1978-04-18

OFFICIAL REPORT

[Stage Direction]
THIRD SESSION-THIRTIETH PARLIAMENT 27 Elizabeth II

[Stage Direction]
________________________Published under authority of the Speaker of the House of Commons by the Queen's Printer for Canada
Available from Canadian Government Publishing Centre, Supply and Services Canada, Hull, Quebec, Canada K1A 0S9, at 5 cents per copy or $3.00 per session
80038-iy2
[Stage Direction]
Tuesday, April 18, 1978


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, under the provisions of Standing Order 43, I ask for the unanimous consent of the House to introduce a motion dealing with a matter of urgent and pressing necessity.
In order to avoid the existing confusion about the final decision of Ottawa towards the Quebec position on the sales tax, I move, seconded by the hon. member for Joliette (Mr. La Salle):
That the Prime Minister make a statement in the House this afternoon to report on the negotiations with the Quebec government and specify his position concerning the possible reopening of the case with other provinces making such a request.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


EXTERNAL AFFAIRS
Mr. Allan Lawrence (Northumberland-Durham):: Mr. Speaker, I have never moved a motion under Standing Order 43 in this parliament. I do so today because of the importance of this matter. I must also admit to the House that I have taken the liberty of speaking to the government House leader about the matter.
My motion concerns the reported execution of one of NATO's foremost statesmen, former Italian premier Aldo
Moro. I am sure that every member of this House shares my shock and horror on hearing of the murder of one of the architects of the post-war era of European democracy by a despicable act of terrorism perpetrated by terrorists who used the fact of a free society which this man himself helped to create to pursue their own repellent aims. I therefore move, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro):
That this House expresses its condolences to the family of Mr. Aldo Moro and the people of Italy generally on the reported death of this statesman at the hands of a group of international murderers, whom all sensible people should strictly and utterly condemn, and calls upon this government and the governments of all free nations to take joint action immediately toward the elimination of the acts of international terrorists who threaten the security of innocent people and the democratic way of life.


Some hon. Members:: Hear, hear!


Mr. MacEachen:: Mr. Speaker, I rise on a point of order. I am sure every one of us shares the sentiments which have been expressed by the hon. gentleman in respect of Mr. Moro, but I do suggest that until current reports are authenticated it might be better to defer putting the motion to the House. It could be considered later, but we may have information which, happily, may turn out to be otherwise.


Mr. Baker (Grenville-Carleton):: Mr. Speaker, I rise on the same point of order. As I understand the situation, it is not that the motion be put; it is whether or not there is unanimous consent to having the motion put. There is nothing that would call for us to agree, necessarily, with the hon. member's point. The question now is whether or not the question should be put. In its terms, it deals with the reported assassination of this man by terrorists, and in that sense I do not see any reason why unanimous consent should or should not be given.


Mr. Speaker:: Order, please. There is no machinery whereby we can argue the merits of either giving or withholding unanimous consent or putting or not putting the motion. The floor is open to hon. members at this period every day. They can put questions pursuant to Standing Order 43, which of course requires unanimous consent. The basis of this motion is a report. Whether the report at this time is authenticated or not is a motivation which might lead to the withholding of consent to debating the motion or to its deferral to some other time. That can be done by simply withholding consent. The hon. member for Northumberland-Durham (Mr. Lawrence) would require the unanimous consent of the House if this motion were to be put for discussion at this time. Is there unanimous consent?


Some hon. Members:: Agreed.

April 18, 1978
Oral Questions


Some hon. Members:: No.


An hon. Member:: Did the Prime Minister say no?


Some hon. Members:: Oh, oh!


INDIAN AFFAIRS
Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a motion of urgent and pressing necessity. The Department of Indian Affairs and Northern Development last week eliminated the entire budget of the Indian guidance councillor training program administered by the Federated Saskatchewan Indian College. This valuable program until last week employed 90 native councillors who were active at the reserve level counselling persons with alcohol, youth and family problems. The entire budget was eliminated with only two days' notice. I move, seconded by the hon. member for Winnipeg North (Mr. Orlikow):
That this House instruct the government to immediately reinstate this valuable and necessary program for the Indian people of Saskatchewan.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


Mr. Speaker:: Order, please. Before beginning the oral question period, I should like to say that I fervently hope, once again, that we will return to the great discipline which governed us until a few days ago, requiring short questions and short answers.



ORAL QUESTION PERIOD


Charles Joseph Clark: Mr. Speaker, my question is directed to the President of Privy Council in his capacity as the minister responsible for GATT negotiations. I am sure the minister needs no reminding of the concern that exists in the country about the secrecy and uncertainty regarding GATT negotiations. That has been added to by statements in briefing notes that were made available as a result of some

of the sectoral consultations. One of those notes with regard to the textile industry reads:
The indicated policy for this sector-
That is, the textile industry.
-is the gradual reduction of the work force in the industry behind temporary measures of protection.
Is it, in fact, the instruction of the Government of Canada to its negotiators at GATT in Geneva that our long-range policy should be to lose more jobs for Canadians now employed or looking for employment in the textile industry?


Allan Joseph MacEachen: No, Mr. Speaker.


Charles Joseph Clark: Mr. Speaker, since the minister has now denied the statement which was made in one of his documents, let me ask him about the veracity of another statement put forward in the briefing document by the Government of Canada in relation to the position taken by this government at GATT.
In relation to the shipbuilding industry, the same document reads as follows:
Here again, the indicated policy is to seek increased consolidation and specialization which would have the effect of progressively shrinking the employment base and the amount of subsidization required.
That means cutting down the jobs available to Canadians in the shipbuilding industry and the strength of the shipbuilding industry. Is the government's document an accurate statement of the position the Government of Canada is taking in the GATT negotiations?


Allan Joseph MacEachen: Mr. Speaker, I wish to repeat what I said yesterday, namely, that the period of hard decision-making will arise probably late in May or early June. Up to that time it will be impossible to be certain about the outcome, certainly with respect to both textiles and shipbuilding. It is not the intention of the government, nor is it its policy, to enter into the GATT negotiations to shrink employment.


Some hon. Members:: Hear, hear!


Charles Joseph Clark: Your Honour will understand the difficulty that Canadian industry has, faced with the fact that documents circulated by this government indicate that precisely the policy we are taking into these negotiations is one which will result in a loss of jobs in the textile industry and a loss of jobs in the shipbuilding industry.
The document goes on to indicate it is expected by the negotiators going into GATT on behalf of Canada that there will be "particularly acute impacts on regional employment, notably in Quebec". Thus, we seem to have a situation where the Government of Canada is setting forth the positions Canada takes to GATT. These are not positions two or three months hence, but positions we have already taken to GATT in the early rounds.
The position of the Government of Canada is to lose jobs in the textile industry, lose jobs in the shipbuilding industry and
April 18, 1978

lose jobs particularly in the province of Quebec. If that is not the policy of the Government of Canada, why is that spelled out in the document circulated by the Government of Canada?


Some hon. Members:: Hear, hear!


Allan Joseph MacEachen: Mr. Speaker, I think the conclusions the hon. Leader of the Opposition has drawn are totally absurd. Whatever background document he is using may be a background for circulation but it does not represent the negotiating position of the Government of Canada-by no means.


GATT BRIEFING NOTES-SUGGESTED PROGRESSIVE REDUCTION OF EMPLOYMENT BASE
Miss Flora MacDonald (Kingston and the Islands):: Mr. Speaker, my question is supplementary and is directed to the Deputy Prime Minister. Like it or not, these were briefing notes prepared by a government department, endorsed by the deputy ministers concerned with trade and industrial policy. The government cannot dissociate itself from the thrust which is contained in the document.
The document reads, "Some industries will, however, remain the focus for industrial adjustment". These include textiles, clothing, footwear, furniture and some electronics industries. Given the fact that in these industries the aim will be to reduce progressively the employment base behind the minimum of transitional protection, I should like to ask the Deputy Prime Minister how many jobs the government intends to phase out by progressively reducing the employment base as the document indicates. What is meant by "transitional protection"?


Allan Joseph MacEachen: Mr. Speaker, once again the hon. member asking the question has quoted from a document which has not been clearly identified to me and which is put forward as the negotiating position of the Government of Canada. I want to make it clear that it does not represent the negotiating position of the Government of Canada. Only a member with a very lurid imagination would regard it as such.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Miss MacDonald:: Mr. Speaker, it takes very little imagination to deal with the positions this government puts forward. For the information of the Deputy Prime Minister, the document is headed "Briefing Notes for Consultative Task Forces". Since the document indicates that 244,000 people are currently employed in the leather, textiles, clothing, furniture and shipbuilding industries and predicts that a substantially lower number of workers would be affected by the government's adjustment process-that is, the phasing out of their jobs- would the Deputy Prime Minister give the government's estimate on lost jobs, based on the prediction it is making?
Oral Questions
In view of the hardship that that kind of policy will cause for some people in textiles communities, will the government reconsider its position at GATT and exempt textiles from the current round of GATT negotiations?


Allan Joseph MacEachen: Mr. Speaker, I dealt with the question of textiles yesterday in reply to a question from the hon. member from St. John's. I informed the House that at the present time there is a disposition amongst all the negotiating partners at Geneva that textiles would be one of the industries that would not experience deep cuts. That is the present atmosphere at the negotiations because there are a number of countries, including Canada, which are very concerned about the effect of any rapid reduction in protection.
The hon. member ought to realize, as well, that a very important part of the negotiating strategy, especially that of the European Community, is the view that any cuts on industrial products in particular should be extended over a long period-possibly over a period of ten years. At the end of the first five years, it is suggested that the matter be reviewed to assess the impact that the preceding five years might have had.


Daniel Joseph MacDonald: Mr. Speaker, would the Deputy Prime Minister explain just how deep are the shallow cuts that he is referring to?


UNEMPLOYMENT INSURANCE
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, I direct my question to the Prime Minister. Two changes in the unemployment insurance regulations in the fall led to a saving of some $135 million to the federal treasury. Since these changes have resulted, first, in the removal of unemployment insurance benefits for thousands of Canadians, and this in turn has now produced an increase in welfare costs of millions of dollars for the provinces and the municipalities, I would ask the Prime Minister: Will he now commit the federal government to reimbursing the provinces and the cities who must rely on increased property taxes to pay for this additional burden?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, I would suggest to the hon. leader of the New Democratic Party that he read the reports put out about the impact of the changes that were made in the bill with respect to welfare. These figures were exaggerated tremendously by the Leader of the Opposition when he suggested that when 40,000 people went off UI payments, 40,000 people automatically went on welfare each month. In point of fact, the figures were not that high for the entire year. We also pumped into all of these regions, in a very weighted way, millions of dollars to counteract that impact.

April 18, 1978
Oral Questions
Another complaint that has come from some of the provinces is to the effect that while people are waiting for their UI benefits, they are coming in for welfare payments. We have indicated that we are prepared to enter into agreements with the provinces so that this can be taken care of in the form of a charge against the unemployment insurance payments that they would eventually receive. It is a slight exaggeration by the hon. Leader of the NDP when he quotes the statistics in that particular way.


John Edward Broadbent: Mr. Speaker, I wish the minister would listen to the question instead of giving us the answer which has been prepared for him by his officials. I gave the minister no statistics in my question other than the one that has come out of his own department, that the saving through the UIC changes amounts to $135 million. That is the only precise figure I gave the minister.
I would ask him, because we from Ontario now know from a newspaper report and on the basis of our own checking with some of the provinces involved-for example, in the province of New Brunswick the situation has deteriorated even more than it has in the province of Ontario-if he would commit the government to fully reimbursing the provinces so that the burden of this unemployment is not put on the property tax base which so badly and unfairly affects the average home owner.


Jack Sydney George (Bud) Cullen: Mr. Speaker, here again the hon. member says he uses one statistic, but he uses it in a very political and simplistic way, ignoring all the benefits that have been derived. There is, for example, the developmental use of unemployment insurance funds where we put that money into work-sharing. Incidentally, his party voted against that measure. Hundreds of people would not be working today if we had passed the amendments moved by his party.
We have moved to the economic growth component factor of the unemployment insurance program to see if we can create more permanent jobs rather than temporary jobs or band-aid measures, as the hon. member's party sometimes calls these programs. I think we have made good use of any savings from unemployment insurance. It was not so much a question of saving money but, rather, redirecting it through different channels so that it would be more, not less, beneficial to the unemployed.
To suggest that there is a $135 million cut and that it should be given to the provinces is a simplistic use of the statistics which were obviously prepared by his people.


John Edward Broadbent: A final supplementary question, Mr. Speaker. The minister suggested that the government has used funds to create jobs and make certain changes in retraining programs for the unemployed. No one disputes that. No one says that ought not to have been done. The point is that, particularly in the have-not provinces which all just a week ago experienced major increases in unemployment levels, they are still stuck with an immense burden.
If the additional funds they have lost are compared with what the minister says they are gaining by the new changes, they are still in a deficit position. I repeat a variant of the question. Is the minister now saying that the federal government will do nothing more to ease the burden of unemployment, particularly in the regionally deprived provinces?


Jack Sydney George (Bud) Cullen: No, Mr. Speaker, I am not saying that. I am suggesting that millions of dollars have been made available for direct job creation and for training through the developmental use of these funds. We are now negotiating with the four Atlantic provinces to deal with a reforestation project they have to cope with, the spruce budworm disease. We think this is a better use of the money. If any money is being saved from unemployment insurance, it will be put into areas where it is really needed. That is precisely what we have been doing with the money.
f Translation]


SUGGESTED BENEFITS FOR PERSONS 65 AND OVERGOVERNMENT POSITION
Mr. Eudore Allard (Rimouski):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. Considering that the validity of the UIC decision concerning the refusal to give unemployment insurance benefits to persons aged 65 or more has never been fully established, considering that this decision is therefore contrary to Bill C-52, can the minister tell the House whether he intends to comply with the requests of those 18,000 retired persons which are getting increasingly urgent in view of the rising cost of living and of the alarmingly low purchasing power of that category of citizens?


Jack Sydney George (Bud) Cullen: Mr. Speaker, at the urging and on the representations of my colleague, the hon. member for Montmorency, I looked into this particular situation. With passage of the bill which removed benefits in respect of persons 65 years of age and over, and as a result of a court decision, we took several actions to help people caught up in that particular situation. We were very generous in the application of the law. We did everything we could in a humanitarian way to accommodate the people caught at this time. But I do not foresee changing the bill back.


ESTIMATES
Mr. David MacDonald (Egmont):: Mr. Speaker, yesterday I raised a question with the President of the Treasury Board with respect to the very severe hardship being created for native groups across the country as a result of expenditure cutbacks by the Department of Indian Affairs and Northern
[Mr. Cullen.)
April 18, 1978

Development. Upon close examination, there seems to be a pattern evolving in a number of departments where there has been a significant cutback in programs and services, particularly to disadvantaged peoples, while there has been an increase in departmental administration costs. In one department, for instance-the Department of Regional Economic Expansion-there is an over-all decrease in the budget for the department, an increase in operating expenditures and a significant decrease in contributions and loans for developmental purposes.
Can the minister indicate whether any policy was evolved prior to the preparation of this year's estimates which in effect cut back services and programs to people while increasing the internal administration costs of the federal government?


Hon. Robert K. Andras (President of the Treasury Board):: Mr. Speaker, there was no policy with that intent or that desire. That was not, in fact, anticipated.


REDUCTIONS IN GRANTS TO CERTAIN ORGANIZATIONS
David Samuel Horne MacDonald: Mr. Speaker, perhaps I should direct this question to the Prime Minister, as the leader of the government. With respect to the services provided by a number of departments there has been considerable public protest. A month or two ago I raised a question with the Secretary of State concerning the cutback in grants to performing art groups. There has been a significant increase- some 77 per cent in one case-in departmental administration costs. A similar effect has occurred with respect to DREE, Indian Affairs and Northern Development, and quite likely other departments.
Can the Prime Minister indicate what steps were taken in the preparation of this year's estimates to prevent the phenomenon of seeing a reduction in services to people by either stabilization or an increase in the internal administration costs of the government?


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, I am assured by the President of the Treasury Board that the facts as stated by the hon. member are not correct. Generally, the answer to his question is that we reduced the growth of the public service this year, as well as last year, very near to zero. Those are the steps we are taking to make sure the public service is not increased in size.


David Samuel Horne MacDonald: Mr. Speaker, I know that the Prime Minister is a busy man and perhaps he has not had an opportunity to look specifically at the thousands of letters and criticisms which have been received with respect to a number of departmental budgets where there have been significant cuts in programs. As recently as this week, the National Indian Brotherhood raised serious questions about basic services, fire protection services, education, hot lunch programs.
What steps are being taken to authorize a review of the procedures followed with respect to the preparation of this
Oral Questions
year's estimates which have had the effect of cutting important services to people, particularly those in disadvantaged groups or regions, while protecting-and in some cases enhancing- the amount of money made available to the federal bureaucracy?


Pierre Elliott Trudeau: Mr. Speaker, in times when the federal government is attempting to restrain the rate of growth of its bureaucracy and when federal budgetary expenditures are being restrained, it is obvious that in some areas of Canada the public will not have services growing at the rate they would like. This has to be accepted by the hon. member. His own party has been preaching-


An hon. Member:: Deal with the question.


Pierre Elliott Trudeau: -government restraint. Obviously, government restraint means restraining government expenditures toward some people. In so far as the detail of each departmental expenditure is concerned, Mr. Speaker, the blue book is before the House; it can be discussed in standing committees of the House. That is why we adjusted the rules respecting that responsibility-


An hon. Member:: When?


Pierre Elliott Trudeau: The hon. member opposite asks when it will be discussed. The government House leader will be happy to discuss with House leaders opposite when they want these estimates to go to the standing committee.


Charles Joseph Clark: You don't understand that either.


IMMIGRATION
Mr. Jake Epp (Provencher):: Mr. Speaker, I direct my question to the Minister of Employment and Immigration. An internal, departmental memo originating in the Toronto immigration offices indicates that marriages of convenience are an ever-increasing concern to departmental officials, in that they only have the time and resources to investigate approximately 5 per cent of the total number of suspected marriages of convenience. The report goes on to say, and I quote, "that their work is largely an exercise in futility".
I would ask the minister if he is aware of this report and, more important, what steps has he taken to investigate this matter which, again in the words of the report, indicates that Canada's immigrants are largely being chosen by methods which involve extortion, blackmail, threat of physical violence and prostitution?


Jack Sydney George (Bud) Cullen: Mr. Speaker, as the hon. member says, I am much more concerned about marriages of convenience. This is something which presents extreme difficulty. Our immigration officers
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April 18, 1978
Oral Questions
have to make what amounts to a subjective test before suggesting that in one case there has been a marriage of convenience specifically for the purpose of defeating the provisions of the Immigration Act, and that in another there has not.
We are looking at this matter, endeavouring to take the more obvious cases and pursuing them. I suspect there are many case where people are getting married for compensation, and subsequently those marriages are annulled or appropriate action is taken. Within the limits of our ability we must try to determine which are marriages of convenience, using evidence we have or evidence we can secure.


Arthur Jacob (Jake) Epp: Mr. Speaker, in view of the minister's answer, namely, that this is of growing concern to his department, I ask the minister if he or his officials have been in contact with York county officials or York county judges who have expressed concern that the number of divorce actions before them indicates that this trend is increasing very rapidly. Has the minister in fact had such discussions?
Could the minister indicate whether manpower will be increased or whether manpower will be shifted into those areas where we might avoid as much as possible marriages of convenience? At the present time it is creating a backlash for the bona fide immigrants coming to this country who are making a valid contribution. I am sure no member of this House wants to see the problem develop any further.


Jack Sydney George (Bud) Cullen: Mr. Speaker, obviously any marriage of convenience causes a backlash which works to the detriment of bona fide marriages that take place. Personally, I have not had representations from the judges, as the hon. member suggests. I would think that the officers who are doing this kind of investigation, where they have some suspicion would be doing a follow-up and culling the records to determine just what is taking place and whether the same name, for example, appears on more than one occasion. If that specific action is not being taken, I have heard the hon. member's representation and I will make it to my officers.


INDUSTRY
Hon. Herb Gray (Windsor West):: Mr. Speaker, I have a question for the Prime Minister about the Canada-U.S. auto pact because that treaty was originally signed by the then prime minister and the president of the United States. In that treaty it states that early achievement was sought, and I quote briefly, for "the development of conditions in which market forces may operate effectively to attain the most economic pattern of investment production and trade".
The two countries agreed, further, that "it shall be the policy of each government to avoid actions that would frustrate" the achievement of this and the other objectives of the agreement. Therefore, the bidding contest which the Minister

of Industry, Trade and Commerce said is going on in the United States, in which cities and states there are offering excessive incentives to get automotive plants to locate in them rather than in Canada, appears to be contrary to that agreement.
Therefore, will the government move immediately to have the United States government bring this conduct in that country into line with the agreement; and will the Canadian government, if necessary, take appropriate measures which are open to it to deal with this situation, as well as generally, to ensure that Canada gets and keeps its fair share of automotive employment, investment and production?


Pierre Elliott Trudeau: Mr. Speaker, the hon. member will remember that at the first ministers' conference the federal government took the position that certain initiatives were being taken in order to bring about an expansion of the automotive industry in some of Canada's provinces. That, indeed, was registered in the memorandum of agreement at that conference.
In so far as specific representations made to the United States administration are concerned, I would have to take notice of the question and perhaps refer to my colleague, the Secretary of State for External Affairs, or to the Minister of Industry, Trade and Commerce. I am not aware of any recent developments in the negotiations.


EXTERNAL AFFAIRS
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Prime Minister. The government has now committed Canada to providing a communications network for a peacekeeping force in southern Lebanon. Despite the fact that the UN mandate fails to satisfy five of the eight criteria set out by the former secretary of state for external affairs, is the Prime Minister satisfied with the wisdom of committing Canadian forces when the majority of the criteria and safeguards have not been met?


Pierre Elliott Trudeau: Mr. Speaker, obviously, we have certain concerns about the operation of UNIFIL and that is why the Secretary of State for External Affairs flew to New York to discuss the military and political situation and the conditions under which the communications unit would be supplied by the Canadian government.
We are satisfied that we are doing this in the service of peace in the Middle East. I would be astonished if we did not have the support of the opposition, because the hon. member will recall that his own leader moved a motion in this House, even before these guarantees were obtained, that we should indeed participate in this peacekeeping operation.
April 18, 1978


Allan Bruce McKinnon: Mr. Speaker, the Prime Minister knows very well that when the Leader of the Opposition moved that motion, we assumed those safeguards would be in place. It now transpires they are not in place.
My second question is to the Minister of National Defence. The second part of the UN mandate directs peacekeeping forces to assist the government of Lebanon in ensuring the return of its effective authority in southern Lebanon. This, in fact, interposes the peacekeeping force into a civil war which has been going on for over a year. It expects them to install last year's losers as the authority in the area. Is the minister satisfied with putting our forces in that position?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I wish the Conservative party would get together in their approach to this. Certainly, we have our act together.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: The conditions necessary in the present situation have been met as a result of the visit of the Secretary of State for External Affairs to the United Nations along with senior military officers. There is an element of risk involved, but we are satisfied our troops are playing a vital role in the area so that the situation can be stabilized and the people who should normally be in control can eventually be in control.


Allan Bruce McKinnon: One of the criteria upon which Canada has always insisted is that the peacekeeping endeavour-I am quoting now-should be linked to a political settlement or at least to a reasonable expectation of a negotiated settlement. Is the hon. gentleman satisfied that such a condition exists in that area?


Barnett Jerome Danson: Mr. Speaker, they are certainly moving toward such an agreement and understanding. There is not perfection when these operations begin, but we are attempting to do our very best in contributing to bring stability to that area.


UNEMPLOYMENT INSURANCE
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Employment and Immigration. As a result of this government's incompetence in managing the economy, we now see the full weight of this incompetence borne on the backs of the municipalities in the sense that taxpayers will now have to bear the cost of the increased run on welfare. One of the problems-the minister himself mentioned this-is that there has been undue delay between application for and receipt of the first unemployment insurance payment. In the meantime, applicants turn to welfare.
Oral Questions
I ask the hon. gentleman whether any specific steps are being undertaken now to advise UIC offices to expedite the processing of applications. Surely this is an issue which the minister can face promptly and with some sense of responsibility.


Jack Sydney George (Bud) Cullen: Mr. Speaker, I hardly need say once again that 1 do not altogether agree with the preamble to the hon. member's question. The studies we carried out in two previous years showed that two thirds of the people who had exhausted their benefit found jobs within a very short time and only about 4 per cent of them ended up on welfare rolls. The hon. member is drawing conclusions, but the people who were studying this subject indicated we needed more time to see just what the impact is.
In so far as efficiency is concerned, we have indicated there is a two-week waiting period. We have indicated to the provinces that if there is some concern about the claim on welfare because people are waiting an undue length of time for cheques, we are prepared to enter into an agreement with them. We will, in fact, make money available to them. Then, at least, when the UIC cheques are ready they can be assigned to the welfare offices to help out in that regard. I believe the efficiency rating of the officials who deal with this problem is very good throughout the country-though, of course, it can be improved.


