1978-01-26

HOUSE OF COMMONS DEBATES


[Stage Direction]
THIRD SESSION-THIRTIETH PARLIAMENT 26-27 Elizabeth II

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Published under the authority of the Speaker of the House of Commons by the Queen's Printer for Canada
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Available from Printing and Publishing, Supply and Services, Hull, Quebec, Canada K1A 0S9
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Thursday, January 26, 1978


Mr. Bob Wenman (Fraser Valley West):: Mr. Speaker, I rise under the provisions of Standing Order 43 regarding a matter of urgent and pressing necessity. In view of the fact that the United States and, presumably, the joint Canada-U.S. NORAD command centre knew in early December that there was a nuclear-powered cell aboard a malfunctioning Soviet satellite, and in view of the fact that the Prime Minister has been unable to explain why the Minister of National Defence did not receive this information until last week, and this information was withheld from the Prime Minister in spite of the fact that he skied into NORAD headquarters for his supposedly more than comprehensive briefing, I move, seconded by the hon. member for Victoria (Mr. McKinnon):
That this government take measures to improve communications between the Canadian command and the Prime Minister before another crisis occurs.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


OLD AGE SECURITY ACT
Mr. Stanley Knowles (Winnipeg North Centre):: Mr. Speaker, the urgency of this matter increases month to month, so I am going to try again.
I therefore move, seconded by the hon. member for Nanai-mo-Cowichan-The Islands (Mr. Douglas):
That this House urges the government to introduce without delay an amendment to the Old Age Security Act to provide for the spouse's allowance to be replaced by an equivalent allowance to be paid to all persons between the ages of
60 and 65, including widows, spinsters, widowers and bachelors as well as spouses, provided they are out of the labour market.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


OFFICIAL LANGUAGES
Mr. Walter Baker (Grenville-Carleton):: Mr. Speaker, I move a motion under Standing Order 43, seconded by the hon. member for Esquimalt-Saanich (Mr. Munro). In view of the statement of the Commissioner of Official Languages that the bilingual bonus program of the government is a comedy of errors, is not one of the government's best moves and has been inevitably unsuccessful, and since it has caused ill-will, jealousy and a sense of discrimination in the public service, I move:
That the government be condemned for its shortsightedness in respect of this costly program and that it be terminated forthwith.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST INITIATIVES BE TAKEN TO IMPROVE WEST COAST HANDLING FACILITIES-MOTION UNDER S. O. 43
Mr. Stan Schellenberger (Wetaskiwin):: Mr. Speaker, now that grain movements from west coast ports have reached crisis proportions, I move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That the Minister of Agriculture immediately announce new initiatives for the Prince Rupert elevator in order that it may quickly reach its potential of 50 million to 60 million bushels, thereby alleviating congestion at Vancouver and helping prairie farm income.

January 26, 1978


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


POST OFFICE
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, 1 should like to move a motion under Standing Order 43 regarding a pressing and urgent matter. In view of the fact that the Postmaster General stated in this House on Monday that "there was no intention of doing anything which would have a negative impact on the letter carriers or, indeed, on home delivery," and in view of the report prepared for senior Post Office officials, including the alternate day delivery proposal, 1 move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That the minister make a statement on motions explaining the apparent contradiction between his assurances in the House on home delivery of mail and the reports now being prepared within his department.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


NATIONAL DEFENCE
Mr. Cecil Smith (Churchill):: Mr. Speaker, I rise on a matter of urgent and pressing necessity under the terms of Standing Order 43. In view of the fact that Canada's resources were not sufficient to warn the Prime Minister of a potentially dangerous Soviet satellite landing in Canada's north, and that the warning came first from the President of the United States, I move, seconded by the hon. member for Fraser Valley West (Mr. Wenman):
That this government take initiatives to safeguard Canada's north, and scrap plans to remove from Churchill, Manitoba, the only active winter warfare training unit in Canada capable of handling such an event; and furthermore, in order to ensure the protection of Canada's citizens and sovereignty, that this government retain and reinforce the existing 35-family armed forces base in Churchill, Manitoba.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


REQUEST GOVERNMENT IMPROVE HANDLING FACILITIES ON WEST COAST-MOTION UNDER S.O. 43
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, I rise under the provisions of Standing Order 43, hoping to receive unanimous consent, with regard to the recurring problem of lack of co-ordination in the movement of grain through the west coast ports. I move, seconded by the hon. member for Vegreville (Mr. Mazankowski):
That the ministers of agriculture and transport avail themselves at the earliest opportunity in the House to make statements on motions with regard to the chronic problem of the movement of grain through the west coast ports, those of Vancouver and Prince Rupert, offering a solution which would see the co-ordination of rail and port traffic and better utilization of the grain handling facilities on the west coast.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


INDUSTRY
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, I rise on a matter of urgent and pressing necessity to present a motion under the provisions of Standing Order 43. In view of the Deputy Prime Minister's earlier assurance that Canadian steel producers would receive the overwhelming majority of contracts to supply steel for the Alcan pipeline, and in view of doubts cast on this assurance by other cabinet ministers and American officials, I move, seconded by the hon. member for Regina-Lake Centre (Mr. Benjamin):
That this House instruct the government to guarantee in its bill on the pipeline that Canadian steel will fill the majority of pipeline contracts.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
January 26, 1978


AGRICULTURE
Mr. Gordon Towers (Red Deer):: Mr. Speaker, I would like to make a motion under Standing Order 43. In view of the fact that trade in agricultural products is not mentioned in Canada's original presentation at GATT, I move, seconded by the hon. member for Elgin (Mr. Wise):
That the Minister of Agriculture be severely reprimanded for being so callous toward trading relations in agricultural products.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


MANPOWER
Mr. Adrien Lambert (Bellechasse):: Mr. Speaker, pursuant to the terms of Standing Order 43, I request the unanimous consent of the House to present a motion dealing with an important and urgent matter.
As there is an everincreasing number of unemployed, and as there is good reason to hope that the situation is only temporary, for I am very optimistic seeing Canada will be needing more and more trained workers to fill the needs of its industrial development, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That this House urge the Minister of Employment and Immigration (Mr. Cullen) to negotiate with the provincial governments, and more particularly with that of Quebec, that more people be allowed to benefit from the adult training programs, more specifically in the field of heavy equipment, with a view to soon being able to meet the needs more adequately in that field.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
Oral Questions



ORAL QUESTION PERIOD


Mr. Joe Clark (Leader of the Opposition):: Mr. Speaker, my question is to the Minister of Employment and Immigration. I wonder if the minister can confirm to the House of Commons the accuracy of figures from the Unemployment Insurance Commission which indicate that in the month of December alone in excess of 42,000 Canadians who were on unemployment insurance had their benefits expire and went onto the welfare rolls of the provinces or municipalities, many of whom were not in a position to bear the financial burden of this failure in federal policy. Can the minister confirm that the expiry rate of people on unemployment insurance benefits was more than 42,000 in the month of December alone?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, once again we have the official opposition trotting out all of the figures from StatsCan and always emphasizing the negative, never the positive-


Some hon. Members:: Oh, oh!


Jack Sydney George (Bud) Cullen: -never the fact that some $117 million, for example, was spent in the Atlantic provinces to help with employment, never the fact that we introduced the job experience training program in co-operation with private enterprise. Never anything positive, always the negative.


Charles Joseph Clark: Mr. Speaker, as the unemployed of Canada know, there is a great deal of negative to emphasize in the record of this government. I presume the minister's evasion can be taken as confirmation that, indeed, in one month alone 42,000 or more Canadians went off unemployment insurance and onto the welfare rolls of provinces and municipalities, which cannot afford that burden.
Is the minister monitoring that situation now? Given the fact that in the month of December, 37 per cent of those who were unemployed had been unemployed for longer than three months, can the minister tell us what will be the number of people who will be coming off unemployment insurance, because of the failure of this government, and becoming a charge on local municipalities and provinces which cannot afford that burden?


Jack Sydney George (Bud) Cullen: Mr. Speaker, here, again, the Leader of the Opposition does not, in fact, indicate that half of the cost of that particular operation is borne by the federal government. He also neglects to point out the facilities that are available in all of the regions for training, for the replacement of these individuals, and for mobility grants where they are necessary. It is not as though there is no help available. The fact is that

January 26, 1978
Oral Questions
many items are in place to cope with this particular need. The Leader of the Opposition, of course, chooses to ignore that.


FINANCE
Charles Joseph Clark: Mr. Speaker, the minister will soon recognize that the problems caused by the failure of the economic policy of this government simply will not go away because he ignores them. I direct my supplementary question to the Minister of State for Federal-Provincial Relations, in the absence of the Minister of Finance. Is the minister monitoring the situation to which 1 have referred, in order to determine the weight of the burden being imposed upon provincial governments, particularly those of the less wealthy provinces, and upon the municipalities, to see if there must be any changes in the financial arrangements relating to those governments because of the failure of this government to follow an economic policy which creates jobs for Canadians?


Hon. Marc Lalonde (Minister of State for Federal-Provincial Relations):: Mr. Speaker, a conference of finance ministers is currently looking into the economic situation and outlook. I am sure that if the finance ministers of some provinces are particularly concerned with this question, they will discuss it with their federal counterpart.
As far as the role of the government is concerned, as my colleague has indicated earlier, we pay 50 per cent of expenses related to assistance to the needy and the provinces and municipalities pay the rest. We will continue to provide these funds. Referring to my own experience as Minister of National Health and Welfare, I can say that the provinces have not made any representations or requests that the federal government should increase its contribution. I must also point out to the hon. member that each year under the equalization program the federal government pays several billion dollars to the provinces whose revenues are below the national average.


Charles Joseph Clark: Mr. Speaker, the minister demonstrates that the government can avoid answering questions in both official languages. I should now like to direct a question to the Prime Minister. Given the fact that there was an increase of 40,000 in the number of unemployed last month, that more than 42,000 people who were on unemployment insurance went off that and on to the welfare rolls of provinces and municipalities, and the number of shut-downs by business, creating joblessness across the country, will the Prime Minister, putting the country's interests ahead of those of his party, now give us an undertaking that the government of Canada will immediately bring in a new budget designed to create jobs through a substantial tax cut that will stimulate consumption and demand in the country?
[Mr. Cullen.)


Some hon. Members:: Hear, hear!


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, at any time in the life of a nation, at any time in the life of an economic cycle-even when the economic cycle is on the upturn-there are unemployed. Their plight is of concern to this government. There are unemployed who are not eligible for unemployment insurance and who are on welfare. As both my colleagues have stated, the government pays 50 per cent of that program.
The question is: Is the government's present economic posture the proper one to create hope and growth for the future? On this aspect we have evidence from the very authors quoted by the opposition, the OECD, that the government's posture is, in fact, creating growth at a rate faster than any other nation except Japan and possibly, marginally, the United States. At the same time, on a per capita basis more people are coming onto the labour market in Canada than in any other nation. This is the situation which creates unemployment and it is one which causes us great concern. As I say, the question we have to ask ourselves is this: Should our short-term and medium-range economic posture be changed?


Some hon. Members:: Order.


LABOUR CONDITIONS
Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. I would say, first, to the Prime Minister that what needs to be changed is the government.
We are approaching the stage at which practically half of the one million unemployed are not eligible for unemployment insurance, as illustrated by the fact that 37 per cent have been unemployed for three months or more. Since 35 per cent of these long-term unemployed are men aged 24 or over-which means they are breadwinners and heads of families-it is obvious that existing job-creation programs are not keeping up with the need. Given the scope of this problem in terms of the additional burden imposed upon the poorer provinces especially, and in terms of the human suffering behind every one of these statistics, I ask the minister what additional advice he is giving to his colleagues in government with respect to additional programs to alleviate this situation.


Jack Sydney George (Bud) Cullen: This is not just a concern of mine during the question period, Mr. Speaker; it is one which concerns me on a daily basis. This is why we were able to get in excess of half a billion dollars from Treasury Board for direct job-creation programs. That is why I considered it appropriate that better use should be made of unemployment insurance funds, so we turned to
January 26, 1978

developmental measures for training, work-sharing and job creation. That is why the Minister of Finance has introduced an employment tax credit program.
In excess of $700 million is being spent in this particular field. It might be argued that we should be spending even more, but I would point out that the money comes from people who are in fact working, people who say, "Do not overspend. Do not create more inflation which would be counterproductive and, in the final analysis, create more unemployment." The amount of money to be used and the direction to be taken are matters of judgment.


Some hon. Members:: Hear, hear!


James Aloysius McGrath: My concern and, I believe, the concern of most of us in this House, is for Canadians who are not working. I will put the question this way: Last year job creation lagged behind the growth in the labour force by
129,000.	That is straightforward and surely the minister can understand it. It is obvious that government programs are not even keeping up with the growth in the labour force. In these circumstances, does the minister intend to sit back and depend on programs which have demonstrated their inability to keep up with the growth in the work force, or the growth in unemployment, or is he recommending to his cabinet colleagues new programs, for example, public works programs, so as to make an impact upon this problem now?


An hon. Member:: Same question.


Jack Sydney George (Bud) Cullen: It is because of the government's concern over this question that a whole series of new programs has been put in place. What the hon. member is doing is robbing the individuals concerned of any hope that things will get better. I believe the economic growth component of the Canada Works program is a positive step forward. I believe my meetings with the western ministers could be very productive. A whole series of measures is in place, designed to help people for whom my concern is just as great as that of the hon. member.


POST OFFICE
David Orlikow: Mr. Speaker, 1 should like to address a question to the Postmaster General. On Monday he said in the House that he had no intention of doing anything which would have a negative effect on home deliveries or on the letter carriers. Can the minister confirm that departmental officials at the most senior level, including the Deputy Postmaster General, are presently considering proposals which would restrict delivery of mail to existing and new homes and, if such proposals are being considered, how does he explain the contradiction with what he said on Monday?
Oral Questions


Hon.   J.-J. Blais@Postmaster General: As the hon. gentleman knows-and I thank him for his question-there are a number of points that need clarification. As he knows, there has been a freeze, in terms of employment and man-years, by government institutions. The Post Office is a government institution and therefore we have been subjected to that freeze. This has meant that in new subdivisions there has been no extension of the letter carrier service.
The first part of the hon. member's question does not address itself specifically to that question but, rather, to the report that has received a great deal of publicity. That report dates back to August of last year. I reiterate that there is no intention at this time to restrict in any way the employment of letter carriers or, indeed, to cut back on the employment of letter carriers in accordance with programs that we have in place.


David Orlikow: How does the minister equate what he has just said with one of the objectives of this advisory council, which states:
The project team was asked to produce a mail delivery proposal which offered an alternative to both the current door-to-door delivery system and the alternate day delivery proposal.
It goes on to talk about the possible cutback of 3,000 letter carriers.


Mr. Blais:: The hon. member understands that in an organization such as the Post Office, which is dynamic and which considers at all times various operations and various methods of providing service to the Canadian public, reports are formulated for the purpose of preparing ourselves for decision-making. That report was done for that purpose. Decisions were taken as of the middle of August last year. I reiterate the statement I made in Toronto last Saturday, that there is no intention of cutting back the letter carriers' service. I repeat what I said then, that no measure will be taken by the Post Office which would have a negative impact on the letter carriers or on any of the work force without full, prior consultation with the employees.


David Orlikow: I ask the Postmaster General, since he has indicated there will be no cut in the service which exists at present, when, if ever, the tens of thousands of homes in the new urban areas of Canada which have not had door-to-door mail service because of the freeze can expect to get the same kind of service which other people in the cities of Canada now get?


Jean-Jacques Blais: Mr. Speaker, we would like to be able to offer door-to-door service in the near future to all the people who live in these new subdivisions. Unfortunately, as the hon. member knows very well, we have a deficit of more than $550 million for the current year and, furthermore, we have to deal with the freeze in government expenses, which makes it very difficult for us to beef up the staff in the Post Office.
Mr. Speaker, I ask all members to be a little bit more patient in this regard so that we might indeed boost our
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Oral Questions
revenues, improve the economic situation of the Post Office and finally provide all the services to all those who are entitled to them and have a right to demand them.


INDUSTRY
Mr. Eudore Allard (Rimouski):: Mr. Speaker, I have a question for the Minister of Energy, Mines and Resources.
In light of the decision made by the cabinet members of the province of Quebec last November concerning a two and a half year moratorium on the nuclear industry program in Quebec, and given the fact that the government of Quebec categorically refuses to sign any contracts involving the heavy water industry, could the minister tell the House if he has met his Quebec counterpart recently to talk about this question?


Hon. Alastair Gillespie (Minister of Energy, Mines and Resources):: Mr. Speaker, I received word this morning that the government of Quebec and Hydro Quebec had signed contracts with AECL with respect to a very substantial purchase of heavy water to be used in the province of Quebec. That word has just come through to me. I expect the closing of this very significant transaction will take place early next week.
[ Translation]


Eudore Allard: Mr. Speaker, should the Quebec government not sign all the agreements, would the federal government, which owns Atomic Energy of Canada Limited, be in a position to carry out its threat to close the Gentilly heavy water plant if the Quebec government does not call off its nuclear moratorium?


Alastair William Gillespie: Mr. Speaker, I cannot speak for the moratorium to which the hon. member refers. I imagine the government of Quebec will be publishing a white paper in due course as to its particular plans for electrical energy generation, including nuclear, in the years to come. It is quite clear the government of Quebec is interested in nuclear energy. As the hon. member may know, at the present time Gentilly I is under demonstration, Gentilly II is being built, Gentilly III has been committed, and sufficient heavy water has been committed for two further reactors with a 600 megawatt capacity.


NATIONAL DEFENCE
Mr. Allan B. McKinnon (Victoria):: Mr. Speaker, my question is directed to the Prime Minister. When the Prime Minister visited NORAD headquarters, apparently he was not briefed about the particular dangers associated with the Cosmos satellite. I would like to know why. One might not want to burden a holidaying Prime Minister with the weight of too many technical details.


Some hon. Members:: Oh, oh!


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, yes, I was briefed. Yesterday I told the House that I was briefed on the very large number of man-made objects which were satelliting around the earth. I believe they said they had approximately 4,000 in their sights and on their records which were being monitored all the time. As I said yesterday, some of them have gone out of control in the past and have re-entered the atmosphere. I was shown certain objects indicating what had been done with these re-entries when there had been recovery. I was told there were other satellites which would probably re-enter in the future, some would not re-enter for a very long time and some would probably re-enter the atmosphere within a shorter period of time.


Mr. MacDonald (Egmont):: What goes up must come down.


Pierre Elliott Trudeau: Not necessarily, because if it is synchronized with the turning of the earth, it can stay up there forever.


Allan Bruce McKinnon: Mr. Speaker, the Prime Minister seems obsessed with passing on the garbage he received in NORAD. My question is directed to the Minister of National Defence. Seeing that the Prime Minister claims he was fully briefed about satellites, with one minor exception that he has not yet answered as to whether he knew that the Comos satellite had a nuclear package aboard, can the Minister of National Defence explain why the Prime Minister did not see fit to enlighten him after the profound and detailed briefing that he had? Yesterday the Minister of National Defence indicated that he found out about the nuclear package last Friday.


Hon. Barney Danson (Minister of National Defence):: Mr. Speaker, there is a lot of nuclear garbage up there, and certainly a lot of it across the way.


Some hon. Members:: Hear, hear!


Barnett Jerome Danson: Within the last hour I reviewed all the procedures of consultation and information which have been gone through. I am perfectly satisfied that the Prime Minister, myself and our staffs were kept fully informed at each stage of the operation when anything effectively could be done or it was in our best interests to know. Co-operation has been complete with the Americans.
January 26, 1978


Charles Joseph Clark: Who decides our best interests?


Barnett Jerome Danson: The Americans have been open with us. At each stage we knew what was happening so that we could determine what was in our best interests and how to respond. We have responded, the Americans have co-operated, and everything that needs to be done is being done. We had all the information we needed except some technical information which was not forthcoming initially from the owners of the satellite. Progress is being made on the search. Some deposits have been found which indicate that there has been some re-entry in the Northwest Territories, and every action possible is being taken.


Allan Bruce McKinnon: Mr. Speaker, it is extraordinarily difficult to receive an answer from the Prime Minister and the Minister of National Defence. My question was simple: When did these two gentlemen find out that there was, in fact, a nuclear package aboard the Cosmos satellite? The Prime Minister claims he was fully briefed, but he has never said he knew that. The Minister of National Defence said he found out last Friday and claims he knew everything there was to know, despite the fact the Americans claim they had full knowledge of this problem on December 19. How can the minister say he was fully briefed, when the Americans knew about it on December 19 and he found out about it last Friday?


Barnett Jerome Danson: Mr. Speaker, our officials were notified on the nineteenth there was danger of destabilization in orbit and that the satellite might return to earth at an earlier period than originally predicted. The information was transferred to our headquarters when the possibility was that it would fall on North American territory on the nineteenth. The date was isolated on the twenty-third although the location was not. The Prime Minister and myself were advised on January 20 of this possibility-indeed, the likelihood that it might come down.
At that time there was no indicated likelihood that it would fall on Canadian soil. We were fully informed and fully on alert at that time. We have done everything necessary to proceed. We had all the information we needed in order to proceed. At the briefing at NORAD that information is readily given, but they cannot predict with accuracy what will happen two or three months in advance.


TRANSPORT
Mr. Don Mazankowski (Vegreville):: Mr. Speaker, my question is directed to the Minister of Transport. It arises out of the continuing congestion and delays in the movement of grain out of the port of Vancouver where there have been as many as 40 ships waiting in the harbour. The situation is being aggravated by the enforcement of what have been referred to in the grain trade as unreasonable regulations of the federal Department of Labour. That has resulted in the closing of some terminals and the threat of further closure, all of which
Oral Questions
will have very grave implications on Canada's ability to meet its grain commitments, not to mention the impact of the Canadian grain economy.
Has the minister discussed this very serious problem with the Minister of Labour? Can he assure us that every possible effort is being made to ensure that these regulations have been complied with? One must bear in mind that the regulations are indeed important, but compliance with them and their enforcement must be carried out in a manner which will minimize disruption in further grain movements.


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, of course the Minister of Labour is concerned and wants to be sure that appropriate measures are taken to ensure the safety of persons working in our terminal elevators. As a result, he has had to enforce the regulations. Obviously, he will look at the question of the balance between the safety which is required and the need to use the terminals effectively for the amount of grain going to the west coast. However, I should say that this particular temporary closure of a terminal is a very small part of the entire question of the amount of grain which can, or will, move through Vancouver during the course of this winter.
Indeed, there is a backlog of ships waiting. There were problems in December which delayed ships arriving. The good part of this is that part of the congestion will continue and the sales level of the Canadian Wheat Board and others is likely to reach record proportions. Already we are running 50 million bushels ahead of last year's volume. The movement of grain will continue very rapidly indeed. This means that, notwithstanding all the things we have done to improve grain handling on the west coast, when you try to put the absolute maximum through, particularly in winter time, you will obviously run into temporary periods of difficulty.


Donald Frank Mazankowski: Mr. Speaker, I trust the minister will meet with management and the enforcement agencies of the Department of Labour to ensure that this matter is closely monitored. Much of the problem in grain movement is the result of lack of proper co-ordination, and under utilization of the Prince Rupert port-it has been reported that the terminal at Prince Rupert port is bursting at the seams with grain- that hundreds of boxcars are to be unloaded, and that there are no ships available at the port.
Has the minister examined that situation? Can he explain the reason for this lack of co-ordination, and can he offer some hope to the prairie grain economy that we will see the end of these disruptions? For your information, Mr. Speaker, we are behind 22 million to 25 million bushels from our movement of grain last year.


Otto Emil Lang: Mr. Speaker, in my previous answer I reassured the Canadian farmer about the movement of grain. We are almost certain this year to set an all-time record in the export of wheat as well as the total export of grains.


Some hon. Members:: Hear, hear!
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Oral Questions


Otto Emil Lang: The reason for the temporary congestion at Prince Rupert is that arrivals of ships are notoriously unpredictable; there is no way to predict absolutely when a ship will arrive. Our problem in Prince Rupert is in part the fact that it is a small terminal. Therefore, the late arrival of even a single ship can make a tremendous difference to operating capabilities at Prince Rupert. As a result of that, the Minister of Agriculture and myself have been looking very zealously at the question of how we can improve and expand the capacity of Prince Rupert to handle grain. I am confident that before very long we will have a solution to that problem and expand the capacity there. The future for grain shipments through the west coast is, clearly, very good.


