1978-10-13

ROUTINE PROCEEDINGS


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, I rise, under the provisions of Standing Order 43, on a matter of urgent and pressing necessity. The government's failure to resolve disputes in the Post Office appears likely to disrupt postal services to all Canadians. Since legislation appears to be the only way to protect the public interest, I move, seconded by the hon. member for Brandon-Souris (Mr. Dinsdale):
That the government introduce, today, emergency legislation that will ensure continuation of the postal service and continuation of negotiation; and that the House leaders of all parties meet immediately to arrange for the House of Commons to deal with that legislation in all stages today.


Some hon. Members:: Hear, hear!


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MANPOWER
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, under the provisions of Standing Order 43, in order to seek the unanimous consent of the House for the following motion. In light of the fact that among the budget cuts announced on September 8 by the President of the Treasury Board (Mr. Andras) were cuts of some $62.5 million in funds for several Manpower retraining programs, and that these cutbacks reduce the level of support for adult education retraining programs to the level where many people, especially married women with children at home, will be unable to take advantage of them, I move,
seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the President of the Treasury Board be informed by this House that it finds such cuts at a time of rising unemployment to be unacceptable, and that he be instructed to rescind these cuts and to restore the level of funding to all Manpower retraining programs to the level that prevailed before his announcement.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL RESOURCES
Mr. Elmer M. MacKay (Central Nova):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to the provisions of Standing Order 43. In view of the continuing refusal of the federal government to deal with Atlantic provinces, like Newfoundland, in a more equitable way in recognizing their historic and legal claims over their social and economic destiny with respect to development of offshore resources, I move, seconded by the hon. member for Annapolis Valley (Mr. Nowlan):
That the Prime Minister and his cabinet modify their policies in this respect to recognize the rights of the provinces to develop and exploit offshore mineral and petroleum resources, which will be done in any event as in the case of the western provinces, under the aegis of national energy policy guidelines, National Energy Board regulations and environmental policy.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.

October 13, 1978
5.0.	43


URBAN AFFAIRS
[Stage Direction]
5.0.	43
Mrs. Jean E. Pigott (Ottawa-Carleton):: Mr. Speaker, I rise on a matter of urgent and pressing necessity, pursuant to the provisions of Standing Order 43. It relates to the multimillion dollar developments studied by the Standing Committee on National Finance in the other place and is a matter with which members on this side have been concerned for some time.
Mr. Bill Perks, National Capital Commission vice chairman, indicated in late 1974, when the Les Terrasses de la Chaudiere proposal was presented to the NCC planning committee, the following:
The committee was not asked if this was appropriate; what we were asked to do was tinker with something that was a fait accompli.
Therefore, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That the Minister of State for Urban Affairs, on motions, explain how the Campeau project could have been a fait accompli in 1974 when the Campeau corporation's only holding in the entire six-block pole west area was a $100,000 option to purchase one property in one corner of the area, and what role any cabinet ministers played in this becoming a fait accompli over V/2 years before the contract was signed.


Some hon. Members:: Hear, hear!


Mr. Speaker:: Presentation of such a motion at this time requires unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


CUTBACK IN HOME INSULATION PROGRAM-MOTION UNDER
[Stage Direction]
5.0.	43
Mr. Arnold Peters (Timiskaming):: Mr. Speaker, 1 rise on a matter of urgent and pressing necessity in order to seek the unanimous consent of the House for the following motion under the provisions of Standing Order 43. In light of the fact that among the budget cuts announced on September 8 by the President of the Treasury Board (Mr. Andras) was the reduction of some $110 million in funding for the Canadian Home Insulation Program, which will result in less insulation being installed in Canadian homes this fall and winter and will lead to a higher consumption of oil and natural gas, 1 move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That the Minister of Energy, Mines and Resources be directed to provide this House with an explanation of this blatant rejection of his policy, and that he be directed to provide to this House any estimates available in his department of the extra cost to the economy in both lost jobs and the increased consumption of fossil fuels as a result of the destruction of the home insulation program.


Mr. Speaker:: Presentation of such a motion for debate can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


URBAN AFFAIRS
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I rise on a matter of urgent and pressing necessity arising from the refusal of someone on the other side of the House to allow the motion of the hon. member for Ottawa-Carleton (Mrs. Pigott).
Questions have been asked in the House, on numerous occasions, about the squandering of public money on the Les Terrasses de la Chaudiere project. The Minister of State for Urban Affairs (Mr. Ouellet) has always said that this giveaway was good value. Now that the Senate Standing Committee on National Finance has studied the matter thoroughly and concluded that the government lost its shirt, it is time for this House to see that everything is done to get to the bottom of this gross waste of public funds. Therefore, I move, seconded by the hon. member for Central Nova (Mr. MacKay):
That in view of the statement of the Senate finance committee in the report entitled "The Accommodation Program of the Department of Public Works" that "the decision to proceed appears to have rested on other than purely economic considerations", this House requests the establishment of a royal commission on government accommodation procurement procedures with particular reference to all negotiations and agreements leading to the lease-purchase agreement for Les Terrasses de la Chaudiere complex in Hull.


Mr. Speaker:: Presentation of such a motion for debate can be done only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL SECURITY
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on a matter of pressing necessity concerning the reports of a top secret RCMP file named "Carte Blanche", bearing the number D 929-2-32-6-2-1, and reports of RCMP internal telexes dated November 25, 1971, and December 8, 1971. I would ask permission of the House to move a motion as follows:
That the Solicitor General immediately confirm or otherwise the genuineness of these telexes, that he outline the reasons that no apparent steps have been taken by the government to deal with serious espionage information that may have been uncovered and, finally, that the minister confirm whether or not the
October 13, 1978

telex of December 8, 1971, states RCMP security distrust of the federal government by declaring that Jean Pierre Mongeau was supplying information to the then Quebec Liberal government's minister of cultural affairs on the Parti Quebecois while at the same time he was working with the Prime Minister's then principal secretary, Marc Lalonde, and the then solicitor general, the member for Dollard.


Mr. Speaker:: The presentation of such a motion at this time, pursuant to Standing Order 43, would require the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.



ORAL QUESTION PERIOD


Charles Joseph Clark: Mr. Speaker, I have a question for the Prime Minister. The Prime Minister will recall that his Postmaster General-who is occasionally in the House-gave the clear undertaking that he would be prepared to meet his responsibilities. We gather that means to ensure that the mail is delivered and to act as quickly as possible.
Since we now know that this morning mail service stopped in Charlottetown, Montreal, Windsor and Calgary, with a threat of more stoppages to come, will the Prime Minister today introduce emergency legislation in this House to guarantee the continuation of postal service and also guarantee the continuation of negotiations?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, it is unkind of the Leader of the Opposition to suggest that the Postmaster General is not in the House. He should know that the Postmaster General has been dealing very efficiently with the letter carriers' strike in the past week, and that this morning he is meeting in an attempt to settle a strike which, if it has not been called officially, seems in effect to have stopped the Post Office across Canada.
There is a meeting going on at this time, and we expect government representatives to meet with the postal union, CUPW, at two o'clock this afternoon. We hope they will call off the strike, which is premature in the sense it was not called by the union executive. If they do, then the question of the Leader of the Opposition remains hypothetical. If they do not call it off, the government will have to take very urgent steps indeed.


Charles Joseph Clark: Mr. Speaker, the efficiency of the Postmaster General and the government is particularly evident today in Charlottetown, Montreal, Windsor and Calgary, where the mail is not being delivered. I assume the Prime Minister has
Oral Questions
some contingency plans in respect of what will happen if there is yet another failure this afternoon. Will he tell the House of Commons what those contingency plans are, and will he also tell the House how long he intends to delay taking action to ensure that Canadians can count upon their mail being delivered?


Pierre Elliott Trudeau: You will have recognized, Mr. Speaker, the hypothetical nature of the question. I am asked what will happen if the meetings at two o'clock are not successful. 1 can tell the Leader of the Opposition that he should stay around this afternoon to see if the meetings are not successful-


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Mr. Speaker, of course, the nation will recognize the continuing evasive nature of the Prime Minister's answers. I have asked the Prime Minister, does the Government of Canada have any contingency plans in the event that the policy of failure as usual continues with the Postmaster General; and what are those contingency plans?


Pierre Elliott Trudeau: Mr. Speaker, I do not know whether the Leader of the Opposition insists on the policy of failure as usual, when last week the letter carriers continued, without a strike, and signed a very good contract with the government.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: This is what we hope the meeting at two o'clock this afternoon will achieve. The House will be convened until at least 4.45, Mr. Speaker, for the vote. 1 urge the Leader of the Opposition, if he is so anxious to see what the government will do, to stay in his seat and he will see.


Charles Joseph Clark: Mr. Speaker, I know that the Prime Minister has very little use for this institution.


Some hon. Members:: Oh, oh!


Charles Joseph Clark: I will wait until it is quiet on the other side of the House, Mr. Speaker. The Prime Minister will not give the House of Commons information which we have a right to receive. Will he at least agree to act on an undertaking which was given by the Postmaster General several months ago, in response to a suggestion from this side, that there be established a special parliamentary committee to look into all the operations of the Post Office-a parliamentary committee established along the same lines as that set up in relation to the penitentiary service, a committee that produced some very useful recommendations at that time?
Since the government has a record of quite consistent failure in ensuring delivery of the mail in this country and ensuring peace in the Post Office, will the government and the Prime Minister agree today, at this moment, before delaying anything to another two o'clock meeting, to establish a committee along those lines and let this parliament take a look at changes
62

October 13, 1978
Oral Questions
that might guarantee more effective delivery of the mail in this country?


Pierre Elliott Trudeau: Mr. Speaker, I find the Leader of the Opposition strangely self-effacing this morning. Just after I suggested he stay in his seat until 4.45, he says that I have very little use for parliament. It seems that he does not have a very high opinion of it himself.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: The Leader of the Opposition knows-and I repeat it for the third time-that meetings are taking place at two o'clock this afternoon. We hope that there will be a recall of the strikers and resumption of work. I can assure the Leader of the Opposition that if there is not, the government will be prepared to announce what measures it intends to take.


NEGOTIATIONS TO AVERT STRIKE-GOVERNMENT INVOLVEMENT
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, the Postmaster General has just arrived in the House.


Some hon. Members:: Hear, hear!


An hon. Member:: Special delivery.


Walter Gilbert Dinsdale: Yes, special delivery.


Mr. Paproski:: Pony express.


Walter Gilbert Dinsdale: 1 would like to direct my question to the hon. gentleman. I see that he has a smile on his face; perhaps he is the bearer of good tidings. We certainly hope so, because of the critical importance of a reliable, efficient postal service to the people of Canada.
Is the Postmaster General aware of the statement that was made on television this morning by the president of the Canadian Union of Postal Workers, that not once during the long, drawn-out period of negotiations has the Postmaster General or his deputy met with the union officials, either formally or informally? Could the Postmaster General deny, or confirm, this allegation; and could he explain, in view of the critical importance of a reliable postal service, this dereliction of duty if the statement is true?


Hon. J. Gilles Lamontagne (Postmaster General):: Mr. Speaker, as far as my smile is concerned, if the hon. gentleman was on this side of the House he would always have a smile.


Some hon. Members:: Hear, hear!


Mr. Lamontagne:: It is not a question of negating or affirming whatever statements Mr. Parrot has made as president of CUPW. I can assure the hon. member that I have met with him on many occasions in a friendly way, discussing matters relevant to the Post Office and trying every time to establish some kind of agreement as far as the operation of the Post Office is concerned.
I can assure the hon. member that my staff and officials at the Post Office have spent hours, days, weeks and months trying to find solutions to our problems; we have done all that is necessary. If it happens that we do not get what we expected, it is not because our staff did not do their duty and did not take responsibility.


MEASURES TO RESOLVE PROBLEMS
Walter Gilbert Dinsdale: A supplementary question, Mr. Speaker. The Postmaster General obviously has no good news for the House at this moment: this is to be regretted, because the situation is deteriorating very rapidly. Let us take a longer-term look at the matter. We cannot blame the current Postmaster General, as the situation has deteriorated gradually.
Is the Postmaster General aware, in view of the current total breakdown in labour management relations in the Post Office Department, that next week in the city of Washington the postal, telegraph and telephone international unions will be meeting in a world congress and that the major theme of the congress will be industrial democracy in the postal service? I read directly from the union bulletin on the matter-


Some hon. Members:: Order.


Mr. Speaker:: Order, please. Does the hon. member have a supplementary question?


Walter Gilbert Dinsdale: My supplementary question is this: is the minister aware that this meeting is taking place to discuss joint consultation and workers' participation in the management of postal services and telecommunications as a solution to the postal problems arising out of mechanization and automation, and is the government considering this procedure as a longterm solution to the growing postal mess in Canada?


J. Gilles Lamontagne: Mr. Speaker, I can assure the hon. gentleman that we are aware of what is going on in the United States. We are in contact with the post office there. We had British officials of the post office here to discuss the matter with them.
I want to rectify something. When the hon. member refers to total breakdown of labour-management relations in the Post Office, 1 would point out that we have 28 bargaining units who negotiate from time to time in the Post Office, and there is only one that is not in agreement at the moment. Twenty-seven others are all settled.


PUBLIC SERVICE
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the President of the Treasury Board. On the

October 13, 1978

issue of the cutbacks in employment in the public service, can the minister give the House an unequivocal assurance, as the Liberal candidate in Ottawa Centre has tried to do, that all of the 650 employees of the Department of National Health and Welfare who have been given their termination notices will still find jobs within the public service?
[ Translation]


Hon.   Monique@: Mr. Speaker, if you will allow me to answer, I can confirm to the House that some 400 surplus notices sent by my department have been supported by unions representing the employees of my department as giving an early chance to the employees to find another job in the pool of unfilled positions. I therefore hope to rehire those people in other jobs in my department which have been left open for about three quarters of them.


DEPARTMENTAL STAFF REDUCTIONS
Reginald Cyril Symes: Mr. Speaker, I asked for an unequivocal assurance and I did not receive it. My question is, again, for the President of the Treasury Board. Can he give an unequivocal assurance that the 250 employees of the Department of Public Works, the 500 employees of the Public Service Commission, the 362 at Statistics Canada and the 300 at Central Mortgage and Housing, will still be able to find jobs within the public service?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, I answered the same question yesterday in more global terms. We are seeking every avenue to re-employ those public servants whose jobs may be declared redundant, but I will not give an unequivocal guarantee that every single person who is affected can find a job. However, we expect the vast majority will and we will bend every effort to that end.


Reginald Cyril Symes: A supplementary question. I ask the minister if he can explain the rationale in firing employees with up to 20 years' experience and those with particular skills. I am thinking of those particularly in the scientific field who obviously will not be placed in positions for which they have been trained and for which they have developed special expertise.


Robert Knight Andras: Mr. Speaker, the exercise of expenditure reductions is a very difficult process. It is, in fact, a painful process and not one which arouses any joy or happiness. However, in our view it is a necessary action for us to take, as a government, at this time.
As I said before, we will do everything we can to alleviate the effect on people directly affected. It is possible that we will not be able to accommodate some people in other jobs. We will institute other measures to make any separation as decent and painless as possible.
Oral Questions


PUBLIC SERVICE COMMISSION STAFF REDUCTIONS
Mr. Gerard Laprise (Abitibi):: Mr. Speaker, my question is also directed to the President of the Treasury Board who in August last announced a budgetary cut of $15 million from the budget of the Civil Service Commission; $12.5 million of that cut was made at the linguistic program directorate. Considering that a commitment had been made in September, 1977, to the effect that this program would end only in 1983, could the President of the Treasury Board tell us why he does not abide by his commitments and why that budgetary cut applies only to one of the few French units based in the national capital?


Robert Knight Andras: Mr. Speaker, the Public Service Commission reductions to which the hon. member refers in the area of language training came about as a natural progression of the lessening requirements for such facilities. In fact, regardless of the statement made last fall to which the hon. member refers, it was then apparent that these facilities, as they existed, in fact included a considerable degree of redundancy. The requirements had lessened; therefore, we took the necessary action. The alternative is to keep people employed or to keep facilities occupied which are totally unused, and that certainly is wasteful.


Gérard Laprise: I would like to ask a supplementary question, Mr. Speaker.
Considering that the government delivers a severe blow to the French fact in Canada when laying off more than 600 French teachers in the civil service, thus retreating in its program of bilingualism, would the President of the Treasury Board reconsider this policy since there are requests for linguistic training from more than 2,000 English-speaking public servants at the present time?


Robert Knight Andras: Mr. Speaker, again, 1 think the figures used by the hon. member are somewhat exaggerated. My information is that closer to 400, rather than 600, people will be affected. In essence, what the hon. member is suggesting-if I interpret his comments correctly-is that people, whether they are French, English or whatever, are kept at jobs that are no longer required, thus carrying an expense to the taxpayer which is no longer justified. It has certainly nothing to do with the continuation of our commitment to bilingualism, national unity, or anything else. To suggest such a thing is, I think, very, very wrong.
8006 s-s 'h
October 13, 1978

Oral Questions POST OFFICE


LABOUR-MANAGEMENT RELATIONS
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I would like to direct a supplementary question to the Postmaster General. I remind him that he has indicated to this House on a number of occasions that he would accept his responsibility and act quickly. However, referring to a press release of his dated June 7, 1978, he indicated there were two problems with the Post Office, one of which involved labour-management relations and the other being how to achieve a faster and more reliable mail service. The press release went on to say, "The discussions of the past three days by the-"


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


Lincoln MacCauley Alexander: I will put it this way: the Postmaster General has been most ineffective in discharging his responsibilities. What happened? Why did the proposals and the measures that the Postmaster General indicated he had on June 7, 1978, fail so miserably?


J. Gilles Lamontagne: Mr. Speaker, it is difficult to answer a question like that. If the hon. member wants to see what we have done with the Post Office during the last year or so, I will be tabling within the next three days the annual report of the Post Office. In that annual report will be everything that has been done in the Post Office in the last year, so the hon. member will see that we have been efficient.


Lincoln MacCauley Alexander: Mr. Speaker, we know what the Postmaster General has done to the Post Office. Let me just say, as he stated in his press release, that he was on the right track on June 7 and had every confidence in the proposal that had been placed before him for consideration. There is a quote by the Postmaster General in the Ottawa Journal of October 10-


Mr. Speaker:: Order, please. The hon. member realizes, I am sure, that we are not engaged in debate.


Lincoln MacCauley Alexander: The Prime Minister indicated that he thought a Crown corporation was the answer to the problems that exist in the Post Office. The Postmaster General now says that a Crown corporation is not the answer because of the attitude of the postal workers and because of the mistrust, to use his word, of the government. Does the Postmaster General now say that? In other words, how can we introduce a Crown corporation if there is still this attitude of mistrust of government? Will he kindly answer that question?


Maurice Lamontagne: Mr. Speaker, I said, and I repeat, that the institution of a Crown corporation in the Post Office is not the solution to all the problems. I said, and I repeat, that it is a step toward finding a better solution for having a more efficient Post Office.


Lincoln MacCauley Alexander: 1 want to remind the Postmaster General of comments he made as a result of questions on March 7.


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


Lincoln MacCauley Alexander: On March 7, the Postmaster General indicated that in the event the solutions he had failed, he would agree with the implementation of a parliamentary inquiry into the problems in the Post Office. Will the Postmaster General keep his word in that regard, because apparently all the solutions the Postmaster General had on the table failed? Will he now implement his undertaking and institute a parliamentary inquiry in order that we can look into all the problems of the Post Office prior to the introduction of a Crown corporation, so we will know just what we are doing? Will he be a gentleman in that regard?


Maurice Lamontagne: Mr. Speaker, I do not think I ever said that I wanted a parliamentary inquiry, or that I even suggested that. I said that we can take our responsibility as it is. When we table the bill establishing a Crown corporation, the hon. member will have all the latitude he wants to discuss the Post Office. At that time he will be able to make his remarks.


