1978-05-25

ROUTINE PROCEEDINGS


Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, I rise under the provisions of Standing Order 43 on a matter of urgent and pressing necessity.
Last week the National Film Board, in Montreal, celebrated a film festival. It has been reported to me that at the end of the festivities a Canadian flag was burned in the yard of the National Film Board headquarters. In view of the seriousness of such a report, I move, seconded by the hon. member for Saskatoon-Biggar (Mr. Hnatyshyn):
That the Secretary of State investigate this report to establish its validity and, if it is found to be true, investigate the circumstances, determine who was involved and report back to the House on his Findings.


Mr. Speaker:: Such a motion, under the terms of Standing Order 43, requires the unanimous consent of the House before it can be put. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


FINANCE
Mr. Edward Broadbent (Oshawa-Whitby):: Pursuant to Standing Order 43, Mr. Speaker, I seek the unanimous consent of the House to move a motion.
In view of the fact that the leader of the opposition in the Quebec national assembly has come up with a reasonable suggestion to put an end to this dialogue which falls on deaf ears-the Ottawa and Quebec governments-concerning the sales tax issue, namely that both governments should sign an agreement whereby the federal government would collect the
$226 million and turn it over to the Quebec government, or grant a tax cut for the fiscal year 1978-79 which would allow the Quebec government to recuperate the sums involved, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the House urge the government to accept one of these solutions to put an end to the conflict between the Ottawa and Quebec governments concerning the sales tax issue.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADIAN TRANSPORT COMMISSION
Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the provisions of Standing Order 43. In view of the fact that the prairie rail action committee recommended the abandonment of the Quadra to Hamiota and Kenton to Wheatland rail lines in Manitoba, which the Hall commission said should be put under a prairie rail authority, and since the Canadian Transport Commission has acted with unseemly haste, without public hearings, to rubber-stamp this bad decision in spite of the assurance given by the Minister of Transport (Mr. Lang) to the House on May 4 that full hearings would be held, I would move, seconded by the hon. member for Yorkton-Mel-ville (Mr. Nystrom):
That the Minister of Transport require the CTC to hold hearings to review its decision to abandon the Quadra to Hamiota and Kenton to Wheatland lines in Manitoba and to hold hearings on other PRAC abandonment recommendations, and that the Minister of Transport disband the prairie rail action committee and bring forward legislation to set up the prairie rail authority.


Mr. Speaker:: Hon. members have heard the proposed motion. Under the terms of Standing Order 43, such a motion would require unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

May 25, 1978
Oral Questions



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Deputy Prime Minister. As the House knows, there has been considerable controversy in recent days about a potential conflict of interest involving members of this House. The basic problem is that there are no guidelines regarding conflict of interest for all members of parliament, and only meaningless guidelines for members of the cabinet.
Since the Prime Minister has said that conflict of interest legislation is ready, would the Deputy Prime Minister tell the House when we may expect to see this legislation?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Mr. Speaker, as I mentioned I believe earlier in the week, the bill on the question of conflict of interest, or the independence of parliament, is ready. There are a few more points which have to be dealt with. It would be my intention, if possible, to bring the bill forward for first reading, if not in May then certainly in June. It would provide a basis for discussion of the whole question of conflict of interest as it applies to members of this House and to members of the Senate.


Charles Joseph Clark: Mr. Speaker, I welcome this legislation and we look forward to seeing it as soon as possible.
If I might turn now to the very difficult question of conflict of interest regulations as they apply to ministers-difficult because it is a question from which this government has backed away-on July 18, 1973, the Prime Minister said that the rules relative to members of the cabinet "will be put in the form of precise guidelines just as soon as parliament has had an opportunity to consider the green paper with regard to members of parliament and senators and the legislation that might be made applicable to them".
Parliament long since has considered that green paper. Will the Deputy Prime Minister tell us whether those precise guidelines promised nearly five years ago by the Prime Minister have been issued? If so, will they be made available to the House of Commons and to the public to see? If not, why have they not been issued as the Prime Minister undertook five years ago?


Allan Joseph MacEachen: Mr. Speaker, I would like to check into the details and get more information on the question. But as I recollect it, based upon the statement that was made by the Prime Minister all ministers were asked to conform to a certain set of guidelines in handling their financial affairs with respect to their public duties. Certainly there has been communicated to members of the cabinet by the Prime Minister the obligations he expects ministers to follow with respect to conflict of interest.
I cannot answer the Leader of the Opposition as to whether these guidelines have been made public, but certainly the obligations which fall upon ministers have been communicated to them and ministers are expected to live up to those obligations.


Charles Joseph Clark: Mr. Speaker, this is a matter of some concern because the Prime Minister went out of his way to make it clear that there would be, and I quote his words of July 18, 1973, "precise guidelines". Not some general directive, but precise guidelines. I presume that if those existed, the Deputy Prime Minister, as a member of the cabinet, would know something about them. I gather that since he does not, they do not.
I would like him to come back to the House of Commons and tell us if the undertaking of the Prime Minister regarding precise guidelines has been honoured; and I would like him, if it has been honoured, to table those guidelines. If it has not, I would like him to set an early date by which that undertaking will be honoured and to give us a commitment now that the guidelines will be tabled in the House of Commons. May we have that date? May we have that undertaking?


Allan Joseph MacEachen: Mr. Speaker, I think the Leader of the Opposition is mistaken in concluding that these precise guidelines do not exist. Precise guidelines do exist, they have been communicated to ministers and ministers have been expected to conform to the guidelines at the request of the Prime Minister. What the Leader of the Opposition is now asking is that these precise guidelines be made available to the public in the form in which they have been transmitted to the ministry: that is something I will check into further.


REQUESTED RESCINDING OF DISCLOSURE OPTION
Mr. Perrin Beatty (Wellington-Grey-Dufferin-Waterloo):: Mr. Speaker, my question is for the Deputy Prime Minister. It relates directly to the precise guidelines which, according to the minister, are available to members of the cabinet.
In view of the fact that the guidelines for cabinet ministers permitted a former minister of finance to take the so-called disclosure option, which involved disclosing the fact that he had a 30 per cent interest in a private investment company without disclosing the company's assets, does the government intend to close this loophole? I point out that when I first asked this question in November of 1974, the minister's predecessor took my question as notice and there has never been any answer to it.


Allan Joseph MacEachen: Mr. Speaker, I do not have the details of the arrangements in the particular case to which the hon. member refers. Obviously, it is a matter which can be checked into, and I will do so. That is all I want to say on the subject.


Henry Perrin Beatty: Mr. Speaker, it seems that these guidelines are so stringent that members of the cabinet are held in terror by

May 25, 1978

them and are very much aware of them. Will the government amend the guidelines for cabinet ministers to require them to disclose their debts to outside creditors, as well as their assets? Also, will the government eliminate the loophole provided by the frozen trust option which allows ministers to manipulate public policy in full and private knowledge of the holdings in their frozen trusts? This is an option which has been followed by six ministers, including the Prime Minister.


Allan Joseph MacEachen: I think the allegations or suggestions made by the hon. member are quite unworthy, Mr. Speaker. The option available to ministers under the frozen trust option or arrangement does not permit manipulation of any kind. The hon. member should really revise his thinking if he is suggesting, as he seems to be, that public policy is being manipulated by ministers in order to accommodate the arrangements they have made under the frozen trust option.
If hon. members are aware of the theory of conflict of interest, they will realize that disclosure is one of the ways of dealing with potential cases of conflict of interest, and in the case of the trust to which the hon. member has referred, the option of disclosure has been used and is well accepted in dealing with cases of conflict of interest. The hon. member should not suggest that that is not the case.


Henry Perrin Beatty: I referred to the frozen trust, not disclosure.


GUIDELINES ON CONFLICT OF INTEREST
John Edward Broadbent: Mr. Speaker, for the information of the Deputy Prime Minister and of the Leader of the Opposition, let me point out that the guidelines have indeed been made public. They were made public in a letter tabled by the Prime Minister which was written to the Deputy Prime Minister on October 18, 1976. It was tabled in the House on December 17.
My question to the Deputy Prime Minister is as follows: Given this government's discovery during the minority government days that such guidelines were essential, and considering that the Deputy Prime Minister promised in 1976 to act with urgency on the matter, will he, in assuring us that we will have the legislation in June, specifically promise the House that the following two aspects of the legislation in this area will be included in the bill: first, the legislation will establish certain moral and legal standards expected of all members of parliament in financial dealings; second, it will follow the successful British example of making it mandatory that all members of parliament declare their financial interests in a form which is accessible to the public?


Allan Joseph MacEachen: Mr. Speaker, I thank the hon. member for reminding us that the precise guidelines have been made public.


Charles Joseph Clark: These are not precise guidelines.
Oral Questions


Allan Joseph MacEachen: With respect to the independence of parliament legislation, the hon. member will recall that the green paper on conflict of interest was sent for study to an all-party committee of the House of Commons. That all-party committee has reported to a great extent; maybe not totally. We will be following the advice of the standing committee of the House which reported upon the proposals made in the green paper.
The hon. member will recall, with respect to the second part of his question, that the conclusion of the parliamentary committee is quite different from the request just made by the Leader of the NDP. Hon. members will be able to deal with the bill when it comes forward and see to what extent it has followed the advice of the all-party committee of the House.


John Edward Broadbent: Mr. Speaker, surely the minister can answer a straightforward question. He is quite correct in pointing out that what I am suggesting is different from the recommendations that came from the all-party committee-recommendations, on this detail, which my party did not support.
I should like to ask the minister precisely, given the very successful practice in the British parliament of making all ministers of the Crown declare, in a form which is accessible to the public, their financial holdings, will the Government of Canada now promise us that whatever else they may include in the bill, that provision will be there-because it is essential?


Allan Joseph MacEachen: The hon. member may believe that provision to be essential: the fact is that the majority of the members of the committee decided otherwise. Normally, we are asked to pay more attention to the recommendations of parliamentary committees. Should we take their advice, or the advice of the Leader of the NDP?
Quite apart from that point, the bill will deal with disclosure provisions. It will be before the House of Commons and members from all parties will be able to decide what regime they wish to have followed in respect of how they deal with the very difficult question of conflict of interest. Hon. members know that there are other ways than through disclosure to deal with the question of conflict of interest. The House will want to consider what other options will be as useful as disclosure in the context of the bill.


John Edward Broadbent: Mr. Speaker, the minister is quite right; there are many ways of avoiding the problem which disclosure in this area is intended to solve. Given the answer of the Deputy Prime Minister, we can expect the bill not to include this very important provision. With respect to the second point in my first question, will the bill or bills the government intends to bring in next month also include guidelines which it thinks are appropriate for members on both sides, in terms of either moral or legal obligations which affect their financial dealings? I say this in the context of allegations which have been made, for example, by the Minister of Industry, Trade and Commerce about behaviour on this side of the House, as

May 25, 1978
Oral Questions
well as the government side. Is that question to be dealt with by the government as well?


Allan Joseph MacEachen: Mr. Speaker, certainly the interface between members of parliament, senators and, for example, the business community and what financial affairs will be tolerable, will be dealt with in the bill. We hope it will be dealt with fully. In addition to the written rules or the written laws which may be adopted by the House of Commons, there is a certain sense of ethics and responsibility which must be exercised by each individual member of the House of Commons. It seems to me that is a stronger guarantee, over-all, than to attempt to anticipate every possible situation which might cause a conflict of interest. I would add to the rules, regulations and the Standing Orders which may be proposed, the sense of ethics and responsibility that hon. members must follow in all their dealings: that is much more important.


Some hon. Members:: Hear, hear!

[ Translation]


SUPPLY AND SERVICES
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, my question is directed to the Minister of Supply and Services. As phase II of the Canada Works program is drawing to a close and some of the sponsors of projects have to borrow money to pay their bills, can the minister tell the House whether he will find out why payment of the subsidies earmarked for the projects is being delayed? If so, can he assure us that those payments will be made in the very near future?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, I shall be happy to do so, all the more so that when we receive requisition for payment from the various departments, we usually comply with their request within three days.


Joseph Adrien Henri Lambert: Mr. Speaker, because payments are made so quickly, may I ask whether the books are checked by civil servants in the department and, if so, is there a long delay between checking and authorizing the payments?


Jean-Pierre Goyer: There may be, Mr. Speaker, but the hon. member can rest assured that I shall look into the matter and speed things up if necessary.
[Mr. Broadbent.l


GOVERNMENT POLICY RESPECTING EXPORT DEVELOPMENT CORPORATION
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in the absence of both the Minister of Industry, Trade and Commerce and the Prime Minister, I should like to direct my first question to the Secretary of State for External Affairs: it deals with the activities of the Export Development Corporation, with particular reference to governmental policy behind EDC. With reference to possible aid or assistance to Cuba, the Prime Minister stated on Tuesday:
This program of co-operation began several years ago, before the Angolan incident. It is being brought to termination: the Secretary of State for External Affairs has said so. There are no present plans for any future projects in Cuba.
Is the minister aware that John MacDonald, chairman of the Export Development Corporation, stated this morning before a standing committee that he has received no instructions to discontinue any future planning in respect of the financing of projects in Cuba and, secondly, that until there is a public declaration requiring all future financing of Cuban projects to be made by the government, he feels free, through his board of directors, to finance projects in Cuba?
Hon. Donald C. Jamieson (Secretary of State for External
Affairs): Mr. Speaker, I was not aware of that particular statement and I am glad the hon. member has told me about it. In so far as statements made previously are concerned, the hon. member will also recall that they were primarily, if not exclusively, directed to CIDA activities. I think the hon. member for Edmonton West originally asked the questions of me and it was in that context that I replied. We are not engaged in any additional activities in respect of CIDA support or financing.
The question in respect of the Export Development Corporation is, of course, quite a different one. That is equally valid as to whether we wish or ought to withdraw or in some way issue the kind of directive with which the hon. member is concerned. One of the considerations is whether or not, for example, such would be a greater penalty to Cuba or one which would, indeed, bear most heavily on Canadian suppliers. The hon. Leader of the Opposition shakes his head. I put it to him that there are a good many agricultural sales and sales of other Canadian products and equipment-


An hon. Member:: Double standard.


Mr. Jamieson:: If the hon. member thinks it is a double standard, Mr. Speaker, it may very well be, but I am not going to argue the point. I think it is a question that we should sit down and discuss at a committee, and I would be very happy to do so, in order to determine precisely what it is we are going to do. I point out to the hon. member that if, in fact, this kind of assistance is withdrawn from Cuba or any other country, it is basically Canadian suppliers, including quite a number in
May 25, 1978

the agricultural community, who will be affected. Hon. members should recognize that and should also be prepared to stand in support of that kind of proposition.


EXPORT DEVELOPMENT CORPORATION-SALES TO IRAN AND SAUDI ARABIA
Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Supply and Services: it again deals with general government policy in respect of the activities of the Export Development Corporation. It was reported this morning that the minister has elaborated on plans for export sales amounting to about $1 billion involving Iran and Saudi Arabia.
Will the minister indicate whether it is anticipated that as these plans become more formalized they will be turning at any time to the Export Development Corporation in order that financing can be made available to either Iran or Saudi Arabia, or both?


Jean-Pierre Goyer: Mr. Speaker, it is the Canadian Commercial Corporation which has been requested by the private sector to help consortia already set up to get contracts, one in Iran and the other in Saudi Arabia, and we are there at their request. As for project financing, it is the prime responsibility of the participants in the consortia and, of course, if we can help them complete financing, we will, because it is our duty to help the private sector export more.


EXPORT DEVELOPMENT FINANCING FOR IRAN AND SAUDI ARABIA
Sinclair McKnight Stevens: Mr. Speaker, my final supplementary question is directed to the Minister of Finance, and again it centres on the activities of the Export Development Corporation. As the minister has probably heard, this new move will likely result in export development financing being made available to Iran and Saudi Arabia if the Canadian Commercial Corporation's transactions are formalized.
As we learned this morning the EDC have fairly large offers of credit, amounting to $500 million to $1 billion, outstanding in favour of Iran, would the Minister of Finance indicate to the House how he reconciles the extensive foreign borrowing, possibly up to $7 billion, that he has put in place with the fact that we are lending money in terms of hundreds of millions of dollars to Iran and Saudi Arabia?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, we are dealing at this moment with two different aspects. We have borrowed on American markets for our exchange operations in Canada and of course when we export we offer
Oral Questions
Canadian exporters credit facilities in order to be able to sell Canadian products. Those are two completely different problems which! have no difficulty in reconciling.


FINANCE
Mr. Roch La Salle (Joliette):: Mr. Speaker, the Minister of Finance stated the day before yesterday that his last communication with his Quebec counterpart dated from May 15. Since we must recognize the failure of those negotiations, whatever may be the reason for that deadlock which should not be extended further in the interests of the Canadian people, does the minister not feel that as Minister of Finance it is his duty to make the first move to resume negotiations on the matter?


Joseph Jacques Jean Chrétien: Mr. Speaker, before the introduction of the budget during three weeks I spoke on several occasions to Mr. Parizeau. He did not give any answer. After the introduction of the budget, he told me about his decision a few hours before announcing the selective tax cut which he made without any negotiation. Afterwards, I sent him two different messages which he rejected in a backhanded manner without calling me back. Before introducing my bill on Monday, I phoned him and he told me that perhaps he would call me back. That was ten days ago and he has not yet done so. I think, Mr. Speaker, that I have shown great flexibility in the matter and since the bill is still under consideration, our solution lies in the bill and the problem will be solved when it is passed.


Roch La Salle: Mr. Speaker, I would like to ask a supplementary question.
The minister is telling us about his flexibility whereas I feel it is a matter of responsibility. Considering this deadlock and the day to day increasing support-and the minister knows what I mean-and considering also the circumstances and his responsibilities, for how long yet is the minister prepared to sulk while he is perfectly aware that Quebeckers expect him to take his responsibilities and act promptly on that matter?


Joseph Jacques Jean Chrétien: Mr. Speaker, perhaps the hon. member has failed to read some papers yesterday morning where it is stated that 87 per cent of Quebeckers agree on the $85 income tax rebate. Besides, the interesting thing in Mr. Ryan's proposal yesterday is the fact that he rejected what I would call the La Salle-Parizeau solution to make a direct payment to the Quebec government. He said that the income tax rebate was the solution. Of course, I realize that I am in good company now when the Liberal leader says that the income tax rebate, that is the tax reduction, is the solution and that he rejects the
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May 25, 1978
Oral Questions
La Salle-Parizeau Conservative-Pequiste solution to make a direct payment to the Quebec government.


Roch La Salle: Mr. Speaker, can the minister assure us that with this tax rebate formula the Quebec government will be able to pass this benefit on to Quebeckers for the five selected products as advocated in the formula, something which would go a long way toward providing Quebec residents with the advantages they are now seeking?


Joseph Jacques Jean Chrétien: Mr. Speaker, since the sales tax is under provincial jurisdiction, the Quebec government decided to act within the limits of its responsibilities and to cut taxes in a way which was unacceptable to the federal government. But Mr. Parizeau has already cut his taxes and he must now suffer the consequences of his act. As far as I am concerned, I will maintain the policy I announced on budget night, which is to reduce the income tax for all Canadians. At this moment the only difference with Quebec Liberals is that they would prefer to have the problem solved in 1978 rather than taking the list of taxpayers for 1977. All in all, it is a question of deciding when the people of Quebec will receive their tax rebate. Since my budget was aiming at stimulating the economy in 1978, I think it is preferable to give Quebec residents their benefits right now rather than having them wait until next spring.


AIR CANADA
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, my question is directed to the Minister of Transport. During the last few days I have endeavoured to secure the lease agreement that was made between Air Canada and Cuba, or with Fidel Castro directly, whereby two jet aircraft were leased to Cuba.
Could the minister, in whose custody the agreement now is, according to Air Canada, produce that particular document so that parliament will understand the basis for what was, and still is, being considered as a most unusual procedure?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I am surprised at the right hon. member's suggestion that it is in my custody. In fact, the question arises as to whether this is the kind of document which should ordinarily be requested on the order paper and then dealt with in the ordinary way. As I understand it, however, it was an ordinary commercial transaction between Air Canada and Cuba, or the Cuban airline, in which I think a total of two DC-8s were involved.
The leases were terminated, in one case, I think, with the destruction of or harm to the aircraft and in the other case by the passing of time, last February. In any case, at no time was there any basis for the right hon. gentleman's extraordinary suggestion the other day of Air Canada's participation in any

movement of troops, if this is what he is now trying to support with his strange question.


John George Diefenbaker: Mr. Speaker, the hon. gentleman has an infinite capacity for evasion. I simply ask, will he produce this innocuous document, which is the way he has described it: simply a document of agreement, of no consequence? Parliament has a right to see the agreement, or there must be some reason for the concealment that has taken place ever since the request was first made by the hon. member for Edmonton Centre. Why hide this agreement, if it is so simple; or does it conceal some information that the government does not want exposed?


Otto Emil Lang: Mr. Speaker, that is, again, a rather characteristic refusal of the right hon. gentleman to note the answer which I provided. If he refers to the blues he will see that I answered him completely. There are ordinary procedures for testing this. He asked whether I would produce it and suggested that I have it in my custody, and I tell the right hon. gentleman that it is not.


John George Diefenbaker: It is in your custody; at least, that is what Air Canada says.


AIR TRANSPORT
Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, my question is for the Minister of Transport. In view of the fact that spokesmen for Eastern Provincial Airways, the Atlantic provinces regional carrier, are publicly stating they are considering purchasing Dash-7 STOL aircraft from the government-owned de Havilland Aircraft if an equitable financing arrangement is arrived at, is the Ministry of Transport supporting and encouraging this move, and have we the assurance this change in planes would improve both the interregional service and the access service to other parts of Canada?


Otto Emil Lang: Mr. Speaker, we are very actively pursuing the question of the additional use of the Dash-7 by several of our regional airlines in providing service to various parts of the country. I, personally, believe that there is a very good chance that the Dash-7 could provide far better service than any alternative, and at a lower cost when you take into account the infrastructure as well as the cost of the aircraft themselves. We are pursuing this with the regional carriers and asking for their analysis of the kinds of routes which would be served and what the financial requirements may be. I look forward to progress in these discussions in the days ahead.
May 25, 1978


EXTERNAL AFFAIRS
Mr. Andrew Brewin (Greenwood):: Mr. Speaker, my question is addressed to the Secretary of State for External Affairs. I intended to address it to the Prime Minister, but he is not here. It is reported that the Prime Minister proposes to disclose, in a speech to the disarmament conference at the United Nations in New York, Canada's attitude toward the production of the neutron bomb.
At the risk of stealing, or at least dulling some of the Prime Minister's thunder there, will the Secretary of State for External Affairs disclose to parliament the attitude Canada is taking to this weapon which is so important to NATO and to the peace of the world?


Donald Campbell Jamieson: Mr. Speaker, I think it is entirely appropriate that in a major speech on disarmament, the Prime Minister should include reference to this particular and quite important subject.


Charles Joseph Clark: Why not to parliament?


Donald Campbell Jamieson: There is no particular reason why not to parliament. I do not believe, however, that it would be possible to handle this question in the context of the question period: this is a most complex subject which I think it would be quite impossible to deal with properly.
I should like to make the observation that I have spent some five or six hours before the committee which includes members of all parties, and I think my colleague, the Minister of National Defence, has done the same thing; but I have yet to be asked a single question on the neutron bomb in the committee, where it would be possible to answer in full.


An hon. Member:: That is an evasion.


Donald Campbell Jamieson: I do not consider it at all an evasion. May I suggest to hon. members that, following the discussions on disarmament which are taking place at the United Nations- in which we have arranged to have members from all parties participate-it would be extremely useful, after that session is over, to have a full discussion of the total disarmament question either in committee or in full session of the House. I would be very happy to answer all questions at such time, but it is not possible to deal with this matter in a minute of the question period.


Francis Andrew Brewin: Mr. Speaker, may I point out to the Secretary of State for External Affairs that as far as most of us are concerned, this question of the neutron bomb has only arisen very recently, probably since he appeared before the Standing Committee on External Affairs and National Defence.
Is there any good reason, that he can think of, why a statement on motions should not be made to this House, and
Oral Questions
why is this House not the proper place to make an announcement of such crucial importance to Canada's policy?


Donald Campbell Jamieson: Mr. Speaker, when I referred to the committee, I was not saying it in any critical way with regard to the hon. member; but I do think it was an issue and was known because it is only a matter of two or three weeks since I was before the committee.
I see no reason why there should not be a statement on motions in this regard. I repeat, I am sure the House leader would be glad to consult on this, but I do not think it would be possible for me to do it today, for a number of reasons. I may say that if there is agreement among the House leaders as to either a statement on motions or an appearance before the committee, there is nothing in this issue that we wish to conceal.
To suggest that in some way the Prime Minister is substituting the United Nations for the House of Commons is grossly unfair, I think, because he is making a comprehensive statement on the whole issue of disarmament. Surely it is logical that something of that nature be included. So far as I know, this is the first occasion anybody has asked in the House that such a statement be made on motions.


AIR TRANSPORT
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is for the Minister of Transport: it is supplementary to the important questions raised by my good friend, the hon. member for Madawaska-Victoria, and the minister's reply.
Considering the fact that EPA has, to my mind, alway given excellent service in the Atlantic provinces, if there should be an arrangement made with regard to the Dash-7 through government subsidiaries, etc., can we have the assurance of the minister that Air Canada will not abandon the Atlantic provinces' service?


Otto Emil Lang: Mr. Speaker, I do not think any such inference should be taken from my answer to the earlier question. This is simply a question of how to provide services which are suitable for regional carriers or primary level carriers. It should in no way diminish the need for mainline carriers connecting our principal cities.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is for the Minister of National Defence. Does the minister know what Canada's policy is regarding the neutron bomb, bearing in mind-perhaps the Secretary of State for External
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May 25, 1978
Oral Questions
Affairs would also take note of this-that he stonewalled my questions on this matter on July 15, 1977, October 24, 1977, and April 5, 1978, in this House?
If the minister knows what Canada's policy is, would he tell the House of Commons and, through us, the Canadian people? Surely we have more right to hear our government's policy in such a vital matter than does the New York or Washington media?


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, I really have nothing more to add.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: The people who aspire to government over there should learn to deal with issues like this a little more sensibly than the comments I hear coming across this aisle.


Charles Joseph Clark: You are so bad that you could be minister of finance.


Allan Bruce McKinnon: A supplementary question, Mr. Speaker. In his stonewalling procedures, the minister always protested there was continuing consideration, particularly during the last three months. This appears to have a certain amount of sanctimoniousness to it when one considers that his department issued a report which concluded as follows:
Given reductions in indiscriminate effects and the potential for a more resilient deterrent posture, it is likely that the enhanced radiation warheads would be a positive addition to NATO's nuclear inventory.
How can the minister explain such support of the bomb when he is unwilling to discuss it in this House?


Barnett Jerome Danson: Mr. Speaker, I, too, would be happy to discuss this in greater detail-


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: -than one can in the question period. Certainly, that is a piece of advice on which there has been a lot of information, briefing papers and articles written; but they are not directions to ministers. Ministers will make up their minds, as will the government. When we have, we will let you know.


NEUTRON BOMB-REQUEST FOR STATEMENTS LATER TODAY
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, given the willingnes of the two ministers, the Secretary of State for External Affairs to deal with the matter of Canada's policy at the disarmament conference and, now, the willingness of the Minister of National Defence to discuss in this House the question of the neutron bomb and the government's policy, whatever that may be-these matters are related-would the Minister of National Defence or the Secretary of State for External Affairs tell the House whether they would be willing to begin statements tonight at eight o'clock, giving them each an hour to make their statements, with an appropriate question period? I know they need time, but would they be prepared to do that tonight?


