1978-02-07

ROUTINE PROCEEDINGS


Mr. J. R. Ellis (Hastings):: Mr. Speaker, under the provisions of Standing Order 43 I wish to present the following motion. The Marmoraton Mining Co. has announced that it will lay off 275 employees early this year when it closes its mine at Marmora. Left in the mine will be minerals which could provide a further two full years of employment at regular production rates. I move, seconded by the hon. member for Edmonton Centre (Mr. Paproski):
That the government be directed to approach every Canadian steel mill and attempt to sell the ore at a subsidized price, and that the subsidy be equal to the amount that would be spent on unemployment insurance and other support for the 275 people unemployed, on the basis that they would prefer to work.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


CANADA WORKS PROGRAM
Mr. Jack Marshall (Humber-St. George's-St. Barbe):: Mr. Speaker, I wish to move a motion under the provisions of Standing Order 43, and I am sure the Minister of Employment and Immigration will give his consent to it. The minister has indicated that there will be a reorientation of Canada Works programs under an economic growth component to provide long-term jobs. I therefore move, seconded by the hon. member for St. John's East (Mr. McGrath):
That the Minister of Employment and Immigration be ordered to make a statement on motions today relating all details of the $50 million expenditure under the economic growth component and all its objectives, and that he do so forthwith.


Mr. Speaker:: Order, please. The motion can be presented for discussion, pursuant to Standing Order 43, only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. Edward Broadbent (Oshawa-Whitby):: Mr. Speaker, considering that the government since the Christmas recess has indicated its complete lack of capacity and will to govern by naming a Solicitor General who refuses to answer questions about scandals, by producing an alleged planning document for the first ministers' conference which contains no plans, by betraying Canadian workers in obtaining no job guarantees on the Alcan pipeline and, finally, by the economic policy which has produced 1.6 million unemployed Canadians, I move, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
That this House, noting that the Prime Minister has failed completely to provide economic leadership and is, instead, spending his time on electioneering trips at the public expense, urges him to call a general election.


Mr. Speaker:: Order, please. In accordance with the terms of Standing Order 43, such a motion can be presented for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.

[ Translation]


BROADCASTING
Mr. Ren6 Matte (Champlain):: Mr. Speaker, under the provisions of Standing Order 43, I seek the unanimous consent of the House to introduce a motion dealing with an important matter.

February 7, 1978
Considering that Radio-Mutuel network station employees have been denied their basic union rights; considering that that conflict has now lasted for a year; considering that the ministers involved have been advised to examine the matter; and considering the bad faith shown by the employers and owners of those stations who received their operating license from the CRTC, I move, seconded by the hon. member for Rimouski (Mr. Allard):
That all government advertising on Radio-Mutuel network stations be prohibited pending the settlement of that dispute and that instructions to that effect be given by the House to the Minister of Finance (Mr. Chretien).


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


Some hon. Members:: Agreed.


Some hon. Members:: No.


THE CANADIAN ECONOMY
Mr. Roch La Salle (Joliette):: Mr. Speaker, under the provisions of Standing Order 43, 1 ask for the unanimous consent of the House to present a motion of urgent and pressing necessity.
Considering that the percentage of men at work in the province of Quebec alone has gone down from 76 per cent to 69 per cent between 1966 and 1977; that the statistics on the rate of unemployment released this morning confirm that the rate of unemployment for this government is no longer a problem but rather a shame to this nation; and finally that the people of certain areas must cope with an unemployment rate of over 20 per cent, I move, seconded by the hon. member for St. John's East (Mr. McGrath):
That this House unanimously urge the minister concerned to introduce immediately very special measures designed for those regions which deserve special consideration because of their rate of unemployment.


Mr. Speaker:: Order, please. The House has heard the hon. member's motion. Pursuant to the provisions of Standing Order 43, this motion can be presented for debate only with the unanimous consent of the House. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.
[Mr. Matte.J


REGIONAL ECONOMIC EXPANSION
Mr. John C. Crosbie (St. John's West):: Mr. Speaker, in view of the fact that Alcan closed their fluorspar mine at St. Lawrence, Newfoundland, in order to replace that fluorspar with cheaper fluorspar imported from Mexico, thereby causing the loss of employment for some 300 people, without any attempt by the government of Canada to persuade or to pressure Alcan to continue operating at St. Lawrence, and in view of the fact that the Export Development Corporation, a creature of the government of Canada, has now announced financing of $30.6 million to assist a subsidiary of Alcan to construct an alumina plant in Ireland, thus assisting in creating jobs in Ireland while jobs are permitted to vanish in Newfoundland, I move, seconded by the hon. member for Humber-St. George's-St. Barbe (Mr. Marshall):
That the Minister of Fisheries and the Minister of Regional Economic Expansion be directed to respond affirmatively, immediately, to a proposal from Fishery Products Limited and from the community of St. Lawrence for financing and for licences to enable the construction of a fish processing plant at St. Lawrence, utilizing offshore as well as inshore fishery resources, and that this House censure the government and its creature, the Export Development Corporation, for the assistance given to Alcan to create jobs in Ireland while doing away with jobs in Newfoundland.


Mr. Speaker:: Such a motion can be presented for discussion as this time, pursuant to Standing Order 43, only with unanimous consent. Is there unanimous consent?


Some hon. Members:: Agreed.


Some hon. Members:: No.


RAILWAYS
Mr. David Orlikow (Winnipeg North):: Mr. Speaker, I should like to move a motion under Standing Order 43, seconded by the hon. member for Winnipeg North Centre (Mr. Knowles):
Whereas both the CN and CPR have adopted policies of cutting back on service, eliminating operations in small towns and moving the reduced service to larger cities, and having been contracting out such railway activities as contract maintenance, and whereas these policies have led to reduced service and a sharp decrease of 10,000 employees in the last two years, therefore be it resolved that the Minister of Transport discuss with the railways the reversal of this policy of centralization which is the exact opposite of the federal government's policy of decentralization.


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


Some hon. Members:: Agreed.


Some hon. Members:: No.
February 7, 1978



ORAL QUESTION PERIOD


Mr. James A. McGrath (St. John's East):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It is prompted by the latest figures from Statistics Canada. These figures have outraged the country. They show that unemployment now is officially at one million, or 9.5 per cent; or in real, hidden terms we have 1.6 million unemployed in the country. 1 can assure the Prime Minister there is nothing subtle about that. I ask the Prime Minister if he is prepared today, in response to these startling figures, to take the House and the country into his confidence and tell us what strategy he is going to present to the first ministers to deal with this situation immediately when he meets with them next week.


Right Hon. P. E. Trudeau (Prime Minister):: Mr. Speaker, the hon. member, of course, knows that the seasonally adjusted unemployment rates decreased in January.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: I am not indicating that they decreased to a level or at a speed which is giving the government any comfort; I just want to remind the hon. member that if he is trying to interpret the effect of government policies and the reaction of the economy to them, he should take this into account. Of course, that is what we plan to do next week at the first ministers' conference which, as the hon. member knows, will last three days-Monday, Tuesday and Wednesday.


FINANCE
James Aloysius McGrath: Mr. Speaker, 1 direct my supplementary question to the Minister of Finance. As of January there were 36,000 fewer jobs in the manufacturing sector than there were at this time a year ago, and job lay-offs are increasing at a rapid rate. Apart altogether from the employment tax credit bill and the make-work project policies of the Minister of Employment and Immigration, does the Minister of Finance have anything to offer the Canadian people who are concerned that we have more people, in real terms, unemployed in Canada today than during the great depression?


Hon. Jean Chretien (Minister of Finance):: Mr. Speaker, I wish to inform the hon. member that beginning January 1, 1978, we put in place programs that are working to help Canadians at this moment. We have indexed the exemptions
Oral Questions
by 7.2 per cent, which is a stimulus of $800 million. We have a program for cutting taxes in January and February for seven million taxpayers, which will cost the government $750 million. There are many other tax incentives. This is a $2.5 billion package to stimulate the economy in 1978. These policies are extremely stimulative to the Canadian economy. We are preoccupied with the level of unemployment. This matter was discussed last week with the ministers of finance of all provinces, of all political stripes. They stated that we must carry on with our present policy. It will take some time, but everyone seems to agree that we are on the right track.


James Aloysius McGrath: Mr. Speaker, it is obvious that the Minister of Finance, like the Prime Minister, is operating in a vacuum. He is the only one who considers himself on the right track. Does the Minister of Finance have any relief to offer the provinces, given the fact that 36 per cent of the unemployed have been out of work for three months or more, and over one-half of the unemployed are no longer eligible for unemployment insurance because of long-term unemployment? Is the minister prepared to offer any relief to the hard-pressed provinces which now have to meet additional welfare payments as a direct consequence of the failure of the minister ot bring in meaningful policies?


Joseph Jacques Jean Chrétien: Mr. Speaker, last week I spent two days with the ministers of finance. There was no request of that nature by any minister of finance of any province.


UNEMPLOYMENT-REQUEST SPECIAL MEASURES BE TAKEN TO IMPROVE SITUATION IN QUEBEC
Roch La Salle: Mr. Speaker, my question is directed to the Minister of Finance.
Earlier in a motion I was referring to very special regions with an unemployment rate of over 20 per cent. Considering these circumstances, 1 think the minister would agree with me that this situation cannot last any longer. Therefore I would like to ask the minister responsible whether he will introduce very special measures for those regions which are recognized as such because of their high level of unemployment.


Joseph Jacques Jean Chrétien: Mr. Speaker, on October 20 last we introduced a program in the House of Commons and most of the proposed measures have come into force as of January 1, 1978. We have offered special credit incentives that those industries can obtain if they are making investments, as well as more advantageous incentives in parts of Canada where the situation is worse. In the program I proposed to the House just two weeks ago for job creation in the private sector, there are exemptions or incentives provided for the maritime regions and other areas in Quebec which have a higher rate of unemployment.


Roch La Salle: Mr. Speaker, the minister is always quick reminding us of his government's good intentions. Since these measures are not likely to produce results for several months, could the minister advise us whether he will let these regions
2606

February 7, 1978
Oral Questions
cope with this excessively high unemployment rate, or whether he has special measures in store for them?


Joseph Jacques Jean Chrétien: Mr. Speaker, I indicated a moment ago that we have stimulated the Canadian economy since January 1, 1978 with total incentives of some $2.5 billion, and that two thirds of these incentives have been given to consumers to increase their purchasing power. As a matter of fact, we have granted in January and February an additional $50 tax cut to some 7,000,000 Canadian taxpayers, an amount which we feel has and will spur consumer spending in both these months and will in turns boost productivity in Canada. I am glad to see that the unemployment rate went down from 8.5 to 8.3 per cent in January.


Roch La Salle: Mr. Speaker, in view of the minister's optimism and taking into account our findings over nearly a year, would the Minister of Finance be honest enough to recognize that the measures proposed and the wrong predictions made by his department over the past year have been a complete failure? Moreover, is he willing to admit this failure which the Canadian public is quite aware of by now?


Joseph Jacques Jean Chrétien: I think, Mr. Speaker, that there are many factors involved in the current situation. One of these factors which are a cause of great concern is the progressive deterioration of the unemployment situation in the province of Quebec. I feel it would be quite beneficial to assure political stability there as soon as possible, because we can see that the situation is improving in both Ontario and the maritimes, while it keeps on deteriorating in Quebec.


SUGGESTION BY PROVINCES THAT GOVERNMENT REDUCE TAXES TO STIMULATE ECONOMY
John Edward Broadbent: Mr. Speaker, I have a question for the Minister of Finance. Considering that the great tax cut the minister boasts about amounts to about $2 a week for a typical family, that unemployment, in real terms, has now reached 1.6 million, and that there has been a loss of 250,000 jobs in one month-the worst record, I am sure, in any single month in Canadian history-will the minister now give serious thought to a proposal which all provincial premiers, from all political parties, made at St. Andrews last fall, when they recommended that the government cut taxes for middle and low income people in order to stimulate the economy?


Joseph Jacques Jean Chrétien: I am very surprised that the hon. member should now suggest I do what I did on October 20. I cut taxes then by $2.5 billion. I know the hon. member does not think $2.5 billion is very much. He does not understand that there are a thousand million per billion.


Some hon. Members:: Oh, oh!
[Mr. La Salle.)


John Edward Broadbent: I realize the Minister of Finance was not trained as an economist before he took the job, but even a lawyer can read a first-year textbook in economics. I should like him now to come to grips with the problem of unemployment, instead of trying to make cheap cracks in the House. At that meeting in St. Andrews, the premiers also urged the federal government to do now, in 1977-78, what was done back in 1971 and 1972 when unemployment was at a lower level, namely, to bring in a municipal capital works assistance program to provide jobs right across the country. Will the Minister of Finance follow that advice?


Joseph Jacques Jean Chrétien: We decided in October to stimulate the Canadian economy to the tune of $2.5 billion. This decision, to take effect in January, means the economy has been stimulated to a greater extent than has been the case for years. For the hon. member to come here at the last hour and say that perhaps we should put something more on top of that is surprising to me. We have to realize that it is not possible. We are being blamed by the official opposition for running a deficit of $8.5 billion. We cannot stimulate the economy further, because it would be counterproductive to do so. Last week I made a certain suggestion to the provinces because their fiscal stance was more favourable than ours. I suggested that perhaps they should do what we have done. But there have not been many takers for that proposition.


John Edward Broadbent: If the minister would look at page 78 of his own document produced for the first ministers' conference next week, he would find the best argument around in favour of cutting taxes. Will he look it up? In view of the minister's refusal to either cut taxes now or to aid the municipalities with winter works, is he really telling the people of Canada, with shipworkers laid off in Halifax, with Christie's bread workers being laid off in Toronto, Inco workers laid off in Manitoba and Sudbury, woodworkers being laid off in Vancouver, that he would rather spend $4 billion on unemployment insurance hand-outs than on job creation?


Joseph Jacques Jean Chrétien: I do not think the hon. member is saying anything new. We have followed what I consider to be a very stimulative policy in the last few months. I discussed it last October and last month with my provincial colleagues of different stripes in the political spectrum of the Canadian society and, generally speaking, they have not pressed me to change the fiscal policy of the government at this time. It is very easy for the hon. member to say, after we have stimulated the economy to the tune of $2.5 billion, "Me too, and a little more". It does not take an economist to say that.


NATIONAL UNITY
Mr. Rene Matte (Champlain):: Mr. Speaker, I would like to direct my question to the Prime Minister.
February 7, 1978

The Prime Minister has previously stated that he would not hesitate to use the army to stand by force in the way of the will of independence in Quebec, if he judged that that will has been expressed through illegal means; since such a statement remains equivocal and ambiguous, would the Prime Minister tell the House how he would judge whether that will has been expressed legally or illegally?


Pierre Elliott Trudeau: Mr. Speaker, 1 have said a great many times both in the House and outside that it was not the government's policy to use force to prevent the legally expressed will of Quebec from moving in a certain direction. If the hon. member is referring to the suggested assumption of illegality, he might refer to the transcript of the question which was put to me before TV cameras in December and he would find what I said about the assumption he is wondering about.


INQUIRY AS TO PARTICIPATION OF GOVERNMENT IN QUEBEC REFERENDUM CAMPAIGN
Charles Edward Rea: Mr. Speaker, can the right hon. Prime Minister tell the House what position his government intends to take during the referendum campaign on Quebec sovereignty, in other words does his government feel that it will be proper for personalities from outside Quebec to take part directly or indirectly in the referendum campaign?


Pierre Elliott Trudeau: Mr. Speaker, instead of worrying about what the government and the hon. members will do at that time, the hon. member would be well advised to take up the matter with the representatives of the Pequiste government and tell them to have the courage to put the question clearly to the Quebeckers as soon as possible.


THE CANADIAN ECONOMY
Mr. Sinclair Stevens (York-Simcoe):: Mr. Speaker, my question is for the Minister of Finance. As it is obvious from the answers he has given today that the die is cast as far as unemployment in this country is concerned, and that the minister and his colleagues have retired into some kind of bunker to see the year out, would the minister indicate what rate of unemployment he sees for the balance of 1978? In short, what does he anticipate unemployment to be in this country this time next year, bearing in mind that in December OECD spelled out very clearly that, notwithstanding the stimulative measures to which the minister referred today, and the October 20 statement, unemployment will likely be higher by the end of 1978 than it is currently? Would the minister indicate whether that is also his impression?
Oral Questions


Joseph Jacques Jean Chrétien: If the people in OECD would look at today's figures, they would see that we have managed to reverse the trend this month.


Sinclair McKnight Stevens: The figures that I referred to in the OECD Economic Outlook of December, 1977, refer very specifically to every stimulative measure announced and referred to by the minister today. In spite of that, they indicate that unemployment will increase markedly, by about 50,000 or, in total, 1,050,000 Canadians will be out of work this time next year, according to the government's own figures. Would the minister indicate whether he denies those figures published by OECD?


Joseph Jacques Jean Chrétien: Mr. Speaker, I have nothing to add to what 1 said in the House: We stimulated the Canadian economy to the tune of $2.5 billion as of January 1 this year. Ours is probably the most expansionary policy at this time of any of the countries in the OECD. I feel quite confident that if we achieve our objective of 5.5 per cent economic growth in 1978, the rate of unemployment will go down in Canada, and I am happy to see that for last January, the adjusted rate went down from 8.5 to 8.3 per cent.


FAILURE OF BUDGET TO CREATE NUMBER OF JOBS ESTIMATED-MINISTER'S REACTION
Sinclair McKnight Stevens: Mr. Speaker, my supplementary question is directed to the Minister of Finance. Bearing in mind that his October 20 statement is simply a rewarmed version of the March 31 budget of his predecessor, and the previous minister of finance stated that 250,000 jobs would be created this year and the government has fallen 20 per cent short of that figure, would the minister indicate why that forecast did not materialize? Why were so few jobs created in 1977 compared to the estimate of his predecessor?


Joseph Jacques Jean Chrétien: Mr. Speaker, in 1977, employment in Canada grew by over 200,000 jobs. We would have liked that figure to be even larger, but I believe that in proportion to the Canadian population, it probably represents the highest growth of any of the OECD countries.


LABOUR CONDITIONS
Mr. Paul Dick (Lanark-Renfrew-Carleton):: Mr. Speaker, my question is directed to the Minister of Employment and Immigration who is responsible for unemployment. In view of the fact that there are now 426,000 unemployed young Canadians, that the unemployment rate for Canada's youth is now 14.9 per cent, seasonally adjusted, but over 16 per cent in
80031-245/2

February 7, 1978
Oral Questions
real terms, and considering that the programs the government announced outside the House last week will provide 3,000 less summer jobs in the government than comparable programs provided last year, what will the minister do to restructure his programs in order to bring them in line with the critical youth unemployment problem?


Hon. Bud Cullen (Minister of Employment and Immigration):: Mr. Speaker, on more than one occasion I have indicated the entire series of programs which is in place, directed specifically to the area of youth unemployment. The student summer program is only one of a series of summer job programs. There is the student summer assistance program, the programs we are operating with the provinces in the co-operative education fields, and the individual students we are placing through our Manpower offices.
With regard to the placing of students, we expect to place approximately 250,000 this year, which is not a bad response to a very, very difficult situation. That is not to indicate there is not concern, but the suggestion seems to be that there is nothing being done, which is just not in accord with the facts.


Paul Wyatt Dick: Mr. Speaker, in view of the fact that in 1973 the government spent $85.4 million to provide 67,000 summer jobs for youth in the government, at a time when the youth unemployment rate was 9.7 per cent, and considering inflation since then, why is the government spending less real money in 1978, and providing less summer jobs for young people now, when the youth unemployment rate has gone up to 14.9 per cent?


Jack Sydney George (Bud) Cullen: Mr. Speaker, 1 would suggest that the hon. member talk to the research bureau of his party and check out those figures.


Mr. Paproski:: They are your figures.


Jack Sydney George (Bud) Cullen: When the hon, member goes down the list of all of the programs which are in fact in place, he will find that those figures are not correct.


Paul Wyatt Dick: Mr. Speaker, last week the minister announced that more than 250,000 young Canadians will be placed in jobs in the private sector this summer through the Canada employment centres for students. Considering the fact that in 1977 those centres made only 135,000 placements in the private sector-some only of a few days' duration-could the minister now tell the House how he expects to place 250,000 young Canadians in summer jobs in the private sector, now that the economy is in a worse position than it was at the same time last year?


Jack Sydney George (Bud) Cullen: Mr. Speaker, in point of fact, those figures were put down after very carefully analysing the people we had in place and the number of jobs we anticipate will be put in place this year. It was specifically spelled out in the press release following the research work we had done. So we are satisfied that figure is correct, in addition to the 60,000 jobs which will be created by the other programs on which the hon. member

neglected to report. They were mentioned also in the press release.


UNEMPLOYMENT-EFFECT ON SMALL INDUSTRIES- GOVERNMENT ACTION TO CORRECT
Jack Marshall: Mr. Speaker, my question is directed to the Minister of Employment and Immigration. The minister is aware of the depressed state of the economy in one-town industries, but the situation is exacerbated when service industries that grow up are also feeling the effects, which further defeats the situation. Can the minister indicate what action he has taken to deal specifically with these smaller industries, before whole areas become so depressed that they are obliterated?


Jack Sydney George (Bud) Cullen: Mr. Speaker, the specific problem to which the hon. member refers is hardly the responsibility of my department alone. I think it covers a whole series of areas where there is, in fact, responsibility. I have indicated that in so far as my department is concerned, we will be providing an emergency response feature, which we have done in several regions across Canada to the benefit of those who were laid off.
We have many programs in place which, in effect, help individuals to become better trained for other jobs. We have mobility grants in place, which help people who are unemployed. My department has a whole series of these kinds of operations in place which are coping with the situation once a lay-off takes place. Of course, we would much prefer to see the reverse occur, that the lay-off not in fact take place, but that is not the sole responsibility of one department of the government at any particular level.


REGIONAL ECONOMIC EXPANSION
Jack Marshall: Mr. Speaker, I should like to direct a question to the Minister of Regional Economic Expansion. Is he aware, as his officials are aware, that across this country there is a spin-off effect on small service industries which are supported by larger industries? Is he doing anything on an individual basis to monitor, reinforce and see what help can be granted to those industries to keep going and provide employment? What action is he taking, in line with his officials in the various provinces?


Hon. Marcel Lessard (Minister of Regional Economic Expansion):: Mr. Speaker, we are aware, of course, of the positive effects that the development and the establishment of some major industries have in various areas and that their impact on service or secondary industries is always significant. What we can do, as the hon. member and most of his colleagues know, is to help the industries to set up, to modern-
February 7, 1978

ize and expand their facilities, but beyond that stage, we could not until recently do more to promote the development of certain sectors. As the hon. member also knows, we are cooperating with the provinces in the development of a number of manufacturing and resource industries throughout the provinces. With regard to the particular province of concern to him, Newfoundland and especially Labrador, I certainly hope that within the next few weeks we shall be in a position to enter into some agreements which, I am sure, will have beneficial effects on the economy of that particular province.