MEASURES TO SETTLE DISPUTE
Mr. Heward Grafftey (Brome-Missisquoi):: Mr. Speaker, my question is directed to the Postmaster General. Considering that indeed we do have a strike right now in the city of Montreal and in the province of Quebec generally, that on numerous occasions in the past the minister told the Canadian people that he is prepared to assume his responsibilities and that yesterday evening he could see that the federal government will not tolerate another strike in the Post Office, what immediate action can we expect this morning on the part of the federal government, in view of the statement made by the minister last night?


J. Gilles Lamontagne: Mr. Speaker, you know very well that it is my duty to be here to answer questions from members of the opposition to enlighten them on the circumstances prevailing in the Post Office at the present time. As the hon. member on the opposition side said, it is true that there is a strike in Montreal and in several other places. I also said, I think, that the government would accept its responsibilities and I take the Prime Minister as witness when he said here yesterday he would take his responsibilities. I think that we did so this morning. I had a consultation with my colleague the Minister of Labour considering that his department has a lot of experience in negotiations, to try a last time to bring the parties together, to try to see if we can come to a negotiated eleventh hour agreement. If we cannot, we shall then take the necessary steps.
[Mr. Andras.)
October 13, 1978


William Heward Grafftey: A supplementary question, Mr. Speaker. Like every member of this House, Mr. Speaker, I sincerely hope the minister will succeed in his negotiations this afternoon. But given the statement he made last night to the effect that he will not tolerate another strike in the Post Office and given that, in the province of Quebec, there is a strike going on right now, does the minister have a bill to introduce in the event he should fail in the negotiations this afternoon to solve the problem which now exists in Quebec?


Maurice Lamontagne: Mr. Speaker, I can tell the hon. member of the opposition we will take all necessary measures if we fail in this afternoon's negotiations. I would urge him to remain in the House until five o'clock to see what happens then.


AGRICULTURE
Mr. Jack Murta (Lisgar):: Mr. Speaker, I have a question for the Minister of Agriculture. Will he inform the House whether the government is considering making any substantive changes to the Farm Credit Corporation in the coming months?


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I have had discussions with the chairman of the Farm Credit Corporation. As I said yesterday, we have talked about privatization of those programs in which the government is involved. We are considering different ways. I have asked them to come up with ways and means of financing the Farm Credit Corporation other than by government financing. We hope to come up with some suggestions with regard to that.
The Farm Credit Corporation would still be under the authority of the Government of Canada. However, we think a better job could be done by finding the finances outside of government-at least some of them-and thereby provide an even better service to farmers than at the present time.


Jack Burnett Murta: Mr. Speaker, that is exactly what I thought the minister would say. With regard to the privatization that it appears will take place within the Farm Credit Corporation, does the minister envisage the Farm Credit Corporation working in far closer concert with the chartered banks and the credit unions in Canada, in terms of the total amount of money that will be loaned to farmers? Also, will the amount of government money going into the Farm Credit Corporation be reduced from the present level?


Eugene Whelan: Mr. Speaker, I am sure the hon. member knows there will be a $23 million cut in funds to the Farm Credit Corporation for the next fiscal year. Applications for farm credit loans are greater than my advisers expected. It appears that many people have tremendous confidence in this Minister of Agriculture and this government and want to continue on in agriculture, borrowing sums, buying more land,
Oral Questions
and so on. The number of applications is far greater than we had anticipated. We are running out of money at this time because of the confidence expressed by their desire to enter agriculture at this time.


FINANCE
Mr. Peter C. Bawden (Calgary South):: Mr. Speaker, my question is for the Minister of Finance. In September of this year, the President of the Treasury Board announced the repeal of the Public Utilities Income Tax Transfer Act. In view of the fact that this action is clearly discriminatory taxation, detrimental to thousands of consumers, particularly in Alberta but in other provinces as well-Newfoundland, Prince Edward Island, Quebec and Ontario-will the minister say whether consultation took place with the provinces before this decision was made, and will he also say whether he is prepared to reconsider this action on the part of the government?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, whenever we have to cut expenditures, some programs, of course, are hurt. I am glad the opposition now realize that it is not easy to find areas in which we can make cuts.
On the precise question, I will be meeting with my provincial colleagues at a finance ministers' meeting at the end of the month. I have received notice from some ministers that they want to discuss this matter, and we will certainly be willing to discuss it. Of course, they must realize that we have to find this money because transfer payments to the provinces are very substantial. No area can be exempted from the cuts on which we decide.


Peter Colwell Bawden: Mr. Speaker, my supplementary question is to the Minister of Industry, Trade and Commerce. If the minister is aware of the government's proposal to repeal this act, will he say whether he is familiar with the argument of a former minister of finance, Mr. Sharp, when the legislation was originally passed, that the purpose of the act was to avoid giving inducement to any province to nationalize its utilities, due to the disadvantages of privately-owned utilities compared with publicly-owned utilities?
Does the minister believe the arguments put forward by the government at the time the bill was passed are no longer valid, and will he tell us whether he feels any concern about the possible elimination of privately-owned utilities as a result of this action by the government?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, I am fully aware of the arguments put forward at that time and now. I have made my representations to the cabinet and to the Minister of Finance, and my

October 13, 1978
Oral Questions
colleague has assured me he will discuss this matter fully with his counterparts in the provinces.


FUNDS FOR RESEARCH AND DEVELOPMENT
David Orlikow: Mr. Speaker, in the absence of the minister responsible for scientific research, I will address my question to the Minister of Finance. Some months ago the minister responsible for scientific research announced a substantial increase in government support in that field, setting a goal according to which 1.5 per cent of the gross national product will be spent on scientific research and development by 1983.
The budget cuts involving scientific research announced by the Minister of Finance and the President of the Treasury Board range between $50 million and $60 million. Has the government set a new target date by which time this country will be spending 1.5 per cent of the gross national product on scientific research, as the minister announced several months ago?


Joseph Jacques Jean Chrétien: Mr. Speaker, there has been a reordering of certain priorities in that field. In the month of June we did, of course, announce incentives to the private sector to carry out more research and development. We are, naturally, very interested in research and development, but we have to work within the finances available to the federal government.


David Orlikow: Mr. Speaker, in view of the stated intention in the Speech from the Throne to give increasing support to industries in the fields of manufacturing, energy and transportation, could the minister explain to the House the rationale which has led to cutbacks in research facilities affecting forestry, fisheries and agriculture, areas which provide some of the most important opportunities for employment in this country?


Joseph Jacques Jean Chrétien: Mr. Speaker, there have been no budgetary cuts, for example, in the field of agricultural research facilities, as the hon. member has suggested. The minister concerned or the responsible ministers have tried to establish priorities in their departments and they have decided to implement some minor changes. However, 1 must reaffirm that we are still interested in helping Canadian research as much as possible, but in the present economic situation, we must obviously impose budgetary restrictions.


BROADCASTING
Mr. Marke Raines (Burnaby-Seymour):: Mr. Speaker, my question is for the Secretary of State. Is the hon. gentleman

concerned because the national news normally broadcast at eleven o'clock on the CBC network seems to have been replaced by coverage of American sports events? Would the Secretary of State consult the CBC to see whether the national news can some day be reinstated and broadcast at the usual hour of eleven o'clock? We are giving a half billion dollars a year to the corporation, yet we are failing to get our national news on schedule.


Hon. John Roberts (Secretary of State):: Mr. Speaker, I should be happy to draw the representations made by the hon. member to the attention of the CBC authorities.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is directed to the Minister of Finance. Would the minister tell us whether he is content to see our dollar hovering around 84 cents American, bearing in mind that his colleague, the Minister of Industry, Trade and Commerce, welcomed a 90-cent dollar?
Does the minister feel an 84-cent dollar is even better, taking into account that the Japanese yen is now 90 per cent higher, that the Swiss franc is 90 per cent higher, and even the Italian lira is 20 per cent higher by comparison with our dollar than was the case two years ago?


Joseph Jacques Jean Chrétien: Mr. Speaker, the Canadian dollar is a floating currency-


An hon. Member:: It has sunk.


Joseph Jacques Jean Chrétien: -and its value is determined by the market. There are some side effects which are not welcome, but the lower Canadian dollar has some good effects, too. Many people believe the Canadian dollar is undervalued, but in the meantime present levels are helping to make Canadian goods competitive in foreign markets, thus benefiting the economy.


Sinclair McKnight Stevens: Mr. Speaker, among the factors contributing to the decline of the dollar are the confusing statements issued by the Minister of Finance. On September 8, for instance, he indicated at a press conference that expenditures anticipated for fiscal 1980 were $52.6 billion, but he refrained from indicating what the government anticipated would be the revenue for that year. Would he inform the House whether it is true that revenues will amount to only $39.3 billion, leaving a shortfall of $13.3 billion in relation to the expenditures he disclosed at that press conference?


Joseph Jacques Jean Chrétien: Mr. Speaker, I stated at that time that the cash requirement would be $9.7 billion next year. I am planning to make a statement in my budget which will include all the forecasts available to us.
October 13, 1978

The other day, when the hon. member was not in the House, I explained that the opposition is completely wrong in trying to project a deficit for this year, because hon. members on that side do not keep in mind that we cut income tax at the beginning of the year, that we have compensated the provinces for the cut in the sales tax and, in addition, paid in one payment the unemployment insurance for the month of April. So it was the case that the gap was big at the beginning of the year, but at the end of the year, as my colleagues and I have said so many times, the cash requirements for this fiscal year will be $11.8 billion.


AGRICULTURE
Mr. Doug Neil (Moose Jaw):: Mr. Speaker, my question is for the Minister of Agriculture. According to information supplied by his department on January 24, 1977, respecting profits and losses incurred by government inland terminals, during the period 1959-1960 and 1975-1976 the five elevators showed a profit of more than $4 million. If one includes the operation at Prince Rupert, the profit was more than $9 million.
Could the minister advise whether prior to the decision to sell the elevators he discussed the matter with the minister in charge of the Wheat Board? Is the decision to sell, his decision or is it the decision of the President of the Treasury Board?


Eugene Whelan: Mr. Speaker, earlier 1 answered a question about privatization. I am sure everyone in the good old Conservative party wants to see more of that. The elevators can probably be used to their fullest extent if they are taken over by a private organization. So far, they have never been used to their fullest capacity mainly because grain was directed to them; the private operators would object to grain going through the government-owned terminals. We think the move to which the hon. member refers is a move in the right direction, and this has been a government decision.


Douglas Charles Neil: Mr. Speaker, I think the reason the elevators were not used to their fullest capacity was that the Minister of Agriculture and his colleague, the minister in charge of the Wheat Board, did not take any steps to use them. In view of the fact that employees at the terminals have now received notice to the effect that their positions are surplus, will the hon. gentleman undertake to make it a condition of any sale that the jobs and pensions of these employees will be guaranteed?


Eugene Whelan: Mr. Speaker, the hon. member has just made an accusation about the use of the terminals. I am sure he is fully aware, as I am, of the way in which grain is handled and distributed. He knows the reason it was not directed to the government terminals. It was because the elevators in the private sector had to be fully utilized and these elevators were,
Oral Questions
in most cases, only used when there was no room anywhere else.
As to the other part of the question, yes, we are concerned for these workers and we shall do everything in our power, within our authority, if we are able to make a proper transition of these elevators into the private sector, to ensure that their welfare will be looked after.


LOTO CANADA
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, I would like to direct a question to the Minister of State (Fitness and Amateur Sport). In June of last year the hon. lady told the country and the House that Loto Canada had entered into a $24 million contract with General Instruments in the United States to provide computer services for its new gaming procedures. We found last week that Loto Canada had withdrawn from that contract and is no longer proposing that game.
Can the minister tell us how much money was expended by either Loto Canada or the federal government in adopting the sole-source approach it did and then withdrawing?


Hon. Iona Campagnolo (Minister of State (Fitness and Amateur Sport)):: Mr. Speaker, the matter is presently under negotiation with the contractor and the provinces. Consequently, I cannot state a figure at this time. However, I shall be pleased to advise the hon. member when I do have a figure available.


PUBLIC SERVICE
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, I should like to direct a question to the President of the Treasury Board: it arises out of the cutbacks announced affecting the Department of Transport.
With regard to the $72 million proposed cutback which will be generated through increased revenues which will be credited to the air transport program, can the minister be more explicit on how the federal government intends to generate this additional revenue?


Robert Knight Andras: Mr. Speaker, the Minister of Transport will be making some comments on that matter on the appropriate occasion.


Donald Frank Mazankowski: Since this seems to be a rather unique method in the application of restraint, simply increasing taxes rather than cutting back expenditures, I ask the President of the Treasury Board whether consideration is being given to

October 13, 1978
Oral Questions
increasing the airport user fees, is consideration being given to raising the airport tax, or will it be a combination of both, all of which will have the effect of increasing the cost of air travel in this country?


Robert Knight Andras: Mr. Speaker, when and if those decisions are taken finally, they will be announced by the Minister of Transport.


ADMINISTRATION OF JUSTICE
Mr. Erik Nielsen (Yukon):: Mr. Speaker, I have a question for the Minister of Justice, but in his absence I should like to direct it to the acting minister, who I assume is the Solicitor General. In view of the fact that the RCMP investigation was completed several months ago into the alleged wrongful conduct of Senator Lucier of the other place and Commissioner Pearson of Whitehorse in respect of the alleged offences of forgery and swearing of false affidavits, has that police report been submitted to the Crown attorneys in Whitehorse for consideration of whether or not charges should be laid, or has it been referred to the department in Ottawa for such consideration?
Included in that reply, may I be advised whether that decision will be made by the Crown attorney in Whitehorse or by the department in Ottawa?


Hon.   J.-J. Blais@Acting Minister of Justice: Mr. Speaker, on behalf of the Minister of Justice I will look into the question directed to him by the hon. gentleman and will provide him with a reply on Monday.


Erik Nielsen: Could the minister also respond to the question of whether or not a decision, if charges are to be laid, will be withheld until after the election in the Yukon, which will be on November 20?


Mr. Blais:: It is my information that the investigation is ongoing and, as I understand it, full details will be made available. I will be pleased to ask the Minister of Justice to report to the hon. gentleman on Monday.


BROADCASTING
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Secretary of State. This week, Mr. Peter Kent, former news reader of the CBC national news, repeated his very serious charges that officials of the Prime Minister's office had pressured the CBC management, which had the effect of intimidating or manipulating them.

I ask the Secretary of State, who is responsible to parliament for the CBC, whether he is prepared to accept his responsibility and move a motion in the House of Commons that the whole matter of the allegations made by Mr. Kent be referred to the Standing Committee on Broadcasting, Films and Assistance to the Arts, where officials of the CBC, of the Prime Minister's office and Mr. Kent can be called upon to testify?


John (Moody) Roberts: Mr. Speaker, of course, I am always prepared to accept my responsibilities, but I am not sure that the course of action suggested by the hon. member would be the most responsible one in the circumstances. After all, the statements to which the hon. member has referred have been very strongly contested by the representatives of the CBC before the CRTC hearings. I think it is proper for CRTC to make its assessment and present its report.
The hon. member, as indeed all members of the House, will have ample opportunities for questioning the CBC on its view of the matter when the estimates of the CBC are before the committee of the House. I doubt very much that the kind of special reference which the hon. member has requested is appropriate at this time, but I will take his representation into consideration.


Henry Perrin Beatty: I wonder if I could have clarification from the minister. Is the Secretary of State saying that because the management of the CBC has not accepted Mr. Kent's statement that they have been manipulated or intimidated, it is not necessary for parliament to look into this matter? May I ask the Secretary of State whether he feels that the CRTC has the authority to police the actions of officials of the Prime Minister's office to ensure that those actions are always proper and above board?


John (Moody) Roberts: No, I do not think I did say that, to reply to the first part of the question. In reply to the second part, 1 simply suggested it would be reasonable to see what CRTC's assessment is.


UNEMPLOYMENT INSURANCE
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, in the absence of the Minister of Employment and Immigration I should like to direct my question to the President of the Treasury Board. In view of the fact that the provinces have estimated the impact of the proposed unemployment insurance changes on the cost of provincial welfare budgets to be something in the order of $200 million, in view of the fact that yesterday the minister admitted that the federal government would pick up 50 per cent of any adverse impact on the welfare budgets of the provinces, and in view of the fact that the minister also stated in the House yesterday that he has set up a joint federal-provincial committee to consider the impact
October 13, 1978

of such changes, can the President of the Treasury Board assure the House that, instead of doing things arse backwards, we will not bring in legislation before-


Mr. Speaker:: Order, please. I think the hon. member should re-examine his choice of words.


ENVIRONMENTAL AFFAIRS
Mr. Ray Hnatyshyn (Saskatoon-Biggar):: Mr. Speaker, my question relates to the report on the news program "The World at Eight" this morning. In the absence of the Minister of the Environment, the Minister of Energy, Mines and Resources, and the Minister of Indian Affairs and Northern Development, may I ask the appropriate acting minister whether the environmental assessment review panel has approved drilling activity in the Davis Strait, off the coast of Baffin Island; and if that is the case, would the minister or the acting minister agree to table that report today in the House?


Mr. Hugh A. Anderson (Parliamentary Secretary to Minister of Indian Affairs and Northern Development):: Mr. Speaker, I understand that the environmental review panel is preparing a report following public meetings in the eastern Arctic, but this report has not been made available either to the Minister of the Environment or to the Minister of Indian Affairs and Northern Development and, therefore, we cannot comment on it.


EXTERNAL AFFAIRS
Mr. Heath Macquarrie (Hillsborough):: Mr. Speaker, I should like to direct a question to the right hon. Prime Minister. In light of his commendable expression of views on the Camp David meetings, can he now advise us whether President Sadat has accepted an invitation to visit this country; and, if so, for what tentative date?


Pierre Elliott Trudeau: The President was invited and has accepted to come in principle. At one point he had considered coming here after the Camp David meetings, but now he has asked that the visit take place some time later in the course of the present session. The initiative is up to them now to fix a date. They are welcome to come.
Oral Questions


URBAN AFFAIRS
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is for the Minister of State for Urban Affairs. The government indicated in the Speech from the Throne that they wanted to continue their policy aimed at helping the poor. Since RRAP is, first, at least in my region, a program which is used by people who have not been able to keep their houses in a good state of repair and who would like to take advantage of this program since there is financial assistance attached to it and, second, because that program permits workers to work at renovating those houses, could the minister tell the House if he hopes to have additional funds earmarked for that program in order to meet the great number of applications which have already been made under that program?


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Yes, Mr. Speaker, this is a program we would like to make universal to enable every citizen wherever he lives in Canada to take advantage of it. As hon. members know, that program now applies only in certain designated areas and certain city districts; yet we hope to be able to make it universal within the next few months and of course to have in hand additional funds to meet the demand.


Joseph Adrien Henri Lambert: Mr. Speaker, I appreciate the minister's desire to expand this program. I commend him for this. However, my question and my concern are more immediate than the project the minister just mentioned. I would like to know what will happen. Representations have been made to me again last week since they have taken charge of the administration of this program at the level of the riding council. They receive a lot of applications and do not have enough money to meet them. I would like to know whether the minister can tell us if additional funds will be set aside for this program in the immediate future.


André Ouellet: Mr. Speaker, the program budget has been doubled in the last few months. This obviously allows a good number of applications to be met, but you have to realize the demand is so high we cannot meet it immediately. So priorities must be established, that is answer first the applications filed by the more indigent people, those living in the oldest houses that are the most urgently in need of repairs, and then consider the applications of those living in areas that have already been designated for renovation purposes. We would like to have billions of dollars and I believe we could spend them all. Unfortunately, in a context of budgetary restrictions, it is impossible for us to obtain as much money as we would like.
70

October 13, 1978
Point of Order-Mr. Cossitt



ROUTINE PROCEEDINGS


Joseph Jacques Jean Chrétien: Mr. Speaker, pursuant to Standing Order 60, I have the honour to table a notice of ways and means, and I request designation of an order of the day for consideration thereof.