Donald Campbell Jamieson: Mr. Speaker, in the first place, I will not be here at eight o'clock tonight. In the second place, I have emphasized that I think it will require consultation about how this is going to be handled, particularly in view of the fact that there are some elements which members would want to discuss privately before there is any public discussion. In the third place, while we might be ready with a sensible statement by eight o'clock tonight, given the ignorance that has been displayed on the other side, they will never be ready.


&quot;BUY CANADIAN&quot; POLICY
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, my question is directed to the government House leader. On May 18, the Minister of Industry, Trade and Commerce-who unfortunately is not with us today-revealed on a T-shirt that we have a new policy in Canada, a "Buy Canadian" policy. Could the minister tell the House whether the government feels bound by the "Buy Canadian" policy, where possible?


Allan Joseph MacEachen: Yes, Mr. Speaker, where possible.


PUBLIC WORKS
Paul Wyatt Dick: Mr. Speaker, I should like to put a question to the Minister of Public Works. The Minister of Transport might also be interested, because the Department of Public Works is responsible for putting up a building in Cornwall for the Department of Transport, called the Transport Canada training institute.
Why would they allow specifications to go through for decorative, exterior lighting fixtures which are so stringent that they apply only to one type of lighting fixture which is manufactured and sold solely in the United States, when if they had broadened the specifications they could have obtained cheaper fixtures which would use less energy and are manufactured in Canada?


Hon. Judd Buchanan (Minister of Public Works and Minister of State for Science and Technology):: Mr. Speaker, I am not certain whether the allegation made by the hon. member is correct. I should like to deal with his fundamental point, that we should make certain architects specify very clearly that products which are available in Canada are used. This is a subject I am currently reviewing with the department. I am making certain that directions go out to architects who are doing design work for the Government of Canada which make
May 25, 1978

it very clear that we expect them to specify products which will favour Canadian producers.


EXTERNAL AFFAIRS
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is to the Secretary of State for External Affairs. I refer to the press release of the International Joint Commission concerning water apportionment on the Poplar River, Saskatchewan. I notice that on the second page the commission says:
The commission's report does not discuss the potential air and water quality impacts of proposed developments in the area because those issues were beyond the scope of the reference given to the commission by Canada and the United States-although a 1977 reference deals with the water quality of the Poplar River.
Will the minister now correct that mistake, join with the United States and give a reference to the International Joint Commission that does include both water and air quality?


Donald Campbell Jamieson: Mr. Speaker, the hon. member for Assiniboia, who obviously has a similar interest in this matter, asked me the same question privately today. I told him at that time, and I tell the hon. member now, that I will take his question as notice and will be in touch with the International Joint Commission. I am informed that the government of Saskatchewan has made such a proposition. We will undoubtedly be looking at it. I am not sure it has reached us formally as yet.


COMMUNICATIONS
Hon. W. G. Dinsdale (Brandon-Souris):: Mr. Speaker, my question is for the Minister of Communications. It arises from the Canada-Manitoba agreement on cable broadcasting that was reached last December 21 which will extend cable service to 28 rural communities in Manitoba.
Can the minister give assurance that she is strongly supporting the agreement and, in particular, the ownership of the hardware, including cable drops, by the Manitoba Telephone System?


Hon. Jeanne Sauvfe (Minister of Communications):: Yes, Mr. Speaker, of course I stand behind that agreement which was signed by myself and the minister of communications of Manitoba. There are some problems which have arisen as to the application of the agreement. I understand that the rural cable companies have come to an understanding with the CRTC.
Oral Questions
As to the question to which the hon. member refers, I know that there will be a meeting in Ottawa of the cable operators of the rural regions, where I hope all these matters will be properly ironed out.


Walter Gilbert Dinsdale: I am pleased that the minister is aware of the urgency of the matter. In view of the fact that Westman Media is proceeding to supply service to the rural areas by September, can the minister give her assurance that the problem of the ownership of the drops will be resolved in plenty of time to reach the target date for opening service?


Jeanne Sauvé: Yes, Mr. Speaker. I know there is a problem with construction. The summer period, of course, is the best period in which this can be done. This is the reason I have asked the chairman of the CRTC to look into these questions in a very urgent manner. There are conditions to the licence which had been given by the CRTC prior to the agreement. Therefore, there is some administrative difficulty as well as practical difficulty in the application of the agreement. I am very confident this will be ironed out. I have been in constant contact with the minister in Manitoba, and the chairman of the CRTC tells me he is doing his utmost to come to a favourable solution.


EXTERNAL AFFAIRS
Mr. Ralph E. Goodale (Assiniboia):: Mr. Speaker, I have a supplementary question with regard to the Poplar River power project near the international boundary between the province of Saskatchewan and the state of Montana. With reference to the suggestion of a special treaty between Canada and the United States dealing with the question of air quality, which is presently not covered, I hope the Secretary of State for External Affairs will report to the House as soon as he has any word from the Saskatchewan legislature on this point.
My supplementary should be directed to the minister of the environment. In view of the language used in a recent report of the International Joint Commission about this matter, which indicated that the necessary permits and licences had been received by the SPC for only the first phase of development, can the minister say whether the SPC has yet obtained any of the necessary permits or licences to allow that corporation to proceed with anything beyond the first generating unit?


Hon. Len Marchand (Minister of State (Environment)):: Mr. Speaker, it is my information that the SPC does not yet have permission to proceed with the second generating station.

May 25, 1978
Oral Questions AIR TRANSPORT


STOL SERVICE FROM TORONTO ISLAND AIRPORT
Mr. James Gillies (Don Valley):: Mr. Speaker, my question is to the Minister of Transport. Can the minister tell us whether it is government policy to have a STOL service out of Toronto Island airport? If they intend to push forward with this, what are the time dimensions for starting that service, and what do they propose to do about it?


Otto Emil Lang: Mr. Speaker, there is at the present time a regular, scheduled service using the Toronto airport. What I have proposed in discussions with the province of Ontario, and now with local authorities, is that the advantages which may exist at Toronto Island be used for flights between there and Ottawa and Montreal, for example.
Because of the overload at Malton and the clear desire of people to move as quickly as possible between Toronto and some other cities, we are prepared to make significant improvements in relation to the Toronto Island airport if there is general agreement about this kind of service.
The next step, really, is local agreement from the Harbour Commission and the city of Toronto. If that were forthcoming, we could probably put our improvements in place in about an 18-month period. I should think by that time the carriers which might be interested in providing the service could also make the necessary arrangements with their licences.


An hon. Member:: Improve the trains.


Otto Emil Lang: I heard an hon. member shout "Improve the trains". I would like to emphasize that we are going to improve the trains. This is quite a different market which is being served. The air service, trying to cover distance in the shortest possible time, is at a much higher price and for quite a different market than people willing to consider train or bus as a convenient method. In cases of our heavy populations, the Toronto-


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


ADMINISTRATION OF JUSTICE
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, I have a question for the Minister of Justice. The arbitrator who dealt with the wage dispute between the 25 women members of the Ottawa Steel Plate Examiners Union and the British American Bank Note Company did not address himself to the question of equal pay for work of equal value.
In view of the fact that section 19 of the Canadian Human Rights Act empowers the government to include a directive in federal contracts with respect to the anti-discrimination sections of the act, may I ask the minister if the government will

test the validity of section 19 of the act by giving a directive to the British American Bank Note Company to pay attention to those anti-discrimination provisions?


Hon. Ron Basford (Minister of Justice):: Mr. Speaker, the award of the arbitrator has not yet been brought to my attention. As a result of the hon. member's question, I will examine the arbitrator's award and the content of his report to determine whether this is an appropriate case in which to issue a directive under the Human Rights Act.


PRIVILEGE
Stanley Howard Knowles: Mr. Speaker, in keeping with a notice which I gave to Your Honour earlier today under Standing Order 17(2), I wish to rise on a question of privilege. I shall indicate in a moment why I believe I have a question of privilege in a parliamentary sense. May I point out that what brings the issue to a head is an editorial in today's Toronto Globe and Mail which uses my name a couple of times. In particular, I should like to quote this paragraph:
Where was Mr. Basford with his concern for "abuse of the privileges of the members of this House" when the abuse came from Mr. Trudeau and Mr. Horner?


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Perhaps members of the Conservative party will let me finish the paragraph. When I read the end of the sentence they may want to applaud again. It reads: "Where was Mr. Knowles?"


Some hon. Members:: Hear, hear!


Stanley Howard Knowles: Mr. Speaker, I regard that as a very fair question, a question which deserves an answer. My view some days ago when the Minister of Industry, Trade and Commerce (Mr. Horner) and other Liberals were throwing taunts across to members of the Conservative party was that it was so much political banter. I did not feel at that time that it was parliamentary. On the other hand, neither did I feel it was severe enough to call for an intervention on my part.


An hon. Member:: A very weak argument.


Stanley Howard Knowles: But when a few days ago the hon. member for York-Simcoe (Mr. Stevens) made a similar charge with regard to members of the cabinet, it seemed to me it was more serious.


Some hon. Members:: Oh!
May 25, 1978


Stanley Howard Knowles: The point I am making, regardless of legal distinctions, is that in terms of parliamentary decorum, in terms of gentlemanly behaviour on the floor of this House, there is no difference. Just as the hon. member for York-Simcoe apologized yesterday for what he had said, so, now, should the Minister of Industry, Trade and Commerce do likewise. It may be argued that the minister's assertions were made some weeks ago. But he repeated them yesterday on television.
My reason for feeling I have a question of privilege is that, as a person who does not belong to either of the parties which are engaged in this warfare, I am concerned about the image of parliament, and I suggest that these allegations back and forth between members of those two parties are not good for the image of this House. In these circumstances I believe I have a right to ask that just as one member yesterday did apologize, so there should be an apology from the other side.
It has been pointed out both in my questions on Tuesday and in the questions asked today by my leader, the hon. member for Oshawa-Whitby (Mr. Broadbent), that the heart of the matter is this: the picture is not clear. Members can make these charges of conflict of interest because no legislation is in effect against such conflicts. It therefore seems to me that for the good of the House there should be a cessation of charges regarding the financial operations of members and that we should clear up this issue. There should be precise legislation setting out the rights and obligations of members of parliament in their financial dealings, so that this whole situation can be cleared. Therefore, Mr. Speaker, if you find I have a question of privilege, I would be prepared to move:
That the question of the urgent need for the introduction and passing of appropriate conflict of interest legislation to clear the air with respect to the rights and obligations of all members of parliament in relation to financial matters be referred to the Standing Committee on Privileges and Elections.


Mr. Speaker:: Order, please. Before calling on other hon. members I would have to find at least the vestige of a question of privilege in what has been put forward by the hon. member for Winnipeg North Centre (Mr. Knowles). He has given the Chair notice and indicated the general nature of the question he intended to raise, in accordance with our practice. Today he has referred to an editorial comment, as has been done in the past under the general heading of a question of privilege. I might reflect, however, that in the past it has always been done by members seeking to differ from what was said rather than to agree with it.
While the hon. member had a comment to make of some importance, in the final analysis his intervention was, first of all, in response to an article in a newspaper, followed by a suggestion that a general subject, the need for legislation in a certain area, be referred to a committee. Especially since part of the question period was devoted to this very subject when it was determined that legislation will be forthcoming, I have to find that though there are perhaps several important matters for discussion here there is nothing which would warrant calling on other hon. members to make contributions at this point.
Point of Order-Mr. Clark POINTS OF ORDER


MR. CLARK-GUIDELINES FOR MINISTERS
Charles Joseph Clark: Mr. Speaker, I rise on a point of order in relation to the statement made by the Deputy Prime Minister (Mr. MacEachen) in which he might have inadvertently misled the House. He accepted the suggestion of the hon. member for Oshawa-Whitby (Mr. Broadbent) that the letter of October 8, 1976, to the President of Privy Council from the Prime Minister (Mr. Trudeau) constituted the precise guidelines which the Prime Minister promised parliament in July, 1973, relative to conflict of interest involving ministers. Upon reflection, the Deputy Prime Minister may now have had an opportunity to reread that letter addressed to him and he might have seen that it deals primarily with former ministers-I can see that such a statement might very well be on the mind of members of the Privy Council on that side of the House at this stage. But it deals only in the most general way with conflict of interest guidelines as they might apply to ministers of the Crown. In fact, it lacks all precision.
The hon. gentleman might wish to advise us whether he was correct in indicating that this document, dated October 8, 1976, represents total fulfilment of the undertaking of the Prime Minister to set out precise guidelines relative to the activities of ministers, or whether we may expect something more later on.


Allan Joseph MacEachen: I am glad the Leader of the Opposition (Mr. Clark) has raised this point. He has read the date of the letter referred to by the hon. member for Oshawa-Whitby (Mr. Broadbent) and I see it does not set out the precise guidelines I had in mind, those which were communicated to ministers by the Prime Minister (Mr. Trudeau) and which have been followed by ministers. They are quite precise. It was this particular set of precise guidelines about which I was uncertain as to whether they had been made public or tabled-I undertook to look into the matter further. Judging from the description given by the hon. member, the letter referred to does not contain the precise guidelines I have in mind.


Charles Joseph Clark: The Deputy Prime Minister undertook, after he had verified the nature of those guidelines, to address himself to the question of whether or not they would be made public so that everyone might know what they are. Will those guidelines be tabled in the House and made available to those of us in parliament and elsewhere who are interested?


Allan Joseph MacEachen: I want to check, first of all, whether they have been tabled. To my recollection, they have not. In the second place, because they constitute a direction from the Prime Minister to ministers, I believe I should consult with the Prime Minister before giving any undertaking about publishing them. I will do so when the Prime Minister returns to Ottawa. However, I can tell the hon. gentleman that these

May 25, 1978
Point of Order-Mr. Diefenbaker
guidelines are quite precise and, as far as I am concerned, are quite onerous.
Hon. members are urging, with legitimacy, the building up of further guidelines and conflict of interest rules for themselves. In so far as those for ministers are concerned, though they may be open to criticism in various ways, I think they are onerous and constitute quite a heavy obligation with respect to the financial dealings of ministers. In contemplating their own guidelines hon. members will want to consider how onerous they wish to be in imposing obligations upon themselves.


Henry Perrin Beatty: Mr. Speaker, I rise on a separate but related point of order which arises out of the response given by the Deputy Prime Minister (Mr. MacEachen) to my question, which was supplementary to the question put by my leader. If the minister did not mislead the House, he certainly appeared to have misled himself into believing that I in some way indicated that I was opposed to the principle of full, true, and plain disclosure of ministers' assets. In no way do I oppose a policy of disclosure. What I do oppose is a policy of disclosure where there is no disclosure. I oppose a polity of frozen trusts-


Mr. Speaker:: Order, please. The right hon. member for Prince Albert.


MR. DIEFENBAKER-AIR CANADA-INCORRECT STATEMENT ON TRANSPORTATION OF CUBAN TROOPS
John George Diefenbaker: Mr. Speaker, I always believe in upholding parliament. I have a reference to make today in connection with a statement I made which is recorded at page 5628 of Hansard. Today two ministers, the Minister of National Defence (Mr. Danson) and the Secretary of State for External Affairs (Mr. Jamieson), were unable to give answers because apparently the Prime Minister (Mr. Trudeau) has not yet told them what the policy he is going to enunciate will be.
The statement I made was this:
Mr. Speaker, my question is directed to the Prime Minister. It arises out of the horrifying slaughter in Zaire over the weekend. At the present time, while there is no evidence that Cuban troops were engaged there, nonetheless 32,000- incidentally, transported to their destination by Air Canada-have been acting in such a way as to give leadership in undermining governments in Africa which would lead one to conclude that the leadership of Cuba has been taken over by others in this regard.
The statement I made was based on information from a reliable source who apparently misunderstood what the situation was with respect to the use of Air Canada aircraft. Two aircraft apparently were leased by Air Canada to Cuba under a lease agreement.
The information coming from this person, who knows the facts, was to the effect that Cuban soldiers were transported either directly or indirectly on these two aircraft. Today I tried again to get some information on the agreement. If the government has nothing to hide, why hide it? It is a very simple

agreement, according to the minister, who says he does not have possession, yet only the day before yesterday Air Canada stated that the documents were in the possession of the Department of Transport.
The statement I made was based on information which, as far as I was concerned, had always been acceptable. I made an error in the generality I used. This is my first opportunity to make it clear that, in so far as the Cuban troops now engaged in Africa are concerned, they were not transported by Air Canada. I have a high regard for Air Canada, but must say that a very serious mistake was made when it leased two jet aircraft to Cuba and, directly or indirectly, was beneficial to that country in its communist aggression with Soviet approval and support.


Otto Emil Lang: Mr. Speaker, I indicated to the right hon. gentleman, in answer to an earlier question in the question period, that I thought this kind of subject matter indeed would be appropriate to be placed on the order paper. It is my recollection, and I will want to check, that in fact there has been an exchange of questions on the order paper in the past, in connection with the lease, and all the information which is available is already there on the record.
Furthermore, I am glad that the right hon. gentleman has now confirmed what the Prime Minister (Mr. Trudeau) said to him the other day, that he was wrong and in error in suggesting that Air Canada had anything to do with the transport of these troops. What was involved was a commercial transaction between a Canadian airline and Cuba, or the Cuban airlines. Over a long period of time trade has gone on between our country and Cuba, and this was not intended to benefit anyone else but, indeed, from Air Canada's point of view was intended to benefit Air Canada. I think that should be on the record.


Mr. Speaker:: The hon. member for Grenville-Carleton (Mr. Baker) on a point of order.


John George Diefenbaker: Mr. Speaker, I want to reply to one statement the minister made. It is apparent that he still intends to cover up and refuse to produce the documents. We will find the truth as to what happened to the aircraft and to the Cuban soldiers who allegedly-


Mr. Speaker:: Order, please. The hon. member for Grenville-Carleton on a point of order.
May 25, 1978



ROUTINE PROCEEDINGS


Walter David Baker: Mr. Speaker, I wonder if I might vary somewhat the normal House business question today. Rather than asking my friend, the Deputy Prime Minister (Mr. MacEachen) what business he intends for the balance of this week and into next week, I would like to ask him what business, from the government's point of view, he intends to bring forward for the balance of this month and into the next month, bearing in mind the statement made by the Prime Minister (Mr. Trudeau), on two occasions, that it is the desire of the government, if at all possible, to have this part of this session of parliament adjourn at the end of June.


Allan Joseph MacEachen: Mr. Speaker, I wish to confirm that it is the intention of the government, if at all possible, to terminate this part of the session by the end of June. I will attempt to indicate as clearly as I can what I think a realistic package of business might be for the time between now and that date. Obviously I would like to clear all items from the order paper, and if hon. gentlemen would be generous they might indicate their willingness to do that, but in the absence of that generosity I will be realistic and indicate what I think might be achievable. If I am pessimistic, please correct me.
I have in mind two bills arising from the budget which are in the name of the Minister of Finance (Mr. Chretien); the language of trials bill, which is in committee; the export development bill, which is also in committee; the bill in the name of the Minister of State (Small Business) (Mr. Abbott) having to do with business reporting; the CALURA bill; and another bill which is in committee which has to do with the monitoring of petroleum corporations.
There is a notice on the notice paper today with respect to a bill in the name of the Minister of Veterans Affairs (Mr. MacDonald) having to do with disability pensions. That is also on my list. I discussed last week my interest in Bill C-28, and I noted the response I received when I raised that matter, but it still is very much on my mind. In addition, I would want to deal with a bill which will flow from the notice of ways and means which will be tabled today by the Minister of Finance. I mentioned that privately to representatives of the parties earlier today.
In addition, there is also a number of small bills which I have discussed with my colleagues and which might be dealt with as opportunities present themselves, and as Friday afternoons become available for these small items. The Minister of Finance is suggesting that I raise the question of the Bank Act. It would be of interest to me if the subject matter of the bill, if the House so wished, would go to the committee, but I think it would be unrealistic to expect that the bill could be cleared before the end of June. Obviously I will have further consultations with my colleague, the Minister of Finance.
Business of the House


Walter David Baker: I understand that there have been discussions with respect to the subject matter of the Bank Act, and I will be prepared to discuss that matter with the government House leader after he has had discussions with the Minister of Finance.
There are two other matters. Would the hon. gentleman designate next Wednesday, May 31, as an allotted day, and could he also make a comment, which he might be prepared to make at this time, with respect to the request that we have made to extend the period for the discussion of estimates in the standing committees of the House of Commons, given the fact that the period has been so short because of the expectation of an election that never came? Is the hon. gentleman in a position to answer those questions?


Allan Joseph MacEachen: Yes, Mr. Speaker, I will designate next Wednesday as an allotted day. I should say, as my hon. friends are aware, that I did mention the possibility of a bill with respect to the Department of Fisheries about which I was not in a position to be conclusive today. I just want to mention it.
With respect to the extension of time period for the consideration of the estimates, I have had discussions with some members on this side of the House and with respresentatives opposite, and I have concluded that it would be useful if the chairmen of the standing committees met with either the steering committees or the committees themselves and assessed the situation in each committee. If necessary, they could come back early next week with a request to sit additional time. If these requests are made by the various committees, then I would certainly consider taking the steps necessary to bring it about. It has been suggested to me that this is a matter which should first be considered in the committees before we dealt with it in the House, or by the steering committee of each committee.


Stanley Howard Knowles: Mr. Speaker, may I say with respect to the program which the government House leader has placed before us that, despite its length, it seems to me that under certain conditions it would be possible to conclude most of that business before the end of June. We have already given the commitment that the legislation respecting veterans can be dealt with in a small part of a day. I have reason to be hopeful that the bill to separate the Department of Environment into two separate departments would not take very long either, and there are a number of items that could be dealt with some Friday afternoon. We are all aware of how propitious things can get at that stage of the week.
But I must say to the minister, as one friend to another-


Mr. Alexander:: Oh, oh!


Stanley Howard Knowles: -that if he wants to make progress and get a number of those small items through, he should not try to bring on Bill C-28. Certainly he should not try to bring it on with any thought of getting it through because it will just not go through, and he should not
5722

May 25, 1978
Point of Order-Mr. Cossitt
even bring it on for a day's debate because it would just mean the loss of a chance to put through three or four other bills.
With respect to the Bank Act, again I make the suggestion that, if possible, we should consider not having a debate in the House but rather we should send the subject matter of the bill to a committee without having a second reading approval. I think that is an endorsable proposition. But to bring on the Bank Act and have a day or two of debate, and then let it go to the bottom of the order paper, seems to me to be very poor planning. In other words, let us use the time between now and the end of June not to start debates which will not be finished but to deal with things that the House is willing to put through.


Mr. Knowles (Norfolk-Haldimand):: Mr. Speaker, I rise on the same point of order. I just want to suggest to the government House leader that we are disappointed that the bill on veterans affairs received such low priority on the list that he has just recited to us, and I join with the hon. member for Winnipeg North Centre (Mr. Knowles) in saying that we on this side would be prepared to give it very speedy passage, because it is something we have long advocated. There is no reason why we could not do it in a matter of moments if it could be brought before the House.


POINT OF ORDER
Mr. Tom Cossitt (Leeds):: Mr. Speaker, I rise on another point of order. With the greatest respect for the Chair, I wish to seek the guidance of the Chair as to the recognition of some of us in the House during the question period. I raise this point because in my case it has been since April 5-I will check the date to be accurate-but almost two months since I have been recognized by the Chair, although I have tried every day and been unable to attract your attention, sir. I know that there are others on the opposition side of the House in the same position as I am. I know my views are not popular with those who sit opposite, and I also realize that that fact has nothing to do with how people are recognized. On the other hand, it forces a backbencher to use the methods of Standing Order 43, points of order, or points of privilege to place his opinions on the record.
Just before I sit down, let me say again that I would like to check my own record to ensure that I am right with regard to the date I have mentioned. If I am inaccurate, I stand to be corrected. I know that in the last few weeks I found it almost impossible to gain the recognition of the Chair.
With all respect, sir, I ask if those of us who are not on the front benches could receive your guidance as to just what the procedure is in that regard.


Mr. Speaker:: I am sure the hon. member will recognize, on reflection, that indeed he was one who was not recognized today, although he was endeavouring to be recognized yester-

day. In that respect he is joined by the hon. member for Pembina (Mr. Elzinga), the hon. member for Battle River (Mr. Malone), the hon. member for Dauphin (Mr. Ritchie), and the hon. member for Red Deer (Mr. Towers), to mention just a few who I am aware are in that situation. He shares that difficulty in common with his colleagues and with the Chair.


LAW OF THE SEA
Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, pursuant to Standing Order 41(2), I wish to table, on behalf of the Secretary of State for External Affairs, the seventh report of the assessment of the Canadian delegation at the seventh session of the Law of the Sea Conference.


CANADA LABOUR CODE
Mr. John Rodriguez (Nickel Belt) moved: for leave to introduce Bill C-458, to amend the Canada Labour Code (safety of employees).


Some hon. Members:: Explain.


John R. Rodriguez: The purpose of this bill is to amend the Canada Labour Code to make the provisions of the Canada Labour Code in relation to safety of employees applicable to all federal undertakings, including the operation of trains, ships and aircraft, departmental corporations, and also to private and local works in both territories.


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

Joseph Jacques Jean Chrétien: Mr. Speaker, pursuant to Standing Order 60, I would like to table a notice of motion of ways and means-

-and I request you to designate the necessary order of the day for the consideration thereof.
May 25, 1978


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Roger Young (Parliamentary Secretary to Minister of Justice):: Mr. Speaker, the following questions will be answered today: Nos. 104, 715, 836, 1,418 and 1,500.


Mr. Herbert: 1.	Has the Export Development Corporation declined to divulge the number of persons under contract who receive a salary in excess of $30,000?
2.	Is the government given such information and is it the government's intention that Crown corporations should be obliged to communicate salary information on a similar basis as that used to record the salary levels of senior public servants?


Mr. Yvon Pinard (Parliamentary Secretary to President of Privy Council):: 1. Crown corporations operating in a commercial environment have not traditionally been required by parliament to publish detailed information relating to matters of day-to-day operations and internal administration which could be of value to competitors, for to do so could prejudice the Crown corporations' competitive position.
2.	Recognizing the responsibility of boards of directors of Crown corporations to oversee the internal administration and day-to-day operations of Crown corporations, the government does not usually request such information. However, when such information is requested by the government it is provided. The possibility that salary information relating to Crown corporations be published on the same basis as that for senior public servants is currently being considered by the government.


Mr. Crosbie: 1.	Were any conditions attached to the financial assistance given to Valley-field Chemical Products Limited by the Department of Industry, Trade and Commerce and the Department of Regional Economic Expansion and, if so, what were they?
2.	What amount of the assistance was by way of (a) grant (b) loan?
3.	(a) Is repayment of the assistance contributed to by the Department of Industry, Trade and Commerce contingent on the realization of profit by the Company and, if so, on what date is repayment expected (b) are there conditions under which repayment is not expected and, if so, what are they?
4.	Did the Company make a commitment to the government to operate the chemical plant at Valleyfield, Quebec for any specified number of years?
5.	Is there a contractual agreement or tacit agreement between the government and the Company regarding the domestic or foreign ownership of the equity and debt of the Company and, if so, what is the agreement?
6.	What is the amount of interest subsidy on the financial assistance given to the Company by the Departments?


