minister of Energy, Mines and Resources. Is there a possibility that the date for the completion of the pipeline that is mentioned in the pipeline agreement might be changed, and does that mean that Canada will be in a position to renegotiate the other conditions of the agreement? Does it mean that the government may be able to recoup some of the possible benefits they gifted away when they negotiated the agreement?


Allan Joseph MacEachen: Without accepting the allegations contained in the last part of the question, may I point out that a timetable is provided in the agreement for the construction and operation of the pipeline, and there have been no discussions of any kind leading to a change in the provisions of that agreement. So I must say that I am at a loss to understand why there should be any doubt whatsoever as to the intention of the government to proceed with the legislation as quickly as

possible and to proceed with the construction and operation of the pipeline according to plan.


INVENTORY OF NATURAL GAS-EFFECT ON ENERGY POLICY
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my supplementary question is for the Minister of Energy, Mines and Resources. It refers to the reliability of the reports that have recently come from his officials with respect to the inventory of natural gas located in western Canada, which would indicate that both domestic and export commitments can be met until the year 1990. I ask the minister whether these reports and forecasts were based on located supplies, or do they include such areas as the Beaufort Sea? Also, can the department provide any assurance as to the reliability of the forecasts, or will such assurance be sought before these forecasts are used to formulate further energy policies, relating them to the construction of a pipeline in the north?


Alastair William Gillespie: Mr. Speaker, all forecasts involve a series of probabilities. We have tried to make that quite clear in the various reports we have put before the Canadian people and before the House. As to the suggestion to which I believe the hon. member is referring, that there might be more gas in the gas bubble than was first expected, it is quite possible that there might be. That is the opinion of one or two persons in my department. My department's view in respect of the inventory situation of natural gas is substantially the same as the findings of the National Energy Board in its Reasons for the Decision regarding the northern pipeline.


SOCIAL SECURITY
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, I have a couple of questions relating to pension studies. I should like to direct the first one to the President of the Treasury Board. In April of 1977 he announced the establishment of a study to be undertaken by Tomenson-Alexander Associates. Has that study now been completed, and when will it be tabled in the House?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, the study has been completed and it is now being translated and printed. I expect to be able to make it public in the not too distant future.
January 25, 1978


INQUIRY AS TO DATE OF INTRODUCTION OF LEGISLATION
Donald W. Munro: My second question, Mr. Speaker, will be for the Minister of National Health and Welfare.
To the best of my memory, an extensive study on pensions under all aspects, both public and private, was initiated in September 1976 within the government and in the public sector; it related more particularly to the Department of Finance and the Department of National Health and Welfare. My question is: When will this study be tabled in the House and referred to the appropriate committee? I also would like the minister to tell us whether she intends to introduce a bill based on this report and if so what will be the scope of such a bill?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, just before Christmas I had a preliminary meeting concerning the preparation of the report. I have not yet received the report and so it is too early to answer the other questions. However, I will inform the House as soon as 1 get the report.


INELIGIBILITY OF CANADIAN WORKERS TO RECEIVE UNEMPLOYMENT INSURANCE BENEFITS
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is for the Minister of National Health and Welfare.
Earlier this afternoon the hon. member for St. John's East pointed out that every day, because of the economic situation in Canada, about 2,000 Canadians become ineligible for unemployment insurance benefits and that in many cases they are forced to ask for welfare. Can the minister then tell the House if she has discussed this matter with the provinces and what immediate action we can anticipate from her to alleviate this serious situation?


Hon.   Monique@: Mr. Speaker, the administration of welfare programs is under provincial jurisdiction. All Canadian deputy ministers of social services, including the deputy minister from my department, will get together as early as tomorrow in a federal-provincial meeting during which this subject matter will be dealt with.


William Heward Grafftey: I want to ask a supplementary, Mr. Speaker.
Considering that situation which is affecting many poor families in Canada, can the minister explain to the House why she has recently contacted the provinces by letter informing the provincial welfare ministers that the federal government intends to cut assistance in this regard in the area of welfare specifically?


Monique Bégin: I regret that the hon. member's information is out of tune with the facts, Mr. Speaker, and I would like to
Oral Questions
correct immediately the wrong impression he is giving to this House.
About December 14 last I wrote to my provincial counterparts to propose an early meeting at their convenience regarding the whole financing of social services, which in eight out of ten provinces would lead to an increase in real expenses and which would result in all provinces having an identical average per capita outlay within ten years.
As was explained in a press release issued at that time, unfortunately the country's economic constraints have forced me to delay for a year the granting of a supplementary amount of $132 million which is offered to the provinces and which will eventually be indexed, on agreement, after a year.


LABOUR CONDITIONS
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I should like to address a question to the Minister of Employment and Immigration. In light of the steady increase in youth unemployment from 9.7 per cent in December of 1973 to 10.6 per cent in December of 1974, to 13 per cent in 1976 and to over 15 per cent today, and in view of the fact that it will continue to increase for the foreseeable future and that the existing youth employment programs apparently are not turning the tide, what specific programs will the minister's department implement during this session to combat this critical situation?


Jack Sydney George (Bud) Cullen: Mr. Speaker, I have catalogued for the hon. member and for this House several of the programs we have in place to deal with youth unemployment in so far as my own department is concerned. The employment tax credit program announced yesterday by my colleague will have a beneficial effect. Jobs will be created by the construction of the pipeline. All these things will have their impact in turning this situation around, as the hon. member has suggested.


Paul Wyatt Dick: In view of the fact that the minister has indicated no new programs in his department to combat the youth unemployment situation, is it the view of his department that this particular situation is under control, or does his department feel that the advice given in Toronto in April of last year by the Prime Minister to unemployed graduates, that they leave this country and go elsewhere for employment, is the appropriate advice for this year?


Mr. Speaker:: Order, please. The hon. member for Winnipeg North Centre.

January 25, 1978
Privilege-Mr. Stanley Knowles VETERANS AFFAIRS


REQUEST THAT BASIC RATE OF WAR DISABILITY PENSION BE RECONSIDERED
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I wish to direct a question to the Minister of Veterans Affairs. In view of the increasing concern on the part of veterans across Canada over the refusal of the government to restore the basic rate of the war disability pension to the average take-home pay of the five categories of public servants designated in 1973, has the minister resubmitted this matter to the cabinet, asking for a reversal of the negative decision which he announced a couple of months ago?


Hon. Daniel J. MacDonald (Minister of Veterans Affairs):: No, Mr. Speaker, I have not resubmitted this question, but I would like to remind the House that on January 1 there was an increase of 7.2 per cent, in disability pensions across this country. As I stated previously, when the government sees things in a different light, I will bring this matter back to it.


James Aloysius McGrath: You will have a long wait.


Stanley Howard Knowles: Mr. Speaker, in view of the fact that the 7.2 per cent cost of living increase granted by legislation this month does not restore the basic rate to the level agreed upon in 1973, will the minister reconsider the position he is taking today? While he is pursuing that, will he also consider pressing for action on behalf of widows where the veteran's pension was less than 48 per cent, resulting in no pension for such widows, and also on behalf of the fewer than 200 veterans of World War I who were prisoners of war in that war but who do not receive the compensation provided by parliament?


Daniel Joseph MacDonald: Mr. Speaker, the answer to all those questions is yes. We have under consideration the widows referred to. I also expect to bring to the House some news about veterans of the First World War. This will be brought to the attention of the House at a later date.


PRIVILEGE
Stanley Howard Knowles: Mr. Speaker, I rise on a question of privilege of which I have given Your Honour the appropriate notice under Standing Order 17(2).
A couple of days ago most members of this House received a letter from CP Air dated January 13. Actually, it reached me only a couple of days ago and it was only yesterday afternoon that I was able to get the background information that leads me to believe that a question of privilege is involved.
As I say, this letter was written on the letterhead of a private corporation, CP Air, and was addressed to members of parliament. The letter expresses the desire of that company to

provide us with service, and so on. It solicits our patronage. Obviously, there is nothing wrong with that, but in the letter we are told that there are two telephone numbers we can dial to get this special service. The significance of these two telephone numbers is that they are not ordinary private company seven-digit numbers; they are five-digit numbers. In other words, they are part of the government telephone service.
There is no comparable number for Air Canada. In the course of my inquiries I was told that a number had been established for Air Canada, but when I called that number the answer was "Central Travel Service" which, of course, is an agency of the government. When I called one of the two numbers listed in this letter the answer was a very pleasant "CP Air Executive Service".


Mr. Gillies:: What is the number?


Stanley Howard Knowles: Mr. Speaker, you will be wondering when I am going to get to the point of this being a matter of parliamentary privilege. My information is that this letter was sent to a limited number of persons. It was sent to most if not all members of parliament, although I have not yet ascertained whether any French-speaking members of the House received a letter in French. The letter was also sent to members of the other place. Apart from the members of these two Houses it was sent only to deputy ministers and possibly assistant deputy ministers; however, so far as I can ascertain, only to deputy ministers.
In other words, we, the 260-odd members of this House, are the majority of those to whom this letter was addressed. My point is that this puts us as members of this House in an awkward situation, if we accept this arrangement, whereby we are party to a scheme or arrangement which involves a government service being used, or abused, by a private company.


Mr. Lambert (Edmonton West):: Nonsense.


Stanley Howard Knowles: My hon. friend says "nonsense". I do not know that any of the hotels of Ottawa, the restaurants or the taxi cab companies which would like to have our business, have been given the privilege of special government numbers, yet CP Air seems to have been given, or to have obtained this privilege.


Some hon. Members:: Oh, oh!


Mr. Speaker:: Order. I wonder if I might be permitted to allow the hon. member to conclude his argument.