POINTS OF ORDER
Joseph Adrien Henri Lambert: Mr. Speaker, I rise on a question of privilege. I will make it short. 1 want to do justice to Radio-Canada. 1 have occasionally had some very harsh criticisms for Radio-Canada's management, and I have always made them known. This morning, I learned that it accomplished its information role fairly yesterday by broadcasting the speeches of the four spokesmen for the political parties of this House. 1 would ask the Secretary of State (Mr. Roberts), who is accountable for Radio-Canada in this House, to tell them of my satisfaction and to encourage them to continue in this direction.


MR. COSSITT-ORDER PAPER QUESTIONS
Thomas Charles Cossitt: Mr. Speaker, while it may seem early in this session to draw attention to questions on the order paper which have not been answered, I feel justified in bringing to the attention of the House questions which are presently listed as Nos. 9 and 19 on the order paper. Question No. 9 has been on various order papers for several years, and No. 19 has been on the order paper for approximately the same length of time.
Question No. 9 concerns the fingerprinting of public servants and asks why this invasion of privacy has taken place. Specifically it asks why public servants are being fingerprinted, especially those who are in positions not of a sensitive nature; how many have been fingerprinted; and how many have refused to be fingerprinted. Perhaps it is common knowledge on Parliament Hill that the number runs into the thousands. It is time the government provided us with this answer, because it has been outstanding for approximately a year or two.
In regard to question No. 19, it concerns the probable misuse of the Unemployment Insurance Commission computer in the city of Montreal by certain individuals employed by UIC. Originally I raised this in the House, and subsequently the Royal Canadian Mounted Police appointed an investiga-

tion to be officially carried out on this matter. I was contacted by the RCMP for information, which I supplied to them. Presumably the investigation has been proceeding for about six months to a year. It is finished, and I would think by now that the government would have the answer to this question in its hands. Yet, I have information from people within the department indicating that the minister has issued orders to stonewall the answer to this question. This is a very, very serious matter if it is true.
Any member has the right to rise, after a year or two, and ask for an end to the nonsense we are receiving from the parliamentary secretary and others in the government that questions are being answered so well, giving high percentages and so on. The government only answers questions which do not embarrass it politically. It is time for the government to commence telling Canadians the truth. It talks about freedom of information and what should be done about it, but the government sets the poorest example Canadians will probably ever see. Can the parliamentary secretary tell us now what he is going to do about questions Nos. 9 and 19?


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, the member can rest assured because, budgetary restraints notwithstanding, it is not our intention to restrict our customary performance in answering the many questions on the order paper, and I think that the hon. member has every reason to believe that he will once again be spoiled by parliament in this new session.
Let me only remind the House that during this past session 78 of his 106 questions were answered, that is about 75 per cent, and that he has no reason to expect unfair treatment in the coming period. As for his suggestion about the minister's attitude towards one or several questions asked by the hon. member or other members of the House, I trust that the hon. member did not really mean what he has implied. There was never any question on the part of the minister or anybody else on this side of the House to intervene to ask our staff to delay or even refuse answering the members' questions. It is important for parliament to know that we do all in our power to answer as precisely, as completely and as often as possible the very many questions on the order paper, which often require very lengthy and costly research. However, it is not on account of high costs to the taxpayers that we are reducing our efforts to answer the very large number of questions put by hon. members, especially the very many questions from the hon. member for Leeds (Mr. Cossitt) requiring much research. There has never been any interference by the government about those questions even if, in my opinion, the Canadian public could do without them. Still it is not up to me to judge the matter, Mr. Speaker, so I wish to reassure the hon. member that parliament is doing its utmost to answer all those questions as thoroughly as possible.
It is physically impossible during a session to answer all questions, Mr. Speaker. However, as I mentioned the day
October 13, 1978

before yesterday, we have answered almost 75 per cent of the questions in the last session and even more and the hon. member particularly got answers to 75 per cent of his questions in the last session, and God knows he did ask an awful lot. Nothing is top secret in our business. We will resume serious consideration of his questions. We will not make any obstruction and he will continue to enjoy the outstanding treatment that parliament has always given him in the past.



SPEECH FROM THE THRONE


[Stage Direction]
The House resumed, from Thursday, October 12, consideration of the motion of Mrs. Ursula Appolloni for an address to His Excellency the Governor General in reply to his speech at the opening of the session, and the amendment thereto (Mr. Clark) (p. 27), and the amendment to the amendment (Mr. Broadbent) (p. 45).
Ramon John Hnatyshyn: Mr. Speaker, yesterday I was in the process of pointing out an obvious fact and truth about the leaders' day presentation. We witnessed a situation where the hon. Leader of the Opposition (Mr. Clark) gave a prime ministerial direction, an inspiring address about the direction in which he felt the country should be headed. On the other hand we had the unusual situation where we found the Prime Minister (Mr. Trudeau) again preoccupied with carping criticism. As the former vice-president of the United States, Mr. Spiro Agnew, once said about a certain enemy of his, "He was a nattering nabob of negativism".
Canadians have had enough of this Prime Minister and the manner in which on every occasion, whenever there is a difficult time or difficult issue to face, he rises and acts as the critic and complains about the proposals of other people, blames Canadians, the press, or anyone he can; but accepts absolutely no responsibility for his leadership as Prime Minister of the country. I commend my own leader for the manner in which he filled the void we have in Canada and in parliament, as far as presenting concrete, constructive, and positive proposals for the recovery of our economy and our national unity.


Some hon. Members:: Hear, hear!


Ramon John Hnatyshyn: I should like to continue with my observations concerning why we are here at this time. We are faced with an unexpected parliament, a time when most of us thought we would have an opportunity to place our positions before Canadians. It is a parliament which was called by a Prime Minister who, quite frankly, was afraid to deal with the electorate at this time because of a certainty of being defeated at the polls.
The Address-Mr. Hnatyshyn
At the conclusion of my remarks last night I was making the suggestion that what we need now is an election to clear the air, with an opportunity for a new mandate. The problem resulting from the extension of this parliament is, and continues to be, that the proposals by the government in power at this time tend to be those very heavily weighted in favour of political consideration. Regardless of who the victor is at the polls, I am certain that, following such an election, a new government would have the opportunity of introducing an economic plan, as an example, in the context of carrying the plan forward over a period of four or four and a half years. I am sure that we in this party will have that opportunity as a result of being successful.
All we have before us now in the Speech from the Throne is a series of suggested so-called cutbacks, completely out of context with what we need in this country at this time. My leader pointed out that we need not only a period of restraint but some fundamental changes in terms of government restraint. On the other hand we require some economic stimulus in order to get our economy moving, to increase our productivity performance, bringing us back into a competitive position with other industrialized nations of the world.
The fact of the matter is that the options open to this government and this parliament are severely and seriously limited. We simply do not have any room in which to operate. This government, when it intends to make fundamental changes, must always consider the political consequences. Therefore it is unable to bring forward the kind of fundamental program my leader outlined in his speech yesterday, and to which the Prime Minister took such great exception in that most negative and unfortunate demonstration he put on here in the House yesterday.
Let me recall to the memory of hon. members of the House that at the time of the last election the Prime Minister made a great issue of the question of leadership. He is again in the position of a sort of macho figure, standing on the train platform, indicating the kind of leadership he could give as opposed to that of the Leader of the Opposition. He did that in respect of the hon. member for Halifax (Mr. Stanfield) in the past. I am sure hon. members on the other side have been hearing the same things I have heard, about how unfortunate it was that the hon. member for Halifax did not have the opportunity to serve as prime minister as opposed to the man now filling that post.
At the last campaign the man who has led our country into the position in which it now finds itself used the same tactics he displayed yesterday in the House. He believes he can go back to that well a number of times, using the same tactics. Let me inform the Prime Minister in no uncertain terms that, from my reading of the electorate, I am sure this particular ploy will not work again, except, perhaps, with those rapidly diminishing hard-bitten supporters he has in this country who still have some faith in the Prime Minister and his party.
In his speech yesterday afternoon the Prime Minister indicated, at least to me, a certain desperateness, particularly
80065 -6 Vi

October 13, 1978
The Address-Mr. Hnatyshyn
in the way in which he spoke and in the negative approach he adopted. Elaving regard to the position the Prime Minister will occupy in this area in terms of our history writers, I am sure he must now wonder what will be his outstanding contribution.
I wonder if he has given any thought at all to what will be the outstanding aspect of his period of office, now something over ten years. The only thing I can think of would be the Prime Minister's unfortunate implementation of the War Measures Act. Plow would you like to go down in history as the prime minister of this country whose only claim to fame was the implementation of the War Measures Act, much to his own and his government's disgrace? If you were in his position now, what would you want to do in order to leave some sort of legacy?
In my estimation the Prime Minister is withdrawing more and more from a consideration of advice, and is becoming more than preoccupied with the whole matter of constitutional reform. This is indicated by the urgency of implementation and the arbitrary deadline set and reiterated by him again yesterday. This whole matter has become an obsession with him. It is my belief that he intends to move in this area, notwithstanding the consequences to the country, with the idea that somehow only he should have the opportunity to decide what kind of a constitution we should have in Canada.
Let me point out the danger inherent in this attitude demonstrated by the Prime Minister. The Prime Minister is becoming more and more isolated, particularly in matters relating to the constitution and matters concerning the economy of our country. He has become more and more withdrawn, seeking the advice of perhaps only two or three people on his own staff. He no longer consults to any degree with his cabinet. His cabinet colleagues have become superfluous to the whole process. What we are observing in Canada is a breakdown of what we term the traditional parliamentary cabinet system.
Incidentally, I was amazed yesterday to hear the Prime Minister's comments as to how the hand applause from this side was a terrible departure from British parliamentary tradition. Apparently the Prime Minister is unaware that in the United Kingdom members do not have desks to pound. That fact has obviously escaped his attention. Of course, he attempts in his rhetoric here to be an expert. He tries to appear or pretend to be knowledgeable on all such matters.
We have observed this obvious breakdown of cabinet government under this Prime Minister. What have been the consequences of that breakdown? I suggest there are four basic consequences. One of the great virtues of cabinet government is that its structure lends itself to decision-making after all the major points of view have been considered. The quality of decision depends on the extent of prior adversary discussion. When discussion formerly took place in full cabinet it was likely that most of the available options were considered.
What we have now is unilateral action by this Prime Minister. He has made apparently serious statements on national television about the future destiny of this country in terms of the economy, without prior consultation with members of his cabinet. This fact is supported by the surprise shown by

cabinet ministers on being told about his statement, and by the bumbling and stumbling effort of the Minister of Finance (Mr. Chretien) to justify the position adopted by the government in the last months.
This withdrawal from the traditional practice of cabinet government in our country, together with his authoritarian, arrogant, and insular attitude, has resulted in a reduction of consultation with his own cabinet to almost none. Members of his own party sit back, not to their credit, and continue to support this man with his non-consultative leadership.
We do not have to speculate about his supporters' attitude toward his actions in terms of the constitution. A long-time supporter of the Prime Minister's party, Senator Lang, outlined this very eloquently at the Joint Committee on the Constitution. He said that the constitutional proposals in the bill were never discussed in Liberal caucus at any time prior to presentation by the Prime Minister in this House. That is the kind of consultation we get from the Prime Minister. That is the shoddy way in which he treats the backbenchers in his party as well as his cabinet ministers. As a result, they are now becoming a laughing stock in terms of government throughout the world.
Where is this sense of leadership that we have heard about? Where is this great Prime Minister leading us to, aside from his carping and criticism at the first opportunity he has to demonstrate leadership when he comes into this House and gives us no specific, constructive direction as a country? We got nothing but an act which did him shame.
Cabinet government has meant in the past that cabinet has had to contain a number of able and strong-minded ministers who have the trust and confidence of the Prime Minister. In this changed reality it seems no longer to be a political advantage to have strong and able ministers in the cabinet, but rather something of a disadvantage to this Prime Minister. Such a man seems to interfere with the plans and wishes of the Prime Minister and his personal entourage. This is why, in the last three to four years, we have had the situation where one after the other of the stronger-that is a relative term respecting this government-ministers left this particular cabinet. It is hardly assuring that the most prominent departing ministers were those responsible for the government departments dealing with the finances and economy of our country.
1 recall very vividly the umbrage taken by a past minister of finance, I believe it was Mr. Turner, when the Prime Minister surrounded himself with his own set of economists, the group of seven, and simply superseded the advice and decisions made by the minister's office and Department of Finance officials. This is the kind of leadership that this man gives.
In a federal country the minister has always had a role to play in representing his region. The danger with the breakdown we are now experiencing in cabinet rule in this country is that, more and more, we find the situation where ministers are having less and less influence in the important decisions with respect to our country. It is no wonder we are suffering the
October 13, 1978

greatest stresses with respect to regional dissatisfaction that we have ever experienced in the history of our country in the time that we have had this government in office.
Cabinet solidarity is an important concept which has gone by the board with this government. Cabinet solidarity is important because it means that the decisions made, notwithstanding their difficulty, have only been arrived at after difficult, internal, adversary discussion. We have lost that now and are being ruled by one man and a small clique of his own personal staff which he has built up consistently since he came into office, a rather elaborate and large apparatus in his own department.
I want to deal briefly, Mr. Speaker, in the time I have available to me, with some other examples of the kind of leadership and disgraceful performance put on by the Prime Minister yesterday afternoon, a time when he had the opportunity to deal with current issues of some importance. We in western Canada have been forgotten and left out absolutely in the Speech from the Throne. The Minister of Industry, Trade and Commerce (Mr. Horner) may smile, but he well understands that there are serious problems in western Canada because he is one who has had a long association with that part of the country. The fact of the matter is that there was no attention whatsoever paid to the important matters relating to transportation when you consider the grain transportation problems we are facing and the way in which the Minister of Transport (Mr. Lang) is attempting to undermine the excellent recommendations of the Hall commission. It is a disgrace that there is nothing set forward in this extended parliament by the government with respect to the difficulties we are experiencing in grain movement.
Another example of the Prime Minister's poor leadership is the way he has handled the resource issues, the way in which he simply and arbitrarily dismissed the right of the Atlantic provinces to offshore resources and minerals. This was an insult to every person and coastal province in this country. The Prime Minister will be extremely sorry, notwithstanding the rhetoric of the position he took yesterday which was further evidence of his arrogant and, indeed, impudent attitude toward both sides and both ends of this country. He has written off Atlantic and western Canada. He understands now that he must concentrate on seeking support in the two central provinces or he will be gone, and that is what we will be seeing in this parliament. We will be seeing an absolute dismissal of these two important regions, Atlantic and western Canada.
What about the Post Office, Mr. Speaker? What kind of leadership has he given there? On August 1 he was full of vim and vigour, "We are going to act with respect to the Post Office." They have done nothing but taunt the union in question, CUPW. They put big ads in the paper saying to the effect, "What a bunch of buffoons these people are for making these demands." Is that the kind of leadership we want, an attempt to create a confrontation before a parliamentary session so that the Prime Minister can walk into parliament and say, "Here is legislation, bring them back to work"? Is that strength in leadership?
The Address-Mr. Horner
I mentioned the area of resource development. The way this government has dealt with the provinces with respect to taxation matters in resource areas has led to some serious questions with respect to provincial rights in the resource field. The Prime Minister takes the attitude somehow-and we in western Canada are very cognizant of the importance of resources to our economies, particularly Alberta and Saskatchewan and, indeed, any area where there are resources-in a unilateral and arbitrary way that we are responsible for the infrastructure and management of our resources, but we have no powers with respect to benefits from and royalties on those resources.
As one pollster indicated, he would have only five members from western Canada. If he is not careful he will find he will have absolutely zero members, because the message will be brought back to him very clearly. In the very short time I have left, I would like to deal-


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired. He may, however, continue with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Ramon John Hnatyshyn: For reasons which I indicated earlier, I must tell this House of my party's feelings about the necessity of a new mandate for a new government to look at economic policy and context. The NDP party has, over the course of the last few years of this term of parliament, supported positions with respect to economic policies and initiatives which we have taken, and have had divergent points of view on others. We have welcomed their support when they have come on board with us, even though their basic philosophy is somewhat different from ours.
With regard to the subamendment put forward in the name of the hon. member for Oshawa-Whitby (Mr. Broadbent), I would like to say that under the present circumstances and context of our economy, and in view of what we consider to be the proper attitude with respect to development of our economy, it seems we would be unable to support the motion. The heavy emphasis which that party places on embarking on a new program of public sector investment is one which we in the province of Saskatchewan have particular knowledge of and one which we in Canada, in view of the present involvement of government in every aspect of our lives, have every reason to want to question. In conclusion I simply say that we in this party do not propose to support the subamendment of the NDP in the context of some of the suggestions and proposals put forward in the course of the subamendment, at the time of the vote this afternoon.
Thank you, Mr. Speaker, for the additional time that was given to me.
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, it was a joy to listen to the member for Saskatoon-Biggar (Mr. Hnatyshyn) speak on the philosophy of that policital party he belongs to, because it was never very clear when I was a member of it.

October 13, 1978
The Address-Mr. Horner
The new leader of that political party was known for his leftist tendencies, and if he is attempting to project what might be called a small "c" conservative philosophy now, it does not fit him very well and can be seen through very easily. I was amused by the speech he gave to the House yesterday afternoon which was very well orchestrated. He must have practised it beforehand quite a bit. He seemed to get run down in places from time to time and had to puff himself up to keep going.
It is rather amusing to me that in the speech he indicated several times that when he is prime minister things will be different. Here is a boy wonder who flunked out of law school, who has not made a five-cent piece in business since then, and who thinks that automatically the people of Canada should choose him to run the country. I find it impossible to comprehend how one could have that much confidence in oneself when it is so shallowly placed.
The basic thrust of the Speech from the Throne will be continued through the thirtieth parliament-


Ramon John Hnatyshyn: On a point of order, Mr. Speaker, I want to point out to the hon. member, for purposes of clarification that he, possibly innocently, has misled the House again. His allegations with respect to the law school history of the Leader of the Opposition (Mr. Clark) are completely unfounded. Maybe the minister would want to outline how many degrees he has, before he starts criticizing other people.


The Acting Speaker (Mr. Turner):: Order, please. I suggest to the hon. member that this is a point of debate, not a point of order.


Mr. Horner:: If he did not flunk out he proceeded to get out, because he knew he could not pass. With regard to my degrees, I guess they are well known all across Canada. The school of hard knocks is one of them. If anybody wants to look up my debt picture and the attempts I have made to borrow money and raise money and make a dollar, that also is well known across Canada.


Mr. Woolliams:: How is your credit?


John (Jack) Henry Horner: My credit is still pretty good, financially and politically.


Some hon. Members:: Hear, hear!