Yvon Pinard: In so far as the Department of Industry, Trade and Commerce is concerned: 1. The assistance provided by the Department of Industry, Trade and Commerce will carry the
Order Paper Questions
normal conditions appropriate to Defence Industry Productivity Program commitments. In addition, the department has taken mortgage security and the two departments have, inter alia, imposed a range of conditions which are concerned with the preservation of viability and the protection of the Crown's interests.
2.	The financial assistance to be provided by the Department of Industry, Trade and Commerce will consist of: $5,325,000 repayable contribution; $3,000,000 conventional contribution: $8,325,000. The financial assistance to be provided by the Department of Regional Economic Expansion consists of $3,000,000 repayable development incentive. It is to be repaid without interest in five equal annual instalments, commencing 48 months after the date the facility is brought into commercial production.
3.	(a) With respect to the $5,325,000 repayable contribution, there is a repayment formula based on sales performance by the company, as well as a minimum repayment provision, which would see the retirement of this contribution within six years after the facility is brought into commercial production. The amount of annual repayment is not contingent upon the profitability of the company except that there are provisions for accelerated repayment if profits exceed current forecasts, (b) With respect to the $3 million conventional contribution, no repayment is expected if the facility is kept in operation for a period of ten years.
4.	A contribution agreement was signed in late December by the Department of Industry, Trade and Commerce and the company. This agreement sets out the undertakings and warranties of the company and the terms and conditions attached to the department's contribution. One of the conditions of the agreement is that the company will continue commercial production using the facilities at Valleyfield for a minimum period of ten years. The non-repayable portion of the department's contribution will not be fully vested in the company until ten years after the facility is deemed to have been in commercial operation.
5.	Under the terms proposed in the contribution agreement, control of the company whether through debt or equity cannot be altered without prior approval of the government. The company is currently controlled by Canadian citizens.
6.	There is no interest payable on the government's contribution to the company.
In so far as the Department of Regional Economic Expansion is concerned: 1. Yes. The financial aid was subject to the applicable conditions of the Department of Regional Economic Expansion Act and the Regional Development Incentives Act and 1974 regulations, special areas order PC 1977-2644 of August 31, 1977, and a memorandum of agreement between the company and the department on the amount of the incentive, dated September 30, 1977.
2.	(a) A repayable incentive of $3 million, to be refunded to the government in five equal annual portions ($600,000) beginning 48 months after the facility is brought into commercial production, (b) None.
80038-72H

May 25, 1978
Order Paper Questions
3.	This question will be answered elsewhere.
4.	The company is required to operate its Valleyfield plant during the administrative control period that normally applies under the Regional Development Incentives Act to a project of this kind. That period normally extends for at least 24 months after the date of commercial production.
5.	No.
6.	No interest is charged on the department's repayable grant.


Mr. Alexander: 1.	Have any Crown corporations reacted to the proposals of the government on the control, direction and accountability of Crown corporations and, if so (a) how many, (b) will the results be made public?
2.	Has the (a) Royal Commission on Financial Management and Accountability, (b) the Auditor General, reacted to the proposals, and, if so, will the results be made public?


Yvon Pinard: 1. (a) As of May 5, 1978, of the 49 active Crown corporations listed on schedules B, C, and D of the Financial Administration Act, 13 have provided a formal response to the government. The government has received undertakings from many of the remaining corporations that formal responses will be transmitted to the government as soon as possible, (b) The responses submitted by Crown corporations to the government's proposals will be fully considered during preparation of the omnibus Crown corporations' bill which the government hopes to present to parliament in the fall of this year.
2. (a) No. (b) Yes. The response may be found in part 9 of the report of the Auditor General of Canada to the House of Commons (for the fiscal year ended March 31, 1977).


Mr. Lambert (Bellechasse): In (a) 1976-77 (b) 1977-78 to date, did the government subsidize Canadian workers' unions and, if so, in each case, what was the (i) name of the union (ii) amount of the subsidy (iii) reason for granting the subsidy?
(i)	(ii)	(iii)	Registered Nurses Association of British Columbia (Labour Relations Division), Vancouver	8,098.50	Labour Education	*MgNon-Academic Staff Association, University of Alberta	1,200.00	Labour Education	Alberta Certified Nursing Aides Association, Edmonton	2,155.50	Labour Education	Health Sciences Association of Alberta, Edmonton	846.00	Labour Education	*Provincial Staff Nurse Committee of the Alberta Association of Registered Nurses, Edmonton	1,000.00	Labour Education	McMurray Independent Oil Workers, Local No. 1, Fort McMurray, Alberta	510.00	Labour Education	Saskatchewan Joint Board, Retail, Wholesale and Department Store Union, Regina	3,565.50	Labour Education	*Saskatchewan Union of Nurses, Regina	641.25	Labour Education	1The Manitoba Teachers' Society, Winnipeg	7,409.25	Labour Education	Manitoba Organization of Nurses Association, Winnipeg	3,554.25	Labour Education	* E*Communication Union Canada, Toronto (National)	5,424.00	Labour Education	*ViOntario Public Service Employees' Union, Toronto	33,750.00	Labour Education	Canadian Steelworkers Union, Welland	1,025.25	Labour Education	IfChristian Labour Association of Canada, Toronto	1,696.00	Labour Education	fr 'vCanadian Air Traffic Control Association Inc., Ottawa (National)	1,287.75	Labour Education	4Centrale des Syndicats D6mocratiques, Montreal	25,500.00	Labour Education	Syndicat des Employse de Soutien de PUniversite de Sherbrooke, Sherbrooke	402.00	Labour Education	Jr mFederation des Policiers du Quebec, Montreal	5,985.00	Labour Education	The United Nurses Incorporated, Montreal	3,600.00	Labour Education	Syndicat de la Construction Cote-Nord de Sept-Iles, Quebec	1,033.75	Labour Education	Canadian Telephone Employees Association Montreal (National)	5,400.00	Labour Education	igNova Scotia Teachers' Union	6,780.00	Labour Education	f.Prince Edward Island Teachers Federation, Charlottetown	878.25	Labour Education	Newfoundland Teachers Association, St. John's, Newfoundland	4,771.50	Labour Education	Canadian Labour Congress	1,000,000.00	Labour Education	Canadian Conference of Teamsters, Ottawa	56,520.00	Labour Education	Confederation des Syndicats Nationaux, Montreal	120,000.00	Labour Education	Centrale des Syndicats Democratique	25,500.00	Labour Education


Hon. John C. Munro (Minister of Labour):: 1. (a) 1976-
1977-No payments; (b) 1977-	1978 to date.	
(i)	(i*)	(iii)Hospital Employee Union, Local 180, Vancouver	$ 12,618.75	Labour EducationVancouver Municipal and Regional Employees Union, Vancouver	2,199.00	Labour EducationBritish Columbia Government Professional Employees Association	575.25	Labour Education


Mr. Jones: 1.	What is the meaning of the government's use of the term "international francophonie"?
2.	What are the responsibilities of the Adviser for Francophone Affairs to the Secretary of State for External Affairs in the field of international francophonie?
3.	Was the Adviser for Francophone Affairs to the Secretary of State for External Affairs accompanied by departmental officials on his visit to Francophone Africa, March 8-13, and if so, what are the names, positions, salaries, and expenses of this trip by these officials? Give details.

[Mr. Pinard.J
May 25, 1978

4.	Has the Adviser for Francophone Affairs to the Secretary of State for External Affairs made other such visits, and if so, please give details, stating full costs for those accompanying him, if any?


Maurice Dupras: 1. The term "international francophonie" has been used since the early 1960s to describe the multilateral co-operation which has developed in a wide range of fields in both intergovernmental and private bodies between countries where the French language has an official status or is frequently used.
2.	The responsibilities of the adviser for Francophone affairs to the Secretary of State for External Affairs in the field of francophonie is to assist the SSEA in his task of developing Canada's relations with Francophone countries and promoting Canada's role and interests in the multilateral institutions and meetings of Francophone countries.
3.	The Minister for Supply and Services and adviser for Francophone affairs to the Secretary of State for External Affairs travelled to Togo, Benin and Gabon between March 9 and 13 accompanied by the following officials of External Affairs: Mr. T. J. Arcand, Director, Francophone Africa and Maghreb Division, Department of External Affairs. Salary: Level FS3 ($33,684-$44,806); Transportation: $1,861; Expenses: $1,246.23. Mr. Gilles Duguay, Executive Assistant to the Under-Secretary of State for External Affairs. Salary: Level FS3; Transportation: $1,861; Expenses: $754.46. Mr. Marc Perron, Special Assistant to the Under-Secretary of State for External Affairs, Department of External Affairs. Salary: Level FS3; Transportation: $1,861; Expenses: $734.46.
4.	(a) The Minister of Supply and Services and adviser for Francophone affairs to the Secretary of State for External Affairs was called upon to replace the former Minister of Industry, Trade and Commerce who had been scheduled to lead a trade mission to Algeria and Morocco from September 22 to October 7, 1977. He was accompanied by the following official of External Affairs. Mr. Raymond Roy, Director, Francophone Africa and Maghred Division, Department of External Affairs. Salary: Level FS3; Transportation: $1,119; Expenses: $681.81. (b) The Minister of Supply and Services and adviser for Francophone affairs to the Secretary of State for External Affairs made an official visit to Senegal, Came-roun, Mauritania and the Ivory Coast from 3-17 June 1977 accompanied by Mr. Andre Couvrette-then Canadian ambassador to Senegal. Mr. Gilles Duguay, Executive Assistant to the Under-Secretary of State for External Affairs. Salary: Level FS3; Transportation: $2,229; Expenses: $930.26. Mr. P. Boulanger, Information Division, Department of External Affairs. Salary: Level FS2 ($23,299-533,684); Transportation: $2,229; Expenses: $915.37. (c) The Minister of Supply and Services and adviser for Francophone affairs made an official visit to Upper Volta, Zaire and Gabon between 7 and 15 November 1977 accompanied by: Mr. Raymond Roy, Director of Francophone Affairs and the Maghred, Department of External Affairs. Salary: Level FS3; Transportation: $1,116; Expenses: $572.52. Mr. Marc Perron, Special Assist-
Point of Order-Mr. Cossitt
ant to the Under-Secretary of State for External Affairs. Salary: Level FS3; Transportation: $1,116; Expenses: $693.76.


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



POINT OF ORDER


Thomas Charles Cossitt: Mr. Speaker, I rise on a point of order which I think Your Honour will find to be a legitimate one. It concerns question No. 1,086, and the question on which I have been attempting to get recognition on the floor of the House for the best part of two months.
Question No. 1,086 concerns the Deputy Prime Minister (Mr. MacEachen). It refers to an oral question which I asked him in November, 1977, in the House, about the so-called Taschereau papers on national security which were taken by Mr. Lemieux to the Privy Council office-Prime Minister's office. At that time I asked him if and when they would be returned, and whether they would be open to public or press inspection after a set number of years, which procedure was halted last year.
The minister said that he would take the question as notice and answer it. The answer has never been forthcoming. In view of the fact that the papers were returned to the National Archives on February 6, 1978, I think there is no logical reason why the question could not have been answered a least to that effect.
Other parts of my question would have brought out why the National Archives has been instructed not to reveal what is in those papers to anyone without the permission of Major Lemieux. I think the answer to this question is long overdue. I gave the Deputy Prime Minister three months, and he did not provide an answer. I put it on the order paper as question No. 1,086 on January 23, 1978. All in all it has been approximately six months and nothing has been forthcoming. I think I am justified in raising this point. What is the government hiding in the Taschereau papers which prohibits the public from knowing what is therein? In other words, are there prominent public servants mentioned in those papers?
In another question I have on the order paper which stands unanswered, I asked if there were, as quoted publicly in the press by Mr. Igor Gouzenko, five Soviet espionage rings which he had disclosed in Canada uninvestigated by the RCMP. No action has been taken. I asked if there was information concerning that in the Taschereau papers, and that has been withheld. Can the parliamentary secretary tell us now when both of those questions will be answered?


Yvon Pinard: Mr. Speaker, I am going to check whether the

May 25, 1978
Grain
hon. member has read the order paper correctly. I am going to check whether his remarks jibe with the questions he asked, and I can assure him that, as in the past, we shall make every effort to give him as much satisfaction as possible.


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


Some hon. Members:: Agreed.



MOTION TO ADJOURN UNDER S.O. 26   GRAIN SHORTAGE OF RAILWAY BOXCARS

Leslie Gordon Benjamin: Mr. Speaker, I have a motion of which I gave Your Honour notice. I ask leave, seconded by the hon. member for Yorkton-Melville (Mr. Nystrom), to move the adjournment of the House under the provisions of Standing Order 26 for the purpose of discussing a specific and important matter which has been raised by many members for many weeks, which remains unresolved, and which now requires urgent consideration, namely, the withdrawal of railway boxcars from grain movement which, in spite of the provision of hopper cars by the government, is inhibiting seriously the efforts for record grain movements this crop year; the refusal of the ministry to implement the Hall Royal Commission recommendations regarding statutory Crowsnest grain rates and compensatory payments for the costs of transporting grain; the costs of demurrage charges for ships waiting to be loaded being assessed against prairie grain producers through no fault of theirs; the rail branch line abandonment recommendations by the Prairie Rail Action Committee that are counter to the recommendations of the Hall Royal Commission; and the lack of government legislation or responses to deal with these and other related matters and, which, as a result, prevents increasing our capacity to meet expanded grain export objectives.


Mr. Speaker:: Order, please. The hon. member for Regina-Lake Centre (Mr. Benjamin) gave the Chair the required notice pursuant to the terms of Standing Order 26. Having given notice of his intention to ask leave to move the adjournment of the House under the provisions of that Standing Order, he has now put forward basically the contents of that notice which in itself is in conformity with the provisions of the rule.
As is very often the case, I have no hesitation on this occasion in saying that these are very important and urgent matters raised by the hon. member. As he and other hon. members will understand, my decision must be made on the basis of the rules of precedent which confine me to the

question of urgency of debate, rather than the urgency attached to the particular subject matter. In this respect I must point out that this subject has been before the House in one way or another on a number of occasions, the most recent being April 25, 1978, approximately a month ago, on a motion on an allotted day which was critical of the transportation policy. That motion was by the hon. member for Vegreville (Mr. Mazankowski).
Subparagraph (d) of that motion called upon the House and the government to implement the major recommendations of the Hall commission report on grain handling and transportation in the west. The hon. member for Regina-Lake Centre moved an amendment to that motion, which read as follows:
(e) to reject the prairie rail action committee recommendations to close down the Liberty to Dilke and Eston to Lacadena rail lines, and to bring forward legislation to set up the prairie rail authority.
In the course of that day I am sure the hon. member had a great deal to say about the subject which he has put forward now. I take that only as a reference point to say that this and other occasions have already presented themselves.
A number of questions have been put forward during question period. It would seem to me, in the face of Standing Order 26(5), I am required to give some consideration to other opportunities for the discussion of these matters.
Also, I must make the general observation that we seem to be dealing with something which is more of a chronic rather than an acute matter in that it has been under consideration by the House for quite some time. Therefore it is not a proper subject for disposition under Standing Order 26.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Wednesday, May 24, consideration of the motion of Mr. Chretien that Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be read the second time and referred to the committee of the whole, and of the amendment (Mr. Broadbent) (p. 5548).
Mr. Gordon Ritchie (Dauphin):: Mr. Speaker, when we adjourned last night at six o'clock, I had discussed the sales tax and the problems the Minister of Finance (Mr. Chretien) was having with his counterpart in the province of Quebec. Mr. Parizeau, the minister of finance for Quebec, seems to have come out of this encounter very well. He has outfoxed and outgunned the Minister of Finance in every category.
Let us look at what he has done. By selective tax cuts for those goods mainly consumed in Quebec and made in that province, in effect Mr. Parizeau has set up a non-tariff barrier.
May 25, 1978

That will not improve manufacturing in the rest of Canada and shipping into the province of Quebec nor garner any advantage. Presumably this will be directed to things like automobiles, wrenches, tools and so on. To this degree, in so far as sales tax is concerned, the province of Quebec has put its interests first, and in this it seems to have been eminently successful.
Each province received 2 per cent from the federal government in lieu of the federal treasury giving up 3 per cent. Each provincial treasury will lose that amount of money, but not the province of Quebec. That province will lose only the portion of money in its selective tax cuts, which is considerably less than the other provinces that went along with the plan. Even so, the Minister of Finance has seen fit to guarantee to the province of Quebec the same amount of money as if it had accepted the federal offer as did the provinces of Ontario, Manitoba, Saskatchewan, and British Columbia.
The Minister of Finance showed that he bowed to pressure from Quebec, making payments that he should not have made if he was to be fair and intended to stick to what he originally attempted to do, and that was reduce sales tax right across the country. In fact the government of Quebec has been able to suggest it can have it both ways; it can have selected tax reductions but still be guaranteed the full value as though it had made a general 3 per cent tax reduction across the board. In the way this is being done the money paid to that province will come out of the general revenue of this country, yet the province of Quebec will maintain its own treasury and tax structure, without great losses. The Minister of Finance supposedly is a street fighter. All I can say in this regard is that he must have slipped on a banana peel when getting his gun out of its holster, because Mr. Parizeau really outgunned him on this occasion.
We are aware of the problems associated with the special status which some want for Quebec. The finance minister for that province has in this case been able to further the interests of his province without necessarily going along with what seemed to be in the national interest. If the Minister of Finance had stuck to the original idea of tax cuts he would have been much better off. He should not have acceded to the request of the finance minister for Quebec, that moneys be given that province indiscriminately.
I should now like to comment on the value of this sales tax reduction so far as its avowed intention of increasing consumer spending is concerned. I might suggest that Mr. Parizeau may have considered some of these things I intend to cover in suggesting that this tax cut will not do what it is supposed to do. It has been suggested there was a personal savings rate of 1114 per cent in the fourth quarter of 1977, which is twice as high as it has been in the past decade. This rise in the rate is considered by some to be the result of uncertainty over the political situation in Quebec and the possible rearrangement of the country.
Income Tax Act
There seems to be a trend to save and for people to be frugal. Personal savings have doubled at $45 billion compared to what they were five years ago. Investment in Canada Savings Bonds accounts for $18 billion. That is almost $2 billion more than last year. This money deposited in banks and invested in savings bonds is money not being spent for the purchase of goods and services. It is difficult to make this money available for investment in the maintenance of existing production, or in expansion or new production. The intent of this reduced sales tax should be to get the economy going and restore confidence.
Is much of the saving a desperate effort on the part of the people to conserve value by counting upon the earnings from the savings to offset the erosion of inflation? We also forget the extent to which savings are forced on the people. We have compulsory participation in pension plans, and because home ownership is so excessively subsidized there is a great deal of pressure on people to own houses rather than to rent. Indeed, a citizen loses out if he does not own. Housing has been used as a source of employment rather than as a means of housing the population.
Many people resort to registered home ownership savings plans because of the tax relief. We are putting some $2 billion into these plans, thereby depriving the government of taxes that have to be made up by other means. Incidentally, I think these registered retirement savings plans give too much of an advantage to people in the higher income brackets. Their savings are much greater and are really at the expense of the federal treasury. On the other hand, without this program, resentment against a regressive income tax would be much greater. It seems likely that much of the savings occur in circumstances that create government deficits, rather than contributing to productive growth.
How much of this increased savings is voluntary and how much is forced upon those seeking tax relief? This cannot really be measured. It is obvious that these registered retirement savings plans and savings bonds are designed to discourage liquidation, so the money involved is not really available for the purchase of goods and services in order to take advantage of a sales tax reduction.
In addition, one might ask what the implications of this increase in personal savings may be. How affluent are Canadians when the liabilities of the federal government alone have reached $51 billion and will increase by $12 billion in the next 12 months? These liabilities will have doubled in the last five years. It is obvious there has been a good deal of borrowing by provincial, municipal, and federal governments. They are borrowing in order to spend on social benefits. As a result, we are supplementing current income by borrowing on the future. If the borrowing were for capital goods and capital works, that would be another situation. Certainly the savings of many individuals are being discounted by the charges against them put on at various levels of government. Personal affluence may well be less than what we expect. This may be why the economy is not responding, as the experts have anticipated, to increased spending at both government and personal levels.

May 25, 1978
Income Tax Act
It is unfortunate that so much of this debate has been taken up in respect of sales tax, with complex abatements and rebatements, particularly when this represents only a minor part of the federal scene. I was astounded at a meeting of the Standing Committee on Finance the other day to hear Mr. Bouey of the Bank of Canada say that we had no real balance of payments problem. When the government has to borrow $3 billion on the foreign exchange market, with a line of credit for another $4 billion, costing us $100,000 a day, does that not mean our economy is in trouble? Surely Mr. Bouey cannot say we are in robust economic health when in fact we have had to shore up a floating dollar that is supposed to find its own level, keeping in mind the $11.5 billion deficit and the necessity to raise more money. All of this creates considerable problems for our economy.
Mr. Bouey said he would not monetize any of the government's deficits, except up to and within the limits of growth which can be set for the money supply. The money supply has already been growing too fast over the years. In the years from 1972 to 1974, when there was a minority government, the bank monetized some 66 per cent of federal requirements in borrowing, but that only amounted to a total of some $3 billion. Can the federal government in fact borrow $9 billion on the market this year to meet its financing requirements? Even if it is able to do so, how much will that leave the private sector? Without money in that private sector our productivity cannot be increased in order to provide the expansion in the number of jobs necessary to meet our growing labour force and increasing government expenditures.
It would be interesting to note what the Minister of Finance intends to do to resolve this difficulty. Will interest rates go up as competition increases for scare money, that is, competition to meet private and government needs? The minister has stated that the Bank of Canada will not inflate the money supply. Let me suggest that only by increasing interest rates can available capital be rationed.
There have been some events occurring around the world that are disturbing to the Canadian economy. Some are predicting a fairly severe economic setback early next year with the slowdown in the United States economy. The United States suffered a severe recession in 1974-75 when wage-prices were corrected. It seems likely that inflation will remain our greatest problem, and it is difficult to see, with the expected increase in inflation in the United States, how Canada can escape.
There are some good things in the budget, but some are more apparent than real. One is the expansion of the rollover provision for the corporate family farm. But unless what is interpreted as a rollover is more widely interpreted than the present regulations allow, this provision is not of much value. As we discussed in the House when the provisions were introduced in the last budget debate, the rollover provision applies only to like businesses, and in the interpretation of the Department of National Revenue, selling a dairy farm and buying a hog farm does not constitute a like business, nor does selling a grain farm and buying a cattle ranch.

These rollover provisions are not really of much practical value. They are really only of value where, for example, a farmer has a parcel of land farther away than he would like from his main operation, sells it, and replaces it with another. Unless the department is willing to expand the scope and to be more liberal in the interpretation of what is a like business, it has little value. In any case, of course, the capital gains tax must eventually be paid somewhere down the road, and in many instances it is probably better to pay capital gains tax rather than have it accumulate to be paid in one lump sum at the end of some generation when that generation leaves the farm.
The Royal Commission on Corporate Concentration had a few things to say about capital gains taxation. On the face of it there is a good argument to tax capital gains in fairness to tax on ordinary income, although presumably all capital gains should be taxed instead of half. But this principle has been eroded as it is realized that capital costs are an important and depressing problem to business. Obviously, the practical problem with capital gains is that it represents very often a great deal of inflation and that the savings of perhaps 20 years are suddenly to be taxed as if they were earned in one year, causing a loss to the extent that the capital gain is fairly well eaten up. As well, principal residences are exempted along with the first $1,000 of capital gains dividends and interest income, all of which have eroded the capital gains tax.
The problem is that for a very small amount of revenue, some one third of a percentage point, capital gains tax causes bad business decisions. People do not sell their businesses, real estate and so on because they find they will lose any gain that might accrue. Capital gains tax would have been fine if the economy had remained stable and with little inflation, but in large measure capital gains tax is only a tax on inflation as such and a great depressant to risk capital investment where the individual entrepreneur is concerned.
The royal commission had this to say:
The design of the capital gains tax ensured that it would do little in terms of equity and the most recent amendments to the tax law are a further step backward in this sense. The result is a complicated and costly addition to the tax system and a disincentive to business investment, with little compensating benefit.
I would certainly agree that the capital gains tax should be abolished. The enormous increase in government spending, particularly in social welfare programs in the past few years, has meant that the tax pay-out of federal and provincial governments has been enormously increased, and all our programs are not yet mature with such further things as bilingualism becoming more expensive. Furthermore, we are facing the probability of an attempt to establish some sort of guaranteed income for our citizens. This, I feel, would be certain disaster and would push our already overburdened service industry into more direct competition with that segment of the economy that produces our goods.
The minister mentioned that indexing of exemptions brackets since 1974 on personal income tax has meant that the take
May 25, 1978

is $5 billion below what it would have been in the absence of indexing. Specific personal tax cuts totalling $2.5 billion, and $1.6 billion for business, have reduced the federal tax take. Of course no one promises that without indexing there would not have been some alleviation in the tax structure. But with the government tending to increase spending at one end with maturation of programs and new programs, to have cut on the intake through the indexing system makes for fiscal deficit budgeting and conceals for a time the necessity of a better balance between income and outgo. Therefore I believe it is time to consider the fact of indexing and I believe governments must, instead of automatic indexing, consider whether or not they should make the proper adjustments in the rates and levels of taxation as they did in the past.
I know it is easy in an inflationary period to hide behind the index, but in fact it is now recognized the index is not a good method of measuring the total business activity. Studies in the United States have shown that indexing is probably fallacious and gives too high a figure for the cost of living index as related to the actual over-all business activity-something which is very difficult to measure, I know. It has been estimated that this cost of living is too high by something like at least 2 per cent, based upon what studies in the United States would indicate. It may well be that the present method of indexing is not as good a barometer as we would like to see.
I am inclined to feel that the use of indexing creates uncertainty and, while its intent is not questioned, it makes for difficulty in budgeting, and increases the incentive to borrow to cover deficits. I appreciate that more and more people in small business, and I presume in larger ones as well, make business decisions on how the tax changes and taxation system affect the business rather than attempting to run it on a careful and constructive basis. Rewards are as great by taking advantage of the tax system, rather than attempting to run an efficient business, and in the final analysis contributing jobs and economic activity to the over-all community. There are so many exemptions, indices and allowances that the tax accountant becomes the most important person in business management. I do not think this is a good thing.
I was pleased to see that the minister of small business has introduced some ideas and some intentions which hopefully will improve the climate for small business. There are a good many more things in the budget I would like to speak about, but at the moment I would like to wait for committee of the whole.