Lincoln MacCauley Alexander: I do not accept the answer the minister has just given, and I would ask him to contact Paul Vezina, the social assistance director for the Peel region, who has stated that a major factor pushing up the welfare rolls is the number of people seeking welfare to tide them over the long wait for their first unemployment insurance benefits. That is for the edification of the minister.


REGIONAL ECONOMIC EXPANSION
Lincoln MacCauley Alexander: Mr. Speaker, my question is to the Minister of Regional Economic Expansion. Two or three weeks ago the hon. gentleman expressed concern about the problems Ontario is facing at the present time, once again as a result of this government having destroyed the viability of the country. He told us he would be travelling through Ontario in order to determine how best his department could help. I would remind him once again of the situation: St. Catharines has an unemployment rate of 13 per cent; Sudbury, 13 per cent; Windsor, Kitchener-I could go on and on.
Since the minister's department is now involved with Montreal in the area of economic expansion, I ask what specific steps are being taken to bring relief to these cities of Ontario
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April 18, 1978
Oral Questions
which are really the industrial base of one of the best provinces in this country. Surely he must have an answer by this time.


Some hon. Members:: Hear, hear!
[ Translation]


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, some time last week-in fact exactly 10 days ago-I made a trip in Ontario, as I had told the hon. member I would, more specifically to the Sudbury area where my department has officially opened an office. On that occasion I met the local authorities. I took advantage of this opportunity to announce that my department would contribute financially to the extension of a foundry in the Sudbury area, which should help increase the number of jobs available and reduce the unemployment rate in that area. I hope I shall have within the next few weeks the opportunity to visit other Ontario areas, including that of St. Catharines which the hon. member would apparently like me to visit, and I shall see what my department can possibly do to improve the economic situation of the province of Ontario.


YOUNG CANADA WORKS
Mr. Andy Hogan (Cape Breton-East Richmond):: Mr. Speaker, I want to address my question to the Minister of Employment and Immigration. Has the minister been able to use his influence with Treasury Board with regard to obtaining supplementary funds for the Young Canada Works program, because while it may have been termed a band-aid approach by others-as the minister said to me in the House on one occasion-I have at no time referred to it in such terms. I can assure the minister that in Nova Scotia there is a desperate need for funds. I sent him the results of a survey I had made in my riding on March 4 and have had no reply from his office since.
Are any more funds likely to be forthcoming, so that the equality of opportunity about which the Prime Minister has spoken so often will become a reality for the low income regions of his country, because unless there is supplementation of these programs young people will not be able to go to universities and technical schools?


Jack Sydney George (Bud) Cullen: Mr. Speaker, once again I thank the hon. member for his support of the Canada Works and the Young Canada Works programs, because they are indeed meeting a need in many regions of Canada. The hon. member for Gander-Twil-lingate has time and again been hammering at me to increase the amount of funding which is available. I have put that particular representation into the area from which we receive funding, but I must tell the hon. member that when we constantly get comments to the effect that these programs are

band-aid solutions and that people do not want temporary jobs, it is very difficult to justify them to the rest of the Canadian taxpayers.


Andrew Hogan: The minister knows that is a totally inadequate answer. I am very disappointed. There are young people in these areas. I urge him to go to Newfoundland, to Cape Breton, and so on. We are happy about the $265 million which is to be put into the coal industry, to which the cabinet has agreed in principle. That will be made a reality. But right now we have young people who need to go to universities to receive higher education, and unless there is additional funding they will not be able to go. I plead with the minister to ask Treasury Board to please make additional funds available in high unemployment areas so that these people will be able, and I again quote the Prime Minister-


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


CANADIAN BROADCASTING CORPORATION
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I direct my question to the Minister of Communications on a humanitarian matter. Approximately two million Canadians are handicapped by varying degrees of deafness and to date they have been given very little representation, political or otherwise, as a result of which they are becoming less and less visible.
Because of the pressure of other issues, nothing has been done to rectify their inability to communicate, and I would like to ask the minister why captions or even sign language could not be added to certain programs produced by the CBC. I refer to such things as news broadcasts, documentaries, political programs and even the proceedings of the House of Commons.


Hon. Jeanne Sauve (Minister of Communications):: Mr. Speaker, several months ago the department issued a proposal for public comment in the Canada Gazette concerning the standardization of television signals which are carried through the television station. Some of these services are broadcast-related and they would include a hidden captioning which could be seen only by those viewers who have special decoders. So when we get comments on this proposal, we will be in a position to determine the position of the department in this respect.
April 18, 1978


OFFICIAL LANGUAGES
Mr.   Chas. L. Caccia@Davenport: Mr. Speaker, my question is addressed to the Secretary of State. In view of the keen wish continuously being expressed by English-speaking parents in Ontario to have their children learn French, and in view of reports from Ontario that the teaching of French in Ontario's public schools is far from meeting parents' expectations, despite the fact that between 1971 and 1977 the federal government paid to the government of Ontario $32.5 million for French language training for grades 1 to 13, could the Secretary of State inform this House what action he will take to ensure that the government of Ontario will at last do what it has long been expected to do and give Ontarians the quality of French language education they desire for their children?


Some hon. Members:: Hear, hear!


Hon. John Roberts (Secretary of State):: Mr. Speaker, as the hon. member indicated, we have been providing financial assistance not only to Ontario but to all of the provinces to support the extension of second language and minority language education in their school systems. I have been reviewing and negotiating these arrangements with the provinces for the past year in an attempt to make sure that these financial resources are used more effectively to achieve the objectives which we have in promoting second language and minority language education. I expect to continue these discussions with the provinces shortly, and a new agreement should be concluded some time before the spring of 1979.


EXTERNAL AFFAIRS
Mr. Donald W. Munro (Esquimalt-Saanich):: Mr. Speaker, my question is addressed to the Secretary of State for External Affairs. In light of the declaration by terrorist factions with respect to the Rhodesian settlement to the effect that they are not interested in a multiracial regime in Rhodesia, is the minister now prepared to modify the stand he has held until now and make a statement in favour of those forces which have negotiated the settlement?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, I would not be prepared at this time to make any further comment beyond what I have said, certainly not until I have received a report, which I expect within the next day or so, from the meetings that have been held this week which involved, among others, Foreign Minister Owen of the United Kingdom and Secretary of State Vance. What we have been receiving so far are news reports. I would like to have an official report.


Donald W. Munro: Mr. Speaker, 1 take it from the minister's comments that Canada has no role whatso-
Oral Questions
ever to play except to follow in this particular instance. I wonder if the minister is prepared to withdraw the financial support which is now being accorded from Canadian public funds to those forces which are supporting terrorist activities whether in Africa or via Cuba?


Donald Campbell Jamieson: Mr. Speaker, concerning the assumption that preceded the question, obviously we are not taking what might be described as a placid or a reactive role. I think it is only reasonable to expect that we would ask for and get from Mr. Owen and Mr. Vance a detailed report on what has been happening.
On the second part of the question, if I understood it correctly, I believe the hon. member used the word "forces" in reference to Canadian contributions. I think I said in the House last week that there are no such contributions and that they are very much of a humanitarian nature aimed primarily at looking after refugees. If the hon. member really is saying that we should take away, for example, food and educational and related assistance from the thousands of young people who are refugees-


Some hon. Members:: Oh, oh!


Donald Campbell Jamieson: I say, if he is asking that, but because he dismissed-


Donald W. Munro: You are twisting my question.


Donald Campbell Jamieson: Then perhaps I had better let the hon. member, with Your Honour's permission, ask a supplementary so I can get it clearer. I have no wish to twist the hon. member's question.


Charles Joseph Clark: It was very clear to everyone else.


Donald W. Munro: I would like to ask a final supplementary. It is quite obvious that the minister is twisting the question I have been putting.


Some hon. Members:: Oh, oh!


Donald Campbell Jamieson: Ask it.


Donald W. Munro: Mr. Speaker, is the minister prepared to support the Cuban regime which, by virtue of the assistance it is getting from Canada, is assisting the forces of terror, murder and kidnapping in Africa?


Donald Campbell Jamieson: Mr. Speaker, without becoming in the least argumentative, I suggest that when the record is available it will show a question quite different from the one the hon. member asked earlier. Certainly, the second time around he included references to Cuba which were not included the first time.


An hon. Member:: Yes, they were.


Donald Campbell Jamieson: Then, frankly, I am sorry; I did not understand that. In so far as that answer is concerned, I indicated to

April 18, 1978
Oral Questions
the hon. member in the House or in committee the other day that we have no ongoing activities in terms of foreign aid or the like with regard to Cuba, other than certain programs which now are being wound up or phased down, and that we have no new initiatives in place.
On the premise, presumably, of the question, let me repeat what I said in the committee-we deplore unequivocally the presence of Cuban forces in Africa or anywhere else where there are troubles of that kind, and we have been making all manner of representations to them in the hope of getting them to withdraw.


Donald W. Munro: Wash your hands.


ADMINISTRATION OF JUSTICE
Mr. Eldon M. Woolliams (Calgary North):: Mr. Speaker, my question is to the Minister of Justice: it concerns the lack of definition of the term "bona fide gun collector" which has never been defined by the legislation, Bill C-51, or by regulation. My question is twofold. Is the minister aware that there is a vacuum created by the law for bona fide firearms collectors who are required to obtain certain certificates by law in order to legalize their collections of firearms, and is he aware that the commissioner says he is powerless under the law to approve those certificates?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, the hon. member for Calgary North will recall the discussion on this matter in committee where, on the advice of draftsmen, it appeared that that was the best possible definition or wording which could be arrived at in the circumstances of that bill, and that it was virtually impossible to spell out a more definitive definition than "bona fide".
The hon. member will also recall that the representatives of the RCMP who administer that part of the Criminal Code spelled out in committee their view of what a bona fide gun collector was and what the ingredients of "bona fide" were or would be. Therefore, it seems to me that it is a section which can be interpreted. Whether or not the commissioner has expressed some difficulty with this, I am unaware because he would have reported that to the Solicitor General. I will take notice of that particular aspect of the question.


Eldon Mattison Woolliams: Mr. Speaker, I point out to the Minister of Justice that I hold in my hand a letter dated February 27, 1978, to the New Glasgow detachment of the RCMP. The letter is signed by J. H. Hodgins, superintendent, officer in charge of "B" branch, identification services. The letter says:
The commissioner has now received legal advice from the Department of Justice which holds that he lacks legal competence to process applications-
The Department of Justice is the minister's own department. The minister's officials have told the commissioner that he has no right to grant applications. In light of the fact that the

minister is not running again, and that he will not be Minister of Justice, will he accept his responsibility today, stop waffling and set out the guidelines in reference to this matter in order to end frustration across this country?


Stanley Ronald Basford: Mr. Speaker, I already indicated to the hon. member that I would take notice of the question and see that it is answered.


POST OFFICE
Mr. G. W. Baldwin (Peace River):: Mr. Speaker, I have a question for the Postmaster General. In light of the fourth report of the Joint Standing Committee on Regulations and Other Statutory Instruments which I have discussed with the hon. gentleman, a unanimous report from this House and the other place, which for the second time in a year takes exception to the method of raising postal rates by order in council and regulation on the ground that they are of doubtful legal validity and offend principles laid down by parliament, will the hon. gentleman review his position in this matter, reject the advice given by his principal civil servants and, rather, accept the opinions tendered by parliament and come to parliament to secure legal and proper authority to raise postal rates?
[ Translation]


Hon. J.-Gilles Lamontagne (Postmaster General):: Mr. Speaker, I must say that the postal rates have been increased legally, as I have already indicated to the House, and we have no intention of changing our present way of doing things.



ROUTINE PROCEEDINGS


Daniel Joseph MacDonald: Mr. Speaker, on behalf of the Minister of Labour (Mr. Munro) I ask for permission to table, in both official languages, documents pertaining to the Canadian position with respect to the conventions and recommendations adopted at the 59th and 60th sessions of the International Labour Conference in Geneva in June of 1974 and June of 1975.
April 18, 1978


POINTS OF ORDER
Mr. James A. McGrath (St. John's East):: Mr. Speaker, I wish to raise a point of order arising out of the deliberations this morning of the Standing Committee on Health, Welfare and Social Affairs. The committee met this morning at 9.30 a.m. to pursue the examination of the estimates of the Ministry of State for Urban Affairs. As has been the unfortunate custom of committees of the House, especially in dealing with the estimates, there was not a quorum present and consequently the matter could not be raised in committee in the form of either a point of order or an appeal against the ruling of the chairman. In any event, notwithstanding that fact, I believe the matter is substantive and important enough to be brought to your attention and to be raised on the floor of the House.
One of the reasons that, under our new rules, the estimates are referred to committees is in order to give members of the House a better opportunity to examine more closely the spending estimates of agencies other than those for which a department is directly responsible. Consequently, we are able to examine the estimates of various Crown corporations, unfortunately not all Crown corporations but certainly the current estimates, for example, of the CBC, notwithstanding the fact that they come under the blanket of the estimates of the Department of the Secretary of State. Indeed, if we were to raise questions in the House on matters relating to the CBC, we would be told by the minister responsible, the Secretary of State in this case, that he was not answerable for the day to day operations of the CBC, and he would take the matter up with the Crown corporation. That is an acceptable practice. But when it comes to committees, quite obviously and for practical purposes the practice is quite different, especially in regard to the examination of estimates. You can examine the standing committees of the House and you will find, for example, that under the estimates of the Department of Transport we are able to examine the spending estimates of the Canadian National Railways and question officials of CNR. The same applies to the CBC when the estimates of the Secretary of State are before the committee.
This morning I attempted to direct questions to the president of the Central Mortgage and Housing Corporation arising out of Vote 10, which was properly before the committee, that is, the vote dealing with the operating expenditures of CMHC. The president of the corporation was present. In fact he was introduced by the chairman of the committee as one of the minister's officials present in connection with the main estimates of the Ministry of State for Urban Affairs.
At that point I was informed by the chairman of the committee, the hon. member for Ottawa-Vanier (Mr. Gauthier), that I could not direct questions to the president of CMHC, that only the minister was answerable for CMHC. I submit to you, sir, that that is a major departure from the practices of the House. Ministers are not answerable for the day to day operations of Crown corporations. When we are in committee we are entitled, indeed we have an obligation, to
Point of Order-Mr. McGrath
examine the spending estimates on a day to day basis of Crown corporations that come under the umbrella of the various ministers who answer for them in the House.
I submit to you, Mr. Speaker, that I was unable to appeal the chairman's ruling because there was not a quorum present, as I have indicated, and I was not able to raise a point of order, again for lack of a quorum.
Given the fact that we are operating under the very limited constraints of the standing orders and the block system by which committees are able to examine estimates, we have very limited time, even if this parliament is to continue beyond the end of the time frame given in the standing orders by which estimates are deemed to have been reported back to the House, and I think the guillotine date is the end of May. So I have no choice but to bring this matter to your attention.
This has been raised in the House before on a number of occasions and Your Honour has said that you are not responsible for the day to day operations of committees and that you are not accountable for the rulings of committee chairmen. Under the circumstances of the various questions that have been raised, this was a ruling that was readily acceptable to the House. But I submit to you that we have a different situation here. We have the situation whereby a Crown corporation which comes under the umbrella of the estimates of the Ministry of State for Urban Affairs comes before the committee. We are told at the outset by the chairman of the committee that one of the votes that we have before us is Vote 10 dealing with the operating expenses of CMHC, and yet we are told we cannot direct questions to the president of CMHC who is sitting at the table. How then are we to examine the estimates of CMHC?
Obviously the minister cannot be accountable for the day to day operations of a Crown corporation, and rightly so because Crown corporations are autonomous organizations established under their own statutes and answerable to the House for their spending estimates through the various committees of the House.
I understand why the hon. member for Ottawa-Vanier, the chairman of the Standing Committee on Health, Welfare and Social Affairs, did not wish to permit me to direct my line of questioning to the president of CMHC because it had to do with a rather scandalous practice that has arisen whereby this very important Crown corporation is being used by the government, and specifically by the Minister of State for Urban Affairs (Mr. Ouellet), for partisan political purposes.
The matter has been raised in the House whereby we questioned the right of Liberal members of parliament to present cheques on behalf of CMHC to various municipalities across the country. That practice has been raised in the House and has been called into question. Indeed we know, by virtue of a Canadian Press story in the form of a memorandum from the president of CMHC to the Minister of State for Urban Affairs, that the corporation itself has very strong reservations about this practice because of the danger of the corporation being used in a partisan way under the operations of the government.

April 18, 1978
Point of Order-Mr. McGrath
Notwithstanding the sensitivity of the chairman, the fact is that I, and other members of the committee, this morning were denied the right to examine the president of this corporation in connection with a vote which was properly before the committee. If I cannot bring this appeal in the form of a point of order to Your Honour as the protector and custodian of our rights and privileges, then where do I take it? Obviously the chairman of the committee will carry on in this way with the advice and consent of the Minister of State for Urban Affairs because it is in the best interests of the minister and, as I have established, in the best interests of the chairman of the committee not to have this question raised because the broader question that we were getting at in committee this morning- which I am sure was not lost on the minister-was the relationship between this Crown corporation and the Ministry of State for Urban Affairs.
Without amendment, and without coming to the House with a bill, the government has taken this Crown corporation and used it as part of a line department. Without the Central Mortgage and Housing Corporation, the Minister of State for Urban Affairs has the ongoing responsibility of co-ordinating activities in the fields of housing and urban affairs. By the Government Organization Act, it was never intended to be a line department.
I appeal to Your Honour to rule on whether I, as a member of the Standing Committee on Health, Welfare and Social Affairs, have a right to direct questions to the president of CMHC in connection with the votes of that Crown corporation which are now properly before the committee.


Some hon. Members:: Hear, hear!


Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, as chairman of that committee I should like to make some comment on the remarks which have been put forward by the hon. member for St. John's East (Mr. McGrath). I take very seriously the allegations of partisanship which have just been made. I resent that. I do not think they were well intended. I hope the hon. member was not reflecting in any way on my chairmanship of that committee. His allegations were completely false.
The chairman of the Standing Committee on Health, Welfare and Social Affairs operates according to a set schedule, set by the steering committee and arrived at by consensus of all members of the House represented on the steering committee. We agreed to a certain series of witnesses, commencing with the hon. Minister of National Health and Welfare (Miss Begin), followed by the hon. Minister of Consumer and Corporate Affairs (Mr. Allmand), and the Minister of State for Urban Affairs (Mr. Ouellet) this morning. By agreement the witness called was the Minister of State for Urban Affairs. Whether the minister comes alone or with his officials is not a matter for the chairman to decide.
I agree with the hon. member that a quorum was not present, and therefore, it was very difficult for us to entertain a

motion of debate on the question as to whether he could address the president of CMHC through me.
I have reviewed the documentation regarding the tradition of committees. As far as I know, the normal procedure is that questions are put through the chairman to the witness, who in this case was the Minister of State for Urban Affairs. At that time I could not entertain any other procedure or any change of procedure, first because there was no quorum, and second, because it was not raised.
I understand the sensitivity of the hon. member. His question reflects on members of all parties. He is attempting to get information from Crown corporations or from witnesses. In my ruling this morning I stood by the decision of the steering committee. The witness this morning was the Minister of State for Urban Affairs. If he wanted to ask his officials to answer questions, he could do so. That is what I said, but at no time did I prevent the hon. member for St. John's East from asking questions. He had his ten minutes. He used it for his purposes. As far as I am concerned, it was a fair and just decision.


Walter David Baker: Mr. Speaker, the hon. member for St. John's East (Mr. McGrath) has put the case very well in terms of the facts, as I investigated them. In the course of dealing with this matter, perhaps Your Honour will want to defer a decision with respect to it.
Your Honour should look at the Votes and Proceedings of yesterday, when we dealt in committee with vote No. 10, as was indicated by the hon. member for St. John's East. Vote No. 10 was in respect to the estimates for the Central Mortgage and Housing Corporation. For some reason or other, the only person who is listed as a witness is the hon. Minister of State for Urban Affairs (Mr. Ouellet), whereas in every other case, such as the Standing Committee on Regional Development and the Standing Committee on Fisheries and Forestry, the hon. Minister of Fisheries and the Environment (Mr. LeBlanc) appears in one case and the hon. Minister of Regional Economic Expansion (Mr. Lessard) appears in the other case, as well as officials of the Cape Breton Development Corporation. This tells me that someone indicated to the committees branch and the committees branch has assumed, notwithstanding the fact that the president of CMHC was accompanying the minister, as he has done before, that the minister would be examined, before the chairman of the committee even had an opportunity to rule on the matter whatsoever.
It follows from that, to the casual observer in any event, there is at least a possibility of a concerted attempt to keep the president of CMHC out of the line of questioning. That was done successfully. Nonetheless, the man was there and he was introduced by the chairman of the committee. Then the Chairman took the unusual step of deciding who would be examined.


Jean-Robert Gauthier: A question of privilege, Mr. Speaker-
April 18, 1978


Mr. Speaker:: The hon. member for Grenville-Carleton (Mr. Baker) has the floor.


Walter David Baker: There are two matters at issue. First is the question of a committee chairman assigning to a minister the responsibility for answering detailed questions concerning a Crown corporation. That is exactly the reverse of the situation in the House of Commons, and it raises a question by itself, the right of the chairman to do that in those circumstances. The second question, which concerns me very much, is whether anything raised in committee should be settled in committee, and that members of parliament under no circumstances have recourse to the House. I hope to argue the precedents on the question of parliamentary practice. The proprieties in this case are just too shaky, to say the least.
The hon. member for St. John's East has dealt with the first question very well. Mr. Speaker has some responsibility and some authority here, moral authority and direct authority.
Committees are creatures of the House of Commons. The references which they receive are references from the House of Commons. The reference they received in this case was the estimates containing Vote 10, involving the Central Morgage and Housing Corporation. The facilities are provided by the House, the staff is provided by the House, and they are supposed to govern themselves in accordance with the rules of the House of Commons. The hon. member for St. John's East indicated that raised at least a prima facie case, and I suggest he has gone further than that.
If we hold to the view that the only recourse for aggrieved members of a committee is the report of the committee to the House of Commons, then really we have embraced the undemocratic notion that the majority can find redress in the House by reporting, but the minority cannot do so. I do not think that is the intent of the rules with respect to the matter. Really, then, there is no appeal to some impartial authority.
Much has been made on the principle that the matter should be settled in committee. Often it has been cited in the House of Commons, but the foundation for it has not been examined very carefully. I respectfully suggest that the foundation for that principle is shaky, and much more has been built on that foundation than it can or ought to support. Citation 295 in Beauchesne's states in part:
No Standing Order provides for an appeal from the Chairman of a Standing or select committee; but it has sometimes happened in standing and select committees that appeals were taken from the chairman's decisions to the committee and even to the House itself. On July 24, 1956, an appeal was taken to the House from the Standing Committee on Banking and Commerce, and the Speaker ruled that the chairman's ruling should be settled in the Committee and not reported to the House. The House cannot be guided in a matter of this kind by precedents from the United Kingdom House of Commons where appeals are unknown. An appeal from a decision given by the Speaker or a Chairman is not a postulate of British parliamentary law, but has been established in Canada by a Standing Order which does not apply to select or standing committees. It seems therefore that a reversal by the committee, of the chairman's ruling, would be ineffective.
There is an ambiguity in this citation, Mr. Speaker, for it appears to concede the point that appeals were once accepted
Point of Order-Mr. McGrath
and were then halted by a ruling which said, very much after the fact, that they were not in accordance with British practice.
I am sure my hon. friend, the President of the Privy Council (Mr. MacEachen), will join with me in finding this rejection of our own procedures in favour of British ones to be most objectionable indeed. It should be realized, first, that it is incorrect to state that appeals from committee rulings were unknown in the British House, and secondly, that the allusion to British practice ignored the differences in the committee system between the parliament at Westminster and the parliament here and ignored the procedures in existence there which have the same effect as appeals in bringing neutral and informed consideration to bear on committee disputes.
I would respectfully invite you, Mr. Speaker, to examine the ruling made on July 24, 1956, cited by Beauchesne. The Speaker was about to rule on the committee appeal when the Clerk convinced him that the practice was without precedent and not in keeping with British practice. I suggest that the Clerk's advise was at best incomplete in that instance, and I would draw your attention to page 638 in the current edition of May.
A situation occurred in 1863 in which the chairman of a select committee resigned suddenly so as to be able to vote, throwing the committee into confusion. It states:
The committee decided to refer the matter to the Speaker for an opinion. The Speaker gave it as his opinion that the chairman, having been elected into the chair, and having accepted the post with a full knowledge of its duties and liabilities, ought to go through with the duties. Reasons of a personal nature, failing health, or a feeling that he was unequal to the task, might afford sufficient reasons for wishing to be released. But after having exercised all the power and influence which belonged to the chair, then to vacate it in order to have the privilege of giving a vote, and altering the balance of opinions, seemed to him (The Speaker) contrary to the spirit of parliamentary proceedings. Mr. Horsfall went back to the committee room and took the chair.
Those are important words, "contrary to the spirit of parliamentary proceedings".
This case is important in a number of ways. First, the form the appeal took is unclear, but as I said, attention should be paid to the words "contrary to the spirit of parliamentary proceedings." In some way we must allow you, Mr. Speaker, to comment on that sort of situation. The second thing is that a comparison of our committee system to the British system is difficult, since we have one type of committee where they have two. I have already shown that appeals are not entirely unknown in British select committees. In their standing or legislative committees the appeal procedure, or a workable substitute, is built in.
The standing committees there are chaired by MPs from a panel of chairmen who are experienced members and who have the same standing committees as the Speaker does in the House. Of this panel, May states at page 616:
The Chairmen's Panel, of whom three are a quorum, consider points of procedure which are not covered by the rules of the House, and are empowered to report to the House from time to time any resolutions they may come to on matters of procedure relating to standing committees. Certain resolutions relating to standing committee procedure are reported each session.