Stanley Howard Knowles: My checking has produced the information that either the Department of Supply and Services or the Department of Communications was responsible for assigning a special number as part of Central Travel Service arrangements. I am told it was clearly understood that this was to provide a service for members and was not to be used as an advertising gimmick by a private company.

January 25, 1978

As I say, if the hotels of this city and other private businesses are not hooked into the government telephone service, why should CP Air have this special arrangement? I suggest that this puts us, as members of this House-because it is mainly to us it is addressed-in an awkward position.
I know we are accustomed to the CPR getting everything in this country for the past hundred years, but surely they should have to be approached the same as Air Canada is, through an ordinary, private, seven-digit number. Mr. Speaker, this matter should be looked into. If the letter had been given general distribution to the entire public service, Your Honour might say it has not got anything to do with the House of Commons, but in view of the limited number of people who received this letter it is primarily a House of Commons matter and, as I say, puts us in an awkward position.
I would be prepared to move the appropriate motion for the matter to be referred to a committee for investigation, and perhaps to have the numbers cancelled and CP Air put on the same basis as any other airline or company. In the meantime I would ask Your Honour to consider whether it is not a question of privilege for members of parliament to be put in this awkward position and to be made guinea pigs for CP Air.


Mr. Speaker:: Order, please. As a result of notification by the hon. member of his concern with this problem and, of course, the formal notice given pursuant to Standing Order 17(2), I have had an opportunity to make only a very cursory investigation into the circumstances and to verify that the exchange involved is not one in any way under the control or administration of parliament. I felt that was my first responsibility.
The exchange involved, which gives access through a fivedigit number, is in fact a government exchange but not one that is under our control or is involved in the administration of the House of Commons. I have, therefore, the greatest difficulty drawing a connection between the grievance the hon. member has raised and a question of parliamentary privilege.
The matter does concern an inquiry or grievance of some sort, however, and I think prudence has indicated in the past that if there is to be a response by either of the two ministers named as having the responsibility or authority in connection with issuing these privileges-that is to say, the Minister of Communications (Mrs. Sauve), or the Minister of Supply and Services (Mr. Goyer)-we ought to await their response. At that time I can give a definitive decision as to whether there is any connection with parliamentary privilege. As I have indicated, I have great doubts about it in connection with a question of parliamentary privilege. I think 1 ought to wait to see whether an immediate response is forthcoming from either of the ministers before taking a final decision.
Order Paper Questions POINT OF ORDER


MR. PAPROSKI-CHAMBER TEMPERATURE
Mr. Paproski:: I rise on a point of order, Mr. Speaker. I know that the candlelight power in the House has been reduced by about 51 candlelights but there seems to be a problem with heat in the chamber. Perhaps Your Honour or the House officials could check to see what is happening. Some of the glare of the television lights has been eliminated but the heat in the chamber is still high. Maybe it is because of some of the members-I do not know-but I feel something should be done. This has happened since Monday of this week, and I hope Your Honour will check into it.


Mr. Speaker:: Order, please. 1 will be very glad to monitor that. We are monitoring things on a daily basis and had hoped that the adjustments made during the recess would contribute to more comfortable temperatures. There is more difficulty with controlling the light level than the heat level-at least in theory. We ought to be able to do something about the temperature.

[ Translation]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: 445, 482, 522, 744, 745, 821, 896, 930 and 1,033.
Mr. Speaker, I ask that the remaining questions be allowed to stand.


Mr. Leggatt: In each fiscal year since 1970, what amount was spent in the Constituency of New Westminster by the Department of National Health and Welfare and those agencies that report to it?


Monique Bégin: In so far as the Minister of National Health and Welfare is concerned: Fitness and Amateur Sport Program: Grants-in-Aid contributions to athletes of international calibre who require financial assistance for travel, training, living costs, equipment, training fees and relocation expenses.
Year	Recipient	Address	(Figures in S's)
1970-71	Nil		
1971-72	Mahony, William V. Wedlock, David G. Jones, Barbara A. Robertson, Nancy M.	301 Carnarvon Street 1028-8th Avenue 559 E. Columbia Street 334 Richmond Street	$2,000 $1,500 $1,500 $1,0001972-73	Phelan, Deborah Wedlock, David G.	141 East Durham 1028-8th Avenue	$1,800 $1,800
January 25, 1978
Order Paper Questions
Year 1973-74	Recipient Nil	Address	(Figures in $'s)1974-75	Mahony, William V. Yakubowick, Joyce	301 Carnarvon Street 814-4th Avenue #208	$1,000 $1,8001975-76	Van Buren, John	324 Holmes Street	$1,8001976-77	Van Buren, John Tottenham, Doug	324 Holmes Street 708-2nd Street	$1,800 $ 500
National Welfare Demonstration Grants-To improve the efficiency and effectiveness of welfare services in Canada.
1970-71	1971-72	1972-73	1973-74	1974-75	1975-76	1976-77$ Nil	$40,554	$99,685	$116,075	$122,446	$141,712	$35,392
New Horizons-To provide opportunities for retired Canadians to plan, operate and participate in meaningful activities.
1970-71	1971-72	1972-73	1973-74	1974-75	1975-76	1976-77$ Nil $ Nil $ Nil $13,862	$13,601	$30,525	$34,930
*ln addition to the above, the Department of National Health and Welfare has incurred numerous other expenditures in the province of British Columbia, but it is not possible to isolate these expenditures by constituency.


Mr. Yewchuk: 
Mr. Howie: In terms of millions of dollars, what was the Canadian production gap between the domestic market for secondary manufacturers and domestic production of secondary manufacturers in (a) 1970 (b) 1973 (c) 1976?


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Statistics Canada reports: the estimated gap between the domestic market for secondary manufacturers and domestic production of secondary manufacturers, in millions of dollars, was as follows: (a) 1970, 111; (b) 1973, 2,665; (c) 1976, 5,009.


Mr. Howie: Has the Medical Research Council funded any research presently underway into cancer?


Monique Bégin: In so far as the Medical Research Council is concerned: Yes. $6.3 million during the fiscal year 1977/78.


Mr. Howie: Has the Medical Research Council funded any research presently underway into heart disease?


Monique Bégin: In so far as the Medical Research Council is concerned: Yes. $5.7 million during the fiscal year 1977/78.


Mr. Howie: 
Mr. McKenzie: With reference to the answer to Question No. 206, what are the names of the three individuals under contract to the Commission of Inquiry into Bilingual Air Traffic Services and (a) what amount was paid to each (b) what is the nature of their work, in each case?


Yvon Pinard: Ogilvie, Cope, Porteous and Associates, Barristers and Solicitors of Montreal for the services of Mr. Yves Fortier, Q.C. (a) Amount paid as at October 20, 1977, $55,507.72. (b) Senior Counsel. R. Dixon, Speas Associates of Manhasset, New York, U.S.A. (a) Amount paid as at October 20, 1977, $160,990.26. (b) Analysis and assessment of technical matters associated with bilingual air traffic services in Quebec-with respect to the possible introduction of bilingual VFR in the Montreal area and the possible introduction of bilingual IFR in the province of Quebec. G.O. Boisjoli and Associates of Quebec City, (a) Amount paid as at October 20, 1977, $7,376.83. (b) Verbatim reporting services for the commission's hearings.


Mr. Herbert: Is any action contemplated to make possible a domestically produced supply of growth hormones for hormone deficient children and, if so, what is it?
January 25, 1978


Monique Bégin: In so far as the Minister of National Health and Welfare is concerned: Yes. The Medical Research Council has clearance for production and distribution under C.08.005 of the Food and Drug Regulations for human growth hormone for treatment of growth hormone deficient children.


Mr. Patterson: For each year since the inception of the New Horizons Programme, what amount was spent in the Constituency of Fraser Valley East?


Monique Bégin: In so far as the Minister of National Health and Welfare is concerned: 1972/73, $19,480; 1973/74, $17,967; 1974/75, $58,609; 1975/76, $93,321; 1976/77, $100,355; 1977/78, $77,483.


Yvon Pinard: Mr. Speaker, would you please call notice of motion No. 57 for the production of papers?


[Stage Direction]
Motion No. 57-Mr. McKenzie:
That an Order of the House do issue for a copy of all government contracts, excluding Crown corporations and agencies, with Canadian Firms and individuals for the years 1976 and 1977.
Yvon Pinard: Mr. Speaker, the number of papers requested is high and there are thousands of contracts. The necessary expenses in time and in personnel for the production of these documents would be considerable and prohibitive. Therefore, I ask that the hon. member withdraw his motion.


Mr. McKenzie:: Transfer for debate.


Mr. Speaker:: Transferred for debate.
Shall the remaining notices of motions be allowed to stand?