Mr. Paul E. McRae (Fort William):: I am very pleased, Mr. Speaker, to have an opportunity to speak in this budget debate and on Bill C-56, which is perhaps one of the more important bills to be discussed in this House in quite some years. It is important not just because it is a budget bill, but because it is a specific budget bill, and also because of the nature of the debate that has surrounded the sales tax provisions.
There are two fundamental principles that must be examined. One of them is the relationship of a common market to a common market within a nation, and that total concept which has to be examined. The other has to do with how a nation like
Income Tax Act
Canada, in terms of global economics, mobilizes its resources, given the federal and provincial problems that surround confederation to meet some of these critical events that are occurring in our industrial world.
Before I deal with these two principles, I would like to review the sequence of events and the ideas that went into this particular budget and this particular sales tax proposal. We have had a great deal of discussion in the House about the difficulty in stimulating the economy and actually creating effective demand in it. We have had comments about the fact that the quantity or degree of savings in the country have increased immeasurably over the last 15 years. I believe in 1960 we had a savings ratio to gross national product of something like 2.3 per cent, and in the last quarter of 1977 it had risen to 11.25 per cent, which is more than a 400 per cent increase in the level of savings as a percentage of the gross national product. This is extremely substantial.
The effect of the tax cuts in last fall's mini-budget on purchases within Canada was minimal. It did not deter people from taking trips, but neither did it increase the demand for goods produced in this country. It therefore became important to find a method of stimulating the economy over a short period so that people would buy more goods. Most economists indicated that the reduction of sales tax would have a rapid effect.
The minister either met, or discussed this problem with all provincial premiers. The province of Alberta had no sales tax so it opted out, but opted instead for some concessions which favoured Syncrude and other operations in heavy oil and tar sands. That left nine provinces with sales tax. The minister was able to get agreement with eight provinces-not with the province of Quebec. The agreement with the five provinces from Ontario west concerned the transfer of 2 per cent to those provinces through the income tax after which the provinces would reduce the sales tax by 3 per cent, thus redistributing the federal funds by a reduction of sales tax. Because of the slack economy and relative poverty of the four Atlantic provinces, the agreement was for the federal government to fund the provinces for the full 3 per cent reduction in sales tax. The province of Quebec took part in the discussions but did not respond, and a few hours before the budget asked for an extension of 48 hours. I assume that if the budget had been delayed nothing would have been done.
Just 48 hours after the budget was tabled, the province of Quebec announced its program which called for an 8 per cent or total reduction of sales tax on specific items. These items are not totally made in Quebec, but in many ways this would create a separate tariff situation within that province for many of the goods produced there.
There is one aspect of all this which is not well understood, Mr. Speaker, and that is that in the other nine provinces the federal income tax and provincial income tax are collected by the federal government. In 1954 Quebec opted to collect its own income tax separate from the federal government. This

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means that the operation could not be conducted the same way in Quebec as in the other provinces.
In the other provinces the federal tax would be reduced by $100 or the provincial tax increased by $100, and the money would be redistributed to the people. That is not possible in Quebec because there the people get separate tax forms.
Let us consider how this program could have operated under two sets of circumstances. Let us assume that the province of Quebec had gone along with the scheme. If it had, the full $226 million would have been sent out in the form of a cheque from the federal government and then redistributed to people in the province by way of a sales tax reduction. The province went along to the extent that there was some reduction on certain items, and for those items the two percentage point reduction will be transferred in this way. In other words, a cheque of roughly $40 million will be given to the province of Quebec to meet this particular reduction, but the other $186 million is not being given in this way because the province did not go along with the scheme.
In the other set of circumstances, the province does not go along with the scheme. If we give the province $40 million to make up for the sales tax being reduced by two percentage points, then the question arises of how we maintain equity in this country in terms of the people of Quebec receiving their fair share of this tax reduction.
Both the Tory party and the NDP have said we should hand over the full amount to the government of Quebec in the form of a cheque even though it has not gone along with the scheme, and then the province could redistribute it in a way that would favour its industry. I cannot accept this method, Mr. Speaker, because I think it would encourage a disruption of the notion of a common market.
The province of Quebec has every right, and should continue to have every right, to do what it wants with its own tax system. It is a different thing, however, when the federal government tries to do something and actually sends a cheque to do it or when the province does something that creates a kind of non-tariff barrier. This is extremely important. Two years ago the province of Ontario removed the sales tax on automobiles. That was a legitimate move. At no time, however, did the federal government offer encouragement to them to do that. This is the difference in the two situations.
I should like to deal with this notion of a common market, Mr. Speaker, because I have seen some things in the press which disturb me. The usual idea of a common market is that it is something that exists between countries and that therefore, in these circumstances we are not talking about the same thing. It seems to me that one of the essential things about nationhood is that the central government does everything it can to maintain the commonality of the market within a nation. This is the principle at stake in this issue. Should the federal government transfer $226 million to the province of Quebec to set up a tax system which tends to break down or disturb that common market-which tends to set up a nontariff barrier? Should the federal government be in that kind

of business? I say no, Mr. Speaker. I think this point is crucial and should be understood.
The other point I wanted to deal with, before I move on to some other aspects of our economy, is the nature of federal-provincial relationships, particularly in a very critical period in our economic history and in the world. There is a very basic difference between the position of the Tory party and the position of the government on this isue. Without putting any value on it, at this particular point it is unique, in the origins of this country and the origins of the Conservative party, that there is a different situation.
Speaker after speaker from the Conservative party has talked about provincial rights, stating that we must do absolutely nothing to reduce provincial rights. They never seem to think there are some very important federal rights that must be maintained. There is a substantial difference in viewpoint and this should be looked at very carefully by the Canadian public.
In this period of real crisis in our country and throughout the world, it is important that the federal government maintain as much power as possible to deal with the critical issues. When we begin making constitutional adjustments, which we are going to do, it is extremely important to remember that this country has a million unemployed, $11 billion deficit, S'A per cent inflation, and a foreign exchange deficit of perhaps $5 billion. This is not the time to dissipate the power of the federal government to deal with these problems.
When we are criticized in terms of this tax situation, I am afraid it creates the impression that we are in some way trying to usurp provincial powers. What the minister attempted to do, and it was extremely important, in my opinion, was to say that the provinces have a taxing power which we do not, and that we should get together with the provincial finance ministers. This did not start a few weeks before the budget. It began eight months to a year ago. The Minister of Finance (Mr. Chretien) asked them to sit down to see how co-operatively they could work out a system to reduce sales tax in order to create a demand to solve part of our problem.
It is extremely important that in a crisis situation, almost like a wartime situation, we have the collective support of the provinces. We need to work with the provinces. We need as much power as possible to solve some of these problems. I would like to deal briefly with the global nature of these problems. In dealing with this budget, we have to realize it is a short term instrument which will provide stimulation for a six to eight-month period. It is not a budget to deal with the global crisis that we face.
Let us take a country with an inflation rate of 16 per cent, an unemployment rate of 11 per cent, a $3.4 billion foreign exchange deficit, a reduction in productivity of 4 per cent last year, and a reduction in gross national product in the year 1977 of 2Vi per cent. This is not Canada. It is Sweden. That is one example of a country in serious trouble. If you put that foreign exchange deficit of $3.4 billion on a population basis
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with Canada, it would be in the order of $10 billion. That country is in serious difficulty. If you go through the group of the 24 OECD countries, you will find similar problems.
I maintain we are in a serious global economic crisis when we see this situation reproduced in country after country. Most of these countries responded extremely well during the sixties and early seventies to very rapid growth. They instituted, as we did in this country, some very elaborate social services to meet the needs of the people.
All of a sudden, a new concept was introduced, a shortage of oil. The OPEC countries began draining off $100 billion to $150 billion a year in capital. From this point, we are all in some trouble. It is not the only reason for the trouble, but it is the point where we seriously began to get into trouble.
There are three major factors globally that we have to look at in terms of these problems. Quantumly in the kinds of problems that all countries are facing, there is a minimum universal rate of inflation of 5 per cent and rapidly growing unemployment, such as in Sweden. A whole series of social problems have grown in a quantum way over the past four or five years. That is the first situation.
The second is the unique situation where, perhaps for the first time in the history of mankind, we see universal shortages of energy. We all grew up with the notion that there was plenty and all we had to do was arrange our lives to take advantage of it. As I mentioned earlier, global shortages have had an effect in terms of the large drain on our dollar. Eventually, we will be required to change our lifestyle.
The third factor which is extremely important is the techniques with which we have traditionally solved these kinds of problems. The Keynesian fiscal and monetary techniques do not work any more. They do not work because of the magnitude of the problems. The problems are far too large to be solved in terms of techniques such as creating demand by sales tax and so on. One cannot reduce one million unemployed just by these techniques.
The second reason they do not work is that they are sometimes counter-productive. We are dealing with stagflation, where you have high unemployment and high inflation at the same time. These are unheard of in any conventional economic theory, at least over a long period of time globally. For these reasons these techniques are not working.
It appears we will not be embarking on an election for some months, possibly a year. It is important that we in this House and we in this nation begin to look very seriously at these long-term problems that face us. I suggest that the government embark on a series of major white papers dealing with some of the alternatives in terms of unemployment, government spending, foreign exchange problems, and energy.
I wish to outline some thoughts on the problems of unemployment. White papers should be set up so that the Canadian public will talk now and at the time of the next election about the real issues facing us. I could perhaps state some ideas on areas such as energy, but the example I wish to deal with is
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unemployment, one problem that has bedevilled us more than any other single problem in the history of this country.
Canadians seem to be concerned about the notion of creating jobs. The thesis I would like to present is that we cannot possibly begin to solve our unemployment problems and substantially reduce the one million unemployed with the techniques used at the present time. We cannot solve this problem by the use of any kind of notions surrounding job creation. We cannot create enough jobs to do this.
I believe discussion about job creation has led to a myth which has made it impossible to come to grips with unemployment in this country at its present level. I want to explain this contention and give some background material which will show how this figure of one million unemployed came about.
Between 1955 and 1971 the school population of this country rose from 2.7 million to nearly 6.4 million. In other words, it increased by about 2 xh times. In the same period the over-all population increased by only one third. Putting these things together we see that the school population rose seven times as fast as the general population. This created a whole series of problems. For example, we now have more vacant classrooms in this country than we know what to do with. We had to build these schools because of the demographic bulge. I suspect there will be a reverse housing problem in a few years because fewer family units will be formed. Remember, there is a factor here of seven. The situation is beginning to change now, but it will be four or five years before the change is substantial enough to be reflected in the unemployment figures.
It is interesting to note, also, that in 1953 19 per cent of the population of Canada, from infants to people 100 years old, were in the work force, and that by 1971 this percentage had grown to 29. So there are these two factors to consider-the striking increase in the school population during the period I have referred to, and the hardly less remarkable increase in the number of the population engaged in employment. Together this had led to an almost impossible situation in terms of job creation.
The number of people working between 1970 and 1975 increased by 18.2 per cent, or 1.4 million. Look at what the OECD countries have accomplished in this field. You will see that Canada leads the group. We have created almost twice as many jobs as any country in that group. The United States has moved along, but before 1975 its record was well below ours. We have created more jobs than any nation in the industrial world. But there are still one million people unemployed. It is perfectly understandable, given the demographic situation to which I have referred.
Consider the conventional techniques one might use to solve this problem. Look at the latest review from the Economic Council. It says that if we were to achieve a 5 per cent growth rate the unemployment rate would level off at about 8 per cent in the next couple of years, and that if we raised it to 6 per cent unemployment would drop to 7.7 per cent. In other words, an increase of a full point in the g.n.p. would result in only a .3

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per cent decrease in unemployment. But how do we achieve even a 5 per cent increase in the g.n.p. when the United States in the first quarter of this year had a negative growth rate- not 5 per cent, or 2 per cent, or 1 per cent, but less than zero? How do we achieve this growth when we are dealing with countries like Sweden, for example, which last year experienced a "growth rate" of minus 2.5 per cent? There are no countries in the OECD at this time which can expect more than 5 per cent.
I should like to refer to a couple statements by different economists, one known as a progressive, and the other an economist for an investment firm. They were made, of all places, on the Barbara Frumm show. The first is from David Wolfe, professor of political science at York University. He was asked whether there were any other things government could still do to improve the situation, and his answer was:
Possibly, but it would involve a more radical degree of government intervention in the economy than the government has appeared willing to undertake to date or the Canadian public at large has appeared interested in seeing the government take.
The other was from Dr. John Grant, chief economist at Wood, Gundy. But he was talking about the baby boom and the other problem I have mentioned in terms of demography, and he said:
For this Five-year period ahead its almost a superhuman effort for the economy to absorb individuals into the labour force as fast as we would like them to be absorbed
He went on to say:
I can't conceive of a policy that could bring us down to 6 per cent unemployment in, say, the next couple of years. I just don't think there is a mix we could live with that would do that.
I hope I have demonstrated that a substantial reduction of the present number of unemployed is just not possible given the techniques which are being suggested. It is not possible of solution in terms, for instance, of the Tory suggestion that we might throw another couple of billion dollars into the pot by way of providing income tax cuts. First, that amount is too small-it represents less than one per cent of the g.n.p. Second, we already have an Sll billion deficit. The New Democratic Party talks about $3.5 billion, but we still face the same problem. It is not going to work.
Hon. members opposite talk about an industrial strategy. Well, that might have some effect, but it would take five or six years for results to show, by which time the demographic situation will have changed and the unemployment rate will begin to go down on its own. I might mention that Sweden has embarked on an industrial strategy of the kind suggested and got itself into grave difficults as a result. In short, I do not believe the techniques suggested, including the present budget in terms of a massive effect, will have any basic impact.
When we talk at this point about putting the unemployed to work, one million of them, we are creating a myth which makes it impossible to approach the problem realistically. We say "Let's create more jobs", and then we do not have to think the unthinkable because we keep saying that. I think that is the problem we are facing.

I do not begin to presume to say that there are simple answers, but I think there is one thing we can look at as an alternative to job creation. We really have not looked seriously at this as yet. When we cannot create enough jobs, perhaps we should look at redistributing the work that is being done among the people who are available to do it. That may sound like a very fanciful idea. It may sound foolish, but how else can we involve the one million people who are unemployed in the labour force? Let us just look for a moment at this possibility in terms of what it really means.
There are one million people who are unemployed. The rate is 8.5 per cent. Because of the way we live and because of the customs we have developed let us accept that perhaps a 4.5 per cent unemployment rate might very well be close to zero. In other words, if we had enough jobs for everybody to work at, there still might be 4 per cent to 4.5 per cent of the population at any given time not working as a result of job turnarounds, etc. There are all kinds of reasons for this.
What I think we are looking at is reducing that one million to 500,000. In terms of man-days, a very rough calculation shows that if in every 20 days, 19 days are worked at the same hourly rate and that other day is given over to someone else, we would eliminate 500,000 people from the unemployment rolls. That sounds fanciful, and obviously that is not the way we do things, but I think there are many things we can examine. We can consider earlier retirements, educational leaves, sabbatical leaves, shorter weeks, and a very interesting thing called pairing.
As a high school principal I found, especially in the early seventies, that growth in the school population began to dwindle, and we did not need quite as many teachers. There were many people who felt they would like in some way or other to work a shorter week, or possibly to work half days and pair their jobs with others. There are all kinds of ways that can happen. For those people who worry about productivity, the studies which have been carried out indicate that each of the individuals in a pair produces more than 50 per cent of the work, more than was produced before, so we get more than 100 per cent of the work being done. In these circumstances productivity tends to grow. Some people call this work sharing. I prefer to use the phrase "redistributing work" because it at least implies that the work is still being done.
I would not be talking about redistributing work if I thought there was any other way, but I believe that the idea that we can create anywhere near the number of jobs that would be necessary to reduce the number of unemployed by half a million is just not plausible, and therefore we have to look at the other alternative, which is redistributing work. I use that as an example of the kinds of things we should be talking about and of the kinds of things which should be found in a white paper on employment, inflation or energy. These are some challenging ideas about which we have to start talking.
We have spent too much time in this House talking about the RCMP, alleged barn burnings, and this, that, and the other thing. We never seem to focus on the real world out
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there, the world of real economic crisis. I hope that before we go before the public, possibly next spring, we will have looked at all these things seriously and given Canadians a chance to have dialogue. We need to have dialogue with Canadians on these problems. When we face the public, I hope we will be talking about the real problems of a world in crisis in a meaningful way.


Roch La Salle: Mr. Speaker, 1 would like to take full advantage of the time allotted to me to make some comments on Bill C-56. We know that since the beginning of this week, part of this legislation has been the main topic in the House and I would like to say first that I object to the contents of the legislation, and this is not the first time that such a thing has occurred, because it includes a number of economic and financial provisions. And of course the bill covers the proposal made by the Minister of Finance to the provinces in connection with the sales tax.
We on this side of the House realize that there are good provisions which should be supported and indeed we would be prepared to do so. Unfortunately it is impossible for us to accept some of them because we find in the bill a provision which we consider unacceptable, encroaching as it does upon provincial jurisdictions. Under the circumstances, I think we must first of all oppose this legislation fiercely as a consequence of the fact that we refuse to accept a specific measure on the sales tax; if the government had wanted to show some honesty, we could have gone on quickly to measures that would be quite welcome throughout Canada, while withdrawing this one until such time as a solution could be found to the dilemma in which the province of Quebec and the federal government find themselves with regard to the sales tax.
It is not the first time, Mr. Speaker, that we have this kind of legislation hidden inside a bill that can hardly be justified but which it is hoped the official opposition will overlook because most of the other provisions can be supported quickly. Perhaps this one should not be discussed. But I feel that part on the sales tax, which is the important part, cannot be glossed over as easily as some might have wished. Last week, I listened to the Minister of Finance (Mr. Chretien) when he introduced this bill; naturally, he appealed to all Canadians; he made an effort to play the part of the great Canadian appealing to us to support this measure. Yesterday, I also heard some of the remarks of the Minister of Finance, as well as those of a minister representing Ontario, who blamed the province of Quebec for trying to protect its own industries. I do not understand that coming from Ontario, he does not know that industries protected under the Quebec proposal are from Ontario in a proportion of 50 per cent. In the four areas, the people in Ontario will benefit from the Quebec proposal which, and I repeat it again and again, was unanimously agreed upon by all opposition parties in the National Assembly.
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In my opinion, it is an attempt to manipulate public opinion to say that the province of Quebec wants to balkanize a segment of the Canadian economy, when the federal Department of Industry, Trade and Commerce has made it clear that the sectors protected by the Quebec government also exist in the neighbouring province of Ontario in a 50 per cent ratio out of 90 per cent, with the 10 per cent remaining divided among three other provinces. So, I am sorry that they should spread the idea that this measure-and the Prime Minister went even further, saying that it tends to undermine federalism, and the Minister of Finance (Mr. Chretien) did not hesitate to endorse his leader's position on this matter. Besides, I put a question along those lives to the Prime Minister: Does he still believe, in view of the support which the Quebec government obtained from the Liberals in the Quebec National Assembly, from Mr. Biron's Union Nationale members, from Fabien Roy, from Mr. Samson and from others, including some I shall mention later on, that all these people seek directly and unequivocally to undermine federalism. I must say that the Prime Minister was not as brave as he was with the media. He did not give the same reply and, as a matter of fact, he did not answer my question.
We fully realized also that the Minister of Finance was pursuing a very specific goal, that of stimulating industry and, consequently, the purchasing power. I feel therefore that Quebec's proposal meets in a selective way the need to stimulate industry, taking into account, of course, Quebec's priorities; perhaps I should remind hon. members of the particular problem facing the province of Quebec: an excessive unemployment rate which gives rise to a difficult situation. And the Minister of Finance, with this proposal and in view of the sudden generosity of the federal government, wanted to satisfy the needs of Quebec with a measure which does not purport to balkanize the national economy, and this was ascertained by the federal Minister of Industry, Trade and Commerce. I therefore do not think that the Quebec government can be blamed for wanting to help those sectors most in need. Some economic meetings in Quebec have also shown that all groups agree that these sectors should receive more help.
The Minister of Finance will say that he has tried to help the textile, footwear and clothing sectors by imposing certain barriers or certain quotas, but he waited until their situation had completely deteriorated. So the Quebec government only profits from the federal proposal. Now I wonder just how much candidness the minister has exhibited. He talks of consultations with the finance ministers, and we know perfectly well that this consultation was not as flexible as he claims. That much we know. He says over and over again that for three weeks he showed a flexibility such as no other finance minister had ever shown, and we know perfectly well that a decision had to be made at some point. The Minister of Finance also knew that nine provinces had presented their budget and that, as in the case of the Maritimes, when he

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offered to pay 3 per cent of a tax under provincial jurisdiction the province would have been foolish to refuse.
In other provinces, his proposal had strings attached and that is where we see interference in provincial jurisdiction. We are told that is a question of federal and provincial powers which we talked about a moment ago. But the minister also knew that the province of Quebec had not handed down its budget and it was normal that his counterpart, whoever he might be, should want to learn first of the federal generosity to use it for the most pressing needs of his province. That was exactly the reaction of the Quebec finance minister who received, I repeat, unanimous support in the National Assembly. And how many other groups support the Quebec government proposal? It seems, Mr. Speaker, that all those people are not intelligent when the Minister of Finance continues to pretend that the Quebec proposal is unacceptable and means the division of our country.
So I think that the Minister of Finance has lost his credibility in the eyes of Quebeckers and even of all Canadians. Obviously when I ask the Prime Minister if in the circumstances he intends, to deal personally with the situation as a head of state and to reopen the negotiations and initiate a meeting with his Quebec counterpart, I think it is important for the Prime Minister of our country to understand the urgency of that issue. What are the real reasons for such stubbornness on the part of the Minister of Finance? I think that with the support coming from everywhere it is obvious that the minister has some reasons he does not want to reveal in the House. That stubbornness on the part of the Minister of Finance reflects to a certain extent the hatred of the government for the legitimately elected government of the province of Quebec, that is supported by all the opposition in Quebec and it is worrying to see that kind of reaction in the province. I understand that the Prime Minister of Canada now supports the unjustified obstinacy of the Minister of Finance. We must recall for instance their deep deception after the election of that government in the fall of 1976.
I know that the election of the present Quebec government in the fall of 1976 was the proof of the monumental failure of this government which bragged about being able to get all Canadians together to reach the objective of the Prime Minister of Canada which was national unity, but everything turned into a monumental failure in the fall of 1976. And I shall never believe that the majority of those members from Quebec will continue to support this odious obstinacy concerning the legitimate demand from the province of Quebec which is not aimed at federalism or economic balkanization in those sectors but only at meeting an urgent need for the people of Quebec.
This is why I insist, Mr. Speaker, that the Prime Minister take the issue into his own hands. There is no doubt that the Minister of Finance has made a blunder. I have no hesitation in saying that, because of his comments concerning the Quebec government, he can no longer reestablish normal

negotiations. I believe that as a responsible leader, the Prime Minister should take matters into his own hands and initiate a meeting with the Quebec premier to find a solution to this problem in the interests of both governments.
Of course, the Prime Minister repeated at a press conference no more than 24 or 48 hours ago: If Quebec wants to negotiate something, I am willing to do so. This is going too far, Mr. Speaker. The Prime Minister is perfectly aware of the concern and the embarrassment that this is causing to many Canadians. However, but for a few exceptions, my colleagues from Quebec remain silent. In fact, these few exceptions will perhaps convince the Minister of Finance to change his attitude because apart from the opposition parties in Quebec, important groups are asking for a change of attitude on the part of the federal government, like the QFL did yesterday. The business executive centre has also condemned the attitude of the federal government in this affair. Moreover, there seem to be some feelings of revolt within the government party, which should normally make the Minister of Finance understand that he could lose everything on this issue. In addition, Mr. Speaker, the Prime Minister of Canada replied with an incredible lack of concern at a press conference that he has other things to do besides dealing with this matter.
It is both disquieting and saddening for Canadians that the Prime Minister acts in such a way on such an important issue. The Prime Minister shrinks from assuming responsibility for the issue for fear of disavowing the Minister of Finance, but he is already disavowed in the minds of Quebeckers and Canadians. The Minister of Finance lacked both competence and know how in these negotiations, as is evidenced by his stubbornness, his negative approach, the pressure he is using because they have the power and the majority to force us into accepting such a proposition on a basic principle, when we believe that any province must have the freedom to negotiate with the federal government and accept such a proposition. Under these circumstances, Mr. Speaker, I can only point to the sell-out by members from Quebec who did not take a stand as they had a duty to do. Regretfully I must indicate this is a conspiracy against one province because it is a well known fact that all opposition parties in the Quebec National Assembly supported their government, and therefore this is turning down the whole of the Quebec people. The Minister of Industry, Trade and Commerce (Mr. Horner), a federal minister, is bringing the proof that protected industries are shared by Ontario and three other provinces, and therefore the reasons given by the Minister of Finance are groundless. Such being the case, certainly I will not hesitate to oppose with all due vigour the Minister of Finance, who suggested he was prepared to put his political future in the balance on this bill. He is doing a very poor job of representing Quebec's interests, a very poor job of meeting his commitments to his own province's interests, and the position we all have a duty to take in
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this House at this point I am ready to share with any member who feels he has that duty to defend his province's interests in the face of a federal decision that is not accepted by that province.
I would like to refer later to the question of provincial and federal powers, since the hon. member who spoke before me expressed a concern for what he called a dilution of federal powers, on the assumption that nothing should be changed at a time when we have a $11.5 billion deficit and 1,500,000 unemployed. Well, this government has been there for ten years and the unilateral decisions it has been taking no matter what repercussions and implications there may be at the provincial level, and it is responsible for that 1,500,000 unemployed figure. Some efforts have been made, I have never denied it, but there were too few and they came too late in several cases.
I am fully aware that the government tried, but they failed to take the proper measures at the right time. They wake up today and tell us that because we have a $11.5 billion deficit and 1.5 million unemployed, we must give the federal government greater powers without adequate consultation with the provinces. Mr. Speaker, we shall never agree to such an attitude on the part of the federal government. We believe that in this matter the federal government has failed and infringed upon the provincial jurisdictions. That is why we shall oppose this legislation so long as the government does not withdraw this part, and I am sorry to say that we should like to support some other measures in this piece of legislation, but after the experience we had with other bills a few years ago, we shall certainly not be made to swallow this unsavoury pill contained in this bill.
The Minister of Finance was telling me this afternoon that a survey-I do not know where he found it-showed that 87 per cent of Quebeckers were in favour of his proposition. I hope he will not say that this 87 per cent was taken in the province of Quebec because, Mr. Speaker, I would then-


Joseph Jacques Jean Chrétien: In a Montreal paper!


Roch La Salle: -find myself again in a difficult position, but today I would like to use my allotted time, even if I entertain some serious doubts about such a statement. I see that the Minister of Finance is in the House, so I ask him again to resume negotiations with the Quebec government.
I say to him again while he is here that it is up to the federal government, to the responsible government to make the first move, to set up a meeting with the Quebec government and find a solution. And a government which is no longer able to bow to the unanimous decision of the National Assembly is an irresponsible and incompetent government. It is impossible, Mr. Speaker, for the Minister of Finance to be the only one to be right in this matter. It is unacceptable and unbelievable. Besides, there are thousands of Canadians who think as I do. In the circumstances, they are trying to waste time, they are
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sulking and refuse to pursue the matter seriously. And I know, and the Minister of Finance is fully aware, that the members behind him are worried by his attitude and would like to see-


Joseph Jacques Jean Chrétien: There is only one.


Roch La Salle: -this issue settled. We have heard some statements and seen some members on television. I can think of one in particular, and I will tell you right away, Mr. Speaker, because he made me laugh a little. The member for Compton (Mr. Tessier) made a statement terming the proposal of the Minister of Finance a political disaster, and the following day he was applauding a statement from the minister like mad. Let the constituents of the riding of Compton be the judge of this performance. It worries me a little, of course, when I see a member act in this manner. But at the same time, another member who is more serious made some remarks and we are waiting to get some evidence in support of his allegations.
Mr. Speaker, the Minister of Finance and the Prime Minister did their best to accuse us of wanting to go to bed with the separatists. Yet they have manipulated, that is the word, public opinion and they chose to conceal the truth. I will not say that they lied but that they concealed the truth, namely that the political parties endorsed the provincial government position. They are not talking about that. The Minister of Finance tells me that Mr. Ryan has rejected the La Salle-Parizeau formula. First of all, this is a further example of public opinion manipulation. No one can claim that I set up that formula with Mr. Parizeau. It is unthinkable, Mr. Speaker! The Minister of Finance fails to say that Mr. Ryan feels the solution of direct payments to taxpayers that Mr. Chretien is trying to have adopted is inconsistent with the true federalist spirit, administratively costly, cumbersome and socially unfair. He likens that solution to a form of blackmail, Mr. Speaker. It is not I who say so nor a separatist. He believes that should the federal government act in this manner every time a province refused to endorse a program, it would be dangerous for it would exert undue pressures on the provinces and undermine local governments in the minds of the people.
That is a statement the new leader of the Liberal party made just recently. Mr. Biron made one also, as well as Mr. Fabien Roy, the Social Credit representatives and the New Democratic Party. The whole opposition, Mr. Speaker, rejects the attitude and the proposal of the Minister of Finance. Responsible organizations across the country, the QFL, the Quebec workers, are opposed to it. Mr. Laberge did not hesitate to ask the government to clarify that matter. But no, it seems that only the Minister of Finance is right.
Mr. Speaker, may I call it five o'clock? I shall have further comments to make after supper at eight o'clock.