LABOUR CONDITIONS
Mr. F. Oberle (Prince George-Peace River):: Mr. Speaker, my question is directed to the right hon. Prime Minister. It relates to the shocking statistics revealed today with respect to unemployment. The figures show a massive increase for the province of British Columbia, undoubtedly reflecting the rather depressed market conditions which the wood fibre industry faces in world markets. The wood fibre industry in British Columbia represents 58 per cent of the economy of the province and improves our balance of trade position by $7.5 billion. Earlier, the Prime Minister said in the question period that these-


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


Frank Oberle: The Prime Minister is prepared to wait to see the government's policies work through the economy. What specific policy is the Prime Minister waiting for to improve this situation, which will obviously result in thousands of lay-offs in British Columbia over the next few months?


Pierre Elliott Trudeau: Mr. Speaker, if the hon. member refers to the very figures he is quoting from the report on unemployment in January, he will see exactly the contrary to what he is suggesting. Employment has gone up in British Columbia. It has gone up, or at least remained stable, in every province except Quebec, as the Minister of Finance said. Employment has gone up, in terms of its rate of creation, in British Columbia.


THE CANADIAN ECONOMY
Frank Oberle: Mr. Speaker, the Prime Minister chooses to play with figures which are adjusted and not adjusted. My supplementary question is
Oral Questions
directed to the Minister of Finance. It deals with yet another industry. The government has imposed import restrictions on steel in British Columbia, which will result in the lay-off, in the construction and steel industries in B.C., of at least 2,000 workers. The restrictions are not at all designed to save Canadian jobs, but merely to shift them from B.C. to Ontario. Can the minister tell the House whether the construction and steel industries in British Columbia are as satisfied with government policies as he led us to believe everyone else in this country is?


Joseph Jacques Jean Chrétien: Mr. Speaker, this problem is before the cabinet and I have nothing to say about it at this moment.


GOVERNMENT ADMINISTRATION
Mr. Art Lee (Vancouver East):: Mr. Speaker, my question is to the right hon. Prime Minister. However, before putting my question I would like to point put that today is the beginning of the Chinese new year. On behalf of all Canadians of Chinese descent, I wish all hon. members a happy Chinese new year.


Some hon. Members:: Hear, hear!


Arthur John (Art) Lee: As some hon. members have already noted, this is the Year of the Horse.


An hon. Member:: Which end?


Arthur John (Art) Lee: In view of that, I would like to ask the Prime Minister whether he will gallop to victory again some time in this Year of the Horse.


Some hon. Members:: Hear, hear!


Pierre Elliott Trudeau: Mr. Speaker, it is not without significance that the Secretary of State for External Affairs has just returned from China, where he learned a great deal about the techniques of galloping. We in this country, of course, have our own ways of doing it, and I am glad to see that the opposition is champing at the bit.


CANADIAN NATIONAL RAILWAYS
David Orlikow: Mr. Speaker, I would like to direct a question to the Minister of Transport. Yesterday, in Winnipeg, the CPR announced the lay-off of 50 employees in its freight department. Lay-offs are taking place in every region of Canada. In the last 2'h years the two major railways have laid off 10,000 employees. Will the minister discuss with the president of the CNR the whole policy of

February 7, 1978
Oral Questions
profit centres which has led to the tremendous number of lay-offs and to much poorer service for customers of the CNR and residents in small communities from one end of Canada to the other?


Hon. Otto E. Lang (Minister of Transport):: Mr. Speaker, I am always glad to have a discussion about any specific area where service can be improved. I think it is worth noting that improved ways of managing the CNR have resulted in the movement of more freight and passengers. It is true that in the process, 6,000 fewer people are employed, but surely hon. members will commend a more efficient way of operating which will lead to a profit, for a change, for the CNR and will result in more productivity.


David Orlikow: Will the minister consider discussing with the president of the CNR whether efficiency is attained by contracting work out to other companies which do not pay wages arrived at over generations of negotiating, but which pay as little as possible, and which provide the poor service now being provided to many small cities, towns and hamlets in Canada? Is there not a better way of operating, without taking it out of the hides of the people of Canada?


Otto Emil Lang: Mr. Speaker, I think that is too general a question, but if the hon. member has a specific item about which he would like me to receive some information, I would be glad to take it under advisement.


REGIONAL ECONOMIC EXPANSION
Mr. J. M. Forrestall (Dartmouth-Halifax East):: Mr. Speaker, I have a question for the Minister of Regional Economic Expansion. In light of the very depressing figures which have been in front of us for, I think, about 17 months in a row, will the minister have the Prime Minister put before the first ministers next week a program which would have the effect of turning around DREE programs in regions of disparity? I refer particularly to the 75 per cent or 80 per cent leakage back into the central economy of moneys pumped into areas such as the Atlantic provinces, where that money has created only temporary jobs and has done absolutely nothing, particularly in the infrastructure area, to create permanent jobs since the DREE program was established several years ago.


Marcel Lessard: Mr. Speaker, at the outset, I must disagree completely with the hon. member's statement to the effect that DREE programs had no effect whatsoever in the Atlantic area. I should like to refer to his own province, Nova Scotia, where, as he knows very well, industries have been set up in the past seven years thanks to DREE financing. He should recognize that fact himself like most if not all Atlantic

premiers who fully endorse the DREE programs. I rest assured that during the conference of first ministers to be held next week here in Ottawa, federal support to regional development will be discussed, especially with regard to the Atlantic area. I am sure that the Prime Minister and myself will have the opportunity to discuss this particular matter.


Mr. Speaker:: One supplementary question; the hon. member for Dartmouth-Halifax East.


J. Michael Forrestall: Mr. Speaker, I will have one supplementary question, and perhaps another, depending on whether the minister is calling me a liar.


Some hon. Members:: Oh, oh!


J. Michael Forrestall: I accept the minister's word if he says I am wrong in my information, it being primarily that money pumped into the Atlantic economy has come back into the central Canadian economy at a rate varying between 60 per cent and 80 per cent, depending on whether there was an infrastructure program or an industrial development incentive program. If that information is wrong, the minister will have to demonstrate it or withdraw his comment to me.
My question is straightforward and simple. Does the minister, together with the Prime Minister, have a proposal to put before the first ministers next week which will have the effect of reversing this trend and creating permanent jobs, and not temporary jobs digging ditches?


Marcel Lessard: Mr. Speaker, the hon. member is asking me to rectify my statement when he says that DREE programs have had no positive effect and created no permanent jobs in the Atlantic region. I reject that statement. As for the fact that a certain portion of the department's expenditures in that region through shared cost programs with the provinces or with industry may eventually leak back into the economy of central Canada or other provinces, that is quite right indeed, because provinces do benefit from the production of other provinces, but this works both ways. As for specific programs that, together with the Prime Minister, I may put before the first ministers next week, I am afraid the hon. member will have to wait for the report on that conference and judge for himself.


LABOUR CONDITIONS
John Carnell Crosbie: Mr. Speaker, I have a question for the Prime Minister. In view of the fact that there are 32,000 unemployed in Newfoundland today, 1,000 more than last month, many of them in the construction industry, has the government of Canada reached an agreement with the government of Newfoundland on the development of
February 7, 1978

the Gull Island hydro project in Labrador, which would create several thousand construction jobs; and are they close to signing an agreement so that that development can go ahead? If there is no agreement yet, has the government of Canada made a new proposal to the government of Newfoundland and, if so, what is the federal government prepared to do; what assistance is it prepared to give to that project?


Pierre Elliott Trudeau: Mr. Speaker, I discussed that very matter two weeks ago with Premier Moores and discussions were continued by the Minister of Energy, Mines and Resources and the Secretary of State for External Affairs. This government is convinced it will be able to reach an agreement with Newfoundland. However, both parties to it must make certain preparations before anything can be finalized.


John Carnell Crosbie: Mr. Speaker, the premier of Newfoundland says that an agreement is close to being reached. I should like the Prime Minister to comment on that.
Also, eight months ago the Premier of Newfoundland put before this government a proposal for a three-year job creation project to cut the wood from the sides of the reservoir at the Gull Island development. This would employ 400 loggers for three years, at a cost of some $4 million. It would be self-sustaining and would be of permanent benefit. The work has been ordered by the environmental authorities. Is the Prime Minister going to approve that project which will put back to work the 400 loggers laid off by the closing of the Labrador linerboard mill?


Pierre Elliott Trudeau: Mr. Speaker, on the first point, I agree with the statement of the premier as quoted by the hon. member. It seems to me that my first answer indicated the very same thing. On the second question, cabinet dealt with this matter as recently as last week and I expect an announcement to be made soon.


REGIONAL ECONOMIC EXPANSION
Mr. W. C. Scott (Victoria-Haliburton):: Mr. Speaker, I should like to ask the Minister of Regional Economic Expansion if the government has any plans to either disband the DREE program or to transfer its functions to another ministry.


Marcel Lessard: No, we have no such plan, Mr. Speaker.


William C. Scott: A supplementary question, Mr. Speaker. Keeping in mind that some areas of the country have enjoyed a special relationship with DREE because they are classed as areas of high unemployment, will the minister say whether the government would be prepared to extend the operations of
Oral Questions
DREE into other areas of high unemployment, especially north-central Ontario?


Marcel Lessard: Mr. Speaker, the DREE programs apply also to northern Ontario. It can be said that 80 per cent of the Ontario territory is covered by some DREE programs, by way of grants to corporations or otherwise. The DREE programs apply to southern and eastern Ontario as well. These programs have been and continue being applied there.


PENITENTIARIES
Mr. Benno Friesen (Surrey-White Rock):: Mr. Speaker, my question is directed to the Solicitor General. The recent hostage-taking at the B.C. penitentiary involved five prisoners known to be extremely dangerous, one of whom was the leader in the events of June, 1975, and is described as one of Canada's most dangerous men. Can the Solicitor General give the House any indication why the administration at B.C. penitentiary allowed these five men into the visitors' area at the same time?


Hon.   J.-J. Blais@Solicitor General: Mr. Speaker, first of all I should like to thank the hon. member for bringing these events to the attention of the House and, indeed, the solution of that particular problem. I should like to commend all parties who participated, including the Canadian Penitentiary Service and the RCMP who assisted in the resolution of the difficulty. Again I commend my predecessor who was instrumental in bringing in the "no deal" policy, which in my view was highly responsible for the eventual solution of the problem.
To answer the hon. member's specific question, Mr. Speaker, I announced in my release on Saturday that there will be a formal inquiry. Surely the information the hon. member seeks will be made available as a result of that inquiry.


Benno Friesen: A supplementary question, Mr. Speaker. According to information I have received, the assistant director of socialization, a former psychiatric nurse, was advanced from a WP3 position to a WP5 position in 18 months, and the head of social development, without previous penitentiary experience, moved from a WPI to a WP4 position in one year. Could the Solicitor General give a commitment to the House that the parliamentary subcommittee which worked so successfully last year will be reconstituted to look into this matter, as it was a very non-partisan group and it could zero in on this specific problem regarding administration and the policy of promotion and advancement in the penitentiary service?


Mr. Blais:: Mr. Speaker, without accepting the allegations of the hon. member, I am not ready to reconstitute the subcom-

February 7, 1978
Oral Questions
mittee of the Standing Committee on Justice and Legal Affairs.


EXTERNAL AFFAIRS
Mr. Robert Muir (Cape Breton-The Sydneys):: Mr. Speaker, my question is directed to the Secretary of State for External Affairs. In view of the continuing high unemployment rate on Cape Breton Island, and in view of the fact that the Sydney Steel Corporation has been able to get into foreign markets in the past, including Korea and Asia, can the minister advise the House what potential there may be to sell rails, railway cars and locomotives to China as a result of the discussions he and Canadian businessmen had recently with the foreign trade minister in Peking?


Hon. Donald C. Jamieson (Secretary of State for External Affairs):: Mr. Speaker, 1 think the hon. member, having been a very valuable member of the delegation, will know that there was considerable interest expressed in both rolling stock and other forms of railway equipment in China. There is a good prospect there, and we will continue to follow it up. 1 should add, of course, that there are a number of prospects, as well, through CIDA payments to various countries and one or two of these have already materialized for rail cars to be produced in Nova Scotia. I hope that others will come through for rails as well as cars.


RAILWAYS
Hon. Alvin Hamilton (Qu'Appelle-Moose Mountain):: Mr. Speaker, my question is for the Minister of Transport. It concerns the monitoring committee dealing with rights-of-way of railway lines abandoned on the prairies. Has the minister obtained from the law officers of the Crown a definite statement about the legal ownership of these abandoned railway lines when the railways cease operating them?


Otto Emil Lang: Mr. Speaker, 1 think there is no doubt about the position in relation to those lines: they are the property of the two railways. In both cases, however, they have agreed to give the land to us, and we are setting up the necessary machinery to put the land into the hands of the appropriate owner, which most often is the farmer through whose land the right-of-way passes. It is our intention to give the benefit of the land, whether it remains in the hands of the farmer, the municipality or occasionally the province, to the municipality in question so that they will be compensated for the loss of the rights-of-way and service.


Francis Alvin George Hamilton: Mr. Speaker, am I correct in deducting from the answer of the minister that
[Mr. Blais.)
there has not been a statement from the law officers of the Crown?


Otto Emil Lang: No, Mr. Speaker, that is not correct. I think there have been, in fact, based on rather secondary questions rather than the principal one the hon. member asked, because so far as I know no one has any doubt about that.


EXTERNAL AFFAIRS
Mr. Lloyd R. Crouse (South Shore):: Mr. Speaker, I wish to direct a question to the Secretary of State for External Affairs. Before doing so, however, may I join in welcoming him back safely from his recent trip to China.


Some hon. Members:: Hear, hear!


Lloyd Roseville Crouse: When the minister released the text of the joint report of the chief negotiators on the Canada-United States maritime boundaries dispute, he indicated that fish stocks off our two coasts would be divided into three management categories, and that each country would be entitled to one-half the oil and gas production from the shared access zones covering hydrocarbon resources.
Would the minister indicate on which issue the negotiations have bogged down? Is it on the sharing of fisheries' resources, the sharing of hydrocarbon resources, or on the proposal with regard to the boundaries? Since the question of offshore hydrocarbon resources in Canada is a matter of direct interest to the provinces of Atlantic Canada, did the federal government consult the provinces during this phase of the negotiations?


Donald Campbell Jamieson: Mr. Speaker, I think the hon. member will appreciate that it is not possible to be very specific, nor would it be wise to indicate the areas which remain unresolved. I can tell him, however, that there is some question remaining unsettled with regard to various matters of allocation of fish stocks. There are some hydrocarbon issues which remain unresolved, and there is the question of the actual drawing of the boundary. None of this has been firmly put in place, but the whole negotiating process is continuing and I would, therefore, prefer not to go beyond these general comments.
I can tell the hon. member, as well, that the provinces on the east and west coasts have been thoroughly involved in the negotiating process, and certainly up until the last round they or their representatives were present either in Washington or Ottawa, depending on where the talks between the negotiators were taking place. I would not want to leave the impression that 1 am pessimistic. I believe the mere fact that we extended the mandates of the two negotiators for a short period indicates that they are moving toward what I hope will be a satisfactory solution for both sides.
February 7, 1978


FINANCE
Mr. Cyril Symes (Sault Ste. Marie):: Mr. Speaker, my question is for the Minister of Finance. In view of the fact that the Canadian steel industry and the jobs of 40,000 steelworkers may be threatened by the American trigger price system affecting steel exports to the U.S. because Canadian steel prices are lower than American prices, due to efficiency rather than dumping, and in view of representations made by my leader, as well as the president of Algoma Steel, to the minister, can the minister assure us that he has sought and gained assurance from the U.S. government that Canadian steel will not be unduly hampered or delayed from entry into the United States because of the trigger price system?


Joseph Jacques Jean Chrétien: Mr. Speaker, we have taken steps with the U.S. government concerning this, but we have been unable to obtain any results as yet. As soon as I receive a definite answer, I shall gladly convey it to the House.


Reginald Cyril Symes: My supplementary question is to the minister. Since the U.S. trigger price system will divert foreign steel from the United States, and thereby pose a threat of dumping this steel on the Canadian market, will the minister implement a trigger or reference price system similar to the American and European models in order to safeguard the Canadian steel industry and Canadian jobs?


Joseph Jacques Jean Chrétien: Mr. Speaker, we are looking into this suggestion at this time. I will probably report on that aspect of the problem at the same time as I report on the other part of the problem, as 1 have already mentioned.
*
* *


PRIVILEGE
Mr. Speaker:: Order, please. Yesterday at the conclusion of the question period, the hon. member for the Yukon (Mr. Nielsen) raised by way of a question of privilege a reference which had been made in yesterday's question period by the Prime Minister (Mr. Trudeau) to some proceedings before an in camera meeting of the Justice and Legal Affairs Committee.
I have examined the precedents, one of which I might refer to the hon. member for Yukon. It is reported at page 781 of Journals for Tuesday, June 21, 1955. That particular ruling had to do with the difference between a secret or confidential meeting and a meeting in camera. I do not rely on this precedent too heavily. However, there is a distinction drawn, and I think that a much more elaborate argument would have
Petitions
to be made in order to establish the kind of confidentiality referred to in the argument yesterday.
Secondly, in examining the remarks of the right hon. Prime Minister yesterday, he seemed to indicate to the House, in answer to a question, that it was his information that this subject had been discussed by the meeting, which was evidently an in camera meeting. It does not appear to be at all clear whether that in any way will be an infraction of the confidentiality of the in camera meeting, if in fact that was part of an in camera meeting. To refer to the subject matter discussed does not, it seems to me, betray a confidence as to what in fact was said or what was done in the meeting.
I think it is well known that often in camera meetings are held where the subject matter of a meeting is published; it forms part of the notice of the meeting. And therefore simply to make reference to what was discussed would seem to me to fall short of betraying the confidentiality of an in camera meeting. In the final analysis, although the hon. member serves the House well by bringing this matter to the attention of the House, his application was not accompanied by a motion, so in any event there is no action that the Chair can take. Therefore I would set aside the question of privilege.



ROUTINE PROCEEDINGS


Hon.   J.-J. Blais@Solicitor General: for leave to introduce Bill C-26, to amend the Criminal Code, the Crown Liability Act and the Post Office Act.


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


Mr. Knowles (Winnipeg North Centre):: Never!


Mr. Speaker:: Next sitting of the House?


Some hon. Members:: Agreed.


Mr. Speaker:: Agreed, and so ordered.


PETITIONS
Benno Friesen: Mr. Speaker, I have the honour to present a petition gathered together by an organization known as B.C. Citizens for Integrity. It is a

February 7, 1978
Order Paper Questions
petition asking the government to restrict the publication of pornography, and reads in part:
In particular that the revision of law:
(a)	Prohibit hard core pornography, depicting and/or describing deviant sexual and violent behaviour;
(b)	Prohibit the advocacy and/or the providing of material for the use of illegal drugs,
(c)	Prohibit the public advocacy and/or public assertion of homosexual behaviour,
(d)	Prohibit promotion of sadistic violence and advocacy of genocide in all media, and
(e)	That all other related material be prohibited for use, display, exchange or purchase to all minors.
Mr. Speaker, there are 18,275 names signed to the petition, gathered together by the people of Vancouver and the lower Fraser Valley.

[ Translation]


QUESTIONS ON THE ORDER PAPER
[Stage Direction]
(Questions answered orally are indicated by an asterisk.)
Mr. Yvon Pinard (Parliamentary Secretary to President of the Privy Council):: Mr. Speaker, the following questions will be answered today: Nos. 813, 818, 945, 948, 949, 955 and 1,125.
I ask, Mr. Speaker, that the remaining questions be allowed to stand.


Mr. Howie: Since January 1, 1977, what was the total amount committed by the government to Katimavik?


Hon. Barney Danson (Minister of National Defence):: 


Mr. Howie: Does the Department of National Defence have any plans to replace or supplement its naval vessels and, if so, how many will be replaced or added in the next two years?


Barnett Jerome Danson: The
only naval vessel scheduled for commissioning within the next two years is a Fleet Diving Support Ship which will replace the diving tender (YMT-2). The ship replacement programme for the future was announced by the minister on December 22, 1977.


Mr. Howie: Since November 1, 1977, was a directive circulated or posted at the Fredericton, New Brunswick offices of the Department of Employment and Immigration relating to future staff bilingual requirements?


Jack Sydney George (Bud) Cullen: No.


Mr. Howie: Since January 1, 1977, did a change take place with respect to bilingual requirements for employees at the Fredericton, New Brunswick office of the Unemployment Insurance Commission?


Jack Sydney George (Bud) Cullen: No.


Mr. Howie: Since January 1, 1977, did a change take place with respect to bilingual requirements for employees at the Fredericton, New Brunswick offices of the Department of Employment and Immigration?


Jack Sydney George (Bud) Cullen: No.


Mr. Howie: Since November 1, 1977, was a directive circulated or posted at the Fredericton, New Brunswick offices of the Unemployment Insurance Commission relating to future staff bilingual requirements?


Jack Sydney George (Bud) Cullen: No.


Mr. Rodriguez: For each fiscal year since 1970, what amount was spent in the Constituency of Nickel Belt by the Department of Supply and Services and those agencies that report to it?


Hon. Jean-Pierre Goyer (Minister of Supply and Services):: The department maintains records by cities and provincial boundaries and not by constituency boundaries.



GOVERNMENT ORDERS


[Stage Direction]
The House resumed, from Monday, February 6, consideration of the motion of Mr. LeBlanc (Westmorland-Kent) that Bill C-2, respecting the administration and development of certain fishing and recreational harbours in Canada, be read the third time and do pass.