John (Jack) Henry Horner: 1 did not put my money in the Bank of Western Canada which was promoted some years ago by an hon. member on the other side of the House. I had more faith in western Canada.
As I was saying, Mr. Speaker, one thing is clear in this debate and will probably run through the entire thirtieth parliament, and that is that we have a healthy economy and a strong, confident, private sector in our country. We will be taking a number of measures to assist private enterprise as we believe that it can effectively do the job and provide many,

many more permanent jobs in Canada. Certainly we intend to give responsible leadership, and I think the Prime Minister (Mr. Trudeau) demonstrated that in his speech yesterday. Certainly it was an expression of confidence, not like the Leader of the Opposition (Mr. Clark) who, as I said, puffed himself up from time to time with one complaint after another, and seemed to have a split personality. Not long ago I read about somebody who had 12 personalities and woke up and found himself another person. I would not accuse the Leader of the Opposition of having twelve personalities; as my colleague here suggests, he has not even got one good one. I guess that is true.
Confidence and responsible leadership go together. The business community is becoming more and more confident, as can be seen in investment figures and surveys of investment intentions in this country because this government has demonstrated that it is committed to assisting private business growth. We have done so in a number of ways which add up to a co-ordinated set of policy directions toward a growth oriented economy. As a result, while unemployment and inflation still are too high, Canada is working its way through the difficult world economic problems better than are most countries. Certainly the Prime Minister dealt with that subject at length yesterday. It was nice to see some honest admission of this fact instead of the old myths that we cannot be competitive and that our industry is not competitive with the rest of the world. Instead of crying the blues, as we hear from time to time from the other side of the House, it was nice to see someone admit their confidence in the businessmen of Canada and say that businessmen are not a group of dummies who must have their hands held when they go to the bathroom. I would rather build confidence than confusion.
Another myth spread by the "fearful Freddies" opposite is that our businessmen cannot compete, unless it is in raw resources, because they are too backward, too inefficient, too unsophisticated in their products. I will be releasing in a few days a factual study of Canada's export performance from 1960 to 1977. It will make remarkable reading, and I commend it to members of the opposition parties.
They talk all the time over there about our rising deficit on so-called end products or fully manufactured goods yet our exports of end products have increased much faster than our imports of end products. In 1977 we exported nearly 20 times more of end products than we exported in 1960; we imported in 1977 less than five times the imports of end products in I960. Instead of a rising deficit in end products, it has fallen from about 21 per cent of our total trade turnover-exports plus imports-in 1960, to 12.7 per cent in 1977.
Canadian export growth was stronger than the world average during that period that we studied, the period from 1960 to 1977 when the average annual increase of Canadian exports was 13.2 per cent, which is certainly far higher than the growth of the total economy. This is of vital importance to Canada when we consider how important export trade is to our country in relation to other countries. Approximately 25 per cent of our GNP is dependent upon our exports. If we wanted
October 13, 1978

to relate that to what many people consider to be the great trading nation of the world, Japan, it must be noted that 13 per cent of their GNP is dependent upon exports. In the United States less than 6 per cent of their GNP is dependent on exports.
We must and we have paid strict attention to our exports, and we can be proud of the rate of growth of the export of finished products over the years.
Over the same period there has been a strong shift in the composition of our exports toward manufactured goods, with a decline in the shares of farm exports and metal ores. There has been a major increase in the export orientation of Canadian manufacturing at the same time as we have had an increase in imports of manufactured goods. Without trying to present too many statistics to the House today, I would point out that the proportion of our trade in manufactured form rose steadily from 8 per cent in 1960 to 46 per cent in 1977. This shows the steady increase in our ability to sell fully manufactured goods on the world market. The share of manufactured products as a whole, including fabricated goods such as aluminum ingots, rose from 60 per cent in 1960 to 77 per cent in 1977.
Last year alone this country exported $1.3 billion worth of machinery and equipment to the developing world, not to mention billions of dollars worth to the United States, Europe and Japan. We are out there and we are active. Probably no other industrial country in the past 15 years has seen so remarkable a transformation of its commodity trade pattern, and all the while our timid friends opposite were saying that Canadian businessmen could not hack it. Some of them are even saying we must go back to being hewers of wood and drawers of water. We need no longer depend upon that fact at all. While I have nothing against hewers of wood and drawers of water, it is clearly recognizable that you cannot employ too many people if you confine yourself to those types of industry, and we are not.
Let us talk about industrial output and the use of the International Monetary Fund and the OECD as our sources. Since before the recession of 1973-74, Canada and the United States have had about the same growth in industrial output, that is, mining, manufacturing and utilities. This is far ahead of any other major industrial nation, and far ahead of all of our largest export markets.
From 1973 to 1978 we have been second only to Japan, and not by much in growth in our gross national product in real terms. We have had by far the strongest growth in employment of any industrial country, and the Prime Minister dealt with those figures yesterday. Even in prices we have done better than most industrial countries. West Germany has done better, and the United States moderately better.
Those are Canadian businessmen out there, scoring remarkable achievements. Certainly they deserve some confidence from the politicians, and we are prepared to give them all the confidence we can. We have confidence that they really know what they are doing and that they can do their jobs best. What
The Address-Mr. Horner
are their opportunities? They have useful views as to what the government can do to help them so nearly a year ago I went to the private sector and the provinces to find out what the most responsible actions would be for the federal and provincial governments to take in order to encourage industrial growth.
We set up 23 individual industry sector task forces composed of business and labour, with the provinces and the federal government having modest representation. They have sent their reports to me and to the provincial ministers of industry. The federal government is now going over all of them with a fine tooth comb.
A second committee has been composed strictly of senior business and labour executives, along with a neutral academic. They are assessing the complete role of the 23 sector reports in order to draw out the common threads of policy recommendations. The second tier committee report will be coming to me very shortly, and naturally it will be sent to the provincial ministers as soon as possible. In fact, we expect it next week.
Federal and provincial deputy ministers of industry will be discussing the second tier and the sector reports in a few weeks. Provincial ministers and myself will follow their example early in November, and the first ministers of Canada will be meeting at the end of November to discuss and identify the policy recommendations that are made. All of this, in my opinion, is a responsible and competent building agenda for action, based upon the best assessment of men and women out there as to what government can do, or can stay out of, to help them grow.
While this process was going on, the government was moving in areas where there already was a consensus that changes were needed, and indeed, the views of the individual sector reports found expression in our recent economic announcements.
Hon. members know from the screams they hear that the government is seriously cutting back its spending, and cutting back the size and intervention of the public service. Most of the screams are coming from the other side, which cries out for cutting government spending but which whimpers when, inevitably, someone is hurt.
Hon. members know that federal government employment is being held at zero growth. However, some layoffs are occuring. Public service salaries will be legislated to prevent them outpacing those in the private sector. The Economic Council of Canada is working at practical means to try to reduce the extent and cost of government regulation to industry. We are spending more on job creation with money saved through the more selective application of unemployment insurance payments and family allowances.
In the past year the Minister of Finance (Mr. Chretien) introduced means and measures to stimulate employment, production, and investment, for example, the reduction of sales taxes, extension of the investment tax credit, the introduction of wage subsidies, and the incentives for industrial R and D. My own department and agencies reporting to me have made very large increases in our support to Canadian industry. I
76	COMMONS DEBATES__________________October 13, 1978
The Address-Mr. Horner
might mention we are assisting Canadian industry in all parts of Canada, including western Canada. We have done a great deal to help the oil and gas industry, particularly in Alberta, within the last year.
The announcements made by the Prime Minister, the President of the Treasury Board (Mr. Andras), and the Minister of Finance, in August were a further demonstration of our commitment to economic growth and prudent management. The Minister of Finance announced total new cash outlays of $300 million in 1979-80 in support of economic development. There will be $65 million in new money for tourism and the resource industries. There will be about $28 million for industrial support programs, about $70 million for shipbuilding and repair facilities, and further amounts of money for more major capital projects.
I have taken some time to illustrate the responsible and the united or co-ordinated nature of the government's economic approach, Mr. Speaker. Reducing the economic shares of the country demanded by government, freeing resources to give private enterprise more room, providing supportive government policies in an attempt to improve investment confidence, all these were objectives worked out by federal departments together. The policies mesh, and they mesh within the context of six main policy directions that this government keeps before it. It is a framework for upgrading the position of the private sector as our economy heads into the competitive challenges of the 1980s.
First, Canadian growth and expansion should be fuelled as much as possible by private Canadian funds. That means government restraint and budget cutting will continue to free more resources for yet more growth.
Second, government policies, both provincial and federal, must be directed at growth. 1 am talking about a whole range of policies regulating quality control, environmental issues, competition, intellectual property, and paper burden requirements. The federal government will protect the legitimate objectives of these policies, but we will strive to design them to keep to a minimum the constraints on industrial growth.
Third, we will see that the required economic infrastructure is in place. This will include transportation facilities such as roads, harbours, railways, pipelines, power and energy facilities. We will contribute in three ways: we will facilitate and speed up the approval of private sector projects for the Alcan pipeline; we will increase our support for infrastructure projects through the Department of Regional Economic Expansion; we will make direct contributions to certain important projects. A list of major projects which could move ahead in the next two years is being reviewed.
Fourth, to be successful in the competitive 1980s, Canada will need very highly trained and skilled manpower. Federal manpower training programs are being revised to increase substantially the amount of skills and on-the-job training support. We are working on improving manpower mobility in Canada.
Fifth, because of the dependence upon new technology for future growth, the government has already enriched its R and D incentives in the tax systems. Now we are committed to a further program that will increase Canada's R and D expenditures toward 1.5 per cent of the gross national product in the early 1980s. The program will be designed to ensure that most of the new R and D will be done within industry itself.
Sixth, and maybe closest to my heart today, is the improvement of industrial support programs and services. I will complete my speech by expanding upon this point.


Some hon. Members:: Flear, hear!


John (Jack) Henry Horner: Intelligence! Yesterday, the Prime Minister spoke about the intelligence over there.
My department was one of those that escaped rather lightly with regard to budget cuts, I am happy to say. On the contrary, we are increasing our spending in the area of industrial support programs. The $28 million I mentioned earlier will be spent next year. We will double our expenditures in the year 1980-81 in this area again, to $100 million, and the increases will go on substantially throughout the first half of the new decade.
The federal government is increasing its spending while cutting back elsewhere, precisely because of our policy commitment of placing first priority on industrial growth through private enterprise. This government's priority is not new. It is being deepened by my department. Last year we authorized projects worth $125 million, and we are moving well ahead of that this year. In fact if one goes back, September to September, we have authorized projects to a total of about $159 million. In the fiscal year we will well exceed the $125 million of the last fiscal year. The Federal Business Development Bank last year made loans of $479 million, 25 per cent of them to the manufacturing industry, up 13 per cent from the previous year, and they have greatly increased their management consulting services.
The Export Development Corporation signed more than $1 billion in loans to foreign buyers for Canadian manufactured goods, directly increasing and maintaining something in the neighbourhood of 200,000 jobs in Canada.
The changes in our funded program within my department and related agencies reflecting the additional $28 million, will come into place in 1979, after consultation with the provinces on administrative details.
One of the most important changes that I am announcing in the House today is that we will make available under the enterprise development program up to $1 billion for insuring loans at the chartered banks for private industry Up until this time, the enterprise development program had a limit of $350 million. We are expanding that to $1 billion.


Some hon. Members:: Hear, hear!

October 13, 1978


John (Jack) Henry Horner: Before some members opposite run off and say that we are spending $1 billion, I want to emphasize that what we are doing is insuring loans that the banks make to enterprises which can prove that they are justified. We insure 90 per cent of the loan and, in some cases, if it is an innovative, new idea, 100 per cent.
This is an expression of confidence by this government in the business community and in their ability to meet the challenges of the eighties. This might be called last resort financing in the form of government loss insurance for loans made by private lending institutions. Since it is a revolving authority, as loans are repaid new insurance can be provided. As a result, more than $1 billion will be made available in term debt to help companies expand or go into new activity.
I might say that last year some 256 companies were helped by this program. Only seven of those 256 were not of Canadian ownership. I want to point that out, because we are helping Canadians. It is an expression of confidence by Canadians in the Canadian economy that we are helping.
The enterprise development board is a central board. It is here in Ottawa. In addition, we have set up ten boards in the provinces, all led by businessmen who spend their funds through direct loans and grants and also through such high level devices as loan guarantees and risk insurance. An additional $28 million for 1979-80 will actually provide support to the industry of about $100 million. Through the first half of the next ten years, it is projected that the funds will provide more than $1.3 billion worth of support.
The enterprise development program, of course, is not all that the federal government does to encourage industry in Canada. As I mentioned, the Export Development Corporation, the Federal Business Development Bank and the Small Businesses Loans Act, together with the Department of Trade's other services, in 1977-78 provided support to Canadian industry of $3.7 billion and were directly involved in 197,000 projects, mostly smaller and medium-sized businesses in Canada.
A new and improved enterprise development program will broaden this criteria to include more smaller and mediumsized businesses. My colleague, the Minister of State (Small Business) (Mr. Abbott) has been successful in arguing their case. He will now have the enjoyable job of explaining to small businessmen what there is and how they can get it.
The flexibility of the enterprise development program to encourage mergers and acquisitions will be increased by several new measures. Support for research, design, and development is going up markedly. More money is being provided for export market development and sales promotion, particularly in areas of the United States. The department will implement a $100 million contingency liability authority to provide risk re-insurance that will further assist Canadian companies to participate in major capital projects.
There are several other measures, all geared to assist business in Canada, to streamline, modernize, and grasp the opportunities. We are entering a period of great change in
The Address-Mr. Horner
technology, trading patterns, and consumer demand. We are entering this period with many strengths, our resources, our expertise, despite the unconfidence expressed from time to time by the opposition parties.


Mr. WooIIiams:: Like selling wheat.


John (Jack) Henry Horner: Yes, we will sell a tremendous amount of wheat. The industrial support program improvements fitted into all of these measures and directions. As I discussed earlier, it provides government support to the margin of-


The Acting Speaker (Mr. Turner):: Order, please. It being one o'clock, I do now leave the chair until two o'clock p.m.
At one o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 2 p.m.
John (Jack) Henry Horner: In the short time remaining to me, Mr. Speaker, I shall attempt to sum up what I have been saying, and make a few further comments upon our economic performance and potential.
As I said, we are entering upon a period of great change in technology, trading patterns, and consumer demand, and we do so with many strengths both in resources and expertise. Some have expressed a lack of confidence in the businessmen of Canada, but we on this side certainly have great confidence in them. We recognize that as a result of freer trade some Canadian firms may find themselves in difficulties. However, we expect that more opportunities than difficulties will arise as a result of negotiations. The lower tariff barriers and the removal of non-tariff barriers in Japan, United States and Europe, will definitely help Canadian business firms and improve the economic climate. The industrial support I have outlined has been designed to assist companies to restructure themselves so as minimize difficulties which may be foreseen in the early 1980s.
We will be setting up a special MTN-related panel to advise the enterprise development program as to which particular industries will be hurt and the way in which we can help those industries to take advantage of the lower tariffs which may come about as a result of the negotiations. I believe that any who read my speech carefully would agree we have been showing tremendous economic leadership over the whole range of Canadian industry. We have received the co-operation of labour-some 40 different unions have worked on the production of those task force reports and most of the provinces have also been involved in their preparation. We are engaged in a concentrated effort to help Canadian businessmen because we believe the private sector is really the engine by which economic recovery and development will be brought about, along with an extensive effort by my department toward trade promotion.
The Leader of the Opposition (Mr. Clark) mentioned my visit to Japan. As hon. members know, I went to Japan and

October 13, 1978
The Address-Mr. Crouse
Korea this summer and was greatly heartened by what I saw, by evidence of our opportunity to increase sales to Japan. Recently, with the help of my department, an extensive, high-powered group of Canadian businessmen visited mainland China. They have reported to me in detail concerning their hopes for additional sales to China.
Canadians concerned with oil exploration both from the private sector and Petro-Can formed part of the group which made that business trip, and they believe a tremendous amount of good will flow from that visit. Intensive work is being done in Indonesia as well as in many countries of South America. Trade shows and trade promotion throughout the world have made people more fully aware of the competence of Canadian businessmen and of their ability to compete in international markets. As one example I might refer to an article which I saw in a newspaper only this morning-Canada is selling cameras to Japan. That certainly sounds like sending coals to Newcastle, I suppose, but it is certainly evidence of our competence and capability.
Much remains to be done, of course. We are working very hard in connection with the automobile industry, the biggest single employer in the province of Ontario. We are devoting a great deal of attention to the shipbuilding and repair industry on both the east and the west coasts. Everybody knows there is an overcapacity in the world as far as shipbuilding is concerned but we can, and should, nevertheless, improve our facilities so that we can carry out a good deal of the repair work which is necessary to enable the shipping industry to move our goods throughout the world.
I end by expressing my confidence that the business community will appreciate what we are doing. We shall continue to work with them. Meetings are to be held later this month involving my provincial counterparts in both industry and tourism. Canada is healthy, well, and working.


Some hon. Members:: Hear, hear!


Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I welcome the opportunity to participate in this debate on the throne speech, and my first words will be to congratulate the mover and seconder of the address who, through their presentation, did honour to their constituencies.
"A Tale of Two Cities" by Charles Dickens was first published as a volume in 1859, some 119 years ago. In chapter one of this classic story, Dickens wrote:
It was the best of times, it was the worst of times, it was the age of wisdom, it was the age of foolishness, it was the epoch of belief, it was the epoch of incredulity, it was the season of Light, it was the season of Darkness, it was the spring of hope, it was the winter of despair. We had everything before us, we had nothing before us, we were all going direct to heaven, we were all going direct the other way.
Although published in 1859, Dickens used these words to describe conditions in 1775 as they existed then between the people in Europe who spoke English and those in Europe who spoke French. His words pointed out the national disorder which existed.
Unfortunately, things have not improved very much since those days. The words of Dickens in 1859 could well be used today to describe aptly conditions in Canada as they exist at present. We have a throne speech opening the fourth session of the thirtieth parliament which is repetitive and misleading. I say it is repetitive for it speaks of strengthening the economy and of helping the private sector to lead the way toward accelerated economic growth. We have known about this requirement for many years. In fact the government has been saying the same thing for some time, but unfortunately no action has been taken.
For example, on February 17, 1972, the throne speech stated the following:
This country fails in its essential purpose if it does not ensure that its most precious resource, human talent, is not wasted away.
How very true those words are!
On January 4, 1973, the throne speech stated:
It is timely to provide to parliament a full report on Canada's financial and economic situation and to propose fiscal and other measures for the effective management of the economy.
On October 18, 1977, the throne speech stated:
The human hardship imposed by the current level of unemployment in Canada is deeply disturbing in that there should be so many men and women deprived of the dignity of self-supporting work, unable to meet their financial commitments and plan confidently for the future.
Obviously the present Liberal government while in office was well aware of the problems, but unfortunately it took no corrective action during the past ten years.
I say the throne speech is misleading because it states:
The projected rate of expenditure growth during the next fiscal year is 8.9 per cent, which is well below the forecast growth of 11 per cent for the gross national product.
It is this type of economic governmental double talk over the years which has brought Canada to the brink of economic ruin. The Prime Minister's (Mr. Trudeau) own pledge of a 5 per cent economic growth as made at the Bonn economic summit is now open to question. I say it is open to question because all of the economists in this country and all the financial papers in this country tell us that we will do well if the rate of growth achieved is at around 4 per cent, not the 5 per cent pledged by the Prime Minister or the 11 per cent stated in the throne speech.
What we are witnessing today is a cruel con job on the Canadian people perpetrated by the present Trudeau Liberal government. In the throne speech we are told that the government will intensify its assault upon unemployment and inflation, carrying forward commitments made by the government in 1976 with the publication of "The Way Ahead". Time will not permit me to deal today with all the words of good intent, the pledges and promises broken since the present Liberal government printed the booklet entitled "The Way Ahead". Obviously the government knew the problems and their cure, as witnessed by the words on page eight, paragraph two, under the heading of "Inflationary Process", which read:
Increased government spending can lead to higher prices if the government simply prints the money or if additional taxes levied to finance these expendi-

October 13, 1978

tures are passed on to others through higher wages and prices. Excessively high wage settlements and pricing decisions impose higher levels of cost, leading directly to higher prices. Expectations escalate and inflation continues to feed upon itself.
The debilitating effects of inflation extend beyond economic considerations to threaten the very nature of our institutions and traditions. The problems that unrestricted inflation creates were spelled out in the budget speech of June 23, 1975:
-inflation ultimately inflicts grievous damage to the fabric of society. It lowers the living standards of those on fixed incomes, including pensioners. It leaves people without reliable, understandable guideposts by which to arrange their economic affairs. It injects grave uncertainty into decisions on family budgets, housing, savings and provision for old age. It provokes deep frustration, social tension and mistrust of private and public institutions. Collective bargaining is embittered. Industrial relations are damaged. We in Canada are already beginning to live some of these experiences.
That was printed in October of 1976. Those are the words printed by the Trudeau Liberal government in "The Way Ahead", and yet this government proceeded, under finance minister Turner, finance minister Macdonald, and under the present Minister of Finance (Mr. Chretien), to do exactly the opposite.
Obviously this government intentionally kept printing more paper money to cover their blunders in a direct attempt to destroy the Canadian economy. I charge this government with the deliberate destruction of the stability and endurance of our economic system, with the deliberate destruction of the social and cultural traditions on which it is based, for reasons known only to a select clique who sits beside and around the Prime Minister of this country.
I listened to the Prime Minister yesterday when he spent most of his time berating my party, my leader, and our policies, instead of putting some flesh on the bones of his proposals in the throne speech. There is not a word about fisheries development in the throne speech. The Prime Minister could have spent some time telling us of his concern for the fishermen in Atlantic Canada and in the western part of this country and in British Columbia. He said not a word about that.