May 25, 1978
Export Development Corporation



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Fraser Valley West (Mr. Wenman)-Canada Council-Request mandate be studied by committee; the hon. member for St. John's West (Mr. Cros-bie)-Transport-Compensation for losses incurred in sinking of m. v. William Carson.

It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, notices of motions for papers.


PRIVATE MEMBERS' MOTIONS FOR PAPERS
The Acting Speaker (Mr. Ethier):: Notice of motion No. 2 in the name of the hon. member for Vaudreuil (Mr. Herbert).


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: The motion stands at the request of the government.
Motion No. 52 in the name of the hon. member for Bran-don-Souris (Mr. Dinsdale).


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: The motion stands at the request of the government.
Motion No. 1 in the name of the hon. member for Kootenay West (Mr. Brisco).


Some hon. Members:: Stand.


The Acting Speaker (Mr. Ethier):: The motion stands at the request of the government.


CORRESPONDENCE RELATING TO EDC FINANCING OF SUGAR COMPLEX IN REPUBLIC OF IVORY COAST
[Stage Direction]
The House resumed from Thursday, December 15, 1977, consideration of the motion of Mr. Herbert:
That an humble address be presented to His Excellency praying that he will cause to be laid before this House copies of all correspondence, notes, minutes of meetings, documents and agreements relating to the financing by the Export

Development Corporation of a cane sugar complex in the Republic of the Ivory Coast to be built by Redpath Sugars Ltd.
Yvon Pinard: Mr. Speaker, concerning this motion, I would like to report a few facts in connection with the financing by the Export Development Corporation of a cane sugar refining complex to be developed by Redpath Sugars Ltd. in the Republic of Ivory Coast. This sugar refining complex is an integrated project wholly-owned by the government of Ivory Coast which has committed itself to expanding and diversifying its agricultural production. To that end, Mr. Speaker, they set up a state corporation, Sodesucre, which is responsible for the production of sugar in Ivory Coast. Traditionally, this country has been importing sugar. Today, Mr. Speaker, it hopes to develop its own natural resources in order to supply its domestic market and get foreign exchange from export sales.
To establish that sugar complex, Sodesucre called for tenders internationally and Redpath Sugars Ltd. was awarded the contract, in spite of very stiff international competition from firms which were supported by state organizations equivalent to the Export Development Corporation. The successful bid of this Canadian firm resulted in suppliers and sub-contractors creating employment for Canadians.
This sugar complex which is a commercial undertaking was developed because the government of Ivory Coast felt that it was an answer to an economic need. The EDC supports commercially viable operations which involve exports profitable to Canada. By definition, such operations involve two willing parties: a buyer and a vendor. In other words, such operations must be profitable to both.
On the other hand, the expected operation must be financially viable. As it is a commercial and financial agency responsible for creating firm commercial relations for Canada, the EDC tries to deal with buyers who will prove successful. Indeed, the buyer who concludes a good deal will be able to meet his financial commitments and will become a regular customer for Canadian goods and services. This sale was announced, Mr. Speaker, on May 11, 1976, partly in the following terms:-


Mr. Lambert (Edmonton West):: I rise on a point of order, Mr. Speaker.


The Acting Speaker (Mr. Ethier):: Order. The hon. member for Edmonton West (Mr. Lambert) on a point of order.


Marcel Joseph Aimé Lambert: Mr. Speaker, we are discussing a motion for the production of papers. The matter we have to consider is not the history and the merits of the project, but merely whether the motion introduced by the hon.
May 25, 1978

member for Vaudreuil (Mr. Herbert) is founded or not, whether the papers are to be produced or not.
We all know that the official record of the Debates does contain numerous decisions made by the Chair to show that the point I am raising is founded and that we cannot afford to spend an hour and forty minutes merely applauding or criticizing the substance of the issue, the contents of the papers. The discussion is on the simple matter of producing or not producing these papers. The member who has the floor should now indicate whether those documents will be tabled or not.


The Acting Speaker (Mr. Ethier):: Order. The hon. member for Edmonton West (Mr. Lambert) may have a point of order, but I must remind him that if we listen to the parliamentary secretary, we might learn at the end why he agrees to or rejects this request. I now suggest that we listen to the Parliamentary Secretary to the President of Privy Council (Mr. Pinard).


Yvon Pinard: Mr. Speaker, I find it strange that the hon. member for Edmonton West (Mr. Lambert) should ak us to say merely yes or no. I find it unbelievable. I am referring specifically to the said organization and I think that for a better understanding of our reasons for agreeing to or rejecting the motion for the production of these papers, it is proper to speak of the organization involved and to give some particulars. I realize that our comments do not always please some members opposite, but the opposite is also true. And the hon. member has enough experience to know that you cannot so candidly censure hon. members who have intelligent remarks to make just because it displeases the members who object to it. So, Mr. Speaker, I think that the hon. member through his intervention-


Marcel Joseph Aimé Lambert: Mr. Speaker, I rise on a point of order.


The Acting Speaker (Mr. Ethier):: The hon. member for Edmonton West (Mr. Lambert) on a point of order.


Marcel Joseph Aimé Lambert: Mr. Speaker, the hon. member is unfair to me. It is not that what he says does not interest me, you can always read any book and find it interesting. But the hon. member being Parliamentary Secretary to the President of Privy Council, the problem is that he has aspirations as concerns our rules and I would urge him, Mr. Speaker, to follow the rules. Our basic rules do not authorize him to talk just about anything during this period. We are considering a motion for the production of papers and I invite the hon. member to say why there should be reluctance or agreement concerning the production of those papers. This is what we would like to know.


The Acting Speaker (Mr. Ethier):: Order, please. That is precisely what I pointed out to the hon. parliamentary secre-
Export Development Corporation tary. During his remarks he certainly will have to say why he supports or rejects the motion for the production of papers.


Yvon Pinard: Mr. Speaker, as the hon. member just said, it is indeed up to the Speaker to decide what is relevant or not under the rules. And what I say is perfectly relevant but no member of the opposition will force me at the beginning of my speech to say in advance if I am for or against a bill. I shall first present my arguments. That is what I am doing. And then I shall decide myself, freely, if the Chair allows me to do so, to support or reject the motion of the hon. member for Vaudreuil (Mr. Herbert). I know as well as the hon. member for Edmonton West the basic rules on which he insisted so much. The rules are the same for everyone. But I do not agree with him on facts and I contend that what I say is particularly relevant to the motion under consideration and that he is entitled not to agree with me. He is entitled to object if he believes that what I am saying is irrelevant, but he does not have a monopoly on truth and you have decided that what I am saying is relevant, Mr. Speaker. Later on in my speech 1 will say whether or not I support the motion. Therefore, with your permission, I shall continue to explain my position. I was saying that the operation considered must be financially sound.
Since it is a business and financial organization responsible for establishing solid business relationships on behalf of Canada, the EDC wants to do business with buyers who will make money. This is what I said a while ago, Mr. Speaker. The sale in question was announced on August 11, 1976, partly as follows: The Export Development Corporation in Ottawa will be the leader of an international pool of financial institutions which will include the Royal Bank of Canada and the Canadian Imperial Bank of Commerce. This pool will be responsible for financing the establishment of a $172 million sugar cane agro-industrial complex in the Republic of the Ivory Coast.
I would like to mention that this is only one of the many projects which have benefitted from the support of the Export Development Corporation through its loan, insurance and foreign investment guarantee programs. Outside the export sector, the role of the Export Development Corporation is perhaps misunderstood by the public, and I would like to take this opportunity to define its areas of responsibility and mention some of its achievements. I think it would also enlighten the hon. member for Edmonton West. It is a fascinating story that goes back to 1944 when a bill was passed on export credits insurance, creating a body whose head office was located in small quarters near Sparks street and was headed by one administrator, only one, assisted by a lone employee. According to its first annual report, published at the end of March 1945, that body had assets of $1 million in available and excess capital; it had also made $296.55 in operating profits. Since then, that body has grown and the present corporation has granted loans in the order of $4 billion to foreign buyers.

May 25, 1978
Export Development Corporation Through its programs alone, just in 1977, its support to Canadian exports exceeded $2.6 billion, Mr. Speaker.
But let us come back to the announcement made in August 1976 on the occasion of the signing by the Export Development Corporation of a loan agreement for $88.3 million for that sugar cane complex. When the Minister of Trade, Industry and Commerce (Mr. Horner) made the announcement, it was with some pride because far more was involved than just a matter of lending money to lubricate the wheels of our trade.
I would like to say a few words about the responsibilities of the corporation, Mr. Speaker. First of all, it issues export credit insurances and as such, it protects exporters against any risk of loss under circumstances beyond their control when carrying out their operations. Those risks include wars, funds freezing, removal of export or import licences and other political hazards. Included are also refusal or failure of payment by the buyer, insolvency, evasions and other commercial risks. The Canadian Export Corporation is the only agency which can provide that range of protection. It can also insure a bank or a third party against insurable risks under an export transaction. As far as insurances and guarantees are concerned, businessmen should also be able to obtain a bank credit to cover their export operations, which would not be charged against their regular line of credit. The CEC covers prior and subsequent risks to delivery either for contracts or for the delivery itself. On the whole, it covers all sales with a one year credit (short term) or a five year credit (middle term). At the end of the year the value of insured exports amounted to something like $1.3 billion.
The Corporation also grants loans to foreign buyers to help them finance the purchase of capital goods, goods and services which, according to standards internationally agreed upon, require a longer credit period, ten years for instance. It is important to emphasize this in this debate on the motion brought forward by the honourable member for Vaudreuil (Mr. Herbert), to justify the position I shall have to take in a few moments, Mr. Speaker, in answer to your suggestion. Such loans cannot be granted by Canadian financial institutions, because either of the lenght of the credit period or the interest rates. The former depends on the level of efficiency of the project and on the existing foreign competition. The loan we grant enable the exporters who are competitive as to prices, quality and delivery periods, not to lose a market for lack of competitive credits. The EDC can also provide guarantees to banks for their export loans. It also encourages banks, involvement as in these loans as much as possible and quite often Mr. Speaker without the benefit of a guarantee. The EDC is not trying to compete with the banks. It only deals with financing arrangements to help the banks. Finally the corporation insures Canadian investors against loss of their foreign investments in case of wars, riots and insurrections, confiscations or uncompensated expropriations and restrictions to the repatriation of gains or goods. This factor is uncreasingly important

for our trade and the new trend for countries which buy our goods is to constitute joint ventures. This simple description of the responsibilities of the EDC will certainly give you an idea of the complexity of the problems which we are facing at this time when our trade is becoming more and more specialized. As a matter of fact the EDC has recently launched a new program of completion guarantee for projects abroad and special aid to expanding export firms.
The Ivory Coast operation, Mr. Speaker, is somewhat exceptional in view of the fact that it is the first of the kind in Canada, as has been announced. Incidentally, Redpath Sugar Limited of Montreal has been able to hire a bilingual team of designers and engineers in Montreal. This is the first Canadian project for which three major EDC programs were used to carry out the trade objectives of our country.
At this stage, Mr. Speaker, I would like to state the position I shall be taking on the motion by the hon. member for Vaudreuil (Mr. Herbert), but I see that my speaking time has nearly expired and I will have several other matters to discuss before I let this position be known. I wish to give some of my colleagues the opportunity to take the floor. To conclude I would like to mention that some other programs to which I have referred require the involvement of very important participants. The buyer, the exporter, the bank and the investor are all seeking to pursue their own interest which does not concern anyone else. The details of the projects considered cannot be made public, for it is because of the information of a confidential nature that the EDC had obtained that it could arrange the financial aspect of these projects. These details could not be released without violating the trust of the parties. On the other hand, the activities of the EDC would be hampered, which would be detrimental to Canada's trade.


Mr. Lome Nystrom (Yorkton-Melville):: Mr. Speaker, I would like to make but two brief points about the motion that is before us today. In supporting the hon. member who wishes to have these papers produced, I would like to read to you once again the motion that is before us:
That an humble address be presented to His Excellency praying that he will cause to be laid before this House copies of all correspondence, notes, minutes of meetings, documents and agreements relating to the financing by the Export Development Corporation of a cane sugar complex in the Republic of the Ivory Coast to be built by Redpath Sugars Ltd.
My first point is, as I say, that I support the motion to produce these papers. It is important to know what the arrangements are, and we should have openness in government and in financial transactions that involve the people's money. The other point of major concern in a case like this is that we have an Export Development Corporation helping a large sugar firm, the Redpath company, to establish a sugar complex in the Ivory Coast. I have a number of questions I would like to have answered with regard to that area.
May 25, 1978

I have seen now for too long large multinational corporations from the west going into the third world countries or developing countries and setting up huge complexes on the best land that is available for luxury crops, primarily goods like sugar, bananas and tobacco-crops that are not part of the necessities of life. These corporations set up on the best land and leave the secondary land for the people of those countries, in this case the Ivory Coast. It is that secondary land that these people must use to feed themselves.
Despite the fact that we have developments like this in many countries of the Third World, there is now more starvation and hunger in many of these countries than there has ever been before. The reason for this is that foreign owners like Redpath are going in and taking the best land and taking advantage of the very cheap labour that is available. Because of this the corporations are making a lot of money but they do not reinvest it in those countries. It is not a good thing to promote, nor is it a good thing for the EDC to be promoting.
It is the taxpayers' money that is financing a project of this sort, and yet, as I said earlier, the people of the Third World countries must live on secondary land and produce their food on land of inferior quality because a foreigner is using their best land to produce a luxury export. This is not a good precedent, nor do I like the importation into the Third World of this sort of agriculture, which is a psychology that North Americans seem to follow.
I do not want that method of farming and agriculture to be exported to countries of the third world because it may not be the best thing for them. Instead, we should help the countries of the developing world help themselves. We should make sure that the countries of Africa, Asia, and South America are self sufficient in food. Few countries can produce enough food to feed themselves. Countries like France and the United States can, of course, and even a small country like Israel is able to feed itself as a result of good planning and proper utilization of its resources. If we do not promote self sufficiency in food for other countries, we will have massive famine. Shortages of food in years to come will make the energy crisis look like a Sunday school picnic. When people are faced with starvation they turn to violence. The EDC should not be involved in transactions of this sort.
The other thing about this kind of development in the Third World is that it is not only important to huge agra-business companies but that those countries also import eating habits. An example is the exportation of skim milk powder to the third world and the promotion of the bottle feeding of children in those countries. This turned out to be a disaster because those children cannot digest the lactose, yet it was promoted for commercial profit. I do not want Canada, through the EDC, to be part of that sort of thing.
I think the House should support the motion for the production of papers relating to the financing arrangements made by the EDC. Just yesterday the hon. member for Simcoe North (Mr. Rynard) questioned the Minister of Supply and Services
Export Development Corporation (Mr. Goyer) about the government's business dealings in Iran and Saudi Arabia. They are two of the wealthiest countries in the world, and anyone who doubts that should read the article in last week's Time magazine about the billions of dollars that Saudi Arabia cannot even spend. The money is coming in faster than they can spend it, yet a Canadian Crown corporation is investing in Saudi Arabia and Iran. Today in the House the minister said that the Canadian Export Development Corporation may become involved in the transaction referred to and, if it does, I say that is a crime. If Canadian industrial development is to be stimulated through the EDC it should be done in countries that can be helped, not the wealthy ones.
The motion calls for the production of documents, notes, minutes of meetings, correspondence, and so on, between the EDC and the Republic of the Ivory Coast regarding a sugar complex to be built there by Redpath Sugars Ltd. Perhaps we should also talk about the other things the EDC does and whether it should be doing them in the third world. I say it should not. It should not be investing in countries like Iran and Saudi Arabia.
I hope the government will take note of my remarks and made policy changes which will help people in the developing countries as well as the people of Canada.


Roger Carl Young: Mr. Speaker, I was going to begin by saying for the benefit of the hon. member for Edmonton West (Mr. Lambert)-but I notice he has left the chamber-that I will be speaking against the motion. I will elucidate on the premise I intend to put this afternoon, which is that it would be adverse to the effective functioning of the Export Development Corporation if we were to expose the papers connected with this transaction. That being the case, I suggest it would mean that such a disclosure would be adverse to Canadian export sales and the interests of all of us so far as employment of Canadians is concerned.
It seems to me that the hon. member for Yorkton-Melville (Mr. Nystrom) has serious misconceptions about how the Export Development Corporation assists other countries and Canadians. Perhaps I can give him some of the bits and pieces of information that he said he was looking for, and at the same time explain how it functions, how it helps Canadians, assists developing countries and even some of the more developed countries of the world.
The financing by the Export Development Corporation of the cane sugar complex in the Republic of the Ivory Coast should be regarded as a commercial triumph. I suggest that it is a victory by Canadian exporters. It carries benefits to exporting suppliers and sub-suppliers all the way across Canada. The project involves development and construction of a cane sugar plantation, raw sugar factory, ancillary facilities, with a new railway spur, sidings, and access roads which will link the site to the existing systems and allow transportation of the factory output to the sea for export. The government of the buyer country is the driving force behind the project and is putting up $25 million of equity, as well as guarantees of payment.

May 25, 1978
Export Development Corporation
The sugar complex is a commercial project being built because the Ivory Coast government has decided that its economy needs and can benefit from it. I want to point out to the hon. member for Yorkton-Melville that is was largely the decision of the Ivory Coast to begin this project. The EDC supports commercially viable transactions which involve exports beneficial to Canada. By definition, such a transaction involves a willing buyer and a willing seller. In other words, it must be mutually beneficial. Furthermore, it must be a financially sound proposition. As a commercial financial institution devoted to building strong, long term trading relationships for Canada, EDC wants to be involved with buyers that will prosper. The satisfied buyer engaged in a sound transaction will be able to meet financial obligations and will also become a valuable repeat customer for Canadian goods and services.
The Ivory Coast government was certainly a willing and enthusiastic buyer. It was represented at the signing of the EDC loan agreement by the minister of finance of the country, its minister of agriculture, two ambassadors, and a number of its very senior officials. Obviously the government sees long term benefits accruing to the country from the project, otherwise it would not have embarked on such a large undertaking in the first place.
The benefits to Canada are very considerable. There is nothing wrong with that. Foreign trade is our economic lifeblood, so to speak. We rely very heavily on export trade. Exports represent over 22 per cent of our gross national product. Canada is seventh in the world of exports as a percentage of gross national product and even more strikingly is second in the world in the value of exports per capita.
The project in the Ivory Coast has been profitable for Redpath Sugar and has been good business for the Export Development Corporation. The foreign investment guarantee was for $12.5 million with respect to a 12-year management contract and for technical services. This provided a substantial premium to the Export Development Corporation. But let me emphasize that the Export Development Corporation proceeded to provide its support when it was satisfied that the government of the Ivory Coast wanted the project. It was at their invitation that the project be conducted. We assume that this project was in the interest of the Ivory Coast, that it made good economic sense for them and would have a beneficial impact on the standard of living in that country.
Let me give some of the specifics about Export Development Corporation's financing with respect to the Redpath Sugar project in the Ivory Coast. On August 11, 1976, the Export Development Corporation announced that it would lead an international syndicate of lending institutions, including the Royal Bank of Canada and Canadian Imperial Bank of Commerce, to finance a $172 million agro-industrial raw cane sugar complex for the Republic of the Ivory Coast. Export Development Corporation is to lend up to $88.3 million for the project.

The Export Development Corporation financing involves participation by Canadian banks totalling $21.6 million which will be co-managed by the Royal Bank of Canada and Canadian Imperial Bank of Commerce. In addition, Antony Gibbs and Sons Limited is participating in the amount of up to $16.7 million.
A $45 million Eurocurrency loan will be provided by a consortium of banks to assist in the local cost financing, start-up working capital and contingencies. The loan will be co-managed by Citicorp International Bank Limited, New York, the Royal Bank of Canada, Canadian Imperial Bank of Commerce and Brandts Limited, London.
A project of Redpath Sugars Limited, Montreal, principal subsidiary of Redpath Industries Limited, Toronto, the 14,800 acre complex in the west African French speaking nation, will provide 60,000 tons of raw sugar for export annually. The deal was the first of its kind for Canada. It was largely due to the assembly, by Redpath, of a bilingual engineering team based in Montreal that the project was a Canadian one and not American or British.
Value of Canadian goods and services to be financed under the Export Development Corporation agreement will exceed $74 million. Export Development will also provide preshipment insurance for Canadian goods and services, as well as guaranteeing the Redpath investment in the form of a longterm management and technical assistance contract. This was the first time all three operating divisions of the corporation have been jointly involved in concluding a project of such magnitude.
Redpath's contract includes responsibility for construction and management of all phases of operation from land preparation to product shipment. This involves development of a sugar plantation, an irrigation system, a molasses terminal, a sugar factory and all necessary infrastructure including a rail spur and marine terminal. The sugar factory, molasses terminal and irrigation system will be handled on a turnkey basis.
A substantial part of capital goods and services will be procured from exporting suppliers and sub-suppliers from accross Canada. The realization of this object has put Canada in a most favourable position for further export sales related to sugar production.
Redpath Industries Limited is a diversified company involved in sugar refining, construction materials manufacturing and engineering, and agricultural consulting services. It employs more than 1,700 people in Canada and abroad.
That is why, Mr. Speaker, I describe the project as somewhat of a triumph. I suggest that for the proper functioning of these facilities provided by Export Development Corporation there must be an element of trust between the Export Development Corporation and its client, exporters and investors, and a similar degree of trust between Export Development Corporation and its correspondents, the banks and similar institutions at home and abroad.
The corporation is on the inside, so to speak, of business deals large and small. In each one the exporter has to trust
May 25, 1978

Export Development Corporation to safeguard information involving particulars of the exporter's business affairs. That trust would be totally destroyed if the confidentiality were broken. These confidences create an obligation. More than a mere government agency fondness for secrecy is involved. To produce papers of a commercially confidential nature would be to require a breach of that trust.
The project in question, an integrated sugar complex, is wholly owned by the government of the Ivory Coast, a government which has committed itself to expanding and diversifying its agricultural base. In an effort to do just this, it created Sodesucre, a government owned corporation to assume responsibility for the production of Ivorian sugar. The country has traditionally imported sugar, and hopes to develop its own national resources to supply the domestic market and provide the country with foreign exchange earnings from export sales.
Sodesucre called for tenders in the international market for the development of the sugar complex, and in response to this call Redpath Sugars submitted a successful bid. The bid was won in the face of stiff international competition from firms which were supported by their national equivalents to Export Development Corporation. The successful bid of the Canadian firm has resulted in the placing of substantial equipment orders in Canada and has created jobs for Canadians by these suppliers and their sub-suppliers.
The sugar complex is a commercial project being built because the ivory Coast government has decided that its economy needs and can benefit from it. The Export Development Corporation supports commercially viable transactions which involve exports beneficial to Canada. By definition, such a transaction involves a willing buyer and a willing seller. In other words, it must be mutually beneficial. Furthermore, it must be a financially sound proposition. As a commercial financial institution devoted to building strong long term trading relationships for Canada, Export Development Corporation wants to be involved with buyers that will prosper.
This project represents the first chance that a Canadian company has had to export a sugar cane complex. It was also the largest project of any kind realized by Canada in West Africa. All of this has been made possible by a unique and ingenious blend of the three facilities available through Canada's EDC. It has not been mentioned that Canada is perhaps the only country in which all three such facilities are available under one roof, available through the same government agency. The EDC is an agency, incidentally, that costs the taxpayers nothing except the share capital paid into it for the shares the government holds, and in 1977 EDC made a profit of $18.7 million or 11 per cent on the equity.
It has been mentioned that among the international syndicates which EDC is leading are Canadian banks; the Royal Bank of Canada and the Canadian Imperial Bank of Commerce are lending U.S. $16.6 million. It was pointed out earlier that banks are not in the business of making loans repayable over a term as long as ten years. The EDC has so
Export Development Corporation
arranged the financing that the banks' share will be on terms acceptable to the bank's normal practices. They will be repaid out of the first five repayment instalments. Thus we can say the banks' funds will be in for a portion of the construction period and a portion of the repayment period, probably not more than five years, so that the funds can be made available without going beyond the normal five or so years maximum for bank funds.
EDC disburses its loan funds and the banks also disburse their loan funds as payments become due to the exporter under the terms of the sale. For goods and services sold by Canadians the disbursements are made to the Canadian exporter or suppliers as delivery is made or performance is carried out. A small percentage may be applied to local costs of the project, under EDC's practice. The banks' funds are not normally tied to Canadian exports. Thus EDC disburses its loan funds to the Canadian supplier. The money stays here in Canada.
What happens if there is a disaster, or a breach by the borrower of a predisbursement condition? In such a case the EDC can protect the exporter by insurance, credits insurance, commonly called pre-shipment cover, which will cover those risks until the time payment is received. Thus the second of the EDC facilities has been blended into this transaction.
Sugar manufacture has gone a long way from the days of the windmill and open fired vats. Will the borrowers be able to manage a modern plant with all the technological refinements, if I may use the term, of a sugar operation? Redpath will not stay in the Ivory Coast indefinitely, and after it leaves trained personnel will be essential. Provisions have been made to cover that eventuality. Redpath and the buyer have arranged a management contract and a training contract which includes training in Canada in the French language of some 50 Ivorians. So that need has been taken care of.
The management contract brings into play the foreign investment guarantee facility of the EDC. It is an "investment in a foreign country" within the Export Development Act, the statute which has created the machinery for these guarantees. Thus if Redpath were unable to repatriate its earnings from the contract or if the government of the Ivory Coast were to repudiate the contract, the resulting loss would be covered by the foreign investment insurance policy. Thus the third of EDC's three facilities was employed in this sale.
I think it would be gratifying to the House to observe how the wise and beneficial measures parliament has provided are employed to bolster our foreign trade and encourage its development, not by subsidy, but by reasonable, sane and sensible operations carried out in a businesslike way.
Let me emphasize that the exporter, Redpath Sugars Limited of Montreal, employs about 1,700 people in Canada. It is Canada's largest producer of refined sugar. It operates two sugar cane refineries in Canada. This company is the principal subsidiary of Redpath Industries Limited of Toronto, which in turn is slightly more than 50 per cent owned by Tate & Lyle Investments Limited of London, England. The Montreal company certainly has the expertise to carry out successfully the

May 25, 1978
Export Development Corporation
interesting Ivory Coast project of which we have been speaking.
Still more importantly, perhaps, is the favourable position in which Canada will be for further export sales related to sugar production when the Ivory Coast operation comes into production. There is a real Canadian identity in this sale. Mr. Speaker, those further sales and the sale we have been speaking of mean jobs for Canadians. Reference has been made at some length to the Export Development Corporation, and in one word that is what it stands for-jobs. As we have said, to expose all the papers connected with this important transaction is adverse to the effective functioning of the EDC. In the simplest terms that means adverse to Canadian export sales and against the interests of all of us so far as employment in Canada is concerned.