Some hon. Members:: Agreed.
Anti-Inflation Act



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Tuesday, January 24, consideration of the motion of Mr. Chretien that Bill C-18, to amend the Anti-Inflation Act and guidelines, be read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
Frank Oberle: Mr. Speaker, I welcome the opportunity to make a few brief comments on Bill C-18 which proposes changes to the Anti-Inflation Act. It would have been reasonable for even the most objective observer and follower of the progress of the anti-inflation program to expect that if any bill were to be placed before this House it should be one that would put this monster to bed-this cruel joke, this albatross which has been hung around our necks and the necks of the industrial and commercial interests in this nation. This monster has caused chaos in the economy and will continue to do so for some time. It will also disrupt the industrial relations process and a variety of other areas.
The bill attempts to correct some serious discrepancies that have occurred in the program. There were deficiencies inherent in the bill when it was introduced. Today the government is trying to legitimize its bastard child which was conceived- ill-conceived-some time ago.
This is not the first time the bill needed to be changed and the loopholes plugged, Mr. Speaker. Even before it became law the government had to make certain concessions to sectors of our society that were not happy with it. Organized labour and the unions were not happy with the legislation because of the effect on historic relationships and contracts. They demanded and received certain concessions to accommodate their sometimes legitimate and sometimes selfish aspirations. Some other groups called for changes before the legislation was passed, such as corporations dealing in export trade. Other sectors of the economy that could not reasonably be controlled such as agriculture and banking voiced their objections as well. Everything was to be straightened out and regulated, and there were to be changes in procedure in connection with the Bank Act.
Now, Mr. Speaker, to the Liberals the anti-inflation war has been a rather good election tool. As we are getting closer to the next election, it comes as no surprise to me that this situation should be brought before us again. Now one can say that the Minister of Finance (Mr. Chretien) is quite right in saying the government has been consistent. At least during elections it has been consistent. In 1974 when we had proposed a program of major price controls, the Liberals were against it-it was a cruel joke; it would cripple the economy, it had not worked anywhere else in the world, it was a retrograde step in regulat-

January 25, 1978
Anti-Inflation Act
ing some of the imbalances we had experienced at that time in the economy. One can reasonably say, Mr. Speaker, that the government could have reasoned, because we had laid out our program reasonably and succinctly, that the government won the election as a result of it.
Here it is 1978 and the minister is travelling throughout the country stating that the government is going to take this burden away from the shoulders of the citizens and is going to get rid of this program. The program was never designed to cure inflation but rather to break the inflationary psychology and to regulate some of the imbalances. One can say that the Liberals did not like the program in 1974. They do not like it now and they are starting to phase it out on April 14 of this year. What went on in between, that is something that the Minister of Finance and the government hope Canadians will forget. What happened in between should have no bearing on the stories the Liberals will be telling in the next election campaign with respect to regulating the economy through wage and price controls.
The problem that legislators have ignored and have forgotten is to consider that when the program was first conceived, even then and for the last ten or 15 years, significant changes have gone on, and our whole society is undergoing significant changes in its social structure. The anti-inflation program has contributed to these changes and, so to speak, has accelerated the changes. I am talking about the changes which will see the shift of the social structure, that segment of our society which once occupied the middle class,-the small entrepreneurs, small- and medium-sized businessmen,-which is now being replaced by the professional manager, the public servant and by the bureaucrat. The corporate manager now decides the direction in which our economy moves. And that most important sector of our economy, namely, the small business sector, and indeed those people who work for the small and medium business sector, are relegated to a minor position in our future social structure.
For a moment I would like to speak about this important sector in our economy, and particularly the two thirds of Canada's work force which does not have access to union power, which is not organized. Let me put it in context with this new corporate manager, with this economist and social engineer who only know the flow chart and know how to deal with the economy in percentages and with charts that have been designed in universities.
Let us look at how this program has affected and how it has widened the gap between organized and unorganized labour; how it has widened the gap between the small businessman and that sector of our economy which is organized in a monopoly or an oligopoly situation. Because the increases were all based on percentages the effect was that organized labour, or the bureaucrat or the professional manager earning $18,000 a year, with an 8 per cent increase was allowed an increase of $1,400, whereas the worker who works in a service industry or small business who may still be making $8,000 had to put up with $640, and that is not even a drastic example. The fact is that all of these people have to buy their bread, their necessi-

ties of life, in the same store, and the economists had completely overlooked that controls, based purely on the percentage increase, had a much different impact on one sector of the economy than it did on another.
Now, Mr. Speaker, as I have said, the reason the government had to amend the law so frequently is that it was so ill-conceived in the first place. Just for the record, and it will be repeated many times in the next few months particularly as we go into the election, I would like to look back to 1974 and make a comparison with the system that was proposed by the Progressive Conservative party in the election campaign. For one thing we have never professed that an anti-inflation program or mandatory controls would be a cure for inflation. What we had set out to do was to break the inflationary psychology and to allow ourselves a period of adjustment, during which some of the imbalances and the great gaps in the system, to which I have made reference, could be corrected. As my hon. colleagues will recall in order to do that we needed a 90-day period, during which everyone would be equal.
I for one had no problem selling that kind of a scheme to reasonable Canadians. There were imbalances in the system as there are now. But if we could assure our constituents for 90 days that the price of a loaf of bread and of a quart of milk would not increase, their contribution to that kind of an approach would be that for 90 days they could not ask for an increase in salary or benefits that they were receiving from their employers. If every reasonable Canadian, in light of the difficulties we experienced then and which we are still experiencing now, managed to live with that approach, then there would have been a period of adjustment for 18 months. Having used the 90 days to arrange the holy trinity of the economy, big government, big business and big labour to work out an agreement over an 18 month period, the necessary adjustments could be made allowing two-thirds of the work force who were left hopelessly behind to catch up to some extent with that section of the labour force that had made the excessive gains. And the same of course would be the case in the business sector, allowing the small businessman to pass through some of the costs which he had to face as a result of commodity exchanges, some of them from other sources.
The partners in the holy trinity wanted no part of that, at least not the corporations; nor did the unions. As you will recall, the unions threatened us outright that there would be a national strike if the Conservatives were elected, and that kind of a program brought in. Of course the Liberals played into their hands saying that they were right, there was no need for those kinds of controls; no need for any controls. The question was not one of regulating the economy with fiscal monetary tools, but the question was one of leadership; and the question was decided. We have yet to figure out where this great Messiah is leading us because on this issue he and the government have failed miserably.
It is difficult to speak on the anti-inflation program without looking at some of the root causes of inflation, particularly in

light of the fact that inflation is the most serious situation facing this country today in economic terms. Promises that 6 per cent and 4 per cent inflation would be achieved as a result of the program have just not been fulfilled.
The simplest way to explain the root cause of inflation is an increase in the money supply over which the government has control, particularly if it is in excess of the real growth of the economy. That, in simple terms, is the cause of inflation.
If we showed a real increase in the gross national product of 5 per cent and if the government increased the money supply by 5 per cent, it would be managing the economy in the context in which it should be managed. Anything in excess of that is inflation because there is nothing to back it up. My colleagues all know that the average increase in the money supply over the past five or six years has been in the area of 15 per cent or 17 per cent.
The government has increased its spending during the time of the anti-inflation program at a rate precisely double that of the inflation rate. That gives a clear indication that the government, for some reason or other, deliberately inflated our economy. It increased the money supply to the point where it could no longer manage the economy with traditional tools and methods that we have learned to use.
Why would a government take deliberate steps like that? There are fundamental reasons for it. In our situation we have very serious problems in fulfilling our social contracts. Commitments the government has made to the provinces, to public servants in the form of pensions, transfer payments to individual Canadians in the form of unemployment insurance payments and so on, are already too high. The government finds it very difficult to fulfil its social contracts. The only way the government knows how to get out of that kind of dilemma is to increase the money supply, paying the recipients of these social programs with watered-down currency.
This is not just a domestic activity or domestic con game. The exchange of commodities on a global basis has had the effect whereby some countries have diluted their currencies, hoping that the sellers of essential commodities would not discover the fact before a deal was made. That is what brought on the energy crisis.
The best way to explain inflation is to point to the fact that heavily industrialized western nations were ripping off the Arab countries. The Arabs discovered that whereas they used to ship 2,000 barrels of oil in order to be able to purchase a Cat or some other form of equipment, they now had to ship ten times that amount to the industrialized countries in order to make the same kind of purchase. They got together, looked at the situation and worked out ways of getting out of that situation, which they did. They increased the oil price, through a cartel, in line with industrial commodities that were being traded on world markets.
The oil crisis did not affect the Canadian economy in the same way that it affected our trading partners with which the government likes to compare our economy. We were not affected in the same way as Japan, West Germany, the United
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States and some of the other industrial giants in the world economy.
It can well be said that the global oil crisis had no effect on our economy. Because of the position we were in in 1974 or in the years that the oil crisis was raging throughout the world, we were exporting more oil than we were importing. As a result, we were not suffering these negative effects and in fact were putting money in the bank during that time.
This international con game is still continuing. Countries are still watering down their currencies in the hope of gaining a better position in the trading community. As a result, people are being cheated out of commitments the government has made and cannot fulfil.
The reason controls do not work is best illustrated by comparisons that we have made as far back as 1972, when a socialist government was elected in British Columbia. The first thing it set out to do was to move against free enterprise. Because there was such a critical shortage of living accommodation in the city of Vancouver, the government decreed in 1973 that there should be a rent control of 6 per cent. Statistics indicated that Toronto had precisely the same problem, roughly 98.8 per cent occupancy with high rents.
After one year of rent control in the province of British Columbia, rents had gone up 3 per cent more than in the city of Toronto. People began scratching their heads, wondering what had gone wrong. The fact was that every person who had anything to rent increased the rent by 6 per cent, whether it was necessary or not. They knew that if they did not do it that year, they could not do it the next. The ceiling automatically became the floor. Some exceptions were made. In some cases the problem was so acute that additional housing units had to be brought on stream and special deals were made with contractors.
The same was true with the Anti-Inflation Board. The ceiling of 8 per cent became the floor. The ceiling of 12 per cent became the floor. Everyone ran off in different directions trying to pass through costs here and there, trying to discover an historic relationship, anything that would lend itself to a logical argument which could be advanced to the Anti-Inflation Board. That is the reason the Anti-Inflation Act has not worked.
The only way out of this dilemma is through leadership by example. If the government wishes to maintain any credibility at all it must take drastic measures not only to curb the increase in its spending but to bring about a decrease in expenditure. We in this party claim that there are, indeed, ways of decreasing government expenditure and we are prepared to propose programs which would cut billions of dollars from the budget. It is not sufficient for the government to curb the rate of increase in its size. The size of the administration must be reduced. It must assume responsibility for reassessing some of the programs it has established. It must refrain from hiring consultants to the tune of a billion dollars a year to help