OFFICIAL LANGUAGES
Mr. Jean-Robert Gauthier (Ottawa-Vanier):: Mr. Speaker, my question is to the Prime Minister. In light of the ruling by the Quebec Superior Court as to the constitutionality of some sections of Bill 101, and in light also of the impact of the Forest case in Manitoba, which puts into question English unilingualism in that province, does the Prime Minister intend to emphasize his representations to all provincial premiers in order to urge them to formally support the rights of language minorities?


Pierre Elliott Trudeau: Yes, Mr. Speaker. The hon. member will recall that in September I indeed asked all premiers not only to protect the rights of minorities in the education system but also to include this protection in the constitution by means of a constitutional amendment. This debate is still in progress. Several premiers have already forwarded their reply. However, I do not anticipate discussing this matter with them at next month's economic conference, but this certainly is our aim and we hope that the provinces will act accordingly.


INDIAN AFFAIRS
Reginald Cyril Symes: Mr. Speaker, my question is for the Minister of Indian Affairs and Northern Development. It concerns the ongoing problem of mercury pollution in the English-Wabigoon river basin in northwestern Ontario. In view of extensive testing done by Dr. Pritchard for the Department of National Health and Welfare, and his report of December 15, 1977, to government officials that his examination of a resident of Grassy Narrows showed more precisely than ever before symptoms of methyl mercury poi-

soning, is the minister, for the sake of the health and safety of the residents of the area, prepared to recommend to cabinet that the river system be closed to all fishing, as the native people have been demanding for several years?


Hon. James Hugh Faulkner (Minister of Indian Affairs and Northern Development):: Mr. Speaker, I will review that matter. My impression was that my predecessor had recommended that as a course of action, and there was disagreement on that course of action with the province of Ontario. However, I will review the matter and report back to the hon. member.


Reginald Cyril Symes: Mr. Speaker, in view of the minister's answer and the testimony given by Mr. Carton, director of legal services of the Department of Fisheries, to the standing committee on June 16, 1977, that under the Fisheries Act the federal government could unilaterally close the English-Wabigoon river system without Ontario's approval, and since the Ontario government has stalled for years on cleaning up this mess, will the minister now do the decent and humane thing, close the river and begin remedial action before it is too late?


James Hugh Faulkner: I will look into that question, Mr. Speaker.


FUNDY TIDAL POWER DEVELOPMENT-GOVERNMENT POSITION
Mr. J. Robert Howie (York-Sunbury):: Mr. Speaker, my question is for the Minister of Energy, Mines and Resources. Now that the maritime premiers agree with the government on the important principle of a maritime energy corporation, will the minister advise the House whether the $5 million equity payment of the government will be spread over a ten-year term, or paid now; and is payment subject to a favourable report on Fundy tidal power development?


Alastair William Gillespie: Mr. Speaker, the three premiers and I reached agreement not only in principle but also on the next steps leading to the incorporation of a maritime energy corporation. We have reconfirmed the objectives and priorities of the corporation. We agreed on share participation and equity participation by the federal government and by the provinces, roughly a 50-50 dimension. We also agreed that it would be necessary, as the first step after incorporation, to set aside a sum of money-not a large sum of money-for working capital purposes. That is the figure to which the hon. member referred. I expect that $10 million is nothing more than a very small proportion of what will be needed over the years to undertake the massive projects which the people of the mari-times are going to need.


J. Robert Howie: Is Ottawa committed to supporting Fundy tidal power development at the recommended sites, and to underwriting at least half the capital cost of these projects?
January 26, 1978


Alastair William Gillespie: That is a matter for further discussion. It was agreed that if the report presently being prepared is favourable, and if the three premiers and the Government of Canada agree with it, phase two of the Fundy tidal development project would be the first one undertaken and funded by the proposed maritime energy corporation. Subject to those provisos, it is anticipated that the cost of phase two might be tens of millions of dollars. The exact proportion has yet to be determined by the parties.


NATIONAL DEFENCE
Right Hon. J. G. Diefenbaker (Prince Albert):: Mr. Speaker, I direct a question to the Minister of National Defence. It has to do with a very serious situation which has caused a great deal of concern in the United States, namely, the degree to which Castro and Cuba are endeavouring to support communist groups in Africa and elsewhere to undermine existing governments. Yesterday I endeavoured to have the matter discussed in the House, but general disapprobation came from government benches: "no" was the answer. I should like to find out from the minister whether this government was in agreement with the Prime Minister when he sang the hallelujah chorus in Cuba, "Viva Castro".


Pierre Elliott Trudeau: That is not Spanish.


John George Diefenbaker: Is that the reason the strong opinions of Americans have caused considerable discussion in Washington, asking why Canada does not take some stand in respect of a country to which the Prime Minister has given his support in such vocal and musical terms?


Barnett Jerome Danson: Mr. Speaker, I am not the secretary of state for external affairs, and not yet the prime minister.


Some hon. Members:: Oh, oh!


Barnett Jerome Danson: I have heard from my colleagues in the United States. There is considerable interest in the friendly relationship between our countries and the example that was set by Canada of renewing bonds with a country which was dissociated from the mainstream of events. Perhaps that will better the state of mankind and bring strength to our resolve in the western world.


John George Diefenbaker: Mr. Speaker, that answer is as evanescent as the minister's answers in connection with that stuff that is flying through the sky. Does the minister think Canada is making any contribution to peace by not standing against what Cuba is doing in sending troops to Ethiopia in a war against Somalia which it is anticipated will have effectively the same results as those attained in Angola?
Oral Questions
Surely, with this wonderful relationship and the carrying into effect of the Prime Minister's admonition from Hamilton hill when he said, "Love one another", that is going too far if it permits a nation so close as Cuba is to the present government to carry on the way it is doing to endanger world peace.


Barnett Jerome Danson: Mr. Speaker, I think we are going beyond my portfolio. If my memory serves me correctly, it was under the right hon. member's government that we maintained relations with Cuba. We are following in his footsteps. Not only that, but if I recall correctly, again, when President Kennedy wanted to take quick action in relation to Cuba, the right hon. gentleman delayed that decision. I find this question very difficult to answer.


John George Diefenbaker: Mr. Speaker, I expected that answer as an example of the minister's wit. On a few occasions in the past I concluded that he was a wit, only to find that I was only half right.


Some hon. Members:: Hear, hear!


INDUSTRY
Mr. Lincoln M. Alexander (Hamilton West):: Mr. Speaker, I should like to direct a question to the Minister of Industry, Trade and Commerce, who I am led to believe has had discussions with the steel industry with respect to pipe. We hear that the steel industry can be competitive. When the minister had these discussions with the steel industry, was there discussion with respect to American pressure? I mean by that the senators, unions and the steel industry in the United States who are apparently moving in a direction which would be to Canada's disadvantage. Was that type of thing discussed and, if so, what answer was given?
Hon. Jack H. Horner (Minister of Industry, Trade and
Commerce): Mr. Speaker, I have had discussions with the steel industry, and more than likely will have a lot more. I have been assured by the Canadian steel industry that they can, will and are able to compete with the United States industry, and are looking forward to getting the contract for the Alcan pipeline.


Lincoln MacCauley Alexander: Mr. Speaker, you will notice how the minister deliberately evaded my question. Let me ask him another. I do not know who is going to carry this bill, but in light of the fact that the estimates with respect to man-years, the estimates with respect to the amount of money involved, and the estimates with respect to the amount of steel in the pipe are all in question at this time, is it the intention of the minister, or whoever will introduce this bill at the time of first reading, to

January 26, 1978
Oral Questions
make a definitive statement regarding the benefits to Canada and Canadians from the pipeline?


Mr. Munro (Hamilton East):: I did that long ago.


Lincoln MacCauley Alexander: It is all out, John, and as usual you are wrong.


Mr. Horner:: Mr. Speaker, I think it should be obvious to all Canadians that the benefits Canada will receive from building this pipeline-the labour component, the steel component, the pipe-building component-will be a tremendous asset to Canadian industry. That should be obvious to everybody. I want to point out that in asking the question the hon. member clearly specified that these were estimates. They will be estimates until the pipe is laid in the ground.


NORTHERN PIPELINE-POSSIBILITY OF UNITED STATES APPLYING TAX WRITE-OFFS TO MANUFACTURE OF PIPE
Mr. James Gillies (Don Valley):: Mr. Speaker, I have a supplementary question for the Deputy Prime Minister in his capacity as chief negotiator in the pipeline agreement. I do not have any doubt about the proposition that Canadian steel can be competitive with steel anywhere in the world. The concern is, given the fact there is such underutilization of the steel industry in the United States, is there any probability or possibility that special advantages will be given to that industry by the government of the United States through tax write-offs or something of that sort, so that it will have an undue advantage in competing for manufacture of the pipe?
I know that under GATT, arrangements are made whereby you cannot dump, and so on, but this is very slow in coming about. When discussions took place with the United States about bidding for the pipe, was it understood-explicitly or implicitly-that no changes would be made, in either country, in the tax structure allowances or subsidies provided to the industry, so that competition will be based on the situation as it exists right now?


Hon. Allan J. MacEachen (Deputy Prime Minister and President of Privy Council):: Yes, indeed, Mr. Speaker, this very point was raised in the discussions. It was understood that both countries would act in good faith, that neither would cheat. There is a provision in the pipeline agreement itself by which one or the other country might raise any such question formally if it were alleged that unfair trade practices or exceptional steps had been taken in order to get business. That is clearly stated in the agreement. When the pipeline legislation comes before the House, I think it will be possible to explain further how we intend to deal with an eventuality of this kind which has already been provided for in the agreement.


James McPhail Gillies: Mr. Speaker, I should like to put a supplementary question to the chief negotiator in the pipeline agreement. Have the reports from Washington about the pressures being exerted by senators and members of Congress from the various steel states been of sufficient magnitude for the Canadian

government to raise with the United States government already-as they are apparently allowed to do-the possibility that undue pressure may be applied in this way? Is it too early to do that sort of thing?


Allan Joseph MacEachen: Mr. Speaker, I should first of all congratulate the hon. member for his realization that it will be possible for Canadian business to participate effectively in this pipeline. He properly raises the question of what steps we can take if extraordinary or unfair practices develop. I think we can provide for that, and have provided for it. In answer to the question as to pressure, I would say that circumstances have not developed to the point where we would wish to raise this question formally with the government of the United States.


HEALTH AND WELFARE
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, I should like to direct a question to the Minister of National Health and Welfare. It concerns the increasing number of older people entering institutions. In view of the increase in cost due to inflation, particularly in the health care field and specifically affecting to the greatest degree those listed as charitable homes with only a few extended care beds and the rest of the beds mostly occupied by old age pensioners on supplement who have no resources-and leaving the balance of the cost to a charitable institution makes it very difficult for them-I ask what contribution is available through the Canada Assistance Plan to institutions which are now in financial difficulty?


Hon. Monique Begin (Minister of National Health and Welfare):: Mr. Speaker, regarding home care for elderly citizens, home care and homemaker services are still covered and still cost-shareable under the Canada Assistance Plan. Under the block funding payments already in existence on the health side of my department, several institutions providing care to elderly citizens can benefit from whatever moneys the provincial governments decide to invest in these institutions. For instance, we presently give to Ontario over $1 billion under this block funding arrangement. Priorities are set now only by provincial governments.


Philip Bernard Rynard: A supplementary question. I should like to ask the minister if the Canada Assistance Plan is available to people who are looked after in their own homes.


Monique Bégin: Yes, Mr. Speaker, I am pleased to confirm that homemaker services and home care is still provided under the Canada Assistance Plan.
January 26, 1978


GATT-REQUEST FOR DETAILS OF CANADA'S TARIFF PROPOSALS
Hon. Marcel Lambert (Edmonton West):: Mr. Speaker, I have a question for the Minister of Industry, Trade and Commerce. In view of the fact that last Sunday he announced that the Canadian delegation to Geneva would table the Canadian list following the tabling of the United States list on Tuesday, is the minister prepared to table the list in the House today so that parliament can know what Canada is doing in the matter of trade and tariff negotiations?


John (Jack) Henry Horner: Mr. Speaker, I said we would be tabling a list in Geneva shortly after the United States tabled theirs on January 23. They have an offer list which can be withdrawn at any time. Therefore, it is not a final list and it would be wrong to refer to it in this House or anywhere else as being a final document. It is a negotiated beginning and not an end, and therefore it will be secret for some months yet.


Marcel Joseph Aimé Lambert: Mr. Speaker, in the event that we read about it in the press next week, would the minister not agree that Canadian business and industry is entitled to know what is being offered in trade for other advantages, so that we do not go through the charade and nonsense of the Kennedy Round when half of Canadian industry had its bargaining rights traded away in secret?


John (Jack) Henry Horner: Mr. Speaker, my department and I have been in constant consultation with the Canadian Manufacturers' Association and with the advisory committee to the Minister of Industry, Trade and Commerce. We are in constant consultation with Canadian industry generally.


Marcel Joseph Aimé Lambert: Since our chief competitor is United States industry, why does not the minister in this administration, to which he now belatedly belongs, follow the example of the American negotiators and do it out in the open, so we know what he is doing? This is indicative of a few people in Geneva who have not consulted with the provinces or industry.


John (Jack) Henry Horner: Mr. Speaker, let me correct the erroneous statement made by the hon. member. We and the team in Geneva have consulted extensively with the provinces. We are aware of the provinces' opinions, and to my knowledge the American list which was tabled on the twenty-third of this month has not been made public to the American businessman or anyone else other than those people who are part of the negotiating team at Geneva.
Business of the House PRIVILEGE


MR. KNOWLES (WINNIPEG NORTH CENTRE)-CP AIR EXECUTIVE SERVICE BOOKING ARRANGEMENTS
Mr. Speaker:: Order. Yesterday the hon. member for Winnipeg North Centre (Mr. Knowles) raised a question of privilege. The hon. Minister of Supply and Services (Mr. Goyer) has indicated he would like to make a brief reply.
[ Translation]


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: Mr. Speaker, yesterday the hon. member for Winnipeg North Centre raised a question of privilege concerning a letter sent by CP Air and suggesting the use of a telephone number from my department's Central Travel Office to make reservations on that airline.
Officers from my department have been acquainted with this letter and on January 24 they contacted and met with representatives of CP Air. The company expressed regret for this administrative error and stopped the distribution of the letter. Moreover, the company has promised to have this telephone number changed and a new explanatory letter will be sent to all persons concerned.


Mr. Speaker:: Order, please. The matter was raised yesterday as a question of privilege. I indicated I had some reservation as to whether or not it was in fact a question of privilege. I can safely say now that it was not, and in any case the point has been properly answered.


BUSINESS OF THE HOUSE
Walter David Baker: Mr. Speaker, I wonder if I could direct a question to the government House leader concerning House business. Could he give us an outline of the business that he foresees, as far as he can look ahead, as we begin the second week of this part of the session? Would he also confirm that he is prepared to designate Thursday, February 2, as an allotted day?


Allan Joseph MacEachen: Yes, Mr. Speaker, I am quite prepared to designate next Thursday as an allotted day.
Apart from the request for information on government business, I would like to confirm that we will be proceeding today with the employment tax credit legislation. This will be followed by Bill C-19 amending the Petroleum Administration Act, and by the bills dealing with the organization of Air Canada and the recapitalization of the CNR. We would follow this by completing the fishing and recreational harbours bill if there is time before we begin the discussion on the pipeline legislation, which I hope to introduce in the House at an early date and call for debate as soon as members have had an opportunity to study the terms of the bill.

January 26, 1978
Business of the House
Since Easter is very early this year, it may be useful if I give in general terms an outline of the business which is still ahead of us. We will have seven allotted days, probably one each week commencing with Thursday, February 2. In addition to the need to deal with these allotted days, the government will also propose legislation creating the post control monitoring agency, and bills and amendments to the Public Service Staff Relations Act with regard to the decontrol period. We will also bring forward amendments to the Farm Credit Act and the amendments to the Criminal Code, the Official Secrets Act and the Post Office Act. These bills will all warrant early consideration. That is a preview of the business I foresee for the early period before the Easter break.
As the hon. member knows, there are also bills in the committees of the House and bills standing on the order paper for second reading. There are bills that relate to the constitution and the holding of a national referendum which have been mentioned in the Speech from the Throne, which we will attempt to bring forward in this session.


Walter David Baker: I want to thank the Deputy Prime Minister for that extensive list. However, I note that there is one glaring omission from that list in terms of the legislative program. That is the question of a budget, which has been mentioned for around the end of March, which I believe was the general phrase used. Can the Deputy Prime Minister tell me today whether it is the intention of the government to bring down a budget prior to the anticipated Easter recess of the House? Naturally we think it should be brought in at a much earlier date. Would he deal with that, and could he deal with the suggestion that there be a special committee of this House, in the place of a standing committee, to deal with the pipeline legislation, which is another matter?
In addition, Sir, would he inform the House whether or not the hon. Minister of Finance will be here today to deal with the employment tax credit legislation himself? I realize the Minister is at a federal-provincial conference and some of his duties take him there. But is there any time during the next few days that he can devote to the House of Commons and be here for part of the debate since the minister has given so much importance to the passage of this bill? I might say to the hon. gentleman we do not intend to delay passage of the bill.


Stanley Howard Knowles: Mr. Speaker, you will note that the Deputy Prime Minister has been giving us a fairly long-range picture of the business of the session. However, may I ask him about two pieces of legislation he has not yet mentioned? As he knows, his colleague, the Minister of Veterans Affairs, said yesterday that he expected to bring to the House some news about veterans of the First World War. He made that statement in the context of answers to various questions concerning veterans affairs. My question is: will there be legislation affecting veterans in this session? At the same time, may I ask if there will be any legislation in the name of the Minister of National Health and Welfare, such as the social services act, or legislation respecting pensions?


Allan Joseph MacEachen: Mr. Speaker, I would like first to deal with the question raised by the hon. member for Grenville-Carleton. It is not possible for me to announce a budget date, or indeed when and if there will be a budget. That is a matter for the Minister of Finance and I have not had an opportunity to discuss it with him. My answer is not intended to declare anything except my inability to answer the question, and no other implications or conclusions should be drawn from it.
I have concluded that it would be desirable to strike a special committee in order to study the pipeline legislation. I hope that we can make whatever arrangements are necessary before we give the bill second reading, call it for second reading, or even introduce it.
We are calling the employment tax credit bill today. The Minister of Finance is currently meeting with the finance ministers of the provinces, but I expect that he will be available in the House tomorrow afternoon to deal with the bill in committee stage, if it is at that stage. I understand it is impossible for him to be in the House today for second reading because of the meetings to which the hon. member has already referred.


Charles Joseph Clark: And tonight?


Allan Joseph MacEachen: Unfortunately, or fortunately, the meetings are still continuing with the finance ministers. It will not be possible for the Minister of Finance to disengage until late tonight, but he will be in the House just as soon as he can, either tonight or tomorrow.
I can tell the hon. member for Winnipeg North Centre that the bills to which he refers are not on my list and it is not possible for me to indicate that they will get on the list at any point, but one never knows.


Walter David Baker: Mr. Speaker, there is one matter that the government House leader alluded to, the question of the availability of the minister for the purpose of the employment tax credit bill. I want to emphasize to him, through you, Sir, that we are very anxious to have that bill proceed. As we have indicated, it has been too late in coming, and now that it is here it should not be delayed. However, we do wish to examine the minister. We think it is quite important because the government seems to attach so much importance to that program.
I wonder if the government House leader would consider extending the hours of the sitting tonight so that the minister could be here and we could go through committee of the whole proceedings after his meetings. He may not be able to give that answer right now. We would certainly be willing to stay to have that done because it is an important piece of legislation.


Allan Joseph MacEachen: Mr. Speaker, I will certainly raise that with the minister. If the minister can be available, it might be a very good idea to try to give the bill full treatment today, second reading and the committee stage. If there are no
January 26, 1973

objections from the other parties, I will take it for granted it is worth pursuing the notion of sitting beyond ten o'clock.



ROUTINE PROCEEDINGS


Hon. Jeanne Sauv6 (Minister of Communications) moved: for leave to introduce Bill C-24, respecting Telecommunications in Canada and providing the appropriation of public revenue under the circumstances, in the manner and for the purposes set out in this measure.


[Stage Direction]
Motion agreed to, bill read the first time and ordered to be printed.
Mr. Speaker:: When shall this bill be read the second time?


Some hon. Members:: At the next sitting of the House.


Mr. Speaker:: At the next sitting of the House?


Some hon. Members:: Agreed.


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to Deputy Prime Minister and President of Privy Council):: Mr. Speaker, the following questions will be answered today: 460 and 773.
Mr. Speaker, I ask that the remaining questions be allowed to stand.


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


Jean-Pierre Goyer: In so far as the Department of Supply and Services and the Canadian Commercial Corporation is concerned: the Department of Supply and Services maintains records by city and provincial boundaries and not by electoral districts. However, our records show the following contracting activity on behalf of government departments with vendors in the city of New Westminster, British Columbia:
Order Paper Questions
Period	$000
1970-71	not available
1971-72	114
1972-73	849
1973-74	1,215
1974-75	1,595
1975-76	1,684
1976-77	1,360
April-October 1977	673
Note: Excludes the Department of Supply and Services regional operations contracting activity prior to April 1, 1976.
In so far as Canadian Arsenals Limited, Crown Assets Disposal Corporation and the Royal Canadian Mint are concerned: Nil


Mr. Cossitt: 1.	Is the government aware that there are a number of steps leading up to the Canada Pension Plan Office in Brockville, Ontario, which create a severe difficulty for the elderly and disabled and has the government looked into the situation and (a) if so, with what results (b) if not, for what reason?
2.	Will the government consider moving the office to another location that will not require such a handicap for those who must use the facilities?


Hon. Judd Buchanan (Minister of Public Works):: 1. Yes, the government is aware that there are 43 stair steps from the street level leading up the Canada Pension Plan office. This situation was taken into account in planning a current space reallocation project of various occupants of the building, scheduled to be completed February 1, 1978. (a) As a result of this project the Canada Pension Plan office will be located in the basement of the building. This will improve the situation by reducing the number of steps to 16. Furthermore, as part of our overall programme to provide case of access for handicapped persons to all government buildings, a project is under preparation to modify the secondary entrance of building, including the freight elevator, to make all floors accessible to persons using wheelchairs. This project is scheduled for completion in June, 1978. (b) Not applicable.
2.	In view of the answer to part I, it is not considered necessary to further move the office within the building or to another building.


Mr. Epp:: Mr. Speaker, 1 rise on a point of order. I placed questions on the order paper three days after this session began in October. These questions are very straighforward. I wonder whether the parliamentary secretary can indicate when he intends to have those answers given to the House?


Yvon Pinard: Mr. Speaker, we have already replied to 414 of the more than 1,204 questions which have been asked. This being more than one third of the total questions asked up to

January 26, 1978
Income Tax Act
this point in time of the session, I feel that it is an excellent average.
As to the hon. member's intervention, I shall inquire.


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


Some hon. Members:: Agreed.



GOVERNMENT ORDERS


Jack Sydney George (Bud) Cullen: that Bill C-23, to amend the Income Tax Act and to establish the employment tax credit program, be read the second time and referred to committee of the whole.


Mr.   Ed. Lumley@Parliamentary Secretary to Minister of Finance: Mr. Speaker, on behalf of the minister I would like to thank the opposition parties for their co-operation. As the House leader has indicated, the Minister of Finance (Mr. Chretien) is attending the finance ministers' conference, something very productive.

Mr. Speaker, I have the honour to rise to deal with second reading of this bill to amend the Income Tax Act and to establish the employment tax credit program.
We are all aware that Canada is faced with high unemployment. In my opinion, what we need is a program to foster employment in the private sector without running the risk of fuelling inflation. The national unemployment rate does not provide a clear picture of the many ways Canadians are affected by unemployment or have access to job opportunities. The reality of unemployment may differ according to living area, age and sex. Our programs, however, have been especially conceived to take these various factors into account. We have always been anxious to streamline our employment programs to meet the needs of the most seriously affected regions and groups. This orientation cannot be maintained with a comprehensive tax reduction program.
We devote considerable resources to the creation of employment. The Canada Employment and Immigration Commission has a $485 million budget for its employment strategy. It includes the Canada Works Program, the Young Canada Works Program and other measures for the creation of employment. The recently announced federal intensive work program will receive an additional $150 million. Those programs provide a great number of additional jobs. However, they cannot offer what the unemployed are mostly seeking, to wit a permanent job in the private sector.