Mr. J. R. Ellis (Hastings):: Mr. Speaker, when this private member's motion was introduced I had, frankly, no reason to get involved in the discussion; but as I sat here this afternoon I found myself irritated by exactly the same kind of nonsense we have heard for years-what is good for the EDC is good for the country. Or, in other words, what is good for General Bullmoose is good for the country.
The hon. member for Niagara Falls (Mr. Young) tells us EDC costs the country nothing. That may be so. But how is it, then, that in the last few minutes in another room closure was almost forced on a committee because the government wanted to raise the appropriation for EDC from $8 billion to $20 billion? If EDC costs us nothing, why should the government be using all its weight to put another $12 billion into the institution? I have great difficulty imagining $18,000 let alone $18 million or $18 million. Yet all of sudden this corporation which costs us nothing is to get $ 12 billion more.
I rise this afternoon to say thank you to the hon. member for Vaudreuil (Mr. Herbert) who has the courage of his convictions, though his colleagues and the government obviously oppose him, in asking for the production of papers to show what happens when the EDC sponsors a Canadian firm operating in a foreign country. One thing the hon. member for Niagara Falls did was to lay before us a lot of figures, millions of dollars for this, hundreds of thousands of dollars for that. Obviously, somebody knows the answers to all these questions. If the hon. member can submit this information so readily, why should it be so difficult to get a look at some of these papers?
Questions were asked in the House this afternoon. For instance, the ministers were asked to explain why the government, through EDC, was investing in countries like Iran and Saudi Arabia, to the tune of $500 million or $1 billion. My understanding of the current world situation is that those countries have enough money of their own. But the Secretary of State for External Affairs (Mr. Jamieson) stood up and accused us of threatening to take away jobs from Canadian farmers and workers if we as much as raised a whisper against the EDC. I do not buy that balderdash, frankly. 1 believe that given the right climate Canadian firms would export a great deal more than they are now. But I do not believe this aura of

secrecy is needed. Nor do we need the heavy hand of government, the inference that when we ask questions on this subject we are threatening Canadian unity or employment possibilities or doing all kinds of nasty things.
What does the government have to hide? What is there in a contract that is so very secret? If a major Canadian company dealt with a contract overseas, at its annual shareholders' meeting it would certainly be forced to reveal some of the details of that contract. Private enterprise has to do it. Why is it so difficult for the government to bring some of these papers before us? What is there in this government that it is so bound up in secrecy?
I might just digress momentarily. I intend to bring this up before this session is closed. All of us know that the Leader of the Opposition (Mr. Clark) caused quite a flurry in the House just recently when there was a question regarding someone looking at his income tax files. That has been exaggerated to the most ridiculous extent.
I tried the other day, in order to help an aged veteran, to get the date of his discharge from the Canadian forces. I was told that that was a secret and that I had to get a letter from that veteran authorizing me to ask the question. That is utter nonsense. All of us know that one of the things we do most frequently is intercede on behalf of our constituents in matters arising out of conflicts with the Unemployment Insurance Commission. Now we are being told that in the future when we ask questions of the Unemployment Insurance Commission we will have to have letters from our constituents authorizing us to ask those questions. This is happening now with regard to income tax. What is there about this government that it wants to hide everything? I heard as a joke some time ago that the government wanted to keep secret the number of cans of dog food on the DEW line. I sincerely believe that the government would hide almost anything.
I want to hear this government tell us why it is going to hide all these documents, but before I sit down I want to say that I admire the hon. member for Vaudreuil for bringing this matter forward and asking very simply that these papers be produced. I must ask again, why is the government trying to hide them?
[ Translation]


Mr. Bernard Loiselle (Parliamentary Secretary to Minister of Industry, Trade and Commerce):: Mr. Speaker, I am very glad to take part in this debate, especially at this time, because of the difficulties we are having in committee, in spite of the agreement in principle we had obtained from the official opposition to support Bill C-36, because of the opposition's eagerness to filibuster and prevent the adoption of this government bill which would provide the Export Development Corporation with a margin of operation which is absolutely essential.
Every time the Corporation wants to increase its authorized capital stock in order to help our Canadian firms export, sell
May 25, 1978

goods and thereby create jobs, it must indeed come before Parliament.
It is clear that the Opposition is asking why the EDC needs so much leeway to manoeuvre. No later than this afternoon in committee I had to explain once again to the hon. member for York-Simcoe (Mr. Stevens) that if the Corporation-


Walter David Baker: Mr. Speaker, I rise on a point of order. I have been listening to the debate and I am beginning to wonder how committee hearings regarding the EDC might relate to a motion which is very simple, namely, that the government produce certain documents. What happened in the committee today is of interest, of course, but the matter which is before the House is a motion asking the government to produce certain documents. I hope the parliamentary secretary will do his best to answer the question.


The Acting Speaker (Mr. Ethier):: Order, please. I think that the remarks of the hon. parliamentary secretary were perhaps brought on by the remarks of the previous speaker, the hon. member for Hastings (Mr. Ellis), which referred to comittee deliberations, particularly those of this afternoon. However, I will ask the parliamentary secretary to confine his remarks to the motion before the House.


Bernard Pierre Loiselle: Mr. Speaker, if my hon. friend on the other side would like to be as patient as we have to be with them everyday and let me continue, he will see that I would quickly come to the point.
With your permission, Mr. Speaker, I should like to mention what happened in committee this afternoon, where members of his party asked us a series of questions. In the case of Redpath Sugar Ltd., we are asked to submit figures, to open books. I ask members of the opposition to take a greater part in the work of the committee on Finance, Trade and Economic Affairs, where the chairman of the Export Development Corporation will answer their questions as long as confidentiality, contrary to what the previous speaker said, is respected. You can indeed, if you are a shareholder of a bank or a company, ask questions at the annual meeting but without going into all sorts of details.
There is secrecy, that principle of confidentiality which might affect the competitive position of the company by divulging some technical aspects, some aspects of their knowhow. When you attend meetings of shareholders of private companies, you will note that you cannot always get all details on a bank loan for instance. There is a very simple reason for that; you may borrow $100,000 at 8 per cent but all the other terms of the contract may affect the terms and the cost of borrowing.
However, Mr. Speaker, Redpath Sugar Ltd. is another case where the Export Development Corporation was involved to create employment in Canada. If I may refer to the New
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Democratic Party members, they used to give examples where the EDC involvement in such transactions had jeopardized employment in Canada. We must remind the Canadian public that if the EDC did not intervene in some cases, as we heard before the standing committee on Finance, Trade and Economic Affairs some other country which has the same financing mechanism will help its own companies compete and get contracts to supply equipment. Consequently not only would our companies not be in a better position and face stiffer competition, but we would lose employment that such initiatives create in Canada. Mr. Speaker, despite all the respect I have for my friend the hon. member for Vaudreuil (Mr. Herbert), it seems to me a proposal, indeed a motion which certainly shows a concern-


The Acting Speaker (Mr. Ethier):: Order, please. The hour provided for the consideration of private members' business having expired, I do now leave the chair until 8 p.m.
At 6 p.m. the House took recess.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed consideration of the motion of Mr. Chretien that Bill C-56, to amend the statute law relating to income tax and to authorize payments related to provincial sales tax reductions, be read for the second time and referred to the committee of the whole, and of the amendment (Mr. Broadbent) (p. 5548).
Roch La Salle: Mr. Speaker, as I was saying before the five o'clock recess, in my capacity as representative of a province which has its own problems, I am quite sorry to see that few members from that province have disagreed with the Minister of Finance who rejected the Quebec proposal which, I repeat, would not jeopardize the incentives or objectives advocated by the Minister of Finance, namely a stimulus to the economy and to the industry and more purchasing power. And I think that my friends from the province of Quebec know perfectly well that the Quebec proposal is the right response to those two basic requirements and will provide an incentive to crucial sectors of the Quebec industry, and is supported, as I said earlier, by Ontario and three other provinces. The sales tax reduction will amount not to 3 per cent but to 8 per cent and I challenge my friends opposite to pretend that this is not a solution or proposal acceptable for the province of Quebec and honourable for the rest of Canada.

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When I look back, Mr. Speaker, on what took place over the last few weeks, and am confronted with this arrogance, this stubbornness, I will not hesitate in accusing the federal government of dishonesty. And what about its prejudiced attitude towards the Quebec move to abolish the sales tax in the soft sectors of its industries? I shall refer you to a recent study in support of the Quebec proposal, by the Department of Industry, Trade and Commerce which shows that in the four sectors where the sales tax was cut out altogether, namely clothing, textile, shoes and furniture, about 122,000 workers out of 270,000 are working in Canada outside the province of Quebec, which clearly proves that the Minister of Finance's allegation that this measure is aiming at the balkanization of the Quebec economy is groundless and deceitful. In fact, it is only in the clothing industry that Quebec has more workers, that is one third of a total number of 121,000 in Canada. I say that by voluntarily suppressing those figures and having us believe that the Quebec proposal is prejudicial to the national interests, the government is misleading the people and is resorting to some kind of political deception which is unworthy of a government with the least sense of honour, Mr. Speaker. A good number of manufacturers in the industries involved outside Quebec have recognized that the other provinces would profit by the withdrawal of the sales tax and not only Quebec, as the government and the Minister of Finance would have us believe.
Once again, Ottawa has infringed upon a field coming under provincial jurisdiction, and because Quebec stands up for its economic priorities and to protect the interests of its citizens, it is taxed with being separatist and with trying to balkanize the Canadian economy. This is just not so, Mr. Speaker. The Prime Minister and his assistants know it quite well, even though they are suffering from chronic federalitis to the extent that they are unable to admit that Quebec can be right without jeopardizing Canadian unity.
The economists, industrialists and political commentators of Canada, even Anglophone, are virtually unanimous in agreeing that the Quebec counter-proposal is likely to stimulate employment, an objective pursued by the Minister of Finance, while at the same time increasing by 8 per cent the purchasing power of Quebec residents. That can only help the national economy and constitute an element of economic revival. Though the complete abolition of the sales tax as advocated by Quebec seems to have favourable effects on the economy throughout the land, the gentlemen heading this government maintain that it is a subversive manoeuvre. According to their reasoning, the formula cannot be beneficial since it supposes a special arrangement with a provincial government. Still, during the negotiations prior to the minister's budget, he himself managed to accommodate the special requests of British Columbia, which delights us, of Saskatchewan, Ontario and the Maritimes. But when it comes to Quebec, that is
[Mr. La Salle.)
asking too much, and as they see it it threatens to split the country asunder.
I say most emphatically that if our party were in power now, we would not hesitate in handing over to Quebec, on their own conditions, that is for the pursuit of two objectives, the full amount of $226 million, to which they are entitled under the formula initially proposed by the minister himself. There would be no hesitation either in giving the same advantages, of course, and the same consideration to the provinces which would voice such a wish.
At this point in my comments, Mr. Speaker, I say that the government's present attitude is close to being ridiculous, and that it amounts to mere stubbornness in these circumstances. I conclude by saying that I charge this government with deliberately seeking a pretext to wage war on the government of Quebec on the eve of an election. This will perhaps enable them not to lose face in front of certain provinces but as far as I am concerned, I call this hypocrisy, falsehood and electoral fraud.
Mr. Speaker, I think it is important that Canadians in general and Quebeckers in particular, be made aware of the position taken on this matter by the hon. members who represent them. All Quebeckers, I was reading this morning in the papers, it is unbelievable, when the Minister of Finance tells me that he saw, in the Journal de Montreal, the results of a survey showing that 87 per cent of Montrealers favor his proposal. Is it possible, Mr. Speaker, that the Minister of Finance should rely on a survey conducted by a newspaper, the Journal de Montreal, which is a serious paper, but this survey may have been rigged by a group of individuals who would report that 87 per cent are supporting Mr. Chretien's proposal. I see how naive he is when he refers to this seriously, just as naive as when he submitted his proposal to a province that had not yet presented its budget.
Quebeckers must know that the Finance Minister's proposal is far from contributing to the just society promised by this champion of national unity, this champion of inflation and unemployment, this czar of the provinces who has promised to give us heaven during the last ten years. Mr. Chretien's proposal amounts to gross injustice. That is unfortunate, but I think the leader of the Liberal party was speaking about it yesterday in Quebec City when he said that he found this solution inconsistent with the true spirit of federalism. That was Mr. Ryan speaking, and Mr. Ryan, Mr. Speaker, is no separatist as far as I know. This solution is administratively costly, cumbersome and socially unfair. It is not Mr. Parizeau who said that but the leader of the Quebec Liberal party.
The Minister of Finance (Mr. Chretien) says that he will compensate for the Quebec refusal by distributing $85 cheques in certain cases, $22, $42 cheques or nothing in other cases, but nearly one million workers in Quebec will not receive this cheque from the federal government. For instance, a young couple who both work and who both paid their $85 in taxes
May 25, 1978

will receive $85 each or $170. I am very happy for this young couple, Mr. Speaker, but in a family with six children, where the mother cannot have an outside job, the father who must work hard every day will only get $85. No one can tell me that this is the just society promised by the Prime Minister who has certainly not kept his promises. Quebeckers are starting to realize that the dream of 1968, the just society, paradise in Canada, has become a deep disillusion in the last few months, since the Prime Minister (Mr. Trudeau) made his decision recently about the possibility of going to the country. Dr. Gallup advised him not to call an election for a while yet, but for a number of Quebeckers, I believe that this dream will determine the future position of the party in power. No one in Quebec remains untouched by this basic issue. We are defending a matter of principle. We want a viable federalism where the provinces will participate truly in major national decisions. It is only in this way that there can be co-operation in Canada, and not in the way that the Prime Minister and the Minister of Finance are now behaving. This is stubbornness, Mr. Speaker. This reflects hate against a government which was legally elected in Quebec. Why? Because of too many deceptions, too many disagreements, too much confrontation and arrogance on the part of the federal authorities.
I remember very well that I endorsed requests from Quebec members, from the Quebec government at the time of Mr. Johnson. I was accused of supporting the Union Nationale. I supported the submissions of Mr. L'Allier, Mr. Hardy, Mr. Saint-Pierre, when the government in Ottawa turned down recommendations which were perfectly justified in view of the rather special situation of Quebec. At that time, of course, I was not accused of being a Liberal, but the Liberals are now ignoring their colleagues in Quebec. Today we are endorsing the proposal unanimously supported by the four Quebec provincial parties, by the chamber of commerce, by the FLQ, and by I do not know how many organizations which are blaming the Minister of Finance for his present position. We are accused of being bedpartners with separatists. The Minister of Finance should have the courage to say that Mr. Ryan is a separatist, that Mr. Biron is a separatist, that Ontario industrialists manufacturing textiles, clothing and footwear are separatists. That is hogwash, Mr. Speaker, and the Minister of Finance knows it. He is disavowed at this very moment by the whole province of Quebec and he has surely lost much credibility across the country. It is a clear fact that the Minister of Finance has made a colossal mistake.
He has not the courage to recognize his error and correct it, and he is now proving, Mr. Speaker, that federalism as suggested and described by Mr. Levesque cannot work. He is proving it with the complicity of members opposite from Quebec who refuse to understand that the situation is serious. They are proving that Mr. Levesque is right when he suggests that federalism cannot work by rejecting a proposal with which most Quebeckers agree, Mr. Speaker.
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That is exactly the situation and we are being accused of promoting separatism, but they are the ones who give first class reasons and grounds to Quebeckers to keep on believing that it is impossible to live under such a regime whereas we are fighting for the respect of provincial jurisdictions and we assure to all provinces that they will have their say whenever a proposal will be made on such a vital issue as the sales tax because it does come under provincial jurisdiction.
I have here yesterday's issue of La Presse and at one place, I read: How disgusting! The Minister of Finance does not mention it! Contemptible mean action! Ottawa must retract. Deeply sickening! A whole series of headlines, Mr. Speaker, which have been appearing on newspapers for the last few weeks. Our friends opposite do not talk of that. The hon. member for Laval (Mr. Roy) was convinced yesterday that we had not yet understood. He would rather applaud to statements made by the Minister of Industry, Trade and Commerce (Mr. Horner) who as recently as 18 months ago, called the members of this cabinet a bunch of nonentities of the worst kind.
To add insult to injury the Minister of Industry, Trade and Commerce, supported by the hon. member for Laval (Mr. Roy), thought this was funny. A lot of Quebeckers will find that funny indeed! The Minister of Industry, Trade and Commerce indicated that that gentlemanly Minister of Finance had shown competence and initiative, after calling him by less flattering names 18 months ago.
No, Mr. Speaker, I believe that Quebeckers and Canadians are not fooled. In the few remaining moments at my disposal, I want to state, in the name of my party, that public opinion is being manipulated. We are not told the truth. Of course I was granted a short leave of absence last week, perhaps because I was telling the truth, but in the current sales tax strife between Canada and Quebec, the Progressive Conservative party is moved neither by electioneering motives nor by the least bit of sympathy for separatist aspirations. What moves us to support nonetheless the Quebec government's position is our historic interpretation of the nature of Canadian federalism, and also our traditional respect for provincial jurisdictions. There is also a factual analysis of the economic impact of the budget proposals as submitted by the Minister of Finance, as well as a sense of fairness to Quebec workers in Quebec's four industries that are the most severely hit.
That quarrel once more underlines the difference in outlook between the government and our party on the constitutional tax problems. For 30 years at least, through successive leaders three of which were former provincial premiers, the Progressive Conservative party consistently exposed the Liberal party of Canada's traditional tendency to view the provinces simply as administrative agencies, whose role most of the time is to implement the central government's unilateral decisions in many areas of provincial jurisdiction.
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May 25, 1978
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To conclude, because I nearing the end of my time, I call once more on Quebec members-if they had some guts left they could not remain seated-and on all members of all sides to work for a solution that is fair, both for Canada and the province I represent here.


Mr. Claude-Andre Lachance (Lafontaine-Rosemont):: Mr. Speaker, the hon. member for Joliette (Mr. La Salle) evidently enjoys the limelight. As a matter of fact, his little performance of last week has demonstrated to all Canadians that of all the words which could be used to describe this party, arrogance is the one that fits best. In this respect, Mr. Speaker, I suggest that Canadians realize now that it is one thing for the Progressive Conservative Party to make allegations and that it is quite another for them to make them stick. Mr. Speaker, the hon. member for Joliette has tried, in a ground-skimming flight of oratory, to prove the unprovable, namely that the Minister of Finance has been dishonest. It is he who is dishonest, Mr. Speaker, because if someone in this House has tried to be an innovator in this whole matter it is the Minister of Finance. If there is someone who has made a real effort to show openness regarding the budget, the consultations with the provinces so that they may take part in the process, it is the Minister of Finance. If there is someone who got himself into hot water in doing so, it is the Minister of Finance.
He can only be blamed for one thing: to have got himself in trouble because of the action of someone in Quebec who has since then taken an uncompromising attitude and who is waiting, sitting on his behind for things to happen and for his own trivial problems to be settled, because Mr. Speaker, we do indeed have a problem. I will come back to that later. But others have problems too and I am convinced that the Canadian people will not be fooled by the petty game played by Mr. Parizeau in Quebec.
In this respect, Mr. Speaker, I think it is important to go over the events which led to the presentation of the bill now under consideration. Besides, I would like to say it is too bad about the sales tax issue, especially because of the difficult relations between Quebec and the federal government which is endeavouring to find a solution. It is too bad that this sales tax issue is so embarrassing that we cannot see the excellent provisions of Bill C-56, which result from the budget presented by the Minister of Finance to improve the economy, to encourage research and development, and to promote small business, in other words, to give it the push it will need during the coming months in order to attain its cruising speed.
But we have a problem, the sales tax issue. Then we must try to understand what has happened. I believe that it is important. First, what do we find in that proposal? There are objectives, ideals, principles, terms and conditions. First, the objectives. Why did the Minister of Finance take all that trouble: consultations, meetings with provincial ministers of Finance, talks with provincial premiers? Why did he go to all that trouble to propose a measure which finally should be

beneficial to all Canadians since it is a tax reduction? Why so much trouble, Mr. Speaker? The reason is, according to all the economists, all the serious economists, not those from the opposition, according to all the economists, reducing the sales tax was an appropriate way of improving the Canadian economy until the fall of 1978 when by that time we hope it will be recovering.
They criticize this measure saying it is a mere six month hoist, whereas it is a basic measure designed to accelerate the recovery of the economy, a measure which should directly encourage Canadians to spend more money, to buy more products. If we had reduced the federal tax as we did in the past, once again retailers or manufacturers might have taken advantage of it and the consumers would have gained nothing by it. But by using the sales tax, Mr. Speaker, consumers were being encouraged directly to benefit from the advantage offered to them. Naturally, sales tax is a field now mainly taken over by the provinces but once again let us not be deluded, it is a shared jurisdiction: the provinces are not the only ones that can deal in indirect levying of taxes like that. The federal government also has powers in that field which it is not now using; so, this is not strictly a sphere of provincial jurisdiction; it is shared. In short, since the provinces are now the ones benefitting from the sales tax, then, of course, there had to be negotiations with them.
And let us remember, Mr. Speaker, that the one who started the whole thing was not the Minister of Finance. It was Darcy McKeough, the Ontario Conservative finance minister, who thought and who continues to think, I believe, although he has been contradicting himself a little recently, that this measure could be extremely beneficial to Canadian industry. Negotiations then lasted for three weeks, during which the provinces that wanted some other arrangements presented their views to the Minister of Finance, who upon consideration, accepted some and rejected others. What about Quebec? We do not know. Quebec is in limbo. Quebec is waiting it out. Quebec is waiting for heaven knows what, Mr. Speaker, because when negotiations are under way, each of the concerned parties must try to present its own view of the matter. Mr. Speaker, I have not yet heard the Quebec finance minister tell what he suggested to the Minister of Finance when he should have. We don't even have it from him, Mr. Speaker. So what was he doing? The question remains unanswered, Mr. Speaker because there is no answer to it. Yet, the negotiations are going on-


Roch La Salle: He made his proposal known. It is unfair to say that.


Claude-André Lachance: Mr. Speaker, I would ask the hon. member for Joliette to listen to me. I listened to him for 40 minutes when he had the floor, I did not interrupt him once, so he should hear me out, Mr. Speaker!
May 25, 1978


Roch La Salle: It is unfair to say that.


An hon. Member:: You will not make the front page like last week!


An hon. Member:: Bedfellows with the separatists!


Roch La Salle: Say in the House what you say outside the House!


An hon. Member:: Be quiet!


Roch La Salle: You are playing another tune!


The Acting Speaker (Mr. Ethier):: Order. I would like hon. members to show the same courtesy to this speaker as they did to the previous one. The hon. member for Lafontaine-Rosemont.


Claude-André Lachance: Mr. Speaker, as usual, the hon. member for Joliette is clowning, but his voters will decide.


Roch La Salle: I will not put up with this! You people are dishonest, but I tell the truth.


The Acting Speaker (Mr. Ethier):: I must ask that we extend to all hon. members the same courtesy as was extended to the hon. member for Joliette. The hon. member for Lafontaine-Rosemont.


Claude-André Lachance: Mr. Speaker, this is the House of Commons; I realize that some have a Latin temper, but once again I would ask the hon. member for Joliette to be kind enough to listen to me. If he is not satisfied, he could ask questions. Mr. Speaker, there has been consultation with the ten provinces. The Minister of Finance has received the agreement of nine of them, the other one has given no answer. It is possible, Mr. Speaker, that the Minister of Finance-oh! it is easy to play politics backwards; the hon. member for Joliette is an expert in this field-it is possible that the Minister of Finance has been imprudent. But what is his mistake? He believed that the others too would play the game of federalism. That is his mistake, Mr. Speaker, to have believed in the rules of the federalist game. Having said that, the province of Quebec reacted a few days later with its budget and made public its own sales tax reduction scheme on a selective basis applied to four sectors seen as priorities. Nobody says, Mr. Speaker, that these sectors have no priority. Nobody says, Mr. Speaker, that they should not have reduced the sales tax by 8 per cent. Nobody says, Mr. Speaker, that they were wrong to put the emphasis on the sectors they felt they had to encourage. Nobody ever said that, Mr. Speaker. To my knowledge, nobody ever said that.
Let us make a distinction! We are living in a federation. Since we are living in a federation, there are national interests,
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provincial interests, and municipal interests, and you also find a federal government, a provincial government and a municipal government. The federal government, Mr. Speaker, proposed a measure designed to spur the economy throughout Canada. Nine provinces accepted, one did not answer. One province, that same one which did not answer, came up a few days later with its own formula. And then it tried to impose upon us its own conclusions because that is what it wanted to do. It wanted to play the game its own way, all by itself. It did not want to play the federal game. It wanted to play the game of the province of Quebec. What are the facts, Mr. Speaker, what are they? In the Maritimes, where the provinces do not have a very strong manufacturing structure, the Minister of Finance suggested that we would pay their sales tax, I mean the reduction, that we would compensate for the loss of revenue due to the sales tax reduction, these 3 per cent. In other provinces, different arrangements were submitted. Quebec, Ontario, Saskatchewan, Manitoba would have to pay 1 per cent, the federal government taking over the other 2 per cent.
By doing away with its 8 per cent sales tax, Quebec figured that this was perhaps not a bad idea at all, Mr. Speaker, and that it just had to squeeze the lemon and see to it that it would not cost them a cent. The problem is again that they will always try their little Parizeau deal but they stand all alone, while the federal Minister of Finance has ten provinces behind him. He is in charge of a federation, you see, Mr. Speaker. When he makes a proposal, Mr. Speaker, he is dealing with ten finance ministers and if the Ministers of Finance were all like Mr. Parizeau, I can tell you that life would be a lot harder in this country because that man wants to play the game his way all by himself. Incidentally, what are the counter-proposals made by Mr. Parizeau? What are they, I ask you? None has come up since the beginning of this debate. All he said was actually "take it or leave it". So much for negotiations, Mr. Speaker! Take it or leave it! You assume entirely the loss of revenue from the sales tax in the four priority sectors on an 8 per cent basis. This is our final position.
The Minister of Finance has played the game from a federal point of view. He made a proposal. He got no answer. Let us admit that he made a mistake. A few days later, maybe one week later, he forwarded a proposal to the Minister of Finance Parizeau. He said: Listen, you have four priority sectors. We might have discussed it before but let us suppose we have been through all that. We shall let you allocate the 1 per cent you should have normally spent for that cut on the four priority sectors you have identified and we are going to pay 2 per cent on everything else. It was perfectly logical, but then there was a problem. The problem was that Mr. Parizeau had to finance a part of his proposal. He does not want to finance it, he wants the whole pie, he wants to press the lemon dry. He wants to get the $220 million without having to pay out a single penny.
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Mr. Speaker, that proposal from the Minister of Finance was something different from his original stand. You cannot call this inflexibility, Mr. Speaker. I think that even the hon. member for Joliette must admit that there has been a compromise between the original proposal and the 2 per cent "across the board" proposal. Mr. Speaker, I keep hearing the hon. member for Joliette from behind the curtains, and having made his speech earlier, he should let me speak now. Mr. Parizeau rejected his proposal. After that, a few Quebeckers realizing that the situation was heading towards a dead end, asked the federal Prime Minister whether he was willing to promise that those funds would finally be paid to the province of Quebec. Mr. Speaker, the Prime Minister promised that the funds owed to the province of Quebec would be handed over to the province of Quebec.
What was the next step? The next step was getting bogged down, unfortunately. Now I come to the definition I gave earlier, Mr. Speaker. What was behind that budget proposal? Objectives. What are those objectives? An economic recovery to join with the upturn in the economy which should have some results next fall. The objectives were to make the link. What was the ideal? Consultation. For the first time, provincial ministers of finance were consulted about a federal budget, in order to help precisely the economy to attain its cruising speed. What was the principle? A very simple principle in a federation. It is for a central government to see to it as much as possible that resources are distributed in all parts of the federation, even if some adjustments have to be made through negotiations, adjustments which were made in the case of five provinces. What were the terms and conditions, Mr. Speaker? That is where things went wrong.
Since Mr. Parizeau refuses the offers made by the Minister of Finance, the minister must find ways to return to the Quebec economy and turn over to Quebeckers and eventually to the Quebec government the funds which cannot be distributed for lack of an agreement. Several proposals have been suggested. As a matter of fact, there have been four proposals.
First of all, there is this proposal which Mr. Parizeau would like us to accept because it would solve some of his problems, and I say some, Mr. Speaker, because it would give rise to problems of another kind, about which I shall say nothing just now. So, let us assume that the federal government turns over to the Quebec government a cheque for $226 million to Finance the 8 per cent reduction in the four priority sectors. It is a possibility, but a possibility which does not make sense under the present circumstances for a number of reasons. First, it runs counter to the principle of equality which I explained a while ago. Should a province receive a cheque for $226 million-for that matter, the hon. member for Joliette (Mr. La Salle) stated a while ago: Well, if we are elected, we promise to give them $226 million. And he added: But if other provinces want to do the same thing, they will get the same