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find a way through the jungle which the administration itself has created.
The cliches of the Minister of Finance will no longer convince anyone. Too many promises have been broken. Too many commitments have been abandoned. The government will, no doubt, go into the next election campaign telling the people that it has removed controls, secured the co-operation of the big unions and of the business sector, and promising a lower rate of inflation-6 per cent at the end of this year and 4 per cent, eventually, in line with the real growth of the economy. But attempts along these lines will meet with no success.
The government has failed to arrange for the co-operation of a tripartite tribunal as is so necessary at this point in time. It is true on occasions there have been conferences in back rooms between representatives of the government and their friends among the business giants. But that is not enough. A totally integrated Canadian corporation today is a company which has a consultant sitting on one of the regulatory boards and agencies which the government has created. Similarly, a well integrated company needs to have some of its directors sitting on the boards of banks as well.
The government calls in its friends and talks about labour, which is supposed to be responsible for the horrendous crisis through which we are passing, and then it calls in some labour leaders to take part in discussions, although I must say they did not play the game as well as the business sector did. Nevertheless, they call in labour as well, and sit together in a back room and talk about the business sector being responsible for the dilemma in which we find ourselves. The fact is, in the whole period during which the anti-inflation program has been in force there has been no attempt to bring the parties together in one room to discuss, for example, the formulation of an industrial and social strategy. No attempt has been made to work out what share each should have of the pie-to divide it fairly, giving government sufficient money to operate, giving industry enough money to meet the horrendous cost of upgrading its technology and modernizing its plant, and giving labour, too, its fair share in the real growth of the economy.
The minister may travel across the country telling Canadians that next year real growth will amount to 5.5 per cent. The fact is, though, that all the evidence, all the traditional sources of information, indicate it will be less than that, possibly 3 per cent. I do not wish to be a prophet of gloom but there is no indication, either, that we are likely to receive anything less than a 9 per cent inflation rate at the end of this year.
The Minister of Labour (Mr. Munro) has told us, of course, that according to some indicators, Canada, next to Japan and the United States, has the best potential for showing a measure of economic recovery. Well, Mr. Speaker, I believe we always have the best potential to be number one in economic terms in the industrial community, but we have not yet learned to seize the opportunity presented to us by the richness of our resources and the skills of our workers. We have not yet been prepared to make the commitment required to muster these resources by giving the necessary incentives to industry and to the workers to dig us out of this predicament, which has
(Mr. Oberle.l
brought with it a measure of shame to our country because we have slipped from number three position in the world to number ten, next to such countries as Luxembourg.
The measure we are discussing today is a housekeeping bill which attempts to plug loopholes so far left open. It is an attempt to ensure that when controls are lifted the unions will not demand that their members be placed in the position they might have expected had controls not been imposed. The government is trying to stick a finger into a leaking dam. The bill is a nothing bill unless ministers are prepared to tell us plainly what plans they propose to adopt as the country enters the post-controls period. We fear that, in the absence of any attempt to arrange a tripartite agreement, the country is in for some rough months, if not rough years. Canadians are beginning to realize it will take a very fundamental change, namely, a change of government, before we can expect a turn around.


Marcel Joseph Aimé Lambert: Mr. Speaker, I do not know where the Minister of Finance is at this time but I would like to point out that being the sponsor of this bill he finds himself in a rather unpleasant situation since he was just recently appointed Minister of Finance and must consequently accept to steer this bill of amendments through the House although the faults therein were inherited from his predecessor.
The press release of December 19 when this bill was introduced said that the government intended to bring in amendments to the Anti-Inflation Act to secure a more orderly withdrawal of wage and price controls as announced by the hon. Jean Chretien. There was mention of amendments which had been introduced last summer under Bill C-59 but which were abandoned before the last session of parliament was prorogated. We are now told that these amendments introduced under Bill C-16 provide for the first time that there will be some orderly transition between the control period and the lifting of certain controls on April 14.
But a thorough examination of Bill C-16 does not indicate any mention of the date of April 14. This would be done by order in council.
I wonder whether electoral reasons did not determine the date of April 14 since the control legislation will no longer be in effect on December 31. December 31 is too far in the future for the election requirements and demands of the government before the end of the year. It is anticipated that it will be for the month of June or the fall-there is uncertainty as to whether there will be an election, so they say that there is going to be a transition period starting on April 14, but what kind of transition? This is not indicated at all in the bill. The withdrawal of this mandatory program is intended for a public which is not too well informed. We are grandfathers to all those people and in our benevolent attention for the well-being of the Canadian public we are going to start withdrawing those controls. There is nothing in this legislation for that, except that the legislation will continue to be in effect until December 31 next.
January 25, 1978

So I quite simply say that this bill is being brought before us for purely cosmetic reasons. I say so very simply, publicly and formally. If it were not against parliamentary rules, I would actually say hypocritical, but that is a bit too strong. So I simply say cosmetic.
We now find ourselves in the last period for presenting reports and it is already foreseen that the mandate of the Anti-Inflation Board will extend beyond December 31 for everything that concerns its regular administration. I would have thought that this was included in the act passed in 1975, but one has to go back to the debates of 1975 to realize that the opposition of the day had indeed clearly informed the public and criticized the bill as presented-I think it was then Bill C-89-and we have never witnessed such a jumble, a package of measures, devised God knows where for the purpose of being presented to us in a hurry. I still recall vividly the first meetings on the anti-inflation bill which took place in the railways committee room and the eagerness of government members. If a member of the opposition dared criticize or challenge the measure, he was guilty of obstruction. The measure was deemed necessary! Indeed it was imperative in October and November 1975 but these very same members, under the guidance of the right hon. Prime Minister (Mr. Trudeau), were all heard during the 1974 electoral campaign condemning any form of control over incomes and prices.
Well, there was a difference of course. In the Bible we read about the conversion of St. Paul on the road to Damascus, but in this case, between I don't know where and Ottawa, during the year 1974-75, the conversion of Saint-Pierre took place. I call him "Saint-Pierre" just for the sake of comparison because I strongly doubt that he or myself ever wish him to be canonized! Isn't it quite singular for instance to see how his apostles, the government members, all came into the fold. Their conversion to controls was instantaneous and those of us who can still feel some measure of indulgence toward them noted that there were some shortcomings in this bill.
Mr. Speaker, if a member of the opposition, if my colleague from York-Simcoe (Mr. Stevens), if the member for Don Valley (Mr. Gillies) and others, ever dared criticize the bill, we were strongly lashed at not only by the government but by a biased press which was poorly informed on the subject. At that time, how should I say, the pass word-
It was the in thing to be in favour of controls, that sudden conversion, and to be with it. It was the spirit of Canada's galloping Prime Minister, no matter what road, what lane, or what lost trail he might either gallop, trot, walk, or merely meander on.
True enough, there were certain spirits who were against this. We in the official opposition divorced ourselves entirely from the motivations of the New Democratic Party opposing controls. I had seen their flip-flops during 1974. Their leader at that time spent three weeks during the election campaign
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trying to destroy the program here in Ontario, and that is the only place where he was at all effective.
The program of wage and price controls had been advocated by the Conservative party since early 1973. I do not for one moment subscribe to the view that it was wrong to disclose this particular type of program in detail to the public of Canada. Everyone knows that in editorials and in all sorts of places opposition parties are being asked to outline their programs weekly, much like supermarkets such as Steinberg's, Dominion, Loblaws and A&P in eastern Canada, and Woodward's or Safeways in western Canada. The people want to know weekly what is the price for cabbage, pork chops and orange juice, as well as for other things in the supermarkets. They apparently also want to know the weekly stand of political parties on any particular point. All I am suggesting is that this sort of reaction to a disclosed program is totally belied by the performance of the Canadian public in 1974. At that time the public had a most essentially detailed program that would affect the economy. It had been laid out and was not something brought in at the last moment. It was outlined here on the floor of this House.
In the budget debate of 1973 I first disclosed that we had such a program, and my colleague, the hon. member for Don Valley fleshed it out as we agreed would be done during the time we had for the debate. That program was laid out. There was no surprise in it and it did not vary, except perhaps in the minds of some of the so-called pundits and political critics.
The NDP assaulted the program. They were totally against it. The then leader offered a price review board as an alternative. What on earth was he using to try to delude the public? He was using another variation of wage and price controls. Such a price review board would place emphasis on prices and presumably profits, but an integral part of price is the cost of rent, of financing and of labour. When I refer to the cost of labour I do not mean only labour on piece work, but also managerial salaries. These costs are all part and parcel of the cost of production. The prices review board would have looked at all suggestions for increases in prices to the public.
This was just a flip-flop, and the net result was that the electorate in Ontario and British Columbia gave the NDP the back of its hand. The leader of the party lost his seat, I would suggest, because of his total lack of sincerity in attacking the program of wage and price controls as it applied in 1974. As a matter of fact, this government did the greatest possible disservice to the public of Canada, and we are the inheritors of the resulting problems in 1978, by its dilly-dallying and deliterious actions, and even by its wrong actions in 1972.
The 1972 budget of John Turner was a totally uncalled for expansionary budget, particularly when you can remember that the Prime Minister had boasted in 1969 that inflation had been licked and wrestled to the ground. He did so even though figures from the Dominion Bureau of Statistics or any other probe indicated a straight line. The Prime Minister was deluding the Canadian public that he knew what he was talking about.