Canada is far from being the only country to experience such extensive unemployment. The necessity of a new concept for the creation of employment has led several governments to consider systems of employment credits. The question is to find a proper mechanism. Although the employment credit can take several forms according to the cases, the basic principles remain the same. An employment credit is a grant given to encourage employers to hire additional workers thus contributing to reduce unemployment. The aim of the program is, first, to create employment in the private sector rather than in the public sector, second, thus to provide greater advantages at the qualifying and training level so that the acquired experience is valuable, third, to create jobs in the areas and for the groups which are most in need and fourth, to create a maximum number of new jobs at the least cost for the state.
I think that those principles are incorporated in the bill referred to this House.

Briefly, this experimental program will have the following features:
The program will be administered by the Canada Employment and Immigration Commission, drawing on their extensive experience in the field of job creation. They will enter into agreements with employers who will certify that the jobs created by the program would not have existed without the incentive of the employment credit.
Reimbursement under the program will take the form of a taxable non-refundable employment credit differentiated in the same manner as the investment tax credit. Incremental employment in areas benefiting from the 10 per cent investment tax credit, that is, the Atlantic and Gaspe regions, will be eligible for a credit of $2.00 per hour. All other areas designated under the Regional Development Incentives Act will be eligible for a credit of $1.75 per hour, and undesignated areas, $1.50 per hour. This regional differentiation of the credit rate provides a higher level of incentive to areas of high unemployment and slow employment growth. This reflects the minister's deep concern with the problem of regional disparity.
Making the credit taxable means that the maximum benefit will accrue to small business. For example, a firm paying the top corporate rate of 46 per cent could get a maximum net benefit of up to $1,685 per job while a firm with a 25 per cent tax rate would net up to $2,340. Also, by making the credit taxable it was possible to make the amount of a taxable credit more generous than a credit which was not taxed. A non-taxable credit would have been approximately one-third lower and result in the same cost to the treasury. Finally, this provision will also prohibit serious abuse of the program.
Eligible employers will include taxable incorporated and unincorporated businesses. They will be issued a tax schedule allowing them to reduce taxes otherwise payable. Participating employers will be allowed to reduce their tax instalment payments by the amount of unused credits accrued to the due
January 26, 1978

date of each payment. These credits could also be carried forward for up to five years.
Eligible employees will be those registered at Canada Manpower Centres or Employment Centres with the general principle that they must have been unemployed and looking for work for at least the eight weeks before referral to the program. One of the objectives of the program is to encourage the hiring of people who are becoming discouraged as a result of their inability to obtain employment, and thus to help them regain their self-confidence. At the same time we wish to ensure that other employment opportunities have been adequately examined prior to referral to this program.
Eligible employment must last at least three months, and at the present time subsidization will not exceed nine months. The three- to nine-month period was chosen so that employees will be offered a sufficient period of employment to benefit in terms of skill development and work experience. At the same time, the period of subsidy must be long enough to be attractive to employers and thus ensure their active support. We feel a nine month maximum represents the best balance between these concerns and program costs. At the same time, the legislation provides for the flexibility of extending the maximum to 12 months if it is warranted.
No limit will be placed on the number of participants but the program will be targetted at a net annual revenue cost of about $100 million. This, we feel, is capable of providing jobs for some 50,000 people per year.
The program will be introduced for a two-year period and will be effective no later than March 31, and hopefully on March 1 of this year.
Before closing, Mr. Speaker, I would like to draw attention to the fact that the employment tax credit program represents a special, additional effort on the part of the federal government, over and above the many millions of dollars that are currently being spent on direct job creation. The program is a new and experimental approach to federal job creation. It will be closely monitored in order to determine its future as part of our employment policy. To be successful, the program requires an enthusiastic response from the private sector, an acknowledgment of the shared responsibility for providing jobs for those Canadians who have difficulty obtaining them.


Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, in taking part in the debate on the second reading of Bill C-23 I should like first of all to clarify the position of the official opposition with respect to this measure.
As most hon. members are well aware, we have for some time been pressing the government to bring in employment tax credit legislation, and I am very pleased that the minister has at last reached the point of bringing down the bill presently before us. Nevertheless, in the course of my remarks I shall draw attention to the differences between Bill C-23 and the employment tax credit program we had hoped to see for the benefit of Canadians and especially of those who are out of work.
Income Tax Act
I cannot refrain from commenting on what I regard as an unforgiveable lack of concern on the part of the government for the unemployment of this country. I really cannot understand why the government did not choose to give this bill priority yesterday. We in this party have indicated repeatedly during the question period that if it was the desire to bring in this bill we would give it passage in one day, subject, of course, to its being basically as represented. But this meant that we expected the Minister of Finance (Mr. Chretien) to be in his place to explain the measure and accept questions during the committee of the whole stage. For reasons not clear to me, the government chose instead to bring in its Anti-Inflation Board patch-up bill yesterday and to proceed with Bill C-23 today. And now we are told that the Minister of Finance is too tied up at a conference to present the bill in this House on second reading and spend an hour of his time answering questions during the committee stage. I do not think this is a very good effort on behalf of the unemployed.
I turn, now, to another point. Yesterday the Minister of Finance stated in answer to a question put by my leader that this bill, if passed, would result in the program being in place "by March 1". There was no equivocation. Today we find the parliamentary secretary, who has been given a brief, written presumably by the public service, saying it will hopefully be in place by March 1. This is just not good enough. If we must ride along with a part-time Minister of Finance, the time has come when somebody within the government has got to exercise compassion for the unemployed and see that progress is made with pressing legislation, putting it into place so as to relieve the tragic consequences of unemployment.
Hon. members will recall that as long ago as the budget of the former minister of finance, the hon. member for Rosedale (Mr. Macdonald), on March 31, we stated in our response, that employment tax credits should be considered by the government and, hopefully, introduced. In October of last year before the start of the session, we again asked the government to bring in employment tax credits. On October 20 the Minister of Finance said he was setting aside $ 100 million for such a purpose. These delays illustrate the dither and lack of confidence which exist in government circles. Not until three months later do we find such a bill before us.
Even today when we commence second reading and, we hope, go into committee of the whole to review the bill, the Minister of Finance is not in his place in the House. I mention this because we all know he is attending the conference of ministers of finance, but he knew that yesterday. Why did he not ask that the House business be changed to give priority to this bill so that he could be with us when the bill is passed? It could have been done yesterday. The administration, to which the parliamentary secretary referred, would have been put in motion by now to ensure that the new law is functioning by March 1 at the latest.

January 26, 1978
Income Tax Act
Having said that, I would like to go back to the remarks we made on October 14 last year when we suggested the following to the Minister of Finance:
We suggest to Mr. Chretien that he institute a temporary employment tax credit for new workers hired by business. It has worked in the provinces, it has worked in other countries, it can work throughout Canada. The credit would be available to any business which increases its work force through hiring younger workers. In effect, the credit would be a subsidy of up to $1 an hour for the first 1,000 hours of employment, or about six months. For small businesses which may generate small taxable profits, it may be preferable to pay a direct subsidy at the same rate.
When we suggested that, we were suggesting a tax credit which would not be taxable itself. We suggested that it should be a clean tax credit for those who wished to apply for it, but only for SI. Secondly, we said the program should be oriented to the young workers in our country who are seeking jobs for the first time.
We are pleased that the government has introduced Bill C-23, but I would have to point out that the government has complicated it and muddled it. First of all, it suggests that the tax credit should be as much as $2 an hour, but then it wishes to tax back up to 46 per cent of it. In other words, for every $2 it is proposing to give to an employer on an employee's wage, 92 cents would be taxed back by the federal government. We suggest that that is a complication which the government could have avoided. It will be confusing for businessmen who wish to participate in the program in that they will not be clear what the total subsidy is worth to them until they have worked out their tax position.
Second, our suggestion was that the program should be oriented toward youth, the first time job seekers. We said that if the program is designed mainly to help first time job seekers, it will avoid the problem which, I know, concerns many members of parliament, that is, the dodge of laying off staff only to hire them on a subsidy basis at a subsequent date. We felt that orienting the program to first time job seekers would avoid the administrative nightmare of trying to prevent that dodge. But, above all, we felt that the high level of unemployment among our youth was something to which we should direct our attention especially, and we felt that the employment tax credit approach was a good way to start. We pointed out that the purpose of the employment tax credit is to relieve unemployment, first of all, but also, secondly, to give a subsidized wage to a person for, say, six months. The government is proposing nine months. During that time it is hoped that that person will become a productive employee of his company and will continue on in a permanent job.
I should like to summarize our suggestions, Mr. Speaker. We are saying that we are pleased the government has accepted our suggestion. We are disappointed it has gone to the complicated rule of proposing a larger subsidy only to tax back up to 46 per cent of it. We are disappointed that the government has not oriented the program to the first time job seekers or to the youth of our country, but perhaps our greatest disappointment is that the government, as stated in the legislation and in the press statement which was released at the same time, proposes to put such a heavy emphasis on the Canada

Manpower Centres. As we all know, businessmen in this country are not pleased with the response they have been getting from Canada Manpower. They feel it is not a good agency through which to secure employees when they look for a further extension to their work force. For example, the Federation of Independent Canadian Businessmen carries out surveys, in one of which it was pointed out that 67 per cent, or about 15,000 people, mainly small business people, said they felt Canada Manpower employment services were poor.
We believe it is unfortunate, if the object of the program is to relieve unemployment, that there should be the impediment and the complication of having to hire the new employee, if one wishes to get the subsidy, through Canada Manpower. This is a rather tight red tape approach which the government is adopting.
I hope there is no doubt in anyone's mind in the House that we propose to support the legislation and we hope it will receive a speedy passage at second reading and in committee of the whole. But we also hope that the government will accept some of the suggestions we have put forth. We hope that the administrative nightmare which might occur will be minimized or eliminated, and we hope that the program will be oriented to our youth, who happen to make up one of the largest sectors among the unemployed of this country. Above all, we hope that the government will get on at last with clearing up whatever administrative difficulties it feels still exist in implementing this program, and that it will put it in place so that the Canadians who are tramping the streets in this cold, cold winter can once again get jobs on a more permanent basis.
1 should like to draw your attention, Mr. Speaker, to the fact that during the committee of the whole proceedings, which we hope to reach before the dinner adjournment, we think it is important that the minister provide time for us to question him and respond to our questions, because I know that members in my caucus, and presumably other members of the House, will have questions to put to him concerning the administration of this program and concerning the government's general concept of the program.
We are talking about big money here. The government has indicated it will cost about $140 million to encourage this type of employment and it hopes to tax back $40 million of that, resulting in a net outflow from the Treasury of $100 million. This is a lot of money, but the most important thing we must ensure is that this program works because, frankly, if the government brings in a program which, for reasons of an administrative nature or because of its concept, is not workable, we will not be doing a service to anyone. It is the unemployed about whom we should be concerned today, and that is why I hope the Minister of Finance will give us some time today when he can answer questions which members will be putting to him, as we are anxious to ensure that it is a program which not only makes sense in theory but which in practice will help relieve the unemployment situation in the country.
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Mr. Stuart Leggatt (New Westminster):: Mr. Speaker, at the outset I should like to agree with the hon. member for York-Simcoe (Mr. Stevens) when he suggests that this bill should have speedy passage. I disagree with his expression of surprise at the parliamentary secretary introducing this bill. This bill will have such a small impact on Canadian unemployment rates that I am surprised a backbencher did not introduce it. Elowever, I might say the parliamentary secretary does an excellent job for his minister.
This bill is being introduced after the worst season is nearly over. It should have been introduced last spring. This band-aid solution is all that is being offered to the million unemployed. It is an incredible situation. The real problem is not the question of tax credits to small business, a principle which we can support on a temporary basis. The real problem is that the government has locked its financial position in because of the massive amounts of subsidies it has given to big business. Because its financial position is locked up, the government does not have the kind of flexibility necessary to move these concessions around to where they belong, which should be a massive tax cut at the consumer level. That would provide purchasing power, which would supply the small businessman with a need to hire additional people.
This bill asks small business to pull our irons out of the fire and to hire someone it does not need in order to remove him from the streets. In a minor way that will reduce our unemployment statistics, and to a limited extent it will reduce some of the money the government is putting into unemployment insurance by the removal of that person from the unemployment rolls. Unless the direction in which the economy is going is changed, there is no need for the small businessman to help out by hiring someone who is unnecessary to his business. There are not enough customers to buy the small businessman's product. The responsibility lies right at the government's door in that respect.
We will not attempt to impede passage of this band-aid legislation, but we have serious questions concerning it. As I read the legislation, it requires that a person being employed under this bill come from Manpower and should have been idle for eight weeks or more. The bill does not deal with the thousands of people who do not go to Manpower, who have given up on the idea that they will receive any help from Manpower, and who have given up on the idea that they will ever get a job. No employment will be created in that particular area.
This legislation is asking small business to do a favour for government. It is not a favour to small business. The hiring of an extra employee, who may or may not be necessary, does not help small business until consumer demand for his product has changed. Instead of the tax credit system, the same thing could be accomplished if the fellow who is coming to pick up his unemployment cheque is told to take a seat inside and is put on the employment list. That procedure would reduce the number of unemployed, but it would not be productive. It would have no impact in terms of the economy. It would take someone off
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one section of the rolls and put him on another. To some extent this bill does that, where the person hired is unnecessary to the operation. Small business will not take advantage of this bill unless the economy is changed and provides it with a need to hire more people. A small businessman might prefer to operate his business with five people rather than ten, because it is easier.
Another reservation we have, and perhaps we will propose an amendment in committee on this, is that under provincial minimum wage law where a part time employee is involved he is not covered under this legislation. I am surprised the government did not include a clause in the bill requiring the minimum wage to be paid by the employer in any event. Surely that must be accepted as a decent and reasonable standard. At least the federal minimum wage figure should be applied to the legislation so that employers do not take advantage of it by paying less than the minimum wage. As I read the legislation, they would be capable of doing that. I hope the minister gives serious consideration to seeing that provision incorporated in the bill.
In my view the red tape which is involved is unnecessary. An employment plan filed by the small businessman is required. Some bureaucrat will have to approve that employment plan before the businessman is able to take advantage of the tax credit system within the plan. I would rather trust the judgment of the small businessman than of some bureaucrat who says, "I do not like your plan. Therefore you cannot come under the program". The program does not need the red tape, nor does it need the plan system.
This piece of legislation does not zero in on the major unemployment groups, such as the young. The hon. member for York-Simcoe has pointed this out. It does not zero in on those who are not on unemployment insurance but are on welfare because they have been out of work so long. Those people desperately need to get back into the work system, and this bill does not help them.
I hope we do not become euphoric about this legislation and feel we have done something marvellous for small business. In fact we are asking small businesses to help by hiring people they may not require, in order to receive a tax advantage. A lot more can be done for small business than that. Surely parliament can sit down and assess the needs of small business.
By moving into this area so delicately, perhaps the government has started to understand that one third of all the jobs in Canada are jobs in the small business area. Those businesses are labour intensive and have the capacity to expand. The large business sector only uses 80 per cent of its capital capacity.
Our entire budgetary processes continue to reward the large business sector with accelerated depreciation and massive grants. For example, recently there was an announcement in Vancouver by the firm MacMillan-Bloedel indicating that it was shutting down its Vancouver plywood plant which would result in 700 people being put out of work. Over the past eight years this large firm has received $10,963,000 in concessions and grants. That is what the government has done for big

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business. They were provided with nearly $11 million in order to be competitive, and for assistance in research. If that money had been used to tool up that plywood plant and to make it efficient, 700 workers would not have to be laid off.
Why do we continue to give massive subsidies and tax concessions to big businesses which are now the weakest part of our economy? Small business is not the weakest part, but it has been ignored and ignored, and now we are paying the price. Workers at Inco are being laid off as well as workers at MacMillan Bloedel. MacMillan Bloedel lost about $50 million because of some very dumb executive decisions. MacMillan Bloedel did not tool up, did not become efficient, and did not use the government help which had been so generously given by the people of Canada, including the workers in its own plant whose taxes went to help in subsidizing the company, to making it efficient and to allowing it to purchase new equipment. Now the company wrings its hands and says it "cannot compete any more. That old mill has to be shut down". That is wrong and immoral.
We need some leadership from the government. The government should end those kinds of concessions to major companies. Concessions should be tied to jobs. If we are going to give massive subsidies to MacMillan Bloedel, let us see that there are job guarantees for Canadians.
In this bill there is a little concession for small business, and that little concession is tied to jobs. That should have been done with major corporations a long time ago. This government did not have the foresight to see what was happening. It was taken advantage of, just as it was taken advantage of in the negotiations regarding the Alcan pipeline.


Mrs. Holt:: What did your buddies do in B.C. when they had a chance?


Stuart Malcolm Leggatt: The hon. member for Vancouver-Kingsway (Mrs. Holt) asks what my buddies did in B.C. when they had a chance. Ocean Falls, Can-cel and Kootenay Forest Products made enough money last year to balance the provincial budget for the people of British Columbia.


Simma Holt: The government went practically bankrupt.


Stuart Malcolm Leggatt: In B.C. we have come back to the same proposition whereby we are allowing our economy to be dominated and controlled by major corporations which are laying off more workers than were ever laid off under the previous provincial regime. That is what is occurring in B.C.
We will support this legislation, although we want some minor changes, or at least some thought about some minor changes. It is very much a band-aid approach to a massive unemployment problem. If the government opposite cannot come up with more original ideas, it should just throw in the towel. This bill could have been brought in before the winter season. I suspect there will be more pie-in-the-sky announcements before the election, but if this bill is the response of this government to the over one million unemployed in Canada, the

government deserves the response it will get from the Canadian people.


Joseph Adrien Henri Lambert: Mr. Speaker, I do not want in any way to delay the passage of Bill C-23 but still I would like to make a few comments because I consider it to be my duty to express the needs of the south shore area which I have the honor to represent.
Mr. Speaker, as most government bills to curb rising prices and unemployment, this proposed employment tax credit program is a sort of hand-out to industry but I will not prolong my comments on this aspect of the bill because I will certainly have the opportunity in the near future to participate in a more comprehensive debate on this issue. There is no doubt that a program designed to create jobs can hardly and honestly be criticized. This is quite normal because that is what we want, namely to provide jobs for workers who are able to work for the betterment of this country. I understand that this is an innovative program. Furthermore, it meets a suggestion I made in my speech on second reading of Bill C-l 1. I said at that time:
I have a suggestion to make to the Minister of Finance: I think that rebates made on real investments in Canada might be much more indicated. Of course, these partial rebates could be calculated according to the number of jobs created.
There would then be a reaction between capital and manpower resources.
I must say that this bill comes very close to the spirit of my suggestion. The idea to increase the credit in proportion to the regional rate of unemployment is only logical. On the other hand, it raises again the need to designate the south shore area as a special and under-privileged area.
Just recently I watched a television program featuring several Liberal members of the Quebec City area. It was interesting to hear those members' comments when describing the Quebec City area as an area which had not been advantaged in recent years, especially because the attention of governments had been directed mostly towards the Montreal area for the preparation of the Olympic games, and those Olympic games have left behind some problems, not only for the city of Montreal, not only for the province of Quebec, but also for Canada. They said that was why the Canadian government had again designated the Montreal area as a special zone to help local industries provide jobs for the numerous unemployed people living there. But also, Mr. Speaker, those hon. colleagues were emphasizing how important it was to have a federal cabinet minister in the Quebec City area to reassess the requests and claims of members in the cabinet and that representation of the Quebec City area in the Cabinet was absolutely necessary, extremely important, something I am not disputing.
I still believe that all areas of Canada must be fairly represented within the executive of the national government. But what surprised me is that after describing all the advantages that an area can have when it is represented by a minister of the federal cabinet, someone-I think it was the
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moderator-brought up the question of the transfer of certain maritime operations from the Quebec City area to the Montreal region. One of the members then said that this matter was vital, that there was no way to stop it, that it would mean a loss of employment in the Quebec City area in favour of the Montreal area, but that the move involved the operations of a private company and that it was impossible to interfere in the matter. I am happy to see my colleague, the hon. member for Langelier (Mr. Lamontagne), who was recently appointed to the cabinet, for which I sincerely congratulate him. I know that he is an able man and that he held the important position of mayor in Quebec City, where he did a very good job, as I have already said, and I am sincerely pleased to repeat it in this House. Today, I would like to urge him to give his support to his colleagues who took part in this television program in favour of keeping the operations in the Quebec City area, whether in the maritime sector or the industrial development area, and I sincerely appeal to him as a member of Parliament and not as a member of a political party to use his influence so that the Quebec City area will not be disadvantaged in favour of Montreal because of exceptional circumstances following the Olympic Games. Mr. Speaker, I am convinced that the minister understands the point I want to make and that he will consider it his duty to outline accurately the economic needs of the Quebec City area so that it can be recognized that the south shore area has been disadvantaged in the past and needs to benefit from this legislation.
During the debate on Bill C-11,1 even wrote to the Minister of Finance (Mr. Chretien) and asked him to introduce an amendment having regard to the area affected by the bill and concerning tax credits for industries in the Atlantic provinces, extending from Gaspesie to Riviere-du-Loup, so that this area be included in the law providing grants for the transport of goods in the eastern area ending at the road going from Levis to the American border. Unfortunately this amendment was not introduced, which is not to say that 1 gave up and changed my mind about the feasibility of this idea. Maybe some day the Minister of State, the hon. member for Langelier, might convince his cabinet colleagues of the soundness of this proposal and the necessity for the industries in this area to benefit from the same advantages.
At it happened, Mr. Speaker, on Monday when the House resumed I met the Minister of Regional Economic Expansion (Mr. Lessard) and spokesmen for an important industry established in the south shore area. Because of their vivacity, their vigour and their youth, these people, who believe in the future, have managed to conquer a market outside Canada and create quite a few jobs in a given community. They can give expansion to their industry and create about thirty new jobs, which is quite appreciable in a community which is home to hardly more than 2,000 or 3,000 people. Of course this calls for co-operation from government authorities and from DREE.
So I think that if we could provide this industry with the benefits of this legislative measure, Bill C-23, it would be of tremendous help for them to pursue their operations and corner new markets in the United States. Even if the province
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of Quebec is involved and there are misunderstandings between the two levels of government, my feeling is that we, as responsible members of parliament, must do our duty and try not to make things more difficult. We should show the people in our areas that there must be in this country a federal government, it must supervise across the country the economic well-being and development of our regions, in order that each and everyone can take advantage of the legislation and benefits that a united Canada can bring them, in whatever province.
As far as I am concerned, Mr. Speaker, I have always been very optimistic in nature, and I am still more so today. I have a conviction that with legislation as that now before us, even if not perfect, there is a will to improve things for industries so they may create jobs to lessen the unemployment plague in our province and our country as a whole.
Mr. Speaker, I remember when we discussed Bill C-l l, my colleague the hon. member for Rimouski (Mr. Allard) put forward an amendment to increase the exemption for workers, the $250 allowance proposed in the bill that workers could deduct from their revenues for income tax purposes. My colleague suggested the amount should be increased to $400.
I still think that such an amendment could have increased to that extent the workers' purchasing power. It should be remembered the right hon. Prime Minister (Mr. Trudeau) and the Minister of Finance suggested during these last months that the purchasing power of consumers must be raised, to increase the consumption of Canadian goods so our industries could operate on a more continuous basis and get rid of their inventories, so the products could reach households where they are needed, thereby increasing employment if possible and reaching for that common goal of ours, which is that every Canadian while earning a living can make a contribution not only to a higher gross national product but also to better competitiveness on the international markets, so that we can produce better quality products and allow our industries to better compete with imports.
[DOT] <1612)
Early this week, I received a report from a textile industry in my area informing me of the sad plight of those industries, particularly the one involved. I dealt with this last December and I emphasized that those factory owners are showing great courage in holding on while making little or no profit, in the hope that the central government, through stricter controls on imports, will enable these industries to get a greater share of the market and to maintain at least the same level of employment as in 1977.
Now, Mr. Speaker, in addition to this measure provided for in Bill C-23, I would like to make again the same suggestion I made before in this House and which was even considered on an opposition day. At that time, I appreciated the position taken by all members of this House, from whatever party, because this motion was looked into carefully, objectively and sincerely by all members who participated in the debate on that opposition day, and I refer to the discount on the price of