April 18, 1978
Point of Order-Mr. McGrath
In other words, Mr. Speaker, the Speaker and the chairmen of standing committees regularly meet to iron out procedural difficulties arising in the committees.
We have no neutral panel in this House, and more than that, we have no appeal in this House. Yet, the committee structure is adjunct to, feeds upon, and lives as a result of the reference and the facilities of the House of Commons. Quite frankly, it is contrary to our parliamentary traditions and to "the spirit of parliamentary proceedings" when committees have new duties loaded on them every day and there has been no corresponding elevation of the committees to a position of neutrality. I feel that we ought to consider very carefully the precedents that we have relied upon to establish the principle that "what happens in committee is the committee's business and there is no appeal to the House of Commons."
I think that the principles and precedents that we have relied on over the years ought to be examined carefully to see whether or not they can support the principle which we have always held that they do. I invite you to do so, Mr. Speaker, in this particular case because, as the member for St. John's East very simply stated, in the circumstances in which he finds himself, he is virtually without recourse. He is the captive of the majority. There is no way if a chairman acts contrary to the principles that have been established-in this particular case with respect to the relationship of a Crown corporation to a minister of the Crown-unlike the majority members of the committee-in which he has any recourse whatsoever, unless that recourse is to you, Mr. Speaker.
That is the question on the point of order raised by my colleague, and that is why I invite you, Mr. Speaker, to examine those precedents and determine whether or not they support the principle to which we have given lip service over the years.


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: Mr. Speaker, I would like to say very briefly that the hon. member for St. John's East (Mr. McGrath) reported the facts to us, and the House leader of the official opposition attempted to talk about the procedure which applies in this case.
It seems to me that the evidence is obvious, Mr. Speaker: a committee controls its procedure, that is the recognized rule. And when the House leader of the opposition in the House quoted citation 295 from Beauchesne, I think he gave the answer to the false problem he is submitting to us. It is clear that there are only two standing orders concerning the decisions of the Speaker or of the chairmen of committees which may or may not be appealed, namely Standing Orders 12 and 55(4).
Standing Order 12, Mr. Speaker, is about a decision from the Speaker of the House of Commons, and Standing Order 59(4) concerns a decision from the chairman of the committee of the whole. Now, the reasoning in Beauchesne and behind the previous decisions made by the Speaker is to the effect that

if in the rules of the House there is a provision for precise cases, consequently the cases which have been omitted are not subject to appeal before the House. Now, as the Standing Orders of the House say nothing about the rulings of the chairmen of special and standing committees, it was not intended that their decisions should be subject to appeal to the House, hence the generally recognized principle that the committees are exclusive masters of their own procedure.
Mr. Speaker, I can only refer you to Beauchesne, 4th Edition, where, on pages 240 and 241, citation 295 defines very specifically the rights or procedure in such a case as resulted from the facts reported by the hon. member for St. John's East. It is obvious that the ruling of the chairman of the committee in question can absolutely not be the subject of an appeal to you. The only thing the hon. members of the opposition are seeking by bringing up this point of order is obviously to appeal the ruling and that our Standing Orders do not allow. Our tradition would not have you rule on this type of dispute. If that is so, Mr. Speaker, in the case of the decision of the chairman of a standing committee when there is quorum, when discussions have been held by the committee, well, a fortiori it is even more so when there is not a quorum at the time of the decision concerned. This leads me to say in closing that the purpose of the interventions of the hon. member of the opposition in this regard smacks more of politics than of a wish to see that the Standing Orders of this House are observed.


Mr. Speaker:: Order, please. There are three specific areas that have been touched in the point of order raised by the hon. member for St. John's East (Mr. McGrath). The first which relates to the ruling of the chairman of the committee and the obvious wisdom in the precedents which indicate that the Speaker ought not to be involved in these decisions, is verified in the circumstances. The hon. member for St. John's East put forward his argument in respect to his right to put questions, and the chairman has stood in his place in this House and put forward his reasons for refusing the request of the hon. member. Any action taken by me at this time would clearly place me in the position of not only being in appeal on that decision but being in appeal on that decision in a disadvantaged circumstance, which verifies the wisdom of those precedents.
I do not have the benefit of knowing the circumstances in the committee. I do not have the benefit of all the arguments, all of the evidence put forward, and the kind of question that was there and things of that sort. It is therefore with great wisdom that the Chair has always avoided sitting in appeal directly on this kind of conflict. To attempt to resolve this particular problem formally would be to invite the proliferation of arguments that occur in committees on procedural matters, to come into this House every day for my decision, in some sort of appeal forum, which is very imperfect at the best
April 18, 1978

of times. I therefore want to make it perfectly clear that I have nothing to do with that procedure and will not have anything to do with it for those obvious reasons.
Two other matters are raised, however. The second one was whether the hon. member, feeling aggrieved by a decision in committee, on procedural grounds has any other remedy. I cannot accept the argument that he has other remedy and that the report of the committee only serves the majority. Indeed, when a committee report is tabled in the House-if in fact it is tabled in the House-there is an opportunity at that time for the hon. member to raise questions either by way of concurrence or by debate upon concurrence in a particular report. I recognize some limitations in respect to estimates which are deemed to be reported by a certain date if in fact they are not reported. There is that right, however, at least in theory.
The third point touched upon by the hon. member is the general right of a member to put questions not to the minister but to the minister's officials. That raises a procedure which, in conformity with our practices up to this time, certainly has been that it is the minister who has responsibility to parliament and questions are put to him. That is an area which I am prepared to examine, however, to see whether there is any substance in the argument that a member of the House of Commons, putting questions in the process of the examination of estimates, ought not to be confined to putting questions to the minister but ought to be able to put questions to the officials in the presence of the minister. That is not a matter on which I can lay down directions, but it is certainly one which I can examine to see if I can be of help to the House. I certainly undertake to do that on the general proposition.


Walter David Baker: Mr. Speaker, with respect, you used the words "and his officials," which might involve the question of the minister with respect to a public servant in the ordinary course of events. I want to make sure it is understood that this is a Crown corporation, in which there may be a different relationship.


Mr. Speaker:: I understand.


MR. DINSDALE-MINISTERS' PRESS CONFERENCE
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, I should like to raise a point of order relating to a matter which occurred in this House yesterday. Bill C-45 was considered and passed expeditiously. In fact the discussion only occupies about two inches of space in the official Hansard report.
Immediately following consideration of that item of business, the Postmaster General (Mr. Lamontagne) and the Minister of Labour (Mr. Munro) proceeded to a press conference at which they announced the government would be conducting a special investigation into the advisability of setting up a committee to pursue a study of a Crown corporation organization for the Post Office.
I know that complaints are made from time to time about the responsibility of ministers to make such announcements in the House of Commons, particularly when they relate to
Point of Order-Mr. Dinsdale
controversial issues. The Postmaster General is new to the job and perhaps does not understand this long established tradition, but certainly the Minister of Labour has been here long enough to know that on a matter of such substance an opportunity should be provided for hon. members to hear the statement and make a suitable response.
This is particularly true when members of the opposition for a long time now and on many occasions, have made precisely the same suggestion, that the Post Office Department be converted into a Crown corporation in order to deal with the growing malaise in the postal service which is all too evident. Furthermore, this is a matter which has been considered by various studies, going back to 1969. The latest of these, the Hay report, which we discussed in this House only last week, specifically recommends that a study of this kind be pursued.
Under the circumstances we must conclude that both Bill C-45 and the announcement made outside the House are not designed to deal with the fundamental causes of trouble in the Post Office Department, causes such as deteriorating service, decreasing business, increasing rates, growing confrontation between management and labour, and so forth. Obviously these things are being done as an election posture and I do not think this is in the best interests of resolving the problems in the Post Office. In fact, the decision seems to have been made so hurriedly and without planning that I had difficulty obtaining the press release which was issued yesterday. A copy has only now come into my hands, after having sought it all morning. A note on the bottom of it reads, "This amends the previous release of today." So even after the initial press statement was made there was a change of mind by the government.
I raise the issue because the matter of reliable and efficient postal service has become of great concern to a growing number of people in Canada. I do not think it is good enough to avoid the responsibility of discussion in the House of Commons, and I do not think it is good enough to posture for election purposes. This sort of cynicism will only aggravate the problem rather than resolve it.


Mr. Alan Martin (Parliamentary Secretary to Minister of Consumer and Corporate Affairs):: Mr. Speaker, on the same point of order, it seems to me that rather than members being concerned about the manner in which this announcement was made, they should recognize it as a response to something that has been sought, not only by members of the opposition but by members on this side, including myself, on numerous occasions.
Bill C-45 was not intended to deal with that particular matter so it seems appropriate to me that the two ministers should come together quickly after the passage of the bill and announce the wishes of parliament were being adhered to and that a formal study of the matter of converting the Post Office into a Crown corporation would be undertaken immediately. I hope the results of that study will be made available to members of parliament when parliament reconvenes in the fall.

April 18, 1978
Order Paper Questions


Mr. Speaker:: An interesting point has been raised on both sides, but this is not a point of order.


MR. CROUSE-REPLY BY SECRETARY OF STATE FOR EXTERNAL AFFAIRS DURING QUESTION PERIOD
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I rise on a point of order which is related to the response given to the House earlier this afternoon by the Secretary of State for External Affairs (Mr. Jamieson) to a question posed by the hon. member for Esquimalt-Saanich (Mr. Munro).
If my memory serves me correctly, at that time the minister implied that we have no ongoing aid to Cuba policy at the present time. This is a direct contradiction of information made available within the last few days in committee when we were informed that we have an ongoing policy of aid to Cuba effective from 1972 to the present time.
This is a very important point, because international newpa-pers report that at the present time there are some 23,000 Cuban troops in Angola, some 12,000 Cuban troops in Ethiopia, and 5,000 or more Cuban troops in some 14 other African nations. This, of course, raises the question of whether Canadians should be supporting with their tax dollars foreign aggression by the Cubans in Africa.
The question I raise, sir, is designed to seek clarification of Canada's foreign policy. I endeavoured to do this when the minister gave his response, but unfortunately I could not catch the Speaker's eye. In the light of statements that a third world war may not start in the Middle East, but that the catalyst could be the Cuban troops in Angola and elsewhere in Africa, this matter should be clarified for the benefit of the House of Commons and the Canadian people.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Yvon Pinard: Mr. Speaker, the following questions will be answered today: 1,170, 1,185, 1,186 and 1,188.


Mr. Andre: 1.	What is the Crown's precise financial interest in Computer Sharing of Canada Limited as administered by the Department of Finance through the Canadian Development Corporation and Polysar Limited and on what date was such interest acquired, at what cost and for what reason?
2.	What was the book value of the Crown's equity on the date of acquisition and what is its latest estimated book value?
3.	To date, what is the Crown's total investment, including equity costs, contributions to operating funds, debt forgiveness and what is the Crown's total realized profit from such investment?

4.	In what manner is the Crown's interest represented (a) on the Board of Directors (b) in its senior management?
5.	Did the government make a policy decision in regard to the future disposition of its interest?


Mr. Ed Lumley (Parliamentary Secretary to Minister of Finance):: 1. The Crown has no financial interest in Computer Sharing of Canada Limited nor does the Department of Finance administer any interests through the "Canadian Development Corporation". The Canada Development Corporation, which is not a Crown Corporation or an agent of Her Majesty, is a corporation in which Parliament authorized the government, by the CDC Act, to acquire shares. The government is now one of more than 17,000 shareholders.
2.	The 1976 Annual Report of the Canada Development Corporation reports that Computer Sharing of Canada Limited is a subsidiary of Polysar Limited.
3.	See 1.
4.	(a) The Deputy Minister of Finance and the Deputy Minister of Industry, Trade and Commerce, are ex officio members of the board of directors of the Canada Development Corporation, (b) See 1.
5.	No. See 1.


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


Edward C. Lumley: 1. The Crown has no financial interest in Pop Shoppes International Inc., nor does the Department of Finance administer any interests through the Canadian Development Corporation". The Canada Development Corporation, which is not a Crown corporation or an agent of Her Majesty, is a corporation in which parliament authorized the government, by the CDC Act, to acquire shares. The government is now one of more than 17,000 shareholders.
2.	The 1976 Annual Report of the Canada Development Corporation reports that CDC has a 32 per cent investment in the shares of Venturetek International Ltd., which in turn owns 56.0 per cent of Pop Shoppes International Inc.
3.	See 1.
4.	(a) The Deputy Minister of Finance and the Deputy Minister of Industry, Trade and Commerce, are ex officio
April 18, 1978

members of the board of directors of the Canada Development Corporation, (b) See 1.
5.	No. See 1.


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


Edward C. Lumley: 1. The Crown has no financial interest in Pop Shoppes of America, nor does the Department of Finance administer any interests through the "Canadian Development Corporation". The Canada Development Corporation which is not a Crown corporation or an agent of Her Majesty, is a corporation in which Parliament authorized the government, by the CDC Act, to acquire shares. The government is now one of more than 17,000 shareholders.
2.	The 1976 Annual Report of the Canada Development Corporation reports that CDC has a 32 per cent investment in the shares of Venturetek International Ltd., which in turn owns 56.0 per cent of Pop Shoppes International Inc., and that the latter company sold, in 1976, a 20 per cent interest in Pop Shoppes of America.
3.	See 1.
4.	(a) The Deputy Minister of Finance and the Deputy Minister of Industry, Trade and Commerce, are ex officio members of the Board of Directors of the Canada Development Corporation, (b) See 1.
5.	No. See 1.


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


Edward C. Lumley: 1. The Crown has no financial interest in Pop Shoppes of Canada, nor does the Department of Finance administer any interests through the "Canadian Development Corporation". The Canada Development Corporation, which is not a Crown corporation or an agent of Her Majesty, is a corporation in which Parliament authorized the government, by the CDC Act, to acquire shares. The Government is now one of more than 17,000 shareholders.
2.	See 1.
3.	See 1.
4.	(a) The Deputy Minister of Finance and the Deputy Minister of Industry, Trade and Commerce, are ex officio members of the board of directors of the Canada Development Corporation, (b) See 1.
5.	No. See 1.


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


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed from Friday, April 14, consideration of the motion by Mr. Chretien that this House approves in general the budgetary policy of the government, and the amendment of Mr. Stevens (p. 4439).
Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, in this debate I had been dealing previously with the problems of foreign ownership. I want to return to that subject briefly in terms of its relationship to the budget we are now examining.
I had pointed out that in considering the decline of the dollar one should look at the same time at the amount of interest and dividends which has been hemorrhaging out of this country for a long time to the absentee landlords. We have a surplus in our manufacturing sector. We continue to outsell our competitors abroad, but our problem lies in what we pay for the capital which we keep introducing into Canada. We keep looking at a very significant figure. The deficit in our service account for interest and dividends is almost double that of our trade surplus. That is where the hemorrhage has been.
The idea that Canadians are not efficient or cannot compete, or that they do not have the education or the skills to

April 18, 1978
The Budget-Mr. Leggatt
compete in the western world, is simply not true. It will not bear serious examination when one looks at the balance of payments account.
We have been merrily encouraging capital of every kind and description, without discrimination, to come to Canada, since I arrived in this place in 1972. We started with a foreign investment review agency-a wonderful thing and a far better term than a welcome wagon. Look at its operation in 1976-77. Out of 235 applications, 19 were disallowed. The turn-down rate is something like 10 per cent. Of those persons applying to acquire Canadian businesses already in operation, the rejection rate is only 10 per cent. We have not merely been encouraging the setting up of new operations, but we have been encouraging a foreign takeover at a rapid rate. In terms of operating new businesses, out of 207 applications 14 were disallowed, which is a 7 per cent turn down rate in that area.
This portfolio was previously under the jurisdiction of the Minister of Finance (Mr. Chretien). The Minister of Industry, Trade and Commerce (Mr. Horner), that famous progressive liberal from Alberta is now operating and managing the Foreign Investment Review Agency. Talk about putting a fox among the chickens! There it is. If hon. members thought the previous minister tried to stream foreign investment into productive areas, hon. members can bet this one will not touch it with a 10-foot pole. He does not care where the money comes from and he does not care for what purpose it is used. In any kind of long-term industrial strategy, problems of unemployment and of the declining Canadian dollar will not be solved as long as this massive hemorrhage of Canadian funds abroad continues. Canada has a branch plant economy. Until Canada leans to grow up and mature as an economy, as long as this country continues to be a branch plant economy, Canadians will be the first fired and the last hired.
Now we come to the question of research and development. Here we have a budget which is moving to a 150 per cent write-off for research and development for corporations. This is an admission that we are not doing enough research and development in Canada. All these changes in the budget will have no effect whatsoever unless it is understood that research and development are done at the head offices of multinational corporations. They could not care less how much research and development is done in a branch plant. The reason is obvious. They do not want the branch plant competing with the head office in sales anywhere in the world.
The major multinational oil companies are the spoiled brats of the corporate sector. They always have their hands out. This time they are getting a special oil depletion allowance of an extra 50 per cent, I think-I would have to check the figures. In any event there will be no money going into research and development. The research and development for the oil companies are done in Los Angeles, San Francisco. They are not interested. In an industry which is 99 per cent owned abroad, they are not interested in employing Canadians in research and development unless it is in the United States.
These multinationals pick our brightest graduates from our engineering schools; our best scientists are constantly

encouraged and recruited to leave this country. Our best people leave Canada because Canadian politicians have never had the foresight or the guts to understand that until we own and control our own economy, Canada will not grow up providing employment to our better skilled and more intelligent people. They will continue to be attracted abroad, and they will continue to make contributions in technology in countries like the United States. That same technology then comes north to compete with our struggling industry here.
So there is 150 per cent write-off on research and development. In school I did not understand what 150 per cent was. I thought one went to 100 per cent and wondered how you get the other 50 per cent. The reality is this: if you happen to be in the manufacturing industry you could write off the whole cost of research and development now. What the government has said is, "Take another 50 per cent." It could have been done another way. It could have said, "Here is a handout, folks." The corporations not only get 100 per cent but all those taxpayers out there, like you and me, have to reach into their pockets and pay money back. That is a good old deficit position. Remember the corporate welfare bums? Just add it to the list, brother. There they are. There's another 50 per cent, and there's the hand in my pocket again. They have some record. The manufacturing sector in this country is spending .7 per cent of its sales returns in research and development. That is a miniscule amount. Mr. Speaker, if we want research and development the heights of this economy must be controlled by Canadians and owned by Canadians. Those decisions have to be taken by Canadians, not abroad.
We are in the glue all right. We have an $11 billion deficit and I agree there is not a lot of manouvering room. The gnomes of Zurich have looked at it and said, "These guys cannot run a peanut stand, we don't have any confidence in their operation." And as is the case when any operation is in the glue that deep, they have started to speculate against the Canadian dollar. Even if ministers had wished, they probably could not have done much in terms of providing public employment unless they had been willing to reorder their priorities and hurt their friends for the first time. And they were not prepared to do that before an election-it is a little dangerous to play around with the upper middle class in Canada because they all vote. They are very careful, when going to the polls, to make sure they have a government which will continue to give them the kind of subsidized upper class housing, subsidized retirement savings programs, and all these wonderful things of which the upper middle class has taken such tremendous advantage. The government is not about to produce a budget which would reorient that situation.
Let me tell you briefly what should have been done in the budget, Mr. Speaker. One and a half billion dollars-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. member, but his time has expired. He may
April 18, 1978

continue, however, if he has the unanimous consent of the House.


An hon. Member:: No.
[ Translation]


Hon. Andre Ouellet (Minister of State for Urban Affairs):: Mr. Speaker, in opening my speech I would like to join all those who preceded me in congratulating the Minister of Finance (Mr. Chretien) who presented what I would call a responsible budget.
No doubt that when the Minister of Finance decided to present a budget to the Canadian people, he did so essentially and exclusively in view of economic considerations. I listened to the hon. member who spoke before me and who tried to play politics with the general aims of the budget. I want to say to him immediately that the views and goals which the Minister of Finance set for himself in presenting the budget were essentially to encourage economic recovery and the rate of industrial development, and any hint of an election ploy the hon. member wants to see in that budget is unfounded. Undoubtedly, Mr. Speaker, had the Minister of Finance of Canada wanted to come up with an election budget, he would have filled it with many more concessions to Canadians, Canadian companies, and all groups of society. The budget would have provided for much more reductions of all kinds to the various groups of Canadian society. But the Minister of Finance of Canada consciously and courageously decided to present a well balanced and reasonable budget knowing full well that in the following days some hon. members of the opposition would try to use that budget as a political weapon.
He even took a risk which, in my opinion, is a precedent in the history of the preparation of budgets in Canada-close consultation with his provincial counterparts, the ministers of Finance of the various provinces, in order to make them a part of the decision making process, to the extent that economic issues were concerned, before preparing his budget. However, shortly before the Easter recess when the Minister of Finance decided to introduce that budget, he had several alternatives among which to choose. One of them, of course, was to cut down the income tax rate. He did not do so and decided to reduce selected taxes because he understood and recognized that a cut in the income tax rate would not be equally favourable to all categories of Canadians.
When one considers that a sizeable number of Canadians do not pay any income tax or live on a fixed pension, or fixed income, one readily understands that an income tax cut is highly illusory for them. So he chose to follow the route suggested by several very well-advised authorities in the economic field, whether it be the Economic Council of Canada, the Canadian Chamber of Commerce or distinguished Canadian economists who had advocated and favoured a tax cut. Now, what did the Minister of Finance do? He consulted all
The Budget-Mr. Ouellet
provincial ministers of Finance and, for three weeks, intensive consultations were held with all the provinces of Canada.
I think that Canadians can appreciate and understand how important the Minister of Finance felt it was to consult the provincial authorities before taking that decision. As everyone knows, it is the provinces' responsibility to set and apply the retail sales tax. The Government of Canada has never wanted or tried to intrude directly and unilaterally in that particular field of provincial jurisdiction. The federal government has offered to share the cost of a provincial sales tax cut without any discrimination with regard to the products. Several provinces-


Mr. Crosbie:: Nonsense!


André Ouellet: The hon. member for Newfoundland feels it is nonsense to have reduced by 3 per cent the sales tax in the provinces of Newfoundland. Well, to my mind he is the one who will not make sense when he says such things to people in his province, for they have accepted that reduction as a very wise and proper decision which, besides, has been recognized and accepted by the provincial government of his province.


An hon. Member:: That he didn't know!


André Ouellet: What is a little special about the government's decision to prepare a budget in close co-operation with the provinces is the fact that the Quebec government has decided recently to put forth a proposal which differs from that of the Minister of Finance of Canada (Mr. Chretien).
Now, it is quite all right for the Quebec government to hold different views on sales tax but what is unacceptable is the fact that the Quebec finance minister, Mr. Parizeau, has remained silent throughout the three weeks of negotiations and made no comment to the Minister of Finance of Canada. That is unacceptable and shows at the very least a lack of good faith on the part of the provincial minister of finance. What strikes me most is that the Quebec premier should recently state on television that Ottawa has fooled around with the most intimate parts of the Quebec government. Well, Mr. Speaker, if the Quebec Finance minister stood silently by and let his federal counterpart to mess around with his government's most intimate parts, I say it was gross ignorance on his part or perverse enjoyment.
Playing the offended virgin and hollering rape when pawing has been going on for three weeks is, I think, overreacting to the real situation. I suggest the serious point in this whole issue is that two provinces-British Columbia and Saskatchewan- have indeed proposed a number of changes during these discussions with the Minister of Finance of Canada. These proposals were presented to all provinces during the discussions and consultations the Minister of Finance had with them and they were accepted.