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I give him a certain credit for intelligence. I do not think he misunderstood the situation but was simply misleading the Canadian public through those years.
The Prime Minister was unavoidably driven into a corner after 1974 when we were experiencing at least nominal doubledigit inflation. This is similar to the unemployment situation in that unemployment figures do not represent a true picture. There is always an underestimation in these matters. It is nonsense to talk about inflation at a rate of 8 per cent, 9 per cent or 9.5 per cent because this is just under the double-digit figure. If you ask people what they will sell their houses, property or farms for, whether they are ordinary working folk or those in the higher income brackets, you will find they want a return of 11.5 per cent or 12 per cent. That is what the public indicates as the degree of inflation.
It is ridiculous to ask the people of Canada to save and invest their funds. The Lord knows that we have had exhortations from "A" to "Z", and from midnight to midnight, 24 hours of the day, to save and to invest, providing we can stay ahead of the tax man. Why should people save to invest when they only get a return of 8 per cent or 9 per cent on Canada Savings Bonds at a time when inflation is 9.5 per cent or 10 per cent? They are not standing still, they are beginning to go backwards. How can we encourage people to save their money? Do not tell me this applies only to those people with incomes of over $25,000 or $30,000.
Every member of the House has had phone calls from old age pensioners who are on modest incomes, but not necessarily limited to what is paid under the old age security and the guaranteed income supplement. Some have perhaps saved a little on the side, maybe they are retired farmers and are getting something from the mortgage on their farms. They have had savings of one sort or another. They might be getting the Canada pension on top of old age pension, and in some provinces they live in residences for senior citizens which are highly subsidized by the provincial government out of the taxes from the general taxpayer, and to that extent they have an addition to the old age security provided by society. But even if they want to buy $200 or $300 worth of Canada Savings Bonds per year, and that is a very modest objective, how can you tell them that they are going to do anything worth while if, on the coupon rate of the Canada Savings Bonds, they will fall behind because inflation has gone up to 9.5 per cent or 10 per cent? There is no profit in trying to delude the public to that extent, and I think it is an act of deliberate dishonesty on the part of the government to engage in such tactics and to adopt such a laissez-faire attitude with regard to the economy as a whole.


Mr. Blais:: Mr. Speaker, I rise on a point of order. To my mind there has been a very precise ruling by Mr. Speaker relating to the use of unparliamentary language. The hon. gentleman has used terms with regard to this government that, in my view, are completely unparliamentary, and I ask him very seriously to withdraw those remarks.


The Acting Speaker (Mr. Turner):: I suggest to the Postmaster General (Mr. Blais) that the hon. member for Edmonton West (Mr. Lambert) has used them in regard to the government as a whole, not in regard to any individual.


Marcel Joseph Aimé Lambert: Mr. Speaker, I wondered whether that was going to be the protest of the Postmaster General (Mr. Blais). From time to time he has been gently exposed to the rules of the House. May I suggest that he take a course in depth on the procedures of the House? I did not say the Postmaster General deliberately misled the House. My statement was that the government misled the public, and that has been perfectly acceptable since Anno Domini, in the same way that it is open to a backbencher on the government side to say that the opposition has misled the public. Of course, God forbid that they should say that because they have no occasion to do so. Be that as it may, I will take on the Postmaster General on a point of order at any time of day or night, and he better get up early in the morning.
When we see this government being honest with the public in so far as inflation is concerned, that will be the second coming of Christ. It has been dishonest with regard to inflation for almost a decade. I can go back to 1968 and 1969, long before the entry to the House of the majority of government backbenchers sitting here today, and I distinctly remember speeches made by the Prime Minister before he became Prime Minister, and subsequent to that time, as well as of the then ministers of the Crown, with regard to inflation. According to them we were doomsayers at the time, but at that time our dollar was worth about 50 per cent more than it is now. We have seen the savings of the Canadian public eroded to the point where they are now.
Some hon. members opposite were with me in Washington last week as members of the Standing Committee on Finance, Trade and Economic Affairs. We heard there a very good expose of the U.S. economy. Our hosts, and I thank them publicly here, were most co-operative and went out of their way to be frank and to make themselves available at a most inopportune time for them on the eve of the president's message to Congress on the state of the nation and on the eve of the presentation of the U.S. budget. They were quite candid in their replies.
There are hon. members opposite who heard me make statements suggesting that unfortunately I thought the U.S. administration suffered from some of the problems that have faced our Canadian administration with regard to inflation, that they simply refused to bite the bullet and take the necessary steps. The same situation prevailed in this country until 1974 when wage and price controls were imposed. They should have been imposed long before that time and in a different form. The Prime Minister was upset. There was no way that he would consider a freeze and he made the comment "zap, you're frozen". That was his slogan in 1974, and it was said to the workers of Ontario. I am only sorry they did not have cotton wool in their ears at the time so they could have avoided hearing it. It was the worst thing he could possibly have said.
January 25, 1978

Members of the finance committee have heard from members of the administration, not only privately but publicly, and from the former chairman of the AIB, who was one of the first ones to say it, that it was unfortunate that the government had not chosen an immediate freeze instead of this creeping sort of program which has been in force and which, frankly, sabotaged the whole principle. A good deal could have been done, but this program as it has worked out has been on the down-slide for many months, and the sooner the government gets rid of it the better because it is causing us to have a surplus of Canadian investment in the U.S. as against investment here in Canada.
Consider the major realty companies in this country. They are investing hundreds of millions of Canadian dollars in the United States and they have been doing so for the last two years. Why? Because we have the most aggressive tax system in so far as business and returns to Canadians are concerned. We have ten times too many regulations, starting with the federal government and going on to the provinces and the municipalities. I will put the blame on the backs of the provinces and the municipalities with regard to realty developments in this country. It is a known fact, it is notorious, and it is to our utter shame.
If there are going to be realty developments, whether of a residential, commercial or industrial nature, it will take developers up to five years to fight their way through an almost impenetrable jungle of a mish-mash of assinine regulations in many instances. During all that time, of course, developers will pay taxes and interest. However, in the United States it takes two years at a minimum. It may take three years, but still that is a big difference. Our major Canadian industrial and commercial developers soon know what the answer is and where the money is going to be made. That is the proof of the pudding. Let us not worry; tax is going to be paid. The Income Tax Act will affect those profits. There will be no exploitation of the public or anything like that.
It is high time this program came to an end. The commodity index on the basis of prices last month was 9.5. Within two months it will be over ten. When we include increases in the prices of petroleum products between now and mid-summer, it will be over ten. The figure will be a double-digit figure.
Wage and price controls are as effective as a sword fight with icicles in the mid-summer sun. The only thing good I see in this bill I pointed out at the beginning. Mr. Tansley, the present administrator, was in the committee dealing with supplementary estimates in November of 1976. I said the following, as recorded at page 6:22 of the minutes:
One point that I did want to raise particularly, Mr. Tansley, is the legal effect of your orders or the decisions or the recommendations of the AIB. They do not modify any contract, do they? They are merely a rollback of rates of compensation for whatever may be the term of the contract or the agreement and that if- I put it to you-say in June in 1977, it were decided to lift the whole program of price controls, all those contracts would spring up like so many mushrooms before dawn at the contract rates and that we have a time bomb sitting in in so far as prices as well as compensation rates in all these contracts which we are now seeing.
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And I think you would confirm you are seeing more and more two- and three-year contracts and the strategy is simply, now you negotiate for a contract well down the road at rates-you may roll them back-but as we approach the terminal date of this program, or shall we say the political attractiveness of lifting the program, there is going to be a very serious adjustment because you have not the power to modify the contract.


Mr. Tansley:: It is my personal view that your concern is well placed but I do not know that I am in a position to say much more than that.
In parenthesis I might say that I confirmed this in subsequent meetings with the then minister. With regard to clause 5 of the present bill insofar as it applies to controls on wages and prices, I agree that there should be a legal amendment of any negotiated agreement for working conditions and pay to the extent that they have been modified by the Anti-Inflation Board or by the administrator and not merely deemed to be a roll-back with a subsequent time bomb.
As my colleagues have pointed out, the first part of the bill is but a retroactive application of a recommendation made by the AIB at the request of the government. I do not like the retroactivity of clause 1 and clause 8. The government had the opportunity and did amend the act, and to that extent I find the act objectionable. Personally, I think the anti-inflation program in its present form has to be wound down and out. It was in a bad form to begin with, and it now has a deleterious effect on our economy. The sooner we get rid of it, the better off we shall be.


Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, it is on the record in Hansard that I have been opposed to wage and price controls as imposed by this government since Day 1.


Sinclair McKnight Stevens: You voted for them twice.


Andrew Hogan: I voted for selective price controls.


Sinclair McKnight Stevens: You voted for them twice.


Andrew Hogan: Do you want to make your speech now, Sine?


Sinclair McKnight Stevens: When you sit down.