February 7, 1978
Jack Marshall: Mr. Speaker, last night when I was interrupted at ten o'clock I was endeavouring to address myself to the bill in an effort to explain to the minister that if indeed we are going to pass this bill and levy fees on those fishermen who use harbour facilities, we should remember our priorities.
I would like to point out that before we approach fishermen on the subject of their paying fees so that they may tie up at harbours, we should have the proper harbour facilities. I would also like to mention the lack of co-ordination of effort between the various agencies which are trying to direct their attention to the provision of small craft harbours. Under the Canada Works Program many small craft harbours have been provided with help and the supplementation of funding by the small craft harbours division of the Department of Fisheries. Unfortunately, because of the lack of sufficient funding the proper harbours cannot be provided. And instead of getting proper engineering and design to put a harbour in place, whether it be a breakwater or a small craft harbour or wharf, it becomes impossible to put a small craft harbour in place as it should be for the benefit of the fisherman and for the benefit of the country.
Last week I made a quick tour through my district to witness and assess the storm damage which has actually obliterated many wharves and breakwaters, with damage reaching millions of dollars. Now they will have to be replaced and more millions of dollars spent. I am sure the minister's officials who are faced with that problem will be able to advise him on the difficulties of providing a reasonable wharf or harbour when funds are limited.
Last week I attended a meeting of another agency, the community employment strategy agency. They have a bit of funding to provide toward creating employment. As everyone in Newfoundland knows, the provision of employment will best be done by the creation, improvement, and expansion of our small craft harbours development policy. It is frustrating when the funding to provide proper facilities is limited. Millions of dollars are being wasted because the wharves float away as a result of storm damage. This is because they are not properly built.
Another problem to which the minister should address himself with regard to the small craft harbours on which a fee will be levied is the lack of capability, and the complete inefficiency of our dredging and icebreaking forces. During this season the fishermen cannot get out into the water. They cannot get their boats through the ice because of the inefficiency of our icebreaking services.
Another problem is the deployment of icebreaking services which are now in existence. Most icebreakers are deployed 300, 400 or 500 miles from the ice. Icebreakers are presently in Halifax, Nova Scotia, and in Quebec. If the minister would just look at a map, he would find it would be better if they were centrally located on the west coast of Newfoundland where there is a perennial ice problem.
Fishing and Recreational Harbours
A new icebreaker, the Franklin, will soon be coming into service. It will be deployed to the province of Newfoundland in order to try to overcome the present inefficiency. Not only will it provide a service which is needed, permitting the fishermen to get out into the water in order to get the fish, but it will provide 70 or 80 jobs that are badly needed in Newfoundland.
Last year we had a perfect example of dredging inefficiency and lack of capability. The fishermen had been promised dredging services for months and months. When the dredge finally arrived, it could not do the work. In some locations it ruined almost a complete season for the fishermen. Both the officials and myself have asked that a new type dredge be provided.
I hope the minister will give priority to protecting, supporting, and reinforcing the present facilities rather than trying to work the reverse through bills such as the one before us, which only creates hostility among the fishermen because they do not have the service required to take advantage of the stocks.
Another matter of importance is that the fishermen will be reluctant to pay fees. In order to build up our stocks, quotas have been placed on the fish over the past few years. There have been restrictions with regard to those who could get a licence to fish, whatever species. This is another detriment, charging the fishermen fees to use harbours which we do not have. I hope, with the various programs that are to come about, that this deficiency will be overcome.
The minister apologized to me for not being here because he is committed elsewhere. However, there is another matter I want to bring to his attention. Under the Canada Works Program there is no definition as to who owns a wharf. There are no criteria which state who has responsibility for a wharf after it has been built. In committee meetings, the minister and his staff indicated they would be responsible, but there is nothing to say whether it is owned by a municipality, town or group of fishermen. This must be clarified. I hope the law officers will look at that situation as it is causing a disruption and disadvantage to the fishermen.
The minister stated that under the bill wharfingers, harbour masters, or whatever you want to call them, will be hired. They will be responsible for a 50-mile radius. They must ensure that proper warning is given if damage should occur to a wharf. As stated in committee, this is building up another bureaucracy. I make this point because we have a situation which is contradictory.
With regard to protecting our rivers from poaching, there has always been a restriction by Treasury Board on funds to hire guardians for a long enough period to provide the protection that is needed. In every case we were told there were not enough funds. As I have pointed out a number of times, the guardians are hired on a 12 week basis, even though the season lasts three months. The Minister of Fisheries and the Environment (Mr. LeBlanc) cannot get the funds, but the Minister of Employment and Immigration (Mr. Cullen) has enough funds to pay those same people two thirds of their salary for nine months of the year. Here is an opportunity to do a double job.

February 7, 1978
Fishing and Recreational Harbours
Ministers are always looking for ideas. The river guardians know the small craft harbours in their area. If they were hired as guardian wharfingers, they could serve a dual purpose. They would provide a benefit to the fishermen and be cost effective. The guardians and wardens should be hired on a year round basis to carry out this double job. The minister mentioned at committee that this might be a good idea.
I wrote to the minister with regard to the vital necessity of increasing surveillance and control over the rivers which are being poached to the detriment of the legitimate angler. In some cases it resulted in the season being closed, and others the season was restricted. A part of our society was destroyed.
I hope the minister will give serious consideration to the excellent points made by the hon. member for South Shore (Mr. Crouse) and others of my colleagues who are interested in this bill and in the changes that are taking place. However, we must ensure that it is done in a cost effective way for the benefit of the fishermen and the economy as well as providing good development policies for the benefit of the country.


Mr. Alexandre Cyr (Gasp6):: Mr. Speaker, 1 am quite pleased to take part in the consideration of Bill C-2 on third reading. Obviously, it is quite a controversial issue and on several occasions I intervened during the study of the bill in committee to echo some comments made to me by fishermen and fishery workers of the Gaspe Peninsula. More particularly on November 10, 1977 when the bill was considered in committee, I put a question to the director of the Small Craft Harbours Branch and to the legal advisers about the responsibility of Quebec in that matter. My question which appears on page 126 reads as follows:
Does Bill C-2 conform to the agreement or to the spirit of the agreement signed in 1922 between the federal government and Quebec assuring the transfer of certain responsibilities in the area of commercial fishing to the province of Quebec?
Mr. Reid replied, and I quote:
Mr. Chairman, the responsibility for fishing harbours, and their construction and maintenance, was not part of the agreement in 1922. The responsibility for fishing harbours, their maintenance, their control, their administration, their repairs, remains exclusively the responsibility of the federal government- commercial fishing harbours.
So, Mr. Speaker, it is pursuant to the terms of the British North America Act that the federal government has jurisdiction over the construction, maintenance and repair of commercial fishing harbours in the province of Quebec as in every other province in Canada. This bill, now before the House for third reading, will clear up the use of fishing ports because, at times, commercial fishermen find it difficult to moor their boats, pleasure crafts crowding most of the facilities.
Nowadays fishing boats are becoming larger and larger and extremely well equipped. We should set well protected facilities and we require increasingly higher credits for building wharves, breakwaters and harbours. Who should pay for these facilities and these works? Mr. Speaker, the federal government did its large share and will continue to do so in the

future, and the bill provides for the imposition of berthing fees for boat owners who will have to use these facilities. Several people will say, and several hon. members repeated this here in the House, that this is a new financial burden which we impose on fishermen both in Quebec and in the other provinces.
But I must say, Mr. Speaker, that Quebec fishermen do not pay any berthing fees at the moment although most commercial fishermen do in other provinces. So this new legislation will put the province of Quebec on an equal footing with the other provinces of Canada. To eliminate the discrimination that has been going on for some time and to get a modest revenue for the administration of fishing harbours, this bill provides for the implementation of limited, easy to apply regulations taking into account regional disparities. So fishermen in the Gaspe area will be paying a lower berthing fee than commercial fishermen in British Columbia.
Mr. Speaker, having said that, I would like to take a few minutes of the time of the House to review briefly the distribution of budgetary allocations and the needs of the Gaspe area with respect to fishing harbours as well as for the rest of the province of Quebec, particularly on the shoreline of the Gulf of St. Lawrence and the river. According to my estimates, the province of Quebec received a very low portion of the budget revenues for the construction of fishing harbours prior to the 1970s-and I did say prior to the 1970s. It was impossible to determine the amount of supplies used for fishing harbours and the budget was administrated by the Department of Public Works and included fishing harbours as well as commercial wharves. It was only in 1972 that the government established two administrative levels: one for commercial wharves and the other for fishing and small craft harbours. The Department of the Environment is responsible for the administration of fishing and recreational harbours.
Let us review for a moment the amounts received by the province out of the budget for small craft harbours since 1973: $899,500 for fiscal year 1973-74 or 4 per cent of the national budget. In 1974-75, $4,361,800 or 14 per cent of the national budget. In 1975-76, $10,205,600 or 35 per cent of the national budget. In 1976-77, $5,754,000 or 20 per cent of the budget; 1977-78, $4,800,000 or 6 per cent of the national budget for small craft harbours. Mr. Speaker, it is after a long battle with the former minister of fisheries and environment, the Hon. Jack Davis, which battle was led jointly by hon. members from Gaspe, Bonaventure and the Magdalen Islands-


Mr. LeBlanc (Westmorland-Kent):: -also from New Brunswick.


Alexandre Cyr: -Yes, from New Brunswick also, as the minister just mentioned. I was saying that we fought this battle to obtain a special fund of $10 million to meet the commitments made in 1968 by the federal government and the Quebec government under the eastern Quebec economic development agreement to provide the Gaspe Peninsula and the Magdalen Islands with adequate fishing harbours and wharves.
The Hon. Jack Davis, like many department officials, did not know much about the needs of the province of Quebec.
February 7, 1978

This is why I said that the battle was difficult, and I would like to thank all hon. members from eastern Quebec and the caucus who helped us throughout these years to support the rights of all Canadians, whether they live in Quebec or British Columbia.
Is not the reason for us being here, Mr. Speaker, that we may defend the rights of our constituents? We have a responsibility, as any member of the legislative assembly in Ontario, in Quebec or in New Brunswick. Every member who received a mandate from his constituents has a responsibility to defend their interests both here in Ottawa and in Quebec and this is why we, as members from Quebec, have been doing so here over the years, with the co-operation of ministers from Quebec who represent us here in Ottawa.
Mr. Speaker, the fishing centre development program provided for in the 1968 agreement has been a great success. Considering the delay experienced from 1968 to 1974 in the voting of funds, a 6-year delay, projects require more funds, the designs of various structures have to be reduced to comply with estimates, other projects were undertaken through stages and are not yet completed. As an illustration, we have the unloading harbour in Cloridorme. Mr. Speaker, my concern and that of my Quebec colleagues on the fisheries and forest committee are that the province of Quebec might not get its due share of estimates in the coming years for the improvement of small craft harbours. If the criteria for distributing national budgets for small craft harbours are maintained, I can see that Quebec will get just about 5 or 6 per cent of budgetary funding. As I said, the criteria were established around 1973 by the Hon. Jack Davis. Since the catch or the value of landings in Quebec is now smaller than in other provinces, our share of the budgets are much smaller than our needs. With such criteria, Mr. Speaker, havenot areas and provinces will always remain poor, and provinces where the value of landings is greater will progress at the expense of other Canadian areas. How can our fishing fleet in the Gaspe Peninsula increase, how can it have larger boats to get to the Atlantic coast when fishing harbours or industrial centres are not provided with good wharves?
Mr. Speaker, I would remind this House of a statement made by the Minister of Fisheries and Environment (Mr. LeBlanc) on January 31, 1978. Let it be said in passing that the minister, an Acadian like myself, has taken to heart the development of fisheries in eastern Quebec as much as in the Pacific. Thanks to successful negotiations with various countries at the Law of the Sea conferences in New York, Caracas and-Geneva and I see here my friend the hon. member for Prince Edward Island, we were in Geneva together, and although he is sitting on the other side of the House he has nothing but commendation for our minister from New Brunswick for the way he defended Canada's interests at the Law of the Sea conference in Geneva. Certainly the minister must be commended for all he did for eastern Quebec, for the protection and encouragement of fishermen to remain in their trade, because things were not easy some years ago when fish was
Fishing and Recreational Harbours
declining and plants were operating a few months only every year.
Mr. Speaker, I thank the minister for all he has done for fisheries in eastern Canada, particularly in Quebec. I refer to the statement he made in this House last January 31, and I quote:
It must be remembered that in 1973 the department inherited over 2,000 harbours and wharves, very large numbers of which were in dire need of repairs as a result of neglect in the past. Because of this, our programs have focused on making good this backlog of repairs and providing for only the most urgent of harbour expansions. It is only now that we are in a position to change the main thrust of our programs from repairs to that of improving, expanding and up-dating our harbours, and providing the better services needed by fishermen such as lighting, haulouts and proper work areas.
In 1973 we initiated a series of major studies to evaluate the existing fishing and recreational harbours owned by the federal government and to suggest a rationale for their development in the future. These studies were completed in 1975 and provide the basis for our ongoing plans-
Further on the minister said:
For example, expenditures in Quebec peaked during 1975-1976 and 1976-77 due to the special St. Lawrence fishing harbour development program, and have now been reduced to more modest levels.
Mr. Speaker, it is the expression "more modest" that I would like to comment on in the next few minutes. The province of Quebec has the longest shoreline in Canada. So we ask that for the coming years the government continue to set aside 15 per cent of the regular department budget to allow the province to build more recreational and fishing harbours along the St. Lawrence and in the Gulf of St. Lawrence. In 1974, the province of Quebec got 14 per cent of the national budget for small craft harbours. This distribution seems perfectly logical. However the minister expects a reduction of expenses to a more modest level compared to 1975, 1976 and 1977, but we do not accept these cuts. They should not be lower than 15 per cent as it was for fiscal year 1974-75. We shall not accept that our percentage of the budget be reduced to 6 per cent only.
Mr. Speaker, as I said on several occasions, several structures show an urgent need for repairs and I am thinking of those located in the communities of L'Anse-a-Valleau, St-Joa-chim de Tourelles, Ste-Anne-des-Monts, Ste-Therese-de-Gaspe and L'Anse-a-Brillant and so on. The works undertaken in the fishing centres and unloading harbours of Cloridorme, Newport, Grande-Riviere and Riviere-aux-Renards should also be completed. I remain very optimistic about the future of fishing activities in the Gaspe Peninsula on account of the newly adopted 200-mile limit as well as the fishing regulations imposed for certain species a few years ago by the minister. But since we have a very high rate of unemployment in the Gaspe Peninsula and that many young people would like to take over the job of their fathers and ancestors as fishermen, we want to give the Gaspe Peninsula and eastern Quebec adequate and fully equipped facilities to accommodate these new fishermen.
I know that the minister is quite aware of the needs of the Gaspe Peninsula and I trust his goodwill and co-operation in that respect so that the province of Quebec may get its fair share of the estimates adopted for the forthcoming years.

February 7, 1978
Fishing and Recreational Harbours
When I say "fair share" I mean about 15 per cent. I would like to close my remarks by asking my colleagues in this House to vote in favour of Bill C-2 so that we way give the minister and his officials working tools for the administration and the good management of our fishing and recreational harbours.
[DOT]	0532)


Mr. David MacDonald (Egmont):: Mr. Speaker, it is not my intention to detain the House to any great degree on third reading of this bill. I think the position of our party has already been clearly stated by the hon. member for South Shore (Mr. Crouse) with regard to this particular initiative. However, I should like to add a word with respect to the Prince Edward Island fisheries situation because I know the minister has had considerable contact with the fisheries people there, not only with the provincial minister of fisheries but with fisheries organizations in that province.
Although he has not been minister of that department since 1969, the minister is well aware of the fact that since that time the organization and planning of fisheries in P.E.I. has generally been included under the umbrella of the P.E.I. comprehensive development plan. I think it is worth while for all hon. members to reflect on what has happened during that time, a period of some eight years. I say it is important because I think we should learn some lessons from what has happened as a result of the 1969 plan.
Hon. members may recall that the attempt, through the joint plan signed by the Government of Canada and the government of P.E.I., provided an over-all comprehensive planning framework for the various economic sectors in the province. These included sectors such as agriculture, fisheries, tourism, light manufacturing, service, etc. With respect to the fishing sector, and I am here quoting from the plan itself, "the essential strategy must therefore be to assist those fishermen who wish to move to other occupations". That was a kind of fisheries abandonment program. Unfortunately, far too much time and attention have been devoted to this kind of rationalization or, perhaps more accurately, this kind of winding down of the fisheries sector in P.E.I.
I suppose that, from the standpoint of some kind of objective logic, one could accept the initiatives that were being taken at the federal and provincial levels. They looked at the number of fishermen involved in the fisheries industry, they looked at the gross intake of either fish products or income, and they divided one into the other and said it was not possible for a fisherman to sustain himself or his family at that income level. The obvious answer, on a kind of mathematical basis, was to reduce the number of people involved in the fishing industry, assuming the fish stock remained constant.
[DOT]	0542)
Perhaps that makes mathematical sense, but that kind of logic could not be applied for a number of very important reasons. One reason is the very nature of the fishing occupation in Prince Edward Island. It is not a trade situation in
which people are regarded as another element in the production factor. Fisheries has been a way of life. As such, that industry was not isolated as if it had no relationship to other forms of activity.
The Minister of Fisheries and the Environment (Mr. LeBlanc) and I share a similar fishing district, district No. 8. Thus I do not have to say the following to him. The situation for many years was one where individual fishermen could fish only for certain periods of the year. That was by reason of the regulation itself. Traditionally our most productive industry had been lobster fishing. Therefore, fishermen had to discover other forms of endeavour or employment. This meant that many fishermen looked upon fishing as a primary way of life and looked upon other forms of activity to support that way of life.
The kinds of activities engaged in by fishermen are too numerous to mention. One could talk about the people who fished and farmed, a stereotype example. On the eastern end of the island, relatives of mine have very naturally combined these two occupations for generations. There was a nice ordering of the seasons, in terms of the preparing of traps, planting, fishing and harvesting. It all fitted into a pattern which made a lot of sense in Prince Edward Island.
Recently fishermen who were not involved in farming turned to other forms of second employment activity. Some turned to the service sector; some were individual entrepreneurs. The list is quite long and extensive. As the approach to the regulation of the fishing industry has become more precision like, if a fisherman did not fall into the precise definition of that category, then he was no longer considered a valid or bona fide fisherman. Quite frankly, the approach taken by the officials in the federal Department of Fisheries and the Environment has concerned me. I see the Minister of Fisheries and the Environment is shaking his head as he reflects on this. I realize he has had similar experiences. I hope I am shoring up the minister's own basic instinct to identify with the way of life in New Brunswick and Prince Edward Island, rather than that which perhaps is more directly related to commercial operations on factory ships, or in a situation where it is possible to have year round employment and income from a direct involvement in that industry. However, that has not been the case for a very long period of time in Prince Edward Island and New Brunswick.
In attempting to maintain an adequate lobster industry in order to supply sufficient income for those engaged in it, we have been required to point out that there is a limited supply of lobster and a limited return from that industry. Also we have indicated, if we are to make the return sufficient for the capital investment and for the employment activity of the fishermen, that we will have to reduce their numbers.
During the last year there was a specific program entered into with the province of Prince Edward Island, as well as others. It was a buy back program which would reduce the number of people engaged in the lobster industry. I was impressed by the fact that few people seriously objected to implementation of this program, because it has restricted
[Mr. Cyr.J
February 7, 1978

greatly the flexibility which has been part and parcel of the lives of Prince Edward Island fishermen, as well as others. This is not to say that particular individuals have not been affected seriously. 1 have raised various cases with the minister. Because of the rules, regulations, and the agreement entered into, it has been difficult for some fishermen to fall within the ambit of this particular definition or regime.
Implicit in the legislation before the House today is the suggestion that increasingly there will be determinations concerning the regulation of fisheries; determinations in terms of the tax or imposition of fees which will be imposed upon fishermen using harbours; determinations as to who these harbours will be leased to; and determinations as to the use and abandonment of harbours by the federal government, which will have major implications in terms of their upkeep and serviceability. I am extremely wary, which perhaps is a mild description.
At the time the development plan was signed in 1969, it called for a reduction of fishing ports in Prince Edward Island from 80 to 14 or 20. I have never been able to understand the consultation or the recognition of the fabric of Prince Edward Island society, community life, or the lives of fishermen, which occurred prior to this announcement. Under that development plan, there would have been a reduction of the fishing harbours and communities by approximately 70 per cent to 80 per cent. It is impossible to understand the type of thinking which arrived at that particular decision.
I see the Minister of Veterans Affairs (Mr. MacDonald) is present in the chamber this afternoon. He was a member of the provincial administration when the development plan was signed. I do not want to draw him into the debate, but it would be interesting to know his point of view as one who sat in the provincial government at that time. It would be interesting to know the earthly justification for a reduction in the number of fishing communities in Prince Edward Island. That was called for in the first phase of the plan. The Minister of Veterans Affairs, as well as the Minister of Fisheries and the Environment, are aware of the fact that subsequently it was abandoned partially. The intent of that reduction is still in existence to this present day.
There have been expenditures made on specific harbours without consultation or agreement with fishermen's associations, processors, or any community structures existent in Prince Edward Island. Those expenditures were based on expert opinions. I use the word "expert" deliberately. I agree it was not the opinion of the Minister of Fisheries and the Environment. He has too much sense for that, quite frankly. It is to be hoped we have entered into a more realistic age where we can get beyond that type of game playing and manipulation of communities and local people who are part and parcel of society. Prince Edward Island has very deep roots and very strong traditions. Manipulation can only do harm and jeopardize the entire province. I realize the minister is attempting to reverse that situation, but also I know how easy it is for officials to enact regulations and create situations which are almost diametrically opposed to the intent of the minister.
Fishing and Recreational Harbours
I realize the minister is attempting to soften the intent of this legislation. Surely he is not seeing himself as a fisheries czar who will enact fishing policies on the banks of the Rideau Canal which will be appropriate for Antigonish, Albert, Surrey, Summerside-


Mr. MacDonald (Cardigan):: And North Lake.


David Samuel Horne MacDonald: North Lake or wherever. The minister well knows, as a fellow maritimer, how we have been affected by that kind of action on the part of well-informed and well-intentioned "experts" in Ottawa. The minister sits within breathing distance of the Minister of Transport (Mr. Lang), who emphasized as recently as a day or two ago what a wonderful policy user-pay is and what an advantage it is for this country to have a minister of transport like the one who is presently the incumbent.


Daniel Joseph MacDonald: Hear, hear!


David Samuel Horne MacDonald: I am surprised to hear the Minister of Veterans Affairs applaud. If he supports the user-pay concept, I hope he will come to Prince Edward Island and announce that publicly because he has given it a very wide berth over a considerable period of time.


Daniel Joseph MacDonald: Mr. Speaker, I rise on a question of privilege. With reference to the remarks of the hon. member for Egmont (Mr. MacDonald) I would like to say that I support the Minister of Transport (Mr. Lang).


David Samuel Horne MacDonald: I am glad the Minister of Veterans Affairs has clarified his position. 1 did not think he wanted to applaud the user-pay policy of the Minister of Transport because the Minister of Veterans Affairs is much too aware of the political repercussions of coming even within breathing distance of the user-pay syndrome which has afflicted the Minister of Transport and which is threatening to afflict the whole government.
I, as one individual member, am exceedingly aware of this legislation. The Minister of Fisheries has not fixed a fee, and he has indicated that there is no immediate plan, because of the nature of the fisheries on the east coast, to bring in such a policy. However, the fact is that we are giving the minister a blank cheque in this legislation. The minister is shaking his head, but unless he can tell me that there is any prohibition against him, tomorrow or next week-or what is more likely in this government, because ministers change once every three weeks, next month-deciding that there is a good reason from his point of view, or from the point of view of his officials, to bring in a user-pay fee on fishing ports on the east coast, it appears that he could do so. Provision is in the legislation for that. A full mandate is there. In effect, we are opening the door to a certain kind of taxation, and there are no parliamentary inhibitions that I can see in this legislative item.
Perhaps as the minister winds up the third reading debate on Bill C-2 he will indicate what safeguards there are. I realize

February 7, 1978
Fishing and Recreational Harbours
that at this point all we could get would be a verbal commitment, but that might be more than he has already given to us. Will there be safeguards through references to an appropriate standing committee if the minister or his successor imposes this kind of tax?


The Acting Speaker (Mr. Turner):: Is it the pleasure of the House to adopt the motion?
Some lion. Members: Agreed.