April 18, 1978
The Budget-Mr. Ouellet
It is obvious that, had Quebec finance minister Parizeau made some proposals before the introduction of the federal budget, they would have been taken much more seriously and considered by the federal minister and his provincial counterparts before the finalization and the public introduction of the federal budget.
The reaction of the Quebec minister of finance came only two days after the federal budget and now it would be inequitable and unfair for the Canadian government to accept Mr. Parizeau's proposal without offering the same to other provinces. And there are some particularly dangerous aspects to this proposal. I am thinking of the following aspects I would like to mention this afternoon because it seems to me that they could lead us down a dangerous slope.
In fact a sudden and selective cut in the sales tax is discriminatory for Quebec producers and retailers because it will help some and penalize others. Besides, the selectivity in favour of Quebec products means in fact the establishment of a tariff on imports from other provinces and this in itself is a very dangerous and inappropriate method.
In a way, that measure is fully anti-Canadian, and it is a protectionist move within a Canadian province. It is a dangerous balkanization of the trade sector in Canada, particularly in our present economic situation and at this time of our history. Third, I think that, technically, Quebec's decision is particularly most counter-productive because it will encourage tax avoidance in some sectors and it will certainly be very expensive to collect.
Looking at the way most developed countries operate, one can see that there are no differences in sales tax rates, that all items are either taxed at the same rate or not taxed at all. Some products are taxed, others are not, but you very hardly and seldom find differences in tax rates among products, with variations ranging from 2, 4, 5 or 8 to 10 per cent, depending on the items. No developed country in the world has ever established that kind of differences in sale tax rates and, in any case, it seems to me most illusory and most dangerous to implement that kind of system in the province of Quebec or in other Canadian provinces. So it appears to me in light of what happened these past few days that the government of Quebec acted in bad faith because had Quebec finance minister Parizeau really wanted to protect in some way selected Quebec products he should have said so before the federal budget was made public. He should have indicated well in advance of the federal budget his preferences and hopes as to an agreement between Ottawa and Quebec on the sales tax, something which had indeed been done by British Columbia and Saskatchewan and which could very certainly have been done had Mr. Parizeau said so before.
It is obvious in this case that the Quebec government is in a position where it wants to favour certain Quebec manufactured products. This as such is in no way opposed by the government of Canada. On the contrary, if the government of

Quebec wants to take the sales tax off certain products manufactured in Quebec, we have no objection. On the contrary, we congratulate the government of Quebec for finally taking its responsibilities and being prepared to take specific action to support the economy of the province of Quebec instead of passing exclusively linguistic measures which are causing irreparable damage instead of really helping the Quebec economy.
I should remind hon. members that the offer of the federal government is valid for six months and is still on the table. Indeed, the Canadian government indicated that it is ready to consider that the provincial contribution of 1 per cent not be required on every product to benefit from the federal contribution of 2 per cent and that the provincial government could reallocate its contribution on certain products only. In other words, the Minister of Finance of Canada (Mr. Chretien) already indicated to Mr. Parizeau that there is a way out, that within the budget of the government of Quebec there is a way of rearranging those decisions he has to make as Quebec minister of finance to fully take advantage of the Canadian government's offer.
I wish to reassert that the Canadian government will always be ready in the next six months to consider, in consultation with the other provinces concerned-not only on the sly with the Quebec government, but in consultation with all the other Canadian provinces any other proposals that the Quebec government may have for the sales tax which will not be equivalent to using federal funds to break up the Canadian market.
However, it must be clearly understood that this arrangement will be available to the other provinces and that the federal government will not accept that its contribution be used to break the Canadian common market and to cause additional distortions in interprovincial trade. What I want to say this afternoon during the budget debate, Mr. Speaker, is that the generous offer of the Canadian government to reduce the sales tax for all products sold in the province of Quebec still holds.
And if the Quebec government so wishes, at any time during the next six months, and we hope it will be as soon as possible, it will still be able to reduce by at least 2 per cent immediately or as soon as it desires the sales tax on all products sold in the province of Quebec. This loss of 2 per cent in the revenue of Quebec will then be compensated by the federal government. As for the other 1 per cent, if the Quebec government decides to apply its effort for reducing taxes exclusively in other areas, it is free to do so, it has sole responsibility in this regard and we shall not be the judges of decisions made by the Quebec government in this matter.
However, it seems clear that in the interest of all Quebec consumers the provincial government must now face the Canadian reality as soon as possible because, finally, this
April 18, 1978

controversy, this move of independence or this little crisis of the Quebec finance minister is motivated only by separatist sentiments and not at all by good intentions towards the population that the provincial government should serve.
If the Quebec government wants to abolish entirely the sales tax on clothes, fair enough, we have no objection. On the contrary, we will congratulate it for this action. As a matter of fact, one of my colleagues reminds me that in the first budget after its victory the Parti Quebecois itself increased the sales tax on footwear and children clothing. If they realize now it was not such a good measure, let them remove it and we will congratulate them for it. But they should not do it with the Canadian government's money, they should not do it by trying to jeopardize the free common market that we enjoy in this country, they should not do it either to enhance their separatist option, because they have been elected not to bring Quebec to independence, but to give the people of Quebec a good administration. I think that this mini-crisis has been provoked exclusively by the Quebec government and by Mr. Parizeau. The Canadian government is not to blame if we are in this situation; the blame rests squarely on Mr. Parizeau. In my opinion, this small crisis will disappear in a few weeks.
I am basing myself on an experience we had some months ago. Mr. Speaker, you will remember that a few months ago, following a conference of energy ministers, namely the Canadian Minister of Energy, Mines and Resources (Mr. Gillespie) and the ten provincial ministers, it was agreed that the two levels of governments, federal and provincial, would strive to conserve energy in Canada and to introduce at both levels a series of measures designed to make the people aware if the need to conserve energy, to consider energy as a valuable asset that should not be wasted. Now, you will remember that following this federal-provincial conference where the federal Minister of Energy, Mines and Resources and the ten provincial energy ministers had agreed on a series of measures at the federal and provincial levels, the home insulation program also caused a minor identity crisis in the province of Quebec. You will remember that the Quebec government had reneged on the commitment made at the federal-provincial conference by his energy minister and was no longer ready to co-operate with the Canadian government in setting up a Canadian home insulation program throughout the country.
Of course, because of the step forward and the two steps backwards taken by the Quebec government, this program was not implemented within the province of Quebec at the same time as in the other provinces, and on that occasion, Quebec found a rather special allied in the province of Alberta which had special problems it wanted to solve before joining the national energy conservation program. So, for some months, we had a home insulation program offered by the Canadian government to all citizens of all provinces, a program which was quickly and heartily endorsed by almost all the provinces, but was turned down by the PQ government in Quebec
The Budget-Mr. Ouellet
because it felt once again that the Canadian government was forcing its hand in a field which it nevertheless acknowledged as being very important. Now, it took federal officials a few weeks, a great deal of patience and goodwill in order to reach positive conclusions and finally an agreement with the Quebec government, so that the people in Quebec could benefit from this program just as all other Canadian citizens.
I believe, Mr. Speaker, that the same thing will happen in the case of the sales tax which now is a ticklish problem in Quebec. In a few weeks from now, a solution will be found by the officials sent by the Quebec Minister of Finance in cooperation with the Canadian government officials, which will enable the minister, Mr. Parizeau, to save face, just like it was possible, a few weeks ago to enable the Quebec Minister of Energy, Mr. Joron, to save face because he had turned down a program that was capital for all Canadians, whatever their province of residence. I believe it is essential, in the course of my contribution to this debate on the budget, that I refer briefly to the programs and measures the Canadian government has undertaken in the last few months, I would even say the last few years, in order to provide all Canadians with adequate housing at reasonable prices.
I think that objectively we can recognize that opportunities for Canadians to find comfortable housing at a reasonable price are better today than ever before. Through a series of government programs in 1976 we offered on the market a great many new housing units. In fact we have built in Canada some 265,000 housing units. It represents a significant number of homes that are offered to the Canadian people and that meet the needs of the majority of Canadians. And this housing production is not made at random but within a program launched two years ago by the Government of Canada to build one million new housing units for the Canadian people over the next four years. If we consider our performance we realize now that we have even exceeded our objectives and we will certainly reach that target of one million new housing units in Canada.
Obviously I do not think that a high number of housing starts is in itself the magic answer to our housing problems. However we must produce annually more housing in Canada if we want to meet the needs of the Canadian people and particularly a group of citizens, the senior citizens and low wage corners. It is absolutely necessary for the Canadian government and provincial governments to do better and more in that field. In fact, in 1976 we have financed only 12,000 units under federal-provincial shared cost public housing programs. I think that 12,000 units is not enough. The target I submitted to my provincial colleagues is 30,000 housing units a year over the next five years and the reason I submitted-


The Acting Speaker (Mr. Ethier):: Order, please. I regret to interrupt the hon. minister but I wish to inform him that his

April 18, 1978
The Budget-Mr. Crosbie
allotted time has expired. However he may continue with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


The Acting Speaker (Mr. Ethier):: There is not unanimous consent.


John Carnell Crosbie: Mr. Speaker, before I come to the main point of my address which is going to deal with the remarks of the Minister of State for Urban Affairs (Mr. Ouellet), whose remarks illustrate the insufferable arrogance of this government, the fantastic damage it is doing to federal-provincial relations and to the cause of national unity, let me just say this first: the theme of this budget was stated by the Minister of Finance (Mr. Chretien) to be one of responsibility. That is what he said. His theme has been complete irresponsibility and complete oppression and destruction of a healthy sense of federal-provincial relationships. That is what has happened, Mr. Speaker.
Just before getting into my main remarks, I wanted to say this: before confederation we had an anti-confederation song so-called, which went something like this:
"Hurray for our own native isle, Newfoundland,
Not a stranger shall touch one inch of her strand;
With her face turned to Britain, her back to the Gulf;
Come hear at your peril, Canadian wolf."
That was our anti-confederation song, Mr. Speaker, which has been defused by the last 28 years of confederation.
I just mention that because I want to recommend to hon. members, who have been very supportive of Newfoundland in the seal fishery controversy, a book which has just come out, called "Haulin' Rope & Gaff", of songs and poetry in the history of the Newfoundland seal fishery, by one Shannon Ryan and by one Larry Small of the Breakwater Press in St. John's, Newfoundland, an enterprising press. This volume will show you, Mr. Speaker, why we are so defensive; why we defend the seal hunt and the importance it has in Newfoundland history and culture. It is 168 pages of poems and songs about the seal fishery and the part it occupies in Newfoundland life. So, before getting into my main remarks, I want to thank hon. members who supported us in the seal fishery and recommend this to them.


Mr. Darling:: What is the cost?


John Carnell Crosbie: Then they will see why it is so important to Newfoundland.


Stan Darling: What is the cost?


John Carnell Crosbie: I do not know what it costs. I was sent a free copy, but it would not be very much. It depends on how far the dollar falls.
I want also to pay tribute-it may be my last time speaking in the House, if the Prime Minister (Mr. Trudeau) can screw up his courage, until the next parliament is called, and hopefully if the Prime Minister can screw up his courage, we may have an election called this week-


An hon. Member:: He has screwed up everything else; he may as well screw up his courage.


John Carnell Crosbie: He has screwed up everything else; he may as well screw up his courage. Is that what the hon. gentleman said?


Walter Gilbert Dinsdale: That is right.


John Carnell Crosbie: So, it may be my last chance in this parliament, and I wanted to say this-


Mr. Collenette:: It is your last chance, period.


John Carnell Crosbie: -that it was an honour to have served with the hon. member for Halifax (Mr. Stanfield), the former leader of the opposition. I am very sorry to see he is not running again. He made a great contribution to Canadian political life.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I am glad I had 18 months to see him in action and listen to his advice in our caucus. I also want to say a parting word to the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), who had a great career, Mr. Speaker, in Canadian political life, in Saskatchewan and nationally.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: I have a great admiration for that gentleman. I am sorry he has had some medical problems lately and he is not here, but I certainly wish him well in his retirement. He is one of the outstanding political figures in Canadian history, and I do not think anyone could gainsay that. There are other members-I cannot mention them all-we are going to miss on this side. The hon. member for Don Valley (Mr. Gillies) is not running again, for reasons I can well understand. He wants to get back to his former life in academia and business. Politics is a tough life, Mr. Speaker. You have got to have a thick hide. After ten years in Newfoundland politics, my hide is thick enough to last at least 50 years here, if the electorate keeps returning me.


Some hon. Members:: Hear, hear!


John Carnell Crosbie: Mr. Speaker, the Minister of Finance is also a very fine fellow. I like the Minister of Finance. He is engaging and he is refreshing. He is a great Canadian, but by golly, I have to say this also: he is a disastrous Minister of Finance. He should be somewhere else. It does not excuse him that he is costing this country tens of millions, if not hundreds of millions of dollars, because he does not understand that as Minister of Finance every word he utters is watched by people in the financial and industrial circles around the world; that a loose
[The Acting Speaker (Mr. Ethier).]
April 18, 1978

word from him can cost tens of millions of dollars of losses to us in foreign exchange, and waves of speculation; that he has to be very careful with every word that he utters. He does not realize that.
If his colleague, the hon. Minister of Industry, Trade and Commerce (Mr. Horner) is properly called "loose lips"-and he has been very loose with his lips; if I get a chance, I will expand on that-the Minister of Finance is being "flip lips". He is too flippant. He is too flip with his lips. Every time he flips his lips, he can cost us tens of millions in foreign exchange. He is not careful enough. He is not thinking out the remarks he makes enough. There is too much confusion. We already have a government in which no one has confidence, in the business and industrial community, in any event. Now we have a Minister of Finance who says one thing about the dollar, and we have the Minister of Industry, Trade and Commerce who says the direct opposite. This is costing this country dearly, Mr. Speaker, but I will come back to that later.
This budget was not a boost to the economy. It could be described mainly as a goose to the economy. There is going to be a little jump up, but that jump is going to subside very quickly. It is going to come down very quickly. It is a rubber duck budget. If you want to run out and buy your rubber duck tomorrow, you will save three cents. This is all this budget amounts to. It was a rubber duck that sprung a lot of leaks before it was brought down, and has sprung a lot of leaks since, Mr. Speaker.
All the Minister of Finance did in this budget was thumb his nose at the Canadian economy. There is nothing else he could do. His hands were tied behind his back. He already had a deficit of $11.5 billion. He could not really spend very much. So, all he could do was thumb his nose without using his hands, and the Minister of Finance is a marvel at that.
The most serious deficiency in his budget is the subject which was addressed by the Minister of State for Urban Affairs this afternoon, and that is the situation with respect to the sales tax.
I make this prophecy: if by some mischance the kind of attitude represented by the Prime Minister, the Minister of State for Urban Affairs and the Minister of Finance, gets them re-elected to operate the government of this country again for another four or five years, then I give national unity very little chance to be accomplished, and see nothing but a disaster for federal-provincial relations.


Walter Gilbert Dinsdale: Heaven forbid!


John Carnell Crosbie: Now, the kind of federal-provincial thinking which goes on in this government is illustrated by the minister of intergovernmental affairs, the hon. Minister of State for Federal-Provincial Relations (Mr. Lalonde). I do not remember his district. There was an article on him in Maclean's magazine a few weeks ago. There have been nothing but articles on Liberals in that magazine in the last few months. And I notice they just got a $1 million advertising contract from the government to advertise to tell Canadians they should
The Budget-Mr. Crosbie
travel at home. I do not know if there is any connection. Maclean's is a Liberal house organ, and that is all it is. But in this article here on the Minister of State for Federal-Provincial Relations there was one astute thing said, and I quote at page 32 c:
Lalonde reflects what seems to some people pretty much the basic problem today with all federal Liberals. They don't argue their cause, they take it for granted. Positions are declared ex cathedra and then Canadians are lectured on them.
That is what is happening today on the sales tax. There is a federal sales tax, Mr. Speaker. I think it is something like 10 per cent, and if the federal government wanted to reduce sales tax, they could reduce their own sales tax. They have their sales tax. They have an excise tax. But they wanted to reduce a retail sales tax, and direct taxation is specifically an area of provincial responsibility, and most of the provinces, except Alberta, have a retail sales tax, a direct retail sales tax. The minister wanted to have a reduction in the retail sales tax across Canada, so he suggested to the other provinces that he would make money available.
In the case of the four Atlantic provinces, he said that if they reduced their sales taxes 3 per cent he would reimburse them for all of the amount that they lost as a result of that. And they accepted; naturally they accepted. Who can expect independence from the four Atlantic provinces when they are economically inextremis, when in Newfoundland we have an 11 per cent sales tax-not by choice but because of cruel economic circumstances? When someone comes along and says, "You reduce that tax to 8 per cent, and we will reimburse you that 3 per cent you lost," naturally you accept it, whether or not it is an interference in federal-provincial affairs. You have no choice.
This offer that was made by the Minister of Finance was a mafia offer. It was an offer that you could not refuse, just like in "The Godfather." Godfather Chretien made an offer that most provinces could not refuse and did not refuse, with the exception of Quebec, which has a long history-whether Liberal governments have ruled or Union Nationale, and now the Parti Queb6cois of refusing to accept these kinds of offers from the Government of Canada. Time after time they have done that, and the Parti Quebecois is following in that tradition. And Mr. Claude Ryan has said himself-it is obvious from his remarks-that he would be taking the same kind of position they have taken. I quote from The Globe and Mail of Monday where Mr. Ryan says:
"The tax is quite evidently one that belongs to the sovereign authority of the provincial Parliament to impose, to withdraw or to change," he told the press conference.
Next quote:
"It is surely not desirable that measures be taken which seem to want to impose, under financial penalties, changes which come under the jurisdiction of the provinces."
That is a support for the position taken by Quebec because it summarizes what has happened.

April 18, 1978
The Budget-Mr. Crosbie
Well, what has happened? Alberta received no assistance. They are a special case, they have no sales tax. B.C. and Saskatchewan, there was a special case made for them. They wanted to remove the sales tax for 9 months and reduce it by 2 per cent, and that was agreed to by the Minister of Finance and by the Prime Minister. That was a special case.
If we look at the sales taxes across Canada, there are all kinds of exemptions. Newfoundland already exempts clothing, it exempts footwear, it exempts now the sales of electricity. P.E.I. does the same. What is exempted differs in every province. The 11 per cent in Newfoundland did not apply to clothing and footwear in the first place. So, there are special cases. All across Canada we have got special cases, different exemptions. We have got different rates. The rates vary, Mr. Speaker, from 5 per cent to 11 per cent in Newfoundland. So, the rates are different all across Canada.
The reduction that was implemented as a result of the minister's budget is discriminatory because in one province it will save the consumer 27 per cent, and in other provinces varying percentages depending on how high their sales tax was in the First place. So, it is different. There are special cases in every province. It means a 25 per cent reduction for Quebeckers if they had reduced it 3 per cent-27 per cent it meant in Newfoundland from the burden on consumers; 29 per cent in Ontario and British Columbia because their tax rate was less; 37 per cent reduction in the Maritimes, and 40 per cent in Manitoba and Saskatchewan, if the federal proposal was accepted. So, it differs in all provinces anyway. Consumers were being treated differently in every province by this proposal.
But Quebec came back and said that they did not want to do it in that manner, that they want to assist not only their consumers but certain Quebec industries. So, they want to reduce and take the 8 per cent off furniture, footwear, clothing, and what was the fourth-textiles. So, that is what they wanted to do. The federal government said to them, "There is $226 million that it will cost in Quebec if you reduce your sales tax over-all 3 per cent for six months. We are going to give you two thirds of that, and you have to come up with the other third if you do what we ask you to do." That is $184 million from the federal government, and they would have to put up $42 million if they did this. If they accepted federal dictation, this is what they would get from the federal government.
Well, they have come back and said no, they want to take 8 per cent off four specific areas. It does not make them any different from Newfoundland. Newfoundland does not tax clothing now, does not tax footwear, but it will help their consumers who will buy clothing and textiles and footwear, and furniture; and it will help the Quebec manufacturing sector which is heavy in that area. Now, what is wrong with that proposal, Mr. Speaker? What is wrong with it? It is a provincial tax. Surely to God, cannot members opposite see that this is a fantastic intrusion into provincial rights and jurisdictions to try to force this over on a province that says it does not want it.
You noticed today in question period when our leader, (Mr. Clark) and the hon. member for Kingston and the Islands (Miss MacDonald) referred to this "Briefing Notes for Consultative Task Forces" put out by the Department of Industry, Trade and Commerce-I got it from them this morning.
When we look at page 19 of that report, the section on industrial adjustment, we see that it says at page 18:
A review of industrial prospects indicates that, even in a buoyant economy, particularly difficult problems of industry adjustment involving significant contraction in employment are anticipated in such sectors as leather industries, textiles and clothing, furniture and shipbuilding. These industries together employ around 244,000 workers ...
And then it goes on to say below:
The regional pattern of industrial activity makes the question of adjustment more problematic. The sectors listed above with severe adjustment problems are generally concentrated in Quebec.
The government's own study shows this. It warns that there is going to be significant contraction in leather, textiles, clothing, and furniture, and says that the severe problems are generally concentrated in Quebec. And when the Quebec government comes forward to try to utilize this federal offer to assist in those areas, the federal government says no, and then tries to pretend it is some kind of criminal action, a separatist action by the Parti Quebecois that they have made this other suggestion.
Now, Mr. Speaker, there can be no satisfactory, no smooth federal-provincial relationship with this government while that kind of attitude is exhibited by the government that operates in Ottawa. This is a perfect illustration of why the Prime Minister is the last man in Canada who can ever come near to solving our unity problem with Quebec. He is too stiff necked about it; he is too inflexible. He will not budge. He has got his own fixed ideas, and it does not matter what the provinces think or what the province of Quebec thinks, or what the people in the province of Quebec think. He is going to force his way on them. That is his attitude.
How can Canada survive if that is the kind of attitude that stays in office in Ottawa? In my opinion, Mr. Speaker, it will not survive. This action of the government was exemplified here today by the minister for urban affairs with his stupid argument that he put forward today, exemplified by the Minister of Finance, exemplified by the Prime Minister on Friday, who by a cheap tactic tried to imply that anyone who thought their policy was unwise was a separatist. By God, Canada is on the road to ruination if the majority of the Canadian people will buy that kind of dangerous guff. What did the minister of urban affairs have today to justify their attitude? And, by the way, I have not got time to go into it, but we all know that the four western premiers have come out and said this is an intrusion in federal-provincial affairs, a shocking way to run things, and flippant remarks of the Prime Minister could prejudice ongoing discussions in national unity. We are all familiar with what they have said and how right they are. And they are upset with this federal interference, although they all accepted what was offered because, as I say, politically unless you were in Quebec it was an offer you could hardly refuse.