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Canadian products that the Canadian government could implement through an act of parliament for certain products whose producers are in deeper trouble. This leads me to mention briefly the plight of hundreds of milk producers, especially industrial milk producers, whose quotas have expired since November, December or last January. If the milk policy schedule is not changed very soon, milk producers will have to consider limiting their production until April 1. Yet, these producers have heavy commitments toward their credit unions, their banks, and all those who grant them credit to purchase dairy feed or farm machinery.
Some will say, Mr. Speaker, that the hon. member for Bellechasse keeps raising this matter. Indeed, and I am not ashamed of doing so because I am well aware of this problem and I would not want to see within a year or two our country running short of milk producers because of the present lack of foresight of the government. I keep meeting many young producers whom I have advised to buy their father's or their neighbour's farm rather than letting it be sold to strangers who are going to let fertile land lie fallow. There is talk about land conservation today. This should not be the exclusive concern of the Quebec government. We should all help out in conserving the land because whatever changes in government happen, whatever form our institutions may take in Canada or in the provinces, we will always need farmers to produce our food.
So, if we are aware of all that, I think it is time, Mr. Speaker-and that is what I am suggesting-the government considered carefully the advisability of granting a rebate on dairy products, let say on whole milk first since surpluses are used as industrial milk, and we know all the wrangling it has brought about last year. Whole milk producers were pitted against industrial milk producers and it is a serious matter to sow discord between members of a same family. That is all right as far as neighbours are concerned, but when people live in the same house or live on the revenues from the same industry or product, it is quite serious.
So, if it were decided to grant a discount on a quart of milk -someone pointed out to me recently that now with the metric system, it costs 52 cents. Before, milk was sold by the quart and it also cost 52 cents. So, with the new system, the consumer gets less milk for the same price. That makes no sense at all! So, the lady bought a quart of milk in a glass container and then took a carton containing a litre and poured the milk into it. And there was really a difference of a teacup. And then, if you buy four litres of milk for your family, it means that you bought four teacups less than what you paid for.
Here again it is the responsibility of the Minister of Consumer and Corporate Affairs (Mr. Allmand) to monitor the implementation of that change in the measurement of consumer goods that people must buy everyday.
So, Mr. Speaker, let us grant a subsidy as we did in 1972 under a minority government! The Canadian government, then in a minority, granted a 5 cent discount per quart of milk, and during the few months when that policy was implemented, $181 million were distributed throughout Canada to promote

the consumption of milk and help Canadian consumers. The purchasing power of those who really need it was increased by $181 million. This was possible in 1972, Mr. Speaker, under a minority government that was listening to the demands of the people and was still able to administer our country. Foreign governments did not meddle in our affairs because we had a minority government. But we did not have a minority parliament. At that time, parliament was assuming its true responsibilities as an inspiring force and a legislator while the executive was assuming its true responsibilities by implementing the will of parliament.
I am not afraid of a minority government, as I know it has been beneficial to our country.
Recently I heard on the CBC TV network that there might be an election in 1978. It is a possibility, but it is also possible that the outcome of that election will be a minority government. If this is the will of the people, there is no problem. We are supposed to live in a democracy, a government by the people and for the people. When I was a child, I heard Mackenzie King make a speech in Quebec City. Mackenzie King was not very fluent in French. He could say yes, no and thank you, and also welcome, but anyhow I was at the meeting he held at the Armouries and he said something I shall remember all my life.
He said at the time: Never ask to live under a dictator, long live democracy-he knew it by heart and had practised for weeks. That was when he said: a government of the people, by the people and for the people. He concluded his speech by saying: That is what I want to give you.
To conclude, Mr. Speaker, I must say that I support Bill C-23, and my colleagues will probably do the same because we usually end up understanding each other. I hope that when the bill is referred to committee it will be amended as required and that the government will then implement them. I hope that the civil servants who will draft regulations after the bill has been passed will do so quickly in order that this legislation be in force as soon as possible. However, they should take care not to lose the real objective of Bill C-23.
I do not want to be unduly critical but sometimes, after we have considered a legislation and done our best to understand it, it happens that when people come to us for information and details we have to refer to the regulations made after enactment of the bill, but we find ourselves at a loss because they do not reflect what we did in parliament, far removed as they are from the legislator's thinking. I am not saying it is done on purpose but it does happen. And when the bill will be in force I do not want to have to say to businessmen who will want to benefit from the law that because of such or such regulation they cannot do this and they cannot do that. People think that we are not serious when, on the contrary, we should demonstrate to all Canadians we are really serious and responsible people who try to give their country the best administration so that our economy will operate at full capacity. After that effort has been made, Mr. Speaker, some people will still be
January 26, 1978

without work because progress is here, because machines are taking the place of man, and because those machines do not ask for a salary the way workers do. After that, a program will have to be implemented which enables the federal government, the various departments, the provincial and municipal governments, to undertake a vast public works program designed to give the people the services they need.
That is where 1 agree with orthodox economists whom I have often had occasion to criticize in this House because I felt it was my duty to do so. Those conventional economists suggest as a means of making up for deficiency of private enterprise, of government bodies, as a means of giving employment so that everyone can have an income, as a means of increasing or giving purchasing power to those who do not have a steady job, those economists suggest public works programs to give everyone a chance to earn some purchasing power. The purchasing power will not only have contributed to produce consumer goods but to produce services which we could enjoy in this world and which could also benefit future generations. Now a public works program as a means of dealing with unemployment is an excellent policy provided that future generations are not burdened with the production of goods which are now needed.
Mr. Speaker, in conclusion and as a third suggestion, I would like to remind the hon. members and members of the executive that such public works should be financed not through taxes but with credits created by the Bank of Canada and refunded in the same way as the credits created by chartered banks. The only difference is that the interest rate would be much lower because the Bank of Canada should not operate to make profits but to provide services. The only interests paid would serve to cover administrative costs.
Mr. Speaker, I am sure that if we did it this way we would contribute to decrease inflation. Some of our opponents have always tried to ridicule our ideas and suggestions-not you, 1 know you as being sincere and honest people. However, there are people outside this House whose mission is to ridicule everything we do here, be it on the side of the majority, or on the side of the official opposition or on the side of the opposition parties, the ones that are called the "small" parties. I do not mind being called a member of a "small" party because in the Gospel, Jesus Himself did say to let "small" people come to Him. He loved small people and I am sure He still does.
Mr. Speaker, this formula which 1 am proposing most respectfully and sincerely, think we should put it to the test. We have made so many experiences here and there which have failed, that I suggest we should at least try a formula in which I, and a number of financial experts today, sincerely believe. Why borrow from others what we ourselves can produce? Why go and draw water from our neighbour's well when our well is filled to capacity with perfectly good and pure water? Why borrow elsewhere? Why have the chartered banks borrow the funds we need to expand the public sector when we have our own bank which can operate and do the same job for a better price?
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Mr. Speaker, let us examine this very carefully. I am sure that if the House analyses this situation and goes to the bottom of this, it will realize that the hon. member for Bellechasse has come up in his remarks with three useful suggestions which deserve to be put to the test and will certainly not bankrupt our country. There is no risk involved. In fact, the way things are going right now, we are very likely to end up in bankruptcy.
Therefore, to stay afloat while there is still some vigour left in us, parliament could certainly convince this government to introduce legislation which would be the extension of the one we are dealing with today and which would make it possible to achieve the results parliament has in mind, namely, to provide all Canadians with enough purchasing power to meet their needs.


Mr. Roch La Salle (Joliette):: Mr. Speaker, I cannot help making a few remarks about this piece of legislation. First it should be well understood that when the government accepts recommendations from the opposition-that does not happen often-and yet they are always intelligent recommendations. But this time the government could not refuse to consider a legislation or a recommendation designed to create employment. We would rather have had the government do it a few months ago when the official critic of the opposition pointed it out in the House on behalf of our party. Nevertheless we will support this legislation which is before the House because it contains some elements of solution.
It is certainly not the ultimate solution but we realize that it deals with an urgent issue and we will obviously not hesitate to support this legislation. In addition, we will do our best to be short so that the government can implement it at the date set in and in the most efficient way. That does not prevent me from urging the government to pay close attention to the monitoring and implementation of this program. It is obvious that in any legislation providing for subsidies to certain classes of people, one will try by all possible means to obtain the most and, unfortunately, from time to time an attempt will also be made to justify a subsidy that is not always justifiable. In view of the circumstances, I feel it is our duty to ask the government to watch very closely the implementation of this act.
We have been advocating a similar program for a long time. May I repeat again that the government could have thought of it at least two years ago. For two years now we have lived through an intolerable situation and, in light of the steady increase in unemployment and in the cost of living, we knew full well that legislation would have to be brought in. Why wait so long? I will attempt to prove my point. It seems that, during those two years the government decided to maintain a million unemployed through various band-aids it introduced. It may be that the government thought that with such programs as the LIP, the Opportunities for Youth Program and the new Canada Works Program, the economic woes of the country would be solved. I hope no one thinks that. But as few other formulas have been found to generate employment, we, on this side of the House, as thousands of Canadians, have to think that the government has nothing rather to suggest than a few

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band-aid measures. Still, if I say that suggestion may be acceptable and even worthy of interest, I want to clear up one point. In the outline given by the Parliamentary Secretary to the Minister of Finance (Mr. Lumley) and in the press release of the officials of the Department of Finance, mention is made of $100 million in federal revenue which would produce 50,000 new jobs in the first year. Those officials recognize and admit, very wisely indeed-because God knows how many errors have been made in forecasts these last few years-that only 25 per cent of the jobs created by this program will be permanent jobs. So I feel the Canadian people have a right to know, to be spared illusions: when we talk about 50,000 jobs, it sounds good and, naturally, outside the House people tend to think of them as 50,000 permanent jobs. Then, if we assume the figure is 25 per cent, which is dubious according to some officials, it means that this program worth $100 million will create next year 12,500 permanent jobs.
But this program may also create 37,500 jobs for periods ranging from three to nine months. It is similar to Canada Works, Mr. Speaker, with the advantage, I must admit, that these jobs will benefit more the Canadian production than others, more than unemployment insurance benefits anyway. It remains nonetheless that Canadians must know that we are not talking about 50,000 permanent jobs. According to some forecasts, as I have said before, it represents 12,500 jobs and if we divide them among the ten provinces, then my own province, for example, may see the creation of 1,000 to 1,200 permanent jobs when the number of unemployed almost reaches 300,000. So I must repeat that this legislation, although worth while, is not the ultimate solution and I hope the government understands that also.
I just said that we have not solved the problem. That much is evident. Is it then some kind of a band-aid legislation which, on the eve of a possible election, can help create an exciting electoral climate for Canadians. I think the question is worth asking. Why do I say that for the last two years we have been living in an intolerable situation? I think that Canadians must put the following question to the government: why are these measures submitted at the last minute? Talking about elections, one never knows if they will be held this spring, next fall or next year, but judging from the subsidies that are being granted on an almost day-to-day basis, and from the arrangements that are being worked out with the provinces, it is interesting to see that the government has managed to scrounge here and there money that it claimed was unavailable only a few months ago.
If we are talking about permanent jobs, Mr. Speaker, I think we should start talking about an industrial strategy. I remember that in reply to the Speech from the Throne the Minister of Finance (Mr. Chretien), supported by the Prime Minister (Mr. Trudeau), talked of an industrial strategy where this government felt that it was time to have an industrial policy. After ten years I do think it is indeed time to have one, and in view of the economic situation we are now facing I think that, to have an industrial strategy, we must have a well

organized research department with the necessary researchers and funds.
Why do we now have to use this band-aid? Precisely because in the absence of that adequate research department for the economic future of this country-and that is indeed the case-I must hold this government responsible for not having thought of allocating the necessary funds to have extensive research which could have foreseen the economic situation we are now facing. So we now find ourselves-and this should also be recognized-in a very obvious and intolerable economic slump which is forcing this government to introduce emergency measures.
I spoke of that band-aid just before an election, of this absence of adequate research only equalled by the absence of an unemployment policy for which this government was responsible and could not come up with-a lack of foresight which resulted in hundreds of industries going belly up. This lack of adequate research can be seen every day in different areas.
Let us talk about the impossibility of forecasting massive imports in the future. I could give examples-I think our friends opposite remember quite well the difficulties facing the textile industry. There were further recent lay-offs in the mining industry, in the footwear industry, in agriculture-the hon. member for Bellechasse (Mr. Lambert) referred to it earlier. We recognize that this absence of adequate research which prevented this government from coming up with a necessary policy created tremendous difficulties for our Canadian industry.
So, Mr. Speaker, a government which scorns such an essential and indispensable tool as a well organized research department is guilty of gross incompetence and irresponsibility. I am sorry but I think the words are not too strong and I must say that this government after ten years, which must show the public such a gloomy economic record, is indeed a pitiful failure.
So the government is prepared to do something to redress the situation and is making today its last attempt with the meeting of the Minister of Finance and his provincial counterparts. Next February there will be the conference on economic affairs. But for how long have we, on this side of the House, been urging the government to meet these people, to share with the provinces, the citizens and the labour organizations and to ask them and more particularly the business community for solutions? I think they could give good advice to our present Minister of Finance, but nothing like that was done. Here again, 1978 will be a very special period. The government will try to hoodwink the Canadians by telling them that it is prepared to do something. But I think our responsibility is to ask the Canadians whether this government still deserves the confidence they have put in it since 1974 and during the last ten years.
Therefore, I repeat, Mr. Speaker, only a well planned industrial strategy will allow us to create jobs, and for this strategy to be properly established, additional funds must be earmarked for research departments. In the short term, we will

have to be content with the corrective measures presented to us today, but then again the package appears a lot more attractive than it is in reality. I therefore repeat, it is urgent that we support this piece of legislation. I also wish to remind Canadians that the slump which we find ourselves in is due to a government that lacked the foresight and decency to equip itself with the tools necessary to establish its policy.
I shall now, Mr. Speaker, leave the floor to some of my colleagues who have comments to make, and I hope that my observations will be taken into consideration by our friends on the other side.


Hon. George Hees (Prince Edward-Hastings):: Mr. Speaker, I should like to say a few words on this important matter because I think the government is on the right track although it is very limited in its approach, and for that reason, when the bill becomes legislation, it will not do nearly as good a job as would be possible with a broader approach which I intend to outline at present. My thoughts are as follows.
If we are to increase employment significantly in this country, we must find a way of obtaining orders which are at present being filled by producers in other countries due to their ability to turn out products which are as good as the ones we produce and to sell them in Canada at significantly lower prices.
There is a great deal of business which Canadian companies are unable to compete for because of low labour costs in the foreign countries where the products are made. If Canadian companies are to be able to compete for a good proportion of this business, and thereby obtain additional employment for Canadians, they must have an incentive which will enable them to reduce their labour cost on this potential new business to a level where they are within striking distance of these low foreign rates. Then by accepting a lower than normal margin of profit on this extra business in order to get started, they can compete for these orders and stand a good chance of obtaining a reasonable proportion of them. Now, what kind of incentive will do the job?
The government should say to all business-not just manufacturers and processors-that it will reward over-all increases in employment during the year by way of an employment incentive, which will be paid in direct proportion to the increases that are made. It is simply a matter of comparing the total number of man-years of employment by the company in the tax year under consideration with the last full year before the plan is put into operation, which will be the base year. The employment incentive would be paid in proportion to the increase in employment and the general wage level of the plant concerned, and the company will thus be able to calculate well in advance just what amounts of money it would receive for various increases in employment.
This will enable businessmen to calculate in advance how much their labour costs would be reduced on additional business which the employment incentive would make it possible
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for them to seek. All such business obtained in this way will be a net gain for Canadians.
As you know, a person receives two thirds of his former pay or salary when he is out of work and receiving UIC benefits. If one third of his former pay scale is made available to a potential employer who can then bid on previously unobtainable contracts, and in this way provide work for that unemployed person, then he or she would have the satisfaction of working instead of remaining in idleness; would be removed from the UIC rolls; would be making a positive contribution to the economy; and would begin paying income tax to the government.
To pay for this employment incentive, we would have available to us a considerable proportion of what the government pays out each year as its contribution to UIC benefits. This year it is estimated that the government's contribution will be at least $2 billion of the more than $4 billion which will be paid out as such benefits.
In the bill before us there are some changes in detail from what I have put forward on this occasion, but the government's proposal is the same in principle as the ideas which I put forward for its consideration. Therefore, I will be very pleased to support the bill when it comes to a vote.


Miss Coline Campbell (South Western Nova):: Mr. Speaker, I do not plan to take very much time of the House on this bill but I do wish first to congratulate the Minister of Finance (Mr. Chretien) and the Minister of Employment and Immigration (Mr. Cullen) for their attempt to recognize again the regional disparities which exist in some areas of Canada. I also wish to congratulate them on trying to reduce unemployment through the incentive proposed in the bill before us.
For the benefit of members of the House and others I should like to say that one does not see too many arrangements which take the regional disparities in this country into consideration. However, under this bill, in the Atlantic provinces and the Gaspe region of Quebec a $2 tax credit per job is offered.
One must look at what is the objective of creating these jobs. The employer must find a new type of work and employ a person for three months in order to qualify for a tax credit for up to nine months of assistance, and the new employee must be employed full time. This should encourage small businesses in Nova Scotia, and in South Western Nova in particular, to consider this new method of reducing unemployment in the fields of fishing within the 200-mile limit, in farming, forestry and tourism.
There are some questions which I hope will be answered with regard to employment in the fishing area in cases where the catch is not available for the full 40 hours in a week or for the full three months. I hope that the minister will answer some questions I will put to him during the debate on this bill later on regarding the case of an employer who wishes to hire people in the fishing industry. Will he have to hire them for a steady three months' period to benefit, or will he be able to extend that period in case fish are not running for a period during that time? I wonder how the legislation should be

January 26, 1978
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interpreted in that respect. There are many areas in Nova Scotia and in other Atlantic provinces where people are unemployed for eight weeks and more and this tax credit will encourage small businesses in these areas to create new jobs for one or more people.
As I said, in South Western Nova in particular the fishing industry is expanding, and hopes for the future are great. The 200-mile limit has certainly contributed to this. The tax credit for the creation of jobs will provide an incentive to reduce unemployment. It parallels perhaps the investment tax credit which was granted in the past year to small businesses which amounts to 10 per cent in the Atlantic provinces and in the Gaspe. It is 7 per cent in other designated areas in Quebec, Saskatchewan, Manitoba, Ontario, Alberta and British Columbia, and 5 per cent in all other areas of Canada.
To return to the tax credit proposed in the bill before us, it will amount to $2 in the Atlantic area and in the Gaspe, to $1.75 in other designated areas in Quebec, Saskatchewan, Manitoba, Ontario, Alberta and British Columbia, and to $1.50 in all other areas. It is calculated after the total taxable income of the company benefiting has been reported for that year. It can credit up to nine months of the $2 per hour for the employed person. It covers up to a maximum of 40 hours each week for a period of nine months. The employer can use this tax credit over a period of five years, if he cannot use it up entirely in one taxation year.
Often opposition members indicate that the government has not been looking for a method to alleviate unemployment in the regions of high unemployment in Canada. In my constituency this year approximately $2.2 million is going toward Canada Works projects. It is creating employment in times of high unemployment.
It is nice for members opposite to boast about the employment situation in Alberta, but a lot of Albertans have not faced the tough times of the east. This income tax credit will help many Canadians, particularly many easterners. I have a lot of confidence in the future of the east. I see businesses starting or expanding from existing businesses, not only because of the 200-mile limit, but because of Canada's ability to find oil on the east coast in the future. If one looks at the North Sea and sees how many wells were dug in order to find oil there, one will realize that Canada has not done as much and has found gas.
I see advantages for the constituency of South Western Nova. In order to receive the $2 tax credit, a person must find full-time employment for three months. I question the three months in terms of the fishing industry. Perhaps fish do not realize they have to be around for three months at a time. This is something that may be answered later in the debate. The benefit to the small businessman will be up to nine months and, if he cannot use the entire tax credit, he can spread it over a period of five years.
I thank Your Honour for allowing me to talk about this further incentive by the federal government. It is designed to

aid in reducing high unemployment in some of the areas of Canada. The job experience and training program under the Department of Employment and Immigration is very new. Chambers of commerce and boards of trade have already taken this problem in hand in order to find out whether companies could use additional unemployed youth between the ages of 18 and 24. They have attempted to find businesses which require this age group, at the same time as creating jobs for the future and taking advantage of the 50 per cent being paid by Manpower.
In conclusion, this two-year program regarding tax credit can only benefit Nova Scotia and my constituency. I congratulate the Minister of Finance and the Minister of Employment and Immigration.


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


Mr. Deputy Speaker:: Is it the pleasure of the House to adopt the said motion?


Some hon. Members:: Agreed.
Motion agreed to and bill read the second time.


Yvon Pinard: Mr. Speaker, I rise on a point of order. After consultation with members of all parties, we have agreed to suspend the private members' hour for this afternoon in order to continue with the discussion of Bill C-23 which is now referred to the committee of the whole.
I therefore propose that the House seek unanimous consent and issue an order on the last two lines of Standing Order 16 to suspend the private members' hour for today so as to allow us to continue the discussion of Bill C-23.


Mr. Deputy Speaker:: Does the House agree?


Mr. Andre:: Yes, Mr. Speaker.


Stanley Howard Knowles: Agreed.


Eudore Allard: Agreed.


Mr. Deputy Speaker:: Do we have the unanimous consent to suspend the private members' hour and go into the committee of the whole to consider Bill C-23.


Some hon. Members:: Agreed.


Mr. Deputy Speaker:: Under the provisions of Standing Order 54, I now leave the chair to enable the House to go into committee of the whole to consider the bill.
January 26, 1978



PROCEEDINGS ON ADJOURNMENT MOTION


Mr. Deputy Speaker:: Before going into committee of the whole it is my duty, pursuant to Standing Order 40, to inform the House that the questions to be raised at the time of adjournment are as follows: the hon. member for Ottawa West (Mr. Francis)-Public Service-Committee of review-Government position on public hearings; the hon. member for Okanagan-Kootenay (Mr. Johnston)-External Affairs- Reason Canadian delegation in Indonesia to discuss possible Canadian participation in coal mining project; the hon. member for Northwest Territories (Mr. Firth)-Northern Affairs-Government position on contracting out work to private operators.



GOVERNMENT ORDERS


[Stage Direction]
House in committee of the whole on Bill C-23, to amend the Income Tax Act and to establish the employment tax credit program-Mr. Chretien-Mr. Laniel in the chair.
On clause 1.
James Aloysius McGrath: Mr. Chairman, it is obvious from the expedition with which this bill was greeted today that there is a disposition on the part of the House to pass this bill as quickly as possible.
Would it not have been better if the government had brought this bill on when we wanted it, that is, prior to the adjournment for Christmas? The earliest this bill can be implemented is March 1, 1978, which means whatever advantages are in this bill will be lost for now. We hope there will be advantages in terms of its ability to create jobs in the private sector. I believe the private sector is where the greatest potential for job creation exists. But the advantages will have been lost, in so far as the peak periods of unemployment are concerned, namely, the winter season.
If the government had agreed to bring on this bill prior to the adjournment for Christmas, which is what we requested, it would have been passed in all stages in one day. The possibility that we might get through this bill today exists, and hopefully we will. The fact that we are dealing with the bill as late as today itself represents a tragedy because we will lose the job creation advantage of the bill at a time when we need it most. To underline that fact, all we have to do is look at the December unemployment rate, and it is growing by leaps and
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bounds. The official unemployment rate for December stood at an all-time high of 8.5 per cent.
I suppose the government and the minister will draw some consolation from the fact that the rate of unemployment in December went up by only one tenth of I per cent over the previous month. There is a failure to recognize the fact that we are dealing here with human beings who are unemployed, and not just with statistics. While the government may draw some consolation from the fact that the rate December over November went up by only one tenth of one per cent, that official tabulation represents 40,000 people added to the number of jobless. That means that 40,000 more Canadians are without jobs.
If we examine the December figures one startling thing which stands out and which causes me a great deal of concern-and reference was made to this today in the question period-is the fact that a growing proportion of the unemployed have been unemployed for three months or more, which means that unemployment insurance benefits for these unfortunate Canadians are expiring at the rate of about 10,000 per week or about 2,000 Canadians every working day, according to December figures. For these people unemployment becomes a real tragedy because they no longer have the relative luxury of unemployment insurance cheques. These people have to make the decision to go to their local welfare officers and to submit themselves to the humiliation of means tests. In my view that holds the potential for great social unrest.
The official figures from Statistics Canada show that 37 per cent of those looking for work in December were unemployed for longer than three months. Of those unemployed for longer than three months 35 per cent represent working males 24 years of age and over, obviously heads of families. However, that is the official rate. In real terms the figures are even more startling because we have an army of unemployed numbering
I.	271 million as opposed to the official figure of 840,000.
The real rate of unemployment in Newfoundland is 26.3 per cent, or 57,000 out of a work force of 217,000. In Prince Edward Island the real rate is 19.6 per cent, or 11,000 out of a work force of 56,000. In Nova Scotia the real rate is 16 per cent, or 57,000 out of a work force of 356,000. In New Brunswick the real rate is 20.9 per cent, or 62,000 out of a work force of 296,000. In Quebec the real rate is 14 per cent, or 408,000 out of a work force of 2.922 million. In Ontario the real rate is 9.4, per cent or 393,000 out of a work force of 4.193 million. In Manitoba the real rate is 8.2 per cent, or 39,000 out of a work force of 475,000. In Saskatchewan the real rate is 6.3 per cent, or 27,000 out of a work force of
432,000.	These are the prairie provinces where employment is supposed to be at its highest. In Alberta the real rate is 7.1 per cent, or 66,000 out of a work force of 934,000. In British Columbia the real rate is 12.4 per cent, representing 151,000 out of a work force of 1.222 million. As I have said, the total number is 1.271 million unemployed Canadians, representing
II.	4 per cent unemployment.