Some hon. Members:: No.
I looked at a recent report in the business section of the Globe and Mail on business prospects for Prince Edward Island in 1978, and I looked at the value of fish landings projected for this year compared with last year. The fish landings in 1976 were valued at $12,396 million, and in 1977 they were valued at $12,162 million. In actual terms and without allowing for what has happened with respect to inflation there has been an absolute decrease in the income from fisheries received by fishermen. That is not a comforting situation to look at, but it is less comforting to see that through this legislation we are giving the minister the opportunity to impose further taxation. Whether it will be, as some of my colleagues have suggested, $50 or $100 a month for fishermen as an additional fee, I do not know. However, I do know that the representative group for P.E.I., the Prince Edward Island Fishermen's Association, has already publicly protested the implementation of this aspect of this bill.
I would like to think that this item, as well as the whole question of changes in port policy which might occur in Prince Edward Island and elsewhere, would be the subject of adequate consultation not only with provincial government agencies but also with the people directly involved in the industry. It is my understanding that even the provincial governments concerned were not asked for any specific input with respect to this legislation. The minister is shaking his head. This is an interesting situation, because I was told they were not. The consultation which took place must have taken place in a corridor. Someone must have said, "By the way, did you know?" The measure of consultation was not enough to make impact on officials in the fisheries department of P.E.I. They were not even aware of it. If consultation did not extend that far, one can only assume that it dit not extend to the P.E.I. Fishermen's Association or to the various county fishing groups. What kind of consultation took place? The answer has to be that there was none.
Therefore, I hope that, with the mandate contained in this bill, the minister will take a renewed interest in the consultative process with respect to the implementation of this legislation and the passage of regulations, and that he will make a definite commitment with respect at least to parliamentary ratification in a standing committee or elsewhere concerning any imposition of port fees which might have a detrimental effect on or do a disservice to the people employed in the Fisheries, whom I know best, those who are fishermen in eastern Canada.


The Acting Speaker (Mr. Turner):: Is the House ready for the question?


Some hon. Members:: Question.


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


Some hon. Members:: Yea.


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


Some hon. Members:: Nay.


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


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


Mr. Speaker:: Before announcing the result I should tell the House that when Mr. Anderson voted he was identified incorrectly as Mr. Robinson; when Mr. Robinson was standing he was identified correctly as Mr. Robinson. The voting list has been revised to show that Mr. Anderson was, indeed, Mr. Anderson.
And the result of the vote having been announced:


Mr. Speaker:: 1 declare the motion carried.
Bill read the third time and passed.


RAILWAY ACT
Otto Emil Lang: that Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be read the second time and referred to the Standing Committee on Transport and Communications.
He said: Mr. Speaker, it gives me great pleasure to speak today on the second reading of Bill C-17, an act to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes.
Railway Act
To some this bill may appear to be an insignificant housekeeping item; it is a brief bill and deals with rather mundane matters concerning one of our Crown corporations. In reality, however, it is rather more important. This bill creates a capital structure for Canada's largest Crown corporation which is appropriate to a mature corporation; it will establish a sensible relationship between the debt and equity; it will consolidate the investment of the Government of Canada in the CNR and will remove the need for regular votes of money to assist the CNR.
Current legislative and other arrangements governing the financing of CNR which have remained largely unchanged for the last 25 years provide that each year the government purchase CNR preferred non-cumulative shares in an amount equal to 3 per cent of the gross revenues of the national system. In 1978 this would have required the inclusion in the government's main estimates of an amount of some $80 million; however, my proposal would eliminate this requirement and, indeed, the main estimate for 1978-79 are being prepared without this provision. This is a very important feature, given the pressures on government to keep public expenditures down and its determination to do so.
Existing arrangements also oblige the government to appropriate funds to meet company deficits. Indeed, an amount of $22 million was included in last fall's supplementary estimates for this purpose. However, agreement has been reached among all concerned that as part of this recapitalization proposal authority would be obtained to restrict the already authorized purchase of preferred stock in the current fiscal year by an equivalent amount. This, in effect, would save $22 million in cash flow from the treasury, and is also an important consideration given the current difficulties being experienced in overall cash management. The provisions of this bill will enable the company to attain an adequate profit level in the future and thus eliminate the need to appropriate funds to meet deficits.
Financing arrangements in place also provide that the CNR would obtain its other capital requirements either from loans from the Minister of Finance or from the private sector. In recent years the company has been encouraged not to look to the Minister of Finance for these needs. It has been co-operative in this regard and has been successful in the capital markets. However, the result of this long-standing obligation for the company to rely on loans for the bulk of its capital requirements has been a debt ratio of about 62 per cent, compared with the rail industry average in North America of approximately 35 per cent, and about 35 per cent for the CPR in particular.
The proposed conversion of about $800 million of debt into equity would result in a debt ratio of 42 per cent, and thus would provide a more realistic basis for the government and the public to assess the economic efficiency of the company and the performance of its officers in relation to that of its competitors. It would also provide an important morale boost to the CNR management who, I am sure you will agree, are dedicated individuals making considerable progress in improving the efficiency and profitability of their operation. It should

February 7, 1978
Railway Act
provide a similar boost to those who work throughout the CN railway system, men and women who have also helped in recent years to improve the productivity and efficiency of the over-all operation.
The interest which will be forgone on converted debt would be more than offset by the elimination of the requirement for the government to purchase CNR preferred shares. Indeed, it is estimated that over the next five years the net gain to the federal treasury will be in the order of $145 million.
Another important feature of the proposal from the government's point of view is that CNR will be required to pay annually to the federal treasury a dividend equal to 20 per cent of its profits or such higher amount as the governor in council may direct. For the first time in over 20 years the Canadian people will be receiving a monetary return on their equity in the company.
A further feature of the proposal would see the consolidation of the remaining CNR debt held by the government, and its repayment rescheduled in a manner that would facilitate cash management for the government's account by the Department of Finance.
Finally, there is the proposed merging into common shares of the present preferred shares and the government's investment in the Canadian government railways. There will also be a reduction of equity in recognition of depreciation attributable to years prior to the adoption of depreciation accounting. This "cleaning-up" action, coupled with the more realistic debt/equity relation and the enhanced ability of the CNR to register and retain profits in the future, will place the company on a more readily understood financial basis and reduce the possibility of having to come to the government for funds.
[ Translation]
As the long term advantages of this project of reallocation of capital, the CN will be able to meet its financial and operational needs without the assistance of the government of Canada. On the short term, that is for this financial year and the next, as the right hon. Prime Minister (Mr. Trudeau) told the House on December 19, 1977, we will avoid outlays of about $100 million and by that very fact we will be able to cut down $80 million from next year's main estimates. On the medium term basis, that is over the next five years, it will no longer be necessary to allocate in the main budget an amount of $470 million for the purchase of preferred shares; the interest lost by writing off the debt will amount to $320 million but the federal treasury will record a net saving of $145 million. In addition, all dividends collected by the government will represent additional revenue. These are important advantages from the viewpoint of the government of Canada.

During the past two years the financial structure of the Crown corporations reporting to the Minister of Transport has been examined and restructured where necessary, for example, the St. Lawrence Seaway, Air Canada, and the Northern

Transportation Company Ltd. Passage of this bill will bring the financial structure of the CN closer to that enjoyed by other Crown corporations. It will provide a framework which will reduce the government's financial requirements in the future and clearly impose on the CN the responsibility and accountability to manage a financially viable, self-supporting institution.
Hon. members will have seen the effect in the last year or two of the new policy of the government in relation to its major Crown corporations, particularly CNR and Air Canada. Both of them in preliminary statements or estimates of their financial position indicate that in the current year they will be turning past deficits into profits. The profits, it is true, are still relatively small, but the policy is to emphasize increasingly that the government, on behalf of the people of Canada, expects these major Crown corporations to operate as efficiently and effectively as possible. In our view, we should not cloud their performance by imposing obligations upon them to carry out even good public services unless we are prepared to quantify the cost of that public service and to pay the price for it directly.
In the past, far too often the morale of management and their ability to handle their affairs effectively has been adversely affected by these obligations imposed on them, without consequence to cost and over-all profitability and efficiency. That is not our intention, nor is it our intention to be involved as shareholders in what might be called the day to day management of the corporation. That is best left in the hands of the best possible management of the best possible board of directors in the usual commercial way, not subjected to day to day variations of the whim of the minister or in response to immediate demands of a particular member.
I think it is important that we continue to allow these corporations to provide the best possible service in this way. Both of them this year are not only turning past deficits into profits but are doing so with a measurably increased performance in terms of the load of work they are accomplishing. Both CNR and Air Canada are doing so with a smaller use of over-all manpower, demonstrating the greater efficiency they have achieved in comparison with a year or so ago.
It is important that we now put CNR on a basis more in keeping with the debt equity ratios of other corporations performing similar functions. But the challenge is that hereafter it should so manage its affairs as to be efficient in the provision of service, and therefore efficient in the use of the investment which the people of Canada have in it, and that it make a progressive return on that investment which is more appropriate to the size of that investment. We in turn should restrain ourselves from demanding of it things which may serve other purposes, unless we are prepared to pay the price. We have stated that such is our policy. We should see the result of this policy over the years in the continuing good performance of the men and women who work in these two great corporations, from the lower levels to the very top management. This is our hope as we move second reading of the bill at this time.
February 7, 1978


Mr. Don Mazankowski (Vegreville):: Mr. Speaker, 1 agree with the Minister of Transport (Mr. Lang) when he says this is not an insignificant piece of legislation. Any bill that writes off $808 million worth of debt is certainly not insignificant but rather a major piece of legislation. Any legislative measure that restructures the capital organization of a corporation of the magnitude of the CNR is certainly a major piece of legislation. 1 think it is fair to say that the impact of this bill will serve to place a heavy onus on management in terms of its financial operations in carrying out its mandate to operate an efficient and effective railway, both from the financial and from the service point of view.
1 must begin by saying that I am somewhat surprised that it was not the Prime Minister (Mr. Trudeau) who introduced this bill because he was chafing at the bit back in December, challenging the opposition to bring forward such a bill because it would in effect save the taxpayers $100 million. That statement has not been forgotten and, as near as we can figure it out, it is as phony as the hollow proclamations he has been making on the economy. I am sure that it is this kind of bluffing and flippancy that causes Canadians to fail to build the necessary faith and confidence in the administration which is at the helm at present. One must seriously question the credibility of a leader of a government who mouths off such flippant and bluffing statements.
Writing off a debt of $808 million is one thing, but losing $65 million worth of interest as a result of that write off is another. While the government, under the provisions of this bill, will no longer have to purchase the 4 per cent CN preferred stock, which at this time would amount to $100 million, this does not translate into a saving of $100 million to the taxpayers. The $100 million at this time is the combination of that which is left owing for the current fiscal year plus the total for the next fiscal year.
In addition to the bill writing off $808 million worth of debt and converting it to equity, it cancels the purchase of the 4 per cent preferred stock by the government which is based on 3 per cent of the gross earnings of the CN system. As I said earlier, the bill also essentially reorganizes the capital structure by converting $1.5 billion worth of preferred shares now held by the government into common shares. It also provides for the payment of an annual dividend by CN of 20 per cent of the net income after interest, depreciation and taxes are met. Also, it provides for the CN to borrow money to meet its deficits. No longer will parliament be called upon to cover the deficits through parliamentary appropriation.
The $808 million arises from changes in accounting procedures with respect to the depreciation which was introduced back in 1940, 1954, and 1956 in a phasing in process. This is covered at page 21 of the 1976 CN annual report in a footnote to the consolidated financial statement. I should like to quote it because this is primarily the issue which surrounds the $808 million debt. I quote from page 21 of the 1976 annual report of Canadian National Railways as follows:
Railway Act
For Canadian properties, depreciation accounting was introduced for equipment in 1940, for hotel properties in 1954, and for track and road structures and all other physical properties except land in 1956. For United States properties, depreciation accounting was introduced for ties, rails, other track material and ballast in 1976.
Because there were no profits to speak of, depreciation was not taken during these periods. If depreciation had been taken, as it probably should have been, the deficits would have been higher or the profits would have been lower, as the case may be. As all members are aware, profits have been recorded for only a few years. Now the theory is that the deficits would have been higher and parliament would have been called upon to provide the shortfall. In that event, Canadian National Railways would have had additional money for capital expansion. Because this did not take place, the railway now believes it is justified in coming before parliament at this time to ask for this adjustment and a cancellation of the $808 million which has arisen as a result of accumulation of depreciation that was not taken into account in prior years. This argument is based upon the assumption that in its wisdom parliament would have seen fit to provide these funds over the past years, and that this allocation would have been reflected in the amount of deficit recorded by CN.
This fact was clearly explained by the current president of the CNR, Mr. Robert Bandeen, when he appeared before the Standing Committee on Transport and Communications on March 29, 1977. Mr. Bandeen said:
We contend that because proper depreciation was not charged over the years-and it was proper at the time, and I should not use that term, I do not mean that it was against accounting principles, but it was on a different theory- that the deficits would have been higher or the profits lower over the years and, indeed, we would have had that money to finance capital expansion. Because we did not have this, we had to go out in the market and borrow money or borrow money from the government. So, we are saying that should be recognized and we should have a chance to make that change.
In effect, CN is indicating that depreciation on its own represents a cash flow to the company. I believe that is a rather strange application because such is not necessarily the case with regard to the private sector. It is fair to assume that in the private sector depreciation charges must be earned, and these funds must be available in order to take advantage of that depreciation. It seems this is being overlooked by CN completely.
Now it is suggested that the deficits covered by cash payments from the treasury were understated, as a result of the failure to take into consideration depreciation which could have been charged over the years. On this basis, from 1923 to 1955-and I use the year 1955 because 1956 is the year when the depreciation formula was changed for road, track and physical properties-this would have meant an additional deficit of more than $24 million on an average basis per year over those 33 years. Thus, one would have to question seriously whether parliament would have willingly provided the funding in face of the commitments and what transpired during the recapitalization in 1937, and particularly, the recapitalization in 1952 which placed CN in as good a position or perhaps an even better position than its competitors.

February 7, 1978
Business of the House
Also it is interesting to note the commitment which was undertaken by the then president of the CNR when the 1952 recapitalization bill was passed. After the passage of the Capital Revision Act of 1952, the late Donald Gordon said the following:
Capital revision has taken away the curse of the past, but let us be frank enough to recognize that it has also taken away an alibi and convenient excuse. This is its real meaning for the future. We are now in a position where we have nothing to hide behind, and nothing to block the road to success. We have a fighting chance of paying our way in the world, and counting the bad years with the good we ought to be able on the average to pay all our operating expenses, our fixed interest charges and income taxes, and still have something left to return to our owners as a dividend on preferred stock.
That was a very lofty proclamation, but it did not come to pass. Given the obvious break which was acknowledged by the then president, and given the clear obligation which was placed upon the shoulders of CN management, it is very questionable whether parliament would have granted these extra funds on an annual basis for what is really tantamount to a bookkeeping entry. Also it is very difficult to arrive at an accurate evaluation of the assets acquired by CN prior to the turn of the century. Thus, the $808 million figure is not based on anything concrete and is not a firm evaluation. It is subject to some questioning.
I take issue with the fact that the 1976 CN annual report makes the assumption, for all intents and purposes, that this bill would be passed, since it is noted that CN actually capitalized the $808 million accumulated depreciation and charged it against assets. Obviously this action was sanctioned by CN's auditor and the government. Mr. Speaker, may I call it five o'clock?


BUSINESS OF THE HOUSE
Steve Eugene Paproski: Mr. Speaker, I rise on a point of order. During the last week we have waited patiently to receive some advice from the Deputy Prime Minister and President of the Privy Council (Mr. MacEachen) as to what will happen as far as private members' business and public bills are concerned. We have not received anything from the minister since last Wednesday. We do not know what bills are coming up. If we had not checked with the Table at 4.45 p.m. or 4.50 p.m. today, we would not have known what bill was going to be before the House this evening. I think the Deputy Prime Minister and President of Privy Council, or his parliamentary secretary, owes that courtesy to the opposition.


Mr. MacFarlane:: Mr. Speaker, I certainly have been aware, as others have been, of what was going to occur. I am surprised that the hon. member was not.


Steve Eugene Paproski: Mr. Speaker, as a courtesy the President of Privy Council sends a list over to the opposition so that we know what is going to happen for the next week with regard to

private members' bills, but that courtesy was not extended to us this time.


The Acting Speaker (Mr. Ethier):: I suggest that the hon. member raise his point of order at a later date when the government House leader is in the House.



PROCEEDINGS ON ADJOURNMENT MOTION


The Acting Speaker (Mr. Ethier):: Order. It is my duty, pursuant to Standing order 40, to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for St. John's West-Industry- Fluorspar mine at St. Lawrence, Newfoundland-Proposed pressure on Alcan to operate; the hon. member for Simcoe North-Health and welfare-Care of the elderly-Financial aid for those in institutions; the hon. member for Nickel Belt-Labour conditions-Proposed lay-offs at certain mines-Government action to avoid.


PRIVATE MEMBERS' PUBLIC BILLS
The Acting Speaker (Mr. Ethier):: It being five o'clock, the House will now proceed to the consideration of private members' business as listed on today's order paper, namely, public bills, private bills, and notices of motions.
Order No. 2; the hon. member for Matane (Mr. De Bane). Shall the order stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Order No. 4; the hon. member for Egmont (Mr. MacDonald). Stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Order No. 8; the hon. member for Assiniboia (Mr. Goodale). Stand by unanimous consent?


Some hon. Members:: Agreed.


The Acting Speaker (Mr. Ethier):: Order No. 9; the hon. member for Hull (Mr. Isabelle). Stand by unanimous consent?


Some hon. Members:: Agreed.
February 7, 1978


CANADIAN LANGUAGE LAW AMENDMENT ACT
Mr. Jean-Robert Gauthier (Ottawa-Vanier) moved: that Bill C-210, to correct certain anomalies and inconsistencies in the Revised Statutes of Canada 1970 pertaining to the protection of Canadian language rights, be read the second time and referred to the Standing Committee on Justice and Legal Affairs.
He said: Mr. Speaker-


Mr. Baker (Grenville-Carleton):: Mr. Speaker, I rise on a point of order. I do not intend to discuss the merits of the bill in the course of debate on this point of order except for the purposes of arguing with respect to procedure. This bill is entitled "An Act to correct certain anomalies and inconsistencies in the Revised Statutes of Canada 1970 pertaining to the protection of Canadian language rights". It may not be proper for a private member to advance this bill in this House.
I have looked over the bill to see whether there is present in it a royal recommendation involving an expenditure of money. Bills calling for the expenditure of money, as we know, cannot be dealt with without the presence of a royal recommendation, and certainly cannot be advanced by private members. I would like to have just a few moments to deal with that procedural matter so that we can decide today whether the matter should go forward.
I want to deal first of all with part I of the bill concerning legal proceedings and the Official Languages Act. The explanatory note to clause 2 says the following:
The purpose of this amendment is to allow the transfer of a case to a judicial district other than the district in which the accused had to make his original appearance, in order to allow him to be tried in his own official language.
That applies not to a provincial court, the Supreme Court of Ontario, the supreme courts of any of the provinces or to a county court; it applies to a federal court and, according to the explanatory note, it imposes a duty on federal courts to provide simultaneous translation.
If this bill were being advanced by a minister of the Crown, if there were an accompanying royal recommendation, and if the bill were adopted, it would impose a duty on the taxpayers of Canada to provide funds for the operation of a federal court. That is the situation as it appears to me. I raise this as an objection from the point of view of the procedure involved. The section which clause 2 is intended to amend says the following:
Every court of record established by or pursuant to an act of the Parliament of Canada has, in any proceedings conducted before it within the national capital region or a federal bilingual district established under the act, the duty to ensure that, at the request of any party to the proceedings, facilities are made available for the simultaneous translation of the proceedings-
The bill extends this duty beyond the national capital region. In a geographical sense that is an extension but, if this bill is passed, it will impose upon the government the necessity to provide funds to pay for the function set forth in the bill.
Language Rights


Jean-Robert Gauthier: Mr. Speaker, I rise on a point of order-


Steve Eugene Paproski: We have one point of order.


Jean-Robert Gauthier: Then I rise on a question of privilege. 1 find it very unusual for the House leader of the Conservative party to discuss a bill on the basis of monetary implications. The hon. member has not heard the remarks I will be making at second reading of this bill. In addition, and more important, there are already provisions-for example, section 11 of the Official Languages Act-which allow courts to offer translation services-


The Acting Speaker (Mr. Ethier):: Order. With all due respect to all hon. members, and particularly the hon. member for Ottawa-Vanier, I must tell him that this is rather an argument he is trying to put to the hon. member for Grenville-Carleton (Mr. Baker), and I will hear him after the hon. member for Grenville-Carleton.


Walter David Baker: Mr. Speaker, I apologize to the hon. member for taking his time. I sincerely do, but I think it is important that, whether a bill is a private bill or a public bill advanced by the government, the rules should apply, if indeed these be the rules. I suppose all of us have a duty to observe the rules-at least to attempt to observe the rules. There is a question in my mind, and I would like the opportunity to discuss it.
Clause 3 of this bill seeks to amend the Criminal Code. It seeks to extend requirements which are already set forth in the statute. At the moment, according to section 555 of the Criminal Code, in the province of Quebec only and not in all judicial districts, there is a requirement on the choice of jurors involving public expense. The whole system demands public expense. The purpose of this bill is to extend that beyond the limitation of the moment and therefore involve the expenditure of money. As it involves the expenditure of public money, it could not be advanced by a private member and would require a royal recommendation.
Clause 6 deals with the Railway Act and requires changing railway signs, timetables, bills of lading and notices throughout the country so that they are printed in both languages. However laudable that motive may be, it involves the expenditure of public moneys, and I therefore ask the Chair to consider the propriety of this being done in a private member's bill without a royal recommendation.
Those are the provisions which struck me as I reviewed the bill, Mr. Speaker, unfortunately with the short notice that was given us as explained by the hon. member for Edmonton Centre (Mr. Paproski). It may be that an explanation can be advanced by the hon. member for Ottawa-Vanier (Mr. Gauthier), but there does seem to be some question about the propriety of this bill. The strongest part of my argument

February 7, 1978
Language Rights
concerns the provision with respect to the Federal Court of Canada which would entail a tremendous increase of expenditure for its operation if that right or privilege were to be extended across the country.
I wonder if Your Honour would be prepared to deal with that point in a preliminary way?


Mr. Eymard Corbin (Madawaska-Victoria):: Mr. Speaker, I would like to comment on the point of order raised by the member for Grenville-Carleton (Mr. Baker). 1 have heard quite a few arguments in this House in attempts to slow down the discussion and sometimes even the passage of certain pieces of legislation but this is undoubtedly the weakest argument, if one at all, I have heard in the ten years I have been in this House. This seems to me to be merely a tactic to delay the discussion of this bill which is quite worthwhile.
Mr. Speaker, at the beginning of every session of Parliament when private members' bills are published or announced, the Speaker of the House of Commons rules on the receivability of the bills from the standpoint of the financial implications they might have for the Crown and when this occurs he usually rejects those bills as a whole. I would like to know if Mr. Speaker did indeed examine the bill we are now discussing this afternoon under Standing Order 94. You may be prepared, Mr. Speaker, to rule immediately on the argument of the hon. member for Grenville-Carleton but I do not see how that argument could hold.
The hon. member for Ottawa-Vanier (Mr. Gauthier) whose argument we have not yet heard, as the hon. member implied earlier, does not add any new provisions to the Official Languages Act but only seeks to amend its application. The financial implications for the Crown that could be contained therein are already in the Official Languages Act. So it seems to me that the hon. member for Grenville-Carleton, who is a lawyer, should understand those things.