April 18, 1978

What did the minister say to justify this kind of club held over the people of Quebec? He said it was on the grounds that they have got a separatist government. This is an attempt to make the people of Quebec suffer, by the federal government to bludgeon them into thinking that they are suffering because they have got a Parti Quebecois government. That kind of tactic is never going to keep this country together. What justification was given for it? He said there were negotiations for three weeks. Nonsense! The four western premiers put the lie to that. They said there was no such thing. There was some consultation, but in the last couple of days they could not talk to each other because they were told it was budget secrecy. So that is a figment of the imagination.
He said the minister of finance in Quebec said nothing when these matters were discussed with him. Why should he have said anything? It was his jurisdiction. It was his sales tax. Why should he have to speak to the Minister of Finance of Canada when the Minister of Finance of Canada comes in with a bludgeon to try to tell him what to do with his sales tax in Quebec. So, if Parizeau said nothing, I say I agree with him- Parizeau did not have to say anything.
Then he went on to say there were four or five other points, that if Quebec does this, they have to offer it to the other provinces. Fine! Good! If they agree, as they should, that Quebec can do this, then they should offer it to the other provinces. There is nothing stopping them.
The minister said that if this went ahead it would aid some people and penalize others by selective cuts. So what? I have explained that every sales tax in every province in Canada has got penalties for some and selective cuts for others. Some exempt clothing altogether, like Newfoundland, and then they tax other things. It is different in every province. That is no argument.
Second, he said it was a measure of protectionism and was going to lead to balkanization of Canadian commerce. What absolute tripe! We have got ten provinces now, all with their own sales taxes. We have got that now. There is no leading to balkanization in that. In a certain manner we have got balkanization in Canada under our present system. We have got protectionism. The real kind of protection is where a provincial government says that you have got to be located in the province to get any work there, that there is a 10 per cent differential in your favour if you bid and if you are from within the province, but not if you are from without. That is where the real balkanization is, not in these sales tax proposals.
Third, the minister said it was going to cost a lot, and it would lead to tax evasion. I do not know how he arrived at that conclusion. One did not follow from the other. The rates now vary in every province, as I have explained.
Fourth, he said the Quebec government acted in bad faith. They should have spoken to them earlier and told them what they proposed. Why? I have already dealt with that. Where is the bad faith? The bad faith is in the federal government that
The Budget-Mr. Crosbie
will use its fiscal powers to try to bludgeon the provinces into doing what it, the federal government, wants them to do, whether they think it is best for them or not.
Fifth, the minister said the "feds" would agree to Quebec reallocating their own one per cent contribution. Now, Mr. Speaker, that reveals an attitude. The minister said the great federal government, the great Trudeau federal government, would agree that Quebec could use its one per cent of the cost, the one per cent it was putting up, the $46 million-they would agree to Quebec using that selectively, but their 2 per cent contribution would have to come off all items.
Imagine the federal government saying to Quebec, "You can do what you like with your own money." Isn't that a great concession from the federal government? Imagine the minister having the gall to get up in this House and tell us, pretend to us, they are making a great concession. It is arrogance unparalleled. By God, we have got to get that across to the Canadian people. We have got disaster staring us in the face if this kind of man gets back into the Government of Canada with this kind of attitude. It will be a federal system no longer, it will be a unitary system if this crew ever gets back in. God knows what will ever happen to the country. Big deal! They are going to allow them to do what they like with their one per cent.
The minister said it was a small crisis provoked by Quebec. How was it provoked by Quebec? It was provoked by the government that brought the budget in last Monday-a week ago Monday, not by Quebec. Quebec provoked nothing. Quebec has come in and said, "This is our sales tax, this is what we want to do with the offer you are making", and the federal government is attempting to crush them down in an exhibition of raw fear and force in federal-provincial relations. I, for, one hope that Mr. Parizeau sticks to his guns.
I had six years of coming up to federal-provincial conferences and seeing the hon. crowd opposite throw their weight around and try to crush all opposition with their financial strength and the fiscal strength they have. I say this is the greatest example we have had yet of the attitude of the Trudeau administration to federal-provincial relationships in Canada. It is a centralist, arrogant, strong-arm, Rung Fu- you do what they like or you get their fiscal foot right in the face-government, a government that somersaults all over Canada putting its fiscal foot right in your mouth if you are not careful, if you do not agree, if you do not do what they say. It is the Godfather. It is the Liberal mafia making offers you cannot refuse across Canada. Let us get the old movie "The Godfather" on and you will see that just what happened in "The Godfather" is what is happening here.
If we are going to have unity in Canada, Mr. Speaker, it has got to be unity in diversity. If Quebec wants to do things in a certain way in its own jurisdiction, it has got to be allowed to do it, and the same in Ontario or Newfoundland or wherever. We have not got a unitary government. The PC party does not believe in a unitary government. We believe in a co-operative federalism. Our leader and the people who serve with him are not going to take this kind of approach in federal-provincial relationships. Not on your life! We are going to hold Canada

April 18, 1978
The Budget-Mr. Crosbie
together by allowing for diversity, by allowing for conciliation and discussion and compromise. That is the only way this can be treated if we do not want Quebec separating, or other parts of this country getting fed up and attempting the same thing. The Prime Minister cannot do that. We have seen it time and time again, and this is the latest illustration of that situation. There cannot be a serious approach to national unity while this is allowed to continue.
It is a political approach that this government has taken. They know in six months' time the provinces are going to be blamed when taxes go back up again. Flow are the people of Newfoundland going to feel about the Newfoundland government when in October, as winter comes on, the sales tax goes back up from 8 to 11 per cent? The same thing will happen here in Ontario, or in nine months time in Saskatchewan and in British Columbia. All that odium is going to go on the provincial governments, not on the government that caused the whole situation with its band-aid approach, its cheap political approach. Politics are interfering with everything. Even Canadian national unity is only a matter of attempting political gain for the government opposite. What a way to approach trying to save our country. It is enough to upset one.
This budget, Mr. Speaker-I will leave that topic now. I wish I had a couple of hours to cover the ground properly.
Unemployment. Here we are in Canada-raging unemployment-16.5 per cent in Newfoundland, and 19.4 per cent is the actual rate down there. Even in mighty Ontario, St. Catharines, it is 13.2 per cent; Sudbury, 13 per cent; Kitchener, 10.8 per cent; Windsor, 11.2 per cent. I am starting to feel sorry for the mainlanders, Mr. Speaker. Central Canada, the industrial heartland of Canada, with these tremendous rates of unemployment-where is Canada headed with her manufacturing industry operating at 80 per cent capacity? The Science Council of Canada says we are approaching deindustrialization. Negotiations are going on over at Geneva and the minister is unable to answer properly any questions we ask about what is happening.
Canadian industry is on the threshold of hari-kari-the hari-kari being carried out by this government. We are used to unemployment in Newfoundland but they are not used to it in Ontario. My heart bleeds for them. St. John's, Newfoundland, 15.8 per cent urban unemployment; Chicoutimi, 20.4 per cent. There are no new steps taken in the budget to relieve unemployment. It is the opposite. Because of the hash of our economic affairs they have made, the Canadian dollar is trembling. It is like a floating kidney. The floating Canadian dollar does not show health, Mr. Speaker. It shows there is something wrong. When your kidney starts to float around it shows there is something wrong with your health, and when the Canadian dollar starts floating around it shows there is something wrong with our economic health. It shows how the people in the rest of the world regard us. They know we are sick.
Poor Jack Horner! "Loose lips" and "Flip lips"! When the two of them get through with the dollar we will be lucky if there is anything left of it.

What is there for the unemployed, the over one million? I mentioned the farce last night that we had at the first ministers' con-job conference. What has been done in Newfoundland? We have Canada Works down in Newfoundland and they pay the lowest wages anywhere in Canada in Newfoundland on the Canada Works projects-a maximum of $115 per week. The unemployed in Newfoundland were shown a vision that Gull Island was going to start this year and they were going to get 11,000 jobs. They learned later on that it was just another study.
There was a suggestion a year ago that we should have a project where 400 loggers would be employed for three years clearing the reservoir for the lower Churchill hydro development-to provide work for 400 men for three years. There are a lot of unemployed loggers there. The federal government makes a niggardly offer after a year that it will pay $10,000 per job. They know the project will cost $25,000,000 and will result in lasting value because the reservoir must be cleared, even though we do not know for sure exactly when the project is going to go ahead. So the federal government is not assisting there.
We have an oil refinery at Come-By-Chance in my district. The Minister of Energy, Mines and Resources (Mr. Gillespie) could care less. He has not done a thing. He has not flicked a toe or finger to get that Come-By-Chance oil refinery going again to help our unemployed.
The Minister of DREE-I got a fatuous silly letter from him yesterday about the National Sea Products Fish Plant proposal in Arnold's Cove, Placentia Bay, in the area of the worst unemployment down there. They applied last October. They were going to expand their fish plant, at a cost for an additional $4 million. They requested a loan of $1,104 million and a grant of $335,000. It is going to create 67 new all-year round jobs down there. They employ 18 now full-time during the year, and 32 part-time. They applied to DREE. That was in October. It is an area of fantastic unemployment, perhaps 40 or 50 per cent unemployment, and the minister has not given his O.K. yet. The federal Department of Fisheries and the Environment said in January that it was all right from the fisheries point of view. I had a silly letter from the minister yesterday saying they had to consider the 200-mile limit, to consider the fish stocks. I say he has to get the lead out of his drawers and help us put these people to work.
What kind of a government is it? The Prime Minister said in May, 1972, that we can be obsessed with unemployment. He was laughing off unemployment. He said we can be obsessed with unemployment, on March 11, 1972, as reported in the Montreal Star. I say "Yes, Mr. Speaker, we damn well can". There are one million people obsessed with it. Any government that is not led by a man obsessed with unemployment in Canada today should resign and get out and let people take over who are obsessed with unemployment. I am obsessed with it, the hon. member for St. John's East (Mr. McGrath) is, and all the members on this side are obsessed with it.
April 18, 1978

We do not want a government that is going to sit on its duff and do nothing. We do not want governments with ministers who say the fat times are over, who attempted to blame it all on the Canadian people when they were speaking their baloney out in "Kelowney" British Columbia, last summer. I have the clipping here which came out of the paper. The fat times are over. Everyone is to blame but the Canadian government. The Canadian people are to blame for everything, not the Canadian government.
Investment intentions are down. Businessmen are not investing. We are falling behind in investment. We have a Prime Minister who said a couple of years ago that the government had to regulate everything. He is now cosying up to the businessmen himself, but the Minister of Public Works and Minister of State for Science and Technology (Mr. Buchanan) was criticizing businessmen just the other day. They have not got any hustle, he said. The Minister of Public Works and Minister of State for Science and Technology said that while ITC officials, and I quote, "bust their behinds" to get export orders, Canadian businessmen take it easy. He said he reported this to the Prime Minister who stated, and I quote, "Judd, Amen; that's the story I get on all the trips I have taken. We Canadians seems to lack the entrepreneurial spirit, lack that hustle". That is what the Prime Minister said. That is the output.
They want us to encourage businessmen to invest and do more. They are saying that their civil servants and themselves have more hustle than Canadian businessmen. Well, by golly, if that is the case, Canadian businessmen should all go and jump in Lake Ontario tomorrow. If they have not got more hustle than the hon. crowd that I have seen opposite for the last 18 months, they are in dire straits indeed. It is no wonder they are not investing. They are not going to invest until they get a government in which they can have some confidence. It must be near the close of my time.


The Acting Speaker (Mr. Ethier):: Order, please. I regret to inform the hon. member that his allotted time has expired.


Barnett Jerome Danson: Mr. Speaker, it is a pleasure to follow the hon. member for St. John's West (Mr. Crosbie), the great Pagliacci of the Conservative party. I was delighted to hear his valedictory address. He is entertaining and persuasive, if one does not stop to think about it. I must say that I agree with the hon. member's tribute paid to the hon. member for Halifax (Mr. Stanfield). He is a great member of this House, a great leader of his party and a great Canadian who will be missed very much. I have said those things in other places at other times about the hon. gentleman.
"Fat lips" referred to "flip lips" across the way here. I do not know quite to whom he was referring, but he kept on speaking about the Minister of Finance (Mr. Chretien) and unsound policies, which is the way to shake confidence in the dollar, in the economy, and in the hearts of the Canadian people. He disparages the dollar, which is a competitive dollar.
The Budget-Mr. Danson
I do not know what the hon. member's policy would be. I do not know what his party's policy would be, and I do not know what the policy would be of any of their finance critics relating to the dollar. Would they let it float, would they peg it, would they intervene and, if they intervened, to what extent would they intervene? Do they think a competitive dollar at honest levels is a proper thing, or not? I say it is an opportunity dollar which allows us to be competitive in the world today, if we take advantage of it and if our own confidence is not shaken and the confidence of others who invest in this country is not shaken by the type of words we have been hearing from across the way.
I think the hon. member misses the point on the sales tax issue. He has been very flippant on the question of who is right. Of course there was a co-ordinated effort among the provinces and the federal government. There were discussions with the Minister of Finance (Mr. Chretien) and the finance ministers of the provinces. It is the first time as far as I know that this has happened in the history of this country. That is co-operative federalism. That is putting your money where your mouth is. It is this type of consultation which will get us further.
We do not need to continue to score debating points in a pre-electoral period. We are in the midst of a serious debate on the budget. We need rational and constructive comments and criticism; a real assessment of the situation.
In my view, and in the view of many other responsible Canadians, we are on the verge of the greatest strategic industrial development in the history of our nation. We cannot lose confidence in ourselves, and we cannot allow those criers of doom and gloom to get us down. Then there are those people who suggest we are going bankrupt, as I heard the hon. member for St. John's West say last night, and those people who say we are winding down.
However, I would like to quote from the Globe and Mail of April 15, 1978, part of an address made to the Empire Club of Canada in Toronto. It reads:
We must set aside the unworthy and unfounded notion that this country is winding down. We are sharing in the problems of the rest of the world, but we are also sharing in its opportunities.
The address goes on to say:
In terms of average growth, our economy has outpaced the United States and the Organization for Economic Co-operation and Development total economies, since 1973.
The same speaker said:
Again during this most recent four-year period, real output grew almost twice as fast as in the United States (6.1 per cent compared to 3.1 per cent). Manufacturing employment in Canada is up slightly, while manufacturing jobs in the United States have declined by 2.3 per cent.
The address continues:
Before looking ahead, we should appreciate that the ground we hold is good, and that an extreme assault, from either the right or the left, on our existing economic and governmental structures is not justified and would only get in the way of feasible and sensible initiatives.

April 18, 1978
The Budget-Mr. Danson Reading further along in the address:
The big levers of fiscal policy will sustain moderate growth. Furthermore, federal monetary policy is now on the right course to restraining inflation.
And reading again from the address, I quote:
... but nevertheless, a far-reaching and genuine enterprise strategy was hammered out at the recent First Ministers' Conference. A consensus has been reached on vital issues including the need to set goals, to improve investment and the business environment, and to deal head-on with sectoral problems.
It is a very hopeful speech given by a responsible Canadian, a responsible minister of finance, the Hon. Darcy McKeough, Ontario Treasurer.
In spite of our partisanship, particularly in a pre-electoral period and before we lose the hon. member for St. John's West, no matter what party we belong to we should look honestly at the country today, and this budget in relation to it.
It is a responsible budget. It is a budget of concern, and I think concern is required. World economic conditions are difficult. We share those, and we have some of our own. It is a competent budget. It looks forward to growth. It shows cohesion in the relationship between provinces and the federal government. It shows innovation with the 150 per cent tax write-off for research, development and design. This is very important with the opportunities which are opening up. It is a signal, not only of a tax credit to make it worth-while for companies large and small to be innovative and entrepreneurial, but it is an indication that this government believes in the private sector, it believes in the entrepreneurs, and it believes in those who are prepared to do the research, development and design, to innovate and to fight for those markets. It is appropriately stimulative in present conditions.
It is very difficult to balance between inflation and growth and creation of jobs. It is the right amount of stimulation according to most economic observers that I have read, and certainly according to responsible finance ministers. It is not going to change or get dramatically better overnight. We are going to see slow, steady progress-perhaps not steady, but progress, anyway-over the next few years.
Anyone who suggests simplistic answers or magic answers is either a liar or a fool. They do not exist. Simplistic criticism is not adequate in a situation like this. What we need is the sense of responsibility the minister has shown, and the determination to overcome short-range problems while looking at medium and long term prospects. We are not going down the drain. We are not going bankrupt. That sort of talk withers the spirit of Canadians who want to get on and do their jobs.
There are just as many opportunities in Canada today as there were when I was a young man growing up, for anyone who is willing to go out and grab them. They are not handed out on a silver platter. They were not handed to me on a silver platter. You had to go out and fight for them and work for them. I am convinced the young people in Canada today are prepared to do this. The opportunities are great.
I heard the hon. member for St. John's West speaking last night about the various developments which are planned or

which are under way. I enjoy listening to him for light b entertainment, now that Archie Bunker is off the TV.
Look across the country and note the tremendous develop- q ment in the Foothills pipeline, for example-some $10 billion, o Think of the number of jobs which will be created during its 1 construction, and the effect of the line on our balance of payments once it is completed. Consider the Beaufort Sea development. There is an indication that this is one of the greatest natural gas finds in the world and its exploitation might require further pipeline development-I do not know at this time.
Investment in the Alberta tar sands project with Syncrude III coming along amounts to $2.5 billion-I get these billions mixed up, there is so much development going on by people who have so much confidence in our country. I believe Imperial Oil is putting some $4 billion into oil sands development. I understand, after speaking to one of the directors recently, that the technology is coming into place in connection with the Polar Gas undertaking in the Arctic islands. Eventually that gas will be brought down to eastern Canada.
Massive investment is also being made in the Gull Island development, which again will lead to a great deal of employment. These things do not happen overnight. And there is the Bay of Fundy project. Look at a map and imagine how much power could be generated from the Fundy tides. Billions of dollars would be required for such an investment, but think of the number of jobs which would be created.
One can hold various opinions about nuclear power, but we are a nation which possesses perhaps the safest and most advanced nuclear power plants, and we are fortunate enough to have a stable supply of uranium within our borders. All this means we are possibly the only country in the western industrial world which will be self-sufficient in energy. It will not be cheap energy, but it will not be any more expensive than it is anywhere else.
I think we should be grateful to the OPEC nations in a way, because their action in raising energy prices has forced us to exploit our own resources, and the cost of doing so is finally economic. This has attracted investment in Canada and assures our future, as well as doing some excellent things for our balance of payments account. I have some figures here showing that the cost of our imports from abroad is presently $3.4 billion a year-I am speaking of oil imports alone-so self-sufficiency in energy is terribly important. Also, it will bring us a stability which no other country in the world enjoys.
There are other advantages which we possess and which are of immense importance-I am thinking of the industrial sector. I think of Bombardier-Montreal Locomotive Worthington in Montreal, with its development in light, rapid and comfortable transportation, all of which are leading to major orders from around the world, one recently from Venezuela. I think of Canadair with its Challenger, a world leading executive aircraft-some 125 are already on order, cash on the barrelhead, firm orders in a highly competitive market. I think of de Havilland in Toronto, a world leader in short take-off and landing aircraft, doubling its production, I understand; a
April 18, 1978

oubling of the production of Buffalo aircraft, with the Twin )tter still a world seller, and the Dash 7 finding an ever more romising place in world markets. I think of Bristol Aircraft ut in Winnipeg and of a number of contractors for my department in Nova Scotia and the Atlantic provinces engaged in high and medium technology industry of a kind which is blossoming all over the country.
When we assess ourselves, Mr. Speaker, I believe we should also assess our social advantages, because we cannot just talk about our country in economic terms, even though the economic and the social are very much intertwined. We should consider the advantages which we have in place and which other nations do not-developments which have largely taken place in the last ten years under this government.
I remember particularly the first time I ran for parliament in 1968 going from door to door in my constituency of York North, knocking at doors and being greeted sometimes by little children, and sometimes by grandmothers or grandfathers who looked sort of cowed and beaten, who had to live with their daughters and sons or sons-in-law or daughters-in-law-we all know the tensions this can create. Grandchildren are wonderful for a couple of hours, so they tell me, but to be there all the time may not be so enjoyable, and having to be a guest in the home of the children of one's family, in a garret or basement, can be soul-destroying. It destroys one's dignity, one's selfrespect. I do not say we have gone far enough, but we have gone further in the last ten years than in all previous history. That is pretty good, and I hope we go further.
I ran a seminar for senior citizens in my constituency. I run these seminars for various groups-for businessmen, for youth. On one day I ran a seminar in the morning for youth and in the afternoon for senior citizens. We offered transportation to the senior citizens because mine is a large riding for an urban constituency. It is located to the north of Toronto and takes in many small communities. I do not think we had a single call to our offer of transportation, although there might have been just one or two. But the people came in their own cars or those of their friends and jammed the hall. That would not have happened ten years ago. The people were well dressed; they were well fed. They were happy and they had dignity, selfrespect, and I was tremendously moved to see that difference which had taken place in just ten years.
It is my belief that you can judge the quality of a society more by the way it treats its senior citizens than by any other measure. I include along with senior citizens other people in society who may not be capable of looking after themselves.
I do not think we need to worry much about the young or about the middle aged. We can take our knocks and do our thing. It does not hurt us. It helps us. It is a sort of crucible of life. And it is the spirit which built this country. But I think we should know that the society in which we live will allow us the dignity of security and independence in our senior years. I put a very high priority on that, perhaps for very selfish reasons, because one day I will be a senior citizen myself, that is, if I am lucky.
The Budget-Mr. Danson
When one is in the productive years one can change jobs, go back to school, start a business, or even do something as ridiculous as going into politics. But one has that flexibility and you have the time. But senior citizens have neither the flexibility nor the time. I would not want to start judging what a senior citizen is. I do not believe 65 is a magic age-I have seen some very dynamic people who were in their mid-eighties and nineties. And I have seen others who had been in a tough production job on a line for 20 years, and who were really senior citizens much younger. But what is important to me is that we have removed the fear and restored dignity to those people.
Another thing which is important to people in those years, Mr. Speaker, is that they have seen under Liberal governments medical insurance plans built up, which means that a family is no longer devastated by the occurrence of an illness or an operation. We forget about that. We take these things for granted. It is true that they are costly, and we probably now have to worry about the cost of the delivery of health services, but I would much rather worry about that than their availability. I do not want to have to worry about people losing their life savings, their homes or their businesses. Losses like that absolutely destroy families, but that was part of every-day life in our society not many years ago. We have this as a base to our society in Canada, and I think that is particularly important.
Then there are those things of the spirit, and I mention this particularly because when the Minister of Finance was minister of Indian affairs and northern development he established more areas for national parks in Canada than had ever been established in the whole history of our country.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: That is a very special heritage for which we Canadians can be grateful. I come from Toronto, and I think of Algonquin Park, which is just 150 miles north of Toronto. I have often wondered who the politicians and civil servants were who set this preserve aside. It was about 100 years ago. It was just as remote-or perhaps more so-from populated centres then as the new national parks are now.


Stan Darling: Don't forget it is in the paradise riding, my riding of Parry Sound-Muskoka.


Barnett Jerome Danson: That makes it even more beautiful. It joins Muskoka and Parry Sound. It is a beautiful place to which thousands and thousands of Canadians go weekly for recreation. There is a game preserve there. We are properly and carefully cropping the lumber there without destroying the natural environment. Some day, perhaps 100 years from now, I hope someone will stand up in this House and speak about Jean Chretien. I have done some research on the Ontario public servants of that time under Sir Oliver Mowat, the premier at that time-obviously a Liberal premier-who had such foresight and sensitivity.
4626

April 18, 1978
The Budget-Mr. Danson
In addition,-and this is in the provincial field largely, but in the post-secondary school field it is certainly largely federal initiative-we have developed an education network. Perhaps there are several levels of government, but there is only one level of taxpayers. The schools we have now which we did not have ten or 15 years ago are quite incredible. I will not deal with the quality of education or the nature of it at this time, but the physical infrastructure is there. In addition, community colleges have been established. The CEGEPs in Quebec have given another dimension and another opportunity for our young people to obtain relevant educations. Rather than having Ph.D.s driving taxicabs, people can now learn skilled trades and become semi-professionals. Those people are extremely valuable.
There are community centres across the country which were started largely under our winter works programs. There is a quality of life in our large and small communities across the country. I know that every principal community in my constituency has an arena, a community centre, which got off the ground because of federal funds. Those are the social assets we have which we do not want to underrate. They are much better than they are in almost any other country in the world.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: In the society we are developing, young people are growing up today, swelling our labour force and causing us temporary problems, even though we are creating more jobs than at any time in history. We are creating jobs at a rate higher than the rate in any other industrialized nation. Because of the baby boom-and we love them-people are having difficulty adjusting, but they are adjusting, and adjusting well. In my experience, both in my portfolio and in other work through the Katimavik program, I have seen young men and women who want challenge which is relevant to them. They are prepared to dig in and work hard. They are not much concerned about economic return. I do not mean they are unconcerned, but that is secondary to being busy and doing something relevant, to them. That is happening at this time.
I mentioned the industrial capacity which is developing and the innovation which is developing. In my department there are tremendous programs going. We are now spending more on capital equipment for defence than at any time previously in our history. We have the largest peace-time programs which have ever been engaged in by a federal government.
We are spending over $1 billion on long-range patrol aircraft, about a quarter of a billion dollars on armoured personnel carriers which are being built totally in London, Ontario, almost $200 million on Leopard tanks, about $2.3 billion on the new fighter aircraft which we are assessing at the present time and $1.6 billion for the first six ships under our new ship program. These are tremendous expenditures, but I think what Canadians realize all too little is that while we buy some of this equipment abroad, we also sell a great deal abroad. We are not in the business of producing heavy armaments, but we are involved in more sophisticated and important technology which we sell to other countries.
We buy from other countries, and other countries buy from us under defence-sharing agreements. I do not have precise figures with me, but we are very much in balance. Amounts vary from month to month and year to year. Sometimes we are ahead, and sometimes we are behind, but we drive very hard bargains.
I am more interested in the qualitative aspects of industrial benefits than I am in quantity. We are hopefully going to buy 150 aircraft. If one Canadian company turns out 150 sets of wings, when the contract ends, the plant closes down, its workers are out of work, and a community is perhaps decimated. I do not say we do not want that type of business, but we should either have it for the whole series of that aircraft or have something which we do better than anyone else, and competitively, rather than things for which we perhaps have to pay a premium, although premiums are sometimes well worth paying. Things we do which spin off far beyond our defence capability have a structural effect in our economy. That is why these billions of dollars which I am responsible for spending will be used strategically as leverage to get the type of industry which spins off in other than defence fields as well as defence fields.
The difficulty with defence-dependent industry is that defence expenditures rise and fall, and those industries rise and fall with them. That also often prevents the Minister of National Defence from making the best military decisions. Sometimes he has to make a decision to keep a plant going rather than to buy the best equipment. That has happened in our history before. The opportunities for innovation and for development which come from these programs are great indeed. This is enhanced by our competitive dollar, the opportunity dollar which we have now.
I think the level of our dollar is a real reflection of its value. I sometimes wish it was not called the dollar. I wish it was called a beaver or a maple leaf or something like that because it has a value, and we cannot pretend it does not. It reflects, primarily, our productive worth. Sometimes we price ourselves out of certain markets for various reasons. The present level of the dollar will price us back into certain markets, where we belong. Where should it settle? That does not really matter. I am not an economist. I think it should settle where it should settle, and intervention should take place only to keep an orderly market and to keep psychological considerations from impinging on our dollar. The lower level of our dollar creates job opportunities and encourages innovation, entrepreneurship, and competitiveness.
There are many other government support programs like the enterprise development programs, the Federal Business Development Bank, and the research and development incentives the Minister of Finance just introduced. There is the Export Development Corporation. All these programs back up the businessman and the entrepreneur who will create jobs in this country for those young people who want to get started.
Instead of the soul destroying gloom and doom we get from hon. members opposite, and the constant carping which makes Canadians lose confidence in themselves and which makes

April 18, 1978

others outside Canada lose confidence in us, we should remember that we are one of the richest and strongest countries in the world. This irresponsible flip-lipping we get here and outside this place from day to day is what is destroying confidence in our dollar more than anything else. I think it is time for responsibility. Our Minister of Finance has demonstrated that with a very even-handed approach. He is interesting and charming, and he has a great deal of charisma. I happen to think he is one of the great Canadians, and so do most Canadians.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: Now more than ever we need to build on the strengths we have. There are opportunities for the future, and we have to look at them with our heads up. We must keep our eyes on the horizon rather than looking down with our boots in the muck which is being raked up by hon. members opposite all the time.