An hon. Member:: He has done it all.


Lloyd Roseville Crouse: The hon. member says he has done it all. He has obviously not done his own homework.
It seemed obvious to me yesterday that the results of the Nova Scotia election had finally got through to the Prime Minister. 1 say to him, sir, through you, that if he feels a little chill wind of anti-liberalism blowing his way from the west, he can expect a hurricane of anti-liberalism blowing his way from Atlantic Canada. Campaigning with my provincial counterparts throughout Nova Scotia was most informative. It was also most rewarding since we turned out a Liberal government in that province that had been in power for eight years.


An hon. Member:: Why don't you look at the Gallup poll?


Lloyd Roseville Crouse: You cannot stand the truth. We have turned out a Liberal government that had been in power for eight years, and yet no one in the press gallery or in the information
The Address-Mr. Crouse
services across Canada had even predicted this. So much for Gallup polls! So much for public opinion polls!


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: Some of these Grits can talk, but I have been given a fairly strong voice by the Almighty and I do not mind interruptions. When the hon. member has something to say, I hope she will stand up.
Obviously the Prime Minister is unaware of the controversy which he alone has stirred up over his proposed constitutional amendments. Yesterday he twisted and turned in his efforts to make a political issue out of the monarchy, and in his efforts to make it appear that the hon. Leader of the Opposition (Mr. Clark) and my party were opposed to the Queen. In this regard his efforts were divisive, distasteful, insulting and disgusting.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: Of all of those in opposition to the proposals of the Prime Minister, it seems to me that Senator Eugene Forsey-


Mr. Collenette:: Which honourable Senator?


Lloyd Roseville Crouse: If the hon. member opposite would listen, perhaps he would learn something. The hon. Senator Eugene Forsey put into words perhaps the most concise and forceful objection to the proposals of the Prime Minister. Unless I am misled, I have no recollection of Senator Forsey making application to be a member of the Progressive Conservative party.
The honourable Joseph Smallwood served for 23 years as Liberal premier of Newfoundland. Neither can he be called a Tory. Yet in September when opening the Nova Scotia Fisheries Exhibition in my home town of Lunenburg, Nova Scotia, Mr. Smallwood stated his strong opposition to the constitutional proposals of the government. He stated, to roars of approval from thousands in the exhibition audience, that whenever the next federal election is called, and if he is required to make a choice between his party and the monarchy, he will vote for the Queen.
It is one thing for the Prime Minister to say in this House, with tongue in cheek, that the role of the Queen in his constitutional proposals is unchanged. However, Bill C-60 tells a very different story. I for one do not accept the position of the Prime Minister that there is no need to refer to the Supreme Court proposed changes respecting the monarchy, just because he said that it is not the intention of the government to propose changes of substance.
For example, by clause 30 of Bill C-60 the government states that the sovereign head of Canada is Her Majesty the Queen. But clauses Nos. 42 and 43 provide for the Governor General to represent the Queen and exercise for her the prerogatives, functions and authority belonging to her in respect of Canada. Other clauses of the bill substitute the

October 13, 1978
The Address-Mr. Crouse
Governor General for the Queen. For example, the opening words of clause 91 vest in the Governor General on behalf of the Queen the executive government of and over Canada. I disagree violently with the Prime Minister and the deceitful position which he is taking on this matter. I believe strongly that these proposals contain substantive elements which raise serious questions about the right of the federal government and parliament to act unilaterally on this issue.
Under our present federation, Her Majesty is the head equally of our federal and provincial governments. There is substantial doubt in my mind that her position can be altered by one level of government, especially this lame duck government in the dying stages of this parliament. This is only one matter which is of serious concern to the people in my area.
Another important issue is the ownership of 100 per cent of the mineral rights off the coast of Atlantic Canada. Shortly after assuming the leadership of my party, my leader, without any equivocation or provocation, made it abundantly clear that he would, upon obtaining the position of Prime Minister of this country, give to the Atlantic provinces complete control and the revenues resulting from the development of any oil, gas or mineral discoveries off our shores. Naturally this announcement was greeted with great enthusiasm, not only by the Conservatives in Atlantic Canada but also by the Liberals, and if there were any labour or New Democratic Party members down there, they were rejoicing as well. Why? They were rejoicing because we in Atlantic Canada have found it necessary for years to fight hard for our place in the sun, to fight against the centralizing powers of the federal government and the tariff walls which favoured industry in Ontario and Quebec, while working to the disadvantage of industry in Atlantic Canada.
Everything we buy in Nova Scotia, and in Atlantic Canada generally, costs much more than it does the citizens of Quebec and Ontario due to the 1,500 mile haul from central Canada to our area. The freight rate on automobiles from Oshawa to Halifax makes a difference of approximately $350 in the price paid for a vehicle by a Nova Scotian as compared to residents of Ontario. Truly we in Atlantic Canada are the victims of the ruinous user-pay policy enunciated by the Minister of Transport (Mr. Lang). Over the years we have borne the burden of higher costs, higher freight rates, higher unemployment, and lower scales of wages than the workers of Ontario, Quebec and western Canada. Naturally we had high hopes for any benefits which may accrue to our area as a result of offshore mineral or oil development. However, yesterday as I sat and listened intently to the words of the Prime Minister, I am sure that the high hopes of the citizens of Atlantic Canada could not help but be dampened by his words and attitude. He went out of his way to ridicule and heap scorn upon my leader and my party.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: 1 hear hon. members opposite saying, "Hear, hear". Will this go down well with anyone in Atlantic Canada who has thought favourably of the Liberal party? 1 doubt it! He heaped ridicule and scorn upon my leader and my party for

the concern we have expressed on behalf of the citizens in Atlantic Canada.
The Prime Minister said that my leader had no trouble getting on with those provincial leaders because he did so by giving them the shirt off his back. Apparently it has not as yet occurred to the Prime Minister that the time has arrived when that is the kind of prime minister this country needs, namely, one who shows concern for the citizens living in the disadvantaged areas of Canada.
When 1 look at the bloated expenditures by the Liberal hierarchy in the Ottawa-Hull area, I believe it would be better for Canadian taxpayers generally if more of their tax dollars were left in the hands of provincial and municipal officials because these authorities, being closer to the people, will spend their money more judicially. For example, Les Terrasses de la Chaudiere in Hull had projected costs of something like $148 million, with no tenders called. An escalation clause costing Canadians hundreds of millions of dollars over the next 35 years in rental payments is an expenditure which was strongly condemned by the Senate Standing Committee on Finance. Every effort to get the true facts and the true costs of this project has been stonewalled by the government, as was evidenced today when the hon. member for Grenville-Carleton (Mr. Baker) called for a public investigation. This is what we mean when we say that there is no leadership given Canadian people today by this government.
When quoting statistics in his speech, the Prime Minister implied that the Liberals were setting new records and that everything would be all right, Jack, if only the official opposition would shut up.


David Michael Collenette: Hear, hear!


Lloyd Roseville Crouse: The hon. member opposite said, "Hear, hear". I know members opposite would like a government of complete dictators. We are not far from that now, but dictatorship by the Liberals will not be tolerated in Canada. We will do our part to see that this does not happen, if that outfit opposite ever screws up enough courage to call another federal election.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: I agree with one of the statements made yesterday by the Prime Minister. He said that they are breaking all records. Well, that is true. Our economy is breaking all records. All records in unemployment are being broken. If the truth were told, there are well over one million people unemployed in this country. All records in inflation are being broken, as well as the records in the devaluation of our currency. All records are being broken in work stoppages, in the flight from Canada of investment capital, in declining productivity, in falling exports, in our soaring national debt and in our budgetary deficits. In these and in all related areas we are indeed exceeding all the other western industrialized countries.
October 13, 1978

It is true that our labour force has had an unusually high growth rate, due in part to the post-war baby boom and continuing immigration. But considering Canada's enormous advantages-we are the second largest land mass in the world, we have coal in every province of this country from British Columbia to Cape Breton, Nova Scotia, we have untapped mineral wealth and every day we are finding new sources of uranium, and we have oil and gas, in fact more natural resources than any other industrialized democracy in the world,-and with a small population, it is surprising we are in our present difficulties. We have substantial production capacity and we should really have no baffling economic problems, and would have none were it not for the crisis this country is suffering today in leadership. We have been like a rudderless ship sailing around in circles; a ship whose captain has lost his sextant, his chart and his compass and does not know which way to turn.
Since we are sinking into a steadily worsening mess, in spite of all Canada's unmatched blessings, the trouble obviously lies with the mismanagement of this country, no matter what the Prime Minister may say to distort the facts and confuse the people. I would ask you, sir, what other explanation can there be for a government which came into power in 1968 when we were a nation of 20 million people?
I hold in my hand a booklet entitled "How Your Tax Dollar Is Spent", put out by C. M. Drury, president of the treasury board in February, 1974. There are many figures here but I am only going to quote one. It shows quite clearly that in 1968 when the present Liberal government under Mr. Trudeau was elected we had 20 million people, and the cost of running this country at that time is shown here as $9,872 million. That was in 1968. Today we have the 1978-79 proposals showing how your tax dollar is spent, brought forward under Robert Andras, President of the Treasury Board. It gives some very interesting figures.
It shows that the 1973-74 expenditures were $24,532 million, an increase of 22.7 per cent in one year. That just happened to be the year that Mr. Turner was minister of finance. It shows that in 1974-75 we were spending $31,483 million. He even outdid himself. He managed a 28.3 per cent increase in that one year. In 1975-76 expenditures went up to $37,278 million, an increase of 18.4 per cent. In 1977-78 expenditures were $44,450 million, an increase of 8.2 per cent, and for this present year, 1978-79, we have total expenditures at $48,800 million, an increase of 9.8 per cent. Those figures have now progressed upwards to something like $50 billion.
These figures clearly indicate the deceit and deception as practised by Liberal speakers when they try to deceive Canadians into believing that during their period in office they have ever practised restraint. The trend of their deceit is evidenced in our declining dollar, our inflationary spiral, and headlines that scream that our small businesses are going bankrupt as never before.
I wish the Minister of Industry, Trade and Commerce (Mr. Horner) were in the House. I will not say he intentionally
The Address-Mr. Crouse
misled the House, because that would be unfair. I would say that in his ignorance today he misled the House because he implied that everything was okay with small businessmen. Last year 4,131 Canadian firms were placed in bankruptcy. By way of comparison, the ten times as large U.S. economy had only twice as many failures. The trend has worsened in the first four months of 1978 when Canada had 1,742 business failures as compared with only 2,303 in the United States.
These figures say nothing of the lost hopes, the spent dreams, and the lost lifetime savings of the men and women who worked to put together these businesses. This is a direct result of the mismanagement of our economy by the present Liberal administration. Small businessmen do not have the expertise to deal with currency fluctuation and foreign exchange, or their eventual impact on prices. Unfortunately the figures show that Atlantic Canada again bears a heavy burden with bankruptcies up from 114 in 1976 to 190 in 1977.
Recent government restraint proposals will not, of course, improve the situation. While I am in general agreement that government expenditures must be curtailed, I find it disconcerting, for example, to hear the proposal to close the Vancouver and Halifax fish technology laboratories. This will save the government less than $2 million annually. I find this difficult to understand when at the same time there is no mention of curtailing services at one of our international airports, the deficits on which since it opened in 1976 total $115 million- almost $1 million a week.
The two laboratories in question have served the Canadian fish industry for some 54 years. Their scientists are highly respected not only in Canada but throughout the entire length and breadth of the world. They are respected for their research and development. This action, of course, brings into question the government's entire list of spending priority.
The Minister of State for Science and Technology (Mr. Buchanan), for example, when speaking in London, Ontario, on April 4, 1978, stated that Canada's poor performance in industrial innovation is threatening its competitive position in both domestic and foreign markets. He said that research and development are vital to the future of Canada and that some of the issues of most pressing national concern at this moment, such as economic stability, unemployment, and even national unity, are directly linked to our investment in research and development.
Since the Hon. Judd Buchanan holds these views, it is obvious he was not consulted by the Prime Minister before the announcement of the cuts, particularly those that are of vital concern to our fishermen and our processors both in Atlantic Canada and in British Columbia. If he had been consulted I am sure he would not have agreed. This points up the fact that we have almost a dictatorship in this country today-a one-man government under Pierre Elliott Trudeau.
On the east coast the extension of the 200-mile limit, the scarcity of some fish species, the environmental quality regulations, food safety and nutrition, plus the necessity to examine non-traditional markets, non-traditional fishing grounds, and the marketing of non-traditional species, have all placed new

October 13, 1978
The Address-Mr. Crouse
demands on our fisheries laboratories and our scientists. Without basic planning, dismantling the technological laboratories will drive some of the work toward our universities which are understaffed and hard pressed financially. In my opinion this will result in the work becoming fragmented and more and more remote from the practical world of industry.
Our fish exports play an important role by bringing into Canada scarce and vital foreign exchange. Some 75 per cent or more of all the fish we catch is exported, and Canada's need for foreign exchange is greater than it has ever been in our history. We can only export fish profitably by maintaining a high standard of quality, and this can only be done through the aid of our scientists. From a financial point of view, exported product which is rejected by the buyer is a financial loss which must also include the cost of shipping. The reputation of the shipper is at stake, as well as the reputation of Canada.
It is also well to remember that the export market is open to the small processors, as well as the large, and that overseas markets are specialized and require new skills in processing, freezing and packaging which can only be provided by our fisheries scientists, especially for our small processors. The Minister of Industry, Trade and Commerce spoke today of his department's efforts to aid research and development. This will be helpful to the large companies, but without the scientific laboratories to help the small, individual packers and processors, they are bound to go out of business because they cannot compete. This is the problem that the small operator is facing today. At a time when we in Atlantic Canada are seeking new markets for expanding catches, closing the fisheries labs appears to me to be penny wise and pound foolish. No matter how you look at it, we have made one step forward and three backward in our quest for a stronger financial base in Canada as a whole, and Atlantic Canada in particular.
This action, of course, places in doubt the future benefits which should accrue to our people from the extension of our economic zone to 200 miles. To realize the opportunities available from this action, it is necessary to establish a climate leading to continuity of investment. As the Minister of Finance has put it, "We will encourage risk-taking and willingness to spend in the private sector that is essential to get the economy going faster." Unfortunately, to date this has not been done.
In my opinion, there are a number of problems that are not creating a favourable climate for long-term investment.
I will be finished in a moment, Mr. Speaker.
For example, the Minister of Fisheries (Mr. LeBlanc) has adopted a go-slow, stand-pat attitude toward the fisheries. He wants to wait until fish quotas are plentiful before establishing a long-term policy that would lead to modernizing and rebuilding our inshore, midwater and offshore fleets. We believe such waiting to be detrimental to Canada's interests, and we are not alone in this belief. A spokesman from one of our leading processors has publicly stated that we should be acquiring freezer trawlers now.
In addition, Mr. Speaker, the fishery development plan prepared by the Atlantic provinces warned that, unless our fishing industry is rapidly developed, a large part of the potential economic benefits from our 200-mile zone will be unnecessarily deferred and possibly lost to Canada while foreign nations will continue to reap significant benefits.
With clearcut, long-term policies in place, developed in consultation with the industry, and which recognize the separation of government and industry roles, I feel certain the Canadian fishing industry can realize its potential both in economic and social terms. However, the time to act is now. For all these reasons I am pleased to support the amendment as moved by my leader.


Some hon. Members:: Hear, hear!


Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I enter this debate on the Address in Reply to the Speech from the Throne because I have a very deep concern about certain trends, certain ideas that are abroad in this land, and I think that there is a message that some of us are duty bound to give to this House. Someone has already said that we live in a time of paradox. On the one hand Canada is a wealthy country, our people are tremendous and the things that are around to make life good in this country are many, but, yet our time is marred by despair and fear. One wonders how we can be so afraid, living as we do in such a wonderful country.
I suspect that the despair and the fear relate, not so much to present conditions, but to the future. There is concern as to whether the good things that we have will continue or whether we may run into some kind of downturn that would make life in Canada less enjoyable than it is today. Having said that there are good things about life in Canada today, I want to say something about how those good things were achieved. I realize that I must be careful not to make myself out to be any older than I am, but I am 70 years of age. I have seen a good part of this century that Sir Wilfrid Faurier said would belong to Canada, and in many ways that prophecy has come true.
I also belong to the generation of Canadians that came of age, that started to get active in life generally and in public affairs in particular just as the depression of the 1930s was beginning. I know that the Prime Minister (Mr. Trudeau) likes to refer to some of us as "leftovers from the depression", but I suggest that those of us who remember those days have a message that we must give. The thing I remember most about the thirties; perhaps even more than the suffering, the unemployment, the hunger and the poverty, was the consensus among our people that cut across party lines and religious lines; people in all kinds of organizations and groups were not only horrified by what we experienced in that decade of depression but were determined to bring such conditions to an end. We were determined that it must not happen again.
As a member of a political party I am prepared to state the role that my party played in those years and in the years that have transpired since; but if I may speak more objectively and more historically, I am happy to say that that generation that was alive and active in the 1930s was a generation with a

October 13, 1978

determination that was implemented in legislation to make Canada a better country. The characteristic of social and economic life of that period, the 1920s and the 1930s, was a minimum of government concern, a minimum of government intervention in the economy, and a minimum of government services. What we who belonged to the generation that got started in that decade were determined to do was to get the government into the economy and to provide services that private enterprise was not providing, and to establish social programs that would end forever the day when people would starve and die because they could not afford medical attention, or be impoverished in their old age.
I pay tribute to those who were older when I was just moving into the 1930s and to all who were part of that generation, that we stuck with it and achieved the things that we knew had to be achieved to make Canada the good country that it is today. The government got into things. It established legislation respecting labour relations, trade, industry, and many other things. It got more heavily into transportation- land, sea and air; it got into the activity of the Canadian Wheat Board and the marketing of other agricultural products; it got into housing; it got into the building of highways; it got into education by means of assistance to the provinces and by means of grants to enable people to take special courses; it got into social security in terms of old age pensions, family allowance and unemployment insurance and then, finally, as the crowning achievement of all, it got into hospitalization and health care.
I say to you, Mr. Speaker, that one of the reasons we can say that today life in Canada is good is because of these things that were fought for by the people of the generation to which I am happy to belong.
As I have already said, I could put this into political terms and talk about the parties and their particular role in achieving these things. But that really does not matter; what does matter is that a generation that knew what it was like to have a society in which there was non-intervention by the government, a society in which there was that lack of social services and lack of social programs-that generation saw to it that all of that was changed.