January 26, 1978
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According to the latest figures available, a little more than half of these people are eligible for unemployment insurance. The rest of them have to fall back on provincial or municipal welfare rolls. That raises a larger problem-which I hope is being discussed today at the finance ministers' conference-of the additional burden this places on the poorer provinces, because most of the long-term unemployment in the country resides in the five eastern provinces, Quebec and the four Atlantic provinces, comprising considerably less than half the work force.
I believe 37 per cent of the work force in Canada resides in the five eastern provinces, yet almost 50 per cent of the total unemployed resides there. I hope that the finance ministers will address themselves to redressing this legitimate grievance of the poorer provinces. I hesitate to use the term "poorer provinces", but those provinces lack the capacity to meet this additional financial burden. I hope some way will be found, apart altogether from the Canada Assistance Plan under which the government boasts of the 50-cent dollar, whereby half of the welfare is paid by the Government of Canada. That represents 100 per cent for the provinces because they have to pay out 50 per cent, when heretofore they had to pay out nothing because unemployment insurance covered the situation. That is a problem of growing concern.
The whole matter of the consequences of long-term unemployment on the individual has not been fully addressed by this government. I know that the Minister of Employment and Immigration is a compassionate man. I know he has a great deal of humanity and compassion, but I do not think he fully appreciates and understands what it means to be unemployed for a long period of time. I know what it means to the statisticians at Statistics Canada. It means that if you are unemployed for a long period of time and out of sheer frustration have given up looking for a job, you are no longer counted as being unemployed. You are not reported. In other words, you become one of the hidden unemployed, part of the indivisible army of unemployed, one of those for whom nobody holds any hope.
There are shortcomings in this bill which will be pointed out as we get into clause by clause examination. This bill is the only thing the government has come up with. We have asked for a new budget. There has been no response to that legitimate suggestion. Only a new budget can really address the comprehensive nature of this problem, the effect of long-term unemployment on the poorer provinces in terms of their capacity to meet additional welfare payments and the human consequences which flow from the effects of long-term unemployment. Only a new budget can prevent the social consequences which will result.
Youth unemployment is growing by leaps and bounds, and that is a real tragedy. Again, according to official Statistics Canada figures for the month of December, 15 per cent of the unemployed in the month of December was between the ages of 15 and 24. Many of them are university graduates or graduates from technical and vocational training schools. They have diplomas but no job opportunities. What does it do to a

young Canadian who works hard to get his diploma when his country shows him absolutely nothing in the way of opportunity? I say that makes for cynicism of the worst kind.
When I addressed a graduating class of a technical college in my constituency last June I was struck by the large number of people there and asked the college president if such a turnout was the usual thing on a nice day. He replied that they rarely got a full complement out as in the normal course the students would be in the field, working at jobs in forestry, construction, or the technical area in which they had graduated. They were present that day because there were no jobs for them.
Unemployment in my part of the country is critical, Mr. Chairman. The best barometer of that is the construction industry where, of a total work force of 20,000 people, about 16,000 are unemployed.
There is a disposition on the part of the House to get this bill through so that it can be operative by March 1. I hope the government will not impose so many bureaucratic-I do not use the word in a derogatory sense-regulations as to make it difficult for people to take advantage of the bill. I think particularly of small businessmen who do not have the resources to deal with bureaucracy and paperwork.
The bill is being sponsored by the Minister of Finance, but its implication will be the responsibility of the Minister of Employment and Immigration. I am glad to see he is here to pilot the bill through committee in the absence of the Minister of Finance who is quite legitimately away attending the conference of ministers of finance. I must say, however, that I think it would be an edifying experience for those provincial ministers of finance to watch these committee proceedings. They are going to have some input into the way the bill is implemented by providing advice to the government. Obviously the government cannot operate in a vacuum but will have to deal with the provinces, so I think those ten ministers of finance would be well served if they could observe committee stage of this bill from the galleries. I think they should understand what we are trying to do here.
All too often in this House when we put in place measures designed to cope with emergency situations, we make them so difficult that middle and small businessmen cannot take advantage of them. They are defeated before they start because of the numerous regulations and paperwork that must be coped with. I should like to ask the minister to address himself to this question as we proceed through committee stage.
The government is spending an impressive amount of money on make-work projects, various tax incentives, and manpower training programs-about $2 billion at the present time. The situation is not improving, however, although these programs have been in place for some time. The Canada Works Program has been in effect for a couple of years. The Young Canada Works Program has had very little impact on youth unemployment and, of course, the various government job training
January 26, 1978

programs obviously can have but minimal impact. Why train people if there are no jobs at the end of the training period?
In my part of the country many people occupy places in vocational schools taking upgrading or training courses financed by the government, only to find at the end there are no jobs for them. Some look for ways to return to the vocational training schools to take other courses. When we consider that over $2 billion has been spent on programs to provide incentives through the Income Tax Act, job training programs, make-work programs, the Federal Labour Intensive Program and others, we wonder just how effective they are. Sometimes I suspect we make it too difficult for people to participate. That does not apply to the Canada Works Program, however, because that was put in place quickly, although because of the scope of the program the impact is minimal. I do not underrate the importance of the Canada Works Program or the Young Canada Works Program but in my province where 57,000 people are unemployed only 10 per cent will find jobs through the $20 million spent on this program.
It is important that we approach this problem as an emergency-one that is unprecedented since the great depression. Unless we do, many Canadians will be forced to the streets, to the welfare offices, and will have to give up on the system. I believe we allow that to happen to our peril. We must treat this situation for what it is. If we approach it as an emergency we will impose a minimum of regulations and bureaucracy in order to ensure that the program is in place, operative and, hopefully, effective, as quickly as possible.


Coline M. Campbell: Mr. Chairman, I have a number of concerns about this bill. I realize that the job involved must be one that would not have been possible without the incentive of the tax credit, but I wonder what is the standard. Is it something that had existed in the past and had folded, or must it be something entirely new to the company?
Perhaps I can go on to my other concern. I realize that the company must not be receiving any other assistance in the form of a subsidy at the federal, provincial, or municipal level, but how does it affect companies presently receiving DREE assistance? Are they to be excluded from the program? The press release states that in order to receive the $2 tax credit which will be given for up to nine months, the person must be employed full time for three months. What is the interpretation of full time? In an area like South Western Nova where there is a volatile industry such as fishing, there may only be two months of herring fishing at the beginning of the season and a month some time later. Can that three months' full time employment be interrupted? I know that full time means the opposite of interruption, but in terms of the fishing industry how will full time employment be defined?
I commend the minister for this new measure. We all hope that most of the people who will be hired under this program will be rehired at the end of the subsidy. Perhaps I could get
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an answer for those two questions and then go on. I understand
I have only ten minutes.


James Aloysius McGrath: You have 20 minutes.


Some hon. Members:: Oh, oh!


The Deputy Chairman:: The hon. member for South Western Nova has the floor.


Coline M. Campbell: Mr. Chairman, I read in the press release of the Minister of Employment and Immigration that the tax credit can be used to offset federal income tax liabilities for the taxation year in which the credit was earned. If not required the credit could be carried forward for up to five years against future federal income tax liabilities and it will count as taxable income. That will be of greatest benefit to small companies that pay lower corporate tax rates than major firms. Again, I think that is good. Is that the total taxable income of the company, or do you relate it to the income earned from that new employment?
It has been brought to my attention that perhaps there might be a difference there. I would think that it would have to be the total income tax owed by the company rather than just relating it to the job. Perhaps the minister could advise if this program could be combined with JET, job experience in training, or is that excluded because it is a federal program? I imagine that the JET program will be receiving a subsidy, so you would not have that.
To reiterate, I have asked for two answers. What is the meaning of full time employment in an area where there is fishing, and whether a company which is presently receiving assistance under DREE would be able to qualify for creation of employment. Do you relate that new employment to the existing DREE having received a subsidy, or are you allowed to go into that?


Jack Sydney George (Bud) Cullen: Mr. Chairman, I would like to extend my compliments to the Parliamentary Secretary to the Minister of Finance who has done a very commendable job, not only on this particular bill, but on other tax bills before us. It is to the credit of the parliamentary secretary that he takes such control. I do not feel that I am piloting this bill through, I feel that I am helping him because the aegis for this particular program does come from the Department of Finance with input from us.
I am not going to comment at this time at length; possibly at the third reading stage I will have something to say on some of the comments made by the hon. member for St. John's East. I thank him for his recognition and his comments about my being compassionate and concerned, because I am, but he seemed to indicate that 1 did not know what it meant to be unemployed. My father was unemployed. 1 know what the impact is on a family when that occurs, and I do have concern for that. This was at a time when there was no unemployment insurance and no welfare. Similarly, I have been in the same predicament myself of being laid off and being unemployed,

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and I do have some concern about the problems faced by individuals who are unemployed.


Sinclair McKnight Stevens: You will have a new stint coming up after the next election.


Jack Sydney George (Bud) Cullen: Frankly, I think we have more important things to talk about.


Sinclair McKnight Stevens: Let's get on with it then.


Jack Sydney George (Bud) Cullen: We have more important things to talk about right now when we are talking about this program and not the election.
Interestingly enough, all the provincial finance ministers have endorsed this particular piece of legislation. They have been over it. They have in fact had a full briefing, and have indicated their full support for this particular program. The opposition across the way have indicated to us their support and we do appreciate the fact that they are going to expedite passage of this bill.


Lincoln MacCauley Alexander: Even though it is full of holes.


Jack Sydney George (Bud) Cullen: In answer to the hon. member for South Western Nova, if DREE assistance is given as an incentive to increase the capital cost there will be no impact whatsoever. This program in fact will be available.
In the event DREE assistance is given to help with jobs, then the full amount of the tax credit will be given under this particular program, but in so far as DREE is concerned they will be looking at the particular form to see what impact this would have on the kinds of incentives and the amounts of money that would be made available. So it will impact to some extent on DREE in that particular region, but not where the incentives are given to increase the capital cost aspect.
I believe the hon. member for South Western Nova asked whether a firm which cuts down on its employment could apply. I can best say that it is in looking at the employment base, that an employer can measure the increment to his work. In the case of seasonal work the employment base would be the level of employment during the equivalent period of one year earlier. If it is in the case of on-seasonal employment, then the base would be the average level of employment during the eight weeks preceding the application. In the case of employment in heavy capital goods or the construction industry where employment levels tend to fluctuate widely but not necessarily seasonally, the base would be the greater of that reflected by the approach taken in either one or the other of the examples given, so that whichever one works in the least interests of the employer, that is the one which would be made applicable.
With respect to the job experience training program, a credit will not be given to employment which already receives support under other federal, provincial or municipal job subsidy plans. Persons who have worked for the employer within the previous eight weeks will not be referred by the Canada

Employment Centres, so that the JET program, being a federal program, would not be applicable.


Coline M. Campbell: Mr. Chairman, I would just like to go over the point the minister explained respecting DREE. I would interpret his explanation as meaning that it would be up to the company which benefit would be best, either to apply for DREE assistance for job creation or to apply for a tax credit. I assume DREE officials will probably be explaining that in future.
With respect to the level of employment, instead of directing my question at two months out of four months possible employment, what about a week? For example, if a person can only obtain employment for two days, 24 hours in a week. You have a maximum of 40 hours, so I take it you would have a minimum of 24 hours or even 20 hours. The maximum is mentioned in the press release but there is no minimum.


Lincoln MacCauley Alexander: I rise on a point of order.


Charles Robert Turner: The hon. member for Hamilton West on a point of order.


Lincoln MacCauley Alexander: Mr. Chairman, I know I am a little late in arriving but we all have some significant interest in this bill. However, I am a little confused by this procedure. I notice the hon. member is directing her comments to clause 1 which I understood was used for debate purposes only. I am listening to my friend, the NDP House leader, who knows much more than 1 do of this procedure and I would not quarrel with him; he is the expert. When I am finished, he can stand up and give his opinion as to what the ruling should be.
We are now asking questions which could come up a little later. I am wondering if the procedure is correct. As long as I have been here, and I have not seen a change, when you call clause 1 it is for the purpose of debate only. Without any further ado, as they say, Mr. Chairman, will you kindly advise what the procedure is at this time.


Charles Robert Turner: The hon. member for Hamilton West has asked a question. When clause 1 is a short title, it is stood. If it is a long clause, there can be questions and answers. A member can make a speech for at least 20 minutes and then speak a second time. The number of times a member can speak is unlimited.


Coline M. Campbell: Mr. Chairman, when I was interrupted, I was talking about the level of employment, and I referred to the period of 20 weeks. In the press release, a maximum of 40 weeks is mentioned. I have not had an opportunity to study the bill in depth clause by clause. I just wonder if the interpretation will be a qualifying period of 20 weeks, 25 weeks, or what minimum is necessary in order to qualify for this tax credit.
The minister has mentioned the different interpretations of employment for three months. Perhaps he can enlighten us as to what full employment means for a week's employment. He has answered my other question.
January 26, 1978


Jack Sydney George (Bud) Cullen: Mr. Chairman, the situation is that the credit is given for the number of hours actually worked. Let us take a situation about which the hon. member might be worried. An individual might work three months, or three weeks and not the fourth week, working only 24 days. The employer would get a tax credit for the number of hours worked. The minimum is not applicable there. The credit is given for the hours that are actually worked.


Sinclair McKnight Stevens: Mr. Chairman, I wish to direct the minister's attention to page 8 of the bill before us. There are certain regulations that are contemplated. Will the minister indicate what in fact will be the definition of "eligible employer"?


Jack Sydney George (Bud) Cullen: Either an incorporated or an unincorporated individual would qualify as an employer.


Sinclair McKnight Stevens: Further to that, Mr. Chairman, are there any limitations on the type of work that the employer may be in? For example, are farmers included without any question?


Jack Sydney George (Bud) Cullen: Mr. Chairman, in the event that the farmer is in fact conducting a business as such, yes, he would be included as an employer. I understand that only temporary help agencies or personal service would not qualify for this particular tax credit.


Sinclair McKnight Stevens: I take it that with those two exceptions the minister referred to, anybody who is carrying on a business will be treated as eligible employers. Presumably farmers, who are one of the most basic types of businessmen in the country, will be included. Will the minister then give us the intended definition for "eligible employment"?


Jack Sydney George (Bud) Cullen: Mr. Chairman, so there will be no misunderstanding, I will read this part of the response. "Eligible employment" is full time employment where the work week exceeds 35 hours, that will last for a minimum of three months and that pays an hourly wage at least as high as the credit. The maximum period of subsidization is nine months. Excluded is employment in personal services.


Sinclair McKnight Stevens: Following on that definition, I wonder whether the minister could clarify one or two things. As I understand the definition, it is for a minimum three months' period. If your employee decided to leave for some reason at the end of the first month, would that be regarded as as ineligible employment?


Jack Sydney George (Bud) Cullen: No, Mr. Chairman, The situation is we would anticipate employers would in fact be offering a job during that period of time, the three month period. If an individual works one or one and half months and leaves, or for that matter is laid off, the employment credit would be applicable, as far as the employer is concerned, for the period of time that the individual actually worked.


Sinclair McKnight Stevens: Mr. Chairman, I noted the minister indicated that you can get your amount of credit provided the wage is at least two dollars or higher. Is that correct?
Income Tax Act


Jack Sydney George (Bud) Cullen: There are the three figures, $1.50, $1.75 and $2, depending on the particular job. Given those three figures, the hon. member's suggestion is correct.


Sinclair McKnight Stevens: I wonder if the minister can indicate what in fact is the lowest minimum wage in Canada at the present time.


Jack Sydney George (Bud) Cullen: I am just having that figure checked out, if the hon. member would like to ask another question.


Sinclair McKnight Stevens: Tied in with that, Mr. Chairman, can the minister give us some idea how many employers may be entitled to this type of credit who will not be bound by any minimum wage? To what extent might there be people who will be offered only $2, $2.25 or some relatively low wage, which would mean the government is paying the entire cost of the hourly wage?


Jack Sydney George (Bud) Cullen: Mr. Chairman, I am hesitating on this because I think it is clear we would not have the statistics until we find out what kinds of operations are in place, what kinds of employers participate in this program. We would need that before we would have the kind of information the hon. member is talking about.


Sinclair McKnight Stevens: I am always anxious to help these ministers, Mr. Chairman. To be very specific, in most areas the farmer as a businessman is not bound to pay any minimum wage in so far as employees are concerned. Taking that as an example, am I correct in saying that a farmer, following the suggested definition, would be able to hire somebody for, say, $1.50 an hour, and be fully reimbursed by the credit that this program will provide?


Jack Sydney George (Bud) Cullen: The first question of concern I would have is how many people would in fact come for $1.50 a hour. Second, the credit that the individual is given as the employer is limited to that figure. Then it is a net benefit because it is taxable.


Sinclair McKnight Stevens: I was not looking for the rationalization; we can all put that in. I am asking a very simple question. Is it not conceivable that an employer could have an employee on his staff, there would be no net cost to him whatsoever in the sense that there may be some tax back, but that as far as the initial payment is concerned there would be no net cost to him for that employee?


Mr. Chretien:: I think I can safely say there is no such possibility.


Sinclair McKnight Stevens: Well, Mr. Chairman, the part-time Minister of Finance-


Joseph Jacques Jean Chrétien: On a question of privilege, Mr. Chairman. I think this is the third time since I entered this chamber that the hon. member has talked about a "part-time minister". I have spent all day with the other ministers of finance of the land doing a very important job. I finished at 5.30 and I came
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January 26, 1978
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right into the Elouse of Commons. It is incredible that members of the opposition, because I go once in a while to Quebec, as I did this week, and speak for Canada so as to keep Canadians together, should sneer in that way. I think such behaviour is completely irresponsible. I do not ask anything from anybody for my benefit but there is one thing nobody can say of me, and it is that I am lazy. I have worked for 15 years for Canada. In a sense, I am happy that the opposition is so irresponsible because the people of Canada who listen to snappy, cheap shots of that kind will never have enough confidence in that party to put them in power.


Some hon. Members:: Shame!


Mr. Gilbert:: Be a man! Apologize!


Sinclair McKnight Stevens: I see we have only 16 or so minutes left before six o'clock so perhaps I might continue.
I should like to ask the minister what would be the definition of an eligible worker.


Jack Sydney George (Bud) Cullen: An eligible worker is one who has been unemployed and registered at a manpower centre as having been actively seeking work for eight weeks or more. An employee must not be related to an employer or to senior management of a company.


Sinclair McKnight Stevens: I take it, then, that the manpower office would be expected to maintain some kind of register of those who meet this definition. Will some running record be kept of those who are available under the definition?


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman. That kind of record is in place now.


Sinclair McKnight Stevens: The bill provides there will be a prescribed form of agreement, one which presumably the employer signs with the local manpower office as the other party.


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman.


Sinclair McKnight Stevens: Does the minister have a draft of this agreement for us to see?


Jack Sydney George (Bud) Cullen: No, we have not, Mr. Chairman. If we did we would probably be criticized for moving ahead on the assumption that the legislation would be passed-we have been caught in that box before. But the agreement will be a simple one. We did not want to get into a lot of bureaucratic regulations. We wanted to keep it as simple as possible so that the employer could benefit without having to do a lot of paperwork.


Sinclair McKnight Stevens: We note that the form of the agreement is still not available. I appreciate that the Minister of Finance will probably not be with us later this evening so perhaps I could put one or two more questions to him now. I understand that at a press conference he estimated that this program will cost the treasury about $140 million. But he anticipated that the tax-back might amount to $40 million, giving the net amount
[Mr. Chrftien.J
of $100 million to which he referred as being the total cost when he spoke on October 20. Could the minister confirm this for the record?


Joseph Jacques Jean Chrétien: Yes, Mr. Chairman, I can confirm that.


Sinclair McKnight Stevens: Can the minister tell us what studies have been made of the second source of revenue to the treasury? We can understand an employer having to add to his income on the credit side, and presumably tax will be payable. On the other hand, tax will also be levied on many of the employees. Has any calculation been made of the net tax revenue expected from employees under this program?


Joseph Jacques Jean Chrétien: We did not make such a calculation. I might say we did not anticipate that many of those who will benefit from this program will be in receipt of incomes at a taxable level anyway. One has to make at least $4 or $5 an hour to be in a tax bracket.


Sinclair McKnight Stevens: The minister would agree, though, that there might be some tax-back.


Joseph Jacques Jean Chrétien: There might be. In the case of an employee who was paid $10 a hour, we concede there would be. But we do not know, and we are inclined to think the effect on the cost of the program would be extremely marginal.


Sinclair McKnight Stevens: In putting the program together, did the department produce any estimate of the average wage likely to be paid to employees who benefit from this program?


Joseph Jacques Jean Chrétien: We did not try to make such a forecast.


Sinclair McKnight Stevens: I draw the minister's attention, now, to clause 6 of the bill, which provides for an instalment basis for the taxation year and refers to an amount "determined in prescribed manner" upon the income tax base in that year. Can the minister tell us what is the "prescribed manner"?


Joseph Jacques Jean Chrétien: I will give that answer to the hon. member later on. I am meeting with ministers of finance again tonight but the Minister of Employment and Immigration will give the hon. member an answer to that question.


Sinclair McKnight Stevens: Thank you. One important point is this: when does the minister anticipate the program will be in operation? If there is any basic criticism of the program, it is that it has not been ready early enough to relieve some of our current unemployment. Yesterday, in reply to my leader, the Minister of Finance stated that the program will be in place by March
1.	There was no equivocation. Today in a prepared statement the Parliamentary Secretary to the Minister of Finance stated that, hopefully, it will be in place by March 1. Could both ministers confirm, assuming the bill receives a speedy passage, possibly today, that it will be definitely operational by March 1?
January 26, 1978


Joseph Jacques Jean Chrétien: If everything goes according to plan, it will be in operation on March 1. That is our goal. We are pushing our officials to circulate all the documentation to the regional offices, and so on. We do not have much time. Of course, there are some rules and regulations which do not allow the government to make any financial outlays on programs such as this before they have been passed, but I am assured by the Minister of Employment and Immigration that the program will very likely be in operation on March 1. This is the goal and the objective of the government and we hope there will be no delays.


Sinclair McKnight Stevens: Mr. Chairman, assuming the program is operational by March 1, can the minister indicate when would be the earliest time that he could report back to the House on how the program is working, the number of people who are utilizing it and the amount of credit that is going out? In short, when will he be able to give us some type of summation following a monitoring?


Joseph Jacques Jean Chrétien: I am informed by my officials that it would be impossible to make a report before the end of April. Of course, it will take some time before we gain sufficient experience to assess the value of the program. I am also informed that in the United States they have a program which is somewhat similar to ours, but even after it has operated for a year they still do not have sufficient data which would be useful. This is an experimental program and as soon as we have any information we will be delighted to pass it on.


Charles Robert Turner: Order, please. I regret to inform the hon. member for York-Simcoe that his allotted time has expired.


Stuart Malcolm Leggatt: Mr. Chairman, I should like to go back to minimum wage questions which were asked previously. Can the minister advise why some provision was not placed in the bill so that a qualified employer would pay at least at the rate of the federal minimum wage? Why was it decided that this legislation may encourage people to pay less than the minimum wage if they hire someone on a part time basis? Could the minister provide a short explanation to the House as to why there is no minimum wage standard set down in this legislation since we have a minimum wage law?


Joseph Jacques Jean Chrétien: The reason is that many occupations come under provincial jurisdiction and the minimum wage is set by provincial governments, so it would be considered to be an intervention in the provincial field by the federal government. Earlier in a question the hon. member for York-Simcoe said that in some areas of work there is no minimum wage. I was quite surprised to hear that, but apparently in some type of agricultural work no minimum wage is set. Hypothetically, someone might then receive more in credit than he has paid out. I was not aware of that possibility and I have instructed my officials to prevent that from happening.
Income Tax Act


Stuart Malcolm Leggatt: Certainly the provincial minimum wage varies and the government could make the lowest provincial minimum wage apply, or the lowest federal minimum wage. I suggest that the principle is one that this government should not abandon.
My second question deals with the reduction in the unemployment insurance payments that will result. Have any studies been made in terms of estimates of the success of the program? The minister has given us ball park figures on how many potential jobs could be created under the program. Have calculations also been made as to the reductions that will result in respect of the government's obligation under the unemployment insurance program?