Some hon. Members:: Shame!


Barnett Jerome Danson: We need enthusiasm, which we as Canadians and Liberals have; we need determination, which we as Canadians and Liberals have. We must not be spooked by the doom sayers and soothsayers across the way or those who do not know where they are going, do not know what to do, and just sit there wringing their hands.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: We need sound fiscal policies with our potential energy self-sufficiency and with a good industrial base, that is being strengthened, with a highly educated, sophisticated and skilled work force, with innovation, of which we need a great deal more and which this government is encouraging. We have a strong social base and we have freedom which is as great as that in any country in the world and greater than in most others. These are precious freedoms which we want preserved: freedom of the press, freedom of religion, freedom of speech, freedom in our courts, freedom in our political system. Nobody tampers with those. Try and tamper with any one of those, and anyone of us here would be prepared to lay down our lives for it. These we take for granted.
We live in a country of unparalleled beauty, diversity, and richness. Rather than be depressed in these times, I like to look for the opportunities which exist. Businessmen and young people know they exist, and I suspect even members of the opposition know they exist but do not want to admit it. They are so intent on trying to score political points each time they get up, each time they face a microphone or a camera, that we might destroy ourselves, our spirit, and lose our energy and enthusiasm for this great and beautiful country of ours.


Some hon. Members:: Hear, hear!


Stan Darling: Mr. Speaker, it is certainly a delight to follow the optimistic and enthusiastic
The Budget-Mr. Darling
Minister of National Defence (Mr. Danson) and I commend him on his remarks. We are all optimistic about the future of Canada and we have every confidence in it. It is because we are an optimistic people and we have so much going for us that even the present government cannot destroy the country, although it has done its best to do so during the past ten years. The minister stated that we are on the eve of one of the greatest upsurges ever. Certainly that is a true statement, because the upsurge will begin the day following the next federal election when a new government will be formed and the illustrious group opposite will find itself on this side of the House.


Some hon. Members:: Hear, hear!


Stan Darling: I would like to pay a special tribute to some members of parliament who will not be standing for re-election, such as our former leader, the hon. member for Halifax (Mr. Stanfield), the former leader of the NDP, the hon. member for Nanaimo-Cowichan-The Islands (Mr. Douglas), and other outstanding members who, for different reasons, are retiring or moving into other fields of endeavour. It might be a good idea at this time to say goodbye to a good many other members, especially on the opposite side of the House, who are not aware at present of the fact that they will not be back here. Many of them are really nice guys and gals, but in order to defeat this Trudeau government there are many nice members of parliament on the government side who will have to go. Therefore, we will wave a fond farewell to them at this time.
Again I want to commend the Minister of National Defence for bringing in new equipment for our armed forces, equipment which is now on order and will be delivered shortly, but none too soon because much of the stuff was hanging together with bailing wire, and so on. So, more power to him, but it should have been done before. I say this having had the privilege of serving as a member on the committee to which the minister answers.
I should like to quote another statistic, and again I am delighted the minister is still here. He gave us a glowing account of what is coming, and I am not disputing it, but I would have liked to have placed on the record at this time a glowing account of the number of personnel in the armed forces, which at present stands at around 80,000. Back in 1968 when the Prime Minister (Mr. Trudeau) took office, the number stood at 102,000. We live in precarious times and, with unemployment as high as it is, it seems to me that the number should be closer to 100,000. I believe that serious consideration should be given to increasing the number of our armed forces personnel.
It appears that there have been glowing reports about the wonderful Minister of Finance (Mr. Chretien). I agree that he is a great guy and a fine man who has contributed greatly, but he is in a tough position as Minister of Finance. He can be the most engaging person in the world and he can be most charming. I have had the privilege of sitting on the committee which questioned him when he was minister of Indian affairs and northern development, and I give him full marks for his
sooas-s1/^

April 18, 1978
The Budget-Mr. Darling
performance. But now he is in the big league as Minister of Finance and, as has been said time and time again, if he coughs or sneezes in the wrong way, it can cost us a lot of money. He holds a very important position. I see that his chair is vacant at present, but I am glad to see that his parliamentary secretary is coming into the House now. I ask him: if his minister is such a great guy, why are we in such a heck of a financial mess?
It appears that the minister is not so fast on the skateboard as he would like to be because, in spite of his budget statement a week ago on Monday, he is pursued by inflation and unemployment. The latest increases, which followed closely on the heels of the minister's latest attempt to restore a measure of confidence in this country, are a source of great concern and worry to everyone across this country. The continued decline in the dollar is cause for alarm. All Canadians should be reminded of the fact that even when the government tries to zero in and put all its resources behind one problem, the results are far from encouraging.
The latest inflation statistics will surely drive home the fact that Canadians all across the country will have to face a lower standard of living. With wage increases limited to 6 per cent, prices will continue to rise rather than wages.
I was pleased to see the reduction in the sales taxes and I hope this will provide a spur to consumer spending which the economy needs. However, I am disappointed that the reduction is only a temporary one. Six months are not a long enough time to provide a strong and lasting stimulus to the economy. Moreover, the reduction will end at one of the most economically difficult times of the year when unemployment is reaching a crest and the approaching winter will force the cost of living upwards, as happens pretty well every year.
The reduction in the sales tax and the new options available under the registered retirement savings plan will not help the lower income groups in any significant way as these people are not likely to be able to afford to rush out and buy high price items which will be most affected by the tax reduction. It is also true that the benefit of the sales tax reduction will be swept away quickly by the continuing high inflation in most provinces. When the sales tax cuts end in either six or nine months, prices will jump up again. The truth is that the effect of sales tax cuts on inflation will be temporary. Even with the cuts, inflation will still average at least 7 per cent in 1978.
Rising inflation has forced all of us to re-evaluate the worth of the dollar in relation to consumer goods, but the continued decline has made us take an even more serious look at the value of the Canadian dollar. In 1971 terms, our dollar is now worth only 59 cents.
In 1968 when the present Prime Minister assumed the reins of government, our dollar bought twice as much as it buys on our present market. Perhaps I should not say "government", considering the disgraceful record of departed ministers. In the past ten years the purchasing power of our dollar has declined while the government has allowed unemployment and inflation

to rise almost unchecked. On the same topic of the dollar, I find it particularly distressing that investor confidence in Canada is so low. Why is that so? The present government has created an economic climate that investors are wary of and that even Canadians worry about. We have all seen the increasing number of newspaper and magazine reports about the growing numbers of Canadians who have taken their money and flown south or at least across the border where they feel it is safer. The political and economic climate of Canada is not conducive to investor confidence right now. That must be changed, and it must be changed quickly before it gets worse. The government must adopt an economic strategy for Canada, instead of the series of half measures and patch-up jobs which have been handed to us. At the very least, Canadians deserve that.
The estimates of the amount of money going to the United States are astronomical. When I was out west with the housing committee two or three years ago, because of red tape and the many other obstacles, real estate men and companies were saying that as much as $1.4 billion had been committed to building apartments, housing, etc. in the United States. I have mentioned before that investors could go across to the United States, and with a minimum amount of red tape they could start a subdivision or an apartment building in a matter of months, whereas in this country holdups because of planning and other things can last as long as six or seven years. I am not even considering other investments, such as in the state of Florida which has been so attractive to Canadians. We have heard the suggestion that Canadian Francophones have decided that Florida is a much better climate for their money, and millions of dollars have been poured into that state, much to the detriment of the Canadian economy.
It is not surprising that the budget failed to predict the unemployment rate for the rest of the year. It did not dare to, in light of the most recent statistics: 38,000 more unemployed in the month of March alone, making a grand total of 1,045,000. The seasonally adjusted rate of unemployed rose to 8.6 per cent, up from 8.3 per cent. I am certainly skeptical, as I am sure many other people are, about the actual number of jobs which will result from the proposals set forth in the budget of the Minister of Finance. It is regrettable indeed that the budget did virtually nothing to zero in on what is certainly the most serious problem facing this country today. It is singularly disappointing that the government saw fit to formulate proposals to aid the economy without raising any levers to alleviate the very unacceptable level of unemployment we are now faced with. The government has acted irresponsibly in choosing not to deal directly with this problem.
To pass off crisis unemployment levels as partly due to the increased numbers of women and young people on the labour market is merely an attempt to avoid the root of such a serious problem. The government knows full well that the reason there are more women working now than ever before is that they have to supplement the incomes of their husbands in an effort to keep pace with the spiralling cost of living. The problem of youth unemployment is especially crucial, yet these people who
April 18, 1978

more than any other group are affected by high unemployment levels were left out of the picture a week ago Monday night. Unemployment is the most crucial economic and social problem confronting us today, and yet this government does not seem to realize that.
Consumer spending is still weak. Canadians save more money per capita than anyone else. Surely that is an indication of the perception that Canadians have of their economic future. Perhaps hon. members on the other side of the House will say that I am spreading doom and gloom, as the hon. Minister of National Defence said. We on this side of the House are telling it as it is. There is no purpose served in glossing things over and saying the rainbow is just over the mountain. That is quite true, but how high is the mountain, and how far away is it? We on this side of the House are telling it as it is and being accused of spreading doom and gloom. I am far from being a pessimist, but if this government remains in power much longer, Canada will be certainly heading down the drain.
During his statement the Minister of Finance noted that the economic growth potential will not be achieved in 1978. This means Canada will have failed to achieve its growth potential for five straight years. This should not be the case, not in a country such as Canada, where the sheer magnitude of our resources and people demand that we should be one of the leading nations of the world.
It is my belief the government's wasteful and exorbitant spending habits have dragged this country into the economic abyss we now find ourselves in. The federal government now overspends per Canadian as much as they spent per Canadian in 1968. The Minister of Finance has predicted a $10.9 billion budgetary deficit for the fiscal year 1979. Hon. members who sit on the Standing Committee on Finance, Trade and Economic Affairs realize that that amount is always added to by supplementary estimates which come in because of over-expenditures that have accumulated during the final part of the fiscal year. That $10.9 billion amounts to an incredible $462 for every Canadian. In the fiscal year 1968 total budgetary spending per Canadian was only $488.
I was particularly impressed with the Minister of Finance's confession of wrongdoing on the part of the government. It is a true statement that confession is good for the soul. I should like to refer to a short excerpt from that confession which reads as follows:
We all came to expect too much of the economy. Governments increased their spending too quickly.
Those final words are fascinating, but what I find even more remarkable is that while the government painfully admits this, there is almost nothing in the budget to make a significant reduction in government spending. If there are no changes in personal or corporate income taxes, or in the federal sales tax imposed at the manufacturing level and built into many prices, it is because of the government's record spending and its reluctance or inability to curb such practice.
Confidence in Canada has sunk slowly in the past ten years. It must be revived. I suppose that is the revival the hon.
The Budget-Mr. Darling
Minister of National Defence spoke about for the future, which of course will follow the next election. I doubt that can be done by those who sit across the floor. How can they accomplish that when it is their deplorable spending habits which have compounded greatly the economic problems of the country? Their spending habits have increased the estimates for 1978-79 to four times the amount of the estimates of 1968-69, just ten years ago.
This country, Mr. Speaker, is in dire need of new policies and practices. This country needs a little spring cleaning. Possibly, a June spring cleaning is what we can look forward to. We need a little fresh air. Only then will the economy begin to recover.
The minister is talking about hot air. I am going to tell hon. members that the Fiberal government has had this very problem over the past ten years, and even more so in recent years. This government has plunged this country into debt, and that cannot be excused. Canada's debt to the rest of the world stood at $106 billion at the end of 1977, up 10.4 per cent from a year earlier. It is important to remember that the service to the debt must be paid by taxes which amount to $894 per person employed during 1977, up from $792 in 1976. The government budget tabled this spring indicates another increase of more than 10 per cent during 1978.
This government has had their chance to give this country what it needs, a budget to restore confidence. Instead we have half measures with an election twist. A budget should seek to reassure. What we have witnessed is a government that has exhausted itself and can no longer provide solutions to the country's economic ills.
I was pleased to hear, Mr. Speaker, the Minister of State for Urban Affairs (Mr. Ouellet) speaking earlier today. I had the privilege, and have had the privilege for a number of years, of serving on the urban affairs committee. In fact, the committee met this morning to discuss the estimates of Central Mortgage and Housing Corporation. During the discussion, I was very interested to quiz the minister to find out how successful the CHIP program, the insulation program for the other eight provinces in Canada, was, and I was able to get the following information which may be of great interest to my colleagues on all sides of the House.
As most members are aware, Prince Edward Island and Nova Scotia have had a plan in effect for approximately a year and a half up to the present time. This plan was much more generous in that it was not taxable. The grant under the plan goes as high as $500, and these are the figures and the applications that have been received by the ministry: In Prince Edward Island, of the 20,000 applications received 16,000 grants have been approved and the amount of $5.5 million has been paid out. In Nova Scotia there have been 97,000 applications received of which 55,000 were approved and $19.5 million paid out. In the eight other provinces there has been a total of only 20,435 applications received, of which 15,000 were approved and only $3.3 million paid out.

April 18, 1978
The Budget-Mr. Abbott
I will concede, Mr. Speaker, that that program has been in effect only since September, but it has not been as successful as the ministry expected because it has not been as generous. If I may repeat, in the other eight provinces the grant is added to income, and those who are in the middle income tax brackets, and so on, find that it is of very little use. The other thing is that that $500 pays only up to two thirds the cost of the material. Of course, a good many smaller homes which might be able to insulate will get only $333. I suggested to the minister that if $500 is spent for insulation there should be no percentage deduction.
On Friday the hon. member for Ottawa-Carleton (Mrs. Pigott), who is our critic on housing, mentioned how important housing is to the people of Canada. Certainly, that is an understatement, if anything. We on this side of the House are very, very concerned about the many Canadians who do not have proper and adequate housing, or even affordable housing, although we know that there are a great many homes available for sale if you have the money. That is the catch. It is most important that housing be made available for those in lower income brackets. Again, I recommended, as I have for years, that tax on tax is unfair, that real estate taxes on a home should be deductible from income tax up to a certain amount. At the time I suggested $500. That could probably go as high as $700 or $800 today. Once again I repeated it and recommended that the minister submit it to cabinet.
Another thing that this party has recommended is that mortgage interest payments should be deductible, as they are in the United States. A great many people are finding that the cost of carrying a home mortgage is crippling, and they are just not able to make ends meet.
It has been a privilege, Mr. Speaker, to add a few comments on this, the last budget of the Trudeau government before they go down to defeat in the next federal election, which, I presume, we will hear about in the immediate future.


Hon. A. C. Abbott (Minister of State (Small Business)):: want to say, Mr. Speaker, what a privilege and pleasure it is to rise this afternoon and to follow my hon. friend from Parry Sound-Muskoka (Mr. Darling), who gave us some interesting if defective comments. He reflected on some opinions that I am afraid his normal good sense waived in favour of repeating some of the points that we have heard these last days on the budget debate by the variety of financial critics that the Tory party possess. As the days go by, however, more and more of their number have chosen to stand down from the fray. Many of them, as has been said earlier, will be missed, but I can think of some who might go and not be missed.
The other day I was up in Parry Sound-Muskoka, and a very beautiful part of the world it is. I had the pleasure of meeting with a number of small businessmen and a number of Liberals, an ever-growing number of Liberals up there.


Stan Darling: Not growing fast enough.


Anthony Chisholm Abbott: No, there is not enough of them yet, but I have every expectation that by election day there will be a good

many more. While I do not suppose there is a more popular member here in the House than the hon. member for Parry Sound-Muskoka, I am afraid, from the enthusiastic warmth that I received there, that he is going to be enjoying more of that beautiful country than he is able to today.
The problem that we have seen over the last few days, both in question period and in the House on the budget debate, has been a worrying, depressing attempt by the opposition, desperate and hungry as they are for political power, to debase this budget. Languishing in opposition, as the Canadian people have justifiably seen fit to let them for so many years, they have exhibited those tendencies that people tend to develop in desperation and have tended to look at the Canadian economy not as loyal, patriotic, positive thinking people who should know better, but as opposition critics who are seizing every opportunity in an attempt to denigrate the accomplishments not simply of this government, but, in the eyes of the world, the accomplishments of the Canadian economy, the Canadian worker and the Canadian people.
The opposition have attempted by every method that they can develop to lower the esteem in which this country is held. I am not suggesting that all our problems are occasioned by opposition criticism, but it is very clear that they render no service to this country and no service to their own party when they attempt to mislead parliament and the Canadian people about the kind of shape the economy has been in over the ten years of this government.
I think it is essential, if anybody is to speak in this budget debate in order to counter this kind of inflammatory, libellous and false accusation that the opposition has been marshalling in the last few days, to refer to the period from 1964 to 1975. It will be seen that our rate of economic growth was exceeded only by Japan. Our job creation in a country with one of the world's fastest growing labour markets was the best of all industrialized countries.
Between 1967 and 1976, Canada's gross national product in constant dollars grew by 53 per cent, just double the 26 per cent U.S. growth in g.n.p. Our real disposable income rose by 73 per cent versus 33 per cent in the United States, while our inflation rate stayed steady with theirs. Without belabouring statistics, I should add that in the eight short years from 1967-75, Canadian productivity in our goods producing industries increased from 65 per cent to 85 per cent of U.S. productivity levels. For durable goods, the productivity gap narrowed all the way from 30 per cent to 2 per cent.
There is no question that in Canada we faltered economically in the past two years. In part, as the Prime Minister (Mr. Trudeau) told the Economic Club of New York recently, it was because we became the victims of our own real income, and therein, as all of us know, lies the psychology of inflation. We tended to forget about that still remaining productivity gap, demanding and granting wage settlements that were harmful to our exports and made imported goods more attractive. By 1975, wage settlements averaged 22 per cent. Average
April 18, 1978

Canadian hourly earnings in manufacturing exceeded the U.S. average by 7 per cent at that time.
We had to take drastic medicine, and did in late 1975 with an anti-inflation program of price and income control. The controls, now coming off, are accompanied by strong federal efforts to reduce government spending and intervention in the affairs of the private sector. It is a gradual road back. But now our rates of wage and cost increases have subsided to reasonable and competitive levels. Our record of productive time lost through industrial disputes has shifted from one of the worst in the industrialized world in 1975 to one of the best in 1977. Unemployment remains unacceptably high, but jobs are once again being created very rapidly-more than 280,000 new jobs between February 1977 and February 1978. Our historical average is 250,000 jobs each year.
The outlook for investment is improving. As the Conference Board in Canada has noted, new orders for machinery and equipment are just one sign that the base for industrial capital investment in Canada is firming up. We look to 5 per cent real growth this year and a rate of inflation declining by year end to 6 per cent. The recent annual report of the Bank of Canada commented as follows:
Wage and salary increases have declined sharply from the 'extraordinary levels' of two to three years ago, and 'there is today evidence in many quarters of more realistic attitudes towards increases in money incomes'.
I have taken these few moments to state what I hope is a straightforward message, Mr. Speaker, and, I think, a fair one. It underlines the comments of the Minister of Finance (Mr. Chretien) which I think are testimony to the responsible nature of his budget. The opposition can say what they like. They can draw conclusions from their own statistics and paint a picture of gloom and doom. But the fact is that this country has had ten years not simply of good government, but ten years of real prosperity.
I have not much time left and there are a number of things I want to speak about, particularly the budget brought down on April 10 by the Minister of Finance. I think it is also important to take not simply that budget when talking about the area I want to spend some time on-that is, small business and the importance of taxation to small business-but to take the preceding budget and the taxation apparatus that Canadians enjoy today. I suggest that hon. members who wish to consult those who are knowledgeable in this area. I could cite names such as John Bulloch of the Canadian Federation of Independent Business and other experts. They will find that no country in the world has a better taxation system or one that gives greater advantage to small businessmen.
I want to take a few moments after dinner to go through certain of these items in some detail. Before I get on to this section of my remarks, I wonder if I could call it six o'clock and return after dinner to discuss this important area.


Mr. Deputy Speaker:: Is it agreed we call it six o'clock?


Some hon. Members:: Agreed.
The Budget-Mr. Abbott


Mr. Deputy Speaker:: It being six o'clock I do now leave the chair until 8 p.m.
At six o'clock the House took recess.


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.
The Acting Speaker (Mr. Turner):: Order, please. At six o'clock the Minister of State (Small Businesses) had the floor.


Anthony Chisholm Abbott: Mr. Speaker, before the dinner hour I made a few comments which I hope will correct some misunderstandings and misapprehensions which exist. I can see some hon. members opposite are still in doubt; some of them take a little longer to understand the facts than others. I attempted on authoritative grounds to show that ten years of Liberal government since 1968, far from being the kind of dismal years that have been reflected upon by the opposition, have indeed been years of great growth, great prosperity and great creation of job opportunities.
Unlike the Tory opposition desperately craving power at the risk of distorting the facts, I have been citing factual evidence to support my proposition. I suggest it is an ill-service to the country for the opposition to take the kind of tack they have been taking. I also said, and again I suggest authoritatively, on the basis of any knowledgeable, fair-minded observer, including those in the small business community that have reason to know, such as Mr. John Bulloch of the Canadian Federation of Independent Business, that there is no country in the world today which has better tax incentives for small business than Canada.


An hon. Member:: What about the United States?


Anthony Chisholm Abbott: I include in that the United States.


The Acting Speaker (Mr. Turner):: Order, please. The hon. Minister of State has the floor and I suggest we all listen.


Anthony Chisholm Abbott: Thank you, Mr. Speaker. Your judgments are always good but I strongly recommend that one.
In order to supplement this statement of fact I would like to spend a few moments relating some of these tax incentives, not simply those of the recent budget but those of the more recent past.
Of course, the most important of these is the low rate of corporate tax and the dividend gross-up and credit. As hon. members are aware, the small incorporated businessman with income below $ 150,000 per year or retained earnings of up to $750,000 pays some 20 to 21 percentage points below that of the larger business.
In addition, under the new system of the dividend gross-up and credit an individual who is the recipient of earnings from

April 18, 1978
The Budget-Mr. Abbott
an incorporated small business, under the small business tax rate, enjoys a substantially lower marginal income tax rate than that of wage earner, salary earner or person earning dividends from a larger business. For instance, a taxpayer with $30,000 of income pays only 26 per cent on additional income received from a small incorporated business. A wage or salary or unincorporated business income would bear a 46 per cent marginal tax rate. The high income taxpayers also enjoy a significant tax deferral on their income from incorporated small businesses. As long as the income is retained in a corporation it bears the low corporation rate of 25 per cent. It is only upon the eventual distribution that the taxpayer pays; then in the case of the high income earner it would be substantially above those at the corporate level. So that there is a distinct saving for those choosing to invest in small businesses in this form.
In addition, in the 1977 budget there was permitted employee stock option liberalization. This provides that employees of a small business can receive options, and it is only when they sell their stock that they pay tax and then it is at the capital gains rate rather than at the higher rate of tax they would pay if it was in the form of earnings.
Family farms, both incorporated and unincorporated, may now be transferred to other members of the family free from tax, whereas in the past this has not been the case. Again, this is a measure most beneficial to those who have an interest in family farms and I believe hon. members opposite who take an interest in agriculture are gratified by this measure.


An hon. Member:: We shall take the credit.


Anthony Chisholm Abbott: Take the credit if you will but at least acknowledge the benefit.
Another great benefit which is available under this beneficent regime which has been so widely criticized is in the area of income splitting among family members in corporations. Family members can now be employed in an incorporated business and receive incomes. Anyone familiar with this situation will know that members of a family who own or share in an enterprise can now receive income from it at substantially lower tax rates than they would pay if they were receiving it as one income from the business, as is the case with an unincorporated business.
There are a number of other benefits, such as the elimination of federal sales taxes for small producers of handicrafts; the deferral of capital gains on voluntary sales of fixed assets, thereby allowing firms to relocate without the penalty of taxation; the option offered to venture capital investors to choose whether to be taxed on a capital gains basis or on the basis of ordinary income. An amendment to Part IV dealing with refundable tax removes the hindrance imposed on corporate investors taking a minority interest in other businesses. There is assistance with respect to metric conversion by tradesmen and retailers. There is a 3 per cent inventory allowance, and a provision for making expenditures on research and

development admissible for tax credit. An increase in the dividend tax credit has been made and in the field of capital gains the present $1,000 exemption has been extended.
I have not covered all the ground, Mr. Speaker, but I have listed examples which go a long way to back up the proposition I have advanced, namely that far from having suffered from a system which is inferior to that in other countries the small businessman in Canada, as is acknowledged by small businessmen and experts in this field, enjoys tax benefits superior to those in any other country in the world.
In my opinion, the Minister of Finance has added to these various incentives by the most direct and positive measure which could be carried out in the circumstances facing him by applying a direct reduction in the sales tax of 3 per cent. The obvious benefit of this is that it places purchasing power directly in the hands of the consumer, thereby creating an incentive for the consumer to spend money at the local retail level. So far from describing the tax system of this country as detrimental to small business, far from regarding the budget as having done no thing for small business, the combination of this budget and th ; budget of March, 1977, together with the tax apparatus which has been set up in the past, goes a long way to adding to incentives for small business people to set up business.
Nobody, least of all myself, suggests there is not or will not be room in the future for further improvements. I think all of us could, in inventive moments, think of areas in which improvements in the tax system could take place. Perhaps modifications in the capital gains tax division, the possible creation of small business investment companies which could take advantage of the tax system and draw capital for investment in small business are good examples. There is the Bank Act which the hon. member opposite speaks of.