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: I say to you, Mr. Speaker, that the deep concern to which I referred in my opening sentence is over the fact that there seems to be abroad in Canada today the notion that the government must get out of the economy, the notion that we must cut back, the notion that there must be restraint, and the notion that we have gone too far in terms of public services and social programs.
In the last two or three days I have heard on both sides of the House the word "privatizing" as though it is a sacred word or a new idea. Mr. Speaker, it is not new; it is as old as the poverty and suffering that some of us saw when we first became active in the life of this country.
The Address-Mr. S. Knowles
I contend that if this country is going to make the mistake of turning back the clock, of going in for less government intervention in the economy and giving things back to private enterprise and the private sector, if the government is going to cut back on public services and refuse to continue to raise pensions and family allowances, or cut into programs for hospitalization and health care, a generation from now the government that took that backward step will be severely criticized. And rightly so!
I know that this hits both ways, Mr. Speaker. Certainly there is no doubt about my friends in the Progressive Conservative party. They want more to be left to the private sector. I heard a prominent Conservative talking outside the House the other day as though he were Adam Smith come back to life. He was saying that what was needed was more opportunity for great wealth to be made at the top so that more would trickle down to those at the bottom. That is a good Tory position. What bothers me today is that the government, the party that has the majority, is talking in those same terms, with two or three exceptions. There are two or three Liberals in the House who have their priorities straight, but for the most part the government today, and this House generally, seem to have forgotten the lesson some of us learned because we have seen several decades of life in this great country.
I call on this House not to fall for the notion that by privatizing services, by increasing unemployment through laying people off, by cutting out programs that the government has got into, by putting the lid on social programs, this will somehow get us on the right track. Mr. Speaker, that will put us back into conditions that may be quite satisfactory to corporation directors in the boardrooms of the nation, but they will make a serious difference so far as the ordinary people of this country are concerned.
That is what I like about what we have achieved in the last 40 or 50 years. People now count. I have stood in this House on previous occasions and told the story-something I shall never forget-of my younger days when I was a minister. I had the experience several times of going into the homes of people who were in my congregation and discovering older people, parents or grandparents, of whose existence I was not even aware. This was in the days when the pension was $20 a month and older people were kept somewhere in the backrooms. Often they just did not have the clothes to go out, and there was no life for them.
Over the years, by establishing the universal pension, by raising that amount, by lowering the age for receiving that pension and getting other pension improvements, by going in for senior citizens housing of various kinds, by getting universal hospitalization, health care and medical programs established, we have changed life completely for our older generation.
There is no comparison between what older people experienced 40 or 50 years ago and what they experience today. That has not come about by any privatization of things; that has not come about because we have left it to private enterprise and all that sort of nonsense. That came about

October 13, 1978
The Address-Mr. S. Knowles
because the people of Canada, all of us through our collective institutions of government, saw to it that the economy was told to provide pensions and services and to make life better, not just for those who look at the balance sheets but to make life better for people themselves.
I say, Mr. Speaker, that far from speeches being made calling on us to get the government out, to privatize and so on, we should recognize we were right in the last 40 or 50 years- whatever party was in power-we were right in moving in the direction of more and more public concern, social concern, government concern for the economy and for what it does to our people. So, Mr. Speaker, that is why we have before the Elouse at this time the subamendment moved yesterday in the name of my leader, the hon. member for Oshawa-Whitby (Mr. Broadbent). It calls for the government to take steps to improve the employment situation and also-and this, I gather, is the phrase in the subamendment that turns off my friends in the Progressive Conservative party-it calls for a new program of public sector investment.
Maybe for a short while we shall be the voice crying in the wilderness, but it will not be long until it is recognized that we are right and that those who have followed this viewpoint for the last 30 or 40 years were right, especially on the Liberal side of the House. They were the ones who seemed to go that way the most, thanks to our prodding. What bothers me about the Liberals is that they are retreating from that position. They are talking about privatization, about curtailment; they are talking about more unemployment and uncertainty for the people so that they will appreciate what they have and get back on the track. That will not take us out of the difficulties we now face. Instead of doing that, we should do what is proposed in our amendment, take the economic steps to increase employment, and take steps to increase investment in the public sector.
Along with that I think this is the time when we should be improving our social services and social programs. If some of my colleagues have wondered if, in this speech in the address debate, I was not going to get to the subject of pensions, they now know there was never any intention of my not getting into that subject. Instead of talking about putting on means tests and giving only to those who supposedly need it and so on, we should be increasing the amount we pay as old age security. Let the income tax take it back, and let us make the changes in the income tax that are necessary for those who do not need the additional amount, but one way to make sure that more money will be spent on the purchase of consumer goods is to put more of it into the hands of our senior citizens.
Another way is to put more of that money into the hands of the families of this country. I quite approve of the part of the program having to do with children which provides an income tax credit of $200 a year per child to families whose incomes are below $18,000 a year, but I see no reason for cutting back the amount of the family allowance from its present $26 to $20 a month. It would be far better, Mr. Speaker, if that amount

were doubled. Put that money into the hands of the mothers of this country who need food and clothing for their children. The spending of the money will in itself have a beneficial effect on the economy of Canada.
So, I say, Mr. Speaker, this is not a time for cutting back on social programs; this is a time to be expanding those programs and to be confirming the judgment of four or five decades of parliamentarians who have sat in this place-that Canada is a better place in which to live because of what the government does. Therefore, this is not a time for the government to get out of our economy.
As I have already indicated, the amount of the old age pension should be increased, and not just for those who draw the guaranteed income supplement. There are hundreds of thousands of Canadians, senior citizens, just over the line, who have just enough with their old age security and some other income not to qualify for the guaranteed income supplement. Because they do not qualify for the guaranteed income supplement, there are certain other benefits that they do not get, and they are having a rough time. I welcome the increase in the supplement to $20 a month. But as I say, there are hundreds of thousands of people just over the line, and the same is true with respect to family allowances. That is why across the board increases are so necessary.
While we are saying something about these benefits, particularly old age pensions, I think the argument that this is a time of restraint and that we have to cut back is no reason for not solving some serious problems that stand out in our pension program. I think the most unfair is what we do to single women who are between the ages of 60 and 65. That spouse's allowance, which is fine for those who get it, says to women between the ages of 60 and 65 who are spinsters, widows, divorced, or unattached in any way, that there is nothing for them. We go even further and say to the spouse who might be getting that allowance that because she is 62 or 63 and has a living husband, if he dies before she is 65 what she has is taken away from her. That is of a piece with other things in our pension program which are grossly unfair to the older women of this country. I want pensions improved across the board, but the more I study the situation, the more messages I get from people in trouble, the more I realize that the group which is most disadvantaged in their older years is our women, especially those women who are unattached because they are single or widowed.
This morning I was answering questions on one of those radio stations that call us sometimes from our constituencies. A woman had phoned in a question about her pension from the Canadian National Railways. It is the same whether the person is receiving a CNR pension, a public service pension, or what-have-you. Her husband had retired, gone on pension and died a month later. She discovered-she did not realize it would happen this way-that one month's full pension was paid in respect of her husband, but then for her it is cut in half. And yet, Mr. Speaker, as I had to say on the radio this morning to Winnipeg, if the reverse had happened, if she had died first, her husband's pension would have continued at 100
October 13, 1978

per cent. That applies to public service pensions and it applies to pensions of all kinds. Somehow or another it seems all right to continue the man's pension at its full amount, but we say to the woman, "You have to get by on 50 per cent or 60 per cent", or in some cases it is even less. That idea is for the birds. If pensions are defensible, as I say they are, if they are part of our structure, they should be there for our women on the same fair basis as they are for men.
I also made the point that pensions, generally speaking, should be put on a very firm and adequate basis so far as escalation is concerned. There are some who argue that the escalation is too much and want to cut it back. I point out that the escalation relates only to the rise in the cost of living, that in all plans it is already several months behind by the time a person gets it. It does not relate to the things pensioners have to buy. Actually we should be giving serious attention to putting our escalation of pensions on a basis that relates to our rising standard of living, one that relates to the increase in the gross national product.
These things do not appeal to those who draw up balance sheets and to those who sit in corporation board rooms. But that is not what this country is for. This country is for people, men, women and children, and it is for their benefit, just as by government intervention in the economy, by government programs, by social programs, we have made life better for our people over the years. We can make it still better in our time. We started these programs when the budget of the country was a great deal smaller than it is today. Of course, we were told then that these things could not be afforded, but we managed to afford them, and not only did we manage to afford them but life is better and the economy is better because we did so. So I call for increases in the old age pension, increases in family allowances and improvements in the escalation of all such programs.
I call upon the government to take steps to make sure that Canadian National Railways and Canadian Pacific Railway pay decent pensions along the lines that have been recommended time and time again. I also call on the government to take steps to ensure that pensions in private industry are made subject to escalation even if it has to involve some kind of government addition to those pensions to make that possible.
I go back to my reference to the experience I had 30 or 40 years ago of finding, in homes I visited, older people of whose existence I was not aware. We have made life a lot better for them but we can make it a lot better still if we stay with the philosophy that has made this a good country, the philosophy of government concern-not the philosophy of government non-intervention which is being preached in this House day after day and which in itself means disaster down the road.
While mentioning pensions, and just in the minute or two before my time runs out, I want to say a special word about the pensions of veterans and their survivors. I think we have done well in the last few years in terms of winning improvements and getting the disability pension related to wage levels in the public service, getting those pensions up, getting prisoner of war compensation and so on. But there are still some
The Address-Mr. McRae
things which must be done. The Minister of Veterans Affairs (Mr. MacDonald) told us last session that the War Veterans Allowance Act was being reviewed and he hoped to have legislation brought in this fall. I trust that that will be done.
There still remains as an unfinished item the question of what happens to a widow of a disabled veteran if the disabled veteran's disability pension is below 48 per cent. Take the case of two widows. One was married to a veteran whose pension was 50 per cent; he died and she gets a full widow's pension. Next door is a widow whose husband when he died was on a 45 per cent pension; she gets no pension at all. It can be argued that she can qualify for the war veterans' allowance, or welfare measures of one kind or another, but why the distinction? Why do we carry it on all down the line? As the veterans who have survived World War II, let alone those from World War I, get older, they realize how important this is. They are calling for action to be taken on this issue of adequate pensions for their widows.
In that connection, may I just say, even if it is not quite related to the theme of my remarks this afternoon, that there is great concern among the veterans of this country over a case that happened a few weeks ago. A disabled veteran, an amputee, a man whose condition was very serious, such that he was getting a good deal of money from the Canadian Pension Commission, was denied the extra amount of money that was needed for the extra care that was required in his home. The day he got the notice that his request had been turned down, he died.
This has raised questions among veterans as to whether there needs to be a review of the terms and conditions under which disability pensions and the attachments thereto are awarded. I hope this will be done. As I said the other day, I think it was a mistake that there was no reference to veterans in the Speech from the Throne. Despite that, I hope the Minister of Veterans Affairs will join with us in seeing that something is done, and that it is done very soon.
I see, Mr. Speaker, you are taking the position that you take when a member's time is about up. I will not make it necessary for you to tell me that my time is up. I am glad to have had this opportunity to speak again. As I say, I hope I have not sounded older than I am, speaking for my generation, the senior citizens of Canada today who did something tremendous for this country. The country owes them a lot for resolving to build back in the thirties the kind of country in which the government would care. I plead for that to be continued. It is on that basis that I call for support for our plea for increases in our social programs, and for support this afternoon when the vote comes on our amendment to the Address in Reply to the Speech from the Throne.


Some hon. Members:: Hear, hear!


Mr. Paul E. McRae (Fort William):: Mr. Speaker, I am very pleased to have the opportunity to participate in this

October 13, 1978
The Address-Mr. McRae
debate on the Address in Reply to the Speech from the Throne and to echo some of the concerns expressed by the hon. member for Winnipeg North Centre (Mr. Knowles).
We must be extremely concerned about those in our society who are having a tough time getting along because this is a very rich society. I certainly agree with many of the concerns the hon. member expressed about pensions. There are many who are just marginally getting along, although with a great deal of difficulty.
The philosophy espoused by the hon. member is one that I accepted for many years, the idea that the state can do everything. However, I have changed my views a great deal. In recalling the thirties, forties and fifties, the hon. member recalled the need for the kinds of solutions he mentioned. However, he should understand there are massive changes occuring at the present time. These changes mean we have to move in different directions.
The solutions which he outlined are solutions that I accepted in the fifties and sixties but which do not at this point pertain. We must understand that we are in a new economic age. Once we understand that, we can begin to take steps to cope with it.
It is particularly disturbing at this point in our history that parties like the New Democratic Party, which have shown the way for so long, should be dealing with problems of the fifties and sixties and not the problems of our present time. There are three essential factors which are responsible for this great change in global economic thinking. This change has not occurred to a lot of economists' thinking, but should occur.
First, there has been a quantum jump in the problems that face all governments. For the past 100 years this country and other nations could expect inflation rates in the order of 1 per cent or 2 per cent, perhaps even less. Today, when our Prime M inister (Mr. Trudeau) attends a meeting of the big seven or our Minister of Finance (Mr. Chretien) attends a meeting of the IMF, they look at 5 per cent as being a zero point. It is from plus or minus zero after five that they start working. This is a totally new concept globally. There have been high inflation rates for short periods of time in some countries, but 5 per cent plus has not been a global phenomenon in the past.
Unemployment problems are rising in all parts of the world. The past ten years has been a period of very substantial growth. That is now changing and we are getting growth rates of 2 per cent or 3 per cent per annum. We see a rise in social problems in most communities throughout the world. We see a significant change in the policy of governments to cope with currency problems. This is because the nation state no longer has the power it used to have given the fact that so much of our liquid assets are controlled by global or multinational corporations. This whole series of events in the past six or seven years has been summed up in this quantum leap in the problems that face all nations.
The second factor is the introduction of an almost totally unique phenomenon, scarcity. I was taught to believe that was something bankers or some other group dreamed up, and that

if we could only get rid of that notion we could solve all problems.
For the first time in the history of mankind we are facing a real scarcity, possibly not in the immediate future, but certainly in the next ten to 15 years. I refer, of course, to shortage of energy. Already the energy problem has created some massive economic problems. This is one of the reasons for the present state of the American dollar; the American economy has a very large deficit in its oil account. I believe last year it was in the order of $45 billion to $50 billion. This is a flow of money from the United States to the Arab states and the OPEC countries. We face the same problem, although not to the same degree.
There are other problems along that line which we face. We have been told that in the next 15 years we will need approximately $180 billion of capital for energy projects, that the percentage of our capital expenditures that go into energy will increase from 10 per cent to between 30 per cent and 40 per cent. That is a unique factor, something we will hear a great deal more of as time goes on.
The third factor in terms of a new economic thinking is that techniques used in the past no longer obtain. They do not work the way they used to. There are two reasons for this. First, the magnitude of the problem makes it impossible to use monetary or fiscal techniques to solve it. Second, the Keynesian techniques, both monetary and fiscal, tend at this point to be counter-productive. It was always a theory that if one increased the amount of money that goes into people's pockets, this would create jobs. However, where you have a situation of high inflation and high unemployment, a parallel situation, very often increases in demand will increase inflation, increase unit costs, decrease sales abroad as well as locally, and possibly result in more unemployment.
I give that one example to show that measures considered effective in the past do not work in today's conditions. It is important we should realize when looking at the problems of our time, especially when we are facing an election, that one cannot come up with old solutions and expect good things to happen. This applies particularly to spokesmen for opposition parties. I do not think one can come up with old solutions and expect Canadians to accept them.
Dealing specifically with the Canadian scene, I should like to outline two or three of the major problems we face and, possibly, suggest some solutions. I shall speak, first of all, of unemployment, because in my view unemployment is at the heart of our difficulties as a country. There are certain features which are unique to this country, features which do not obtain in other countries, and for this reason many of the actions the government has been obliged to take and which tend to disturb the economy have been taken because of the constraints of unemployment.
If we assume 1965 to be the base year and equate the number of people available for employment in each of the major countries in that year to 100, we find that for every 100
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people in the labour force in West Germany in 1965 there are 96 in the labour force today. For every 100 in the labour force in the United Kingdom in 1965 there are today 103 or 104. In Italy the figure is around 100, in France it is 110, in Sweden 112 and in Japan, 114. The figure in all of these countries is between 96 and 114, so that in most of them the increase amounts to six or seven per hundred compared with the figure 12 years ago.
Three countries are rather different, however. One of them is the United States, where there were 28 more people per hundred in the labour force at the end of 1977 than there were in 1965. In Australia there were 30 more people in the labour force. Now, when we turn to Canada we find that Canada is in an entirely unique position, the labour force having grown from 100 to 146 on the basis I have outlined. In other words, over that 12-year period no other country has shown this astonishing increase.
Now, Mr. Speaker, even on the basis of an 8.5 per cent rate of unemployment, or 9 per cent as New Democratic spokesmen tend to assert, we would still have a shortage of people to do jobs if we had done just as well as the United States in creating jobs.
This situation has caused great concern and difficulty for industry in the private sector and for governments at federal and provincial levels. First, the cost of our massive unemployment insurance scheme is running at between $4 billion and $5 billion-something we would not need were it not for the rapid growth in the labour force to which I have referred.
Moreover, massive amounts of expenditure are involved in DREE, in internal payments to provinces, in the Canada Works program and in various incentive programs designed to create jobs. All these expenditures are connected to the one dominant problem I have mentioned.
I find myself terribly disturbed that these facts are not better known to Canadians generally, because it is only when we understand them that we can do something about them. It is certain that the deficit on the national account is dictated largely by this single question of unemployment. I would estimate that in round terms our $11.5 billion deficit would disappear were it not for unemployment, and were it not for the massive rise in the labour force.
I should like to deal briefly, now, with some of the other problems we are facing. I refer to inflation. We are all to blame in one way or another for what has happened. We could expect a normal inflation rate of 1 per cent or 2 per cent over the years but, as hon. members know, it is running at between 7 per cent and 9 per cent, likely in the order of 7.5 per cent this year. Most other countries are in a similar situation; anyone who has travelled outside Canada and the United States will certainly be aware of that. While we are experiencing a higher inflation rate in Canada than, say, in Switzerland, the cost of everything in Switzerland is much higher in real terms than in Canada.
I believe that over the years the government has made a real effort to lower the inflation rate. When wage settlements were
The Address-Mr. McRae
running around 22 per cent in 1975, we thought it necessary to impose controls and we did, against the advice of a great many people and in spite of the concern expressed by some spokesmen for the labour movement. The result was that in two or three years we were able to reduce those increases to something in the order of 7 per cent. As a matter of fact, the increase in the cost of labour in this country is running at a considerably lower rate today than it is in the United States; the unit labour cost in the U.S. went up by 6.4 per cent last year while in Canada the increase was only 5.6 per cent. So we have had some luck, or we have been effective, perhaps I should say, in reducing our inflation rate and bringing it down to a figure which is at least equivalent to that of some our friends and neighbours.
The continuance of inflation is the one single problem over which the economists I speak to worry most in terms of the possibility of a world recession. They are particularly concerned about what is happening in the United States where the rate of inflation is rising sharply at this moment. If the situation gets out of hand we might very well face a major depression as a result.
Another area I wish to deal with concerns government spending. The government has been accused for many years of spending money outrageously and many hold the opinion that most of this country's problems, including inflation and the weakness of the Canadian dollar, are directly attributable to government spending. In particular, they blame the federal government. This is not necessarily the case, of course.
It is important to understand the way in which government spending is distributed. In other words, who benefits from the money which the federal government collects? The major expenditure is, of course, on transfer payments.
Because of inflation and all kinds of other reasons, we transferred 52.3 per cent of government expenditures in the form of pensions and family allowances and in the form of various subsidies to other levels of government.
The next item has to do with the government debt which costs in the neighbourhood of 15.8 per cent. Then there are some payments to Crown corporations, costing 3.3 per cent, which gives us a total of 71.4 per cent of all the money that the federal government spends in transfer payments, on the public debt and money which goes to Crown corporations to keep them in operation. The rest of the money, which amounts to only 28 per cent, runs the whole operation of the government.
So when the opposition, particularly the Tory opposition, refer to government cuts, they are talking about this 28.6 per cent. Because I do not think they dare go very far into the other areas. I do not know how you can get these kinds of cuts out of 28 per cent. Sure, there are some things we can do, but it is difficult to say that we can cut massive sums out of government spending unless we go into the transfer area or unless we take it out of people's pensions or out of the money that goes to the provinces.