Stanley Howard Knowles: Mr. Speaker, the first comment I should like to make with respect to this point of order is that I think I have to correct something just said by the hon. member for Madawaska-Victoria (Mr. Corbin). I believe it is a fact that when Mr. Speaker grants first reading to all bills brought in at the beginning of a session, he does enter a caveat as to the procedural propriety of each individual bill, to be dealt with later. The suggestion of the hon. member for Grenville-Carleton (Mr. Baker), therefore, that this bill should now be looked at is certainly in order.
The second thing I want to say is that on the face of it the hon. member for Grenville-Carleton seems to have a point in that it looks as though more money would have to be spent if this amended bill were passed than would be spent if it were not passed. I say on the face of it he seems to have a point, but I have not had the opportunity to look at the act on the statute books. There may be financial provisions in the act that cover this.
1 do not want to spend time now in a procedural argument. I think all of us in this House, in all parties, like to see private members have the opportunity to present their ideas and 1 would not like the hon. member for Ottawa-Vanier (Mr. Gauthier) to be denied the right to proceed with discussion of this matter this afternoon. I hope we could have the discussion on the merits of the legislation rather than on the procedural point.
I also point out that there have been times when the Chair has had doubts and has allowed discussion to proceed. I would hope the Chair might take that position today.
The other thing I should like to say-and I have checked this and know I am not revealing a secret-is that I understand a member on the government side at some point is going to move that the bill be not now read a second time but that the subject matter be referred to an appropriate standing committee. That would certainly not violate any procedural rule about spending money because sending the subject matter to a committee does not involve spending money. I would therefore hope, Mr. Speaker, that you would be willing and that the hon. member for Grenville-Carleton would be willing that you reserve decision on this point, not ruling it in order or out of order, but, letting us proceed on the understanding that we are simply having a discussion, particularly in the knowledge that there will be a motion to refer the subject matter to committee and thus the discussion be allowed to go ahead.
I think I express the view of all members of the House when I say we have enough trouble around here, and one trouble we do not like is having private members denied the right to present their ideas and have them debated.


Mr. Jones:: Mr. Speaker, albeit that the hon. member may have a good bill, I happen to be in the position that I presented a bill to the Speaker's legal department which it is alleged- and I disagree-would entail the expenditure of money. There is a disagreement between myself and that department on the point. I am quite surprised that a bill of this nature would come before the House and proceed this far.
I take great exception to this member's bill being presented as a private member's bill and my bill not being presented, apparently because I am an independent. It is outright discrimination and I do not think it is proper at all. It was explained to me by legal counsel who came to my office that the particular bill I wish to present would not be valid, and would not be proper for the exact reasons-


The Acting Speaker (Mr. Ethier):: Order, please. I would like to advise the hon. member that he was recognized on a point of order, namely, the objection to the presentation of this bill. I see no connection between this bill and the one the hon. member had refused to him. I would certainly hear argument as to why this one should not be proceeded with on the point of order which was raised by the hon. member for Grenville-Carleton (Mr. Baker).

February 7, 1978


Leonard C. Jones: If I might be permitted to continue, this bill obviously is going to entail expenditure of additional moneys than those budgeted for. There is nothing in the bill to indicate otherwise. When you change signs, when you provide simultaneous translation, you just do not call for expenditure of thousands of dollars, you call for expenditure of thousands and thousands of dollars. You do not have to be any mathematical accountant to come to the conclusion that this is in fact a money bill. If it entails the expenditure of money it should not be here at all.


Stanley Howard Knowles: Maybe there is money in the original act.


Leonard C. Jones: If there is money in the original act, then it should not have been there.


The Acting Speaker (Mr. Ethier):: Order, please.


Mr. Young:: Mr. Speaker, I would like to confirm what the hon. member for Winnipeg North Centre (Mr. Knowles) has said. I would be prepared to move a motion that the bill be withdrawn but the subject matter be referred to committee. If it will assist in resolving the procedural wrangle that we seem to be caught in, I would be prepared to do so now and put to rest that problem. Perhaps we could use the balance of the house to discuss the subject matter. If my understanding is correct and my amendment is accepted by the House, then the subject matter would be referred to a committee. If that will solve your problem, Mr. Speaker, I would be glad to make that motion now.


Walter David Baker: Mr. Speaker, I would like to thank the parliamentary secretary. I think it is an excellent suggestion and one with which I am in accord.
I said at the outset, as my hon. friend will note, that I made my argument on the procedural problem extremely short for the very purposes about which he is concerned. I would think it would be appropriate if the hon. gentleman wanted to move the motion now, that we deal with the matter and then perhaps that can be the end of it.


Roger Carl Young: Mr. Speaker, I have only one question. I would like to allow my colleague from Ottawa-Vanier who has proposed a motion to be able to speak on it. If I propose the amendment now, am I going to be required to speak to the amendment right away with the possibility that he will lose his turn?


Stanley Howard Knowles: You cannot move an amendment until the motion is put.


The Acting Speaker (Mr. Ethier):: Order, please. If you are seeking guidance you cannot move the amendment now.


Jean-Robert Gauthier: Are we on the bill now?


The Acting Speaker (Mr. Ethier):: Order, please. Perhaps we should seek the consent of the House. Is it agreed, if there
Language Rights
is a forthcoming amendment, to refer the subject matter to the committee and that the point of order will be withdrawn?


Some hon. Members:: Agreed.


Jean-Robert Gauthier: Mr. Speaker, we are therefore discussing the subject of Bill C-210 rather than the bill itself, but I am somewhat confused and perplexed by the comments made on the point of order because, as indicated by the hon. member for Winnipeg North Centre (Mr. Knowles), although there are monetary provisions in the current Revised Statutes of Canada, Bill C-210 does not address itself to them but rather to the intent of statutes, and the Official Languages Act in particular which, in my view, should be paramount as regards language rights in Canada.
Bill C-210 would correct some anomalies and inconsistencies in the Revised Statutes of Canada 1970 pertaining to language rights in Canada. Moreover, it would delete references to billingual districts which were never implemented, and finally it would give the accused the right to be heard and dealt with in his official language. The bill is the result of extensive study and is based in particular on the conviction that Canadians in 1978 are ready and willing to recognize equal legal status to this country's both official languages. I would like to pay tribute and extend my sincere thanks to counsel, and especially his assistant Mr. R. M. Beaupre, for the advice and expertise they so generously extended in the preparation of this legislation.
Since tonight's debate is on the bill at second reading stage, or the principle of the bill, I would like to briefly review the situation as it now exists and then discuss in general terms the amendments proposed in Bill C-210. The issue of language rights has been widely publicized and is closely linked to that of national unity. If the official status of the English and French languages is accepted, their equal status must also be recognized in the courts of justice as well as before all government institutions, and both official languages must also be accepted in the day to day cultural, educational, social and economic life. Bill C-210 brings a contribution to language equality, and that concept of natural justice that will give every Canadian a feeling of belonging and true equality. [English]
Historically, Mr. Speaker, it was only in the province of Quebec that Canadians had a right to a trial in the language of their choice. In the last decade, major changes were brought about in a few other provinces, allowing the accused the right to use the language of his choice. It has been argued convincingly that amendments to the Criminal Code were required before language rights could be given to all Canadians. Hon. members will remember that as recently as last summer the attorney general for Ontario, the Honourable Roy McMurtry, had indicated that his province was proceeding with its provincial program to provide court services in French in designated areas and that amendments to the Criminal Code were required to permit French trials in Ontario. This the federal

February 7, 1978
Language Rights
government promised to do; in the Speech from the Throne in October last, this statement was made:
After consultation with the provinces, the government will amend the Criminal Code to guarantee the right of accused persons to be tried in the official language of their choice.
Although we know that ongoing consultations with the provinces are continuing at this time, we are all waiting impatiently for the government to table the amending legislation. I began working on Bill C-210 in the spring of 1977 and tabled the bill in October, 1977. Since I am not party to the consultations, hon. members will understand that Bill C-210 could vary considerably with the addition of the proposed amendments whenever they are tabled by the justice minister.
Bill C-210 is divided into two parts. Part I deals with legal proceedings and, more specifically, with amendments to the Official Languages Act and to the Criminal Code. It deals specifically with the duty of federal courts to provide simultaneous translation. Members will recall that section 11(2) of the Official Languages Act restricted the simultaneous translation facilities to proceedings conducted within the national capital region or in a bilingual district to be established under the same act. Since the government announced that it did not intend at this time to establish these bilingual districts, and since I sincerely believe that all persons appearing before federal courts should have facilities for simultaneous translation of the proceedings, I propose to amend the Official Languages Act to eliminate this restrictive clause and make it mandatory that, at the request of any party to the proceedings before a federal court, facilities be made available for simultaneous translation of the proceedings.
Further, Section 11 of the Official Languages Act needs to be amended to allow a change of venue in cases where the courts do not speak the official language of the accused. This would allow an accused who is arraigned before a court of criminal jurisdiction, as defined in section 2 of the Criminal Code, and who speaks an official language other than that in which the proceedings of the court are conducted, to request the court that his trial be conducted in a judicial district in Canada where such language is used.
[Translation)
When we read the Revised Statutes of 1970, it is obvious that substantial amendments to the Criminal Code are required, especially as concerns sections 555 and 556. These two sections concern the selection of the jury and the right of the accused to demand a mixed jury. It is probably because of historical reasons that there are mixed juries in Quebec and Manitoba. In 1864, the legislature instituted by the Act of Union of 1840 passed legislation introducing a system of mixed juries which applied only to the province of Lower Canada which later was to become the province of Quebec. In 1867, section 129 of the British North America Act maintained the laws that had already been passed in 1903, including those passed in the province of Lower Canada. Section 555 of the Criminal Code of Canada simply reflects this situation,

and has done so since passage of an amendment to the Criminal Code in June 1869. As concerns Manitoba, the province was formed within the Northwest Territories. The section of the act of parliament which created the province of Manitoba instituted bilingualism in this province and consequently a system of mixed juries.
About twenty years later, the Manitoba legislature adopted a policy of English unilingualism, but since criminal trials did not come under its jurisdiction, it could not repeal the legislation. The Canadian Parliament having decided not to rescind its own legislation, the system of mixed juries has been maintained until now in Manitoba. In this province as in Quebec, the present Criminal Code is only reflecting a historical situation. At the present time, under section II of the Official Languages Act, anyone called before a court in Canada is entitled, subject to the provisions of section 5 of the act, to do so in French or English. Of course, the courts must therefore provide translation services to the court, the jury, the legal officers and the audience. But this does not provide the right to a mixed jury. Moreover, there is a discretionary element and nothing can force the courts to allow the person charged to be tried in his language, whether English or French.
Yet, Mr. Speaker, neither the British North America Act, the Official Languages Act, the Canadian Bill of Rights or any other act passed by the Canadian parliament provides for the constitution of mixed juries in any province other than Quebec and Manitoba. The amendment contained in Bill C-210 would extend this right to the whole Canadian population in all provinces. Moreover, it would coincide with the spirit of the Official Languages Act and would confirm the equality before the law of all Canadians, whatever official language they may use.
Taking into account the recent decision of the Quebec Superior Court concerning the constitutionality of Bill 101, and in particular of the sections dealing with the language of legislation and the courts, bearing in mind also the Forest case in Manitoba which in fact challenges the constitutionality of the Manitoba Act of 1899, I feel, Mr. Speaker, that the House will recognize the urgency and prime necessity of passing the necessary amendments suggested by Bill C-210.
The interest and support of the Canadian public opinion, the many editorials, the recent comments in support of bilingualiz-ing our judicial services can only strengthen the legislators who are interested in and concerned about national unity. The recent statements of the Ontario premier also give serious suppport to linguistic equality. If I understand Mr. Davis well, he says: No more symbolic gestures-we will prove our support and understanding of the great principles of bilingualism.
Mr. Speaker, the Francophones of Ontario still hope to see the historical moment when the province will quit making beautiful promises and start acting concretely. It is awaiting impatiently the legislative interventions that will confer equal status upon it. We are willing to exchange the historic symbols of which Mr. Davis speaks for serious steps indicative of serious support for our just claims.

February 7, 1978



Part II of Bill C-210 addresses itself to four statutes which upon review require amendment so that they will conform to the spirit of the Official Languages Act adopted by parliament. Section 7 of the Official Languages Act deals with the printing of notices and advertisements. The present provision says that where, by virtue of the authority of parliament, the Government of Canada, any judicial, quasi-judicial or administrative body or Crown corporation established by or pursuant to an act of the parliament of Canada, any notice or advertisement for information to the public in the national capital region or a federal bilingual district established under the Official Languages Act is printed, it shall be printed in both official languages. Here again, Mr. Speaker, we find a restrictive clause, that of establishing bilingual districts not in keeping with present government intentions. Bill C-210 would amend section 7 so as to extend to any corporation having national status the language requirements of the Official Languages Act concerning public notices and announcements. It would in fact be a step toward establishing the supremacy of the Official Languages Act over all statutes with regard to language requirements of all corporations established or continuing to exist by or pursuant to an act of the parliament of Canada,
At the present time, Mr. Speaker, the Bank Act, the Railway Act and the Winding-Up Act restrict to the province of Quebec public notices and announcements in both official languages. It is particularly inconsistent at this time that the Railway Act should state that English and French are to be used in the province of Quebec and English only in the other provinces. It could happen, Mr. Speaker, that somebody may contest the right of our national railways to advertise in French outside Quebec, thereby putting to the test the legality of CNR using both official languages outside the province of Quebec.
[ Translation]
In summary, Mr. Speaker, Bill C-210 introduces some important amendments. In short, these amendments allow the provinces, which bear responsibility for the administration of justice in Canada, to amend certain acts which limit language rights, thereby confirming the right to language equality before the courts. The amendments to other statutes largely eliminate what I would term the "Quebec restrictions" as regards public notices in both official languages. The amendment to the act would allow banks and other public institutions, whenever possible, to publish in newspapers of general circulation in their area, either in French or in English. To conclude my remarks, I would say that, in my opinion, until we have adopted international signs, railway crossing signs will have to be bilingual. Government institutions must reflect the spirit of the Official Languages Act and full bilingualism.
Mr. Speaker, even if it can be maintained that there are financial implications, I am also convinced that the present legislation provides for expenditures for services which are mentioned in Bill C-210. I think, Mr. Speaker, that we should not think in terms of privileges. In this bill we should think in
Language Rights
terms of rights. What we want to obtain are not privileges. All Canadians are equal and full citizens. I think it is also a matter of natural right which should be recognized to each and every Canadian citizen. The federal government and the provinces should demonstrate their co-operation by introducing amendments which will enable all Canadians to be heard in the courts and to see the English and French facts reflected in our government institutions all over Canada.


Roger Carl Young: Mr. Speaker, I will try to make my comments very brief and then move my motion at the end.
I commend the hon. member for giving us the opportunity to debate this subject matter this afternoon. These proposals are a step in the right direction. Some time ago the government announced its intention of finding a means to recognize the right of a person whose language is one of the official languages of Canada to be heard before a judge or a judge and jury who speaks that language. Furthermore, provisions may well be required dealing with joint trials of accused when one speaks French and the other speaks English, with trials where a large number of witnesses testify in both languages, or where a large number of documents in both languages are filed. The solution, in appropriate cases, may be the use of bilingual judges or jurors.
Then again, provision for change of venue may be required in order to permit the transfer of a case from one district in a province to another district in the same province. It is desirable that resident francophones or anglophones of a province should be entitled to trial before a judge, or before a judge and jury, capable of understanding and speaking the appropriate language. In most provinces, including Quebec, it may not be possible to constitute an English or a French jury in all judicial districts. For this reason, mixed juries, as proposed, might not achieve the goal of providing adequate rights to accused persons. Mixed juries have been seldom used in Quebec and Manitoba; problems have arisen with regard to their operational efficacy. In cases where knowledge of the two official languages is required, bilingual juries should be used.
It is important to recognize that provisions for the hearing of trials by judges and jurors who speak French and/or English are not of the kind which can be implemented overnight. Adequate provision should be made to allow for proclamation province by province, thus allowing sufficient lead time in which the provinces can implement the legislation.
To sum up, let me say the bill is a suggestion in the right direction. It purports to recognize a principle which the government fully supports. However, it fails to deal with some of the practical problems which regularly confront the courts. It seeks to establish mixed juries throughout Canada though it would seem preferable to follow the concept of French, English or bilingual juries. Moreover, the bill does not ensure that residents of a province would be tried in that province by judges or jurors who speak their language.
80031 -25

February 7, 1978
Language Rights
I might add that in the near future the government proposes to introduce legislation in relation to language rights before courts of criminal jurisdiction. It proposes to offer solutions which will guarantee language rights before such courts without adversely affecting the efficiency of the administration of justice.
It should be borne in mind that the provinces have an important role to play in the implementation of any proposed legislation. The views of the provinces have been solicited and the minister has been in consultation with his provincial colleagues in relation to what should be done. Legislation is now being considered with a view to drafting. We would like to commend the provinces for the co-operation they have shown.
Since we are dealing with a subject covering a wide field- there are a number of ramifications-I should like to move an amendment in the hope that, while we can continue to deal with these issues in the few minutes remaining to us, the subject matter of the bill itself will be referred to the committee, at which stage all members will have an opportunity to make their views known and to amplify their remarks.


Stanley Howard Knowles: I second that proposal.


Roger Carl Young: I therefore move:
That Bill C-210, to correct certain anomalies and inconsistencies in the Revised Statutes of Canada, 1970, pertaining to the protection of Canadian language rights be not now read the second time but that the order be discharged, the bill withdrawn and the subject matter thereof referred to the Standing Committee on Justice and Legal Affairs.


Walter David Baker: The Speaker, I wish to say, first of all, that I appreciate the attitude taken by the Parliamentary Secretary to the Minister of Justice (Mr. Young) with respect to this difficult and vexing question, one which has troubled Canadians for years. I was also pleased to hear him say-and I am sure he was speaking for the Government of Canada-that his department has had the co-operation of all provinces with respect to this matter.
Discussions have obviously taken place between the Minister of Justice (Mr. Basford) and the attorney general of Ontario, for instance. The parliamentary secretary nods his head in agreement. There have been negotiations, I am sure, with the attorney general of British Columbia and with attorneys general of other provinces. With respect to these discussions the parliamentary secretary has commended those concerned for the positive and helpful approach they have adopted.
I note that the bill itself provides for the immediate introduction of the services to which it refers. This does concern me in the light of the questions raised by the parliamentary secretary. The hon. gentleman called attention to possible adverse effects upon the administration of justice in a particular case even though we might be dealing, as we are in this bill, with the Federal Court of Canada. This is something we cannot ignore.
I have been concerned, also, by a line of questioning which has gone on in this House involving the hon. member for Ottawa-Vanier (Mr. Gauthier) and the hon. member for

Madawaska with respect to the position of the government of Ontario.
[ Translation]


The Acting Speaker (Mr. Ethier):: The hon. member for Madawaska-Victoria (Mr. Corbin) on a point of order.


Eymard G. Corbin: Mr. Speaker, I rise on a point of order. I simply want to remind the hon. member for Grenville-Carleton (Mr. Baker) that my riding is called Madawaska-Victoria.


Walter David Baker: I am sorry. I did not want to misname the hon. member's constituency. As I was saying, in light of the statement made just now by a representative of the government, the Parliamentary Secretary to the Minister of Justice, with respect to co-operation, I am very much concerned about the maintenance of the goodwill which must exist between the government of Canada and the government of Ontario in the course of the discussions on this subject.
It is unfortunate that the questions which have been put forward by the hon. member for Ottawa-Vanier and by the hon. member for Madawaska-Victoria (Mr. Corbin) have been somewhat provocative with respect to the position taken by the premier of Ontario, who has the political responsibility for the administration of justice and, indeed, for the administration of the government of Ontario. I just want to say to the hon. member for Ottawa-Vanier (Mr. Gauthier) that while the premier of Ontario has indicated that perhaps there is a better way of moving than by codification, and that symbols are not nearly as important as substance, with respect to questions involving second language, whether it be in education, in the administration of justice or in the provision of schools for education in the second language of Ontario, I think the record of the government of Ontario is impressive, given the situation. I believe it is important that nothing happen on the political level which would harden attitudes and perhaps blind people to certain realities.
Yesterday or the day before the premier of Ontario, in speaking to the Canadian Club in Toronto, expressed his concern for those in the second language group in Ontario, French-speaking Ontarians, by saying that he did not want to repeat the errors on the provincial side, in his jurisdiction, that have been made by the Government of Canada.


Jean-Robert Gauthier: What errors?


Eymard G. Corbin: He could have followed the example of New Brunswick.


Walter David Baker: I am very glad that hon. members are listening to my argument because I intend to deal with the question of New Brunswick. New Brunswick, under the jurisdiction of the premier there and having regard to the situation in that province, decided to enact an official languages act in that province. As the hon. member for Madawaska-Victoria (Mr. Corbin) will confirm, there is a tremen-
February 7, 1978

dous difference, in terms of the development of the province and its history, between the province of New Brunswick and the province of Ontario. One of the things that concerns me about the whole matter of language is that when we move headlong into language matters we can destroy the soil of good will. All of us must be very careful not to criticize efforts that might seem small to some but which in certain areas, having regard to the development and history of certain provinces, are really major steps.
Keith Spicer has said to the federal government and to the people of Canada that the federal government's language approach, the codification of the law, the overdesignation of bilingual positions, and all the tremendous emphasis on bilin-gualsim, has generated an attitude in Canada which the premier of Ontario does not want to have generated in Ontario. That is what he said. If members of the House are really interested in advancing the cause, they should not use this forum carelessly. The Secretary of State (Mr. Roberts) should not have answered the questions of the hon. member for Ottawa-Vanier the other day in the way in which he answered them if we are to maintain an attitude of good will.
I have been across this country too and I have seen attitudes in Canada that are not helping with respect to second language training. What has happened in Canada is that suddenly, and 1 suppose finally, people are beginning to recognize that the place to begin with second language training, wherever one resides, is in the schools. It is to be hoped that it is an evolutionary process. If it ever becomes anything other than evolutionary, resentments will develop. Somehow we must balance that situation with other resentments that develop because the process has not moved swiftly enough.
An hon. Mlember: How do you balance rights?


Walter David Baker: The hon. member puts a good question. I guess it is a delicate act of statecraft. If there is anything indicative of the first ten years, anything that falls out of the federal Official Languages Act, it is that it is not, and has not been in terms of its implementation, an act of statecraft.
We hope that the approach involving the provinces will be proclamation seriatim, as the Parliamentary Secretary to the Minister of Justice (Mr. Young) said, as the situation develops, and that the federal government will admit there are differences in Canada. That is a very healthy thing. We in the House can damage good will and can undermine progress if we use the House irresponsibly. The danger that I see in the attitudes expressed in the questions the other day was precisely that. That is something we must avoid.


The Acting Speaker (Mr. Ethier):: Order, please. The hour appointed for the consideration of private members' business has now expired. Therefore, I do now leave the Chair until 8 p.m.
At six o'clock the House took recess.
Railway Act


[Stage Direction]
AFTER RECESS

The House resumed at 8 p.m.