Mr. Whiteway:: When it comes.


Anthony Chisholm Abbott: Well, when it is brought in I am sure hon. members will find that it, too, contains measures which will be beneficial to the country and beneficial to the small business community and to new entries in the banking field.
We who are working very hard in this area of small business need not stop, however, at describing the benefits under the tax system, happy and progressive though it is. There have been a number of other improvements which have done a great deal to give heart to the small business community. One of the most important concerns the Small Businesses Loans Act.


Stan Darling: Oh!


Anthony Chisholm Abbott: The hon. member for Parry Sound-Muskoka (Mr. Darling) says "Oh!" I can assure him that when I was up in his constituency the other day businessmen in Bracebridge were delighted to hear about the improvement in that act.


Some hon. Members:: Flear, hear!


Anthony Chisholm Abbott: The legislation was amended in the spring to raise the limit to $75,000. Recently the interest rate was
April 18, 1978

amended. Small businessmen are now encouraged to find they will be able to borrow money under the act to expand their businesses, and these amendments will really do a great deal. I have spoken to representatives of the chartered banks and they have assured me that this act has hitherto not been an inducement. Yet last year, despite the fact they claimed they lost money, they lent as much as $80 million. So I believe that with the improvements in the legislation we shall now see a real volume of business being done to help the small business community.
I turn to the activities of the Federal Business Development Bank. Here is an institution which has served the Canadian businessman well. It now has nearly $2 billion in loans outstanding, having lent over $300 million last year. Its affairs are being conducted by an aggressive new management with new ideas, and I believe that this bank, too, will prove of even greater assistance to the small business community than it has in the past.
We also have the CASE program under the direction of the Federal Business Development Bank. Here is an important program which is being offered to the small business community. Almost 2,000 consultants drawn mainly from retired business people are advising at low or nominal fees and showing small businessmen how to improve their management techniques. Dun and Bradstreet, a firm specializing in bankruptcies, indicates that 90 per cent of bankruptcies are caused by poor management. Failure among small businessmen is all too frequently brought about by a lack of understanding of management techniques. The Government of Canada, through the CASE program, is bringing assistance to them which is unavailable in any other form at the price.
In addition, we have taken an important new initiative in moving toward the reduction of the paper burden by the creation of an office in government whose purpose is to reduce the paper burden on small business.


Dean Waldon Whiteway: Hurrah for that!


Anthony Chisholm Abbott: I am glad to hear that expression of enthusiastic support. I suggest that progress will be made, that we shall shortly see some demonstrable results from this program and that there will be far fewer forms to be filled in by business people and a great deal less government interference with their daily work.
I am sorry there is so little time available to me in which to give a fuller resume of all the things this government has tried to do for the small businessman. Recently we opened a small business centre in the Department of Industry, Trade and Commerce staffed by a knowledgeable group of people who are there when visiting businessmen come to Ottawa. They will not only tell them where to go; they will help them with their problems, assist them in making appointments and give them advice with regard to government programs.
In addition, this small business centre has a "hot line" which anybody in Canada can call. The number is Zenith 03200.
The Budget-Mr. Abbott
Anybody can call and get an answer which does not pass the buck but which really gives a response. I urge the hon. member for Parry Sound-Muskoka to call that number when he gets home, to see if I am right.
While many other governments would sit back and ask who could do more, this government is not prepared to rest on its laurels, deserving as it may be. It is not prepared simply to acknowledge that in the last ten years Canada has enjoyed a growth and prosperity unequalled by any other country in the world with the exception of Japan.
We are now looking at a number of positive incentives such as the one I mentioned, the creation of small business investment companies and the setting up of venture development centres to help small businessmen who want to get into business find people with money.
The other day I sent a couple of officials up to Whitehorse, where they spent three days because we are very concerned that not just the great corporations which are making steel pipe or making valves, etc., receive the benefits of the pipeline. We are interested in seeing that the small business community also enjoys the benefits. When those officials returned they advised me that there is a great deal of enthusiasm in that community, and I believe we can do much to help them.
In addition to these positive, beneficial and progressive ideas and programs, responsible programs were enunciated in the budget by the Minister of Finance who, notwithstanding difficult times, accepted his responsibility, delivered a sober, constructive and responsible budget, and yet offered Canadians incentives.
What are we getting from the desperate crowd of power-hungry politicians opposite, who crave above all else to sit on this side of the House, probably by their desperation and irresponsibility permanently denying themselves that privilege forever?


Some hon. Members:: Hear, hear!


Anthony Chisholm Abbott: What we get from the Leader of the Opposition (Mr. Clark) are reckless suggestions that they would cut taxes by up to $3 billion. They would restrain government spending and do a lot of other things at the same time.
Mr. White way: You are right.


Anthony Chisholm Abbott: The hon. member says I am right. He is the only one who believes it because the Canadian people are not going to buy that kind of rubbish. The Canadian people will listen to that kind of irresponsibility and ask themselves whether they are satisfied to hear "Joe Who?"-the Leader of the Opposition-enunciate what he is going to do for the economy when he cannot even secure a seat in his own home town. Canadians will ask themselves whether they should listen to a man who is trying to urge upon his colleagues that same sense of irresponsibility. His colleagues are a feeble army of financial critics who are, to serve their own ends, attempting to foster in the minds of the Canadian people an apprehension that this country is going down the drain.
4634

April 18, 1978
The Budget-Mr. F. Hamilton
No, Mr. Speaker, I suggest that the people of this country will consider the responsible statements of the Minister of Finance. They will see where this country stands after ten years of Liberal government, and I suggest they will reject the gloom and doom we hear from the opposition and once again demonstrate at the polls just where they think the Tory party should reside.


Mr. Frank Hamilton (Swift Current-Maple Creek):: Mr. Speaker, I welcome the minister's assurance that our banking system will now use the new Small Businesses Loans Act, because in the past it and the Farm Credit Act have been major stumbling blocks. Our banking system has been hesitant to use those two acts.
If I understood the minister correctly, he said that last year some $80 million was lent under the Small Businesses Loans Act. At the maximum rate of $75,000 per businessman, that amounts only to just over 1,000 loans, so I think that is not a record to be proud of.
It seems obvious that this parliament is winding down. The sooner we go to the country, the better, because this government has almost overwhelmed Canada with its permissiveness, disunity and economic incompetence in the past decade. The budget indicates no basic change in the philosophy of this government. Generally speaking, if you tax something, you get less of it; if you subsidize something, you tend to get more of it. The approach of this government is still the same. It continues to tax work, growth, investment, employment, savings and productivity and to subsidize no work, consumption and debt. Ten years is enough!
Ten years ago we were a nation proud of our heritage, confident in our capabilities and purpose and sure of our direction and destiny in world affairs. It was this confidence and purpose which held together our widely scattered provinces and racial groups. Today, however, this spirit of national unity and purpose has given way to doubts, fears and uncertainties in every province.
Even ten short years ago there were few Canadians who were not convinced that Canada had the capacity, resources and will to survive as a strong and independent North American nation. Any suggestions of separation or of joining with the United States would have been ridiculed. Indeed, we assumed that the rest of the world envied the strength of our judicial structure, the soundness of our banking system and economic policies and the integrity and reputation of our police forces. Our stability, respect for law and order and educational standards were all matters of great pride.
However, in the span of only a few years much of this solid structure has crumbled, and we now find ourselves groping and wondering just what has happened so suddenly. Canadians are weary of inflation, bureaucracy, political scandals and the false promises of our leaders. They are tired of the shopworn government we have which no longer commands respect. People generally are sick of the new morality which seems to have something in it to offend everyone.

What are the answers, and is a cure possible? If we continue this downhill slide while at the same time having resources of all kinds, we are certainly headed for an ultimate bust if we do not learn a few simple lessons. The picture may be bleak, but it is not hopeless.
Canada is one of the wealthiest nations on earth, yet we look with envy on the Arabs. We over-react to the significance of their energy wealth. Certainly they have oil, and lots of it, but they are lacking in many resources, particularly the human resources which we have in Canada.
In Canada we, too, have oil and natural gas. We also have tremendous forests, agricultural reserves, coal, iron ore, nickel, lead, uranium; you name it. And probably the greatest wealth of all, not often thought about, is our water. Imagine what the Middle East would give for an ample supply of fresh water. The Arabian countries have lots of oil, but they are short of welders, electricians, carpenters, engineers, chemists and pipe fitters. We have them in abundance, and it is this great Canadian resource of skilled people that we have to take advantage of.
The Japanese have virtually no resources. All they really have going for them are about 90 million workers who have some incentive to work. Imagine what our agricultural producers and small business people could do if they could just have a tax-free kitty to put a few dollars into in good years, to be drawn upon in poor years.
We have to upgrade the resources which leave this country. The natural gas which goes south to the United States comes back in the form of plastic. Wood from our forests goes south and across the Pacific and comes back as furniture or plywood. Our coal and iron ore which go to Japan come back as Toyotas. Probably half of the goods purchased by our overtaxed workers is made elsewhere, from coal, oil, natural gas, wood or other materials, extracted from this country.
In order to upgrade our raw materials we must have a climate to encourage investment in Canadian manufacturing. Since the end of the World War II we have visibly lost strength and status among the world's more powerful industrial nations. We have tended to concentrate on redistributing the wealth we have rather than creating new wealth.
We may well look at Germany's economic miracle after World War II. They proceeded on the basis that it was easier to give everyone a larger slice out of a bigger cake than to gain anything by fighting over the division of a smaller cake. The German government did three things: the first was to abolish state planning and end price controls; second, they established freedom for the consumer to buy what he likes and recognize his freedom to work with or without union membership as a basic right of every citizen; third, they encouraged greater productivity of goods to help bring down prices. They established a 48-hour work week and overtime wages were made tax free.
We cannot find a solution in Canada by still more spending and more borrowing for social services and less individual
April 18, 1978

incentive. We cannot serve long term unemployment through more welfare because it will only bring another generation into being as wards of the Crown. Our problems will not be solved outside this country. The job is internal and the unity of our country will never be secured with a sick economy.
So is it any wonder that our people are bitter when we see American TV ads for automobiles which are $2,000 cheaper than our automobiles? It is particularly irritating when a good number of people realize that the automobile in question was manufactured in Canada. Home appliances are offered at substantially lower prices in the United States. Many U.S. models are identical to Canadian models built in Canada by the same company with headquarters in the U.S. Housing prices are much higher in Canada. Also, mortgage interest rates at time are more than double here, and they are not tax deductible as they are in the U.S. Higher and higher personal income taxes required to pay for social programs all add to this frustration.
One of our real problems in Canada has been the failure of our federal government to bargain properly with the public sector. Salary scales have gone completely out of control, putting undue pressure on the private sector to equal the wage gains of government employees.
However, I believe the attitude in Canada is changing and that we are going to recognize that a restoration of the incentive system is really the only way to bring about prosperity. We should be using our energy surplus and our great natural resources to negotiate bilateral trade agreements with the United States in particular, with Japan and the European Economic Community, to promote substantial growth in the manufacturing sector in this country.
It does not seem unreasonable, if we agree to export several hundred million cubic feet of natural gas to the United States to assist in their gas shortage situation, if we ask that some of the export be in the form of manufactured products derived from Canadian natural gas. Indications are the United States is willing to discuss such an agreement. The United States being our principal trading partner, this is the logical place to start.
One of the fictions we have been living under for the past decade, and it is a most insidious one, is that our political rights guarantee equality in all things. This has come to mean equality not only at the starting line but at the finish line as well. Well, I just do not believe it. We should all have equality, not only at the starting line, but while the race is on. The guarantee should be freedom-freedom to achieve or to fail, freedom to make the most of every talent and ability we have, and freedom to run the race as best we can. Finally, we should have freedom to receive the rewards of that effort. We need a change in policy, attitudes and outlook, a new Canada with a new government.
[ Translation]


Eudore Allard: Mr. Speaker, I am pleased to have this opportunity to speak out and express my opinion on the budget, especially in these hard times. Mr. Speaker, this
The Budget-Mr. Allard
budget must be considered in light of the present economic and political situation. No budget can be made in a vacuum, without regard for the reality of the day. I would like to consider some blatant examples of the way the government persists in giving everything to the rich and nothing to the poor.
But first I would like to comment on the 2 per cent provincial sales tax rebate that the government has proposed. Once again it is the low income earner who will foot the bill because the government will have to take this money somewhere or else transfer it to the already heavy debt. Furthermore, the government should have offered solutions that come under its jurisdiction and not act on behalf of the provinces. I am not against federal aid in a sense, but that should only occur after certain other measures are taken such as lowering the federal tax, increasing the basic exemption from $2,700 to at least $4,000, the government should also have increased the excise tax on products we could easily produce ourselves here in Canada. With regard to the controversy that opposes the Quebec government to that in Ottawa, to my mind, having a protectionist policy is not turning everything upside down. I feel the proposal of the Minister of Finance (Mr. Chretien) was not adapted to the needs in Quebec. Hardly any automobiles are manufactured there and a 2 per cent reduction on that product would not have helped the province. The last budget proves that this government is unable to apply measures that take into consideration the particular needs of the provinces generally.
I should now like to discuss the amounts earmarked for research and development. The new tax credits the government proposes for R & D are another example of inadequate solutions to current problems. The government wants to allow companies to deduct 50 per cent of their additional expenditures on R & D. Applied research especially is involved here, as new technologies are wanted to improve existing products. However, those new tax credits favour big business which already enjoys the benefit of other government measures. But nothing is being done to help independent researchers. The situation of the researcher in Canada is unacceptable. Allow me to quote a paragraph from the article by Margaret Munro, published in the Ottawa Citizen on April 10, 1978, on the lack of efficient government assistance to research, and I quote:

This sort of unexpected oscillation is not only destroying Canada's medical research community but it's costing the taxpayer millions of dollars. A researcher spends six months setting up his lab and the next thing you know he loses his grant, he says.

It is truly unbelievable, Mr. Speaker, that a researcher should have to live in financial and material poverty in Canada. It is also unbelievable that in his budget the Minister of Finance did not provide concrete measures to help research and development in hospitals and universities.
80038-4Vi

April 18, 1978
The Budget-Mr. Allard
I would like to quote some questions submitted by Dr. John Kucharczyk, executive secretary of scientific policies of the Canadian Federation of Biological Societies, to my colleague the hon. member for Abitibi (Mr. Laprise):

Is the Canadian neglect of scientific research more serious in some sectors, i.e. universities, than in others? Is the neglect concentrated in particular areas, i.e. social sciences and natural sciences?

Mr. Speaker, we of the Social Credit Party of Canada say that the measures put forward in the budgets last year and this year do not meet the real needs of Canadians. These measures tend to favour research and development through tax deductions. This is effective for the government in office because it attracts favours and election funds from large companies. This explains the cuts which were made to the funds allocated to medical research at the university level. Given the shortsightedness of Liberal members, the government hastens to tell the people that funds earmarked for pure research done mainly in universities should be cut to increase the funds allocated to applied or industrial research.
Another question read as follows, and I quote:
Your party is on record as favouring an increase in R & D investment in the public and private sector from the current level of less than 1 per cent of the gross national product to 2.5 per cent of the GNP. What effect do you believe that an increase in Canadian R & D would have on the nation's economy?

We reply that the most obvious effect of research is the greater technological and consequently economic independence from neighbouring countries, especially the United States. Research is the only way to make our industries more competitive on the international market. Moreover, this will promote the hiring of more employees in research laboratories. From a medical point of view, it is a known fact that research improves the health of the population who can then have more productive activities.
Finally, only research and its effects can bring a final solution to the great problems of our times, such as unemployment, inflation, control over Canada's 200 mile zone and the protection of our environment. If the minister has understood what we have just said, he will agree that research and development can bring solutions to our economic problems, whether in the area of agriculture, of pulp and paper or elsewhere.
I would now like to say a few words about our debt. Another one of the false solutions proposed by the minister in his budget is the debt. We must wonder if the minister is aware of the definiton of debt. The Larousse dictionary gives one and it is not necessary to be Minister of Finance to understand it. At page 313 of the Larousse dictionary, we find the following definition: Something owed, an obligation. Mr. Speaker, we

have an obligation of more than $11 billion. The debt for each Canadian worker amounts to $10,600. Every newborn in Canada owes this amount from the date of his birth.
Last Thursday, during question period, there was reference to the sales tax quarrel between Quebec and Ottawa. My colleague from Bellechasse (Mr. Lambert) asked the Minister of Finance if he could use the Bank of Canada to create new credits to increase the money supply. The minister replied that he had looked into the social credit theories as early as 1963 and that he was convinced that he was right to oppose them. But, Mr. Speaker, if the Minister of Finance is really serious, he should start to learn social credit philosophy and he would find out that if foreign investors consider Canadian bonds as valuable guarantees for their loans to the Government of Canada, our own bank, the Bank of Canada, could accept the same guarantees from the same government.
When foreign investors lend money to this country, they know that the wealth and labour of Canadians are good guarantees to buy Canadian bonds. So why should those who have been elected by Canadians not take their own responsibilities? And instead of maintaining a debt system, let us have a credit system so that Canadians may get rid of this debt system and perform as a sovereign people. Those same guarantees accepted by foreigners should also be accepted by the Bank of Canada and thus it would be able to monetize the credit of Canadians.
Mr. Speaker, how can the minister understand our philosophy when he does not even know what a debt is? Since the minister does not understand the basis of the economy, how can he put forward a sound budget? Current issues which can destroy Canada are not explained by the nature of this country but by the way it is governed. So, Mr. Speaker, there is only one solution and that is to elect a Social Credit government at next election.


Flora Isabel MacDonald: Mr. Speaker, in the budget debate there are always a number of matters a person would like to refer to, given the latitude one is able to exercise in debate, but tonight I want to deal with the major fiscal proposal which appeared in the budget, in fact the only fiscal proposal of any significance, and this is the proposed reduction in provincial sales tax.
But to do that, Mr. Speaker, we must enter the world of Alice in Wonderland, where words mean what the federal government chooses them to mean; where a hasty round of telephone calls becomes full consultation; where a proposal which was mentioned briefly in October, revived suddenly at the end of March, and then firmed up after six provincial budgets came down, is said to have undergone extensive negotiation; a world where Claude Ryan becomes a separatist and Allan Blakeney a closet Tory. That is the Alice in Wonderland world which characterizes the government's tax cut proposal.
April 18, 1978

Nevertheless, let us proceed. We begin with a proposal clearly and solely in the field of provincial jurisdiction, one obviously requiring full partnership between the federal and provincial governments to ensure its success. Not only was the opportunity to forge such a partnership in budget making missed, but it was missed because no serious effort was made by the federal government to achieve it. Yet the Minister of Finance (Mr. Chretien) said the following:
... for the first time in Canadian history we have achieved a certain level of co-ordination of fiscal policy between the federal and the provincial governments.
As we look back at this past week, all we can say is: some level, some achievement. Meanwhile in his remarks on the budget, the Secretary of State for External Affairs (Mr. Jamieson) referred to the tremendous progress made by the government in the area of federal-provincial co-operation. He stated that after the tax cut period there may be the following:
... other new, imaginative and creative ideas flowing from this unique process which was introduced by the Prime Minister, and reinforced in these last few days by the Minister of Finance.
Let us take a closer look at this "unique process" which the minister extols. I will tell hon. members what is unique about the government's process of federal-provincial relations. At a time when most other forces in the country are aiming for consolidation, co-operation and compromise in the interests of unity, the federal government stands uniquely alone in its tactics of divide and conquer. If the government is doing anything imaginatively and creatively, it is fostering division rather than unity, resentment rather than accommodation. The manner in which the sales tax cut was put into place is just the latest in a long list of divisive federal government actions.
What is almost amusing about the sales tax issue is the fact that, while government members applaud what they perceive as a step forward in federal-provincial relations, or as an outstanding example of federal-provincial fiscal co-ordination, they seem to be the only ones applauding. Certainly the four western premiers have stated that the budget move contradicted the spirit of federal-provincial co-operation and consultation, and they said it could be prejudicial to ongoing discussions on national unity.
The reaction of the province of Quebec to this step forward in federal-provincial relations has been anything but ecstatic. All political parties in that province, the new leader of the Liberal party in the province of Quebec, and Quebec newspapers both English and French, have been unanimous in their criticism of the federal government's handling of the sales tax cut.
We have five of the ten provinces dissatisfied with the federal government's latest effort at federai-provincial co-operation. When one considers that, of the remaining five provinces, four do not have to make any financial contribution to the plan and the fifth was the originator of the idea, one can readily conclude that there is little reason to applaud the government's federal-provincial diplomacy.
The Budget-Miss MacDonald
It has long been my contention that the process of conducting federal-provincial relations requires as much sensitivity and consideration as do the substantive measures involved. Here, sir, in the government's sales tax proposal we have a concrete example of where their lack of sensitivity toward the process of federal-provincial relations has diminished the potential good in the substantive issue.
We on this side of the House have no quarrel with the sales tax cut in itself. We have said it is a good idea, and we have said that here in the House. We have, rather, argued that it will not be in effect long enough and that it will come to an end just when the winter unemployment season is beginning. It is not the measure in itself but how the measure was taken that invites the criticism, not just of the opposition, but of the House and of the provincial premiers, the very ones whose goodwill is essential to maintaining the plan or putting it into effect.
The Prime Minister (Mr. Trudeau) has made much of the proposed success of the recent first ministers' economic summit conference which he billed as the beginning of a new era in federal-provincial relations. He and his ministers have exaggerated beyond belief the degree of agreement that was reached by all the premiers on this detail or on that detail. They were supposed to have discussed all the urgent matters of joint concern at that conference. It was the logical place to do so.
But now what do we find? We find that in the two months following that conference the federal government brings in two major initiatives, the referendum bill and the sales tax proposal, both of which are of great concern to the provinces and neither of which we find was discussed or even mentioned at that much-vaunted economic summit conference. The renewed sense of partnership that the Prime Minister sought and thought he had in the first ministers' conference does not exist. It was all a facade and sham, an exercise in public relations designed to brush up on appearances, but to accomplish little of substance. How else can we explain the failure of consultation in regard to both the referendum bill and the budget proposal?
The main point of discussion here today is the sales tax cut. But, sir, it is not the only recent deviation from that conference high in February. Another breakdown in federal-provincial relations is that complete lack of consultation with the provinces on the referendum legislation. A process to which so much importance should be attached is abandoned by the federal government whenever it is convenient for them to do so.
The minister in charge of federal-provincial relations, when questioned in the House about consultation with the premiers, stated that the referendum legislation covered only issues under federal jurisdiction, knowing full well, of course, that the referendum legislation addresses itself to any question relating to the constitution of Canada. He did admit at a press conference that it could be used in the case of failure to reach agreement with a province on constitutional matters, yet he

April 18, 1978
The Budget-Miss MacDonald
has either the naivety or audacity to suggest that all constitutional questions automatically fall within federal jurisdiction.
When the federal government is defining matters that fall within federal jurisdiction and providing the questions to be posed, how long would it be, given the record of this government, before the people of Canada were faced with national referenda on matters of joint jurisdiction such as authority over agricultural marketing boards, and then move on to subjects of disputed jurisdiction such as resources taxation, or even to subjects of strictly provincial jurisdiction such as post-secondary education?
We all need to be wary of the government's perspective of matters that fall within federal jurisdiction, but given their preoccupation with their own importance the federal government continues to be blind to the needs, the aspirations and to the wishes of the provinces, the other partners of confederation. More than that, the federal government is oblivious to their own blindness in this respect. When criticized about the failure to consult with the provinces on the budget proposals, the Prime Minister and his Minister of Finance state: Oh, but we did consult with the provinces.
We all remember that phrase "profitable federalism". The federal government has their own version of that phrase. They were eager, indeed they were anxious, to have the provincial premiers at their side to endorse the generalities of their medium or midterm economic proposals. But when they had specific initiatives in mind, initiatives which would directly and immediately impact on the provinces, those proposals conveniently fell outside the boundaries of what could profitably be discussed at the first ministers' conference, even though the timing of the economic summit had been carefully chosen to give the first ministers the information they needed to adjust their budget planning in the light of the new proposals jointly agreed to at the time. The much vaunted mood of partnership that the Prime Minister spoke of, it now becomes clear, was taken seriously by the federal government only in so far as it served their own interests.
As I recall, looking back to that economic summit conference the general consensus at the close of the conference was that the federal government was the only government not to put forward a proposal. Now we know the reason why. It was not that they did not have proposals to make; it was just that they did not want to subject them to that forum. The Prime Minister and the Minister of Finance argue that the sales tax proposal had extensive discussion and that there was intensive co-operation over a period of six months. But when pushed, they reluctantly admit that it was raised briefly some six months ago and not by the federal government. Then it was allowed to lapse and only proceeded with a few weeks prior to the bringing down of the federal budget, after a flurry of telephone calls between the Minister of Finance and the provincial ministers on a one-to-one basis. At no time were the provinces able to discuss the matter among themselves, as would have been the case had the matter been properly brought up at the first ministers' conference in February. This is the place where it ought to have been discussed.