Joseph Jacques Jean Chrétien: I think this is a valid question. There will be some savings in the unemployment insurance programs because we have designed the scheme in such a way as to ensure that people will benefit either under this tax credit program or under the unemployment insurance program or under welfare after the minimum eight weeks of unemployment. So in any case there will be savings for the federal government because we pay half the welfare cost and the full unemployment insurance cost. However, we have not made any calculations with regard to gains that would accrue for the government from this program in reduced unemployment insurance payments.


Stuart Malcolm Leggatt: In cases where the approved employer has qualified employees under this legislation but operates his business at a loss and the loss continues year after year, is there a time when he will lose the tax credit available to him under this legislation since, if he does not earn a profit or file a tax return in which there is a tax payable, he will not have a tax credit available to him in the long run?


Joseph Jacques Jean Chrétien: He can carry the tax credit forward for five years. We have to put a time limit on this because it would be extremely difficult to carry forward this tax credit for a period longer than that in terms of the bureaucracy. Also, it is most likely that a person who does not make a profit for five years will be out of business. We assume there are few guys in Canada who can carry losses for five years and still be in operation.


Stuart Malcolm Leggatt: As I understand it, under the legislation an employer has the obligation to have his plan for employment approved. Is there a discretionary power on the part of the minister's officials in approving the plan? Let us say that the operator of a massage parlour wants to hire a few extra girls from all across the country. Will that be an approved small business which will qualify under this program?


Joseph Jacques Jean Chrétien: First we must satisfy ourselves that the business is legal. The employer will have to certify that without the program he would not have increased his manpower strength. But in terms of how much strength is added to the body in a massage parlour, I do not know.
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Stuart Malcolm Leggatt: The last question which I wish to put concerns the use of the Manpower office as the funnelling agency for all the applicants. They must qualify as having been unemployed for eight weeks and be referred through a Manpower office. The difficulty with that provision is that there are a great many people who have fallen out of the manpower system because they have been out of work for such a long time. Can there be a provision in this bill permitting an employer to hire someone who does not come through manpower?


Joseph Jacques Jean Chrétien: No. We have not included such a provision intentionally, because in previous programs we have come across cases where people were using programs to enter the labour force only to qualify for unemployment benefits, and we do not want that. In previous make work schemes of the government we found such abuses. We want to ensure that this program will benefit people who are in the labour force. For a person to be eligible to be in the labour force, he must be registered for more than eight weeks in a Manpower office as being eligible for work, even if he is not drawing unemployment insurance benefits.


Charles Robert Turner: Order, please. It being six o'clock, I do now leave the chair until eight p.m.
At six o'clock the House took recess. [DOT]


[Stage Direction]
AFTER RECESS

The committee resumed at 8 p.m.
Gérald Laniel: Order, please. When the committee rose at six o'clock clause 1 of Bill C-23, to amend the Income Tax Act and to establish the employment tax credit program, was under consideration, and the hon. member for New Westminster had the floor. Noting that he is not here, I will recognize the hon. member for Simcoe North.
On clause 1.


Philip Bernard Rynard: Mr. Chairman, I should like to ask the minister if it might have been possible, when this bill was being drafted, to enlarge its scope. For instance, it follows, as I understand it, pretty well the lines of the DREE legislation, and takes us north into the riding of Simcoe North to the Parry Sound area before becoming effective on the higher scale of pay; in other words, those working in Simcoe county, where there is a large urban area and a great deal of manufacturing, as in the cities of Barrie and Orillia, and the town of Midland with 12,000 people, and Penetanguishene. Since the unemployment rate in that area is quite high, I am wondering why the minister could not include it so that we would have the opportunity of taking some of these people off the unemployment rolls. Industry has been hard hit in the area with the closing entirely of Motorola and with the strike at Decor Metals which supplies motor parts for cars principally, as well as seatbelts, windshield wipers and other safety devices.

One of the big plastic firms in the Midland area, which was basically sound, has cut some of its orders because of the slowdown in industry. As I have said, Motorola has entirely closed down its plant. RCA Victor recently lost its orders for government supplies, which means the loss of approximately 50 jobs. Penetang has a very high rate of unemployment, and Orillia, which is highly industrialized, has experienced the closing of one plant and many lay-offs. Barrie has a high rate of unemployment because of some industrial lay-offs.
My point is: the minister could have included that largely industrialized area of approximately 210,000 people in the DREE program in order for those people to be covered, and in an attempt to help other industries in the area as well. Why was this not possible? Is it still possible to do this?


Jack Sydney George (Bud) Cullen: Mr. Chairman, it is a well known fact, when the hon. member speaks in this House, that we all listen very carefully. Perhaps he does not speak as often as some members, but when he does, it is because he has something worth-while to say. I have noticed that in regard to the question period as well, but it is unfortunate that I am not in a position to say the same thing about his hon. colleagues.
It was the feeling that people right across the country will qualify for this particular program. It was drawn up in such a manner as to parallel the investment tax credit. That was felt to be appropriate. I appreciate the hon. member's concern about small areas in regard to the variable entrance requirement on unemployment insurance. I think the expansion from 16 to 54 regions is good. Certainly the hon. member's argument has merit. But given the fact that this is a two-year program and we expect it to be successful, I do not foresee our moving in the manner suggested by the hon. member.


Philip Bernard Rynard: Mr. Chairman, I thank the minister for his compliment. If this program works out and is successful, as the hon. minister has indicated, would it not be advantageous to include an area like Simcoe county which has so much industry?


Jack Sydney George (Bud) Cullen: Mr. Chairman, because we are embarking on a new program, even though all ideas and suggestions may not be accepted now, I am sure they will be looked at. We do not have the time to look at them at this point, because we want to get this program operational. I assure the hon. member that suggestions will be looked at carefully over the next year or two years in an attempt to see if they can be implemented.


Mr. Neil:: Mr. Chairman, I understand this program will commence around March 1. What provision has been made, or will be made, with respect to monitoring the program in order to determine the effectiveness of it? Approximately $100 million of taxpayers' money is being spent; therefore, it is important for the program to be monitored in order for Canadian taxpayers and parliament to know whether value is being received for the dollars spent. Will the minister advise whether he has a monitoring program? If so, would this
January 26, 1978

monitoring program provide for a monthly report to parliament?


Jack Sydney George (Bud) Cullen: Mr. Chairman, of course we will be monitoring. From the standpoint of my own particular department, there will be a second monitoring when the individual business or employer makes application for his tax credit. Approximately a year is required in order to give it a full evaluation.
In answer to an earlier question, my colleague indicated that possibly by the end of April we will be in a position to give some preliminary information, after having experienced the kinds of people who are applying and which employers propose to take advantage of this particular program. By the end of the year we should know how effective the operation is. Of course we will monitor the program. I am sure both employees and employers will want to see that it works to their advantage.


Douglas Charles Neil: Mr. Chairman, a year seems to be quite a lengthy period of time to determine whether a program is working or not. If the hiring is done through Manpower offices, certainly those offices will record the number of people who are being referred to jobs under the program. There are not that many Manpower offices. I understand the program will create work for approximately 50,000 people. Within 10 or 15 days after the end of each month, it seems to me the Manpower offices will be in a position to give tentative figures as to the number of people who have been referred by them to jobs. I appreciate employees have to work for a minimum of three months in a job before an employer can qualify for the particular subsidy, but in fairness parliament should be entitled on a monthly basis to the number of individual employees who have been referred to jobs under this program.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I should like to correct one misapprehension the hon. member seems to have. It will not be necessary for the employee to work three months. We are anticipating that employers will recognize we want them to take advantage of this credit. We would expect the minimum time frame to be three months. However, if an individual works for two months and quits, the employer will still receive the employment tax credit. The employer will not be cut off because the individual did not work for three months. As a matter of fact, if an individual works only one month, perhaps it is because he has moved on to a better or more permanent job, or he may not be satisfied with the particular job he has. The employer will receive the credit for the time frame the employee has worked.
In an attempt to be as honest as possible, I referred to a year in answer to the hon. member. After talking with the Americans, members of my party, the Conservative party, the NDP and Social Credit parties, the Standing Committee on Finance, Trade and Economic Affairs felt that was the shortest time it required in order to give an honest evaluation. As a result of monitoring, we will know the number of people applying; but we will be required to look very carefully at the implementation of the program in order to see just what impact it has. In fairness, a year is not out of line, given the
Income Tax Act
fact that Americans have had some experience with this and that was the best advice they could give.


James Aloysius McGrath: Mr. Chairman, with respect to the implementation which is targeted for March 1, what is the plan regarding the promotion of the program? Small companies in remote parts of the country hardly can take advantage of this if they do not know about it. If the program is to be expeditiously implemented and working by March 1, it would required quite an ambitious promotional campaign, and if the program is to be successful as soon as possible, certainly an ambitious promotion campaign is warranted. Is there a promotional plan in existence? If so, what is the scope of it and when will it get underway?


Jack Sydney George (Bud) Cullen: Mr. Chairman, we anticipated an advertising campaign. Approximately 450,000 brochures will be distributed through the Department of National Revenue across the country. In addition to that, Canada Manpower centres will be making calls to businesses which will benefit from this particular program, particularly the small businesses, as well as having booklets, forms and the benefit of the advertising.


James Aloysius McGrath: Mr. Chairman, with regard to the types of firms which may qualify, we have heard some reference by the hon. member from Nova Scotia to companies, for example, which are receiving DREE grants. Would companies which have substantial provincial government involvement-not necessarily Crown corporations; I am thinking, for example, of the fishing industry-be ineligible for grants under this program?


Jack Sydney George (Bud) Cullen: If in fact they are paying taxes, they are eligible. If they are making a profit, they qualify.


James Aloysius McGrath: I presume there would be co-operation and consultation with respect to maximizing the use of the program to promote industries which have employment potential. I am thinking of the fishing industry on the east coast where, by virtue of the implementation of the 200-mile limit, there is suddenly a tremendous unexploited potential. We are operating at about 50 per cent capacity, and there is room for tremendous expansion. If this program could be discussed between the Minister of Fisheries and the Environment and the provincial fisheries ministers, I can see ways whereby the fishing industry could take tremendous advantage of it. This program could be a tremendous boost to the industry because the industry could take advantage of the unexploited stocks which are available as a result of the 200-mile limit.


Jack Sydney George (Bud) Cullen: As I said, as we embark on this new program it seems to me that provincial and federal ministers and probably members of parliament, MLAs and MPPs will all endeavour to do what they can. However, as long as there is an increase in employment and as long as tax paying businesses are eligible, I would expect to see some leadership being taken in fields such as the one suggested by the hon. member. I do not see anything wrong with that.

January 26, 1978
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James Aloysius McGrath: I wonder, then, if the minister would address himself to a matter with which I concerned myself in my opening remarks. Can he assure the committee that there will not be an overly burdensome bureaucracy put into place? Will this program be implemented by existing agencies of the government and the existing bureaucracy in the minister's department?


Jack Sydney George (Bud) Cullen: If this program is to be successful at all it must have ease of operation, so we are endeavouring to do what we can to make it as simple as we can without imposing many regulations which would make it difficult. We do not want to hire additional people to fill out forms and to operate this program. We do not want to have a series of regulations which will impede what I think will be an excellent program.


Mr. McKinley:: Mr. Chairman, like the hon. member for Simcoe North I am not very happy to be told that this program will not be of as much benefit to the businessmen and the unemployed in my area-and I assume also in the minister's area-as it will be in some other parts of Canada. I think perhaps the department should re-examine that aspect. The Minister of Employment and Immigration need not be afraid that people will think he is looking after only his constituents; he can always say he is looking after the constituency of Huron-Middlesex, and his can slip in on the side.
There is another thing about this plan which disturbs me considerably, and that is that the department is going to run into the problem of deciding whether the new jobs which will be created under this plan would not in fact have been created without the plan. The other night the Minister of Finance was on television answering questions, and he said that the businessman would have to state on his honour-and the department would have to accept what the businessman says- whether any new jobs created would have been created regardless of whether this plan was in effect.
The department and the ministers like to refer to the U.S. plan. They say that this plan is patterned after the United States plan, but I note that under the U.S. plan there is no such provision. I think the Americans have the better plan because it is asking too much of the administrators of this plan to ask them to decide if an employer would have provided a new job whether the plan had been in effect or not. It is almost an impossible situation. I would like either the minister or the parliamentary secretary to have another look at this situation because they are asking for serious trouble.


Jack Sydney George (Bud) Cullen: Mr. Chairman, the hon. member and I should be thankful that we live in areas of low unemployment where there is natural growth. Our areas do not need the assistance which is provided here to the same extent it is needed in areas of high unemployment.
With regard to monitoring and control we are going to rely on the word of employers. Our whole tax system is built on a trust mechanism, with occasional audits. In this case, when we do audits we will know how many employees particular firms

or particular employers have. We will be able to check this out in that way.
This is a procedure we were asked to put in place by the Canadian Chamber of Commerce and by the Canadian Federation of Independent Business. The hon. member for New Westminster suggested that rather than having too much bureaucracy, checking and auditing, this might be the better approach.


Robert Elgin McKinley: I thank the minister for that explanation, but I still suggest that it will be impossible for the administrators of this program to be able to tell whether jobs would have been created without this plan. I think the minister is dreaming.


Mr. Hargrave:: Mr. Chairman, I would like to take a few moments to make some brief comments about the possible impact of this bill, and then I would like to address perhaps just a single question to the minister about the manner in which the bill might work.
I would like to point out that in the southeast corner of Alberta, in my constituency of Medicine Hat and particularly in my home city of Medicine Hat and in Redcliff, where there is a population of about 40,000, for the first time in quite a number of years there is an increase in unemployment. I hasten to point out that I am not unmindful of the fact that we have enjoyed a very high level of employment for quite a number of years.
However, in the last quarter of 1977 and certainly in this early part of 1978 there has been a definite increase in unemployment in the Medicine Hat-Redcliff community. This is due partly to the termination of several years of heavy construction activity and also more recently to the shutdown of our meat packing plant the day before Christmas, which now appears to be a permanent shutdown. For the first time in quite a number of years we see a definite increase in the number of job hunters. They appear to be quite willing even to go out to work on farms and ranches, and that is quite a change.
I suggest to the minister that the best opportunity for employment in these circumstances at the moment is in rural areas. We are in the throes of a very severe winter, one which is exceedingly hard on range cattle. It seems that last year's severe drought all over southern Alberta and southwestern Saskatchewan has given way to this severe winter and we have more snow now than the total fall of the last two winters. I hasten to say that I am not complaining about the severe winter. It seems we must have a lot of snow in order to get rain next spring. But it has created a demand for workers in rural areas.
Notwithstanding the remarks of my colleague, the hon. member for York-Simcoe, about whether the program will apply to agriculture, I hope the minister can give an assurance that it will apply to the farmer who creates a new, permanent job, not one under a winter works type of deal. Will the

January 26, 1978

program cover the farmer or rancher who wants to hire someone for a permanent job? I think this is the best way for it to work.
We are also a little concerned that the program may not come into operation until March. In that case would there be a possibility of retroactive application where jobs have been created as a result of severe winter conditions and where those jobs will continue?


Jack Sydney George (Bud) Cullen: Mr. Chairman, I indicated earlier that as long as the job is incremental and the individual pays or is eligible to pay income tax, it will qualify under this program. We hope that the employee will establish to the satisfaction of the employer that he is worth keeping and that the employment will continue. We hope it will have that good "catch" factor and that we are creating not only temporary jobs. We think the increment will be maintained notwithstanding the fact that the employment tax credit will terminate at the end of a certain period.
There will not be any retroactivity in the program. We think that would be counterproductive.


Mr. Ritchie:: Mr. Chairman, this program has been a long time in the making. The United States has had something similar and has not been very happy with it so there is some doubt about whether it is effective. Many felt that most of the jobs would have been created in any case. How does this program differ from the one in the United States?


Jack Sydney George (Bud) Cullen: Mr. Chairman, the first difference is that the United States system is automatic. If there is an increment over two per cent it is treated as automatically qualifying for the benefit. Second, no certification is required from the employer in the United States as will be required in Canada. Third, we will refer individuals to this program who have been out of work for eight weeks. Those are three specific instances of how it differs from the program in the United States.


William Gordon Ritchie: Mr. Chairman, the Minister of Finance predicted that 50,000 jobs would be created. How was that figure arrived at? Was it based on the U.S. experience?


Jack Sydney George (Bud) Cullen: I believe the Minister of Finance indicated that this was a calculation based on the dollars that are available and the rate of subsidy that will be paid.


William Gordon Ritchie: May I ask the minister if this program will be open to unincorporated businesses, to farmers and others? Is there any limit on the number of employees that a single firm may apply for? Firms like the CPR or Bell Canada, for instance, might employ 2,000 or 3,000 new employees.


Jack Sydney George (Bud) Cullen: Mr. Chairman, as I have indicated, the program is open to incorporated businesses, unincorporated businesses, partnerships or sole proprietorships. There is no limit and nothing would make me happier than to have some corporations announce that they will participate and hire the number of people the hon. member mentions.
Income Tax Act


William Gordon Ritchie: It seems that all an employer will have to do, Mr. Chairman, is sign an affidavit to the effect that the number of employees he takes on will be an increase in staff. I think employers may feel that, without a plan such as this, that would be a risk. Is there any way the department can check that it was not already the employer's intention to increase the staff? How can we be sure that the jobs have been created just because of this program?


Jack Sydney George (Bud) Cullen: Mr. Chairman, the hon. member is correct; it will be necessary for the employer to sign a certificate or participate in an agreement. We will conduct some sample audits and will be able to compare employment before and after. The claim will be filed under the Income Tax Act. The physical evidence of expansion of a business will be noted.


William Gordon Ritchie: Mr. Chairman, many small business people who have gone through the red tape necessary to qualify for a grant are reluctant to go through the process a second time. Will the application of the rules be severe or lenient? Will there be a penalty if the department decides that a new job has not been created and that there was merely a roll-over?


Jack Sydney George (Bud) Cullen: Mr. Chairman, it is interesting to hear the hon. member's general comment that some people who have experienced difficulty collecting money from the government might be somewhat hesitant to go through the procedure again. I suggest with respect that once you have that experience, it has not been my conclusion that people are reluctant ever to seek out additional funds from the government, particularly when it is a good program.
In so far as being severe or lenient is concerned, we have indicated that we are endeavouring to remove as much of the bureaucratic aspect of it as possible. There is an element of trust but, by the same token, the individual will be filing a claim under the Income Tax Act to the effect that he is entitled to this particular benefit for the reasons given in the return. If that is incorrect he would pay that particular penalty.
I am advised that clause 7 of the bill provides that every person who makes a statement or representation that he knows to be false or misleading or who fails to disclose any information with the intent of misleading any other person is guilty of an offence punishable on summary conviction.


William Gordon Ritchie: Mr. Chairman, one final question. The Minister of Finance the other day in addressing business stated he was amazed that business was not taking up his tax breaks of $2 billion in the March and October budgets. Have the government canvassed business, that is at the local manpower levels, as to the possible acceptance of this? And have the government actually had the Manpower offices conduct a canvass beforehand in the small and larger business sectors as to their reaction to this type of program?


Jack Sydney George (Bud) Cullen: Mr. Chairman, probably one of the catalysts, if you will, of this particular program was Mr. Bullock, president

January 26, 1978
Income Tax Act
of the Canadian Federation of Independent Business, who came forward with a particular program comparable to this one. He indicated that they would definitely be very interested in participating and saw this program as a benefit to the small businessman. The Canadian Chamber of Commerce has also indicated that they are most interested in this program and would be encouraging members of their organization to participate. Having had some experience with the chamber in connection with the job experience training program, and knowing the kind of leadership that comes from the top in that organization where something can be done, I am satisfied that this particular program will be used by the business community, particularly the small businessmen and those members of the chamber.


Mr. Friesen:: Mr. Chairman, in answer to questions from the member for St. John's East the minister said that there would be a massive advertising campaign to inform people about this program. I am assuming he is referring to newspapers, radio and television. If so, could the minister tell me the amount of the budget which has been allotted to the program?


Jack Sydney George (Bud) Cullen: My answer is yes, we will advertise in the newspapers, on radio, television, etc. I am advised it will be done in two phases. In the first stage there is a budget amount of $800,000. In the second phase approximately six months down the road an amount of $700,000 is budgeted for.


Benno Friesen: By my quick addition, that is $1.5 million for advertising this program?


Mr. Lumley:: Yes.


Benno Friesen: Could I ask the minister which advertising firm was awarded the contract for this?


Jack Sydney George (Bud) Cullen: I am advised that no contracts have been let. But, of course, they could not be until the bill is passed in any event. I would expect it to be one of our better Canadian agencies; they are all good.


Benno Friesen: Mr. Chairman, is the same firm that composed the advertising for the UIC being considered as one of the possible ones? Is it in the list somewhere?


Jack Sydney George (Bud) Cullen: I would not want to say yes or no. I think all companies would be in a position to bid for these particular contracts. They are all government contracts, and the people who do our advertising do a first class job. There will be less criticism after people see our advertising than there is now, before people even read the ads.


Benno Friesen: It would be interesting to know what the antecedent is to the possessive pronoun "our".
One final question. Will all companies in Canada be permitted to take advantage of this program? In other words, will the multinational corporations? Will there be any restrictions as to size or nationality of the companies that can take part in this program?


Jack Sydney George (Bud) Cullen: No. It is as broad as the hon. member has indicated, and as I have answered to his colleague the hon. member for York-Simcoe and others of his party. I have mentioned some earlier exceptions, personal service contracts and things of that nature. The impact is to be Canada wide and business wide.
[ Translation]


Roch La Salle: Mr. Chairman, while listening to the answers given to my colleague concerning the opportunity for farmers to take advantage of this program, I had the impression we were talking about permanent jobs. If I understand this legislation, where some employment is assured for three months, one becomes eligible and from there on, taking as minimum criterion the three months required by the legislation which could be extended to nine months, could any producer hire an individual for at least three months if he is qualified after three months, because I imagine that the producers with that assistance will probably be in a position to hire one or several persons for various purposes. Will a minimum of three months make a producer eligible for a subsidy?


Jack Sydney George (Bud) Cullen: We hope, Mr. Chairman, we hope that employment will last at least three months, but it is not necessary. A job could possibly last only one or two months. It is then possible to benefit under the legislation.


Roch La Salle: Mr. Chairman, I hope that it is quite clear. A farmer could hire an individual for one, two or three months, but anyhow the farmer would be eligible under the program.


Jack Sydney George (Bud) Cullen: Yes, that is right. However we hope that the farmer or other employers will keep the employees for three months or even more. However, even if it is for less than three months, it is still possible to take advantage of the program.


Roch La Salle: It seems that even if employment does not last for three months, it will be still possible for the farmer to qualify under the program. I thought there was a minimum of three months to guarantee employment under the program. The minister says that even if employment does not last three months, the farmer could still take advantage of this legislation.


Jack Sydney George (Bud) Cullen: With your permission, Mr. Chairman, I think I have used all my French vocabulary and I would like to switch to English because it would be easier for me.

The three month criterion is included so that employees will be offered a sufficient period of employment to benefit in terms of skill, development, work experience and self-reinforcement. But if an individual is hired for three months or six months and he only works for one month, the employer-the farmer for example-will still qualify for the tax credit.
[ Translation]


Roch La Salle: Mr. Chairman, I would like to ask another question. During the press conference which was given when this program was launched, officials estimated, according to
January 26, 1978

the reports I have been able to read, that permanent employment under this program would be in the vicinity of 25 per cent. So I conclude from this that if 50,000 jobs are anticipated, it seems already that officials estimate very cautiously that they will maintain about 25 per cent, that is 12,500 permanent jobs which could be created under that program. The other jobs could last from three to nine months. Could the minister tell the House if he agrees with the predictions of his officials because I think it should be clear for all Canadians that we are not talking about 50,000 permanent jobs but hopefully 25 per cent of 50,000, that is 12,500 jobs.