Andrew Hogan: The ungracious intervention by the so-called finance critic, who I think used to be the president of a western bank and now has a bleeding heart for the unemployed in this country, to the effect that I personally voted for price and wage controls as imposed by this government is a complete distortion, if not an outright fallacy.
As everybody in this House and as this whole country knows, in both the 1972 and 1974 elections this party took a stand in favour of selective price controls, and our continuing conviction was enunciated in the House yesterday by our leader when he said that in such things as mortgages, automobiles and in other particular sectors of the economy, whether we are elected or in the opposition, we would still push for selective price controls as a means of overcoming price instability and price inflation in the economy. What was imposed by the government was altogether different.
The government has almost total control of wages but loose control of prices. Prices of imports and other commodities

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which are important to ordinary families are exempt from controls. That is the basic reason the New Democratic Party opposes wage and price controls. We keep repeating, and the Canadian people should remember, that what this government says on the campaign trail may not necessarily be what we get six months later.
The Prime Minister (Mr. Trudeau) and his party, even this party and the Social Credit party, stood against the then leader of the opposition when he advocated wage and price controls. I have no qualms about that because while this party believed in selective price controls, we could not agree to tying up the economy with wage and price controls. Every country in the western world that had tried this, including the United States, had found it inadequate as a means of controlling prices. We know that in reality wage and price controls are simply a means of controlling wages. The results are there for all to see.
In a year-end interview with journalist Bruce Phillips of CTV, the Prime Minister was asked to defend the economic record of his government. Mr. Phillips pointed out that the cost of living had increased by 9.5 per cent over the last twelve months, but the Prime Minister countered that it was unfair to look at the year-to-year change in the consumer price index- the figures for the latest month available showed it standing at 9.1 per cent-without reference to the over-all trend during controls. Just the other day the Prime Minister referred to the increase in the gross national product for the last three months but he did not mention that in the last three months the consumer price index has been growing at an annual rate of 11 per cent.
In the interview with Mr. Phillips the Prime Minister claimed that by the end of the three-year control period the inflation rate will have been brought down from almost 12 per cent to 6 per cent. A few moments later he said that on the over-all three-year average, we will be on target. Mr. Speaker, the Prime Minister was wrong in his view of recent economic history and he will be proven wrong in his forecast.
The Prime Minister claimed that the inflation rate was almost 12 per cent when the controls program was introduced in 1975 but, according to Statistics Canada, the consumer price index was 10.6 per cent when controls were imposed. The three-year target that the Prime Minister mentioned was not 6 per cent, but was 4 per cent. As for the Prime Minister's forecast of 4 per cent this year, every economist that I know of says this country will be lucky to have an inflation rate of 8 per cent for 1978.
Everybody knows that the national unemployment rate will be at least 8 per cent this year-perhaps 8.5 per cent. This does not allow for the forecast by the Department of Labour of decreased participation by all groups in the work force. This is an important measure of the under utilization of people in the economy.
When Hon. John Turner was minister of finance this party told him and the government that inflation cannot be con-

trolled by deliberately creating more unemployment. The Liberals seemed to believe that expansionary policies would push up the cost of living, but this party regards such thinking as a fundamental error. The results are shown in the one million unemployed and the fact that for the last three months there has been an 11 per cent increase in the cost of living, considered on an annual basis. Things are particularly bad in the Atlantic region and areas like mine where there is low income and unstable employment.
Both Mr. Turner and the hon. member for Rosedale (Mr. Macdonald), when they occupied the finance portfolio, accused this party of not caring about inflation. We responded by accusing them of hurting regions, individuals, and national unity by waging the fight against inflation on the backs of the unemployed. Just recently Mr. Ralph Sultan, chief economist of the Royal Bank of Canada, who is not known as a wild-eyed radical, said that the current thinking is that expansionary policies would be inflationary. That is the thinking of this government which the former minister, Mr. Turner, got from Mr. Simon, who was secretary of the treasury in the United States at one time. Mr. Sultan said that this may be one of our fundamental errors, and we certainly agree with that. He also said that inflation seems to be built into our economy regardless of our growth rate.
The Prime Minister's economic policy for the last three or four years has been based upon this notion, which is prepared to see unemployment rise as a trade-off for less inflation. I suggest that 1977 has shown this policy to be bankrupt, and 1978 will prove that to be the case even more. There will be no double-talk during the next election campaign to fool the Canadian people.
When we look back over this period of wage and price controls introduced by a government which was elected after pushing hard against this type of thing, we see how the Atlantic region, for example, suffered from these small "c" conservative fiscal and monetary policies. It also suffered as a result of a stupid commercial policy that for too long allowed an over-valued exchange rate, as well as a complete failure to co-ordinate the monetary, fiscal, commercial and exchange rate policies in order to bring about a balance between stimulation of the economy and stable prices.
They fell hook, line, and sinker for what the American people were telling them under a very conservative Republican administration. I think this happened to the former minister of finance, Mr. Turner, and the hon. member for Rosedale willy-nilly had to follow. As a result the latter is practically out of politics today, because all he got was an increase from following these policies, an increase of unemployment, and he could see an increase in inflation coming up at the same time.
As I mentioned yesterday in another speech, despite the good intentions of the Prime Minister on national unity through his bilingual policy, and I was never so mean or small to attack that policy except in its implementation but never concerning intention, this government has mismanaged in an
January 25, 1978

extremely poor way the economy of our nation. The Atlantic region has worsening unemployment, in northern New Brunswick, Newfoundland and in Cape Breton which we, as a nation, should be absolutely ashamed about. It is not only now in these areas which have been traditionally hard hit but also right into the heartland of the industrial part of this country. In Ontario 7.1 per cent of the work force is unemployed. If you added the discouraged workers of Ontario the figure would likely be 8 per cent. It is no longer then a strictly Atlantic region problem or a problem for the other hard hit areas such as the Northwest Territories.
The national policy being implemented and used by this government has made it much worse for the hard hit and traditionally low income and heavy unemployment areas of the Atlantic region. Together with ridings such as the one where I come from, the one where the Deputy Prime Minister (Mr. MacEachen) comes from, and the various other areas I have mentioned, the unemployment situation is spreading now into northern Ontario and seeping down into the heartland of southern Ontario.
In 1967, when the Cape Breton Development Corporation was set up, the coal industry was declining and being phased out. The Sydney steel plant was the cornerstone industry so far as Cape Breton was concerned, but the federal government would not take over that industry.
It said to the government in Halifax, the small provincial government with a bureaucracy which did not have the expertise, a government which did not have the financing, that it should take it over so that the provincial government would be looking after the steel plant. If there was anything that was designed and planned, and stupidly planned if it was planned, to bring trouble to the people in that region in the future, it was that kind of an arrangement. To this very day we have suffered. I am not saying that the federal government did not make contributions, perhaps up to $100 million to the Sydney steel plant within the last ten years. However, because of the fact the main owner was the provincial government which did not have the expertise, they did not know and did not recognize that this plant had to compete internationally if it was going to exist. As a result of the federal government's refusal to make it a separate division under Devco we are in a plight in Cape Breton now which can only be classified as grim.
I would like to make a suggestion both to the Deputy Prime Minister-I see him in the House-and to the Department of Regional Economic Expansion although the minister of that department is not present at the moment. I would like them to give serious consideration at this stage of the Sydney steel plant history to making it a separate division under Devco. I will explain why I feel this is necessary.
The provincial government has made a complete mess of trying to renovate the steel plant. A lot of money has been spent there. Before I came into politics I pleaded with them to put in basic oxygen furnaces as a substitute for the old open hearth furnaces. Although you might not know the technology of the steel industry it was plain you could cook a batch of steel in about half the time with these furnaces that you could
Anti-Inflation Act
with the old open hearth ones. Incidentally this was introduced into North America in Hamilton by Dofasco in 1955. By the time we were in difficulty in Sydney in 1973, the Japanese were producing 95 per cent of their steel by this method. It is no wonder they cleaned out the markets and everybody is trying to keep restrictions on imports and using quotas and tariffs against the Japanese because they are beating all the so-called free enterprisers in the United States at their own game. Under Japan's system the government did not back out. They actually helped these Japanese firms without actually nationalizing them.
There have been literally hundreds of millions of dollars put into that plant, and it was wasted. Some $20 million was recently given by the federal government and that is just for housekeeping chores. If the job had been done five or six years ago they would not need to give them that money now. It is ridiculous to be given money to lift open hearth furnaces which should now be completely non-existent. In the proposed plans they were to replace the open hearth furnaces with basic oxygen ones. The result would have been that today, instead of a loss of $30 million in these plants, the maximum loss would be some $10 million taking into account output and the depressed international situation in steel during the last three or four years. More important we would be ready for a new influx of capital with a base to allow us to compete in the future.
The situation is unrealistic. Either the Sydney steel plant should be closed or it should be taken out of the hands of the provincial government. They should pick up the debt that is owed. There is a continuing debt, not from general revenues, but from guaranteed loans which they gave to that corporation. Devco ought to take it over and renovate it. Devco or Sysco are going to be coming in there within the next year and a half-it will be after the election-and I am sure promises will be made during the election campaign with a plan which will require $200 to $250 million from the federal government in order to renovate that plant.
When my leader spoke yesterday about the need for national planning, everybody got uptight about it, because they take it to mean continual government intervention. We want some sense in the steel sector. It is not difficult to run a steel plant in Hamilton which is near the source of raw materials and the markets. They use coal from the United States. Possibly in ten years there will be some difficulty. The coal may not be available. A lot of government help may be needed there yet.
It will take a special effort in order to build up the Atlantic region and the steel industry there. I plead with the Deputy Prime Minister because he is the only representative of Nova Scotia in cabinet. He knows about these problems. There is no way to bring back the Sydney steel plant unless it is taken over by Devco and made a separate division. I admit that because of mistakes which have been made it will be tough sledding, but there is no other way it can be done.

January 25, 1978
Anti-Inflation Act
As a result of wage and price controls, along with the international situation, the situation at that steel plant has gone from bad to worse. It is sickening to hear a former Liberal premier of Nova Scotia, who now exists in the other place while at the same time trying to run a big university, telling the Halifax Rotary Club that most of the blame must be put on the Sydney steel workers instead of on mismanagement by the Nova Scotia government and their cohorts in running that plant.
Ad hon. Member: Shame!