[Stage Direction]
The House resumed consideration of the motion of Mr. Lang that Bill C-17, to amend the Canadian National Railways Capital Revision Act and the Railway Act and to amend and repeal certain other statutes in consequence thereof, be read the second time and referred to the Standing Committee on Transport and Communications.
Donald Frank Mazankowski: Mr. Speaker, prior to the adjournment hour I mentioned I was very disturbed by the fact that the latest annual report of CN for 1976 made the assumption that this bill would be passed. It noted that the CN had actually capitalized the $808 million accumulated depreciation and charged it against its assets. This was obviously sanctioned by CN auditors and by the government, and I consider it to be another affront to the parliamentary process and a clear example of this government's taking parliament for granted and of administration by decree.
I suppose in some respects we might consider ourselves fortunate because we have in the past had the dissolution of debts merely by a stroke of the pen through the estimates. It seems to me these are very important issues that should be debated in the House of Commons, and it is my hope that in future CN or any other government Crown corporation will not take it upon itself to assume that because it proposes something which would constitute the cancellation of a very massive debt parliament will simply rubber stamp it or give it that support.
This is not the first time CN has had a capital revision. As a matter of fact, this particular bill is the third such piece of legislation. Also it is interesting to note that this is the fourth time since its formation in 1922 that the CNR has been relieved of debt and interest costs. In addition to the $808 million which is being cancelled under this bill, the total relief provided over that period is in excess of $6.7 billion.
The first relief was provided for in the provisions of the Canadian National-Canadian Pacific Act of 1933. It provided for the government to contribute outright, commencing with the year 1932, all future deficits of the company. Prior to this the government had met the annual deficits of CNR by advances in the form of interest-bearing loans. From 1932 to 1976 the government contributed $1,230 million to cover the
80031-2S'/2

February 7, 1978
Railway Act
deficits of the CNR. This amount is net of the surpluses, which total $37 million, earned by the CNR in the years 1952, 1953, 1955 and 1956 and paid to the government. Thus, there is quite a history of deficits, the CNR recording a profit only in those four years.
The Canadian National Railways Capital Revision Act of 1937 relieved Canadian National of liabilities totalling approximately $1,167 million. In addition, it converted other liabilities amounting to $658 million into proprietors' equity of the dominion government. By eliminating the government loans for deficits prior to 1932 and the interest accruals thereon, and by writing out the Grand Trunk stock and writing down Canadian Northern stock to a nominal $18 million, it effectively wiped out what Canadian National management has referred to frequently as the legacy of the past. That was followed by the 1952 recapitalization act, and the one we are dealing with now in 1978. I understand there was one proposed in 1962. However, it did not materialize.
The relief under the Canadian National-Canadian Pacific Act of 1933 totalled approximately $1,230 million. The Revision Act of 1937 relieved Canadian National of the debt of $1,167 million and $658 million respectively. The Canadian National Revision Act of 1952 relieved the debt of the Canadian National by $2,845 million. At the present time $808 million is being cancelled under this bill. Therefore, the total debt reduction provided by the public treasury was $6,708 million. That is a whopping amount of money.
We have received many reasons why this measure is necessary. The Prime Minister (Mr. Trudeau) indicated that it was necessary because it constituted a saving to the public treasury. The Minister of Transport (Mr. Lang) outlined today some reasons why this particular measure is necessary. Canadian National Railways officials have outlined their reasoning for this particular piece of legislation.
The arguments in favour of this bill are essentially the same as they were back in 1952 when the recapitalization bill was advanced. It has been said that the passage of this bill will provide Canadian National with a capital structure comparable to other companies in the North American railway system, with a debt ratio of approximately 38 per cent to 40 per cent compared to the current debt ratio of the CNR which ranges in the vicinity of 60 per cent. Also it is suggested that this piece of legislation will improve international investor confidence, now that the CNR is going outside government circles for its capital. 1 suppose the $168 million loss which was incurred in 1975, for example, would not be over appealing to the international investor.
We should not overlook the fact that the CNR is wholly owned by the government of Canada. Even though the credibility of the government is not that great at the present time, the CNR has the credibility and the backing of the government and indeed the country. Nevertheless, when the CNR goes outside government circles for money, it does so with the backing of the Government of Canada, and certainly that has an impact on investors' confidence.

Also it has been suggested that this bill will impose a much stronger discipline upon management to operate effectively and efficiently. In looking at the bill, 1 really do not see the mechanisms which will provide for that. When the parliamentary secretary or hon. members opposite speak on this bill, I hope they will give us the advantage of placing their interpretations on some of the clauses which would have the effect of imposing that stronger discipline upon management to operate in an effective and efficient manner. As a minimum, effective disciplinary guidelines ought to be inserted in the legislation, as well as proper and effective accountability features. I do not see those provisions in the bill at the present time.
From the government's point of view, the cancellation of this debt has the effect of relieving the government of an encumbrance. Under this piece of legislation, the debt will reflect the financial position of the CNR rather than being a burden to the government. In the eyes of the Auditor General and in the eyes of the Canadian public, I suppose it is fair to say the debt position of the federal government is improved by the fact that this debt has been cancelled and transferred to the equity of the CNR.
Because of the cancellation of the $808 million debt, this bill will relieve the CNR from paying interest on that amount, which works out to approximately $65 million on an annual basis. For that reason, it will tend to improve the economic performance of the CNR, at least on paper.
Then there is the phony argument which suggests the passage of this bill will represent no cost to the government but will be merely a book transaction. The Prime Minister suggested the other day that the passage of this bill will constitute a saving. I find that to be highly questionable and it will have to be explored in detail at committee stage.
The effect of the 1937 Capital Revision Act reduced the fixed charges of the CNR by something more than $35 million a year. The second Capital Revision Act more or less completed the job of removing the debt which has been termed a legacy of the past. After the 1937 recapitalization act and by the time 1952 roiled around, the capital liabilities of the CNR had increased from approximately $1.2 billion to approximately $2.2 billion, which is more than it was prior to its first recapitalization.
The revision of 1952 converted $736 million of debt into 4 per cent non-cumulative preferred stock of the same value. This had the effect of reducing CN's fixed charges by about $23 million, from $47 million to $24 million. As I said earlier, this was heralded with great anticipation and expectation. The late Donald Gordon, the former president of the CNR who was in command at that time, addressing CN's interdepartmental education association, had this to say in Toronto, and I quote:
This will clean the windows of our financial house. Once the legacy of excessive debt has been lifted from our shoulders, we will be judged entirely on our merits, and it will be a challenge to everyone in the organization to show what we can do.
February 7, 1978

Then in the transportation committee he said the following:
If we should get this bill through, then all the hocus pocus, if I may use the term, in respect of bookkeeping entries, will be wound up, and from then on the Canadian National System will have a chance to be judged on its record, and on a basis which will be appropriate and reasonable in respect to what might be expected of it.
The Montreal Star attributed the following quotation to the late Mr. Gordon:
I would like to record, even now, my complete confidence that our proposal deals with the last possibility of any further revision of this nature and that it is aimed at a final clearance of the effects of what has been called the legacy of the past. I am confident that, given this final clearance, the Canadian National will be able to demonstrate that it is an efficient and well run organization.
There are many similarities between those glowing words, those we heard at the presentation of this bill and the remarks which have been made by officers of the CNR. If there is any apprehension or suspicion that this may recur, it is certainly in the minds of hon. members on this side of the House.
The 1952 revision act went beyond the debt aspect of CN's financial structure by providing the railway with a new source of funds. It provided that CN would increase its equity annually to the tune of 3 per cent of the gross annual revenues of the national system. It also provided for an interest waiver on some $100 million for a period of ten years.
As for the $736 million equity fund provided for in the act, in no single year has the full 4 per cent dividend been paid to the government. As a matter of fact, in only three years during that period did the government receive a dividend, and the highest amount which was received was something in the order of 3.1 per cent. It should also be noted that as a result of the 1952 recapitalization act CN had the advantage of enjoying the use of cost-free capital which amounted to $1,504 billion by 1976.
Having said all that, it is very difficult for us to draw any other conclusion than that the result of the first and second recapitalization acts has been to unleash to CN the opportunity to go on a capital spending binge of enormous proportions. It is quite interesting to note that CN's capital expenditure policies have been extravagant, to say the least. From 1952 to the end of 1976 CN spent $4.8 billion, equal to 80 per cent of its total property investment at the end of 1976, on improvements, additions and replacements of its properties. About $2.8 billion of this was provided by depreciation and salvage, and $768 million came from government purchases of preferred stock, leaving over $1 billion to be financed by borrowing.
Of the increase by this amount in CN's long-term debt we are now proposing here under this bill to cancel some $808 million, or roughly two-thirds. This can be interpreted only as an admission that the capital expenditures represented by that amount are unable to pay their way and were therefore not justifiable economically. What is more important is that this has very serious implications for every privately owned firm which competes with the transportation undertaking or any other undertaking of CNR, because CN is once again able to enjoy the benefits of spending money without bearing the burden of its cost. One more time CN's competitors are
Railway Act
finding the terms of competition radically altered, to their disadvantage, as a result of CN's having expanded and having improved its operations through capital spending on which no return need ever be earned.
So one can only conclude that, given this record of performance and given the realities of what we are seeing, CN has been grossly mismanaged. When I say that I do not cast a reflection upon the current management. I think the current management is very eagerly and desperately trying to turn things around; but the management and the record of performance of CN from a financial management point of view over the years is less than satisfactory. I must say that CN is not unlike many other Crown corporations which have been subjected to parliamentary scrutiny, when parliament has been given the chance to scrutinize.
It should be noted, with respect to debt-equity, that in 1952 when the recapitalization bill was passed CN had a debt-equity ratio of about 32 per cent or 33 per cent, compared with CP, which had a debt-equity ratio in the same vicinity. One must seriously question how CP could show a profit every year, pay a dividend and take advantage of its rightful depreciation while CN went merrily along accumulating more and more debt. I say that even though I understand that CP pays rather extraordinary salaries to its senior officials, which is a subject of some controversy and a matter of highly guarded secrecy. I am not sure whether CP pays its chief executive officer, Mr. Sinclair, for his services by the pound or by the amount of brains he has, but he is probably getting more than he is worth regardless of what formula is used. I say that particularly in view of some of his preposterous reasons for failing to disclose the salaries of CP officials to the securities exchange commission. It seems to me only logical that we should propose the same legislation which is in existence in the United States. Under U.S. law all companies which do business or arrange financing must reveal their executives' or directors' salaries when those salaries are above $40,000.
I want to reiterate that we are concerned that there are not sufficient safeguards and guidelines in this legislation to prevent a repeat performance of that which has gone before us. Since in no one year did CN meet its obligation to pay a 4 per cent dividend to the government on its non-cumulative preferred shares, what is so different about this particular legislation under which CN is obliged to provide the payment of 20 per cent of its net earnings to the government under clause 10? Unless there are clearly defined objectives and responsibilities for management to meet clearly spelled out in the legislation, unless the consequences of failing to carry out those responsibilities are clearly defined, unpleasant as they might be, and unless appropriate safeguards are inserted for meeting that purpose and ensuring that there is absolute accountability to this House, I submit that we can conclude that there is nothing to prevent a repetition of CN's past performance.
Clearly this legislation must have some teeth to guarantee that parliament will not be called upon to continue the pattern

February 7, 1978
Railway Act
of covering future deficits without taking management to task. We must call upon management to produce and to be answerable for their actions. In other words, they must produce or face the consequences. There should be no further excuses. We are now in a situation where we must assess the cost of providing transportation. Under this policy, the government is prepared to pay for the provision of transportation services which may not be economic but which are in the best public interest. We are in the process of looking at the Crowsnest pass freight rates and I think there is general agreement that the railways will have to be given a compensatory rate. Whether that will come out of the public treasury or out of the pockets of the farmers, or both, we know the railways will obtain redress in that area so there is no reason why subsidization should be required. Any cross-subsidization will be minimized by the policies of the government.
The CNR clearly has the type of economic environment which should provide service effectively, efficiently and at a profit. The corporation must be held accountable too and must be answerable to parliament through the House and the committee. To these ends we will be advancing the necessary amendments in committee.
We will allow the bill to go to committee with the understanding that witnesses will be called and in the anticipation of the government being receptive to logical, well reasoned amendments. We will be particularly interested in knowing how the current management will demonstrate that this measure will impose stronger management disciplines and how it proposes to manage effectively, efficiently and responsibly. We will want a clear projection of the future plans for the corporation in terms of growth in order to meet the important challenges in the field of transportation in the 1980s.
We will want, as well, a realistic five-year projection based on the current structure vis-a-vis the modified structure under this bill in order to prove that there are advantages to the government and the corporation. The committee should be able to see clearly the total implications of the bill.
Finally, Mr. Speaker, we will demand answers from CN management and from the minister in charge on how CN will fulfil its mandate efficiently, effectively and profitably in the interests of all Canadians, particularly those Canadians it serves.


Mr. Les Benjamin (Regina-Lake Centre):: Mr. Speaker, 1 listened carefully to the little the minister had to say on this bill and to what my good friend the hon. member for Vegre-ville (Mr. Mazankowski) had to say. I must disagree with some of his conclusions arrived at from what I consider to be incorrect premises.
Canadian National Railways started off with the deck stacked against it. For the benefit of my colleague from Vegreville, if no one else in this House, I do not think it will hurt to go over a little bit of history. The hon. member and the minister as well as others over the years have talked about the unprofitability of CN. They conveniently forgot to mention that in most years, particularly those since World War II, the

CN has shown an operating profit. When it came to paying interest on the debt, however, it consumed all the operating profit, plus $5 million or $6 million in any good year that parliament had to vote.
When any company, whether privately or publicly owned, starts out with a debt that it can never pay off, even if it lasts for a thousand years, which debt was not acquired as a result of operating the company, then it is doomed to failure. A private company would declare bankruptcy and fold up, but in the case of a public company like the CN parliament and the people of Canada pick up the tab. Of course, parliament and the people of Canada have done that with some private companies as well-for instance, the CPR and some others.
Given that sound economic and private enterprise business premise, I am surprised that any fair-minded private enterpriser would condemn a corporation, public or private, that is required to pay off debts which have nothing to do with its operation or how efficiently it is managed but which accrued as a result of bailing out bankrupt private companies.
The minister is not here this evening, Mr. Speaker, and one is almost tempted to call a vote in order to adjourn the debate until a time when he can be around. On a bill as important as this one would think the minister could schedule his activities so that he could be present in the House. In order to educate his parliamentary secretary and the hon. member for Vegreville, I would remind the House that this all started in 1850. The Intercolonial Railway was not built as a commercial proposition, but to serve the political and economic needs of the country. Its construction was one of the conditions of confederation.
Then there was the National Transcontinental Railway. The government of the day claimed that all of the most important reasons for building it as a government railway and retaining control were that it could be used as a common outlet for both eastern and western railways. The National Transcontinental Railway was financed by government funds and the Grand Trunk Railway approved the specifications. That railroad, built with the taxpayers' money, was operated by the Grand Trunk Pacific Railway. It was a private enterprise operation without rental for a period of seven years and paid 3 per cent on the cost for the next 43 years. The cost of construction exceeded by a considerable amount the original estimates. We have been through that in this country before. The Grand Trunk found itself in financial difficulties and, in 1913, the National Transcontinental Railway was placed under the management of the Intercolonial Railway.
The Grand Trunk Railway itself was incorporated by an act of parliament in 1852. The expression "Grand Trunk", used in the 1850s, signified a line running from east to west in Canada, which in those days comprised the provinces of Quebec and Ontario, connecting the Atlantic ports of Montreal in the summer and Portland, Maine, in the winter with midwestern United States railways. In 1923 the Grand Trunk was amalgamated with the Canadian National. By that time the Grand Trunk had been merged into the 125 companies which originally had separate corporate identities.
February 7, 1978

The financial success of the privately owned Grand Trunk Pacific Railway depended upon rapid development of the west. It was inhibited by some business recessions in 1912 and again during the first world war. The Grand Trunk Pacific found itself in financial difficulties and had to turn to the government for further aid. These are private companies, Mr. Speaker. The Canadian government refused to provide any further financial assistance; they had already provided them with quite a bit, and in order to maintain operation of that company the government took it over as receiver in 1919.
The Canadian Northern Railway began with a few small enterprises in western Canada and grew into the third largest railway in the nation. At the time it was taken over by the Canadian government it had a complete system from Montreal to Vancouver with numerous branch lines. In 1918 financial difficulties again forced the Canadian government to take over the operations of a formerly prosperous private railway company.
In 1914 both the Grand Trunk Pacific and the Canadian Northern were in financial difficulties. They were granted loans by the dominion government which enabled them to carry on the necessary work on their line and continue in operation.
In 1916 further loans were requested. It became apparent to the government of the day that it was necessary to take stock of the situation and define policies for the future. They were faced with alternatives: to withhold further aid and let them go belly up; take them over and operate them as government properties; or continue with temporary assistance. They opted for continuing with temporary assistance.
By 1923 the government of that day took over all of those railroads and amalgamated them into the Canadan National Railways. All but one were privately owned. When Canadian National was set up they took over all the bonded indebtedness of those railroads. The taxpayers of Canada have been paying and paying ever since. On the successive refinancing occasions to which the hon. member for Vegreville (Mr. Mazankowski) referred, we paid off some more. I thought it was a tenet and a truism for private enterprise that if you invest in something, you take your chance. If it makes a buck, you make a buck; if it loses and goes broke, you lose. But in this instance all the private enterprise investors, the ones who were going to operate in the marketplace, have been paid. I do not hear my friend the hon. member for Vegreville or anyone else complaining about the poor management and inefficiency of these railroad companies that the Government of Canada had no choice in 1923 but to take over.
It is useless having a private enterprise government trying to run a Crown corporation. In the first place, they do not believe in it. Secondly, they do it as a last resort, a last desperate, frantic effort to bail out their private enterprise friends who got themselves into trouble.
In a country such as Canada with a large land mass, a cold climate and a thinly scattered population, there is not a single
Railway Act
transportation system in our entire history that has ever made a profit without substantial public assistance from the taxpayers. My hon. friend from Vegreville mentioned the profitability of the CPR. I wish he would return to his office and turn up the financial reports for the CPR for the period 1960 to 1969. He will find in every year except two that had it not been for the subsidies received from the taxpayers of Canada, Canadian Pacific Railway would have been in a deficit position. I get sick and tired of the Canadian Pacific being held up as some kind of god of private enterprise, profitability and efficient operations, because without financial input from the public of Canada the CPR would have shown a loss eight out of ten during the 1960s.
We in the New Democratic Party agree with the principle of refinancing the Canadian National Railways system, but we highly suspect the motives behind it. If it is such a good idea now, why was it not an excellent idea 10, 20, 30 or 40 years ago? The refinancing that was done in previous years, the last being 1952-53, was not only an exercise in futility, it was just trimming off the edges of some of the tougher parts of the CNR's indebtedness.
In a situation like this you cannot be half pregnant. There is no such thing. You either own everything or else you get out of the operation. If we had been straightforward in the past and were straightforward now, the people of Canada would own all of Canadian National. The people of Canada are the sole and total shareholders of Canadian National.
An amount of $808 million debt is being transferred. This is because of depreciation not taken in previous years. Why I will never know, because all private enterprise firms are allowed to claim depreciation. Of course, they get tax benefits. Another $1,500 million is being taken out of 4 per cent preferred stock and transferred to no par value common stock. So we are looking at $2.3 billion of CN indebtedness transferred into the common equity of the people of Canada.
I agree with that, but we are only doing half the job. I ask this question, and I certainly will ask it in committee: "Why do we not do the whole job?" There is $271 million of long term debt in Government of Canada loans which falls due between now and I believe 1983; I am subject to correction on that date. There is another $991 million in loans under the 1955 refunding act that is due this year. Why is not that amount of money being transferred into common no par value stock held by the people of Canada through their national government so we can relieve Canadian National and put them into a net equity ratio, even better than Canadian Pacific or any other private company? After all it is our company. It belongs to the people of Canada. They have paid for it and repaid for it time and time again all the way back to 1850. The mythology of private enterprise and transportation in this country, which is still perpetuated and promulgated by my colleagues in the free enterprise parties, has been disproven time and time again, not only in Canada but in every other industrialized nation in the world.
When are we in Canada, with our kind of climate, going to face the reality that there is no such thing as a transportation

February 7, 1978
Railway Act
company in any mode, be it trucks, buses, rail or air, that can operate on its own, provide its own infrastructure and facilities, provide service to the public in the area it serves, and still make a profit? It has never happened and it never will happen. In countries with a much smaller land mass than ours but much greater population, transportation companies are subsidized by the public. However, they are publicly owned and controlled. Not so in Canada and the United States.
While we support the principle of the refinancing of Canadian National's debt, we are terrified about the motive behind that refinancing. In January of last year the Minister of Transport (Mr. Lang) sent a letter, which was nothing more than a letter of instruction, to the chairman of the board of directors of Canadian National. He said such things as:
Although it has generally been conceded that the railways should operate on a commercial basis-
I do not know where he got that general consensus.
-in fact the impression has persisted that Canadian National should be used as an instrument of public policy even if at the expense of its commercial performance-
That is perfectly true. The minister is admitting that since Canadian National was set up, every year it has operated the government of Canada has been misleading the people. The minister says it is just an impression that has persisted. I assure him that when I was a child it was not an impression on the prairies. We believed that both the public and private railway systems were there to provide a service and that their objective was not a commercial operation. Their objective was to provide a public utility, something we can all use. In the minister's letter the truth comes out. He went on to say:
-it is the view of the government that Canadian National should make every attempt to conduct its affairs with a commercial attitude and in a commercial manner.
In plain language, that means a reduction in service, a reduction of thousands of employees. And how many bucks are in it for CN? In that letter the minister encouraged the board of directors to make Canadian National profitable and therefore more attractive to the private sector.
We in the New Democratic Party are in something of a catch 22 situation. We agree with the principle of refinancing and the recapitalizing of the CN debt. In fact, it is my opinion that this bill does not go nearly far enough. At least another $2 billion should be transferred into equity and shares owned by the people of Canada. If that were accepted and passed by parliament, it would make Canadian National very attractive to the private investor.
Canadian National have already established six or seven profit centres, such as CN Marine, CN Hotels, CN Express and CN Rail. They have regionalized each operation. They are supposed to be semi-autonomous. In doing that, they made commercial viability and profitability the priority. As a result, there has been reduced service and thousands of layoffs. Those who do not live in the large profitable metropolitan areas must either sink or swim.
Most Canadians, regardless of their political belief, believe that this is the kind of enterprise in which competition and profitability have no place. Many areas of enterprise should remain in the hands of the private entrepreneur. However, in the case of transportation, it is only logical, sensible and civilized that it be publicly owned and controlled.
When operating a transportation company in Canada, there are areas which are very profitable because of the density of population and the volume of traffic moved, with or without competition. The only way to provide reasonable service to the other parts of the country is to take the profit from those areas and cross-subsidize services in those parts of the country that are not profitable.
This nineteenth century free enterprise mythology which is still perpetuated by the Minister of Transport (Mr. Lang) and echoed by the hon. member for Vegreville (Mr. Mazankowski) has been proven a disaster so many times that I question their intelligence as so-called free enterprisers and sound businessmen. If they were operating their own businesses in that manner, they would be appealing to parliament to bail them out the same way we bailed out the shareholders of the railroads from 1850 to 1923.
Why do we just play around, going only half way? The long term debt of Canadian National should be transferred into equity, common shares in the name of the people of Canada I agree with the hon. member for Vegreville that Canadian National should be fully accountable. It should be part of the statute that their annual report must not only be tabled in the House of Commons, but that CN officials must appear before the appropriate standing committee of parliament. That should apply to every Crown corporation.
Private corporations in the public service sector should be accountable to parliament. You can bet your bottom dollar the shareholders of Canadian Pacific are not given a full accounting at their annual meeting. They operate as a law unto themselves. That enterprise is of a public service nature. They withhold much of the detail of their operations and management from their shareholders.
Having spent a few years in that operation, I still think of the horror of some of their activities. The shareholders never knew about them. Therefore, Canadian Pacific should also be accountable. The same is true of any other privately owned enterprise that provides a public service. That includes utilities as well as transportation.
These bookkeeping entries of $808 million for depreciation and $1.5 billion for the transfer of stock from 4 per cent preferred to no par value common is all on paper. No money will change hands. The essential motive behind this bill is to make Canadian National more attractive for private investment. The minister, the president of the company and some of its officers have stated that in this way it can move to the private sector. This means two things will happen. The profitable areas in the dense high traffic regions will be sold to private enterprise. Those fellows will make a sound business investment and get a good return on it. What about the rest of the country where it is not profitable to service the public by