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The Address-Mr. McRae
The other thing of which we are accused is that we are that part of the government which grows the fastest. In other words, all the problems are caused by the federal government.


Some hon. Members:: Hear, hear!


Paul Edmund McRae: I should like to indicate that since 1961 the federal government's portion of the GNP has risen from 18.1 per cent to 20.2 per cent; in other words, roughly an increase of 10 per cent. We bit into more of it than we did in the past for many reasons. However, the provinces' and municipalities' share has gone up from 12.7 per cent to 20.1 per cent, roughly a 70 per cent increase. The other levels of government have increased their expenditures at seven times the rate we have. So let us not ascribe all the difficulties to the federal government, as the Tories in particular would want to do.
The other point I would like to mention about government revenues, and this is of great concern, is the large deficit we have at present. I would like to indicate one of the reasons why this deficit is growing at such a rapid rate. If one looks at the chart showing the expenditures of the government alongside government revenues, one sees that the two lines run parallel and are very close together going all the way back to 1970 and through 1974. But all of a sudden, about the end of 1974, the revenue starts to decline.
I think that if we are looking at the reasons for the deficit we look for the reason for that decline, why the revenue has fallen off. There are many factors, but I would say that one of them was that when we were indexing family allowances and pensions we also indexed taxation in the sense that the tax break, the money people got back in allowances and so on, was indexed so that each individual was able to claim a larger break in the taxation area. Of course, this resulted in an increased deficit. I recall the time in 1974 when we were bringing down the budget which brought this provision in, Mr. Turner's budget. The real push for this came from the Tory opposition during the minority parliament.
Those are just a few thoughts 1 have on government expenditures. I agree that for many reasons we have to cut back and operate more efficiently than we have; but I also think that Canadians should understand that it will be very difficult to make effective cuts in government spending because we control less than one third of what the government spends. The actual expenditures, 70 per cent of them, are going to transfers, over many of which the government has little control because they are legislated.
The last point I want to mention, and I will do it very briefly, has to do with the Canadian dollar. From discussions 1 have had with many economists and from my own research 1 have come to the conclusion that the Canadian dollar is seriously undervalued at present, especially in view of the fact that in the last several months manufacturing capacity in this country has increased from 81 per cent to close to 86.5 per cent. We have had a slow but steady growth in our manufacturing capacity. We have had a much slower growth in the cost of labour than have some other countries, and our productivity has increased in comparison with other countries.

I think that for this and for many other reasons the Canadian dollar will tend to seek a higher level over the next short period. In the meantime, this fall has been a definite advantage to some Canadians, and I can cite two reasons. One is an increase-in spite of what the previous Tory speaker said-in the level of our exports to other countries simply because, by having a lower dollar, our exports have become more competitive. Another factor which has affected this increase in capacity in terms of our manufacturing industry is that our Canadian producers, producing for the home market are in a much more favourable position and are able to compete better with the higher cost imports. This is a factor which tells me that our trade balance has improved fairly rapidly. Because of the effect of these two factors on our trade balance, we will find that the dollar will improve its position over the next several months.
Finally, 1 should like to deal with some of the solutions that I hear offered by members of the opposition, i am concerned, particularly in the context of my introductory remarks, about the approach that the opposition parties, and sometimes some of our members on this side, are taking to these problems. If we assume we are in a period of new economics, if we assume, for instance, as Mr. Callaghan said, that we cannot buy our way out of this, then why are we concentrating on these kinds of approaches like the Tory approach of a couple of billion dollars in tax savings in the area of mortgages and other taxes? This is done partly to give some relief to the taxpayers, but it is mostly done in the name of creating jobs. We seem to assume that by cutting back a couple of billion dollars and increasing the deficit, all of a sudden we will start creating jobs.
Anyone who has any understanding of the new economic thinking or of what is happening in our times realizes that this kind of action does not have this effect. I do not care whether it is our own finance people or people on the other side to whom I am talking. I am saying that in the new economic era a couple of billion dollars will not make any difference, partly because we have a level of savings which is five times what it was in the early 1960s. Approximately 10 per cent of the GNP goes into savings, as opposed to a little over 2 per cent in the sixties.
The other thing we should remember when we talk about saving a couple of billion dollars is that we used to talk about that figure in the sixties-just throw another couple of billion dollars in to stimulate the economy. That was at a time when the G.N.P. was approximately $50 billion. Now we are talking about $220 billion and something less than 1 per cent as a stimulant. We should begin to understand the kinds of changes which are occurring in our economic systems. For instance, for the benefit of the hon. leader of the New Democratic Party, Keynes is dead. Keynes is finished in terms of any serious movement toward changes in economic positions. We should start to look at a new way of approaching the thing. The problems have changed. The techniques we used in the past do not work today. When we realize that, we will stop seeing the
October 13, 1978

answers as a simplistic increasing of the deficit by another couple of billion dollars.
All governments are facing much more serious problems than ever before. We have the notion of scarcity which was not there before. Keynesian techniques which have been so convenient over the last 35 or 40 years just do not work. We must look for different answers if we are even marginally to correct the problems which face us.


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, once again I am pleased to be able to take part in the debate on the Address in Reply to the Speech from the Throne. However, I am saddened after six years of participation in these debates that matters have not changed very much. In fact, there is a sense that one has heard it all before.
When I witnessed the Speech from the Throne as a new member of parliament some six years ago, I was impressed and excited with the multitude of promises made and the many words exulting success and hope for Canada and Canadians in every field and walk of life. Unfortunately my naive glimmer of expectation at that time was short-lived. My hopes were shattered when I quickly realized that this administration was outlining in the Speech from the Throne a series of hollow words and false expectations of which very few, if any, would materialize.
The Speech from the Throne six years ago was not an isolated incident. One can simply look at the record of subsequent speeches, many budgets and many Liberal campaign promises, such as we are faced with right now, and conclude that time after time the present government has not lived up to its promises. It continues to make them and it continues to break them to the point of misleading the public.
Of course, we do not have to go back six years for examples. I am sure all hon. members and all Canadians will recall the 1974 election campaign when the Prime Minister (Mr. Trudeau) shouted and yelled at the top of his voice that income and price controls would never be implemented in this country. At that time we proposed a 90-day price freeze in order to establish a positive and realistic economic policy. We all know what happened as soon as the Prime Minister received his mandate. He slapped wage and price controls on Canadians far more stringent than those proposed by my party. That is but just one example. There are many, many others too numerous to mention at this time in view of our time limitations. It is because of this continuing attitude that our country is deteriorating from what was once a healthy, unified, free enterprise nation to the divided, socialist-stricken state which I believe exists today.
Turning to a more personal note, I came to Canada in 1949 as a child, having left a depressed nation where the freedoms of speech, hope, opportunity and enterprise were snuffed out by a government dedicated to socialism. I came to Canada with my family, along with many new Canadians, because Canada was a young, vibrant, growing country offering opportunity, hope, diversification and freedom of all kinds, including that of enterprise. Included in this bountiful and beautiful
The Address-Mr. Jelinek
country were governments which offered a work ethic atmosphere that was the envy of nations around the world. They were governments which offered an incentive to its peoples and industries and rewarded them accordingly.
At that time Canadians were proud of a hard day's work, and new Canadians were honoured to come to this country in order to join that work force. Canada grew and prospered in a united front. In the last decade, a decade which has been governed by our present Prime Minister, unfortunately this trend has reversed itself. Government incentives have disappeared, only to be replaced by handouts and give-aways. Frustration has taken over from pride. Hope and opportunity have been replaced by confusion and despair.
Yet there is no reason why our country cannot be the leader in the industrialized world. As we all know, Canada is the wealthiest nation per capita as far as natural resoures are concerned. Our human resource is surpassed by none. Our technological know-how is the best in the world. Yet our country is falling apart. Our productivity is at its lowest level in years. Unemployment and inflation rates are far too high and climbing. I will not refer to the figures at this point because they are common knowledge. Our currency has lost the confidence of international money makers and of Canadians as well. Canadians have stopped investing in Canada because the incentive is not here. Even the government has lost confidence in our dollar. One of its agencies, Loto Canada, whether inadvertently or not, decided to give away gold as its million dollar prize rather than the Canadian dollar.


John R. Rodriguez: Let's give nickel.


Otto John Jelinek: I had occasion to be in New York a few weeks ago. The people of that city involved in the money markets are laughing at this government. The government has become the laughing stock of the world because it is afraid to give out prizes in Canadian dollars and has reverted to gold. Just yesterday when the Minister of Finance (Mr. Chretien) was asked about that, he laughed it off jokingly and said that the government was supporting the Canadian mining industry.
There is no question in my mind that we have reached the critical crossroads where we will either continue to slide down the Trudeau trail to social, political and economic disaster, or make an abrupt change and return this nation to what it was built upon, namely, an incentive-oriented, free enterprise system. We can no longer allow our Prime Minister to tell Canadians that the free market system will no longer work in Canada. That is precisely what he told Canadians less than two years ago. It is not because the free market system in Canada will not work; it is because the government is strangling that system with bureaucracy, controls, regulations, directives, etc. Clearly it is obvious that under our present Prime Minister the only decision government has taken is the decision to change this country.
Of course, there is no doubt that changes must take place in the history of any nation in order to keep pace with the ever-changing world around us.


John R. Rodriguez: Free enterpriser.

October 13, 1978
The Address-Mr. Jelinek


Otto John Jelinek: I stand here today not only as a member of the official opposition but as a very concerned citizen of this country. 1 can see where changes brought about by the Prime Minister are leading us. Along with millions of other Canadians, I do not want this country to change from the political, social and cultural greatness it was built upon.
I hear an hon. member of the New Democratic Party calling me a "free enterpriser".


John R. Rodriguez: Right on!


Otto John Jelinek: He is correct. I am a free enterpriser and I am proud of it.


Steve Eugene Paproski: Not like you, turkey.


Otto John Jelinek: Mr. Speaker, sadly we are no longer the envy of the world. While many other nations strive for togetherness, we squabble amongst ourselves about all aspects; the economy, unity, labour, etc. One province fights against another, the west against the east, the French against the English and one against another, all resulting from the short-term, ad hoc political indecision of this government in the name of change instead of in the name of harmony and co-operation.
Let me give one example. Why do we not cater, since we cater to socialism in this country, to the development of the secondary manufacturing sector? Our secondary manufacturing sector has virtually disappeared. Even the auto parts industry is suffering. The deficits within that industry are phenomenal.
The government has shifted its obligation. The governmet has shifted its priorities to handouts and to increasing UIC benefits to such an extent that it is bankrupting our economy. This government is loaning millions of dollars interest-free to other countries. We must continue to sell some of our natural resources abroad, 1 agree, but we certainly should not sell them all. Surely we shoud take advantage of some of those natural resources which make this country so wealthy by utilizing them in secondary manufacturing at home. Instead, we ship them to Japan, the United States and elsewhere where those resources from this land create jobs, productivity and healthy economies. We then in turn buy the finished products, often at inflated prices, and most often made from materials that were dug out of this country.
When the Prime Minister and the government are able to show our trade deficit being close to balanced, it is only because we are so rich in natural resources. Yet we are exporting our natural resources and importing the finished goods. That is not a healthy situation for any country, and certainly not for one that operates within a free enterprise system. We loan millions and even billions of dollars interest-free to foreign countries, yet we cannot afford to assist our small businesses at home. We make these loans to countries such as Algeria, Cuba and others.


An hon. Member:: Hear, hear!


Otto John Jelinek: Again a member of the NDP says "hear, hear". They would love this country to be turned into a socialist state such as Cuba, China, the Soviet Union, Czechoslovakia or Bulgaria. They would then be happy. But that is one reason why the NDP will never become the official opposition in this parliament.


Some hon. Members:: Hear, hear!


Otto John Jelinek: The beneficial results of increased secondary industry would take the form of the greatest boost possible to our economy. This would resut in a great number of new jobs, more exports and cheaper prices for many items that now have to be imported but which could be manufactured here by secondary manufacturing. The development of secondary industry would give the small businessmen of this country a much needed boost.
Proposals such as this, coupled with tax cuts, government spending restraints-an important factor-the elimination of indexed pensions, reduction of the money supply, the introduction of mortgage interest and property tax deductions, along with the many other proposals which this party and other interested groups in Canada have been making, would all help to reverse the downward economic trend in Canada.
During the last few months the Leader of the Opposition (Mr. Clark) has been outlining in detail many such specific and realistic recommendations toward just such a gosC- Indeed, I was proud yesterday to hear him reiterate many of those proposals during his eloquent address to this House. It would be redundant, therefore, for me at this time to repeat all the measures that Mr. Clark so eloquently proposed to this House and to the Canadian people for months.


The Acting Speaker (Mr. Turner):: Order, please. Would the hon. member refer to an hon. member of this House by his riding, or as the Leader of the Opposition, not by name.


Otto John Jelinek: Everyone knows he is no longer "Joe Who", Mr. Speaker, but rather the Leader of the Opposition. Instead of reiterating those proposals our leader has been making for some time, I should like to dwell briefly on that area of my responsibility on behalf of this party, namely, the area of small business.
As hon. members know, this vital sector of our economy is responsible for the employment of roughly 60 per cent of the labour force and, therefore, is a sector that can make or break the economic fabric of our nation. In view of the continual disturbance throughout my remarks caused by the NDP, perhaps 1 should suggest that they would like to nationalize even the small businesses of this nation.
Although the Prime Minister did appoint a member of his cabinet over two years ago to look after the affairs of the small businessman in Canada, and this at our urging, the fact remains that this sector continues to be sadly overlooked. It was the initiative of the Conservative party that prompted the first full debate on small business in parliament on March 28, 1977. We have had the opportunity to repeat that debate on
October 13, 1978

several occasions since, each time outlining in detail the many specific recommendations beneficial not only to the small business community but to our economy as a whole.
It is true, of course, that as a result of our insistence, as well as the urging of such small business interest groups as the Canadian Federation of Independent Business, the Canadian Manufacturers' Association, chambers of commerce and others, the government was shamed into taking some belated steps in the proper direction. Unfortunately, with each little step the government has taken forward in respect of small business it has taken a giant step backwards in general economic matters.
It is not just specific small business policies that affect small business, as I hope to outline quickly in just a few moments; it is also the lack of general long-range programs that adversely affect the over-all economy of Canada. One example is this government's inability to act decisively in respect of labour situations. Instead of trying to unite labour and management with government, it creates a spirit of confrontation. Each time Canadians are threatened by an essential service strike, which unfortunately is regularly, the government panics and ends up by legislating the strikers back to work. Unfortunately, the economy suffers and Canadians are inconvenienced. In addition, when you legislate an essential service union back to work you in fact take away the right to strike.
We all know we are once again faced with a postal strike. I refer again to this matter because such a strike has an adverse effect on everyone, but on no one more than the small businessman. The small businessman depends on daily mail delivery. Postal strikes have been regular in this country as a result of the inability of this government to establish some long-range policy. Small businesses have suffered drastically, to the extent that every time there is a postal strike many small businesses go bankrupt. This adds to our unemployment situation, to our poor productivity and our inflation, not to mention the millions of dollars lost to our economy and the inconvenience caused to all Canadians.
Indeed, it was a surprise last August 1 when the Prime Minister went on television without telling anybody in his cabinet, in the civil service or anywhere else, and said that he was finally fed up with what was going on within the Post Office. He must have been the last Canadian to be fed up with the post office situation; I do not know where he has been for the last few years. That was August 1 and since then he has not done one thing about it. Already we have had one rotation of strikes and now we are on the eve of having a national strike once again, after the Prime Minister finally decided that he was fed up with the Post Office situation.
The Post Office is not only to blame for this matter, because it is a fact that the government has no long-range, realistic policies in that regard, that there is trouble within the Post Office, and, indeed, within the civil service and the whole labour situation throughout Canada.
The Address-Mr. Jelinek
Our party back on May 18, 1977, was concerned to such a point with the Post Office situation that we used one of our opposition days to discuss it. I will read the motion from that day under the name of my colleague and friend, the hon. member for Brandon-Souris (Mr. Dinsdale). It reads as follows:
That this House notes with alarm the government's continuing inability to provide Canadians with an efficient postal service, its obsession with secrecy, its illegal use of orders in council to set postal rates, and its chronic ineptness in the field of collective bargaining and industrial relations, and recommends that the operations of the Post Office Department be referred to a special joint committee of the House of Commons and the Senate.
That was in May of last year, a year and a half ago. It was a good recommendation that received good debate from everybody. Yet for a year and a half the government have sat on their rumps without taking one positive step to deal with the situation; hence we are stuck with a forthcoming postal strike.
Two days ago I took the opportunity to move a motion under Standing Order 43 similar to this motion made by the hon. member pleading with this House to form a joint committee to study the proposals and recommendations that have come forward and to deal with the matter once and for all, rather than dealing with the Post Office on an ad hoc basis. Again it was rejected by the government because they would rather wait until the country was hit with a postal strike and with the disruption it causes the country, the small businessman and every industry from coast to coast. My recommendation falls along the same lines of that of my colleague from Brandon-Souris. 1 would like to see that committee formed, a joint committee of members from the House of Commons and the Senate.
What would that committee study, Mr. Speaker? Recommendations from many people. Very quickly, my recommendations would be as follows. First, we should study within that committee the possibility of sector bargaining. I have a secret cabinet memo of two years ago where this was discussed in cabinet after the government was questioned on sector bargaining. It makes so much sense because each industry within our economy has three, four, five or more different unions within it. The Post Office is no different. The letter carriers went on a rotating strike last month. That issue was settled and now we have CUPW going on strike.
Another example is the airlines. First we had the pilots threatening to strike. That issue was settled after a lot of money was spent on negotiations. The airlines went back into operation and then it was the baggage handlers who struck. I am not sure if I have it in the right order. After the baggage handlers it was the stewards and stewardesses. Next will be someone else, another union within the airlines. There are too many unions within each industry. It would be far simpler and make more sense to deal with each sector as one unit and in that way at least Canadians would be free of strikes in essential service sectors for the duration of the contract.
Talking about the strike, I am sorry to report to the hon. members present that on the four o'clock radio news, ten minutes ago, Mr. Parrot of CUPW walked out of the talks that were in progress. This is the attitude we get. There is no

October 13, 1978
The Address-Mr. Jelinek
doubt in my mind, now that Mr. Parrot has walked out, that we will be in a strike situation. I will support back to work legislation as soon as it is presented to us, but that is not the solution for the future and neither is the proposal of making the Post Office a Crown corporation. Air Canada is a Crown corporation. What is the government trying to do before an election? It is trying to fool the people into thinking that if the Post Office is made a Crown corporation, the situation will be resolved. There is no way that can happen.
Another area that I would like to see studied in committee is secret ballot voting. Hon. members will recall that last year the postal strike in Toronto took place because the majority of the rank and file members in the Toronto union did not get a chance to vote, and when they did vote they were afraid to go against the self-proclaimed radical leaders within that union. And they were self-proclaimed; it was public knowledge.
If the union is not afraid to follow the wishes of its rank and file members, they should not be opposed to secret ballot voting within the unit. For that matter, if the unions were not afraid of dealing directly and positively with the situation, I do not think that they should be afraid of a government-appointed overseer within the unions so that baseball bat tactics would be eliminated. I am not making things up when I say this because we all know that this is the case with many of our militant unions, whether it be the seafarers union or others.
Our party has been prompting the government to create such a committee instead of dealing on an ad hoc basis and saying, "Oh, yes, we are going to legislate them back to work." I would like to speak longer on this subject, but 1 said that I would move to different matters, and I know that my time is running out.
Briefly, I would like to refer to our small business policy. As the Leader of the Opposition said, "We don't mind the government stealing our policies as long as it is for the well-being of the country." Certainly the small businessman needs to be looked after. We would recommend two things to help small business. First, we recommend the removal of as much government regulation, directives and controls from small business as possible. Let small businesses operate on their own. The minister must be commended for finally taking steps to reduce the paperwork burden.
This is a small step in the right direction, but it does not go far enough. Our party would create, and it will create after the next election, a small business secretariat which is independently operated through the Department of Industry, Trade and Commerce. The Minister of State (Small Business) (Mr. Abbott), sincere as he may be, with the small business community, has his hands tied behind his back in trying to deal with the problems and potential of small business because he has to go through the massive bureaucracy of the Department of Industry, Trade and Commerce, which is run by the old cowboy-who will no longer be here after the next election.
Under this independent secretariat we would pass a small business act which would, first of all, define what small

business is. Ironic as it may seem this government does not yet know what the definition of small business is. We have asked time and time again and each time they have given a different definition. This confuses small businessmen in the country even more than they are already because they do not know into which category they fall.
Third, we would pass a small business act which would encompass the over-all problems of the small business sector and create such incentives and policies as tax incentives for investment in small business, the creation of an export and import consortium operated through the government and assisted by the government, a "set aside" program that made sure that a certain portion of products, management and so on, would be purchased by governments rather than just big business. I will not go over our whole policy again as we have stated it on many other occasions.
I should like to close by reading one editorial, if I may, Mr. Speaker. I am not one for reading editorials but I think this one sums up the wastefulness of this government-the wastefulness of borrowing money and lending to other countries and the fact that we are not taking care of ourselves before we take care of others.