Andrew Hogan: It is a damned shame. It is even worse than what the Minister of Industry, Trade and Commerce (Mr. Horner) had to say about the "unappreciability" of the Cape Breton workers. I do not think that word is even in the dictionary, but that does not matter to him. He has made a slur against people who have long suffered in our Confederation. They have been alienated by economic forces and a lack of political clout.
One does not have to be here very long to know that the maritimes have no political clout. The west is now starting to get some because it has economic clout. Those who represent the maritimes do not apologize for having to ask for these things because, in a well planned economy, they would be sharing in the wealth.
There is no way an international steel plant can operate without government money in such an area after private enterprise has pulled out. What is the alternative? There are 125,000 people in one county. Are they to be put on welfare? There are enough people on welfare and unemployment insurance already. As one member pointed out earlier today, every day there are 2,000 people coming off unemployment insurance and going on welfare. Is that where our economy is heading?
In addition to the government failing miserably with regard to the Atlantic steel situation over the past ten years, it has also failed with regard to what has traditionally been a basic and important industry in the Atlantic region, namely, the fishery. I think the present Minister of Fisheries (Mr. LeBlanc) is on the right track. If we had had his type of thinking ten or 15 years ago, our stocks would not be depleted to the extent they are at present. The government would not now have to make such an enormous investment in order to bring the fisheries back to a viable level. Jobs could have been provided that are now desperately needed in the Atlantic region fishing communities.
New Brunswick, Nova Scotia, Prince Edward Island and, in particular, Newfoundland, are heavily dependent upon the fishery. In the past, large foreign fishing fleets have been allowed to come in. Because it was thought that every species was renewable, they were permitted to take all they wanted. Our independent and inshore fisheries were allowed to die off. The fishermen were given small subsidies. They were pushed onto special unemployment insurance benefits. That is not good enough.

Whether we like it or not, this has contributed as much to national disunity in this country as the linguistic question or any other factor. As I said before, I am not convinced that the separatist movement in Quebec is only as a result of cultural and other deep historical reasons. It is also as a result of policies of this government over the past ten years, specifically the past five.


Mr. Pelletier:: Come on.


Andrew Hogan: That has inflamed the situation. Moving from 7.1 per cent to 11.5 per cent unemployment in five years has inflamed the cause of the young people. It is hard to deny that. I would be dishonest if I said that was the only cause. However, I believe that increasing unemployment among the young people in Quebec and in general has added to the difficulties of keeping this country together. The hon. member is an old student of mine and I kind of took it to heart.


Irénée Pelletier: He was my professor.


Andrew Hogan: The Atlantic region has traditionally suffered as a result of the geographic distance from its central markets. We have the same complaint as western Canada with regard to freight rates and rail transportation.
I may be very wrong on this. I know the experts are mixed up in view of the energy situation. However, the Minister of Transport (Mr. Lang) places a lot of emphasis on the future of air travel even though gasoline prices are increasing to the point where they now constitute 22 per cent of the operating costs of Air Canada. He talks of road building as the predominant way of helping the Atlantic region. The minister almost neglects rail passenger transportation for the future. Tax rates are not being adjusted equitably to give us some chance to compete in the central market. That is the traditional complaint at both ends of the country. There is no real attempt to plan the economy.
It is not a God-given thing in economics for the manufacturing industry only to be here and not there. That protection of artificial barriers which pushes up the price to consumers is the price we have to pay to keep Quebec and Ontario going. We are witnessing that now. The furniture industry, textile industry, clothing industry, and footwear industry constitute, directly and indirectly, hundreds of thousands of jobs in these two central provinces. Many of these will go down the drain if the protection they have had in the past is not continued.
It is a sad commentary on a government that has been in office so long that it has not tried to change the economy structurally in order that this area would not be so heavily dependent upon tariffs, and that the west and the east are still disadvantaged in the area of transportation. This has built up into a feeling of alienation.
Despite these difficulties, we all love Canada. However, you can only push people and regions to a certain edge before they become less Canadian. We must lessen the income disparity between the better off and poorer regions, such as the one I represent. I am saying nothing new. The government has had
January 25, 1978

ample opportunity to take action. Indeed, one could almost argue that we have a one-party system in Canada since, for historical reasons in the province of Quebec, the Liberals always start with 55 seats. We are in a desperate economic plight and at the same time we face this problem of national disunity involving not only Quebec but the Atlantic region and the western provinces.
I have mentioned the Atlantic region. I want to turn, now, to conditions in my home town and draw attention to what has happened under wage and price controls there, bearing in mind that the measures through which the government has sought to fight inflation have resulted in increased unemployment. I am not saying this was done deliberately but it has been the result of government policy and the party opposite should be turned out for it. If John Turner followed incorrect advice and if the hon. member for Rosedale persisted in the error, then it is time the Canadian people held the Prime Minister responsible for this gross mismanagement of the economy and the high unemployment which has resulted.
The largest town in my riding is Glace Bay which, according to the 1976 census, had a population of 21,836, less than the number recorded in the 1971 census. The town is presently facing serious difficulties as a result of the slump in the national economy. As members in this group have consistently pointed out, it is the lower income regions which are most seriously affected.
The provincial government of Nova Scotia is super cautious, afraid to adopt deficit financing at a time of such high unemployment in the province, and as a result we in Glace Bay find ourselves unable to get loans from the provincial government to create jobs, provide services, and look after the aged in the recently-built Seaview Manor. A further factor is the stubbornness of Atomic Energy Ltd. which refuses to increase its payments to the town in lieu of taxes as it has done with respect to projects in Ontario. This raises a question I intend to put to the Minister of Energy, Mines and Resources (Mr. Gillespie) when I have the opportunity. Atomic Energy of Canada is a Crown corporation and if it is behaving as badly as everyone in my riding feels it is, the situation is one which should be corrected.
The town of Glace Bay is faced with increasingly heavy welfare costs. Surely the Minister of National Health and Welfare (Miss Begin), who seems to be one of the few in cabinet with a strong social conscience, one of the few one can admire for good intentions, anyway, could use her influence to see that the department of social assistance in Halifax increases its payment to the town of Glace Bay. Perhaps representatives of the Department of Finance and the ministry of urban affairs could meet with officials of the municipal affairs department in Nova Scotia to arrange for special payments to be made to Glace Bay so that the town could meet its escalating costs.
I return to the general topic, that of the dismantling of controls. We in this party fought to end controls in 1977. The
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bill as it now reads would extend the controls beyond the date of December 31, 1978, originally anticipated. The regulations accompanying it provide for an allowable wage increase in the third year of controls amounting to 6 per cent when, under the original legislation, the figure was to have been 8 per cent.
I draw attention to the fact that the cost of living has been increasing at the rate of about 11 per cent for the past three months. In the opinion of most economists the figure for the year is not likely to be less than 8 per cent. I say to the government that it is inviting further confrontation not only from organized labour but from many workers who are being asked to take 6 per cent at a time when the cost of living has risen to 8 per cent or higher. There is no way in which the Liberal party can get away with another flip-flop during an election campaign. No credit will be given to protestations by the Minister of Finance that inflation next year will be 6 per cent instead of 11 per cent. The people of Canada will not fall for it this time.


Sinclair McKnight Stevens: Mr. Speaker, as the last to speak on the bill from the Progressive Conservative caucus in this House I feel I must say immediately that we cannot, we must not, and we shall not vote for the legislation at second reading later today.
The bill does three things. Initially, the clauses patch up certain deficiencies which have existed for more than two years in the government's anti-inflation program. It refers to certain decrees issued by the government in December, 1975- and they are in effect now, in 1978-asking parliament to ratify or sanction what has been done as far back as 1975. In my view it is almost contemptuous of parliament that this state of affairs should have been allowed to exist for so long, notwithstanding the fact that members opposite have had ample opportunity to bring in remedial legislation embodying the ratification they are now seeking. To bring in such a bill now is contemptuous of parliament, bearing in mind that the government intends to decontrol the whole system by April 14 of this year.
The second thing the bill does is patch up loopholes which existed, and exist, in the initial legislation-Bill C-73. As my hon. friends have pointed out, we in this party drew attention to these deficiencies at the time the legislation was introduced. The original bill did not provide for so-called AIB clauses, that is, clauses which could be written into contracts and which would be in effect upon termination of the anti-inflation program.
The third thing the bill does is, in effect, to give life after death to the control program. There are certain measures the government wishes to take notwithstanding the fact that on December 31, under the present legislation, the controls terminate. So we are asked to make provision for the continuance of a substantial public service and to ensure that some level of activity may continue after 1978.