February 7, 1978

rail or any other method? They will have to make their own way or be left in the lurch.
The hon. member for Vegreville talked about subsidization. You increase the amount of direct public subsidy every time you move a larger part of your transportation system into private enterprise. No matter which or how many of us are sitting here in years to come, the public will demand, and this parliament will have to provide, hundreds of millions of dollars in direct subsidies for transportation. That is an economic reality, whether those systems are publicly or privately owned.
To suggest, now, that we could cut off six or seven profit sectors in Canadian National and sell them off means that a few private investors will rake in the profits while the taxpayers get stuck with all the operations that fail to make money. Surely it is a civilized thing, as well as good business practice, to use money from the profitable sectors to pay for the sectors which lose money. Sometimes this cross-subsidization will be insufficient. Periodically there will be a need for additional public subsidies. That is the reality in Canada. That is part of the price of national unity. That is why confederation was agreed upon in the first place-to attain some measure of equity in transportation costs.
Both the privately-owned Canadian Pacific and the publicly-owned Canadian National have been deserting Canadians by the thousand-on the prairies, in the far north, in the eastern provinces, on the coast of British Columbia, in northern British Columbia. Why? Because they cannot make a buck there. Tough cookie, Mr. Speaker. Surely this proves that private enterprise has no damned business in transportation. This is what got us into trouble in the first place. Take the western European countries which have private enterprise governments. They think we are nuts having private enterprise transport systems. Theirs are publicly-owned and are subsidized as required.
The Minister of Transport (Mr. Lang) is worried about the Canadian people knowing how much the railways are costing us. Hells bells, every year when we got the estimates and the company reports we knew how much it was costing us. The minister suggested that in the case of the statutory grain rates maybe the farmer should receive the benefit of those rates in some other way. He "conned" the Atlantic premiers into forgetting about the Maritime Freight Rates Compensation Act. The premiers did not realize when dealing with the Minister of Transport that they should keep their backs to the wall and their guns loose in their holsters. They were "had". Transportation is a field in which we all share the costs through fares, rates and subsidies. If the hon. member for Vegreville (Mr. Mazankowski) really wants to do something about national unity, he will refuse to agree to this sell-off which is contemplated, the so-called privatization of Canadian National. His party will refuse to agree to it.
If the government really wanted to do something for national unity, if it really wished to end the feeling of alienation in various parts of the country, it would change its mind. Trans-
Railway Act
portation is one of the key elements in national unity. Let ministers opposite say to the people of Canada just once, without equivocation, that, for example, in the case of the statutory grain rates, the amount paid by the grain producers is a sufficient amount and that the cost of putting grain into export position should be borne by the nation as a whole, so that we can compete with Argentina, the United States and Australia whose grain is much closer to the seaports. That is the basic reason for the statutory grain rates.
I trust I did not hear the hon. member for Vegreville suggest tonight that he and his colleagues would agree to the total cost of grain transport being borne by the grain producers and then, somehow or other, a little subsidy cheque would be sent out to each farmer. Mr. Speaker, that would be taking us back to the old days of Jimmy Gardiner when he could send every farmer a cheque around election time. I hope I did not misunderstand the hon. member for Vegreville, the spokesman for the Progressive Conservative party.


Mr. Lambert (Edmonton West):: You would have difficulty understanding him.


Leslie Gordon Benjamin: Any deficit the railways incur through moving grain should be paid to them directly by the people of Canada through parliament. Canadian grain producers can then remain in competition with the other countries of the world which produce grain. The same applies to the Atlantic provinces. If they are to get their manufactured or primary products into central Canada where the market is to be found, then transportation cost ought surely to be a neutral factor in the business process. If you privatize Canadian National you will not be able to fault management for closing down services in small cities and towns, let alone in small cities and hamlets. You cannot blame the company if the only equipment they buy is the kind that serves big customers and makes the bucks.
I would point out that in most years Canadian National showed an operating profit. The reality is that, whether the railways were privately or publicly owned, when they were built is immaterial. They could not have been built by private investment alone and they would not have been built in the absence of public investment by way of cash, loans at low interest or interest-free, land grant, mineral rights and so on. Once started they got into trouble almost immediately trying to run a private enterprise operation in a geographic and economic situation completely unacceptable to any sensible businessman.
It is no different from trying to run a power line or telephone line into a rural area containing only scattered farm houses and hamlets. You would lose your shirt. Public investment is a necessity because you are dealing with a public utility which everyone in the country uses.
1 would be just as happy voting against this bill as voting for it. 1 do not want to reject the principle of refinancing Canadian National, but the reason for bringing in the bill at the present time is to privatize the company in the same way as Air Canada and other agencies. It is convenient for private enterprises to forget that when the railway companies could
2638

February 7, 1978
Railway Act
not make a buck, when they would not move in and do the job, the people of Canada did it. Now that parts of the operation have become profitable, the minister is saying: It is time to privatize the CN.
As for the private enterprisers who tried to get into the railway business, we bought them off. We made sure they did not go bankrupt. We made sure they got a return on their investment. It has taken us since 1850, and particularly since 1923, to do so. Now, I'll be damned if the Minister of Transport with the support of the hon. member for Vegreville does not want to go through the whole process again. Much of the indebtedness on the CN books is still carried over, financed and refinanced, from the original indebtedness of those private enterprise railroads. And now that we have paid and paid and paid again, we own the system. I wish we had more control over it. Now the minister wants to sell it off. Mr. Speaker, after all these years of paying and struggling and arguing, now is not the time to instruct the board of directors of the CN to make the operations of the CN purely commercial.
In my province of Saskatchewan, CN and CP have deserted hundreds of towns and villages so far as the provision of rail or truck services is concerned, regardless of their public responsibility and the commitments they made in the past. First they promised us better service if we would let them take off the trains and close the stations. They were going to give us better service with trucks. Then they moved all their truck agencies to only two or three locations in the province. Now they want to take away their trucks too.
We have gone through the business of making them profitable and commercial, and this has harmed Canadians. It had discriminated against Canadians because of where they happen to live. It has discriminated against small and big businessmen just because of the location of their processing plants. You cannot run a transportation system in a country like Canada on a private enterprise basis. It is the dumbest thing you can do. Ask any of your private enterprise friends and they will agree. Talk, for instance, to people in West Germany. The head of the biggest private enterprise you can find in that country would say it would be stupid. It would make even less sense to try it here.
The paper work we are doing in juggling the books for the recapitalization of CN is only on paper. We should add another $1.5 billion.


Donald Frank Mazankowski: What's a billion?


Leslie Gordon Benjamin: The bill does not go far enough. The total ownership is in the hands of the people of Canada and no place else. The mandate of CNR is to provide the best, most efficient and frequent service they can provide in every part of Canada.


Some hon. Members:: Hear, hear!


Leslie Gordon Benjamin: If it becomes private, it will not be able to do that. No private company can do that and survive. If you keep

it publicly owned, as it is now, with an instruction from the Minister of Transport (Mr. Lang) and a government policy which says it must be commercially viable and profitable, then you will be preventing a publicly owned enterprise from providing a decent service to people in every part of Canada. I say that you can equate efficiency and good management with good service-and I have not heard the word "service" mentioned here tonight. Surely when an enterprise fulfils the role of a public utility, service has to be the number one priority. There will be times when the operation will lose money, but if it is providing an equitable, decent and fair service to every part of the country, then the money is well spent.
This is called co-operative federalism; it is called aiding national unity. All the people in Canada share the cost; we all treat one another the same. Surely that is the raison d'etre of a publicly owned rail transportation system. At that point it has nothing to do with whether it is a private enterprise or a Crown corporation. Its purpose is to provide a rail transportation service to all parts of Canada. The bill before us lessens that equity across the country and, I submit, it does great harm to national unity.


J. Michael Forrestall: Mr. Speaker, I rise to join the debate with some surprise that there was no contribution from our friends a little farther down to the left. However, notwithstanding that, I feel obliged this evening to pick up the threads of the debate opened up by my colleague, the hon. member for Vegreville (Mr. Mazankowski), as well as comment on one or two points made by the previous speaker, the distinguished railroader from Saskatchewan. A little later I will deal with something a little more parochial than the national unity issue, namely CN's attitude to the freight rate structure. Then, in winding up my few remarks, I will put a very serious question to whomever on the government side will be taking part in the debate next, and it will have to do with the quid pro quo that the government has been able to get from Dr. Bandeen and CNR with respect to the largesse with which we are dealing now.
The observations and comments of the hon. member for Vegreville had to do with our skepticism about the position taken by CNR with respect to this bill. It is quite easy to accept on the surface the argument of Dr. Bandeen and others in CN that if we give them one more chance, if we let them operate under more modern methods of applying depreciation and accounting procedures and practices, they will do better. As the hon. member for Vegreville has pointed out, and as others who follow me will point out, again and again I hope, the argument is somewhat shallow and is perhaps not quite what this parliament or the people of Canada deserve.
I suppose that the position of CNR should be debated here in a general way. It will be discussed in great depth in committee. In any event, for a more general purpose it might be well to reiterate some of the points made by the hon. member for Vegreville and to emphasize one or two others. Any review of the CN's financial history since 1940-that is a 35 to 40 year period-would quite readily lay a primary colour against which this application to parliament and to the people
February 7, 1978

of Canada for relief of $808 million can be clearly portrayed. In the years 1942 to 1951, for example, it can be reasonably estimated that if CNR had accrued depreciation on all its structures, which is part of the point made by my colleague, the hon. member for Vegreville, it would have had approximately $110 million to $115 million more available for capital expenditures. Consequently, it would not have had to borrow the $110 million for capital expansion. However, the Capital Revision Act of 1952 in fact eliminated all the interest charge. As indicated, it wiped out all of the interest charge in respect of the government's participation.
Of the total government debt held, some $857 million, $736 million was converted to preferred stock, $100 million was converted to interest-free debentures, leaving a balance of $21 million. This has already been pointed out but it must be repeated. It is a reasonable assumption that the government held the debt of the CN. If the government had held the debt at the much lower rate in 1951-52 because of the depreciation accrual on structures, the amount of preferred stock would have been smaller; but it is difficult to see how higher depreciation accruals prior to that particular Capital Revision Act of 1952 could have had any effect on the present level of interest charges of CN.
We continue to be concerned about this because during the four-year period from 1952 to the 1955-56 year the depreciation on structures in Canada would have made available approximately $42 million to the CN for capital expenditures or whatever other purpose it might have had in mind.
My colleague has pointed out that this seems to approximate the amount by which the funded debt of the CN is higher because of the depreciation practices it has followed in comparison with that followed by the CP. I think this is apparent if you take 8 per cent, which represents the additional interest charges over that particular period of time, on something under $4 million during the year. At the very best the argument regarding insufficient depreciation having caused this situation is unacceptable and has to be viewed with some skepticism. The amount this would account for to this point in time would only be minor in terms of writing off debt, nowhere near the $808 million we are confronted with in this particular bill.
One could go on with these examples, and probably there are a dozen arguments that might occur to us, but all of them lead us to the shallowness of CN management and the government in their attempt to indicate to the people of Canada that in fact this $800 million is simply a paper transfer which in any event does not mean anything. I almost used the word "spurious" to describe that attempt by management and the government. What it amounts to is CN management suggesting that we should get out from under these old unworkable accounting practices. There is no suggestion they were unethical, but simply old fashioned practices which do not keep the system in line with the situation in the late 1970s and 1980s. Management is suggesting we should get the debt equity ratio
Railway Act
in line with that of the Canadian Pacific. I do not know what is so magical about CP, but they keep referring to it. All of this just does not hold much water as far as I am concerned when viewed in conjunction with past practice. We have had three capital revision debt relief measures in respect of the CNR, all of them occurring very nearly within my lifetime; none has worked.
The hon. member for Vegreville (Mr. Mazankowski) made a very valid point. He asked what there is in this measure that will give us some assurance that when we write off the $808 million-and that is not a mundane matter-this parliament or a parliament ten or 15 years down the road will not be back here doing exactly the same thing. It is that question to which this House tonight and the committee within the next few days must address themselves. Hon. members must address themselves to this question in a way which I hope will reflect the type of assurance desired by the Canadian people. I hope there is some assurance that we will not be coming back to this chamber literally month in and month out, year in and year out, looking for debt relief of this magnitude on structures within our social and economic system.
This government is proud of the fact it has written off Air Canada's debt, the debt associated with the St. Lawrence Seaway and now Canadian National's debt. Please do not tell me that the writing off of the St. Lawrence Seaway debt cost the people of Canada nothing. Let us consider what it did to the ports of Halifax and Saint John. Who paid for this debt? I suggest the people of Atlantic Canada did.


An hon. Member:: Oh, come on!


J. Michael Forrestall: It is true.


An hon. Member:: What about the expansion?


J. Michael Forrestall: What expansion is that? I will mention the 115 per cent increase in freight rates on containers out of the port of Halifax since 1969 with another 6 per cent coming up in two or three months. The Council of Maritime Premiers and a premier of the province of Nova Scotia thought they knew the answers to everything, but they howled and cried when the CN said it wanted an increase in rates. Management finally said that they had made a lot of noise and would only put in the 4 per cent increase on January 1, instead of the 9 per cent. Do you realize what they intend to do on June 1 ? They will not just put on the other 5 per cent increase but will pick up what they have calculated they lost between those dates by not having the additional 5 per cent. The people of Atlantic Canada will not be paying the 9 per cent increase in 1978; they will be paying in reality something much closer to 10.5 per cent in additional freight rate charges. Do not talk to me about expansion and the grandeur of everything the CN has done for us.
Let us talk a little bit about the port of Halifax.


An hon. Member:: Why don't you just mention the benefits you got through DREE?


J. Michael Forrestall: What benefits?
80031-26^2

February 7, 1978
Railway Act


An hon. Member:: The expansion to the ports.


J. Michael Forrestall: You are talking about the benefits received from DREE which has an 80 per cent leakage. The CNR is bad enough, but DREE is far worse. You gave us $100 million and within 60 days $80 million was back in the provinces of Quebec and Ontario. Is that what you call expansion? You tell me why DREE is a failure.
We hear a lot of talk about Canadian unity and those things that constitute that unity. I wonder if the members on the other side are really aware of what is contained in this bill before us? I wonder how many of them have ever bothered to read the bill or consider any of its history?
I want to talk about the bill before us and point out some of the "great things" that have been done for Atlantic Canada by this do-nothing government, and I will do so in the context of the Canadian National so that I will be properly in order. We over here want to know what return the Canadian National is offering Canadians. It will have to be better than what the CNR has been offering in recent years.
This evening I do not want to become involved in a purely provincial or parochial debate on this matter of CN re-financing, but I must suggest that the attitude of the CN to Atlantic Canada typifies the shallowness of the argument put foward to justify this request for re-financing. Let us consider some of the facts. There is not much question about the fact that the metropolitan area of Halifax-Dartmouth is one of the most important industrial centres in Atlantic Canada. It has to be one of the key centres, and is probably one of the most influential and important. It is acknowledged that the port itself is the key to the importance of the industrial area. It plays a significant role and is the main economic element in the development of our Atlantic economy.
In connection with that port, our sole railway to the market of central Canada is Canadian National. In the past the CNR has played a very active and positive role toward development in Atlantic Canada. Not only did the railway live up to its responsibilities, but it was able to benefit from its monopolistic position. As a matter of fact, perhaps we would have been better off to continue the concepts and the policies under which Intercolonial operated. Then we would have had an industrial corridor stretching from the marketplace in the heartland of Ontario and Quebec all the way to Halifax. I see the hon. member for Madawaska-Victoria (Mr. Corbin) is shaking his head. He does not want our industrial processing and producing capacity to be in a position to compete in the Canadian marketplace. In fact, we cannot compete in our own economy because our marketplace is too small. We cannot compete in the central Canadian marketplace as a result of the policies of the government.
In the past the CNR has played a very important and effective role in the development of the maritime economy. However, lately there seems to have been a drastic change in its attitude toward the Halifax-Dartmouth port. It is not an

overstatement to say that this change in attitude is causing enormous uncertainty in the minds of the traditional users of that port. I am sure the same thing could be said with respect to the port of Saint John, except for the influence of the Canadian Pacific Railway. The reason for this uncertainty is the steady and seemingly unending series of rate increases dating back to 1969. Since that year there has been an average of more than one rate increase per year. In percentage terms, it is something in the vicinity of a 115 per cent increase.
The psychological effect of this on shippers and the users of the port has been nothing short of intimidating. Indeed, business has been lost. Above and beyond that, any further rate increases may very well have a disastrous effect on the capacity of the port of Halifax-Dartmouth to continue to serve as an interface of intermodal transportation into central Canada. The point has been reached now where Halifax is only a hair's breadth away from losing its competitive advantage over the port of New York in terms of moving containers into Montreal, Toronto and points west, including the mid-west of the United States. The advantage which has been enjoyed is gone because of continued harassment of our users and customers by freight rate increases. The 20-foot container business is seriously threatened, and we are virtually out of the 40-foot container business. We still have a little toehold in the 20-foot container business, but it is in serious jeopardy.
With respect to this situation, brought about solely by our captive position to the CNR, I should like to point out to hon. members that if business is lost, it will not show up in any other Canadian port. It will be lost to the United States. It will be lost to the port of New York, the port of Boston, as well as other ports. That business will be lost to the ports of the United States and will not be rerouted to the central Canadian or river ports.
We are at the will of Canadian National. A few years ago I argued strongly against the CNR investing in cast steamships. It seemed unnatural to me for Canadian taxpayers to invest their money in shipping operations which were owned offshore. The president of the CNR, Dr. Bandeen, will indicate that it was a viable investment, that Canadian National received a good return on its money. If one examines the background of cast, one will find out that Canadian National was trying to tie up the entire container business, which would remove competition. The notion of a Crown corporation engaging in this type of practice is somewhat repugnant to me in light of the history of Canadian National and the role it has played in the development of the Atlantic economy.
The CNR has come forward requesting assistance. There is nothing in this bill to assure that the CNR will not return in 15, 20 or 25 years seeking further relief. On the other hand, the Minister of Transport (Mr. Lang) said that he accepted the position of Canadian National. I want to find out something about the quid pro quo. If the Minister of Transport is correct in believing that this bill will resolve the problems of Canadian National and will put it in a position where it can properly expand its plant, buildings and equipment, then I ask
February 7, 1978

the minister what he has received from Dr. Bandeen in exchange for that.
We would be interested in receiving answers to questions regarding the entire situation with respect to road beds and grades over which Canadian National runs its stock. What will be done to upgrade the roadbeds and grades? What will be done about the bottlenecks which cause congestion in the lower mainland of British Columbia? What will be done about electrification? Canadian National Railways will have all kinds of capital for investment. What undertaking has the Minister of Transport received from the CNR in these areas? What will be done about rail and ferry passenger service in Atlantic Canada? Essentially there are five systems. The Minister of Transport has indicated that four of those systems will be abandoned, and yet the CNR comes forward and requests $808 million in debt relief. What will be done about the ferry system of Atlantic Canada? The Minister of Transport is talking out of both sides of his mouth. The other day he told me in the House that his departmental officials had not gone to Europe to find new construction for a ferry to replace the one in use; they had gone to Europe attempting to find one to lease. Balderdash and hogwash! They are over there looking for someone to construct a ferry at a time when our Canadian shipyards are underutilized and when there is an excess capacity which should be used! Of course a ferry cannot be built in a year, but if they do not order it this year, they will not have it for four years. They will still be going offshore to look. They know what the requirements will be well into the 1980s, but they have not canvassed Canadian shipyards where there is a capacity and a willingness to build.
What is Canadian National going to do with all this capital? What is the government going to do about rate increase for containers out of Halifax to central Canada? People in Atlantic Canada are very bitter when they see thousands of millions being poured into the central economy. We are criticized because we have to transfer the natural wealth of the richer provinces to Atlantic Canada. The government says it believes in equalization but, as I mentioned earlier, within 30 or 60 days a large percentage of every $1 million sent to us is back in Quebec. That is by design. Hon. members can ask the drafters of the original DREE policy. They were instructed to write it that way. They play games. Will $808 million not cost anybody anything?
Whatever happened to the "at and east" rates? That government proposal would have cost thousands of jobs at the lakehead, on farm lands and in Atlantic Canada. Processors, millers and shippers would have been affected.


Leslie Gordon Benjamin: The Atlantic premiers agreed with it.


J. Michael Forrestall: Well, they were sucked in by the Minister of Transport (Mr. Lang). We are concerned. We want solutions to these problems.
The hon. member for Vegreville (Mr. Mazankowski) says we are quite prepared to let this bill go to the committee. I do
Railway Act
not think it should until every member on this side of the House has expressed his concern to the minister about the absence of any meaningful assurance that this new accounting system is going to work and an acknowledgement that, if in fact it does work, the funding available for capital expansion and improvement will be spent on road bed improvement, grade improvement, bottleneck problems in the lower mainland of B.C., the coal resources in the northern region of Alberta, and rail access to the port at Prince Rupert.
One is hard pressed to go more than 200 or 300 miles without finding a major requirement for capital expansion in the system and facilities of CN. There are signalling and switching requirements, control of box cars is needed and new rolling stock and reefer cars are needed. Cars are needed to move shakes, potatoes and fish. We need a new dock warehouse facility at the port of Saint John. What assurances did the Minister of Transport get out of Dr. Bandeen and Canadian National with respect to these requirements? Where are those assurances, and when are we going to hear about them? This is a form of contempt, disregard and arrogance on the part of a government which has been in power so long that it does not know the difference and does not care.


An hon. Member:: Oh, oh!


J. Michael Forrestall: That hon. member will be put on the bench shortly. Perhaps he will go to the Senate or somewhere else; either that or we will build a tunnel so that we can visit him.
1 hope hon. members on all sides of the House will raise matters regarding the assurances of which 1 spoke. There is a need, and I hope hon. members will point out clearly alternative policies to be followed. 1 hope hon. members will extract from the government what CN will do with the capital which is going to be available. 1 hope we can get from the minister or some other hon. member opposite an assurance with respect to our shipyards. Unless these things are done, skepticism and cynicism will continue with respect to CN and its role in the development of the national economy. We believe that transportation is a tool of economic development. We believe it is a useful, meaningful and needed tool in the development of the economies of regions of disparity. Without that tool Atlantic Canada and the north will not survive.
A change of attitude on the part of Canadian National is needed, and I hope that this $808 million will go a long way toward improving the attitude of CN toward this chamber, the regions of this country which rely totally and completely on transportation and toward the people of this country whose economic well being depends so much upon the capacity of CN to service, in an efficient and economic way, not only the financial requirements of this country but also the hopes and aspirations of the people who live in it.