amount. What kind of a low calibre policy is this that the Canadian population is expected to swallow? They should at least try to meet their objectives, because otherwise it will be a monumental flop. For the moment, it is a flop in Quebec. It is not a flop elsewhere. It is working very well in nine provinces up to this time.
Mr. Speaker, let us talk about the various possibilities. The first one is to give $226 million. It is impossible because, as I said earlier, it goes against a basic principle. It also goes against the most basic rules of negotiation. If you have negotiated something, it is more or less the same as if you have signed a collective agreement with one or two unions, and a third one comes along and says: Listen, we want such or such a thing. The first two unions will not be very happy if you give something to the third that you did not give either to the second or to the first.
If you have agreed on something, you must respect your agreement and do so for everyone. Moreover, this transfer of $226 million is not logical for another reason. I cannot see why the Minister of Finance would give a cheque of $226 million to Quebec when the other provinces will not receive immediately the sums to which they are entitled since they will get this amount in the form of fiscal rebates over a period of six months in 1978. Quebec would therefore have an unfair advantage over the other provinces over a period of six months. This is another possibility, that of fiscal rebates. These rebates can seem very attractive at first glance, but I shall come back to this later on. The third possibility is a tax credit for taxpayers. What is a tax credit? Federal taxpayers simply paid income tax to the federal government. We are making tax room for a certain amount of fiscal points. We are rebating taxpayers the monies involved, so that provincial government may tax in that field. I see nothing bad with that. I cannot understand why there is so much excitement. I do not understand the outcry. There is nothing so horrendous about that, it is simply a matter of provision. There is no principle involved. None, Mr. Speaker, it is merely a matter of provision. I do not say it is the best one, but it is a simple provision. There is no question of principle involved. And what is the principle? It is to rebate $226 million. Once the principle is accepted, we turn to the provision. And what is the available means? It is to rebate an income tax credit for the province to collect. Why is it somewhat more complicated in Quebec? In fact, it is rather more apparent in Quebec. Quebec is the only province with its own revenue department, and I am not judging that in any way. So it collects its own income tax, with its own income tax returns. You have on the one hand the Canadian government collecting its own taxes, and the province doing the same. In other provinces the Canadian government, through Revenue Canada, collects for both levels of government and pays the provinces their share. In other words, to make room for the income tax credit in the nine other provinces, because this in effect was done, the Canadian government vacated a tax field
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to the tune of $100, allowing the provinces to increase their income taxes by that amount. Nothing shows on the income tax return. The Canadian government gets a cheque and then distributes the money. In Quebec, things are slightly different because they are more apparent. There is an income tax credit.
The fourth possibility that was not used but that is still available was to rebate $226 million pro-rated on the Quebec population. This way everyone would get a cheque, every Quebecker at least would get a cheque for $45. Trying to understand somewhat the confusion perpertuated by opposition members, it is more or less the formula they were putting forward two weeks ago. They have changed their views two or three times since then, but that was the Clark formula, that of allegedly reimbursing the poor.
But that does not make much sense in taxation, and it is administratively extremely complex. Thus there are two possible formulas left: the tax credit and the tax rebate. The Minister of Finance retained the tax credit. I have no objection in principle, and I repeat, Mr. Speaker, I have no objection in principle because there is no principle involved. As a matter of principle, whether they choose a tax rebate or a tax credit makes no difference at all. I repeat it a third time, Mr. Speaker, because I think it is the basic factor, it is the key which will enable us to get out of this dilemma which some newsmen take pleasure in maintaining because it serves their purpose and makes the news, I think, but never mind the newsmen for the moment. The key is that there is no principle involved. What was the principle? It was to remit $226 million to Quebec so that the government of Quebec can take over this tax field and finance its own activities. There is no invasion of the provincial field, but where is the invasion of the provincial field, Mr. Speaker? You know, so many falsehoods have been spread around. Besides, members opposite have had their share in that matter. There have been so many falsehoods, so much lack of understanding in all that matter that there comes a point when one must restate the facts. There are principles, possibilities, ideals and objectives involved. Let us make a distinction. The possibilities are as follows. A tax credit. The Minister of Finance proposes that $85 be refunded to each Quebec taxpayer, and I mean Quebec taxpayer at the federal level. We are then accused of proposing a socially unjust measure. I surely would like to know why. It is quite easy to launch accusations once again but they should be able to substantiate them.
Why is it socially unjust? Why is it that by making tax room, because this is what we are actually doing by issuing a cheque to allow the provinces or the province of Quebec to move into a tax field, we are applying a socially unjust measure? I would like someone to explain that to me because I fail to understand. Would it be more just to give $45, because I am returning the argument, would it be more just to give $45 to all Quebec taxpayers, and then the government of Quebec steps in and taxes the Quebec taxpayers-who are more or less
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the same as the federal taxpayers who have actually received only $45-to the tune of $85 because they still have to finance the whole debt!
But is it more just this way? This question has not been answered yet, and I would like somebody to answer it once for all. The tax credit is $85 and not $100 as in the case of the other provinces. The reason for this is also quite simple to understand. It is because the Minister of Finance has agreed to give $40 million to the province of Quebec to finance 2 per cent of the sales tax reduction in four priority sectors. I must admit that I have no objection whatsoever to that, even if I doubt that it is in complete accordance with the original proposal, but this is another story. The Quebec government will get $40 million, and I suppose it will manage to get the rest. Anyway, logic-and I do not say that pure logic necessarily goes with pure politics-logic would have required us to take a position and to stick to it, from A to Z. For example, the tax credit should have been $100 for everybody; thus Quebec would have had to get the $226 million it needs. But these are only technicalities since on the question of principle it does not make much difference to the Quebec government to receive either $40 million from the federal government and $186 million from the taxpayers or $226 million from the taxpayers, even though in practice it makes a slight difference.
However, there was another possibility, that is a tax rebate. It has certain advantages and disadvantages. First of all, it has the advantage of avoiding the obvious administrative problems involved in the $85 refund because to do this, you must take the tax tables for 1978, or what is left of them, and make the deduction at source for an x amount, for instance, 10 tax points in the case of Quebec-I believe it would be 10 in this case-and you must tell the province of Quebec: You will increase your own tax tables for the equivalent amount. What happens then? This implies fairly large expenses for businesses and administrative problems in preparing the tables, but those again are problems that can always be solved in cooperation with the Quebec department of revenue.
So, for 1978, what you would do would be simply to give a tax rebate for a certain number of tax points so that Quebec could, and again this is the same principle, tax within its temporary tax points for a period of six or three months-if the period was six months, it would be ten points, if the period was three months, it would be 20 points. I suppose that there would be problems with the tax tables, but here again, I believe it is possible to come to some agreement with the Quebec department of revenue.
This is a possibility, this is the system that Mr. Ryan supports. There is nothing to get excited about. Why should there be? Why the other system, but not this one? In any event, those are possibilities and possibilities can always be discussed. There is something else that I could perhaps urge the Minister of Finance to try, because we cannot be certain that the other side would agree to this suggestion, and this

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would be to discuss these possibilities with the Quebec authorities. Would this be the Quebec minister of finance, or the premier? The decision is up to him and I have complete confidence in him in this regard.
Mr. Speaker, there is a moral to be drawn of all this. Sometimes, the best intentions give rise to problems in politics. Sometimes, logic and feelings are incompatible for all sorts of reasons beyond anyone's control. Sometimes, the population or the politicians of different levels of government fail to understand each other because they do not speak the same language. Sometimes, it is next to impossible to put forward logical, reasonable, realistic arguments. Yet, that is what I tried to do tonight, Mr. Speaker. And 1 can assure you it is not easy, because even if the hon. member for Joliette might call us traitors, it is quite easy to call someone names. Mr. Speaker, I have always thought that logic was worth a fight at least once. An attempt had to be made to quietly solve these problems which are not really so complicated, Mr. Speaker, to suppress emotions for 40 minutes and try to prove that the objectives were worthwhile, that the ideal was lofty, and that the whole thing fizzled out because of technicalities, a speck of dust having lodged in the wheel axle. In short, Mr. Speaker, I would be the last one to put the blame on the Minister of Finance, because I say once again that he has done a terrific job and has broken new ground. He was the first to discuss tax matters with the provinces while preparing his budget, and that, Mr. Speaker, nobody will be able to take it away from him.


Mr. Otto Jelinek (High Park-Humber Valley):: Mr. Speaker, the bill before us deals with tax measures which the present government, under the direction of the Minister of Finance (Mr. Chretien), bungled in an unprecedented way. I say that because never in our history has a government attempted to hand out money to Canadians only to find themselves under near unanimous attack by all, including their Liberal colleagues in Quebec and elsewhere, and, I may add, here within their own caucus as well.
I will not dwell on this subject of underwriting provincial sales taxes because many of my colleagues before me have dealt with that subject in detail, and more have yet to make numerous worthwhile comments on the matter in the days and perhaps weeks ahead. I would like instead to deal with some of the small business measures that were announced this week by the Minister of State (Small Business) (Mr. Abbott) and others.
In introducing these long-awaited announcements on small business, the government created a three-ring circus equivalent to a tragi-comedy drama. Not only did the government choose to spread the announcements on one subject matter over a three-day period, but they did it in such a manner that they once again demonstrated a shameful disregard for parliament by ignoring parliamentary traditions.

On Tuesday, the "minister irresponsible for small business" bypassed the House of Commons by allowing himself to be led by the nose to the weekly news conference of the Prime Minister (Mr. Trudeau) where he read his statement to the most unimpressed media we have ever seen. I was not there, but someone said there were only two questions for the minister. One was, why was he there; and, second, when was he leaving? I am not sure whether that was a fact, but someone suggested that was the case. By announcing what he thought to be new measures outside the House of Commons, he shamefully ignored parliament.
By the reception he received at that press conference, he was moved the next day to table in the House of Commons his second phase of his announcement which dealt with a study on improving the equity financing environment for small business in Canada. A very important topic indeed, and yet the minister again ignored parliamentary procedures, this time by declining to make a statement on motions, thereby removing the rights of all members of parliament to question the minister on this very important subject.
The third part of the three-ring circus came today when the Minister of Finance tabled tax measures related to small business, again without giving the traditional statement. It is obvious that this "charade" was meant to receive maximum exposure for the government and the Minister of State in view of their lack of public activity within the small business sector, particularly when compared to what our party has been proposing in this regard in the last months and years.
I am not one for quoting newspapers, Mr. Speaker. However, Don McGillivray put it correctly when he wrote in his column published in the Montreal Gazette, Wednesday, May 24, and I quote:
We are not having the election. But we are having the campaign, which has now turned into a campaign for victory in the Gallup poll as a prelude to victory in the eventual election.
So the small business plank from the Liberal campaign platform was produced at a Trudeau press conference. The press gallery reporters, gathered for their weekly joust with the Prime Minister, found themselves confronted as well by Tony Abbott, the apple-cheeked Minister of State for Small Business.


The Acting Speaker (Mr. Ethier):: Order, please. I am left wondering whether the hon. member is addressing his remarks to Bill C-56 which is before the House.


Otto John Jelinek: Obviously, Mr. Speaker, these are some preambles. I will be dealing with the tax measures. I would like to continue my quote by Mr. McGillivray. I will back up a little bit:
The press gallery reporters, gathered for their weekly joust with the Prime Minister, found themselves confronted as well by Tony Abbott, the applecheeked Minister of State for Small Business.
They were not too pleased to have come loaded for bear only to find that the first course was chipmunk. They sat silent while Abbott read out his press releases. And they still sat silent when asked if there were any questions about small business.
He went on to write, and I quote:
What Abbott had to say was mostly fluff... Canadians have learned in the past to treat election promises with some reserve. But we are now in a new
May 25, 1978

situation in which a government that has called no election is likely to conduct its day-to-day administration as though it were part of a political campaign.
The episode also suggested that Trudeau and his colleagues will bear watching as they try to run a government and a campaign at the same time.
That, Mr. Speaker, basically indicates the fiasco surrounding the various announcements this week, and what makes it more serious is the fact that we in the official opposition, as well as a vast number of small business concerns across Canada, have been pressing the government for years to introduce and implement realistic incentive-oriented programs helpful to the small business community and changes in the tax system that would be beneficial to small business. Instead, we received a hodge-podge of rehashed promises with the exception of one or two provisions which we were advocating in the first place.
Nevertheless, my primary purpose in taking part in today's debate is to respond to the minister's long awaited announcements. Although it is the duty of the opposition to oppose, as its name implies, the record shows that over the past few years we have been doing much more than that. In matters pertaining to small business we have taken a wide lead in introducing policies and recommendations geared to the small business sector. These measures have proved sound, logical and realistic and have generally been welcomed by small business interest groups and concerned businessmen in every region of Canada.
I shall not repeat here the policies we have introduced in the past due to the lack of time, and because the last time we did so was less than two weeks ago, on May 16, when we took the initiative to introduce again measures to assist the small business community in Canada. In fact, it is ironic, Mr. Speaker, that important as the small business community is, employing well over 50 per cent of the labour force, it has only been the Conservative party which has prompted and initiated debates on small business in the House of Commons. I believe it is this insistence which has moved the government into at least the limited action we witnessed this week.
It seems that the federal sales tax amendments by the Minister of National Revenue were the highlight of the minister's announcements last Tuesday. The proposal is to raise from $10,000 to $50,000 the level of sales by manufacturing firms which would make them exempt from paying the 12 per cent federal sales tax on production and sales.
At first glance this seems like an honourable and welcome gesture by the government. However, does any hon. member here know of a full time manufacturing firm which can operate on total yearly sales of $50,000 a year? We are not talking about small retail outlets, we are talking about manufacturers. Even the government's claim that 11,000 businesses will be affected by this change indicates less than one per cent involvement from the 1.1 million plus small firms operating in Canada today. Less than one per cent, Mr. Speaker, by the government's own admission, and in my opinion less than one tenth of one per cent of full time Canadian manufacturers. That, Mr. Speaker, was the highlight of the minister's announcement when he claimed that this measure will greatly
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enhance the betterment of the over-all small business community in Canada.
I believe consideration should be given instead to removing the federal sales tax from all Canadian owned and operated small business manufacturers. This would not only help the over-all small business community, but make Canadian-produced goods at least competitive with their imported counterparts on which federal sales tax would continue to be collected.
This renewed sense of competition by Canadian manufacturers would naturally stimulate sales and thereby equalize government losses caused by removing the federal sales tax in the first place. This, of course, cannot be done unless a realistic definition is used, one which the government obviously lacks. As I stated last week in this House, the government up to that time had taken four different positions within one year as to definitions, including one of 100 employees or less. Since then a new definition has been added which indicates that a small business is one that has 300 employees or less. In this last definition, as in previous ones, no provisions have been made to exempt subsidiaries of large multinational corporations from the small business definitions.
This latest addition to the government's various definitions only underlines the total chaos within the small business secretariat in its relationship to other federal departments. I repeat that any definition based on the number of employees is only a negative incentive to small business, urging them to curb growth and employment opportunities for the sake of remaining within the small business definition.
We on this side of the House have consistently maintained that the only realistic definition is the one used by the United States small business administration, that being that a small business is one that is owner-managed and not dominant in its field.
The minister also announced that a series of information bulletins will be sent out to small businessmen by his office. Small business does not need more government paperwork. Small business does not need more government directives, regulations or controls. It is obvious that these bulletins would only add to an already heavy paper burden while at the same time promoting the government and the minister himself prior to an election.
One area of importance which the minister did touch on was that of job creation for university graduates. But can you imagine, Mr. Speaker, that the minister is limiting this program to only 800 students, and this on a temporary basis at a cost of $5.4 million to the taxpayer? It is like throwing crumbs at potential voters. What about the thousands of other graduates in Canada who are just as qualified and unable to find job opportunities? At least the minister did not repeat what the Prime Minister told students in Toronto a year or so ago, that if they do not like it here, they should move elsewhere.
I believe that governments, being the largest potential employers in this country by far, should have a set-aside employment program for graduate students along the same lines as a set-aside program for goods and services to small

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business as proposed by my party. In the area of procurement the minister also had an announcement to make. He acknowledged "that small businesses from time to time have cash flow problems which stem from slow payment of bills by the federal government." He promised that progress to speed up these payments will be made. Hurray for the minister! He promised something which should have been done years ago.
The rest of the minister's announcements on Tuesday were generally, as I said at the outset, rehashed policies or proposals already made. For example, the minister emphasized the importance of the Small Businesses Loans Act. This act, Mr. Speaker, has been in effect since 1961 with amendments made last year only for the sake of keeping up with the times. The minister also dwelt on the enterprise development program, for example, and said that millions of dollars are available to small business. No specific number of millions was mentioned though he did say that the amount allocated to the EDP for this coming year is less than last year. And is it really geared to small business? Just recently, the government awarded $8 million to C.C.M., not only a large company on its own but a subsidiary of a multinational corporation, Multi Seaway Corporation. Hardly helpful for small business, is it?
We move now to the second ring of the circus, the minister's tabling of the white paper on venture capital. Yesterday in the House of Commons, after years of persistence by us and other Canadians concerned with the lack of working capital in the small business community, the minister presented a white paper on venture capital. I will not dwell on it very long because most of the paper is dedicated to such sub-titles as "Government recognition of the need to support small business financing". We told the government that years ago. I am happy they finally recognized its importance. In any event, the three basic proposals within the paper are viable to a certain extent although in some cases overlapping with existing programs. The simplest, of course, is to increase the equity investment activities of the FBDB. My own thought is that since the FBDB, an extension of the IDB, has not been overly successful in the past, the idea is perhaps overly simplified.
The second option is to introduce tax measures to enhance the availability of risk capital to small business. This is excellent verbiage except that the paper does not expound on how the government would go about providing these tax measures.
The third option-


The Acting Speaker (Mr. Turner):: Order, please. I suggest the hon. member get back to Bill C-56 and not continue to address himself entirely to the subject of small business.


Otto John Jelinek: Mr. Speaker, with all due respect I suggest that Bill C-56 has a great deal to do with small business, tax incentives and with all the other matters connected therewith. If this government-or anyone for that matter-thinks that small business should be disregarded in Bill C-56, it does not have the right perspective of what small business is all about in Canada.
If I may continue, the other option is to introduce tax measures to enhance the availability of risk capital to small business. The option is to create another intermediary vehicle, this time referred to as a venture enterprise company. The bulk of the white paper deals with the licensing requirements of this program, the limitations, ownership, powers and so forth, and generally one can conclude that the incentive to invest in this program is a back end incentive, which would not be very entertaining to the investor. "Back end" means that the incentive would not be there at the beginning, and Canadians would be discouraged from investing in that capital pool. It is obviously based on the United States program called the Small Business Investment Company, operational since 1958; and even the white paper refers to this program as not having been an unqualified success.
Therefore, it seems strange to me that, on the one hand, the government would be considering following the not too successful program of the United States while ignoring the very successful SBA policies, such as the introduction of a small business act or the general definition of small business plus any number of incentive-oriented programs which have been working effectively in the United States.
Although the white paper is impressive in its appearance-it consists of 36 pages-it is far too unrealistic in its recommendations for improving the equity financing environment for small business in Canada. It is, of course, presented for public discussion and therefore all options should stay open, and I do hope it will receive the attention it deserves. In any event, I believe that the recommendations we have been making in this regard, whether we want to call it venture capital, risk capital or working capital, are far more realistic and relatively simple to implement. We must continue to realize that red tape and bureaucracy must be simplified rather than made more complicated. Therefore, one of the ways to increase working capital for small business is to utilize and expand on existing programs.
One such program which is in place but which is under-utilized is the Small Businesses Loans Act, which assists small businesses with sales of $1.5 million or less with up to $75,000 toward fixed assets. My party's recommendation has been to expand this program to include working capital as well, and I will quote from my remarks during our opposition day on Tuesday, May 16. We have been recommending this for quite some time, and we made it clear again that day. I said the following:
-in order to help owner-operated enterprises raise working capital, we are recommending that the small business loans program cover working, as well as investment capital where such funds are not available through normal commercial arrangements. We feel that including working capital assistance within the loans act would enhance the use of the act and assist the small firms where assistance is most required.
This is precisely what the white paper is attempting to achieve, but I am afraid that instead of achieving such an objective it will only enhance the already confusing and contradictory atmosphere which the small business ministry is creating.

May 25, 1978

Our second recommendation in this regard, which we have been advocating for some time, is to provide an incentive tax crecdit to any Canadian citizen who makes a direct investment in the equity of a Canadian-owned small business. This is a front end incentive because the incentive would come to the Canadian citizen directly as a tax credit when investing in a Canadian-owned and Canadian-operated small business enterprise. This again is a typical example of what the white paper is trying to get at. Instead of copying, borrowing, stealing or begging ideas which are available-I do not care which- many of which are operational in the United States and elsewhere, we create a monster, the white paper which was put forward just yesterday in this House for discussion. I hope there will be a discussion of the paper on a national level, but I hope that the final outcome will be simplified and realistic because we need less government and more incentive programs in this very vital sector of our economy.
The third and final tabling of the government was the amendments to the Income Tax Act and the excise tax, which were tabled yesterday. Naturally, we welcome these amendments, particularly the first one which deals with the rollover of capital gains tax to families in small businesses. In March of 1977 we made precisely that recommendation, and I quote: "Amend those provisions of the Income Tax Act which discourage the transfer of small businesses within families or to employees." This tax proposal does do this, but it does not go far enough. There is a limitation of $200,000 and, therefore, as a capital gain only $100,000 is gained.
Second, it does not include employees. In small businesses there are a great number of employees who are close to the ownership, and it would be worthwhile to be able to transfer those businesses to employees rather than shutting them down because the taxes cannot be paid at the time of death.
The other two matters, the capital losses and the amendments to the Income Tax Act, are really just window dressing to the VEIC program proposed in the white paper. We have no objection to that amendment except, as I say, that it is applied by the government to make the VEIC proposal in the white paper more favourable to the investor by amending the Income Tax Act according to the capital losses as outlined in the paper.
The third amendment to the Excise Tax Act by the Minister of National Revenue, through the Minister of Finance, deals strictly with those announcements of last Tuesday on the removal of the federal sales tax for companies whose sales are under $50,000. Basically this last move by the government today in its three-ring circus was clearly just to tie in with the two announcements which were made over the past two days.
It is incredible to me that the latest budget did not include these amendments to the Income Tax Act. Is this a second thought by the government in dealing with small business? Is it because the government has seen fit to move into the small business area after it saw what happened in the Gallup poll? Is it because many people are involved in small business in Canada? It is not that long ago that the budget was introduced, and in fact in the budget-and, to satisfy you, Mr. Income Tax Act
Speaker, in Bill C-56-the limits we are taking off for incorporated farms and farm partnerships as far as the rollovers are concerned do nothing for small business.
Then, as an afterthought, when the government does come in with amendments for the rest of the small business community, they do not compare with the amendments regarding farmers. I agree with those farm amendments. They are long overdue. Farmers deserve the amendments in Bill C-56 and we support them, but why not handle the small business community in a uniform way? Why is there a limit on the other small business sector of our economy? Why are employees not included? These are some of the questions which must be answered by the government in the very near future.
I just want to emphasize that any assistance to small business is naturally welcome. Small business has become, I believe, a partisan issue because everyone always wants to help the small guy. But the government must realize who the small guy is. They cannot make provisions, tax amendments and assistance available in the form of incentive oriented programs unless they come up with a realistic definition of small business. I repeat, we have had five different positions from the government so far as definitions are concerned, and this cannot work. It has not worked in any other industrialized country. Therefore, I recommend again what I have done many times in the House: let us borrow from the United States small business administration their definition of small business which has worked effectively and which is viable. I do not understand why the minister is afraid to come up with that definition rather than changing it every week.
As I said, we welcome as well any policies or measures that the government decides to borrow from us. I say "borrow" because after the next election when we are on the other side we will naturally keep those recommendations and suggestions which we have been making and develop them in such a way that small business will once again become the backbone of our economy, and our economy will once again reflect the healthy and free enterprising system on which this country was built.
[ Translation]