This kind of dealing is not consultation, and, further, bringing in a proposal which seriously affects provincial budgets after six provincial budgets have already been brought down is not co-operation. It was in some respects more akin to a lottery in which those provinces which bring down their budgets in April have a clear advantage over those which do so in March. The fact that four provinces were able to take the sales tax cuts into consideration in the budgets, with two provinces actually changing the dates and forms of their budgets-as the Prime Minister admitted yesterday-while six were not able to do so, give them a kind of special status and breeds resentment among the provinces. In no way does this exercise in federal bungling add up to partnership.
If you add to this, Mr. Speaker, the heavy-handed manner in which the government rejected the counter-proposal of Quebec, then the bungling becomes a fiasco. The handling of the sales tax with regard to the province of Quebec has been a disgrace, and when opposition members criticized the Prime Minister and his Minister of Finance for their inept handling of this matter, what was the government's response? They lashed out and called all their critics separatists. That is their stock response to criticism of any stance regarding Quebec. To disagree with the Prime Minister is to want to break up the country.
So desperate was the Prime Minister in assailing his critics that he was able to perceive what had escaped everyone else- that Allan Blakeney was a closet supporter of the federal Progressive Conservative party. That was the claim he made. All of this might fit very well with the Prime Minister's image of himself as the saviour of the country, but it does not fit at all well with reality.
The Minister of Finance was proud of his sales tax proposal and the way in which it took into consideration certain regional realities. It has been flexible enough to give special consideration to the Atlantic provinces with full compensation and to allow two other provinces to opt for a smaller cut over a longer time. Yet when it comes to the province of Quebec, which has an even higher unemployment rate than two Atlantic provinces, the government took on the attitude of inflexiblity. All three political parties in the national assembly in the province of Quebec, the newly elected leader of the Liberal party in that province, and both the English and the French press, all came out in support of Quebec's position; but the federal government remained rigid in its stand.
In a move of apparent accommodation, the federal government then turned around and offered Quebec a supposedly new deal, which was in reality a new twist to its rigid position. Meanwhile, the federal money sits there as a reminder to the province of Quebec that there is only one set of rules by which to play the federal-provincial game, and those rules are set in Ottawa. Is it any wonder, Mr. Speaker, that faced with such domineering rigidity, the province of Quebec hurls accusations of paternalism and federal domination? Is it any wonder that in the space of ten years of such domineering rigidity, this country has a national unity problem that is fostered right here
April 18, 1978

in Ottawa? Does the Minister of Finance not realize that by his actions he lends credibility to the Parti Quebecois with allegations that Ottawa is paternalistic and domineering, or did he deliberately pick this fight? Did the minister deliberately pick this fight to shore up his government's sagging support in the rest of the country?
If this was his intent, his cynical manoeuvre served the tragic purpose of renewing fading support for a separatist government in the province of Quebec which he purports to oppose. The lesson to be learned here is that even a good idea badly executed works against itself.
It was with amazement yesterday that I listened to the Prime Minister express his puzzlement at the reaction of the western premiers. He said that they were upset, not about the content of the federal proposal, but about the form of its negotiation. That is precisely the point: given the blindness that I have already referred to on the part of this government, the Prime Minister will go on being puzzled as to why the western premiers are upset. The government has consistently overlooked the importance of the process through which negotiations are carried on, and in so doing has often jeopardized the substance of those proposals.
In federai-provincial relations as in most other areas of life, means and ends cannot be separated. Bad form on the golf course produces only a slice or a hook, but bad form in federal-provincial negotiations endangers the unity of our country.


Some hon. Members:: Hear, hear!


Daniel Joseph MacDonald: More than any other aspect, it is the form of federal-provincial relations that must change, and it cannot change so long as there exists an insensitive and remote federal government that does not respect the needs and wishes of the provinces. I am not a champion of the provinces against the federal government. The provinces must appreciate and respect the essential roles and powers of the federal government. But they would demonstrate that respect more readily if it were reciprocated or, even better, initiated by the federal government.
I would like to quote from the Conservative party's Kingston communique, which was a joint statement made by our leader and the then four Progressive Conservative premiers after their meeting last September in Kingston. In that document the Conservative party's view of the process of federal-provincial relations was clearly set out. It said:
The federal government must be strong enough financially to influence the economy, bring about equalization of opportunity and stimulate under-developed sectors of the economy. But those national objectives can be attained without the federal government arbitrarily using its spending power, as it has so often in recent years, to force its way into areas of provincial responsibility. We are agreed that the federal spending power must be brought within constitutional bounds so that it never again is used by Ottawa to force action in areas not granted to Ottawa by the constitution.
Well, Mr. Speaker, the attitude of this government is one of take it or leave it. It is one of fiscal manipulation. If you take it you must do such and such. This attitude will not beget a sense of partnership, no matter how much money or how good the
The Budget-Mr. Whelan
idea. Federal-provincial co-operation must be a two-way street; there must be input from the provinces, not just output from Ottawa.
Regional diversity is a fact of life in this country. Economically, politically and socially, the regions have different attitudes, different needs, different aspirations. It is essential that these attitudes, needs and aspirations find expression in federal decision-making. This budget was an opportunity for making that kind of accommodation for regional diversity in national policy. It should have demonstrated that such accommodation is possible. Instead, the episode has aggravated old tensions, reinforced old fears and put up hurdles which it will be difficult to clear if such a measure is attempted again.
The concept of a budget founded on federal-provincial cooperation, a concept which held out and still holds out so much promise, has been made into a travesty by what has gone on in the past several days. That travesty could have been avoided if only the Prime Minister had taken the premiers into his confidence by broaching this concept at the economic summit in February. He chose not to do so. The curtain on this tragedy of errors is now about to fall, but the consequences for the federal system have yet to make their presence felt on the stage. The Minister of Finance cannot escape the authorship of this budget; he and the Prime Minister must also accept the responsibility for the damage that has needlessly resulted from it.


Hon. E. F. Whelan (Minister of Agriculture):: Mr. Speaker, I have listened to and read some of the speeches made on the budget on both sides of the House. Coming as I do from an area that is diversified and probably has a little bit of all Canada, the constituency of Essex-Windsor which I represent-one of the most southerly parts of Canada and a very productive part-I sometimes wonder if I am in dreamland or if I live in Canada.


An hon. Member:: You are on cloud nine.


Eugene Whelan: I have had the opportunity to represent this country as a member of parliament and as Minister of Agriculture at world meetings, and I can say there is no other country in the world that is envied as is Canada.


Some hon. Members:: Hear, hear!


Eugene Whelan: We are envied for the freedom that we take for granted and for the things in which Canada has given world leadership. We are a northern hemisphere country, a country that many people refer to as the land of ice and snow. I am a representative of my constituency first and foremost. I know, Mr. Speaker, that I could not be Minister of Agriculture in our democratic society in Canada if I had not been elected in my own constituency of Essex-Windsor. Having had the opportunity to represent the people of Canada at many world meetings as Minister of Agriculture, it is hard for me to accept the tremendous admiration that people express for Canada without realizing what Canada is all about.

April 18, 1978
The Budget-Mr. Whelan
I wonder if some people in this country know what Canada is all about or why Canada even exists today. They should go back in history and find out why this country was created, why we created this confederation called Canada and how it came about. It is one of the most fragile confederations in the whole world, created mainly by two founding nations, the French and the English. Had it not been for those two groups working together, then-and some people may scoff at this-I would probably be the secretary of agriculture for North America! But those two founding nations together said they wanted to be different, that they wanted to be a country called Canada.
When 1 attend these world meetings I am proud that Canada has given leadership in food aid long before it became a "sexy" thing to be involved in and before other countries entered this sphere. My Department of Agriculture was in the forefront of providing help to developing countries and to the poor and underprivileged of this world. Other departments became more involved as time went on because food aid became a "sexy" thing to be involved in.
We have gained a respect that no other nation in the world has, whether it be the United States or the U.S.S.R. Of the 132 nations that attend the World Food Conference meetings, none has the respect that Canada commands. We aid our fellowman no matter where he may be in the world. We help on the basis of need, not because of their political philosophy or whether they are going to join our military alliance or whatever. That is why we are the envy of the world and the jewel of the world.
Sometimes when I sit here listening to dull speeches from the opposition about what a terrible country Canada has turned out to be I cannot believe I am in one of the most democratic parliaments in the world, the Canadian parliament. I can hardly believe I am the peasant child who grew up in Essex county, who was elected to one of the highest positions in the land and then appointed Minister of Agriculture. This is a country that offers a tremendous opportunity to anyone who wants to take it.
I listen to the opposition speak of gloom and doom in this great country that offers more opportunity than any other nation in the world at the present time, knowing that no other nation offers as much. There have been more inquiries from foreign corporations about investment in this country this year than ever before in our history. Does that say that this country is so bad? No, it does not say it is so bad. It says it offers more opportunity for investment than any other country.
We hear talk about the dollar. I see members here who are knowledgeable about agriculture but who say nothing about what the dollar has meant to them. I see people associated with the cattle industry, but they have not said that the dollar has brought the boom days back again to the cattle industry. We do not have an influx of cattle from the United States because our dollar is higher than theirs and they are not shipping cattle to us.
We are paying our debts in Canadian dollars to our banks, to our mortgage holders, to our trust companies and so on, and this has been beneficial to us. Whether it be in world trade,
[Mr. Whelan.)
with cereal grains, oil seeds or whatever you like, this is one of the most beneficial things that has ever happened to us.
Today I heard a member of the opposition criticize the Minister of Industry, Trade and Commerce (Mr. Horner) for something he said about the dollar's value. If the opposition were honest, they would admit that this has been one of the most beneficial things that has happened, because we have been able to compete in the export of agricultural and industrial products.
We hear talk of gloom and doom in regard to development in our country. Mr. Speaker, when I was elected to this House in 1962 unemployment in my area-the great agricultural, productive area of Essex county within which is the great industrial city of Windsor-stood at 22 per cent. I was raised on a farm but I worked in factories. I know what life in an auto factory or a chemical plant is like because I worked in different occupations. I hear talk today about this great economic depression in this country. I wonder how honest some politicians are when they compare today to the dirty thirties and say this is the greatest economic depression we have seen. I was not in the work force in the 1930's but my older brothers were. I can remember those days and so can others. People were lucky if they worked for board in those days. They dared not take sick as there was no hospitalization, no medicare, no social services.
Let me talk about what is going on in my humble constituency of Essex-Windsor and the area where I live. Last year we had never before issued so many building permits, not only in volume but also in dollar value. In my area at the present time expansion is going on in the industrial sectors. In the agricultural business, which is still very important in that area, the Maple Leaf company is expanding by building a tremendous vegetable oil processing complex which will cost in excess of $50 million. The United Co-operative Company is building a large agricultural complex with an elevator system which will be the most efficient elevator system in Canada and will cost in excess of $22 million. The Redpath company and Labatt's brewery are going into a corn sweetener plant costing approximately $75 million, or maybe $100 million by the time it is finished. All of these things, plus many others, have taken place in that great economically depressed area of southwestern Ontario.
It does me good to go outside Canada and listen to what people say about this country. When I come back I realize how lucky we are to live in this country. All I can say is: "Thank God that we live in Canada".
To come back to my constituency, General Motors Corporation is expanding production facilities which will include 1,500 new jobs by 1980. Chrysler Corporation will be expanding their facilities and increasing manpower in that area. Do these people who will invest millions and billions of dollars in the auto industry in Canada and the United States of America not have confidence in what will take place in the economic makeup of North America? We have those people who print
April 18, 1978

doom and gloom about the auto pact. All I can say, Mr. Speaker, is: "Thank God for the auto pact and thank God for those politicians of the past." Some of them are still very active, such as our High Commissioner in Great Britain, the Hon. Paul Martin, who was one of the leaders in the auto pact and who realized the importance of having agreement that a certain portion of the North American auto market belonged to us.
Let us compare that situation to the farm machinery industry where there is no free trade and no such agreement. The hon. member from Winnipeg who is making a lot of noise over there and who will win his election on a hate campaign in Manitoba, should face the fact that maybe there would be a healthier farm machinery industry in western Canada if we did not have the completely free trade program. Maybe it is not so free trade because they are always great defenders when I criticize the U.S. ambassador to Canada as not so liberal in free trade.
Farm machinery parts can be brought into Canada duty free, but a machinery part manufactured in the hon. member's constituency could not be exported to the U.S. duty free, there would be 7 per cent duty. Agricultural chemicals come into Canada duty-free, but going into the United Stales there is about 14 per cent duty. We need more pacts like the auto pact, not less. We can improve upon them as time goes on and as we gain experience. They are not as bad as hon. members try to make them out to be.
The hon. member from Newfoundland pointed out today that my city had some of the most outlandish unemployment figures. He mentioned some figures about St. Catharines and the city of Windsor, but he did not point out the figures from the area where the hon. member for Perth-Wilmot (Mr. Jarvis) lives. The hon. member for Perth-Wilmot is not in the House tonight; he probably has some other obligations elsewhere and we will excuse him for not being here tonight. But I want to say that there is less than 2 per cent unemployment in the Perth-Wilmot constituency. Maybe that is why he figures it is not necessary for him to participate in the budget debate; he has nothing to worry about in Perth-Wilmot because of the government's actions. That hon. member's constituency has the least unemployment among young people-


An hon. Member:: Why?


Eugene Whelan: Why? Because of government policy. The constituency which the hon. member represents probably has some of the highest incomes per farm family in Ontario and the area has possibly the highest farm incomes in Canada. Fifty-four per cent of the constituents have an income of $25,000 plus. This is the result of the healthy agricultural society which we have in Canada.
I am so tired of listening to politicians and even some farm leaders who talk about farm income going down. I received a letter from a so-called farm leader from British Columbia pointing out that farmers' incomes had dropped 9 per cent. Mr. Speaker, do you know how much farm income went up in 1975? At that time it had an increase of 187 per cent.
The Budget-Mr. Whelan


Some hon. Members:: Shame, shame!


Eugene Whelan: From 1971 to 1975 there was an increase of 187 per cent.


Some hon. Members:: Oh, oh!


The Acting Speaker (Mr. Turner):: Order, please. The hon. Minister of Agriculture has the floor.


Eugene Whelan: From 1971 to 1975 there was an increase of 187 per cent. Some people talk about it going down 9 per cent and 11 per cent. It has a long way to go down to equal the 187 per cent it went up. Figures are being used out of context. In British Columbia last year net income did not increase the way we would all like to see it, but it was not down, it was up. It increased three points on net income in British Columbia. I can go on and point out other farm production entities in Canada which have looked after themselves and are not doing all that badly. Some members on the other side of the House do not like to admit it.
The Canadian Horticultural Society gave an award this year to a person who had done more than anyone before in the history of the Canadian Horticultural Society.


An hon. Member:: Who received that award?


Eugene Whelan: That award was to the Minister of Agriculture.


Some hon. Members:: Hear, hear!


Eugene Whelan: If all these people from the Canadian Horticultural Society were Liberals, I could understand that, but I do not think the majority of them are Liberals in that organization. They are honest enough to recognize what this government has done for their organization.


Some hon. Members:: Hear, hear!


Eugene Whelan: There is not one member of the horticultural industry producing those crops who has not benefitted from the action of this government. There is not one that is an efficient producer that does not have a net income that I know of. In addition, we have used stablization programs more since this government has been in power and since I have been Minister of Agriculture than ever before to assist those people in time of need, when they have experienced depressed markets.
I am so tired of hearing talk about farmers who have lost their net income. I wonder how many are honest enough to admit why farm land is higher in value in Canada than it is in the United States. The answer should be plain and simple to them. It is because farm income is generally better in Canada and because farmers, if they are efficient producers, are provided more security in this country than they are in any other nation in the world. None of our programs provide any kind of income for an inefficient producer who is lazy and does not want to work. He or she must work or they will not get

April 18, 1978
The Budget-Mr. Whelan
that kind of living or that kind of net income I have just talked about.
I have heard a lot of members talk about the dairy industry. A number of members who are listening to me tonight were in the House when I presented the new dairy program for 1978-79, but they did not even listen to what I was saying. I am sure a great many of them have not even read the informative briefs we gave them at the time. But I say there is no other country in the whole nation called the world-


Some hon. Members:: Oh, oh!


Eugene Whelan: Mr. Speaker, whether we want to recognize it or not, we are citizens of the world, or of a nation called the world. The hon. member is laughing. It is too bad he does not widen his horizons a little because we are citizens of the world whether you want to call it a nation or a lithosphere. We are citizens of that great globe. Some of the members opposite, by their attitude, probably do not want to recognize it is round.


Some hon. Members:: Oh, oh!


An hon. Member:: Back to the budget debate.


Eugene Whelan: Someone says "back to the budget debate". I do not know what the hon. member for Peace River (Mr. Baldwin) said in the budget debate. I did not read his speech in the media anywhere. If he said anything at all it was probably about some kind of information scheme he was dreaming up which would put money in other people's pockets. He is talking about things in a democracy which have about as much to do with security of a family income as a snowball in hell. I have not received many letters from him lately about anything in his constituency, though in that constituency up in Peace River country even Peter's heritage fund could do a bit more by way of looking after the people there. The province of Alberta has so many billions to spare that they are piling them up. The hon. member for Peace River talks a great deal about Canadianism. If he can say that this heritage fund has created fairness in Canada I should like him some day to explain it to me as a peasant so that I can understand it.
The budget has done much more than most people realize to assist the farm community. Take the part in the budget having to do with research. It means that the private sector engaged in agricultural research can write off 50 per cent of the cost. That is what we want. We want more involvement in agricultural research in the private sector. This is the opportunity for those who have been saying they want to do more in the private sector. They have been given the chance.
I can see the hon. member for Medicine Hat (Mr. Hargrave) agreeing with me even before I make this statement because I know he has the welfare of the average Canadian corporate farm at heart. I do not know whether the hon. member's farm is a corporate farm, but if it is he will now be able to pass it on to his son or daughter free of tax.


Mr. Hargrave:: That was one of my ideas.


Eugene Whelan: Yes, and I give credit to the hon. member for Medicine Hat, along with a lot of members on this side who made the same kind of recommendation as he did. We wanted to keep all those experienced people in agriculture and not oblige them to buy their farm twice. I want to tell the hon. member something. In many ways he is a great defender of the country to the south of us, though not all the time. Let me ask him whether farmers can do that in the United States of America. He knows they cannot do that in the United States. Even when a former minister of finance permitted the transfer of family farms without taxation to sons or daughters, Mr. Butt, the secretary of agriculture for the United States, said: "You must be out of your cotton-picking minds; we would never do that in the United States".
We have problems in Canadian agriculture but they are not of the magnitude of those experienced in the United States. The Minister of Finance (Mr. Chretien) has shown his sincerity by listening to the wishes of members of this democratic institution called the House of Commons. He has shown his sincerity by reacting in a receptive way to the demands which have been made for this kind of provision. I know of no other country which would allow this to take place.
Canada, we must remember, was built by farmers. It was built by people who had not been given the opportunity to own land in their country of origin, whether it was the United Kingdom, Scotland, Ireland, France or another of the European countries. Their chance of owning land and building up new democratic institutions was pretty well nil, maybe even minus nil as far as that goes.


Some hon. Members:: Oh, oh!


Eugene Whelan: I recently saw figures for Scotland which showed there are less than a thousand landowners in Scotland, most of them share croppers. That is why agricultural production in Canada is held in such tremendous admiration around the world. Such northern hemisphere countries as Russia, China and so on cannot understand how we are so productive, not only cereals but in dairy products, livestock, poultry and so on. No country is as efficient as we have become. And there is no nation in the world which lets its farmers run its business as we do.
The hon. member for Kingston and the Islands (Miss MacDonald) was talking about federal-provincial co-operation. I challenge anyone to look at any federal state and tell me where there is more co-operation between the various departments of agriculture in the field of food production than there is here in Canada. On the other hand, there is no other minister of agriculture in the world who has to deal as I do with such powerful provinces which are concerned with agricultural production.
Do hon. members think the secretary of agriculture of the United States has to call up 52 directors of agriculture in that country before he can make a decision? Not on your bottom dollar. They have authority federally. But we on this side believe in federal-provincial co-operation. We even have a separatist government in Quebec signing agreements with us
April 18, 1978

on such matters as national broiler marketing boards. They recognize this is good for agriculture. They recognize the constitution as it is, because it says agriculture should, first and foremost, be a federal responsibility. It is, and we are fulfilling that responsibility. This is why we are so productive. There is no other group in society which has increased productivity by 300 per cent in the last 25 years. Agriculture has done it. The farmers have accepted every form of automation and scientific break-through. But the incentive to create was there and was provided by government for the last 25 years.


Mr. Jarvis:: The income of those farmers is going down.


Eugene Whelan: I have dealt with the hon. member's constituency. He even told me himself he had one of the richest, with one of the lowest rates of unemployment. As humble as the hon. member is, he certainly would not want to take credit for that.


William Herbert Jarvis: I hope you don't either.


Eugene Whelan: The budget debate could go on for several days, in which case the hon. member for Perth-Wilmot would have an opportunity to take part in it. I am sure he would want to, and if he wants to put the facts on the record, he will tell us how wonderfully the farmers in Perth county are doing. He will tell us all about those things.
I want to say a couple of things about the Minister of Finance. I met Jean Chretien when he first came to Ottawa.


Mr. Deputy Speaker:: Order.


Eugene Whelan: I meant the Minister of Finance. I cannot get used to the formality of not being able to call a person by his first name in parliament, because in our rural communities we always do that.


Some hon. Members:: Hear, hear!


Eugene Whelan: I have been to the Mother of Parliaments. Sometimes I think our parliament has detoured away from the instinct of democratic parliament. I do not want this to be a lesson to you, Mr. Speaker, but recently I visited the House of Commons in the United Kingdom. The members there put their feet up on the Speaker's table. They laid on the benches and nearly went to sleep. I said to one minister afterwards, "Mr. Minister, if we did that in the parliament of Canada, which is on television, we would be run out of the place". That minister brought me down to the ground pretty quickly. He said to me, "Mr. Minister, this is the house of commoners, and it must always have the image of a place for commoners". I sometimes think we detour away from that here.


Some hon. Members:: Hear, hear!


Mr. Deputy Speaker:: Order, please.


Dean Waldon Whiteway: Mr. Speaker, the Minister of Agriculture (Mr. Whelan) has once again demonstrated to
The Budget-Mr. Whiteway
the country his ability to speak without notes and without facts.


Some hon. Members:: Hear, hear!


Dean Waldon Whiteway: He takes pride in the fact that he is born of a humble background. I was born the son of a cobbler from Nova Scotia.


An hon. Member:: The son of a what?


Dean Waldon Whiteway: The son of a cobbler from Nova Scotia. Down there the fishermen have a little adage about which the Minister of Agriculture might be aware: Even fish would not find themselves on the hook if they kept their mouths shut.
We are going to be quoting the minister's speech tonight to every farmer in this country, because there will not be a farmer who will not want to hear about the prosperity he has missed for years. We will quote the minister's every word to every farmer, and we will see how the minister's words stand up when and if the Prime Minister (Mr. Trudeau) dares to issue the writ.
Hon. members opposite speak firmly and boldly, yet it is April 18 and there is no writ of election. Where is the Prime Minister tonight? I expect that he will walk down that aisle opposite with a writ in hand, and when he does, we will see about this decade of progress about which the Minister of Agriculture talks, the Trudeau decade. The Minister of Agriculture is shaking his head. Well, let him go behind the curtain, have a caucus with his leader and see if he has the guts to issue the writ tonight.


Some hon. Members:: Order.


Mr. Deputy Speaker:: Order, please. I regret to interrupt the hon. member, but it being 9.45 p.m. it is my duty, pursuant to Standing Order 60(7), to interrupt the proceedings and put forthwith the amendment now before the House.
The question is on the amendment in the name of the hon. member for York-Simcoe (Mr. Stevens). Is it the pleasure of the House to adopt the said amendment?


Some hon. Members:: Agreed.


Some hon. Members:: No.


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


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


Mr. Deputy Speaker:: In my opinion the nays have it.

April 18, 1978
The Budget-Mr. Whiteway
And more than five members having risen:	nays


Mr. Deputy Speaker:: Wednesday, April 19, 1978