John Carnell Crosbie: Mr. Speaker, it is a pleasure to have an opportunity to speak in this hallowed chamber on the subject of the CNR. It is a subject which is of great importance to the province from which I come. 1 am glad to see that the minister responsible for small business, or

February 7, 1978
Railway Act
responsible for the problems suffered by small business in this country, is here tonight. However, this bill is not about small business, and the minister might be able to learn something about debt forgiveness in the amount of $808 million.
The late C. D. Howe would be turning over in his grave if he knew that the Canadian government was writing off $808 million in the bill which is before us now. I believe he got into serious political difficulty one time when he said "What's a million?" We are dealing with $808 million tonight, a burden we are going to have to take off the shoulders of the CNR.
When 1 speak about transportation, 1 like to consult the experts. One of the experts is now the Minister of Industry, Trade and Commerce (Mr. Horner). He used to be the transportation critic for this side of the House, so when I was preparing for this debate I felt I could do no better than look into some of the views of a man who is now in a position to see that his views are confirmed.
In the fall of 1976 the present Minister of Industry, Trade and Commerce was still able to say what he thought, or he was still able to think. I do not know whether either applies today but I would like to quote from Hansard for November 6, 1976 at page 14,417. The Minister of Industry, Trade and Commerce, then a civilian, referring to the Minister of Transport (Mr. Lang), said:
He has bought the line handed down by, I suppose, the civil service which said that we must work on a 'user pay' concept. I have always felt that transportation could serve the people of Canada a great deal better if users had a little more say before they were asked to pay.
That is an excellent principle that the Minister of Industry, Trade and Commerce pronounced in 1976 and I am sure his view has not changed. He went on to say:
The only conclusion I can come to is that the minister seems bent on increasing freight rates, increasing the cost of air passenger travel, increasing the cost of rail passenger travel, and recently, increasing the cost of shipping.
What the minister said then is true still. The Minister of Transport is bent on increasing freight rates, increasing air passenger costs, rail passenger costs and the cost of shipping. Now our former critic is over there helping him carry out those objectives. Time changes all things and the man who was going to tar and feather the Minister of Transport has forgotten all about it.
The principles he enunciated are still correct, however. I am not against lifting this burden of $808 million off the back of the CNR if it is a burden. After all, it is only taxpayers' money and since the taxpayers do not know they loaned it in the first place they will not worry that they will never get it back.
Before I quote, Mr. Bandeen I want to say that I think he and the people running the CN are a capable group and I have no criticism of them. They had to operate within the conditions set by this government. The Department of Transport is extremely unlucky, Mr. Speaker. Most other departments have been lucky with this cabinet and had a change of minister every six or nine months, so no minister could do too much damage in his short tenure. But the unlucky Department of

Transport has had the same minister since September, 1975. For 29 months the minister has headed the department and this is really taking its toll on the country's transportation system. Instead of the "whirling dervish" policy, the present policy is that the minister is so effective in punishing the people of Canada and squeezing every dollar of savings that can be squeezed out of the transportation system, that he should be left there at least until the next election when the constituency of Saskatoon-Humboldt will be liberated from the user-pay concept of the minister.
I will mention only part of what Mr. Bandeen predicted would be needed for a profitable CN. In an interview reported in the Globe and Mail on February 11, 1977, he said:
Canadian National Railways can be profitable if four main burdens are lifted-
He really meant five but he did not want to mention the Minister of Transport. The report gives the first principle:
The losses from the almost compulsory provision of rail passenger service, estimated by Mr. Bandeen at about $50 million a year.
Why have railway passenger services at all, Mr. Speaker? Without them we could save $50 million per year. In the Newfoundland scorched earth policy they eliminated the railway passenger service in 1965. I remember the sign a grateful Mr. Smallwood erected on behalf of the public which said: "We will finish the drive in '65, thanks to Mr. Pearson." The drive was the TransCanada highway of which the federal government agreed to pay 90 per cent of the cost if Newfoundland would not make a fuss about losing the rail passenger service. If Newfoundland has no rail passenger service, why should Canada have a rail passenger service? I say we should look at this Bandeen principle very seriously. It would eliminate losses of $50 million per year.
The report then gives the second and third principles:
The losses from grain transport at low Crowsnest rates, which he calculated could reach about $64 million in 1977.
The losses from rail operations in Newfoundland which are in the range of $22 million to $23 million a year.
Let us finish off the railway in Newfoundland. We only did a partial job in 1965 so let us do away with the rest of it-take away the rails and sell them! That would be user-pay effective and cost-effective. Mr. Speaker, if the Minister of Transport attempts that we will put the rails around his neck and drop him into the Cabot Strait. The Hydrology Institute has been moved to Saskatoon so the minister is now an expert on water.
To return to the Globe and Mail report, it continues with the fourth principle:
The $2 billion in long term debt, most of it to the federal government, which has been building since the Crown corporation's founding in 1923.
This bill is only the start, the first instalment, Mr. Speaker, because Mr. Bandeen's four great principles include $2 billion in debt.
I hope I am not speaking too loudly, Mr. Speaker, but I want to make my point. This $808 million is only the start. The Bandeen plan is to make the CNR profitable. The bill will only do one quarter of one-quarter of what Mr. Bandeen said
February 7, 1978

should be done if the CNR is to become profitable. Why has the Minister of Transport not included these things in the bill? Is he waiting until after the election to slip through the appendices of this bill-in other words, to eliminate rail service altogether in Newfoundland? That is part of the prescription: forgive another $1,200 million in debt and that will really help out the CN. Eliminate the Crowsnest pass rates. There are not going to be any Liberal members west of Toronto anyway after the next election, so they may as well eliminate the Crowsnest rates. Eliminate rail passenger service; let us have a railway without any rails, without any passengers. That is what we want, a profitable railway that has no passengers, no trains, no freight rates and no cargo! At last we will be able to point to CN and say that after 100 years we now have a railway that is profitable. It has no passengers, no freight, no cargo, but by golly it makes money! That is why I am so anxious to support this bill, Mr. Speaker.
I have not enough time to speak tonight and I am only warming up, but I did want to reveal the conspiracy that lies behind this bill. I also want to ask the minister some questions before he closes debate about five months hence-because the bill is not going through tonight or tomorrow or Friday. The bill is not going through until we get passenger service back in Newfoundland. Unless all the people on the mainland agree to have their passenger service taken away, we will not agree to this bill. We will agree to it only if ours is restored. We have a TransCanada highway that is falling apart. You can hardly drive a hundred yards without falling into the swamp.


Mr. Deputy Speaker:: Order.



PROCEEDINGS ON ADJOURNMENT MOTION

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

John Carnell Crosbie: Mr. Speaker, on December 6, 1977, I asked a question of the Deputy Prime Minister and President of Privy Council (Mr. MacEachen) about unemployment. After that question I asked about a work project in Newfoundland concerning the lower Churchill water reservoir, a project which was suggested by the Newfoundland government and put forward to the Ottawa government in June, 1977. I asked whether the Gull Island project is to go ahead either this year, next year or in five years' time. The environmentalists have said that they have to clear cut the sides of the river which is to comprise the reservoir. They said this work can be done now, that it will take 400 loggers three
Adjournment Debate
years to clear this reservoir and it will cost about $4 million. The work they would do would be of permanent value and it must be done before this job goes ahead. It will re-employ 400 loggers laid off as a result of the closing of Labrador Liner-board Limited. The Deputy Prime Minister and President of Privy Council then said to me:
-I will take note of the hon. member's representations and ensure that whatever proposals have been made will be considered at the earliest possible date.
That was on December 6, 1977. I now come before you, Mr. Speaker, and it is February 7, two months later. Today during the question period, I asked the Prime Minister (Mr. Trudeau), the "living" Prime Minister, what had been done about this proposal for employment on the lower Churchill reservoir, Gull Island River. The Prime Minister said that it was discussed in cabinet last week. I presume it will be produced at the televised extravaganza on Monday, Tuesday or Wednesday as some great work project that the Prime Minister and his confreres have cooked up to pull out of their hats in front of the public. I am just reminding them now that it has been eight months since that project was put forward. And that has been eight months during which time 400 men were unemployed while the government up here dithered, neither accepting nor rejecting the project. The minister said on December 6 that he was going to consider these things at the earliest possible date, but two months have passed before they have been properly discussed.
Another question I asked on December 6, 1977 concerned the closing of the fluorspar mine at St. Lawrence, Newfoundland. The consultants paid for by the federal-provincial governments, B. L. Hodge and Partners of London, England, made a report to the two governments saying that it was feasible to operate this fluorspar mine and that it could be profitable if Alcan would operate it properly and make the necessary investments. But Alcan refused. They wanted to close the mine because they were able to import fluorspar more cheaply from Mexico than operate the mine itself. I asked if the government would put pressure on Alcan and tell Alcan that there would be no tax concessions, no tax relief, no help for Alcan in any way, shape or form if they did not continue to operate that fluorspar mine in St. Lawrence, Newfoundland and save the jobs of 300 men. And this silly, stupid answer that I had from the minister was that Alcan had informed him that the fluorspar from the mine at St. Lawrence was used mainly as a chemical in spray cans, and because of the drastic reduction in the use of spray cans in Canada it was no longer feasible to operate that mine. That is a piece of nonsense. A man that would believe that tripe from Alcan would believe anything. That is a "Hornerism" of the worst. It is a spoonerism disguised as a "Hornerism" but that is the answer I got. It shows the lack of concern for jobs in Newfoundland.
When Sun Life decided to move its head office from Montreal to Toronto there was a fuss and a furore. But when Alcan wants to close a mine for no good economic reason, move out of Newfoundland and cause the loss of 300 jobs, it does not

February 7, 1978
Adjournment Debate
cause the government any bother at all. If firms move out of Quebec it is different, but out of Newfoundland anyone can move.
Then yesterday I came across a proud boast from the Export Development Corporation that that crowd of clowns are giving $30.6 million to Alcan to help them construct an alumina plant in Ireland. The government allow Alcan to do away with jobs in Newfoundland, Mr. Speaker, and create them with our money and our credit in Ireland. Jobs for the Irish through Alcan, but not in Newfoundland. What kind of sense does that make?
The Export Development Corporation has to be brought under control. They do not care what they do as long as they whack the money out. The more money they whack out, supposedly financing our exports, the better they like it. It is the "Export and be Damned the Canadian Workers Corporation". That is what the EDC is.
Alcan should not receive one cent from the government of Canada. Alcan has calmly shut a fluorspar mine down and put 300 men out of work in St. Lawrence, not because the mine was losing money but because Alcan can get fluorspar cheaper from Mexico. The Minister of Industry, Trade and Commerce (Mr. Horner) did nothing to stop this. The government would not put on a tariff or impose quotas for reasons they never properly explained.
The only alternative for that community is a fish plant. There is a fine harbour there. The only alternative for the men is to go back to fishing or work in a fish plant. They made a proposal to the federal government through Fisheries Products Limited and the Newfoundland government to put a plant there. They need two things. They need loans and grants from DREE and permission from the Minister of Fisheries and the Environment (Mr. LeBlanc) to allow several Portuguese vessels to land there. But the federal government is delaying making any decision. 1 call on the ministers to take some action on these problems, particularly with regard to St. Lawrence.


Mr. Gilbert Parent (Parliamentary Secretary to Minister of Veterans Affairs):: Mr. Speaker, I do not always understand English very well. The hon. member has used the word "dithering". What does it mean in French? I did not quite understand everything, but the hon. member asked two questions to which I will now reply.

I would like to advise the hon. member for St. John's West (Mr. Crosbie), that the minister has a copy of the preliminary report on a study of the economic potential of the St. Lawrence fluorspar deposits in Newfoundland which was prepared for the government of Newfoundland and Labrador by B. L. Hodge and Partners, London, England. The report was sent to the minister by the Hon. T. Alex Hickman, minister of intergovernmental affairs of the government of Newfoundland and

Labrador-I am sure the hon. member is familiar with this gentleman-on the understanding that it be kept strictly confidential. Accordingly, I suggest that the hon. member approach the Hon. A. Brian Peckford, minister of mines and energy of the government of Newfoundland and Labrador, with regard to the report, because we intend to uphold the confidentiality of the report that was given to the minister.
I understand that Mr. Peckford met with Alcan officials in Montreal when Alcan restated the company's decision to close down its fluorspar mining operations in St. Lawrence, Newfoundland because they are no longer economically viable. A press release of December 1, 1977 by Alcan indicates that there are differences of opinion between Alcan and its consultants and the Hodge report on many aspects of the possible continuation of production having regard to mining safety and economic viability under present conditions.
I also understand that Alcan has offered the Newfoundland government a five-year lease of the mining rights and equipment at St. Lawrence for a nominal sum of $1 per year as the company does not want to be a stumbling block between the Newfoundland government and any other company which may be found to operate the fluorspar mines at St. Lawrence.


HEALTH AND WELFARE-CARE OF THE ELDERLY-FINANCIAL AID FOR THOSE IN INSTITUTIONS
Mr. P. B. Rynard (Simcoe North):: Mr. Speaker, on January 26 I asked the minister whether home care help was available under the Canada assistance plan and, if so, how much. Her answer was that the plan extended into the home care field, that Ontario had already been given $1 billion under the block funding arrangements, and that money was available also for home care programs.
I wish to set my question in order and lay the basis for the question I am going to ask. In 1957, the federal government brought in the Hospital Diagnostic Services Act. Ten years later they brought in national medicare. Quality of service was stressed. There was to be 95 per cent coverage. This was in spite of the fact that Ontario had a health care plan brought in by the Robarts government which covered all social services.
The federal government forced the provinces to accept the universal health care scheme, and then the pressure went on. Of course, escalating costs due to inflation were an important factor. The situation necessitated cuts in the nursing staff and then there was pressure to get patients out of active treatment beds quickly because the cost of an active treatment bed is anywhere from $100 to over $200 a day. Patients were removed to chronic care beds costing between $40 to $100, quite a saving. As I say, the nursing staff was reduced and a nurse, no matter how capable, can only do so much. My contention is that these measures could lead inevitably to a reduction in the quality of patient care.
I go on a little further. From chronic care beds patients are transferred to nursing homes, in which case the government
February 7, 1978

pays a total of $14.10 a day per patient. 1 want to ask this question: How often has the minister or her officials been in consultation with provincial officials with regard to the effectiveness of these arrangements? I ask this question bearing in mind that this is an extended plan operating right across Canada. Is the quality of care in these homes guaranteed? What equipment is in place to treat patients with illnesses capable of being treated? Are oxygen cylinders in place for use as necessary? Is other necessary medical apparatus available for use if required? In short, is the quality of care promised by the federal government when it brought in this scheme up to standard and is it being maintained across Canada?
I turn now to the charitable institutions which are finding it very hard now to make ends meet. I have in mind the Catholic institutions, and the Protestant ones, too. Their revenues are falling far behind and each patient they receive is cared for at a financial loss. If nothing is done, these institutions will be obliged to close down.
I should like the parliamentary secretary to tell us how often officials of the department talk over the future of this plan and consider the direction we are taking in the field of health care. Can we continue to assure the people concerned that the quality of health care across Canada will be maintained? What I am pleading for tonight is that the minister ensure more frequent consultations between her officials and those of the provincial governments with emphasis on future needs so that the mess in which we find ourselves at the present time in the field of health care will not continue.


Mr. W. Kenneth Robinson (Parliamentary Secretary to Minister of National Health and Welfare):: First, Mr. Speaker, I should like to congratulate the hon. member for his usual clarity in presenting his concerns. They are also the concerns of the minister. I can assure him there is no intent whatever to cut the level of medical care that we have enjoyed in Canada for so long.
As the hon. member is aware, the provision of health and social services is a responsibility of the provinces, with the federal government helping them in meeting those responsibilities by providing financial assistance, collaborating in the development of standards, undertaking studies in important subject areas, and through other means. In the present instance the federal government is providing a $2.2 billion cash contribution in the current year to support the hospital and medical care services. In addition, for 1977-78, some $464 million is being transferred to assist provinces in providing extended health care services, which include nursing home, institutional and home care services, the very items the hon. member has referred to. This amount is considerably in excess of the contribution that the provinces would have received under the Canada assistance plan for these same services. Hence, in a very real way the Government of Canada is sharing with the provinces the costs of both institutional and home care services.
Adjournment Debate
In addition, the government of Canada has recently proposed to the provinces that $575 million be transferred in 1978-79 through a block funding arrangement to assist them in providing a comprehensive range of social services, which includes the homemaker component of a home care program. While a final agreement has not yet been reached, it is hoped that this new financing arrangement can come into effect on April 1, 1978. In the meantime the Canada assistance plan is sharing with the provinces the cost of providing homemaker services to persons in need who are living in their own homes, and is also assisting with the basic income maintenance needs of adults residing in a residential care institution. The provinces have been advised that even with the introduction of block financing for social services Canada will continue to assist individuals with their basic income needs through the Canada assistance plan, whether such persons are living in their own homes or in institutions.
In conclusion, may I say that it is the purpose and intention of the department to continue the same level of medical care as has been provided in the past. Once again I want to thank the hon. member for bringing this matter to the attention of the minister and the department concerned.


LABOUR CONDITIONS-PROPOSED LAY-OFFS AT CERTAIN MINES-GOVERNMENT ACTION TO AVOID
Mr. John Rodriguez (Nickel Belt):: Mr. Speaker, on January 24 I asked the Minister of Energy, Mines and Resources (Mr. Gillespie) what specific steps he had discussed with Canada's provincial mines ministers to prevent the impending lay-off of 4,000 workers in the nickel industry in the Sudbury basin, Port Colborne and Thompson, Manitoba. In his response to me he did not list one single specific proposal. He talked about medium term prospects, he talked about restoring confidence in the mining industry, and he talked about separate jurisdictions, but he did not mention one specific step he would consider taking to save the jobs of 4,000 of Canada's miners.
The reason the minister could not talk about such steps is that he has no steps. He has totally abdicated his responsibility both to Canada's miners and to the communities of Port Colborne, Thompson and the Sudbury basin. His government is prepared to dump millions of dollars into the mining sector but it is not prepared to even attempt to see that the money is used constructively.
The government gave the International Nickel Company $318 million in deferred taxes but were not prepared to make such deferrals conditional on increasing employment. In fact, at the time the company announced the lay-offs the government was in the process of passing tax legislation that would give Inco $10 million. That comes to a grant of $3,333 for every miner they are laying off.
The government would not consider a temporary stockpile of the nickel to keep those men employed. Instead they would prefer to give the company more tax concessions and then pay the laid off miners unemployment insurance. The miners do

February 7, 1978
Adjournment Debate
not want unemployment insurance; they want jobs, they want to be productive. This government has denied them the opportunity to work and be productive.
It is not as if a stockpile would have been a bad investment, because officials of the companies involved all say publicly that the nickel markets look healthy in the medium to long term. Even a recent study by G. A. Barry and G. E. Wood of the minister's department says the same thing. But the government will not act to stockpile nickel, an action it has undertaken profitably in the past with uranium.
The government also refuses to take steps to prevent such a crisis in the future. At a time when Canada and the Sudbury basin desperately needed money for investment in job producing secondary industry, Inco was exporting hundreds of millions of dollars made from profits in Canada to invest in new mines abroad. What did the government do about this? It gave the company another $77 million to help it on its way. This was $77 million of taxpayers' money paid in taxes by the workers who become unemployed next Monday.
The government would not even take steps to protect jobs in Canada. My party requested a temporary tariff on nickel carbonate coming into Canada destined for the Sherritt Gordon refinery at Fort Saskatchewan. It would not put that temporary tariff on raw nickel coming into Canada even though the Japanese have been protecting their nickel industries with temporary tariffs of 13 per cent for the last few years. The government would not even stop the import of that nickel into Canada, yet that nickel is processed in the Sherritt Gordon refinery. The irony of it all is that it is sold to our mint in Winnipeg to make our coinage, and this at a time when we have raw nickel stockpiled to our eyeballs in Port Colborne and Sudbury.
This is the same kind of brutal unconcern that permits this government to allow Alcan to close out a mine in St. Lawrence, Newfoundland because the mine is not making as much money as it would make if it were importing the fluorspar from Mexico. Yet this government has given Alcan $200 million in deferred taxes. We heard earlier tonight that this government through the EDC is lending Alcan $30 million to build a plant in Ireland. I wonder by what stretch of the imagination the government can now turn around and put Ireland in the same category as Guatemala and Indonesia. I suppose Ireland is a third world country and we are now helping third world Ireland with this low interest loan.
The government could have come up with specific proposals to save the jobs of our miners. It could have stockpiled nickel in the short-term and made a profit. It could have imposed a temporary tariff which would have saved some jobs in the nickel mining industry. Most important, over the years that this government has been in power it could have initiated economic planning that would have prevented companies from such criminal acts as deliberately stockpiling nickel to gamble on future markets and then using the stockpile as a weapon in wage negotiations with the workers. This government could

have prevented the companies from making the workers pay for the companies' own economic mismanagement. The government could have used ownership or taxation of our resources to make sure there was an adequate pool of investment capital here in Canada to ensure jobs in manufacturing and to diversify the economies of one-industry towns such as Sudbury and Thompson.
Truly this government is tired; it has grown fat and sassy. It is like a ship struggling through the water, barnacles hanging from its bottom and impeding its progress. Members opposite have to be completely out of touch with the citizenry of Canada to be able to sit so insensitively on the government benches while Canadian workers are discarded like so many used pieces of tissue. This government in its repeated failure to act has surely earned and richly deserves the scorn of the Canadian people at the polls whenever an election should come.


William Kenneth Robinson: seem rational. The government is concerned with ameliorating the hardships to labour.
As the hon. member for Nickel Belt is well aware, a conference of mines ministers was held on January 20, 1978 to look at the medium-term prospects for the mining industry and how it would be possible for mines ministers to restore confidence in the mining industry. There was general agreement that over the next few years world market conditions will be a major influence on the mining industry of this country.
The ministers discussed several questions under the general topic of mineral sector management and co-ordination. Many subjects were discussed, including the point that it is important to ensure the industry and its employees are getting the maximum benefit from social programs already available. It was agreed that there was a need for a better understanding of
Adjournment Debate
social factors related to mining employment, particularly in the area of pensions and the desirability or not of portable pensions for industry employees. It was agreed that there is a need for continuing dialogue between ministers. The ministers looked at a number of questions in their separate jurisdictions which they may be able to address for the purpose of reporting to their first ministers' meeting in February.
In the long run a unified effort by both the federal and provincial governments to design measures on a commodity basis is needed to protect industry's viability and expand into new employment areas.


Mr. Deputy Speaker:: I regret to interrupt the hon. member, but his allotted time has expired. The motion to adjourn the House is now deemed to have been adopted. Therefore this House stands adjourned until tomorrow at two o'clock.
Motion agreed to and the House adjourned at 10.28 p.m.

Wednesday, February 8, 1978