The Acting Speaker (Mr. Turner):: Order, please. 1 regret to inform the hon. member that his allotted time has expired. He may continue with the consent of the House. Does the hon. member for High Park-Humber Valley (Mr. Jelinek) have consent to continue?


Some hon. Members:: No.


Mr. Pierre De Bane (Matane):: Mr. Speaker, I would like to seize this opportunity to talk about my area, eastern Quebec. It is my sincere belief, Mr. Speaker, that if Canada were to experience today the intense problems facing the Gaspe peninsula we would have an open revolution on our hands. You have no idea of the degree of suffering and misery to be found in that area which I am proud to have represented for the past ten years. And if you allow me, I would like to begin by quoting some figures on this all at once so beautiful and so battered area which hardly represents 1 per cent of the Canadian population. But the better to show the acuity of the problems plaguing that area I will put them into perspective with those of the province of Quebec.
From 1961 to 1971, the population of Quebec has increased by 14.6 per cent while at the same time the population of the Gaspe peninsula, more precisely that of the Lower St. Lawrence and the Gaspe peninsula has experienced a decrease of 6.8 per cent. These figures would take a more dramatic significance if I mentioned that the Gaspe peninsula is the only area of Quebec which has had a decline in its population over the past 15 years. All areas of Quebec have had an increase in their population and in four of these areas-As everyone knows, Quebec is divided into ten administrative regions and once again only the Gaspe peninsula has experienced a drop in
October 13, 1978

its population during the past 15 years. As for the other regions, four have experienced an increase in their population above the average rate for Quebec and they are the Montreal area, the Outaouais region, the city of Quebec and the North Shore. It is also the Gaspe peninsula which has had such a negative balance in migratory trends that it has offset its natural increase. As a matter of fact nearly 140,000 people have left eastern Quebec since 1961.
It is also the most rural area in Quebec with the majority of its people, 53 per cent, being considered rural people. Furthermore, we have barely 4 per cent of Quebec's labour force. To further illustrate how our area is shrinking I will mention that the number of people working in 1961 was higher than the number working at the time of the last census in 1971. In fact the number of people who had a job decreased by 1.3 per cent. Indeed, in 1961 there were 84,267 people working as against 83,150 in 1971. It is the only area in Quebec to have experienced such a drop. I remind you, to put those figures in a national perspective, that every year in Canada we have 250,000 more people working than the previous year while in my area, even in absolute figures, there are fewer people working today than 15 years ago.
On the other hand, if we look at the participation rate, that is the relationship between the labour force and the total population 18 years of age and over, we see that in the Gaspe area the rate is the lowest in the province with 45.6 per cent while in Quebec it is 52 per cent. In other words we consider a good part of the people in the Gaspe area as part of the labour force while we all know that if work were available there would be no reason why we should have a lower participation rate than the national average.
However it is the less educated area not because people do not go to school but quite the contrary because every year about 7,000 youths as soon as they are out of the Polyvalente or the CEGEP leave the area because of a lack of work. It is also the area where the average income per worker is the lowest in Quebec. According to the latest statistics of the Department of Regional Economic Expansion, incomes were about 60 per cent lower than in the Montreal metropolitan area.
As concerns unemployment, I find it most surprising and discouraging that while we have the lowest activity and participation level in the province of Quebec we also have the highest unemployment rate. I shall quote a letter dated September 23, 1974 from the then minister of manpower and immigration, the hon. Mr. Andras, now President of the Treasury Board, who wrote me:
As you mentioned, there is no doubt that the general unemployment level in Gaspe is higher than in Newfoundland.
So, as concerns our unemployment rate it is the highest in the province of Quebec and I would even say in Canada.
The Address-Mr. De Bane
Contrarily to the province of Quebec as a whole, unemployment is higher in the male population to the extent that the male labour fore has decreased between 1961 and 1971 in spite of an increase in the male population 15 years old or more. According to the statistics bureau of the government of Quebec, personal income in the province has soared by 130 per cent between 1961 and 1971. If you do not take Montreal centre into account, it rose during that decade by 160 per cent for the whole province and by 124 per cent for Gaspe. So, even in light of those figures which are somewhat less dramatic than the first I quoted, you see that the gap is still widening.
On the other hand, the per capita personal income is the lowest in Quebec. Indeed, it should be noted that this area has the lowest rate of activity and the highest average family size. What is even more surprising, Mr. Speaker, is that transfer payments represent 22 per cent of personal income, and this is where we have the highest per capita percentage. It is not in our area that transfer payments are the highest. In our area, in eastern Quebec, they are $405 per capita while they amount to $464 per capita in the eastern townships, for example. There are many reasons for this. For instance, unemployment insurance is based on the wages earned during the employment period and other such factors.
I mentioned earlier certain population shifts. The population of eastern Quebec was at its highest in 1961 with 349,000 people, but since then it has been going down regularly to such a point that today, even with a very high birth rate, it reaches only about 318,000. Of course, the area has long been the victim of negative migration, but with the fall of the birth rate, there is no natural increase to compensate for these negative migration figures. Once again, the characteristic which I find most eloquent and most depressing is that the number of workers in the Gaspe peninsula is lower now than it was 15 years ago. In absolute numbers, there are 1,000 fewer workers today than in 1961. Yet, during that same period, we have created several million jos in Canada and, each year, the labour force increases by over 250,000 people. Some will say to this that the answer for an area with as many resources as ours would be to rationalize the various resource sectors.
In this regard, the Economic Council of Canada recently published a remarkable study by Mr. Michel Boisvert on the correspondence between the urban system and the economic base of Canadian regions. This paper includes a study on eastern Quebec, and I must say that this effort of rationalization and consolidaton of basic and resource sectors of traditional sectors has been going on in the Gaspe area for a few years. However, I do not believe that we can hope to increase the number of jobs in these various sectors in the future for the simple reason that most of the effort and the progress have already been made. So, in forestry operations for instance, it is noted that on Crown lands, the coniferous forests west of the Matapedia Valley are developed to the extent of almost 100 per cent of their potential. In the eastern part of the region,

October 13, 1978
94_____________________________________________
The Address-Mr. De Bane because of a more rugged topography, the potential is not fully developed. However, the development of coniferous forests on Crown lands is comparatively intensive. As far as private wood lots are concerned, conifers seem to be overexploited throughout the territory.
As regards farming, it seems that more than an economic acreage has been cleared up. Although farming on the coastal plain and along the Chaleur Bay is definitely profitable, several hinterland farms are switching to beef cattle production or are sold to city dwellers who leave them in fallow.
The area is not exempt either from the problem of getting young farmers to take over, rampant throughout Quebec. Marine fisheries went through a strong expansionary period in the early 1970s, but the level of catches has been declining since because of a significant decrease in resources. In mining, there is a marked slowdown in copper-related activities. Caused by unfavourable pricing conditions on the international scene, this slowdown has been mainly featured by the closing down of the Madeleine mines and also by declining activities in Murdochville.
In the tourist industry, the yearly volume of clients varies between 350,000 and 500,000, and apparently that level is difficult to exceed. All this suggests, Mr. Speaker, that the traditional ways of managing resources in eastern Quebec may have reached their maximum potential. The exploitation of resources leaves little room for additional job creation and limits expansion in the manufacturing industry. Barring changes, unemployment will remain high, emigration will continue and the population will decline. This tendency toward an extensive use of economic resources is coupled with another factor of equal significance to our area, namely the specialization of productions. The agricultural effort was directed mainly towards dairy production. Forestry went progressively towards pulp and paper, while our mineral production is still strongly concentrated on copper.
But this specialization in production leads necessarily to dependency. This dependency is particularly felt on our regional economy which is very sensitive to any change in government policies and to international market fluctuations. For example lower copper prices on world markets forced closure of the Madeleine mines. The entire agricultural sector is being affected by changes made in dairy policies and in policies on feed grain movements. The future of the forestry industry will have to be revised in light of tighter international competition for the production of pulp and paper and in view of the higher cost of imported energy.
Finally, a generally unfavourable economic context directly influences tourism. This phenomenon of specialization makes the economy of the region even more vulnerable, all the more so when the exploitation of its resources is already close to its maximum. And what is more remarkable, Mr. Speaker, is that

these efforts of normalization still brought a decrease in labour or a rise in skilled labour but over-all it meant a smaller labour force.
For example in 1971 agriculture, forestry, fisheries and mines accounted for 17 per cent of skilled labour in the area and for 13.2 per cent of the gross domestic products at factor cost. For the whole of Quebec, this ratio was 5.6 per cent and 6.2 per cent. Nevertheless between 1961 and 1971, the effects of serious strengthening of our primary industry and of the development of secondary and tertiary industries were being felt and the economy of eastern Quebec was undergoing substantial strutural change. In 1961, 30 per cent of the skill employed in the area and 20 per cent of the gross domestic product were corrected to primary industry. In terms of labour, between 1961 and 1971, agriculture lost 52 per cent of its strength, forestry 66 per cent and fishery 23.7 per cent. Mines were the only industry with a growth of 5.6 per cent between April 1961 and 1971. To conclude these statistics on the region, Mr. Speaker, eastern Quebec is still the area with the lowest employment rate and the highest unemployment rate in Quebec.
In 1971, only 45 per cent of all men and women over 15 were in the labour force. For Quebec as a whole, I repeat that this percentage was 52.9 per cent. Moreover, that year, some 5,300 eastern Quebec residents, that is 6.3 per cent of the active labour force, were working outside the province. In spite of this, 16 per cent of the labour force was unemployed in June. Unemployment statistics also show clearly the importance of seasonal activities: agriculture, fishing, forestry, peat bogs, tourism.
One notes a sharp difference between June and October, when the unemployment rate goes from 13 per cent to 17 per cent, and betwen November and May, when it goes from 20 per cent to 26 per cent. No other region shows such sharp fluctuations. For Quebec as a whole, the gap between the best summer month and the worse winter month is less than 2 per cent. On the other hand, considering government investments per capita, one realizes that they were less than the Quebec average for 1976-77.
Mr. Speaker, after having drawn such a picture, I think the conclusion is quite clear: new means of action will be required. In the last ten years or so, since 1968 to be more precise, the federal and Quebec governments have invested together $411 million to upgrade the various sectors in the Gaspe peninsula and equip that region with infrastructures. About S300 million out of those $411 million came from the federal government.
Unfortunatey, one finds today that despite the offer made several times to the Quebec government, the one now in power in that province, they still refuse to enter into another general agreement for eastern Quebec, even though under the first agreement the Quebec government was responsible for identifying, defining, developing and implementing the projects, while the federal government was paying almost three quarters
October 13, 1978

of the amount. Today they refuse to enter into another agreement and 1 think the federal government should, under the circumstances, amend the Department of Regional Economic Expansion Act in order to allow that department itself, within our own jurisdictio, to take action in this area by other means than sectorial agreements which have little impact on the area or again through industrial incentives.
So that is, in my view, my first recommendation. The second, Mr. Speaker, is that the Department of Finance should introduce fiscal measures giving the private sector such a marked advantage that it would compensate for the drawbacks inherent in establishing a business in such a remote area. There are only a few paths open to us, Mr. Speaker. Either we let the people continue to emigrate reluctantly from an area which does not alow them to earn a living, or the state becomes a providence state, an employer state, or else, as I just said, the Department of Finance should drop its uniform income tax schedule across the counry. For instance, if we were to tell businessmen considering the possibility of operating in such an area that they would not have to pay any income on profits for a period of ten or 25 years, provided the profits are reinvested in the area, I feel, I am convinced such a solution not only would cost the government less than the transfer payments we are making now, but also would give back a sense of dignity to the population.
I see that very large amounts of money were invested in all kinds of social programs in my area, Mr. Speaker, and that the population is deeply humiliated to have to accept those handouts. I say to the Department of Finance that as long as there are fiscal measures, and to the Bank of Canada that as long as there are monetary measures like those we have today, regional inequalities are going to increase in Canada. I gave statistics, Mr. Speaker, to show that the economic situation in my area has been getting worse for 15 years and the very timid efforts made for one or two years by the Department of Finance to regionalize fiscal policy are not sufficient.
Recently I asked federal and provincial civil servants in my area how many businesses have established themselves in Gaspe in the last ten years. Even though we have invested over $411 million to build roads, harbours, airports and industrial parks in that area during that period, they could not mention the name of five outside firms which had come to settle there. I would like someone to tell me why any industry would establish itself in that area, once again an area with less than 1 per cent of the total population of Canada and which is so far from the markets?
Mr. Speaker, it is obvious that, all things being equal, and market pressures being what they are, no manufacturing industry will ever settle in our regions. The rationalization of the resource sectors was done at great costs. We do not think we will be able to go much further. So either we accept that our young people leave eastern Quebec at a rate of 7,000 a year, or else we innovate and do what other countries have
The Address-Mr. De Bane
done, that is offer such tantalizing tax advantages that private enterprise will want to settle in those areas.
What I am suggesting is that in the budget that the Minister of Finance (Mr. Chretien) will present within two months, we try such an experiment in two or three areas which in total would represent 3 or 4 per cent of the Canadian population. I am thinking, for example, of eastern Quebec, northeast New Brunswick and maybe another region in the maritimes. Let us try this experiment. Let us drop these measures which are not only extremely costly for the government but are also a source of profound humiliation for the people. Mr. Speaker, people do not want unemployment insurance, they do not want social welfare. They want work. 1 say that in the market system we have in North America, the best one, it must be recognized that in areas far from the market, the government must introduce new policies and the tax schedule must be the same at the other end of the country as in Toronto or in Montreal. This is complete nonsense. And it is certainly not through industrial incentives which businessmen must finally pay back within three years that we are going to encourage investors to establish themselves in the maritimes or in Gaspe.
My colleague, the hon. member for Bonaventure-lles-de-la-Madeleine (Mr. Bechard) was telling me that the major industry now operating in New Richmond would not be there if it had not been offered considerable tax benefits at that time. It has been a decisive factor for its establishment in that area. And once again I urge the Minister of Finance to try this experience when he presents his budget next month. It would be much less costly, Mr. Speaker, than the $50 million spent each year in my constituency on unemployment insurance and social welfare. I have suggested that idea. I know that the Department of Finance and the Bank of Canada are reluctant to take different financial and monetary measures, but to show you what happens when the Bank of Canada wants to ignore something and to indicate how far things have gone I would point out that the biggest and wealthiest bank in Canada, the Royal Bank of Canada, does not have even one branch in my constituency which has more than 60,000 people. How can they say that private enterprise is concerned about regional disparities when this same bank is going to open branches on every street corner in Toronto, Ottawa or Montreal, yet not a single one throughout my riding?
This demonstrates, Mr. Speaker, that it will be absolutely necessary to innovate and to reform our monetary and fiscal policies. I know that the new system will be more complicated but there is no reason why we should sink into pessimism or gloom. In the face of a difficult situation, I think that politicians should be able to react positively and the deterioration my constituency is presently going through is simply unacceptable. We have been elected on a just society platform. We promised justice at the national level to the two main ethnic groups-French-speaking and English-speaking Canadians- and justice at the economic level which will allow all Canadians to enjoy the same advantages.
8006 5-7'/2

October 13, 1978
The Address-Mr. De Bane


Mr. Roche:: Mr. Speaker, may I call it a quarter to five?


The Acting Speaker (Mr. Turner):: Order. It being 4.45 p.m. it is my duty pursuant to Standing Order 38(3) to interrupt the proceedings and forthwith put any question to dispose of the subamendment which is now before the House.
The question is, therefore, on the amendment to the amendment (Mr. Broadbent). Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Turner):: All those in favour of the amendment to the amendment will please say yea.


Some hon. Members:: Yea.


The Acting Speaker (Mr. Turner):: All those opposed will please say nay.


Some hon. Members:: Nay.


The Acting Speaker (Mr. Turner):: In my opinion the nays have it.
And more than five members having risen:


The Acting Speaker (Mr. Turner):: Call in the members.


Mr. Speaker:: I therefore declare the amendment to the amendment lost.
Amendment to the amendment (Mr. Broadbent) negatived.
* *
*


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I rise on a point of order. I have been given to understand that the Postmaster General (Mr. Lamontagne) has laid upon the table notice of the intention of the government to introduce legislation. If that is the case and if a bill is available, I wonder whether it might be available to all members of the House in order to expedite matters, and so that all members of the House know what the government's legislative intention is respecting the postal strike. We would be prepared to give unanimous consent now for the first reading of that bill, so that it could be printed and distributed immediately in order for all members of the House of Commons to be fully apprised of the government's intention.


Some hon. Members:: Hear, hear!


André Ouellet: Mr. Speaker, I should like to report to the House that this afternoon I discussed with Mr. Parrot and Mrs. Carr possible procedures which could lead to the resumption of negotiations. Mr. Parrot will have discussions with his national executive over the weekend. He has undertaken to
[Mr. De Bane.)

study these proposals. Also he has undertaken to meet with me on Monday. In light of this, I would appreciate no further action being taken until these further discussions with Mr. Parrot take place on Monday.


Some hon. Members:: Hear, hear!


Walter David Baker: Mr. Speaker, we all appreciate receiving the minister's statement because this is an important matter. I am sure he spoke seriously. Before he leaves, I wonder if he could tell us, whether, in the course of the discussions he has had with his colleagues, the Postmaster General and the president of CUPW, there was the assurance that postal services will be continued until Monday and while these negotiations are taking place.


André Ouellet: Mr. Speaker, I should like to give the full details of the discussions which took place, but in a spirit of
Business of the House
mutual co-operation and goodwill, in order to achieve a negotiated settlement, hon. members of the House will appreciate that I cannot divulge the total conversations I have had. Indeed I have expressed the concern of members on both sides of the House regarding the fact that there has been a partial disruption of postal services, and that I was hoping these partial disruptions would cease. Obviously the union will know that the government already has served notice, if a settlement is not reached, to bring forward a piece of legislation to deal with the situation. It is my hope that this will not be necessary.


Some hon. Members:: Hear, hear!


Mr. Speaker:: It being five o'clock, this House stands adjourned until Monday at eleven o'clock in the morning, pursuant to Standing Order 2(2).
At 5.14 p.m. the House adjourned, without question put, pursuant to Standing Order.

Monday, October 16, 1978