January 25, 1978
Anti-Inflation Act
I should like to indicate the more general reasons why we intend to vote against Bill C-18 on second reading. The Conservative party is the only party in this House that has consistently voted against the government's anti-inflation legislation. At third reading on Bill C-73 we voted against the government's legislation. On Bill C-86 we voted against the government's legislation as well. Notwithstanding the fact that the NDP like to pretend they have been violently opposed to the anti-inflation legislation, we know they joined with their cousins on the government side to support Bill C-86 when it was going through the House. Once again we will vote against the government's bill which is now before us.
We intend to vote against the government because it has not conducted the economic affairs of this country, especially in relation to inflation, in a satisfactory manner. Time and again this government represents that somehow or other it feels it has done a relatively good job compared to other countries. Fortunately, we have the "Economic Outlook" which was published by the OECD last December. As an independent body it can be relied upon for an independent judgment as to what in fact has transpired in the Government of Canada, its record on inflation, and the record of other countries.
In 1975 when this program was brought in, the facts show that there were only six other nations which were doing better as far as inflation was concerned. Those nations were the United States, Germany, Austria, Denmark, Sweden and Switzerland. In short, we had the seventh best inflation level of any of those countries. At that time we had a 10.8 per cent inflation level, compared to the United States at 9.1 per cent, Germany at 6 per cent, Austria at 8.4 per cent, Denmark at 9.6 per cent, Sweden at 9.8 per cent, and Switzerland at 6.7 per cent.
In October, 1975, we were told that our record was not good enough, and that if we accepted the suggestions of the Prime Minister (Mr. Trudeau) concerning the anti-inflation program, he would somehow bring inflation down to a much lower level in relation to other countries. According to the OECD, in the 12 months to October, 1977, we are running as number ten among world countries. We have lost ground. There are three more countries which are ahead of Canada as far as the inflation level is concerned. That has occurred under the controls program of this government. How can any thinking member of this House stand up and support Bill C-18 later today?
The countries which are ahead of Canada have gained on us, as far as inflation is concerned, since this controls program was inflicted upon Canadians. The countries which now have better inflation levels than Canada are the United States, Japan, Germany, Austria, Belgium, Luxembourg, the Netherlands, and Switzerland. The total OECD average inflation level is now below that of Canada. The government's anti-inflation program has been a disgrace.
I know many, including members of the press, who like to say: "Yes, but what is your alternative? What would you have done differently?" In this respect our credentials are good.
[Mr. Stevens.)
Consistently we have asked the government to take steps to relieve inflation in this country, which it has failed to do. We called for the termination of controls on June 30, 1977. We indicated that following termination there should be a monitoring for approximately six months. Also we indicated that we felt the counterproductive nature of controls was such that it was time to call a halt to them. Using its brutal majority, the government voted us down. Consequently, in insisting its program should continue, the government has contributed to unemployment in this country and has not come up with a satisfactory inflation level.
A credible government should provide us with a two-year guideline setting out what inflation levels exist in the nation. It should set out what real growth targets it intends to work toward. The anticipated job creation programs should be set out, as well as where the jobs will be located on a regionalized basis. Not only should the government partake in rhetoric concerning restraint, but it should set out a clearcut program for the reduction of the government's share of the gross national product, in conjunction with the provinces. The government must accept a more restrained approach to monetary growth than we have witnessed in the past decade under the leadership of the present Prime Minister.
I should like to refer to the remarks made by the Minister of Finance (Mr. Chretien) to the Canadian Club in Toronto. He said:
To sum up, we expect real growth this year of 5 per cent, more than any other leading western country with the possible exception of Japan.
I do not mind the Minister of Finance going to a town that I know something about, but I wish he would at least give the facts. The figures he gave are not correct. He can anticipate a 5 per cent or 10 per cent real growth, if he wishes, but in his heart he must realize that credible independent agencies such as the OECD do not agree with him. Those agencies do not feel we will experience a 5 per cent real growth in the current year. In fact, if one looks at their predictions for the larger industrialized nations, one will find a rather sad picture for Canada. They predict our real growth will be 33/4 per cent, which means that Canada's real growth will be behind that of the United States, Japan, and almost equal to that of Germany. Most important, according to the OECD, Canada's real growth will be virtually tied with or equal to the average real growth of all countries which it has reviewed, including Italy which has an anticipated 1 per cent real growth.
There is a developing pattern with the Minister of Finance, of giving wrong facts to the Canadian public. Obviously he feels he is beyond his depth. It is fine for the minister to pluck out of the air a 5 per cent real growth figure. Obviously he is doing that to take attention away from the actual real growth figures of 1977. For that year the OECD indicates that Canada had a real growth of 2Vi per cent. Incidentally, that real growth was less than that of the United States, Japan, Germany, France, and it was less than the real growth of all the countries reviewed by the OECD.
January 25, 1978

We have a Minister of Finance who ignores the real growth figures for 1977, because they are very damning of this government, but plucks figures out of the air from which he in effect creates the illusion that in this current year, 1978, we are going to be ahead of any country, with the possible exception of Japan. It is time we knew the minister for what he is. He is misleading the facts to the Canadian public.


Some hon. Members:: Hear, hear!


Steve Eugene Paproski: A part-time, do-nothing minister.


Sinclair McKnight Stevens: It was demonstrated today that this minister is nothing but a part-time Minister of Finance. Everytime he is under pressure because of economic issues he quickly wraps himself in the flag and begins to defend national unity. If the Prime Minister wanted a minister to defend national unity he should have given the present Minister of Finance the job of Minister of State for Federal-Provincial Relations, and let him spend full time travelling across the country talking about national unity. I would then say, more power to him.
I suggest there is no ministry in which it is more important to have a man with the strongest available talent working full time than the ministry of finance. If this minister cannot produce or come up with a proper budget to stimulate this country, it is time we got rid of him and, hopefully, got somebody else who could do the job.
The other startling thing I noted today is the fact that the Minister of Finance, in a rather desperate state, is now beginning to quote the bankers of Canada to justify his position. Just how naive does he think we are in the opposition? Does he not know we realize that by giving these same bankers three eights of one per cent as a standby fee for $1.5 billion credit, which the minister obtained to snoic up our dollar, he is putting into the respective banks a credit of $5,600,000 per year for the next seven years? With that type of standby fee payable, whether or not there is any money taken out, who would not expect favourable comments from the bankers when the Minister of Finance asks them how he is doing?
Those are the facts, Mr. Speaker, and I have checked them out. I have discovered that Libya and other countries obtained comparable credit terms with no standby fee comparable to the fee paid by the Government of Canada. Those are the facts.
I have already referred to the provisions and calculations found in reports of the OECD regarding economic outlook. There is one other thing I should put on the record. This government has been told repeatedly that if it does not correct some of the inflationary forces it has put into the economy we will have greater inflation. In this connection I should like to refer hon. members to the thirteenth annual review of the Economic Council of Canada published in late 1976. It is entitled "The Inflation Dilemma." I think it is very important that we read some of these economic reviews.
Anti-Inflation Act
For reasons not fully disclosed we now have a new chairman of the Economic Council of Canada. The time has now come when we must ask ourselves whether the new chairman of the Economic Council of Canada will come forward with the same critical opinions of this government's action we have seen in the past, or will we find that this chairman has been chosen because our august Prime Minister, the emperor, likes no criticism from the Economic Council or any other body?
Before voting on Bill C-18 let me quote a few statements made in that review by the Economic Council over a year ago. At page 57 it is stated, and I hope hon. members will note this-


An hon. Member:: Why don't you use the latest one?


Sinclair McKnight Stevens: It states:
The federal government is not a neutral participant in the inflationary process. It contributes to the determination of inflation through its influence and objectives in the conduct of monetary policy, its control and administration of the national debt, and its expenditure patterns and fiscal structure.
We all agree with that and I think it is important the Economic Council made that point.
At page 72 of the same review we find the following statement:
From our examination, it is clear that the federal government has been the principal benefactor from the rising inflation of recent years, through the unanticipated transfers of real income from businesses and individuals. It has gained in real terms through the built-in progressivity of personal income taxes, through the cost and inventory accounting required in the corporate tax regulations, and through its situation as a net debtor.
The Economic Council has called it the way it is. It is the federal government which manufactures inflation, and the council has pointed out how the federal government is the chief benefactor of inflation.
At page 84 of the review the Economic Council in fact refutes one of the common excuses raised by this government for its sad performance in respect of the oil situation in Canada. It states:
Among the main western countries, those initially injured the most by the oil "crisis" were Japan, Italy and France; the least injured was Canada, a net oil exporter at that time.
In short, Mr. Speaker, the Council is saying we had the smallest disadvantage because of the oil situation, as compared to other countries.
Perhaps one of the most significant things to be said is found at page 135 of the report. It reads:
Over the medium term, of particular importance in our view is the labour market situation. For the terminal year 1979, the unemployment target is set at a minimum of 4.5 per cent of the total labour force-
In 1976 the Economic Council of Canada was talking about an unemployment level of 4.5 per cent for next year. In view of the statements I have read into the record, is it any wonder the Prime Minister of Canada finds it embarrassing to be living with an 8.5 per cent unemployment level and a 9.5 per cent inflation level? I would recommend that members read that Economic Council of Canada review again.

January 25, 1978
Anti-Inflation Act
I heard one Liberal backbencher suggest that I should read a more up-to-date review. That is typical of Liberal attitude. Those people always like to read the current press release which gives them the reassurance that all is well, but rarely do they go back to find out what in fact was anticipated in earlier releases, particularly those things which have not materialized.
1 have outlined what we in this party feel are the most serious problems in this country, particularly the interrelationship between high inflation and high unemployment, which are not being satisfactorily coped with by the present government.
[DOT]	0732)
At a time when we need the strongest minister of finance since confederation, we have one of the weakest. I think it is time that we pressed the minister and the Prime Minister consistently to get on with some of the meaningful things that must be done in this country if we are to have our unemployment level and inflation level go down. If they cannot produce, then let us give the Canadian public an opportunity through a general election to say who should be governing this country.


Some hon. Members:: Hear, hear!


An hon. Member:: Resign.


Mr. Deputy Speaker:: Is the House ready for the question?


Some hon. Members:: Question.


Mr. Deputy Speaker:: All those in favour of the motion will please say yea.


Some hon. Members:: Yea.


Mr. Deputy Speaker:: All those opposed will please say nay.


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the yeas have it.
And more than five members having risen:


Mr. Deputy Speaker:: Call in the members.


Mr. Speaker:: I therefore declare the motion carried. Bill read the second time and referred to the Standing Committee on Finance, Trade and Economic Affairs.
It being after six o'clock this House stands adjourned until 2 p.m. tomorrow.
At 6.10 p.m. the House adjourned, without question put, pursuant to Standing Order.


END OF VOLUME II