Jack Sydney George (Bud) Cullen: Mr. Chairman, it must be stressed constantly that this is a new and innovative program. This is the best prediction that can be made, given the experience of looking at the American program where after a year they are still not in a position to tell how many of the jobs created will go on to become permanent jobs. As I indicated, it is my hope that at the end of the tax program period, employers will see the benefit of having an extra employee and will continue to employ him, notwithstanding the fact they will not receive the benefit.
With regard to the other aspect, it is not 50,000 for the period. It is 50,000 per annum. As this is a two-year program, we are looking at 100,000, not 50,000.


Thomas Gordon Towers: Mr. Chairman, I congratulate the minister on this move. It far exceeds some of the other programs that have been put in place by the government. It is anticipated that some good will come from this type of program. If the business or the farmer is in a tax loss position, will the tax incentive be taxed at a basic rate, or will it be added to his income and the business and farmer end up in a tax loss position even with this? Can the minister explain that?


Jack Sydney George (Bud) Cullen: Mr. Chairman, I am advised that you add it to your income only in the year that you propose to take advantage of a particular program. It can be carried forward for a period of five years.


Thomas Gordon Towers: If bodies such as chambers of commerce qualify as a business in that they hire personnel to run tourist booths in the summer and other types of projects in which they may become involved, are they eligible for this type of program?


Jack Sydney George (Bud) Cullen: Mr. Chairman, the criteria require that the employer must pay taxes in order to qualify.


Thomas Gordon Towers: As a considerable amount of personnel will be involved in managing this program, will extra staff be hired in Manpower offices? Will private auditing firms do the auditing or will this be done by government auditors?


Jack Sydney George (Bud) Cullen: Mr. Chairman, we are endeavouring to avoid an expansion of personnel for the managers required. As far as we are able to determine, the auditing will be done by the
Income Tax Act
personnel we have now in place. Again, we will want to look at that. I cannot say there will not be any increase. I cannot make that prediction at the present time. It is our hope that as a result of keeping this simple and not doing all the kinds of audits that have been suggested from time to time, we will not have to increase our personnel. We are trying to keep this simple and non-bureaucratic. We will, as we so often do, rely on the businessman to comply with the bill as it is intended to be used by him.
[ Translation]


Mr. Cyr:: Mr. Chairman, the minister provided us a while ago with information which I feel is somewhat ambiguous about the conditions employers must meet to become eligible for the employment tax credit program. I submit to him for instance the case of a farmer who hires three or four people for the summer months and who is considered as a seasonal employer. Also a hotel keeper who hires some 30 people, say in the Gaspe region, during the tourist season is considered as a seasonal employer. The owner of a fish processing plant is also considered as a seasonal employer. It is a well known fact that these employers lay off their staff either in September, October or November and hire them again in May.
Mr. Chairman, based on the minister's last explanations, all these employers would be eligible for these tax credits, so that I am afraid the funds made available under this legislation would not be sufficient to meet the needs of all the employers who will apply for the $2 an hour tax credit on behalf of the staff they will rehire or the new staff they will hire in May or June for the summer months.


Jack Sydney George (Bud) Cullen: Mr. Chairman, it probably sounded ambiguous because I spoke in English, knowing that French is much more precise. I probably should use French, but my French is not as precise as it should be.
If an individual hires a lot of people in the summer, the previous summer will be the period used to do the comparison, not the fact that he had quite a few people and then laid them off. The comparison will take place for the season. The number of employees in one summer would be compared with the number of employees in the previous summer, not necessarily the previous eight weeks.
[ Translation]


Alexandre Cyr: Mr. Chairman, a few moments ago, our colleague from Joliette asked whether a farmer hiring two or three people for a three-month period could be entitled to any employment tax credits. But it must be clearly understood that if that same farmer had four employees in 1976 and if in 1978 he has only three or keeps his maximum of four employees during the season, that farmer or employer would not be entitled to employment tax credits for his four employees. He will perhaps get employment tax credits for the two or three extra people he will have hired as compared to his payroll for the previous years.
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Jack Sydney George (Bud) Cullen: Under the bill a new employer, be he a farmer or anybody else, will not qualify unless there is an increase in the number of employees. This is not a tax credit for hiring people. It is a tax credit for hiring an additional number of people.


Joseph Adrien Henri Lambert: Mr. Chairman, in the January 24 communique issued by the Minister of Finance, we can read somewhere that any hired people will have to be referred to the employer by a Canada Manpower Centre, which will refer only people unemployed for more than eight weeks. Now here is what we find somewhere in another document on the highlights of the employment tax credit program:
Employers shall hire new employees referred by the Canada Manpower Centres.
We know from experiences we had in the past with various other programs that complications arose and that, in some cases, there were what may be described shady deals. But I hope the minister does not want employers to try by every means to take advantage of this legislation and to get tax credit, for example by laying off a worker who after nine or ten weeks, in compliance with the requirements of the legislation, will be referred to an employer, maybe the same one, who will then re-hire him after laying him off eight or ten weeks before.
Could the minister clarify this point for us in order to give us some real guarantees about the spirit of this legislation and the way it will be enforced to reach its true objectives.


Jack Sydney George (Bud) Cullen: I might have expected that the hon. member would call attention to one of the dilemmas facing us. I suppose there is hardly a system conceived by parliamentarians which could not be abused in one way or another. It is for this reason that we shall be carrying out monitoring. We shall be checking the number of employees, we shall be requiring employers to sign certificates to the effect that there has been a legitimate increment. Employers will be filling up a tax form to certify entitlement under the act. There will be post-monitoring and there is provision in clause 7 for penalties. So we have introduced such safety measures as we can. I think, too, that some degree of trust should be placed in the business community.


Joseph Adrien Henri Lambert: Mr. Chairman, in another paragraph we read this, and I quote:
Employers will be required to sign an agreement certifying that their job-creation projects meet the criteria of the program. Agreements must be signed before March 31, 1980.
That is what I understood since, according to the news release of the Minister of Finance, the program gets under way on March 31, 1978, and lasts two years. Is there not a contradiction there, or is there any reason why agreements
[Mr. Cyr.J
must be signed before March 31, 1980? Does it mean that date is the deadline? Could an employer start taking advantage of the program from March 31, 1978 on, even if he does not sign an agreement before March 31, 1980? I would appreciate the minister explaining this to us so that, in turn, we can give employers in our respective areas very specific information, and so enable them to benefit from the program and co-operate with the government under this act while contributing to the well-being of the unemployed.


Jack Sydney George (Bud) Cullen: For a moment I thought the hon. member had caught me. It is a legitimate question and I thought I did not have an answer. In the first place, the Minister of Finance did clarify the situation by saying we were hoping to have this program in operation by March 1 instead of March 31. The press release was in error in that regard. Those who take part in the program must enter into the agreement within that time frame, March 1, 1978, to March 31, 1980. If they enter into it the day before March 31,1980 the agreement will continue for nine months beyond that date.


Mr. Portelance:: Mr. Chairman, I should like to ask the minister what would happen in the case of an industry which is expanding and this will create new jobs. Suppose the industry is already operating, and funds have been spent to hire some 15 or 20 new workers in a different area. What happens in that case? Is that industry also eligible for the reductions?


Jack Sydney George (Bud) Cullen: It has to be an increment as compared with the situation eight weeks before the agreement was entered into, and must relate to personnel additional to those who would normally have been hired for the operation.
[ Translation]


Arthur Portelance: Mr. Chairman, it is still something completely new, it did not exist before. On what will this additional grant be based since nothing like this has ever existed before?


Jack Sydney George (Bud) Cullen: I am not sure I heard the hon. member's question correctly, but a new business does not qualify because it implies an expansion which would have taken place in the ordinary course of events.


Mr. Clarke:: Mr. Chairman, I was sitting in other committees this afternoon and I apologize if the questions I wish to raise have been touched on by other speakers. When is it expected that the first funds will become available for this program? Will it be in April, as I have heard?


Jack Sydney George (Bud) Cullen: I would remind the hon. member that this does not involve a payment out of funds. It is an employment tax credit. So an employer will receive the benefit at the time he files his income tax returns, or, in some cases, when he gets his tax rebate.
January 26, 1978


William Hillary (Bill) Clarke: Then perhaps the question might be better put this way: When is the commencement date of the program? When will the first jobs be created?


Jack Sydney George (Bud) Cullen: We are looking to a date soon after March 1. We hope the program will be operational on that date. The answer is, as soon as agreements are entered into thereafter.


William Hillary (Bill) Clarke: It is obvious this program will have no effect on winter unemployment which is usually so severe. Is the Canada Works program for this winter in effect at the present time or has it been postponed because of this program?


Jack Sydney George (Bud) Cullen: That program is in place and so is the job experience program. We hope to increase by twelvefold the number of people who will be able to participate in that program. What we are considering now is one more weapon in the total arsenal.


William Hillary (Bill) Clarke: I understand after talking to members of the ministerial advisory board in my riding that there has been a change in the Canada Works program. I know the Young Canada Works program is presently under consideration and that preliminary meetings will be held in February. Is the next Canada Works program to take place next winter?


Jack Sydney George (Bud) Cullen: Because of the representations we have received from both sides of the House and from the business community as well as from those who have participated in the program we feel we should build an economic growth component into the program. That will account for about 30 per cent of the funding. We are telling individuals that they can apply until April 3, 1978 in connection with projects next winter. In the meantime, the second phase of the Canada Works Program is going on. The Young Canada Works program is going on together with the others we have in place. I shall not list them because we are not talking about them tonight.


William Hillary (Bill) Clarke: I am sure the minister knows I am not a fan of the Canada Works program as it appears to me the jobs created are not permanent jobs. But the question which arises in my mind is this: Why start another program to help the unemployed instead of expanding programs such as Canada Works? It is obvious that Canada Works, as it now stands, is not meeting the need. By starting a new program we are only setting up an additional element of bureaucracy. What is the rationale?


Jack Sydney George (Bud) Cullen: This is an innovative approach which does not depend heavily on bureaucracy. It has been accepted and endorsed by the ministers of finance across the country meeting in Ottawa today. We believe we should not lose any opportunity at a time of high unemployment to use every tool at our disposal and this is one we hope will be very effective.


William Hillary (Bill) Clarke: I might come back to that topic but now I should like to know what safeguards there are in the program
Income Tax Act
to guard against an employer laying off people and then rehiring them.


Jack Sydney George (Bud) Cullen: I understand that the hon. member, as he said, has attended committee meetings and could not come here earlier, but I have answered that particular question put to me by two colleagues in his party on at least two occasions. I spelled out the control mechanism which we will have in place to guard against that eventuality and the reasons for it.


William Hillary (Bill) Clarke: I thank the minister for his answer and I will speak to my colleagues on that point.
It was my understanding that any new employment would be covered, but now I understand from what I have heard and read that the program applies only to jobs that would not have been created. So there is no reward for an employer who is hiring these very same people who are unemployed for eight weeks or longer unless he can prove that the jobs would not have existed except for this program. Is that correct?


Jack Sydney George (Bud) Cullen: It is right on, Mr. Chairman. The idea is to have an increment. In the past year, between 200,000 and 300,000 additional jobs were created and would have been created this year whether or not this program were in place. What we want to do with this program is to have an increment; not to compensate people for hiring people whom they would have hired in any event, but to encourage them to hire one, two or three more people, depending on the size of the operation.


Mr. Scott:: My question to the minister is in respect of students who cannot be classed as unemployed, who get out of community colleges, universities or other such institutions and are looking for jobs. How would they Fit into the program? Will any consideration be given to them? They only get out of university at the end of May and it would be July before they could apply for a job, after being unemployed for eight weeks.


Jack Sydney George (Bud) Cullen: It is the intention of this program to have an increment in employment. There is a whole series of other programs in place for students. As I have indicated, this is a new program which we hope will have an impact on another section of the work force. That does not mean that students could not apply, although those who have to go back to school cannot. There is the Canada Works program, the student job corps, and the Canada Manpower Centre program for students which not only employs people but also places students. There is a series of programs in place for students. This program is aimed at a different sector of the unemployed.


William C. Scott: I had hoped this program could be oriented towards students as well. It might mean future careers for these young people. They could be serving an apprenticeship in a trade. If we do not offer them this opportunity we would be denying our younger workers the possibility of entering the labour market to pursue a career. A career would be the goal and this program would channel them into such a future career. The minister should take this into consideration and should open this program to students. This could be considered
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January 26, 1978
Income Tax Act
as an apprenticeship course which would be of value to these young people in the future.


Jack Sydney George (Bud) Cullen: As I have indicated, an individual must be unemployed for eight weeks to qualify under the program. If the individual students to whom the hon. member is referring are not going back to school and want an apprenticeship course, it is available to them under the Canada Manpower industrial training program, the adult occupational training program as well as programs in different schools in various provinces.
A student who is not going back to school and who is unemployed for eight weeks can participate in this program. We hope that people who wish to take advantage of the employment tax credit program will see the benefit of retaining the particular employee after the employment tax credit period runs out. If it will have that beneficial spin-off effect, the program will be that much better.


William C. Scott: I am not speaking of students who do not intend to go back to university but of students who do intend to go back to university, and God knows they have had a hard enough job finding work in spite of all the programs to which the minister has referred. We should probably try to encourage these chaps not only to go back to university but to find meaningful employment through the minister's program, and I am sure consideration should be given to some of these very deserving people.


Jack Sydney George (Bud) Cullen: We know they are deserving and we have made other programs available to them. We do not think this program is appropriate for them, given the fact that students will be out for a shorter period of time and intend to go back to school.


Mr. Alkenbrack:: The minister mentioned the requirement of unemployment for eight weeks. What about the vast throngs of people of whom we do not have any record who have ceased to draw unemployment insurance? Would they have to re-register in order to be eligible?


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman, and be looking for a job.


William Gordon Ritchie: The minister suggested to me that Mr. Bullock of small business is in favour of this program. My understanding is that this is certainly not what he had in mind but rather a much larger proposal based on an increase in wages over the year.
I should like to make a comment regarding the bureaucracy involved in the program. I think it is a significant deterrent to small business. First of all, an employer wishing to participate in the job creation program must approach a Canada Manpower Centre with a proposal. This proposal must be approved by the centre. Then the employer cannot go and hire any person whom he wants to hire, although that person may have been unemployed for eight weeks. He can only employ workers sent to him by the Manpower centre or else he will not get a tax credit. Also, he must sign an affidavit that he will create new jobs which he would not have had the financial ability to

create without the program. Then, when he applies for the tax
credit, assuming he has reached agreement with the Manpower centre, he must use a special tax schedule so they will know he is involved.
I do not see how this system can be said to require minimal red tape or how it is likely to produce jobs. Small businessmen especially who would stand to gain most from the tax credit may be reluctant to entangle themselves in all this bureaucracy and to risk the threat of a jail sentence or a fine if they are judged to have lied. In fact, the net value of the tax credit is not that attractive, particularly when one remembers that employers will presumably hire workers in a soft market and in a weak competitive position. Furthermore, this program is designed to reduce the hard core unemployed who, as group unemployment officers will tell you, will be unemployed from year to year. I think it is only fair to say that while the program may be of some value in improving the situation of this group of people, from the employer's point of view these people are not highly productive workers. That is the comment that I wish to make about the program.


Jack Sydney George (Bud) Cullen: The hon. member seems to forget we are dealing with the general taxpayers' money and that the system is comparatively simple. I think that this program could have been a lot more bureaucratic. It is a very simple procedure. The employer calls up, gets the form, fills it out, signs it and fills out his income tax form. It strikes me as a comparatively simple procedure.


Joseph Adrien Henri Lambert: Mr. Chairman, I would like to ask the minister whether, before this program was introduced in the House, there were consultations with employers across Canada and, if so, were those employers enthusiastic about this program which could become an act affecting them?
Furthermore, it is said that this program will operate under a tax credit from which employers hiring personnel will be able to benefit. Will the employers who will wish to register under such a program have to prove in advance that they will in fact be paying taxes to the federal government to get credits? And since there are many businesses in rural areas where there are a lot of people without jobs, let us say a business signed an agreement with the Department of Employment and Immigration and anticipated paying taxes and because of unforeseeable circumstances or a difficult situation-higher costs, lower sales and profits-and at a given point that business which hired two, three, four or five persons is placed in that situation in preparing its tax return of not paying any taxes, what is going to happen to it? It cannot claim a tax credit. Can the minister tell the House whether such a situation was considered, and what will be the solution to this dilemma because this could very well happen, unless the minister has another explanation to give to the House or I did not grasp the scope of the bill?

January 26, 1978


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman, we have considered that. This is why there is a five-year carry forward, so that if an individual business, for example, as the hon. member has said, does not make a profit this year or in fact has made a loss, but makes a profit in the following year, this tax credit can be taken in that year. This can go on for the five-year time period.


Joseph Adrien Henri Lambert: Mr. Chairman, could the minister tell the House whether under this Bill C-23 there are different categories of businesses or whether it is open to all businesses which truly want to benefit under this program and see in this an opportunity to become a competitive business, particularly in a line of production facing competition from imports? I think that all serious businesses wishing to benefit from this program should be eligible but that is not clearly set out. So if all businesses meeting the criteria of the legislation are eligible I would like the minister to give us that assurance.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I assume the hon. member was in the committee when I was commenting on that, but, in point of fact, there is no discrimination between one business and another. It is open to all businesses. I mentioned some exceptions, for example a business engaged in personal service. As long as it is a business that pays tax or qualifies to pay tax then it will qualify under this program. New businesses that start up will not qualify because they would have started in business in any event.


Sinclair McKnight Stevens: Mr. Chairman, perhaps I could just follow up on the last answer by the minister. He has referred to personal service as being an exception. What does the government have in mind as being included in personal service? Would a data processing service be looked upon as a personal service, or would a hairdressing business be personal service? What is included in that phrase?


Jack Sydney George (Bud) Cullen: It includes maids, chauffeurs and domestics, that kind of thing, not the kind of operation the hon. member indicated at the beginning, data processing or data service.


Sinclair McKnight Stevens: If someone had a barber shop, would that be regarded as a personal service? Would such an individual not be able to hire somebody and get this investment tax credit as part of his barbering business?


Jack Sydney George (Bud) Cullen: Mr. Chairman, a barber shop, being a taxable enterprise, does in fact qualify under this program.


Sinclair McKnight Stevens: Mr. Chairman, earlier when the Minister of Finance was with us I asked him to define what was meant by "in prescribed manner" as it appears at page 6, clause 6 of the bill. Could we have that definition now?


Jack Sydney George (Bud) Cullen: Mr. Chairman, all corporations and those individuals who carry on business are required to make tax instalments. Corporate instalments are due monthly and
Income Tax Act
individual instalments quarterly. Generally speaking, the instalments due are based on the lesser of: (a) an estimate of the current year's taxes; or (b) last year's taxes, referred to in the legislation as the instalment base. The instalment base has always been defined by regulation.
The effect of the amendments to the regulations will be to permit a taxpayer to reduce his instalments for the current year by the benefit he estimates he will derive from the employment tax credit program. Thus an employer can reduce his 1978 tax instalments by the benefit he estimates he will get from this program in his 1978 tax year. We believe this feature will provide immediate stimulus to the economy and improve the take-up rate under the program.


Sinclair McKnight Stevens: As I understand the minister's answer, it is not exactly in line with his answer to my colleague, the hon. member for Vancouver Quadra. Certainly the implication was that the credit would only be something you would benefit from next April; in other words, when you file your income tax return. As I understand it, the answer the minister has just put on the record is much better than that, in that you can claim a credit against instalments as they are due on a personal or corporate basis.


Jack Sydney George (Bud) Cullen: Yes, Mr. Speaker, that is in fact the case. I was being precise in my answer, given the question the hon. member asked; but, as the hon. member has explained it, that is in fact the case and it is better than what was understood previously.


Sinclair McKnight Stevens: Perhaps I could take the minister ahead to clause 2 of the bill. Would he indicate what the significance of this amendment is in relation to the employment tax credit? Subsection 127(5), as I read the act, seems to be dealing with investment tax credits. It is not clear to me how this amendment is relevant to what we are proposing in setting up this employment tax credit.


Jack Sydney George (Bud) Cullen: Mr. Chairman, this is a relieving technical amendment to the definition of the capital cost of depreciable property. This definition now requires the capital cost of depreciable property to be reduced by the amount of certain grants, subsidies or tax credits which the taxpayer is entitled to receive from governments. Since the amount of the investment tax credit claim reduces cost, it also reduces the amount of depreciation that may be claimed. This amendment was necessary because of the relationship between the investment tax credit and the new employment tax credit. The taxpayer may claim any portion of either or both, as the circumstances require. It will insure that the capital cost of depreciable property will continue to be reduced only by the amount of investment tax credit actually claimed, not by the amount a taxpayer could have claimed.


William Hillary (Bill) Clarke: Mr. Chairman, I indicated earlier I would return to a comparison of this program with the Canada Works program. Under the Canada Works program jobs were

January 26, 1978
Income Tax Act
created, and I understand this program will create jobs. The Canada Works program did not adequately fund all the jobs it wanted, because there was a need for jobs even after that program's money was used up. Why is it necessary to have a different kind of program, rather than just expanding the Canada Works program?


Jack Sydney George (Bud) Cullen: Mr. Chairman, they are two completely different programs. Canada Works is government sponsored and paid for by the government. This is an attempt to have private enterprises participating in job creation, given the incentive of the employment tax credit. It is not unusual to have more applications than funding under Canada Works. Normally it is approximately a three to one ratio in order to implement the excellent programs we want.


William Hillary (Bill) Clarke: Mr. Chairman, since it is expected that jobs will be created because of the program, what expectation does the government have that the jobs will continue after the program ends?


Jack Sydney George (Bud) Cullen: Mr. Chairman, I have commented at some length on the predictions made and the bases for them. If the hon. member reads the answers I have already given, I am sure he will be provided with an explanation of the figures used.


William Hillary (Bill) Clarke: Mr. Chairman, one newsman has observed the program will produce more work for accountants. If jobs for accountants are created under this program, will those accountants be eligible for benefits as well?


Jack Sydney George (Bud) Cullen: Mr. Chairman, if an employer hires an accountant to do his books, and if the accountant indicates that he has to hire one more employee because of the employment tax credit, he would be well advised to get a new accountant.


William Hillary (Bill) Clarke: Before I became a professional politician I was a professional accountant. I was not referring to the employer who might have to hire one more bookkeeper. I am sure many accounting services in this country will have to hire extra men because of this program, and I cannot see why they should not be eligible for the program.


Jack Sydney George (Bud) Cullen: If an accounting firm hires more people, no one will be happier than myself. The amount of work entailed is simply putting down the number of employees last year, the number who are working this year, and substracting one from the other to show there is an increment and that they are entitled to benefit. I am sure I would have been able to do that, even though I was a lawyer and not a professional accountant prior to being a member of parliament.


Joseph Adrien Henri Lambert: Mr. Chairman, I put to the minister a question he has not answered. I realize my question may have been somewhat lengthy, so I would like to put it again in a shorter form.
Before Bill C-23 was introduced and the Minister of Finance made his statement on the program, could the minister tell the House whether discussions were held with firms

that might participate? Were they enthusiastic about it, and can we entertain real hope that we are not losing our time in discussing the legislation and that when the final date comes, a number of jobs will be created because employers are enthusiastic?


Jack Sydney George (Bud) Cullen: Yes, we had extensive consultations with representatives of business. We met with the president and representatives of CFIB, as well as the chambers of commerce. The Parliamentary Secretary to the Minister of Finance is now pointing out to me an article entitled: "Canadian Federation for Independent Business Demands the Job Tax Credit". We feel the benefits will be particularly felt in the small business community. Given that type of backing, I am sure we will have participation from the business community.


Joseph Adrien Henri Lambert: Mr. Chairman, there was a program, which I believe is still in force, under which employers could hire people to train them.
Can the minister indicate whether the program was successful, whether employers were as enthusiastic about it, and whether we can really be proud of the results? We know that it is a program somewhat similar in that both involve employer participation.


Jack Sydney George (Bud) Cullen: It is difficult to compare enthusiastic receptions or rejections of a particular program. The people trained and employed because of industrial training programs were enthusiastic. We are being asked constantly for more money under those programs.


Sinclair McKnight Stevens: Mr. Chairman, during second reading I mentioned the fact that we were disappointed there was nothing in the minister's statement to favour first time job seekers, the unemployed youth. Can the minister indicate if any consideration was given to supplying a higher subsidy to somehow entice employers into hiring first time job seekers, as opposed to allowing them to be treated the same as any other person who is out of work?


Jack Sydney George (Bud) Cullen: Mr. Chairman, consideration was given to almost every idea which was put forward. Some were accepted, others rejected. Since the program was new and innovative, it was felt it should be kept as simple as possible. That would have provided one more complication, which we felt should not be built into the program at this particular time. We did not want to build too many issues into an innovative program. We wanted to get it working, realizing that the rough spots could be smoothed out later.