Mr. C. A. Gauthier (Roberval):: Mr. Speaker, I will try to deal with Bill C-56 and I would ask you to be as lenient with me as you have been with the previous speaker. I have always wondered why it was so hard to get along in Canada, particularly Quebec and Ottawa, and now I realize why: Not only do we not speak the same language, Mr. Speaker, but we cannot discuss the same subject.
With regard to Bill C-56, I regret to have to say again that the government has once again brought forward an omnibus bill. This is just another bill designed to make us accept the unacceptable. I think that someday someone will write about this government saying that it was the omnibus bills champion. I think that all the discussions which we have had in this House since the present Prime Minister (Mr. Trudeau)
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became the head of the government and most particularly since the issue of the provincial sales tax came up, which will compel us to reject this bill C-56, if the Finance Minister (Mr. Chretien) does not see reason, will have been completely useless if the government won't give way.
The crisis which we are' presently experiencing is just the outcome of the increasingly centralizing policies of this government and if we want to put an end to this rising federal dictature which I have ceaselessly denounced before this House, there is only one way: throw out of this House those intruders into areas of provincial jurisdiction, who are going to destroy Canada. As soon as we rise to defend the constitutional rights of the provinces, and most particularly today, those of Quebec, all the Liberal party tenors call us separatists but where are the separatists actually to be found, Mr. Speaker? Are they not among those who want to strip the provinces of all their powers, which are at the very basis of our Confederation? The Parti Quebecois wants to establish a true and legitimate association so that Canada will cease to have to survive by snatching one compromise after another. With regard to the British North America Act which I do not consider as a constitution but rather a royal decree, do people know that there has never been a formal agreement signed by the Canadian people and supported by it?
All that this act contains is a compromise between the newly constituted provinces of the time and it is from that compromise that have emerged all the struggles between the two founding peoples of Canada, mainly over the past 110 years. England has always acted as the arbitrator between two groups which have never gotten along with one another, because it was actually London's intentions to make us quarrel between ourselves to dominate us. This is what we have never understood in Canada. An in this regard we are not yet decolonized. This is why a petty autocrat such as the present Prime Minister (Mr. Trudeau) French by birth and English by principle has managed to bring Canada to the brink of collapse. And just like any dictator has to have its court jester, ours has found one in the person of the Minister of Finance (Mr. Chretien) who seems to enjoy that role greatly. The Minister of Finance keeps shouting right and left that he does not want to grant Quebec any favors, that he wants to treat the province of Quebec absolutely like any other province. Let us see how he acts out his contradictions. While he accepts to hand over directly to the provincial governments the reimbursement of the loss incurred through cancellation of the sales tax, after entering into various agreements with each one of the provinces, and incidentally those agreements are tailored to the need of each province, when it comes to Quebec, he finds all kinds of reasons not to transfer to the province the amounts he had promised and refuses to allow it the freedom to choose its own mode of taxation and distribution.
This is not the first time the provinces are allowed to choose. It happened with family allowances when Quebec decided on how they would be distributed, contrary to the other provinces; but we did not have then in power the petty dictators we have today. What we have here in this fight is the Prime Minister who, having failed to get the Quebec government to kowtow to him since November 15, 1976 has decided to resort to any legal or illegal means he could find to punish Quebecers for having elected such a government by launching an attack on all sectors of exclusively provincial jurisdiction. Today, he was caught red-handed in the case of the sales tax. Having been found out, he now plays innocent and even proclaims his innocence, laying the blame on the P.Q. government and separatism.
From the very beginning, I have followed the confrontation with regard to the provincial sales tax. Clearly, the present government has once again put its foot in it, not to say in the provinces, by interfering in the field of sales tax which is an area of provincial jurisdiction. We should not forget that. I heard earlier spokesman for the Liberal party say: What is so wrong about that? What is wrong is that you have trampled on someone else's ground and do not want to admit it. To justify this intrusion which all parties in the Quebec national assembly objected to the Minister of Finance tries to flip-flop like the Prime Minister or under his direction.
I do not know exactly how you could call someone who acts exactly contrary to what he preaches. I am not saying he is a liar. Nor is he perfectly honest. In fact, the Minister of Finance is always saying that he does not want to grant the province of Quebec any special privilege and will treat it exactly like any other province. However, in bill C-56 the Minister demonstrates that he deals differently with each province according to the discussions he had privately with each of them except Quebec as they did not accept his proposals like the others. In fact, except Quebec, the other provinces have finally accepted the federal proposal while they reacted and obtained what they asked for as the Minister of Industry, Trade and Commerce (Mr. Horner) mentioned yesterday. And he recognized that the Atlantic provinces were in a position different from that of other provinces. They had different agreements. It appears on page 5695 of the Debates.
First, four provinces have seriously blamed the government, which the Minister does not want to admit, for having invaded an area of exclusive provincial jurisdiction. We must let the people know because the Minister of Finance will not admit it and does not want the people to find out. Second, some provinces asked for a nine months' exemption instead of six months. The federal government has accepted in spite of all the budget difficulties it might cause. Some provinces will have a nine months' cut and for others it will be six months within a twelve months' budget. And last, in the case of some provinces the Minister of Finance has accepted to repay two-thirds of

May 25, 1978

the loss while for other provinces it will be a complete writeoff. And in another province he will pay nothing. The legislation leaves the door open for some other forthcoming arrangements that have yet to be determined. All those provinces had discussions with the minister, and they succeeded in having their requirements accepted according to their criteria. When it comes to Quebec, the finance minister also states his conditions and has priority since it is an exclusively provincial jurisdiction. Although he was extremely surprised to see the federal government invade once more an exclusive jurisdiction of Quebec, Mr. Parizeau listened to the Minister of Finance (Mr. Chretien) make his offer, namely whether he accepted to reduce the sales tax by 3 per cent, the federal government would refund two-thirds of the loss incurred because of this reduction, and the provincial government could get back the 1 per cent through income tax. Although this proposal was against the constitution, Mr. Parizeau accepted it while indicating his preferences or priorities, just as the other provinces did. Here are his priorities: in order to stimulate four industries in the economy of Quebec which had been declining for several years, Mr. Parizeau thought it was time to change direction by removing completely the sales tax in Quebec not for six or nine months, but for twelve months. The government of Quebec and all opposition parties found this proposal fantastic. The Minister of Finance and the right hon. Prime Minister (Mr. Trudeau) did not see it that way. Quebec had had the gall to devise a new formula more appropriate to the priorities of the Quebec economy. That is why federal ministers had to punish the Quebec government and all its supporters.
So the Minister of Finance stated that the government of Quebec will not get anything of those $285 million he had for it. But when he found out that all Quebeckers were behind their representatives in the National Assembly and raised a strong protest, the federal minister of Finance then decided to give $285 million directly to taxpayers, that is to those who have filed an income tax return. The minister did not suspect he had made a bigger mistake since he was prepared to make a gift to the rich, forgetting there were 2,500,000 people who are too poor to pay income tax. And he will not gain friends among the millions of taxpayers who filed income tax returns because they know that the provincial government will have to get back that money and all that scheme has been prepared by the federal government. Its last mistake was to refuse to treat Quebec like all the other provinces by forcing it to find the money which the federal government gave to the other provinces.
The Prime Minister and the Minister of Finance believed they had found a way to humiliate the Quebec government but the whole thing boomeranged because the reaction of Quebeckers was quite contrary to what federal liberal party strategists had anticipated. The Prime Minister and the Minister of Finance succeeded in at least one thing in Quebec, Mr. Income Tax Act
Speaker, that is to achieve unanimity among all parties in the national assembly, among all federal opposition parties and among all Quebeckers who want Quebec to survive and the constitution to be respected. And of course some senators supported the population, unlike federal members who cannot say how they feel about it. Speaking about the flip-flop of the Minister of Finance, I cannot help mentioning the acrobatic trick played by the right hon. Prime Minister on May 18, 1978.
In trying to reply to the question of the hon. member for Kingston and the Islands (Miss MacDonald), as reported on page 5532 of Hansard:
-yesterday the Prime Minister stated that the same deal on tax room was being offered to all the provinces. I still question that, but the point I want to clarify now is this: will the Prime Minister not concede that the effect of this proposal will be that individuals in the province of Quebec will be affected in a much different way than individuals in the provinces which have agreed to an across-the board reduction in sales tax, and that that effect will be a sort of reverse means test so that in the province of Quebec only those individuals who have income high enough to pay income tax will benefit-
And the Prime Minister replied, and I quote:
-the hon. lady is confusing two things: the federal action and the provincial response. In so far as the federal action is concerned, it is the same in all provinces which accepted the scheme and it is the same in Quebec.
And the Prime Minister went on:
We are cutting taxes and making room so the provinces can increase their income tax ... Obviously what the provinces are delivering is different. Eight of the provinces have said: "Yes,. .. One province has said: "No ... We will cut them in the way we want."
Let us consider the craftiness used by the Prime Minister of Canada to conceal the discrimination he practices against the Quebec government. He attacks the response of the provinces. But surely there are various responses and it could not be otherwise, since the Prime Minister or the Minister of Finance contacted them one after the other. Why were they not brought together. It was a matter of national interest since they were going against a basic principle of the constitution. It should have been dealt with at a federal-provincial conference, but when the federal government has infringed upon provincial areas, it has always done so as cunningly as possible. When the Prime Minister states that eight provinces unanimously agreed to the federal proposal, I must point out to him that some of them reacted to the terms and conditions of that proposal, as did Quebec, and it is precisely on that point that I heard recently the Prime Minister expressing his support for the Minister of Finance. It is true that some provinces, after discussions, have accepted a six- or nine-month exemption, but Quebec asked for a 12-month exemption. Why accept six or nine, but not 12? The other provinces indicated that they were primarily interested in a general reduction. Quebec proposed four specific sectors of its economy. I think that Quebec, like the other provinces, had the right to indicate its priorities within its field of taxation.
80038-74^2

May 25, 1978
Income Tax Act
When the Prime Minister says: We are cutting taxes so that the provinces may collect more, I am stunned by such a statement, Mr. Speaker. In my opinion, the Prime Minister should have said: We ask or we suggest that the provinces reduce their sales taxes; instead of we are reducing them. The truth is that the federal government does not cut any of its taxes. It asks the provinces to cut their own taxes. Why let the population believe that the federal government is the most generous? The Minister of Finance wants to punish the province of Quebec because his provincial counterpart took a few weeks before answering to his proposals. Should we not instead blame the federal Minister of Finance for having so long delayed his budget. The two budgets would not have come out at the same time as they did. The Minister of Finance first refused to introduce a budget probably because just before an election he did not want Canadians to realize that it would cost them $56 billion to look after 23 million people. It is a fantastic amount because the government took over all the best tax fields and spends unsparingly, while the provinces cannot find enough money for their administration. The province of Quebec which was preparing its budget as well wanted to know more about the intentions of the federal government in order to gear its own budget accordingly. But because of the budget secrecy and because the government, constantly fears any possible leak I am sure that the Minister of Finance of Quebec had not been informed of some important details, especially when we learn on the side that the Federal government is ready to change the provincial sales tax.
Any serious Minister of Finance would have reacted just as the Quebec Minister did. The federal government ought not to have brought forward generalities, invading somebody else's jurisdiction. If the Minister of Finance had been serious and sincere, he would have gone to Quebec and would have revealed the whole thing to Mr. Parizeau, even at the risk of a few leaks. After all, they are both Ministers of Finance, two Ministers who should be able to keep a secret. One could hardly expect the provincial minister to run after the federal minister because the federal government was asking a favour in coming into a provincial field of jurisdiction to play the good Samaritan. Why did not the government use their own tax fields to bring a tax relief to the people? The federal government has more powers of taxation than the provinces. Why ask the provinces to stimulate the economy when the federal government have all the money?
I am sure that if ever the provinces were to ventures into the federal tax field, this would raise a general outcry here in the House. But with all this quarrelling and more to come, we have an irrefutable evidence of the need for a new Canadian Constitution in order to determine once for all the rights and duties of each level of government, with well defined standards and severe penalties in case of non-compliance.
We have said it time and times again in the House: Canada is made up of various regions; their geography, their various

resources, their economic features make them different. This is why we maintain that not two provinces in Canada are alike and therefore that each of them must be treated differently. That is why we say that a true confederation must be based on the authority of the provinces joined in an economic association, based on a truly Canadian constitution, written for Canadians and voted by Canadians in a referendum, after interprovincial meetings where it will be determined which sectors the provinces wish to relinquish to the federal government which will become the executor of provincial wishes.
It is time, Mr. Speaker, that a group of men from Financial influences took over Canada. Unfortunately today, we are faced with a personality clash where the opponents are risking the future of Canada for their own personal glory. This may surprise everyone, but the minister is showing us here the government's true face.
Since this Prime Minister has been leading the government, he has been dreaming of the day he has all fiscal rights now enjoyed by the provinces. He is dreaming of a central government for Canada, and yesterday we heard the statement made by the Minister of Industry, Trade and Commerce (Mr. Horner) on the subject. I believe it perfectly reflects this government's schemes. Let me quote his comments from page 5699 of Hansard'.
... One could even accuse me of being a centralist. I do not mind that, because I believe that in order to hold this nation together we have to accept the fact that there should be one government for the whole of the nation.
That is the Liberal party's dream, Mr. Speaker. Those are the people who pretend to save Confederation, who do not even realize they are destroying it. All those centralist federalists must have read the sad history of federal-provincial conferences, which shows all the tricks used by various Liberal governments to steal tax fields away from the provinces in order to completely dominate them one day.
A single scenario runs through all those conferences. The federal government takes hold of the most profitable tax fields, leaving only residues for the provinces, and then perforce remitting them a share to allow them to survive, rebating a fraction after they have taken everything. Or alternately, the federal makes loans, this is still better, loans that tie them up, ropes around their necks, those famous shared cost programs that are just so many ropes to hold the provinces and make them pay interest to the federal government.


Joseph Adrien Henri Lambert: Repay five for one!


Charles-Arthur Gauthier: A province with a five to ten year loan repays five and ten times the principal. In the 1867 financial arrangements, it is stated that the federal gets unlimited taxing powers in indirect taxes, but direct taxes were so hated it left them to provinces. Anything repugnant was left to the provinces.
With changing direct taxation, especially in the 40's, the provinces had to enter direct taxation because the federal
May 25, 1978

government had occupied everything else. When direct taxation became profitable for the provinces, especially in the 40's, the federal government used all available tricks to get its hands on direct taxes, because he saw they were profitable, to the dismay of the provinces losing the main bulkwork of their autonomy.
As the government of that time could not get the agreement of the provinces, the Minister of Finance used its discretionary powers in wartime to declare that the dominion would levy taxes on personal and corporate income. It forced the provinces to find other sources of revenue, which explains the series of small taxes that the provinces had to levy while the federal government used those additional revenues to invade areas under provincial jurisdiction such as health, education, municipal affairs, because the provinces no longer had the money to work in those fields. That is the federal government's iron collar of which we have been trying to rid ourselves since this famous invasion.
And again today, after they robbed the provinces of their direct taxation power, they have the nerve to propose the abolition of the provincial revenue department. The Minister of Finance declared that if Quebec considers it too expensive, they should abolish their revenue department. They go really far. They even went further by creating a federal Department of Urban Affairs. This is the most serious insult, everybody knows that towns and municipalities are strictly under provincial jurisdiction.
Not satisfied with having its own Department of Agriculture, its own Department of Labour, its own Department of Energy, Mines and Resources, its Department of Communications, its Department of Fisheries and Environment, its Department of Regional Economic Expansion, its Department of National Flealth, the federal government has now created its own Department of Urban Affairs. All of these already exist at the provincial level, but the federal government wants to play the same role as the provinces in Canada. As I watched the right hon. Prime Minister in the last few years, and more recently the Minister of Finance, I have been wondering if they have not sworn to destroy Canada and if their prejudices against Quebec did not override every other consideration. The survival of Canada should not be based on the result of a confrontation between two men.
National interests outweigh the pride of a few politicians who seem to care nothing about better harmony among our provinces. I only hope that what I said here tonight will bring back to sanity certain Liberal party leaders who seem to ignore the law, the constitutional agreements and show no respect for the provinces and cannot forget about their resentment for Quebeckers because they elected that particular government on November 15, 1976. The bitterness has reached its climax with that surprising interference of the Minister of Finance in a tax field which has always been recognized as being exclusive to Quebec. And still more recently, the latest statements
Adjournment Debate
made by the Minister of State for Urban Affairs (Mr. Ouel-let), thus following the example of his leader, the Minister of Finance and others. It so happens that the little people in Quebec have succeeded in reaching a consensus in Quebec, something that not one government had managed to do since Confederation, to alienate all parties in Quebec.
I heard Mr. Gerard D. Levesque, Mr. Claude Ryan, Mr. Goldbloom state on television that they strongly objected to the statements of the Prime Minister, the Minister of Finance and the Minister of State for Urban Affairs. I sincerely hope that all those testimonies will bring the Minister of Finance to his senses and that he will refrain from shirking the issue and from playing on words about the the rebate to Quebec. He may not like the PQ supporters, but he should not forget that most Quebeckers of all political parties do not like at all the present Minister of Finance.


Miss Campbell:: Mr. Speaker, on a point of order, I wonder if you would call it ten o'clock and not count this as my time to speak? I cannot speak tomorrow and I would like to speak next week.


The Acting Speaker (Mr. Turner):: Shall we call it ten o'clock?


Some hon. Members:: Agreed.



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, when I made my motion back in early April suggesting that the House of Commons should assign the committee on broadcasting and the arts to re-examine the mandate of the Canada Council, the minister received the request in a careful, studied and seemingly concerned manner and indicated that he would look into the matter. That was the first time he had said in his studied way that he would look at the matter. Well, he looked at the matter. Then he looked at the matter six months ago when I raised it and I thought, "Well, I shall raise it again in the House of Commons". This is that opportunity.
However, as I stand to raise this issue I know that the minister has already answered. In fact, he gave the studied, careful response that he would make in an address to the



May 25, 1978
Adjournment Debate
Canadian Conference of the Arts in Halifax on April 28. That studied response in reference to the arts and their relationship to the Canada Council and its relationship to the government was entitled "The Relationship between Government and Support for the Arts". I waited anticipating that we might have a response, even a non-partisan look at the Canada Council mandate, the Canada Council's relationship to government, members of parliament and the people of Canada. And what was the response? It was one of the most amazing and irresponsible speeches that I have heard given by a minister.
I could understand when he stood up in this House of Commons and in committee and said, "I am not accountable or responsible for the Canada Council." The Canada Council agreed he was not responsible. So who was responsible and accountable? We were led to believe it was this House of Commons-you and me, Mr. Speaker. If we are going to be responsible, I say let us look at the information. Let us look at the criticisms of the Auditor General who said that things were not right in the Canada Council; that in the way they were spending their money there was not adequate invoicing, there was not adequate documentation, there was not adequate assessment. It was one of the severest criticisms in the Auditor General's report.
In reply to the allegations of the Auditor General the Canada Council has said, "Mr. Auditor General, you are overstating the matter. It is just not so." Now we have a dispute between the Auditor General and the Canada Council, each of them saying very opposite things on the basis of some documentation. One of them is saying that this is serious and the other one is saying that it is not. Mr. Speaker, who is to judge whether the allegations of the Auditor General are serious? The minister cannot be the judge.
In committee I asked if he had access to the files of the Canada Council and his answer was that he did not. He has confirmed that in his speech. Can you believe a minister would make a statement such as the following:
Politicians, on both the opposition and government sides of the Commons, have been demanding information-
What a terrible thing, that members of the House of Commons should be demanding information, Mr. Speaker! The minister continued:
I am not one of them. I want to be clear about that.
Then he went on in the next paragraph to say:
I am opposed to that. So long as I am Secretary of State I shall not allow interference-
I want to give notice tonight to this House of Commons, to the minister, to parliament and to the people of Canada that I intend to interfere, and my interference is just starting. I realize now how absolutely necessary it is that I interfere, because the minister refuses to accept his responsibility. In addition to that his attitude is that, if he is not going to do it, then members of parliament will have to.

I should like to give the House the minister's description of himself, Mr. Speaker-not my description or that of another person eulogizing him. This is what he said in the same speech:
I regard myself, personally, as a sensitive and discriminating individual, knowledgeable of our past cultural heritage, perceptive, and sure of what should or should not be accepted. I am quite assertive and combative about my judgments:
I hold to them strongly. I am undismayed by the fact that few agree with me. I am superbly confident of my taste.
That is the Secretary of State (Mr. Roberts) speaking of himself. He is a paragon, Mr. Speaker. But what does this very sure person do with what he has? I will quote him again:
Politicians, on both the opposition and government sides of the Commons, have been demanding information-
And then again:
I am not one of them.
In the House I asked the minister if he had ever been refused information by the Canada Council.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member his allotted time has expired.
Mr. Robert Daudlin (Parliamentary Secretary to Secretary
of State): Mr. Speaker, some time ago the hon. member raised the question which I thought he would pursue this evening, but since he has gone in a different direction I will not stick to the answer that I thought he might be seeking.
The hon. member has demonstrated an inability to perceive or understand the speech delivered on the east coast. Even when he has it before him he picks and chooses bits and pieces from it that completely distort the direction of the speech. The hon. member takes bits and pieces out of his speech and would indicate that the minister was not seeking information. He would have the House believe that in fact it dealt not only with the finances and the directions of the Canada Council, but all aspects of the Canada Council.
The speech makes quite clear that the minister accepts full responsibility in terms of the finances and, indeed, he believes that he, together with the parliamentary committee, has the responsibility to examine the finances. He has made that clear not only in that speech, but in this House and in the committee. If the hon. member is going to be fair, he will agree that that in fact is what has been done.
In addition, the speech makes quite clear that the hon. minister does not feel he has the responsibility-indeed, he said that not only in his speech but in this House-to interfere with the ordinary day-to-day operations of Canada Council. That is not his mandate. He has never had that mandate. He proposes not to move into that sphere.
The minister does not delude himself or anyone else into believing that he does not have financial responsibility in terms of presenting Canada Council applications to Treasury Board and appearing before the appropriate committee with the financial administration of the Canada Council. Indeed, there is an opportunity for all hon. members, the hon. member opposite as well as myself, to go before that committee and
May 25, 1978

examine in great detail and very closely the Canada Council and demand the figures showing what they are spending, on what and why.
The Canada Council has made clear that it will in fact make that information available. The information the council will not make available is the private information of artists who are seeking grants, the kind of information that in fact is the day to day operation of the Canada Council. That would go beyond any mandate that this House has ever given the Canada Council if that were the case.


Robert Lloyd Wenman: You are wrong.


Mr. Daudlin:: The hon. member says I am wrong. I suggest that he go back to the questions and answers that were given to him in the committee. He seems not to be able to understand those answers, notwithstanding that they come to him directly in response to questions given to him. I suggest in effect he has completely misread the speech. He does not understand-


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


TRANSPORT-COMPENSATION FOR LOSSES INCURRED IN SINKING OF &quot;WILLIAM CARSON&quot;
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, I rise in connection with a question I asked of the Minister of Transport (Mr. Lang) yesterday about the sinking of the William Carson and his reaction to some things that now need to be clarified. I received an unsatisfactory response. In fact, I did not get much of a response at all.
The Minister of Transport, as all members know, is as popular as a school of dogfish in a cod trap. He is continuing to sully his reputation in that direction. In fact, today in the transport committee it was moved that the committee does not have any confidence in the Minister of Transport and urges the Prime Minister (Mr. Trudeau) to request his resignation, a motion I would strongly support.
On May 23 the minister made public the report of Mr. Justice Nathaniel S. Noel of the Newfoundland Supreme Court on his investigation into the sinking of the m.v. William Carson off Labrador, on June 3, 1977. By the way, that report is dated January 27. The minister explained today that he did not receive it until March 13. Well, even March 13 is 71 days earlier than May 23. Why did the public have to wait 71 days to have the minister make this public? It is unjustified. It should have been made public a lot sooner. It does not take 71 days to print this little report that I have in my hand now.
The commissioner found that the vessel sank, and I quote:
-due to the default of the vessel's operator, Canadian National Railway Company and her Master, Norman Lewis Hinks, the sinking was caused by ice penetrating the hull when the vessel was making a passage through an ice field on a voyage from St. Anthony to Cartwright.
Adjournment Debate
At the end of his report he repeats those findings. I quote from page 39:
The sinking of the m.v. William Carson was contributed to by the default of her Master, Norman Lewis Hinks, who directed the ship into the hazards of Labrador ice when there was no grave necessity to do so.
At page 40 he states:
The sinking of the m.v. William Carson was contributed to by the default of her operators, Canadian National Railway Company, who sent the ship on a voyage to Goose Bay, via intermediate ports, when it was known and intended that she would encounter Labrador ice, under a Master who had little experience in the conditions to be met.
Mr. Justice Noel may be right or not right in his conclusions and opinions, but this is what he has found after studying the case. This brings up several questions. One that arises is whether CN, who are not going to be pleased with this report of Mr. Justice Noel, and I cannot blame them, will be driven by the conclusions of this report perhaps to hesitate to send a ship up to Goose Bay this year while there is still Labrador ice around. The Bond is supposed to replace the Carson and is to be under way on July 4. It is possible CN will say they are not going to send a ship, that they will not take that responsibility in view of this report.
I asked the minister today in that committee what he would do in that event. It is possible CN might say: "We are not going to send a ship; we are not going to take responsibility in view of this report". I asked the minister today in committee what would he do in that event. He seemed to indicate there was only one course of action to take. The government would then have to instruct CN to send a vessel or to agree to indemnify them and take the responsibility to assure that that service starts as soon as possible, that the people on the Labrador coast get the cargo and other supplies they need and enjoy the passenger service that is required. I hope the minister understands this and that if CN attempts this manoeuvre he will counteract it immediately.
Yesterday I asked him:
Is he going to direct the CNR to pay the passengers and crew loss claims and the cargo owners their claims which have been in abeyance now for 11 months?
There were 1,000 tons of cargo aboard the vessel, Mr. Speaker. It was not insured by the consignees. It was not insured by CN. CN, a Crown corporation, has refused to pay the claims. It will be 12 months one week from Saturday, on June 3, 1978, during which the cargo owners have had to sustain this cost not knowing whether they will ever be paid.
Canadian National has stated that the claims will only be paid if the company is held legally liable. CN has certainly been found, now, to be liable by the commissioner, Mr. Justice Noel, so I asked the minister where he would now direct the railway company to pay up with no further delay. Some of these small businesses in Labrador are in a bankrupt condition. It was the start of the season last year when the Carson sank, and very large consignments were on the way to them. The minister said:

May 25, 1978
Adjournment Debate
It would not be my intention to give directions to the Canadian National. I am sure they are looking at their legal position and what is their proper course of action.
Mr. Speaker, the government is responsible for this service. The government meets its deficits through subsidies. The minister can direct CN. It is the government that is responsible. The minister should say to CN: "Pay those cargo owners. Never mind your strict legal liability, never mind running them through the courts for the next three or four years, pay up; we have a commission report that says you were in default." But he has given no undertaking he would do this.
Then when I asked him whether he would have CN speed the matter up, he said:
I would certainly be glad if I could do anything to speed up the resolution of the questions referred to in the first part of the hon. member's question.
What nonsense, saying he would be glad if he could speed it up. That is no answer. He is the minister. He could order the company on behalf of the government to settle these claims or to speed up the settlement.
Then I asked him whether the government was going to take action against the CN to recover the value of the Carson which had been lost due to fault on the part of the company. The minister replied:
The Canadian National was operating this vessel on behalf of the government and I would want to have legal advice as to the implications of that in respect of any potential claim.
It is time, Mr. Speaker, for this minister to wake up and observe his responsibilities. Here are those poor cargo owners, 1,000 tons of cargo lost, and their claims are still not peid. It may take years for the courts to settle this. Mr. Justice Noel has given his view and opinion now. Why should the vast CN Crown corporation be able to punish them by making them wait for years for their money? Or perhaps they won't get it at all in strict legal terms.


The Acting Speaker (Mr. Turner):: Order, please. I regret to inform the hon. member that his allotted time has expired.
Mr. Robert Daudlin (Parliamentary Secretary to Secretary
of State): Mr. Speaker, the hon. member started off this evening by talking about mackerel and dogfish. I suggest that at least the first half of the question he asked tonight is neither of those two species but probably herring of the red variety. Having spent a lot of time on the first question he raised with the minister with respect particularly to the date of January 27, he today finds out that he was wrong about that date, so the next tack is to say that, notwithstanding what the time was, it still has been too long. He emphasized that the date, which he now admits was March-I think March 9-was still too long ago.
The essence and the crunch of what the hon. member is getting to is the fact that he would have the minister direct CN to pay. I suggest that the hon. member ask us to direct Canadian National to pay compensation to those who lost goods as a result of the sinking. In so doing he would have us pre-empt the legal process, and I do not think he really means that. Perhaps he really has not thought about it. In any event, I believe that all hon. members sympathize with those who are in this position. However, surely the hon. member would not want the government to act arbitrarily in this case in setting aside the legal rights which exist not only for the company but for the claimants as well.
With regard to the whole question of claims I can do no more than reiterate what the minister has said, that CN should deal with the situation expeditiously and with the sensitivity which is always appropriate for any business in a situation like this involving many individual claims.


The Acting Speaker (Mr. Turner):: Order, please. The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m.
At 10.18 p.m. the House adjourned, without question put, pursuant to Standing Order.

Friday, May 26, 1978