Sinclair McKnight Stevens: Will the minister consider waiving the eight-week out of work provision for those who are first time job seekers? I can see how that provision is necessary in regard to people who want to fiddle the system by giving up jobs in order for an employer to become eligible for benefit. Why is it necessary to apply the eight-week period in the case of a youth
January 26, 1978

who literally has no job? Why does he have to wait eight weeks without work before he can even qualify?


Jack Sydney George (Bud) Cullen: Mr. Chairman, one of the objectives of the program is to get people who have been in the work force and are discouraged because they cannot find employment back to work. That seems to be an appropriate thrust for this program.
Second, as the Minister of Finance indicated earlier this afternoon, it is not the intention of this program to entice into the work force people who had no intention of coming into it in any event. Those are two of the reasons we want to stick, for the time being at least, with the eight-week program, albeit it would have the impact the hon. member is suggesting on first time job seekers.


Sinclair McKnight Stevens: Those people who have qualified to draw unemployment insurance are going to be eligible to get work, but a person who has never had enough employment to qualify for unemployment insurance will be in the odd situation of not being able to qualify for the employment tax credit. In other words, he has to be out of work for eight weeks. He cannot draw unemployment insurance, and I just do not know why there is that inconsistency.


Jack Sydney George (Bud) Cullen: The situation is that that individual can in fact qualify, but he will have to have been registered and unemployed for a period of eight weeks. I think the first time job seeker particularly will probably want to do a bit of looking around. We do not propose to give this the same emphasis the hon. member is giving it at this time. We should be dealing primarily with discouraged workers and not with drawing into the labour force people who would not have wanted to enter it in the first instance. It is a matter of judgment at this time, and we think we have adopted the right approach.


Sinclair McKnight Stevens: I will not press it now, but I hope the minister will keep an open mind in this matter because I think there is an inequity here in the sense that the approach seems to favour those who are already on unemployment insurance. Frankly, there has been wide speculation that the program is deliberately warped in order to take people out of the unemployment insurance scheme, knowing full well that some people, including young people who are unable to find jobs, are automatically disqualified because of this arbitrary eight-week looking for work period which is required.
I have a further question to put to the minister. It is stated in the press release that the program will be applicable for nine months' work. The bill sets it at 12 months. I wonder why the press release is more restrictive as to the time during which an employer can receive a credit, while the bill provides a 12 month period.


Jack Sydney George (Bud) Cullen: Mr. Chairman, I think it is fair to say that in endeavouring to find the correct time frame in a new program it is a matter of judgment. I say without any real concern that, in my own view, it should have been a six-month time frame. I feel that that would have been more appropriate. More people
Income Tax Act
could have benefitted from the program. I think that would have made the program twice as effective and provided a much better opportunity. There were others who thought 12 months would have been more effective and that people would be hired for that time and benefit more from the program. If the program works within a nine-month time frame, perhaps we should try it at six. If it does not, perhaps we should go to twelve. It is a judgment which was made with regard to a new program. We did not want to spend a lot of time debating whether it should be six, nine or twelve.


Sinclair McKnight Stevens: My final question arises from an answer the minister gave earlier. I believe he said that one of the restrictions on employees would be that employees have no relationship with the employer. Would the minister clarify that? Is that in a family sense or in the sense of prior employment?


Jack Sydney George (Bud) Cullen: Family, Mr. Chairman.


Sinclair McKnight Stevens: If a man has been working with company A and for some reason is laid off or quits and is out of work for eight weeks, in the ninth week could he be hired back by company A and could company A pick up the employment tax credit?


Jack Sydney George (Bud) Cullen: Yes, Mr. Chairman, provided there was an increment. Obviously somebody else would have to be hired to fill the vacancy before the particular employee could be hired back. As long as there is an increment, the employer would qualify for a tax credit.


Thomas Gordon Towers: Mr. Chairman, would the minister state whether there will be a choice as to whom the employee might work for or whom the employer might hire? Are Manpower officials to have the sole jurisdiction in this matter?


Jack Sydney George (Bud) Cullen: Mr. Chairman, we will decide who will be referred, but the employer will decide who to hire.


Eudore Allard: Concerning the question put by the hon. member from the Progressive Conservative Party, Mr. Chairman, reference was made to relatives. Supposing I had a plant and employed people, would there not be a danger for instance that I fired one or two employees and rehired them eight weeks later, to take advantage of the legislation? I wonder if the question is understood. If I were an employer and wanted to get the income tax reduction, if I fired one or two employees and rehired them after eight weeks, would I be eligible for the income tax credit?


Jack Sydney George (Bud) Cullen: Mr. Chairman, as we indicated, there will be a monitoring. We will be doing sample audits from time to time, and if an individual employer laid off two people, he would first have to hire two people to get back to the level he was originally at before he could take advantage of the program by hiring two more. If he simply hires them back to fill a void, there is no increase in the number of employees and he therefore does not qualify.

January 26, 1978
Income Tax Act


Arthur Portelance: A final question, Mr. Chairman. In the construction industry, I do not know whether you already answered these questions, what will happen? It is well known things are rather quiet in the construction industry right now, but no later than next spring larger contracts will get under way. The contractor that used to hire maybe five or six people, let us say that this year he intends to do much more, assuming he hired some 15 people, would the differential in number of employees used entitle him to the income tax reduction?


Jack Sydney George (Bud) Cullen: No, Mr. Chairman. I think I did answer when the hon. member was in the committee, but it would be a seasonal comparison. It would not be compared with the eight weeks or ten weeks but with the previous season. If an employer hired 15 last year and 15 this year, there would in fact be no increment.
Clause 1 agreed to.
Clauses 2 to 6 inclusive agreed to.


Charles Robert Turner: Shall clause 7 carry?


Some hon. Members:: Agreed.


Stanley Howard Knowles: Mr. Chairman-


Charles Robert Turner: Shall the title carry?


Stanley Howard Knowles: Mr. Chairman, I was about to move the amendment the hon. member for New Westminster proposed to move, but he has arrived, so he can move it himself.


Stuart Malcolm Leggatt: Mr. Chairman, I move:
That Bill C-23 be amended on page 7, in line 31, by changing the period after the word "employment" to a comma, and by adding immediately thereafter the following words:
"provided that no employer is entitled to the deduction from tax in respect of
any eligible worker who is paid at a rate below the minimum wage provided by
law in the province or territory in which the employment takes place."


Charles Robert Turner: Order, please. The Chair put the question on clause 7, and clause 7 carried. The Chair then put the question on the title, and that is where we are now.


Stanley Howard Knowles: Mr. Chairman, I insist that I was on my feet when you called clause 7. As my colleague came in I handed him the amendment.


Jack Sydney George (Bud) Cullen: Mr. Chairman, as a matter of fact, we were holding off because I knew the hon. member for New Westminster had an amendment. I would have to concede that as far as we are concerned the hon. member for Winnipeg North Centre was on his feet at the time.


Sinclair McKnight Stevens: Mr. Chairman, in all fairness I think the hon. member was trying to get your attention to move the amendment when we were on clause 7.


Charles Robert Turner: Shall clause 7 carry?


Stuart Malcolm Leggatt: Mr. Chairman, I will provide a brief explanation of the amendment. It simply provides that the prevailing provincial minimum wage must at least be paid by an employer seeking to take the benefits of this legislation. I therefore move:
That Bill C-23 be amended on page 7, in line 31, by changing the period after the word "employment" to a comma, and by adding immediately thereafter the following words:
provided that no employer is entitled to the deduction from tax in respect of
any eligible worker who is paid at a rate below the minimum wage provided by
law in the province or territory in which the employment takes place.


Jack Sydney George (Bud) Cullen: I know what the hon. member is trying to do, Mr. Chairman, but I think the amendment is ineffective because the wages normally set in the various provinces are industrial wages. Without exception farmers are exempt from these provisions, so the effect of the amendment would be to make things the same as they are at the present. Farmers gave us some concern, but they would be excluded by provincial legislation in any event.


Stuart Malcolm Leggatt: Mr. Chairman, there is also the question of the part-time employee. In some provinces if you employ someone on a temporary or part-time basis you are exempt from the minimum wage law. The purpose of the amendment is to see that the rate paid is at least the provincial minimum wage. Surely this House should support employers at least bringing their wage levels up to the minimum, otherwise no worker would be attracted to the program and perhaps not many employers would want to participate. The basic rate should be raised to the provincial minimum, which is generally $2.50 or $3.00 per hour around the country. This is a humane amendment. We do not want to be in the position of encouraging employers to pay unsatisfactory wage rates simply to comply with this program.


Charles Robert Turner: Shall the amendment carry?


Some hon. Members:: Yea.


Some hon. Members:: Nay.
Amendment (Mr. Leggatt) negatived: yeas, 5; nays, 54.


Charles Robert Turner: I declare the amendment lost.
Clause 7 agreed to.


[Stage Direction]
Title agreed to.
Bill reported.
The Acting Speaker (Mr. Turner):: When shall the bill be read the third time?


Some hon. Members:: By leave, now.


Jack Sydney George (Bud) Cullen: that the bill be read the third time and do pass.
Motion agreed to and bill read the third time and passed.
January 26, 1978



PROCEEDINGS ON ADJOURNMENT MOTION

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

Mr. Lloyd Francis (Ottawa West):: Mr. Speaker, on January 23 at page 2092 of Hansard I asked the following question of the Deputy Prime Minister and President of Privy Council (Mr. MacEachen) concerning the special committee on the review of personnel management and the merit principle in the public service:
Will this committee hold public hearings? If so. when? Also, will MPs and others be given the opportunity to express their views?
I received an answer as follows:


Allan Joseph MacEachen: Mr. Speaker, I will have to verify the impression I have that it is not the intention to hold public hearings. I will make sure whether that is the correct situation.
I raise the matter tonight because I think it is extremely important that there be no misunderstanding concerning the procedures to be followed by this special committee of investigation. I hope we will have a further statement tonight.
To sketch the background a little, on February 4, 1977, the Deputy Prime Minister and President of Privy Council announced the appointment of this special committee. It was to consist of a representative of the employers, Mr. Bruce Brittain, who had held a position at the deputy minister level in the public service for some time; a representative of the employees, Mr. Davidge, a highly respected spokesman for the public service; and the chairman of the committee named in the first week of January this year, Mr. Guy D'Avignon.
The government did not exactly move with haste in this matter because a recommendation was made that such a committee of inquiry be appointed in the joint report of the committee of the Senate and House of Commons presented unanimously in January of 1976. That report recommended changes in the Public Service Staff Relations Act. But it pointed out very clearly that the changes that had to be made in the Public Service Staff Relations Act, while long overdue, would require consequential amendments to the Public Service Employment Act. The former chairman of the Public Service Commission, Mr. John Carson, had repeatedly requested that this inquiry take place. In a special audit conducted in 1973 and reported in the 1974 annual report of the Public Service Commission, something over 6,000 appointments were examined in detail. A substantial proportion of them, perhaps a third, indicated irregularities in the form of violations of the Public Service Employment Act and/or the regulations issued under that act.
Adjournment Debate
Those of us who have been following events in the public service have been very much concerned with what has evolved over the period. We go back to the reports of the Glassco commission, that commission of investigation into government itself named by the right hon. member for Prince Albert (Mr. Diefenbaker) when he was the prime minister of Canada. The Glassco commission brought forward a philosophy, a theory, a basic development of government policy, which said the organization had been too bureaucratic, that the comptroller general of the treasury had exerted too great a control. The Public Service Commission had exerted too strong a control on hiring. The Glassco commission said that the deputy ministers should be managers, that they should manage and have freedom and they should take responsibility for their own decisions. The Glassco commission also recommended certain safeguards be implemented. One half of the Glassco recommendations were implemented. The deputy ministers were given a great deal of discretion, but the other half, the checks on their operations, were not placed where they should be.
The Auditor General pointed out the consequences of this in his report of 1976, which was a bit of a blockbuster, and the government has moved to correct the bad administration which has crept in on the financial side. Very substantial improvements have taken place there. On the side of employment and personnel administration, I submit there have been equally serious defects that have crept into the operation of the public service and have not yet been corrected.
Those of us who have followed events are very much concerned, for example, about delegated authority, the procedure under which deputy ministers are making appointments. Sometimes the appointments they have made, for instance doubledecking, when candidates were required to go to language school, were clearly made without full examination of the requirements of the merit principle.


Walter David Baker: A lot of friendship in it too.


Cyril Lloyd Francis: We are very much concerned about the situation of temporary help and what has developed in a number of areas here. We are concerned about the application of a computerized system of selection of applications for posts and the abuses that have crept in as a result of those who have learned how to beat the computer; how to put the right codes on their files; how to get the candidate that was wanted when a search was made in a computer, someone with say, ten years of experience in the northern territories for administrative posts, and by some strange coincidence only one candidate's name emerged when the file was examined. This kind of abuse of the procedures has become something of a legend in the public service today.
As a member representing an Ottawa constituency, I am pleased to see on the other side the representative of a neigh-

January 26, 1978
Adjournment Debate
bouring constituency, Grenville-Carleton, the House leader of the opposition. I am sure he concurs with me on this.
We are very much concerned as to how this committee is going to operate. Will it hold public hearings or will it not? If it is not going to hold public hearings, why will it not do so? If it is not going to hold public hearings, how is it going to get the necessary input of information from those who are not in the public service itself?


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


Yvon Pinard: As everybody knows, Mr, Speaker, last Monday the Deputy Prime Minister and President of the Privy Council (Mr. MacEachen) answered the question the hon. member for Ottawa West (Mr. Francis) had asked him concerning the special committee on the review of personnel management and the merit principle in the public service, when he said that he did not feel at the time that the special committee intended to hold public hearings, but that he would make sure whether that was the correct situation.
Mr. Speaker, I should like to convey to the hon. member and to the House the information I have obtained. I have learned that to provide a forum of free and open discussion, and obtain as much information as possible, the special committee did not intend to hold public hearings at the early stage of its work. It may, however, decide to do so later on. Moreover, the special committee would directly ask parliamentarians, representatives of civil service unions and other interested people to appear to make their views known. The public at large would be invited to do the same through advertising in the papers.


EXTERNAL AFFAIRS-REASON CANADIAN DELEGATION IN INDONESIA TO DISCUSS POSSIBLE CANADIAN PARTICIPATION IN COAL MINING PROJECT
Mr. Howard Johnston (Okanagan-Kootenay):: Mr. Speaker, a week or so before the Christmas recess I raised the question of the propriety of this country sending a trade delegation to Indonesia, hoping to participate in the development of a billion dollar coal mining project. At the time the minister promised to make some inquiries and reply to me.
In the last two days prior to Christmas we had the debate on external affairs. Again I alluded to the trade relationship with Indonesia because what was going on simultaneously was a remarkable contrast to the minister's response to conditions in South Africa as he saw them in the withdrawing of Canadian representatives from that nation.
Since then I have received a reply from the minister. He assures me that the coal mining operation in Indonesia, if and when it comes on for local use, probably will not compete with Canadian mines. I find that a little strange to believe, particularly when he goes on with a qualifier. If that development

proceeded, it would be remarkable if the government of Indonesia did not see to it that a great deal of that coal were exported. It could very possibly be in direct competition with Canada.
I do not at all see it beyond the scope of Japanese technology to raise lower grade coal to the point where it could serve good use. Of course, within this country we have a great deal of low grade thermal coal that we might profitably export in a few years' time. However, if a development like this proceeds, we would not be able to do that.
I represent an area of British Columbia with a history of coal mining. The initial industrial base in the province was based on Vancouver Island and in the southeast Kootenay riding that I represent. The coal mining industry virtually died. It saw extremely hard times. It made a remarkable comeback, particularly in the south Kootenay corner. At the moment the development of several promising prospects there is being delayed.
I would still raise the question whether it is in the best interests of Canada to so actively promote industry abroad that will be in direct competition with our Canadian industry when developed. I have a great suspicion that what we gain in the short range will be lost in the long range.
If we are going to be righteous about South Africa how can we actively and aggressively promote trade with Indonesia which has been the object of a report by Amnesty International highly critical of that country and placing it far beyond South Africa in terms of restrictions upon human rights and freedoms? The minister says that all the evidence available to him rules out any suspicion that Indonesia is making forced labour from political prisoner camps available for industrial or mining projects. From this I gather he has failed to read the report made on that country by Amnesty International. It is a lengthy document, one of pocketbook size, and nobody who reads it could reach such a conclusion. This report was produced by an organization which is held in high repute internationally, one whose censure of South Africa has been accepted by the government. I find it strange that an organization should be supported when it draws attention to a situation in one country, and totally ignored when it draws attention to a desperate situation in another, because it happens to suit our purpose, in this case to develop trade. It also happens that Indonesia is not the object of massive censure as is South Africa.
In the light of these considerations I can only conclude that this question has not been given the scrutiny and consideration it deserves either by the Department of Industry, Trade and Commerce or, certainly, by the Department of External Affairs.


Mr. Maurice Dupras (Parliamentary Secretary to Secretary of State for External Affairs):: Mr. Speaker, a mission visited Indonesia recently led by an assistant deputy minister and comprised of officials from the Department of Industry,
January 26, 1978

Trade and Commerce and members of the engineering consulting community. Its object was to support a consortium of three highly recognized Canadian consulting firms in its bid to win an engineering services contract, financed by the World Bank, to co-ordinate what is known as the Sumatra project. This project, whose value is conservatively estimated at $1 million, includes the development of a coal mine, rail transportation, port facilities and two 375 megawatt thermal power plants. The government of Indonesia has decided that indigenous coal would be used for power generation wherever feasible and has requested financial and technical assistance from the World Bank in implementing the project.
Faced with stiff competition from countries such as the U.S.A., the U.K., Japan, Germany and France it would be presumptuous for Canada to believe that this project would not be implemented if we did not participate. We feel that if Canada is successful in winning the engineering contract it will enhance our opportunities to participate in the tremendous supply of capital equipment and related services needed. The expertise and capital equipment available from Canada in the rail, material handling, marine and thermal power sectors makes this truly a project worth pursuing. In addition, the number of jobs which could be created through export sales would be significant.


NORTHERN AFFAIRS-GOVERNMENT POSITION ON CONTRACTING OUT WORK TO PRIVATE OPERATORS
Mr. Wally Firth (Northwest Territories):: Mr. Speaker, before the Christmas recess, on December 6, 1977, to be precise, I raised two questions with the Minister of Indian Affairs and Northern Development (Mr. Faulkner). They are related questions and they have to do with job opportunities, economic development and government policy in the Northwest Territories. I was asking about the government's plans to alleviate unemployment in the Northwest Territories and the government's position as to contracting out work to private operators in the Northwest Territories.
I was not completely satisfied with the minister's reply at that time. He mentioned he would look into these matters and report back. Since then the minister has had an opportunity to visit the Northwest Territories and the Yukon. Indeed, I believe he has gone as far north as some parts of Alaska. So I hope that whoever is replying for the minister will have better answers than I received at the time I raised these questions.
With that in mind I should like to make a couple of brief remarks on economic development and job opportunities in the Northwest Territories. First, I believe the Northwest Territories are paying a large part of the bill for operating the Territories. I can think of a number of users of our resources up there, namely, oil companies, the mining industry and so on, that are exploiting the resources in the north. So I suggest that vast amounts of revenue go to government and pay for labour. There has been oil production at Norman Wells for some 35 or 40 years. There is the lead and zinc operation run
Adjournment Debate
by Cominco in Pine Point. There are two gold mines operating in Yellowknife, the Con and Giant Mines. There is silver coming from Echo Bay mines. There is the Tungsten mine on the Yukon-Northwest Territories border. There is a gas well and pipeline operating out of Pointed Mountain. There is the lead and zinc mine at Nanisivik on Baffin Island, and there are a number of other operations which pay taxes to the government. I refer to personal income tax, taxes and royalties on the fur industry, and business taxes.
So I have come to the conclusion that the Northwest Territories is paying its own way. I suggest this because of the sources of revenue which I just mentioned and the fact that there are only 43,000 people spread over that vast territory. Therefore, I think it is the responsibility of the government to put some investment into the north to provide more jobs and to provide for northern development in a way that people in that part of the country can accept.
I should like to make a couple of suggestions, if I may. First, however, I should like to congratulate the minister on his recent announcement that the government will be spending some $40 million to complete the Liard highway which will link Nelson, British Columbia with Liard and Fort Simpson.
I certainly hope the government will seriously consider adopting the policy which was announced some time ago by the previous minister of Indian affairs and northern development of giving people in the Northwest Territories preference for jobs. I hope the minister will consider this very seriously, not only with respect to the labour force but with respect to the contractors, the people who have equipment, so that they will put these people to work on the building of the highway from Nelson, B.C. to Liard and Fort Simpson in the Northwest Territories. This policy was in effect some years ago, not that far back in fact, in a project in which northern people had preference. There was on-the-job training and it was working very well. However, much more is needed and many ideas are required.
I believe the government must show some initiative. I have received ideas from my constituents which they have transmitted to me through letters and phone calls and during visits. They are very concerned that there is such high unemployment there. In December when I raised this question with the minister I mentioned that in the village where I come from there was at that time 72.2 per cent unemployment. That situation has not changed much.
I hope the government will move toward this idea of northern preference, looking at some other ideas such as the construction of an all-weather highway, gravel though it would be, from Fort McMurray, Alberta, to Fort Smith in the Northwest Territories. I met with the minister of highways for Alberta five or six weeks ago and he was very enthusiastic about such an idea. As a matter of fact, the government of Alberta has been considering this very seriously. I hope the federal government will get together with that province and pursue that idea as soon as possible.

January 26, 1978
Adjournment Debate
It is also my hope that the government will consider seriously the construction of a bridge across the Mackenzie River at Fort Providence. This is another long-range program that could be initiated and spread over a number of years, thereby alleviating unemployment and would be a positive step in the area of economic development, especially for the western Arctic.
Other areas that require consideration are the tourist industry, the settlement of land claims, and a number of others. Another matter on which I place high priority-and I have mentioned this time and time again-is serious government consideration of the housing problems in the Northwest Territories. I hope it will alleviate the situation by-


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


Miss Aideen Nicholson (Parliamentary Secretary to Minister of Supply and Services):: Mr. Speaker, the present levels of employment in the Northwest Territories and the expectation of rapid growth in the labour force in the coming years pose important challenges to both the government and the people of the north. In December officials of the Department of Indian Affairs and Northern Development and the government of the Northwest Territories met with representatives from most communities of the Mackenzie valley to discuss ways of increasing employment in those communities. The ideas suggested for new employment by those communities are being followed up by officials.
The Minister of Indian Affairs and Northern Development (Mr. Faulkner) also intends to convene a conference on economic development in the Northwest Territories at which representatives of business, native associations and other interested organizations can exchange ideas on future directions for northern economic development for specific sectors.
While there is serious unemployment in the Northwest Territories, a great deal of employment has been created. For example, in the petroleum industry last year 802 northerners from 30 different settlements were employed. In the Mackenzie Delta alone, Beaufort Sea drilling resulted in employment
for 194 northerners. In the mining industry it has been a priority of the government of the Northwest Territories to increase native employment through the use of rotation schemes which have been worked out with local communities. There have been significant increases in native employment at the Con Rycon, Terra and Echo Bay mines because of this initiative.
There will also be significant opportunities for employment in road construction this year. Work on two contracts on the northern part of the Dempster highway will be beginning again in the next few weeks. These will provide job opportunities for people from Fort McPherson.
The hon. member for Northwest Territories (Mr. Firth) referred to the Liard highway. The Minister of Indian Affairs and Northern Development announced on January 20 that construction will begin immediately on the Liard highway between Fort Simpson and the British Columbia border. This project and the regional economic development initiatives which the road will make possible have the potential to create some hundreds of jobs.
Steps have also been taken to facilitate the private sector in its own employment-creating initiatives. For example, the government has improved the terms of the various loan funds operating in the Northwest Territories to assist business development. In addition, during the past year the Department of Regional Economic Expansion began offering its special ARDA program and a number of new small businesses have been created with special ARDA assistance. The government is also assisting two native associations in establishing development corporations in anticipation of future land claim settlements. Since there is much to be done to create new jobs, the government and the private sector have been active in exploring new opportunities.


The Acting Speaker (Mr. Turner):: The motion to adjourn the House is now deemed to have been adopted. Accordingly, this House stands adjourned until tomorrow at 11 a.m.
Motion agreed to and the House adjourned at 10.26 p.m.

Friday, January 27, 1978